[Congressional Record Volume 147, Number 47 (Tuesday, April 3, 2001)]
[Extensions of Remarks]
[Pages E516-E517]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      MAKE SUBPART F LAW PERMANENT

                                 ______
                                 

                            HON. JIM McCRERY

                              of louisiana

                    in the house of representatives

                         Tuesday, April 3, 2001

  Mr. McCRERY. Mr. Speaker, today I am pleased to introduce a bill on 
behalf of myself, Mr. Neal of Massachusetts, and 24 of our colleagues 
from the Ways and Means Committee. Current law contains a temporary 
active financial services provision in Subpart F. This provision makes 
sure that active business income of a U.S. financial services company 
operating overseas is not subjected to U.S. tax until that income is 
distributed to the U.S. parent. If this temporary provision were 
allowed to expire at the end of 2001, American financial services 
companies would be placed on an unequal footing with their foreign 
competitors.
  Our legislation would make the active financial services provision 
permanent, securing international parity for our financial services 
industry and providing it with treatment comparable to that afforded 
other segments of the U.S. economy.
  This legislation is important not only to U.S. financial services 
companies but also to the U.S. businesses that they service 
internationally. As just one example, U.S. banks and finance companies 
support the international sales growth of U.S. manufacturers and 
distributors. Additionally, Mr. Speaker, because U.S. employees provide 
support services for the overseas operations of our financial services 
companies, this legislation will also enhance the creation and 
preservation of U.S. jobs that depend on these international 
operations.
  The growth of American finance and credit companies, banks, 
securities firms, and insurance companies is impaired by the 
uncertainty of an ``on-again, off-again'' practice of annual extensions 
of the active financial services provision. Making this provision a 
permanent part of the law will allow our financial services companies 
to make long-term plans for their continued international growth. 
Without this legislation, American financial services companies will be 
deprived of the certainty that their foreign-based competitors enjoy 
when operating outside of their home countries.
  Mr. Speaker, this legislation will ensure U.S. tax policy does not 
hamper the ability of our financial services companies to compete in 
the international marketplace. The permanent extension of the active 
financial services provision is particularly important today, if the 
U.S. financial services industry is to continue as a global leader in 
international markets. The highly competitive and global nature of many 
of the businesses that will benefit from this legislation highlights 
the need to ensure greater parity between U.S. tax laws and those of

[[Page E517]]

most other industrialized nations. Any disparity enhances the ability 
of foreign competitors to engage in a wider range of financial 
activities than U.S. companies.
  In closing, making this provision a permanent part of the law would 
provide for an equitable and stable international tax regime for the 
U.S. financial services industry. We hope that this legislation will 
receive every possible consideration.

                          ____________________