[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 767 Introduced in House (IH)]
108th CONGRESS
1st Session
H. R. 767
To amend the Internal Revenue Code of 1986 to encourage investing of
foreign earnings within the United States for productive business
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 13, 2003
Mr. English (for himself, Mr. Dreier, Mr. Brady of Texas, and Ms. Dunn)
introduced the following bill; which was referred to the Committee on
Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to encourage investing of
foreign earnings within the United States for productive business
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Homeland Investment Act of 2003''.
SEC. 2. TOLL TAX ON EXCESS QUALIFIED FOREIGN DISTRIBUTION AMOUNT.
(a) In General.--Subpart F of part III of subchapter N of chapter 1
of the Internal Revenue Code of 1986 (relating to controlled foreign
corporations) is amended by adding at the end the following new
section:
``SEC. 965. TOLL TAX IMPOSED ON EXCESS QUALIFIED FOREIGN DISTRIBUTION
AMOUNT
``(a) Toll Tax Imposed on Excess Qualified Foreign Distribution
Amount.--If a taxpayer elects the application of this section, a tax
shall be imposed on the taxpayer in an amount equal to 5.25 percent
of--
``(1) the excess qualified foreign distribution amount, and
``(2) the amount determined under section 78 that is
attributable to such excess qualified foreign distribution
amount.
Such tax shall be imposed in lieu of the tax imposed under section 1 or
11 on such amounts.
``(b) Excess Qualified Foreign Distribution Amount.--
``(1) In general.--The term `excess qualified foreign
distribution amount' means the excess (if any) of--
``(A) dividends received by the taxpayer during the
taxable year from corporations that are controlled
foreign corporations in which the taxpayer is a United
States shareholder on the date such dividends are paid,
over
``(B) the base dividend amount.
``(2) Base dividend amount.--The term `base dividend
amount' means an amount not less than the average amount of
dividends received during the fixed base period from
corporations that are controlled foreign corporations in which
the taxpayer is a United States shareholder on the date such
dividends are paid.
``(3) Fixed base period.--
``(A) In general.--The term `fixed base period'
means each of 3 taxable years which are among the 5
most recent taxable years of the taxpayer ending on or
before December 31, 2002, determined by disregarding--
``(i) the 1 taxable year for which the
corporation had the highest amount of dividends
from controlled foreign corporations relative
to the other 4 taxable years, and
``(ii) the one taxable year for which the
corporation had the lowest amount of dividends
from controlled foreign corporations relative
to the other 4 taxable years.
``(B) Shorter period.--If the taxpayer has fewer
than 5 taxable years ending on or before December 31,
2002, then in lieu of applying subparagraph (b)(3)(A),
the fixed base period shall mean such shorter period
representing all of the taxable years beginning on or
before December 31, 2002. Rules similar to the rules of
section 41(f)(3) shall apply in the case of
acquisitions or dispositions of controlled foreign
corporations beginning after the fixed base period.
``(c) Definitions and Special Rules.--
``(1) Dividends.--For purposes of this section, the term
`dividend' means a dividend as defined in section 316, except
that the term shall also include amounts described in section
951(a)(1)(B), and shall exclude amounts described in section
78.
``(2) Controlled foreign corporations and united states
shareholders.--For purpose of this section, the term
`controlled foreign corporation' shall have the same meaning as
under section 957(a) and the term `United States shareholder'
shall have the same meaning as under section 951(b).
``(3) Foreign tax credits.--The amount of any income, war,
profits, or excess profits taxes paid (or deemed paid under
sections 902 and 960) or accrued by the taxpayer with respect
to the excess qualified foreign distribution amount for which a
credit would be allowable under section 901 in the absence of
this section shall be reduced by 85 percent.
``(4) Foreign tax credit limitation.--For all purposes of
section 904, there shall be disregarded 85 percent of--
``(A) the excess qualified foreign distribution
amount, and
``(B) the amount determined under section 78 that
is attributable to such excess qualified foreign
distribution amount.
``(5) Treatment of consolidated groups.--Members of an
affiliated group of corporations filing a consolidated return
under section 1501 shall be treated as a single taxpayer in
applying the rules of this section.
``(6) Designation of dividends.--The taxpayer shall
designate the particular dividends received during the taxable
year from one or more controlled foreign corporations in which
it is a United States shareholder that are dividends excluded
from the excess qualified foreign distribution amount. The
total amount of such designated dividends shall equal the base
dividend amount.
``(d) Election.--
``(1) In general.--An election under this section shall be
made on the taxpayer's timely filed income tax return for the
taxable year (determined by taking extensions into account)
and, once made, may be revoked only with the consent of the
Secretary.
``(2) All controlled foreign corporations.--The election
shall apply to all controlled foreign corporations in which the
taxpayer is a United States shareholder during the taxable
year.
``(3) Consolidated groups.--If a taxpayer is a member of an
affiliated group of corporations filing a consolidated return
under section 1501 for the taxable year, an election under this
section shall be made by the common parent of the affiliated
group which includes the taxpayer, and shall apply to all
members of the affiliated group.
``(e) Regulations.--The Secretary shall prescribe such regulations
as may be necessary and appropriate to carry out the purposes of this
section, including regulations under section 55 and regulations
addressing corporations that, during the fixed base period or
thereafter, join or leave an affiliated group of corporations filing a
consolidated return.''.
(b) Clerical Amendment.--The table of sections for such subpart is
amended by adding at the end the following new item:
``Sec. 965. Toll tax imposed on excess
qualified foreign distribution
amount.''.
(c) Effective Date.--The amendments made by this section shall
apply only to the first taxable year of the electing taxpayer ending
120 days after the date of the enactment of this Act.
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