US SB1938

Repeals the limitation on federal excise tax "cover over" payments to Puerto Rico and the Virgin Islands for distilled spirits, with changes applying retroactively to articles brought into the U.S. after December 31, 2021

Requires Puerto Rico to transfer a portion of rum tax revenues to the Puerto Rico Conservation Trust Fund when cover over payments equal or exceed $10.50 per proof gallon, with the transfer amount calculated as at least 1/6 of the difference between $10.50 and the actual rate (capped at $13.25)

Defines the Puerto Rico Conservation Trust Fund as the entity established by a 1968 Memorandum of Understanding between the U.S. Department of the Interior and Puerto Rico for conserving natural areas, sustainable agriculture, and habitat restoration

Preserves existing Puerto Rico payment priorities established under local law as of December 31, 2022, ensuring the conservation fund transfers do not disrupt prior obligations

Applies certain cover over determination rules retroactively as if included in the Tax Cuts and Jobs Act of 2017 (Public Law 115-97) and the Bipartisan Budget Act of 2018 (Public Law 115-123)