S.Amdt. 3587

1. Replaces the bill's text with a full substitute

   Replaces the full textEverything after the enacting clause

   In S. 2569 · Placed on Calendar Senate

   SECTION 1. SHORT TITLE.

   This Act may be cited as the "[struck: Bring Jobs Home][inserted: Foreign Earnings Reinvestment] Act".

   Struck: SEC. 2. CREDIT FOR INSOURCING EXPENSES.

   Struck: (a) In General.--Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

   Struck: "SEC. 45S. CREDIT FOR INSOURCING EXPENSES.

   Struck: "(a) In General.--For purposes of section 38, the insourcing expenses credit for any taxable year is an amount equal to 20 percent of the eligible insourcing expenses of the taxpayer which are taken into account in such taxable year under subsection (d).

   Show 55 more struck paragraphsShow less

   Struck: "(b) Eligible Insourcing Expenses.--For purposes of this section--

   Struck: "(1) In general.--The term 'eligible insourcing expenses' means--

   Struck: "(A) eligible expenses paid or incurred by the taxpayer in connection with the elimination of any business unit of the taxpayer (or of any member of any expanded affiliated group in which the taxpayer is also a member) located outside the United States, and

   Struck: "(B) eligible expenses paid or incurred by the taxpayer in connection with the establishment of any business unit of the taxpayer (or of any member of any expanded affiliated group in which the taxpayer is also a member) located within the United States, if such establishment constitutes the relocation of the business unit so eliminated. For purposes of the preceding sentence, a relocation shall not be treated as failing to occur merely because such elimination occurs in a different taxable year than such establishment.

   Struck: "(2) Eligible expenses.--The term 'eligible expenses' means--

   Struck: "(A) any amount for which a deduction is allowed to the taxpayer under section 162, and

   Struck: "(B) permit and license fees, lease brokerage fees, equipment installation costs, and, to the extent provided by the Secretary, other similar expenses. Such term does not include any compensation which is paid or incurred in connection with severance from employment and, to the extent provided by the Secretary, any similar amount.

   Struck: "(3) Business unit.--The term 'business unit' means--

   Struck: "(A) any trade or business, and

   Struck: "(B) any line of business, or functional unit, which is part of any trade or business.

   Struck: "(4) Expanded affiliated group.--The term 'expanded affiliated group' means an affiliated group as defined in section 1504(a), determined without regard to section 1504(b)(3) and by substituting 'more than 50 percent' for 'at least 80 percent' each place it appears in section 1504(a). A partnership or any other entity (other than a corporation) shall be treated as a member of an expanded affiliated group if such entity is controlled (within the meaning of section 954(d)(3)) by members of such group (including any entity treated as a member of such group by reason of this paragraph).

   Struck: "(5) Expenses must be pursuant to insourcing plan.-- Amounts shall be taken into account under paragraph (1) only to the extent that such amounts are paid or incurred pursuant to a written plan to carry out the relocation described in paragraph (1).

   Struck: "(6) Operating expenses not taken into account.--Any amount paid or incurred in connection with the on-going operation of a business unit shall not be treated as an amount paid or incurred in connection with the establishment or elimination of such business unit.

   Struck: "(c) Increased Domestic Employment Requirement.--No credit shall be allowed under this section unless the number of full-time equivalent employees of the taxpayer for the taxable year for which the credit is claimed exceeds the number of full-time equivalent employees of the taxpayer for the last taxable year ending before the first taxable year in which such eligible insourcing expenses were paid or incurred. For purposes of this subsection, full-time equivalent employees has the meaning given such term under section 45R(d) (and the applicable rules of section 45R(e)). All employers treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer for purposes of this subsection.

   Struck: "(d) Credit Allowed Upon Completion of Insourcing Plan.--

   Struck: "(1) In general.--Except as provided in paragraph (2), eligible insourcing expenses shall be taken into account under subsection (a) in the taxable year during which the plan described in subsection (b)(5) has been completed and all eligible insourcing expenses pursuant to such plan have been paid or incurred.

   Struck: "(2) Election to apply employment test and claim credit in first full taxable year after completion of plan.--If the taxpayer elects the application of this paragraph, eligible insourcing expenses shall be taken into account under subsection (a) in the first taxable year after the taxable year described in paragraph (1).

   Struck: "(e) Possessions Treated as Part of the United States.--For purposes of this section, the term 'United States' shall be treated as including each possession of the United States (including the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands).

   Struck: "(f) Regulations.--The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section.".

   Struck: (b) Credit To Be Part of General Business Credit.--Subsection (b) of section 38 of such Code is amended by striking "plus" at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting ", plus", and by adding at the end the following new paragraph:

   Struck: "(37) the insourcing expenses credit determined under section 45S(a).".

   Struck: (c) Clerical Amendment.--The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:

   Struck: "Sec. 45S. Credit for insourcing expenses.".

   Struck: (d) Effective Date.--The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act.

   Struck: (e) Application to United States Possessions.--

   Struck: (1) Payments to possessions.--

   Struck: (A) Mirror code possessions.--The Secretary of the Treasury shall make periodic payments to each possession of the United States with a mirror code tax system in an amount equal to the loss to that possession by reason of section 45S of the Internal Revenue Code of 1986. Such amount shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession.

   Struck: (B) Other possessions.--The Secretary of the Treasury shall make annual payments to each possession of the United States which does not have a mirror code tax system in an amount estimated by the Secretary of the Treasury as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of section 45S of such Code if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply with respect to any possession of the United States unless such possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payment to the residents of such possession.

   Struck: (2) Coordination with credit allowed against united states income taxes.--No credit shall be allowed against United States income taxes under section 45S of such Code to any person--

   Struck: (A) to whom a credit is allowed against taxes imposed by the possession by reason of such section, or

   Struck: (B) who is eligible for a payment under a plan described in paragraph (1)(B).

   Struck: (3) Definitions and special rules.--

   Struck: (A) Possessions of the united states.--For purposes of this section, the term "possession of the United States" includes the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands.

   Struck: (B) Mirror code tax system.--For purposes of this section, the term "mirror code tax system" means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.

   Struck: (C) Treatment of payments.--For purposes of section 1324(b)(2) of title 31, United States Code, the payments under this section shall be treated in the same manner as a refund due from sections referred to in such section 1324(b)(2).

   Struck: SEC. 3. DENIAL OF DEDUCTION FOR OUTSOURCING EXPENSES.

   Struck: (a) In General.--Part IX of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

   Struck: "SEC. 280I. OUTSOURCING EXPENSES.

   Struck: "(a) In General.--No deduction otherwise allowable under this chapter shall be allowed for any specified outsourcing expense.

   Struck: "(b) Specified Outsourcing Expense.--For purposes of this section--

   Struck: "(1) In general.--The term 'specified outsourcing expense' means--

   Struck: "(A) any eligible expense paid or incurred by the taxpayer in connection with the elimination of any business unit of the taxpayer (or of any member of any expanded affiliated group in which the taxpayer is also a member) located within the United States, and

   Struck: "(B) any eligible expense paid or incurred by the taxpayer in connection with the establishment of any business unit of the taxpayer (or of any member of any expanded affiliated group in which the taxpayer is also a member) located outside the United States, if such establishment constitutes the relocation of the business unit so eliminated. For purposes of the preceding sentence, a relocation shall not be treated as failing to occur merely because such elimination occurs in a different taxable year than such establishment.

   Struck: "(2) Application of certain definitions and rules.--

   Struck: "(A) Definitions.--For purposes of this section, the terms 'eligible expenses', 'business unit', and 'expanded affiliated group' shall have the respective meanings given such terms by section 45S(b).

   Struck: "(B) Operating expenses not taken into account.--A rule similar to the rule of section 45S(b)(6) shall apply for purposes of this section.

   Struck: "(c) Special Rules.--

   Struck: "(1) Application to deductions for depreciation and amortization.--In the case of any portion of a specified outsourcing expense which is not deductible in the taxable year in which paid or incurred, such portion shall neither be chargeable to capital account nor amortizable.

   Struck: "(2) Possessions treated as part of the united states.-- For purposes of this section, the term 'United States' shall be treated as including each possession of the United States (including the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands).

   Struck: "(d) Regulations.--The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including regulations which provide (or create a rebuttable presumption) that certain establishments of business units outside the United States will be treated as relocations (based on timing or such other factors as the Secretary may provide) of business units eliminated within the United States.".

   Struck: (b) Limitation on Subpart F Income of Controlled Foreign Corporations Determined Without Regard to Specified Outsourcing Expenses.--Subsection (c) of section 952 of such Code is amended by adding at the end the following new paragraph:

   Struck: "(4) Earnings and profits determined without regard to specified outsourcing expenses.--For purposes of this subsection, earnings and profits of any controlled foreign corporation shall be determined without regard to any specified outsourcing expense (as defined in section 280I(b)).".

   Struck: (c) Clerical Amendment.--The table of sections for part IX of subchapter B of chapter 1 of such Code is amended by adding at the end the following new item:

   Struck: "Sec. 280I. Outsourcing expenses.".

   Struck: (d) Effective Date.--The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act.

   Inserted: SEC. 2. ALLOWANCE OF TEMPORARY DIVIDENDS RECEIVED DEDUCTION FOR DIVIDENDS RECEIVED FROM A CONTROLLED FOREIGN CORPORATION.

   Inserted: (a) Applicability of Provision.--

   Inserted: (1) In general.--Subsection (f) of section 965 of the Internal Revenue Code of 1986 is amended to read as follows:

   Inserted: "(f) Election; Election Year.--

   Inserted: "(1) In general.--The taxpayer may elect to apply this section to--

   Inserted: "(A) the taxpayer's last taxable year which begins before the date of the enactment of the Foreign Earnings Reinvestment Act, or

   Inserted: "(B) 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.

   Inserted: "(C) Election year.--For purposes of this section, the term 'election year' means the taxable year--

   Inserted: "(i) which begins after the date that is one year before the date of the enactment of the Foreign Earnings Reinvestment Act, and

   Inserted: "(ii) to which the taxpayer elects under paragraph (1) to apply this section.".

   Inserted: (2) Conforming amendments.--

   Inserted: (A) Extraordinary dividends.--Section 965(b)(2) of such Code is amended--

   Show 43 more inserted paragraphsShow less

   Inserted: (i) by striking "June 30, 2003" and inserting "June 30, 2014", and

   Inserted: (ii) by adding at the end the following new sentence: "The amounts described in clauses (i), (ii), and (iii) shall not include any amounts which were taken into account in determining the deduction under subsection (a) for any prior taxable year.".

   Inserted: (B) Determinations relating to related party indebtedness.--Section 965(b)(3)(B) of such Code is amended by striking "October 3, 2004" and inserting "June 30, 2014".

   Inserted: (C) Determinations relating to base period.--Section 965(c)(2) of such Code is amended by striking "June 30, 2003" and inserting "June 30, 2014".

   Inserted: (b) Deduction Includes Current and Accumulated Foreign Earnings.--

   Inserted: (1) In general.--Paragraph (1) of section 965(b) of the Internal Revenue Code of 1986 is amended to read as follows:

   Inserted: "(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.".

   Inserted: (2) Conforming amendments.--

   Inserted: (A) Section 965(c) of such Code, as amended by subsection (a), is amended by striking paragraph (1) and by redesignating paragraphs (2), (3), (4), and (5), as paragraphs (1), (2), (3), and (4), respectively.

   Inserted: (B) Paragraph (4) of section 965(c) of such Code, as redesignated by subparagraph (A), is amended to read as follows:

   Inserted: "(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.".

   Inserted: (c) Amount of Deduction.--

   Inserted: (1) In general.--Paragraph (1) of section 965(a) of the Internal Revenue Code of 1986 is amended by striking "85 percent" and inserting "75 percent".

   Inserted: (2) Bonus deduction in subsequent taxable year for increasing jobs.--Section 965 of such Code is amended by adding at the end the following new subsection:

   Inserted: "(g) Bonus Deduction.--

   Inserted: "(1) In general.--In the case of any taxpayer who makes an election to apply this section, there shall be allowed as a deduction for the first taxable year following the election year an amount equal to the applicable percentage of the cash dividends which are taken into account under subsection (a) with respect to such taxpayer for the election year.

   Inserted: "(2) Applicable percentage.--For purposes of paragraph (1), the applicable percentage is the amount which bears the same ratio (not greater than 1) to 10 percent as--

   Inserted: "(A) the excess (if any) of--

   Inserted: "(i) the qualified payroll of the taxpayer for the calendar year which begins with or within the first taxable year following the election year, over

   Inserted: "(ii) the qualified payroll of the taxpayer for calendar year 2013, bears to

   Inserted: "(B) 10 percent of the qualified payroll of the taxpayer for calendar year 2013.

   Inserted: "(3) Qualified payroll.--For purposes of this paragraph:

   Inserted: "(A) In general.--The term 'qualified payroll' means, with respect to a taxpayer for any calendar year, the aggregate wages (as defined in section 3121(a)) paid by the corporation during such calendar year.

   Inserted: "(B) Exception for changes in ownership of trades or businesses.--

   Inserted: "(i) Acquisitions.--If, after December 31, 2012, and before the close of the first taxable year following the election year, a taxpayer acquires the trade or business of a predecessor, then the qualified payroll of such taxpayer for any calendar year shall be increased by so much of the qualified payroll of the predecessor for such calendar year as was attributable to the trade or business acquired by the taxpayer.

   Inserted: "(ii) Dispositions.--If, after December 31, 2012, and before the close of the first taxable year following the election year, a taxpayer disposes of a trade or business, then--

   Inserted: "(I) the qualified payroll of such taxpayer for calendar year 2013 shall be decreased by the amount of wages for such calendar year as were attributable to the trade or business which was disposed of by the taxpayer, and

   Inserted: "(II) if the disposition occurs after the beginning of the first taxable year following the election year, the qualified payroll of such taxpayer for the calendar year which begins with or within such taxable year shall be decreased by the amount of wages for such calendar year as were attributable to the trade or business which was disposed of by the taxpayer.

   Inserted: "(C) Special rule.--For purposes of determining qualified payroll for any calendar year after calendar year 2014, such term shall not include wages paid to any individual if such individual received compensation from the taxpayer for services performed--

   Inserted: "(i) after the date of the enactment of this paragraph, and

   Inserted: "(ii) at a time when such individual was not an employee of the taxpayer.".

   Inserted: (3) Reduction for failure to maintain employment levels.--Paragraph (4) of section 965(b) of such Code is amended to read as follows:

   Inserted: "(4) Reduction in benefits for failure to maintain employment levels.--

   Inserted: "(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 $75,000 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.

   Inserted: "(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.

   Inserted: "(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).

   Inserted: "(D) Full-time united states employee.--For purposes of this paragraph--

   Inserted: "(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.

   Inserted: "(ii) Exception for changes in ownership of trades or businesses.--Such term does not include--

   Inserted: "(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

   Inserted: "(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).

   Inserted: "(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.".

   Inserted: (d) Effective Date.--The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.

   Original wording

   Strike all after the enacting clause and insert the following:

Read automatically from the Congressional Record. Check the original before relying on it.

As printed