,i  #aadth ,,congress  #b;d ,session    
,h4 ,r4 #ebfa  ,,in ,,the ,,house ,,of  
,,representatives  ,may #ag1 #bjaf ,mr4 
,levin 7for himself1 ,mr4 ,van ,hollen1 
,mr4 ,rangel1 ,mr4 ,mc,dermott1 ,mr4    
,thompson of ,california1 ,mr4          
,pascrell1 and ,mr4 ,danny ,k4 ,davis of
 ,illinois7 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 prevent the avoidance
 of the rules related to investment of  
earnings in ,united ,states property    
through corporate expatriation or the   
use of corporate structures in which the
 common parent is a foreign corporation4
  #a4 ,short title ,this ,act may be    
cited as the ,protecting the ,u4,s4     
,corporate ,tax ,base ,act of #bjaf4    
#b4 ,inclusion in subpart ,f income of  
investments by controlled foreign       
corporations with respect to members of 
foreign group which includes ,united    
,states shareholder  7a7 ,in general    

,section #ief7;a77#a77;,a7 of the       
,internal ,revenue ,code of #aihf is    
amended to read as follows3  7,a7 such  
shareholder's pro rata share of the sum 
of-- 7i7 the average of the amounts of  
,united ,states property held 7directly 
or indirectly7 by the controlled foreign
 corporation as of the close of each    
quarter of such taxable year1 and  7ii7 
in the case of a controlled foreign     
corporation which is a member of an     
expanded affiliated group the common    
parent of which is not a domestic       
corporation1 the average of the amounts 
of foreign group property held 7directly
 or indirectly7 by the controlled       
foreign corporation as of the close of  
each quarter of such taxable year1 over 
4  7b7 ,foreign group property ,section 
#ief of such ,code is amended by        
redesignating subsections 7d7 and 7e7 as
 subsections 7e7 and 7f71 respectively1 
and by inserting after subsection 7c7   
the following new subsection3  7d7      
,foreign group property2 expanded       

affiliated group ,for purposes of this  
section-- 7#a7 ,foreign group property  
7,a7 ,in general ,the term foreign group
 property means any stock or obligation 
of any foreign person which is not a    
controlled foreign corporation4  7,b7   
,exceptions ,such term shall not        
include-- 7i7 the stock or obligation of
 any entity if less than #be percent of 
the total combined voting power of such 
entity1 immediately after the           
acquisition of any stock in such entity 
by the controlled foreign corporation1  
is owned 7directly or indirectly7 by the
 common parent referred to in subsection
 7a77#a77;,a77ii71 and  7ii7 property   
described in subparagraph 7,c71 7,i71   
7,j71 7,k7 or 7,l7 of subsection        
7c77#b71 applied-- 7,i7 by substituting 
foreign person for ,united ,states      
person in such subparagraphs 7,c71 7,j71
 and 7,l71  7,,ii7 by substituting      
foreign corporation for domestic        
corporation in subsection               
7c77#b77,l77i71 and  7,,iii7 by treating

 a foreign person as a ,united ,states  
shareholder described in subsection     
7c77#b77,l77ii77,i7 if such foreign     
person would be so described if such    
person were a ,united ,states person4   
7,c7 ,limitation on treatment as a      
controlled foreign corporation ,a       
foreign corporation shall not be treated
 as a controlled foreign corporation for
 purposes of subparagraph 7,a7 unless   
more than #ej percent of the total      
combined voting power of all classes of 
stock of such corporation entitled to   
vote1 and more than #ej percent of the  
total value of the stock of such        
corporation1 is owned 7directly or      
indirectly7 by ,united ,states persons  
described in subparagraph 7,a7 or 7,c7  
of section #ggja7;a77#cj74  7,d7        
,foreign person ,for purposes of this   
paragraph1 the term foreign person means
 any person who is not a ,united ,states
 person 7as defined in section          
#ggja7;a77#cj774  7#b7 ,expanded        
affiliated group ,the term expanded     

affiliated group means an affiliated    
group as defined in section #aejd7;a71  
determined--  7,a7 by substituting more 
than #ej percent for at least #hj       
percent each place it appears1 and  7,b7
 without regard to paragraphs 7#b7 and  
7#c7 of section #aejd7;b74  ,a          
partnership or any other entity 7other  
than a corporation7 shall be treated as 
a member of an expanded affiliated group
 if such entity controls 7as determined 
under section #ied7;d77#c771 or is      
controlled by 7as so determined71       
members of such group 7including any    
entity treated as a member of such group
 by reason of this sentence74  7#c7     
,application to non-corporate entities  
,in the case of any entity which is not 
a corporation-- 7,a7 any reference in   
this subsection to stock shall be       
treated as a reference to any equity or 
profits interest in such entity1 and    
7,b7 except as otherwise provided by the
 ,secretary1 paragraph 7#a77;,b77i7     
shall be applied by substituting #be    

percent 7by value7 of the beneficial    
interests in such entity for #be percent
 of the total combined voting power of  
such entity4  4  7c7 ,application of    
rules for pledges and guarantees        
,section #ief7;e7 of such ,code1 as so  
redesignated1 is amended to read as     
follows3  7e7 ,pledges and guarantees   
,for purposes of subsection 7a71 a      
controlled foreign corporation shall1   
under regulations prescribed by the     
,secretary1 be considered as holding--  
7#a7 an obligation of a ,united ,states 
person if such controlled foreign       
corporation is a pledgor or guarantor of
 such obligation1 and  7#b7 an          
obligation of a foreign person if such  
controlled foreign corporation or1 to   
the extent provided under such          
regulations1 any ,united ,states        
shareholder of such controlled foreign  
corporation1 is a pledgor or guarantor  
of such obligation4  4  7d7 ,termination
 of rule which permits use of           
related-,party transactions ,to avoid   

treatment as a controlled foreign       
corporation ,section #ieh7;b77#d7 of    
such ,code is amended by inserting if   
such stock was acquired by such person  
on or before ,may #ag1 #bjaf before the 
period at the end4  7e7 ,application of 
limitation on amount of foreign taxes   
deemed paid with respect to section #ief
 inclusions ,notwithstanding section    
#bad7;b7 of ,public ,law #aaa-bbf1      
section #ifj7;c7 of the ,internal       
,revenue ,code of #aihf shall apply to  
acquisitions of foreign group property  
7as defined in #ief7;d7 of such ,code1  
as amended by this section7 after       
,december #ca1 #bjaj1 in addition to    
acquisitions of ,united ,states property
 7as defined in section #ief7;c7 of such
 ,code7 after such date4  7f7 ,effective
 date  7#a7 ,in general ,except as      
provided in paragraph 7#b71 the         
amendments made by this section shall   
apply to taxable years of controlled    
foreign corporations ending after the   
date of the enactment of this ,act and  

to taxable years of ,united ,states     
shareholders in which or with which such
 taxable years of controlled foreign    
corporations end4  7#b7 ,termination of 
rule which permits use of related-party 
transactions to avoid treatment as a    
controlled foreign corporation ,the     
amendment made by subsection 7d7 shall  
apply to taxable years of controlled    
foreign corporations ending on or after 
,may #ag1 #bjaf1 and to taxable years of
 ,united ,states shareholders in which  
or with which such taxable years of     
controlled foreign corporations end4