text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Corporate Tax Fairness and 
  Shareholder Rights Act of 2003''.
  
  SEC. 2. PREVENTION OF CORPORATE EXPATRIATION TO AVOID UNITED STATES 
                INCOME TAX.
  
      (a) In General.--Paragraph (4) of section 7701(a) of the Internal 
  Revenue Code of 1986 (defining domestic) is amended to read as follows:
              ``(4) Domestic.--
                      ``(A) In general.--Except as provided in 
                  subparagraph (B), the term `domestic' when applied to a 
                  corporation or partnership means created or organized 
                  in the United States or under the law of the United 
                  States or of any State unless, in the case of a 
                  partnership, the Secretary provides otherwise by 
                  regulations.
                      ``(B) Certain corporations treated as domestic.--
                              ``(i) In general.--The acquiring 
                          corporation in a corporate expatriation 
                          transaction shall be treated as a domestic 
                          corporation.
                              ``(ii) Corporate expatriation 
                          transaction.--For purposes of this 
                          subparagraph, the term `corporate expatriation 
                          transaction' means any transaction if--
                                      ``(I) a nominally foreign 
                                  corporation (referred to in this 
                                  subparagraph as the `acquiring 
                                  corporation') acquires, as a result of 
                                  such transaction, directly or 
                                  indirectly substantially all of the 
                                  properties held directly or indirectly 
                                  by a domestic corporation, and
                                      ``(II) immediately after the 
                                  transaction, more than 80 percent of 
                                  the stock (by vote or value) of the 
                                  acquiring corporation is held by former 
                                  shareholders of the domestic 
                                  corporation by reason of holding stock 
                                  in the domestic corporation.
                              ``(iii) Lower stock ownership requirement 
                          in certain cases.--Subclause (II) of clause 
                          (ii) shall be applied by substituting `50 
                          percent' for `80 percent' with respect to any 
                          nominally foreign corporation if--
                                      ``(I) such corporation does not 
                                  have substantial business activities 
                                  (when compared to the total business 
                                  activities of the expanded affiliated 
                                  group) in the foreign country in which 
                                  or under the law of which the 
                                  corporation is created or organized, 
                                  and
                                      ``(II) the stock of the corporation 
                                  is publicly traded and the principal 
                                  market for the public trading of such 
                                  stock is in the United States.
                              ``(iv) Partnership transactions.--The term 
                          `corporate expatriation transaction' includes 
                          any transaction if--
                                      ``(I) a nominally foreign 
                                  corporation (referred to in this 
                                  subparagraph as the `acquiring 
                                  corporation') acquires, as a result of 
                                  such transaction, directly or 
                                  indirectly properties constituting a 
                                  trade or business of a domestic 
                                  partnership,
                                      ``(II) immediately after the 
                                  transaction, more than 80 percent of 
                                  the stock (by vote or value) of the 
                                  acquiring corporation is held by former 
                                  partners of the domestic partnership or 
                                  related foreign partnerships 
                                  (determined without regard to stock of 
                                  the acquiring corporation which is sold 
                                  in a public offering related to the 
                                  transaction), and
                                      ``(III) the acquiring corporation 
                                  meets the requirements of subclauses 
                                  (I) and (II) of clause (iii).
                              ``(v) Special rules.--For purposes of this 
                          subparagraph--
                                      ``(I) a series of related 
                                  transactions shall be treated as 1 
                                  transaction, and
                                      ``(II) stock held by members of the 
                                  expanded affiliated group which 
                                  includes the acquiring corporation 
                                  shall not be taken into account in 
                                  determining ownership.
                              ``(vi) Other definitions.--For purposes of 
                          this subparagraph--
                                      ``(I) Nominally foreign 
                                  corporation.--The term `nominally 
                                  foreign corporation' means any 
                                  corporation which would (but for this 
                                  subparagraph) be treated as a foreign 
                                  corporation.
                                      ``(II) Expanded affiliated group.--
                                  The term `expanded affiliated group' 
                                  means an affiliated group (as defined 
                                  in section 1504(a) without regard to 
                                  section 1504(b)).
                                      ``(III) Related foreign 
                                  partnership.--A foreign partnership is 
                                  related to a domestic partnership if 
                                  they are under common control (within 
                                  the meaning of section 482), or they 
                                  shared the same trademark or 
                                  tradename.''.
      (b) Effective Dates.--
              (1) In general.--The amendment made by this section shall 
          apply to corporate expatriation transactions completed after 
          September 11, 2001.
              (2) Special rule.--The amendment made by this section shall 
          also apply to corporate expatriation transactions completed 
          after December 31, 1996, and before September 11, 2001, but 
          only with respect to taxable years of the acquiring corporation 
          beginning after December 31, 2003.
  
  SEC. 3. DISCLOSURE OF CORPORATE EXPATRIATION TRANSACTIONS.
  
      (a) In General.--Section 14 of the Securities Exchange Act of 1934 
  (15 U.S.C. 78n) is amended by adding at the end the following new 
  subsection:
      ``(i) Proxy Solicitations in Connection With Corporate Expatriation 
  Transactions.--
              ``(1) Disclosure to shareholders of effects of corporate 
          expatriation transaction.--The Commission shall, by rule, 
          require that each domestic issuer shall prominently disclose, 
          as a separate and distinct document accompanying each proxy 
          statement relating to a corporate expatriation transaction--
                      ``(A) the number of employees of the domestic 
                  issuer that would be located in the new foreign 
                  jurisdiction of incorporation or organization of that 
                  issuer upon completion of the corporate expatriation 
                  transaction;
                      ``(B) the percentage of the total assets of the 
                  domestic issuer that would be located within the new 
                  foreign jurisdiction of incorporation or organization 
                  of that issuer upon completion of the corporate 
                  expatriation transaction;
                      ``(C) how the rights of holders of the securities 
                  of the domestic issuer would be impacted by a completed 
                  corporate expatriation transaction;
                      ``(D) that as a result of a completed corporate 
                  expatriation transaction, any taxable holder of the 
  securities of the domestic issuer shall be subject to the taxation of 
  any capital gains realized with respect to such securities; and
                      ``(E) the estimated tax benefit that would be 
                  realized by the domestic issuer upon completion of the 
                  corporate expatriation transaction.
              ``(2) Disclosure to commission of results of vote.--Upon 
          the approval of any corporate expatriation transaction by the 
          holders of the securities of a domestic issuer, that issuer 
          shall provide to the Commission, in a form and manner to be 
          determined by the Commission, information as to how each holder 
          of record of a voting security of that domestic issuer (or a 
          proxy there for) voted with respect to the corporate 
          expatriation transaction.
              ``(3) Definitions.--In this subsection, the following 
          definitions shall apply:
                      ``(A) Corporate expatriation transaction.--The term 
                  `corporate expatriation transaction' means any 
                  transaction, or series of related transactions, in 
                  which an entity organized under the laws of a foreign 
                  country acquires, directly or indirectly, substantially 
                  all of the voting securities in, or substantially all 
                  of the assets of, a domestic issuer, and--
                              ``(i) immediately after completion of the 
                          transaction, more than 80 percent of the 
                          securities (by vote or value) of the acquiring 
                          foreign entity will be held by persons that 
                          were security holders of the domestic issuer 
                          immediately prior to the transaction; or
                              ``(ii) immediately after completion of the 
                          transaction, more than 50 percent of the 
                          securities (by vote or value) of the acquiring 
                          foreign entity will be held by persons that 
                          were security holders of the domestic issuer 
                          immediately prior to the transaction, and--
                                      ``(I) such foreign entity will not 
                                  have substantial business activities in 
                                  the foreign country in which it is 
                                  organized; and
                                      ``(II) the securities of the 
                                  foreign entity will be publicly traded, 
                                  and the principal market for the public 
                                  trading of such securities will be in 
                                  the United States.
                      ``(B) Domestic issuer.--The term `domestic issuer' 
                  means an issuer created or organized in the United 
                  States or under the law of the United States or of any 
                  State.''.
      (b) Effective Date.--Section 14(i) of the Securities Exchange Act 
  of 1934 (as added by this section) shall apply with respect to 
  corporate expatriation transactions (as defined in that section 14(i)) 
  proposed on and after the date of enactment of this Act.
  
  SEC. 4. MODIFICATIONS TO EXPENSING UNDER SECTION 179.
  
      (a) Increase of Amount Which May Be Expensed.--
              (1) In general.--Paragraph (1) of section 179(b) of the 
          Internal Revenue Code of 1986 (relating to dollar limitation) 
          is amended to read as follows:
              ``(1) Dollar limitation.--The aggregate cost which may be 
          taken into account under subsection (a) for any taxable year 
          shall not exceed $75,000 ($25,000 in the case of taxable years 
          beginning after December 31, 2007).''.
              (2) Increase in phaseout threshold.--Paragraph (2) of 
          section 179(b) of such Code is amended by striking ``$200,000'' 
          and inserting ``$325,000 ($200,000 in the case of taxable years 
          beginning after December 31, 2007)''.
      (b) Effective Date.--The amendments made by this section shall 
  apply to property placed in service in taxable years beginning after 
  December 31, 2002.
target: Corporate Tax Fairness and Shareholder Rights Act of 2003 - Amends the Internal Revenue Code (IRC) by determining that acquiring corporations in"corporate expatriation transactions" shall be considered domestic corporations. Defines a "corporate expatriation transaction" as, with certain exceptions, one in which a "nominally foreign corporation" acquires substantially all of the properties held by a domestic corporation and in which, immediately after the transaction, more than 80 percent of the stock of the acquiring corporation is held by former shareholders of the domestic corporation. Lowers the 80 percent threshold to 50 percent when the acquiring "nominally foreign corporation" lacks substantial business activities in the foreign country in which it was created and organized compared to the total activities of the "expanded affiliated group" and the stock is publicly traded, with the principal market of trading being the United States. Defines the terms "nominally foreign corporation" and "expanded affiliated group."Applies similar rules to partnership transactions.Establishes that a series of related transactions relevant to the Act shall be handled as a single transaction.Amends the Securities Act of 1934 to require: (1) disclosure to shareholders, and effects of, corporate expatriation transaction; and (2) disclosure to the SEC of the approval of any corporate expatriate transaction.Amends the IRC to temporarily (through 2007) increase the expensing limit and phaseout threshold.
feat_title: A bill to amend the Internal Revenue Code of 1986 and the Securities Exchange Act of 1934 to provide for the treatment of corporate expatriation transactions, and for other purposes.