Today, Ways and Means Committee Ranking Member Sander Levin (D-MI) and Budget Committee Ranking Member Chris Van Hollen (D-MD) introduced the Stop Corporate Earnings Stripping Act of 2016 (H.R. 4581). In the case of any US corporation that inverts on or after May 8, 2014, the legislation would further limit the foreign-controlled inverted group’s ability to “strip” its US tax base. The bill would: (1) repeal the debt-to-equity ratio threshold; (2) reduce the permitted net interest expense threshold to no more than 25% of the entity’s adjusted taxable income; (3) repeal the excess limitation carryforward; and (4) permit disallowed interest expense to be carried forward only for five years (rather than indefinitely under present law). The limitations would apply if historical shareholders of the US entity own more than 50% (but less than 80%) of the new foreign parent entity following an inversion. (Under current law, if the continuing ownership of historical shareholders of the domestic corporation in the foreign acquiring corporation is 80% or more (by vote or value), the new foreign parent corporation is treated as a domestic corporation for all US tax purposes.) A summary of the bill is available here.