[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7309 Introduced in House (IH)]
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116th CONGRESS
2d Session
H. R. 7309
To prohibit certain assistance for inverted domestic corporations.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 24, 2020
Mr. Doggett introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committee on
Financial Services, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To prohibit certain assistance for inverted domestic corporations.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``American Assistance for American
Companies Act''.
SEC. 2. PROHIBITION ON APPLICATION OF CERTAIN ASSISTANCE TO INVERTED
DOMESTIC CORPORATIONS.
(a) Prohibition on Use of Certain Tax Incentives.--
(1) Net operating loss carrybacks.--
(A) In general.--Section 172(b)(1)(D) of the
Internal Revenue Code of 1986 is amended by adding at
the end the following new clause:
``(vi) Special rule for inverted domestic
corporations.--Clause (i) shall not apply to
any foreign corporation for any taxable year in
which such corporation is an inverted domestic
corporation (as defined in section 7701(p)(2)),
or to any member of the expanded affiliated
group (as defined in section 7874(c)(1)) of
such a foreign corporation, unless such foreign
corporation has made an election under section
7701(p)(1).''.
(B) Effective date.--The amendment made by this
section shall take effect as if included in section
2303(b) of the CARES Act.
(2) Increased limitation on business interest.--
(A) In general.--Section 163(j)(10) of the Internal
Revenue Code of 1986 is amended by adding at the end
the following new subparagraph:
``(C) Special rule for inverted domestic
corporations.--Subparagraphs (A) and (B) shall not
apply to any foreign corporation for any taxable year
in which such corporation is an inverted domestic
corporation (as defined in section 7701(p)(2)), or to
any member of the expanded affiliated group (as defined
in section 7874(c)(1)) of such a foreign corporation,
unless such foreign corporation has made an election
under section 7701(p)(1).''.
(B) Effective date.--The amendment made by this
section shall take effect as if included in section
2306 of the CARES Act.
(3) Federal reserve emergency lending facilities.--
(A) In general.--No inverted domestic corporation,
as defined in section 7701(p)(2) of the Internal
Revenue Code of 1986, or any member of the expanded
affiliated group (as defined in section 7874(c)(1) of
such Code) of such inverted domestic corporation, may
participate in any program or facility established by
the Board of Governors of the Federal Reserve System
under the authority of section 13(3) of the Federal
Reserve Act (12 U.S.C. 343) and with funding authorized
under section 4003 of the CARES Act (Public Law 116-
136), including the Primary Market Corporate Credit
Facility and the Secondary Market Corporate Credit
Facility.
(B) Exception.--Subparagraph (A) shall not apply if
the inverted domestic corporation makes an election
under section 7701(p)(1) of the Internal Revenue Code
of 1986.
(C) Applicability.--This paragraph shall apply to
participation in any program or facility described in
subparagraph (A) established before, on, or after the
date of enactment of this Act.
(b) Election To Treat Inverted Domestic Corporations as Domestic
Corporations.--
(1) Inverted domestic corporations.--Section 7701 of the
Internal Revenue Code of 1986 is amended by redesignating
subsection (p) as subsection (q) and by inserting after
subsection (o) the following new subsection:
``(p) Inverted Domestic Corporations.--
``(1) Election to be treated as a domestic corporation.--
``(A) In general.--Notwithstanding paragraphs (4)
and (5) of subsection (a), an inverted domestic
corporation may elect to be treated as a domestic
corporation for taxable years beginning with the last
taxable year which begins before January 1, 2018.
``(B) Election.--An election under this
subsection--
``(i) shall be made not later than 30 days
after the date of the enactment of this
subsection, and
``(ii) once made, shall be irrevocable.
``(C) Time for filing returns and payment of
taxes.--Notwithstanding sections 6072 and 6151, any
return for any taxable year ending before the date
described in subparagraph (B)(i), and any payment of
taxes or penalties, shall not be considered due before
January 1, 2021.
``(2) Inverted domestic corporation.--For purposes of this
subsection, the term `inverted domestic corporation' means any
foreign corporation which, pursuant to a plan (or a series of
related transactions)--
``(A) completes after March 4, 2003, the direct or
indirect acquisition of--
``(i) substantially all of the properties
held directly or indirectly by a domestic
corporation, or
``(ii) substantially all of the assets of,
or substantially all of the properties
constituting a trade or business of, a domestic
partnership, and
``(B) after the acquisition, either--
``(i) more than 50 percent of the stock (by
vote or value) of the corporation is held--
``(I) in the case of an acquisition
with respect to a domestic corporation,
by former shareholders of the domestic
corporation by reason of holding stock
in the domestic corporation, or
``(II) in the case of an
acquisition with respect to a domestic
partnership, by former partners of the
domestic partnership by reason of
holding a capital or profits interest
in the domestic partnership, or
``(ii) the management and control of the
expanded affiliated group which includes the
corporation occurs, directly or indirectly,
primarily within the United States, and such
expanded affiliated group has significant
domestic business activities.
``(3) Exception for corporations with substantial business
activities in foreign country of organization.--Such term shall
not include a foreign corporation described in paragraph (2) if
after the acquisition the expanded affiliated group which
includes the corporation has substantial business activities in
the foreign country in which or under the law of which the
corporation is created or organized when compared to the total
business activities of such expanded affiliated group. For
purposes of the preceding sentence, the term `substantial
business activities' shall have the meaning given such term
under regulations in effect on January 18, 2017, except that
the Secretary may issue regulations increasing the threshold
percent in any of the tests under such regulations for
determining if business activities constitute substantial
business activities for purposes of this paragraph.
``(4) Management and control.--For purposes of paragraph
(2)(B)(ii)--
``(A) In general.--The Secretary shall prescribe
regulations for purposes of determining cases in which
the management and control of an expanded affiliated
group is to be treated as occurring, directly or
indirectly, primarily within the United States. The
regulations prescribed under the preceding sentence
shall apply to periods after March 4, 2003.
``(B) Executive officers and senior management.--
Such regulations shall provide that the management and
control of an expanded affiliated group shall be
treated as occurring, directly or indirectly, primarily
within the United States if substantially all of the
executive officers and senior management of the
expanded affiliated group who exercise day-to-day
responsibility for making decisions involving
strategic, financial, and operational policies of the
expanded affiliated group are based or primarily
located within the United States. Individuals who in
fact exercise such day-to-day responsibilities shall be
treated as executive officers and senior management
regardless of their title.
``(5) Significant domestic business activities.--For
purposes of paragraph (2)(B)(ii), an expanded affiliated group
has significant domestic business activities if at least 25
percent of--
``(A) the employees of the group are based in the
United States,
``(B) the employee compensation incurred by the
group is incurred with respect to employees based in
the United States,
``(C) the assets of the group are located in the
United States, or
``(D) the income of the group is derived in the
United States,
determined in the same manner as such determinations are made
for purposes of determining substantial business activities
under regulations referred to in paragraph (3) as in effect on
January 18, 2017, but applied by treating all references in
such regulations to `foreign country' and `relevant foreign
country' as references to `the United States'. The Secretary
may issue regulations decreasing the threshold percent in any
of the tests under such regulations for determining if business
activities constitute significant domestic business activities
for purposes of this paragraph.
``(6) Definitions and other rules.--
``(A) Expanded affiliated group.--The term
`expanded affiliated group' has the meaning give such
term under section 7874(c)(1).
``(B) Other rules.--Rules similar to the rules of
paragraphs (2), (3), (5), and (6) of section 7874(c)
shall apply for purposes of this subsection.''.
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