Bring Jobs Home Act

I 117TH CONGRESS 1ST SESSION H. R. 2341 To amend the Internal Revenue Code of 1986 to encourage domestic insourcing and discourage foreign outsourcing. IN THE HOUSE OF REPRESENTATIVES APRIL 1, 2021 Mr. PASCRELL (for himself, Mr. SUOZZI, Ms. NORTON, and Ms. BROWNLEY) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to encourage domestic insourcing and discourage foreign outsourcing. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Bring Jobs Home 4 Act’’. 5 SEC. 2. CREDIT FOR INSOURCING EXPENSES. 6 (a) IN GENERAL.—Subpart D of part IV of sub- 7 chapter A of chapter 1 of the Internal Revenue Code of 8 1986 is amended by adding at the end the following new 9 section: 10 VerDate Sep 11 2014 04:03 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2341.IH H2341 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 2341 IH ‘‘SEC. 45U. CREDIT FOR INSOURCING EXPENSES. 1 ‘‘(a) IN GENERAL.—For purposes of section 38, the 2 insourcing expenses credit for any taxable year is an 3 amount equal to 20 percent of the eligible insourcing ex- 4 penses of the taxpayer which are taken into account in 5 such taxable year under subsection (d). 6 ‘‘(b) ELIGIBLE INSOURCING EXPENSES.—For pur- 7 poses of this section— 8 ‘‘(1) IN GENERAL.—The term ‘eligible 9 insourcing expenses’ means— 10 ‘‘(A) eligible expenses paid or incurred by 11 the taxpayer in connection with the elimination 12 of any business unit of the taxpayer (or of any 13 member of any expanded affiliated group in 14 which the taxpayer is also a member) located 15 outside the United States, and 16 ‘‘(B) eligible expenses paid or incurred by 17 the taxpayer in connection with the establish- 18 ment of any business unit of the taxpayer (or 19 of any member of any expanded affiliated group 20 in which the taxpayer is also a member) located 21 within the United States, 22 if such establishment constitutes the relocation of 23 business unit so eliminated. For purposes of the pre- 24 ceding sentence, a relocation shall not be treated as 25 failing to occur merely because such elimination oc- 26 VerDate Sep 11 2014 04:03 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2341.IH H2341 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 2341 IH curs in a different taxable year than such establish- 1 ment. 2 ‘‘(2) ELIGIBLE EXPENSES.—The term ‘eligible 3 expenses’ means— 4 ‘‘(A) any amount for which a deduction is 5 allowed to the taxpayer under section 162, and 6 ‘‘(B) permit and license fees, lease broker- 7 age fees, equipment installation costs, and, to 8 the extent provided by the Secretary, other 9 similar expenses. 10 Such term does not include any compensation which 11 is paid or incurred in connection with severance 12 from employment and, to the extent provided by the 13 Secretary, any similar amount. 14 ‘‘(3) BUSINESS UNIT.—The term ‘business unit’ 15 means— 16 ‘‘(A) any trade or business, and 17 ‘‘(B) any line of business, or functional 18 unit, which is part of any trade or business. 19 ‘‘(4) EXPANDED AFFILIATED GROUP.—The 20 term ‘expanded affiliated group’ means an affiliated 21 group as defined in section 1504(a), determined 22 without regard to section 1504(b)(3) and by sub- 23 stituting ‘more than 50 percent’ for ‘at least 80 per- 24 cent’ each place it appears in section 1504(a). A 25 VerDate Sep 11 2014 04:03 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2341.IH H2341 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 2341 IH partnership or any other entity (other than a cor- 1 poration) shall be treated as a member of an ex- 2 panded affiliated group if such entity is controlled 3 (within the meaning of section 954(d)(3)) by mem- 4 bers of such group (including any entity treated as 5 a member of such group by reason of this para- 6 graph). 7 ‘‘(5) EXPENSES MUST BE PURSUANT TO 8 INSOURCING PLAN.—Amounts shall be taken into ac- 9 count under paragraph (1) only to the extent that 10 such amounts are paid or incurred pursuant to a 11 written plan approved by the board of directors or 12 authorized officers to carry out the relocation de- 13 scribed in paragraph (1). 14 ‘‘(6) OPERATING EXPENSES NOT TAKEN INTO 15 ACCOUNT.—Any amount paid or incurred in connec- 16 tion with the ongoing operation of a business unit 17 shall not be treated as an amount paid or incurred 18 in connection with the establishment or elimination 19 of such business unit. 20 ‘‘(c) INCREASED DOMESTIC EMPLOYMENT REQUIRE- 21 MENT.—No credit shall be allowed under this section un- 22 less the number of full-time equivalent employees of the 23 taxpayer for the taxable year for which the credit is 24 claimed exceeds the number of full-time equivalent em- 25 VerDate Sep 11 2014 04:03 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2341.IH H2341 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 2341 IH ployees of the taxpayer for the last taxable year ending 1 before the first taxable year in which such eligible 2 insourcing expenses were paid or incurred. For purposes 3 of this subsection, full-time equivalent employees has the 4 meaning given such term under section 45R(d) (and the 5 applicable rules of section 45R(e)), determined by only 6 taking into account wages (as otherwise defined in section 7 45R(e)) paid with respect to services performed within the 8 United States. All employers treated as a single employer 9 under subsection (b), (c), (m), or (o) of section 414 shall 10 be treated as a single employer for purposes of this sub- 11 section. 12 ‘‘(d) CREDIT ALLOWED UPON COMPLETION OF 13 INSOURCING PLAN.— 14 ‘‘(1) IN GENERAL.—Except as provided in para- 15 graph (2), eligible insourcing expenses shall be taken 16 into account under subsection (a) in the taxable year 17 during which the plan described in subsection (b)(5) 18 has been completed and all eligible insourcing ex- 19 penses pursuant to such plan have been paid or in- 20 curred. 21 ‘‘(2) ELECTION TO APPLY EMPLOYMENT TEST 22 AND CLAIM CREDIT IN FIRST FULL TAXABLE YEAR 23 AFTER COMPLETION OF PLAN.—If the taxpayer 24 elects the application of this paragraph, eligible 25 VerDate Sep 11 2014 04:03 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2341.IH H2341 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 2341 IH insourcing expenses shall be taken into account 1 under subsection (a) in the first taxable year after 2 the taxable year described in paragraph (1). 3 ‘‘(e) POSSESSIONS TREATED AS PART OF THE 4 UNITED STATES.—For purposes of this section, the term 5 ‘United States’ shall be treated as including each posses- 6 sion of the United States (including the Commonwealth 7 of Puerto Rico and the Commonwealth of the Northern 8 Mariana Islands). 9 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 10 such regulations or other guidance as may be necessary 11 or appropriate to carry out the purposes of this section.’’. 12 (b) CREDIT TO BE PART OF GENERAL BUSINESS 13 CREDIT.—Section 38(b) of such Code is amended by strik- 14 ing ‘‘plus’’ at the end of paragraph (32), by striking the 15 period at the end of paragraph (33) and inserting ‘‘, plus’’, 16 and by adding at the end the following new paragraph: 17 ‘‘(34) the insourcing expenses credit determined 18 under section 45U(a).’’. 19 (c) CONFORMING AMENDMENTS.— 20 (1) Section 280C of such Code is amended by 21 adding at the end the following new subsection: 22 ‘‘(i) CREDIT FOR INSOURCING EXPENSES.—No de- 23 duction shall be allowed for that portion of the expenses 24 otherwise allowable as a deduction taken into account in 25 VerDate Sep 11 2014 04:03 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2341.IH H2341 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 2341 IH determining the credit under section 45U for the taxable 1 year which is equal to the amount of the credit determined 2 for such taxable year under section 45U(a).’’. 3 (2) The table of sections for subpart D of part 4 IV of subchapter A of chapter 1 of such Code is 5 amended by adding at the end the following new 6 item: 7 ‘‘Sec. 45U. Credit for insourcing expenses.’’. (d) EFFECTIVE DATE.—The amendments made by 8 this section shall apply to amounts paid or incurred after 9 the date of the enactment of this Act. 10 (e) APPLICATION TO UNITED STATES POSSES- 11 SIONS.— 12 (1) PAYMENTS TO POSSESSIONS.— 13 (A) MIRROR CODE POSSESSIONS.—The 14 Secretary of the Treasury shall make periodic 15 payments to the United States Virgin Islands, 16 Guam, and the Commonwealth of the Northern 17 Mariana Islands in an amount equal to the loss 18 to that possession by reason of section 45U of 19 the Internal Revenue Code of 1986. Such 20 amount shall be determined by the Secretary of 21 the Treasury based on information provided by 22 the government of the respective possession. 23 (B) OTHER POSSESSIONS.—The Secretary 24 of the Treasury shall make annual payments to 25 VerDate Sep 11 2014 04:03 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2341.IH H2341 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 2341 IH the Commonwealth of Puerto Rico and Amer- 1 ican Samoa in an amount estimated by the Sec- 2 retary of the Treasury as being equal to the ag- 3 gregate benefits that would have been provided 4 to residents of each such possession by reason 5 of section 45U of such Code if a mirror code 6 tax system had been in effect in such posses- 7 sion. The preceding sentence shall not apply 8 with respect to any possession of the United 9 States unless such possession has a plan, which 10 has been approved by the Secretary of the 11 Treasury, under which such possession will 12 promptly distribute such payment to the resi- 13 dents of such possession. 14 (2) COORDINATION WITH CREDIT ALLOWED 15 AGAINST UNITED STATES INCOME TAXES.—No cred- 16 it shall be allowed against United States income 17 taxes under section 45U of such Code to any per- 18 son— 19 (A) to whom a credit is allowed against 20 taxes imposed by the possession by reason of 21 such section, or 22 (B) who is eligible for a payment under a 23 plan described in paragraph (1)(B). 24 VerDate Sep 11 2014 04:03 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2341.IH H2341 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 2341 IH (3) TREATMENT OF PAYMENTS.—For purposes 1 of section 1324(b)(2) of title 31, United States 2 Code, the payments under this section shall be treat- 3 ed in the same manner as a refund due from sec- 4 tions referred to in such section 1324(b)(2). 5 SEC. 3. DENIAL OF DEDUCTION FOR OUTSOURCING EX- 6 PENSES. 7 (a) IN GENERAL.—Part IX of subchapter B of chap- 8 ter 1 of the Internal Revenue Code of 1986 is amended 9 by adding at the end the following new section: 10 ‘‘SEC. 280I. OUTSOURCING EXPENSES. 11 ‘‘(a) IN GENERAL.—No deduction otherwise allow- 12 able under this chapter shall be allowed for any specified 13 outsourcing expense. 14 ‘‘(b) SPECIFIED OUTSOURCING EXPENSE.—For pur- 15 poses of this section— 16 ‘‘(1) IN GENERAL.—The term ‘specified out- 17 sourcing expense’ means— 18 ‘‘(A) any eligible expense paid or incurred 19 by the taxpayer in connection with the elimi- 20 nation of any business unit of the taxpayer (or 21 of any member of any expanded affiliated group 22 in which the taxpayer is also a member) located 23 within the United States, and 24 VerDate Sep 11 2014 04:03 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2341.IH H2341 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 2341 IH ‘‘(B) any eligible expense paid or incurred 1 by the taxpayer in connection with the estab- 2 lishment of any business unit of the taxpayer 3 (or of any member of any expanded affiliated 4 group in which the taxpayer is also a member) 5 located outside the United States, 6 if such establishment constitutes the relocation of 7 business unit so eliminated. For purposes of the pre- 8 ceding sentence, a relocation shall not be treated as 9 failing to occur merely because such elimination oc- 10 curs in a different taxable year than such establish- 11 ment. 12 ‘‘(2) APPLICATION OF CERTAIN DEFINITIONS 13 AND RULES.— 14 ‘‘(A) DEFINITIONS.—For purposes of this 15 section, the terms ‘eligible expenses’, ‘business 16 unit’, and ‘expanded affiliated group’ shall have 17 the respective meanings given such terms by 18 section 45U(b). 19 ‘‘(B) OPERATING EXPENSES NOT TAKEN 20 INTO ACCOUNT.—A rule similar to the rule of 21 section 45U(b)(6) shall apply for purposes of 22 this section. 23 ‘‘(c) SPECIAL RULES.— 24 VerDate Sep 11 2014 04:03 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2341.IH H2341 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 2341 IH ‘‘(1) APPLICATION TO DEDUCTIONS FOR DE- 1 PRECIATION AND AMORTIZATION.—In the case of 2 any portion of a specified outsourcing expense which 3 is not deductible in the taxable year in which paid 4 or incurred, such portion shall neither be chargeable 5 to capital account nor amortizable. 6 ‘‘(2) POSSESSIONS TREATED AS PART OF THE 7 UNITED STATES.—For purposes of this section, the 8 term ‘United States’ shall be treated as including 9 each possession of the United States (including the 10 Commonwealth of Puerto Rico and the Common- 11 wealth of the Northern Mariana Islands). 12 ‘‘(d) REGULATIONS.—The Secretary shall prescribe 13 such regulations or other guidance as may be necessary 14 or appropriate to carry out the purposes of this section, 15 including regulations which provide (or create a rebuttable 16 presumption) that certain establishments of business units 17 outside the United States will be treated as relocations 18 (based on timing or such other factors as the Secretary 19 may provide) of business units eliminated within the 20 United States.’’. 21 (b) LIMITATION ON SUBPART F INCOME OF CON- 22 TROLLED FOREIGN CORPORATIONS DETERMINED WITH- 23 OUT REGARD TO SPECIFIED OUTSOURCING EXPENSES.— 24 VerDate Sep 11 2014 04:03 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2341.IH H2341 pbinns on DSKJLVW7X2PROD with BILLS 12 •HR 2341 IH Section 952(c) of such Code is amended by adding at the 1 end the following new paragraph: 2 ‘‘(4) EARNINGS AND PROFITS DETERMINED 3 WITHOUT REGARD TO SPECIFIED OUTSOURCING EX- 4 PENSES.—For purposes of this subsection, earnings 5 and profits of any controlled foreign corporation 6 shall be determined without regard to any specified 7 outsourcing expense (as defined in section 8 280I(b)).’’. 9 (c) CLERICAL AMENDMENT.—The table of sections 10 for part IX of subchapter B of chapter [Text truncated for display. Full text available on Congress.gov.]