End Outsourcing Act

II 117TH CONGRESS 1ST SESSION S. 1513 To provide incentives for businesses to keep jobs in America, and for other purposes. IN THE SENATE OF THE UNITED STATES APRIL 29, 2021 Mrs. GILLIBRAND (for herself, Ms. BALDWIN, and Mr. PETERS) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To provide incentives for businesses to keep jobs in America, and for other purposes. 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 ‘‘End Outsourcing Act’’. 4 SEC. 2. OUTSOURCING STATEMENT IN WORKER ADJUST- 5 MENT AND RETRAINING NOTICE. 6 (a) OUTSOURCING STATEMENT.—Section 3 of the 7 Worker Adjustment and Retraining Notification Act (29 8 U.S.C. 2102) is amended by adding at the end the fol- 9 lowing: 10 VerDate Sep 11 2014 01:37 May 25, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1513.IS S1513 kjohnson on DSK79L0C42PROD with BILLS 2 •S 1513 IS ‘‘(e) OUTSOURCING STATEMENT.— 1 ‘‘(1) IN GENERAL.—For purposes of subsection 2 (a), the employer shall include an outsourcing state- 3 ment in the notice described in that subsection. The 4 outsourcing statement shall specify whether part or 5 all of the positions held by affected employees cov- 6 ered by subsection (a) will be moved to a country 7 outside the United States, regardless of whether the 8 positions are moved within the business enterprise 9 involved or to another business enterprise. The em- 10 ployer shall make the determination of whether the 11 positions are being so moved in accordance with reg- 12 ulations issued by the Secretary. The employer shall 13 serve the notice as required under subsection (a) and 14 submit the notice to the Secretary of Labor. 15 ‘‘(2) LIST.—Not less often than annually, the 16 Secretary shall publish and make available on the 17 website of the Department of Labor, a list including 18 each employer who— 19 ‘‘(A) has included an outsourcing state- 20 ment in a notice under paragraph (1); or 21 ‘‘(B) has incurred liability under section 5, 22 in part or in whole, because the employer or- 23 dered a plant closing or mass layoff without 24 having served a notice that is required, under 25 VerDate Sep 11 2014 01:37 May 25, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1513.IS S1513 kjohnson on DSK79L0C42PROD with BILLS 3 •S 1513 IS this section, to include an outsourcing state- 1 ment.’’. 2 (b) IMPLEMENTATION REPORT.—The Worker Ad- 3 justment and Retraining Notification Act is amended by 4 inserting after section 10 (29 U.S.C. 2109) the following: 5 ‘‘SEC. 10A. IMPLEMENTATION STUDY. 6 ‘‘(a) STUDY.—The Comptroller General of the United 7 States shall conduct a study of the implementation of sec- 8 tion 3(e) of the Worker Adjustment and Retraining Notifi- 9 cation Act (29 U.S.C. 2102(e)) by the Department of 10 Labor. 11 ‘‘(b) REPORT.—Not later than 3 years after the date 12 of enactment of this section, the Comptroller General shall 13 submit to the appropriate committees of Congress a report 14 containing the results of the study.’’. 15 SEC. 3. DENIAL OF DEDUCTION FOR OUTSOURCING EX- 16 PENSES. 17 (a) IN GENERAL.—Part IX of subchapter B of chap- 18 ter 1 of the Internal Revenue Code of 1986 is amended 19 by adding at the end the following new section: 20 ‘‘SEC. 280I. OUTSOURCING EXPENSES. 21 ‘‘(a) IN GENERAL.—No deduction otherwise allow- 22 able under this chapter shall be allowed for any specified 23 outsourcing expense. 24 VerDate Sep 11 2014 01:37 May 25, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1513.IS S1513 kjohnson on DSK79L0C42PROD with BILLS 4 •S 1513 IS ‘‘(b) SPECIFIED OUTSOURCING EXPENSE.—For pur- 1 poses of this section— 2 ‘‘(1) IN GENERAL.—The term ‘specified out- 3 sourcing expense’ means— 4 ‘‘(A) any eligible expense paid or incurred 5 by the taxpayer in connection with the elimi- 6 nation of any business unit of the taxpayer (or 7 of any member of any expanded affiliated group 8 in which the taxpayer is also a member) located 9 within the United States, and 10 ‘‘(B) any eligible expense paid or incurred 11 by the taxpayer in connection with the estab- 12 lishment of any business unit of the taxpayer 13 (or of any member of any expanded affiliated 14 group in which the taxpayer is also a member) 15 located outside the United States, 16 if such establishment constitutes the relocation of 17 the business unit so eliminated. For purposes of the 18 preceding sentence, a relocation shall not be treated 19 as failing to occur merely because such elimination 20 occurs in a different taxable year than such estab- 21 lishment. 22 ‘‘(2) ELIGIBLE EXPENSES.—The term ‘eligible 23 expenses’ means— 24 VerDate Sep 11 2014 01:37 May 25, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1513.IS S1513 kjohnson on DSK79L0C42PROD with BILLS 5 •S 1513 IS ‘‘(A) any amount for which a deduction is 1 allowed to the taxpayer under section 162, and 2 ‘‘(B) permit and license fees, lease broker- 3 age fees, equipment installation costs, and, to 4 the extent provided by the Secretary, other 5 similar expenses. 6 Such term does not include any compensation which 7 is paid or incurred in connection with severance 8 from employment and, to the extent provided by the 9 Secretary, any similar amount. 10 ‘‘(3) BUSINESS UNIT.—The term ‘business unit’ 11 means— 12 ‘‘(A) any trade or business, and 13 ‘‘(B) any line of business, or functional 14 unit, which is part of any trade or business. 15 ‘‘(4) EXPANDED AFFILIATED GROUP.—The 16 term ‘expanded affiliated group’ means an affiliated 17 group as defined in section 1504(a), determined 18 without regard to section 1504(b)(3) and by sub- 19 stituting ‘more than 50 percent’ for ‘at least 80 per- 20 cent’ each place it appears in section 1504(a). A 21 partnership or any other entity (other than a cor- 22 poration) shall be treated as a member of an ex- 23 panded affiliated group if such entity is controlled 24 (within the meaning of section 954(d)(3)) by mem- 25 VerDate Sep 11 2014 01:37 May 25, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1513.IS S1513 kjohnson on DSK79L0C42PROD with BILLS 6 •S 1513 IS bers of such group (including any entity treated as 1 a member of such group by reason of this para- 2 graph). 3 ‘‘(5) OPERATING EXPENSES NOT TAKEN INTO 4 ACCOUNT.—Any amount paid or incurred in connec- 5 tion with the ongoing operation of a business unit 6 shall not be treated as an amount paid or incurred 7 in connection with the establishment or elimination 8 of such business unit. 9 ‘‘(c) SPECIAL RULES.— 10 ‘‘(1) APPLICATION TO DEDUCTIONS FOR DE- 11 PRECIATION AND AMORTIZATION.—In the case of 12 any portion of a specified outsourcing expense which 13 is not deductible in the taxable year in which paid 14 or incurred, such portion shall neither be chargeable 15 to capital account nor amortizable. 16 ‘‘(2) POSSESSIONS TREATED AS PART OF THE 17 UNITED STATES.—For purposes of this section, the 18 term ‘United States’ shall be treated as including 19 each possession of the United States (including the 20 Commonwealth of Puerto Rico and the Common- 21 wealth of the Northern Mariana Islands). 22 ‘‘(d) REGULATIONS.—The Secretary shall prescribe 23 such regulations or other guidance as may be necessary 24 or appropriate to carry out the purposes of this section, 25 VerDate Sep 11 2014 01:37 May 25, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1513.IS S1513 kjohnson on DSK79L0C42PROD with BILLS 7 •S 1513 IS including regulations which provide (or create a rebuttable 1 presumption) that certain establishments of business units 2 outside the United States will be treated as relocations 3 (based on timing or such other factors as the Secretary 4 may provide) of business units eliminated within the 5 United States.’’. 6 (b) LIMITATION ON SUBPART F INCOME OF CON- 7 TROLLED FOREIGN CORPORATIONS DETERMINED WITH- 8 OUT REGARD TO SPECIFIED OUTSOURCING EXPENSES.— 9 Subsection (c) of section 952 of such Code is amended 10 by adding at the end the following new paragraph: 11 ‘‘(4) EARNINGS AND PROFITS DETERMINED 12 WITHOUT REGARD TO SPECIFIED OUTSOURCING EX- 13 PENSES.—For purposes of this subsection, earnings 14 and profits of any controlled foreign corporation 15 shall be determined without regard to any specified 16 outsourcing expense (as defined in section 17 280I(b)).’’. 18 (c) CLERICAL AMENDMENT.—The table of sections 19 for part IX of subchapter B of chapter 1 of such Code 20 is amended by adding at the end the following new item: 21 ‘‘Sec. 280I. Outsourcing expenses.’’. (d) EFFECTIVE DATE.—The amendments made by 22 this section shall apply to amounts paid or incurred after 23 the date of the enactment of this Act. 24 VerDate Sep 11 2014 01:37 May 25, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1513.IS S1513 kjohnson on DSK79L0C42PROD with BILLS 8 •S 1513 IS SEC. 4. DENIAL OF CERTAIN DEDUCTIONS AND ACCOUNT- 1 ING METHODS FOR OUTSOURCING EMPLOY- 2 ERS. 3 (a) IN GENERAL.—Part IX of subchapter B of chap- 4 ter 1 of the Internal Revenue Code of 1986, as amended 5 by section 3, is amended by adding at the end the fol- 6 lowing new section: 7 ‘‘SEC. 280J. LIMITATIONS FOR OUTSOURCING EMPLOYERS. 8 ‘‘(a) IN GENERAL.—During the disallowance period, 9 an applicable taxpayer— 10 ‘‘(1) may not use the method provided in sec- 11 tion 472(b) in inventorying goods, 12 ‘‘(2) may not use the lower of cost or market 13 method of determining inventories for purposes of 14 determining income, and 15 ‘‘(3) shall not be allowed any deduction under 16 section 163 for interest paid or accrued on indebted- 17 ness. 18 ‘‘(b) APPLICABLE TAXPAYER.—For purposes of sub- 19 section (a), the term ‘applicable taxpayer’ means a tax- 20 payer which— 21 ‘‘(1) during the taxable year, has served written 22 notice under subsection (a) of section 3 of the Work- 23 er Adjustment and Retraining Notification Act 24 which includes an outsourcing statement described 25 in subsection (e) of such section, and 26 VerDate Sep 11 2014 01:37 May 25, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1513.IS S1513 kjohnson on DSK79L0C42PROD with BILLS 9 •S 1513 IS ‘‘(2) the cumulative employment loss (excluding 1 any part-time employees) for positions at facilities 2 owned by such taxpayer which will be moved to a 3 country outside of the United States, as determined 4 pursuant to any outsourcing statements served by 5 such taxpayer during such taxable year, exceeds 50 6 employees. 7 ‘‘(c) DISALLOWANCE PERIOD.—For purposes of sub- 8 section (a), the disallowance period is the period of 3 tax- 9 able years after the taxable year in which the statements 10 described in subsection (b)(2) are required to be served. 11 ‘‘(d) EXPANDED AFFILIATED GROUP TREATED AS 12 SINGLE TAXPAYER.—For purposes of this section, the 13 members of an expanded affiliated group (as defined in 14 section 280I(b)(4)) shall be treated as a single taxpayer. 15 ‘‘(e) REGULATIONS.—The Secretary shall prescribe 16 such regulations or other guidance as may be necessary 17 or appropriate to carry out the purposes of this section.’’. 18 (b) CLERICAL AMENDMENT.—The table of sections 19 for part IX of subchapter B of chapter 1 of the Internal 20 Revenue Code of 1986, as amended by section 3, is 21 amended by adding at the end the following new item: 22 ‘‘Sec. 280J. Limitations for outsourcing employers.’’. (c) EFFECTIVE DATE.—The amendments made by 23 this section shall apply to taxable years beginning after 24 the date of the enactment of this Act. 25 VerDate Sep 11 2014 01:37 May 25, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1513.IS S1513 kjohnson on DSK79L0C42PROD with BILLS 10 •S 1513 IS SEC. 5. AUTHORITY FOR FEDERAL AGENCIES TO TAKE THE 1 OUTSOURCING OF JOBS FROM THE UNITED 2 STATES INTO ACCOUNT FOR GRANTS, LOANS, 3 AND LOAN GUARANTEES. 4 (a) DISCLOSURE OF OUTSOURCING OF JOBS.— 5 (1) IN GENERAL.—The head of any Federal 6 agency, or their delegate, shall require any entity 7 that submits a request for an applicable agency ac- 8 tion to disclose in the request if such entity, or any 9 subsidiary of such entity, owns a facility for which 10 there is an outsourcing event during the 3-year pe- 11 riod ending on the date of the submission of the re- 12 quest. 13 (2) OUTSOURCING EVENT.—For purposes of 14 paragraph (1), the term ‘‘outsourcing event’’ means 15 a plant closing or mass layoff (as described in sec- 16 tion 2(a) of the Worker Adjustment and Retraining 17 Notification Act) in which the employment loss (ex- 18 cluding any part-time employees) for positions which 19 will be moved to a country outside of the United 20 States, as determined pursuant to the outsourcing 21 statement (as described in paragraph (1) of such 22 section 3(e) of such Act), exceeds 50 employees. 23 (b) CONSIDERATION AUTHORITY.— 24 (1) IN GENERAL.—In considering a request by 25 an entity for an applicable agency action, the head 26 VerDate Sep 11 2014 01:37 May 25, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1513.IS S1513 kjohnson on DSK79L0C42PROD with BILLS 11 •S 1513 IS of any Federal agency, as well as any officers, em- 1 ployees, and contractors of such Agency, shall take 2 into account any disclosure made pursuant to sub- 3 section (a) for purposes of such request. 4 (2) NEGATIVE PREFERENCE.—The head of any 5 Federal agency shall establish a negative preference 6 of not less than 10 percent of the scoring evaluation 7 for any request for an applicable agency action by 8 an entity that makes a disclosure pursuant to sub- 9 section (a). 10 (c) SENSE OF CONGRESS.—It is the sense of Con- 11 gress that Federal agencies should, in considering requests 12 by entities for any applicable agency action, exclude enti- 13 ties making a disclosure of an outsourcing event pursuant 14 to subsection (a) on the grounds that the actions described 15 in the disclosures are against the public interests of the 16 United States. 17 (d) ANNUAL REPORT.—The head of each Federal 18 agency shall submit to Congress each year a report on the 19 following: 20 (1) The number of entities making a disclosure 21 of an outsourcing event pursuant to subsection (a) 22 in regards to a request for applicable agency action 23 during the preceding year. 24 VerDate Sep 11 2014 01:37 May 25, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1513.IS S1513 kjohnson on DSK79L0C42PROD with BILLS 12 •S 1513 IS (2) The number of requests for applicable agen- 1 cy action which were granted by the agency during 2 the preceding year in which such disclosures were 3 taken into account. [Text truncated for display. Full text available on Congress.gov.]