[Congressional Record Volume 163, Number 195 (Thursday, November 30, 2017)]
[Senate]
[Pages S7606-S7609]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 1750. Mr. DONNELLY submitted an amendment intended to be proposed
to amendment SA 1618 proposed by Mr. McConnell (for Mr. Hatch (for
himself and Ms. Murkowski)) to the bill H.R. 1, to provide for
reconciliation pursuant to titles II and V of the concurrent resolution
on the budget for fiscal year 2018; which was ordered to lie on the
table; as follows:
At the appropriate place, insert the following:
SEC. __. ENDING OUTSOURCING.
(a) Outsourcing Statement in Worker Adjustment and
Retraining Notice.--
(1) Outsourcing statement.--Section 3 of the Worker
Adjustment and Retraining Notification Act (29 U.S.C. 2102)
is amended by adding at the end the following:
``(e) Outsourcing Statement.--
``(1) In general.--For purposes of subsection (a), the
employer shall include an outsourcing statement in the notice
described in that subsection. The outsourcing statement shall
specify whether part or all of the positions held by affected
employees covered by subsection (a) will be moved to a
country outside the United States, regardless of whether the
positions are moved within the business enterprise involved
or to another business enterprise. The employer shall make
the determination of whether the positions are being so moved
in accordance with regulations issued by the Secretary. The
employer shall serve the notice as required under subsection
(a) and submit the notice to the Secretary of Labor.
``(2) List.--Not less often than annually, the Secretary
shall publish and make available on the website of the
Department of Labor, a list including each employer who--
``(A) has included an outsourcing statement in a notice
under paragraph (1); or
``(B) has incurred liability under section 5, in part or in
whole, because the employer ordered a plant closing or mass
layoff without having served a notice that is required, under
this section, to include an outsourcing statement.''.
(2) Implementation report.--The Worker Adjustment and
Retraining Notification Act is amended by inserting after
section 10 (29 U.S.C. 2109) the following:
``SEC. 10A. IMPLEMENTATION STUDY.
``(a) Study.--The Comptroller General of the United States
shall conduct a study of the implementation of section 3(e)
of the Worker Adjustment and Retraining Notification Act (29
U.S.C. 2102(e)) by the Department of Labor.
``(b) Report.--Not later than 3 years after the date of
enactment of this Act, the Comptroller General shall submit
to the appropriate committees of Congress a report containing
the results of the study.''.
(b) Denial of Deduction for Outsourcing Expenses.--
(1) In general.--Part IX of subchapter B of chapter 1 is
amended by adding at the end the following new section:
``SEC. 280I. OUTSOURCING EXPENSES.
``(a) In General.--No deduction otherwise allowable under
this chapter shall be allowed for any specified outsourcing
expense.
``(b) Specified Outsourcing Expense.--For purposes of this
section--
``(1) In general.--The term `specified outsourcing expense'
means--
``(A) any eligible expense paid or incurred by the taxpayer
in connection with the elimination of any business unit of
the taxpayer (or of any member of any expanded affiliated
group in which the taxpayer is also a member) located within
the United States, and
``(B) any eligible expense paid or incurred by the taxpayer
in connection with the establishment of any business unit of
the taxpayer (or of any member of any expanded affiliated
group in which the taxpayer is also a member) located outside
the United States,
if such establishment constitutes the relocation of the
business unit so eliminated. For purposes of the preceding
sentence, a relocation shall not be treated as failing to
occur merely because such elimination occurs in a different
taxable year than such establishment.
``(2) Eligible expenses.--The term `eligible expenses'
means--
``(A) any amount for which a deduction is allowed to the
taxpayer under section 162, and
[[Page S7607]]
``(B) permit and license fees, lease brokerage fees,
equipment installation costs, and, to the extent provided by
the Secretary, other similar expenses.
Such term does not include any compensation which is paid or
incurred in connection with severance from employment and, to
the extent provided by the Secretary, any similar amount.
``(3) Business unit.--The term `business unit' means--
``(A) any trade or business, and
``(B) any line of business, or functional unit, which is
part of any trade or business.
``(4) Expanded affiliated group.--The term `expanded
affiliated group' means an affiliated group as defined in
section 1504(a), determined without regard to section
1504(b)(3) and by substituting `more than 50 percent' for `at
least 80 percent' each place it appears in section 1504(a). A
partnership or any other entity (other than a corporation)
shall be treated as a member of an expanded affiliated group
if such entity is controlled (within the meaning of section
954(d)(3)) by members of such group (including any entity
treated as a member of such group by reason of this
paragraph).
``(5) Operating expenses not taken into account.--Any
amount paid or incurred in connection with the ongoing
operation of a business unit shall not be treated as an
amount paid or incurred in connection with the establishment
or elimination of such business unit.
``(c) Special Rules.--
``(1) Application to deductions for depreciation and
amortization.--In the case of any portion of a specified
outsourcing expense which is not deductible in the taxable
year in which paid or incurred, such portion shall neither be
chargeable to capital account nor amortizable.
``(2) Possessions treated as part of the united states.--
For purposes of this section, the term `United States' shall
be treated as including each possession of the United States
(including the Commonwealth of Puerto Rico and the
Commonwealth of the Northern Mariana Islands).
``(d) Regulations.--The Secretary shall prescribe such
regulations or other guidance as may be necessary or
appropriate to carry out the purposes of this section,
including regulations which provide (or create a rebuttable
presumption) that certain establishments of business units
outside the United States will be treated as relocations
(based on timing or such other factors as the Secretary may
provide) of business units eliminated within the United
States.''.
(2) Limitation on subpart f income of controlled foreign
corporations determined without regard to specified
outsourcing expenses.--Subsection (c) of section 952 is
amended by adding at the end he following new paragraph:
``(4) Earnings and profits determined without regard to
specified outsourcing expenses.--For purposes of this
subsection, earnings and profits of any controlled foreign
corporation shall be determined without regard to any
specified outsourcing expense (as defined in section
280I(b)).''.
(3) Clerical amendment.--The table of sections for part IX
of subchapter B of chapter 1 is amended by adding at the end
the following new item:
``Sec. 280I. Outsourcing expenses.''.
(4) Effective date.--The amendments made by this subsection
shall apply to amounts paid or incurred after the date of the
enactment of this Act.
(c) Denial of Certain Deductions and Accounting Methods for
Outsourcing Employers.--
(1) In general.--Part IX of subchapter B of chapter 1 is
amended by adding at the end the following new section:
``SEC. 280J. LIMITATIONS FOR OUTSOURCING EMPLOYERS.
``(a) In General.--During the disallowance period, an
applicable taxpayer--
``(1) shall not be allowed any deduction under section 199
for any income of the taxpayer,
``(2) may not use the method provided in section 472(b) in
inventorying goods,
``(3) may not use the lower of cost or market method of
determining inventories for purposes of determining income,
and
``(4) shall not be allowed any deduction under section 163
for interest paid or accrued on indebtedness.
``(b) Applicable Taxpayer.--For purposes of subsection (a),
the term `applicable taxpayer' means a taxpayer which--
``(1) during the taxable year, has served written notice
under subsection (a) of section 3 of the Worker Adjustment
and Retraining Notification Act which includes an outsourcing
statement described in subsection (e) of such section, and
``(2) the cumulative employment loss (excluding any part-
time employees) for positions at facilities owned by such
taxpayer which will be moved to a country outside of the
United States, as determined pursuant to any outsourcing
statements served by such taxpayer during such taxable year,
exceeds 50 employees.
``(c) Disallowance Period.--For purposes of subsection (a),
the disallowance period is the period of 3 taxable years
after the taxable year in which the statements described in
subsection (b)(2) are required to be served.
``(d) Expanded Affiliated Group Treated as Single
Taxpayer.--For purposes of this section, the members of an
expanded affiliated group (as defined in section 280I(b)(4))
shall be treated as a single taxpayer.
``(e) Regulations.--The Secretary shall prescribe such
regulations or other guidance as may be necessary or
appropriate to carry out the purposes of this section.''.
(2) Clerical amendment.--The table of sections for part IX
of subchapter B of chapter 1 is amended by adding at the end
the following new item:
``Sec. 280J. Limitations for outsourcing employers.''.
(3) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after the date of the
enactment of this Act.
(d) Recapture of Credits for Outsourcing Employers.--
(1) In general.--Part IV of subchapter A of chapter 1 is
amended by adding at the end the following new subpart:
``Subpart K--Recapture of Credits for Outsourcing Employers
``Sec. 54BB. Recapture of credits for outsourcing employers.
``SEC. 54BB. RECAPTURE OF CREDITS FOR OUTSOURCING EMPLOYERS.
``(a) In General.--Pursuant to regulations prescribed by
the Secretary, in the case of a taxpayer which owns a
facility for which there is an outsourcing event during the
taxable year, the tax under this chapter for such taxable
year shall be increased by the amount equal to the sum of--
``(1) any credits allowed under this chapter relating to
expenses for design, construction, operation, or maintenance
of such facility during the 5 taxable years preceding such
taxable year, and
``(2) any grants provided by the Secretary in lieu of
credits described in paragraph (1) during the 5 taxable years
preceding such taxable year.
``(b) Outsourcing Event.--For purposes of subsection (a),
the term `outsourcing event' means a plant closing or mass
layoff (as described in section 2(a) of the Worker Adjustment
and Retraining Notification Act) in which the employment loss
(excluding any part-time employees) for positions which will
be moved to a country outside of the United States, as
determined pursuant to the outsourcing statement (as
described in paragraph (1) of such section 3(e) of such Act)
served by the taxpayer during the taxable year, exceeds 50
employees.
``(c) Expanded Affiliated Group Treated as Single
Taxpayer.--For purposes of this section, the members of an
expanded affiliated group (as defined in section 280I(b)(4))
shall be treated as a single taxpayer.''.
(2) Clerical amendment.--The table of subparts for part IV
of subchapter A of chapter 1 is amended by adding at the end
the following new item:
``subpart k. recapture of credits for outsourcing employers''.
(3) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after the date of the
enactment of this Act.
(e) Credit for Insourcing Expenses.--
(1) In general.--Subpart D of part IV of subchapter A of
chapter 1 is amended by adding at the end the following new
section:
``SEC. 45S. CREDIT FOR INSOURCING EXPENSES.
``(a) In General.--For purposes of section 38, the
insourcing expenses credit for any taxable year is an amount
equal to 20 percent of the eligible insourcing expenses of
the taxpayer which are taken into account in such taxable
year under subsection (d).
``(b) Eligible Insourcing Expenses.--For purposes of this
section--
``(1) In general.--The term `eligible insourcing expenses'
means--
``(A) eligible expenses paid or incurred by the taxpayer in
connection with the elimination of any business unit of the
taxpayer (or of any member of any expanded affiliated group
in which the taxpayer is also a member) located outside the
United States, and
``(B) eligible expenses paid or incurred by the taxpayer in
connection with the establishment of any business unit of the
taxpayer (or of any member of any expanded affiliated group
in which the taxpayer is also a member) located within--
``(i) a HUBZone (as defined in section 3(p)(2) of the Small
Business Act (15 U.S.C. 632(p)(2))), or
``(ii) a low-income community (as described in section
45D(e)),
if such establishment constitutes the relocation of the
business unit so eliminated. For purposes of the preceding
sentence, a relocation shall not be treated as failing to
occur merely because such elimination occurs in a different
taxable year than such establishment.
``(2) Eligible expenses.--The term `eligible expenses'
means--
``(A) any amount for which a deduction is allowed to the
taxpayer under section 162, and
``(B) permit and license fees, lease brokerage fees,
equipment installation costs, and, to the extent provided by
the Secretary, other similar expenses.
Such term does not include any compensation which is paid or
incurred in connection with severance from employment and, to
the extent provided by the Secretary, any similar amount.
``(3) Business unit.--The term `business unit' means--
``(A) any trade or business, and
``(B) any line of business, or functional unit, which is
part of any trade or business.
[[Page S7608]]
``(4) Expanded affiliated group.--The term `expanded
affiliated group' means an affiliated group as defined in
section 1504(a), determined without regard to section
1504(b)(3) and by substituting `more than 50 percent' for `at
least 80 percent' each place it appears in section 1504(a). A
partnership or any other entity (other than a corporation)
shall be treated as a member of an expanded affiliated group
if such entity is controlled (within the meaning of section
954(d)(3)) by members of such group (including any entity
treated as a member of such group by reason of this
paragraph).
``(5) Expenses must be pursuant to insourcing plan.--
Amounts shall be taken into account under paragraph (1) only
to the extent that such amounts are paid or incurred pursuant
to a written plan to carry out the relocation described in
paragraph (1).
``(6) Operating expenses not taken into account.--Any
amount paid or incurred in connection with the on-going
operation of a business unit shall not be treated as an
amount paid or incurred in connection with the establishment
or elimination of such business unit.
``(c) Increased Domestic Employment Requirement.--No credit
shall be allowed under this section unless the number of
full-time equivalent employees of the taxpayer for the
taxable year for which the credit is claimed exceeds the
number of full-time equivalent employees of the taxpayer for
the last taxable year ending before the first taxable year in
which such eligible insourcing expenses were paid or
incurred. For purposes of this subsection, full-time
equivalent employees has the meaning given such term under
section 45R(d) (and the applicable rules of section 45R(e)).
All employers treated as a single employer under subsection
(b), (c), (m), or (o) of section 414 shall be treated as a
single employer for purposes of this subsection.
``(d) Credit Allowed Upon Completion of Insourcing Plan.--
``(1) In general.--Except as provided in paragraph (2),
eligible insourcing expenses shall be taken into account
under subsection (a) in the taxable year during which the
plan described in subsection (b)(5) has been completed and
all eligible insourcing expenses pursuant to such plan have
been paid or incurred.
``(2) Election to apply employment test and claim credit in
first full taxable year after completion of plan.--If the
taxpayer elects the application of this paragraph, eligible
insourcing expenses shall be taken into account under
subsection (a) in the first taxable year after the taxable
year described in paragraph (1).
``(e) Possessions Treated as Part of the United States.--
For purposes of this section, the term `United States' shall
be treated as including each possession of the United States
(including the Commonwealth of Puerto Rico and the
Commonwealth of the Northern Mariana Islands).
``(f) Regulations.--The Secretary shall prescribe such
regulations or other guidance as may be necessary or
appropriate to carry out the purposes of this section.''.
(2) Credit to be part of general business credit.--
Subsection (b) of section 38 is amended by striking ``plus''
at the end of paragraph (35), by striking the period at the
end of paragraph (36) and inserting ``, plus'', and by adding
at the end the following new paragraph:
``(37) the insourcing expenses credit determined under
section 45S(a).''.
(3) Clerical amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 is amended by
adding at the end the following new item:
``Sec. 45S. Credit for insourcing expenses.''.
(4) Effective date.--The amendments made by this subsection
shall apply to amounts paid or incurred after the date of the
enactment of this Act.
(5) Application to united states possessions.--
(A) Payments to possessions.--
(i) Mirror code possessions.--The Secretary of the Treasury
shall make periodic payments to each possession of the United
States with a mirror code tax system in an amount equal to
the loss to that possession by reason of section 45S of the
Internal Revenue Code of 1986. Such amount shall be
determined by the Secretary of the Treasury based on
information provided by the government of the respective
possession.
(ii) Other possessions.--The Secretary of the Treasury
shall make annual payments to each possession of the United
States which does not have a mirror code tax system in an
amount estimated by the Secretary of the Treasury as being
equal to the aggregate benefits that would have been provided
to residents of such possession by reason of section 45S of
such Code if a mirror code tax system had been in effect in
such possession. The preceding sentence shall not apply with
respect to any possession of the United States unless such
possession has a plan, which has been approved by the
Secretary of the Treasury, under which such possession will
promptly distribute such payment to the residents of such
possession.
(B) Coordination with credit allowed against united states
income taxes.--No credit shall be allowed against United
States income taxes under section 45S of such Code to any
person--
(i) to whom a credit is allowed against taxes imposed by
the possession by reason of such section, or
(ii) who is eligible for a payment under a plan described
in paragraph (1)(B).
(C) Definitions and special rules.--
(i) Possessions of the united states.--For purposes of this
section, the term ``possession of the United States''
includes the Commonwealth of Puerto Rico and the Commonwealth
of the Northern Mariana Islands.
(ii) Mirror code tax system.--For purposes of this section,
the term ``mirror code tax system'' means, with respect to
any possession of the United States, the income tax system of
such possession if the income tax liability of the residents
of such possession under such system is determined by
reference to the income tax laws of the United States as if
such possession were the United States.
(iii) Treatment of payments.--For purposes of section
1324(b)(2) of title 31, United States Code, the payments
under this section shall be treated in the same manner as a
refund due from sections referred to in such section
1324(b)(2).
(f) Authority for Federal Contracting Officers to Take the
Outsourcing of Jobs From the United States Into Account in
Awarding Contracts.--
(1) Department of defense and related agency contracts.--
(A) Consideration of outsourcing.--
(i) In general.--Chapter 137 of title 10, United States
Code, is amended by inserting after section 2327 the
following new section:
``Sec. 2327a. Contracts: consideration of outsourcing of jobs
``(a) Disclosure of Outsourcing of Jobs.--
``(1) In general.--The head of an agency shall require a
contractor that submits a bid or proposal in response to a
solicitation issued by the agency to disclose in that bid or
proposal if the contractor, or a subsidiary of the
contractor, owns a facility for which there is an outsourcing
event during the three-year period ending on the date of the
submittal of the bid or proposal.
``(2) Outsourcing event.--For purposes of paragraph (1),
the term `outsourcing event' means a plant closing or mass
layoff (as described in section 2(a) of the Worker Adjustment
and Retraining Notification Act) in which the employment loss
(excluding any part-time employees) for positions which will
be moved to a country outside of the United States, as
determined pursuant to the outsourcing statement (as
described in paragraph (1) of such section 3(e) of such Act)
served by the taxpayer during the taxable year, exceeds 50
employees.
``(b) Consideration Authorized.--(1) Agency contracting
officers considering bids or proposals in response to a
solicitation issued by the agency may take into account any
disclosure made pursuant to subsection (a) in such bids and
proposals.
``(2) The head of an agency may establish a negative
preference of up to 10 percent of the cost of a contract for
purposes of evaluating a bid or proposal of a contractor that
makes a disclosure pursuant to subsection (a).
``(c) Sense of Congress.--It is the sense of Congress that
agency contracting officers should, using section 2304(b)(3)
of this title, exclude contractors making a disclosure
pursuant to subsection (a) in response to solicitations
issued by the agency from the bidding process in connection
with such solicitations on the grounds that the actions
described in the disclosures are against the public interests
of the United States.
``(d) Annual Report.--The head of each agency shall submit
to Congress each year a report on the following:
``(1) The number of solicitations made by the agency during
the preceding year for which disclosures were made pursuant
to subsection (a) in responsive bids or proposals.
``(2) The number of contracts awarded by the agency during
the preceding year in which such disclosures were taken into
account in the contract award.''.
(ii) Clerical amendment.--The table of sections at the
beginning of chapter 137 of such title is amended by
inserting after the item relating to section 2327 the
following new item:
``2327a. Contracts: consideration of outsourcing of jobs.''.
(B) Exclusion of firms from sources.--Section 2304(b) of
such title is amended--
(i) by redesignating paragraphs (3) and (4) as paragraphs
(4) and (5), respectively;
(ii) by inserting after paragraph (2) the following new
paragraph:
``(3) The head of an agency may provide for the procurement
of property and services covered by this chapter using
competitive procedures but excluding a source making a
disclosure pursuant to section 2327a(a) of this title in the
bid or proposal in response to the solicitation issued by the
agency if the head of the agency determines that the actions
described by disclosure are against the public interests of
the United States and the source is to be excluded on those
grounds. Any such determination shall take into account the
sense of Congress set forth in section 2327a(c) of this
title.''; and
(iii) in paragraph (3), as so redesignated, by striking
``paragraphs (1) and (2)'' and inserting ``paragraphs (1),
(2), and (3)''.
(2) Other federal contracts.--
(A) Consideration of outsourcing.--Chapter 35 of title 41,
United States Code, is amended by inserting after section
3303 the following new section:
``Sec. 3303a. Bidders outsourcing jobs: disclosure of
outsourcing; consideration of outsourcing in award;
exclusion from sources
``(a) Disclosure of Outsourcing of Jobs.--
[[Page S7609]]
``(1) In general.--The head of an executive agency shall
require a contractor that submits a bid or proposal in
response to a solicitation issued by the executive agency to
disclose in that bid or proposal if the contractor, or a
subsidiary of the contractor, owns a facility for which there
is an outsourcing event during the three-year period ending
on the date of the submittal of the bid or proposal.
``(2) Outsourcing event.--For purposes of paragraph (1),
the term `outsourcing event' means a plant closing or mass
layoff (as described in section 2(a) of the Worker Adjustment
and Retraining Notification Act) in which the employment loss
(excluding any part-time employees) for positions which will
be moved to a country outside of the United States, as
determined pursuant to the outsourcing statement (as
described in paragraph (1) of such section 3(e) of such Act)
served by the taxpayer during the taxable year, exceeds 50
employees.
``(b) Consideration Authorized.--(1) Contracting officers
of an executive agency considering bids or proposals in
response to a solicitation issued by the executive agency may
take into account any disclosure made pursuant to subsection
(a) in such bids and proposals.
``(2) The head of an executive agency may establish a
negative preference of up to 10 percent of the cost of a
contract for purposes of evaluating a bid or proposal of a
contractor that makes a disclosure pursuant to subsection
(a).
``(c) Exclusion From Sources.--
``(1) In general.--The head of an executive agency may
provide for the procurement of property and services using
competitive procedures but excluding a source making a
disclosure under subsection (a) in the bid or proposal in
response to the solicitation issued by the executive agency
if the head of the executive agency determines that the
actions described by disclosure are against the public
interests of the United States and the source is to be
excluded on those grounds. Any such determination shall take
into account the sense of Congress set forth in paragraph
(2).
``(2) Sense of congress.--It is the sense of Congress that
contracting officers of executive agencies may use paragraph
(1) to exclude contractors making a disclosure pursuant to
subsection (a) in response to a solicitation issued by the
executive agency from the bidding process in connection with
the solicitation on the grounds that the actions described by
the disclosure are against the public interests of the United
States.
``(d) Annual Report.--The head of each executive agency
shall submit to Congress each year a report on the following:
``(1) The number of solicitations made by the executive
agency during the preceding year for which disclosures were
made pursuant to subsection (a) in responsive bids or
proposals.
``(2) The number of contracts awarded to contractors that
disclosed having outsourced more than 50 jobs during the
preceding three years.''.
(B) Clerical amendment.--The table of sections at the
beginning of chapter 35 of such title is amended by inserting
after the item relating to section 3303 the following new
item:
``3303a. Bidders outsourcing jobs: disclosure of outsourcing;
consideration of outsourcing in award; exclusion from
sources.''.
(C) Conforming amendment.--Section 3301(a) of such title is
amended by inserting ``3303a(c),'' after ``3303,''.
(3) Regulations.--
(A) In general.--Not later than 180 days after the date of
the enactment of this Act, the Federal Acquisition Regulatory
Council, in consultation with the heads of relevant agencies,
shall amend the Federal Acquisition Regulation and the
Defense Federal Acquisition Regulation Supplement to carry
out the requirements of section 3303a of title 41, United
States Code, and section 2327a of title 10, United States
Code, as added by this section.
(B) Definition of outsourcing.--For purposes of defining
outsourcing pursuant to paragraph (1), the Federal
Acquisition Regulatory Council may utilize regulations
prescribed by the Secretary of Labor.
(4) Rule of construction.--This subsection, and the
amendments made by this subsection, shall be applied in a
manner consistent with United States obligations under
international agreements.
______