[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 430 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 430

    To establish The National Dividend Plan by reforming the budget 
process, and by amending the Internal Revenue Code of 1986 to eliminate 
the double tax on dividends, to allocate corporate income tax revenues 
  for payments to qualified registered voters, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 5, 1993

Mr. Tauzin introduced the following bill; which was referred jointly to 
               the Committees on Ways and Means and Rules

_______________________________________________________________________

                                 A BILL


 
    To establish The National Dividend Plan by reforming the budget 
process, and by amending the Internal Revenue Code of 1986 to eliminate 
the double tax on dividends, to allocate corporate income tax revenues 
  for payments to qualified registered voters, and for other 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 ``National Dividend Act of 1993''.

SEC. 2. NATIONAL DIVIDEND PAYMENT TO REGISTERED VOTERS.

    (a) Payments for Disbursements to Registered Voters of Each 
State.--
            (1) In general.--The Secretary shall pay during each 
        calendar year after the Base Year to the chief financial 
        officer of each State an amount equal to the National Dividend 
        Payment for the immediately preceding calendar year multiplied 
        by the number (provided to the Secretary by such officer) of 
        individuals who are qualified registered voters of such State 
        for such preceding year.
            (2) Semiannual installments.--One-half of the amount 
        payable under paragraph (1) to the chief financial officer of 
        any State during the 3 calendar years immediately following the 
        Base Year shall be paid to such officer at the beginning of the 
        second and fourth calendar quarters of such year.
            (3) Quarterly installments.--One-fourth of the amount 
        payable under paragraph (1) to the chief financial officer of 
        any State during any calendar year subsequent to the third 
        calendar year immediately following the Base Year shall be paid 
        to such officer at the beginning of each calendar quarter of 
        such year.
    (b) Amount of National Dividend Payment.--The National Dividend 
Payment for any calendar year shall be an amount equal to--
            (1) the excess of--
                    (A) the sum of--
                            (i) the aggregate amount transferred under 
                        section 3(b)(3) to the National Dividend 
                        Payment Trust Fund during the fiscal year 
                        ending during such calendar year, plus
                            (ii) any interest credited during such 
                        fiscal year to the Trust Fund under section 
                        3(c)(2)(B)(iii), over
                    (B) the sum of--
                            (i) the amount transferred out of the Trust 
                        Fund during such fiscal year under section 
                        3(b)(4), plus
                            (ii) the deficit adjustment amount for such 
                        fiscal year calculated pursuant to section 6 of 
                        this Act,
        divided by
            (2) the number of individuals who are qualified registered 
        voters for such calendar year as determined on the basis of 
        reports submitted not later than November 30 of such calendar 
        year by the chief financial officer of each State to the 
        Secretary (in such manner as the Secretary may by regulations 
        prescribe).
    (c) Method of Disbursements to Qualified Registered Voters.--
            (1) In general.--The National Dividend Payment for any 
        calendar year shall be paid to each qualified registered voter 
        of a State by an incorporated bank which is selected (in 
        accordance with paragraph (2)) for such year by the chief 
        financial officer of such State as the disbursing agent of such 
        State.
            (2) Selection of disbursing agent.--Any incorporated bank 
        may be selected as the disbursing agent of any State under 
        paragraph (1) by the chief financial officer of such State if--
                    (A) such bank is determined by such officer to be 
                operating within such State,
                    (B) such bank submits a sealed bid to such officer 
                in which such bank--
                            (i) specifies an amount which it agrees to 
                        pay such State as consideration for each year 
                        for which it pays National Dividend Payments to 
                        qualified registered voters of such State,
                            (ii) specifies procedures which it agrees 
                        to follow in making such payments, and
                            (iii) agrees to limit the investment of any 
                        funds received for the purpose of making such 
                        payments to interest-bearing obligations of the 
                        United States or to obligations guaranteed as 
                        to both principal and interest by the United 
                        States,
                and
                    (C) such officer approves such bid, taking into 
                account with respect to all such bids--
                            (i) the amount of such consideration,
                            (ii) any previous experience of such bank 
                        in making such payments, and
                            (iii) the ability and reliability of such 
                        bank to make such payments.
            (3) Transfer of funds to disbursing agent.--Funds received 
        under subsection (a) by the chief financial officer of any 
        State shall be transferred by such officer to the disbursing 
        agent for such State not less than 10 days after the date such 
        officer receives such funds.
            (4) Payment by disbursing agent.--A National Dividend 
        Payment shall be paid by the disbursing agent of each State to 
        each qualified registered voter of such State who is included 
        on a list provided to such agent by the chief financial officer 
        of such State. Such payment shall be in the form of a 
        negotiable instrument--
                    (A) which is drawn on an account of such agent,
                    (B) which is made payable to such voter, and
                    (C) which states, on the endorsement side of such 
                instrument, that--
                            (i) such instrument must be negotiated 
                        within the 90-day period which begins on the 
                        date such instrument is drawn,
                            (ii) each qualified registered voter is 
                        entitled to only 1 National Dividend Payment 
                        for each calendar year, and
                            (iii) any individual who negotiates any 
                        such instrument and who is not entitled to the 
                        payment made by such instrument is subject 
                        under Federal law to fine, or imprisonment, or 
                        both.
            (5) National dividend payment installments.--
                    (A) Semiannual installments.--One-half of the 
                amount of the National Dividend Payment payable during 
                the 3 calendar years immediately following the Base 
                Year to any qualified registered voter shall be paid to 
                such voter at the close of the second and fourth 
                calendar quarters of such year.
                    (B) Quarterly installments.--One-fourth of the 
                National Dividend Payment payable to any qualified 
                registered voter during any calendar year subsequent to 
                the third calendar year following the Base Year shall 
                be paid to such voter at the close of each calendar 
                quarter of such year.
    (d) Qualified Registered Voter.--
            (1) In general.--For purposes of this section, an 
        individual is a qualified registered voter for any calendar 
        year if--
                    (A) such individual was entitled to vote in the 
                most recent Federal election before such calendar year, 
                and
                    (B) such individual certifies to the State or local 
                authority which supervises the voting of such 
                individual that, during such calendar year, he complies 
                with all conditions of his entitlement to vote.
            (2) Registered Voters.--In the case of any individual who 
        in any calendar year registers to vote under State or local 
        law, such registration shall be treated as complying with the 
        certification under paragraph (1)(B) for such year.
    (e) Applications Permitted.--
            (1) In general.--The chief financial officer of each State 
        may require individuals to apply to receive any National 
        Dividend Payment under this Act.
            (2) Criminal penalty.--Any person who knowingly makes any 
        false statement or false representation of a material fact in 
        any application submitted pursuant to paragraph (1) or any 
        certification under subsection (d) shall be fined not more than 
        $10,000, or imprisoned not more than 10 years, or both for each 
        such false statement or false representation.
    (f) Payments To Be Made From National Dividend Payment Trust 
Fund.--Amounts in the National Dividend Payment Trust Fund shall be 
available, to such extent and in such amounts as are provided in 
appropriation Acts, for making the payments under this section.

SEC. 3. ESTABLISHMENT OF NATIONAL DIVIDEND PAYMENT TRUST FUND.

    (a) Creation of Trust Fund.--There is hereby established in the 
Treasury of the United States a trust fund to be known as the National 
Dividend Payment Trust Fund.
    (b) Transfer of Amounts Equivalent to Corporate Income Taxes to the 
Trust Fund.--
            (1) In general.--There are hereby authorized to be 
        appropriated to the Trust Fund amounts determined by the 
        Secretary to be equivalent to amounts received in the Treasury 
        in fiscal years ending after the Base Year from the following 
        taxes:
                    (A) the taxes imposed by sections 11, 511(a) and 
                1201(a) of the Code;
                    (B) the taxes imposed by subchapter L of chapter 1 
                of the Code; and
                    (C) the tax imposed on a corporation by section 
                55(a) of the Code.
            (2) Transition rule.--In the case of the first four fiscal 
        years ending after the Base Year, the amounts authorized to be 
        appropriated to the Trust Fund for such years shall be the 
        following percentage of the amount determined under paragraph 
        (1):
                    (A) 20 percent in the case of the first such fiscal 
                year;
                    (B) 40 percent in the case of the second such 
                fiscal year;
                    (C) 60 percent in the case of the third such fiscal 
                year; and
                    (D) 80 percent in the case of the fourth such 
                fiscal year.
            (3) Method of transfer.--The amounts appropriated pursuant 
        to paragraphs (1) and (2) shall be transferred at least 
        quarterly from the general fund of the Treasury to the Trust 
        Fund on the basis of estimates made by the Secretary of the 
        amounts derived from the taxes described in paragraph (1). 
        Proper adjustments shall be made in the amounts subsequently 
        transferred to the extent such estimates are in excess of or 
        less than the amounts required to be transferred.
            (4) Transfer from trust fund for administrative expenses.--
        The Secretary may from time to time transfer from the Trust 
        Fund--
                    (A) to the general fund of the Treasury the amount 
                estimated as the costs incurred by the Department of 
                the Treasury in the administration of section 2, and
                    (B) to the Board the amount estimated by the Board 
                as its costs in carrying out its duties under this Act.
        Proper adjustments shall be made in the amounts subsequently 
        transferred to the extent such estimates are in excess of or 
        less than the amounts required to be transferred.
    (c) Trust Fund Board.--
            (1) In general.--There is hereby established a review board 
        to be known as the National Dividend Review Board which shall 
        consist of 5 members appointed by the President, by and with 
        the advice and consent of the Senate, from among individuals 
        who are not officers or employees of the Federal Government.
            (2) Duties.--
                    (A) Report.--It shall be the duty of the Board to 
                review the manner in which payments under section 2 are 
                made, to hold the Trust Fund, and to report to the 
                Congress each year on such review and on the financial 
                condition and the results of the operations of the 
                Trust Fund during the preceding fiscal year and on its 
                expected condition and operation during the next 5 
                fiscal years. Such report shall be printed as a House 
                document of the session of the Congress to which the 
                report is made.
                    (B) Investment.--
                            (i) In general.--The Board may invest any 
                        amount of the Trust Fund which the Board 
                        determines is not required to meet current 
                        payments. Such investments shall be made only 
                        in interest-bearing obligations of the United 
                        States or in obligations guaranteed as to both 
                        principal and interest by the United States. 
                        Such obligations may be acquired--
                                    (I) on original issue at the issue 
                                price, or
                                    (II) by purchase of outstanding 
                                obligations at the market price.
                        The purposes for which obligations of the 
                        United States may be issued under the Second 
                        Liberty Bond Act are hereby extended to 
                        authorize the issuance at par of special 
                        obligations exclusively to the Trust Fund. Such 
                        special obligations shall bear interest at a 
                        rate equal to the average rate of interest, 
                        computed as to the end of the calendar month 
                        next preceding the date of such issue, borne by 
                        all marketable interest-bearing obligations of 
                        the United States then forming a part of the 
                        public debt; except that if such average rate 
                        is not a multiple of one-eighth of 1 percent, 
                        the rate of interest of such special 
                        obligations shall be the multiple of one-eighth 
                        of 1 percent next lower than such average rate. 
                        Such special obligations shall be issued only 
                        if the Board determines that the purchase of 
                        other interest-bearing obligations guaranteed 
                        as to both principal and interest by the United 
                        States on original issue or at the market 
                        price, is not in the public interest.
                            (ii) Sale of obligations.--Any obligations 
                        acquired by the Trust Fund (except special 
                        obligations issued exclusively to the Trust 
                        Fund) may be sold by the Board at the market 
                        price, and such special obligations may be 
                        redeemed at par plus accrued interest.
                            (iii) Interest on certain proceeds.--The 
                        interest on, and the proceeds from the sale or 
                        redemption of, any obligations held in the 
                        Trust Fund shall be credited to and form a part 
                        of the Trust Fund.
            (3) Term, pay, and travel expenses of members.--
                    (A) Term.--Each member of the Board shall be 
                appointed for a term of 2 years; except that any member 
                appointed to fill a vacancy occurring before the 
                expiration of the term for which his predecessor was 
                appointed shall be appointed only for the remainder of 
                such term.
                    (B) Pay.--Members of the Board shall receive 
                compensation at the rate of $100 for each day they are 
                engaged in the performance of their duties as members 
                of the Board.
                    (C) Travel expenses.--While away from their homes 
                or regular places of business in performance of 
                services for the Board, members of the Board shall be 
                allowed travel expenses, including a per diem in lieu 
                of subsistence, in the same manner as persons employed 
                intermittently in the Government service are allowed 
                expenses under section 5703 of title 5 of the United 
                States Code.
    (d) Restriction on the Use of the Trust Fund.--Except as provided 
in subsection (b)(4), amounts in the Trust Fund shall be available only 
for purposes of making payments under section 2.

SEC. 4. ELIMINATION OF DOUBLE TAX ON DIVIDENDS.

    (a) Dividends Received by Individuals.--
            (1) In general.--Part III of subchapter B of chapter 1 of 
        the Code (relating to items specifically excluded from gross 
        income) is amended by inserting after section 115 the following 
        new section:

``SEC. 116. EXCLUSION OF DIVIDENDS RECEIVED BY INDIVIDUALS.

    ``(a) Exclusion.--Gross income does not include amounts received by 
an individual as dividends from domestic corporations.
    ``(b) National Dividend Payment.--For purposes of subsection (a), 
amounts received by an individual as national dividend payments under 
the National Dividend Act of 1993 shall be treated as dividends from 
domestic corporations.''
            (2) Technical, conforming, and clerical amendments.--
                    (A) The table of sections for part III of 
                subchapter B of chapter 1 of the Code is amended by 
                inserting after the item relating to section 115 the 
                following new item:

                              ``Sec. 116. Exclusion of dividends 
                                        received by individuals.''
                    (B) Subsection (g) of section 301 of the Code 
                (relating to special rules for distributions of 
                property by corporations) is amended by inserting after 
                paragraph (3) the following new paragraph (4):
            ``(4) For exclusion from gross income of dividends received 
        by individuals, see section 116.''
                    (C) Subsection (a) of section 643 of the Code 
                (relating to certain definitions with respect to the 
                taxation of estates, trusts and beneficiaries) is 
                amended by inserting after paragraph (6) the following 
                new paragraph (7):
            ``(7) Dividends.--There shall be included the amount of any 
        dividends excluded from gross income pursuant to section 116 
        (relating to exclusion of dividends).''
    (b) Dividends Received by Corporations.--
            (1) In general.--Subsection (a) of section 243 of the Code 
        (relating to dividends received by corporations) is amended to 
        read as follows:
    ``(a) General Rule.--In the case of a corporation, there shall be 
allowed as a deduction an amount equal to 100 percent of the amount 
received as dividends from a domestic corporation which is subject to 
taxation under this chapter.''
            (2) Dividends on certain preferred stock.--Section 244 of 
        the Code (relating to dividends received on certain preferred 
        stock) is amended to read as follows:

``SEC. 244. DIVIDENDS RECEIVED ON CERTAIN PREFERRED STOCK.

    ``In the case of a corporation, there shall be allowed as a 
deduction an amount computed as follows:
            ``(1) First determine the amount received as dividends on 
        the preferred stock of a public utility which is subject to 
        taxation under this chapter and with respect to which the 
        deduction provided in section 247 for dividends paid is 
        allowable.
            ``(2) Then multiply the amount determined under paragraph 
        (1) by the fraction--
                    ``(A) the numerator of which is 14 percent, and
                    ``(B) the denominator of which is that percentage 
                which equals the highest rate of tax specified in 
                section 11(b).
            ``(3) Finally ascertain the amount which is 100 percent of 
        the excess of--
                    ``(A) the amount determined under paragraph (1), 
                over
                    ``(B) the amount determined under paragraph (2).''
            (3) Technical, conforming and clerical amendments.--
                    (A) Section 243 of the Code (relating to dividends 
                received by corporations) is amended by striking out 
                subsections (b) and (c) and by redesignating 
                subsections (d) and (e) as subsections (b) and (c), 
                respectively.
                    (B) Subsection (b) of section 246 of the Code 
                (relating to rules applying to deductions for dividends 
                received) is amended--
                            (i) in paragraph (1) by striking out 
                        ``243(a)(1), 244(a)'' each time it appears and 
                        inserting in lieu thereof ``243, 244'' and by 
                        striking out ``the percentage determined under 
                        paragraph (3) of'', and
                            (ii) by striking out paragraph (3).
                    (C)(i) Subparagraph (A) of section 805(a)(4) of the 
                Code (relating to dividends received by life insurance 
                companies) is amended by striking out all that follows 
                ``subparagraph (B))'' and insert in lieu thereof a 
                period.
                    (ii) Subparagraph (B) of section 805(a)(4) of the 
                Code is amended--
                            (I) by striking out ``243(a)(1), 244(a)'' 
                        each place it appears and inserting in lieu 
                        thereof ``243, 244'',
                            (II) by striking out ``the percentage 
                        determined under section 246(b)(3) of'', and
                            (III) by striking out ``(and such 
                        limitation shall be applied as provided in 
                        section 246(b)(3))''.
                    (iii) Paragraph (4) of section 805(a) of the Code 
                is amended by striking out subparagraphs (C), (D), and 
                (E) and inserting in lieu thereof the following:
                    ``(C) Distributions out of tax exempt interest.--No 
                deduction shall be allowed by reason of this paragraph 
                with respect to any dividend to the extent the dividend 
                is a distribution out of tax-exempt interest.''
                    (D) Subparagraph (C) of section 861(a)(2) of the 
                Code (relating to income from sources within the United 
                States) is amended by striking out ``243(e)'' and 
                inserting in lieu thereof ``243(c)''.
                    (E) Subparagraph (B) of section 1504(c)(2) of the 
                Code (relating to definition of includible insurance 
                companies) is amended by striking out clause (i) and by 
                redesignating clauses (ii) and (iii) as clauses (i) and 
                (ii), respectively.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

SEC. 5. LIMITATION ON CORPORATE INCOME TAXES AND ON NEW FEDERAL 
              SPENDING.

    (a) Limitation on Corporate Income Taxes.--Notwithstanding any 
other provision of law, the maximum rate of tax imposed by section 11 
of the Code shall not be increased above 34 percent.
    (b) Limitation on Federal Spending.--Section 301 of the 
Congressional Budget and Impoundment Control Act of 1974 is amended by 
inserting after subsection (i) the following new subsection (j):
    ``(j) Limitation on Federal Spending.--
          ``(1) Budget resolutions, etc.--It shall not be in order in 
        either the House of Representatives or the Senate to consider 
        any concurrent resolution on the budget for a fiscal year 
        beginning after September 30, 1993 under this section or to 
        consider any amendment to such concurrent resolution or to 
        consider a conference report on such concurrent resolution if 
        the level of total budget outlays for such fiscal year in such 
        concurrent resolution or amendment or conference report exceeds 
        the recommended level of total budget outlays in the concurrent 
        resolution under this section for the fiscal year beginning 
        October 1, 1993.
            ``(2) Continuing resolution.--For purposes of paragraph 
        (1), a joint resolution making appropriations of money out of 
        the Treasury not otherwise appropriated and out of other 
        applicable revenues, receipts and funds shall be treated as a 
        concurrent resolution on the budget.''

SEC. 6. CALCULATION OF DEFICIT ADJUSTMENT AMOUNT.

    The amount to be deducted under section 2(b)(1)(B)(ii) of this Act 
as the deficit adjustment in any calendar year shall be the amount, if 
any, by which total budget outlays exceed Federal revenues for the 
fiscal year ending in such calendar year.

SEC. 7. DEFINITIONS.

    For purposes of this Act--
            (1) Base year.--The term ``Base Year'' means the first 
        calendar year after 1992 in which ends a fiscal year in which 
        total budget outlays do not exceed Federal revenues.
            (2) Board.--The term ``Board'' means the National Dividend 
        Review Board established by section 3(c).
            (3) Federal election.--The term ``Federal election'' means 
        any general election in which Members of (including any 
        Delegate or Resident Commissioner to) Congress are elected or 
        in which the President and Vice President are elected.
            (4) Code.--The term ``Code'' means the Internal Revenue 
        Code of 1986.
            (5) National dividend payment.--The term ``National 
        Dividend Payment'' means the amount determined under section 
        2(b).
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury or his delegate.
            (7) State.--The term ``State'' includes the District of 
        Columbia, the Commonwealth of Puerto Rico, and any territory or 
        possession of the United States.
            (8) Trust fund.--The term ``Trust Fund'' means the National 
        Dividend Payment Trust Fund established by section 3(a).

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