* Tax holiday effort faces uphill climb in Senate
* Obama opposes holiday without corporate code revamp
WASHINGTON May 11 (Reuters) - Several lawmakers in the U.S. House of Representatives introduced legislation on Wednesday that would allow corporations to bring profits held overseas back to the United States at a sharply reduced tax rate, though the measure faces an uphill climb to passage.
Backed by a handful of Republicans and conservative Democrats, the legislation would allow companies to bring back profits held outside the United States at a reduced tax rate of up to 5.25 percent for either 2011 or 2012.
Technology companies in particular have been lobbying hard for this type of tax repatriation holiday.
U.S. corporations are sitting on an estimated $1 trillion in profits overseas, in part to avoid being slapped with the current 35 percent corporate tax rate.
Many Democratic critics of such holidays point to a similar effort adopted in 2004, intended to jumpstart the economy and create jobs.
Several independent reports found the money brought back then was used for stock buybacks and other rewards for Wall Street - not job creation.
To staunch such criticism, the legislation would impose sanctions for failure to maintain current workforce levels for two years.
Although there is some bipartisan backing in the Democratic-led Senate, such a tax repatriation holiday is seen facing criticism there as a giveaway to corporations.
At the same time, the Obama administration is drafting a plan to cut the top corporate tax rate, now topping out at 35 percent, while trimming deductions, credits and tax breaks in order to broaden the total corporate profits subject to taxation.
As part of that package, officials are considering a plan to allow companies to bring profits back the United States at a 10 percent rate.
But Obama officials insist any repatriation be done in conjunction with a broad revamp of the corporate tax code, a process that is expected to take years.
(Reporting by Kim Dixon, Editing by Jackie Frank)