,,ii #aadth ,,congress #ast ,session ,s4 #cig ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,february #e1 #bjae,mr4 ,mc,cain introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to allow a temporary dividends received deduction for dividends received from a controlled foreign corporation4 #a4 ,short title ,this ,act may be cited as the ,foreign ,earnings ,reinvestment ,act4 #b4 ,allowance of temporary dividends received deduction for dividends received from a controlled foreign corporation 7a7 ,applicability of provision 7#a7 ,in general ,subsection 7f7 of section #ife of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7f7 ,election2 election year 7#a7 ,in general ,the taxpayer may elect to apply this section to-- 7,a7 the taxpayer's last taxable year which begins before the date of the enactment of the ,foreign ,earnings ,reinvestment ,act1 or 7,b7 the taxpayer's first taxable year which begins during the #a-year period beginning on such date4 ,such election may be made for a taxable year only if made on or before the due date 7including extensions7 for filing the return of tax for such taxable year4 7,c7 ,election year ,for purposes of this section1 the term election year means the taxable year-- 7i7 which begins after the date that is one year before the date of the enactment of the ,foreign ,earnings ,reinvestment ,act1 and 7ii7 to which the taxpayer elects under paragraph 7#a7 to apply this section4 4 7#b7 ,conforming amendments 7,a7 ,extraordinary dividends ,section #ife7;b77#b7 of such ,code is amended-- 7i7 by striking ,june #cj1 #bjjc and inserting ,december #ca1 #bjad1 and 7ii7 by adding at the end the following new sentence3 ,the amounts described in clauses 7i71 7ii71 and 7iii7 shall not include any amounts which were taken into account in determining the deduction under subsection 7a7 for any prior taxable year44 7,b7 ,determinations relating to related party indebtedness ,section #ife7;b77#c77;,b7 of such ,code is amended by striking ,october #c1 #bjjd and inserting ,december #ca1 #bjad4 7,c7 ,determinations relating to base period ,section #ife7;c77#b7 of such ,code is amended by striking ,june #cj1 #bjjc and inserting ,december #ca1 #bjad4 7b7 ,deduction includes current and accumulated foreign earnings 7#a7 ,in general ,paragraph 7#a7 of section #ife7;b7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7#a7 ,in general ,the amount of dividends taken into account under subsection 7a7 shall not exceed the sum of the current and accumulated earnings and profits described in section #iei7;c77#c7 for the year a deduction is claimed under subsection 7a71 without diminution by reason of any distributions made during the election year1 for all controlled foreign corporations of the ,united ,states shareholder4 4 7#b7 ,conforming amendments 7,a7 ,section #ife7;c7 of such ,code1 as amended by subsection 7a71 is amended by striking paragraph 7#a7 and by redesignating paragraphs 7#b71 7#c71 7#d71 and 7#e71 as paragraphs 7#a71 7#b71 7#c71 and 7#d71 respectively4 7,b7 ,paragraph 7#d7 of section #ife7;c7 of such ,code1 as redesignated by subparagraph 7,a71 is amended to read as follows3 7#d7 ,controlled groups ,all ,united ,states shareholders which are members of an affiliated group filing a consolidated return under section #aeja shall be treated as one ,united ,states shareholder4 4 7c7 ,amount of deduction 7#a7 ,in general ,paragraph 7#a7 of section #ife7;a7 of the ,internal ,revenue ,code of #aihf is amended by striking #he percent and inserting #ge percent4 7#b7 ,bonus deduction in subsequent taxable year for increasing jobs ,section #ife of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7g7 ,bonus deduction 7#a7 ,in general ,in the case of any taxpayer who makes an election to apply this section1 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 7a7 with respect to such taxpayer for the election year4 7#b7 ,applicable percentage ,for purposes of paragraph 7#a71 the applicable percentage is the amount which bears the same ratio 7not greater than #a7 to #aj percent as-- 7,a7 the excess 7if any7 of-- 7i7 the qualified payroll of the taxpayer for the calendar year which begins with or within the first taxable year following the election year1 over 7ii7 the qualified payroll of the taxpayer for calendar year #bjad1 bears to 7,b7 #aj percent of the qualified payroll of the taxpayer for calendar year #bjad4 7#c7 ,qualified payroll ,for purposes of this paragraph3 7,a7 ,in general ,the term qualified payroll means1 with respect to a taxpayer for any calendar year1 the aggregate wages 7as defined in section #caba7;a77 paid by the corporation during such calendar year4 7,b7 ,exception for changes in ownership of trades or businesses 7i7 ,acquisitions ,if1 after ,december #ca1 #bjac1 and before the close of the first taxable year following the election year1 a taxpayer acquires the trade or business of a predecessor1 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 taxpayer4 7ii7 ,dispositions ,if1 after ,december #ca1 #bjac1 and before the close of the first taxable year following the election year1 a taxpayer disposes of a trade or business1 then-- 7,i7 the qualified payroll of such taxpayer for calendar year #bjad 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 taxpayer1 and 7,,ii7 if the disposition occurs after the beginning of the first taxable year following the election year1 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 taxpayer4 7,c7 ,special rule ,for purposes of determining qualified payroll for any calendar year after calendar year #bjae1 such term shall not include wages paid to any individual if such individual received compensation from the taxpayer for services performed-- 7i7 after the date of the enactment of this paragraph1 and 7ii7 at a time when such individual was not an employee of the taxpayer4 4 7#c7 ,reduction for failure to maintain employment levels ,paragraph 7#d7 of section #ife7;b7 of such ,code is amended to read as follows3 7#d7 ,reduction in benefits for failure to maintain employment levels 7,a7 ,in general ,if1 during the period consisting of the calendar month in which the taxpayer first receives a distribution described in subsection 7a77#a7 and the succeeding #bc calendar months1 the taxpayer does not maintain an average employment level at least equal to the taxpayer's prior average employment1 an additional amount equal to #ge1jjj multiplied by the number of employees by which the taxpayer's average employment level during such period falls below the prior average employment 7but not exceeding the aggregate amount allowed as a deduction pursuant to subsection 7a77#a77 shall be taken into income by the taxpayer during the taxable year that includes the final day of such period4 7,b7 ,average employment level ,for purposes of this paragraph1 the taxpayer's average employment level for a period shall be the average number of full-time ,united ,states employees of the taxpayer1 measured at the end of each month during the period4 7,c7 ,prior average employment ,for purposes of this paragraph1 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 #bd calendar months immediately preceding the calendar month in which the taxpayer first receives a distribution described in subsection 7a77#a74 7,d7 ,full-time ,united ,states employee ,for purposes of this paragraph-- 7i7 ,in general ,the term full-time ,united ,states employee means an individual who provides services in the ,united ,states as a full-time employee1 based on the employer's standards and practices2 except that regardless of the employer's classification of the employee1 an employee whose normal schedule is #dj hours or more per week is considered a full-time employee4 7ii7 ,exception for changes in ownership of trades or businesses ,such term does not include-- 7,i7 any individual who was an employee1 on the date of acquisition1 of any trade or business acquired by the taxpayer during the #bd-month period referred to in subparagraph 7,a71 and 7,,ii7 any individual who was an employee of any trade or business disposed of by the taxpayer during the #bd-month period referred to in subparagraph 7,a7 or the #bd-month period referred to in subparagraph 7,c74 7,e7 ,aggregation rules ,in determining the taxpayer's average employment level and prior average employment1 all domestic members of a controlled group shall be treated as a single taxpayer4 4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years ending after the date of the enactment of this ,act4