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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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