[Congressional Record Volume 147, Number 159 (Friday, November 16, 2001)]
[Extensions of Remarks]
[Page E2122]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            THE RESTORE ACCESS TO FOREIGN TRADE ACT OF 2001

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                           HON. JERRY WELLER

                              of illinois

                    in the house of representatives

                       Friday, November 16, 2001

  Mr. WELLER. Mr. Speaker, today, I am pleased to introduce the Restore 
Access to Foreign Trade Act of 2001, the (RAFT Act), on behalf of 
myself and my colleagues; Mr. Rangel, Mr. Crane, Mr. Foley, Mr. Shimkus 
and Mrs. Biggert.
  The RAFT Act reverses tax law that has nearly destroyed our great 
maritime system by excluding shipping income from Subpart F, a section 
of the Internal Revenue Code affecting the taxation of income of U.S. 
controlled foreign corporations (CFC).
  Prior to 1976, income earned by CFCs from U.S. owned foreign shipping 
operations was not treated as Subpart F income, and was subject to 
taxation only when repatriated, or brought back into the United States. 
The Tax Reform Act of 1975 eliminated this deferral, except for foreign 
shipping income reinvested in certain qualified shipping investments. 
The 1986 Tax Act repealed the reinvestment exception, subjecting 
foreign shipping income earned by CFCs to current taxation under 
Subpart F.
  While the issue may sound complicated, the consequences are simple: 
the U.S.-owned liner container trade has seen its market share drop 
from nearly 22 percent in 1994 to just three percent in 1999. Thousands 
of jobs across America have been lost. This decline is dangerous from 
both an economic and national security standpoint--loss of an 
economically important industry and our country's inability to rely on 
the availability of a U.S. fleet in times of national security crises.
  Mr. Speaker, at this critical time, national security concerns are 
uppermost in our minds. The immediate availability of U.S.-owned 
vessels in times of national security crises is a key component of the 
U.S. government's defense programs.
  The anti-competitive impact of Subpart F will continue to erode the 
U.S. owned fleet and will ultimately result in an international 
marketplace that has no American participation.
  Our trading partners have actively pursued tax policies designed to 
encourage and increase their shipping industry. The U.S. Government 
needs to work towards the same goal. We must not allow the tax code to 
penalize U.S. companies in the current economic environment.
  I ask my colleagues to support this important legislation.

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