[Congressional Record Volume 149, Number 68 (Thursday, May 8, 2003)]
[House]
[Pages H3858-H3859]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               AMENDMENTS

  Under clause 8 of rule XVIII, proposed amendments were submitted as 
follows:

                                 H.R. 2

                        Offered By: Mr. Emanuel

       Amendment No. 1. Insert at the end of the bill the 
     following (and amend the table of contents accordingly):

   TITLE V--EXTENSION OF DEDUCTION FOR QUALIFIED TUITION AND RELATED 
                               EXPENSES.

     SEC. 501. EXTENSION OF DEDUCTION FOR QUALIFIED TUITION AND 
                   RELATED EXPENSES.

       (a) In General.--Subsection (e) of section 222 (relating to 
     termination) is amended by striking ``December 31, 2005'' and 
     inserting ``December 31, 2007''.
       (b) Conforming Amendments.--
       (1) Section 222(b)(2)(B) is amended by striking ``2004 or 
     2005'' and inserting ``2004, 2005, 2006, or 2007''.
       (2) The heading of section 222(b)(2)(B) is amended by 
     striking ``and 2005'' and inserting ``, 2005, 2006, and 
     2007''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2005.

   TITLE VI--CORPORATE EXPATRIATION; REDUCTION OF BONUS DEPRECIATION

     SEC. 601. TAX TREATMENT OF CORPORATE EXPATRIATION.

       (a) In General.--Subchapter C of chapter 80 (relating to 
     provisions affecting more than one subtitle) is amended by 
     adding at the end the following new section:

     ``SEC. 7874. TAX TREATMENT OF CORPORATE EXPATRIATION.

       ``(a) Inverted Corporations Treated as Domestic 
     Corporations.--
       ``(1) In general.--If a foreign incorporated entity is 
     treated as an inverted domestic corporation, then, 
     notwithstanding section 7701(a)(4), such entity shall be 
     treated for purposes of this title as a domestic corporation.
       ``(2) Inverted domestic corporation.--For purposes of this 
     section, a foreign incorporated entity shall be treated as an 
     inverted domestic corporation if, pursuant to a plan (or a 
     series of related transactions)--
       ``(A) the entity completes after March 4, 2003, the direct 
     or indirect acquisition of substantially all of the 
     properties held directly or indirectly by a domestic 
     corporation or substantially all of the properties 
     constituting a trade or business of a domestic partnership,
       ``(B) after the acquisition at least 80 percent of the 
     stock (by vote or value) of the entity is held--
       ``(i) in the case of an acquisition with respect to a 
     domestic corporation, by former shareholders of the domestic 
     corporation by reason of holding stock in the domestic 
     corporation, or
       ``(ii) in the case of an acquisition with respect to a 
     domestic partnership, by former partners of the domestic 
     partnership by reason of holding a capital or profits 
     interest in the domestic partnership, and

[[Page H3859]]

       ``(C) the expanded affiliated group which after the 
     acquisition includes the entity does not have substantial 
     business activities in the foreign country in which or under 
     the law of which the entity is created or organized when 
     compared to the total business activities of such expanded 
     affiliated group.
       ``(3) Termination.--This subsection shall not apply to any 
     acquisition completed after December 31, 2007.
       ``(b) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Foreign incorporated entity.--The term `foreign 
     incorporated entity' means any entity which is, or but for 
     subsection (a) would be, treated as a foreign corporation for 
     purposes of this title.
       ``(2) Expanded affiliated group.--The term `expanded 
     affiliated group' means an affiliated group as defined in 
     section 1504(a) but without regard to paragraphs (2), (3), 
     and (4) of section 1504(b), except that section 1504(a) shall 
     be applied by substituting `more than 50 percent' for `at 
     least 80 percent' each place it appears.
       ``(3) Certain stock disregarded.--There shall not be taken 
     into account in determining ownership under subsection 
     (a)(3)(B)--
       ``(A) stock held by members of the expanded affiliated 
     group which includes the foreign incorporated entity, or
       ``(B) stock of such foreign incorporated entity which is 
     sold in a public offering related to the acquisition 
     described in subsection (a)(3)(A).
       ``(4) Plan deemed in certain cases.--If a foreign 
     incorporated entity acquires directly or indirectly 
     substantially all of the properties of a domestic corporation 
     or partnership during the 4-year period beginning on the date 
     which is 2 years before the ownership requirements of 
     subsection (a)(3)(B) are met, such actions shall be treated 
     as pursuant to a plan.
       ``(5) Certain transfers disregarded.--The transfer of 
     properties or liabilities (including by contribution or 
     distribution) shall be disregarded if such transfers are part 
     of a plan a principal purpose of which is to avoid the 
     purposes of this section.
       ``(6) Special rule for related partnerships.--For purposes 
     of applying subsection (a)(3)(B) to the acquisition of a 
     domestic partnership, except as provided in regulations, all 
     partnerships which are under common control (within the 
     meaning of section 482) shall be treated as 1 partnership.
       ``(7) Regulations.--The Secretary shall prescribe such 
     regulations as may be appropriate to determine whether a 
     corporation is an inverted domestic corporation, including 
     regulations--
       ``(A) to treat warrants, options, contracts to acquire 
     stock, convertible debt interests, and other similar 
     interests as stock, and
       ``(B) to treat stock as not stock.
       ``(c) Special Rule for Treaties.--Nothing in section 894 or 
     7852(d) or in any other provision of law shall be construed 
     as permitting an exemption, by reason of any treaty 
     obligation of the United States heretofore or hereafter 
     entered into, from the provisions of this section.
       ``(d) Regulations.--The Secretary shall provide such 
     regulations as are necessary to carry out this section, 
     including regulations providing for such adjustments to the 
     application of this section as are necessary to prevent the 
     avoidance of the purposes of this section, including the 
     avoidance of such purposes through--
       ``(1) the use of related persons, pass-through or other 
     noncorporate entities, or other intermediaries, or
       ``(2) transactions designed to have persons cease to be (or 
     not become) members of expanded affiliated groups or related 
     persons.''.
       (b) Conforming Amendment.--The table of sections for 
     subchapter C of chapter 80 is amended by adding at the end 
     the following new item:
``Sec. 7874. Tax treatment of corporate expatriation.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after March 4, 2003.

     SEC. 602. REDUCTION IN BONUS DEPRECIATION.

       (a) In General.--Clause (i) of section 168(k)(4)(A), as 
     added by section 201(a), is amended by inserting ``(or such 
     lesser percentage as the Secretary estimates will offset the 
     excess (if any) of the revenue reduction resulting from the 
     amendments made by section 501 of the Jobs and Growth 
     Reconciliation Tax Act of 2003 over the revenue attributable 
     to the amendments made by section 601 of such Act)'' after 
     ``50 percent''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.