[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 592 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 592
To establish an Office of Manufacturing in the Department of Commerce,
and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 11, 2003
Mr. Hollings introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To establish an Office of Manufacturing in the Department of Commerce,
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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Save American
Manufacturing Act of 2003''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--OFFICE OF MANUFACTURING
Sec. 101. Establishment of Office of Manufacturing.
TITLE II--WTO DISPUTE SETTLEMENT REVIEW COMMISSION
Sec. 201. Congressional findings and purpose.
Sec. 202. Establishment of Commission.
Sec. 203. Duties of the Commission.
Sec. 204. Powers of the Commission.
Sec. 205. Review of dispute settlement procedures and
participation in the WTO.
Sec. 206. Participation in WTO panel proceedings.
Sec. 207. Definitions.
TITLE III--REFORM OF EXPORT-IMPORT BANK AND OVERSEAS PRIVATE INVESTOR
CORPORATION; ABOLITION OF INTERNATIONAL TRADE COMMISSION
Sec. 301. Restrictions on Export-Import Bank assistance.
Sec. 302. Restrictions on the Overseas Private Investment
Corporation.
Sec. 303. Abolition of International Trade Commission
TITLE IV--MISCELLANEOUS
Sec. 401. Buy-American requirement imposed on Department of
Homeland Security; exceptions.
Sec. 402. Prohibition on sale of child-labor manufactured goods
in interstate commerce.
Sec. 403. Additional customs agents to combat inappropriate
transshipment of textiles.
Sec. 404. Sense of the Senate regarding Byrd Amendment.
TITLE V--INTERNAL REVENUE CODE AMENDMENTS
Sec. 501. Disincentivization of corporate expatriation to avoid
United States income tax.
Sec. 502. Inclusion of income from U.S. imports in Subpart F
income.
Sec. 503. Denial of treaty benefits for certain deductible
payments.
SEC. 101. ESTABLISHMENT OF OFFICE OF MANUFACTURING.
(a) In General.--
(1) Establishment.--There is established within the
Department of Commerce an Office of Manufacturing. The office
shall be responsible for gathering, coordinating, and analyzing
all the information necessary for the Secretary of Commerce to
make any determinations the Secretary is required by law to
make about the industrial base of the United States.
(2) Staff.--The Secretary shall ensure that the office
includes appropriate staff to carry out the functions of the
office under subsection (b), including individuals with
training, expertise, or experience in--
(A) economic analysis;
(B) the industrial base of the United States for
national defense-related production;
(C) the industrial base of the United States not
related to national defense-related production;
(D) technological developments;
(E) trends in manufacturing in the United States;
and
(F) national security.
(3) Detailees.--In addition to employees of the Department
of Commerce, the Secretary may accept, on nonreimbursable
detail to the office, employees of other Federal departments
and agencies.
(b) Functions.--The office shall be responsible for--
(1) developing policies designed to preserve and enhance
the industrial base of the United States;
(2) monitoring and evaluating worldwide technological
developments in industry sectors critical to the national
security interests of the United States;
(3) conducting assessments of those sectors of the
industrial base of the United States that are involved in
national defense-related production, including analysis of how
those sectors are affected by technological developments,
technology transfers, foreign competition, and imported goods;
(4) conducting assessments of--
(A) those sectors of the industrial base of the
United States that are of critical importance to the
national security interests of the United States; and
(B) the economy of the United States.
(c) Reports.--The Secretary shall make an annual report to the
Senate Committee on Commerce, Science, and Technology and the House of
Representatives Committee on Energy and Commerce that--
(1) describes the operations of the office during the 12-
month period to which the report relates; and
(2) sets forth the Secretary's views on the ability of the
United States government to support the industrial base of the
United States.
TITLE II--WTO DISPUTE SETTLEMENT REVIEW COMMISSION
SEC. 201. CONGRESSIONAL FINDINGS AND PURPOSE.
(a) Findings.--The Congress finds the following:
(1) The United States joined the World Trade Organization
as a founding member with the goal of creating an improved
global trading system.
(2) The American people must receive assurances that United
States sovereignty will be protected, and United States
interests will be advanced, within the global trading system
which the WTO will oversee.
(3) The survival of the new WTO requires the ability to
respond effectively to unfair or otherwise harmful trade
practices.
(4) United States support for the WTO depends upon
obtaining mutual trade benefits through the openness of foreign
markets and the maintenance of effective United States and WTO
remedies against unfair or otherwise harmful trade practices.
(5) Congress passed the Uruguay Round Agreements Act based
upon its understanding that effective trade remedies would not
be eroded. These remedies are essential to continue the process
of opening foreign markets to imports of goods and services and
to prevent harm to American industry and agriculture
particularly through foreign dumping and subsidization.
(6) The continued support of the Congress for the WTO is
dependent upon a WTO dispute settlement system that--
(A) operates in a fair and impartial manner;
(B) does not add to the obligations of or diminish
the rights of the United States under the Uruguay Round
agreements; and
(C) does not exceed its authority, scope, or
established standard of review.
(b) Purpose.--It is the purpose of this title to provide for the
establishment of the WTO Dispute Settlement Review Commission to
achieve the goals described in subsection (a)(6).
SEC. 202. ESTABLISHMENT OF COMMISSION.
(a) Establishment.--There is established a commission to be known
as the WTO Dispute Settlement Review Commission (hereafter in this
title referred to as the ``Commission'').
(b) Membership.--
(1) Composition.--The Commission shall be composed of 5
members all of whom shall be judges of the Federal judicial
circuits and shall be appointed by the President, after
consultation with the Majority Leader and Minority Leader of
the House of Representatives, and the Majority Leader and
Minority Leader of the Senate.
(2) Date.--The appointments of the members of the
Commission shall be made no later than 60 days after the date
of the enactment of this Act.
(c) Period of Appointment; Vacancies.--
(1) In general.--Members of the Commission first appointed
shall each be appointed for a term of 5 years. After the
initial 5-year term, 3 members of the Commission shall be
appointed for terms of 3 years and the remaining 2 members
shall be appointed for terms of 2 years.
(2) Vacancies.--
(A) In general.--Any vacancy on the Commission
shall not affect its powers, but shall be filled in the
same manner as the original appointment and shall be
subject to the same conditions as the original
appointment.
(B) Unexpired term.--An individual chosen to fill a
vacancy shall be appointed for the unexpired term of
the member replaced.
(d) Initial Meeting.--No later than 30 days after the date on which
all members of the Commission have been appointed, the Commission shall
hold its first meeting.
(e) Meetings.--The Commission shall meet at the call of the
Chairman.
(f) Quorum.--A majority of the members of the Commission shall
constitute a quorum, but a lesser number of members may hold hearings.
(g) Chairman and Vice Chairman.--The Commission shall select a
Chairman and Vice Chairman from among its members.
SEC. 203. DUTIES OF THE COMMISSION.
(a) Review of WTO Dispute Settlement Reports.--
(1) In general.--The Commission shall review--
(A) all reports of dispute settlement panels or the
Appellate Body of the World Trade Organization in
proceedings initiated by other parties to the WTO which
are adverse to the United States and which are adopted
by the Dispute Settlement Body, and
(B) upon request of the United States Trade
Representative, any other report of a dispute
settlement panel or the Appellate Body which is adopted
by the Dispute Settlement Body.
(2) Scope of review.--In the case of reports described in
paragraph (1), the Commission shall review the report and
determine whether--
(A) the panel or the Appellate Body, as the case
may be, exceeded its authority or its terms of
reference;
(B) the panel or the Appellate Body, as the case
may be, added to the obligations of or diminished the
rights of the United States under the Uruguay Round
agreement which is the subject of report;
(C) the panel or the Appellate Body, as the case
may be, acted arbitrarily or capriciously, engaged in
misconduct, or demonstrably departed from the
procedures specified for panels and Appellate Bodies in
the applicable Uruguay Round Agreement; and
(D) the report of the panel or the Appellate Body,
as the case may be, deviated from the applicable
standard of review, including in antidumping,
countervailing duty, and other unfair trade remedy
cases, the standard of review set forth in Article 17.6
of the Agreement on Implementation of Article VI of the
General Agreement on Tariffs and Trade 1994.
(3) Affirmative determination.--If the Commission makes an
affirmative determination with respect to the action of a panel
or an Appellate Body under subparagraph (A), (B), (C), or (D)
of paragraph (2), the Commission shall determine whether the
action of the panel or Appellate Body materially affected the
outcome of the report of the panel or Appellate Body.
(b) Determination; Report.--
(1) Determination.--No later than 120 days after the date
of a report of a panel or Appellate Body described in
subsection (a)(1) is adopted by the Dispute Settlement Body,
the Commission shall make a written determination with respect
to matters described in subsections (a)(2) and (a)(3).
(2) Reports.--The Commission shall report the
determinations described in paragraph (1) to the Committee on
Ways and Means of the House of Representatives and the
Committee on Finance of the Senate.
SEC. 204. POWERS OF THE COMMISSION.
(a) Hearings.--The Commission may hold such hearings, sit and act
at such times and places, take such testimony, and receive such
evidence as the Commission considers advisable to carry out the
purposes of this title.
(b) Information From Interested Parties and Federal Agencies.--
(1) Notice of panel or appellate body report.--The United
States Trade Representative shall advise the Commission no
later than 5 days after the date the Dispute Settlement Body
adopts the report of a panel or Appellate Body that is adverse
to the United States and shall immediately publish notice of
such advice in the Federal Register, along with notice of an
opportunity for interested parties to submit comments to the
Commission.
(2) Submissions and requests for information.--Any
interested party may submit comments to the Commission
regarding the panel or Appellate Body report. The Commission
may also secure directly from any Federal department or agency
such information as the Commission considers necessary to carry
out the provisions of this title. Upon request of the Chairman
of the Commission, the head of such department or agency shall
furnish such information to the Commission.
(3) Access to panel and appellate body documents.--The
United States Trade Representative shall make available to the
Commission all submissions and relevant documents relating to
the panel or Appellate Body report, including any information
contained in such submissions identified by the provider of the
information as proprietary information or information treated
as confidential by a foreign government.
SEC. 205. REVIEW OF DISPUTE SETTLEMENT PROCEDURES AND PARTICIPATION IN
THE WTO.
(a) Affirmative Report by Commission.--
(1) In general.--If a joint resolution described in
subsection (b)(1) is enacted into law pursuant to the
provisions of subsection (c), the President shall undertake
negotiations to amend or modify the rules and procedures of the
Understanding on Rules and Procedures Governing the Settlement
of Disputes to which such joint resolution relates.
(2) 3 affirmative reports by commission.--If a joint
resolution described in subsection (b)(2) is enacted into law
pursuant to the provisions of subsection (c), the approval of
the Congress, provided under section 101(a) of the Uruguay
Round Agreements Act, of the WTO Agreement shall cease to be
effective in accordance with the provisions of the joint
resolution and the United States shall cease to be a member of
the WTO.
(b) Joint Resolutions Described.--
(1) In general.--For purposes of subsection (a)(1), a joint
resolution is described in this paragraph, if it is a joint
resolution of the 2 Houses of Congress and the matter after the
resolving clause of such joint resolution is as follows: ``That
the Congress authorizes and directs the President to undertake
negotiations to amend or modify the rules and procedures of the
Understanding on Rules and Procedures Governing the Settlement
of Disputes relating to ____ with respect to the affirmative
determination submitted to the Congress by the WTO Dispute
Settlement Review Commission on ____'', the first blank space
being filled with the specific rules and procedures with
respect to which the President is to undertake negotiations and
the second blank space being filled with the date of the
affirmative determination submitted to the Congress by the
Commission pursuant to section 203(b) which has given rise to
the joint resolution.
(2) Withdrawal resolution.--For purposes of subsection
(a)(2), a joint resolution is described in this paragraph, if
it is a joint resolution of the 2 Houses of Congress and the
matter after the resolving clause of such joint resolution is
as follows: ``That the Congress authorizes and directs the
President to undertake negotiations to amend or modify the
rules and procedures of the Understanding on Rules and
Procedures Governing the Settlement of Disputes relating to
____ with respect to the affirmative report submitted to the
Congress by the WTO Dispute Settlement Review Commission on
____ and if such negotiations do not result in a satisfactory
solution by ____, the Congress withdraws its approval, provided
under section 101(a) of the Uruguay Round Agreements Act, of
the WTO Agreement as defined in section 2(9) of that Act'', the
first blank space being filled with the specific rules and
procedures with respect to which the President is to undertake
negotiations, the second blank space being filled with the date
of the affirmative determination submitted to the Congress by
the Commission pursuant to section 203(b) which has given rise
to the joint resolution, and the third blank space being filled
with the date the Congress withdraws its approval of the WTO
Agreement.
(c) Procedural Provisions.--
(1) In general.--The requirements of this subsection are
met if the joint resolution is enacted in accordance with this
subsection, and--
(A) in the case of a joint resolution described in
subsection (b)(1) the Congress adopts and transmits the
joint resolution to the President before the end of the
90-day period (excluding any day described in section
154(b) of the Trade Act of 1974), beginning on the date
on which the Congress receives an affirmative
determination from the Commission described in section
203(b), or
(B) in the case of a joint resolution described in
subsection (b)(2), the Commission has made 3
affirmative determinations described in section 203(b)
during a 5-year period, and the Congress adopts and
transmits the joint resolution to the President before
the end of the 90-day period (excluding any day
described in section 154(b) of the Trade Act of 1974),
beginning on the date on which the Congress receives
the third such affirmative determination.
(2) Presidential veto.--In any case in which the President
vetoes the joint resolution, the requirements of this
subsection are met, if each House of Congress votes to override
that veto on or before the later of the last day of the 90-day
period referred to in subparagraph (A) or (B), whichever is
applicable, or the last day of the 15-day period (excluding any day
described in section 154(b) of the Trade Act of 1974) beginning on the
date on which the Congress receives the veto message from the
President.
(3) Introduction.--
(A) Time.--A joint resolution to which this section
applies may be introduced at any time on or after the
date on which the Commission transmits to the Congress
an affirmative determination described in section
203(b), and before the end of the 90-day period
referred to in subparagraph (A) or (B), as the case may
be.
(B) Any member may introduce.--A joint resolution
described in subsection (b) may be introduced in either
House of the Congress by any Member of such House.
(4) Expedited procedures.--
(A) General rule.--Subject to the provisions of
this subsection, the provisions of subsections (b),
(d), (e), and (f) of section 152 of the Trade Act of
1974 (19 U.S.C. 2192(b), (d), (e), and (f)) apply to
joint resolutions described in subsection (b) to the
same extent as such provisions apply to resolutions
under such section.
(B) Report or discharge of committee.--If the
committee of either House to which a joint resolution
has been referred has not reported it by the close of
the 45th day after its introduction (excluding any day
described in section 154(b) of the Trade Act of 1974),
such committee shall be automatically discharged from
further consideration of the joint resolution and it
shall be placed on the appropriate calendar.
(C) Finance and ways and means committees.--It is
not in order for--
(i) the Senate to consider any joint
resolution unless it has been reported by the
Committee on Finance or the committee has been
discharged under subparagraph (B); or
(ii) the House of Representatives to
consider any joint resolution unless it has
been reported by the Committee on Ways and
Means or the committee has been discharged
under subparagraph (B).
(D) Special rule for house.--A motion in the House
of Representatives to proceed to the consideration of a
joint resolution may only be made on the second
legislative day after the calendar day on which the
Member making the motion announces to the House his or
her intention to do so.
(5) Consideration of second resolution not in order.--It
shall not be in order in either the House of Representatives or
the Senate to consider a joint resolution (other than a joint
resolution received from the other House), if that House has
previously adopted a joint resolution under this section
relating to the same matter.
(d) Rules of House of Representatives and Senate.--This section is
enacted by the Congress--
(1) as an exercise of the rulemaking power of the House of
Representatives and the Senate, respectively, and as such is
deemed a part of the rules of each House, respectively, and
such procedures supersede other rules only to the extent that
they are inconsistent with such other rules; and
(2) with the full recognition of the constitutional right
of either House to change the rules (so far as relating to the
procedures of that House) at any time, in the same manner, and
to the same extent as any other rule of that House.
SEC. 206. PARTICIPATION IN WTO PANEL PROCEEDINGS.
(a) In General.--If the United States Trade Representative, in
proceedings before a dispute settlement panel or the Appellate Body of
the WTO, seeks--
(1) to enforce United States rights under a multilateral
trade agreement, or
(2) to defend a challenged action or determination of the
United States Government,
a private United States person that is supportive of the United States
Government's position before the panel or Appellate Body and that has a
direct economic interest in the panel's or Appellate Body's resolution
of the matters in dispute shall be permitted to participate in
consultations and panel proceedings. The Trade Representative shall
issue regulations, consistent with subsections (b) and (c), ensuring
full and effective participation by any such private person.
(b) Access to Information.--The United States Trade Representative
shall make available to persons described in subsection (a) all
information presented to or otherwise obtained by the Trade
Representative in connection with a WTO dispute settlement proceeding.
The United States Trade Representative shall promulgate regulations
implementing a protective order system to protect information
designated by the submitting member as confidential.
(c) Participation in Panel Process.--Upon request from a person
described in subsection (a), the United States Trade Representative
shall--
(1) consult in advance with such person regarding the
content of written submissions from the United States to the
WTO panel concerned or to the other member countries involved;
(2) include, where appropriate, such person or its
appropriate representative as an advisory member of the
delegation in sessions of the dispute settlement panel;
(3) allow such special delegation member, where such member
would bring special knowledge to the proceeding, to appear
before the panel, directly or through counsel, under the
supervision of responsible United States Government officials;
and
(4) in proceedings involving confidential information,
allow appearance of such person only through counsel as a
member of the special delegation.
SEC. 207. DEFINITIONS.
For purposes of this title:
(1) Appellate body.--The term ``Appellate Body'' means the
Appellate Body established under Article 17.1 of the Dispute
Settlement Understanding.
(2) Adverse to the united states.--The term ``adverse to
the United States'' includes any report which holds any law,
regulation, or application thereof by a government agency to be
inconsistent with international obligations under the Uruguay
Round Agreement (or a nullification or impairment thereof),
whether or not there are other elements of the decision which
favor arguments made by the United States.
(3) Dispute settlement panel; panel.--The terms ``dispute
settlement panel'' and ``panel'' mean a panel established
pursuant to Article 6 of the Dispute Settlement Understanding.
(4) Dispute settlement body.--The term ``Dispute Settlement
Body'' means the Dispute Settlement Body administering the
rules and procedures set forth in the Dispute Settlement
Understanding.
(5) Dispute settlement understanding.--The term ``Dispute
Settlement Understanding'' means the Understanding on Rules and
Procedures Governing the Settlement of Disputes referred to in
section 101(d)(16) of the Uruguay Round Agreements Act.
(6) Uruguay round agreement.--The term ``Uruguay Round
Agreement'' means one or more of the agreements described in
section 101(d) of the Uruguay Round Agreements Act.
(7) World trade organization; wto.--The terms ``World Trade
Organization'' and ``WTO'' mean the organization established
pursuant to the WTO Agreement.
(8) WTO agreement.--The term ``WTO Agreement'' means the
Agreement Establishing the World Trade Organization entered
into on April 15, 1994.
TITLE III--REFORM OF EXPORT-IMPORT BANK AND OVERSEAS PRIVATE INVESTOR
CORPORATION
SEC. 301. RESTRICTIONS ON EXPORT-IMPORT BANK ASSISTANCE.
Section 2 of the Act of July 31, 1945 (12 U.S.C. 635) is amended by
adding at the end the following:
``(g) United States Content Requirements.--Notwithstanding any
other provision of law, the Bank may not guarantee, insure, extend
credit, or participate in the extension of credit in connection with
any project or activity in connection with the production of any
commodity less than 80 percent of the value of which is attributable to
content produced, manufactured, mined, or grown in the United
States.''.
SEC. 302. RESTRICTIONS ON THE OVERSEAS PRIVATE INVESTMENT CORPORATION.
Section 231A of the Foreign Assistance Act of 1961 (22 U.S.C.
2191a) is amended--
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the following:
``(c) United States Content Requirements.--Notwithstanding any
other provision of law, the Corporation may not insure, reinsure,
guarantee, or finance a project if the project involves the production
of any commodity less than 80 percent of the value of which is
attributable to content produced, manufactured, mined, or grown in the
United States.''.
SEC. 303. ABOLITION OF INTERNATIONAL TRADE COMMISSION FUNCTIONS.
(a) Abolishment of ITC.--Effective on the first day of the seventh
month beginning after the date of enactment of this Act, the United
States International Trade Commission established by section 330 of the
Tariff Act of 1930 (19 U.S.C. 1330) as in effect on the last day of the
sixth month beginning after the date of enactment of this Act is
abolished.
(b) Transfer of Functions.--Except as otherwise provided in this
Act, all functions that on the last day of the sixth month beginning
after the date of enactment of this Act are authorized to be performed
by the United States International Trade Commission are transferred to
the Department of Commerce effective on the first day of the seventh
month beginning after the date of enactment of this Act and shall be
performed by the Assistant Secretary of Commerce for Import
Administration.
(c) Determination of Certain Functions.--If necessary, the Office
of Management and Budget shall make any determination of the functions
that are transferred under this section.
(d) Incidental Transfers.--The Director of the Office of Management
and Budget, in consultation with the Secretary of Commerce, shall make
such determinations as may be necessary with regard to the functions,
offices, or portions thereof transferred by this Act, and make such
additional incidental dispositions of personnel, assets, liabilities,
grants, contracts, property, records, and unexpended balances of
appropriations, authorizations, allocations, and other funds held,
used, arising from, available to, or to be made available in connection
with such functions, offices, or portions thereof, as may be necessary
to carry out this Act. The Director shall provide for the termination
of the affairs of all entities terminated by this Act and, in
consultation with the Administrator, for such further measures and
dispositions as may be necessary to effectuate the purposes of this
Act.
TITLE IV--MISCELLANEOUS
SEC. 401. BUY-AMERICAN REQUIREMENT IMPOSED ON DEPARTMENT OF HOMELAND
SECURITY; EXCEPTIONS.
(a) Requirement.--Except as provided in subsections (c) through
(e), funds appropriated or otherwise available to the Department of
Homeland Security may not be used for the procurement of an item
described in subsection (b) if the item is not grown, reprocessed,
reused, or produced in the United States.
(b) Covered Items.--An item referred to in subsection (a) is any of
the following:
(1) An article or item of--
(A) food;
(B) clothing;
(C) tents, tarpaulins, or covers;
(D) cotton and other natural fiber products, woven
silk or woven silk blends, spun silk yarn for cartridge
cloth, synthetic fabric or coated synthetic fabric
(including all textile fibers and yarns that are for
use in such fabrics), canvas products, or wool (whether
in the form of fiber or yarn or contained in fabrics,
materials, or manufactured articles); or
(E) any item of individual equipment manufactured
from or containing such fibers, yarns, fabrics, or
materials.
(2) Specialty metals, including stainless steel flatware.
(3) Hand or measuring tools.
(c) Availability Exception.--Subsection (a) does not apply to the
extent that the Secretary of Homeland Security determines that
satisfactory quality and sufficient quantity of any such article or
item described in subsection (b)(1) or specialty metals (including
stainless steel flatware) grown, reprocessed, reused, or produced in
the United States cannot be procured as and when needed at United
States market prices.
(d) Exception for Certain Procurements Outside the United States.--
Subsection (a) does not apply to the following:
(1) Procurements by vessels in foreign waters.
(2) Emergency procurements or procurements of perishable
foods by an establishment located outside the United States for
the personnel attached to such establishment.
(e) Exception for Small Purchases.--Subsection (a) does not apply
to purchases for amounts not greater than the simplified acquisition
threshold referred to in section 2304(g) of title 10, United States
Code.
(f) Applicability to Contracts and Subcontracts for Procurement of
Commercial Items.--This section is applicable to contracts and
subcontracts for the procurement of commercial items notwithstanding
section 34 of the Office of Federal Procurement Policy Act (41 U.S.C.
430).
(g) Geographic Coverage.--In this section, the term ``United
States'' includes the possessions of the United States.
SEC. 402. PROHIBITION ON SALE OF CHILD-LABOR MANUFACTURED GOODS IN
INTERSTATE COMMERCE.
(a) In General.--It is unlawful to sell, or offer for sale, in
interstate commerce or affecting interstate commerce, any good, wares,
article, or merchandise manufactured wholly or in part by child labor.
In this subsection, the term ``child labor'' means the employment of a
child under the age of 12.
(b) Penalty.--Violation of subsection (a) is punishable by a fine
of $100,000, multiplied by each item of goods sold or offered for sale
in violation of that section.
SEC. 403. ADDITIONAL CUSTOMS AGENTS TO COMBAT INAPPROPRIATE
TRANSSHIPMENT OF TEXTILES.
The Secretary of the Treasury is authorized to increase the
staffing level of personnel of the United States Customs Service
performing customs revenue functions (as defined in section 415 of the
Homeland Security Act of 2002) by 500 for the purpose of preventing the
use of transshipment and technical resourcing techniques--
(1) to avoid quota limitations on imports of textiles and
textile products from any country; or
(2) to exploit the availability of lower rates of customs
duties applicable to such imports from any country other than
the country of original origin.
SEC. 404. SENSE OF THE SENATE REGARDING BYRD AMENDMENT.
It is the sense of the Senate that section 754 of the Trade Act of
1930 (19 U.S.C. 1675c), commonly known as the Byrd Amendment, providing
for the distribution of duties assessed pursuant to an antidumping duty
order or a finding under the Antidumping Act of 1921 to affected
domestic producers is--
(1) consistent with the obligations of the United States
under the Agreement Establishing the World Trade Organization;
(2) not in violation of the World Trade Organization
Agreement on Subsidies and Countervailing Measures;
(3) not inconsistent with the obligations of the United
States under the World Trade Organization Dispute Settlement
Understanding;
(4) a just, measured, and appropriate remedy; and
(5) an important weapon in the arsenal of the United States
for combating further declines in the United States industrial
base attributable to predatory trade practices of other
countries.
TITLE V--INTERNAL REVENUE CODE AMENDMENTS.
SEC. 501. DISINCENTIVIZATION OF CORPORATE EXPATRIATION TO AVOID UNITED
STATES INCOME TAX.
(a) In General.--Paragraph (4) of section 7701(a) of the Internal
Revenue Code of 1986 (defining domestic) is amended to read as follows:
``(4) Domestic.--
``(A) In General.--Except as provided in
subparagraph (B), the term `domestic' when applied to a
corporation or partnership means created or organized
in the United States or under the law of the United
States or of any State unless, in the case of a
partnership, the Secretary provides otherwise by
regulations.
``(B) Certain corporations treated as domestic.--
``(i) In general.--The acquiring
corporation in a corporate expatriation
transaction shall be treated as a domestic
corporation.
``(ii) Corporate expatriation
transaction.--For purposes of this
subparagraph, the term `corporate expatriation
transaction' means any transaction if--
``(I) a nominally foreign
corporation (referred to in this
subparagraph as the `acquiring
corporation') acquires, as a result of
such transaction, directly or
indirectly substantially all of the
properties held directly or indirectly
by a domestic corporation, and
``(II) immediately after the
transaction, more than 80 percent of
the stock (by vote or value) of the
acquiring corporation is held by former
shareholders of the domestic
corporation by reason of holding stock
in the domestic corporation.
``(iii) Lower stock ownership requirement
in certain cases.--Subclause (II) of clause
(ii) shall be applied by substituting `50
percent' for `80 percent' with respect to any
nominally foreign corporation if--
``(I) such corporation does not
have substantial business activities
(when compared to the total business
activities of the expanded affiliated
group) in the foreign country in which
or under the law of which the
corporation is created or organized,
and
``(II) the stock of the corporation
is publicly traded and the principal
market for the public trading of such
stock is in the United States.
``(iv) Partnership transactions.--The term
`corporate expatriation transaction' includes
any transaction if--
``(I) a nominally foreign
corporation (referred to in this
subparagraph as the `acquiring
corporation') acquires, as a result of
such transaction, directly or
indirectly properties constituting a
trade or business of a domestic
partnership,
``(II) immediately after the
transaction, more than 80 percent of
the stock (by vote or value) of the
acquiring corporation is held by former
partners of the domestic partnership or
related foreign partnerships
(determined without regard to stock of
the acquiring corporation which is sold
in a public offering related to the
transaction), and
``(III) the acquiring corporation
meets the requirements of subclauses
(I) and (II) of clause (iii).
``(v) Special rules.--For purposes of this
subparagraph--
``(I) a series of related
transactions shall be treated as 1
transaction, and
``(II) stock held by members of the
expanded affiliated group which
includes the acquiring corporation
shall not be taken into account in
determining ownership.
``(vi) Other definitions.--For purposes of
this subparagraph--
``(I) Nominally foreign
corporation.--The term `nominally
foreign corporation' means any
corporation which would (but for this
subparagraph) be treated as a foreign
corporation.
``(II) Expanded affiliated group.--
The term `expanded affiliated group'
means an affiliated group (as defined
in section 1504(a) without regard to
section 1504(b)).
``(III) Related foreign
partnership.--A foreign partnership is
related to a domestic partnership if
they are under common control (within
the meaning of section 482), or they
shared the same trademark or
tradename.''.
(b) Effective Dates.--
(1) In general.--The amendment made by this section shall
apply to corporate expatriation transactions completed after
September 11, 2001.
(2) Special rule.--The amendment made by this section shall
also apply to corporate expatriation transactions completed on
or before September 11, 2001, but only with respect to taxable
years of the acquiring corporation beginning after December 31,
2003.
SEC. 502. INCLUSION OF INCOME FROM U.S. IMPORTS IN SUBPART F INCOME.
(a) In General.--Section 952(a) of the Internal Revenue Code of
1986 (relating to definition of Subpart F income) is amended--
(1) by striking ``and'' in paragraph (4);
(2) by striking ``country.'' in paragraph (5) and inserting
``country, and''; and
(3) inserting after paragraph (5) the following:
``(6) United States import income (as determined under
section 954(j)).''.
(b) Import Income Defined.--Section 954 of such Code is amended--
(1) by striking ``and'' in subsection (a)(4);
(2) by striking ``subsection (b)(5)).'' in subsection
(a)(5) and inserting ``subsection (b)(5)), and'';
(3) by adding at the end of subsection (a) the following:
``(6) the foreign base company United States import income
for the taxable year (determined under subsection (j) and
reduced as provided in subsection (b)(5)).''; and
(4) by adding at the end the following:
``(j) Foreign Base Company United States Import Income.--For
purposes of subsection (a)(6):
``(1) In general.--The term `foreign base company United
States import income' means gross income derived from the sale
of goods manufactured, produced, grown, or extracted outside
the United States and imported into the United States.
``(2) Not treated as another kind of base company income.--
Income of a corporation which is foreign base company United
States import income shall not be considered foreign base
company income or foreign base company oil related income of
such corporation.''.
(c) Effective Date.--The amendments made by this section apply to
taxable years of controlled foreign corporations beginning after the
date of 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. 503. DENIAL OF TREATY BENEFITS FOR CERTAIN DEDUCTIBLE PAYMENTS.
(a) In General.--Section 894 of the Internal Revenue Code of 1986
(relating to income affected by treaty) is amended by adding at the end
the following new subsection:
``(d) Denial of Treaty Benefits for Certain Deductible Payments.--
``(1) In general.--A foreign entity shall not be entitled
under any income tax treaty of the United States with a foreign
country to any reduced rate of any withholding tax imposed by
this title on any deductible foreign payment unless such entity
is predominantly owned by individuals who are residents of such
foreign country.
``(2) Deductible foreign payment.--For purposes of
paragraph (1), the term `deductible foreign payment' means any
payment--
``(A) which is made by a domestic entity directly
or indirectly to a related person which is a foreign
entity, and
``(B) which is allowable as a deduction under this
chapter.
``(3) Domestic and foreign entities; related person.--For
purposes of this subsection--
``(A) Domestic entity.--The term `domestic entity'
means any domestic corporation or domestic partnership.
``(B) Foreign entity.--The term `foreign entity'
means any foreign corporation or foreign partnership.
``(C) Related person.--The term `related person'
has the meaning given such term by section 954(d)(3)
(determined by substituting `domestic entity' for
`controlled foreign corporation' each place it
appears).
``(4) Predominant ownership.--For purposes of this
subsection--
``(A) In general.--An entity is predominantly owned
by individuals who are residents of a foreign country
if--
``(i) in the case of a corporation, more
than 50 percent (by value) of the stock of such
corporation is owned (within the meaning of
section 883(c)(4)) by individuals who are
residents of such foreign country, or
``(ii) in the case of a partnership, more
than 50 percent (by value) of the beneficial
interests in such partnership are so owned.
``(B) Publicly traded corporations.--A foreign
corporation also shall be treated as predominantly
owned by individuals who are residents of a foreign
country if--
``(i)(I) the stock of such corporation is
primarily and regularly traded on an
established securities market in such foreign
country, and
``(II) such corporation has activities
within such foreign country which are
substantial in relation to the total activities
of such corporation and its related persons, or
``(ii) such corporation is wholly owned (directly
or indirectly) by another foreign corporation which is
described in clause (i).
``(5) Conduit payments.--Under regulations prescribed by
the Secretary, paragraph (1) shall not apply to a payment
received by a foreign entity referred to in paragraph (1) if--
``(A) within a reasonable period after such entity
receives such payment, such entity makes a comparable
payment directly or indirectly to another related
person,
``(B) such related person is a resident of a
foreign country with which the United States has an
income tax treaty,
``(C) such related person is predominantly owned by
individuals who are residents of such country, and
``(D) the withholding tax rate reduction under such
treaty is not less than the withholding tax rate
reduction applicable (without regard to this paragraph)
to the payment received by such foreign entity.''.
(b) Effective Date.--The amendment made by this section shall take
effect on the date of the enactment of this Act.
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