I 
109TH CONGRESS 
2D SESSION 
H. R. 6142 
To amend the African Growth and Opportunity Act relating to preferential 
treatment to apparel articles of lesser developed countries, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 21, 2006 
Mr. THOMAS introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the African Growth and Opportunity Act relating 
to preferential treatment to apparel articles of lesser 
developed countries, 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. TABLE OF CONTENTS. 
The table of contents of this Act is as follows: 
Sec. 1. Table of contents. 
TITLE I—AFRICAN GROWTH AND OPPORTUNITY ACT 
Sec. 101. Short title. 
Sec. 102. Preferential treatment of apparel products of lesser developed coun-
tries. 
Sec. 103. Technical corrections. 
Sec. 104. Sub-Saharan Africa economic activity credit. 
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TITLE II—GENERALIZED SYSTEM OF PREFERENCES (GSP) 
PROGRAM 
Sec. 201. Limitations on waivers of competitive need limitation. 
Sec. 202. Extension of GSP program. 
TITLE III—HAITI 
Sec. 301. Short title. 
Sec. 302. Trade benefits for Haiti. 
Sec. 303. ITC study. 
Sec. 304. Sense of Congress on interpretation of textile and apparel provisions 
for Haiti. 
Sec. 305. Technical amendments. 
Sec. 306. Effective date. 
TITLE I—AFRICAN GROWTH AND 
OPPORTUNITY ACT 
SEC. 101. SHORT TITLE. 
This title may be referred to as the ‘‘Africa Invest-
ment Incentive Act of 2006’’. 
SEC. 102. PREFERENTIAL TREATMENT OF APPAREL PROD-
UCTS OF LESSER DEVELOPED COUNTRIES. 
(a) IN
GENERAL.—Section 112 of the African 
Growth and Opportunity Act (19 U.S.C. 3721) is amend-
ed— 
(1) by redesignating subsections (c) through (e) 
as subsections (d) through (f); 
(2) in subsection (b)— 
(A) in the matter preceding paragraph (1), 
by striking ‘‘The’’ and inserting ‘‘Subject to 
subsection (c), the’’ ; and 
(B) by striking subparagraph (B) and re-
designating subparagraph (C) as subparagraph 
(B); and 
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(3) by inserting after subsection (b) the fol-
lowing new subsection: 
‘‘(c) LESSER DEVELOPED COUNTRIES.— 
‘‘(1) PREFERENTIAL TREATMENT OF PRODUCTS 
THROUGH SEPTEMBER 30, 2008.— 
‘‘(A) PRODUCTS COVERED.—In addition to 
the products described in subsection (b), and 
subject to paragraph (4), the preferential treat-
ment described in subsection (a) shall apply 
through September 30, 2008, to apparel articles 
wholly assembled, or knit-to-shape and wholly 
assembled, or both, in one or more lesser devel-
oped beneficiary sub-Saharan African countries, 
regardless of the country of origin of the fabric 
or the yarn used to make such articles, in an 
amount not to exceed the applicable percentage 
of the aggregate square meter equivalents of all 
apparel articles imported into the United States 
in the preceding 12-month period for which 
data are available. 
‘‘(B) 
APPLICABLE
PERCENTAGE.—For 
purposes of subparagraph (A), the term ‘appli-
cable percentage’ means— 
‘‘(i) 2.9285 percent for the 1-year pe-
riod beginning October 1, 2005; 
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‘‘(ii) 3.5 percent for the 1-year period 
beginning October 1, 2006; and 
‘‘(iii) 3.5 percent for the 1-year period 
beginning October 1, 2007. 
‘‘(2) PREFERENTIAL TREATMENT OF PRODUCTS 
BEGINNING OCTOBER 1, 2008.— 
‘‘(A) IN
GENERAL.—In addition to the 
products described in subsection (b), the pref-
erential treatment described in subsection (a) 
shall apply to apparel articles described in sub-
paragraph (B) of a producer or entity control-
ling production that are imported directly from 
a lesser developed beneficiary sub-Saharan Afri-
can country during an applicable 1-year period, 
subject to the limitations set forth in this sub-
section. 
‘‘(B) ARTICLES DESCRIBED.—The apparel 
articles referred to in subparagraph (A) are ap-
parel articles that are wholly assembled, or are 
knit-to-shape, in a lesser developed beneficiary 
sub-Saharan African country from any com-
bination of fabrics, fabric components, compo-
nents knit-to-shape, and yarns. 
‘‘(C) RESTRICTIONS IN SECOND THROUGH 
SEVENTH APPLICABLE 1-YEAR PERIODS.—The 
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preferential treatment under subparagraph (A) 
applies to apparel articles described in subpara-
graph (B) in each of the second through sev-
enth applicable 1-year periods only if, for each 
entry in the preceding applicable 1-year period, 
the sum of— 
‘‘(i) the cost or value of the materials 
produced in one or more beneficiary sub- 
Saharan African countries or one or more 
countries described in subparagraph (E), 
or any combination thereof, plus 
‘‘(ii) the direct costs of processing op-
erations (as defined in section 213(a)(3)) 
of the Caribbean Basin Economic Recovery 
Act performed in one or more beneficiary 
developed beneficiary sub-Saharan African 
countries or one or more countries de-
scribed in subparagraph (E), or any com-
bination thereof, 
is not less than the applicable percentage (as 
defined in subparagraph (I)) of the declared 
customs value of such apparel articles. 
‘‘(D) DEDUCTIONS.—In calculating cost or 
value under subparagraph (C)(i), there shall be 
deducted the cost or value of— 
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‘‘(i) any foreign materials that are 
used in the production of the apparel arti-
cles in a lesser developed beneficiary sub- 
Saharan African country; and 
‘‘(ii) any foreign materials that are 
used in the production of the materials de-
scribed in subparagraph (C)(i). 
‘‘(E) COUNTRIES DESCRIBED.—The coun-
tries referred to in subparagraph (C) are the 
following: 
‘‘(i) The United States. 
‘‘(ii) Any country that is a party to a 
free trade agreement with the United 
States that is in effect on the date of the 
enactment of the Africa Investment Incen-
tive Act of 2006, or that enters into force 
under the Bipartisan Trade Promotion Au-
thority Act of 2002 (19 U.S.C. 3801 et 
seq.). 
‘‘(iii) Any country designated as a 
beneficiary 
country 
under 
section 
213(b)(5)(B) of the Caribbean Basin Eco-
nomic Recovery Act. 
‘‘(iv) Any country designated as a 
beneficiary 
country 
under 
section 
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204(b)(6)(B) of the Andean Trade Pref-
erence Act (19 U.S.C. 3203(b)(6)(B)). 
‘‘(F) ANNUAL
AGGREGATION.—The re-
quirements under subparagraph (C) relating to 
applicable percentage may also be met for arti-
cles of a producer or an entity controlling pro-
duction that enter during an applicable 1-year 
period by aggregating— 
‘‘(i) the cost or value of materials 
under subparagraph (C)(i), and 
‘‘(ii) the direct costs of processing op-
erations under subparagraph (C)(ii), 
of all apparel articles of that producer or entity 
controlling production that are wholly assem-
bled, or are knit-to-shape, in a lesser developed 
beneficiary sub-Saharan African country and 
are entered during that applicable 1-year pe-
riod. 
‘‘(G) DEDUCTIONS.—In calculating the 
cost or value under subparagraph (F)(i), there 
shall be deducted the cost or value of— 
‘‘(i) any foreign materials that are 
used in the production of the articles in a 
lesser developed beneficiary sub-Saharan 
African country; and 
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‘‘(ii) any foreign materials that are 
used in the production of the materials de-
scribed in subparagraph (F)(i). 
‘‘(H) QUANTITATIVE
LIMITATIONS.—The 
preferential treatment described in this para-
graph shall be extended, during each applicable 
1-year period, to not more than 3.5 percent of 
the aggregate square meter equivalents of all 
apparel articles imported into the United States 
in the most recent 12-month period for which 
data are available. No preferential treatment 
shall be provided under this paragraph after the 
last day of the seventh applicable 1-year period. 
‘‘(I) DEFINITIONS.—In this paragraph: 
‘‘(i) APPLICABLE 1-YEAR PERIOD.— 
‘‘(I) IN
GENERAL.—The term 
‘applicable 1-year period’ means each 
of the 1-year periods described in sub-
clauses (I) through (VIII). 
‘‘(II) INITIAL 1-YEAR PERIOD.— 
The term ‘initial 1-year period’ means 
the 1-year period beginning October 
1, 2008. 
‘‘(III) SECOND
APPLICABLE
1- 
YEAR PERIOD.—The term ‘second ap-
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plicable 1-year period’ means the 1- 
year period beginning October 1, 
2009. 
‘‘(IV) THIRD APPLICABLE 1-YEAR 
PERIOD.—The term ‘third applicable 
1-year period’ means the 1-year pe-
riod beginning October 1, 2010. 
‘‘(V) FOURTH
APPLICABLE
1- 
YEAR PERIOD.—The term ‘fourth ap-
plicable 1-year period’ means the 1- 
year period beginning October 1, 
2011. 
‘‘(VI) FIFTH APPLICABLE 1-YEAR 
PERIOD.—The term ‘fifth applicable 
1-year period’ means the 1-year pe-
riod beginning October 1, 2012. 
‘‘(VII) SIXTH
APPLICABLE
1- 
YEAR PERIOD.—The term ‘sixth appli-
cable 1-year period’ means the 1-year 
period beginning October 1, 2013. 
‘‘(VIII) SEVENTH APPLICABLE 1- 
YEAR PERIOD.—the term ‘seventh ap-
plicable 1-year period’ means the 1- 
year period beginning October 1, 
2014. 
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‘‘(ii) APPLICABLE PERCENTAGE.—The 
term ‘applicable percentage’ means— 
‘‘(I) 50 percent or more during 
the initial applicable 1-year period, 
the second applicable 1-year period, 
and the third applicable 1-year period; 
‘‘(II) 55 percent or more during 
the fourth applicable 1-year period; 
and 
‘‘(III) 60 percent or more during 
the fifth, sixth, and seventh applicable 
1-year periods. 
‘‘(3) DEVELOPMENT
OF
PROCEDURE
TO
EN-
SURE COMPLIANCE.— 
‘‘(A) IN GENERAL.—The Bureau of Cus-
toms and Border Protection of the Department 
of Homeland Security shall, not later than 1 
year after the date of enactment of the Africa 
Investment Incentive Act of 2006, develop and 
implement methods and procedures to ensure 
ongoing compliance with the requirements set 
forth in paragraph (2). 
‘‘(B) NONCOMPLIANCE.—If the Bureau of 
Customs and Border Protection finds that a 
producer or an entity controlling production has 
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not satisfied the requirements of paragraph (2) 
in any applicable 1-year period, then apparel 
articles described in paragraph (2)(B) of that 
producer or entity shall be ineligible for pref-
erential treatment under paragraph (2) during 
any succeeding applicable 1-year period until— 
‘‘(i) the cost or value of materials 
under paragraph (2)(C)(i), plus 
‘‘(ii) the direct costs of processing op-
erations under paragraph (2)(C)(ii), 
of that producer or entity controlling produc-
tion, is not less than the applicable percentage 
that would otherwise apply under paragraph 
(2)(C), plus 10 percent, of the aggregate de-
clared customs value of all apparel articles of 
that producer or entity controlling production 
that are wholly assembled, or are knit-to-shape, 
in a sub-Saharan African country and are en-
tered during the preceding applicable 1-year pe-
riod. 
‘‘(C) 
RETROACTIVE
APPLICATION
OF 
DUTY-FREE TREATMENT.— 
‘‘(i) IN GENERAL.—If— 
‘‘(I) a producer or an entity con-
trolling production is ineligible for 
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preferential treatment under para-
graph (2) in an applicable 1-year pe-
riod because that producer or entity 
controlling production did not satisfy 
the requirements of paragraph (2)(C) 
or (2)(F), and 
‘‘(II) that producer or entity con-
trolling production satisfies the re-
quirements of subparagraph (B) of 
this paragraph in that applicable 1- 
year period, 
then, notwithstanding section 514 of the 
Tariff Act of 1930 (19 U.S.C. 1514) or 
any other provision on law, upon proper 
request filed with the Bureau of Customs 
and Border Protection before the 90th day 
after the Bureau of Customs and Border 
Protection determines that subclause (II) 
applies, any entry described in clause (ii) 
shall be liquidated or reliquidated as 
though such preferential treatment applied 
to such entry. 
‘‘(ii) ENTRIES.—An entry is described 
in this clause if it is an entry of any arti-
cles— 
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‘‘(I) that was made during the 
applicable 1-year period referred to in 
clause (i)(I); and 
‘‘(II) with respect to which there 
would have been preferential treat-
ment under paragraph (2) if the pro-
ducer or entity controlling production 
had satisfied the requirements of 
paragraph (2)(C) or (2)(F) (as the 
case may be). 
‘‘(D) FABRICS
NOT
AVAILABLE
IN
COM-
MERCIAL QUANTITIES.—For purposes of deter-
mining the applicable percentage under para-
graph (2)(C) or (2)(F), there may be included 
in that percentage— 
‘‘(i) the cost of fabrics or yarns to the 
extent that apparel articles of such fabrics 
or yarns would be eligible for preferential 
treatment, without regard to the source of 
the fabrics or yarns, under Annex 401 of 
the NAFTA; and 
‘‘(ii) the cost of fabrics or yarns that 
are designated as not being available in 
commercial quantities for purposes of— 
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‘‘(I) section 213(b)(2)(A)(v) of 
the Caribbean Basin Economic Recov-
ery Act, 
‘‘(II) paragraph (5) of this sub-
section, 
‘‘(III) 
section 
204(b)(3)(B)(i)(III) or (ii) of the An-
dean Trade Preference Act, or 
‘‘(IV) any other provision, relat-
ing to determining whether a textile 
or apparel article is an originating 
good eligible for preferential treat-
ment, of a law that implements a free 
trade agreement that enters into force 
under the Bipartisan Trade Pro-
motion Authority Act of 2002, 
without regard to the source of the fabrics 
or yarns. 
‘‘(4) SPECIAL RULES FOR PRODUCTS IN COM-
MERCIAL QUANTITIES IN AFRICA.— 
‘‘(A) PETITION PROCESS.—Upon a petition 
filed by an interested party (which may include 
a foreign manufacturer), the Commission shall 
determine whether a fabric or yarn produced in 
beneficiary sub-Saharan African countries is 
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available in commercial quantities for use by 
lesser developed beneficiary sub-Saharan Afri-
can countries. 
‘‘(B) EFFECT
OF
AFFIRMATIVE
DETER-
MINATION.— 
‘‘(i) DETERMINATION
OF
QUANTITY 
AVAILABLE.—If the Commission deter-
mines under subparagraph (A) that a fab-
ric or yarn produced in beneficiary sub-Sa-
haran African countries is available in 
commercial quantities for use by lesser de-
veloped beneficiary sub-Saharan African 
countries, the Commission shall determine 
the quantity of the fabric or yarn that will 
be so available in lesser developed bene-
ficiary sub-Saharan African countries in 
the applicable 1-year period (as defined in 
paragraph (2)(H)) beginning after the de-
termination is made. 
‘‘(ii) DETERMINATIONS.—In each case 
in which the Commission determines that a 
fabric or yarn is available in commercial 
quantities under subparagraph (A) for an 
applicable 1-year period, the Commission 
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shall determine, before the end of that ap-
plicable 1-year period— 
‘‘(I) whether the fabric or yarn 
produced in beneficiary sub-Saharan 
African countries will be available in 
commercial quantities in the suc-
ceeding applicable 1-year period; and 
‘‘(II) if so, the quantity of the 
fabric or yarn that will be so available 
in that succeeding 1-year period, sub-
ject to clause (iii). 
‘‘(iii) 
DETERMINATION
REGARDING 
IMPORTED
ARTICLES.—After the end of 
each applicable 1-year period for which a 
determination under clause (i) is in effect, 
the Commission shall determine to what 
extent the quantity of the fabric or yarn 
determined under clause (i) to be available 
in commercial quantities for use by lesser 
developed beneficiary sub-Saharan African 
countries was used in the production of ap-
parel articles receiving preferential treat-
ment under paragraph (1) or (2) that were 
entered in that applicable 1-year period. 
To the extent that the quantity so deter-
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mined was not so used, then the Commis-
sion shall add to the quantity of that fabric 
or yarn determined to be available in the 
next applicable 1-year period the quantity 
not so used in the preceding applicable 1- 
year period. 
‘‘(C) DENIM.—Denim articles provided for 
in subheading 5209.42.00 of the Harmonized 
Tariff Schedule of the United States shall be 
deemed to have been determined to be in abun-
dant supply under subparagraph (A) in an 
amount of 30,000,000 square meter equivalents 
for the 1-year period beginning October 1, 
2006. 
‘‘(D) PRESIDENTIAL
AUTHORITY
TO
RE-
STRICT IMPORTS.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), the President may by proclamation 
provide that apparel articles otherwise eli-
gible for preferential treatment under 
paragraph (1) or (2) that contain a fabric 
or yarn determined to be available in com-
mercial quantities under subparagraph (A) 
may not receive such preferential treat-
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ment in an applicable 1-year period un-
less— 
‘‘(I) the fabric or yarn in such 
articles was produced in 1 or more 
beneficiary sub-Saharan African coun-
tries; or 
‘‘(II) the Commission has deter-
mined that the quantity of the fabric 
or yarn determined under subpara-
graph (B) (or (C), as the case may 
be) to be available in lesser developed 
beneficiary sub-Saharan African coun-
tries for that applicable 1-year period 
has already been used in the produc-
tion of apparel articles receiving pref-
erential treatment under paragraph 
(1) or (2) that were entered in that 
applicable 1-year period. 
‘‘(ii) MANDATORY RESTRICTION.—If a 
fabric or yarn is determined to be available 
in commercial quantities under subpara-
graph (A) in an applicable 1-year period, 
and for 2 consecutive applicable 1-year pe-
riods the quantities determined to be so 
available are not used in the production of 
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apparel articles receiving preferential treat-
ment under paragraph (1) or (2) that were 
entered during those 2 applicable 1-year 
periods, then beginning in the succeeding 
applicable 1-year period, apparel articles 
containing that fabric or yarn are ineligible 
for preferential treatment under paragraph 
(1) or (2) in any succeeding applicable 1- 
year period unless the Commission has de-
termined that the quantity of the fabric or 
yarn determined under subparagraph (B) 
(or (C), as the case may be) to be available 
in lesser developed beneficiary sub-Saharan 
African countries for that applicable 1-year 
period has already been used in the pro-
duction of apparel articles receiving pref-
erential treatment under paragraph (1) or 
(2) that were entered in that applicable 1- 
year period. 
‘‘(E) 
PROCEDURES.—The 
Commission 
shall use the procedures prescribed in sub-
section (b)(3)(C)(iv) for the Secretary of Com-
merce in making determinations under this 
paragraph. 
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‘‘(5) REMOVAL OF DESIGNATION OF FABRICS 
OR YARNS NOT AVAILABLE IN COMMERCIAL QUAN-
TITIES.—If the President determines that— 
‘‘(A) any fabric or yarn described in para-
graph (4)(A) was determined to be eligible for 
preferential treatment, or 
‘‘(B) any fabric or yarn described in para-
graph (4)(B) was designated as not being avail-
able in commercial quantities, 
on the basis of fraud, the President may remove the 
eligibility or designation (as the case may be) of that 
fabric or yarn with respect to articles entered after 
such removal. 
‘‘(6) APPLICABILITY OF OTHER PROVISIONS.— 
Subsection (b)(3)(C) applies to apparel articles eligi-
ble for preferential treatment under this subsection 
to the same extent as that subsection applies to ap-
parel articles eligible for preferential treatment 
under subsection (b)(3). 
‘‘(7) DEFINITIONS.—In this subsection: 
‘‘(A) COMMISSION.—The term ‘Commis-
sion’ means the United States International 
Trade Commission. 
‘‘(B) ENTER; ENTRY.—The terms ‘enter’ 
and ‘entry’ refer to the entry, or withdrawal 
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from warehouse for consumption, in the cus-
toms territory of the United States. 
‘‘(C) FOREIGN MATERIAL.—The term ‘for-
eign material’ means a material produced in a 
country other than a sub-Saharan African 
country or a country described in paragraph 
(2)(E). 
‘‘(D) LESSER
DEVELOPED
BENEFICIARY 
SUB-SAHARAN
AFRICAN
COUNTRY.—The term 
‘lesser developed beneficiary sub-Saharan Afri-
can country’ means— 
‘‘(i) a beneficiary sub-Saharan African 
country that had a per capita gross na-
tional product of less than $1,500 in 1998, 
as measured by the International Bank for 
Reconstruction and Development; 
‘‘(ii) Botswana; and 
‘‘(iii) Namibia.’’. 
(b) ADDITIONAL PREFERENTIAL TREATMENT.—Sec-
tion 112(b) of the African Growth and Opportunity Act 
(19 U.S.C. 3721(b)) is amended by adding at the end the 
following new paragraph: 
‘‘(8) TEXTILE
ARTICLES
ORIGINATING
EN-
TIRELY IN ONE OR MORE LESSER DEVELOPED BEN-
EFICIARY SUB-SAHARAN AFRICAN COUNTRIES.—Tex-
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tile articles, other than apparel articles, that are 
wholly assembled, or are knit-to-shape, in one or 
more lesser developed beneficiary sub-Saharan Afri-
can countries, from fabrics, fabric components, com-
ponents knit-to-shape, and yarns originating entirely 
in one or more lesser developed beneficiary sub-Sa-
haran African countries.’’. 
(c) TECHNICAL AMENDMENT.—Section 112(e)(3) of 
the African Growth and Opportunity Act (as redesignated 
by subsection (a)(1) of this section) is amended by striking 
‘‘subsection (b)’’ and inserting ‘‘subsections (b) and (c)’’. 
SEC. 103. TECHNICAL CORRECTIONS. 
Section 112 of the African Growth and Opportunity 
Act (19 U.S.C. 3721) is amended as follows: 
(1) Subsection (b)(5) is amended by adding at 
the end the following new subparagraph: 
‘‘(C) REMOVAL OF DESIGNATION OF FAB-
RICS OR YARNS NOT AVAILABLE IN COMMER-
CIAL QUANTITIES.—If the President determines 
that any fabric or yarn was determined to be el-
igible for preferential treatment under subpara-
graph (A) on the basis of fraud, the President 
is authorized to remove that designation from 
that fabric or yarn with respect to articles en-
tered after such removal.’’. 
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(2) Subsection (e) is amended by adding at the 
end the following: 
‘‘(4) ENTER; ENTERED.—The terms ‘enter’ and 
‘entered’ refer to the entry, or withdrawal from 
warehouse for consumption, in the customs territory 
of the United States.’’. 
(3) Subsection (f) is amended by striking 
‘‘2008’’ and inserting ‘‘2015’’. 
SEC. 104. SUB-SAHARAN AFRICA ECONOMIC ACTIVITY 
CREDIT. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to other credits) is amended by adding at 
the end the following new section: 
‘‘SEC. 30D. SUB-SAHARAN AFRICA ECONOMIC ACTIVITY 
CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—Except as otherwise 
provided in this section, if a domestic corporation elects 
the application of this section, there shall be allowed as 
a credit against the tax imposed by this chapter the 
amount determined under subsection (b). 
‘‘(b) AMOUNT OF CREDIT.—The amount determined 
under this subsection is the excess of— 
‘‘(1) the product of the highest rate of tax spec-
ified in section 11(b) multiplied by the taxable in-
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come (determined without regard to any deduction 
for the taxes described in paragraph (2)), from 
sources without the United States, from the active 
conduct of a qualified trade or business within sub- 
Saharan Africa, over 
‘‘(2) the aggregate taxes described in section 
901(b)(1) which are paid or accrued with respect to 
such income. 
‘‘(c) LIMITATION TO TAX ATTRIBUTABLE TO FOR-
EIGN SOURCE INCOME.— 
‘‘(1) IN
GENERAL.—The amount determined 
under subsection (b) for any taxable year shall not 
exceed the excess of— 
‘‘(A) the amount which bears the same 
ratio to the tax against which such credit is 
taken which the taxpayer’s taxable income from 
sources without the United States (but not in 
excess of the taxpayer’s entire taxable income) 
bears to the taxpayer’s entire taxable income 
for the same taxable year, over 
‘‘(B) the sum of the credits allowed under 
section 901, 30A, and 936 for the taxable year. 
‘‘(2) ALLOCABLE SHARE OF SPECIFIED ITEMS 
TAKEN INTO ACCOUNT.—In the case of a taxpayer 
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whose specified items are increased under subsection 
(f), paragraph (1) shall be applied— 
‘‘(A) by treating the taxpayer’s aggregate 
allocable share of the taxable income referred to 
in subsection (f)(2)(A) as taxable income of the 
taxpayer from sources without the United 
States, and 
‘‘(B) by increasing the amount described in 
paragraph (1)(B) by the taxpayer’s aggregate 
allocable share of taxes referred to in subsection 
(f)(2)(B). 
‘‘(d) LIMITATIONS ON CREDIT FOR ACTIVE BUSI-
NESS INCOME.—The amount determined under subsection 
(b) for any taxable year shall not exceed the sum of the 
following amounts: 
‘‘(1) 60 percent of the sum of— 
‘‘(A) the aggregate amount of the domestic 
corporation’s qualified Africa wages for such 
taxable year, plus 
‘‘(B) the allocable qualified employee fringe 
benefit expenses of the domestic corporation for 
such taxable year. 
‘‘(2) The sum of— 
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‘‘(A) 15 percent of the depreciation allow-
ances for the taxable year with respect to short- 
life qualified tangible property, 
‘‘(B) 40 percent of the depreciation allow-
ances for the taxable year with respect to me-
dium-life qualified tangible property, and 
‘‘(C) 65 percent of the depreciation allow-
ances for the taxable year with respect to long- 
life qualified tangible property. 
‘‘(e) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED
TRADE
OR
BUSINESS.—The 
term ‘qualified trade or business’ means any trade 
or business other than— 
‘‘(A) the trade or business of mining (as 
defined in section 613(c)(2)), and 
‘‘(B) the trade or business of exploring for, 
developing, producing, refining, transporting, or 
selling crude oil or natural gas, or any product 
thereof. 
‘‘(2) QUALIFIED AFRICA WAGES.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
Africa wages’ means, with respect to any tax-
able year, the excess of— 
‘‘(i) the sum of the wages which are 
paid or incurred during such taxable year 
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in connection with the active conduct of a 
qualified trade or business within sub-Sa-
haran Africa to any employee for services 
performed in sub-Saharan Africa, but only 
if such services are performed while the 
principal place of employment of such em-
ployee is within sub-Saharan Africa, over 
‘‘(ii) the sum of wages (if any) paid or 
incurred during the last taxable year end-
ing before the date of the enactment of 
this section in connection with the active 
conduct of a qualified trade or business 
within sub-Saharan Africa (determined as 
of the first day of the taxable year referred 
to in clause (i)) to any employee for serv-
ices performed in sub-Saharan Africa (as 
so determined), but only if such services 
are performed while the principal place of 
employment of such employee is within 
sub-Saharan Africa (as so determined). 
‘‘(B) APPLICABLE
RULES
FOR
DETER-
MINING WAGES.—For purposes of subparagraph 
(A), rules similar to the rules of subparagraphs 
(B), (C), and (D) of section 936(i)(1) shall 
apply. 
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‘‘(3) QUALIFIED EMPLOYEE FRINGE BENEFIT 
EXPENSES.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
employee fringe benefit expense’ means, with 
respect to any taxable year, the excess of— 
‘‘(i) the sum of the employee fringe 
benefit expenses which are paid or incurred 
during such taxable year in connection 
with the active conduct of a qualified trade 
or business within sub-Saharan Africa to 
or for the benefit of any employee for serv-
ices performed in sub-Saharan Africa, but 
only if such services are performed while 
the principal place of employment of such 
employee is within sub-Saharan Africa, 
over 
‘‘(ii) the sum of the employee fringe 
benefit expenses paid or incurred during 
the last taxable year ending before the date 
of the enactment of this section in connec-
tion with the active conduct of a qualified 
trade or business within sub-Saharan Afri-
ca (determined as of the first day of the 
taxable year referred to in clause (i)) to or 
for the benefit of any employee for services 
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performed in sub-Saharan Africa (as so de-
termined), but only if such services are 
performed while the principal place of em-
ployment of such employee is within sub- 
Saharan Africa (as so determined). 
‘‘(B) EMPLOYEE
FRINGE
BENEFIT
EX-
PENSES.—The term ‘employee fringe benefit ex-
penses’ means with respect to any taxable year 
the expenses described in section 936(i)(2)(B). 
‘‘(4) DEFINITIONS
RELATED
TO
DEPRECIA-
TION.— 
‘‘(A) DEPRECIATION
ALLOWANCES.—The 
term ‘depreciation allowances’ means the depre-
ciation deductions allowable under section 167 
to the taxpayer. 
‘‘(B) QUALIFIED TANGIBLE PROPERTY.— 
The term ‘qualified tangible property’ means 
any tangible property— 
‘‘(i) substantially all of the use of 
which is in sub-Saharan Africa in the ac-
tive conduct of a qualified trade or busi-
ness by the taxpayer in sub-Saharan Afri-
ca, 
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‘‘(ii) the original use of which in sub- 
Saharan Africa commences with the tax-
payer after September 21, 2006, and 
‘‘(iii) which is acquired by the tax-
payer by purchase (as defined in section 
179(d)) after September 21, 2006, but 
only if no written binding contract for the 
acquisition was in effect on or before such 
date. 
Such term shall not include any vessel or air-
craft, including any container used in connec-
tion with any such vessel or aircraft, within the 
meaning of section 863(c)(3). 
‘‘(C) SHORT-, MEDIUM-, AND
LONG-LIFE 
QUALIFIED TANGIBLE PROPERTY.—The terms 
‘short-life qualified tangible property’, ‘medium- 
life qualified tangible property’, and ‘long-life 
qualified tangible property’ shall have the same 
meaning given such terms, respectively, by sec-
tion 936(i)(4)(B), except that in applying such 
section the term ‘qualified tangible property’ 
shall have the meaning given such term by sub-
paragraph (B). 
‘‘(5) SUB-SAHARAN
AFRICA.—The term ‘sub- 
Saharan Africa’ means, with respect to any taxable 
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year, the region comprised of countries for which 
there is in effect on the first day of such taxable 
year a designation as an eligible sub-Saharan Africa 
country under section 104 of the African Growth 
and Opportunity Act (19 U.S.C. 3703). 
‘‘(f) ALLOCATION
OF ITEMS FROM CONTROLLED 
FOREIGN CORPORATIONS TO UNITED STATES SHARE-
HOLDERS.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, in the case of a domestic corporation which 
elects the application of this section, each of the do-
mestic corporation’s specified items shall be in-
creased by such corporation’s allocable share of each 
such specified item of each controlled foreign cor-
poration with respect to which such domestic cor-
poration is a United States shareholder (as defined 
in section 951(b)). 
‘‘(2) SPECIFIED ITEMS.—For purposes of this 
subsection, the term ‘specified items’ means— 
‘‘(A) the taxable income taken into account 
under subsection (b)(1), 
‘‘(B) the taxes taken into account under 
subsection (b)(2), 
‘‘(C) the wages taken into account under 
clauses (i) and (ii) of subsection (e)(2)(A), 
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‘‘(D) the expenses taken into account 
under clauses (i) and (ii) of subsection 
(e)(3)(A), and 
‘‘(E) the depreciation allowances with re-
spect to each class of property under subpara-
graphs (A), (B), and (C) of subsection (d)(2). 
For purposes of determining any specified item of a 
controlled foreign corporation under this subsection, 
such corporation shall be treated as a domestic cor-
poration electing the application of this section. For 
purposes of this paragraph, taxes do not include any 
withholding tax paid to a foreign government with 
respect to payments by the controlled foreign cor-
poration to its shareholders. 
‘‘(3) ALLOCABLE SHARE.—For purposes of this 
subsection, the term ‘allocable share’ means, with re-
spect to any item of a controlled foreign corporation 
which is owned by any United States shareholder (as 
defined in section 951(b)), the percentage of total 
combined voting power of all classes of stock entitled 
to vote of such foreign corporation which is owned 
by such United States shareholder (within the mean-
ing of section 958(a)), or is considered as owned by 
such United States shareholder by applying the rules 
of ownership of section 958(b). For purposes of the 
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preceding sentence, section 958(b) shall be applied 
in the same manner as in determining whether a 
United States person is a United States shareholder 
within the meaning of section 951(b). 
‘‘(4) DIVIDENDS
FROM
SUB-SAHARAN
AFRICA 
BUSINESS ACTIVITY.—Dividends from a controlled 
foreign corporation and amounts included in gross 
income under section 951(a) (and any taxes associ-
ated with such dividends or amounts under section 
902 or 960) shall not be taken into account in deter-
mining the taxable income or taxes which are taken 
into account under subsections (b) and (c) to the ex-
tent such dividends or amounts are attributable to 
income described in paragraph (2)(A) and taken into 
account under paragraph (1). 
‘‘(g) CARRYFORWARD.—If the limitation under sub-
section (d) for any taxable year exceeds the credit allowed 
under subsection (a) for such taxable year, such excess 
shall be carried to the succeeding taxable year and added 
to the limitation under subsection (d) for such succeeding 
taxable year. No limitation may be carried forward under 
this subsection to any taxable year following the tenth tax-
able year after the taxable year in which the limitation 
arose. For purposes of the preceding sentence, limitations 
shall be treated as used on a first-in first-out basis. 
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‘‘(h) CREDIT NOT ALLOWED AGAINST CERTAIN 
TAXES.—The credit provided by subsection (a) shall not 
be allowed against the tax imposed by— 
‘‘(1) section 59A (relating to environmental 
tax), 
‘‘(2) section 531 (relating to the tax on accu-
mulated earnings), 
‘‘(3) section 541 (relating to personal holding 
company tax), or 
‘‘(4) section 1351 (relating to recoveries of for-
eign expropriation losses). 
‘‘(i) ADMINISTRATIVE PROVISIONS.—For purposes of 
this title— 
‘‘(1) rules similar to the rules of subsections 
(b), (g), and (h) of section 936 shall apply in the 
same manner as if the credit under this section were 
a credit under section 936(a)(1)(A) for a domestic 
corporation to which section 936(a)(4)(A) applies, 
‘‘(2) the credit under this section shall be treat-
ed in the same manner as the credit under section 
936 (other than for purposes of subsection (c)), and 
‘‘(3) a corporation to which this section applies 
shall be treated in the same manner as if it were a 
corporation electing the application of section 936. 
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‘‘(j) AGGREGATION RULE FOR WAGES AND FRINGE 
BENEFITS.— 
‘‘(1) IN
GENERAL.—All members of an ex-
panded affiliated group shall be treated as a single 
corporation for purposes paragraphs (2) and (3) of 
subsection (e). 
‘‘(2) EXPANDED AFFILIATED GROUP.—For pur-
poses of paragraph (1), the term ‘expanded affiliated 
group’ means an affiliated group as defined in sec-
tion 1504(a), determined— 
‘‘(A) by substituting ‘more than 50 per-
cent’ for ‘at least 80 percent’ each place it ap-
pears, and 
‘‘(B) without regard to paragraphs (2) and 
(4) of section 1504(b). 
‘‘(k) ELECTION.—The election provided in subsection 
(a) shall be made at such time and in such manner as 
the Secretary may by regulations prescribe. Any such elec-
tion shall apply for the taxable year for which made and 
for each succeeding taxable year. Such election may be re-
voked only with the consent of the Secretary. 
‘‘(l) REGULATIONS.—The Secretary shall prescribe 
regulations to carry out this section, including regula-
tions— 
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‘‘(1) for determining the credit under this sec-
tion for when a country is designated under section 
104 of the African Growth and Opportunity Act as 
an eligible sub-Saharan Africa country on a day 
other than the first day of the taxable year or if 
such designation is terminated during the taxable 
year, 
‘‘(2) for determining the allocable share of spec-
ified items (as defined in subsection (f)) of a part-
nership in the case of a domestic corporation or a 
controlled foreign corporation in which such domes-
tic corporation is a United States shareholder, or a 
lower tier entity of either such corporation, which is 
a partner in such partnership, and 
‘‘(3) to prevent the abuse of this section. 
‘‘(m) TERMINATION.—No credit shall be allowed 
under this section with respect to any taxable year begin-
ning after December 31, 2015.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) The first sentence of section 55(c)(1) of 
such Code is amended by striking ‘‘27(b), and’’ and 
inserting ‘‘27(b),’’ and by inserting before the period 
at the end the following: ‘‘, and the Sub-Saharan Af-
rica economic activity credit under section 30D’’. 
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(2) Section 56(g)(4)(C)(ii)(I) of such Code is 
amended by inserting ‘‘30D,’’ after ‘‘30A,’’. 
(3) Section 56(g)(4)(C)(iii)(VI) of such Code is 
amended by inserting before the period at the end 
‘‘and, notwithstanding section 30D(i), shall not be 
treated as including references to section 30D’’. 
(4) Section 59(b) of such Code is amended by 
inserting ‘‘, 30D,’’ after ‘‘30A’’ each place it appears 
in the heading and text. 
(5) The table of sections for subpart B of part 
IV of subchapter A of chapter 1 of such Code (relat-
ing to other credits) is amended by adding at the 
end the following new item: 
‘‘Sec. 30D. Sub-Saharan Africa economic activity credit.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
TITLE II—GENERALIZED SYSTEM 
OF PREFERENCES (GSP) PRO-
GRAM 
SEC. 201. LIMITATIONS ON WAIVERS OF COMPETITIVE 
NEED LIMITATION. 
Section 503(d)(4)(B) of the Trade Act of 1974 (19 
U.S.C. 2463(d)(4)(B)) is amended— 
(1) by striking ‘‘The President’’ and inserting 
‘‘(i) The President’’; 
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(2) by striking ‘‘(i) had’’ and inserting ‘‘(I) 
had’’ and by striking ‘‘(ii) had’’ and inserting ‘‘(II) 
had’’; and 
(3) by adding at the end the following new 
clauses: 
‘‘(ii) Beginning on January 1, 2007, the 
President may not exercise the waiver authority 
provided under this subsection with respect to 
a quantity of an eligible article of a beneficiary 
developing country entered during any calendar 
year if the President determines that the aggre-
gate appraised value of the article of the coun-
try that entered duty-free under this title dur-
ing the preceding calendar year exceeded 
$1,500,000,000. 
‘‘(iii) Beginning on January 1, 2007, the 
President may not exercise the waiver authority 
provided under this subsection with respect to 
a quantity of any eligible article of a beneficiary 
developing country entered during any calendar 
year if the President determines that the per 
capita gross national income (GNI) of the coun-
try during the preceding calendar year exceeded 
$3,400.’’. 
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