SHAREHOLDERS OF SURROGATE FOREIGN CORPORATIONS NOT ELIGIBLE FOR REDUCED RATE ON DIVIDENDS.

SEC. 14223. SHAREHOLDERS OF SURROGATE FOREIGN CORPORATIONS NOT ELIGIBLE FOR REDUCED RATE ON DIVIDENDS.(a) In General.—Section 1(h)(11)(C)(iii) is amended—(1) by striking “shall not include any foreign corporation” and inserting “shall not include—“(I) any foreign corporation”,(2) by striking the period at the end and inserting “, and”, and(3) by adding at the end the following new subclause:131 STAT. 2221 “(II) any corporation which first becomes a surrogate foreign corporation (as defined in section 7874(a)(2)(B)) after the date of the enactment of this subclause, other than a foreign corporation which is treated as a domestic corporation under section 7874(b).”.(b) Effective Date.—The amendments made by this section shall apply to dividends received after the date of the enactment of this Act.