S. 2489 — Introduced in Senate

II 113th CONGRESS 2d Session S. 2489 IN THE SENATE OF THE UNITED STATES June 18, 2014 Mr. Walsh 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 ensure that sufficient funding is made available for the Highway Trust Fund, and for other purposes. 1. Short title; table of contents (a) Short title This Act may be cited as the American Jobs for American Infrastructure Act. (b) Table of contents The table of contents of this Act is as follows: Sec. 1. Short title; table of contents. TITLE I—Highway Trust Fund Sec. 101. Ensuring sufficient funding for the Highway Trust Fund. Sec. 102. Sense of Congress regarding the Surface Transportation reauthorization. TITLE II—Water infrastructure Sec. 201. Reclamation Water Infrastructure Fund. Sec. 202. Sense of Congress regarding direction of Secretary of the Interior. TITLE III—Energy infrastructure Sec. 301. Energy Upgrade and Retrofit Infrastructure Fund. Sec. 302. Sense of Congress regarding direction of Secretary of Energy. TITLE IV—Taxation of foreign income Sec. 401. Allocation of expenses and taxes on basis of repatriation of foreign income. Sec. 402. Modifications to rules relating to inverted corporations. TITLE V—Deficit Reduction Sec. 501. Deficit reduction. I Highway Trust Fund 101. Ensuring sufficient funding for the Highway Trust Fund (a) In general Section 9503(f) of the Internal Revenue Code of 1986 is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph: (5) Ensuring adequate balances in Highway Account and Mass Transit Account For the period of fiscal years 2014 through 2018, out of money in the Treasury not otherwise appropriated, there are hereby appropriated— (A) in the case of the Highway Account (as defined in subsection (e)(5)(B)) in the Highway Trust Fund, such amounts as are determined by the Secretary to be necessary to ensure that the balance of such account is not less than $4,000,000,000 for any quarter during such period, and (B) in the case of the Mass Transit Account in the Highway Trust Fund, such amounts as are determined by the Secretary to be necessary to ensure that the balance of such account is not less than $1,000,000,000 for any quarter during such period. . (b) Effective date The amendments made by this section shall take effect on the date of the enactment of this Act. 102. Sense of Congress regarding the Surface Transportation reauthorization It is the sense of Congress that Congress should provide annual inflation increases for the Federal Lands Access Program, the Federal Lands Transportation Program, and the Tribal Transportation Program in the next Surface Transportation reauthorization. II Water infrastructure 201. Reclamation Water Infrastructure Fund (a) Establishment of Fund There is established in the Treasury a fund to be known as the Reclamation Water Infrastructure Fund (referred to in this section as the Fund), to be administered by the Secretary of the Interior, to be available without fiscal year limitation and not subject to appropriation, for use in accordance with subsection (e). (b) Deposits For the period of fiscal years 2015 through 2036, the Secretary of the Treasury shall deposit in the Fund— (1) of the revenues that would otherwise be deposited for each fiscal year in the reclamation fund established by the first section of the Act of June 17, 1902 (32 Stat. 388, chapter 1093), $150,000,000; and (2) out of amounts in the Treasury not otherwise obligated, $6,500,000,000. (c) Investment (1) In general The Secretary of the Treasury shall invest such portion of the Fund as is not, in the judgment of the Secretary, required to meet current withdrawals. (2) Credits to Fund The interest on, and the proceeds from the sale or redemption of, any obligations held in the Fund shall be credited to, and form a part of, the Fund. (d) Prohibition Amounts in the Fund may not be made available for any purpose other than a purpose described in subsection (e). (e) Use of funds The Secretary of the Interior may use amounts in the Fund for the following purposes: (1) Rural water projects To complete construction (but not including operation or maintenance) of rural water projects— (A) that were authorized to be carried out by the Secretary on or before the date of enactment of this Act; or (B) for which— (i) pursuant to section 106(e) of the Rural Water Supply Act of 2006 (43 U.S.C. 2405(e)), a feasibility study has been submitted to the Secretary by not later than December 31, 2015; and (ii) an Act enacted after the date of enactment of this Act authorizes construction. (2) Deferred maintenance of Indian irrigation projects To address deferred maintenance needs of Indian irrigation projects (including maintenance, repair, and replacement activities for any structures, facilities, equipment, or vehicles used in connection with the operation of those projects) that, on the date of enactment of this Act— (A) are owned by the Federal Government, as listed in the Federal inventory required by Executive Order 13327 (40 U.S.C. 121 note; relating to Federal real property asset management); (B) are managed by the Bureau of Indian Affairs (including projects managed under contracts or compacts pursuant to the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450 et seq.)); and (C) have deferred maintenance documented by the Bureau of Indian Affairs. (3) Indian reserved water rights settlements To provide amounts to complete construction, planning, and design of any project, or to implement any provision of Federal law, that— (A) settles or otherwise resolves, in whole or in part, litigation involving the United States and the rights of one or more federally recognized Indian tribes to access, use, or manage water resources; or (B) implements an agreement approved by Congress pursuant to which one or more federally recognized Indian tribes agree to some limitation on the exercise of rights or claims to access, use, or manage water resources. (f) Annual reports (1) In general Not later than 60 days after the end of each fiscal year beginning with fiscal year 2015, the Secretary of the Interior shall submit to the Committee on Appropriations of the House of Representatives, the Committee on Appropriations of the Senate, and authorizing committees a report on the operation of the Fund during the fiscal year. (2) Contents Each report shall include, for the fiscal year covered by the report, the following: (A) A statement of the amounts deposited into the Fund. (B) A description of the expenditures made from the Fund for the fiscal year, including the purpose of the expenditures. (C) Recommendations for additional authorities to fulfill the purpose of the Fund. (D) A statement of the balance remaining in the Fund at the end of the fiscal year. 202. Sense of Congress regarding direction of Secretary of the Interior It is the sense of Congress that Congress should provide direction to the Secretary of the Interior with respect to expenditures under this title, including— (1) requirements under the annual budget submission of the President; (2) annual reporting requirements describing final allocations; (3) programmatic goals to carry out this title; and (4) funding prioritization criteria to serve as a methodology for distributing funds. III Energy infrastructure 301. Energy Upgrade and Retrofit Infrastructure Fund (a) Establishment of Fund There is established in the Treasury a fund to be known as the Energy Upgrade and Retrofit Infrastructure Fund (referred to in this section as the Fund), to be administered by the Secretary of Energy, to be available without fiscal year limitation and not subject to appropriation, for use in accordance with subsection (e). (b) Deposits For the period of fiscal years 2015 through 2034, the Secretary of the Treasury shall deposit in the Fund, out of amounts in the Treasury not otherwise obligated, $8,000,000,000. (c) Investment (1) In general The Secretary of the Treasury shall invest such portion of the Fund as is not, in the judgment of the Secretary, required to meet current withdrawals. (2) Credits to Fund The interest on, and the proceeds from the sale or redemption of, any obligations held in the Fund shall be credited to, and form a part of, the Fund. (d) Prohibition Amounts in the Fund may not be made available for any purpose other than a purpose described in subsection (e). (e) Use of funds (1) In general Of amounts in the Fund, the Secretary of Energy may use, in accordance with this title, such sums as are necessary to provide grants, loans, loan guarantees, or other credit financing instruments, including any such instruments under the Energy Policy Act of 2005 (42 U.S.C. 15801 et seq.), to support novel and innovative technologies that— (A) capture or prevent carbon dioxide emissions from carbon-based fuels; (B) enable the beneficial use of carbon dioxide and other greenhouse gases; (C) enable the long-term storage of carbon dioxide; (D) reduce net carbon emissions from the fleet of electric generation units in a State or region of the bulk electric system; or (E) construct, upgrade, or retrofit electric transmission property that serves the public interest by facilitating the deployment of low-carbon energy sources while ensuring reliability and reducing congestion. (2) Prioritization In carrying out paragraph (1), the Secretary of Energy shall give priority to projects that upgrade or retrofit existing infrastructure for the generation and transmission of electric power. (3) Commercial-scale coal technology (A) Expenditure Not less than 60 percent of amounts expended under this subsection shall be for commercial-scale, coal-fired electric generation units— (i) designed to generate and sell electric power directly to consumers or for resale; and (ii) with a carbon dioxide capture and storage system having a useful life of not fewer than 15 years. (B) Eligible projects Eligible projects under this paragraph include projects for— (i) the construction of new coal-fired electric generation units; (ii) the retrofitting of existing coal-fired electric generation units; or (iii) the construction of carbon dioxide transmission pipelines to transport carbon dioxide from carbon capture and sequestration facilities to— (I) sequestration sites; or (II) sites at which the carbon dioxide will be used for hydrocarbon recovery. (f) Annual reports (1) In general Not later than 60 days after the end of each fiscal year beginning with fiscal year 2015, the Secretary of Energy shall submit to the Committee on Appropriations of the House of Representatives, the Committee on Appropriations of the Senate, and authorizing committees a report on the operation of the Fund during the fiscal year. (2) Contents Each report shall include, for the fiscal year covered by the report, the following: (A) A statement of the amounts deposited into the Fund. (B) A description of the expenditures made from the Fund for the fiscal year, including the purpose of the expenditures. (C) Recommendations for additional authorities to fulfill the purpose of the Fund. (D) A statement of the balance remaining in the Fund at the end of the fiscal year. 302. Sense of Congress regarding direction of Secretary of Energy It is the sense of Congress that Congress should provide direction to the Secretary of Energy with respect to effects of expenditures under this title on other applicable Federal programs and laws, including— (1) provisions of the Internal Revenue Code of 1986 that affect electric power generation and transmission; (2) existing standards with respect to the percentage of carbon dioxide required to be captured and stored by projects that receive Federal funds; and (3) liability standards with respect to the long-term storage of carbon dioxide. IV Taxation of foreign income 401. Allocation of expenses and taxes on basis of repatriation of foreign income (a) In general Part III of subchapter N of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after subpart G the following new subpart: H Special Rules for Allocation of Foreign-Related Deductions Sec. 975. Deductions allocated to deferred foreign income may not offset United States source income. 975. Deductions allocated to deferred foreign income may not offset United States source income (a) Current year deductions For purposes of this chapter, foreign-related deductions for any taxable year— (1) shall be taken into account for such taxable year only to the extent that such deductions are allocable to currently-taxed foreign income, and (2) to the extent not so allowed, shall be taken into account in subsequent taxable years as provided in subsection (b). Foreign-related deductions shall be allocated to currently-taxed foreign income in the same proportion which currently-taxed foreign income bears to the sum of currently-taxed foreign income and deferred foreign income. (b) Deductions related to repatriated deferred foreign income (1) In general If there is repatriated foreign income for a taxable year, the portion of the previously deferred deductions allocated to the repatriated foreign income shall be taken into account for the taxable year as a deduction allocated to income from sources outside the United States. Any such amount shall not be included in foreign-related deductions for purposes of applying subsection (a) to such taxable year. (2) Portion of previously deferred deductions For purposes of paragraph (1), the portion of the previously deferred deductions allocated to repatriated foreign income is— (A) the amount which bears the same proportion to such deductions, as (B) the repatriated income bears to the previously deferred foreign income. (c) Definitions and special rule For purposes of this section— (1) Foreign-related deductions The term foreign-related deductions means the total amount of deductions and expenses which would be allocated or apportioned to gross income from sources without the United States for the taxable year if both the currently-taxed foreign income and deferred foreign income were taken into account. (2) Currently-taxed foreign income The term currently-taxed foreign income means the amount of gross income from sources without the United States for the taxable year (determined without regard to repatriated foreign income for such year). (3) Deferred foreign income The term deferred foreign income means the excess of— (A) the amount that would be includible in gross income under subpart F of this part for the taxable year if— (i) all controlled foreign corporations were treated as one controlled foreign corporation, and (ii) all earnings and profits of all controlled foreign corporations were subpart F income (as defined in section 952), over (B) the sum of— (i) all dividends received during the taxable year from controlled foreign corporations, plus (ii) amounts includible in gross income under section 951(a). (4) Previously deferred foreign income The term previously deferred foreign income means the aggregate amount of deferred foreign income for all prior taxable years to which this part applies, determined as of the beginning of the taxable year, reduced by the repatriated foreign income for all such prior taxable years. (5) Repatriated foreign income The term repatriated foreign income means the amount included in gross income on account of distributions out of previously deferred foreign income. (6) Previously deferred deductions The term previously deferred deductions means the aggregate amount of foreign-related deductions not taken into account under subsection (a) for all prior taxable years (determined as of the beginning of the taxable year), reduced by any amounts taken into account under subsection (b) for such prior taxable years. (7) Treatment of certain foreign taxes (A) Paid by controlled foreign corporation Section 78 shall not apply for purposes of determining currently-taxed foreign income and deferred foreign income. (B) Paid by taxpayer For purposes of determining currently-taxed foreign income, gross income from sources without the United States shall be reduced by the aggregate amount of taxes described in the applicable paragraph of section 901(b) which are paid by the taxpayer (without regard to sections 902 and 960) during the taxable year. (d) Application of section This section— (1) shall be applied before subpart A, and (2) shall be applied separately with respect to the categories of income specified in section 904(d)(1). . (b) Clerical amendment The table of subparts for part III of subpart N of chapter 1 of such Code is amended by inserting after the item relating to subpart G the following new item: Subpart H. Special Rules for Allocation of Foreign-Related Deductions . (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 402. Modifications to rules relating to inverted corporations (a) In general Subsection (b) of section 7874 of the Internal Revenue Code of 1986 is amended to read as follows: (b) Inverted corporations treated as domestic corporations (1) In general Notwithstanding section 7701(a)(4), a foreign corporation shall be treated for purposes of this title as a domestic corporation if— (A) such corporation would be a surrogate foreign corporation if subsection (a)(2) were applied by substituting 80 percent for 60 percent, or (B) such corporation is an inverted domestic corporation. (2) Inverted domestic corporation For purposes of this subsection, a foreign corporation shall be treated as an inverted domestic corporation if, pursuant to a plan (or a series of related transactions)— (A) the entity completes after May 8, 2014, the direct or indirect acquisition of— (i) substantially all of the properties held directly or indirectly by a domestic corporation, or (ii) substantially all of the assets of, or substantially all of the properties constituting a trade or business of, a domestic partnership, and (B) after the acquisition, either— (i) more than 50 percent of the stock (by vote or value) of the entity is held— (I) in the case of an acquisition with respect to a domestic corporation, by former shareholders of the domestic corporation by reason of holding stock in the domestic corporation, or (II) in the case of an acquisition with respect to a domestic partnership, by former partners of the domestic partnership by reason of holding a capital or profits interest in the domestic partnership, or (ii) the management and control of the expanded affiliated group which includes the entity occurs, directly or indirectly, primarily within the United States, and such expanded affiliated group has significant domestic business activities. (3) Exception for corporations with substantial business activities in foreign country of organization A foreign corporation described in paragraph (2) shall not be treated as an inverted domestic corporation if after the acquisition the expanded affiliated group which includes the entity has substantial business activities in the foreign country in which or under the law of which the entity is created or organized when compared to the total business activities of such expanded affiliated group. For purposes of subsection (a)(2)(B)(iii) and the preceding sentence, the term substantial business activities shall have the meaning given such term under regulations in effect on May 8, 2014, except that the Secretary may issue regulations increasing the threshold percent in any of the tests under such regulations for determining if business activities constitute substantial business activities for purposes of this paragraph. (4) Management and control For purposes of paragraph (2)(B)(ii)— (A) In general The Secretary shall prescribe regulations for purposes of determining cases in which the management and control of an expanded affiliated group is to be treated as occurring, directly or indirectly, primarily within the United States. The regulations prescribed under the preceding sentence shall apply to periods after May 8, 2014. (B) Executive officers and senior management Such regulations shall provide that the management and control of an expanded affiliated group shall be treated as occurring, directly or indirectly, primarily within the United States if substantially all of the executive officers and senior management of the expanded affiliated group who exercise day-to-day responsibility for making decisions involving strategic, financial, and operational policies of the expanded affiliated group are based or primarily located within the United States. Individuals who in fact exercise such day-to-day responsibilities shall be treated as executive officers and senior management regardless of their title. (5) Significant domestic business activities For purposes of paragraph (2)(B)(ii), an expanded affiliated group has significant domestic business activities if at least 25 percent of— (A) the employees of the group are based in the United States, (B) the employee compensation incurred by the group is incurred with respect to employees based in the United States, (C) the assets of the group are located in the United States, or (D) the income of the group is derived in the United States, determined in the same manner as such determinations are made for purposes of determining substantial business activities under regulations referred to in paragraph (3) as in effect on May 8, 2014, but applied by treating all references in such regulations to foreign country and relevant foreign country as references to the United States. The Secretary may issue regulations decreasing the threshold percent in any of the tests under such regulations for determining if business activities constitute significant domestic business activities for purposes of this paragraph. . (b) Conforming amendments (1) Clause (i) of section 7874(a)(2)(B) of such Code is amended by striking after March 4, 2003, and inserting after March 4, 2003, and before May 9, 2014,. (2) Subsection (c) of section 7874 of such Code is amended— (A) in paragraph (2)— (i) by striking subsection (a)(2)(B)(ii) and inserting subsections (a)(2)(B)(ii) and (b)(2)(B)(i), and (ii) by inserting or (b)(2)(A) after (a)(2)(B)(i) in subparagraph (B), (B) in paragraph (3), by inserting or (b)(2)(B)(i), as the case may be, after (a)(2)(B)(ii), (C) in paragraph (5), by striking subsection (a)(2)(B)(ii) and inserting subsections (a)(2)(B)(ii) and (b)(2)(B)(i), and (D) in paragraph (6), by inserting or inverted domestic corporation, as the case may be, after surrogate foreign corporation. (c) Effective date The amendments made by this section shall apply to taxable years ending after May 8, 2014. V Deficit Reduction 501. Deficit reduction For purposes of the amount of any increase in revenue to the Treasury by reason of the provisions of this Act and the amendments made by this Act, $1,000,000,000 of such amount shall be, at such times and in such manner as determined appropriate by the Secretary of the Treasury (or the Secretary's delegate), deposited and credited as general revenue of the Treasury for the purposes of deficit reduction and shall not be available for obligation.