Investing in American Jobs and Closing Tax Loopholes Act of 2010 - Amends the Internal Revenue Code to: (1) extend through 2012 the period for issuing Build America Bonds and for making payments to issuers of such bonds; (2) allow financing of levees and other flood control projects with such Bonds; (3) exempt private activity bonds for sewage and water supply facilities from otherwise applicable state volume caps and allow Indian tribal governments to issue tax-exempt private activity bonds to provide water or sewage facilities; (4) extend through 2011 the exemption of interest on tax-exempt bonds from the alternative minimum tax (AMT); (5) extend through 2011 the period for issuing recovery zone economic development bonds and recovery zone bonds; (6) allow a full offset against the AMT for new market tax credit amounts attributable to qualified equity investments initially made before January 1, 2012; and (7) extend through 2011 the tax exemption allowed for interest on bonds guaranteed by a federal home loan bank and small issuer rules for the allocation of tax-exempt interest expense by financial institutions.
Amends title IV, part A (Block Grants to States for Temporary Assistance for Needy Families) of the Social Security Act to: (1) rename the Emergency Contingency Fund for State Temporary Assistance for Needy Family Programs as the Emergency Fund for Job Creation and Assistance; and (2) extend appropriations for such Fund through FY2011.
Amends the Internal Revenue Code, with respect to the taxation of foreign income and the foreign tax credit, to: (1) suspend the recognition of foreign tax credits until the related foreign income is taken into account for U.S. tax purposes; (2) deny a foreign tax credit for foreign income not subject to U.S. taxation due to a covered asset acquisition (defined as an acquisition that results in an increase in tax basis for U.S. tax purposes but not for foreign tax purposes); (3) apply a separate foreign tax credit limitation for each item of income that would be treated as derived from sources within the United States and that would be treated as arising from sources outside the United States under a treaty obligation (if the taxpayer chooses the benefits of such treaty); (4) limit the amount of foreign tax credits that may be claimed by a U.S. domestic corporation with respect to a deemed dividend paid by a foreign subsidiary; (5) prevent a reduction in earnings in profits of a foreign corporation in an acquisition if more than 50% of the dividends arising from such acquisition would not be subject to U.S. taxation or would be includible in the earnings and profits of a controlled foreign corporation; (6) treat a foreign corporation as a member of an affiliated group for interest allocation and apportionment purposes if more than 50% of its gross income is effectively connected with a U.S. trade or business and at least 80% of either the vote or value of its outstanding stock is owned directly or indirectly by members of the affiliated group; (7) repeal tax rules exempting foreign source income attributable to the active conduct of a foreign trade or business from withholding of tax requirements; (8) treat as income received in the United States amounts received from noncorporate residents or domestic corporations with respect to guarantees and amounts paid by any foreign person if such amounts are connected with income that is effectively connected with the conduct of a trade or business in the United States; and (9) provide that the statute of limitations for assessing any tax on certain foreign transactions shall apply only to items related to a failure to provide information to the Internal Revenue Service (IRS) due to reasonable cause and not willful neglect.
Provides for compliance of the budgetary effects of this Act with the Statutory Pay-As-You-Go Act of 2010.
Increases by 3% the estimated tax payment of corporations with assets of not less than $1 billion in the third quarter of 2015.
[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5893 Introduced in House (IH)]
111th CONGRESS
2d Session
H. R. 5893
To amend the Internal Revenue Code of 1986 to create jobs through
increased investment in infrastructure, to eliminate loopholes which
encourage companies to move operations offshore, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 28, 2010
Mr. Levin (for himself, Mr. Rangel, Mr. Stark, Mr. McDermott, Mr. Lewis
of Georgia, Mr. Becerra, Mr. Pascrell, Mr. Crowley, Ms. Berkley, Mr.
Meek of Florida, Mr. Davis of Illinois, Mr. Etheridge, Mr. Higgins, Mr.
Garamendi, Mrs. Dahlkemper, Mr. Kagen, Mr. Perriello, Ms. Kilroy, Mr.
McMahon, Mr. Kissell, and Mr. Carney) introduced the following bill;
which was referred to the Committee on Ways and Means, and in addition
to the Committee on the Budget, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to create jobs through
increased investment in infrastructure, to eliminate loopholes which
encourage companies to move operations offshore, and for other
purposes.
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 ``Investing in
American Jobs and Closing Tax Loopholes 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--INFRASTRUCTURE INCENTIVES
Sec. 101. Extension of Build America Bonds.
Sec. 102. Exempt-facility bonds for sewage and water supply facilities.
Sec. 103. Extension of exemption from alternative minimum tax treatment
for certain tax-exempt bonds.
Sec. 104. Extension and additional allocations of recovery zone bond
authority.
Sec. 105. Allowance of new markets tax credit against alternative
minimum tax.
Sec. 106. Extension of tax-exempt eligibility for loans guaranteed by
Federal home loan banks.
Sec. 107. Extension of temporary small issuer rules for allocation of
tax-exempt interest expense by financial
institutions.
TITLE II--EMERGENCY FUND FOR JOB CREATION AND ASSISTANCE
Sec. 201. Extension of the Emergency Fund for Job Creation and
Assistance.
TITLE III--FOREIGN PROVISIONS
Sec. 301. Rules to prevent splitting foreign tax credits from the
income to which they relate.
Sec. 302. Denial of foreign tax credit with respect to foreign income
not subject to United States taxation by
reason of covered asset acquisitions.
Sec. 303. Separate application of foreign tax credit limitation, etc.,
to items resourced under treaties.
Sec. 304. Limitation on the amount of foreign taxes deemed paid with
respect to section 956 inclusions.
Sec. 305. Special rule with respect to certain redemptions by foreign
subsidiaries.
Sec. 306. Modification of affiliation rules for purposes of rules
allocating interest expense.
Sec. 307. Termination of special rules for interest and dividends
received from persons meeting the 80-
percent foreign business requirements.
Sec. 308. Source rules for income on guarantees.
Sec. 309. Limitation on extension of statute of limitations for failure
to notify Secretary of certain foreign
transfers.
TITLE IV--BUDGETARY PROVISIONS
Sec. 401. Paygo compliance.
Sec. 402. Time for payment of corporate estimated taxes.
TITLE I--INFRASTRUCTURE INCENTIVES
SEC. 101. EXTENSION OF BUILD AMERICA BONDS.
(a) In General.--Subparagraph (B) of section 54AA(d)(1) is amended
by striking ``January 1, 2011'' and inserting ``January 1, 2013''.
(b) Extension of Payments to Issuers.--
(1) In general.--Section 6431 is amended--
(A) by striking ``January 1, 2011'' in subsection
(a) and inserting ``January 1, 2013''; and
(B) by striking ``January 1, 2011'' in subsection
(f)(1)(B) and inserting ``a particular date''.
(2) Conforming amendments.--Subsection (g) of section 54AA
is amended--
(A) by striking ``January 1, 2011'' and inserting
``January 1, 2013''; and
(B) by striking ``Qualified Bonds Issued Before
2011'' in the heading and inserting ``Certain Qualified
Bonds''.
(c) Reduction in Percentage of Payments to Issuers.--Subsection (b)
of section 6431 is amended--
(1) by striking ``The Secretary'' and inserting the
following:
``(1) In general.--The Secretary'';
(2) by striking ``35 percent'' and inserting ``the
applicable percentage''; and
(3) by adding at the end the following new paragraph:
``(2) Applicable percentage.--For purposes of this
subsection, the term `applicable percentage' means the
percentage determined in accordance with the following table:
----------------------------------------------------------------------------------------------------------------
``In the case of a qualified bond issued during calendar
year: The applicable percentage is:
----------------------------------------------------------------------------------------------------------------
2009 or 2010............................................... 35 percent
2011....................................................... 32 percent
2012....................................................... 30 percent.''.
----------------------------------------------------------------------------------------------------------------
(d) Current Refundings Permitted.--Subsection (g) of section 54AA
is amended by adding at the end the following new paragraph:
``(3) Treatment of current refunding bonds.--
``(A) In general.--For purposes of this subsection,
the term `qualified bond' includes any bond (or series
of bonds) issued to refund a qualified bond if--
``(i) the average maturity date of the
issue of which the refunding bond is a part is
not later than the average maturity date of the
bonds to be refunded by such issue,
``(ii) the amount of the refunding bond
does not exceed the outstanding amount of the
refunded bond, and
``(iii) the refunded bond is redeemed not
later than 90 days after the date of the
issuance of the refunding bond.
``(B) Applicable percentage.--In the case of a
refunding bond referred to in subparagraph (A), the
applicable percentage with respect to such bond under
section 6431(b) shall be the lowest percentage
specified in paragraph (2) of such section.
``(C) Determination of average maturity.--For
purposes of subparagraph (A)(i), average maturity shall
be determined in accordance with section
147(b)(2)(A).''.
(e) Clarification Related to Levees and Flood Control Projects.--
Subparagraph (A) of section 54AA(g)(2) is amended by inserting
``(including capital expenditures for levees and other flood control
projects)'' after ``capital expenditures''.
SEC. 102. EXEMPT-FACILITY BONDS FOR SEWAGE AND WATER SUPPLY FACILITIES.
(a) Bonds for Water and Sewage Facilities Exempt From Volume Cap on
Private Activity Bonds.--
(1) In general.--Paragraph (3) of section 146(g) is amended
by inserting ``(4), (5),'' after ``(2),''.
(2) Conforming amendment.--Paragraphs (2) and (3)(B) of
section 146(k) are both amended by striking ``(4), (5), (6),''
and inserting ``(6)''.
(b) Tax-Exempt Issuance by Indian Tribal Governments.--
(1) In general.--Subsection (c) of section 7871 is amended
by adding at the end the following new paragraph:
``(4) Exception for bonds for water and sewage
facilities.--Paragraph (2) shall not apply to an exempt
facility bond 95 percent or more of the net proceeds (as
defined in section 150(a)(3)) of which are to be used to
provide facilities described in paragraph (4) or (5) of section
142(a).''.
(2) Conforming amendment.--Paragraph (2) of section 7871(c)
is amended by striking ``paragraph (3)'' and inserting
``paragraphs (3) and (4)''.
(c) Effective Date.--The amendments made by this section shall
apply to obligations issued after the date of the enactment of this
Act.
SEC. 103. EXTENSION OF EXEMPTION FROM ALTERNATIVE MINIMUM TAX TREATMENT
FOR CERTAIN TAX-EXEMPT BONDS.
(a) In General.--Clause (vi) of section 57(a)(5)(C) is amended--
(1) by striking ``January 1, 2011'' in subclause (I) and
inserting ``January 1, 2012''; and
(2) by striking ``and 2010'' in the heading and inserting
``, 2010, and 2011''.
(b) Adjusted Current Earnings.--Clause (iv) of section 56(g)(4)(B)
is amended--
(1) by striking ``January 1, 2011'' in subclause (I) and
inserting ``January 1, 2012''; and
(2) by striking ``and 2010'' in the heading and inserting
``, 2010, and 2011''.
(c) Effective Date.--The amendments made by this section shall
apply to obligations issued after December 31, 2010.
SEC. 104. EXTENSION AND ADDITIONAL ALLOCATIONS OF RECOVERY ZONE BOND
AUTHORITY.
(a) Extension of Recovery Zone Bond Authority.--Section 1400U-
2(b)(1) and section 1400U-3(b)(1)(B) are each amended by striking
``January 1, 2011'' and inserting ``January 1, 2012''.
(b) Additional Allocations of Recovery Zone Bond Authority Based on
Unemployment.--Section 1400U-1 is amended by adding at the end the
following new subsection:
``(c) Allocation of 2010 Recovery Zone Bond Limitations Based on
Unemployment.--
``(1) In general.--The Secretary shall allocate the 2010
national recovery zone economic development bond limitation and
the 2010 national recovery zone facility bond limitation among
the States in the proportion that each such State's 2009
unemployment number bears to the aggregate of the 2009
unemployment numbers for all of the States.
``(2) Minimum allocation.--The Secretary shall adjust the
allocations under paragraph (1) for each State to the extent
necessary to ensure that no State (prior to any reduction under
paragraph (3)) receives less than 0.9 percent of the 2010
national recovery zone economic development bond limitation and
0.9 percent of the 2010 national recovery zone facility bond
limitation.
``(3) Allocations by states.--
``(A) In general.--Each State with respect to which
an allocation is made under paragraph (1) shall
reallocate such allocation among the counties and large
municipalities (as defined in subsection (a)(3)(B)) in
such State in the proportion that each such county's or
municipality's 2009 unemployment number bears to the
aggregate of the 2009 unemployment numbers for all the
counties and large municipalities (as so defined) in
such State.
``(B) 2010 allocation reduced by amount of previous
allocation.--Each State shall reduce (but not below
zero)--
``(i) the amount of the 2010 national
recovery zone economic development bond
limitation allocated to each county or large
municipality (as so defined) in such State by
the amount of the national recovery zone
economic development bond limitation allocated
to such county or large municipality under
subsection (a)(3)(A) (determined without regard
to any waiver thereof), and
``(ii) the amount of the 2010 national
recovery zone facility bond limitation
allocated to each county or large municipality
(as so defined) in such State by the amount of
the national recovery zone facility bond
limitation allocated to such county or large
municipality under subsection (a)(3)(A)
(determined without regard to any waiver
thereof).
``(C) Waiver of suballocations.--A county or
municipality may waive any portion of an allocation
made under this paragraph. A county or municipality
shall be treated as having waived any portion of an
allocation made under this paragraph which has not been
allocated to a bond issued before May 1, 2011. Any
allocation waived (or treated as waived) under this
subparagraph may be used or reallocated by the State.
``(D) Special rule for a municipality in a
county.--In the case of any large municipality any
portion of which is in a county, such portion shall be
treated as part of such municipality and not part of
such county.
``(4) 2009 unemployment number.--For purposes of this
subsection, the term `2009 unemployment number' means, with
respect to any State, county or municipality, the number of
individuals in such State, county, or municipality who were
determined to be unemployed by the Bureau of Labor Statistics
for December 2009.
``(5) 2010 national limitations.--
``(A) Recovery zone economic development bonds.--
The 2010 national recovery zone economic development
bond limitation is $10,000,000,000. Any allocation of
such limitation under this subsection shall be treated
for purposes of section 1400U-2 in the same manner as
an allocation of national recovery zone economic
development bond limitation.
``(B) Recovery zone facility bonds.--The 2010
national recovery zone facility bond limitation is
$15,000,000,000. Any allocation of such limitation
under this subsection shall be treated for purposes of
section 1400U-3 in the same manner as an allocation of
national recovery zone facility bond limitation.''.
(c) Authority of State To Waive Certain 2009 Allocations.--
Subparagraph (A) of section 1400U-1(a)(3) is amended by adding at the
end the following: ``A county or municipality shall be treated as
having waived any portion of an allocation made under this subparagraph
which has not been allocated to a bond issued before May 1, 2011. Any
allocation waived (or treated as waived) under this subparagraph may be
used or reallocated by the State.''.
SEC. 105. ALLOWANCE OF NEW MARKETS TAX CREDIT AGAINST ALTERNATIVE
MINIMUM TAX.
(a) In General.--Subparagraph (B) of section 38(c)(4) is amended by
redesignating clauses (v) through (ix) as clauses (vi) through (x),
respectively, and by inserting after clause (iv) the following new
clause:
``(v) the credit determined under section
45D, but only with respect to credits
determined with respect to qualified equity
investments (as defined in section 45D(b))
initially made before January 1, 2012,''.
(b) Effective Date.--The amendments made by this section shall
apply to credits determined with respect to qualified equity
investments (as defined in section 45D(b) of the Internal Revenue Code
of 1986) initially made after March 15, 2010.
SEC. 106. EXTENSION OF TAX-EXEMPT ELIGIBILITY FOR LOANS GUARANTEED BY
FEDERAL HOME LOAN BANKS.
Clause (iv) of section 149(b)(3)(A) is amended by striking
``December 31, 2010'' and inserting ``December 31, 2011''.
SEC. 107. EXTENSION OF TEMPORARY SMALL ISSUER RULES FOR ALLOCATION OF
TAX-EXEMPT INTEREST EXPENSE BY FINANCIAL INSTITUTIONS.
(a) In General.--Clauses (i), (ii), and (iii) of section
265(b)(3)(G) are each amended by striking ``or 2010'' and inserting ``,
2010, or 2011''.
(b) Conforming Amendment.--Subparagraph (G) of section 265(b)(3) is
amended by striking ``and 2010'' in the heading and inserting ``, 2010,
and 2011''.
(c) Effective Date.--The amendments made by this section shall
apply to obligations issued after December 31, 2010.
TITLE II--EMERGENCY FUND FOR JOB CREATION AND ASSISTANCE
SEC. 201. EXTENSION OF THE EMERGENCY FUND FOR JOB CREATION AND
ASSISTANCE.
(a) In General.--Section 403(c) of the Social Security Act (42
U.S.C. 603(c)) is amended--
(1) in paragraph (1), by striking ``Emergency Contingency
Fund for State Temporary Assistance for Needy Families
Programs'' and inserting ``Emergency Fund for Job Creation and
Assistance'';
(2) in paragraph (2)(A), by inserting ``, and for fiscal
year 2011, such sums as may be necessary to carry out this
subsection'' before ``for payment'';
(3) by striking paragraph (2)(B) and inserting the
following:
``(B) Availability and use of funds.--
``(i) Fiscal years 2009 and 2010.--The
amounts appropriated to the Emergency Fund
under subparagraph (A) for fiscal year 2009
shall remain available through fiscal year 2010
and shall be used to make grants to States in
each of fiscal years 2009 and 2010 in
accordance with paragraph (3), except that the
amounts shall remain available through fiscal
year 2011 to make grants and payments to States
in accordance with paragraph (3)(C) to cover
expenditures to subsidize employment positions
held by individuals placed in the positions
before fiscal year 2011.
``(ii) Fiscal year 2011.--Subject to clause
(iii), the amounts appropriated to the
Emergency Fund under subparagraph (A) for
fiscal year 2011 shall remain available through
fiscal year 2012 and shall be used to make
grants to States based on expenditures in
fiscal year 2011 for benefits and services
provided in fiscal year 2011 in accordance with
the requirements of paragraph (3).
``(iii) Reservation of funds.--Of the
amounts appropriated to the Emergency Fund
under subparagraph (A) for fiscal year 2011,
$500,000 shall be placed in reserve for use in
fiscal year 2012, and shall be used to award
grants for any expenditures described in this
subsection incurred by States after September
30, 2011.'';
(4) in paragraph (2)(C), by striking ``2010'' and inserting
``2012'';
(5) in paragraph (3)--
(A) in clause (i) of each of subparagraphs (A),
(B), and (C), by striking ``year 2009 or 2010'' and
inserting ``years 2009 through 2011''; and
(B) in subparagraph (C), by adding at the end the
following:
``(iv) Limitation on expenditures for
subsidized employment.--An expenditure for
subsidized employment shall be taken into
account under clause (ii) only if the
expenditure is used to subsidize employment
for--
``(I) a member of a needy family
(without regard to whether the family
is receiving assistance under the State
program funded under this part); or
``(II) an individual who has
exhausted (or, within 60 days, will
exhaust) all rights to receive
unemployment compensation under Federal
and State law, and who is a member of a
needy family.'';
(6) by striking paragraph (5) and inserting the following:
``(5) Limitations on payments.--
``(A) Fiscal years 2009 and 2010.--The total amount
payable to a single State under subsection (b) and this
subsection for fiscal years 2009 and 2010 combined
shall not exceed 50 percent of the annual State family
assistance grant.
``(B) Fiscal year 2011.--The total amount payable
to a single State under subsection (b) and this
subsection for fiscal year 2011 shall not exceed 30
percent of the annual State family assistance grant.'';
and
(7) in paragraph (6), by inserting ``or for expenditures
described in paragraph (3)(C)(iv)'' before the period.
(b) Conforming Amendments.--Section 2101 of division B of the
American Recovery and Reinvestment Act of 2009 (Public Law 111-5) is
amended--
(1) in subsection (a)(2)--
(A) by striking ``2010'' and inserting ``2011'';
and
(B) by striking all that follows ``repealed'' and
inserting a period; and
(2) in subsection (d)(1), by striking ``2010'' and
inserting ``2011''.
(c) Program Guidance.--The Secretary of Health and Human Services
shall issue program guidance, without regard to the requirements of
section 553 of title 5, United States Code, which ensures that the
funds provided under the amendments made by this section to a
jurisdiction for subsidized employment do not support any subsidized
employment position the annual salary of which is greater than, at
State option--
(1) 200 percent of the poverty line (within the meaning of
section 673(2) of the Omnibus Budget Reconciliation Act of
1981, including any revision required by such section 673(2))
for a family of 4; or
(2) the median wage in the jurisdiction.
TITLE III--FOREIGN PROVISIONS
SEC. 301. 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 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. 302. 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. 303. 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. 304. 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:
``(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. 305. 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. 306. 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. 307. 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 of any obligation
(including any extension of the term of such
obligation) shall be treated as a new issue.
SEC. 308. 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. 309. 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.
TITLE IV--BUDGETARY PROVISIONS
SEC. 401. 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.
SEC. 402. 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 3 percentage points.
<all>
Introduced in House
Introduced in House
Rules Committee Resolution H. Res. 1568 Reported to House. Rule provides for consideration of H.R. 5893 with 1 hour of general debate. Previous question shall be considered as ordered without intervening motions except motion to recommit with or without instructions. Measure will be considered read. Bill is closed to amendments. All points of order against consideration of the bill except those arising under clause 9 or 10 of rule XXI are waived.
Referred to House Ways and Means
Referred to the Committee on Ways and Means, and in addition to the Committee on the Budget, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to House Budget
Rule H. Res. 1568 passed House.
Considered under the provisions of rule H. Res. 1568. (consideration: CR H6355-6368; text of measure as introduced: CR H6355-6359)
Rule provides for consideration of H.R. 5893 with 1 hour of general debate. Previous question shall be considered as ordered without intervening motions except motion to recommit with or without instructions. Measure will be considered read. Bill is closed to amendments. All points of order against consideration of the bill except those arising under clause 9 or 10 of rule XXI are waived.
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DEBATE - The House proceeded with one hour of debate on H.R. 5893.
The previous question was ordered pursuant to the rule. (consideration: CR H6368)
POSTPONED PROCEEDINGS - Pursuant to clause 2c of rule 19, the Chair postponed further proccedings on H.R. 5893 until a time to be announced.