,,ii #aagth ,,congress #b;d ,session ,s4 #eagh ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,december #a1 #bjbb,mr4 ,hawley introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to impose restrictions on the investment in ,chinese companies by tax-exempt entities4 #a4 ,short title ,this ,act may be cited as the ,dump ,investments in ,troublesome ,communist ,holdings ,act or as the ,,ditch ,act4 #b4 ,restriction on investment in ,chinese companies by tax-exempt entities 7a7 ,in general ,section #eja of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7s7 ,restriction on investment in ,chinese companies 7#a7 ,in general ,an organization shall not be treated as described in subsection 7c7 or 7d7 or section #dja7;a7 for any taxable year if such organization-- 7,a7 holds any interest in a disqualified ,chinese company at any time during such taxable year1 or 7,b7 fails to timely transmit the annual report described in paragraph 7#e7 for such taxable year4 7#b7 ,disqualified ,chinese company ,for purposes of this subsection-- 7,a7 ,in general ,the term disqualified ,chinese company means any corporation-- 7i7 that is incorporated in ,china1 or 7ii7 more than #aj percent of the stock of which 7determined by vote or value7 is held 7directly or indirectly through any chain of ownership7 by any of the following 7or combination thereof73 7,i7 #a or more corporations described in clause 7i74 7,,ii7 ,china or any governmental agency thereof4 7,,iii7 ,provincial1 regional1 municipal1 ,special ,administrative ,regions1 prefecture1 county1 township1 village1 or any other ,chinese sub-national governmental entity or agency4 7,,iv7 ,any entity controlled 7directly or indirectly7 by the ,chinese ,communist ,party or any ,chinese ,communist ,party organ4 7,v7 ,any ,chinese national4 7,b7 ,application to entities other than corporations ,in the case of any business organization which is not a corporation1 subparagraph 7,a7 shall apply to such organization in the same manner as though such organization were a corporation4 7,c7 ,application to indirect1 derivative1 or other contractual interests1 etc ,for purposes of this subsection1 an organization shall be treated as holding an interest in a disqualified ,chinese company if such organization-- 7i7 holds such interest 7or any instrument described in subparagraph 7,a77 directly or indirectly through any chain of ownership1 or 7ii7 holds any derivative financial instrument or other contractual arrangement with respect to such interest or company 7including any financial instrument or other contract which seeks to replicate any financial return with respect to such interest or such company74 7,d7 ,publication of list by ,secretary ,the ,secretary shall1 not later than #abj days after the date of the enactment of this subsection1 establish a process for the periodic publishing of a list of certified pooled investments1 including exchange traded funds and mutual funds1 that do not have exposure to disqualified ,chinese companies4 7#c7 ,waivers 7,a7 ,in general ,paragraph 7#a7 shall not apply with respect to any interest in a disqualified ,chinese company held by any organization during any taxable year if the ,secretary issues a waiver to such organization with respect to such interest for such taxable year under this paragraph4 ,any waiver issued under this paragraph shall be subject to renewal or expiration on a biannual basis4 7,b7 ,waiver process 7i7 ,application ,not later than #fj days after the date of the enactment of this subsection1 the ,secretary shall establish a process under which an organization may submit a written application for a waiver under this paragraph4 ,such application shall be made publicly available and shall include the following3 7,i7 ,an explanation of the need for such waiver and the reasons that the need for such waiver outweigh the threat posed to the ,united ,states by ,china and the lack of separation between ,china and the disqualified ,chinese company involved4 7,,ii7 ,the type 7including sector of the economy71 amount1 and duration of the investment in the disqualified ,chinese company4 7,,iii7 ,the relationship between the disqualified ,chinese company and ,china4 7,,iv7 ,the extenuating circumstances justifying the applicant's need to invest in the disqualified ,chinese company4 7ii7 ,response ,the ,secretary shall provide a written response to each completed application under clause 7i7 not later than #fj days after receipt of such application4 ,such written response shall be made publicly available and shall include the following3 7,i7 ,a statement of whether the waiver has been provided or withheld4 7,,ii7 ,the reasons for providing or withholding the waiver4 7,,iii7 ,the identification of any future investments with respect to which such waiver applies4 7,,iv7 ,the date on which such waiver expires 7which may not be later than the earlier of the termination of the extenuating circumstances referred to in clause 7i77,,iv7 or the end of the biannual period referred to in subparagraph 7,a774 7,c7 ,standards for determining if waiver is provided ,the ,secretary may provide a waiver under this paragraph only if the ,secretary independently determines that-- 7i7 the need for such waiver1 and the reasons for the need for such waiver1 outweigh the threat posed to the ,united ,states by ,china and the lack of separation between ,china and the disqualified ,chinese company involved1 and 7ii7 extenuating circumstances justify the applicant's need to invest in the disqualified ,chinese company4 ,for purposes of this subparagraph1 the ,secretary shall not consider the past or future financial returns of any investment in any disqualified ,chinese company1 or any other justification based on the applicant's own financial needs1 as an extenuating circumstance justifying such an investment4 7,d7 ,publication of waivers provided ,with respect to each calendar quarter1 the ,secretary shall publish and make publicly available a list of the waivers provided by the ,secretary under this paragraph during such quarter4 7#d7 ,china ,for purposes of this section1 the term ,china means the ,people's ,republic of ,china and includes any subordinate ,special ,administrative ,regions thereof4 7#e7 ,annual report ,each organization described in paragraph 7#a7 with respect to each taxable year shall1 not later than the due date for the return of tax for such taxable year1 transmit to the ,secretary a written report including-- 7,a7 a description of each interest in a disqualified ,chinese company held by such organization during such taxable year1 7,b7 the period during which such interest was so held1 and 7,c7 whether such organization has a waiver under paragraph 7#c7 to hold such interest during such period4 4 7b7 ,effective date 7#a7 ,in general ,the amendment made by this section shall apply to taxable years ending after the date of the enactment of this ,act1 except that only periods after the date that is #bgj days after the date of the enactment of this ,act shall be taken into account in determining whether the requirement of section #eja7s7 of the ,internal ,revenue ,code of #aihf 7as added by this section7 is met with respect to any taxable year4 7#b7 #a-year grace period under certain circumstances ,in the case of organization that1 after intensive due diligence1 is unaware of the failure to satisfy the requirement of such section #eja7s71 paragraph 7#a7 shall be applied by substituting #a year for #bgj days4 7c7 ,public report ,not later than #cfj days after the date of the enactment of this ,act1 and annually thereafter1 the ,secretary of the ,treasury 7or the ,secretary's delegate7 shall publicly release a report describing the patterns of ,united ,states outbound investment in ,china1 including such investment by organizations described in section #eja7s77#a7 of the ,internal ,revenue ,code of #aihf 7as added by this section74 ,such report shall detail the sectoral breakdown of such investments4