[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 592 Introduced in Senate (IS)]


108th CONGRESS
  1st Session
                                 S. 592

To establish an Office of Manufacturing in the Department of Commerce, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 11, 2003

 Mr. Hollings introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To establish an Office of Manufacturing in the Department of Commerce, 
                        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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Save American 
Manufacturing Act of 2003''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

        Sec. 1. Short title; table of contents.
                    TITLE I--OFFICE OF MANUFACTURING

        Sec. 101. Establishment of Office of Manufacturing.
           TITLE II--WTO DISPUTE SETTLEMENT REVIEW COMMISSION

        Sec. 201. Congressional findings and purpose.
        Sec. 202. Establishment of Commission.
        Sec. 203. Duties of the Commission.
        Sec. 204. Powers of the Commission.
        Sec. 205. Review of dispute settlement procedures and 
                            participation in the WTO.
        Sec. 206. Participation in WTO panel proceedings.
        Sec. 207. Definitions.
 TITLE III--REFORM OF EXPORT-IMPORT BANK AND OVERSEAS PRIVATE INVESTOR 
        CORPORATION; ABOLITION OF INTERNATIONAL TRADE COMMISSION

        Sec. 301. Restrictions on Export-Import Bank assistance.
        Sec. 302. Restrictions on the Overseas Private Investment 
                            Corporation.
        Sec. 303. Abolition of International Trade Commission
                        TITLE IV--MISCELLANEOUS

        Sec. 401. Buy-American requirement imposed on Department of 
                            Homeland Security; exceptions.
        Sec. 402. Prohibition on sale of child-labor manufactured goods 
                            in interstate commerce.
        Sec. 403. Additional customs agents to combat inappropriate 
                            transshipment of textiles.
        Sec. 404. Sense of the Senate regarding Byrd Amendment.
               TITLE V--INTERNAL REVENUE CODE AMENDMENTS

        Sec. 501. Disincentivization of corporate expatriation to avoid 
                            United States income tax.
        Sec. 502. Inclusion of income from U.S. imports in Subpart F 
                            income.
        Sec. 503. Denial of treaty benefits for certain deductible 
                            payments.

SEC. 101. ESTABLISHMENT OF OFFICE OF MANUFACTURING.

    (a) In General.--
            (1) Establishment.--There is established within the 
        Department of Commerce an Office of Manufacturing. The office 
        shall be responsible for gathering, coordinating, and analyzing 
        all the information necessary for the Secretary of Commerce to 
        make any determinations the Secretary is required by law to 
        make about the industrial base of the United States.
            (2) Staff.--The Secretary shall ensure that the office 
        includes appropriate staff to carry out the functions of the 
        office under subsection (b), including individuals with 
        training, expertise, or experience in--
                    (A) economic analysis;
                    (B) the industrial base of the United States for 
                national defense-related production;
                    (C) the industrial base of the United States not 
                related to national defense-related production;
                    (D) technological developments;
                    (E) trends in manufacturing in the United States; 
                and
                    (F) national security.
            (3) Detailees.--In addition to employees of the Department 
        of Commerce, the Secretary may accept, on nonreimbursable 
        detail to the office, employees of other Federal departments 
        and agencies.
    (b) Functions.--The office shall be responsible for--
            (1) developing policies designed to preserve and enhance 
        the industrial base of the United States;
            (2) monitoring and evaluating worldwide technological 
        developments in industry sectors critical to the national 
        security interests of the United States;
            (3) conducting assessments of those sectors of the 
        industrial base of the United States that are involved in 
        national defense-related production, including analysis of how 
        those sectors are affected by technological developments, 
        technology transfers, foreign competition, and imported goods;
            (4) conducting assessments of--
                    (A) those sectors of the industrial base of the 
                United States that are of critical importance to the 
                national security interests of the United States; and
                    (B) the economy of the United States.
    (c) Reports.--The Secretary shall make an annual report to the 
Senate Committee on Commerce, Science, and Technology and the House of 
Representatives Committee on Energy and Commerce that--
            (1) describes the operations of the office during the 12-
        month period to which the report relates; and
            (2) sets forth the Secretary's views on the ability of the 
        United States government to support the industrial base of the 
        United States.

           TITLE II--WTO DISPUTE SETTLEMENT REVIEW COMMISSION

SEC. 201. CONGRESSIONAL FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds the following:
            (1) The United States joined the World Trade Organization 
        as a founding member with the goal of creating an improved 
        global trading system.
            (2) The American people must receive assurances that United 
        States sovereignty will be protected, and United States 
        interests will be advanced, within the global trading system 
        which the WTO will oversee.
            (3) The survival of the new WTO requires the ability to 
        respond effectively to unfair or otherwise harmful trade 
        practices.
            (4) United States support for the WTO depends upon 
        obtaining mutual trade benefits through the openness of foreign 
        markets and the maintenance of effective United States and WTO 
        remedies against unfair or otherwise harmful trade practices.
            (5) Congress passed the Uruguay Round Agreements Act based 
        upon its understanding that effective trade remedies would not 
        be eroded. These remedies are essential to continue the process 
        of opening foreign markets to imports of goods and services and 
        to prevent harm to American industry and agriculture 
        particularly through foreign dumping and subsidization.
            (6) The continued support of the Congress for the WTO is 
        dependent upon a WTO dispute settlement system that--
                    (A) operates in a fair and impartial manner;
                    (B) does not add to the obligations of or diminish 
                the rights of the United States under the Uruguay Round 
                agreements; and
                    (C) does not exceed its authority, scope, or 
                established standard of review.
    (b) Purpose.--It is the purpose of this title to provide for the 
establishment of the WTO Dispute Settlement Review Commission to 
achieve the goals described in subsection (a)(6).

SEC. 202. ESTABLISHMENT OF COMMISSION.

    (a) Establishment.--There is established a commission to be known 
as the WTO Dispute Settlement Review Commission (hereafter in this 
title referred to as the ``Commission'').
    (b) Membership.--
            (1) Composition.--The Commission shall be composed of 5 
        members all of whom shall be judges of the Federal judicial 
        circuits and shall be appointed by the President, after 
        consultation with the Majority Leader and Minority Leader of 
        the House of Representatives, and the Majority Leader and 
        Minority Leader of the Senate.
            (2) Date.--The appointments of the members of the 
        Commission shall be made no later than 60 days after the date 
        of the enactment of this Act.
    (c) Period of Appointment; Vacancies.--
            (1) In general.--Members of the Commission first appointed 
        shall each be appointed for a term of 5 years. After the 
        initial 5-year term, 3 members of the Commission shall be 
        appointed for terms of 3 years and the remaining 2 members 
        shall be appointed for terms of 2 years.
            (2) Vacancies.--
                    (A) In general.--Any vacancy on the Commission 
                shall not affect its powers, but shall be filled in the 
                same manner as the original appointment and shall be 
                subject to the same conditions as the original 
                appointment.
                    (B) Unexpired term.--An individual chosen to fill a 
                vacancy shall be appointed for the unexpired term of 
                the member replaced.
    (d) Initial Meeting.--No later than 30 days after the date on which 
all members of the Commission have been appointed, the Commission shall 
hold its first meeting.
    (e) Meetings.--The Commission shall meet at the call of the 
Chairman.
    (f) Quorum.--A majority of the members of the Commission shall 
constitute a quorum, but a lesser number of members may hold hearings.
    (g) Chairman and Vice Chairman.--The Commission shall select a 
Chairman and Vice Chairman from among its members.

SEC. 203. DUTIES OF THE COMMISSION.

    (a) Review of WTO Dispute Settlement Reports.--
            (1) In general.--The Commission shall review--
                    (A) all reports of dispute settlement panels or the 
                Appellate Body of the World Trade Organization in 
                proceedings initiated by other parties to the WTO which 
                are adverse to the United States and which are adopted 
                by the Dispute Settlement Body, and
                    (B) upon request of the United States Trade 
                Representative, any other report of a dispute 
                settlement panel or the Appellate Body which is adopted 
                by the Dispute Settlement Body.
            (2) Scope of review.--In the case of reports described in 
        paragraph (1), the Commission shall review the report and 
        determine whether--
                    (A) the panel or the Appellate Body, as the case 
                may be, exceeded its authority or its terms of 
                reference;
                    (B) the panel or the Appellate Body, as the case 
                may be, added to the obligations of or diminished the 
                rights of the United States under the Uruguay Round 
                agreement which is the subject of report;
                    (C) the panel or the Appellate Body, as the case 
                may be, acted arbitrarily or capriciously, engaged in 
                misconduct, or demonstrably departed from the 
                procedures specified for panels and Appellate Bodies in 
                the applicable Uruguay Round Agreement; and
                    (D) the report of the panel or the Appellate Body, 
                as the case may be, deviated from the applicable 
                standard of review, including in antidumping, 
                countervailing duty, and other unfair trade remedy 
                cases, the standard of review set forth in Article 17.6 
                of the Agreement on Implementation of Article VI of the 
                General Agreement on Tariffs and Trade 1994.
            (3) Affirmative determination.--If the Commission makes an 
        affirmative determination with respect to the action of a panel 
        or an Appellate Body under subparagraph (A), (B), (C), or (D) 
        of paragraph (2), the Commission shall determine whether the 
        action of the panel or Appellate Body materially affected the 
        outcome of the report of the panel or Appellate Body.
    (b) Determination; Report.--
            (1) Determination.--No later than 120 days after the date 
        of a report of a panel or Appellate Body described in 
        subsection (a)(1) is adopted by the Dispute Settlement Body, 
        the Commission shall make a written determination with respect 
        to matters described in subsections (a)(2) and (a)(3).
            (2) Reports.--The Commission shall report the 
        determinations described in paragraph (1) to the Committee on 
        Ways and Means of the House of Representatives and the 
        Committee on Finance of the Senate.

SEC. 204. POWERS OF THE COMMISSION.

    (a) Hearings.--The Commission may hold such hearings, sit and act 
at such times and places, take such testimony, and receive such 
evidence as the Commission considers advisable to carry out the 
purposes of this title.
    (b) Information From Interested Parties and Federal Agencies.--
            (1) Notice of panel or appellate body report.--The United 
        States Trade Representative shall advise the Commission no 
        later than 5 days after the date the Dispute Settlement Body 
        adopts the report of a panel or Appellate Body that is adverse 
        to the United States and shall immediately publish notice of 
        such advice in the Federal Register, along with notice of an 
        opportunity for interested parties to submit comments to the 
        Commission.
            (2) Submissions and requests for information.--Any 
        interested party may submit comments to the Commission 
        regarding the panel or Appellate Body report. The Commission 
        may also secure directly from any Federal department or agency 
        such information as the Commission considers necessary to carry 
        out the provisions of this title. Upon request of the Chairman 
        of the Commission, the head of such department or agency shall 
        furnish such information to the Commission.
            (3) Access to panel and appellate body documents.--The 
        United States Trade Representative shall make available to the 
        Commission all submissions and relevant documents relating to 
        the panel or Appellate Body report, including any information 
        contained in such submissions identified by the provider of the 
        information as proprietary information or information treated 
        as confidential by a foreign government.

SEC. 205. REVIEW OF DISPUTE SETTLEMENT PROCEDURES AND PARTICIPATION IN 
              THE WTO.

    (a) Affirmative Report by Commission.--
            (1) In general.--If a joint resolution described in 
        subsection (b)(1) is enacted into law pursuant to the 
        provisions of subsection (c), the President shall undertake 
        negotiations to amend or modify the rules and procedures of the 
        Understanding on Rules and Procedures Governing the Settlement 
        of Disputes to which such joint resolution relates.
            (2) 3 affirmative reports by commission.--If a joint 
        resolution described in subsection (b)(2) is enacted into law 
        pursuant to the provisions of subsection (c), the approval of 
        the Congress, provided under section 101(a) of the Uruguay 
        Round Agreements Act, of the WTO Agreement shall cease to be 
        effective in accordance with the provisions of the joint 
        resolution and the United States shall cease to be a member of 
        the WTO.
    (b) Joint Resolutions Described.--
            (1) In general.--For purposes of subsection (a)(1), a joint 
        resolution is described in this paragraph, if it is a joint 
        resolution of the 2 Houses of Congress and the matter after the 
        resolving clause of such joint resolution is as follows: ``That 
        the Congress authorizes and directs the President to undertake 
        negotiations to amend or modify the rules and procedures of the 
        Understanding on Rules and Procedures Governing the Settlement 
        of Disputes relating to ____ with respect to the affirmative 
        determination submitted to the Congress by the WTO Dispute 
        Settlement Review Commission on ____'', the first blank space 
        being filled with the specific rules and procedures with 
        respect to which the President is to undertake negotiations and 
        the second blank space being filled with the date of the 
        affirmative determination submitted to the Congress by the 
        Commission pursuant to section 203(b) which has given rise to 
        the joint resolution.
            (2) Withdrawal resolution.--For purposes of subsection 
        (a)(2), a joint resolution is described in this paragraph, if 
        it is a joint resolution of the 2 Houses of Congress and the 
        matter after the resolving clause of such joint resolution is 
        as follows: ``That the Congress authorizes and directs the 
        President to undertake negotiations to amend or modify the 
        rules and procedures of the Understanding on Rules and 
        Procedures Governing the Settlement of Disputes relating to 
        ____ with respect to the affirmative report submitted to the 
        Congress by the WTO Dispute Settlement Review Commission on 
        ____ and if such negotiations do not result in a satisfactory 
        solution by ____, the Congress withdraws its approval, provided 
        under section 101(a) of the Uruguay Round Agreements Act, of 
        the WTO Agreement as defined in section 2(9) of that Act'', the 
        first blank space being filled with the specific rules and 
        procedures with respect to which the President is to undertake 
        negotiations, the second blank space being filled with the date 
        of the affirmative determination submitted to the Congress by 
        the Commission pursuant to section 203(b) which has given rise 
        to the joint resolution, and the third blank space being filled 
        with the date the Congress withdraws its approval of the WTO 
        Agreement.
    (c) Procedural Provisions.--
            (1) In general.--The requirements of this subsection are 
        met if the joint resolution is enacted in accordance with this 
        subsection, and--
                    (A) in the case of a joint resolution described in 
                subsection (b)(1) the Congress adopts and transmits the 
                joint resolution to the President before the end of the 
                90-day period (excluding any day described in section 
                154(b) of the Trade Act of 1974), beginning on the date 
                on which the Congress receives an affirmative 
                determination from the Commission described in section 
                203(b), or
                    (B) in the case of a joint resolution described in 
                subsection (b)(2), the Commission has made 3 
                affirmative determinations described in section 203(b) 
                during a 5-year period, and the Congress adopts and 
                transmits the joint resolution to the President before 
                the end of the 90-day period (excluding any day 
                described in section 154(b) of the Trade Act of 1974), 
                beginning on the date on which the Congress receives 
                the third such affirmative determination.
            (2) Presidential veto.--In any case in which the President 
        vetoes the joint resolution, the requirements of this 
        subsection are met, if each House of Congress votes to override 
        that veto on or before the later of the last day of the 90-day 
        period referred to in subparagraph (A) or (B), whichever is 
applicable, or the last day of the 15-day period (excluding any day 
described in section 154(b) of the Trade Act of 1974) beginning on the 
date on which the Congress receives the veto message from the 
President.
            (3) Introduction.--
                    (A) Time.--A joint resolution to which this section 
                applies may be introduced at any time on or after the 
                date on which the Commission transmits to the Congress 
                an affirmative determination described in section 
                203(b), and before the end of the 90-day period 
                referred to in subparagraph (A) or (B), as the case may 
                be.
                    (B) Any member may introduce.--A joint resolution 
                described in subsection (b) may be introduced in either 
                House of the Congress by any Member of such House.
            (4) Expedited procedures.--
                    (A) General rule.--Subject to the provisions of 
                this subsection, the provisions of subsections (b), 
                (d), (e), and (f) of section 152 of the Trade Act of 
                1974 (19 U.S.C. 2192(b), (d), (e), and (f)) apply to 
                joint resolutions described in subsection (b) to the 
                same extent as such provisions apply to resolutions 
                under such section.
                    (B) Report or discharge of committee.--If the 
                committee of either House to which a joint resolution 
                has been referred has not reported it by the close of 
                the 45th day after its introduction (excluding any day 
                described in section 154(b) of the Trade Act of 1974), 
                such committee shall be automatically discharged from 
                further consideration of the joint resolution and it 
                shall be placed on the appropriate calendar.
                    (C) Finance and ways and means committees.--It is 
                not in order for--
                            (i) the Senate to consider any joint 
                        resolution unless it has been reported by the 
                        Committee on Finance or the committee has been 
                        discharged under subparagraph (B); or
                            (ii) the House of Representatives to 
                        consider any joint resolution unless it has 
                        been reported by the Committee on Ways and 
                        Means or the committee has been discharged 
                        under subparagraph (B).
                    (D) Special rule for house.--A motion in the House 
                of Representatives to proceed to the consideration of a 
                joint resolution may only be made on the second 
                legislative day after the calendar day on which the 
                Member making the motion announces to the House his or 
                her intention to do so.
            (5) Consideration of second resolution not in order.--It 
        shall not be in order in either the House of Representatives or 
        the Senate to consider a joint resolution (other than a joint 
        resolution received from the other House), if that House has 
        previously adopted a joint resolution under this section 
        relating to the same matter.
    (d) Rules of House of Representatives and Senate.--This section is 
enacted by the Congress--
            (1) as an exercise of the rulemaking power of the House of 
        Representatives and the Senate, respectively, and as such is 
        deemed a part of the rules of each House, respectively, and 
        such procedures supersede other rules only to the extent that 
        they are inconsistent with such other rules; and
            (2) with the full recognition of the constitutional right 
        of either House to change the rules (so far as relating to the 
        procedures of that House) at any time, in the same manner, and 
        to the same extent as any other rule of that House.

SEC. 206. PARTICIPATION IN WTO PANEL PROCEEDINGS.

    (a) In General.--If the United States Trade Representative, in 
proceedings before a dispute settlement panel or the Appellate Body of 
the WTO, seeks--
            (1) to enforce United States rights under a multilateral 
        trade agreement, or
            (2) to defend a challenged action or determination of the 
        United States Government,
a private United States person that is supportive of the United States 
Government's position before the panel or Appellate Body and that has a 
direct economic interest in the panel's or Appellate Body's resolution 
of the matters in dispute shall be permitted to participate in 
consultations and panel proceedings. The Trade Representative shall 
issue regulations, consistent with subsections (b) and (c), ensuring 
full and effective participation by any such private person.
    (b) Access to Information.--The United States Trade Representative 
shall make available to persons described in subsection (a) all 
information presented to or otherwise obtained by the Trade 
Representative in connection with a WTO dispute settlement proceeding. 
The United States Trade Representative shall promulgate regulations 
implementing a protective order system to protect information 
designated by the submitting member as confidential.
    (c) Participation in Panel Process.--Upon request from a person 
described in subsection (a), the United States Trade Representative 
shall--
            (1) consult in advance with such person regarding the 
        content of written submissions from the United States to the 
        WTO panel concerned or to the other member countries involved;
            (2) include, where appropriate, such person or its 
        appropriate representative as an advisory member of the 
        delegation in sessions of the dispute settlement panel;
            (3) allow such special delegation member, where such member 
        would bring special knowledge to the proceeding, to appear 
        before the panel, directly or through counsel, under the 
        supervision of responsible United States Government officials; 
        and
            (4) in proceedings involving confidential information, 
        allow appearance of such person only through counsel as a 
        member of the special delegation.

SEC. 207. DEFINITIONS.

    For purposes of this title:
            (1) Appellate body.--The term ``Appellate Body'' means the 
        Appellate Body established under Article 17.1 of the Dispute 
        Settlement Understanding.
            (2) Adverse to the united states.--The term ``adverse to 
        the United States'' includes any report which holds any law, 
        regulation, or application thereof by a government agency to be 
        inconsistent with international obligations under the Uruguay 
        Round Agreement (or a nullification or impairment thereof), 
        whether or not there are other elements of the decision which 
        favor arguments made by the United States.
            (3) Dispute settlement panel; panel.--The terms ``dispute 
        settlement panel'' and ``panel'' mean a panel established 
        pursuant to Article 6 of the Dispute Settlement Understanding.
            (4) Dispute settlement body.--The term ``Dispute Settlement 
        Body'' means the Dispute Settlement Body administering the 
        rules and procedures set forth in the Dispute Settlement 
        Understanding.
            (5) Dispute settlement understanding.--The term ``Dispute 
        Settlement Understanding'' means the Understanding on Rules and 
        Procedures Governing the Settlement of Disputes referred to in 
        section 101(d)(16) of the Uruguay Round Agreements Act.
            (6) Uruguay round agreement.--The term ``Uruguay Round 
        Agreement'' means one or more of the agreements described in 
        section 101(d) of the Uruguay Round Agreements Act.
            (7) World trade organization; wto.--The terms ``World Trade 
        Organization'' and ``WTO'' mean the organization established 
        pursuant to the WTO Agreement.
            (8) WTO agreement.--The term ``WTO Agreement'' means the 
        Agreement Establishing the World Trade Organization entered 
        into on April 15, 1994.

 TITLE III--REFORM OF EXPORT-IMPORT BANK AND OVERSEAS PRIVATE INVESTOR 
                              CORPORATION

SEC. 301. RESTRICTIONS ON EXPORT-IMPORT BANK ASSISTANCE.

    Section 2 of the Act of July 31, 1945 (12 U.S.C. 635) is amended by 
adding at the end the following:
    ``(g) United States Content Requirements.--Notwithstanding any 
other provision of law, the Bank may not guarantee, insure, extend 
credit, or participate in the extension of credit in connection with 
any project or activity in connection with the production of any 
commodity less than 80 percent of the value of which is attributable to 
content produced, manufactured, mined, or grown in the United 
States.''.

SEC. 302. RESTRICTIONS ON THE OVERSEAS PRIVATE INVESTMENT CORPORATION.

    Section 231A of the Foreign Assistance Act of 1961 (22 U.S.C. 
2191a) is amended--
            (1) by redesignating subsection (c) as subsection (d); and
            (2) by inserting after subsection (b) the following:
    ``(c) United States Content Requirements.--Notwithstanding any 
other provision of law, the Corporation may not insure, reinsure, 
guarantee, or finance a project if the project involves the production 
of any commodity less than 80 percent of the value of which is 
attributable to content produced, manufactured, mined, or grown in the 
United States.''.

SEC. 303. ABOLITION OF INTERNATIONAL TRADE COMMISSION FUNCTIONS.

    (a) Abolishment of ITC.--Effective on the first day of the seventh 
month beginning after the date of enactment of this Act, the United 
States International Trade Commission established by section 330 of the 
Tariff Act of 1930 (19 U.S.C. 1330) as in effect on the last day of the 
sixth month beginning after the date of enactment of this Act is 
abolished.
    (b) Transfer of Functions.--Except as otherwise provided in this 
Act, all functions that on the last day of the sixth month beginning 
after the date of enactment of this Act are authorized to be performed 
by the United States International Trade Commission are transferred to 
the Department of Commerce effective on the first day of the seventh 
month beginning after the date of enactment of this Act and shall be 
performed by the Assistant Secretary of Commerce for Import 
Administration.
    (c) Determination of Certain Functions.--If necessary, the Office 
of Management and Budget shall make any determination of the functions 
that are transferred under this section.
    (d) Incidental Transfers.--The Director of the Office of Management 
and Budget, in consultation with the Secretary of Commerce, shall make 
such determinations as may be necessary with regard to the functions, 
offices, or portions thereof transferred by this Act, and make such 
additional incidental dispositions of personnel, assets, liabilities, 
grants, contracts, property, records, and unexpended balances of 
appropriations, authorizations, allocations, and other funds held, 
used, arising from, available to, or to be made available in connection 
with such functions, offices, or portions thereof, as may be necessary 
to carry out this Act. The Director shall provide for the termination 
of the affairs of all entities terminated by this Act and, in 
consultation with the Administrator, for such further measures and 
dispositions as may be necessary to effectuate the purposes of this 
Act.

                        TITLE IV--MISCELLANEOUS

SEC. 401. BUY-AMERICAN REQUIREMENT IMPOSED ON DEPARTMENT OF HOMELAND 
              SECURITY; EXCEPTIONS.

    (a) Requirement.--Except as provided in subsections (c) through 
(e), funds appropriated or otherwise available to the Department of 
Homeland Security may not be used for the procurement of an item 
described in subsection (b) if the item is not grown, reprocessed, 
reused, or produced in the United States.
    (b) Covered Items.--An item referred to in subsection (a) is any of 
the following:
            (1) An article or item of--
                    (A) food;
                    (B) clothing;
                    (C) tents, tarpaulins, or covers;
                    (D) cotton and other natural fiber products, woven 
                silk or woven silk blends, spun silk yarn for cartridge 
                cloth, synthetic fabric or coated synthetic fabric 
                (including all textile fibers and yarns that are for 
                use in such fabrics), canvas products, or wool (whether 
                in the form of fiber or yarn or contained in fabrics, 
                materials, or manufactured articles); or
                    (E) any item of individual equipment manufactured 
                from or containing such fibers, yarns, fabrics, or 
                materials.
            (2) Specialty metals, including stainless steel flatware.
            (3) Hand or measuring tools.
    (c) Availability Exception.--Subsection (a) does not apply to the 
extent that the Secretary of Homeland Security determines that 
satisfactory quality and sufficient quantity of any such article or 
item described in subsection (b)(1) or specialty metals (including 
stainless steel flatware) grown, reprocessed, reused, or produced in 
the United States cannot be procured as and when needed at United 
States market prices.
    (d) Exception for Certain Procurements Outside the United States.--
Subsection (a) does not apply to the following:
            (1) Procurements by vessels in foreign waters.
            (2) Emergency procurements or procurements of perishable 
        foods by an establishment located outside the United States for 
        the personnel attached to such establishment.
    (e) Exception for Small Purchases.--Subsection (a) does not apply 
to purchases for amounts not greater than the simplified acquisition 
threshold referred to in section 2304(g) of title 10, United States 
Code.
    (f) Applicability to Contracts and Subcontracts for Procurement of 
Commercial Items.--This section is applicable to contracts and 
subcontracts for the procurement of commercial items notwithstanding 
section 34 of the Office of Federal Procurement Policy Act (41 U.S.C. 
430).
    (g) Geographic Coverage.--In this section, the term ``United 
States'' includes the possessions of the United States.

SEC. 402. PROHIBITION ON SALE OF CHILD-LABOR MANUFACTURED GOODS IN 
              INTERSTATE COMMERCE.

    (a) In General.--It is unlawful to sell, or offer for sale, in 
interstate commerce or affecting interstate commerce, any good, wares, 
article, or merchandise manufactured wholly or in part by child labor. 
In this subsection, the term ``child labor'' means the employment of a 
child under the age of 12.
    (b) Penalty.--Violation of subsection (a) is punishable by a fine 
of $100,000, multiplied by each item of goods sold or offered for sale 
in violation of that section.

SEC. 403. ADDITIONAL CUSTOMS AGENTS TO COMBAT INAPPROPRIATE 
              TRANSSHIPMENT OF TEXTILES.

    The Secretary of the Treasury is authorized to increase the 
staffing level of personnel of the United States Customs Service 
performing customs revenue functions (as defined in section 415 of the 
Homeland Security Act of 2002) by 500 for the purpose of preventing the 
use of transshipment and technical resourcing techniques--
            (1) to avoid quota limitations on imports of textiles and 
        textile products from any country; or
            (2) to exploit the availability of lower rates of customs 
        duties applicable to such imports from any country other than 
        the country of original origin.

SEC. 404. SENSE OF THE SENATE REGARDING BYRD AMENDMENT.

    It is the sense of the Senate that section 754 of the Trade Act of 
1930 (19 U.S.C. 1675c), commonly known as the Byrd Amendment, providing 
for the distribution of duties assessed pursuant to an antidumping duty 
order or a finding under the Antidumping Act of 1921 to affected 
domestic producers is--
            (1) consistent with the obligations of the United States 
        under the Agreement Establishing the World Trade Organization;
            (2) not in violation of the World Trade Organization 
        Agreement on Subsidies and Countervailing Measures;
            (3) not inconsistent with the obligations of the United 
        States under the World Trade Organization Dispute Settlement 
        Understanding;
            (4) a just, measured, and appropriate remedy; and
            (5) an important weapon in the arsenal of the United States 
        for combating further declines in the United States industrial 
        base attributable to predatory trade practices of other 
        countries.

               TITLE V--INTERNAL REVENUE CODE AMENDMENTS.

SEC. 501. DISINCENTIVIZATION OF CORPORATE EXPATRIATION TO AVOID UNITED 
              STATES INCOME TAX.

    (a) In General.--Paragraph (4) of section 7701(a) of the Internal 
Revenue Code of 1986 (defining domestic) is amended to read as follows:
            ``(4) Domestic.--
                    ``(A) In General.--Except as provided in 
                subparagraph (B), the term `domestic' when applied to a 
                corporation or partnership means created or organized 
                in the United States or under the law of the United 
                States or of any State unless, in the case of a 
                partnership, the Secretary provides otherwise by 
                regulations.
                    ``(B) Certain corporations treated as domestic.--
                            ``(i) In general.--The acquiring 
                        corporation in a corporate expatriation 
                        transaction shall be treated as a domestic 
                        corporation.
                            ``(ii) Corporate expatriation 
                        transaction.--For purposes of this 
                        subparagraph, the term `corporate expatriation 
                        transaction' means any transaction if--
                                    ``(I) a nominally foreign 
                                corporation (referred to in this 
                                subparagraph as the `acquiring 
                                corporation') acquires, as a result of 
                                such transaction, directly or 
                                indirectly substantially all of the 
                                properties held directly or indirectly 
                                by a domestic corporation, and
                                    ``(II) immediately after the 
                                transaction, more than 80 percent of 
                                the stock (by vote or value) of the 
                                acquiring corporation is held by former 
                                shareholders of the domestic 
                                corporation by reason of holding stock 
                                in the domestic corporation.
                            ``(iii) Lower stock ownership requirement 
                        in certain cases.--Subclause (II) of clause 
                        (ii) shall be applied by substituting `50 
                        percent' for `80 percent' with respect to any 
                        nominally foreign corporation if--
                                    ``(I) such corporation does not 
                                have substantial business activities 
                                (when compared to the total business 
                                activities of the expanded affiliated 
                                group) in the foreign country in which 
                                or under the law of which the 
                                corporation is created or organized, 
                                and
                                    ``(II) the stock of the corporation 
                                is publicly traded and the principal 
                                market for the public trading of such 
                                stock is in the United States.
                            ``(iv) Partnership transactions.--The term 
                        `corporate expatriation transaction' includes 
                        any transaction if--
                                    ``(I) a nominally foreign 
                                corporation (referred to in this 
                                subparagraph as the `acquiring 
                                corporation') acquires, as a result of 
                                such transaction, directly or 
                                indirectly properties constituting a 
                                trade or business of a domestic 
                                partnership,
                                    ``(II) immediately after the 
                                transaction, more than 80 percent of 
                                the stock (by vote or value) of the 
                                acquiring corporation is held by former 
                                partners of the domestic partnership or 
                                related foreign partnerships 
                                (determined without regard to stock of 
                                the acquiring corporation which is sold 
                                in a public offering related to the 
                                transaction), and
                                    ``(III) the acquiring corporation 
                                meets the requirements of subclauses 
                                (I) and (II) of clause (iii).
                            ``(v) Special rules.--For purposes of this 
                        subparagraph--
                                    ``(I) a series of related 
                                transactions shall be treated as 1 
                                transaction, and
                                    ``(II) stock held by members of the 
                                expanded affiliated group which 
                                includes the acquiring corporation 
                                shall not be taken into account in 
                                determining ownership.
                            ``(vi) Other definitions.--For purposes of 
                        this subparagraph--
                                    ``(I) Nominally foreign 
                                corporation.--The term `nominally 
                                foreign corporation' means any 
                                corporation which would (but for this 
                                subparagraph) be treated as a foreign 
                                corporation.
                                    ``(II) Expanded affiliated group.--
                                The term `expanded affiliated group' 
                                means an affiliated group (as defined 
                                in section 1504(a) without regard to 
                                section 1504(b)).
                                    ``(III) Related foreign 
                                partnership.--A foreign partnership is 
                                related to a domestic partnership if 
                                they are under common control (within 
                                the meaning of section 482), or they 
                                shared the same trademark or 
                                tradename.''.
    (b) Effective Dates.--
            (1) In general.--The amendment made by this section shall 
        apply to corporate expatriation transactions completed after 
        September 11, 2001.
            (2) Special rule.--The amendment made by this section shall 
        also apply to corporate expatriation transactions completed on 
        or before September 11, 2001, but only with respect to taxable 
        years of the acquiring corporation beginning after December 31, 
        2003.

SEC. 502. INCLUSION OF INCOME FROM U.S. IMPORTS IN SUBPART F INCOME.

    (a) In General.--Section 952(a) of the Internal Revenue Code of 
1986 (relating to definition of Subpart F income) is amended--
            (1) by striking ``and'' in paragraph (4);
            (2) by striking ``country.'' in paragraph (5) and inserting 
        ``country, and''; and
            (3) inserting after paragraph (5) the following:
            ``(6) United States import income (as determined under 
        section 954(j)).''.
    (b) Import Income Defined.--Section 954 of such Code is amended--
            (1) by striking ``and'' in subsection (a)(4);
            (2) by striking ``subsection (b)(5)).'' in subsection 
        (a)(5) and inserting ``subsection (b)(5)), and'';
            (3) by adding at the end of subsection (a) the following:
            ``(6) the foreign base company United States import income 
        for the taxable year (determined under subsection (j) and 
        reduced as provided in subsection (b)(5)).''; and
            (4) by adding at the end the following:
    ``(j) Foreign Base Company United States Import Income.--For 
purposes of subsection (a)(6):
            ``(1) In general.--The term `foreign base company United 
        States import income' means gross income derived from the sale 
        of goods manufactured, produced, grown, or extracted outside 
        the United States and imported into the United States.
            ``(2) Not treated as another kind of base company income.--
        Income of a corporation which is foreign base company United 
        States import income shall not be considered foreign base 
        company income or foreign base company oil related income of 
such corporation.''.
    (c) Effective Date.--The amendments made by this section apply to 
taxable years of controlled foreign corporations beginning after the 
date of enactment of this Act and to taxable years of United States 
shareholders in which or with which such taxable years of controlled 
foreign corporations end.

SEC. 503. DENIAL OF TREATY BENEFITS FOR CERTAIN DEDUCTIBLE PAYMENTS.

    (a) In General.--Section 894 of the Internal Revenue Code of 1986 
(relating to income affected by treaty) is amended by adding at the end 
the following new subsection:
    ``(d) Denial of Treaty Benefits for Certain Deductible Payments.--
            ``(1) In general.--A foreign entity shall not be entitled 
        under any income tax treaty of the United States with a foreign 
        country to any reduced rate of any withholding tax imposed by 
        this title on any deductible foreign payment unless such entity 
        is predominantly owned by individuals who are residents of such 
        foreign country.
            ``(2) Deductible foreign payment.--For purposes of 
        paragraph (1), the term `deductible foreign payment' means any 
        payment--
                    ``(A) which is made by a domestic entity directly 
                or indirectly to a related person which is a foreign 
                entity, and
                    ``(B) which is allowable as a deduction under this 
                chapter.
            ``(3) Domestic and foreign entities; related person.--For 
        purposes of this subsection--
                    ``(A) Domestic entity.--The term `domestic entity' 
                means any domestic corporation or domestic partnership.
                    ``(B) Foreign entity.--The term `foreign entity' 
                means any foreign corporation or foreign partnership.
                    ``(C) Related person.--The term `related person' 
                has the meaning given such term by section 954(d)(3) 
                (determined by substituting `domestic entity' for 
                `controlled foreign corporation' each place it 
                appears).
            ``(4) Predominant ownership.--For purposes of this 
        subsection--
                    ``(A) In general.--An entity is predominantly owned 
                by individuals who are residents of a foreign country 
                if--
                            ``(i) in the case of a corporation, more 
                        than 50 percent (by value) of the stock of such 
                        corporation is owned (within the meaning of 
                        section 883(c)(4)) by individuals who are 
                        residents of such foreign country, or
                            ``(ii) in the case of a partnership, more 
                        than 50 percent (by value) of the beneficial 
                        interests in such partnership are so owned.
                    ``(B) Publicly traded corporations.--A foreign 
                corporation also shall be treated as predominantly 
                owned by individuals who are residents of a foreign 
                country if--
                            ``(i)(I) the stock of such corporation is 
                        primarily and regularly traded on an 
                        established securities market in such foreign 
                        country, and
                            ``(II) such corporation has activities 
                        within such foreign country which are 
                        substantial in relation to the total activities 
                        of such corporation and its related persons, or
                    ``(ii) such corporation is wholly owned (directly 
                or indirectly) by another foreign corporation which is 
                described in clause (i).
            ``(5) Conduit payments.--Under regulations prescribed by 
        the Secretary, paragraph (1) shall not apply to a payment 
        received by a foreign entity referred to in paragraph (1) if--
                    ``(A) within a reasonable period after such entity 
                receives such payment, such entity makes a comparable 
                payment directly or indirectly to another related 
                person,
                    ``(B) such related person is a resident of a 
                foreign country with which the United States has an 
                income tax treaty,
                    ``(C) such related person is predominantly owned by 
                individuals who are residents of such country, and
                    ``(D) the withholding tax rate reduction under such 
                treaty is not less than the withholding tax rate 
                reduction applicable (without regard to this paragraph) 
                to the payment received by such foreign entity.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.
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