Menendez, Cassidy Introduce Bill to Make Permanent the 'Rum Cover Over' For Puerto Rico and the U.S. Virgin Islands
Statement
U.S. Senators Bob Menendez (D-N.J.) and Bill Cassidy, M.D. (R-La.) introduced a bill to modify the amount of money transferred to the Treasuries of Puerto Rico and the U.S.Virgin Islands--known as the "rum cover over'--from the excise taxes collected on rum that is produced in or imported into the U.S. The transfer of funds dates back to 1917 for Puerto Rico and 1954 for the U.S. Virgin Islands.
"For a long time, the people of Puerto Rico and the U.S. Virgin Islands have counted on the rum cover over to promote economic development and guarantee well-paid jobs in both territories," said Sen. Menendez. "Our bipartisan bill would once and for all eliminate the limitation on taxes paid to Puerto Rico and the U.S. Virgin Islands, ensuring that the taxes on rum sold in the continental U.S. are properly returned to these two territories. In addition, a portion of the funds covered over to Puerto Rico will be transferred to the Puerto Rico Conservation Trust Fund to support the island's sustainability."
"The Rum Cover Over dates back to 1917, but has long faced funding cliffs that create unneeded uncertainty and put investment in jeopardy," said Dr. Cassidy. "Just as Louisiana uses offshore energy revenue sharing to restore our coasts, Puerto Rico and the U.S. Virgin Islands use this revenue to reinvest in their communities."
Sens. Menendez and Cassidy's bill strikes the $10.50 and $13.25 limitation on cover over amounts, established by the Bipartisan Budget Act of 2018, finally making the cover-over permanent. It also adds a new provision that would require a portion of the transferred funds to go to the Puerto Rico Conservation Trust. The Conservation Trust of Puerto Rico is a private, nonprofit organization that works to protect natural areas; restore, rehabilitate and preserve historical structures; and develop educational programs that foster the protection of natural areas on the island.
Earlier this year, U.S. Representative Stacey Plaskett (D-U.S. Virgin Islands) introduced similar legislation in the House of Representatives.
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