Page:United States Statutes at Large Volume 118.djvu/1546

 118 STAT. 1516 PUBLIC LAW 108–357—OCT. 22, 2004 returns filed after June 30, 2003, shall not be taken into account. ‘‘(3) REDUCTION OF BENEFIT IF INCREASE IN RELATED PARTY INDEBTEDNESS.—The amount of dividends which would (but for this paragraph) be taken into account under subsection (a) shall be reduced by the excess (if any) of— ‘‘(A) the amount of indebtedness of the controlled for eign corporation to any related person (as defined in section 954(d)(3)) as of the close of the taxable year for which the election under this section is in effect, over ‘‘(B) the amount of indebtedness of the controlled for eign corporation to any related person (as so defined) as of the close of October 3, 2004. All controlled foreign corporations with respect to which the taxpayer is a United States shareholder shall be treated as 1 controlled foreign corporation for purposes of this paragraph. ‘‘(4) REQUIREMENT TO INVEST IN UNITED STATES.—Sub section (a) shall not apply to any dividend received by a United States shareholder unless the amount of the dividend is invested in the United States pursuant to a domestic reinvest ment plan which— ‘‘(A) is approved by the taxpayer’s president, chief executive officer, or comparable official before the payment of such dividend and subsequently approved by the tax payer’s board of directors, management committee, execu tive committee, or similar body, and ‘‘(B) provides for the reinvestment of such dividend in the United States (other than as payment for executive compensation), including as a source for the funding of worker hiring and training, infrastructure, research and development, capital investments, or the financial stabiliza tion of the corporation for the purposes of job retention or creation. ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For purposes of this section— ‘‘(1) APPLICABLE FINANCIAL STATEMENT.—The term ‘applicable financial statement’ means, with respect to a United States shareholder, the most recently audited financial state ment (including notes and other documents which accompany such statement) which includes such shareholder— ‘‘(A) which is certified on or before June 30, 2003, as being prepared in accordance with generally accepted accounting principles, and ‘‘(B) 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. In the case of a corporation required to file a financial statement with the Securities and Exchange Commission, such term means the most recent such statement filed on or before June 30, 2003. ‘‘(2) BASE PERIOD YEARS.— ‘‘(A) IN GENERAL.—The base period years are the 3 taxable years— ‘‘(i) which are among the 5 most recent taxable years ending on or before June 30, 2003, and

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