Cage the Paper Tiger Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 6916 To prohibit the listing of certain firms on national securities exchanges, to provide for expensing of costs directly connected with moving manufac- turing from China to the United States, to establish a counterintelligence vetting task force, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MAY 15, 2020 Mr. WALKER introduced the following bill; which was referred to the Com- mittee on Homeland Security, and in addition to the Committees on Ways and Means, and Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provi- sions as fall within the jurisdiction of the committee concerned A BILL To prohibit the listing of certain firms on national securities exchanges, to provide for expensing of costs directly con- nected with moving manufacturing from China to the United States, to establish a counterintelligence vetting task force, 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 ‘‘Cage the Paper Tiger 4 Act of 2020’’. 5 VerDate Sep 11 2014 22:34 Jun 08, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6916.IH H6916 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 6916 IH SEC. 2. PROHIBITION AGAINST THE LISTING OF CERTAIN 1 FIRMS ON NATIONAL SECURITIES EX- 2 CHANGES. 3 (a) IN GENERAL.—Section 6(b) of the Securities Ex- 4 change Act of 1934 (15 U.S.C. 78f(b)) is amended by add- 5 ing at the end the following: 6 ‘‘(11)(A) The rules of the exchange prohibit the 7 initial listing, after the date of enactment of this 8 paragraph, of any security of an issuer if the reg- 9 istration statement filed with the Commission for 10 such security includes an audit report prepared by 11 a covered foreign public accounting firm. 12 ‘‘(B) Nothing in subparagraph (A) may be con- 13 strued to prevent an exchange from listing a security 14 on the exchange on or after the date of enactment 15 of this paragraph if that security was listed on the 16 exchange or a national securities exchange before 17 the date of enactment of this paragraph. 18 ‘‘(C) In this paragraph— 19 ‘‘(i) the term ‘audit report’ has the mean- 20 ing given the term in section 2(a) of the Sar- 21 banes-Oxley Act of 2002 (15 U.S.C. 7201(a)); 22 ‘‘(ii) the term ‘covered foreign public ac- 23 counting firm’ means a foreign public account- 24 ing firm that the Public Company Accounting 25 Oversight Board is unable to inspect or inves- 26 VerDate Sep 11 2014 22:34 Jun 08, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6916.IH H6916 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 6916 IH tigate under the Sarbanes-Oxley Act of 2002 1 (15 U.S.C. 7201 et seq.) because of a position 2 taken by an authority outside of the United 3 States; and 4 ‘‘(iii) the term ‘foreign public accounting 5 firm’ has the meaning given the term in section 6 106(g) of the Sarbanes-Oxley Act of 2002 (15 7 U.S.C. 7216(g)).’’. 8 (b) RULES.— 9 (1) PROPOSALS.—Not later than 90 days after 10 the date of enactment of this Act, each national se- 11 curities exchange shall file with the Commission any 12 proposed change to the rules of the exchange that is 13 required as a result of the amendments made by this 14 section. 15 (2) ADOPTION.—Not later than 1 year after the 16 date of enactment of this Act, each national securi- 17 ties exchange shall have each proposed change de- 18 scribed in paragraph (1) approved by the Commis- 19 sion. 20 VerDate Sep 11 2014 22:34 Jun 08, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6916.IH H6916 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 6916 IH SEC. 3. EXPENSING OF COSTS DIRECTLY CONNECTED WITH 1 MOVING MANUFACTURING FROM CHINA TO 2 THE UNITED STATES. 3 (a) IN GENERAL.—Part VI of subchapter B of chap- 4 ter 1 of the Internal Revenue Code of 1986 is amended 5 by inserting after section 179E the following new section: 6 ‘‘SEC. 179F. ELECTION TO EXPENSE CERTAIN ASSETS DI- 7 RECTLY CONNECTED TO MOVING MANUFAC- 8 TURING FROM CHINA TO THE UNITED 9 STATES. 10 ‘‘(a) IN GENERAL.—A specified taxpayer may elect 11 to treat amounts paid or incurred for repatriation prop- 12 erty as an expense which is not chargeable to capital ac- 13 count. Any cost so treated shall be allowed as a deduction 14 for the taxable year in which such repatriation property 15 is placed in service. 16 ‘‘(b) SPECIFIED TAXPAYER.—For purposes of this 17 section, the term ‘specified taxpayer’ means any taxpayer 18 engaged in the trade or business of manufacturing any 19 product if— 20 ‘‘(1) as of the date of the enactment of this sec- 21 tion, such taxpayer manufactured such product in 22 China, and 23 ‘‘(2) as of the date which is 3 years after the 24 date that the repatriation property is placed in serv- 25 ice— 26 VerDate Sep 11 2014 22:34 Jun 08, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6916.IH H6916 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 6916 IH ‘‘(A) such taxpayer does not manufacture 1 such product in China, and 2 ‘‘(B) the quantity of such product manu- 3 factured in the United States by such taxpayer 4 has increased (relative to such quantity deter- 5 mined as of the date of the enactment of this 6 section) by an amount not less than the quan- 7 tity of such product manufactured in China as 8 of the date of the enactment of this section. 9 ‘‘(c) REPATRIATION PROPERTY.—For purposes of 10 this section, the term ‘repatriation property’ means any 11 property (including any real property) if— 12 ‘‘(1) such property is used by the taxpayer in 13 the United States to manufacture the product re- 14 ferred to in subsection (b), 15 ‘‘(2) the acquisition of such property by the 16 taxpayer is directly connected to replacing the pro- 17 ductive capacity lost by the taxpayer by reason of 18 ceasing manufacturing of such product in China (as 19 described in subsection (b)(2)(A)), and 20 ‘‘(3) such property is of a character which is 21 subject to the allowance for depreciation provided in 22 section 167. 23 ‘‘(d) APPLICATION OF CERTAIN RULES.—Rules simi- 24 lar to the rules of subsection (c), and paragraphs (4) and 25 VerDate Sep 11 2014 22:34 Jun 08, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6916.IH H6916 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 6916 IH (10) of subsection (d), of section 179 shall apply for pur- 1 poses of this section.’’. 2 (b) CLERICAL AMENDMENT.—The table of sections 3 for part VI of subchapter B of chapter 1 of such Code 4 is amended by inserting after the item relating to section 5 179E the following new item: 6 ‘‘Sec. 179F. Election to expense certain assets directly connected to moving manufacturing from China to the United States.’’. (c) EFFECTIVE DATE.—The amendments made by 7 this section shall apply to property placed in service after 8 the date of the enactment of this Act, in taxable years 9 ending after such date. 10 SEC. 4. DEPARTMENT OF HOMELAND SECURITY COUNTER- 11 INTELLIGENCE VETTING TASK FORCE. 12 (a) ESTABLISHMENT.—Not later than 180 days after 13 the date of the enactment of this Act, the Secretary of 14 Homeland Security shall assign personnel of the Depart- 15 ment of Homeland Security to participate in a counter- 16 intelligence vetting task force to make recommendations 17 to improve counterintelligence vetting for appropriate de- 18 partmental programs. 19 (b) PERSONNEL.—In carrying out subsection (a), the 20 Secretary of Homeland Security may assign personnel 21 from any component of the Department of Homeland Se- 22 curity the Secretary determines necessary to participate 23 in the task force established pursuant to such subsection. 24 VerDate Sep 11 2014 22:34 Jun 08, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6916.IH H6916 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 6916 IH (c) COORDINATION.—In carrying out subsection (a), 1 the Secretary of Homeland Security may request partici- 2 pation in the task force established pursuant to such sub- 3 section from other appropriate Federal agencies. 4 (d) REPORT.—Not later than one year after the date 5 of the enactment of this Act, the Secretary of Homeland 6 Security shall submit to the Committee on Homeland Se- 7 curity of the House of Representatives and the Committee 8 on Homeland Security and Governmental Affairs of the 9 Senate a report on the recommendations made by the task 10 force established pursuant to subsection (a). 11 SEC. 5. COUNTERINTELLIGENCE TRAINING AND VETTING. 12 (a) IN GENERAL.—Not later than 180 days after the 13 date of the enactment of this Act, in carrying out the pro- 14 gram administered pursuant to section 442(a)(4) of the 15 Homeland Security Act (6 U.S.C. 252(a)(4)), the Sec- 16 retary of Homeland Security shall develop a counterintel- 17 ligence awareness training program and require participa- 18 tion in such program from appropriate faculty, as deter- 19 mined by the Secretary in consultation with the Homeland 20 Security Academic Advisory Council (established pursuant 21 to section 871 of the Homeland Security Act of 2002 (6 22 U.S.C. 451)), from approved institutions of higher edu- 23 cation, other approved educational institutions, and des- 24 ignated exchange visitor programs in the United States. 25 VerDate Sep 11 2014 22:34 Jun 08, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H6916.IH H6916 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 6916 IH (b) PROGRAM ENHANCEMENTS.—Not later than one 1 year after the date of enactment of this Act, the Secretary 2 of Homeland Security shall make the following enhance- 3 ments to the program administered pursuant to section 4 442(a)(4) of the Homeland Security Act (6 U.S.C. 5 252(a)(4)): 6 (1) Identify degrees and fields of study deter- 7 mined to be sensitive for homeland security and 8 counterintelligence purposes. 9 (2) Update the information to be collected to 10 include any changes to the degree programs, if ap- 11 plicable, and fields of study. 12 (3) Make any other enhancements determined 13 appropriate by the Secretary to improve counter- 14 intelligence vetting capabilities. 15 (c) CONSULTATION.—In carrying out the identifica- 16 tion required pursuant to subsection (b)(1), the Secretary 17 of Homeland Security shall consult with the Secretary of 18 State to ensure the degrees and field of study determined 19 to be sensitive for homeland security and counterintel- 20 ligence purposes referred to in such subsection are aligned, 21 to the greatest extent practicable, between the Department 22 of Homeland Security and the Department of State. 23 (d) DEFINITIONS.— 24 VerDate Sep 11 2014 22:34 Jun 08, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H6916.IH H6916 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 6916 IH (1) APPROVED INSTITUTION OF HIGHER EDU- 1 CATION.—The term ‘‘approved institution of higher 2 education’’ has the meaning given such term in sec- 3 tion 641(h) of the Illegal Immigration Reform and 4 Immigrant Responsibility Act of 1996 (8 U.S.C. 5 1372). 6 (2) DESIGNATED EXCHANGE VISITOR PRO- 7 GRAM.—The term ‘‘designated exchange visitor pro- 8 gram’’ has the meaning given such term in section 9 641(h) of the Illegal Immigration Reform and Immi- 10 grant Responsibility Act of 1996 (8 U.S.C. 1372). 11 (3) OTHER APPROVED EDUCATIONAL INSTITU- 12 TION.—The term ‘‘other approved educational insti- 13 tution’’ has the meaning given such term in section 14 641(h) of the Illegal Immigration Reform and Immi- 15 grant Responsibility Act of 1996 (8 U.S.C. 1372). 16 SEC. 6. HOMELAND SECURITY ACADEMIC ADVISORY COUN- 17 CIL. 18 (a) IN GENERAL.—Not later than 30 days after the 19 date of the enactment of this Act, the Secretary of Home- 20 land Security shall convene a meeting of the Homeland 21 Security Academic Advisory Council to seek advice and 22 recommendations from the Council on the counterintel- 23 ligence awareness training and appropriate faculty des- 24 ignated to receive such training required under section 5. 25 VerDate Sep 11 2014 22:34 Jun 08, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H6916.IH H6916 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 6916 IH (b) NOTIFICATION.—Not later than September 1, 1 2020, the Secretary of Homeland Security shall notify the 2 Committee on Homeland Security of the House of Rep- 3 resentatives and the Committee on Homeland Security 4 and Governmental Affairs of the Senate if the Secretary 5 determines to not extend the existence of the Homeland 6 Security Academic Advisory Council. 7 Æ VerDate Sep 11 2014 22:34 Jun 08, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\H6916.IH H6916 kjohnson on DSK79L0C42PROD with BILLS