[House Report 108-549]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-549

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PROVIDING FOR CONSIDERATION OF H.R. 4520, AMERICAN JOBS CREATION ACT OF 
                                  2004

                                _______
                                

   June 17 (legislative day, June 16), 2004.--Referred to the House 
                   Calendar and ordered to be printed

                                _______
                                

   Mr. Reynolds, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 681]

    The Committee on Rules, having had under consideration 
House Resolution 681, by a record vote of 9 to 3, report the 
same to the House with the recommendation that the resolution 
be adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for the consideration of H.R. 4520, 
the American Jobs Creation Act of 2004, under a closed rule. 
The rule provides one hour of debate in the House equally 
divided and controlled by the chairman and ranking minority 
member of the Committee on Ways and Means.
    The rule provides that the amendment in the nature of a 
substitute recommended by the Committee on Ways and Means, as 
modified by the amendment printed in this report, shall be 
considered as adopted. The rule waives all points of order 
against the bill, as amended, and against its consideration. 
Finally, the rule provides one motion to recommit with or 
without instructions.
    The waiver of all points of order against consideration of 
the bill includes a waiver of clause 4(a) of rule XIII 
(requiring a three-day layover of the committee report), which 
is necessary because the committee report (H. Rept. 108-548) 
was not filed until Wednesday, June 16, 2004, and the bill may 
be considered by the House as early as Thursday, June 17, 2004.

                            COMMITTEE VOTES

    Pursuant to clause 3(b) of House rule XIII the results of 
each record vote on an amendment or motion to report, together 
with the names of those voting for and against, are printed 
below:

Rules Committee record vote No. 280

    Date: June 17, 2004 (legislative day of June 16, 2004).
    Measure: H.R. 4520, American Jobs Creation Act of 2004.
    Motion by: Mr. Frost.
    Summary of motion: To make in order and provide the 
appropriate waivers for the amendment offered by Representative 
Rangel which strikes the reported bill except Title VII and 
inserts the following provisions: (1) Repeals the exclusion for 
extraterritorial income, effective January 1, 2005. The 
amendment contains binding contract relief and general 
transition relief that retains 80 percent of the benefit for 
2005 and 60 percent for 2006. (2) Provides a deduction for a 
portion of the income attributable to U.S. production 
activities. U.S. production activities are defined as 
activities in producing goods that were eligible for the FSC/
ETI benefits if exported. This includes movies and software. 
The deduction applies to both corporate and noncorporate 
taxpayers. The deduction is phased in, ultimately reaching 10 
percent. As a result, there is a 10 percent across-the-board 
rate reduction for income from those productive activities for 
both corporate and non-corporate taxpayers. Taxpayers at the 
maximum tax rate will receive a 3.5 point reduction. (3) 
Extends the current level of small business expensing identical 
to the extension included in the reported bill. The amendment 
also includes all of the subchapter S corporate reform and 
simplification changes that are contained in the reported bill. 
(4) Extends the research credit and other expiring tax 
provisions in a form identical to that included in the reported 
bill. (5) Includes a permanent deduction for State and local 
general sales taxes. Taxpayers would have the election of 
deducting income taxes or sales taxes. The amount of the 
deduction for sales taxes would be computed under pre-1986 
laws. It would not be limited to the amount determined under a 
table, as in the reported bill, and it would not be subject to 
a cap, as in the reported bill. (6) Includes a temporary 
reduction in tax on repatriated earnings identical to the 
provision in the Senate bill.
    The amendment is revenue neutral and includes the following 
offsets: (A) The tax shelter provisions adopted on a bipartisan 
basis by the Senate. (B) Permanent extension of IRS and custom 
user fees identical to provisions in the reported bill. (C) 
Provisions preventing corporations from avoiding tax by 
reincorporating overseas. (D) Provisions preventing individuals 
from renouncing their citizenship for tax avoidance purposes 
identical to the provisions passed by the Senate. (E) 
Restructuring ethanol incentives identical to provisions in the 
reported bill. (F) Provisions addressing fuel tax evasion 
identical to provisions in the reported bill. (G) Provisions 
adding two vaccines to the list of taxable vaccines, identical 
to provisions in the reported bill. (H) Provisions preventing 
foreign entities from avoiding U.S. taxes through treaty-
shopping.
    Results: Defeated 3 to 9.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings (WA)--Nay; Myrick--Nay; Sessions--Nay; 
Reynolds--Nay; Frost--Yea; Slaughter--Yea; McGovern--Yea; 
Dreier--Nay.

Rules Committee record vote No. 281

    Date: June 17, 2004 (legislative day of June 16, 2004).
    Measure: H.R. 4520, American Jobs Creation Act of 2004.
    Motion by: Mr. Frost.
    Summary of motion: To make in order and provide the 
appropriate waivers for the amendment offered by Representative 
Frost which returns to pre-1986 law the deduction of state 
sales taxes. The amendment gives taxpayers the option of either 
using the Treasury-developed table to take their sales tax 
deduction or submitting their actual sales tax receipts. It 
also gives taxpayers the opportunity to deduct big ticket items 
like cars, on top of the deduction received from the official 
table. Finally, it makes the deduction permanent.
    Results: Defeated 4 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings (WA)--Nay; Myrick--Nay; Sessions--Yea; 
Reynolds--Nay; Frost--Yea; Slaughter--Yea; McGovern--Yea; 
Dreier--Nay.

Rules Committee record vote No. 282

    Date: June 17, 2004 (legislative day of June 16, 2004).
    Measure: H.R. 4520, American Jobs Creation Act of 2004.
    Motion by: Mr. Frost.
    Summary of motion: To make in order and provide the 
appropriate waivers for the amendment offered by Representative 
Frost which makes the sales tax deduction in the bill 
permanent.
    Results: Defeated 4 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings (WA)--Nay; Myrick--Nay; Sessions--Yea; 
Reynolds--Nay; Frost--Yea; Slaughter--Yea; McGovern--Yea; 
Dreier--Nay.

 Rules Committee record vote No. 283

     Date: June 17, 2004 (legislative day of June 16, 2004).
     Measure: H.R. 4520, American Jobs Creation Act of 2004.
     Motion by: Mrs. Slaughter.
     Summary of motion: To make in order and provide the 
appropriate waivers for the amendment offered by Representative 
McCarthy which encourages film producers to keep feature film 
and television production projects in the U.S.
     Results: Defeated 3 to 9.
     Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings (WA)--Nay; Myrick--Nay; Sessions--Nay; 
Reynolds--Nay; Frost--Yea; Slaughter--Yea; McGovern--Yea; 
Dreier--Nay.

 Rules Committee record vote No. 284

     Date: June 17, 2004 (legislative day of June 16, 2004).
     Measure: H.R. 4520, American Jobs Creation Act of 2004.
     Motion by: Mrs. Slaughter.
     Summary of motion: To make in order and provide the 
appropriate waivers for the amendment offered by Representative 
Emanuel which increases penalties for promoting abusive tax 
shelter by setting penalties at 150 percent of the fees earned 
by accountants, attorneys, investment advisors and other tax 
professionals who design and sell them.
     Results: Defeated 3 to 9.
     Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings (WA)--Nay; Myrick--Nay; Sessions--Nay; 
Reynolds--Nay; Frost--Yea; Slaughter--Yea; McGovern--Yea; 
Dreier--Nay.

Rules Committee record vote No. 285

    Date: June 17, 2004 (legislative day of June 16, 2004).
    Measure: H.R. 4520, American Jobs Creation Act of 2004.
    Motion by: Mrs. Slaughter.
    Summary of motion: To make in order and provide the 
appropriate waivers for the amendment offered by Representative 
Emanuel which requires businesses to reimburse municipalities 
for economic assistance exceeding $100,000 once a business 
relocates offshore and before the term of the agreement 
providing for the economic assistance is completed.
    Results: Defeated 3 to 9.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings (WA)--Nay; Myrick--Nay; Sessions--Nay; 
Reynolds--Nay; Frost--Yea; Slaughter--Yea; McGovern--Yea; 
Dreier--Nay.

Rules Committee record vote No. 286

    Date: June 17, 2004 (legislative day of June 16, 2004).
    Measure: H.R. 4520, American Jobs Creation Act of 2004.
    Motion by: Mr. McGovern.
    Summary of motion: To make in order and provide the 
appropriate waivers for the amendment offered by 
Representatives Lantos and McGovern which creates a tax credit 
for employers continuing to pay activated Guard and Reserve 
employees equal to 50 percent of the compensation (capped at 
$30,000 for a $15,000 maximum credit per employee per year). 
This credit rewards those employers already going above and 
beyond what the law mandates and encourages more employers to 
do so which will alleviate strains on Guard and Reserve 
families caused by longer than expected activations. The offset 
for this legislation is found by striking Section 311, relating 
to look-thru treatment of payments between related controlled 
foreign corporations under foreign personal holding company 
income rules.
    Results: Defeated 3 to 9.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings (WA)--Nay; Myrick--Nay; Sessions--Nay; 
Reynolds--Nay; Frost--Yea; Slaughter--Yea; McGovern--Yea; 
Dreier--Nay.

Rules Committee record vote No. 287

    Date: June 17, 2004 (legislative day of June 16, 2004).
    Measure: H.R. 4520, American Jobs Creation Act of 2004.
    Motion By: Mr. Goss.
    Summary of motion: To report the rule.
    Results: Agreed to 9 to 3.
    Vote by Members: Goss--Yea; Linder--Yea; Pryce--Yea; Diaz-
Balart--Yea; Hastings (WA)--Yea; Myrick--Yea; Sessions--Yea; 
Reynolds--Yea; Frost--Nay; Slaughter--Nay; McGovern--Nay; 
Dreier--Yea.

            SUMMARY OF AMENDMENT TO BE CONSIDERED AS ADOPTED

    Thomas: Manager's Amendment. Modification of Aquatic 
Resources Trust Fund Provision, Section 251: Provides for the 
transfer of a portion of the fuel excise taxes paid on fuel 
used by motorboats and small engines from the general fund to 
the Aquatic Resources Trust Fund beginning in 2007.
    Modification of Attorney-Client Privilege, Section 615: 
Strikes provision that clarifies that taxpayer identity is not 
covered by attorney-client or authorized tax-practitioner 
privilege with respect to tax shelter investor lists.
    Limiting Cost of Tobacco Program Repeal, New Section 713 
and Section 725: The current ``no net cost'' tobacco program 
employs assessments on producers, manufacturers and tobacco 
importers to offset the program's cost. The amendment ensures 
that the buyout will cost no more than $9.6 billion by 
continuing to apply the current assessments to tobacco 
currently covered by the ``no net cost'' program and clarifies 
the limitation.

             TEXT OF AMENDMENT TO BE CONSIDERED AS ADOPTED

  Amend subsection (c) of section 251 to read as follows:
  (c) Transfers to Highway Trust Fund.--
          (1) Paragraph (4) of section 9503(b) is amended by 
        adding ``or'' at the end of subparagraph (C), by 
        striking the comma at the end of subparagraph (D) and 
        inserting a period, and by striking subparagraphs (E) 
        and (F).
          (2) Paragraph (4) of section 9503(b), as amended by 
        paragraph (1), is further amended by adding ``or'' at 
        the end of subparagraph (B), by striking the comma at 
        the end of subparagraph (C) and inserting a period, and 
        by striking subparagraph (D).
  Amend paragraph (2) of section 251(e) to read as follows:
          (2) Subsection (c).--
                  (A) The amendments made by subsection (c)(1) 
                shall apply to taxes imposed after September 
                30, 2003.
                  (B) The amendments made by subsection (c)(2) 
                shall apply to taxes imposed after September 
                30, 2006.
  In section 615, strike subsections (c) and (d) and insert the 
following new subsection:
  (c) Effective Date.--The amendments made by this section 
shall apply to transactions with respect to which material aid, 
assistance, or advice referred to in section 6111(b)(1)(A)(i) 
of the Internal Revenue Code of 1986 (as added by this section) 
is provided after the date of the enactment of this Act.
  Strike section 713 and insert the following new section (and 
conform the table of contents accordingly):

SEC. 713. CONTINUATION OF LIABILITY AND NO NET LOSS ASSESSMENTS TO 
                    PREVENT LOSSES ON PRICE SUPPORT LOANS.

  (a) Liability.--The amendments made by this subtitle shall 
not affect the liability of any person under any provision of 
law so amended with respect to any crop of tobacco planted 
before the effective date applicable to that kind of tobacco 
under section 702.
  (b) Assessment Authority.--
          (1) Assessments to cover outstanding loan costs.--The 
        Commodity Credit Corporation shall impose and collect 
        an assessment on the sale of 2005 and subsequent crops 
        of each kind of tobacco and on the importation of 
        tobacco in such amounts as may be necessary to obtain 
        funds sufficient to cover any losses incurred by the 
        Corporation with respect to price support loans that--
                  (A) were made for that kind of tobacco under 
                section 106 of the Agricultural Act of 1949 (7 
                U.S.C. 1445), before the repeal of such section 
                by section 712 of this Act; and
                  (B) remain outstanding on or after the date 
                of the enactment of this Act.
          (2) Administration.--Assessments under paragraph (1) 
        shall be administered in the manner provided for in 
        section 106B of the Agricultural Act of 1949 (7 U.S.C. 
        1445-2), as in effect the day before the date of the 
        enactment of this Act. To cover the costs of 
        administering such assessments, the Commodity Credit 
        Corporation shall use funds remaining in the No Net 
        Cost Tobacco Funds and No Net Cost Tobacco Accounts 
        established pursuant to sections 106A and 106B of the 
        Agricultural Act of 1949 (7 U.S.C. 1445-1, 1445-2).
  Strike section 725 and insert the following new section:

SEC. 725. SOURCE OF FUNDS FOR PAYMENTS.

  There is hereby appropriated to the Secretary, from amounts 
in the general fund of the Treasury, such amounts as the 
Secretary needs in order to make the payments required by 
sections 722 and 723, except that such amounts shall not exceed 
the lesser of--
          (1) amounts received in the Treasury under chapter 52 
        of the Internal Revenue Code of 1986 (relating to 
        tobacco products and cigarette papers and tubes) during 
        the period beginning on October 1, 2004, and ending on 
        September 30, 2009, or
          (2) $9,600,000,000.

                                  
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