[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2542 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 2542
To amend the Internal Revenue Code of 1986 to repeal the shipping
investment withdrawal rules in section 955 and to provide an incentive
to reinvest foreign shipping earnings in the United States.
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IN THE HOUSE OF REPRESENTATIVES
May 21, 2009
Mr. McDermott (for himself and Mr. Tiberi) introduced the following
bill; which was referred to the Committee on Ways and Means
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A BILL
To amend the Internal Revenue Code of 1986 to repeal the shipping
investment withdrawal rules in section 955 and to provide an incentive
to reinvest foreign shipping earnings in the United States.
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 ``American Shipping Reinvestment Act
of 2009''.
SEC. 2. REPEAL OF QUALIFIED SHIPPING INVESTMENT WITHDRAWAL RULES.
(a) In General.--Section 955 of the Internal Revenue Code of 1986
(relating to withdrawal of previously excluded subpart F income from
qualified investment) is hereby repealed.
(b) Conforming Amendments.--
(1) Section 951(a)(1)(A) of the Internal Revenue Code of
1986 is amended by adding ``and'' at the end of clause (i) and
by striking clause (iii).
(2) Section 951(a)(1)(A)(ii) is amended by striking ``,
and'' at the end and inserting ``, except that in applying this
clause amounts invested in less developed country corporations
described in section 955(c)(2) (as so in effect) shall not be
treated as investments in less developed countries.''.
(3) Section 951(a)(3) of such Code (relating to the
limitation on pro rata share of previously excluded subpart F
income withdrawn from investment) is hereby repealed.
(4) Section 964(b) of such Code is amended by striking ``,
955,''.
(5) The table of sections for subpart F of part III of
subchapter N of chapter 1 of such Code is amended by striking
the item relating to section 955.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years of controlled foreign corporations ending on or
after the date of the 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. 3. ONE-TIME TEMPORARY DIVIDENDS RECEIVED DEDUCTION FOR PREVIOUSLY
UNTAXED FOREIGN BASE COMPANY SHIPPING INCOME.
(a) In General.--In the case of a corporation which is a United
States shareholder and for which an election under this section is made
for the taxable year, for purposes of the Internal Revenue Code of
1986, there shall be allowed as a deduction in computing taxable income
under section 63 of such Code an amount equal to 85 percent of the cash
distributions which are received during such taxable year by such
shareholder from controlled foreign corporations to the extent that the
distributions are attributable to income--
(1) which was derived by the controlled foreign corporation
in taxable years beginning before January 1, 2005, and
(2) which would, without regard to the year earned, be
described in section 954(f) (as in effect before the enactment
of the American Jobs Creation Act of 2004).
(b) Indirect Dividends.--A rule similar to the rule of section
965(a)(2) of the Internal Revenue Code of 1986 shall apply, determined
by treating cash distributions which are so attributable as cash
dividends.
(c) Limitation.--The amount of dividends taken into account under
this section shall not exceed the amount permitted to be taken into
account under paragraphs (1), (3) (determined by substituting
``December 31, 2008'' for ``October 3, 2004''), and (4) of section
965(b) of the Internal Revenue Code of 1986, determined as if such
paragraphs applied to this section.
(d) Taxpayer Election and Designation.--For purposes of subsection
(a), a taxpayer may, on its return for the taxable year to which this
section applies--
(1) elect to apply paragraph (3) of section 959(c) of the
Internal Revenue Code of 1986 before paragraphs (1) and (2)
thereof, and
(2) designate the extent, if any, to which a cash
distribution reduces a controlled foreign corporation's
earnings and profits attributable to--
(A) foreign base company shipping income
(determined under section 954(f) of the Internal
Revenue Code of 1986 as in effect before the enactment
of the American Jobs Creation Act of 2004), or
(B) other earnings and profits.
(e) Election.--
(1) In general.--The taxpayer may elect to apply this
section to--
(A) the taxpayer's last taxable year which begins
before the date of the enactment of this Act, or
(B) the taxpayer's first taxable year which begins
during the 1-year period beginning on such date.
(2) Timing of election and one-time election.--Such
election may be made for a taxable year--
(A) only if made on or before the due date
(including extensions) for filing the return of tax for
such taxable year, and
(B) only if no election has been made under this
section or section 965 of the Internal Revenue Code of
1986 with respect to the same distribution for any
other taxable year of the taxpayer.
(f) Reduction in Benefits for Failure to Maintain Employment
Levels.--
(1) In general.--If, during the period consisting of the
calendar month in which the taxpayer first receives a
distribution described in subsection (a) and the succeeding 23
calendar months, the taxpayer does not maintain an average
employment level at least equal to the taxpayer's prior average
employment, an additional amount equal to $25,000 multiplied by
the number of employees by which the taxpayer's average
employment level during such period falls below the prior
average employment (but not exceeding the aggregate amount
allowed as a deduction pursuant to subsection (a)) shall be
taken into account as income by the taxpayer during the taxable
year that includes the final day of such period.
(2) Prior average employment.--For purposes of this
paragraph, the taxpayer's ``prior average employment'' shall be
the average number of full time equivalent employees of the
taxpayer during the period consisting of the 24 calendar months
immediately preceding the calendar month in which the taxpayer
first receives a distribution described in subsection (a).
(3) Aggregation rules.--In determining the taxpayer's
average employment level and prior average employment, all
domestic members of a controlled group (as defined in section
264(e)(5)(B) of the Internal Revenue Code of 1986) shall be
treated as a single taxpayer.
(g) Special Rules.--Rules similar to the rules of subsections (d)
and (e) and paragraphs (3), (4), and (5) of subsection (c) of section
965 of the Internal Revenue Code of 1986 shall apply for purposes of
this section.
(h) Effective Date.--This section shall apply to taxable years
ending on or after the date of the enactment of this Act.
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