II 

113TH CONGRESS 

2D SESSION S. 2489 

To amend the Internal Revenue Code of 1986 to ensure that sufficient 

funding is made available for the Highway Trust Fund, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 18, 2014 

Mr. WALSH introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to ensure 

that sufficient funding is made available for the Highway 

Trust Fund, and for other purposes. 

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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘American Jobs for American Infrastructure Act’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—HIGHWAY TRUST FUND 

Sec. 101. Ensuring sufficient funding for the Highway Trust Fund. 


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Sec. 102. Sense of Congress regarding the Surface Transportation reauthorization. 

TITLE II—WATER INFRASTRUCTURE 

Sec. 201. Reclamation Water Infrastructure Fund. 

Sec. 202. Sense of Congress regarding direction of Secretary of the Interior. 

TITLE III—ENERGY INFRASTRUCTURE 

Sec. 301. Energy Upgrade and Retrofit Infrastructure Fund. 

Sec. 302. Sense of Congress regarding direction of Secretary of Energy. 

TITLE IV—TAXATION OF FOREIGN INCOME 

Sec. 401. Allocation of expenses and taxes on basis of repatriation of foreign 

income. 

Sec. 402. Modifications to rules relating to inverted corporations. 

TITLE V—DEFICIT REDUCTION 

Sec. 501. Deficit reduction. 

1 TITLE I—HIGHWAY TRUST FUND 

2 SEC. 101. ENSURING SUFFICIENT FUNDING FOR THE HIGH3 WAY TRUST FUND. 

4 (a) IN GENERAL.—Section 9503(f) of the Internal 

5 Revenue Code of 1986 is amended by redesignating para6 graph (5) as paragraph (6) and by inserting after para7 graph (4) the following new paragraph: 

8 ‘‘(5) ENSURING ADEQUATE BALANCES IN HIGH9 WAY ACCOUNT AND MASS TRANSIT ACCOUNT.—For 

10 the period of fiscal years 2014 through 2018, out of 

11 money in the Treasury not otherwise appropriated, 

12 there are hereby appropriated— 

13 ‘‘(A) in the case of the Highway Account 

14 (as defined in subsection (e)(5)(B)) in the 

15 Highway Trust Fund, such amounts as are de16 termined by the Secretary to be necessary to 


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1 ensure that the balance of such account is not 

2 less than $4,000,000,000 for any quarter dur3 ing such period, and 

4 ‘‘(B) in the case of the Mass Transit Ac5 count in the Highway Trust Fund, such 

6 amounts as are determined by the Secretary to 

7 be necessary to ensure that the balance of such 

8 account is not less than $1,000,000,000 for any 

9 quarter during such period.’’. 

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

11 this section shall take effect on the date of the enactment 

12 of this Act. 

13 SEC. 102. SENSE OF CONGRESS REGARDING THE SURFACE 

14 TRANSPORTATION REAUTHORIZATION. 

15 It is the sense of Congress that Congress should pro16 vide annual inflation increases for the Federal Lands Ac17 cess Program, the Federal Lands Transportation Pro18 gram, and the Tribal Transportation Program in the next 

19 Surface Transportation reauthorization. 

20 TITLE II—WATER 

21 INFRASTRUCTURE 

22 SEC. 201. RECLAMATION WATER INFRASTRUCTURE FUND. 

23 (a) ESTABLISHMENT OF FUND.—There is estab24 lished in the Treasury a fund to be known as the ‘‘Rec25 lamation Water Infrastructure Fund’’ (referred to in this 


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1 section as the ‘‘Fund’’), to be administered by the Sec2 retary of the Interior, to be available without fiscal year 

3 limitation and not subject to appropriation, for use in ac4 cordance with subsection (e). 

5 (b) DEPOSITS.—For the period of fiscal years 2015 

6 through 2036, the Secretary of the Treasury shall deposit 

7 in the Fund— 

8 (1) of the revenues that would otherwise be de9 posited for each fiscal year in the reclamation fund 

10 established by the first section of the Act of June 

11 17, 1902 (32 Stat. 388, chapter 1093), 

12 $150,000,000; and 

13 (2) out of amounts in the Treasury not other14 wise obligated, $6,500,000,000. 

15 (c) INVESTMENT.— 

16 (1) IN GENERAL.—The Secretary of the Treas17 ury shall invest such portion of the Fund as is not, 

18 in the judgment of the Secretary, required to meet 

19 current withdrawals. 

20 (2) CREDITS TO FUND.—The interest on, and 

21 the proceeds from the sale or redemption of, any ob22 ligations held in the Fund shall be credited to, and 

23 form a part of, the Fund. 


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1 (d) PROHIBITION.—Amounts in the Fund may not 

2 be made available for any purpose other than a purpose 

3 described in subsection (e). 

4 (e) USE OF FUNDS.—The Secretary of the Interior 

5 may use amounts in the Fund for the following purposes: 

6 (1) RURAL WATER PROJECTS.—To complete 

7 construction (but not including operation or mainte8 nance) of rural water projects— 

9 (A) that were authorized to be carried out 

10 by the Secretary on or before the date of enact11 ment of this Act; or 

12 (B) for which— 

13 (i) pursuant to section 106(e) of the 

14 Rural Water Supply Act of 2006 (43 

15 U.S.C. 2405(e)), a feasibility study has 

16 been submitted to the Secretary by not 

17 later than December 31, 2015; and 

18 (ii) an Act enacted after the date of 

19 enactment of this Act authorizes construc20 tion. 

21 (2) DEFERRED MAINTENANCE OF INDIAN IRRI22 GATION PROJECTS.—To address deferred mainte23 nance needs of Indian irrigation projects (including 

24 maintenance, repair, and replacement activities for 

25 any structures, facilities, equipment, or vehicles used 


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1 in connection with the operation of those projects) 

2 that, on the date of enactment of this Act— 

3 (A) are owned by the Federal Government, 

4 as listed in the Federal inventory required by 

5 Executive Order 13327 (40 U.S.C. 121 note; 

6 relating to Federal real property asset manage7 ment); 

8 (B) are managed by the Bureau of Indian 

9 Affairs (including projects managed under con10 tracts or compacts pursuant to the Indian Self11 Determination and Education Assistance Act 

12 (25 U.S.C. 450 et seq.)); and 

13 (C) have deferred maintenance documented 

14 by the Bureau of Indian Affairs. 

15 (3) INDIAN RESERVED WATER RIGHTS SETTLE16 MENTS.—To provide amounts to complete construc17 tion, planning, and design of any project, or to im18 plement any provision of Federal law, that— 

19 (A) settles or otherwise resolves, in whole 

20 or in part, litigation involving the United States 

21 and the rights of one or more federally recog22 nized Indian tribes to access, use, or manage 

23 water resources; or 

24 (B) implements an agreement approved by 

25 Congress pursuant to which one or more federVerDate Mar 15 2010 01:59 Jun 21, 2014 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2489.IS S2489

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1 ally recognized Indian tribes agree to some limi2 tation on the exercise of rights or claims to ac3 cess, use, or manage water resources. 

4 (f) ANNUAL REPORTS.— 

5 (1) IN GENERAL.—Not later than 60 days after 

6 the end of each fiscal year beginning with fiscal year 

7 2015, the Secretary of the Interior shall submit to 

8 the Committee on Appropriations of the House of 

9 Representatives, the Committee on Appropriations of 

10 the Senate, and authorizing committees a report on 

11 the operation of the Fund during the fiscal year. 

12 (2) CONTENTS.—Each report shall include, for 

13 the fiscal year covered by the report, the following: 

14 (A) A statement of the amounts deposited 

15 into the Fund. 

16 (B) A description of the expenditures made 

17 from the Fund for the fiscal year, including the 

18 purpose of the expenditures. 

19 (C) Recommendations for additional au20 thorities to fulfill the purpose of the Fund. 

21 (D) A statement of the balance remaining 

22 in the Fund at the end of the fiscal year. 


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1 SEC. 202. SENSE OF CONGRESS REGARDING DIRECTION OF 

2 SECRETARY OF THE INTERIOR. 

3 It is the sense of Congress that Congress should pro4 vide direction to the Secretary of the Interior with respect 

5 to expenditures under this title, including— 

6 (1) requirements under the annual budget sub7 mission of the President; 

8 (2) annual reporting requirements describing 

9 final allocations; 

10 (3) programmatic goals to carry out this title; 

11 and 

12 (4) funding prioritization criteria to serve as a 

13 methodology for distributing funds. 

14 TITLE III—ENERGY 

15 INFRASTRUCTURE 

16 SEC. 301. ENERGY UPGRADE AND RETROFIT INFRASTRUC17 TURE FUND. 

18 (a) ESTABLISHMENT OF FUND.—There is estab19 lished in the Treasury a fund to be known as the ‘‘Energy 

20 Upgrade and Retrofit Infrastructure Fund’’ (referred to 

21 in this section as the ‘‘Fund’’), to be administered by the 

22 Secretary of Energy, to be available without fiscal year 

23 limitation and not subject to appropriation, for use in ac24 cordance with subsection (e). 

25 (b) DEPOSITS.—For the period of fiscal years 2015 

26 through 2034, the Secretary of the Treasury shall deposit 


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1 in the Fund, out of amounts in the Treasury not otherwise 

2 obligated, $8,000,000,000. 

3 (c) INVESTMENT.— 

4 (1) IN GENERAL.—The Secretary of the Treas5 ury shall invest such portion of the Fund as is not, 

6 in the judgment of the Secretary, required to meet 

7 current withdrawals. 

8 (2) CREDITS TO FUND.—The interest on, and 

9 the proceeds from the sale or redemption of, any ob10 ligations held in the Fund shall be credited to, and 

11 form a part of, the Fund. 

12 (d) PROHIBITION.—Amounts in the Fund may not 

13 be made available for any purpose other than a purpose 

14 described in subsection (e). 

15 (e) USE OF FUNDS.— 

16 (1) IN GENERAL.—Of amounts in the Fund, 

17 the Secretary of Energy may use, in accordance with 

18 this title, such sums as are necessary to provide 

19 grants, loans, loan guarantees, or other credit fi20 nancing instruments, including any such instruments 

21 under the Energy Policy Act of 2005 (42 U.S.C. 

22 15801 et seq.), to support novel and innovative tech23 nologies that— 

24 (A) capture or prevent carbon dioxide 

25 emissions from carbon-based fuels; 


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1 (B) enable the beneficial use of carbon di2 oxide and other greenhouse gases; 

3 (C) enable the long-term storage of carbon 

4 dioxide; 

5 (D) reduce net carbon emissions from the 

6 fleet of electric generation units in a State or 

7 region of the bulk electric system; or 

8 (E) construct, upgrade, or retrofit electric 

9 transmission property that serves the public in10 terest by facilitating the deployment of low-car11 bon energy sources while ensuring reliability 

12 and reducing congestion. 

13 (2) PRIORITIZATION.—In carrying out para14 graph (1), the Secretary of Energy shall give pri15 ority to projects that upgrade or retrofit existing in16 frastructure for the generation and transmission of 

17 electric power. 

18 (3) COMMERCIAL-SCALE COAL TECHNOLOGY.— 

19 (A) EXPENDITURE.—Not less than 60 per20 cent of amounts expended under this subsection 

21 shall be for commercial-scale, coal-fired electric 

22 generation units— 

23 (i) designed to generate and sell elec24 tric power directly to consumers or for re25 sale; and 


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1 (ii) with a carbon dioxide capture and 

2 storage system having a useful life of not 

3 fewer than 15 years. 

4 (B) ELIGIBLE PROJECTS.—Eligible 

5 projects under this paragraph include projects 

6 for— 

7 (i) the construction of new coal-fired 

8 electric generation units; 

9 (ii) the retrofitting of existing coal10 fired electric generation units; or 

11 (iii) the construction of carbon dioxide 

12 transmission pipelines to transport carbon 

13 dioxide from carbon capture and sequestra14 tion facilities to— 

15 (I) sequestration sites; or 

16 (II) sites at which the carbon di17 oxide will be used for hydrocarbon re18 covery. 

19 (f) ANNUAL REPORTS.— 

20 (1) IN GENERAL.—Not later than 60 days after 

21 the end of each fiscal year beginning with fiscal year 

22 2015, the Secretary of Energy shall submit to the 

23 Committee on Appropriations of the House of Rep24 resentatives, the Committee on Appropriations of the 


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1 Senate, and authorizing committees a report on the 

2 operation of the Fund during the fiscal year. 

3 (2) CONTENTS.—Each report shall include, for 

4 the fiscal year covered by the report, the following: 

5 (A) A statement of the amounts deposited 

6 into the Fund. 

7 (B) A description of the expenditures made 

8 from the Fund for the fiscal year, including the 

9 purpose of the expenditures. 

10 (C) Recommendations for additional au11 thorities to fulfill the purpose of the Fund. 

12 (D) A statement of the balance remaining 

13 in the Fund at the end of the fiscal year. 

14 SEC. 302. SENSE OF CONGRESS REGARDING DIRECTION OF 

15 SECRETARY OF ENERGY. 

16 It is the sense of Congress that Congress should pro17 vide direction to the Secretary of Energy with respect to 

18 effects of expenditures under this title on other applicable 

19 Federal programs and laws, including— 

20 (1) provisions of the Internal Revenue Code of 

21 1986 that affect electric power generation and trans22 mission; 

23 (2) existing standards with respect to the per24 centage of carbon dioxide required to be captured 


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1 and stored by projects that receive Federal funds; 

2 and 

3 (3) liability standards with respect to the long4 term storage of carbon dioxide. 

5 TITLE IV—TAXATION OF 

6 FOREIGN INCOME 

7 SEC. 401. ALLOCATION OF EXPENSES AND TAXES ON BASIS 

8 OF REPATRIATION OF FOREIGN INCOME. 

9 (a) IN GENERAL.—Part III of subchapter N of chap10 ter 1 of the Internal Revenue Code of 1986 is amended 

11 by inserting after subpart G the following new subpart: 

12 ‘‘Subpart H—Special Rules for Allocation of Foreign13 Related Deductions 

‘‘Sec. 975. Deductions allocated to deferred foreign income may not offset 

United States source income. 

14 ‘‘SEC. 975. DEDUCTIONS ALLOCATED TO DEFERRED FOR15 EIGN INCOME MAY NOT OFFSET UNITED 

16 STATES SOURCE INCOME. 

17 ‘‘(a) CURRENT YEAR DEDUCTIONS.—For purposes 

18 of this chapter, foreign-related deductions for any taxable 

19 year— 

20 ‘‘(1) shall be taken into account for such tax21 able year only to the extent that such deductions are 

22 allocable to currently-taxed foreign income, and 


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1 ‘‘(2) to the extent not so allowed, shall be taken 

2 into account in subsequent taxable years as provided 

3 in subsection (b). 

4 Foreign-related deductions shall be allocated to currently5 taxed foreign income in the same proportion which cur6 rently-taxed foreign income bears to the sum of currently7 taxed foreign income and deferred foreign income. 

8 ‘‘(b) DEDUCTIONS RELATED TO REPATRIATED DE9 FERRED FOREIGN INCOME.— 

10 ‘‘(1) IN GENERAL.—If there is repatriated for11 eign income for a taxable year, the portion of the 

12 previously deferred deductions allocated to the repa13 triated foreign income shall be taken into account 

14 for the taxable year as a deduction allocated to in15 come from sources outside the United States. Any 

16 such amount shall not be included in foreign-related 

17 deductions for purposes of applying subsection (a) to 

18 such taxable year. 

19 ‘‘(2) PORTION OF PREVIOUSLY DEFERRED DE20 DUCTIONS.—For purposes of paragraph (1), the por21 tion of the previously deferred deductions allocated 

22 to repatriated foreign income is— 

23 ‘‘(A) the amount which bears the same 

24 proportion to such deductions, as 


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1 ‘‘(B) the repatriated income bears to the 

2 previously deferred foreign income. 

3 ‘‘(c) DEFINITIONS AND SPECIAL RULE.—For pur4 poses of this section— 

5 ‘‘(1) FOREIGN-RELATED DEDUCTIONS.—The 

6 term ‘foreign-related deductions’ means the total 

7 amount of deductions and expenses which would be 

8 allocated or apportioned to gross income from 

9 sources without the United States for the taxable 

10 year if both the currently-taxed foreign income and 

11 deferred foreign income were taken into account. 

12 ‘‘(2) CURRENTLY-TAXED FOREIGN INCOME.— 

13 The term ‘currently-taxed foreign income’ means the 

14 amount of gross income from sources without the 

15 United States for the taxable year (determined with16 out regard to repatriated foreign income for such 

17 year). 

18 ‘‘(3) DEFERRED FOREIGN INCOME.—The term 

19 ‘deferred foreign income’ means the excess of— 

20 ‘‘(A) the amount that would be includible 

21 in gross income under subpart F of this part 

22 for the taxable year if— 

23 ‘‘(i) all controlled foreign corporations 

24 were treated as one controlled foreign cor25 poration, and 


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1 ‘‘(ii) all earnings and profits of all 

2 controlled foreign corporations were sub3 part F income (as defined in section 952), 

4 over 

5 ‘‘(B) the sum of— 

6 ‘‘(i) all dividends received during the 

7 taxable year from controlled foreign cor8 porations, plus 

9 ‘‘(ii) amounts includible in gross in10 come under section 951(a). 

11 ‘‘(4) PREVIOUSLY DEFERRED FOREIGN IN12 COME.—The term ‘previously deferred foreign in13 come’ means the aggregate amount of deferred for14 eign income for all prior taxable years to which this 

15 part applies, determined as of the beginning of the 

16 taxable year, reduced by the repatriated foreign in17 come for all such prior taxable years. 

18 ‘‘(5) REPATRIATED FOREIGN INCOME.—The 

19 term ‘repatriated foreign income’ means the amount 

20 included in gross income on account of distributions 

21 out of previously deferred foreign income. 

22 ‘‘(6) PREVIOUSLY DEFERRED DEDUCTIONS.— 

23 The term ‘previously deferred deductions’ means the 

24 aggregate amount of foreign-related deductions not 

25 taken into account under subsection (a) for all prior 


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1 taxable years (determined as of the beginning of the 

2 taxable year), reduced by any amounts taken into 

3 account under subsection (b) for such prior taxable 

4 years. 

5 ‘‘(7) TREATMENT OF CERTAIN FOREIGN

6 TAXES.— 

7 ‘‘(A) PAID BY CONTROLLED FOREIGN COR8 PORATION.—Section 78 shall not apply for pur9 poses of determining currently-taxed foreign in10 come and deferred foreign income. 

11 ‘‘(B) PAID BY TAXPAYER.—For purposes 

12 of determining currently-taxed foreign income, 

13 gross income from sources without the United 

14 States shall be reduced by the aggregate 

15 amount of taxes described in the applicable 

16 paragraph of section 901(b) which are paid by 

17 the taxpayer (without regard to sections 902 

18 and 960) during the taxable year. 

19 ‘‘(d) APPLICATION OF SECTION.—This section— 

20 ‘‘(1) shall be applied before subpart A, and 

21 ‘‘(2) shall be applied separately with respect to 

22 the categories of income specified in section 

23 904(d)(1).’’. 

24 (b) CLERICAL AMENDMENT.—The table of subparts 

25 for part III of subpart N of chapter 1 of such Code is 


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1 amended by inserting after the item relating to subpart 

2 G the following new item: 

‘‘SUBPART H. SPECIAL RULES FOR ALLOCATION OF FOREIGN-RELATED

DEDUCTIONS’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to taxable years beginning after 

5 the date of the enactment of this Act. 

6 SEC. 402. MODIFICATIONS TO RULES RELATING TO IN7 VERTED CORPORATIONS. 

8 (a) IN GENERAL.—Subsection (b) of section 7874 of 

9 the Internal Revenue Code of 1986 is amended to read 

10 as follows: 

11 ‘‘(b) INVERTED CORPORATIONS TREATED AS DO12 MESTIC CORPORATIONS.— 

13 ‘‘(1) IN GENERAL.—Notwithstanding section 

14 7701(a)(4), a foreign corporation shall be treated for 

15 purposes of this title as a domestic corporation if— 

16 ‘‘(A) such corporation would be a surro17 gate foreign corporation if subsection (a)(2) 

18 were applied by substituting ‘80 percent’ for 

19 ‘60 percent’, or 

20 ‘‘(B) such corporation is an inverted do21 mestic corporation. 

22 ‘‘(2) INVERTED DOMESTIC CORPORATION.—For 

23 purposes of this subsection, a foreign corporation 

24 shall be treated as an inverted domestic corporation 


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1 if, pursuant to a plan (or a series of related trans2 actions)— 

3 ‘‘(A) the entity completes after May 8, 

4 2014, the direct or indirect acquisition of— 

5 ‘‘(i) substantially all of the properties 

6 held directly or indirectly by a domestic 

7 corporation, or 

8 ‘‘(ii) substantially all of the assets of, 

9 or substantially all of the properties consti10 tuting a trade or business of, a domestic 

11 partnership, and 

12 ‘‘(B) after the acquisition, either— 

13 ‘‘(i) more than 50 percent of the stock 

14 (by vote or value) of the entity is held— 

15 ‘‘(I) in the case of an acquisition 

16 with respect to a domestic corpora17 tion, by former shareholders of the 

18 domestic corporation by reason of 

19 holding stock in the domestic corpora20 tion, or 

21 ‘‘(II) in the case of an acquisition 

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1 ing a capital or profits interest in the 

2 domestic partnership, or 

3 ‘‘(ii) the management and control of 

4 the expanded affiliated group which in5 cludes the entity occurs, directly or indi6 rectly, primarily within the United States, 

7 and such expanded affiliated group has 

8 significant domestic business activities. 

9 ‘‘(3) EXCEPTION FOR CORPORATIONS WITH

10 SUBSTANTIAL BUSINESS ACTIVITIES IN FOREIGN

11 COUNTRY OF ORGANIZATION.—A foreign corporation 

12 described in paragraph (2) shall not be treated as an 

13 inverted domestic corporation if after the acquisition 

14 the expanded affiliated group which includes the en15 tity has substantial business activities in the foreign 

16 country in which or under the law of which the enti17 ty is created or organized when compared to the 

18 total business activities of such expanded affiliated 

19 group. For purposes of subsection (a)(2)(B)(iii) and 

20 the preceding sentence, the term ‘substantial busi21 ness activities’ shall have the meaning given such 

22 term under regulations in effect on May 8, 2014, ex23 cept that the Secretary may issue regulations in24 creasing the threshold percent in any of the tests 

25 under such regulations for determining if business 


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1 activities constitute substantial business activities for 

2 purposes of this paragraph. 

3 ‘‘(4) MANAGEMENT AND CONTROL.—For pur4 poses of paragraph (2)(B)(ii)— 

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

6 prescribe regulations for purposes of deter7 mining cases in which the management and 

8 control of an expanded affiliated group is to be 

9 treated as occurring, directly or indirectly, pri10 marily within the United States. The regula11 tions prescribed under the preceding sentence 

12 shall apply to periods after May 8, 2014. 

13 ‘‘(B) EXECUTIVE OFFICERS AND SENIOR

14 MANAGEMENT.—Such regulations shall provide 

15 that the management and control of an ex16 panded affiliated group shall be treated as oc17 curring, directly or indirectly, primarily within 

18 the United States if substantially all of the ex19 ecutive officers and senior management of the 

20 expanded affiliated group who exercise day-to21 day responsibility for making decisions involving 

22 strategic, financial, and operational policies of 

23 the expanded affiliated group are based or pri24 marily located within the United States. Indi25 viduals who in fact exercise such day-to-day reVerDate Mar 15 2010 01:59 Jun 21, 2014 Jkt 039200 PO 00000 Frm 00021 Fmt 6652 Sfmt 6201 E:\BILLS\S2489.IS S2489

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1 sponsibilities shall be treated as executive offi2 cers and senior management regardless of their 

3 title. 

4 ‘‘(5) SIGNIFICANT DOMESTIC BUSINESS ACTIVI5 TIES.—For purposes of paragraph (2)(B)(ii), an ex6 panded affiliated group has significant domestic 

7 business activities if at least 25 percent of— 

8 ‘‘(A) the employees of the group are based 

9 in the United States, 

10 ‘‘(B) the employee compensation incurred 

11 by the group is incurred with respect to employ12 ees based in the United States, 

13 ‘‘(C) the assets of the group are located in 

14 the United States, or 

15 ‘‘(D) the income of the group is derived in 

16 the United States, 

17 determined in the same manner as such determina18 tions are made for purposes of determining substan19 tial business activities under regulations referred to 

20 in paragraph (3) as in effect on May 8, 2014, but 

21 applied by treating all references in such regulations 

22 to ‘foreign country’ and ‘relevant foreign country’ as 

23 references to ‘the United States’. The Secretary may 

24 issue regulations decreasing the threshold percent in 

25 any of the tests under such regulations for deterVerDate Mar 15 2010 01:59 Jun 21, 2014 Jkt 039200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\S2489.IS S2489

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1 mining if business activities constitute significant 

2 domestic business activities for purposes of this 

3 paragraph.’’. 

4 (b) CONFORMING AMENDMENTS.— 

5 (1) Clause (i) of section 7874(a)(2)(B) of such 

6 Code is amended by striking ‘‘after March 4, 2003,’’ 

7 and inserting ‘‘after March 4, 2003, and before May 

8 9, 2014,’’. 

9 (2) Subsection (c) of section 7874 of such Code 

10 is amended— 

11 (A) in paragraph (2)— 

12 (i) by striking ‘‘subsection 

13 (a)(2)(B)(ii)’’ and inserting ‘‘subsections 

14 (a)(2)(B)(ii) and (b)(2)(B)(i)’’, and 

15 (ii) by inserting ‘‘or (b)(2)(A)’’ after 

16 ‘‘(a)(2)(B)(i)’’ in subparagraph (B), 

17 (B) in paragraph (3), by inserting ‘‘or 

18 (b)(2)(B)(i), as the case may be,’’ after 

19 ‘‘(a)(2)(B)(ii)’’, 

20 (C) in paragraph (5), by striking ‘‘sub21 section (a)(2)(B)(ii)’’ and inserting ‘‘sub22 sections (a)(2)(B)(ii) and (b)(2)(B)(i)’’, and 

23 (D) in paragraph (6), by inserting ‘‘or in24 verted domestic corporation, as the case may 

25 be,’’ after ‘‘surrogate foreign corporation’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years ending after May 

3 8, 2014. 

4 TITLE V—DEFICIT REDUCTION 

5 SEC. 501. DEFICIT REDUCTION. 

6 For purposes of the amount of any increase in rev7 enue to the Treasury by reason of the provisions of this 

8 Act and the amendments made by this Act, 

9 $1,000,000,000 of such amount shall be, at such times 

10 and in such manner as determined appropriate by the Sec11 retary of the Treasury (or the Secretary’s delegate), de12 posited and credited as general revenue of the Treasury 

13 for the purposes of deficit reduction and shall not be avail14 able for obligation. 

Æ 


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