[Congressional Record Volume 163, Number 196 (Friday, December 1, 2017)]
[Senate]
[Pages S7729-S7730]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 1836. Mr. HATCH 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:

       On page 480, between lines 11 and 12, insert the following:
       ``(3) Increased rate for certain banks and securities 
     dealers.--
       ``(A) In general.--In the case of an applicable taxpayer 
     described in subparagraph (B) for any taxable year--
       ``(i) paragraphs (1)(A) and (2)(A) shall each be applied by 
     substituting `11 percent' for `10 percent', and
       ``(ii) paragraph (2)(A) shall be applied by substituting 
     `13.5 percent' for `12.5 percent'.
       ``(B) Taxpayer described.--An applicable taxpayer is 
     described in this subparagraph if such taxpayer is a member 
     of an affiliated group (as defined in section 1504(a)(1)) 
     which includes--

[[Page S7730]]

       ``(i) a bank (as defined in section 581), or
       ``(ii) a registered securities dealer under section 15(a) 
     of the Securities Exchange Act of 1934.
       On page 489, strike lines 3 through 19, and insert:
       ``(g) Exception for Certain Payments Made in the Ordinary 
     Course of Trade or Business.--For purposes of this section--
       ``(1) In general.--Except as provided in paragraph (3), any 
     qualified derivative payment shall not be treated as a base 
     erosion payment.
       ``(2) Qualified derivative payment.--
       ``(A) In general.--The term `qualified derivative payment' 
     means any payment made by a taxpayer pursuant to a derivative 
     with respect to which the taxpayer--
       ``(i) recognizes gain or loss as if such derivative were 
     sold for its fair market value on the last business day of 
     the taxable year (and such additional times as required by 
     this title or the taxpayer's method of accounting),
       ``(ii) treats any gain or loss so recognized as ordinary, 
     and
       ``(iii) treats the character of all items of income, 
     deduction, gain, or loss with respect to a payment pursuant 
     to the derivative as ordinary.
       ``(B) Reporting requirement.--No payments shall be treated 
     as qualified derivative payments under subparagraph (A) for 
     any taxable year unless the taxpayer includes in the 
     information required to be reported under section 6038B(b)(2) 
     with respect to such taxable year such information as is 
     necessary to identify the payments to be so treated and such 
     other information as the Secretary determines necessary to 
     carry out the provisions of this subsection.
       ``(3) Exceptions for payments otherwise treated as base 
     erosion payments.--This subsection shall not apply to any 
     qualified derivative payment if--
       ``(A) the payment would be treated as a base erosion 
     payment if it were not made pursuant to a derivative, 
     including any interest, royalty, or service payment, or
       ``(B) in the case of a contract which has derivative and 
     nonderivative components, the payment is properly allocable 
     to the nonderivative component.
       ``(4) Derivative defined.--For purposes of this 
     subsection--
       ``(A) In general.--The term `derivative' means any contract 
     (including any option, forward contract, futures contract, 
     short position, swap, or similar contract) the value of 
     which, or any payment or other transfer with respect to 
     which, is (directly or indirectly) determined by reference to 
     one or more of the following:
       ``(i) Any share of stock in a corporation.
       ``(ii) Any evidence of indebtedness.
       ``(iii) Any commodity which is actively traded.
       ``(iv) Any currency.
       ``(v) Any rate, price, amount, index, formula, or 
     algorithm.
       ``(B) Treatment of american depository receipts and similar 
     instruments.--Except as otherwise provided by the Secretary, 
     for purposes of this part, American depository receipts (and 
     similar instruments) with respect to shares of stock in 
     foreign corporations shall be treated as shares of stock in 
     such foreign corporations.
       ``(h) Regulations.--The Secretary shall prescribe such 
     regulations or other guidance as may be necessary or 
     appropriate to carry out the provisions of this section, 
     including regulations--
       ``(1) providing for such adjustments to the application of 
     this section as are necessary to prevent the avoidance of the 
     purposes of this section, including through--
       ``(A) the use of unrelated persons, conduit transactions, 
     or other intermediaries, or
       ``(B) transactions or arrangements designed, in whole or in 
     part--
       ``(i) to characterize payments otherwise subject to this 
     section as payments not subject to this section, or
       ``(ii) to substitute payments not subject to this section 
     for payments otherwise subject to this section and
       ``(2) for the application of subsection (g), including 
     rules to prevent the avoidance of the exceptions under 
     subsection (g)(3).
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