I 
108TH CONGRESS 
1ST SESSION 
H. R. 767
To amend the Internal Revenue Code of 1986 to encourage investing of 
foreign earnings within the United States for productive business purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 13, 2003
Mr. ENGLISH (for himself, Mr. DREIER, Mr. BRADY of Texas, and Ms. DUNN) 
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 encourage 
investing of foreign earnings within the United States 
for productive business 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 ‘‘Homeland Investment 
Act of 2003’’. 
SEC. 2. TOLL TAX ON EXCESS QUALIFIED FOREIGN DIS-
TRIBUTION AMOUNT. 
(a) IN GENERAL.—Subpart F of part III of sub-
chapter N of chapter 1 of the Internal Revenue Code of
1986 (relating to controlled foreign corporations) is 
amended by adding at the end the following new section: 
‘‘SEC. 965. TOLL TAX IMPOSED ON EXCESS QUALIFIED FOR-
EIGN DISTRIBUTION AMOUNT 
‘‘(a) TOLL TAX IMPOSED ON EXCESS QUALIFIED 
FOREIGN DISTRIBUTION AMOUNT.—If a taxpayer elects 
the application of this section, a tax shall be imposed on 
the taxpayer in an amount equal to 5.25 percent of—
‘‘(1) the excess qualified foreign distribution 
amount, and 
‘‘(2) the amount determined under section 78 
that is attributable to such excess qualified foreign 
distribution amount. 
Such tax shall be imposed in lieu of the tax imposed under 
section 1 or 11 on such amounts. 
‘‘(b) EXCESS QUALIFIED FOREIGN DISTRIBUTION 
AMOUNT.—
‘‘(1) IN GENERAL.—The term ‘excess qualified 
foreign distribution amount’ means the excess (if 
any) of—
‘‘(A) dividends received by the taxpayer 
during the taxable year from corporations that 
are controlled foreign corporations in which the 
taxpayer is a United States shareholder on the 
date such dividends are paid, over
‘‘(B) the base dividend amount. 
‘‘(2) BASE
DIVIDEND
AMOUNT.—The term 
‘base dividend amount’ means an amount not less 
than the average amount of dividends received dur-
ing the fixed base period from corporations that are 
controlled foreign corporations in which the taxpayer 
is a United States shareholder on the date such divi-
dends are paid. 
‘‘(3) FIXED BASE PERIOD.—
‘‘(A) IN GENERAL.—The term ‘fixed base 
period’ means each of 3 taxable years which are 
among the 5 most recent taxable years of the 
taxpayer ending on or before December 31, 
2002, determined by disregarding—
‘‘(i) the 1 taxable year for which the 
corporation had the highest amount of 
dividends from controlled foreign corpora-
tions relative to the other 4 taxable years, 
and 
‘‘(ii) the one taxable year for which 
the corporation had the lowest amount of 
dividends from controlled foreign corpora-
tions relative to the other 4 taxable years. 
‘‘(B) SHORTER PERIOD.—If the taxpayer 
has fewer than 5 taxable years ending on or be-
fore December 31, 2002, then in lieu of apply-
ing subparagraph (b)(3)(A), the fixed base pe-
riod shall mean such shorter period rep-
resenting all of the taxable years beginning on 
or before December 31, 2002. Rules similar to 
the rules of section 41(f)(3) shall apply in the 
case of acquisitions or dispositions of controlled 
foreign corporations beginning after the fixed 
base period. 
‘‘(c) DEFINITIONS AND SPECIAL RULES.—
‘‘(1) DIVIDENDS.—For purposes of this section, 
the term ‘dividend’ means a dividend as defined in 
section 316, except that the term shall also include 
amounts described in section 951(a)(1)(B), and shall 
exclude amounts described in section 78. 
‘‘(2) CONTROLLED
FOREIGN
CORPORATIONS 
AND UNITED STATES SHAREHOLDERS.—For purpose 
of this section, the term ‘controlled foreign corpora-
tion’ shall have the same meaning as under section 
957(a) and the term ‘United States shareholder’ 
shall have the same meaning as under section 
951(b). 
‘‘(3) FOREIGN TAX CREDITS.—The amount of 
any income, war, profits, or excess profits taxes paid 
(or deemed paid under sections 902 and 960) or ac-
crued by the taxpayer with respect to the excess 
qualified foreign distribution amount for which a 
credit would be allowable under section 901 in the 
absence of this section shall be reduced by 85 per-
cent. 
‘‘(4) FOREIGN TAX CREDIT LIMITATION.—For 
all purposes of section 904, there shall be dis-
regarded 85 percent of—
‘‘(A) the excess qualified foreign distribu-
tion amount, and 
‘‘(B) the amount determined under section 
78 that is attributable to such excess qualified 
foreign distribution amount. 
‘‘(5) 
TREATMENT
OF
CONSOLIDATED 
GROUPS.—Members of an affiliated group of cor-
porations filing a consolidated return under section 
1501 shall be treated as a single taxpayer in apply-
ing the rules of this section. 
‘‘(6) DESIGNATION OF DIVIDENDS.—The tax-
payer shall designate the particular dividends re-
ceived during the taxable year from one or more 
controlled foreign corporations in which it is a 
United States shareholder that are dividends ex-
cluded from the excess qualified foreign distribution
amount. The total amount of such designated divi-
dends shall equal the base dividend amount. 
‘‘(d) ELECTION.—
‘‘(1) IN GENERAL.—An election under this sec-
tion shall be made on the taxpayer’s timely filed in-
come tax return for the taxable year (determined by 
taking extensions into account) and, once made, may 
be revoked only with the consent of the Secretary. 
‘‘(2) ALL
CONTROLLED
FOREIGN
CORPORA-
TIONS.—The election shall apply to all controlled 
foreign corporations in which the taxpayer is a 
United States shareholder during the taxable year. 
‘‘(3) CONSOLIDATED GROUPS.—If a taxpayer is 
a member of an affiliated group of corporations fil-
ing a consolidated return under section 1501 for the 
taxable year, an election under this section shall be 
made by the common parent of the affiliated group 
which includes the taxpayer, and shall apply to all 
members of the affiliated group. 
‘‘(e) REGULATIONS.—The Secretary shall prescribe 
such regulations as may be necessary and appropriate to 
carry out the purposes of this section, including regula-
tions under section 55 and regulations addressing corpora-
tions that, during the fixed base period or thereafter, join
or leave an affiliated group of corporations filing a consoli-
dated return.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for such subpart is amended by adding at the end the fol-
lowing new item:
‘‘Sec. 965. Toll tax imposed on excess qualified foreign distribu-
tion amount.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply only to the first taxable year of 
the electing taxpayer ending 120 days after the date of 
the enactment of this Act.
Æ