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† HR 1 EAS 
‘‘(A) IN GENERAL.—The term ‘qualified de-
rivative payment’ means any payment made by 
a taxpayer pursuant to a derivative with respect 
to which the taxpayer— 
‘‘(i) recognizes gain or loss as if such 
derivative were sold for its fair market 
value on the last business day of the taxable 
year (and such additional times as required 
by this title or the taxpayer’s method of ac-
counting), 
‘‘(ii) treats any gain or loss so recog-
nized as ordinary, and 
‘‘(iii) treats the character of all items 
of income, deduction, gain, or loss with re-
spect to a payment pursuant to the deriva-
tive as ordinary. 
‘‘(B) REPORTING REQUIREMENT.—No pay-
ments shall be treated as qualified derivative 
payments under subparagraph (A) for any tax-
able year unless the taxpayer includes in the in-
formation required to be reported under section 
6038B(b)(2) with respect to such taxable year 
such information as is necessary to identify the 
payments to be so treated and such other infor-
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† HR 1 EAS 
mation as the Secretary determines necessary to 
carry out the provisions of this subsection. 
‘‘(3) EXCEPTIONS
FOR
PAYMENTS
OTHERWISE 
TREATED AS BASE EROSION PAYMENTS.—This sub-
section shall not apply to any qualified derivative 
payment if— 
‘‘(A) the payment would be treated as a 
base erosion payment if it were not made pursu-
ant to a derivative, including any interest, roy-
alty, or service payment, or 
‘‘(B) in the case of a contract which has de-
rivative and nonderivative components, the pay-
ment is properly allocable to the nonderivative 
component. 
‘‘(4) DERIVATIVE
DEFINED.—For purposes of 
this subsection— 
‘‘(A) IN
GENERAL.—The term ‘derivative’ 
means any contract (including any option, for-
ward contract, futures contract, short position, 
swap, or similar contract) the value of which, or 
any payment or other transfer with respect to 
which, is (directly or indirectly) determined by 
reference to one or more of the following: 
‘‘(i) Any share of stock in a corpora-
tion.
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† HR 1 EAS 
‘‘(ii) Any evidence of indebtedness. 
‘‘(iii) Any commodity which is actively 
traded. 
‘‘(iv) Any currency. 
‘‘(v) Any rate, price, amount, index, 
formula, or algorithm. 
‘‘(B) TREATMENT
OF
AMERICAN
DEPOSI-
TORY RECEIPTS AND SIMILAR INSTRUMENTS.— 
Except as otherwise provided by the Secretary, 
for purposes of this part, American depository 
receipts (and similar instruments) with respect 
to shares of stock in foreign corporations shall be 
treated as shares of stock in such foreign cor-
porations. 
‘‘(i) REGULATIONS.—The Secretary shall prescribe 
such regulations or other guidance as may be necessary or 
appropriate to carry out the provisions of this section, in-
cluding regulations— 
‘‘(1) providing for such adjustments to the appli-
cation of this section as are necessary to prevent the 
avoidance of the purposes of this section, including 
through— 
‘‘(A) the use of unrelated persons, conduit 
transactions, or other intermediaries, or
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† HR 1 EAS 
‘‘(B) transactions or arrangements designed, 
in whole or in part— 
‘‘(i) to characterize payments otherwise 
subject to this section as payments not sub-
ject to this section, or 
‘‘(ii) to substitute payments not subject 
to this section for payments otherwise sub-
ject to this section and 
‘‘(2) for the application of subsection (g), includ-
ing rules to prevent the avoidance of the exceptions 
under subsection (g)(3).’’. 
(b) REPORTING REQUIREMENTS AND PENALTIES.— 
(1) IN
GENERAL.—Subsection (b) of section 
6038A is amended to read as follows: 
‘‘(b) REQUIRED INFORMATION.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the information described in this subsection is 
such information as the Secretary prescribes by regu-
lations relating to— 
‘‘(A) the name, principal place of business, 
nature of business, and country or countries in 
which organized or resident, of each person 
which— 
‘‘(i) is a related party to the reporting 
corporation, and
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† HR 1 EAS 
‘‘(ii) had any transaction with the re-
porting corporation during its taxable year, 
‘‘(B) the manner in which the reporting 
corporation is related to each person referred to 
in subparagraph (A), and 
‘‘(C) transactions between the reporting cor-
poration and each foreign person which is a re-
lated party to the reporting corporation. 
‘‘(2) 
ADDITIONAL
INFORMATION
REGARDING 
BASE
EROSION
PAYMENTS.—For purposes of sub-
section (a) and section 6038C, if the reporting cor-
poration or the foreign corporation to whom section 
6038C applies is an applicable taxpayer, the informa-
tion described in this subsection shall include— 
‘‘(A) such information as the Secretary de-
termines necessary to determine the base erosion 
minimum tax amount, base erosion payments, 
and base erosion tax benefits of the taxpayer for 
purposes of section 59A for the taxable year, and 
‘‘(B) such other information as the Sec-
retary determines necessary to carry out such 
section. 
For purposes of this paragraph, any term used in this 
paragraph which is also used in section 59A shall
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† HR 1 EAS 
have the same meaning as when used in such sec-
tion.’’. 
(2) INCREASE IN PENALTY.—Paragraphs (1) and 
(2) of section 6038A(d) are each amended by striking 
‘‘$10,000’’ and inserting ‘‘$25,000’’. 
(c) DISALLOWANCE OF CREDITS AGAINST BASE ERO-
SION TAX.—Paragraph (2) of section 26(b) is amended by 
inserting after subparagraph (A) the following new sub-
paragraph: 
‘‘(B) section 59A (relating to base erosion 
and anti-abuse tax),’’. 
(d) CONFORMING AMENDMENTS.— 
(1) The table of parts for subchapter A of chapter 
1 is amended by adding after the item relating to 
part VI the following new item: 
‘‘Part VII. Base erosion and anti-abuse tax’’. 
(2) Paragraph (1) of section 882(a), as amended 
by this Act, is amended by inserting ‘‘ or 59A,’’ after 
‘‘section 11,’’. 
(3) Subparagraph (A) of section 6425(c)(1), as 
amended by section 13001, is amended to read as fol-
lows: 
‘‘(A) the sum of— 
‘‘(i) the tax imposed by section 11, or 
subchapter L of chapter 1, whichever is ap-
plicable, plus
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† HR 1 EAS 
‘‘(ii) the tax imposed by section 59A, 
over’’. 
(4)(A) Subparagraph (A) of section 6655(g)(1), 
as amended by section 13001, is amended by striking 
‘‘plus’’ at the end of clause (i), by redesignating 
clause (ii) as clause (iii), and by inserting after 
clause (i) the following new clause: 
‘‘(ii) the tax imposed by section 59A, 
plus’’. 
(B) Subparagraphs (A)(i) and (B)(i) of section 
6655(e)(2), as amended by section 13001, are each 
amended by inserting ‘‘and modified taxable income’’ 
after ‘‘taxable income’’. 
(C) Subparagraph (B) of section 6655(e)(2) is 
amended by adding at the end the following new 
clause: 
‘‘(iii) MODIFIED TAXABLE INCOME.— 
The term ‘modified taxable income’ has the 
meaning given such term by section 
59A(c)(1).’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall apply to base erosion payments (as defined in 
section 59A(d) of the Internal Revenue Code of 1986, as 
added by this section) paid or accrued in taxable years be-
ginning after December 31, 2017.
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† HR 1 EAS 
PART III—OTHER PROVISIONS 
SEC. 14501. RESTRICTION ON INSURANCE BUSINESS EXCEP-
TION TO PASSIVE FOREIGN INVESTMENT 
COMPANY RULES. 
(a) IN GENERAL.—Section 1297(b)(2)(B) is amended 
to read as follows: 
‘‘(B) derived in the active conduct of an in-
surance business by a qualifying insurance cor-
poration (as defined in subsection (f)),’’. 
(b) QUALIFYING
INSURANCE
CORPORATION
DE-
FINED.—Section 1297 is amended by adding at the end the 
following new subsection: 
‘‘(f) QUALIFYING
INSURANCE
CORPORATION.—For 
purposes of subsection (b)(2)(B)— 
‘‘(1) IN GENERAL.—The term ‘qualifying insur-
ance corporation’ means, with respect to any taxable 
year, a foreign corporation— 
‘‘(A) which would be subject to tax under 
subchapter L if such corporation were a domestic 
corporation, and 
‘‘(B) the applicable insurance liabilities of 
which constitute more than 25 percent of its 
total assets, determined on the basis of such li-
abilities and assets as reported on the corpora-
tion’s applicable financial statement for the last 
year ending with or within the taxable year.
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† HR 1 EAS 
‘‘(2) ALTERNATIVE FACTS AND CIRCUMSTANCES 
TEST FOR CERTAIN CORPORATIONS.—If a corporation 
fails to qualify as a qualified insurance corporation 
under paragraph (1) solely because the percentage de-
termined under paragraph (1)(B) is 25 percent or 
less, a United States person that owns stock in such 
corporation may elect to treat such stock as stock of 
a qualifying insurance corporation if— 
‘‘(A) the percentage so determined for the 
corporation is at least 10 percent, and 
‘‘(B) under regulations provided by the Sec-
retary, based on the applicable facts and cir-
cumstances— 
‘‘(i) the corporation is predominantly 
engaged in an insurance business, and 
‘‘(ii) such failure is due solely to run-
off-related or rating-related circumstances 
involving such insurance business. 
‘‘(3) APPLICABLE INSURANCE LIABILITIES.—For 
purposes of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘applicable 
insurance liabilities’ means, with respect to any 
life or property and casualty insurance busi-
ness—
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† HR 1 EAS 
‘‘(i) loss and loss adjustment expenses, 
and 
‘‘(ii) reserves (other than deficiency, 
contingency, or unearned premium reserves) 
for life and health insurance risks and life 
and health insurance claims with respect to 
contracts providing coverage for mortality 
or morbidity risks. 
‘‘(B) LIMITATIONS ON AMOUNT OF LIABIL-
ITIES.—Any amount determined under clause (i) 
or (ii) of subparagraph (A) shall not exceed the 
lesser of such amount— 
‘‘(i) as reported to the applicable in-
surance regulatory body in the applicable 
financial statement described in paragraph 
(4)(A) (or, if less, the amount required by 
applicable law or regulation), or 
‘‘(ii) as determined under regulations 
prescribed by the Secretary. 
‘‘(4) OTHER
DEFINITIONS
AND
RULES.—For 
purposes of this subsection— 
‘‘(A) APPLICABLE FINANCIAL STATEMENT.— 
The term ‘applicable financial statement’ means 
a statement for financial reporting purposes 
which—
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† HR 1 EAS 
SEC. 14502. REPEAL OF FAIR MARKET VALUE METHOD OF 
INTEREST EXPENSE APPORTIONMENT. 
(a) IN GENERAL.—Paragraph (2) of section 864(e) is 
amended to read as follows: 
‘‘(2) GROSS INCOME AND FAIR MARKET VALUE 
METHODS MAY NOT BE USED FOR INTEREST.—All al-
locations and apportionments of interest expense shall 
be determined using the adjusted bases of assets rather 
than on the basis of the fair market value of the assets 
or gross income.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017. 
SEC. 14503. MODIFICATION TO SOURCE RULES INVOLVING 
POSSESSIONS. 
(a) IN GENERAL.—Subsection (b)(2) of Section 937 of 
the Internal Revenue Code of 1986 is amended by inserting 
‘‘, but only to the extent such income is attributable to an 
office or fixed place of business within the United States 
(determined under the rules of Section 864(c)(5))’’ before 
the period at the end. 
(b) SOURCE
RULES
FOR
PERSONAL
PROPERTY 
SALES.—Subsection (j)(3) of section 865 of the Internal 
Revenue Code of 1986 is amended by inserting ‘‘932,’’ after 
‘‘931,’’.
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† HR 1 EAS 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2018. 
TITLE II 
SEC. 20001. OIL AND GAS PROGRAM. 
(a) DEFINITIONS.—In this section: 
(1) COASTAL PLAIN.—The term ‘‘Coastal Plain’’ 
means the area identified as the 1002 Area on the 
plates prepared by the United States Geological Sur-
vey entitled ‘‘ANWR Map – Plate 1’’ and ‘‘ANWR 
Map – Plate 2’’, dated October 24, 2017, and on file 
with the United States Geological Survey and the Of-
fice of the Solicitor of the Department of the Interior. 
(2) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Interior, acting through the Bu-
reau of Land Management. 
(b) OIL AND GAS PROGRAM.— 
(1) IN GENERAL.—Section 1003 of the Alaska 
National Interest Lands Conservation Act (16 U.S.C. 
3143) shall not apply to the Coastal Plain. 
(2) ESTABLISHMENT.— 
(A) IN GENERAL.—The Secretary shall es-
tablish and administer a competitive oil and gas 
program for the leasing, development, produc-
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† HR 1 EAS 
tion, and transportation of oil and gas in and 
from the Coastal Plain. 
(B) PURPOSES.—Section 303(2)(B) of the 
Alaska National Interest Lands Conservation Act 
(Public Law 96–487; 94 Stat. 2390) is amend-
ed— 
(i) in clause (iii), by striking ‘‘and’’ at 
the end; 
(ii) in clause (iv), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(v) to provide for an oil and gas pro-
gram on the Coastal Plain.’’. 
(3) MANAGEMENT.—Except as otherwise pro-
vided in this section, the Secretary shall manage the 
oil and gas program on the Coastal Plain in a man-
ner similar to the administration of lease sales under 
the Naval Petroleum Reserves Production Act of 1976 
(42 U.S.C. 6501 et seq.) (including regulations). 
(4) ROYALTIES.—Notwithstanding the Mineral 
Leasing Act (30 U.S.C. 181 et seq.), the royalty rate 
for leases issued pursuant to this section shall be 
16.67 percent.
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† HR 1 EAS 
(5) RECEIPTS.—Notwithstanding the Mineral 
Leasing Act (30 U.S.C. 181 et seq.), of the amount of 
adjusted bonus, rental, and royalty receipts derived 
from the oil and gas program and operations on Fed-
eral land authorized under this section— 
(A) 50 percent shall be paid to the State of 
Alaska; and 
(B) the balance shall be deposited into the 
Treasury as miscellaneous receipts. 
(c) 2 LEASE SALES WITHIN 10 YEARS.— 
(1) REQUIREMENT.— 
(A) IN GENERAL.—Subject to subparagraph 
(B), the Secretary shall conduct not fewer than 
2 lease sales area-wide under the oil and gas 
program under this section by not later than 10 
years after the date of enactment of this Act. 
(B) SALE ACREAGES; SCHEDULE.— 
(i) ACREAGES.—The Secretary shall 
offer for lease under the oil and gas pro-
gram under this section— 
(I) not fewer than 400,000 acres 
area-wide in each lease sale; and 
(II) those areas that have the 
highest potential for the discovery of 
hydrocarbons.
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† HR 1 EAS 
(ii) SCHEDULE.—The Secretary shall 
offer— 
(I) the initial lease sale under the 
oil and gas program under this section 
not later than 4 years after the date of 
enactment of this Act; and 
(II) a second lease sale under the 
oil and gas program under this section 
not later than 7 years after the date of 
enactment of this Act. 
(2) RIGHTS-OF-WAY.—The Secretary shall issue 
any rights-of-way or easements across the Coastal 
Plain for the exploration, development, production, or 
transportation necessary to carry out this section. 
(3) SURFACE DEVELOPMENT.—In administering 
this section, the Secretary shall authorize up to 2,000 
surface acres of Federal land on the Coastal Plain to 
be covered by production and support facilities (in-
cluding airstrips and any area covered by gravel 
berms or piers for support of pipelines) during the 
term of the leases under the oil and gas program 
under this section.
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† HR 1 EAS 
SEC. 20002. LIMITATIONS ON AMOUNT OF DISTRIBUTED 
QUALIFIED 
OUTER 
CONTINENTAL 
SHELF 
REVENUES. 
Section 105(f)(1) of the Gulf of Mexico Energy Secu-
rity Act of 2006 (43 U.S.C. 1331 note; Public Law 109– 
432) is amended by striking ‘‘exceed $500,000,000 for each 
of fiscal years 2016 through 2055.’’ and inserting the fol-
lowing: ‘‘exceed— 
‘‘(A) $500,000,000 for each of fiscal years 
2016 through 2019; 
‘‘(B) $650,000,000 for each of fiscal years 
2020 and 2021; and 
‘‘(C) $500,000,000 for each of fiscal years 
2022 through 2055.’’. 
SEC. 20003. STRATEGIC PETROLEUM RESERVE DRAWDOWN 
AND SALE. 
(a) DRAWDOWN AND SALE.— 
(1) IN GENERAL.—Notwithstanding section 161 
of the Energy Policy and Conservation Act (42 U.S.C. 
6241), except as provided in subsections (b) and (c), 
the Secretary of Energy shall draw down and sell 
from the Strategic Petroleum Reserve 7,000,000 bar-
rels of crude oil during the period of fiscal years 2026 
through 2027. 
(2) DEPOSIT
OF
AMOUNTS
RECEIVED
FROM 
SALE.—Amounts received from a sale under para-
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† HR 1 EAS 
graph (1) shall be deposited in the general fund of the 
Treasury during the fiscal year in which the sale oc-
curs. 
(b) EMERGENCY PROTECTION.—The Secretary of En-
ergy shall not draw down and sell crude oil under sub-
section (a) in a quantity that would limit the authority 
to sell petroleum products under subsection (h) of section 
161 of the Energy Policy and Conservation Act (42 U.S.C. 
6241) in the full quantity authorized by that subsection. 
(c) LIMITATION.—The Secretary of Energy shall not 
drawdown or conduct sales of crude oil under subsection 
(a) after the date on which a total of $600,000,000 has been 
deposited in the general fund of the Treasury from sales 
authorized under that subsection. 
Attest: 
Secretary.