‘‘(B) the amount of indebtedness of the 
controlled foreign corporation to any related 
person (as so defined) as of the close of Sep-
tember 26, 2008. 
All controlled foreign corporations with respect to 
which the taxpayer is a United States shareholder 
shall be treated as one controlled foreign corporation 
for purposes of this paragraph. The Secretary may 
prescribe such regulations as may be necessary or 
appropriate to prevent the avoidance of the purposes 
of this paragraph, including regulations which pro-
vide that cash dividends shall not be taken into ac-
count under subsection (a) to the extent such divi-
dends are attributable to the direct or indirect trans-
fer (including through the use of intervening entities 
or capital contributions) of cash or other property 
from a related person (as so defined) to a controlled 
foreign corporation. 
‘‘(4) REQUIREMENTS.— 
‘‘(A) REQUIREMENT TO INVEST IN UNITED 
STATES.—Except as provided by subparagraph 
(B), subsection (a) shall not apply to any divi-
dend received by a United States shareholder 
unless the amount of the dividend is invested in 
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the United States pursuant to a domestic rein-
vestment plan which— 
‘‘(i) is approved by the taxpayer’s 
president, chief executive officer, or com-
parable official before the payment of such 
dividend and subsequently approved by the 
taxpayer’s board of directors, management 
committee, executive committee, or similar 
body; and 
‘‘(ii) provides for the reinvestment of 
such dividend in the United States (other 
than as payment for executive compensa-
tion), including as a source for the funding 
of worker hiring and training, infrastruc-
ture, research and development, capital in-
vestments, or the financial stabilization of 
the corporation for the purposes of job re-
tention or creation. 
‘‘(B) DISTRESSED
DEBT.—The require-
ments of this subparagraph are met if amounts 
repatriated are invested in distressed debt (as 
defined by the Secretary) for at least 1 year. 
‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
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‘‘(1) APPLICABLE
FINANCIAL
STATEMENT.— 
The term ‘applicable financial statement’ means— 
‘‘(A) with respect to a United States 
shareholder which is required to file a financial 
statement with the Securities and Exchange 
Commission (or which is included in such a 
statement so filed by another person), the most 
recent audited annual financial statement (in-
cluding the notes which form an integral part 
of such statement) of such shareholder (or 
which includes such shareholder)— 
‘‘(i) which was so filed on or before 
June 30, 2007; and 
‘‘(ii) which was certified on or before 
June 30, 2007, as being prepared in ac-
cordance with generally accepted account-
ing principles; and 
‘‘(B) with respect to any other United 
States shareholder, the most recent audited fi-
nancial statement (including the notes which 
form an integral part of such statement) of 
such shareholder (or which includes such share-
holder)— 
‘‘(i) which was certified on or before 
June 30, 2007, as being prepared in ac-
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cordance with generally accepted account-
ing principles; and 
‘‘(ii) which is used for the purposes of 
a statement or report— 
‘‘(I) to creditors; 
‘‘(II) to shareholders; or 
‘‘(III) for any other substantial 
nontax purpose. 
‘‘(2) BASE PERIOD YEAR.— 
‘‘(A) IN GENERAL.—The base period year 
is the first taxable year ending in 2007. 
‘‘(B) MERGERS, ACQUISITIONS, ETC.— 
‘‘(i) IN
GENERAL.—Rules similar to 
the rules of subparagraphs (A) and (B) of 
section 41(f)(3) shall apply for purposes of 
this paragraph. 
‘‘(ii) SPIN-OFFS, ETC.—If there is a 
distribution to which section 355 (or so 
much of section 356 as relates to section 
355) applies during the base period year 
and the controlled corporation (within the 
meaning of section 355) is a United States 
shareholder— 
‘‘(I) the controlled corporation 
shall be treated as being in existence 
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during the period that the distributing 
corporation (within the meaning of 
section 355) is in existence; and 
‘‘(II) for purposes of applying 
subsection (b)(2) to the controlled cor-
poration and the distributing corpora-
tion, amounts described in subsection 
(b)(2)(B) which are received or in-
cludible by the distributing corpora-
tion or controlled corporation (as the 
case may be) before the distribution 
referred to in subclause (I) from a 
controlled foreign corporation shall be 
allocated between such corporations in 
proportion to their respective interests 
as United States shareholders of such 
controlled foreign corporation imme-
diately after such distribution. 
Subclause (II) shall not apply if neither 
the controlled corporation nor the distrib-
uting corporation is a United States share-
holder of such controlled foreign corpora-
tion immediately after such distribution. 
‘‘(3) DIVIDEND.—The term ‘dividend’ shall not 
include amounts includible in gross income as a divi-
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dend under section 78, 367, or 1248. In the case of 
a liquidation under section 332 to which section 
367(b) applies, the preceding sentence shall not 
apply to the extent the United States shareholder 
actually receives cash as part of the liquidation. 
‘‘(4) COORDINATION
WITH
DIVIDENDS
RE-
CEIVED DEDUCTION.—No deduction shall be allowed 
under section 243 or 245 for any dividend for which 
a deduction is allowed under this section. 
‘‘(5) CONTROLLED GROUPS.— 
‘‘(A) IN
GENERAL.—All United States 
shareholders which are members of an affiliated 
group filing a consolidated return under section 
1501 shall be treated as one United States 
shareholder. 
‘‘(B) 
APPLICATION
OF
$500,000,000 
LIMIT.—All corporations which are treated as a 
single employer under section 52(a) shall be 
limited to one $500,000,000 amount in sub-
section (b)(1)(A), and such amount shall be di-
vided among such corporations under regula-
tions prescribed by the Secretary. 
‘‘(C) PERMANENTLY
REINVESTED
EARN-
INGS.—If a financial statement is an applicable 
financial statement for more than one United 
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