§ 395. Prohibition on contracts with corporate expatriates

Footnotes

1. 1 So in original.

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 2002

   Homeland Security Act of 2002

   Pub. L. 107–296 title VIII § 835 · 116 Stat. 2135

   Enacted · 6 U.S.C. § 395

   Pub. L. 107–296, title VIII, § 835, Nov. 25, 2002, 116 Stat. 2227

   Source evidence

   Code source credit
   Pub. L. 107–296, title VIII, § 835, Nov. 25, 2002, 116 Stat. 2227

   Enacted provision · exact public law section
   SEC. 835. PROHIBITION ON CONTRACTS WITH CORPORATE EXPATRIATES. (a) In General.— The Secretary may not enter into any contract with a foreign incorporated entity which is treated as an inverted domestic corporation under subsection (b). (b) Inverted Domestic Corporation.— For purposes of this section, a foreign incorporated entity shall be treated as an inverted domestic corporation if, pursuant to a plan (or a series of related transactions)— (1) the entity completes after the date of enactment of this Act, the direct or indirect acquisition of substantially all of the properties held directly or indirectly by a domestic corporation or substantially all of the properties constituting a trade or business of a domestic partnership; (2) after the acquisition at least 80 percent of the stock (by vote or value) of the entity is held— (A) in the case of an acquisition with respect to a domestic corporation, by former shareholders of the domestic corporation by reason of holding stock in the domestic corporation; or (B) in the case of an acquisition with respect to a domestic partnership, by former partners of the domestic partnership by reason of holding a capital or profits interest in the domestic partnership; and (3) the expanded affiliated group which after the acquisition includes the entity does not have substantial business activities in the foreign country in which or under the law of which the entity is created or organized when compared to the total business activities of such expanded affiliated group. (c) Definitions and Special Rules.— (1) Rules for application of subsection (b).— In applying subsection (b) for purposes of subsection (a), the following rules shall apply: (A) Certain stock disregarded.— There shall not be taken into account in determining ownership for purposes of subsection (b)(2)— (i) stock held by members of the expanded affiliated group which includes the foreign incorporated entity; or (ii) stock of such entity which is sold in a public offering related to the acquisition described in subsection (b)(1). (B) Plan deemed in certain cases.— If a foreign incorporated entity acquires directly or indirectly substantially all of the properties of a domestic corporation or partnership during the 4-year period beginning on the date which is after the date of enactment of this Act and which is 2 years before the ownership requirements of subsection (b)(2) are met, such actions shall be treated as pursuant to a plan. (C) Certain transfers disregarded.— The transfer of properties or liabilities (including by contribution or distribution) shall be disregarded if such transfers are part of a plan a principal purpose of which is to avoid the purposes of this section. (D) Special rule for related partnerships.— For purposes of applying subsection (b) to the acquisition of a domestic partnership, except as provided in regulations, all domestic partnerships which are under common control (within the meaning of section 482 of the Internal Revenue Code of 1986) shall be treated as I partnership. (E) Treatment of certain rights.— The Secretary shall prescribe such regulations as may be necessary to— (i) treat warrants, options, contracts to acquire stock, convertible debt instruments, and other similar interests as stock; and (ii) treat stock as not stock. (2) Expanded affiliated group.— The term “expanded affiliated group” means an affiliated group as defined in section 1504(a) of the Internal Revenue Code of 1986 (without regard to section 1504(b) of such Code), except that section 1504 of such Code shall be applied by substituting “more than 50 percent” for “at least 80 percent” each place it appears. (3) Foreign incorporated entity.— The term “foreign incorporated entity” means any entity which is, or but for subsection (b) would be, treated as a foreign corporation for purposes of the Internal Revenue Code of 1986. (4) Other definitions.— The terms “person”, “domestic”, and “foreign” have the meanings given such terms by paragraphs (1), (4), and (5) of section 7701(a) of the Internal Revenue Code of 1986, respectively. (d) Waivers.— The Secretary shall waive subsection (a) with respect to any specific contract if the Secretary determines that the waiver is required in the interest of homeland security, or to prevent the loss of any jobs in the United States or prevent the Government from incurring any additional costs that otherwise would not occur.

2. 2003

   Department of Justice Appropriations Act, 2003

   Pub. L. 108–7 div. L § 101(2) · 117 Stat. 11

   Struck · 6 U.S.C. § 395(d)

   Pub. L. 108–7 struck out “, or to prevent the loss of any jobs in the United States or prevent the Government from incurring any additional costs that otherwise would not occur” before period at end

   Source evidence

   Code amendment note
   Subsec. (d). Pub. L. 108–7 struck out “, or to prevent the loss of any jobs in the United States or prevent the Government from incurring any additional costs that otherwise would not occur” before period at end.

   Enacted provision · exact public law section
   Sec. 101. In addition to amounts otherwise made available in this title for official reception and representation expenses, a total of not to exceed $45,000 from funds appropriated to the Department of Justice in this title shall be available to the Attorney General for official reception and representation expenses in accordance with distributions, procedures, and regulations established by the Attorney General.

3. 2004

   Department of Homeland Security Appropriations Act, 2005

   Pub. L. 108–334 § 523(1) · 118 Stat. 1298

   Inserted · 6 U.S.C. § 395(a)

   Pub. L. 108–334, § 523(1), inserted before period at end “, or any subsidiary of such an entity”

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 108–334, § 523(1), inserted before period at end “, or any subsidiary of such an entity”.

   Enacted provision · exact public law section
   (1) in subsection (a), by inserting before the period “, or any subsidiary of such an entity”;

4. 2004

   Department of Homeland Security Appropriations Act, 2005

   Pub. L. 108–334 § 523(2) · 118 Stat. 1298

   Inserted · 6 U.S.C. § 395(b)(1)

   Pub. L. 108–334, § 523(2), inserted “before, on, or” after “completes”

   Source evidence

   Code amendment note
   Subsec. (b)(1). Pub. L. 108–334, § 523(2), inserted “before, on, or” after “completes”.

   Enacted provision · exact public law section
   (2) in subsection (b)(1), by inserting “before, on, or” after the “completes”;

5. 2004

   Department of Homeland Security Appropriations Act, 2005

   Pub. L. 108–334 § 523(3) · 118 Stat. 1298

   Struck · 6 U.S.C. § 395(c)(1)(B)

   Pub. L. 108–334, § 523(3), struck out “which is after November 25, 2002, and” after “beginning on the date”

   Source evidence

   Code amendment note
   Subsec. (c)(1)(B). Pub. L. 108–334, § 523(3), struck out “which is after November 25, 2002, and” after “beginning on the date”.

   Enacted provision · exact public law section
   (3) in subsection (c)(1)(B), by striking “which is after the date of enactment of this Act and”; and

6. 2004

   Department of Homeland Security Appropriations Act, 2005

   Pub. L. 108–334 § 523(4) · 118 Stat. 1298

   Substituted · 6 U.S.C. § 395(d)

   Pub. L. 108–334, § 523(4), substituted “national” for “homeland”

   Source evidence

   Code amendment note
   Subsec. (d). Pub. L. 108–334, § 523(4), substituted “national” for “homeland”.

   Enacted provision · exact public law section
   (4) in subsection (d), by striking “homeland” and inserting “national”.

6 of 6 references resolved to an enrolled provision