To amend the Internal Revenue Code of 1986 to allow temporarily a reduced rate of tax with respect to repatriated foreign earnings.

Summary: American Jobs First Act of 2011 - Amends the Internal Revenue Code to extend the election to deduct dividends received by a domestic corporation from a controlled foreign corporation.  Increases the amount of such deduction by increases in the payroll of the domestic corporation over the previous taxable year.  Requires the Secretary of the Treasury to provide, by regulations, for a recapture of any portion of the increased tax deduction allowed to a domestic corporation if such corporation's payroll decreases during either of the two taxable years following the taxable year in which the increased deduction was allowed.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Jobs First Act of 2011''.

SEC. 2. EXTENSION AND MODIFICATION OF DIVIDENDS RECEIVED DEDUCTION FOR 
              CERTAIN REPATRIATED FOREIGN EARNINGS.

    (a) In General.--Section 965 of such Code is amended by adding at 
the end the following new subsection:
    ``(g) Temporary Extension and Modification.--
            ``(1) In general.--In the case of an election under this 
        subsection, subsection (f)(1) shall be applied by substituting 
        `the date of the enactment of subsection (g)' for `the date of 
        the enactment of this section'.
            ``(2) Percentage deductible.--
                    ``(A) In general.--In the case of an election under 
                this subsection, subsection (a)(1) shall be applied by 
                substituting `the applicable percentage' for `85 
                percent'.
                    ``(B) Applicable percentage.--For purposes of this 
                section, the applicable percentage is 29 percent, 
                increased by the number of percentage points determined 
                with respect to the taxpayer under subparagraph (C).
                    ``(C) Increased deduction for payroll expansion.--
                            ``(i) In general.--For purposes of 
                        subparagraph (B), the number of percentage 
                        points determined with respect to a taxpayer 
                        under this subparagraph shall be--
                                    ``(I) so much of the percentage 
                                increase, if any, in the taxpayer's 
                                qualified payroll for all quarters 
                                ending during the taxable year as 
                                compared to the qualified payroll for 
                                the same quarters during the taxpayer's 
                                taxable year ending during 2010 as does 
                                not exceed 14 percent, multiplied by
                                    ``(II) 4.
                            ``(ii) Qualified payroll.--For purposes of 
                        this subparagraph, the term `qualified payroll' 
                        means the amount of all wages (within the 
                        meaning of section 3121(a)) paid or incurred by 
                        the taxpayer to the employees of such taxpayer, 
                        except that, with respect to each such 
                        employee, such wages shall be taken into 
                        account only to the extent that such wages do 
                        not exceed the contribution and benefit base as 
                        determined under section 230 of the Social 
                        Security Act.
                            ``(iii) Railway labor.--In the case of 
                        remuneration subject to the tax imposed by 
                        section 3221(a), clause (ii) shall be applied 
                        by substituting `all compensation (within the 
                        meaning of section 3231(e))' for `all wages 
                        (within the meaning of section 3121(a))'.
                            ``(iv) Special rule for converted 
                        employees.--For purposes of this subparagraph--
                                    ``(I) In general.--The wages of any 
                                specified individual shall not be taken 
                                into account.
                                    ``(II) Specified individual.--
                                Except as provided by the Secretary, 
                                the term `specified individual' means 
                                any individual who, during the 2-year 
                                period ending on the date of the 
                                enactment of this subsection, performed 
                                services directly or indirectly for the 
                                taxpayer and was treated for purposes 
                                of employment taxes as not an employee 
                                with respect to the performance of such 
                                services.
            ``(3) Special rules.--
                    ``(A) Recapture in case of payroll decrease during 
                recapture period.--The Secretary shall, by regulations, 
                provide for recapturing any portion of the benefit 
                under any deduction allowable by this subsection, and 
                attributable to paragraph (2)(C), to the extent--
                            ``(i) the taxpayer's qualified payroll for 
                        all quarters ending during the taxable year for 
                        which the such deduction was allowed, exceeds
                            ``(ii) the taxpayer's qualified payroll for 
                        all quarters ending during either of the 2 
                        taxable years following the taxable year with 
                        respect to which such deduction was allowed.
                    ``(B) Controlled groups.--All employers treated as 
                a single employer under section (a) or (b) of section 
                52 shall be treated as a single employer for purposes 
                of this subsection.''.
    (b) Conforming Amendment.--
            (1) Subsection (b) of section 965 of such Code is amended 
        by striking paragraph (4).
            (2) Section 965 of such Code is amended by striking ``June 
        30, 2003'' each place it occurs and inserting ``June 30, 
        2010''.
            (3) Subparagraph (B) of section 965(b)(3) of such Code is 
        amended by striking ``October 3, 2004'' and inserting ``October 
        1, 2011''.
    (c) Effective Date.--The amendment made by this section shall apply 
to taxable years ending on or after the date of the enactment of this 
Act