SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

    (a) Short Title.--This Act may be cited as the ``American Jobs 
Act''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.

SEC. 2. TAXATION OF INCOME OF CONTROLLED FOREIGN CORPORATIONS 
              ATTRIBUTABLE TO IMPORTED PROPERTY.

    (a) General Rule.--Subsection (a) of section 954 (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 (h) and reduced as provided in 
        subsection (b)(5)).''
    (b) Definition of Imported Property Income.--Section 954 is amended 
by adding at the end the following new subsection:
    ``(h) 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 an intangible (as defined 
                in section 936(b)(3)(B)) in the United States.
                    ``(B) 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.
                    ``(C) 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) In general.--Paragraph (1) of section 904(d) (relating 
        to separate application of section with respect to certain 
        categories of income) 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''.
            (2) Imported property income defined.--Paragraph (2) of 
        section 904(d) 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(h)).''
            (3) Look-thru rules to apply.--Subparagraph (F) of section 
        904(d)(3) is amended by striking ``or (E)'' and inserting 
        ``(E), or (H)''.
    (d) Technical Amendments.--
            (1) Clause (iii) of section 952(c)(1)(B) (relating to 
        certain prior year deficits may be taken into account) is 
        amended by inserting the following subclause after subclause 
        (II) (and by redesignating the following subclauses 
        accordingly):
                            ``(III) imported property income,''.
            (2) Paragraph (5) of section 954(b) (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 Date.--
            (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 December 31, 1995, 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) 
        shall apply to taxable years beginning after December 31, 1995.

SEC. 3. REFUNDABLE CREDIT FOR NEW EMPLOYEES.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
(relating to refundable credits) is amended by redesignating section 35 
as section 36 and by inserting after section 34 the following new 
section:

``SEC. 35. CREDIT FOR NEW EMPLOYEES.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this subtitle for any taxable year an amount 
equal to 20 percent of the qualified social security taxes paid or 
incurred by the taxpayer during the taxable year.
    ``(b) Qualified Social Security Taxes.--For purposes of this 
section--
            ``(1) In general.--The term `qualified social security 
        taxes' means the amount of taxes imposed by section 3111(a) 
        with respect to wages of an employee for employment during the 
        2-year period beginning with the day the employee begins work 
        for the employer.
            ``(2) Application to railroad retirement.--Such term shall 
        also include taxes imposed by section 3221(a) with respect to 
        compensation during such 2-year period but only to the extent 
        attributable to the rate of tax in effect under section 
        3111(a).
            ``(3) Exception for employment outside the united states.--
        Such term shall not include taxes paid with respect to 
        employment described in section 3121(b)(B) (relating to 
        employment outside the United States by citizens and 
        residents).
    ``(c) Certain Employees Ineligible.--
            ``(1) Overall employment must increase.--
                    ``(A) In general.--An employer may take into 
                account for purposes of this section only that number 
                of employees hired by the employer during a taxable 
                year which does not exceed the number of employees 
                determined under subparagraph (B). The employer shall 
                designate which employees shall be taken into account. 
                Such designation shall apply for such taxable year and 
                any succeeding taxable year.
                    ``(B) Maximum number of employees.--For purposes of 
                subparagraph (A), the number of employees determined 
                under this subparagraph for a taxable year is an amount 
                equal to the excess (if any) of--
                            ``(i) the average daily number of full-time 
                        equivalent employees of the taxpayer for such 
                        taxable year, over
                            ``(ii) the average daily number of full-
                        time equivalent employees of the taxpayer (or 
                        any predecessor) for the 3-taxable-year period 
                        immediately preceding such taxable year.
            ``(2) Other ineligible employees.--Qualified social 
        security taxes paid with respect to any employee shall not be 
        taken into account under subsection (a) if such employee--
                    ``(A) is a member of a targeted group with respect 
                to whom the employer has taken into account wages in 
                determining the amount of the targeted jobs credit 
                under section 51,
                    ``(B) is described in paragraph (1) of section 
                51(i) (relating to related individuals), or
                    ``(C) is employed by the employer for less than 120 
                days or has not completed at least 120 hours of 
                service.
    ``(d) Other Special Rules.--For purposes of this section--
            ``(1) Controlled groups.--All employers treated as a single 
        employer under subsection (a) or (b) of section 52 shall be 
        treated as a single employer.
            ``(2) Other rules.--Rules similar to the rules of section 
        51(k) and subsections (c), (d), and (e) of section 52 shall 
        apply.''
    (b) Conforming Amendments.--The table of sections for subpart C of 
part IV of subchapter A of chapter 1 is amended by striking the item 
relating to section 35 and inserting the following new items:

``Sec. 35. Credit for new employees.
``Sec. 36. Overpayments of tax.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

SEC. 4. REPORT ON ELIMINATION OF BUSINESS TAX PREFERENCES.

    The Secretary of the Treasury shall, as soon as practicable after 
the date of the enactment of this Act, report to the Committee on Ways 
and Means of the House of Representatives and the Committee on Finance 
of the Senate recommendations as to the elimination of, or changes in, 
business tax preferences. Such recommendations shall provide an 
increase in Federal revenues sufficient to offset any overall decrease 
in Federal revenues under the other provisions of this Act.
American Jobs Act - Amends the Internal Revenue Code to include imported property income of a controlled foreign corporation within the sums added together to compute foreign base company income. Defines imported income property to include, among other things, income from manufacturing, growing, selling, renting, or leasing imported property, but exempts any foreign oil and gas income or any foreign oil-related income.  Provides for a separate application of limitations on the foreign tax credit for imported property income. 
Allows an employer a credit against tax, during the two-year period beginning with the day an employee starts work, equal to 20 percent of the qualified social security taxes paid or incurred by the employer for such new employee. 
Directs the Secretary of the Treasury to report to the Committee on Ways and Means and the Committee on Finance recommendations on the elimination of, or changes in, business tax preferences.
American Jobs Act