S.Amdt. 3580

1. Adds SEC. 830. PROHIBITION ON CONTRACTS WITH INVERTED DOMESTIC CORPORATIONS at the end of subtitle B of title VIII

   Adds a section

   In S. 2410 · Placed on Calendar Senate

   (2) Photovoltaic devices.--The term "photovoltaic device" means devices that convert light directly into electricity through a solid-stats, semiconductor process.

   Inserted: SEC. 830. PROHIBITION ON CONTRACTS WITH INVERTED DOMESTIC CORPORATIONS.

   Inserted: (a) Civilian Contracts.--

   Inserted: (1) In general.--Chapter 47 of title 41, United States Code, is amended by adding at the end the following new section:

   Inserted: "Sec. 4713. Prohibition on contracts with inverted domestic corporations

   Inserted: "(a) In General.--The head of an executive agency may not enter into any contract with any foreign incorporated entity which is treated as an inverted domestic corporation or any subsidiary of such entity.

   Inserted: "(b) Definition of Inverted Domestic Corporation.--

   Inserted: "(1) In general.--For purposes of this section, a foreign incorporated entity shall be treated as an inverted domestic corporation if, pursuant to a plan (or a series of related transactions)--

   Inserted: "(A) the entity has, directly or indirectly, acquired--

   Inserted: "(i) most of the properties held directly or indirectly by a domestic corporation; or

   Inserted: "(ii) most of the assets of, or most of the properties constituting a trade or business of, a domestic partnership; and

   Inserted: "(B) either--

   Inserted: "(i) after the acquisition at least 50 percent of the stock (by vote or value) of the entity is held--

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   Inserted: "(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

   Inserted: "(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

   Inserted: "(ii)(I) the expanded affiliated group which after the acquisition conducts most of its business activities in the United States; and

   Inserted: "(II) the management and control of the entity (or of any other member of the expanded affiliated group which after the acquisition includes the entity and to which this subclause applies under regulations prescribed by the Secretary of the Treasury or the Secretary's delegate) occurs, directly or indirectly, mostly within the United States.

   Inserted: "(2) Management and control.--

   Inserted: "(A) In general.--For purposes of subclause (II) of paragraph (1)(B)(ii), the Secretary of the Treasury (or the Secretary's delegate) shall prescribe regulations for purposes of determining cases in which the management and control of an entity is to be treated as occurring mostly within the United States.

   Inserted: "(B) Executive officers and senior management.--The regulations required under subparagraph (A) shall provide that--

   Inserted: "(i) the management and control of an entity shall be treated as occurring mostly within the United States if most of the executive officers and senior management of the entity who exercise day-to-day responsibility for making decisions involving strategic, financial, and operational policies of the entity are located mostly within the United States; and

   Inserted: "(ii) individuals who are not executive officers and senior management of the entity (including individuals who are officers or employees of other members of the expanded affiliated group which includes the entity) shall be treated as executive officers and senior management if such individuals exercise the day-to-day responsibilities of the entity described in clause (i).".

   Inserted: (2) Clerical amendment.--The table of sections at the beginning of such chapter is amended by inserting after the item related to section 4712 the following new item:

   Inserted: "4713. Prohibition on contracts with inverted domestic corporations.".

   Inserted: (b) Defense Contracts.--

   Inserted: (1) In general.--Chapter 137 of title 10, United States Code, is amended by adding at the end the following new section:

   Inserted: "Sec. 2338. Prohibition on contracts with inverted domestic corporations

   Inserted: "(a) In General.--The head of an agency may not enter into any contract with any foreign incorporated entity which is treated as an inverted domestic corporation or any subsidiary of such entity.

   Inserted: "(b) Definition of Inverted Domestic Corporation.--

   Inserted: "(1) In general.--For purposes of this section, a foreign incorporated entity shall be treated as an inverted domestic corporation if, pursuant to a plan (or a series of related transactions)--

   Inserted: "(A) the entity has, directly or indirectly, acquired--

   Inserted: "(i) most of the properties held directly or indirectly by a domestic corporation; or

   Inserted: "(ii) most of the assets of, or most of the properties constituting a trade or business of, a domestic partnership; and

   Inserted: "(B) either--

   Inserted: "(i) after the acquisition at least 50 percent of the stock (by vote or value) of the entity is held--

   Inserted: "(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

   Inserted: "(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

   Inserted: "(ii)(I) the expanded affiliated group which after the acquisition conducts most of its business activities in the United States; and

   Inserted: "(II) the management and control of the entity (or of any other member of the expanded affiliated group which after the acquisition includes the entity and to which this subclause applies under regulations prescribed by the Secretary of the Treasury or the Secretary's delegate) occurs, directly or indirectly, mostly within the United States.

   Inserted: "(2) Management and control.--

   Inserted: "(A) In general.--For purposes of subclause (II) of paragraph (1)(B)(ii), the Secretary of the Treasury (or the Secretary's delegate) shall prescribe regulations for purposes of determining cases in which the management and control of an entity is to be treated as occurring mostly within the United States.

   Inserted: "(B) Executive officers and senior management.--The regulations prescribed under subparagraph (A) shall provide that--

   Inserted: "(i) the management and control of an entity shall be treated as occurring mostly within the United States if most of the executive officers and senior management of the entity who exercise day-to-day responsibility for making decisions involving strategic, financial, and operational policies of the entity are located mostly within the United States; and

   Inserted: "(ii) individuals who are not executive officers and senior management of the entity (including individuals who are officers or employees of other members of the expanded affiliated group which includes the entity) shall be treated as executive officers and senior management if such individuals exercise the day-to-day responsibilities of the entity described in clause (i).".

   Inserted: (2) Clerical amendment.--The table of sections at the beginning of such chapter is amended by inserting after the item related to section 2337 the following new item:

   Inserted: "2338. Prohibition on contracts with inverted domestic corporations.".

   Original wording

   At the end of subtitle B of title VIII, add the following:

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As printed