I
103D CONGRESS
1ST SESSION
H. R. 3648
To amend the Internal Revenue Code of 1986 to provide investment incentives
for any corporation with a majority of its manufacturing operations
in the United States.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 22, 1993
Mr. HUNTER (for himself, Mr. EVERETT, Ms. KAPTUR, and Mr. TRAFICANT)
introduced the following bill; which was referred to the Committee on
Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
investment incentives for any corporation with a majority
of its manufacturing operations in the United States.
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 ‘‘Jobs Friendly America
Act’’.
SEC. 2. ACCELERATED DEPRECIATION FOR EQUIPMENT
USED TO MANUFACTURE OR DEVELOP PROD-
UCTS IN THE UNITED STATES.
(a) IN GENERAL.—Subparagraph (A) of section
168(e)(3) of the Internal Revenue Code of 1986 (relating
to classification of property) is amended by striking ‘‘and’’
at the end of clause (i), by striking the period at the end
of clause (ii) and inserting ‘‘, and’’, and by adding at the
end the following new clause:
‘‘(iii) any tool of production of a
qualifying corporation (as defined in sub-
section (i)(14)) used by such corporation
to manufacture or develop products in the
United States.’’
(b) QUALIFYING CORPORATION.—Subsection (i) of
section 168 of such Code is amended by adding at the
end the following new paragraph:
‘‘(14) QUALIFYING CORPORATION.—
‘‘(A) IN GENERAL.—The term ‘qualifying
corporation’ means any corporation having a
majority of its manufacturing equipment in the
United States.
‘‘(B) CONTROLLED
GROUPS.—For pur-
poses of subparagraph (A), all corporations
which are members of the same controlled
group of corporations shall be treated as 1 cor-
poration. For purposes of the preceding sen-
tence, the term ‘controlled group of corpora-
tions’ has the meaning given such term by sec-
tion 1563(a); except that—
‘‘(i) ‘more than 10 percent’ shall be
substituted for ‘at least 80 percent’ each
place it appears in section 1563(a)(1), and
‘‘(ii) section 1563(b)(2) shall be ap-
plied without regard to subparagraph (C)
thereof.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to property placed in service after
December 31, 1993.
SEC. 3. REDUCTION IN CORPORATE CAPITAL GAINS RATE.
(a) GENERAL RULE.—Section 1201 of the Internal
Revenue Code of 1986 (relating to alternative tax for cor-
porations) is amended by redesignating subsection (b) as
subsection (c), and by striking subsection (a) and inserting
the following:
‘‘(a) GENERAL RULE.—If for any taxable year a
qualifying corporation (as defined in section 168(i)(14))
has a net capital gain, then, in lieu of the tax imposed
by section 11, 511, or 831(a) (whichever applies), there
is hereby imposed a tax (if such tax is less than the tax
imposed by such section) which shall consist of the sum
of—
‘‘(1) a tax computed on the taxable income re-
duced by the net capital gain, at the same rates and
in the same manner as if this subsection had not
been enacted, plus
‘‘(2) a tax of 15 percent of the net capital gain.
‘‘(b) TRANSITIONAL RULE.—In the case of a taxable
year which includes the date of the enactment of this para-
graph, the amount of the net capital gain for purposes
of subsection (a) shall not exceed the net capital gain de-
termined by only taking into account gains and losses
properly taken into account for the portion of the taxable
year after such date.’’
(b) TECHNICAL AMENDMENTS.—
(1) Clause (iii) of section 852(b)(3)(D) of such
Code is amended by striking ‘‘65 percent’’ and in-
serting ‘‘85 percent’’.
(2) Paragraphs (1) and (2) of section 1445(e)
of such Code are each amended by striking ‘‘35 per-
cent’’ and inserting ‘‘15 percent’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to sales and exchanges occurring
after the date of the enactment of this Act in taxable years
ending after such date.
SEC. 4. REDUCTION IN INDIVIDUAL CAPITAL GAINS RATE.
(a) GENERAL RULE.—Subsection (h) of section 1 of
the Internal Revenue Code of 1986 (relating to maximum
capital gains rate) is amended to read as follows:
‘‘(h) MAXIMUM CAPITAL GAINS RATE.—
‘‘(1) IN GENERAL.—If a taxpayer has a net
capital gain for any taxable year, then the tax im-
posed by this section shall not exceed the sum of—
‘‘(A) a tax computed at the rates and in
the same manner as if this subsection had not
been enacted on the taxable income reduced by
the net capital gain, plus
‘‘(B) a tax equal to the sum of—
‘‘(i) 7.5 percent of so much of the net
capital gain as does not exceed—
‘‘(I) the maximum amount of
taxable income to which the 15-per-
cent rate applies under the table ap-
plicable to the taxpayer, reduced by
‘‘(II) the taxable income to which
subparagraph (A) applies, plus
‘‘(ii) 15 percent of the net capital gain
in excess of the net capital gain to which
clause (i) applies.
‘‘(2) TRANSITIONAL RULE.—In the case of a
taxable year which includes the date of the enact-
ment of this paragraph, the amount of the net cap-
ital gain for purposes of paragraph (1) shall not ex-
ceed the net capital gain determined by only taking
into account gains and losses properly taken into ac-
count for the portion of the taxable year after such
date.’’
(b) TECHNICAL AMENDMENTS.—
(1) Paragraph (1) of section 170(e) of such
Code is amended by striking ‘‘the amount of gain’’
in the material following subparagraph (B)(ii) and
inserting ‘‘13/28 (19/34 in the case of a corporation)
of the amount of gain’’.
(2)(A) 
The 
second 
sentence 
of 
section
7518(g)(6)(A) of such Code is amended by strik-
ing ‘‘28 percent (34 percent in the case of a corpora-
tion)’’ and inserting ‘‘15 percent’’.
(B) 
The 
second 
sentence 
of 
section
607(h)(6)(A) of the Merchant Marine Act, 1936, is
amended by striking ‘‘28 percent (34 percent in the
case of a corporation)’’ and inserting ‘‘15 percent’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to sales and exchanges occurring
after the date of the enactment of this Act in taxable years
ending after such date.
SEC. 5. REPEAL OF DEFERRAL ON FOREIGN EARNINGS.
(a) IN GENERAL.—Subparagraph (A) of section
956A(c)(1) of the Internal Revenue Code of 1986 is
amended to read as follows:
‘‘(A) the average of the amounts of—
‘‘(i) passive assets, and
‘‘(ii) post-1993 foreign investments,
held by such corporation as of the close of each
quarter of such taxable year, over.’’
(b) POST-1993 FOREIGN INVESTMENT.—Subsection
(c) of section 956A of such Code is amended by redesig-
nating paragraph (3) as paragraph (4) and by inserting
after paragraph (2) the following new paragraph:
‘‘(3) POST-1993
FOREIGN
INVESTMENT.—For
purposes of this subsection, the term ‘post-1993 for-
eign investment’ means any asset (other than United
States property as defined in section 956) acquired
by the controlled foreign corporation after December
31, 1993.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years of controlled for-
eign corporations ending after December 31, 1993.
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