Invest in America Act

I 116TH CONGRESS 1ST SESSION H. R. 2210 To amend the Internal Revenue Code of 1986 to repeal certain provisions applicable to foreign investment in United States real property. IN THE HOUSE OF REPRESENTATIVES APRIL 10, 2019 Mr. LARSON of Connecticut (for himself, Mr. MARCHANT, Mr. BLUMENAUER, Mr. DANNY K. DAVIS of Illinois, Mr. HOLDING, Mr. HORSFORD, Mr. KIND, Mr. LAHOOD, Mr. PASCRELL, Mr. SUOZZI, and Mrs. WALORSKI) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to repeal certain provisions applicable to foreign investment in United States real property. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Invest in America 4 Act’’. 5 VerDate Sep 11 2014 22:36 Apr 18, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2210.IH H2210 kjohnson on DSK79L0C42 with BILLS 2 •HR 2210 IH SEC. 2. REPEAL OF AMENDMENTS MADE BY THE FOREIGN 1 INVESTMENT IN REAL PROPERTY TAX ACT OF 2 1980 (‘‘FIRPTA’’). 3 (a) REPEAL OF CAPITAL GAINS TAX ON DISPOSITION 4 OF INVESTMENTS IN UNITED STATES REAL PROPERTY 5 BY FOREIGN CITIZENS.— 6 (1) IN GENERAL.—Subpart D of part II of sub- 7 chapter N of chapter 1 of the Internal Revenue Code 8 of 1986 is amended by striking section 897. 9 (2) CONFORMING AMENDMENTS.— 10 (A) Section 852(b)(3) of such Code is 11 amended by striking subparagraph (E). 12 (B) Section 857(b)(3) of such Code is 13 amended by striking subparagraph (E) and by 14 redesignating subparagraph (F) as subpara- 15 graph (E). 16 (C) Section 861(a)(5) of such Code is 17 amended to read as follows: 18 ‘‘(5) SALE OR EXCHANGE OF REAL PROP- 19 ERTY.—Gains, profits, and income from the sale or 20 exchange of interests in real property (as defined in 21 section 856(c)(5)(C), except that such term shall in- 22 clude mineral, oil, and gas royalty interests) located 23 in the United States.’’. 24 (D) Section 862(a) of such Code is amend- 25 ed by adding ‘‘and’’ at the end of paragraph 26 VerDate Sep 11 2014 22:36 Apr 18, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2210.IH H2210 kjohnson on DSK79L0C42 with BILLS 3 •HR 2210 IH (7), by striking paragraph (8), and by redesig- 1 nating paragraph (9) as paragraph (8). 2 (E) Section 864(c)(8) of such Code is 3 amended by striking subparagraph (C) and by 4 redesignating subparagraphs (D) and (E) as 5 subparagraphs (C) and (D), respectively. 6 (F) Section 871(h)(4)(C)(v)(I) of such 7 Code is amended by striking ‘‘other than prop- 8 erty described in section 897(c)(1) or (g)’’. 9 (G) Section 871(k)(2) of such Code is 10 amended by striking subparagraph (E). 11 (H) Section 871(n) of such Code is amend- 12 ed by striking paragraph (7). 13 (I) Section 882(a) of such Code is amend- 14 ed by striking paragraph (3). 15 (J) Section 884(d)(2) of such Code is 16 amended by striking subparagraph (C) and by 17 redesignating subparagraphs (D) and (E) as 18 subparagraphs (C) and (D), respectively. 19 (K) Section 1125 of the Foreign Invest- 20 ment in Real Property Tax Act of 1980 is 21 amended by striking subsections (c) and (d). 22 (3) CLERICAL AMENDMENT.—The table of sec- 23 tions for subpart D of part II of subchapter N of 24 VerDate Sep 11 2014 22:36 Apr 18, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2210.IH H2210 kjohnson on DSK79L0C42 with BILLS 4 •HR 2210 IH chapter 1 of such Code is amended by striking the 1 item relating to section 897. 2 (b) REPEAL OF WITHHOLDING OF TAX ON DISPOSI- 3 TIONS OF UNITED STATES REAL PROPERTY INTER- 4 ESTS.— 5 (1) IN GENERAL.—Subchapter A of chapter 3 6 of such Code is amended by striking section 1445. 7 (2) CONFORMING AMENDMENTS.— 8 (A) Section 1446(f)(2)(A) of such Code is 9 amended by striking ‘‘is not a foreign person’’ 10 and inserting ‘‘is a United States person’’. 11 (B) Section 1446(f)(2) of such Code is 12 amended— 13 (i) by striking ‘‘section 1445(d)’’ in 14 subparagraph (B)(i) and inserting ‘‘sub- 15 paragraph (C)’’; and 16 (ii) by striking subparagraph (C) and 17 inserting the following new subparagraphs: 18 ‘‘(C) NOTICE OF FALSE AFFIDAVIT; FOR- 19 EIGN CORPORATIONS.—If the transferor fur- 20 nishes the transferee an affidavit described in 21 subparagraph (A), and 22 ‘‘(i) in the case of any transferor’s 23 agent— 24 VerDate Sep 11 2014 22:36 Apr 18, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2210.IH H2210 kjohnson on DSK79L0C42 with BILLS 5 •HR 2210 IH ‘‘(I) such agent has actual knowl- 1 edge that such affidavit is false, or 2 ‘‘(II) in the case of an affidavit 3 described in subparagraph (A) fur- 4 nished by a corporation, such corpora- 5 tion is a foreign corporation, or 6 ‘‘(ii) in the case of any transferee’s 7 agent, such agent has actual knowledge 8 that such affidavit is false, 9 such agent shall so notify the transferee at such 10 time and in such form and manner as the Sec- 11 retary may require by regulations. 12 ‘‘(D) FAILURE TO FURNISH NOTICE.— 13 ‘‘(i) IN GENERAL.—If any transferor’s 14 agent or transferee’s agent is required by 15 subparagraph (C) to furnish notice, but 16 fails to furnish such notice at such time or 17 times and in such manner as may be re- 18 quired by regulations, such agent shall 19 have the same duty to deduct and withhold 20 that the transferee would have had if such 21 agent had complied with subparagraph 22 (C). 23 ‘‘(ii) LIABILITY LIMITED TO AMOUNT 24 OF COMPENSATION.—An agent’s liability 25 VerDate Sep 11 2014 22:36 Apr 18, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2210.IH H2210 kjohnson on DSK79L0C42 with BILLS 6 •HR 2210 IH under clause (i) shall be limited to the 1 amount of compensation the agent derives 2 from the transaction. 3 ‘‘(E) TRANSFEROR’S AGENT.—For pur- 4 poses of this paragraph, the term ‘transferor’s 5 agent’ means any person who represents the 6 transferor— 7 ‘‘(i) in any negotiation with the trans- 8 feree or any transferee’s agent related to 9 the transaction, or 10 ‘‘(ii) in settling the transaction. 11 ‘‘(F) TRANSFEREE’S AGENT.—For pur- 12 poses of this paragraph, the term ‘transferee’s 13 agent’ means any person who represents the 14 transferee— 15 ‘‘(i) in any negotiation with the trans- 16 feror or the transferor’s agent related to 17 the transaction, or 18 ‘‘(ii) in settling the transaction. 19 ‘‘(G) SETTLEMENT OFFICER NOT TREATED 20 AS TRANSFEROR’S AGENT.—For purposes of 21 this paragraph, a person shall not be treated as 22 a transferor’s agent or transferee’s agent with 23 respect to any transaction merely because such 24 VerDate Sep 11 2014 22:36 Apr 18, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2210.IH H2210 kjohnson on DSK79L0C42 with BILLS 7 •HR 2210 IH person performs 1 or more of the following 1 acts: 2 ‘‘(i) The receipt and the disbursement 3 of any portion of the consideration for the 4 transaction. 5 ‘‘(ii) The recording of any document 6 in connection with the transaction.’’. 7 (C) Section 1446(f)(4) of such Code is 8 amended— 9 (i) by inserting ‘‘or if any transferor’s 10 agent or transferee’s agent fails to with- 11 hold any amount required to be withheld 12 under paragraph (2)(D) (determined with- 13 out regard to clause (ii) thereof),’’ after 14 ‘‘withheld under paragraph (1),’’, and 15 (ii) by striking ‘‘the amount the trans- 16 feree failed to withhold’’ and inserting ‘‘the 17 amount the transferee, transferor’s agent, 18 or transferee’s agent (as the case may be) 19 so failed to withhold’’. 20 (D) Section 1446(f) of such Code is 21 amended by striking paragraph (5) and by re- 22 designating paragraph (6) as paragraph (5). 23 (3) CLERICAL AMENDMENT.—The table of sec- 24 tions for subchapter A of chapter 3 of such Code is 25 VerDate Sep 11 2014 22:36 Apr 18, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2210.IH H2210 kjohnson on DSK79L0C42 with BILLS 8 •HR 2210 IH amended by striking the item relating to section 1 1445. 2 (c) REPEAL OF SPECIAL REPORTING REQUIREMENTS 3 WITH RESPECT TO UNITED STATES REAL PROPERTY IN- 4 TERESTS.— 5 (1) IN GENERAL.—Subpart A of part III of 6 subchapter A of chapter 61 of such Code is amended 7 by striking section 6039C. 8 (2) CONFORMING AMENDMENT.—Section 6652 9 of such Code is amended by striking subsection (f). 10 (3) CLERICAL AMENDMENT.—The table of sec- 11 tions for subpart A of part III of subchapter A of 12 chapter 61 of such Code is amended by striking the 13 item relating to section 6039C. 14 (d) EFFECTIVE DATE.— 15 (1) IN GENERAL.—Except as otherwise pro- 16 vided in this subsection, the amendments made by 17 this section shall apply to dispositions and distribu- 18 tions after the date of the enactment of this Act. 19 (2) REPORTING REQUIREMENTS.— 20 (A) IN GENERAL.—The amendments made 21 by subsection (c) shall apply to calendar years 22 beginning after the date of the enactment of 23 this Act. 24 VerDate Sep 11 2014 22:36 Apr 18, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2210.IH H2210 kjohnson on DSK79L0C42 with BILLS 9 •HR 2210 IH (B) TRANSITION RULE.—In the case of the 1 calendar year which includes the date of the en- 2 actment of this Act, section 6039C of the Inter- 3 nal Revenue Code of 1986 shall be applied by 4 only taking into account interests held during 5 the portion of such calendar year which pre- 6 cedes the date of the enactment of this Act. 7 Æ VerDate Sep 11 2014 22:36 Apr 18, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6301 E:\BILLS\H2210.IH H2210 kjohnson on DSK79L0C42 with BILLS