S.Amdt. 1811

SA 1811. Mr. BLUNT submitted an amendment intended to be proposed to
amendment SA 1618 proposed by Mr. McConnell (for Mr. Hatch (for himself
and Ms. Murkowski)) to the bill H.R. 1, to provide for reconciliation
pursuant to titles II and V of the concurrent resolution on the budget
for fiscal year 2018; which was ordered to lie on the table; as
follows:

On page 381, line 1, strike ``(g) Regulations.--'' and
insert:
``(g) Election to Be Treated as a Specified 10-percent
Owned Foreign Corporation.--For purposes of this section--
``(1) In general.--An electing insurance, banking, and
financing branch shall be treated as a specified 10-percent
owned foreign corporation.
``(2) Electing insurance, banking, and financing branch.--
The term `electing insurance, banking, and financing branch'
means, with respect to any taxable year, a qualified business
unit (as defined in section 989(a)) of a domestic
corporation, if--
``(A) the domestic corporation is an insurance company
taxable under subchapter L or is a bank taxable under
subchapter H,
``(B) the qualified business unit is a qualified insurance
branch or a qualified banking and financing branch, and
``(C) the election described in paragraph (5) is in effect
with respect to such branch for the taxable year.
``(3) Taxable income of domestic corporation computed
without regard to qualified business unit.--For purposes of
this title, the taxable income of a domestic corporation
described in paragraph (2)(A) shall be computed without
regard to items of the qualified business unit described in
paragraph (2)(B) which are separately accounted for in
accordance with paragraph (6).
``(4) Definitions.--
``(A) Qualified insurance branch.--The term `qualified
insurance branch' means a qualified business unit (within the
meaning of section 989(a)) of a domestic corporation that is
an insurance company taxable under subchapter L, if such unit
is licensed, authorized, or regulated by the applicable
insurance regulatory body for its home country to sell
insurance, reinsurance, or annuity contracts to persons other
than related persons (within the meaning of section
954(d)(3)) in such home country. Any term used in this
subparagraph which is also used in section 953(e) shall have
the meaning given to such term by section 953(e).
``(B) Qualified banking and financing branch.--The term
`qualified banking and financing branch' means a qualified
business unit (within the meaning of section 989(a)) of a
domestic corporation that is a bank taxable under subchapter
H, if such unit is predominantly engaged in the active
conduct of a banking, financing, or similar business, and
conducts substantial activity with respect to such business.
Any term used in this subparagraph which is also used in
section 954(h) shall have the meaning given to such term by
section 954(h).
``(5) Election.--
``(A) In general.--A domestic corporation may make the
election described in this paragraph with respect to any
qualified insurance branch or qualified banking and financing
branch for any taxable year.
``(B) Duration and termination of election.--Subject to
subparagraph (C), an election made under this paragraph for
any taxable year shall remain in effect for all subsequent
taxable years, except that it may be revoked with the consent
of the Secretary.
``(C) Timing of election.--The election provided by this
paragraph shall be made not later than the time prescribed by
law for filing the return for the taxable year (including
extensions thereof) with respect to which such election is
made, and such election and any approved revocation thereof
shall be made in the manner provided by the Secretary.
``(6) Separate accounting required.--Any domestic
corporation which makes the election described in paragraph
(5) with respect to a qualified business unit shall establish
and maintain a separate account for the various income,
exclusion, deduction, asset, reserve, liability, and surplus
items properly attributable to the qualified business unit.
Such separate accounting shall be made--

[[Page S7722]]

``(A) in accordance with the method regularly employed by
such domestic company, if such method clearly reflects income
derived from, and the other items attributable to, the
qualified business unit, and
``(B) in all other cases, in accordance with regulations
prescribed by the Secretary.
``(7) Effect of election and termination.--
``(A) In general.--For purposes of this title, each
electing insurance, banking, and financing branch shall be
treated as a foreign corporation organized in its home
country (as defined in section 953(e)(6)(B)).
``(B) Treatment of assets and liabilities.--Any domestic
corporation making an election under paragraph (5) shall be
treated as transferring (as of the first day of the first
taxable year to which such election applies) all of the
assets and liabilities separately accounted for under
paragraph (6) to a foreign corporation in connection with an
exchange to which section 351 applies, subject to section
367.
``(C) Effect of termination of election.--If an election is
made by a domestic corporation under paragraph (5) for any
taxable year, and such election ceases to apply to the
electing insurance, banking, and financing branch for any
subsequent taxable year, the electing insurance, banking, and
financing branch treated as a foreign corporation shall be
treated (as of the first day of the first taxable year
following such cessation) as liquidating under section 332,
subject to section 367.
``(8) Transactions between electing insurance, banking, and
financing branch and domestic corporation.--Any amount
directly or indirectly transferred or credited from an
electing insurance, banking, and financing branch account
established pursuant to paragraph (6) to one or more other
accounts of such domestic company shall be treated as a
deemed distribution for purposes of this title.
``(h) Regulations.--
______