[Congressional Record Volume 166, Number 116 (Wednesday, June 24, 2020)]
[Senate]
[Pages S3209-S3210]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DURBIN (for himself, Ms. Duckworth, and Mr. Van Hollen):
  S. 4067. A bill to prohibit certain assistance for inverted domestic 
corporations; to the Committee on Finance.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 4067

       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

[[Page S3210]]

     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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