,i #aadth ,,congress #ast ,session ,h4 ,r4 #babh ,,in ,,the ,,house ,,of ,,representatives ,april #cj1 #bjae ,mr4 ,brady of ,texas 7for himself1 ,mr4 ,crowley1 ,mr4 ,mc,dermott1 ,mr4 ,reichert1 ,mr4 ,marchant1 ,mr4 ,young of ,indiana1 ,mr4 ,roskam1 ,mr4 ,meehan1 ,ms4 ,linda ,t4 ,snchez of ,california1 ,mr4 ,renacci1 ,mr4 ,reed1 ,mr4 ,tiberi1 ,mr4 ,blumenauer1 ,mr4 ,rangel1 ,mr4 ,thompson of ,california1 ,mr4 ,larson of ,connecticut1 ,mr4 ,neal1 ,mr4 ,kind1 ,mr4 ,king of ,new ,york1 ,mr4 ,sessions1 ,mr4 ,sam ,johnson of ,texas1 ,mr4 ,dold1 ,mr4 ,buchanan1 and ,ms4 ,jenkins of ,kansas7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to exempt certain stock of real estate investment trusts from the tax on foreign investments in ,united ,states real property interests1 and for other purposes4 #a4 ,short title2 etc 7a7 ,short title ,this ,act may be cited as the ,real ,estate ,investment and ,jobs ,act of #bjae4 7b7 ,amendment of #aihf ,code ,except as otherwise expressly provided1 whenever in this ,act an amendment or repeal is expressed in terms of an amendment to1 or repeal of1 a section or other provision1 the reference shall be considered to be made to a section or other provision of the ,internal ,revenue ,code of #aihf4 #b4 ,exception from ,,firpta for certain stock of real estate investment trusts 7a7 ,modifications of ownership rules 7#a7 ,in general ,section #hig is amended by adding at the end the following new subsection3 7k7 ,special rules relating to real estate investment trusts 7#a7 ,increase in percentage ownership for exceptions for persons holding publicly traded stock 7,a7 ,dispositions ,in the case of any disposition of stock in a real estate investment trust1 paragraphs 7#c7 and 7#f77;,c7 of subsection 7c7 shall each be applied by substituting more than #aj percent for more than #e percent4 7,b7 ,distributions ,in the case of any distribution from a real estate investment trust1 subsection 7h77#a7 shall be applied by substituting #aj percent for #e percent4 7#b7 ,stock held by qualified shareholders not treated as ,,usrpi 7,a7 ,in general ,except as provided in subparagraph 7,b7-- 7i7 stock of a real estate investment trust which is held directly by a qualified shareholder shall not be treated as a ,united ,states real property interest1 and 7ii7 notwithstanding subsection 7h77#a71 any distribution to a qualified shareholder shall not be treated as gain recognized from the sale or exchange of a ,united ,states real property interest to the extent the stock of the real estate investment trust held by such qualified shareholder is not treated as a ,united ,states real property interest under clause 7i74 7,b7 ,exception ,in the case of a qualified shareholder with #a or more applicable investors-- 7i7 subparagraph 7,a77i7 shall not apply to so much of the stock of a real estate investment trust held by a qualified shareholder as bears the same ratio to the value of the interests 7other than interests held solely as a creditor7 held by such applicable investors in the qualified shareholder bears to value of all interests 7other than interests held solely as a creditor7 in the qualified shareholder1 and 7ii7 a percentage equal to the ratio determined under clause 7i7 of the amounts realized by the qualified shareholder with respect to any disposition of stock in the real estate investment trust or with respect to any distribution from the real estate investment trust attributable to gain from sales or exchanges of a ,united ,states real property interest shall be treated as amounts realized from the disposition of ,united ,states real property interests4 7,c7 ,applicable investor ,for purposes of this paragraph1 the term applicable investor means1 with respect to any qualified shareholder holding stock in a real estate investment trust1 a person 7other than a qualified shareholder7 which-- 7i7 holds an interest 7other than an interest solely as a creditor7 in such qualified shareholder1 and 7ii7 holds more than #aj percent of the stock of such real estate investment trust 7whether or not by reason of the person's ownership interest in the qualified shareholder74 7,d7 ,constructive ownership rules ,for purposes of subparagraphs 7,b77i7 and 7,c71 the constructive ownership rules under subsection 7c77#f77;,c7 shall apply4 7#c7 ,qualified shareholder ,for purposes of this subsection-- 7,a7 ,in general ,the term qualified shareholder means a foreign person-- 7i7 which is eligible for benefits of a comprehensive income tax treaty with the ,united ,states which includes an exchange of information program1 7ii7 which is a qualified collective investment vehicle1 7iii7 the principal class of interests of which is listed and regularly traded on #a or more recognized stock exchanges 7as defined in such comprehensive income tax treaty71 and 7iv7 which maintains records on the identity of each person who1 at any time during the foreign person's taxable year1 holds directly #e percent or more of the class of interest described in clause 7iii74 7,b7 ,qualified collective investment vehicle ,for purposes of this subsection1 the term qualified collective investment vehicle means a foreign person-- 7i7 which1 under the comprehensive income tax treaty described in subparagraph 7,a77i71 is eligible for a reduced rate of withholding with respect to ordinary dividends paid by a real estate investment trust even if such person holds more than #aj percent of the stock of such real estate investment trust1 or 7ii7 which is designated as a qualified collective investment vehicle by the ,secretary and is either-- 7,i7 fiscally transparent within the meaning of section #hid1 or 7,,ii7 required to include dividends in its gross income1 but entitled to a deduction for distributions to persons holding interests 7other than interests solely as a creditor7 in such foreign person4 4 7#b7 ,conforming amendments 7,a7 ,section #hig7;c77#a77;,a7 is amended by inserting or subsection 7k7 after subparagraph 7,b7 in the matter preceding clause 7i74 7,b7 ,section #heg7;b77#c77;,f7 is amended by inserting or section #hig7k77#b77;,a77ii7 after #hig7;h77#a74 7b7 ,determination of domestic control 7#a7 ,special ownership rules 7,a7 ,in general ,section #hig7;h77#d7 is amended by adding at the end the following new subparagraph3 7,e7 ,special ownership rules ,for purposes of determining the holder of stock under subparagraphs 7,b7 and 7,c7-- 7i7 in the case of any class of stock of the qualified investment entity which is regularly traded on an established securities market in the ,united ,states1 a person holding less than #e percent of such class of stock at all times during the testing period shall be treated as a ,united ,states person unless the qualified investment entity has actual knowledge that such person is not a ,united ,states person1 7ii7 any stock in the qualified investment entity held by another qualified investment entity-- 7,i7 any class of stock of which is regularly traded on an established securities market1 or 7,,ii7 which is a regulated investment company which issues redeemable securities 7within the meaning of section #b of the ,investment ,company ,act of #aidj71 shall be treated as held by a foreign person1 except that if such other qualified investment entity is domestically controlled 7determined after application of this subparagraph71 such stock shall be treated as held by a ,united ,states person1 and 7iii7 any stock in the qualified investment entity held by any other qualified investment entity not described in subclause 7,i7 or 7,,ii7 of clause 7ii7 shall only be treated as held by a ,united ,states person in proportion to the stock of such other qualified investment entity which is 7or is treated under clause 7ii7 or 7iii7 as7 held by a ,united ,states person4 4 7,b7 ,conforming amendment ,the heading for paragraph 7#d7 of section #hig7;h7 is amended by inserting and special rules after ,definitions4 7#b7 ,technical amendment ,clause 7ii7 of section #hig7;h77#d77;,a7 is amended by inserting and for purposes of determining whether a real estate investment trust is a domestically controlled qualified investment entity under this subsection after real estate investment trust4 7c7 ,effective dates 7#a7 ,in general ,the amendments made by subsection 7a7 shall take effect on the date of enactment and shall apply to-- 7,a7 any disposition on and after the date of the enactment of this ,act1 and 7,b7 any distribution by a real estate investment trust on or after the date of the enactment of this ,act which is treated as a deduction for a taxable year of such trust ending after such date4 7#b7 ,determination of domestic control ,the amendments made by subsection 7b77#a7 shall take effect on the date of the enactment of this ,act4 7#c7 ,technical amendment ,the amendment made by subsection 7b77#b7 shall take effect on ,january #a1 #bjae4 #c4 ,exception for interests held by foreign retirement or pension funds 7a7 ,in general ,section #hig1 as amended by section #b1 is amended by adding at the end the following new subsection3 7l7 ,exception for interests held by foreign pension funds 7#a7 ,in general ,this section shall not apply to any ,united ,states real property interest held by-- 7,a7 a qualified foreign pension fund1 or 7,b7 any entity all of the interests of which are held by a qualified foreign pension fund4 7#b7 ,qualified foreign pension fund ,for purposes of this subsection1 the term qualified foreign pension fund means any trust1 corporation1 or other organization or arrangement-- 7,a7 which is created or organized under the law of a country other than the ,united ,states1 7,b7 which is established to provide retirement or pension benefits to participants or beneficiaries that are current or former employees 7or persons designated by such employees7 of one or more employers in consideration for services rendered1 7,c7 which does not have a single participant or beneficiary with a right to more than five percent of its assets or income1 7,d7 which is subject to government regulation and provides annual information reporting about its beneficiaries to the relevant tax authorities in the country in which it is established or operates1 and 7,e7 with respect to which1 under the laws of the country in which it is established or operates-- 7i7 contributions to such trust1 corporation1 organization1 or arrangement which would otherwise be subject to tax under such laws are deductible or excluded from the gross income of such entity or taxed at a reduced rate1 or 7ii7 taxation of any investment income of such trust1 corporation1 organization or arrangement is deferred or such income is taxed at a reduced rate4 7#c7 ,regulations ,the ,secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection4 4 7b7 ,exemption from withholding ,section #adde7;f77#c7 is amended by striking any person and all that follows and inserting the following3 any person other than-- 7,a7 a ,united ,states person1 and 7,b7 except as otherwise provided by the ,secretary1 an entity with respect to which section #hig does not apply by reason of subsection 7l7 thereof4 4 7c7 ,effective date ,the amendments made by this section shall apply to dispositions and distributions after the date of the enactment of this ,act4