[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4394 Introduced in House (IH)]







108th CONGRESS
  2d Session
                                H. R. 4394

    To make ineligible for Federal contract awards any expatriated 
 corporations and any companies that do business with, or own foreign 
  subsidiaries that do business with, state sponsors of terrorism or 
                    foreign terrorist organizations.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 19, 2004

Mr. Brown of Ohio (for himself, Mr. Neal of Massachusetts, Ms. DeLauro, 
 and Mr. Waxman) introduced the following bill; which was referred to 
                   the Committee on Government Reform

_______________________________________________________________________

                                 A BILL


 
    To make ineligible for Federal contract awards any expatriated 
 corporations and any companies that do business with, or own foreign 
  subsidiaries that do business with, state sponsors of terrorism or 
                    foreign terrorist organizations.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Accountability and Responsibility in 
Contracting Act''.

SEC. 2. INELIGIBILITY OF EXPATRIATED CORPORATIONS FOR FEDERAL CONTRACT 
              AWARDS.

    (a) In General.--No acquiring corporation or any subsidiary of such 
a corporation that enters into a corporate expatriation transaction 
shall be eligible to be awarded a Federal contract.
    (b) Period of Ineligibility.--The period of ineligibility under 
subsection (a) shall be 3 years, beginning on the date of completion of 
the corporate expatriation transaction.
    (c) Exception for Repatriated Corporations.--If an acquiring 
corporation reorganizes as a domestic corporation within one year after 
the date of the enactment of this Act under the applicable 
incorporation laws of a State, subsection (a) shall not apply.
    (d) Definitions.--In this Act:
            (1) Corporate expatriation transaction.--(A) The term 
        ``corporate expatriation transaction''--
                    (i) means any transaction if--
                            (I) a foreign corporation (referred to in 
                        this section as the ``acquiring corporation'') 
                        acquires, as a result of such transaction, 
                        directly or indirectly substantially all of the 
                        properties held directly or indirectly by a 
                        domestic corporation; and
                            (II) immediately after the transaction, 
                        more than 80 percent of the stock (by vote or 
                        value) of the acquiring corporation is held by 
                        former shareholders of the domestic corporation 
                        by reason of holding stock in the domestic 
                        corporation; and
                    (ii) includes any transaction if--
                            (I) a foreign corporation acquires, as a 
                        result of such transaction, directly or 
                        indirectly properties constituting a trade or 
                        business of a domestic partnership;
                            (II) immediately after the transaction, 
                        more than 80 percent of the stock (by vote or 
                        value) of the acquiring corporation is held by 
                        former partners of the domestic partnership or 
                        related foreign partnership (determined without 
                        regard to stock of the acquiring corporation 
                        which is sold in a public offering related to 
                        the transaction); and
                            (III) the acquiring corporation meets the 
                        requirements of clauses (i) and (ii) of 
                        subparagraph (B).
            (B) Subclause (II) of subparagraph (A)(i) shall be applied 
        by substituting ``50 percent'' for ``80 percent'' with respect 
        to any foreign corporation if--
                    (i) such corporation does not have substantial 
                business activities (when compared to the total 
                business activities of the expanded affiliated group) 
                in the foreign country in which or under the law of 
                which the corporation is created or organized; and
                    (ii) the stock of the corporation is publicly 
                traded and the principal market for the public trading 
                of such stock is in the United States.
            (C) For purposes of this paragraph--
                    (i) a series of related transactions shall be 
                treated as 1 transaction; and
                    (ii) stock held by members of the expanded 
                affiliated group which includes the acquiring 
                corporation shall not be taken into account in 
                determining ownership.
            (2) Domestic.--The term ``domestic'' means created or 
        organized in the United States or under the law of the United 
        States or of any State.
            (3) Expanded affiliated group.--The term ``expanded 
        affiliated group'' means an affiliated group as defined in 
        section 1504(a) of the Internal Revenue Code of 1986, without 
        regard to section 1504(b) of such Code.
    (e) Applicability.--This section shall apply with respect to a 
corporate expatriation transaction occurring before, on, or after the 
date of the enactment of this Act.
    (f) Waiver.--
            (1) In general.--Subject to paragraph (2), the President 
        may waive this section with respect to any specific contract if 
        the President certifies to Congress that the waiver is required 
        in the interest of national security.
            (2) Report.--The President may not carry out a waiver under 
        paragraph (1) until a period of 30 days has expired after the 
        President submits to Congress a report containing the 
        certification described in paragraph (1) and setting forth the 
        rationale for the waiver.

SEC. 3. INELIGIBILITY FOR FEDERAL CONTRACT AWARDS OF COMPANIES DOING 
              BUSINESS WITH, AND COMPANIES WITH FOREIGN SUBSIDIARIES 
              DOING BUSINESS WITH, STATE SPONSORS OF TERRORISM OR 
              FOREIGN TERRORIST ORGANIZATIONS.

    (a) In General.--No entity doing business with a state sponsor of 
terrorism or foreign terrorist organization, and no entity with a 
foreign subsidiary doing business with a state sponsor of terrorism or 
foreign terrorist organization, shall be eligible to be awarded a 
Federal contract.
    (b) Period of Ineligibility.--The period of ineligibility under 
subsection (a), as determined by the head of the executive agency 
entering into the contract concerned, in cooperation with the Secretary 
of State, shall be--
            (1) 3 years for a first offense;
            (2) 10 years for a second offense; and
            (3) 15 years for any offense after a second offense,
beginning on the date of certification under subsection (c) or (d).
    (c) Certification for Current Contracts.--Each executive agency 
shall require, for each contract with the agency that is in effect on 
the date of the enactment of this Act, that the contractor certify in 
writing that the contractor, the contractor's domestic parent company, 
and all other domestic subsidiaries of the domestic parent company did 
not do business, and did not own a foreign subsidiary that did 
business, during the 10-year period ending on the date of the enactment 
of this Act, with a state sponsor of terrorism or a foreign terrorist 
organization. A certification that the contractor, the parent, or other 
subsidiaries did do such business, or did own one or more foreign 
subsidiaries that did such business, shall be considered a first 
offense under subsection (b).
    (d) Certification for Future Contracts.--Each executive agency 
shall require, as a condition of entering into a contract after the 
date of the enactment of this Act, that a potential contractor certify 
in writing that the potential contractor, the potential contractor's 
domestic parent company, and all other domestic subsidiaries of the 
domestic parent company is not doing business, and does not own a 
foreign subsidiary that is doing business, or has done business within 
the last ten years, with a state sponsor of terrorism or a foreign 
terrorist organization. Each certification that the potential 
contractor, the parent, or other subsidiaries is doing such business, 
or owned one or more foreign subsidiaries doing such business currently 
or in the last ten years, shall be considered a separate offense under 
subsection (b).
    (e) Complaints.--
            (1) In general.--Citizens may file complaints with 
        executive agencies regarding Federal contractors.
            (2) Report.--The head of each executive agency shall submit 
        to Congress an annual report on the complaints received by 
        citizens under this subsection, including the nature of the 
        complaint and the manner in which the agency handled the 
        complaint.
    (f) Definitions.--In this section:
            (1) Executive agency.--The term ``executive agency'' has 
        the meaning provided in section 102 of title 31, United States 
        Code.
            (2) Foreign subsidiary.--The term ``foreign subsidiary'' 
        means any foreign entity owned or controlled (directly or 
        indirectly) by a potential contractor.
            (3) State sponsor of terrorism.--The term ``state sponsor 
        of terrorism'' means any government which the Secretary of 
        State has determined, for purposes of section 6(j) of the 
        Export Administration Act of 1979, section 620A of the Foreign 
        Assistance Act of 1961, section 40 of the Arms Export Control 
        Act, or other provision of law, is a government that has 
        provided support for acts of international terrorism.
            (4) Foreign terrorist organization.--The term ``foreign 
        terrorist organization'' means a foreign terrorist organization 
        designated under section 219 of the Immigration and Nationality 
        Act (8 U.S.C. 1189).
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