II 

113TH CONGRESS 

1ST SESSION S. 1844 

To restore full military retirement benefits by closing corporate tax loopholes. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 17, 2013 

Mrs. SHAHEEN (for herself, Mr. SCHATZ, Mr. WARNER, Mr. UDALL of New 

Mexico, Mr. REED, Ms. HIRONO, Mr. SANDERS, Mr. FRANKEN, Mr. 

BLUMENTHAL, Mr. MERKLEY, Ms. WARREN, Mr. KAINE, Mr. KING, Mr. 

BEGICH, Mr. UDALL of Colorado, Ms. KLOBUCHAR, and Ms. LANDRIEU) 

introduced the following bill; which was read twice and referred to the 

Committee on Finance 

A BILL 

To restore full military retirement benefits by closing 

corporate tax loopholes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Military Retirement 

5 Restoration Act’’. 

6 SEC. 2. REPEAL OF REDUCTIONS MADE BY BIPARTISAN 

7 BUDGET ACT OF 2013. 

8 Section 403 of the Bipartisan Budget Act of 2013 

9 is repealed as of the date of the enactment of such Act. 


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1 SEC. 3. TREATMENT OF FOREIGN CORPORATIONS MAN2 AGED AND CONTROLLED IN THE UNITED 

3 STATES AS DOMESTIC CORPORATIONS. 

4 (a) IN GENERAL.—Section 7701 of the Internal Rev5 enue Code of 1986 is amended by redesignating subsection 

6 (p) as subsection (q) and by inserting after subsection (o) 

7 the following new subsection: 

8 ‘‘(p) CERTAIN CORPORATIONS MANAGED AND CON9 TROLLED IN THE UNITED STATES TREATED AS DOMES10 TIC FOR INCOME TAX.— 

11 ‘‘(1) IN GENERAL.—Notwithstanding subsection 

12 (a)(4), in the case of a corporation described in 

13 paragraph (2) if— 

14 ‘‘(A) the corporation would not otherwise 

15 be treated as a domestic corporation for pur16 poses of this title, but 

17 ‘‘(B) the management and control of the 

18 corporation occurs, directly or indirectly, pri19 marily within the United States, 

20 then, solely for purposes of chapter 1 (and any other 

21 provision of this title relating to chapter 1), the cor22 poration shall be treated as a domestic corporation. 

23 ‘‘(2) CORPORATION DESCRIBED.— 

24 ‘‘(A) IN GENERAL.—A corporation is de25 scribed in this paragraph if— 


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•S 1844 IS

1 ‘‘(i) the stock of such corporation is 

2 regularly traded on an established securi3 ties market, or 

4 ‘‘(ii) the aggregate gross assets of 

5 such corporation (or any predecessor there6 of), including assets under management 

7 for investors, whether held directly or indi8 rectly, at any time during the taxable year 

9 or any preceding taxable year is 

10 $50,000,000 or more. 

11 ‘‘(B) GENERAL EXCEPTION.—A corpora12 tion shall not be treated as described in this 

13 paragraph if— 

14 ‘‘(i) such corporation was treated as a 

15 corporation described in this paragraph in 

16 a preceding taxable year, 

17 ‘‘(ii) such corporation— 

18 ‘‘(I) is not regularly traded on an 

19 established securities market, and 

20 ‘‘(II) has, and is reasonably ex21 pected to continue to have, aggregate 

22 gross assets (including assets under 

23 management for investors, whether 

24 held directly or indirectly) of less than 

25 $50,000,000, and 


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1 ‘‘(iii) the Secretary grants a waiver to 

2 such corporation under this subparagraph. 

3 ‘‘(3) MANAGEMENT AND CONTROL.— 

4 ‘‘(A) IN GENERAL.—The Secretary shall 

5 prescribe regulations for purposes of deter6 mining cases in which the management and 

7 control of a corporation is to be treated as oc8 curring primarily within the United States. 

9 ‘‘(B) EXECUTIVE OFFICERS AND SENIOR

10 MANAGEMENT.—Such regulations shall provide 

11 that— 

12 ‘‘(i) the management and control of a 

13 corporation shall be treated as occurring 

14 primarily within the United States if sub15 stantially all of the executive officers and 

16 senior management of the corporation who 

17 exercise day-to-day responsibility for mak18 ing decisions involving strategic, financial, 

19 and operational policies of the corporation 

20 are located primarily within the United 

21 States, and 

22 ‘‘(ii) individuals who are not executive 

23 officers and senior management of the cor24 poration (including individuals who are of25 ficers or employees of other corporations in 


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1 the same chain of corporations as the cor2 poration) shall be treated as executive offi3 cers and senior management if such indi4 viduals exercise the day-to-day responsibil5 ities of the corporation described in clause 

6 (i). 

7 ‘‘(C) CORPORATIONS PRIMARILY HOLDING

8 INVESTMENT ASSETS.—Such regulations shall 

9 also provide that the management and control 

10 of a corporation shall be treated as occurring 

11 primarily within the United States if— 

12 ‘‘(i) the assets of such corporation (di13 rectly or indirectly) consist primarily of as14 sets being managed on behalf of investors, 

15 and 

16 ‘‘(ii) decisions about how to invest the 

17 assets are made in the United States.’’. 

18 (b) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to taxable years beginning on or 

20 after the date which is 2 years after the date of the enact21 ment of this Act, whether or not regulations are issued 

22 under section 7701(p)(3) of the Internal Revenue Code 

23 of 1986, as added by this section. 

Æ 


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