I
103D CONGRESS
1ST SESSION
H. R. 430
To establish The National Dividend Plan by reforming the budget process,
and by amending the Internal Revenue Code of 1986 to eliminate the
double tax on dividends, to allocate corporate income tax revenues for
payments to qualified registered voters, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 5, 1993
Mr. TAUZIN introduced the following bill; which was referred jointly to the
Committees on Ways and Means and Rules
A BILL
To establish The National Dividend Plan by reforming the
budget process, and by amending the Internal Revenue
Code of 1986 to eliminate the double tax on dividends,
to allocate corporate income tax revenues for payments
to qualified registered voters, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘National Dividend
Act of 1993’’.
(b) AMOUNT OF NATIONAL DIVIDEND PAYMENT.—
The National Dividend Payment for any calendar year
shall be an amount equal to—
(1) the excess of—
(A) the sum of—
(i) the aggregate amount transferred
under section 3(b)(3) to the National Divi-
dend Payment Trust Fund during the fis-
cal year ending during such calendar year,
plus
(ii) any interest credited during such
fiscal year to the Trust Fund under section
3(c)(2)(B)(iii), over
(B) the sum of—
(i) the amount transferred out of the
Trust Fund during such fiscal year under
section 3(b)(4), plus
(ii) the deficit adjustment amount for
such fiscal year calculated pursuant to sec-
tion 6 of this Act,
divided by
(2) the number of individuals who are qualified
registered voters for such calendar year as deter-
mined on the basis of reports submitted not later
than November 30 of such calendar year by the
chief financial officer of each State to the Secretary
(in such manner as the Secretary may by regulations
prescribe).
(c) METHOD
OF DISBURSEMENTS
TO QUALIFIED
REGISTERED VOTERS.—
(1) IN GENERAL.—The National Dividend Pay-
ment for any calendar year shall be paid to each
qualified registered voter of a State by an incor-
porated bank which is selected (in accordance with
paragraph (2)) for such year by the chief financial
officer of such State as the disbursing agent of such
State.
(2) SELECTION OF DISBURSING AGENT.—Any
incorporated bank may be selected as the disbursing
agent of any State under paragraph (1) by the chief
financial officer of such State if—
(A) such bank is determined by such offi-
cer to be operating within such State,
(B) such bank submits a sealed bid to such
officer in which such bank—
(i) specifies an amount which it
agrees to pay such State as consideration
for each year for which it pays National
Dividend Payments to qualified registered
voters of such State,
(ii) specifies procedures which it
agrees to follow in making such payments,
and
(iii) agrees to limit the investment of
any funds received for the purpose of mak-
ing such payments to interest-bearing obli-
gations of the United States or to obliga-
tions guaranteed as to both principal and
interest by the United States,
and
(C) such officer approves such bid, taking
into account with respect to all such bids—
(i) the amount of such consideration,
(ii) any previous experience of such
bank in making such payments, and
(iii) the ability and reliability of such
bank to make such payments.
(3) TRANSFER
OF
FUNDS
TO
DISBURSING
AGENT.—Funds received under subsection (a) by the
chief financial officer of any State shall be trans-
ferred by such officer to the disbursing agent for
such State not less than 10 days after the date such
officer receives such funds.
(4) PAYMENT BY DISBURSING AGENT.—A Na-
tional Dividend Payment shall be paid by the dis-
bursing agent of each State to each qualified reg-
istered voter of such State who is included on a list
provided to such agent by the chief financial officer
of such State. Such payment shall be in the form of
a negotiable instrument—
(A) which is drawn on an account of such
agent,
(B) which is made payable to such voter,
and
(C) which states, on the endorsement side
of such instrument, that—
(i) such instrument must be nego-
tiated within the 90-day period which be-
gins on the date such instrument is drawn,
(ii) each qualified registered voter is
entitled to only 1 National Dividend Pay-
ment for each calendar year, and
(iii) any individual who negotiates any
such instrument and who is not entitled to
the payment made by such instrument is
subject under Federal law to fine, or im-
prisonment, or both.
(5) NATIONAL
DIVIDEND
PAYMENT
INSTALL-
MENTS.—
(A) SEMIANNUAL
INSTALLMENTS.—One-
half of the amount of the National Dividend
Payment payable during the 3 calendar years
immediately following the Base Year to any
qualified registered voter shall be paid to such
voter at the close of the second and fourth cal-
endar quarters of such year.
(B) QUARTERLY
INSTALLMENTS.—One-
fourth of the National Dividend Payment pay-
able to any qualified registered voter during any
calendar year subsequent to the third calendar
year following the Base Year shall be paid to
such voter at the close of each calendar quarter
of such year.
(d) QUALIFIED REGISTERED VOTER.—
(1) IN GENERAL.—For purposes of this section,
an individual is a qualified registered voter for any
calendar year if—
(A) such individual was entitled to vote in
the most recent Federal election before such
calendar year, and
(B) such individual certifies to the State or
local authority which supervises the voting of
such individual that, during such calendar year,
he complies with all conditions of his entitle-
ment to vote.
(2) REGISTERED VOTERS.—In the case of any
individual who in any calendar year registers to vote
under State or local law, such registration shall be
treated as complying with the certification under
paragraph (1)(B) for such year.
(e) APPLICATIONS PERMITTED.—
(1) IN GENERAL.—The chief financial officer of
each State may require individuals to apply to re-
ceive any National Dividend Payment under this
Act.
(2) CRIMINAL
PENALTY.—Any person who
knowingly makes any false statement or false rep-
resentation of a material fact in any application sub-
mitted pursuant to paragraph (1) or any certifi-
cation under subsection (d) shall be fined not more
than $10,000, or imprisoned not more than 10
years, or both for each such false statement or false
representation.
(f) PAYMENTS TO BE MADE FROM NATIONAL DIVI-
DEND PAYMENT TRUST FUND.—Amounts in the National
Dividend Payment Trust Fund shall be available, to such
extent and in such amounts as are provided in appropria-
tion Acts, for making the payments under this section.
SEC. 3. ESTABLISHMENT OF NATIONAL DIVIDEND PAY-
MENT TRUST FUND.
(a) CREATION OF TRUST FUND.—There is hereby es-
tablished in the Treasury of the United States a trust fund
to be known as the National Dividend Payment Trust
Fund.
(b) TRANSFER OF AMOUNTS EQUIVALENT TO COR-
PORATE INCOME TAXES TO THE TRUST FUND.—
(1) IN GENERAL.—There are hereby authorized
to be appropriated to the Trust Fund amounts de-
termined by the Secretary to be equivalent to
amounts received in the Treasury in fiscal years
ending after the Base Year from the following taxes:
(A) the taxes imposed by sections 11,
511(a) and 1201(a) of the Code;
(B) the taxes imposed by subchapter L of
chapter 1 of the Code; and
(C) the tax imposed on a corporation by
section 55(a) of the Code.
(2) TRANSITION RULE.—In the case of the first
four fiscal years ending after the Base Year, the
amounts authorized to be appropriated to the Trust
Fund for such years shall be the following percent-
age of the amount determined under paragraph (1):
(A) 20 percent in the case of the first such
fiscal year;
(B) 40 percent in the case of the second
such fiscal year;
(C) 60 percent in the case of the third
such fiscal year; and
(D) 80 percent in the case of the fourth
such fiscal year.
(3) METHOD OF TRANSFER.—The amounts ap-
propriated pursuant to paragraphs (1) and (2) shall
be transferred at least quarterly from the general
fund of the Treasury to the Trust Fund on the basis
of estimates made by the Secretary of the amounts
derived from the taxes described in paragraph (1).
Proper adjustments shall be made in the amounts
subsequently transferred to the extent such esti-
mates are in excess of or less than the amounts re-
quired to be transferred.
(4) TRANSFER FROM TRUST FUND FOR ADMIN-
ISTRATIVE
EXPENSES.—The Secretary may from
time to time transfer from the Trust Fund—
(A) to the general fund of the Treasury
the amount estimated as the costs incurred by
the Department of the Treasury in the adminis-
tration of section 2, and
(B) to the Board the amount estimated by
the Board as its costs in carrying out its duties
under this Act.
Proper adjustments shall be made in the amounts
subsequently transferred to the extent such esti-
mates are in excess of or less than the amounts re-
quired to be transferred.
(c) TRUST FUND BOARD.—
(1) IN GENERAL.—There is hereby established
a review board to be known as the National Divi-
dend Review Board which shall consist of 5 members
appointed by the President, by and with the advice
and consent of the Senate, from among individuals
who are not officers or employees of the Federal
Government.
(2) DUTIES.—
(A) REPORT.—It shall be the duty of the
Board to review the manner in which payments
under section 2 are made, to hold the Trust
Fund, and to report to the Congress each year
on such review and on the financial condition
and the results of the operations of the Trust
Fund during the preceding fiscal year and on
its expected condition and operation during the
next 5 fiscal years. Such report shall be printed
as a House document of the session of the Con-
gress to which the report is made.
(B) INVESTMENT.—
(i) IN GENERAL.—The Board may in-
vest any amount of the Trust Fund which
the Board determines is not required to
meet current payments. Such investments
shall be made only in interest-bearing obli-
gations of the United States or in obliga-
tions guaranteed as to both principal and
interest by the United States. Such obliga-
tions may be acquired—
(I) on original issue at the issue
price, or
(II) by purchase of outstanding
obligations at the market price.
The purposes for which obligations of the
United States may be issued under the
Second Liberty Bond Act are hereby ex-
tended to authorize the issuance at par of
special obligations exclusively to the Trust
Fund. Such special obligations shall bear
interest at a rate equal to the average rate
of interest, computed as to the end of the
calendar month next preceding the date of
such issue, borne by all marketable inter-
est-bearing obligations of the United
States then forming a part of the public
debt; except that if such average rate is
not a multiple of one-eighth of 1 percent,
the rate of interest of such special obliga-
tions shall be the multiple of one-eighth of
1 percent next lower than such average
rate. Such special obligations shall be is-
sued only if the Board determines that the
purchase of other interest-bearing obliga-
tions guaranteed as to both principal and
interest by the United States on original
issue or at the market price, is not in the
public interest.
(ii) SALE OF OBLIGATIONS.—Any ob-
ligations acquired by the Trust Fund (ex-
cept special obligations issued exclusively
to the Trust Fund) may be sold by the
Board at the market price, and such spe-
cial obligations may be redeemed at par
plus accrued interest.
(iii) INTEREST
ON
CERTAIN
PRO-
CEEDS.—The interest on, and the proceeds
from the sale or redemption of, any obliga-
tions held in the Trust Fund shall be cred-
ited to and form a part of the Trust Fund.
(3) TERM, PAY, AND
TRAVEL
EXPENSES
OF
MEMBERS.—
(A) TERM.—Each member of the Board
shall be appointed for a term of 2 years; except
that any member appointed to fill a vacancy oc-
curring before the expiration of the term for
which his predecessor was appointed shall be
appointed only for the remainder of such term.
(B) PAY.—Members of the Board shall re-
ceive compensation at the rate of $100 for each
day they are engaged in the performance of
their duties as members of the Board.
(C) TRAVEL EXPENSES.—While away from
their homes or regular places of business in
performance of services for the Board, members
of the Board shall be allowed travel expenses,
including a per diem in lieu of subsistence, in
the same manner as persons employed intermit-
tently in the Government service are allowed ex-
penses under section 5703 of title 5 of the
United States Code.
(d) RESTRICTION
ON
THE USE
OF
THE TRUST
FUND.—Except as provided in subsection (b)(4), amounts
in the Trust Fund shall be available only for purposes of
making payments under section 2.
SEC. 4. ELIMINATION OF DOUBLE TAX ON DIVIDENDS.
(a) DIVIDENDS RECEIVED BY INDIVIDUALS.—
(1) IN GENERAL.—Part III of subchapter B of
chapter 1 of the Code (relating to items specifically
excluded from gross income) is amended by inserting
after section 115 the following new section:
‘‘SEC. 116. EXCLUSION OF DIVIDENDS RECEIVED BY INDI-
VIDUALS.
‘‘(a) EXCLUSION.—Gross income does not include
amounts received by an individual as dividends from do-
mestic corporations.
‘‘(b) NATIONAL DIVIDEND PAYMENT.—For purposes
of subsection (a), amounts received by an individual as
national dividend payments under the National Dividend
Act of 1993 shall be treated as dividends from domestic
corporations.’’
(2) TECHNICAL, CONFORMING, AND CLERICAL
AMENDMENTS.—
(A) The table of sections for part III of
subchapter B of chapter 1 of the Code is
amended by inserting after the item relating to
section 115 the following new item:
‘‘Sec. 116. Exclusion of dividends received by individuals.’’
(B) Subsection (g) of section 301 of the
Code (relating to special rules for distributions
of property by corporations) is amended by in-
serting after paragraph (3) the following new
paragraph (4):
‘‘(4) For exclusion from gross income of divi-
dends received by individuals, see section 116.’’
(C) Subsection (a) of section 643 of the
Code (relating to certain definitions with re-
spect to the taxation of estates, trusts and
beneficiaries) is amended by inserting after
paragraph (6) the following new paragraph (7):
‘‘(7) DIVIDENDS.—There shall be included the
amount of any dividends excluded from gross income
pursuant to section 116 (relating to exclusion of
dividends).’’
(b) DIVIDENDS RECEIVED BY CORPORATIONS.—
(1) IN
GENERAL.—Subsection (a) of section
243 of the Code (relating to dividends received by
corporations) is amended to read as follows:
‘‘(a) GENERAL RULE.—In the case of a corporation,
there shall be allowed as a deduction an amount equal to
100 percent of the amount received as dividends from a
domestic corporation which is subject to taxation under
this chapter.’’
(2) 
DIVIDENDS
ON
CERTAIN
PREFERRED
STOCK.—Section 244 of the Code (relating to divi-
dends received on certain preferred stock) is amend-
ed to read as follows:
‘‘SEC. 244. DIVIDENDS RECEIVED ON CERTAIN PREFERRED
STOCK.
‘‘In the case of a corporation, there shall be allowed
as a deduction an amount computed as follows:
‘‘(1) First determine the amount received as
dividends on the preferred stock of a public utility
which is subject to taxation under this chapter and
with respect to which the deduction provided in sec-
tion 247 for dividends paid is allowable.
‘‘(2) Then multiply the amount determined
under paragraph (1) by the fraction—
‘‘(A) the numerator of which is 14 percent,
and
‘‘(B) the denominator of which is that per-
centage which equals the highest rate of tax
specified in section 11(b).
‘‘(3) Finally ascertain the amount which is 100
percent of the excess of—
‘‘(A) the amount determined under para-
graph (1), over
‘‘(B) the amount determined under para-
graph (2).’’
(3) TECHNICAL, CONFORMING
AND
CLERICAL
AMENDMENTS.—
(A) Section 243 of the Code (relating to
dividends received by corporations) is amended
by striking out subsections (b) and (c) and by
redesignating subsections (d) and (e) as sub-
sections (b) and (c), respectively.
(B) Subsection (b) of section 246 of the
Code (relating to rules applying to deductions
for dividends received) is amended—
(i) in paragraph (1) by striking out
‘‘243(a)(1), 244(a)’’ each time it appears
and inserting in lieu thereof ‘‘243, 244’’
and by striking out ‘‘the percentage deter-
mined under paragraph (3) of’’, and
(ii) by striking out paragraph (3).
(C)(i) 
Subparagraph 
(A) 
of 
section
805(a)(4) of the Code (relating to dividends re-
ceived by life insurance companies) is amended
by striking out all that follows ‘‘subparagraph
(B))’’ and insert in lieu thereof a period.
(ii) Subparagraph (B) of section 805(a)(4)
of the Code is amended—
(I) 
by 
striking 
out 
‘‘243(a)(1),
244(a)’’ each place it appears and insert-
ing in lieu thereof ‘‘243, 244’’,
(II) by striking out ‘‘the percentage
determined under section 246(b)(3) of’’,
and
(III) by striking out ‘‘(and such limi-
tation shall be applied as provided in sec-
tion 246(b)(3))’’.
(iii) Paragraph (4) of section 805(a) of the
Code is amended by striking out subparagraphs
(C), (D), and (E) and inserting in lieu thereof
the following:
‘‘(C) DISTRIBUTIONS OUT OF TAX EXEMPT
INTEREST.—No deduction shall be allowed by
reason of this paragraph with respect to any
dividend to the extent the dividend is a distribu-
tion out of tax-exempt interest.’’
(D) Subparagraph (C) of section 861(a)(2)
of the Code (relating to income from sources
within the United States) is amended by strik-
ing out ‘‘243(e)’’ and inserting in lieu thereof
‘‘243(c)’’.
(E) 
Subparagraph 
(B) 
of 
section
1504(c)(2) of the Code (relating to definition of
includible insurance companies) is amended by
striking out clause (i) and by redesignating
clauses (ii) and (iii) as clauses (i) and (ii), re-
spectively.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years ending after the
date of the enactment of this Act.
SEC. 5. LIMITATION ON CORPORATE INCOME TAXES AND
ON NEW FEDERAL SPENDING.
(a) LIMITATION ON CORPORATE INCOME TAXES.—
Notwithstanding any other provision of law, the maximum
rate of tax imposed by section 11 of the Code shall not
be increased above 34 percent.
(b) LIMITATION ON FEDERAL SPENDING.—Section
301 of the Congressional Budget and Impoundment Con-
trol Act of 1974 is amended by inserting after subsection
(i) the following new subsection (j):
‘‘(j) LIMITATION ON FEDERAL SPENDING.—
‘‘(1) BUDGET RESOLUTIONS, ETC.—It shall not be
in order in either the House of Representatives or
the Senate to consider any concurrent resolution on
the budget for a fiscal year beginning after Septem-
ber 30, 1993 under this section or to consider any
amendment to such concurrent resolution or to con-
sider a conference report on such concurrent resolu-
tion if the level of total budget outlays for such fis-
cal year in such concurrent resolution or amendment
or conference report exceeds the recommended level
of total budget outlays in the concurrent resolution
under this section for the fiscal year beginning Octo-
ber 1, 1993.
‘‘(2) CONTINUING RESOLUTION.—For purposes
of paragraph (1), a joint resolution making appro-
priations of money out of the Treasury not otherwise
appropriated and out of other applicable revenues,
receipts and funds shall be treated as a concurrent
resolution on the budget.’’
SEC. 6. CALCULATION OF DEFICIT ADJUSTMENT AMOUNT.
The 
amount 
to 
be 
deducted 
under 
section
2(b)(1)(B)(ii) of this Act as the deficit adjustment in any
calendar year shall be the amount, if any, by which total
budget outlays exceed Federal revenues for the fiscal year
ending in such calendar year.
SEC. 7. DEFINITIONS.
For purposes of this Act—
(1) BASE YEAR.—The term ‘‘Base Year’’ means
the first calendar year after 1992 in which ends a
fiscal year in which total budget outlays do not ex-
ceed Federal revenues.
(2) BOARD.—The term ‘‘Board’’ means the Na-
tional Dividend Review Board established by
section 3(c).
(3) FEDERAL ELECTION.—The term ‘‘Federal
election’’ means any general election in which Mem-
bers of (including any Delegate or Resident Commis-
sioner to) Congress are elected or in which the
President and Vice President are elected.
(4) CODE.—The term ‘‘Code’’ means the Inter-
nal Revenue Code of 1986.
(5) NATIONAL DIVIDEND PAYMENT.—The term
‘‘National Dividend Payment’’ means the amount
determined under section 2(b).
(6) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of the Treasury or his delegate.
(7) STATE.—The term ‘‘State’’ includes the
District of Columbia, the Commonwealth of Puerto
Rico, and any territory or possession of the United
States.
(8) TRUST
FUND.—The term ‘‘Trust Fund’’
means the National Dividend Payment Trust Fund
established by section 3(a).
Æ
HR 430 IH——2
HR 430 IH——3