Prohibiting Incentives for Corporations that Kickout Employees Tax (PICKET) Act

II 116TH CONGRESS 1ST SESSION S. 1548 To amend the Internal Revenue Code of 1986 to modify the rate of tax on corporations participating in labor lockouts and to prohibit deductions and credits for wages and benefits paid to temporary workers during labor lockouts. IN THE SENATE OF THE UNITED STATES MAY 20, 2019 Mr. TESTER introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to modify the rate of tax on corporations participating in labor lockouts and to prohibit deductions and credits for wages and benefits paid to temporary workers during labor lockouts. 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 ‘‘Prohibiting Incentives 4 for Corporations that Kickout Employees Tax (PICKET) 5 Act’’. 6 VerDate Sep 11 2014 21:46 May 29, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1548.IS S1548 pamtmann on DSKBFK8HB2PROD with BILLS 2 •S 1548 IS SEC. 2. RATE OF TAX FOR CORPORATIONS PARTICIPATING 1 IN LABOR LOCKOUTS. 2 (a) IN GENERAL.—Section 11 of the Internal Rev- 3 enue Code of 1986 is amended by redesignating sub- 4 sections (c) and (d) as subsections (d) and (e), respec- 5 tively, and by inserting after subsection (b) the following 6 new subsection: 7 ‘‘(c) EXCEPTION FOR DISQUALIFIED CORPORA- 8 TIONS.— 9 ‘‘(1) IN GENERAL.—In the case of any corpora- 10 tion participating in a labor lockout during the tax- 11 able year, subsection (b) shall be applied by sub- 12 stituting ‘35 percent’ for ‘21 percent’. 13 ‘‘(2) LABOR LOCKOUT.—For purposes of this 14 subsection, the term ‘labor lockout’ means a labor 15 dispute involving a work stoppage, wherein an em- 16 ployer withholds work from its employees in order to 17 gain a concession from them.’’. 18 (b) CONFORMING AMENDMENTS.— 19 (1) The heading of section 11(d) of the Internal 20 Revenue Code of 1986 (as redesignated by sub- 21 section (a)) is amended by striking ‘‘EXCEPTIONS’’ 22 and inserting ‘‘OTHER EXCEPTIONS’’. 23 (2) Section 280C(c)(2)(B)(ii)(II) of such Code 24 is amended by inserting ‘‘(section 11(c), in the case 25 VerDate Sep 11 2014 21:46 May 29, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1548.IS S1548 pamtmann on DSKBFK8HB2PROD with BILLS 3 •S 1548 IS of a corporation described in such section)’’ after 1 ‘‘section 11(b)’’. 2 (c) EFFECTIVE DATE.—The amendments made by 3 this section shall apply to taxable years beginning after 4 the date of the enactment of this Act. 5 SEC. 3. DENIAL OF DEDUCTION AND CREDITS FOR WAGES 6 AND BENEFITS PAID TO TEMPORARY WORK- 7 ERS DURING A LABOR LOCKOUT. 8 (a) DEDUCTION.— 9 (1) IN GENERAL.—Part IX of subchapter B of 10 chapter 1 of the Internal Revenue Code of 1986 is 11 amended by adding at the end the following new 12 subsection: 13 ‘‘SEC. 280I. REMUNERATION PAID DURING LABOR LOCK- 14 OUTS. 15 ‘‘(a) IN GENERAL.—No deduction shall be allowed 16 for any remuneration paid by the taxpayer (including 17 wages or other benefits) to any temporary replacement 18 worker during a labor lockout (as defined in section 19 11(c)(2)). 20 ‘‘(b) TEMPORARY REPLACEMENT WORKER.—For 21 purposes of subsection (a), the term ‘temporary replace- 22 ment worker’ means any individual compensated to per- 23 form duties normally performed by employees from whom 24 work is withheld under the labor lockout.’’. 25 VerDate Sep 11 2014 21:46 May 29, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1548.IS S1548 pamtmann on DSKBFK8HB2PROD with BILLS 4 •S 1548 IS (2) CLERICAL AMENDMENT.—The table of sec- 1 tions for part IX of subchapter B of chapter 1 of 2 such Code is amended by adding at the end the fol- 3 lowing new item: 4 ‘‘Sec. 280I. Remuneration paid during labor lockouts.’’. (b) CREDITS.— 5 (1) RESEARCH CREDIT.—Section 41(b)(2)(D) 6 of the Internal Revenue Code of 1986 is amended by 7 adding at the end the following new clause: 8 ‘‘(iv) EXCLUSION FOR WAGES PAID 9 DURING A LABOR LOCKOUT.—The term 10 ‘wages’ shall not include any amount paid 11 to a temporary replacement worker (as de- 12 fined in section 280I) during a labor lock- 13 out (as defined in section 11(c)(2)).’’. 14 (2) WORK OPPORTUNITY CREDIT.—Section 15 51(c) of such Code is amended by adding at the end 16 the following new paragraph: 17 ‘‘(6) EXCLUSION FOR WAGES PAID DURING A 18 LABOR LOCKOUT.—The term ‘wages’ shall not in- 19 clude any amount paid to a temporary replacement 20 worker (as defined in section 280I) during a labor 21 lockout (as defined in section 11(c)(2)).’’. 22 VerDate Sep 11 2014 21:46 May 29, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1548.IS S1548 pamtmann on DSKBFK8HB2PROD with BILLS 5 •S 1548 IS (c) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to taxable years beginning after 2 the date of the enactment of this Act. 3 Æ VerDate Sep 11 2014 21:46 May 29, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\S1548.IS S1548 pamtmann on DSKBFK8HB2PROD with BILLS