[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1162 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 1162

To amend the Internal Revenue Service Code of 1986 to allow a deduction 
  for certain distributions from a controlled foreign corporation to 
     encourage companies to invest in worker hiring and training, 
      infrastructure investments, capital investments, financial 
      stabilization of the company, and research and development.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 6, 2003

  Mr. Smith of Washington (for himself, Mr. Dooley of California, Mr. 
 McIntyre, Mr. Turner of Texas, Ms. Eshoo, Ms. Lofgren, Mr. Reyes, Mr. 
 Cooper, Mr. John, Mrs. Tauscher, Mr. Case, Mrs. McCarthy of New York, 
Mrs. Jones of Ohio, Mr. Kind, Mr. Scott of Georgia, Mr. Baird, and Mr. 
Davis of Florida) introduced the following bill; which was referred to 
                    the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Service Code of 1986 to allow a deduction 
  for certain distributions from a controlled foreign corporation to 
     encourage companies to invest in worker hiring and training, 
      infrastructure investments, capital investments, financial 
      stabilization of the company, and research and development.

    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 ``Invest in America Act of 2003''.

SEC. 2. DEDUCTION BY UNITED STATES SHAREHOLDERS FOR DIVIDENDS RECEIVED 
              FROM A CONTROLLED FOREIGN CORPORATION.

    (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. DIVIDENDS RECEIVED DEDUCTION.

    ``(a) General Rule.--In the case of a United States shareholder, if 
such shareholder elects the application of this section, there shall be 
allowed as a deduction for the taxable year an amount equal to the 
excess of--
            ``(1) 85 percent of qualified distributions, over
            ``(2) the average of qualified distributions amounts for 
        the period of 3 taxable years (or the period the taxpayer was 
        in existence, if shorter) ending in 2000, 2001, and 2002.
    ``(b) Qualified Distribution.--
            ``(1) In general.--The term `qualified distribution' means, 
        with respect to a taxable year, the sum of--
                    ``(A) dividend (as defined by section 316), and
                    ``(B) the amount described in section 951(a)(1)(B),
        received from a controlled foreign corporation during the first 
        taxable year of the shareholder ending after 90 days after the 
        date of the enactment of the Invest in America Act of 2003.
            ``(2) Exception.--Such term shall not include amounts 
        described in section 951(a)(1)(A).
            ``(3) Requirement to reinvest in united states.--No amount 
        described in subparagraph (A) or (B) of paragraph (1) shall be 
        treated as a qualified distribution for purposes of this 
        section unless such amount is reinvested in the United States 
        pursuant to a plan approved by the president or chief executive 
        officer of the United States shareholder prior to the 
        distribution from which such amount is derived and subsequently 
        approved by the Board of Directors (or management committee) of 
        such United States shareholder, which plan shall describe 
        expenditures to be made from such amount.
    ``(c) Disallowance of foreign tax credit.--
            ``(1) In general.--For purposes of this section, no credit 
        shall be allowed under section 901 for any taxes paid or 
        accrued (or treated as paid or accrued) with respect to the 
        portion of the qualified distribution allowed as a deduction 
        under subsection (a) for the taxable year.
            ``(2) Portion determined.--For purposes of paragraph (1), 
        the portion of the qualified distribution to which paragraph 
        (1) applies shall be the amount which bears the same ratio to 
        the credit allowed under section 901 (determined without regard 
        to this paragraph) for the taxable year as such portion bears 
        to the total qualified distributions for the taxable year.
    ``(d) Termination.--Subsection (a) shall apply only to the first 
taxable year of a United States shareholder ending after 90 days after 
the date of the enactment of the Invest in America Act of 2003.''.
    (b) Alternative Minimum Tax.--Subparagraph (C) of section 
56(g)(4)(C) of such Code is amended by adding at the end the following 
new clause:
                            ``(v) Special rule for certain 
                        distributions from controlled foreign 
                        corporations.--Clause (i) shall not apply to 
                        any deduction allowable under section 965.''.
    (c) Clerical Amendment.--The table of sections for subpart F of 
part III of subchapter N of chapter 1 of such Code is amended by adding 
at the end the following new item:

                              ``Sec. 965. Dividends received 
                                        deduction.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.
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