[Congressional Record Volume 161, Number 174 (Wednesday, December 2, 2015)]
[Senate]
[Page S8311]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 2881. Mr. DURBIN (for himself, Mr. Reed, Mr. Whitehouse, and Mr. 
Sanders) submitted an amendment intended to be proposed by him to the 
bill H.R. 3762, to provide for reconciliation pursuant to section 2002 
of the concurrent resolution on the budget for fiscal year 2016; which 
was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. MODIFICATIONS TO RULES RELATING TO INVERTED 
                   CORPORATIONS.

       (a) In General.--Subsection (b) of section 7874 of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(b) Inverted Corporations Treated as Domestic 
     Corporations.--
       ``(1) In general.--Notwithstanding section 7701(a)(4), a 
     foreign corporation shall be treated for purposes of this 
     title as a domestic corporation if--
       ``(A) such corporation would be a surrogate foreign 
     corporation if subsection (a)(2) were applied by substituting 
     `80 percent' for `60 percent', or
       ``(B) such corporation is an inverted domestic corporation.
       ``(2) Inverted domestic corporation.--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)--
       ``(A) the entity completes after May 8, 2014, 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, more than 50 percent of the 
     stock (by vote or value) of the entity 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.
       ``(3) Exception for corporations with substantial business 
     activities in foreign country of organization.--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 
     `substantial business activities' 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.''.
       (b) Conforming Amendments.--
       (1) Clause (i) of section 7874(a)(2)(B) of such Code is 
     amended by striking ``after March 4, 2003,'' and inserting 
     ``after March 4, 2003, and before May 9, 2014,''.
       (2) Subsection (c) of section 7874 of such Code is 
     amended--
       (A) in paragraph (2)--
       (i) by striking ``subsection (a)(2)(B)(ii)'' and inserting 
     ``subsections (a)(2)(B)(ii) and (b)(2)(B)'', and
       (ii) by inserting ``or (b)(2)(A)'' after ``(a)(2)(B)(i)'' 
     in subparagraph (B),
       (B) in paragraph (3), by inserting ``or (b)(2)(B), as the 
     case may be,'' after ``(a)(2)(B)(ii)'',
       (C) in paragraph (5), by striking ``subsection 
     (a)(2)(B)(ii)'' and inserting ``subsections (a)(2)(B)(ii) and 
     (b)(2)(B)'', and
       (D) in paragraph (6), by inserting ``or inverted domestic 
     corporation, as the case may be,'' after ``surrogate foreign 
     corporation''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after May 8, 2014.
                                 ______