S. 196Senate109th Congress (2005-2007)In Committee

A bill to amend the Internal Revenue Code of 1986 to provide for the taxation of income of controlled foreign corporations attributable to imported property.

Introduced January 26, 2005

Legislative Activity

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2 earlier actions
SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance.

January 26, 2005

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SenateIntro Referral

Introduced in Senate

January 26, 2005

SenateIntro Referral

Sponsor introductory remarks on measure. (CR S605)

January 26, 2005

SenateIntro Referral

Read twice and referred to the Committee on Finance.

January 26, 2005

Floor Debate

23 members

What members said about S. 196 on the floor

13 Republicans10 Democrats
Jeff Bingaman
Sen. Jeff BingamanD-NM · Jan 26, 2005

Mr. President, I rise today with my distinguished colleague Senator Bennett to introduce the Indian School Bus Route Safety Reauthorization Act of 2005. This bill continues an important Federal…

Jon S. Corzine
Sen. Jon S. CorzineD-NJ · Jan 26, 2005

Mr. President, I rise today to announce the introduction of the Military Retiree Survivor Benefit Equity Act of 2005. This bill is a major step forward in making our military's Survivor Benefit…

Mike DeWine
Sen. Mike DeWineR-OH · Jan 26, 2005

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record. Mr. President, I would like to discuss a bill Senator Dodd and I are introducing today. This is a bill about…

Dianne Feinstein
Sen. Dianne FeinsteinD-CA · Jan 26, 2005

Mr. President, today I am pleased to introduce the Sierra National Forest Land Exchange Act of 2005, the companion to legislation authored by Representative Radanovich. This legislation would assist…

Sam Brownback
Sen. Sam BrownbackR-KS · Jan 26, 2005

Mr. President, I am proud to join with my colleague from the great State of Kansas, Senator Pat Roberts, and introduce the Bleeding Kansas National Heritage Area Act. I appreciate the Senator's hard…

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Wayne Allard
Sen. Wayne AllardR-CO · Jan 26, 2005

Mr. President, I rise to discuss an issue of considerable importance to the people of southern Colorado. For nearly 50 years, the people of southern Colorado have lived with the knowledge that within…

Christopher J. Dodd
Sen. Christopher J. DoddD-CT · Jan 26, 2005

Mr. President, I come to the floor today, along with my good friend Senator Mike DeWine, to introduce the Compassionate Care for Children Act of 2005. This important legislation is designed to…

Pete V. Domenici
Sen. Pete V. DomeniciR-NM · Jan 26, 2005

Mr. President, I rise today to reintroduce a piece of legislation that is of paramount importance to the State of New Mexico and many other western States. This bill will address the mounting…

Richard G. Lugar
Sen. Richard G. LugarR-IN · Jan 26, 2005

The bill I am introducing today seeks to enhance United States effectiveness in dealing with countries that are either emerging from civil strife and conflict or threatened with instability. It calls…

Joseph I. Lieberman
Sen. Joseph I. LiebermanD-CT · Jan 26, 2005

Mr. President, I rise today to introduce the No Taxation Without Representation Act of 2005 in an effort to right a persistent injustice experienced by the 600,000 citizens of the District of…

Byron L. Dorgan
Sen. Byron L. DorganD-ND · Jan 26, 2005

Mr. President, today I am joined by Senator Mikulski of Maryland and seven of our colleagues in introducing legislation to repeal one of the most egregious tax subsidies found in the U.S. Tax Code.…

Byron L. Dorgan
Sen. Byron L. DorganD-ND · Jan 26, 2005

Mr. President, today I am joined by Senator Mikulski of Maryland and seven of our colleagues in introducing legislation to repeal one of the most egregious tax subsidies found in the U.S. Tax Code.…

Bill Nelson
Sen. Bill NelsonD-FL · Jan 26, 2005

Mr. President, on behalf of myself and Senators Corzine, Hagel, Durbin and Dayton, I am honored to introduce legislation today that we are convinced is necessary to fix a long- standing problem in…

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Chuck Hagel
Sen. Chuck HagelR-NE · Jan 26, 2005

Mr. President, I rise today to introduce, along with my colleagues Senators Sununu and Dole, the Federal Housing Enterprise Regulatory Reform Act of 2005. This is needed regulatory reform at a…

Edward M. Kennedy
Sen. Edward M. KennedyD-MA · Jan 26, 2005

Mr. President, it is an honor once again to join my colleague Senator Grassley in introducing the Family Opportunity Act to remove the health care barriers for children with disabilities that so…

Chuck Grassley
Sen. Chuck GrassleyR-IA · Jan 26, 2005

Mr. President, I am pleased to join once again with my good friend Senator Kennedy to introduce the Family Opportunity Act. The Family Opportunity Act provides states the option to allow families…

Mitch McConnell
Sen. Mitch McConnellR-KY · Jan 26, 2005

Mr. President, one of the first meetings I had as a U.S. Senator 20 years ago was about the aging chemical weapons stored at the Blue Grass Army Depot in Richmond, KY. At the time, the Army was…

Maria Cantwell
Sen. Maria CantwellD-WA · Jan 26, 2005

Mr. President, I want to take a moment to talk about the advantages of having a college education and the importance of ensuring access to higher education. That is why I am pleased to join as a…

Gordon H. Smith
Sen. Gordon H. SmithR-OR · Jan 26, 2005

Mr. President, I rise today to introduce important legislation aimed at helping some the world's poorest countries along their path toward economic development and self-sufficiency. Joining me in…

Lisa Murkowski
Sen. Lisa MurkowskiR-AK · Jan 26, 2005

Mr. President, I rise today to introduce two related pieces of legislation addressing inequities that affect seaplane operators and passengers in rural areas. Both of these were included in S. 1072…

John Ensign
Sen. John EnsignR-NV · Jan 26, 2005

Mr. President, I rise today to offer legislation to correct an inequity with the United States Tax Code that affects thousands of taxpayers every year. The bill I am offering is the Fuel Tax…

Ken Salazar
Sen. Ken SalazarD-CO · Jan 26, 2005

Mr. President, I rise today along with my colleagues in relation to the Pueblo Chemical Depot. When the Senate ratified the Chemical Weapons Convention in 1997, it became U.S. law and our sworn…

Saxby Chambliss
Sen. Saxby ChamblissR-GA · Jan 26, 2005

Mr. President a mere 20 minutes away from the hustle and bustle of the booming city of Atlanta, GA, lies a quiet refuge that cradles historical remnants and nature's beauty. This area around Arabia…

Pat Roberts
Sen. Pat RobertsR-KS · Jan 26, 2005

Mr. President, I am pleased to once again introduce, along with my distinguished colleague Senator Brownback, a bill designating the Bleeding Kansas and the Enduring Struggle for Freedom National…

Bill Text

Latest available legislative text

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Latest
Introduced in SenateIssued January 26, 2005
        [Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 196 Introduced in Senate (IS)]

109th CONGRESS
1st Session
S. 196

To amend the Internal Revenue Code of 1986 to provide for the taxation
of income of controlled foreign corporations attributable to imported
property.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

January 26, 2005

Mr. Dorgan (for himself, Ms. Mikulski, Mr. Feingold, Mr. Kohl, Mr.
Harkin, Mr. Kennedy, Mr. Leahy, Mr. Levin, and Mr. Johnson) introduced
the following bill; which was read twice and referred to the Committee
on Finance

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to provide for the taxation
of income of controlled foreign corporations attributable to imported
property.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. TAXATION OF INCOME OF CONTROLLED FOREIGN CORPORATIONS
ATTRIBUTABLE TO IMPORTED PROPERTY.

(a) General Rule.--Subsection (a) of section 954 of the Internal
Revenue Code of 1986 (defining foreign base company income) is amended
by striking ``and'' at the end of paragraph (4), by striking the period
at the end of paragraph (5) and inserting ``, and'', and by adding at
the end the following new paragraph:
``(6) imported property income for the taxable year
(determined under subsection (j) and reduced as provided in
subsection (b)(5)).''.
(b) Definition of Imported Property Income.--Section 954 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new subsection:
``(j) Imported Property Income.--
``(1) In general.--For purposes of subsection (a)(6), the
term `imported property income' means income (whether in the
form of profits, commissions, fees, or otherwise) derived in
connection with--
``(A) manufacturing, producing, growing, or
extracting imported property;
``(B) the sale, exchange, or other disposition of
imported property; or
``(C) the lease, rental, or licensing of imported
property.
Such term shall not include any foreign oil and gas extraction
income (within the meaning of section 907(c)) or any foreign
oil related income (within the meaning of section 907(c)).
``(2) Imported property.--For purposes of this subsection--
``(A) In general.--Except as otherwise provided in
this paragraph, the term `imported property' means
property which is imported into the United States by
the controlled foreign corporation or a related person.
``(B) Imported property includes certain property
imported by unrelated persons.--The term `imported
property' includes any property imported into the
United States by an unrelated person if, when such
property was sold to the unrelated person by the
controlled foreign corporation (or a related person),
it was reasonable to expect that--
``(i) such property would be imported into
the United States; or
``(ii) such property would be used as a
component in other property which would be
imported into the United States.
``(C) Exception for property subsequently
exported.--The term `imported property' does not
include any property which is imported into the United
States and which--
``(i) before substantial use in the United
States, is sold, leased, or rented by the
controlled foreign corporation or a related
person for direct use, consumption, or
disposition outside the United States; or
``(ii) is used by the controlled foreign
corporation or a related person as a component
in other property which is so sold, leased, or
rented.
``(3) Definitions and special rules.--
``(A) Import.--For purposes of this subsection, the
term `import' means entering, or withdrawal from
warehouse, for consumption or use. Such term includes
any grant of the right to use intangible property (as
defined in section 936(h)(3)(B)) in the United States.
``(B) United states.--For purposes of this
subsection, the term `United States' includes the
Commonwealth of Puerto Rico, the Virgin Islands of the
United States, Guam, American Samoa, and the
Commonwealth of the Northern Mariana Islands.
``(C) Unrelated person.--For purposes of this
subsection, the term `unrelated person' means any
person who is not a related person with respect to the
controlled foreign corporation.
``(D) Coordination with foreign base company sales
income.--For purposes of this section, the term
`foreign base company sales income' shall not include
any imported property income.''.
(c) Separate Application of Limitations on Foreign Tax Credit for
Imported Property Income.--
(1) Before 2007.--
(A) In general.--Paragraph (1) of section 904(d) of
the Internal Revenue Code of 1986 (relating to separate
application of section with respect to certain
categories of income), as in effect for taxable years
beginning before January 1, 2007, is amended by
striking ``and'' at the end of subparagraph (H), by
redesignating subparagraph (I) as subparagraph (J), and
by inserting after subparagraph (H) the following new
subparagraph:
``(I) imported property income, and''.
(B) Imported property income defined.--Paragraph
(2) of section 904(d) of such Code, as so in effect, is
amended by redesignating subparagraphs (H) and (I) as
subparagraphs (I) and (J), respectively, and by
inserting after subparagraph (G) the following new
subparagraph:
``(H) Imported property income.--The term `imported
property income' means any income received or accrued
by any person which is of a kind which would be
imported property income (as defined in section
954(j)).''.
(C) Look-thru rules to apply.--Subparagraph (F) of
section 904(d)(3) of such Code, as so in effect, is
amended by striking ``or (D)'' and inserting ``(D), or
(I)''.
(2) After 2006.--
(A) In general.--Paragraph (1) of section 904(d) of
such Code (relating to separate application of section
with respect to certain categories of income), as in
effect for taxable years beginning after December 31,
2006, is amended by striking ``and'' at the end of
subparagraph (A), by redesignating subparagraph (B) as
subparagraph (C), and by inserting after subparagraph
(A) the following new subparagraph:
``(B) imported property income, and''.
(B) Imported property income defined.--Paragraph
(2) of section 904(d) of such Code, as so in effect, is
amended by redesignating subparagraphs (I) and (J) as
subparagraphs (J) and (K), respectively, and by
inserting after subparagraph (H) the following new
subparagraph:
``(I) Imported property income.--The term `imported
property income' means any income received or accrued
by any person which is of a kind which would be
imported property income (as defined in section
954(j)).''.
(C) Conforming amendment.--Clause (ii) of section
904(d)(2)(A) of such Code, as so in effect, is amended
by inserting ``or imported property income'' after
``passive category income''.
(d) Technical Amendments.--
(1) Clause (iii) of section 952(c)(1)(B) of the Internal
Revenue Code of 1986 (relating to certain prior year deficits
may be taken into account) is amended--
(A) by redesignating subclauses (II), (III), (IV),
and (V) as subclauses (III), (IV), (V), and (VI), and
(B) by inserting after subclause (I) the following
new subclause:
``(II) imported property income,''.
(2) Paragraph (5) of section 954(b) of such Code (relating
to deductions to be taken into account) is amended by striking
``and the foreign base company oil related income'' and
inserting ``the foreign base company oil related income, and
the imported property income''.
(e) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years of
foreign corporations beginning after the date of the enactment
of this Act, and to taxable years of United States shareholders
within which or with which such taxable years of such foreign
corporations end.
(2) Subsection (c).--The amendments made by subsection
(c)(1) shall apply to taxable years beginning after the date of
the enactment of this Act and before January 1, 2007, and the
amendments made by subsection (c)(2) shall apply to taxable
years beginning after December 31, 2006.
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