This bill changes how federal rum taxes are shared with Puerto Rico and the U.S. Virgin Islands. It removes a cap so that more of the federal tax collected on distilled spirits can be sent back to these territories. These changes apply to spirits brought into the U.S. after December 31, 2021 .

It also directs Puerto Rico to send part of its rum tax money to the Puerto Rico Conservation Trust Fund. When the “cover over” rate is at least $10.50 per proof gallon, the amount above $10.50 (up to $13.25) must be transferred to the Trust Fund to support conservation, farming, and habitat restoration in Puerto Rico. This requirement does not change existing payment priorities under Puerto Rico law as of December 31, 2022. Certain rules are applied retroactively so the calculations line up with earlier laws .

• Who is affected: Puerto Rico, the U.S. Virgin Islands, rum producers, and conservation efforts in Puerto Rico .
• What changes: More rum tax revenue can be returned to the territories; Puerto Rico must send the portion above $10.50 per proof gallon (up to $13.25) to the Conservation Trust Fund .
• When it starts: Applies to spirits brought into the U.S. after December 31, 2021; includes retroactive adjustments to how amounts are figured .