[Congressional Record Volume 154, Number 58 (Monday, April 14, 2008)]
[House]
[Pages H2234-H2237]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CONTRACTING AND TAX ACCOUNTABILITY ACT OF 2008
Mr. BRALEY of Iowa. Mr. Speaker, I move to suspend the rules and pass
the bill (H.R. 4881) to prohibit the awarding of a contract or grant in
excess of the simplified acquisition threshold unless the prospective
contractor or grantee certifies in writing to the agency awarding the
contract or grant that the contractor or grantee has no seriously
delinquent tax debts, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 4881
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 ``Contracting and Tax
Accountability Act of 2008''.
SEC. 2. GOVERNMENTAL POLICY.
It is the policy of the United States Government that no
Government contracts or grants should be awarded to
individuals or companies with seriously delinquent Federal
tax debts.
SEC. 3. PROHIBITION ON AWARDING OF CONTRACTS TO DELINQUENT
FEDERAL DEBTORS.
Section 3720B of title 31, United States Code, is amended--
[[Page H2235]]
(1) in the section heading, by adding at the end ``OR
CONTRACTS'';
(2) by adding at the end the following:
``(c)(1) Unless this subsection is waived by the head of a
Federal agency, a person who has a seriously delinquent tax
debt shall be proposed for debarment from any contract
awarded by the Federal Government.
``(2) The head of any Federal agency that issues an
invitation for bids or a request for proposals for a contract
in an amount greater than the simplified acquisition
threshold (as defined in section 4(11) of the Office of
Federal Procurement Policy Act (41 U.S.C. 401(11)) shall
require each person that submits a bid or proposal to submit
with the bid or proposal a form--
``(A) certifying that the person does not have a seriously
delinquent tax debt; and
``(B) authorizing the Secretary of the Treasury to disclose
to the head of the agency information limited to describing
whether the person has a seriously delinquent tax debt.
``(3) The Secretary shall make available to all Federal
agencies a standard form for the certification and
authorization described in paragraph (2).
``(4) Not later than 270 days after the date of enactment
of this subsection, the Federal Acquisition Regulation shall
be revised to incorporate the requirements of this
subsection.
``(5) For purposes of this subsection:
``(A) The term `contract' means a binding agreement entered
into by a Federal agency for the purpose of obtaining
property or services, but does not include--
``(i) a contract designated by the head of the agency as
assisting the agency in the performance of disaster relief
authorities; or
``(ii) a contract designated by the head of the agency as
necessary to the national security of the United States.
``(B)(i) The term `person' includes--
``(I) an individual;
``(II) a partnership; and
``(III) a corporation.
``(ii) A partnership shall be treated as a person with a
seriously delinquent tax debt if such partnership has a
partner who--
``(I) holds an ownership interest of 50 percent or more in
that partnership; and
``(II) who has a seriously delinquent tax debt.
``(iii) A corporation shall be treated as a person with a
seriously delinquent tax debt if such corporation has an
officer or a shareholder who--
``(I) holds 50 percent or more, or a controlling interest
that is less than 50 percent, of the outstanding shares of
corporate stock in that corporation; and
``(II) who has a seriously delinquent tax debt.
``(C)(i) The term `seriously delinquent tax debt' means an
outstanding debt under the Internal Revenue Code of 1986 for
which a notice of lien has been filed in public records
pursuant to section 6323 of such Code.
``(ii) Such term does not include--
``(I) a debt that is being paid in a timely manner pursuant
to an agreement under section 6159 or section 7122 of such
Code; and
``(II) a debt with respect to which a collection due
process hearing under section 6330 of such Code, or relief
under subsections (a), (b), or (f) of section 6015 of such
Code, is requested or pending.''.
SEC. 4. PROHIBITION ON AWARDING OF GRANTS TO DELINQUENT
FEDERAL DEBTORS.
(a) In General.--The head of any Executive agency that
offers a grant in excess of an amount equal to the simplified
acquisition threshold (as defined in section 4(11) of the
Office of Federal Procurement Policy Act (41 U.S.C. 401(11))
may not award such grant to any person unless such person
submits with the application for such grant a form--
(1) certifying that the person does not have a seriously
delinquent tax debt; and
(2) authorizing the Secretary of the Treasury to disclose
to the head of the Executive agency information limited to
describing whether the person has a seriously delinquent tax
debt.
(b) Release of Information.--The Secretary shall make
available to all Executive agencies a standard form for the
certification and authorization described in subsection
(a)(2).
(c) Revision of Regulations.--Not later than 270 days after
the date of the enactment of this section, the Director of
the Office of Management and Budget shall revise such
regulations as necessary to incorporate the requirements of
this section.
(d) Definitions and Special Rules.--For purposes of this
section:
(1) Person.--
(A) In general.--The term ``person'' includes--
(i) an individual;
(ii) a partnership; and
(iii) a corporation.
(B) Treatment of certain partnerships.--A partnership shall
be treated as a person with a seriously delinquent tax debt
if such partnership has a partner who--
(i) holds an ownership interest of 50 percent or more in
that partnership; and
(ii) who has a seriously delinquent tax debt.
(C) Treatment of certain corporations.--A corporation shall
be treated as a person with a seriously delinquent tax debt
if such corporation has an officer or a shareholder who--
(i) holds 50 percent or more, or a controlling interest
that is less than 50 percent, of the outstanding shares of
corporate stock in that corporation; and
(ii) who has a seriously delinquent tax debt.
(2) Executive agency.--The term ``executive agency'' has
the meaning given such term in section 4 of the Office of
Federal Procurement Policy Act (41 U.S.C. 403).
(3) Seriously delinquent tax debt.--
(A) In general.--The term ``seriously delinquent tax debt''
means an outstanding debt under the Internal Revenue Code of
1986 for which a notice of lien has been filed in public
records pursuant to section 6323 of such Code.
(B) Exceptions.--Such term does not include--
(i) a debt that is being paid in a timely manner pursuant
to an agreement under section 6159 or section 7122 of such
Code; and
(ii) a debt with respect to which a collection due process
hearing under section 6330 of such Code, or relief under
subsections (a), (b), or (f) of section 6015 of such Code, is
requested or pending.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Iowa (Mr. Braley) and the gentlewoman from North Carolina (Ms. Foxx)
each will control 20 minutes.
The Chair recognizes the gentleman from Iowa.
General Leave
Mr. BRALEY of Iowa. Mr. Speaker, I ask unanimous consent that all
Members have 5 legislative days in which to revise and extend their
remarks.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Iowa?
There was no objection.
Mr. BRALEY of Iowa. Mr. Speaker, I yield myself such time as I may
consume.
H.R. 4881, the Contracting and Tax Accountability Act of 2008, is a
very simple bill and a very timely bill. It prevents companies that
don't pay their taxes from receiving contracts with the Federal
Government. Today, people across the country are finishing up their tax
returns to submit to the IRS by tomorrow. Nobody likes to pay taxes,
but the vast majority of American families and companies obey the law
and comply with their responsibilities as citizens and taxpayers.
{time} 1500
Unfortunately, some people do not follow the law and have serious
delinquencies in paying taxes to the IRS.
What is shocking to me and honest taxpayers across the country is
that many companies that didn't pay their taxes were benefiting from
Federal Government contracts. GAO studies over the past few years have
identified more than 50,000 contractors owing nearly $8 billion in
unpaid Federal taxes. This bill will put an end to that problem once
and for all.
Mr. Speaker, H.R. 4881 establishes a process to prohibit companies
with seriously delinquent Federal tax debt from receiving new Federal
contracts and grants. It will reward responsible taxpaying contractors
with more opportunities to continue serving the Federal Government for
abiding by the law. And it should increase collections because
companies will get current on their tax bills if they want to continue
receiving Federal contracts. With a mounting Federal budget deficit and
rising obligations, the Federal Government cannot afford to leave
billions of dollars in tax revenue uncollected.
The sponsor of H.R. 4881, Mr. Ellsworth from Indiana, has put in a
lot of work on this bill, and I want to thank him for his efforts. As a
former sheriff, he wants to make sure people who break the law are not
rewarded.
When we get into contracting and tax law, the law gets complicated.
He has worked hard to make sure this law will not have unintended
consequences. We also received guidance from our colleagues on the Ways
and Means and Joint Tax Committees. I would like to thank my friend
from New York (Mr. Rangel) and his staff for their assistance.
Chairman Waxman and Chairman Rangel exchanged letters regarding
committee jurisdiction on this bill, and I ask that these letters be
placed in the Record.
Mr. Speaker, this bill is of monumental importance to improving
fairness and efficiency in Federal contracting. I fully support its
passage and urge my colleagues to do the same.
House of Representatives,
Committee on Ways and Means,
Washington, DC, March 12, 2008.
Hon. Henry Waxman,
Chairman, Oversight and Government Reform Committee, Rayburn
House Office Building, Washington, DC.
Dear Henry, I am writing regarding H.R. 4881, the
Contracting and Tax Accountability Act of 2008, which the
Oversight and Government Reform Committee ordered favorably
reported on March 13, 2008. As you know, a similar bill, H.R.
1870, was referred to the Oversight and Government Reform
Committee, as well as to the Committee on Ways and Means.
Section 3 of H.R. 4881 authorizes the Secretary of the
Treasury to disclose to other agencies whether or not a
potential Federal
[[Page H2236]]
contractor has a seriously delinquent tax debt as defined by
the bill, and requires the Secretary to develop and issue a
form for this purpose. As you know, Rule X gives the
Committee on Ways and Means jurisdiction over subjects
relating to the U.S. Treasury and tax information being
disclosed to other agencies generally, and we have
successfully asserted jurisdiction over similar legislation.
Because our staffs have worked together to produce this
bipartisan legislation, and in order to expedite this
legislation for Floor consideration, the Committee will forgo
action on this bill, and will not oppose the inclusion of
these provisions within H.R. 4881. This is being done with
the understanding that it does not in any way prejudice the
Committee with respect to its jurisdictional prerogatives on
this bill or similar legislation in the future.
I would appreciate your response to this letter, confirming
this understanding with respect to H.R. 4881, and would ask
that a copy of our exchange of letters on this matter be
included in the record.
Sincerely,
Charles B. Rangel,
Chairman.
____
House of Representatives, Committee on Oversight and
Government Reform,
Washington, DC, April 11, 2008.
Hon. Charles B. Rangel,
Chairman, Committee on Ways and Means, Longworth House Office
Building, Washington, DC.
Dear Mr. Chairman: Thank you for your letter regarding H.R.
4881, the Contracting and Tax Accountability Act of 2008,
which the Committee on Oversight and Government Reform
reported, as amended, on April 10, 2008.
I appreciate your willingness to work cooperatively on this
legislation and I recognize that the bill contains provisions
that fall within the jurisdiction of the Committee on Ways
and Means. I agree that your inaction with respect to this
bill does not prejudice the Ways and Means Committee's
interests and prerogatives regarding this bill or similar
legislation.
I will ensure that our exchange of letters is included in
the Congressional Record during consideration on the House
floor of H.R. 4881.
Sincerely,
Henry A. Waxman,
Chairman.
Mr. Speaker, I reserve the balance of my time.
Ms. FOXX. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise today in support of H.R. 4881, the Contracting
and Tax Accountability Act of 2008.
This legislation would subject any firm that has a seriously
delinquent tax debt, defined to mean any time the IRS has filed a tax
lien against the company, to a debarment proceeding with the aim of
preventing the firm from obtaining a government contract or grant.
Potential contractors and grant recipients must certify that the
company does not have any seriously delinquent tax debt in order to be
eligible for Federal grants and contracts.
This might sound like a reasonable requirement, and it is. In fact,
the administration is currently finalizing a regulation that would
require Federal contractors and grantees to certify, among other
things, that they have not been notified by the IRS of liability for
delinquent taxes. The proposed regulation would also include the
failure to pay taxes as a specific cause for a company to be debarred
from receiving Federal contracts. Since the issue addressed in this
legislation is already being addressed through the regulatory process,
it is unclear to us whether this legislation is necessary.
Nevertheless, we will not object to it.
Mr. Speaker, I yield back the balance of my time.
Mr. BRALEY of Iowa. Mr. Speaker, at this time, I yield 5 minutes to
the gentleman from Indiana, the sponsor of this bill, Mr. Ellsworth.
Mr. ELLSWORTH. I would like to thank the gentleman.
Mr. Speaker, I rise today in strong support of the Contracting and
Tax Accountability Act of 2008.
Tomorrow is April 15, Tax Day, a day when Americans follow through on
their civic obligation by filing their tax returns with the Federal
Government. Paying taxes isn't something any of us enjoy doing, but we
all do it anyway out of a sense of duty to our country.
Each year, taxpayers play by the rules and pay their share of taxes.
I don't think it's too much to ask companies, particularly those who
receive Federal Government contracts, to do the very same.
According to the Government Accountability Office report, in 2004 and
2005 alone, government contractors owed the U.S. Treasury over $5
billion, that's billion with a ``b,'' in unpaid Federal taxes. Many of
these contractors were closely held businesses that simply gamed the
system by withholding employee wages, Social Security, Medicare and
individual income taxes and then never sending these withholdings to
the IRS.
That doesn't mean that all contractors are cheating the system; in
fact, most are not. Most are doing terrific work and putting our tax
dollars to good use. But we have a responsibility to protect companies
and taxpayer dollars by stopping corrupt contractors from gaming our
system. The only way you do that, when they won't do it on their own,
is by increased oversight.
This legislation is simple in scope and will go a long way towards
ensuring that companies doing business with the Federal Government are
doing that in good faith. And by leveling the playing field between
contractors, we can better ensure our tax dollars are not used to
reward tax cheats.
The Contracting and Tax Accountability Act establishes a process to
prevent people who have serious tax delinquent debts from ever
receiving Federal contracts or grants. This legislation affirms that it
is the policy of the United States that no government contracts or
grants should be awarded to individuals or companies with seriously
delinquent Federal tax debts. It requires that bids for Federal
contracts include a certification that the person does not possess
serious delinquent tax debt. An authorization to verify this
certification with the Secretary of the Treasury is also required.
The definition of serious delinquent tax debt was carefully defined
as an outstanding debt for which a Notice of Lien has been filed in the
public record. The definition also excludes tax debt that is being
repaid in accordance with an installment agreement, and a tax debt for
which a collection due process has been requested.
I would like to thank Chairman Waxman, Chairman Ed Towns for guiding
this legislation through his subcommittee, and Mike McCarthy on his
staff for lending his expertise. I would also like to thank Senator
Barack Obama and Ian Solomon on his staff for their collaboration in
the Senate on this important legislation.
Mr. Speaker, the Contracting and Tax Accountability Act is a
practical and cost-effective way to ensure all companies who wish to do
business with the Federal Government compete on an equal playing field.
This legislation protects good faith contractors who are playing by the
rules and brings much needed transparency to how our tax dollars are
being spent.
I urge my colleagues to pass this bill.
Mr. BRALEY of Iowa. Mr. Speaker, at this time, I yield as much time
as he may consume to the distinguished Chair of the Oversight and
Government Reform Committee, the gentleman from California (Mr.
Waxman).
Mr. WAXMAN. Mr. Speaker, H.R. 4881, introduced by Representative
Ellsworth, is a very important bill. It's a simple one. It's a
commonsense bill. It would prohibit the award of Federal contracts to
companies that don't pay their Federal taxes. It accomplishes this by
requiring contractors to certify they do not have a serious delinquent
debt, and to authorize the Treasury Department to disclose such
information to contracting agencies.
The Federal Government should not be granting Federal contracts to
companies that won't pay their taxes. Companies that cheat on their
taxes have an unfair competitive advantage when bidding for Federal
contracts because their costs are lowered. This bill will level the
playing field and restore fairness to the Federal procurement system.
Representative Towns, who is the chairman of the subcommittee, along
with Mr. Ellsworth, have put a lot of time and effort into addressing
these concerns and in crafting a very good bill, and I want to thank
them for all their hard work.
The minority also raised some concerns about previous versions of
this legislation, and I also want to thank Representative Tom Davis for
working constructively with us to address those issues.
The end product before us today is solid legislation which should
have bipartisan support, and which I hope will address this issue once
and for all.
[[Page H2237]]
I thank Representative Ellsworth for his excellent recommendations in
offering this bill and seeing it through to the point where we are now
on the House floor. I hope this bill will soon become law.
I urge all my colleagues to vote for H.R. 4881.
Mr. BRALEY of Iowa. Mr. Speaker, I encourage all of my colleagues to
vote in favor of this bill.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Iowa (Mr. Braley) that the House suspend the rules and
pass the bill, H.R. 4881, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
____________________