Short title

This Act may be cited as the

Restoring Integrity in Contracting Act of 2007

Definitions

(a)

Corporate expatriation transaction defined

(1)

In general

In this Act, the term corporate expatriation transaction— (A)means any transaction in which— (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 (B)includes any transaction in which— (i)a foreign corporation acquires, as a result of such transaction, directly or indirectly properties constituting a trade or business of a domestic partnership; 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 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). (2)

Lower stock ownership threshold for certain acquiring corporations

Clause (ii) of paragraph (1)(A) shall be applied by substituting 50 percent for 80 percent with respect to any foreign corporation if— (A)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 (B)the stock of the corporation is publicly traded and the principal market for the public trading of such stock is in the United States. (3)

Rules for determining ownership and scope of transaction

For purposes of this subsection— (A)a series of related transactions shall be treated as 1 transaction; and (B)stock held by members of the expanded affiliated group which includes the acquiring corporation shall not be taken into account in determining ownership. (b)

Other definitions

In this Act: (1)

Domestic

The term domestic means created or organized in the United States or under the law of the United States or of any State. (2)

Executive agency

The term executive agency has the meaning given the term in section 102 of title 31, United States Code. (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. (4)

Foreign subsidiary

The term foreign subsidiary means any foreign entity owned or controlled (directly or indirectly) by a potential contractor. (5)

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 (50 U.S.C. App. 2405(j)), section 620A of the Foreign Assistance Act of 1961 (22 U.S.C. 2371), section 40 of the Arms Export Control Act (22 U.S.C. 2780), or any other provision of law, to be a government that has provided support for acts of international terrorism. (6)

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).

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 after the date of the enactment of this Act shall be eligible to be awarded a Federal contract for the 5-year period beginning on the date that a disclosure regarding such transaction is made under section 5. (b)

Penalties for failure to disclose

In the event that the Administrator for Federal Procurement Policy determines that an entity is ineligible for a Federal contract under subsection (a) as a result of a corporate expatriation transaction that the entity fails to disclose under section 5(a), the period of ineligibility— (1)shall begin on the date that the Administrator makes such determination; and (2)may be extended by the Administrator for a period that is longer than the period otherwise applicable under subsection (a) as a penalty for such failure to disclose. (c)

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.

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)

Ineligibility

(1)

In general

Except as provided under paragraph (2), any entity doing business with, or having a parent or subsidiary doing business with, a state sponsor of terrorism or foreign terrorist organization after the date of the enactment of this Act shall be ineligible to be awarded a Federal contract for the period described in subsection (b). (2)

Exception for entities doing business in compliance with the Trade Sanctions Reform and Export Enhancement Act of 2000

(A)

Authority unaffected

Nothing in this section shall be construed to prohibit or restrict an entity from selling food, agricultural commodities, medicine, or medical products to a state sponsor of terrorism or foreign terrorist organization pursuant to section 906 of the Trade Sanctions Reform and Export Enhancement Act of 2000 (22 U.S.C. 7205). (B)

Eligibility for contracts unaffected

No entity selling food, agricultural commodities, medicine, or medical products to a state sponsor of terrorism or foreign terrorist organization in full compliance with the requirements of section 906 of the Trade Sanctions Reform and Export Enhancement Act of 2000 (22 U.S.C. 7205), or any parent or subsidiary of such entity, shall be deemed ineligible to be awarded a Federal contract under subsection (a) as a result of conducting such business. (b)

Period of Ineligibility

(1)

Duration

The period of ineligibility referred to in subsection (a)(1), as determined by the Administrator for Federal Procurement Policy, in cooperation with the Secretary of State, shall be— (A)5 years for a first offense; (B)10 years for a second offense; and (C)15 years for any offense after a second offense. (2)

Commencement

The period of ineligibility under this subsection shall begin on the date that a contractor makes a disclosure under section 5 that, according to the criteria under such section, the contractor is doing or has done business with, or has a subsidiary that is doing or has done business with, a state sponsor of terrorism or foreign terrorist organization. (3)

Penalties for failure to disclose

In the event that the Administrator for Federal Procurement Policy determines that an entity is ineligible for a Federal contract under subsection (a) as a result of a transaction or activity that the entity fails to disclose under section 5(a), the period of ineligibility— (A)shall begin on the date that the Administrator makes such determination; and (B)may be extended by the Administrator for a period longer than the period otherwise applicable under paragraph (1) as a penalty for such failure to disclose. (c)

Complaints

(1)

In general

Any United States citizen may file a complaint with an executive agency regarding a Federal contractor that has committed an offense under this section. (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.

Disclosure requirements

(a)

Certification

Not later than 180 days after the date of the enactment of this Act, the Federal Acquisition Regulation issued pursuant to section 25 of the Office of Federal Procurement Policy Act (41 U.S.C. 421) shall be revised to require that every contractor that submits a bid for a government contract shall be required to submit with such bid a certification describing— (1)whether the contractor or the contractor’s parent company has entered into a corporate expatriation transaction after the date of the enactment of this Act; and (2)whether the contractor, the contractor’s domestic parent company, or any other domestic subsidiaries of the domestic parent company are doing business, or own a foreign subsidiary that is doing business, or has done business since the date of the enactment of this Act, with a state sponsor of terrorism or a foreign terrorist organization. (b)

Information sharing

The head of each executive agency shall regularly transmit information disclosed pursuant to subsection (a) to the Administrator for Federal Procurement Policy. (c)

Database

The Office of Federal Procurement Policy Act (41 U.S.C. 403 et seq.) is amended by adding at the end the following new section:

43.

Database of corporate expatriation transactions and transactions with state sponsors of terrorism or foreign terrorist organizations

(a)

Database

The Administrator for Federal Procurement Policy shall establish and maintain a database listing each contractor that, after the date of the enactment of the Restoring Integrity in Contracting Act of 2007— (1)has entered into a corporate expatriation transaction, or has a parent company that has entered into such a transaction; or (2)has done business with, or owns a foreign subsidiary that has done business with, a state sponsor of terrorism or a foreign terrorist organization, or has a domestic parent company that has done, or has any other domestic subsidiaries that have done, such business. (b)

Collection of information

The Administrator shall establish and maintain the database under subsection (a) using information compiled from certifications submitted by contractors pursuant to section 5(a) of the Restoring Integrity in Contracting Act of 2007. (c)

Corporate expatriation transaction defined

(1)

In general

In this section, the term corporate expatriation transaction— (A)means any transaction in which— (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 (B)includes any transaction in which— (i)a foreign corporation acquires, as a result of such transaction, directly or indirectly properties constituting a trade or business of a domestic partnership; 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 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). (2)

Lower stock ownership threshold for certain acquiring corporations

Rules for determining ownership and scope of transaction

Other definitions

In this section: (1)

Domestic

The term domestic means created or organized in the United States or under the law of the United States or of any State. (2)

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. (3)

Foreign subsidiary

The term foreign subsidiary means any foreign entity owned or controlled (directly or indirectly) by a potential contractor. (4)

State sponsor of terrorism

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).