Freedom to Invest Act of 2013 - Amends the Internal Revenue Code to: (1) extend the election allowed to a U.S. corporation to deduct dividends received from a controlled foreign corporation to the corporation's last taxable year beginning before the enactment of this Act or the first taxable year beginning during the one-year period beginning on such enactment date, and (2) reduce the amount of such tax deduction for corporations that fail to maintain specified employment levels for full-time U.S. employees.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2862 Introduced in House (IH)]
113th CONGRESS
1st Session
H. R. 2862
To amend the Internal Revenue Code of 1986 to allow a temporary
dividends received deduction for 2013 or 2014.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 30, 2013
Mr. Matheson introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to allow a temporary
dividends received deduction for 2013 or 2014.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Freedom to Invest Act of 2013''.
SEC. 2. TEMPORARY DIVIDENDS RECEIVED DEDUCTION ALLOWED FOR 2013 OR
2014.
(a) Election.--Subsection (f) of section 965 of the Internal
Revenue Code of 1986 (relating to election) is amended to read as
follows:
``(f) Election.--The taxpayer may elect to apply this section to--
``(1) the taxpayer's last taxable year which begins before
the date of the enactment of this subsection, or
``(2) the taxpayer's first taxable year which begins during
the 1-year period beginning on such date.
Such election may be made for a taxable year only if made on or before
the due date (including extensions) for filing the return of tax for
such taxable year.''.
(b) Limitation.--Paragraph (1) of section 965(b) of such Code is
amended to read as follows:
``(1) In general.--The amount of dividends taken into
account under subsection (a) shall not exceed the sum of the
current and accumulated earnings and profits described in
section 959(c)(3) for the year a deduction is claimed under
subsection (a), without diminution by reason of any
distributions made during the election year, for all controlled
foreign corporations of the United States shareholder.''.
(c) Failure To Maintain Employment Levels.--Paragraph (4) of
section 965(b) of such Code (relating to limitations) is amended to
read as follows:
``(4) Reduction in benefits for failure to maintain
employment levels.--
``(A) In general.--If, during the period consisting
of the calendar month in which the taxpayer first
receives a distribution described in subsection (a)(1)
and the succeeding 23 calendar months, the taxpayer
does not maintain an average employment level at least
equal to the taxpayer's prior average employment, an
additional amount equal to $25,000 multiplied by the
number of employees by which the taxpayer's average
employment level during such period falls below the
prior average employment (but not exceeding the
aggregate amount allowed as a deduction pursuant to
subsection (a)(1)) shall be taken into income by the
taxpayer during the taxable year that includes the
final day of such period.
``(B) Average employment level.--For purposes of
this paragraph, the taxpayer's average employment level
for a period shall be the average number of full-time
United States employees of the taxpayer, measured at
the end of each month during the period.
``(C) Prior average employment.--For purposes of
this paragraph, the taxpayer's `prior average
employment' shall be the average number of full-time
United States employees of the taxpayer during the
period consisting of the 24 calendar months immediately
preceding the calendar month in which the taxpayer
first receives a distribution described in subsection
(a)(1).
``(D) Full-time united states employee.--For
purposes of this paragraph--
``(i) In general.--The term `full-time
United States employee' means an individual who
provides services in the United States as a
full-time employee, based on the employer's
standards and practices; except that regardless
of the employer's classification of the
employee, an employee whose normal schedule is
40 hours or more per week is considered a full-
time employee.
``(ii) Exception for changes in ownership
of trades or businesses.--Such term does not
include--
``(I) any individual who was an
employee, on the date of acquisition,
of any trade or business acquired by
the taxpayer during the 24-month period
referred to in subparagraph (A); and
``(II) any individual who was an
employee of any trade or business
disposed of by the taxpayer during the
24-month period referred to in
subparagraph (A) or the 24-month period
referred to in subparagraph (C).
``(E) Aggregation rules.--In determining the
taxpayer's average employment level and prior average
employment, all domestic members of a controlled group
shall be treated as a single taxpayer.''.
(d) Threshold Period.--Section 965 of such Code is amended by
striking ``June 30, 2003'' each place it occurs and inserting ``June
30, 2012''.
(e) Base Period.--Paragraph (2) of subsection 965(c) of such Code
is amended by inserting at the end of subparagraph (A) the following
flush sentence: ``For purposes of this paragraph, taxable years shall
not include any year for which an election under section 965 was in
effect.''.
(f) Indebtedness Determination Date.--Subparagraph (B) of section
965(b)(3) of such Code is amended by striking ``October 3, 2004'' and
inserting ``January 11, 2013''.
(g) Conforming Amendments.--
(1) Subsection 965(c) of such Code, as amended by
subsection (e), is amended by striking paragraph (1) and
redesignating paragraphs (2), (3), (4), and (5) as paragraphs
(1), (2), (3), and (4), respectively.
(2) Paragraph 965(c)(4) of such Code, as redesignated by
paragraph (1), is amended to read as follows:
``(4) Controlled groups.--All United States shareholders
which are members of an affiliated group filing a consolidated
return under section 1501 shall be treated as one United States
shareholder.''.
(h) Effective Date.--The amendments made by this section shall
apply to taxable years ending on or after the date of the enactment of
this Act.
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Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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