March 3, 2004 CONGRESSIONAL RECORD — SENATE S2025 these provisions will help to ensure an a.m. having arrived, the Senate will øSec. 216. Repeal of special capital gains tax affordable, reliable wood supply upon proceed to the consideration of S. 1637, on aliens present in the United which so many manufacturing jobs in which the clerk will report. States for 183 days or more. Maine depend. The assistant legislative clerk read øTITLE I—PROVISIONS RELATING TO RE- Finally, this bill is designed to en- as follows: PEAL OF EXCLUSION FOR EXTRATERRITORIAL INCOME sure that only companies that are help- A bill (S. 1637) to amend the Internal Rev- ø ing to build America’s manufacturing enue Code of 1986 to comply with the World SEC. 101. REPEAL OF EXCLUSION FOR EXTRATERRITORIAL INCOME. base obtain its benefits. It has both a Trade Organization rulings on the FSC/ETI ø(a) IN GENERAL.—Section 114 is hereby re- benefit in a manner that preserves jobs and carrot and a stick approach. Companies pealed. production activities in the United States, to that move jobs offshore will see their ø(b) CONFORMING AMENDMENTS.— reform and simplify the international tax- benefits reduced. For example, they ø(1)(A) Subpart E of part III of subchapter ation rules of the United States, and for will not be able to claim that 9-percent N of chapter 1 (relating to qualifying foreign other purposes. deduction on operations that are lo- trade income) is hereby repealed. cated in the United States. Companies The Senate proceeded to consider the ø(B) The table of subparts for such part III that choose to invert their corporate bill, which had been reported from the is amended by striking the item relating to structure altogether in order to avoid Committee on Finance, with an amend- subpart E. ø U.S. taxes will not be eligible for this ment to strike all after the enacting (2) The table of sections for part III of subchapter B of chapter 1 is amended by credit at all. clause and inserting in lieu thereof the following: striking the item relating to section 114. The crisis in the manufacturing sec- ø(3) The second sentence of section tor demands our attention. It did not (Strike the part shown in black 56(g)(4)(B)(i) is amended by striking ‘‘or start yesterday, and it will not be re- brackets and insert the part shown in under section 114’’. solved tomorrow. Solutions can and italic.) ø(4) Section 275(a) is amended— should be sought today. S. 1637 ø(A) by inserting ‘‘or’’ at the end of para- The bill I have introduced is a good Be it enacted by the Senate and House of Rep- graph (4)(A), by striking ‘‘or’’ at the end of start, but additional remedies are need- resentatives of the United States of America in paragraph (4)(B) and inserting a period, and ed. Manufacturing jobs arise in part be- Congress assembled, by striking subparagraph (C), and ø(B) by striking the last sentence. cause some of our trading partners øSECTION 1. SHORT TITLE; AMENDMENT OF 1986 ø(5) Paragraph (3) of section 864(e) is simply do not play by the rules. The CODE; TABLE OF CONTENTS. ø(a) SHORT TITLE.—This Act may be cited amended— Presiding Officer has been a leader in ø as the ‘‘Jumpstart Our Business Strength (A) by striking: ø this area. Our Nation’s manufacturers (JOBS) Act’’. ‘‘(3) TAX-EXEMPT ASSETS NOT TAKEN INTO can compete against the best in the ø(b) AMENDMENT OF 1986 CODE.—Except as ACCOUNT.— ø world, but they cannot compete otherwise expressly provided, whenever in ‘‘(A) IN GENERAL.—For purposes of’’; and against nations that provide huge sub- this Act an amendment or repeal is ex- inserting: ø sidies and other help to their manufac- pressed in terms of an amendment to, or re- ‘‘(3) TAX-EXEMPT ASSETS NOT TAKEN INTO peal of, a section or other provision, the ref- ACCOUNT.—For purposes of’’, and turers. ø erence shall be considered to be made to a (B) by striking subparagraph (B). I hear from manufacturers in my ø(6) Section 903 is amended by striking State time and again whose efforts to section or other provision of the Internal Revenue Code of 1986. ‘‘114, 164(a),’’ and inserting ‘‘164(a)’’. compete successfully in a global econ- ø ø(c) TABLE OF CONTENTS.— (7) Section 999(c)(1) is amended by strik- omy simply cannot overcome the prac- ing ‘‘941(a)(5),’’. øSec. 1. Short title; amendment of 1986 Code; tices of the illegal pricing and sub- ø(c) EFFECTIVE DATE.— table of contents. sidies of nations such as China. That is ø(1) IN GENERAL.—The amendments made øTITLE I—PROVISIONS RELATING TO RE- by this section shall apply to transactions why I will soon be introducing a second PEAL OF EXCLUSION FOR bill that will help ensure that nations occurring after the date of the enactment of EXTRATERRITORIAL INCOME this Act. such as China are held fully account- øSec. 101. Repeal of exclusion for ø(2) BINDING CONTRACTS.—The amendments able for their actions by our trade rem- extraterritorial income. made by this section shall not apply to any edy laws. Unfair market conditions øSec. 102. Deduction relating to income at- transaction in the ordinary course of a trade cannot continue to cause our manufac- tributable to United States pro- or business which occurs pursuant to a bind- turers to hemorrhage jobs. duction activities. ing contract— I am hopeful that working together øTITLE II—INTERNATIONAL TAX ø(A) which is between the taxpayer and a on this and other legislative and ad- PROVISIONS person who is not a related person (as de- fined in section 943(b)(3) of such Code, as in ministrative proposals, we can take the øSubtitle A—International Tax Reform effect on the day before the date of the en- important steps needed to strengthen ø Sec. 201. 20-year foreign tax credit actment of this Act), and American manufacturers, to preserve carryforward. ø(B) which is in effect on September 17, ø our manufacturing capacity, and most Sec. 202. Look-thru rules to apply to divi- 2003, and at all times thereafter. of all, to help ensure that hard-working dends from noncontrolled sec- ø(d) REVOCATION OF SECTION 943(e) ELEC- Americans have the jobs they need and tion 902 corporations. TIONS.— øSec. 203. Foreign tax credit under alter- deserve. ø(1) IN GENERAL.—In the case of a corpora- native minimum tax. tion that elected to be treated as a domestic The PRESIDING OFFICER. The Sen- øSec. 204. Recharacterization of overall do- ator from Oregon. corporation under section 943(e) of the Inter- mestic loss. nal Revenue Code of 1986 (as in effect on the Mr. WYDEN. I thank the Chair. ø Sec. 205. Interest expense allocation rules. day before the date of the enactment of this (The remarks of Mr. WYDEN per- øSec. 206. Determination of foreign personal taining to the introduction of S. 2160 Act)— holding company income with ø(A) the corporation may, during the 1- are located in today’s RECORD under respect to transactions in com- year period beginning on the date of the en- ‘‘Statements on Introduced Bills and modities. actment of this Act, revoke such election, ef- Joint Resolutions.’’) øSubtitle B—International Tax fective as of such date of enactment, and Mr. WYDEN. Mr. President, I yield Simplification ø(B) if the corporation does revoke such the floor. øSec. 211. Repeal of foreign personal holding election— ø f company rules and foreign in- (i) such corporation shall be treated as a vestment company rules. domestic corporation transferring (as of such CONCLUSION OF MORNING øSec. 212. Expansion of de minimis rule date of enactment) all of its property to a BUSINESS under subpart F. foreign corporation in connection with an The PRESIDING OFFICER. Morning øSec. 213. Attribution of stock ownership exchange described in section 354 of such business is closed. through partnerships to apply Code, and in determining section 902 and ø(ii) no gain or loss shall be recognized on f 960 credits. such transfer. JUMPSTART OUR BUSINESS øSec. 214. Application of uniform capitaliza- ø(2) EXCEPTION.—Subparagraph (B)(ii) of STRENGTH (JOBS) ACT tion rules to foreign persons. paragraph (1) shall not apply to gain on any øSec. 215. Repeal of withholding tax on divi- asset held by the revoking corporation if— The PRESIDING OFFICER. Under dends from certain foreign cor- ø(A) the basis of such asset is determined the previous order, the hour of 10:30 porations. in whole or in part by reference to the basis VerDate jul 14 2003 01:25 Mar 04, 2004 Jkt 029060 PO 00000 Frm 00007 Fmt 4624 Sfmt 0634 E:\CR\FM\G03MR6.015 S03PT1 S2026 CONGRESSIONAL RECORD — SENATE March 3, 2004 of such asset in the hands of the person from ø(6) SPECIAL RULE FOR FARM COOPERA- ø‘‘(1) IN GENERAL.—The portion of the whom the revoking corporation acquired TIVES.—Determinations under this sub- modified taxable income which is attrib- such asset, section with respect to an organization de- utable to domestic production activities is ø(B) the asset was acquired by transfer scribed in section 943(g)(1) of such Code, as in so much of the modified taxable income for (not as a result of the election under section effect on the day before the date of the en- the taxable year as does not exceed— 943(e) of such Code) occurring on or after the actment of this Act, shall be made at the co- ø‘‘(A) the taxpayer’s domestic production 1st day on which its election under section operative level and the purposes of this sub- gross receipts for such taxable year, reduced 943(e) of such Code was effective, and section shall be carried out in a manner by ø(C) a principal purpose of the acquisition similar to section 250(h) of such Code, as ø‘‘(B) the sum of— was the reduction or avoidance of tax (other added by this Act.