Corporate Welfare Reduction and Job Preservation Act of 1996

Summary: Corporate Welfare Reduction and Job Preservation Act of 1996 - Amends the Internal Revenue Code to provide that if any profitable large corporation reduces by 15 percent or more the number of employees who perform any task or function at any facility in the United States, the amount of each facility-related tax benefit shall be reduced by 50 percent.  Amends the Foreign Assistance Act of 1961 and the Export-Import Bank Act of 1945 to require, if a facility-related tax benefit of an entity is reduced, the acceleration of the repayment of any loan and the termination of any insurance policy provided by certain Government entities.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Corporate Welfare Reduction and Job 
Preservation Act of 1996''.

SEC. 2. CONGRESSIONAL FINDINGS.

    The Congress finds the following:
            (1) Corporations are subject to a tax rate of up to 34 
        percent or 35 percent.
            (2) Due to tax deductions, exclusions, and credits, the net 
        tax liability actually paid by many corporations is far below 
        the real rate. In fact, certain special-interest tax deductions 
        and expenditures provide corporations with an extra 
        $70,000,000,000 per year. Additionally, direct Government 
        subsidies to corporations will amount to $30,000,000,000 per 
        year.
            (3) Over the past several years, one of the most serious 
        problems affecting the middle-class has been corporate 
        downsizing. Many large, wealthy, and profitable corporations 
        have reduced the number of their American employees by 
        transferring those jobs to foreign countries or have reduced 
        the number of their employees in order to realize an immediate 
        short-term profit or increase in stock value.
            (4) Between April 3, 1975, and January 31, 1996, the 
        relocation of manufacturing operations resulted in over 
        4,500,000 workers seeking adjustment assistance for workers 
        under chapter 2 of title II of the Trade Act of 1974. Because 
        many displaced workers did not seek assistance, this figure is 
        far below the actual number of workers displaced.
            (5) A higher priority should be given to preserving 
        American jobs and adding fairness to the Federal tax system by 
        closing loopholes and eliminating unnecessary expenditures, 
        thus providing additional funds to assist in balancing the 
        Federal budget by 2002 while maintaining Medicare and Medicaid 
        at acceptable levels.

SEC. 3. REDUCTION OF TAX BENEFITS FOR PROFITABLE LARGE CORPORATIONS 
              WHICH REDUCE WORKFORCE.

    (a) In General.--Subchapter C of chapter 1 of the Internal Revenue 
Code of 1986 (relating to corporate distributions and adjustments) is 
amended by adding at the end the following new part:

``PART VII--REDUCTION OF TAX BENEFITS FOR PROFITABLE LARGE CORPORATIONS 
                         WHICH REDUCE WORKFORCE

                              ``Sec. 386. Reduction of tax benefits for 
                                        profitable large corporations 
                                        which reduce workforce.

``SEC. 386. REDUCTION OF TAX BENEFITS FOR PROFITABLE LARGE CORPORATIONS 
              WHICH REDUCE WORKFORCE.

    ``(a) In General.--For any taxable year, if any profitable large 
corporation reduces by 15 percent or more the number of employees who 
perform any task or function at any facility in the United States, the 
amount of each facility-related tax benefit shall be reduced by 50 
percent.
    ``(b) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Facility-related tax benefit.--
                    ``(A) In general.--The term `facility-related tax 
                benefit' means--
                            ``(i) any tax benefit to the extent 
                        attributable to a facility described in 
                        subsection (a), or
                            ``(ii) to the extent that a tax benefit is 
                        not attributable to any facility, a pro rata 
                        portion of such tax benefit (as determined 
                        under regulations prescribed by the Secretary).
                    ``(B) Exception.--Such term shall not include--
                            ``(i) any deduction under section 127 or 
                        129 or any other deduction for the cost of 
                        employee health care, child care, job training, 
                        or retraining, or
                            ``(ii) any other tax benefit (other than 
                        wages) which the Secretary determines by 
                        regulation to be a tax benefit for costs 
                        incurred primarily for the benefit of employees 
                        rather than the employer.
            ``(2) Large corporation.--The term `large corporation' 
        means a corporation or partnership which is not a small-
        business concern (within the meaning of section 3 of the Small 
        Business Act, as in effect on the date of the enactment of this 
        section).
            ``(3) Profitable.--Any large corporation shall be treated 
        as profitable, for any taxable year, if the sum of taxable 
        income (if any) for the 5-taxable-year period ending with the 
        preceding taxable year (or, if shorter, the period consisting 
        of all preceding taxable years of such large corporation) 
        equals or exceeds the sum of the net operating losses (if any) 
        attributable to such period.
            ``(4) Related persons.--
                    ``(A) In general.--All related persons shall be 
                treated as one person.
                    ``(B) Related persons defined.--The term `related 
                persons' means--
                            ``(i) persons bearing a relationship 
                        described in section 267 or 707(b), and
                            ``(ii) persons treated as a single employer 
                        under subsection (a) or (b) of section 52.
            ``(5) Tax benefit.--The term `tax benefit' means a credit, 
        deduction, or exclusion allowable under this title.''
    (b) Transmission of Data by Secretary of Labor.--The Secretary of 
Labor shall transmit to the Secretary of the Treasury, not less than 
annually, a list of corporations and partnerships described in section 
386(a) of the Internal Revenue Code of 1986 (as added by this section).
    (c) Clerical Amendment.--The table of parts for subchapter C of 
chapter 1 of such Code is amended by adding at the end the following 
new item:

                              ``Part VII. Reduction of tax benefits for 
                                        profitable large corporations 
                                        which reduce workforce.''
    (d) Effective Date.--This section and the amendments made by this 
section shall apply to taxable years beginning after December 31, 1996.

SEC. 4. ACCELERATION OF LOANS MADE BY CERTAIN GOVERNMENT ENTITIES AS 
              PENALTY AGAINST PROFITABLE LARGE CORPORATIONS WHICH 
              REDUCE WORKFORCE.

    (a) OPIC Loans.--Section 235 of the Foreign Assistance Act of 1961 
(22 U.S.C. 2195) is amended by adding at the end the following:
    ``(g) Limitations on Assistance to Profitable Large Corporations 
That Reduce Workforce.--
            ``(1) In general.--If a facility-related tax benefit of an 
        entity for a taxable year is reduced by reason of section 
        386(a) of the Internal Revenue Code of 1986, then--
                    ``(A) the entity shall immediately repay to the 
                Corporation the amount of any loan made by the 
                Corporation to the entity under section 234;
                    ``(B) any insurance policy provided by the 
                Corporation to the entity under such section is 
                rescinded; and
                    ``(C) until the Secretary of the Treasury 
                determines that the activity on the basis of which the 
                facility-related tax benefit of the entity was so 
                reduced has ceased, the Corporation may not, during the 
                immediately succeeding taxable year of the entity, 
                extend credit, participate in an extension of credit, 
                or provide any insurance, directly to the entity under 
                such section.
            ``(2) Effect of failure to repay loan.--Interest shall 
        accrue on any amount required by paragraph (1)(A) to be repaid 
        to the Corporation at a rate of 10 percent per month.''.
    (b) Export-Import Bank Loans.--Section 2 of the Export-Import Bank 
Act of 1945 (12 U.S.C. 635) is amended by adding at the end the 
following:
    ``(f) Limitations on Assistance to Profitable Large Corporations 
That Reduce Workforce.--
            ``(1) In general.--If a facility-related tax benefit of an 
        entity for a taxable year is reduced by reason of section 
        386(a) of the Internal Revenue Code of 1986, then--
                    ``(A) the entity shall immediately repay to the 
                Bank the amount of any loan made by the Bank to the 
                entity;
                    ``(B) any insurance policy provided by the Bank to 
                the entity is rescinded; and
                    ``(C) until the Secretary of the Treasury 
                determines that the activity on the basis of which the 
                facility-related tax benefit of the entity was so 
                reduced has ceased, the Bank may not, during the 
                immediately succeeding taxable year of the entity, 
                extend credit, participate in an extension of credit, 
                or provide any insurance, directly to the entity.
            ``(2) Effect of failure to repay loan.--Interest shall 
        accrue on any amount required by paragraph (1)(A) to be repaid 
        to the Bank at a rate of 10 percent per month.''.