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The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress, and was published on Jul 26, 2017.
American Business for American Companies Act of 2017
This bill prohibits an executive agency from awarding a contract for the procurement of property or services (including a defense contract) to: (1) any foreign incorporated entity determined to be an inverted domestic corporation or any subsidiary of such entity, or (2) any joint venture more than 10% of which is held by such an entity or subsidiary.
Each agency must include in each such contract awarded with a value in excess of $10 million, other than a contract for exclusively commercial items, a clause that prohibits the prime contractor from: (1) awarding a first-tier subcontract with a value greater than 10% of the total prime contract to such an entity or joint venture, or (2) structuring subcontract tiers enabling such entity or joint venture to perform more than 10% of the total value of the prime contract.
An agency may waive such requirements for a contract: (1) in the interest of national security, or (2) if necessary for the efficient or effective administration of federal or federally funded programs that provide health benefits to individuals or public health programs. The bill provides for termination of a contract or suspension or debarment of a contractor in violation of this bill.
A foreign incorporated entity must be treated as an inverted domestic corporation if: (1) the entity acquires, on or after May 8, 2014, substantially all of the properties held by a domestic corporation or substantially all of the assets of, or substantially all of the properties constituting a trade or business of, a domestic partnership; and (2) after the acquisition, either more than 50% of the stock of the entity is held by former shareholders of the domestic corporation or former partners of the domestic partnership, or the management and control of the expanded affiliated group which includes the entity occurs primarily within the United States and such expanded affiliated group has significant domestic business activities. The bill: (1) sets forth an exception for an entity within an expanded affiliated group with substantial business activities in the foreign country in which the entity is created, and (2) requires the Department of the Treasury to prescribe regulations for determining cases in which the management and control of an expanded affiliated group is to be treated as occurring primarily within the United States.