[Congressional Record Volume 163, Number 194 (Wednesday, November 29, 2017)]
[Senate]
[Pages S7414-S7415]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 1615. Mr. HELLER (for himself and Mr. Cornyn) submitted an
amendment intended to be proposed by him to the bill H.R. 1, to provide
for reconciliation pursuant to titles II and V of the concurrent
resolution on the budget for fiscal year 2018; which was ordered to lie
on the table; as follows:
At the end of part III of subtitle D of title I, add the
following:
SEC. 14506. INTERNATIONAL REGULATED INVESTMENT COMPANIES.
(a) In General.--Subchapter N of chapter 1 is amended by
redesignating part V as part VI and inserting after part IV
the following new part:
``PART V--INTERNATIONAL REGULATED INVESTMENT COMPANIES
``Sec. 998. Definition of international regulated investment company.
``Sec. 998A. Taxation of IRICs.
``Sec. 998B. Other rules.
``SEC. 998. DEFINITION OF INTERNATIONAL REGULATED INVESTMENT
COMPANY.
``(a) General Rule.--For purposes of this title, the terms
`international regulated investment company' and `IRIC' mean,
with respect to any taxable year, a domestic corporation
which, at all times during the taxable year, meets the
following requirements:
[[Page S7415]]
``(1) The corporation is registered under the Investment
Company Act of 1940.
``(2) Except as provided in subsection (c), the corporation
holds no assets other than the stock of a single regulated
investment company--
``(A) to which part I of subchapter M applies, and
``(B) which is not a qualified investment entity (as
defined in section 897(h)(4)(A)(ii))).
``(3) All outstanding stock of the corporation is held by
nonresident alien individuals (and their foreign estates) and
qualified foreign pension funds (within the meaning of
section 897(l)(2)).
``(4) The corporation has in effect an election to be
treated as an IRIC.
``(b) Election.--An election to be treated as an IRIC shall
apply to the taxable year for which made and all subsequent
taxable years until terminated. Such election shall be made
for any taxable year not later than the due date (with
extensions) for the return of tax imposed by this subtitle
for the taxable year.
``(c) Permitted Assets.--For purposes of subsection (a)(2),
an IRIC may hold--
``(1) an amount of cash and cash equivalents reasonably
necessary or appropriate for the corporation to conduct its
normal affairs, and
``(2) such other assets as are incidental to the
corporation's conduct of its normal affairs or otherwise
allowed by the Secretary.
``(d) Termination.--
``(1) In general.--Except as provided in paragraph (2), if
a corporation fails to meet the requirements of subsection
(a) at any time during the taxable year, the corporation
shall not be treated as an IRIC for such taxable year.
``(2) Inadvertent failure.--
``(A) In general.--A corporation which fails to meet the
requirements of subsection (a) for any taxable year shall
nevertheless be considered to have satisfied the requirements
of such subsection for such taxable year if--
``(i) the failure was due to reasonable cause and not due
to willful neglect,
``(ii) no later than 30 days after the discovery of the
event causing such failure, the corporation meets the
requirements of subsection (a),
``(iii) in the case of a failure to meet the requirements
of subsection (a)(3) for any period, the failure was caused
by persons not described therein holding, in the aggregate,
less than 1 percent of the stock (by value) of the
corporation, and
``(iv) the corporation pays the additional tax imposed by
reason of subparagraph (B).
``(B) Imposition of additional tax on certain failures.--In
the case of a failure described in subparagraph (A)(iii) for
any taxable year, the tax imposed by section 998A(a) on the
IRIC shall be equal to the sum of --
``(i) the tax determined under such section (without regard
to this subparagraph) on amounts received by the IRIC for the
taxable year other than amounts so received which are
attributable to stock held by persons not described in
subsection (a)(3) for the period so held, plus
``(ii) 100 percent of the amounts received which are so
attributable.
The Secretary shall prescribe rules for the proper allocation
of deductions to amounts described in this subparagraph.
``SEC. 998A. TAXATION OF IRICS.
``(a) In General.--In the case of an IRIC, there shall be
imposed, in lieu of the tax imposed by section 11, a tax
equal to 30 percent of the excess of--
``(1) the amounts received by the IRIC which (before the
application of any treaty) would be subject to tax under
section 871(a) if received by a nonresident alien individual,
over
``(2) the deductions properly allocable to such amounts
(other than deductions allowed under sections 163, 172, 243,
and such other provisions as the Secretary may prescribe in
regulations to prevent abuse).
``(b) Treaties.--
``(1) In general.--In the case of a treaty IRIC, subsection
(a) shall be applied by substituting `15 percent' for `30
percent'.
``(2) Treaty iric.--For purposes of paragraph (1), the term
`treaty IRIC' means an IRIC--
``(A) all the outstanding stock of which is held by persons
resident in a country that has in effect with the United
States an income tax treaty pursuant to which such persons
would, by reason of section 894(a), be subject to tax under
section 871(a) on dividends at a rate not greater than 15
percent, and
``(B) which elects to be a treaty IRIC.
Rules similar to the rules of section 998(b) shall apply to
an election under subparagraph (B).
``SEC. 998B. OTHER RULES.
``(a) Coordination With Subchapter M.--Except as provided
in subsection (e), an IRIC shall not be treated as a
regulated investment company for purposes of this title.
``(b) No Carryovers.--
``(1) Carryovers to iric years.--No carryforward, and no
carryback, arising for a taxable year for which the
corporation is not an IRIC may be carried to a taxable year
for which such corporation is an IRIC.
``(2) Carryovers from iric years.--No carryforward, and no
carryback, shall arise for a taxable year for which a
corporation is an IRIC.
``(c) Certain Taxes Not to Apply.--Sections 531 and 541
shall not apply to an IRIC.
``(d) Credits Not Allowed.--No credits under this chapter
shall be allowed to an IRIC.
``(e) Redemptions.--In applying section 302(b)(5), an IRIC
shall be treated as a publicly offered regulated investment
company.
``(f) Reliance on Certification.--
``(1) Reliance.--With respect to the requirement in
sections 998(a)(3) and 998A(b)(2)(A), a corporation may rely
on the certification of its shareholders, unless or until
such time that the corporation has reason to know that the
certification is false or is no longer true.
``(2) Redemption upon false certification.--If a
corporation has reason to know that the certification made by
one of its shareholders is false or is no longer true, the
corporation must redeem the stock held by such shareholder as
soon as reasonably practicable (and in no case more than 30
days after the corporation obtains such reason to know).
Failure to redeem such stock in a timely manner shall result
in the corporation failing the requirement of section
998(a)(3) or 998A(b)(2)(A), whichever is applicable.
``(3) Certification by certain institutions.--For purposes
of this subsection, a certification with regard to a person
which is made by an institution described in section
871(h)(5)(B) in a form satisfactory to the Secretary under
section 871(h) shall be deemed to be a certification by such
person.''.
(b) Clerical Amendment.--The table of parts for subchapter
N of chapter 1 is amended by redesignating the item relating
to part V as relating to part VI and inserting after the item
relating to part IV the following new item:
``PART V--International Regulated Investment Companies''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.
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