H.R. 4679House113th Congress (2013-2015)In Committee

Stop Corporate Inversions Act of 2014

Introduced May 20, 2014

Legislative Activity

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HouseIntro Referral Latest Action

Referred to the House Committee on Ways and Means.

May 20, 2014

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HouseIntro Referral

Introduced in House

May 20, 2014

HouseIntro Referral

Referred to the House Committee on Ways and Means.

May 20, 2014

Floor Debate

10 members

What members said about H.R. 4679 on the floor

1 Republican9 Democrats
Jared Polis
Rep. Jared PolisD-CO-2 · Sep 10, 2014

Mr. Speaker, I yield myself such time as I may consume, and I thank the gentleman for yielding me the customary 30 minutes. I am hearing quotes given about what people promised when and what is…

Michael C. Burgess
Rep. Michael C. BurgessR-TX-26 · Sep 10, 2014

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 717 and ask for its immediate consideration. Mr. Speaker, for the purpose of debate only, I yield the customary 30…

Theodore E. Deutch
Rep. Theodore E. DeutchD-FL-21 · Sep 10, 2014

Mr. Speaker, I thank my friend from Colorado for yielding. I rise to urge the defeat of the motion on ordering the previous question on this rule. Most Americans would be outraged to see the 113th…

Donna F. Edwards
Rep. Donna F. EdwardsD-MD-4 · Sep 10, 2014

I thank the gentleman from Colorado for yielding. Mr. Speaker, I rise today in support of defeating the motion on ordering the previous question. The GOP has put forward H.R. 3522, which would…

Joe Courtney
Rep. Joe CourtneyD-CT-2 · Sep 10, 2014

Mr. Speaker, I rise in opposition to the rule. Again, Mr. Polis, I think, very powerfully stated how this majority once again is denying a free and open amendment process, or even a limited amendment…

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Gene Green
Rep. Gene GreenD-TX-29 · Sep 10, 2014

Mr. Speaker, I rise in opposition to H.R. 3522. Mr. Speaker, I rise today to express my opposition to H.R. 3522, the Employee Health Care Protection Act. While the title of this legislation and those…

John A. Yarmuth
Rep. John A. YarmuthD-KY-3 · Sep 10, 2014

I thank the gentleman for yielding. Mr. Speaker, I rise to oppose the previous question and to urge support of the Democracy for All Amendment that we intend to offer if the question is defeated. The…

Steve Cohen
Rep. Steve CohenD-TN-9 · Sep 10, 2014

I appreciate the time. Mr. Speaker, this is a tremendously important topic because this Congress, unfortunately, and our government are affected so much by political contributions. Because of Baker…

John P. Sarbanes
Rep. John P. SarbanesD-MD-3 · Sep 10, 2014

I thank my colleague for yielding. Mr. Speaker, I urge a vote ``no'' on the previous question as well so we can allow consideration of the Democracy for All constitutional amendment, which would…

Sander M. Levin
Rep. Sander M. LevinD-MI-9 · Sep 10, 2014

Mr. Speaker, I urge we defeat the previous question for two reasons, and I want to speak to one of them. Right now, corporations can move their tax address overseas and avoid or lower their U.S.…

Bill Text

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Introduced in HouseIssued May 20, 2014

I

113th CONGRESS

2d Session

H. R. 4679

IN THE HOUSE OF REPRESENTATIVES

May 20, 2014

Mr. Levin (for himself, Mr. Rangel, Mr. McDermott, Mr. Neal, Mr. Doggett, Mr. Larson of Connecticut, Mr. Danny K. Davis of Illinois, Mr. Van Hollen, Ms. DeLauro, and Ms. Schakowsky) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to modify the rules relating to inverted corporations.

1.

Short title

This Act may be cited as the Stop Corporate Inversions Act of 2014.

2.

Modifications to rules relating to inverted corporations

(a)

In general

Subsection (b) of section 7874 of the Internal Revenue Code of 1986 is amended to read as follows:

(b)

Inverted corporations treated as domestic corporations

(1)

In general

Notwithstanding section 7701(a)(4), a foreign corporation shall be treated for purposes of this title as a domestic corporation if—

(A)

such corporation would be a surrogate foreign corporation if subsection (a)(2) were applied by substituting 80 percent for 60 percent, or

(B)

such corporation is an inverted domestic corporation.

(2)

Inverted domestic corporation

For purposes of this subsection, a foreign corporation shall be treated as an inverted domestic corporation if, pursuant to a plan (or a series of related transactions)—

(A)

the entity completes after May 8, 2014, the direct or indirect acquisition of—

(i)

substantially all of the properties held directly or indirectly by a domestic corporation, or

(ii)

substantially all of the assets of, or substantially all of the properties constituting a trade or business of, a domestic partnership, and

(B)

after the acquisition, either—

(i)

more than 50 percent of the stock (by vote or value) of the entity is held—

(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

(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

(ii)

the management and control of the expanded affiliated group which includes the entity occurs, directly or indirectly, primarily within the United States, and such expanded affiliated group has significant domestic business activities.

(3)

Exception for corporations with substantial business activities in foreign country of organization

A foreign corporation described in paragraph (2) shall not be treated as an inverted domestic corporation if after the acquisition the expanded affiliated group which includes the entity has substantial business activities in the foreign country in which or under the law of which the entity is created or organized when compared to the total business activities of such expanded affiliated group. For purposes of subsection (a)(2)(B)(iii) and the preceding sentence, the term substantial business activities shall have the meaning given such term under regulations in effect on May 8, 2014, except that the Secretary may issue regulations increasing the threshold percent in any of the tests under such regulations for determining if business activities constitute substantial business activities for purposes of this paragraph.

(4)

Management and control

For purposes of paragraph (2)(B)(ii)—

(A)

In general

The Secretary shall prescribe regulations for purposes of determining cases in which the management and control of an expanded affiliated group is to be treated as occurring, directly or indirectly, primarily within the United States. The regulations prescribed under the preceding sentence shall apply to periods after May 8, 2014.

(B)

Executive officers and senior management

Such regulations shall provide that the management and control of an expanded affiliated group shall be treated as occurring, directly or indirectly, primarily within the United States if substantially all of the executive officers and senior management of the expanded affiliated group who exercise day-to-day responsibility for making decisions involving strategic, financial, and operational policies of the expanded affiliated group are based or primarily located within the United States. Individuals who in fact exercise such day-to-day responsibilities shall be treated as executive officers and senior management regardless of their title.

(5)

Significant domestic business activities

For purposes of paragraph (2)(B)(ii), an expanded affiliated group has significant domestic business activities if at least 25 percent of—

(A)

the employees of the group are based in the United States,

(B)

the employee compensation incurred by the group is incurred with respect to employees based in the United States,

(C)

the assets of the group are located in the United States, or

(D)

the income of the group is derived in the United States,

determined in the same manner as such determinations are made for purposes of determining substantial business activities under regulations referred to in paragraph (3) as in effect on May 8, 2014, but applied by treating all references in such regulations to foreign country and relevant foreign country as references to the United States. The Secretary may issue regulations decreasing the threshold percent in any of the tests under such regulations for determining if business activities constitute significant domestic business activities for purposes of this paragraph.

.

(b)

Conforming amendments

(1)

Clause (i) of section 7874(a)(2)(B) of such Code is amended by striking after March 4, 2003, and inserting after March 4, 2003, and before May 9, 2014,.

(2)

Subsection (c) of section 7874 of such Code is amended—

(A)

in paragraph (2)—

(i)

by striking subsection (a)(2)(B)(ii) and inserting subsections (a)(2)(B)(ii) and (b)(2)(B)(i), and

(ii)

by inserting or (b)(2)(A) after (a)(2)(B)(i) in subparagraph (B),

(B)

in paragraph (3), by inserting or (b)(2)(B)(i), as the case may be, after (a)(2)(B)(ii),

(C)

in paragraph (5), by striking subsection (a)(2)(B)(ii) and inserting subsections (a)(2)(B)(ii) and (b)(2)(B)(i), and

(D)

in paragraph (6), by inserting or inverted domestic corporation, as the case may be, after surrogate foreign corporation.

(c)

Effective date

The amendments made by this section shall apply to taxable years ending after May 8, 2014.