S.Amdt. 4355

SA 4355. Ms. CANTWELL (for herself, Mr. Vitter, Mrs. Murray, Ms.
Stabenow, and Mr. Inouye) submitted an amendment intended to be
proposed to amendent SA 4301 proposed by Mr. Baucus to the bill H.R.
4213, to amend the Internal Revenue Code of 1986 to extend certain
expiring provisions, and for other purposes; wich was ordered to lie on
the table; as follows:

At the end of title VI, insert the following:

SEC. --. REPEAL OF QUALIFIED SHIPPING INVESTMENT WITHDRAWAL
RULES.

(a) In General.--Section 955 is hereby repealed.
(b) Conforming Amendments.--
(1) Section 951(a)(1)(A) is amended by adding ``and'' at
the end of clause (i) and by striking clause (iii).
(2) Section 951(a)(1)(A)(ii) is amended by striking ``,
and'' at the end and inserting ``, except that in applying
this clause amounts invested in less developed country
corporations described in section 955(c)(2) (as so in effect)
shall not be treated as investments in less developed
countries.''.
(3) Section 951(a)(3) is hereby repealed.
(4) Section 964(b) of such Code is amended by striking ``,
955,''.
(5) The table of sections for subpart F of part III of
subchapter N of chapter 1 is amended by striking the item
relating to section 955.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years of controlled foreign
corporations ending on or after the date of the enactment of
this Act, and to taxable years of United States shareholders
in which or with which such taxable years of controlled
foreign corporations end.

SEC. --. TAX IMPOSED ON ELECTING UNITED STATES SHAREHOLDERS.

(a) In General.--In the case of a United States shareholder
for which an election is in effect under this section, a tax
is hereby imposed on such shareholder's pro rata share
(determined under the principles of paragraph (2) of
subsection (a) of section 951 of the Internal Revenue Code of
1986) of the sum of--
(1) the foreign base company shipping income (determined
under section 954(f) of the Internal Revenue Code of 1986 as
in effect before the enactment of the American Jobs Creation
Act of 2004) for all prior taxable years beginning after 1975
and before 1987, and
(2) income described in section 954(b)(2) of the Internal
Revenue Code as in effect prior to the effective date of the
Tax Reform Act of 1975, without regard to whether such income
was not included in subpart F income under section 954(b)(2)
or any other provision of such Code,

but only to the extent such income has not previously been
included in the gross income of a United States person as a
dividend or under any section of the Internal Revenue Code
after 1962, or excluded from gross income pursuant to
subsection (a) of section 959 of the Internal Revenue Code of
1986.
(b) Amount of Tax.--The amount of tax imposed by subsection
(a) shall be 5.25 percent of the income described therein.
(c) Income Not Subject to Further Tax.--The income on which
a tax is imposed by subsection (a) shall not (other than such
tax) be included in the gross income of such United States
shareholder (or any other United States person who acquires
from any person any portion of the interest of such United
States shareholder in such foreign corporation) and shall be
treated for purposes of the Internal Revenue Code of 1986 as
if such amounts are, or have been, included in the income of
the United States shareholder under section 951(a)(1)(B).
(d) Additional Tax Imposed for Failure to Maintain
Employment Levels.--
(1) In general.--If, during the period consisting of the
calendar month in which the election under this section is
made 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
shall be taken into account as income by the taxpayer during
the taxable year that includes the final day of such period,
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.
(2) Prior average employment.--For purposes of this
subsection, the taxpayer's prior average employment is the
average number of full time equivalent employees of the
taxpayer during the period consisting of the 24 calendar
months immediately preceding the calendar month in which the
election under this section is made.
(3) Aggregation rules.--In determining the taxpayer's
average employment level and prior average employment, all
domestic members of a controlled group (as defined in section
264(e)(5)(B) of the Internal Revenue Code of 1986) shall be
treated as a single taxpayer.
(e) Election.--
(1) In general.--A taxpayer may elect to apply this section
to--
(A) the taxpayer's last taxable year which begins before
the date of the enactment of this Act, or
(B) the taxpayer's first taxable year beginning on or after
such date.
(2) Timing of election and one-time election.--Such
election may be made only once by any taxpayer, and only if
made on or before the due date (including extensions) for
filing the return of tax for the taxable year of such
election.
(f) Effective Date.--This section shall apply to taxable
years ending on or after the date of the enactment of this
Act.
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