Congressional Record, Volume 156 Issue 114 (Friday, July 30, 2010)

[Congressional Record Volume 156, Number 114 (Friday, July 30, 2010)]
[House]
[Pages H6470-H6482]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

SMALL BUSINESS TAX RELIEF ACT OF 2010

Mr. LEVIN. Mr. Speaker, I move to suspend the rules and pass the bill
(H.R. 5982) to amend the Internal Revenue Code of 1986 to repeal the
expansion of certain information reporting requirements to corporations
and to payments for property, to eliminate loopholes which encourage
companies to move operations offshore, and for other purposes.
The Clerk read the title of the bill.
The text of the bill is as follows:

H.R. 5982

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF
CONTENTS.

(a) Short Title.--This Act may be cited as the ``Small
Business Tax Relief Act of 2010''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.

TITLE I--REPEAL OF CERTAIN INFORMATION REPORTING REQUIREMENTS

Sec. 101. Repeal of expansion of certain information reporting
requirements to corporations and to payments for
property.

TITLE II--REVENUE PROVISIONS

Subtitle A--Foreign Provisions

Sec. 201. Rules to prevent splitting foreign tax credits from the
income to which they relate.
Sec. 202. Denial of foreign tax credit with respect to foreign income
not subject to United States taxation by reason of
covered asset acquisitions.
Sec. 203. Separate application of foreign tax credit limitation, etc.,
to items resourced under treaties.
Sec. 204. Limitation on the amount of foreign taxes deemed paid with
respect to section 956 inclusions.
Sec. 205. Special rule with respect to certain redemptions by foreign
subsidiaries.
Sec. 206. Modification of affiliation rules for purposes of rules
allocating interest expense.
Sec. 207. Termination of special rules for interest and dividends
received from persons meeting the 80-percent foreign
business requirements.
Sec. 208. Source rules for income on guarantees.
Sec. 209. Limitation on extension of statute of limitations for failure
to notify Secretary of certain foreign transfers.

Subtitle B--Other Revenue Provisions

Sec. 211. Required minimum 10-year term, etc., for grantor retained
annuity trusts.
Sec. 212. Crude tall oil ineligible for cellulosic biofuel producer
credit.
Sec. 213. Increase in information return penalties.
Sec. 214. Treatment of securities of a controlled corporation exchanged
for assets in certain reorganizations.

TITLE III--PAYGO COMPLIANCE

Sec. 301. Paygo compliance.

TITLE I--REPEAL OF CERTAIN INFORMATION REPORTING REQUIREMENTS

SEC. 101. REPEAL OF EXPANSION OF CERTAIN INFORMATION
REPORTING REQUIREMENTS TO CORPORATIONS AND TO
PAYMENTS FOR PROPERTY.

Section 9006 of the Patient Protection and Affordable Care
Act is repealed. Each provision of law amended by such
section is amended to read as such provision would read if
such section had never been enacted.

TITLE II--REVENUE PROVISIONS

Subtitle A--Foreign Provisions

SEC. 201. RULES TO PREVENT SPLITTING FOREIGN TAX CREDITS FROM
THE INCOME TO WHICH THEY RELATE.

(a) In General.--Subpart A of part III of subchapter N of
chapter 1 is amended by adding at the end the following new
section:

``SEC. 909. SUSPENSION OF TAXES AND CREDITS UNTIL RELATED
INCOME TAKEN INTO ACCOUNT.

``(a) In General.--If there is a foreign tax credit
splitting event with respect to a foreign income tax paid or
accrued by the taxpayer, such tax shall not be taken into
account for purposes of this title before the taxable year in
which the related income is taken into account under this
chapter by the taxpayer.
``(b) Special Rules With Respect to Section 902
Corporations.--If there is a foreign tax credit splitting
event with respect to a foreign income tax paid or accrued by
a section 902 corporation, such tax shall not be taken into
account--
``(1) for purposes of section 902 or 960, or
``(2) for purposes of determining earnings and profits
under section 964(a),

before the taxable year in which the related income is taken
into account under this chapter by such section 902
corporation or a domestic corporation which meets the
ownership requirements of subsection (a) or (b) of section
902 with respect to such section 902 corporation.
``(c) Special Rules.--For purposes of this section--
``(1) Application to partnerships, etc.--In the case of a
partnership, subsections (a) and (b) shall be applied at the
partner level. Except as otherwise provided by the Secretary,
a rule similar to the rule of the preceding sentence shall
apply in the case of any S corporation or trust.
``(2) Treatment of foreign taxes after suspension.--In the
case of any foreign income tax not taken into account by
reason of subsection (a) or (b), except as otherwise provided
by the Secretary, such tax shall be so taken into account in
the taxable year referred to in such subsection (other than
for purposes of section 986(a)) as a foreign income tax paid
or accrued in such taxable year.
``(d) Definitions.--For purposes of this section--
``(1) Foreign tax credit splitting event.--There is a
foreign tax credit splitting event with respect to a foreign
income tax if the related income is (or will be) taken into
account under this chapter by a covered person.
``(2) Foreign income tax.--The term `foreign income tax'
means any income, war profits, or excess profits tax paid or
accrued to any foreign country or to any possession of the
United States.
``(3) Related income.--The term `related income' means,
with respect to any portion of any foreign income tax, the
income (or, as appropriate, earnings and profits) to which
such portion of foreign income tax relates.
``(4) Covered person.--The term `covered person' means,
with respect to any person

[[Page H6471]]

who pays or accrues a foreign income tax (hereafter in this
paragraph referred to as the `payor')--
``(A) any entity in which the payor holds, directly or
indirectly, at least a 10 percent ownership interest
(determined by vote or value),
``(B) any person which holds, directly or indirectly, at
least a 10 percent ownership interest (determined by vote or
value) in the payor,
``(C) any person which bears a relationship to the payor
described in section 267(b) or 707(b), and
``(D) any other person specified by the Secretary for
purposes of this paragraph.
``(5) Section 902 corporation.--The term `section 902
corporation' means any foreign corporation with respect to
which one or more domestic corporations meets the ownership
requirements of subsection (a) or (b) of section 902.
``(e) Regulations.--The Secretary may issue such
regulations or other guidance as is necessary or appropriate
to carry out the purposes of this section, including
regulations or other guidance which provides--
``(1) appropriate exceptions from the provisions of this
section, and
``(2) for the proper application of this section with
respect to hybrid instruments.''.
(b) Clerical Amendment.--The table of sections for subpart
A of part III of subchapter N of chapter 1 is amended by
adding at the end the following new item:

``Sec. 909. Suspension of taxes and credits until related income taken
into account.''.

(c) Effective Date.--The amendments made by this section
shall apply to--
(1) foreign income taxes (as defined in section 909(d) of
the Internal Revenue Code of 1986, as added by this section)
paid or accrued after December 31, 2010; and
(2) foreign income taxes (as so defined) paid or accrued by
a section 902 corporation (as so defined) on or before such
date (and not deemed paid under section 902(a) or 960 of such
Code on or before such date), but only for purposes of
applying sections 902 and 960 with respect to periods after
such date.

Section 909(b)(2) of the Internal Revenue Code of 1986, as
added by this section, shall not apply to foreign income
taxes described in paragraph (2).

SEC. 202. DENIAL OF FOREIGN TAX CREDIT WITH RESPECT TO
FOREIGN INCOME NOT SUBJECT TO UNITED STATES
TAXATION BY REASON OF COVERED ASSET
ACQUISITIONS.

(a) In General.--Section 901 is amended by redesignating
subsection (m) as subsection (n) and by inserting after
subsection (l) the following new subsection:
``(m) Denial of Foreign Tax Credit With Respect to Foreign
Income Not Subject to United States Taxation by Reason of
Covered Asset Acquisitions.--
``(1) In general.--In the case of a covered asset
acquisition, the disqualified portion of any foreign income
tax determined with respect to the income or gain
attributable to the relevant foreign assets--
``(A) shall not be taken into account in determining the
credit allowed under subsection (a), and
``(B) in the case of a foreign income tax paid by a section
902 corporation (as defined in section 909(d)(5)), shall not
be taken into account for purposes of section 902 or 960.
``(2) Covered asset acquisition.--For purposes of this
section, the term `covered asset acquisition' means--
``(A) a qualified stock purchase (as defined in section
338(d)(3)) to which section 338(a) applies,
``(B) any transaction which--
``(i) is treated as an acquisition of assets for purposes
of this chapter, and
``(ii) is treated as the acquisition of stock of a
corporation (or is disregarded) for purposes of the foreign
income taxes of the relevant jurisdiction,
``(C) any acquisition of an interest in a partnership which
has an election in effect under section 754, and
``(D) to the extent provided by the Secretary, any other
similar transaction.
``(3) Disqualified portion.--For purposes of this section--
``(A) In general.--The term `disqualified portion' means,
with respect to any covered asset acquisition, for any
taxable year, the ratio (expressed as a percentage) of--
``(i) the aggregate basis differences (but not below zero)
allocable to such taxable year under subparagraph (B) with
respect to all relevant foreign assets, divided by
``(ii) the income on which the foreign income tax referred
to in paragraph (1) is determined (or, if the taxpayer fails
to substantiate such income to the satisfaction of the
Secretary, such income shall be determined by dividing the
amount of such foreign income tax by the highest marginal tax
rate applicable to such income in the relevant jurisdiction).
``(B) Allocation of basis difference.--For purposes of
subparagraph (A)(i)--
``(i) In general.--The basis difference with respect to any
relevant foreign asset shall be allocated to taxable years
using the applicable cost recovery method under this chapter.
``(ii) Special rule for disposition of assets.--Except as
otherwise provided by the Secretary, in the case of the
disposition of any relevant foreign asset--

``(I) the basis difference allocated to the taxable year
which includes the date of such disposition shall be the
excess of the basis difference with respect to such asset
over the aggregate basis difference with respect to such
asset which has been allocated under clause (i) to all prior
taxable years, and
``(II) no basis difference with respect to such asset shall
be allocated under clause (i) to any taxable year thereafter.

``(C) Basis difference.--
``(i) In general.--The term `basis difference' means, with
respect to any relevant foreign asset, the excess of--

``(I) the adjusted basis of such asset immediately after
the covered asset acquisition, over
``(II) the adjusted basis of such asset immediately before
the covered asset acquisition.

``(ii) Built-in loss assets.--In the case of a relevant
foreign asset with respect to which the amount described in
clause (i)(II) exceeds the amount described in clause (i)(I),
such excess shall be taken into account under this subsection
as a basis difference of a negative amount.
``(iii) Special rule for section 338 elections.--In the
case of a covered asset acquisition described in paragraph
(2)(A), the covered asset acquisition shall be treated for
purposes of this subparagraph as occurring at the close of
the acquisition date (as defined in section 338(h)(2)).
``(4) Relevant foreign assets.--For purposes of this
section, the term `relevant foreign asset' means, with
respect to any covered asset acquisition, any asset
(including any goodwill, going concern value, or other
intangible) with respect to such acquisition if income,
deduction, gain, or loss attributable to such asset is taken
into account in determining the foreign income tax referred
to in paragraph (1).
``(5) Foreign income tax.--For purposes of this section,
the term `foreign income tax' means any income, war profits,
or excess profits tax paid or accrued to any foreign country
or to any possession of the United States.
``(6) Taxes allowed as a deduction, etc.--Sections 275 and
78 shall not apply to any tax which is not allowable as a
credit under subsection (a) by reason of this subsection.
``(7) Regulations.--The Secretary may issue such
regulations or other guidance as is necessary or appropriate
to carry out the purposes of this subsection, including to
exempt from the application of this subsection certain
covered asset acquisitions, and relevant foreign assets with
respect to which the basis difference is de minimis.''.
(b) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to covered asset
acquisitions (as defined in section 901(m)(2) of the Internal
Revenue Code of 1986, as added by this section) after
December 31, 2010.
(2) Transition rule.--The amendments made by this section
shall not apply to any covered asset acquisition (as so
defined) with respect to which the transferor and the
transferee are not related if such acquisition is--
(A) made pursuant to a written agreement which was binding
on May 20, 2010, and at all times thereafter,
(B) described in a ruling request submitted to the Internal
Revenue Service on or before such date; or
(C) described on or before such date in a public
announcement or in a filing with the Securities and Exchange
Commission.
(3) Related persons.--For purposes of this subsection, a
person shall be treated as related to another person if the
relationship between such persons is described in section 267
or 707(b) of the Internal Revenue Code of 1986.

SEC. 203. SEPARATE APPLICATION OF FOREIGN TAX CREDIT
LIMITATION, ETC., TO ITEMS RESOURCED UNDER
TREATIES.

(a) In General.--Subsection (d) of section 904 is amended
by redesignating paragraph (6) as paragraph (7) and by
inserting after paragraph (5) the following new paragraph:
``(6) Separate application to items resourced under
treaties.--
``(A) In general.--If--
``(i) without regard to any treaty obligation of the United
States, any item of income would be treated as derived from
sources within the United States,
``(ii) under a treaty obligation of the United States, such
item would be treated as arising from sources outside the
United States, and
``(iii) the taxpayer chooses the benefits of such treaty
obligation,

subsections (a), (b), and (c) of this section and sections
902, 907, and 960 shall be applied separately with respect to
each such item.
``(B) Coordination with other provisions.--This paragraph
shall not apply to any item of income to which subsection
(h)(10) or section 865(h) applies.
``(C) Regulations.--The Secretary may issue such
regulations or other guidance as is necessary or appropriate
to carry out the purposes of this paragraph, including
regulations or other guidance which provides that related
items of income may be aggregated for purposes of this
paragraph.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.

SEC. 204. LIMITATION ON THE AMOUNT OF FOREIGN TAXES DEEMED
PAID WITH RESPECT TO SECTION 956 INCLUSIONS.

(a) In General.--Section 960 is amended by adding at the
end the following new subsection:

[[Page H6472]]

``(c) Limitation With Respect to Section 956 Inclusions.--
``(1) In general.--If there is included under section
951(a)(1)(B) in the gross income of a domestic corporation
any amount attributable to the earnings and profits of a
foreign corporation which is a member of a qualified group
(as defined in section 902(b)) with respect to the domestic
corporation, the amount of any foreign income taxes deemed to
have been paid during the taxable year by such domestic
corporation under section 902 by reason of subsection (a)
with respect to such inclusion in gross income shall not
exceed the amount of the foreign income taxes which would
have been deemed to have been paid during the taxable year by
such domestic corporation if cash in an amount equal to the
amount of such inclusion in gross income were distributed as
a series of distributions (determined without regard to any
foreign taxes which would be imposed on an actual
distribution) through the chain of ownership which begins
with such foreign corporation and ends with such domestic
corporation.
``(2) Authority to prevent abuse.--The Secretary shall
issue such regulations or other guidance as is necessary or
appropriate to carry out the purposes of this subsection,
including regulations or other guidance which prevent the
inappropriate use of the foreign corporation's foreign income
taxes not deemed paid by reason of paragraph (1).''.
(b) Effective Date.--The amendment made by this section
shall apply to acquisitions of United States property (as
defined in section 956(c) of the Internal Revenue Code of
1986) after December 31, 2010.

SEC. 205. SPECIAL RULE WITH RESPECT TO CERTAIN REDEMPTIONS BY
FOREIGN SUBSIDIARIES.

(a) In General.--Paragraph (5) of section 304(b) is amended
by redesignating subparagraph (B) as subparagraph (C) and by
inserting after subparagraph (A) the following new
subparagraph:
``(B) Special rule in case of foreign acquiring
corporation.--In the case of any acquisition to which
subsection (a) applies in which the acquiring corporation is
a foreign corporation, no earnings and profits shall be taken
into account under paragraph (2)(A) (and subparagraph (A)
shall not apply) if more than 50 percent of the dividends
arising from such acquisition (determined without regard to
this subparagraph) would neither--
``(i) be subject to tax under this chapter for the taxable
year in which the dividends arise, nor
``(ii) be includible in the earnings and profits of a
controlled foreign corporation (as defined in section 957 and
without regard to section 953(c)).''.
(b) Effective Date.--The amendments made by this section
shall apply to acquisitions after December 31, 2010.

SEC. 206. MODIFICATION OF AFFILIATION RULES FOR PURPOSES OF
RULES ALLOCATING INTEREST EXPENSE.

(a) In General.--Subparagraph (A) of section 864(e)(5) is
amended by adding at the end the following: ``Notwithstanding
the preceding sentence, a foreign corporation shall be
treated as a member of the affiliated group if--
``(i) more than 50 percent of the gross income of such
foreign corporation for the taxable year is effectively
connected with the conduct of a trade or business within the
United States, and

``(ii) at least 80 percent of either the vote or value of
all outstanding stock of such foreign corporation is owned
directly or indirectly by members of the affiliated group
(determined with regard to this sentence).''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.

SEC. 207. TERMINATION OF SPECIAL RULES FOR INTEREST AND
DIVIDENDS RECEIVED FROM PERSONS MEETING THE 80-
PERCENT FOREIGN BUSINESS REQUIREMENTS.

(a) In General.--Paragraph (1) of section 861(a) is amended
by striking subparagraph (A) and by redesignating
subparagraphs (B) and (C) as subparagraphs (A) and (B),
respectively.
(b) Grandfather Rule With Respect to Withholding on
Interest and Dividends Received From Persons Meeting the 80-
percent Foreign Business Requirements.--
(1) In general.--Subparagraph (B) of section 871(i)(2) is
amended to read as follows:
``(B) The active foreign business percentage of--
``(i) any dividend paid by an existing 80/20 company, and
``(ii) any interest paid by an existing 80/20 company.''.
(2) Definitions and special rules.--Section 871 is amended
by redesignating subsections (l) and (m) as subsections (m)
and (n), respectively, and by inserting after subsection (k)
the following new subsection:
``(l) Rules Relating to Existing 80/20 Companies.--For
purposes of this subsection and subsection (i)(2)(B)--
``(1) Existing 80/20 company.--
``(A) In general.--The term `existing 80/20 company' means
any corporation if--
``(i) such corporation met the 80-percent foreign business
requirements of section 861(c)(1) (as in effect before the
date of the enactment of this subsection) for such
corporation's last taxable year beginning before January 1,
2011,
``(ii) such corporation meets the 80-percent foreign
business requirements of subparagraph (B) with respect to
each taxable year after the taxable year referred to in
clause (i), and
``(iii) there has not been an addition of a substantial
line of business with respect to such corporation after the
date of the enactment of this subsection.
``(B) Foreign business requirements.--
``(i) In general.--Except as provided in clause (iv), a
corporation meets the 80-percent foreign business
requirements of this subparagraph if it is shown to the
satisfaction of the Secretary that at least 80 percent of the
gross income from all sources of such corporation for the
testing period is active foreign business income.
``(ii) Active foreign business income.--For purposes of
clause (i), the term `active foreign business income' means
gross income which--

``(I) is derived from sources outside the United States (as
determined under this subchapter), and
``(II) is attributable to the active conduct of a trade or
business in a foreign country or possession of the United
States.

``(iii) Testing period.--For purposes of this subsection,
the term `testing period' means the 3-year period ending with
the close of the taxable year of the corporation preceding
the payment (or such part of such period as may be
applicable). If the corporation has no gross income for such
3-year period (or part thereof), the testing period shall be
the taxable year in which the payment is made.
``(iv) Transition rule.--In the case of a taxable year for
which the testing period includes 1 or more taxable years
beginning before January 1, 2011--

``(I) a corporation meets the 80-percent foreign business
requirements of this subparagraph if and only if the weighted
average of--

``(aa) the percentage of the corporation's gross income
from all sources that is active foreign business income (as
defined in subparagraph (B) of section 861(c)(1) (as in
effect before the date of the enactment of this subsection))
for the portion of the testing period that includes taxable
years beginning before January 1, 2011, and
``(bb) the percentage of the corporation's gross income
from all sources that is active foreign business income (as
defined in clause (ii) of this subparagraph) for the portion
of the testing period, if any, that includes taxable years
beginning on or after January 1, 2011,

is at least 80 percent, and
``(II) the active foreign business percentage for such
taxable year shall equal the weighted average percentage
determined under subclause (I).

``(2) Active foreign business percentage.--Except as
provided in paragraph (1)(B)(iv), the term `active foreign
business percentage' means, with respect to any existing 80/
20 company, the percentage which--
``(A) the active foreign business income of such company
for the testing period, is of
``(B) the gross income of such company for the testing
period from all sources.
``(3) Aggregation rules.--For purposes of applying
paragraph (1) (other than subparagraphs (A)(i) and (B)(iv)
thereof) and paragraph (2)--
``(A) In general.--The corporation referred to in paragraph
(1)(A) and all of such corporation's subsidiaries shall be
treated as one corporation.
``(B) Subsidiaries.--For purposes of subparagraph (A), the
term `subsidiary' means any corporation in which the
corporation referred to in subparagraph (A) owns (directly or
indirectly) stock meeting the requirements of section
1504(a)(2) (determined by substituting `50 percent' for `80
percent' each place it appears and without regard to section
1504(b)(3)).
``(4) Regulations.--The Secretary may issue such
regulations or other guidance as is necessary or appropriate
to carry out the purposes of this section, including
regulations or other guidance which provide for the proper
application of the aggregation rules described in paragraph
(3).''.
(c) Conforming Amendments.--
(1) Section 861 is amended by striking subsection (c) and
by redesignating subsections (d), (e), and (f) as subsections
(c), (d), and (e), respectively.
(2) Paragraph (9) of section 904(h) is amended to read as
follows:
``(9) Treatment of certain domestic corporations.--In the
case of any dividend treated as not from sources within the
United States under section 861(a)(2)(A), the corporation
paying such dividend shall be treated for purposes of this
subsection as a United States-owned foreign corporation.''.
(3) Subsection (c) of section 2104 is amended in the last
sentence by striking ``or to a debt obligation of a domestic
corporation'' and all that follows and inserting a period.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2010.
(2) Grandfather rule for outstanding debt obligations.--
(A) In general.--The amendments made by this section shall
not apply to payments of interest on obligations issued
before the date of the enactment of this Act.
(B) Exception for related party debt.--Subparagraph (A)
shall not apply to any interest which is payable to a related
person (determined under rules similar to the rules of
section 954(d)(3)).
(C) Significant modifications treated as new issues.--For
purposes of subparagraph (A), a significant modification of
the terms

[[Page H6473]]

of any obligation (including any extension of the term of
such obligation) shall be treated as a new issue.

SEC. 208. SOURCE RULES FOR INCOME ON GUARANTEES.

(a) Amounts Sourced Within the United States.--Subsection
(a) of section 861 is amended by adding at the end the
following new paragraph:
``(9) Guarantees.--Amounts received, directly or
indirectly, from--
``(A) a noncorporate resident or domestic corporation for
the provision of a guarantee of any indebtedness of such
resident or corporation, or
``(B) any foreign person for the provision of a guarantee
of any indebtedness of such person, if such amount is
connected with income which is effectively connected (or
treated as effectively connected) with the conduct of a trade
or business in the United States.''.
(b) Amounts Sourced Without the United States.--Subsection
(a) of section 862 is amended by striking ``and'' at the end
of paragraph (7), by striking the period at the end of
paragraph (8) and inserting ``; and'', and by adding at the
end the following new paragraph:
``(9) amounts received, directly or indirectly, from a
foreign person for the provision of a guarantee of
indebtedness of such person other than amounts which are
derived from sources within the United States as provided in
section 861(a)(9).''.
(c) Conforming Amendment.--Clause (ii) of section
864(c)(4)(B) is amended by striking ``dividends or interest''
and inserting ``dividends, interest, or amounts received for
the provision of guarantees of indebtedness''.
(d) Effective Date.--The amendments made by this section
shall apply to guarantees issued after the date of the
enactment of this Act.

SEC. 209. LIMITATION ON EXTENSION OF STATUTE OF LIMITATIONS
FOR FAILURE TO NOTIFY SECRETARY OF CERTAIN
FOREIGN TRANSFERS.

(a) In General.--Paragraph (8) of section 6501(c) is
amended--
(1) by striking ``In the case of any information'' and
inserting the following:
``(A) In general.--In the case of any information''; and
(2) by adding at the end the following:
``(B) Application to failures due to reasonable cause.--If
the failure to furnish the information referred to in
subparagraph (A) is due to reasonable cause and not willful
neglect, subparagraph (A) shall apply only to the item or
items related to such failure.''.
(b) Effective Date.--The amendments made by this section
shall take effect as if included in section 513 of the Hiring
Incentives to Restore Employment Act.

Subtitle B--Other Revenue Provisions

SEC. 211. REQUIRED MINIMUM 10-YEAR TERM, ETC., FOR GRANTOR
RETAINED ANNUITY TRUSTS.

(a) In General.--Subsection (b) of section 2702 is
amended--
(1) by redesignating paragraphs (1), (2) and (3) as
subparagraphs (A), (B), and (C), respectively, and by moving
such subparagraphs (as so redesignated) 2 ems to the right,
(2) by striking ``For purposes of'' and inserting the
following:
``(1) In general.--For purposes of'', and
(3) by striking ``paragraph (1) or (2)'' in paragraph
(1)(C) (as so redesignated) and inserting ``subparagraph (A)
or (B)'', and
(4) by adding at the end the following new paragraph:
``(2) Additional requirements with respect to grantor
retained annuities.--For purposes of subsection (a), in the
case of an interest described in paragraph (1)(A) (determined
without regard to this paragraph) which is retained by the
transferor, such interest shall be treated as described in
such paragraph only if--
``(A) the right to receive the fixed amounts referred to in
such paragraph is for a term of not less than 10 years,
``(B) such fixed amounts, when determined on an annual
basis, do not decrease relative to any prior year during the
first 10 years of the term referred to in subparagraph (A),
and
``(C) the remainder interest has a value greater than zero
determined as of the time of the transfer.''.
(b) Effective Date.--The amendments made by this section
shall apply to transfers made after the date of the enactment
of this Act.

SEC. 212. CRUDE TALL OIL INELIGIBLE FOR CELLULOSIC BIOFUEL
PRODUCER CREDIT.

(a) In General.--Clause (iii) of section 40(b)(6)(E) is
amended--
(1) by striking ``or'' at the end of subclause (I),
(2) by striking the period at the end of subclause (II) and
inserting ``, or'',
(3) by adding at the end the following new subclause:

``(III) such fuel has an acid number greater than 25.'',
and

(4) by striking ``unprocessed'' in the heading and
inserting ``certain''.
(b) Effective Date.--The amendment made by this section
shall apply to fuels sold or used on or after January 1,
2010.

SEC. 213. INCREASE IN INFORMATION RETURN PENALTIES.

(a) Failure To File Correct Information Returns.--
(1) In general.--Subsections (a)(1), (b)(1)(A), and
(b)(2)(A) of section 6721 are each amended by striking
``$50'' and inserting ``$100''.
(2) Aggregate annual limitation.--Subsections (a)(1),
(d)(1)(A), and (e)(3)(A) of section 6721 are each amended by
striking ``$250,000'' and inserting ``$1,500,000''.
(b) Reduction Where Correction Within 30 Days.--
(1) In general.--Subparagraph (A) of section 6721(b)(1) is
amended by striking ``$15'' and inserting ``$30''.
(2) Aggregate annual limitation.--Subsections (b)(1)(B) and
(d)(1)(B) of section 6721 are each amended by striking
``$75,000'' and inserting ``$250,000''.
(c) Reduction Where Correction on or Before August 1.--
(1) In general.--Subparagraph (A) of section 6721(b)(2) is
amended by striking ``$30'' and inserting ``$60''.
(2) Aggregate annual limitation.--Subsections (b)(2)(B) and
(d)(1)(C) of section 6721 are each amended by striking
``$150,000'' and inserting ``$500,000''.
(d) Aggregate Annual Limitations for Persons With Gross
Receipts of Not More Than $5,000,000.--
(1) In general.--Paragraph (1) of section 6721(d) is
amended--
(A) by striking ``$100,000'' in subparagraph (A) and
inserting ``$500,000'',
(B) by striking ``$25,000'' in subparagraph (B) and
inserting ``$75,000'', and
(C) by striking ``$50,000'' in subparagraph (C) and
inserting ``$200,000''.
(2) Technical amendment.--Paragraph (1) of section 6721(d)
is amended by striking ``such taxable year'' and inserting
``such calendar year''.
(e) Penalty in Case of Intentional Disregard.--Paragraph
(2) of section 6721(e) is amended by striking ``$100'' and
inserting ``$250''.
(f) Adjustment for Inflation.--Section 6721 is amended by
adding at the end the following new subsection:
``(f) Adjustment for Inflation.--
``(1) In general.--In the case of any calendar year
beginning after 2014, each of the dollar amounts under
subsections (a), (b), (d) (other than paragraph (2)(A)
thereof), and (e) shall be increased by such dollar amount
multiplied by the cost-of-living adjustment determined under
section 1(f)(3) determined by substituting `calendar year
2011' for `calendar year 1992' in subparagraph (B) thereof.
``(2) Additional adjustments made only every fifth year.--
Notwithstanding paragraph (1), in the case of any calendar
year beginning after 2015 (other than every fifth calendar
after 2015), each increase determined under paragraph (1)
shall not exceed the amount of such increase determined for
the preceding year.
``(3) Rounding.--If any amount adjusted under paragraph
(1)--
``(A) is not less than $75,000 and is not a multiple of
$500, such amount shall be rounded to the next lowest
multiple of $500, and
``(B) is not described in subparagraph (A) and is not a
multiple of $10, such amount shall be rounded to the next
lowest multiple of $10.''.
(g) Failure To Furnish Correct Payee Statements.--Section
6722 is amended to read as follows:

``SEC. 6722. FAILURE TO FURNISH CORRECT PAYEE STATEMENTS.

``(a) Imposition of Penalty.--
``(1) General rule.--In the case of each failure described
in paragraph (2) by any person with respect to a payee
statement, such person shall pay a penalty of $100 for each
statement with respect to which such a failure occurs, but
the total amount imposed on such person for all such failures
during any calendar year shall not exceed $1,500,000.
``(2) Failures subject to penalty.--For purposes of
paragraph (1), the failures described in this paragraph are--
``(A) any failure to furnish a payee statement on or before
the date prescribed therefor to the person to whom such
statement is required to be furnished, and
``(B) any failure to include all of the information
required to be shown on a payee statement or the inclusion of
incorrect information.
``(b) Reduction Where Correction in Specified Period.--
``(1) Correction within 30 days.--If any failure described
in subsection (a)(2) is corrected on or before the day 30
days after the required filing date--
``(A) the penalty imposed by subsection (a) shall be $30 in
lieu of $100, and
``(B) the total amount imposed on the person for all such
failures during any calendar year which are so corrected
shall not exceed $250,000.
``(2) Failures corrected on or before august 1.--If any
failure described in subsection (a)(2) is corrected after the
30th day referred to in paragraph (1) but on or before August
1 of the calendar year in which the required filing date
occurs--
``(A) the penalty imposed by subsection (a) shall be $60 in
lieu of $100, and
``(B) the total amount imposed on the person for all such
failures during the calendar year which are so corrected
shall not exceed $500,000.
``(c) Exception for De Minimis Failures.--
``(1) In general.--If--
``(A) a payee statement is furnished to the person to whom
such statement is required to be furnished,
``(B) there is a failure described in subsection (a)(2)(B)
(determined after the application of section 6724(a)) with
respect to such statement, and

[[Page H6474]]

``(C) such failure is corrected on or before August 1 of
the calendar year in which the required filing date occurs,

for purposes of this section, such statement shall be treated
as having been furnished with all of the correct required
information.
``(2) Limitation.--The number of payee statements to which
paragraph (1) applies for any calendar year shall not exceed
the greater of--
``(A) 10, or
``(B) one-half of 1 percent of the total number of payee
statements required to be filed by the person during the
calendar year.
``(d) Lower Limitations for Persons With Gross Receipts of
Not More Than $5,000,000.--
``(1) In general.--If any person meets the gross receipts
test of paragraph (2) with respect to any calendar year, with
respect to failures during such calendar year--
``(A) subsection (a)(1) shall be applied by substituting
`$500,000' for `$1,500,000',
``(B) subsection (b)(1)(B) shall be applied by substituting
`$75,000' for `$250,000', and
``(C) subsection (b)(2)(B) shall be applied by substituting
`$200,000' for `$500,000'.
``(2) Gross receipts test.--A person meets the gross
receipts test of this paragraph if such person meets the
gross receipts test of section 6721(d)(2).
``(e) Penalty in Case of Intentional Disregard.--If 1 or
more failures to which subsection (a) applies are due to
intentional disregard of the requirement to furnish a payee
statement (or the correct information reporting requirement),
then, with respect to each such failure--
``(1) subsections (b), (c), and (d) shall not apply,
``(2) the penalty imposed under subsection (a)(1) shall be
$250, or, if greater--
``(A) in the case of a payee statement other than a
statement required under section 6045(b), 6041A(e) (in
respect of a return required under section 6041A(b)),
6050H(d), 6050J(e), 6050K(b), or 6050L(c), 10 percent of the
aggregate amount of the items required to be reported
correctly, or
``(B) in the case of a payee statement required under
section 6045(b), 6050K(b), or 6050L(c), 5 percent of the
aggregate amount of the items required to be reported
correctly, and
``(3) in the case of any penalty determined under paragraph
(2)--
``(A) the $1,500,000 limitation under subsection (a) shall
not apply, and
``(B) such penalty shall not be taken into account in
applying such limitation to penalties not determined under
paragraph (2).
``(f) Adjustment for Inflation.--
``(1) In general.--In the case of any calendar year
beginning after 2014, each of the dollar amounts under
subsections (a), (b), (d)(1), and (e) shall be increased by
such dollar amount multiplied by the cost-of-living
adjustment determined under section 1(f)(3) determined by
substituting `calendar year 2011' for `calendar year 1992' in
subparagraph (B) thereof.
``(2) Additional adjustments made only every fifth year.--
Notwithstanding paragraph (1), in the case of any calendar
year beginning after 2015 (other than every fifth calendar
after 2015), each increase determined under paragraph (1)
shall not exceed the amount of such increase determined for
the preceding year.
``(3) Rounding.--If any amount adjusted under paragraph
(1)--
``(A) is not less than $75,000 and is not a multiple of
$500, such amount shall be rounded to the next lowest
multiple of $500, and
``(B) is not described in subparagraph (A) and is not a
multiple of $10, such amount shall be rounded to the next
lowest multiple of $10.''.
(h) Effective Date.--The amendments made by this section
shall apply with respect to information returns required to
be filed on or after January 1, 2011.

SEC. 214. TREATMENT OF SECURITIES OF A CONTROLLED CORPORATION
EXCHANGED FOR ASSETS IN CERTAIN
REORGANIZATIONS.

(a) In General.--Section 361 is amended by adding at the
end the following new subsection:
``(d) Special Rules for Transactions Involving Section 355
Distributions.--In the case of a reorganization described in
section 368(a)(1)(D) with respect to which stock or
securities of the corporation to which the assets are
transferred are distributed in a transaction which qualifies
under section 355--
``(1) this section shall be applied by substituting `stock
other than nonqualified preferred stock (as defined in
section 351(g)(2))' for `stock or securities' in subsections
(a) and (b)(1), and
``(2) the first sentence of subsection (b)(3) shall apply
only to the extent that the sum of the money and the fair
market value of the other property transferred to such
creditors does not exceed the adjusted bases of such assets
transferred (reduced by the amount of the liabilities assumed
(within the meaning of section 357(c))).''.
(b) Conforming Amendment.--Paragraph (3) of section 361(b)
is amended by striking the last sentence.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to exchanges
after the date of the enactment of this Act.
(2) Transition rule.--The amendments made by this section
shall not apply to any exchange pursuant to a transaction
which is--
(A) made pursuant to an agreement which was binding on
March 15, 2010, and at all times thereafter;
(B) described in a ruling request submitted to the Internal
Revenue Service on or before such date; or
(C) described on or before such date in a public
announcement or in a filing with the Securities and Exchange
Commission.

TITLE III--PAYGO COMPLIANCE

SEC. 301. PAYGO COMPLIANCE.

The budgetary effects of this Act, for the purpose of
complying with the Statutory Pay-As-You-Go Act of 2010, shall
be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation'' for this Act,
submitted for printing in the Congressional Record by the
Chairman of the House Budget Committee, provided that such
statement has been submitted prior to the vote on passage.

{time} 1030

The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Michigan (Mr. Levin) and the gentleman from Michigan (Mr. Camp) each
will control 20 minutes.
The Chair recognizes the gentleman from Michigan (Mr. Levin).

Parliamentary Inquiry

Mr. CAMP. Mr. Speaker, parliamentary inquiry.
As this bill was just introduced seconds ago, is it in order to ask
that the bill be read for the American people and for Members who are
going to be required to understand and vote on this legislation in a
short time?
The SPEAKER pro tempore. Under the rule, the Clerk reports the title
of the bill.
Mr. CAMP. And so is it in order for me to make a motion to ask that
the bill be read for understanding by the American people?
The SPEAKER pro tempore. That would not be a proper motion.
The Chair recognizes the gentleman from Michigan (Mr. Levin).
Mr. LEVIN. Mr. Speaker, I urge all Members to support this
legislation that indeed has been posted online.
The SPEAKER pro tempore. The gentleman will suspend.
Pursuant to the rule, the gentleman from Michigan (Mr. Levin) and the
gentleman from Michigan (Mr. Camp) each will control 20 minutes.
Again, the Chair recognizes the gentleman from Michigan (Mr. Levin).
Mr. LEVIN. Mr. Speaker, again I urge all Members to support this
legislation, which has indeed been posted online. This bill would
eliminate a reporting requirement which has been identified as a
potentially onerous burden for small businesses. The provision itself
is not currently in place--it does not take effect until 2012--but
recent studies have indicated that it could pose challenges for small
businesses throughout this country.
The Independent Taxpayer Advocate recently stated the provision,
``may present significant administrative challenges to taxpayers and
the IRS.'' The advocate is concerned that the reporting requirement for
small business--and again I quote--``may turn out to be
disproportionate as compared with any resulting improvement in tax
compliance.''
So here we are today to provide this House with an up-or-down vote on
eliminating this requirement. This bill is fiscally responsible,
covering the cost by reducing tax incentives that encourage companies
to ship jobs overseas. This is a win-win for American jobs.
This bill both provides relief to small businesses and reduces
incentives for some large, multinational corporations to ship jobs
overseas. It also closes an egregious loophole in the gift tax, the
Grantor Retained Annuity Trust, that is only available for extremely
wealthy individuals.
So in a few words, all Members on both sides of the aisle have a
choice today--to stand up for millions of American small businesses and
their workers, or keep a tax loophole and side with those companies
that ship jobs overseas.
Mr. Speaker, I reserve the balance of my time.
Mr. CAMP. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, in my 20 years in Congress, I don't think I have seen a
more disappointing time for this House. I had great hopes when my
colleague from Michigan, Sander Levin, assumed the chairmanship of the
Ways and Means Committee after the ethical charges against a man I
worked closely with, Mr. Rangel, who was the chairman. I know it's
difficult to come into

[[Page H6475]]

a leadership position partway through a Congress, but I have to say to
a fellow colleague from Michigan, the lack of consultation, the lack of
discussion, the lack of attempts to bring things to this Congress in a
bipartisan way, which I believe has more balance than bills written
alone, in secret by the Democratic Party late at night than are brought
to this floor with maybe moments notice--I think this bill was given to
us less than 10 minutes ago. I think that is regrettable. I think it is
unfortunate. I don't think it needed to be that way. We have always had
a great working relationship. Many delegation meetings over the years
in working on behalf of issues common to Michigan, now I had hoped we
would work together on behalf of issues important to America.
It is unfortunate that the leaders of this Congress on the Democrat
side have really taken control and not given the chairman the latitude
he needs to really draft bills in a bipartisan way. I think it's
unfortunate that control has been ceded to the leaders in such a way
that make it impossible for us to work together on issues that I think
the American people are crying out for to be worked on in a bipartisan
manner.
This was supposed to be the most open, the most transparent, the most
ethical Congress. I think we have seen events of this week prove that
otherwise. And I don't mean just the publicity events. I mean events on
the way these bills are brought to the floor without any discussions or
consultation.
We have great staffs on both sides in the Ways and Means Committee.
Our staffs do tremendous work. They are capable of working together if
given the opportunity. And I think we could resolve these issues in a
way that would benefit all Americans.
Last night, I intended to offer a motion to recommit that we gave
full notice to the other side about--unlike what we are seeing today--
that would have eliminated the new onerous job-killing 1099 requirement
that's in the health care law. In addition to helping small business,
the motion to recommit would have better protected taxpayers from
erroneously paying too much in health insurance subsidies. And the
motion would have cut taxes, cut spending, protected taxpayers, and
reduced the deficit. But as we saw last night, because Democrat leaders
were too afraid to let their Members vote on a pro-jobs, pro-small
business, pro-taxpayer, pro-deficit reduction bill, they canceled the
vote and pulled the bill from consideration by the House.
Instead, we are here today, as we have been so often under the heavy-
handed tactics of the majority, voting on a bill that has not been
reviewed by committee, that has not been posted online for 72 hours,
has not been reviewed by the employers this bill will affect, and most
importantly, has not been reviewed by the American public in any way.
The result? The Democrats have created a bill that pits American
employers against other American employers, worker against worker,
neighbor against neighbor. With unemployment stuck at nearly 10
percent, Democrats are again playing politics with American jobs. This
is not the time for politics; this is a time to get serious about the
economy and helping businesses create jobs. Frankly, it didn't have to
be this way, and it should not have been this way. There is a way to
pay for the repeal of the 1099 requirement without punishing job
providers and their workers and their families.
Additionally, we would have protected taxpayers by cracking down on
fraud and abuse. And if someone received an erroneous or excessive
benefit that they were not entitled to, they would have been required
to repay it. The bill before us leaves that very important flaw in
place. I have in my hands a way to do this without raising taxes and
killing jobs: It is the motion to recommit I intended to offer last
night but was not given the opportunity to do so. I will have it
inserted into the Congressional Record so that everyone can see that we
can save jobs without raising taxes.
Small businesses supported the measure, Republicans supported the
measure, and it's clear that rank-and-file Democrats would have
supported the measure. Somehow, Democrat leaders are so opposed to
helping small businesses--the real job creators in this country--that
they wouldn't even allow a vote on a full repeal of the 1099
requirement that also didn't include a massive job-killing tax
increase.
Why are Democrats so afraid to work with Republicans to help
America's job creators? Why don't Democrats allow Republicans to offer
amendments on behalf of small businesses? And why are they so bent on
raising taxes?

{time} 1040

Isn't $670 billion alone in tax increases in this Congress enough?
Why?
It is because Democrats are more interested in protecting their $1
trillion health care law than solving legitimate problems being
expressed by the American people and American employers. So, while it
is clear that Democrats have admitted that the burden imposed by their
health care law is a job killer, they are offering no solution today,
because the bill before us will undoubtedly have the effect of killing
jobs.
Frankly, this is a missed opportunity. It is a missed opportunity to
fix a fundamental flaw in the health care law, and it is a missed
opportunity to truly help American employers in the jobs they provide.
A job is a job is a job.
I urge my colleagues to stand up for job providers by demanding a
full repeal of the 1099 requirement that does not impose other job-
killing tax increases.

Motion To Recommit With Instructions Offered by Mr. Camp of Michigan

Mr. Camp moves to recommit the bill H.R. 5893 to the
Committee on Ways and Means with instructions to report the
same back to the House forthwith with the following
amendment:
Strike all after the enacting clause and insert the
following:

SECTION 1. INCREASE IN AMOUNT OF OVERPAYMENT OF HEALTH CARE
CREDIT WHICH CAN BE RECAPTURED.

(a) In General.--Clause (i) of section 36B(f)(2)(B) of the
Internal Revenue Code of 1986 is amended by striking ``$400
($250'' and inserting ``$2,000 ($1,000''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to taxable years ending after December 31, 2013.

SEC. 2. REPEAL OF EXPANSION OF CERTAIN INFORMATION REPORTING
REQUIREMENTS TO CORPORATIONS AND TO PAYMENTS
FOR PROPERTY.

SEC. 3. BUDGETARY PROVISIONS.

(a) Time for Payment of Corporate Estimated Taxes.--The
percentage under paragraph (2) of section 561 of the Hiring
Incentives to Restore Employment Act in effect on the date of
the enactment of this Act is increased by 7.25 percentage
points.
(b) Paygo Compliance.--The budgetary effects of this Act,
for the purpose of complying with the Statutory Pay-As-You-
Go-Act of 2010, shall be determined by reference to the
latest statement titled ``Budgetary Effects of PAYGO
Legislation'' for this Act, submitted for printing in the
Congressional Record by the Chairman of the House Budget
Committee, provided that such statement has been submitted
prior to the vote on passage.

[[Page H6476]]

[GRAPHIC] [TIFF OMITTED] TH30JY10.001

[[Page H6477]]

[GRAPHIC] [TIFF OMITTED] TH30JY10.002

[[Page H6478]]

Mr. Speaker, I reserve the balance of my time.
Mr. LEVIN. Mr. Speaker, I yield myself such time as I may consume.
Number one, you received more notice about this than we did about
your motion to recommit.
Mr. CAMP. Will the gentleman yield?
Mr. LEVIN. I yield to the gentleman from Michigan.
Mr. CAMP. That is just simply an untrue statement, and it is beneath
the dignity of the chairman of the Ways and Means Committee to assert
that.
Mr. LEVIN. Mr. Speaker, I reclaim my time.
Mr. Camp, you may not like the bill----
The SPEAKER pro tempore. All Members will suspend.
The gentleman from Michigan (Mr. LEVIN) controls the time.
Mr. LEVIN. Mr. Camp, abide by the rules of the House. I did not yield
to you to rant and rave.

Announcement by the Speaker Pro Tempore

The SPEAKER pro tempore. The gentlemen will direct all remarks to the
Chair.
Mr. LEVIN. We received a couple-minutes' notice of the motion to
recommit.
Mr. BOUSTANY. Will the gentleman yield?
Mr. LEVIN. I will continue and then I will yield.
Mr. BOUSTANY. Thank you.
Mr. LEVIN. It was handed to us as it was being submitted. So, if
there is an effort for bipartisanship, then a motion to recommit can be
submitted early on, without any effort to surprise, and we can see if
we can work it out. That's the fact.
Number two, in terms of worker against worker, what you don't like
about our proposal is that we protect and safeguard the workers of the
United States of America, and we make sure that jobs are not shipped
overseas that may help workers in other countries but not workers in
the United States of America. That is what our bill provides.
Number three, in terms of added taxes, the taxes on the very wealthy,
closing the loophole is something that should be done. You are not
protecting the typical taxpayers in this country. They don't use these
annuity provisions. They don't try to escape gift taxes through this
device. The administration has pleaded with this Congress to close this
loophole, and you, today, are essentially saying you don't want to vote
for this bill because it addresses outsourcing and because it addresses
a tax loophole. You don't like that. All right. Then vote ``no.''
We find a way to eliminate the 1099 requirement and pay for it by
making sure companies don't have an inducement to ship jobs overseas
and the very, very wealthy to escape gift taxation. So that is really
what this is all about. Everybody here has a choice: eliminate the 1099
and not use a hammer on millions of families in this country and
eliminate it in a way that saves jobs in this country.
Mr. BOUSTANY. Will the gentleman yield?
Mr. LEVIN. I yield to the gentleman from Louisiana.
Mr. BOUSTANY. I thank the gentleman.
Mr. Speaker, as a member of the committee and as the ranking member
on Oversight, I was sitting in my office. This debate began, and the
bill was not even in electronic form for us to review.
Mr. LEVIN. Okay. I reclaim my time.
I told you that it was placed on the Internet, number one. Number
two, every provision in this bill in terms of the pay-for has been
before this Congress before--every single provision. So don't say
you're surprised by these provisions.
I reserve the balance of my time.

Announcement by the Speaker Pro Tempore

The SPEAKER pro tempore. Again, Members are reminded that all remarks
must be addressed to the Chair.
Mr. CAMP. I yield myself such time as I may consume.
Mr. Speaker, to correct the Record, I would just say the motion to
recommit that I tried to offer last night was available for several
hours to the majority. They pulled the bill and didn't allow me to
ultimately offer it. That's why I introduced it in the Record today.
At this time, I yield such time as he may consume to a distinguished
member of the Ways and Means Committee, the gentleman from Louisiana
(Mr. Boustany).
Mr. BOUSTANY. Mr. Speaker, again, I am in my office. This debate
begins, and we can't find the actual bill language in electronic form.
I understand it is now available, but to have the debate begin I don't
think is very fair to Members of this House, and it is not what the
American people would expect of us.
I think it is entirely regrettable that--we are dealing with an issue
of national importance. This body can act. This body can act in the
national interest if we work together, but these kinds of trust-
destroying measures are not in the interest of this body or in the
interest of the American people.
My objection to the bill still stands. Even though there is a move to
incorporate the repeal of the 1099 provisions, I still have a
significant objection because we are talking about some very
complicated international tax provisions for which we really have not
had the kind of hearings necessary to understand the consequences. We
should not be doing this type of ad hoc tax tinkering.
We ought to be taking a more comprehensive approach in understanding
the economic consequences. These tax provisions, from what I am hearing
from those who are trying to engage in international business to create
American jobs, will be a job killer. They will destroy American jobs.
What we need to do is look at this in a more comprehensive way.
Now, if we haven't had the kind of hearings to vet this, to explore
this, how can we expect the American people to understand the
complexity of the nature of these tax provisions?
What we ought to be doing is creating jobs. What we ought to be doing
is promoting American competitiveness. What we ought to be doing is
promoting economic growth and private sector job growth. That is the
problem with the bill.
Now, if you have U.S. companies that are trying to compete against
foreign-owned companies in a very complex economic environment and if
U.S. companies are subject to double taxation, you can call it a
loophole. I call it hurting American competitiveness.
The bottom line is we want a Tax Code that promotes private sector
job growth. We want a Tax Code that promotes American corporations and
businesses that are going to be competitive worldwide to create jobs at
the highest standards possible, and we want to see economic growth,
which we know will lead to private sector job growth.

{time} 1050

So my objection to the bill still stands based on the policy. But I
am deeply, deeply regretful and distressed at the way this bill has
been taken to the floor of the House this morning.
Mr. LEVIN. I now yield 3 minutes to the distinguished gentleman from
New York (Mr. Murphy).
Mr. MURPHY of New York. Mr. Speaker, I rise today supporting House
bill 5982, the Small Business Tax Relief Act of 2010. This bill is
incredibly important for us to pass. As I travel around my district in
upstate New York, I hear consistently, all the time from my small
business owners that they need regulatory relief, and they need support
if they're going to invest and expand our economic recovery that we
have going on.
As somebody who has been a small business owner, who has started
small businesses and has been building them up all of my life, I know
what a burden regulatory hurdles can be for small businesses. This bill
is going to repeal what could potentially be a huge hassle for a lot of
small businesses. This 1099 reporting was a well-intentioned provision
to try to catch people who were cheating on their taxes; but it has
some unintended consequences, in my opinion, that will create a lot of
extra work and hassle for our small businesses.
This is something I hear about every day when I travel my district. I
am sure that our colleagues across the aisle hear this from their small
business owners as well. And everyone in this body who knows what's
going on with our economy will know how important it is to stimulate
activity and to get people back to work. The best way we do that is to
support our small businesses. They're the ones who create new jobs.
Sixty to 80 percent of the

[[Page H6479]]

new jobs are created by small businesses--in particular, new small
businesses. That's where the economic activity comes from in our
country. That's who we have got to be supporting. This bill does a
great job of doing that.
I know that many of my colleagues on the other side know that this
hurdle that we have out there, with this 1099 reporting, needs to be
repealed. They've been talking about it. We've been talking about it.
There's bipartisan consensus there, but this bill does something else
that's very valuable for the American public as well. It closes some
foreign tax loopholes. Some of these are very egregious. Companies are
getting the United States Government to refund foreign tax credits
they're paying on income that they had never reported in the United
States. This is something that should be fixed. We need to make sure
our corporations have incentives to invest here, not incentives to
invest overseas based on complex tax schemes that keep them from paying
taxes.
I want to be building stuff in America. I want to be making stuff in
America. I want our tax policy to encourage corporations to make stuff
here in America. That's what I hear from big companies. They want to
build it here, but our tax rules make it so that it's better for them
to build it somewhere else. This is how we solve that. This will bring
American jobs back here. It will bring American investment back from
American corporations, and it will help our small businesses get some
regulatory relief. This is a win on both sides. This is a bipartisan
kind of solution because we're helping our small businesses by getting
government out of the way. We're fixing our Tax Code to make it so that
American companies will have incentives to invest here in America, not
in China and not anyplace else around the world.
This is the kind of policy that will help get our economy moving.
This will put Americans back to work. This will help our middle class
folks who are struggling all over this country, looking for good jobs.
This is the way that we do that. I think this is a great piece of
legislation. I expect we'll have good bipartisan support for it.
Mr. CAMP. Mr. Speaker, I yield myself such time as I may consume.
I would just say I agree with a portion of what the previous speaker
said. I agree, there is a serious flaw in this health care bill. This
is one of many, and this serious flaw is a job-killer. So I commend the
majority for their recognition of these serious flaws in the health
care bill and that there are job-killing provisions in it that many of
us warned them about before the bill came to the floor but weren't
really allowed to be part of the process to try to correct those before
they came. And, frankly, not many people here were able to do that
either, as it was just rolled out.
But the answer isn't to hurt other job providers. We're in a
recession. Unemployment isn't getting better. We know the stimulus
didn't work. We're still at a national rate of about 10 percent. But
let's look at what job providers say about the way that they pay for
this fix. The fix we're for--and we had a legitimate way to do it, as I
said, without raising taxes, without hurting other job providers, and
by actually helping to prevent the potentially fraudulent way this
provision was drafted.
And let me just tell you what an association of employers that
promotes America's Competitive Edge Group said. They represent more
than 63 million American jobs, and they say the $12 billion imposed in
the proposed international tax increases would further disadvantage
U.S. companies, harming their competitiveness. We are competing around
the world, like it or not, and that would reduce U.S. earnings. That
would reduce U.S. earnings and thereby reduce investment in U.S. plant
and equipment research and expanding U.S. payrolls.
Let me read to you what the National Association of Manufacturers
says about the way they pay for this bill. Why not use the anti-fraud
corrections that we had in the motion to recommit last night? They
represent about 22 million people in the United States, U.S. workers.
Manufacturers feel strongly that imposing this $11.5 billion tax
increase on these companies will jeopardize the jobs of American
manufacturers. We've already lost 700,000 American manufacturing jobs.
Why impose a greater burden on them? It's not necessary, and it would
stifle our fragile economy.
The United States Chamber of Commerce, they represent more than 3
million businesses and millions more U.S. employees. They say this
legislation would impose Draconian tax increases on American worldwide
companies, would hinder job creation, decrease the competitiveness of
American businesses, and deter economic growth. If there's one thing
this country needs, it's economic growth and the jobs that provides.
I don't know why they're so bent on increasing taxes when we could
fix this flaw in the health care bill--which I commend my colleagues on
the other side for recognizing the flaw in the health care bill, and
there are others that we need to fix as well--but it is not a fix when
we have these reputable employers and businesses say that this is going
to hurt our recovery, hurt job creation; and, frankly, the record on
job creation in the last year has not been a good one. We need to do
better. We can do better, and I would urge a ``no'' vote.
With that, I yield 1 minute to my distinguished colleague from
Louisiana (Mr. Boustany).
Mr. BOUSTANY. Mr. Speaker, I thank my friend, the ranking member of
the full committee.
I want to respond to a couple of things the gentleman from New York
brought up. This 1099 provision, we agree on it. It's an egregious
issue. It needs to be repealed. We need to do it in the right way,
along with many of these other issues in the health care bill.
But with regard to small businesses, the President himself has said
that he wants to double exports in 5 years, and the best way to do that
is to expand export opportunities. And if we're going to do that for
small businesses and mid-sized companies, we have to do this in a way
that allows them to partner with large corporations and have the
infrastructure. These tax provisions in the bill will subject our
companies, who are doing this type of work, to double taxation, making
us less competitive, inhibiting economic growth, and reducing our
ability to export. It's clear.
Secondly, we haven't had the hearings to actually flesh all this out.
I think it's critical that we really look at this if we're going to
promote American competitiveness. My fear is that, yes, we might double
exports in 5 years, but it will be the export of American jobs.
Mr. LEVIN. I now yield 3 minutes to a very distinguished colleague of
ours from New York (Mr. Owens).
Mr. OWENS. I thank the gentleman from Michigan, Chairman Levin.
I rise today in support of H.R. 5982, the Small Business Tax Relief
Act. This legislation repeals the new 1099 reporting requirements that
impose a flood of new tax paperwork on small businesses. This bill
evidences our commitment to listening to our constituents and acting to
resolve their legitimate concerns. We, on our side of the aisle, are
listening. We are acting.
I have heard from numerous constituents, farmers, manufacturers and
other small businesses, about this issue. Repealing these requirements
is critical to protecting small businesses and family farms from having
to mail hundreds of forms to vendors each year. H.R. 5982 is fully paid
for by eliminating $11.6 billion in tax breaks for companies that ship
jobs overseas.

{time} 1100

We hear constantly about the need for regulatory reform. This bill
provides regulatory relief. Foreign tax credits do not incentivize
production or manufacturing in the United States, as my colleague, Mr.
Murphy, amply and adequately pointed out. We need to focus on
incentivizing U.S.-based production by focusing on appropriate tax
incentives and reduction in regulatory activity by the government.
We have an opportunity today to continue to improve on the health
reform law by passing this bill, by helping to create U.S. jobs, and
focusing and incentivizing companies to grow the American economy.
I urge my colleagues to support H.R. 5982.
Mr. LEVIN. I yield 2 minutes to the very vigorous gentleman from
Virginia (Mr. Perriello).

[[Page H6480]]

Mr. PERRIELLO. Give America a chance and America will outcompete the
world. Give American business a chance, and it will outcompete China
and the world. Give American workers a chance, a level playing field,
and we will outcompete the world. We can build things, make things, and
grow things better in this country than anywhere in the world if we
give a level playing field. We have a chance once again today to level
that playing field and let America win again.
We can do that by closing this outsourcing loophole that rewards
companies for sending jobs overseas. And we can do it in a way that
also provides relief to our small business owners, who are trying to
work hard and play by the rules. Well-intentioned efforts to make sure
people were not cheating on their taxes, to make sure people were
paying their burden, can also be done in a way that doesn't cost those
who have been working hard and playing by the rules.
We have a chance to do two great things today. We have a chance to
level that playing field so that America can win in manufacturing, in
agriculture, in forestry, in farming. These are things we can do better
than anyone when we don't have the trade deals and the tax code that
rewards all the worst things of sending those much-needed American jobs
overseas. And we can do so at the same time by reducing that regulatory
pressure on small business.
We worked hard this year to support our small businesses, with the
Small Business Lending Fund that is dying in the Senate, with tax
credits for small business, too many of which have died in the Senate.
Here is a chance today to provide relief to small business, and most
importantly, to level that playing field so that we can make it in
America again, so that we can have those good jobs that make the middle
class and working class in this country thrive, that reward
entrepreneurship and innovation, that reward people who work hard and
play by the rules. This is an opportunity today that is beyond Democrat
and Republican. It's just about common sense and making a difference in
the economy.
Washington should have the same sense of urgency I feel back home
every weekend when we talk to small business owners. This is a chance
for us to come together, to do good things to let America win again.
This is important for American business, for American workers, and for
American families.
I urge all of my colleagues on both sides of the aisle to be part of
the solution.
Mr. CAMP. I yield 2 minutes to a distinguished member of the Ways and
Means Committee, the gentlewoman from Florida (Ms. Ginny Brown-Waite).
Ms. GINNY BROWN-WAITE of Florida. I thank the gentleman for yielding.
Madam Speaker, this bill never went through committee, never was
marked up in committee. And you know what, it's awfully good to hear
the other side finally admit that they messed up in the health care
bill, that it is going to have a tremendous impact on small businesses.
You know, you can't raise taxes on small businesses in the health care
bill, use that revenue to say ObamaCare will reduce the deficit, and
then turn around and remove those same business tax increases and tell
small businesses that you are doing them a favor. That's known as a
shell game in a carnival. That's shameful. You know what, you are not
doing them a favor.
Representative Lungren introduced the Small Business Paperwork
Mandate Elimination Act to remove that huge burden on entrepreneurs
that was found in the health care bill. That language was here
yesterday, and it was not allowed to be voted on. Rather, the majority
pulled the bill so that we could not have that very meaningful vote.
This morning it was turned around and added to language that raises
taxes elsewhere. And ironically, it's called the Small Business Tax
Relief bill. And Members are going to be forced to vote on that. This
is totally unacceptable.
The majority first needs to make up its mind whether or not it really
wants to help small businesses. Then I think that the majority needs to
be honest about that decision. There is a reason, Madam Speaker, why
Members on the opposite side of the aisle are afraid to go home and
face election, and it's exactly this kind of chicanery that causes that
fear.
Mr. LEVIN. Madam Speaker, could you please give us the time remaining
on both sides?
The SPEAKER pro tempore. Mr. Levin of Michigan has 7 minutes
remaining, and Mr. Camp of Michigan has 3\1/2\ minutes.
Mr. LEVIN. I now yield 1 minute to the gentleman from New York (Mr.
Murphy).
Mr. MURPHY of New York. Madam Speaker, this bill is very simple. It
does two things. There has been a lot of talk here to confuse people,
but it's very simple. One, it provides regulatory reform to our small
businesses so they can get busy putting Americans back to work. And
two, very important, it closes a tax loophole that encourages
businesses to invest overseas. The other side is claiming somehow
that's a bad thing. It's exactly what we should do.
I want the tax code to be set up to encourage businesses to invest in
America. Because if we do that, we will see more investment in America.
We will see American workers back to work. We will see our middle class
back to work and feeling their incomes rising, and we will see the
greatness that has made this country, the innovation, the forward
thinking. It comes from doing our manufacturing, our agriculture, our
mining here in the United States. But we've let our tax code incent
businesses to go away. So this does two things. One, it helps our small
businesses with relief. Two, it turns our tax code in the right
direction so that businesses have incentives to be here.
Mr. CAMP. I reserve the balance of my time.
Mr. LEVIN. It is now my pleasure to yield 2 minutes to a very
distinguished member of our committee, Mr. Xavier Becerra from
California.
Mr. BECERRA. I thank the gentleman for yielding.
My friends, when was the last time you picked up a product that you
just purchased at a store, turned it over, and took a look at where it
was made? When was the last time you saw that product say ``Made in
America''? Well, this legislation is all about making sure the next
time you buy something in a store in America that product will have
been made in America. Because guess what? Not only do we have to face
unfair competition by some of our very fierce competitors who are using
tactics that are unreasonable to somehow defeat American business and
American workers, but we even have things in our tax code that
encourage American companies to ship jobs abroad and get paid by the
taxpayers through tax credits for doing so.
This legislation is all about getting rid of that unfair competition
for America's workers so we can make it in America. That's what this is
all about. This is also about making sure that small businesses have a
chance to compete without bureaucratic regulation. And so there is
bipartisan agreement on removing the burden under 1099 tax return
filings that would make it difficult for small businesses to compete.
And that's in this bill as well.
What is not in this bill is the process, is the frustration that
American workers are feeling. Some people it sounds like in this
Chamber would like you to vote ``no'' on a good bill because they are
complaining about a process. The only folks in America who have a right
to complain about process right now are Americans who are trying to pay
their mortgage and keep their jobs. And they are sick and tired of a
process where people say ``no'' to good legislation. It is time for us
to say ``yes'' to good legislation.
Let us once again make things in America and make them by Americans.
Pass H.R. 5982 and make sure that we can tell Americans when they turn
over that product that they just bought it was made in America.

{time} 1110

General Leave

Mr. LEVIN. I ask that all Members have leave to enter extraneous
material into the Record.
The SPEAKER pro tempore (Ms. Loretta Sanchez of California). Is there
objection to the request of the gentleman from Michigan?
There was no objection.
Mr. CAMP. Madam Speaker, I yield the balance of my time to the
gentleman from Illinois (Mr. Roskam), a

[[Page H6481]]

distinguished member of the Ways and Means Committee.
Mr. ROSKAM. I thank the gentleman for yielding.
If you're Peyton Manning, the football great for the Indianapolis
Colts, and you come to the line of scrimmage, you have the right to do
an audible call at the line of scrimmage. I mean, Peyton's a champion.
Time and time and time again he's come out, he sees the play, he
recognizes that the play has to change, he shouts out the play to the
team, and they score and they're famous and they're successful.
Unfortunately, Madam Speaker, we don't have any Peyton Manning's on
the other side of the aisle who are driving this process. In other
words, there is nobody that has the breadth and the depth and the
comprehensive understanding--there's, frankly, nobody in this Chamber
that has that--to come in and say, You know what? New plan. We're going
to do something completely different.
Last night, ironically, the chairman of the Ways and Means Committee
was on this very floor in that very seat and said, There are no excuses
to vote against this bill. He said that once or twice or three times. I
jotted it down. And I reminded him of that during the debate last
night, and yet, ironically, within that very short period of time, it's
my understanding that the chairman, himself, found that there was a
reason to vote against the very bill that moments before he was arguing
for.
And why is that? Because the Founders have a process in place that is
a process of deliberation. The Founders understood that this process is
one that is made better by robust participation.
Now, the majority has known about this 1099 requirement since
November of last year, and what have they done? They have stifled the
minority. They have said, No, no, no, no. We've got this all figured
out. You Republicans, you just continue to press your nose up against
the glass and look in and mouth suggestions, but we're really not
interested in what you have to say. All right.
Then there's a revelation. The public gets to see this 1099
requirement, and they recognize this is a disaster. We had friends on
the other side of the aisle minutes ago recounting about how bad this
is going to be for farmers and small businesses. And you know what?
They're right.
The 1099 requirement is absurd. The 1099 requirement, I would submit
to you, is the result of line of scrimmage audible calls by the
majority.
Now, it doesn't have to be this way. Mr. Camp laid out a very
articulate process moments ago about how best to improve this. And this
is an underperformance. The chairman said that we shouldn't be
surprised by things that are in this bill. And, frankly, I'm not
surprised by anything the majority does. I've seen the majority run
roughshod over process in the name of a better product, and time and
again, it has fallen short.
So here we are basically with an admission that ObamaCare is
fundamentally flawed in this sense, a mandate on business. I promise
you there will be efforts in the future to revisit other parts of
ObamaCare--the individual mandate, the employer mandate, health savings
account taxes, and on and on and on, all things that the American
public has been speaking out--they're even calling right now, they're
so upset about it.
Madam Speaker, the reason Republicans are opposed to this is process,
but, fundamentally, bad process yields a bad product. This is a bad
product. It creates a Hobson's choice. It says we're going to remove
the 1099 requirement and, instead, we're going to jeopardize job
producers in exchange. We should vote ``no.''
Mr. LEVIN. First, I yield 30 seconds to the gentleman from New York
(Mr. Murphy).
Mr. MURPHY of New York. I just wanted to add one thing that didn't
come out in the debate yet. There's a lot of talk about this being a
bill from our side, and the Republicans seem to disagree that it's
going to be helpful for business. The National Federation of
Independent Business has endorsed this bill and is asking people to
vote in favor of it. I wanted to make sure all the Members knew that.

Parliamentary Inquiries

Mr. DANIEL E. LUNGREN of California. Madam Speaker, parliamentary
inquiry.
The SPEAKER pro tempore. The gentleman will state his inquiry.
Mr. DANIEL E. LUNGREN of California. Is there any rule, under the
House, that requires notice being given to the author of a bill when it
is being brought up without any notice whatsoever, since I am the
author of the 1099 repeal bill and have had it before this House since
April of this year and given no notice? Is there any requirement under
the rules that this be notified that this bill is going to come up?
The SPEAKER pro tempore. The Chair notes that the motion before the
House is a motion to suspend the rules.
Mr. DANIEL E. LUNGREN of California. Further parliamentary inquiry,
Madam Speaker.
The SPEAKER pro tempore. The gentleman will state his inquiry.
Mr. DANIEL E. LUNGREN of California. The Speaker has just told us
that because this is a bill being brought up under suspension of the
rules that all rules are, therefore, suspended. My parliamentary
inquiry is under regular rules.
Is there any requirement that the author of a bill be at least given
notice that that bill is to be brought up to the floor for
consideration before it is considered?
The SPEAKER pro tempore. There is no such rule.
The gentleman from Michigan is recognized.
Mr. LEVIN. Madam Speaker, there's obvious discomfort on the side of
the minority. There's a claim about procedure.
What I said before about our notice to motion on the motion to
recommit is exactly correct. Now, you say we should act on elimination
of 1099? That's exactly what we're doing, exactly what we're doing.
Then you say you don't like the pay-fors. You act as if this is a new
issue. We have debated these provisions time and time and time and time
again, and you know it.
Mr. DANIEL E. LUNGREN of California. Will the gentleman yield on
that?
Mr. LEVIN. No. I'm going to finish my statement.
The outsourcing provision has been before us a number of times.
And you keep talking about workers. We talk about having workers in
the United States having work. That's what this is all about. And
essentially what the provision does in the Tax Code is to help those
companies that ship jobs overseas, and what we're saying is that that
should be prevented, period. We've been saying it time and time and
time again.
We've also discussed another loophole that's here that you don't seem
to discuss, and that is for a relatively few very wealthy people taking
a loophole in the Code and setting up a gift to others in the family,
taking back the money, hoping that there will be an increase and no
gift tax paid. That is a grievous loophole that should be closed, and
we provide payment for this bill by closing it.
Now, I want to finish about outsourcing.
We have lost so many jobs in this country. If it comes through
competition that's fair, so be it. If it comes, however, from companies
using a provision that says you get a foreign tax credit on income,
you're supposed to bring that income back here and not use the foreign
tax credit to avoid taxation.

{time} 1120

It's not an issue of double taxation. It is an issue of companies
avoiding any taxation.
So essentially everybody who comes to the floor to vote on this has
the opportunity to eliminate the 1099 provision and to close loopholes
and to stop some of the outsourcing of American jobs. There could not
be stronger reasons to vote for a bill.
So I close: Vote for it.
Mr. LEVIN. Mr. Speaker, I and Ways and Means Committee Ranking Member
Camp have asked the nonpartisan Joint Committee on Taxation to make
available to the public a technical explanation of H.R. 5982, the
``Small Business Tax Relief Act of 2010''. This technical explanation
provides information on the Committee's understanding and legislative
intent behind the legislation. It is available on the Joint Committee's
website at www.jct.gov and is listed under document number JCX-43-10.

[[Page H6482]]

Mr. VAN HOLLEN. Madam Speaker, I rise in strong support of the Small
Business Tax Relief Act of 2010, and I commend my colleagues
Representative Scott Murphy and Representative Bill Owens for bringing
it to the floor today.
Simply put, this bill does two things: It provides information
reporting relief to small businesses--and it closes loopholes in
current law that encourage U.S. multinationals to invest overseas.
The question members must ask themselves is this: Do we want jobs in
America, or do we want a tax code that rewards companies for shipping
jobs overseas?
For every small business seeking to expand and create jobs, and for
every American looking for work, I urge a yes vote.
Mr. LEVIN. I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Michigan (Mr. Levin) that the House suspend the rules
and pass the bill, H.R. 5982.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. LEVIN. Madam Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.

____________________