113 S2489 IS: American Jobs for American Infrastructure Act
U.S. Senate
2014-06-18
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.Short title; table of contents(a)
This Act may be cited as the
American Jobs for American Infrastructure Act
.(b)The table of contents of this Act is as follows:Sec. 1. Short title; table of contents.
TITLE I—Highway Trust Fund
Sec. 101. Ensuring sufficient funding for the Highway Trust Fund.
Sec. 102. Sense of Congress regarding the Surface Transportation reauthorization.
TITLE II—Water infrastructure
Sec. 201. Reclamation Water Infrastructure Fund.
Sec. 202. Sense of Congress regarding direction of Secretary of the Interior.
TITLE III—Energy infrastructure
Sec. 301. Energy Upgrade and Retrofit Infrastructure Fund.
Sec. 302. Sense of Congress regarding direction of Secretary of Energy.
TITLE IV—Taxation of foreign income
Sec. 401. Allocation of expenses and taxes on basis of repatriation of foreign income.
Sec. 402. Modifications to rules relating to inverted corporations.
TITLE V—Deficit Reduction
Sec. 501. Deficit reduction.
<enum>I</enum><header>Highway Trust Fund</header><section id="idDD1C5C3BDA374648ABDD74BD1D389589"><enum>101.</enum><header>Ensuring sufficient funding for the Highway Trust Fund</header><subsection id="idB4510267734B45C59DC5C5679672BB19"><enum>(a)</enum><header>In general</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/9503">Section 9503(f)</external-xref> of the Internal Revenue Code of 1986 is amended by redesignating paragraph (5) as
paragraph (6) and by inserting after paragraph (4) the following new
paragraph:</text><quoted-block display-inline="no-display-inline" id="id14EAB0FD2C0D48F197D4EE8A6ECC91F7" style="OLC"><paragraph id="idB763CA836F4C4EAB8EB1E54DFB760277"><enum>(5)</enum><header>Ensuring adequate balances in Highway Account and Mass Transit Account</header><text>For the period of fiscal years 2014 through 2018, out of money in the Treasury not otherwise
appropriated, there are hereby appropriated—</text><subparagraph id="idF4514DF8045D4C8CAE0EF376B4A80F7B"><enum>(A)</enum><text>in the case of the Highway Account (as defined in subsection (e)(5)(B)) in the Highway Trust Fund,
such amounts as are determined by the Secretary to be necessary to ensure
that the balance of such account is not less than $4,000,000,000 for any
quarter during such period, and</text></subparagraph><subparagraph id="id12E960959A8B4AB7A9E5356B4053E839"><enum>(B)</enum><text>in the case of the Mass Transit Account in the Highway Trust Fund, such amounts as are determined
by the Secretary to be necessary to ensure that the balance of such
account is not less than $1,000,000,000 for any quarter during such
period.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="id5C49B642EE6A4003B4C7A36A04A93005"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall take effect on the date of the enactment of this Act.</text></subsection></section><section id="id29C3BE65232745178D1FC322C1FC8469"><enum>102.</enum><header>Sense of Congress regarding the Surface Transportation
reauthorization</header><text display-inline="no-display-inline">It is the sense of Congress that Congress should provide annual inflation increases for the
Federal Lands Access Program, the Federal Lands Transportation Program,
and the Tribal Transportation Program in the next Surface Transportation
reauthorization.</text></section><enum>II</enum><header>Water infrastructure</header><section id="id4de904d9a41c4ca6aec27ce95de51a8a"><enum>201.</enum><header>Reclamation Water Infrastructure Fund</header><subsection id="ID44ebc5c84ee04e7d993decdc4f53cfa4"><enum>(a)</enum><header>Establishment
of Fund</header><text>There is established in the Treasury a fund to be known as the <quote>Reclamation Water Infrastructure Fund</quote> (referred to in this section
as the <term>Fund</term>), to be administered by the Secretary of the Interior, to be available without fiscal year
limitation and not subject to
appropriation, for use in accordance with subsection (e).</text></subsection><subsection id="iddf00ecf854d8401dbb45aac3df2459b8"><enum>(b)</enum><header>Deposits</header><text display-inline="yes-display-inline">For the period of fiscal years 2015 through 2036, the Secretary of the Treasury shall
deposit in the Fund—</text><paragraph id="id90D7C0860AFF400EB3D7941D33B71A48"><enum>(1)</enum><text display-inline="yes-display-inline">of the revenues that
would otherwise be deposited for each fiscal year in the reclamation fund
established by the first section of the Act of June 17, 1902 (32 Stat.
388, chapter 1093), $150,000,000; and</text></paragraph><paragraph id="id4461104BECCB46FAA3A4666493C35AB9"><enum>(2)</enum><text>out of
amounts in the Treasury not otherwise obligated, $6,500,000,000.</text></paragraph></subsection><subsection id="id35bc3933f63948168c5a83d087758af4"><enum>(c)</enum><header>Investment</header><paragraph id="id597e9e540be540968328f258b3cd4093"><enum>(1)</enum><header>In general</header><text>The Secretary of the Treasury shall invest such portion of the Fund as
is not, in the judgment of the Secretary, required to meet current
withdrawals.</text></paragraph><paragraph id="id07552b6bb54b44e191b63e4fc0a8628f"><enum>(2)</enum><header>Credits to Fund</header><text>The interest on, and the proceeds from the sale or redemption of, any obligations held in the
Fund shall be credited to, and
form a part of, the Fund.</text></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDe28214dbd69b4183b86261ba8eaa5e20"><enum>(d)</enum><header display-inline="yes-display-inline">Prohibition</header><text display-inline="yes-display-inline">Amounts
in the Fund may not be made available for any purpose other than a purpose
described in subsection (e).</text></subsection><subsection id="idcb0e2a2339f84bb4a9f588a23e9b0e9e"><enum>(e)</enum><header>Use of funds</header><text display-inline="yes-display-inline">The Secretary of the Interior may use amounts in the Fund for the following
purposes:</text><paragraph id="id413357d7d7994af7b5678c1c24dae173"><enum>(1)</enum><header>Rural water projects</header><text>To complete construction (but not including operation or maintenance) of rural water projects—</text><subparagraph id="id7035769612eb4709bb2233c06166d05b"><enum>(A)</enum><text>that were authorized to be carried out by the Secretary on or before the date of enactment of this
Act; or</text></subparagraph><subparagraph id="id33f92d83032141e4bc990a5d9ca66c54"><enum>(B)</enum><text>for which—</text><clause id="id827d6d2446a84a4fa3c4386ac204c536"><enum>(i)</enum><text>pursuant to section 106(e) of the Rural Water Supply Act of 2006 (<external-xref legal-doc="usc" parsable-cite="usc/43/2405">43 U.S.C. 2405(e)</external-xref>), a feasibility
study has been submitted to the Secretary by not later than December 31,
2015; and</text></clause><clause id="id45a30db15e244fbe8a2e24657ddadc35"><enum>(ii)</enum><text>an Act enacted after the date of enactment of this Act authorizes construction.</text></clause></subparagraph></paragraph><paragraph id="idb4621b5b068942da891b7c02cc1aa9f7"><enum>(2)</enum><header>Deferred maintenance of Indian irrigation projects</header><text>To address deferred maintenance needs of Indian irrigation projects (including maintenance, repair,
and replacement activities for any structures, facilities, equipment, or
vehicles used in connection with the operation of those projects) that, on
the date of enactment of this Act—</text><subparagraph id="id53a3b87a7b984a708e6cc3e9830a20ac"><enum>(A)</enum><text>are owned by the Federal Government, as listed in the Federal inventory required by Executive Order
13327 (<external-xref legal-doc="usc" parsable-cite="usc/40/121">40 U.S.C. 121</external-xref> note; relating to Federal real property asset
management);</text></subparagraph><subparagraph id="id68fa392f5f354b01a46c61de74cb8f0c"><enum>(B)</enum><text>are managed by the Bureau of Indian Affairs (including projects managed under contracts or compacts
pursuant to the Indian Self-Determination and Education Assistance Act (25
U.S.C. 450 et seq.)); and</text></subparagraph><subparagraph id="id58f0535bae1b4824a81d2dcae9488acc"><enum>(C)</enum><text>have deferred maintenance documented by the Bureau of Indian Affairs.</text></subparagraph></paragraph><paragraph id="id1d3c900b812c4d8a8b300fcb1596a9da"><enum>(3)</enum><header>Indian reserved water rights settlements</header><text>To provide amounts to complete construction, planning, and design of any project, or to implement
any provision of Federal law, that—</text><subparagraph id="id58891432036b497aa7b18a050d3c8e59"><enum>(A)</enum><text>settles or otherwise resolves, in whole or in part, litigation involving the United States and the
rights of one or more federally recognized Indian tribes to access, use,
or manage water resources; or</text></subparagraph><subparagraph id="id1aeb68f5ffb9440385aa0eb601139a2e"><enum>(B)</enum><text>implements an agreement approved by Congress pursuant to which one or more federally recognized
Indian
tribes agree to some limitation on the exercise of rights or claims to
access, use, or manage water resources.</text></subparagraph></paragraph></subsection><subsection id="ID07da58b629734be4945f49dadf73323a"><enum>(f)</enum><header>Annual
reports</header>
<paragraph id="id6888A87F785B4826BE72B08EB7FCB7EA"><enum>(1)</enum><header>In
general</header><text>Not later than 60 days after the end of each fiscal year
beginning with fiscal year 2015, the
Secretary of the Interior shall submit to the
Committee on Appropriations of the House of Representatives,
the Committee on Appropriations of the Senate, and authorizing
committees a report on the operation of the Fund during the
fiscal year.</text>
</paragraph><paragraph id="id282CC27FC11648EDA4ACAFB5B7C746E5"><enum>(2)</enum><header>Contents</header><text>Each
report shall include, for the fiscal year covered by the report, the
following:</text>
<subparagraph id="ID885d3878ca8c42bba3c906ed4daf03ab"><enum>(A)</enum><text>A
statement of the amounts deposited into the Fund.</text>
</subparagraph><subparagraph id="ID0496eab1575648ada51a8420957ec2ba"><enum>(B)</enum><text>A
description of the expenditures made from the Fund for the fiscal year,
including the purpose of the expenditures.</text>
</subparagraph><subparagraph id="IDff6136e44a714883835cca0b49673ade"><enum>(C)</enum><text>Recommendations
for additional authorities to fulfill the purpose of the Fund.</text>
</subparagraph><subparagraph id="IDd893a10175174d29ab0a83f45cb33bab"><enum>(D)</enum><text>A
statement of the balance remaining in the Fund at the end of the fiscal
year.</text></subparagraph></paragraph></subsection></section><section id="idd26349b6b77840a4b2c60a511acb38f2"><enum>202.</enum><header>Sense of Congress regarding direction of Secretary of the Interior</header><text display-inline="no-display-inline">It is the sense of Congress that Congress should provide direction to the Secretary of the
Interior with respect to expenditures under this title, including—</text><paragraph id="id984A59480F724E96B4ED0BEB19BAFF29"><enum>(1)</enum><text display-inline="yes-display-inline">requirements under the annual budget submission of the President;</text></paragraph><paragraph id="id65BEBA4C87D842098BEDF74E0CAA16B0"><enum>(2)</enum><text display-inline="yes-display-inline">annual
reporting requirements describing final allocations;</text></paragraph><paragraph id="id3DF769824A1F4B76B024D74FD69C4D65"><enum>(3)</enum><text display-inline="yes-display-inline">programmatic goals to
carry out this title; and</text></paragraph><paragraph id="id9D29049CFEBE4779A5DEB8257D2D3CC4"><enum>(4)</enum><text display-inline="yes-display-inline">funding prioritization criteria to serve as a
methodology for distributing funds.</text></paragraph></section><enum>III</enum><header>Energy infrastructure</header><section id="idfdcc083f09264c09889f3640d6561f51"><enum>301.</enum><header>Energy Upgrade and Retrofit Infrastructure Fund</header><subsection commented="no" display-inline="no-display-inline" id="id7DBFED0FACA5454E9B5E63FAE3642339"><enum>(a)</enum><header display-inline="yes-display-inline">Establishment
of Fund</header><text display-inline="yes-display-inline">There is established in the Treasury a fund to be known as the <quote>Energy Upgrade and Retrofit Infrastructure Fund</quote> (referred to in this section
as the <term>Fund</term>), to be administered by the Secretary of Energy, to be available without fiscal year
limitation and not subject to
appropriation, for use in accordance with subsection (e).</text></subsection><subsection id="id3311551499B3472DAC061D1ADA4C6275"><enum>(b)</enum><header>Deposits</header><text display-inline="yes-display-inline">For the period of fiscal years 2015 through 2034, the Secretary of the Treasury shall
deposit in the Fund, out of
amounts in the Treasury not otherwise obligated, $8,000,000,000.</text></subsection><subsection id="idC6BF4697200946A4B468952A1A110618"><enum>(c)</enum><header>Investment</header><paragraph id="id1C1D57A07F8D4695B3AD590EC6079606"><enum>(1)</enum><header>In general</header><text>The Secretary of the Treasury shall invest such portion of the Fund as
is not, in the judgment of the Secretary, required to meet current
withdrawals.</text></paragraph><paragraph id="id7B101351A66C43059B6DD342787879FD"><enum>(2)</enum><header>Credits to Fund</header><text>The interest on, and the proceeds from the sale or redemption of, any obligations held in the
Fund shall be credited to, and
form a part of, the Fund.</text></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id156EC6BB9096444BB183E670312948B3"><enum>(d)</enum><header display-inline="yes-display-inline">Prohibition</header><text display-inline="yes-display-inline">Amounts
in the Fund may not be made available for any purpose other than a purpose
described in subsection (e).</text></subsection><subsection id="id0692a8d9dea74b4f99d6e94c3c334993"><enum>(e)</enum><header>Use of funds</header><paragraph id="id6dfd7db1118b475da24c75fe1d431394"><enum>(1)</enum><header>In general</header><text>Of amounts in the Fund, the Secretary of Energy may use, in
accordance with this title, such sums as are necessary to provide
grants, loans, loan guarantees, or other credit financing instruments,
including any such instruments under the Energy Policy Act of 2005 (42
U.S.C.
15801 et seq.),
to support novel and innovative technologies that—</text><subparagraph id="id4a454a34eb7145d79775fa4387270576"><enum>(A)</enum><text>capture or prevent carbon dioxide emissions from carbon-based fuels;</text></subparagraph><subparagraph id="ida8bd7bf199904580834332dd85f7320a"><enum>(B)</enum><text>enable the beneficial use of carbon dioxide and other greenhouse gases;</text></subparagraph><subparagraph id="idf381710d06744541b56770a6fdd32f0e"><enum>(C)</enum><text>enable the long-term storage of carbon dioxide;</text></subparagraph><subparagraph id="ide438f407241e4cba9d8ec0a25463e71b"><enum>(D)</enum><text>reduce net carbon emissions from the fleet of electric generation units in a State or region of the
bulk electric system; or</text></subparagraph><subparagraph id="id6a26b5c500a440438d3fcc8612f58877"><enum>(E)</enum><text>construct, upgrade, or retrofit electric transmission property that serves the public interest by
facilitating the deployment of low-carbon energy sources while ensuring
reliability and reducing congestion.</text></subparagraph></paragraph><paragraph id="idc716a783a0ca4196aa828fb0f48b086f"><enum>(2)</enum><header>Prioritization</header><text>In carrying out paragraph (1), the Secretary of Energy shall give priority to projects that upgrade
or
retrofit existing infrastructure for the generation and transmission of
electric power.</text></paragraph><paragraph id="id7bd100a952ff4336bdbe5089f420fc2e"><enum>(3)</enum><header>Commercial-scale coal technology</header><subparagraph id="id4964ce44fccc4b0e8ae5b7470e4f1f0c"><enum>(A)</enum><header>Expenditure</header><text>Not less than 60 percent of amounts expended under this subsection shall be for commercial-scale,
coal-fired electric generation units—</text><clause id="id1aa8a0662dcc4a7bb6b59b1a9dda1ff6"><enum>(i)</enum><text>designed to generate and sell electric power directly to consumers or for resale; and</text></clause><clause id="id164a8214ab434bbe9a1b5c26287a6ead"><enum>(ii)</enum><text>with a carbon dioxide capture and storage system having a useful life of not fewer than 15 years.</text></clause></subparagraph><subparagraph id="id5eda2e02f0604086bcdcafeb21aaf1fe"><enum>(B)</enum><header>Eligible projects</header><text>Eligible projects under this paragraph include projects for—</text><clause id="idf9be27fe86234bf587a08be58a9283e4"><enum>(i)</enum><text>the construction of new coal-fired electric generation units;</text></clause><clause id="ida60bdf382dea436e821f3f30738a53c8"><enum>(ii)</enum><text>the retrofitting of existing coal-fired electric generation units; or</text></clause><clause id="ida35c78fdbf334cf6a647dec5409418b5"><enum>(iii)</enum><text>the construction of carbon dioxide transmission pipelines to transport carbon dioxide from carbon
capture and sequestration facilities to—</text><subclause id="id0832229084834cb386fafb137fcbf989"><enum>(I)</enum><text>sequestration sites; or</text></subclause><subclause id="idb210ccd9c9124623a5277fbb4723412b"><enum>(II)</enum><text>sites at which the carbon dioxide will be used for hydrocarbon recovery.</text></subclause></clause></subparagraph></paragraph></subsection><subsection id="idA1FB23F488BA4B5B9F683AD06E1B35B1"><enum>(f)</enum><header>Annual
reports</header>
<paragraph id="idE304B2E301324C49AB74647B83489D59"><enum>(1)</enum><header>In
general</header><text>Not later than 60 days after the end of each fiscal year
beginning with fiscal year 2015, the
Secretary of Energy shall submit to the
Committee on Appropriations of the House of Representatives,
the Committee on Appropriations of the Senate, and authorizing
committees a report on the operation of the Fund during the
fiscal year.</text>
</paragraph><paragraph id="id2661AB042EE6473B935C62D6D3E61368"><enum>(2)</enum><header>Contents</header><text>Each
report shall include, for the fiscal year covered by the report, the
following:</text>
<subparagraph id="id76BB621A9AD54B6BAAAB12EFACFFD0C9"><enum>(A)</enum><text>A
statement of the amounts deposited into the Fund.</text>
</subparagraph><subparagraph id="id949585B812B246D2A201D51D52DF3763"><enum>(B)</enum><text>A
description of the expenditures made from the Fund for the fiscal year,
including the purpose of the expenditures.</text>
</subparagraph><subparagraph id="idF9BF05289C984CD0B496029F48BF33D5"><enum>(C)</enum><text>Recommendations
for additional authorities to fulfill the purpose of the Fund.</text>
</subparagraph><subparagraph id="id13FA8DCB423C4A30B294ACAE6078B392"><enum>(D)</enum><text>A
statement of the balance remaining in the Fund at the end of the fiscal
year.</text></subparagraph></paragraph></subsection></section><section id="idd4a226c69ca14b9fb89a15585fc40cdf"><enum>302.</enum><header>Sense of Congress regarding direction of Secretary of Energy</header><text display-inline="no-display-inline">It is the sense of Congress that Congress should provide direction to the Secretary of Energy
with respect to effects of expenditures under this title on other
applicable Federal programs and laws, including—</text><paragraph id="idB5178D490DA444988149A555BB423AE7"><enum>(1)</enum><text display-inline="yes-display-inline">provisions of the Internal Revenue Code of 1986
that affect electric power generation and transmission;</text></paragraph><paragraph id="id4FBD1925FAC742BA922CB2EF0B1CD32C"><enum>(2)</enum><text display-inline="yes-display-inline">existing standards
with respect to the percentage of carbon dioxide required to be captured
and stored by projects that receive Federal funds; and</text></paragraph><paragraph id="id8642B01A54B14A55BE1222C277FAD59D"><enum>(3)</enum><text display-inline="yes-display-inline">liability standards
with respect to the long-term storage of carbon dioxide.</text></paragraph></section><enum>IV</enum><header>Taxation of foreign income</header><section display-inline="no-display-inline" id="H2E9F6CC15B284B3D91F7B5E5044DA200" section-type="subsequent-section"><enum>401.</enum><header>Allocation of
expenses and taxes on basis of repatriation of foreign income</header><subsection id="H43EF7191267E403DB37900BD3893E4B7"><enum>(a)</enum><header>In
general</header><text>Part III of subchapter N of chapter 1 of the Internal
Revenue Code of 1986 is amended by inserting after subpart G the following
new
subpart:</text>
<quoted-block display-inline="no-display-inline" id="HD52A43474A684C5BBFFF8CD500D88694" style="OLC">
<subpart id="H379C5A4DBB9B4D0CB2A0AB45FFF2A822"><enum>H</enum><header>Special Rules for
Allocation of Foreign-Related Deductions</header>
<toc container-level="subpart-container" idref="H379C5A4DBB9B4D0CB2A0AB45FFF2A822" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
<toc-entry idref="H7AE93E10584D4685B195E2E37CE49BA4" level="section">Sec. 975. Deductions allocated to deferred foreign income may
not offset United States source income.</toc-entry>
</toc>
<section id="H7AE93E10584D4685B195E2E37CE49BA4"><enum>975.</enum><header>Deductions
allocated to deferred foreign income may not offset United States
source
income</header>
<subsection id="H558D4E2E71564782AF80ED7BE28D77AE"><enum>(a)</enum><header>Current year
deductions</header><text display-inline="yes-display-inline">For purposes of
this chapter, foreign-related deductions for any taxable year—</text>
<paragraph id="H3D4516BCB89B44BFA222A3EAC2E800E8"><enum>(1)</enum><text>shall be taken
into account for such taxable year only to the extent that such
deductions are
allocable to currently-taxed foreign income, and</text>
</paragraph><paragraph id="H28B891782CD740DA8699D3006DAE383C"><enum>(2)</enum><text>to the extent not
so allowed, shall be taken into account in subsequent taxable years
as provided
in subsection (b).</text>
</paragraph><continuation-text continuation-text-level="subsection">Foreign-related deductions shall be
allocated to currently-taxed foreign income in the same proportion
which
currently-taxed foreign income bears to the sum of currently-taxed
foreign
income and deferred foreign income.</continuation-text></subsection><subsection id="HC7F23126B1A44ABC977F7FEB92F63C9B"><enum>(b)</enum><header>Deductions
related to repatriated deferred foreign income</header>
<paragraph id="HE2A9287405DA41C7A943725EA92F3FE"><enum>(1)</enum><header>In
general</header><text>If there is repatriated foreign income for a taxable
year, the portion of the previously deferred deductions allocated
to the
repatriated foreign income shall be taken into account for the
taxable year as
a deduction allocated to income from sources outside the United
States. Any
such amount shall not be included in foreign-related deductions for
purposes of
applying subsection (a) to such taxable year.</text>
</paragraph><paragraph id="H4716D1C410B64466AD1FFC5C23F9DBA8"><enum>(2)</enum><header>Portion of
previously deferred deductions</header><text>For purposes of paragraph (1), the
portion of the previously deferred deductions allocated to
repatriated foreign
income is—</text>
<subparagraph id="H551707681223474AB2108E064631E00"><enum>(A)</enum><text>the amount which
bears the same proportion to such deductions, as</text>
</subparagraph><subparagraph id="H55EBAF4B3CFE43E9977E628D42E3A0CB"><enum>(B)</enum><text>the repatriated
income bears to the previously deferred foreign income.</text>
</subparagraph></paragraph></subsection><subsection id="HFFED56E6BE3D40E2841DA0899314E470"><enum>(c)</enum><header>Definitions and
special rule</header><text display-inline="yes-display-inline">For purposes of
this section—</text>
<paragraph id="HD8A1B4AD82EE4FC78635BA44EF4517E2"><enum>(1)</enum><header>Foreign-related
deductions</header><text>The term <term>foreign-related deductions</term> means
the total amount of deductions and expenses which would be
allocated or
apportioned to gross income from sources without the United States
for the
taxable year if both the currently-taxed foreign income and
deferred foreign
income were taken into account.</text>
</paragraph><paragraph display-inline="no-display-inline" id="HCD70A802166C4C82A83200DC4EF19B8D"><enum>(2)</enum><header>Currently-taxed
foreign income</header><text>The term <term>currently-taxed foreign
income</term> means the amount of gross income from sources without the United
States for the taxable year (determined without regard to
repatriated foreign
income for such year).</text>
</paragraph><paragraph display-inline="no-display-inline" id="H97033661171740CAB35B4364E4B9CD57"><enum>(3)</enum><header>Deferred foreign
income</header><text>The term <term>deferred foreign income</term> means the
excess of—</text>
<subparagraph id="H79626A01C131458E961626248E3499FE"><enum>(A)</enum><text display-inline="yes-display-inline">the amount that would be includible in
gross income under subpart F of this part for the taxable year if—</text>
<clause id="HE5FDDEF44D4945928DAEDC1F782C51ED"><enum>(i)</enum><text>all controlled
foreign corporations were treated as one controlled foreign
corporation,
and</text>
</clause><clause id="HBB8BF3A0A12149B296AE83FB48049E71"><enum>(ii)</enum><text>all earnings and
profits of all controlled foreign corporations were subpart F
income (as
defined in section 952), over</text>
</clause></subparagraph><subparagraph id="H0485DC431041498A9350ADEFE3E6A012"><enum>(B)</enum><text>the sum of—</text>
<clause id="H23CFAAB66A814FF68EBA6608F7E98725"><enum>(i)</enum><text>all dividends
received during the taxable year from controlled foreign
corporations,
plus</text>
</clause><clause id="H704E50F236BE41AC9421A54BACCCED5"><enum>(ii)</enum><text>amounts includible
in gross income under section 951(a).</text>
</clause></subparagraph></paragraph><paragraph id="H584938FDA0224A21A507768466FE0121"><enum>(4)</enum><header>Previously
deferred foreign income</header><text display-inline="yes-display-inline">The
term <term>previously deferred foreign income</term> means the aggregate amount
of deferred foreign income for all prior taxable years to which
this part
applies, determined as of the beginning of the taxable year,
reduced by the
repatriated foreign income for all such prior taxable years.</text>
</paragraph><paragraph id="HBC687988A56142B39213934B758832BC"><enum>(5)</enum><header>Repatriated
foreign income</header><text>The term <term>repatriated foreign income</term>
means the amount included in gross income on account of
distributions out of
previously deferred foreign income.</text>
</paragraph><paragraph id="H2F202257ABB64BC0BF5B247CF0E7471C"><enum>(6)</enum><header>Previously
deferred deductions</header><text display-inline="yes-display-inline">The term
<term>previously deferred deductions</term> means the aggregate amount of
foreign-related deductions not taken into account under subsection
(a) for all
prior taxable years (determined as of the beginning of the taxable
year),
reduced by any amounts taken into account under subsection (b) for
such prior
taxable years.</text>
</paragraph><paragraph id="H4C5FBB0E1F4B4BA396CD3D4D73007FFC"><enum>(7)</enum><header>Treatment of
certain foreign taxes</header>
<subparagraph id="H242E7E3B86844475BF3E725E1F386DD7"><enum>(A)</enum><header>Paid by
controlled foreign corporation</header><text display-inline="yes-display-inline">Section 78 shall not apply for purposes of
determining currently-taxed foreign income and deferred foreign
income.</text>
</subparagraph><subparagraph id="H047053A21E294F6C94600063633D9703"><enum>(B)</enum><header>Paid by
taxpayer</header><text>For purposes of determining currently-taxed foreign
income, gross income from sources without the United States shall
be reduced by
the aggregate amount of taxes described in the applicable paragraph
of section
901(b) which are paid by the taxpayer (without regard to sections
902 and 960)
during the taxable year.</text>
</subparagraph></paragraph></subsection><subsection id="H3C198D1DE8E5436391F18F65A192533C"><enum>(d)</enum><header>Application of
section</header><text display-inline="yes-display-inline">This section—</text>
<paragraph id="H278B262C823B431BB6E1FF00B1441C4"><enum>(1)</enum><text>shall be applied
before subpart A, and</text>
</paragraph><paragraph id="HDF333812472943F2A07CC7B697DBB61E"><enum>(2)</enum><text>shall be applied
separately with respect to the categories of income specified in
section
904(d)(1).</text>
</paragraph></subsection></section></subpart><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="HA73E30222EEC40A7B91D60C64C17D5E"><enum>(b)</enum><header>Clerical
amendment</header><text>The table of subparts for part III of subpart N of
chapter 1 of such Code is amended by inserting after the item relating to
subpart G the following new item:</text>
<quoted-block display-inline="no-display-inline" id="HB28BF2482CD94943AF5D591BFD88EC8F" style="OLC">
<toc container-level="quoted-block-container" idref="HD52A43474A684C5BBFFF8CD500D88694" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
<toc-entry idref="H379C5A4DBB9B4D0CB2A0AB45FFF2A822" level="subpart">Subpart H. Special Rules for Allocation of Foreign-Related
Deductions</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H9125BD1C6DE742C1A41C1C44F13D57C8"><enum>(c)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this section shall apply to taxable years beginning after the date of the
enactment of this Act.</text></subsection></section><section id="HCC7023BB7BAF4C0E970DCA6B43DD13ED" section-type="subsequent-section"><enum>402.</enum>
<header>Modifications to rules relating to inverted corporations</header>
<subsection id="H64C1AE3E51594734930D96D60D794104"><enum>(a)</enum><header>In general</header><text>Subsection (b) of <external-xref legal-doc="usc" parsable-cite="usc/26/7874">section 7874</external-xref> of the Internal Revenue Code of 1986 is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HED5BCD1CA64D4B28BFA68F424FE6160B" style="OLC">
<subsection id="HF9F0BAE6CC8A49749648A16BAD9B0DEC"><enum>(b)</enum><header>Inverted corporations treated as domestic corporations</header>
<paragraph id="H993295563471465EB5B13E30B223394B"><enum>(1)</enum><header>In general</header><text>Notwithstanding section 7701(a)(4), a foreign corporation shall be treated for purposes of this
title as a domestic corporation if—</text>
<subparagraph id="HA165BFAB19A24DA6BAB06F4DBE4DDFE8"><enum>(A)</enum><text>such corporation would be a surrogate foreign corporation if subsection (a)(2) were applied by
substituting <quote>80 percent</quote> for <quote>60 percent</quote>, or</text>
</subparagraph><subparagraph id="H736FAACBD77F49C0A3156ED6F99176E5"><enum>(B)</enum><text>such corporation is an inverted domestic corporation.</text>
</subparagraph></paragraph><paragraph id="H98CD59F6E48840D08F36F93952496B50"><enum>(2)</enum><header>Inverted domestic corporation</header><text>For purposes of this subsection, a foreign corporation shall be treated as an inverted domestic
corporation if, pursuant to a plan (or a series of related transactions)—</text>
<subparagraph id="HC061CA19E7AE4DB4B3B01E05B8A690DA"><enum>(A)</enum><text>the entity completes after May 8, 2014, the direct or indirect acquisition of—</text>
<clause id="H3DD6BD12EC77426B8E89B741C1441C35"><enum>(i)</enum><text>substantially all of the properties held directly or indirectly by a domestic corporation, or</text>
</clause><clause id="H417243DAB73347EF9156958670842997"><enum>(ii)</enum><text>substantially all of the assets of, or substantially all of the properties constituting a trade or
business of, a domestic partnership, and</text>
</clause></subparagraph><subparagraph id="H59636454BD5141FF905D8CCABC6809E3"><enum>(B)</enum><text>after the acquisition, either—</text>
<clause id="H7AB87A5F43BC420CA526C198BC3D89D5"><enum>(i)</enum><text>more than 50 percent of the stock (by vote or value) of the entity is held—</text>
<subclause id="H96005B09D6AA48D7A193966E59A6A922"><enum>(I)</enum><text>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</text>
</subclause><subclause id="H16C20F23B03744EEABC8E22EF46F5D8A"><enum>(II)</enum><text>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</text>
</subclause></clause><clause id="HCB9B44D69CCE4FCB8E12C066ED0C18B1"><enum>(ii)</enum><text>the management and control of the expanded affiliated group which includes the entity occurs,
directly or indirectly, primarily within the United States, and such
expanded affiliated group has significant domestic business activities.</text>
</clause></subparagraph></paragraph><paragraph id="H68B9192CDE43425E89ABEE2FB257F8A5"><enum>(3)</enum><header>Exception for corporations with substantial business activities in foreign country of organization</header><text>A foreign corporation described in paragraph (2) shall not be treated as an inverted domestic
corporation if after the acquisition the expanded affiliated group which
includes the entity has substantial business activities in the foreign
country in which or under the law of which the entity is created or
organized when compared to the total business activities of such expanded
affiliated group. For purposes of subsection (a)(2)(B)(iii) and the
preceding sentence, the term <term>substantial business activities</term> shall have the meaning given such term under regulations in effect on May 8, 2014, 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.</text>
</paragraph><paragraph id="H352A22954AD94EDAB074CF63CB7A8260"><enum>(4)</enum><header>Management and control</header><text display-inline="yes-display-inline">For purposes of paragraph (2)(B)(ii)—</text>
<subparagraph id="H5277F7707B2F4AC5A6CF427F97BA9B14"><enum>(A)</enum><header>In general</header><text>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 May 8, 2014.</text>
</subparagraph><subparagraph id="HA99580D907ED432E95943E7045F55AC4"><enum>(B)</enum><header>Executive officers and senior management</header><text display-inline="yes-display-inline">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.</text>
</subparagraph></paragraph><paragraph id="HABAA9E9AC0634E13B662BB937D6D070E"><enum>(5)</enum><header>Significant domestic business activities</header><text display-inline="yes-display-inline">For purposes of paragraph (2)(B)(ii), an expanded affiliated group has significant domestic
business activities if at least 25 percent of—</text>
<subparagraph id="HE104EC8A33DB402188380626A50686C3"><enum>(A)</enum><text display-inline="yes-display-inline">the employees of the group are based in the United States,</text>
</subparagraph><subparagraph id="HE981725134D04CF08C455B1C131666AD"><enum>(B)</enum><text display-inline="yes-display-inline">the employee compensation incurred by the group is incurred with respect to employees based in the
United States,</text>
</subparagraph><subparagraph id="HBDFF4E9FBF6D4CC0BD48205669F4A967"><enum>(C)</enum><text display-inline="yes-display-inline">the assets of the group are located in the United States, or</text>
</subparagraph><subparagraph id="H9B0AFB59FD2F480D8B2416E0B3A63819"><enum>(D)</enum><text display-inline="yes-display-inline">the income of the group is derived in the United States,</text></subparagraph><continuation-text continuation-text-level="paragraph">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 May 8, 2014, but applied by treating all references in
such regulations to <term>foreign country</term> and <term>relevant foreign country</term> as references to <term>the United States</term>. 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.</continuation-text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="HC725B926B1AA418D8CD3FE527591F92F"><enum>(b)</enum><header>Conforming amendments</header>
<paragraph id="H36595E5831C9415EBD9D13ED0058977F"><enum>(1)</enum><text>Clause (i) of section 7874(a)(2)(B) of such Code is amended by striking <quote>after March 4, 2003,</quote> and inserting <quote>after March 4, 2003, and before May 9, 2014,</quote>.</text>
</paragraph><paragraph id="HF303B26FBF2F41038979F0915AB0AF5B"><enum>(2)</enum><text>Subsection (c) of section 7874 of such Code is amended—</text>
<subparagraph id="H655F18825B7A4059AA133A6245E93ACA"><enum>(A)</enum><text>in paragraph (2)—</text>
<clause id="H6FBC1C8F7E004E86BD20DAF533083CDF"><enum>(i)</enum><text>by striking <quote>subsection (a)(2)(B)(ii)</quote> and inserting <quote>subsections (a)(2)(B)(ii) and (b)(2)(B)(i)</quote>, and</text>
</clause><clause id="HE24FD786A659418B9FB45DF6D7E39573"><enum>(ii)</enum><text>by inserting <quote>or (b)(2)(A)</quote> after <quote>(a)(2)(B)(i)</quote> in subparagraph (B),</text>
</clause></subparagraph><subparagraph id="HC14F63F81BB04566927B61A3C9F3B482"><enum>(B)</enum><text>in paragraph (3), by inserting <quote>or (b)(2)(B)(i), as the case may be,</quote> after <quote>(a)(2)(B)(ii)</quote>,</text>
</subparagraph><subparagraph id="HF11A3EE1A41940988E5A73A32E2922A8"><enum>(C)</enum><text>in paragraph (5), by striking <quote>subsection (a)(2)(B)(ii)</quote> and inserting <quote>subsections (a)(2)(B)(ii) and (b)(2)(B)(i)</quote>, and</text>
</subparagraph><subparagraph id="H7D48195BA48B48509519E01E675DC69B"><enum>(D)</enum><text>in paragraph (6), by inserting <quote>or inverted domestic corporation, as the case may be,</quote> after <quote>surrogate foreign corporation</quote>.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="H28805F579B0A4EAFA17C7A7B2B65DB92"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years ending after May 8, 2014.</text></subsection></section><enum>V</enum><header>Deficit Reduction</header><section id="id92A9EE8BF58D4D168DE808A048956CDE"><enum>501.</enum><header>Deficit reduction</header><text display-inline="no-display-inline">For purposes of the amount of any increase in revenue to the Treasury by reason of the provisions
of this Act and the amendments made by this Act, $1,000,000,000 of such
amount shall be, at such times and in such manner as determined
appropriate by the Secretary of the Treasury (or the Secretary's
delegate), deposited and credited as general revenue of the Treasury for
the purposes of deficit reduction and shall not be available for
obligation.</text></section>