(1) IN GENERAL.—The amendments made by 
this section shall apply on the first day of the first 
pay period beginning after the date of enactment of 
this Act. 
(2) TREATMENT OF FORMER REVISED OR FUR-
THER REVISED ANNUITANTS.—Any individual who, 
as of the date of enactment of this Act, was a re-
vised annuity employee or a further revised annuity 
employee (but for the amendments made by this sec-
tion) shall be deemed to be an employee or Member 
(as those terms are defined in section 8401 of title 
5, United States Code) for purposes of chapter 84 
of such title. 
SEC. 3. REPEAL OF FOREIGN SERVICE REVISED OR FUR-
THER REVISED ANNUITY PARTICIPANT CAT-
EGORIES. 
(a) REPEAL OF ANNUITANT CATEGORIES.—Section 
856(a) of the Foreign Service Act of 1980 (22 U.S.C. 
4071e(a)) is amended by striking paragraph (2) and in-
serting the following: 
‘‘(2) The applicable percentage for a participant 
other than a revised annuity participant or a further re-
vised annuity participant shall be as follows: 
‘‘7.5 
Before January 1, 1999. 
7.75 
January 1, 1999, to December 31, 1999. 
7.9 
January 1, 2000, to December 31, 2000. 
7.55 
After January 11, 2003.’’. 
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(b) GOVERNMENT CONTRIBUTION.—Section 857 of 
the Foreign Service Act of 1980 (22 U.S.C. 4071f) is 
amended by striking subsection (c). 
(c) CONFORMING AMENDMENTS.—Section 852 of 
such Act is amended (22 U.S.C. 4071a)— 
(1) by striking paragraphs (7) and (8); and 
(2) by redesignating paragraphs (9), (10), and 
(11) as paragraphs (7), (8), and (9), respectively. 
(d) APPLICATION.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply on the first day of the first 
pay period beginning after the date of enactment of 
this Act. 
(2) TREATMENT OF FORMER REVISED OR FUR-
THER REVISED ANNUITANTS.—Any individual who, 
as of the date of enactment of this Act, was a re-
vised annuity participant or a further revised annu-
ity participant (but for the amendments made by 
this section) shall be deemed to be a participant (as 
that term is defined in section 852 of the Foreign 
Service Act of 1980 (22 U.S.C. 4071a)) for pur-
poses of the Foreign Service pension system. 
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SEC. 4. TREATMENT OF FOREIGN CORPORATIONS MAN-
AGED AND CONTROLLED IN THE UNITED 
STATES AS DOMESTIC CORPORATIONS. 
(a) IN GENERAL.—Section 7701 of the Internal Rev-
enue Code of 1986 is amended by redesignating subsection 
(p) as subsection (q) and by inserting after subsection (o) 
the following new subsection: 
‘‘(p) CERTAIN CORPORATIONS MANAGED AND CON-
TROLLED IN THE UNITED STATES TREATED AS DOMES-
TIC FOR INCOME TAX.— 
‘‘(1) IN GENERAL.—Notwithstanding subsection 
(a)(4), in the case of a corporation described in 
paragraph (2) if— 
‘‘(A) the corporation would not otherwise 
be treated as a domestic corporation for pur-
poses of this title, but 
‘‘(B) the management and control of the 
corporation occurs, directly or indirectly, pri-
marily within the United States, 
then, solely for purposes of chapter 1 (and any other 
provision of this title relating to chapter 1), the cor-
poration shall be treated as a domestic corporation. 
‘‘(2) CORPORATION DESCRIBED.— 
‘‘(A) IN GENERAL.—A corporation is de-
scribed in this paragraph if— 
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‘‘(i) the stock of such corporation is 
regularly traded on an established securi-
ties market, or 
‘‘(ii) the aggregate gross assets of 
such corporation (or any predecessor there-
of), including assets under management 
for investors, whether held directly or indi-
rectly, at any time during the taxable year 
or 
any 
preceding 
taxable 
year 
is 
$50,000,000 or more. 
‘‘(B) GENERAL
EXCEPTION.—A corpora-
tion shall not be treated as described in this 
paragraph if— 
‘‘(i) such corporation was treated as a 
corporation described in this paragraph in 
a preceding taxable year, 
‘‘(ii) such corporation— 
‘‘(I) is not regularly traded on an 
established securities market, and 
‘‘(II) has, and is reasonably ex-
pected to continue to have, aggregate 
gross assets (including assets under 
management for investors, whether 
held directly or indirectly) of less than 
$50,000,000, and 
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‘‘(iii) the Secretary grants a waiver to 
such corporation under this subparagraph. 
‘‘(3) MANAGEMENT AND CONTROL.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
prescribe regulations for purposes of deter-
mining cases in which the management and 
control of a corporation is to be treated as oc-
curring primarily within the United States. 
‘‘(B) EXECUTIVE OFFICERS AND SENIOR 
MANAGEMENT.—Such regulations shall provide 
that— 
‘‘(i) the management and control of a 
corporation shall be treated as occurring 
primarily within the United States if sub-
stantially all of the executive officers and 
senior management of the corporation who 
exercise day-to-day responsibility for mak-
ing decisions involving strategic, financial, 
and operational policies of the corporation 
are located primarily within the United 
States, and 
‘‘(ii) individuals who are not executive 
officers and senior management of the cor-
poration (including individuals who are of-
ficers or employees of other corporations in 
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the same chain of corporations as the cor-
poration) shall be treated as executive offi-
cers and senior management if such indi-
viduals exercise the day-to-day responsibil-
ities of the corporation described in clause 
(i). 
‘‘(C) CORPORATIONS PRIMARILY HOLDING 
INVESTMENT
ASSETS.—Such regulations shall 
also provide that the management and control 
of a corporation shall be treated as occurring 
primarily within the United States if— 
‘‘(i) the assets of such corporation (di-
rectly or indirectly) consist primarily of as-
sets being managed on behalf of investors, 
and 
‘‘(ii) decisions about how to invest the 
assets are made in the United States.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning on or 
after the date which is 2 years after the date of the enact-
ment of this Act, whether or not regulations are issued 
under section 7701(p)(3) of the Internal Revenue Code 
of 1986, as added by this section. 
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