The rum cover-over extenders – which provide an extra $2.75 per proof gallon for rum exported from the territory – was approved Thursday by the U.S. Senate Finance Committee, drawing thanks from Government House.

Gov. John deJongh Jr. said he was pleased at the passage of legislation by the Finance Committee following the governor's lobbying efforts against measures to restrict the use of the funds.

The cover-over provides $13.25 per proof gallon of rum made in and exported from the territory to the United States. While the bulk of that per-gallon charge is set in the legislation that created the program, the final $2.75 must be approved every other year by Congress.

“It was important for us to secure a clean extension of the rum cover-over rate to allow the territories to continue receiving $13.25 of every $13.50 in excise taxes paid by their rum producers, including a $2.75 portion that is regularly extended by Congress,” deJongh said Thursday.

DeJongh was critical of an amendment proposed, but never offered, by Sen. Robert Menendez, D-NJ, that would have restricted the authority of the U.S. Virgin Islands to invest cover-over revenues based on their own priorities. In recent years the cover-over extender had been a political football in Puerto Rico's complaints the V.I. was using them improperly to support the industry.

DeJongh described the cover-over program “as even more critical now as we confront the challenges posed by the closure of the Hovensa refinery on St. Croix, and as a result, one of the highest unemployment rates in the nation.”

“The amendment proposed by Sen. Menendez would undermine the public-private partnerships my administration has negotiated with Diageo and Beam Inc. to strengthen our historic rum industry, increase our revenues and broaden our private sector economy at a time of national economic distress,” deJongh wrote in a letter to two senators, Sen. Max Baucus, the chairman of the Finance Committee, and ranking committee member Sen. Orrin Hatch.

“The rum cover-over program is essential to generating economic growth in the U.S. Virgin Islands,” deJongh said. “I commend the members of the Senate Finance Committee for assuring the program’s continued success through the tax extenders bill. I will continue to strongly encourage Congressional leaders to reject harmful amendments from special interests which seek to harm our already fragile economy.”