,,ii  #aafth ,,congress  #b;d ,session  
,s4 #cidj  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,june #aa1     
#bjbj,mr4 ,wicker introduced the        
following bill2 which was read twice and
 referred to the ,committee on ,finance 
,a ,,bill  ,to amend the ,internal      
,revenue ,code of #aihf to exclude      
certain amounts from the tested income  
of controlled foreign corporations1 and 
for other purposes4  #a4 ,short title   
,this ,act may be cited as the          
,territorial ,economic ,recovery ,act4  
#b4 ,income of certain qualified        
possession corporations excluded from   
tested income  7a7 ,in general ,section 
#iea;,a of the ,internal ,revenue ,code 
of #aihf is amended-- 7#a7 in subsection
 7c77#b77;,a77i71 by striking and at the
 end of subclause 7,,iv71 by striking   
over at the end of subclause 7,v7 and   
inserting and1 and by adding at the end 
the following new subclause3  7,,vi7 any
 income of a qualified possession       
corporation that is effectively         

connected with the active conduct of a  
trade or business within a possession of
 the ,united ,states1 over  2 and  7#b7 
by adding at the end the following new  
subsections3  7g7 ,possession of the    
,united ,states ,for purposes of this   
section1 the term possession of the     
,united ,states means ,puerto ,rico1 the
 ,virgin ,islands1 and any specified    
possession described in section         
#ica7;c74  7h7 ,qualified possession    
corporation ,for purposes of this       
section1 the term qualified possession  
corporation means any controlled foreign
 corporation for any taxable year1 if1  
for the #c-year period 7or the period   
during which the controlled foreign     
corporation has been in existence1 if   
shorter7 ending in the taxable year     
preceding the taxable year in which the 
determination is made-- 7#a7 #hj percent
 or more of the gross income of such    
corporation was derived from sources    
within a possession of the ,united      
,states1 and  7#b7 #ge percent or more  

of the gross income of such corporation 
was effectively connected with the      
active conduct of a trade or business   
within a possession of the ,united      
,states4  4  7b7 ,effective date ,the   
amendments made by this section shall   
apply taxable years of foreign          
corporations beginning after ,december  
#ca1 #bjai1 and to taxable years of     
,united ,states shareholders in which or
 with which such taxable years of       
foreign corporations end4