I

104TH CONGRESS

1ST SESSION H. R. 2705

To provide that Federal contracts and certain Federal subsidies shall be

provided only to businesses which have qualified profit-sharing plans.

IN THE HOUSE OF REPRESENTATIVES

DECEMBER 5, 1995

Mr. FATTAH introduced the following bill; which was referred to the Committee on Government Reform and Oversight, and in addition to the Committee on Economic and Educational Opportunities, for a period to be

subsequently determined by the Speaker, in each case for consideration

of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To provide that Federal contracts and certain Federal subsidies shall be provided only to businesses which have

qualified profit-sharing plans.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘American Profit Shar5 ing Act’’.

6 SEC. 2. FINDINGS.

7 The Congress finds that:
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1 (1) Reducing income disparities will stimulate

2 and stabilize the national economy.

3 (2) The best solutions to prevailing income dis4 parities are structural changes in our income dis5 tribution system.

6 (3) It is important that American corporations

7 retain the flexibility to compete effectively in this

8 global economy.

9 (4) It is equally important that the well-being

10 of the American worker be protected in this chang11 ing economic environment.

12 (5) The most effective incomes policy approach

13 in such an environment is diversification of sources

14 and types of income for the American worker.

15 (6) Return to capital in terms of interest, divi16 dends, and capital gains have soared in recent years

17 and is the single most robust source of income

18 growth.

19 (7) A significant percentage of this increase in

20 the return to capital has been a direct result of pub21 lic policy and public investment.

22 (8) Our global competitors use profit sharing as

23 a significant part of their employee compensation

24 systems.
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1 (9) In this country, profit sharing has been

2 shown to contribute to increased productivity and

3 profitability.

4 (10) It is appropriate that taxpayers participate

5 in capital expansions created and financed with tax

6 dollars.

7 SEC. 3. PROVISION OF FEDERAL CONTRACTS AND CERTAIN

8 FEDERAL SUBSIDIES ONLY TO BUSINESSES

9 WITH QUALIFIED PROFIT-SHARING PLANS.

10 (a) IN GENERAL.—Federal contracts and specified

11 Federal subsidies may be provided only to businesses

12 which have a stock bonus or profit-sharing plan which

13 meets the requirements of section 401(a) of the Internal

14 Revenue Code of 1986.

15 (b) EXCEPTION FOR START-UP SMALL BUSI16 NESSES.—Subsection (a) shall not apply to any business

17 for a year unless—

18 (1) such business has been in existence for at

19 least 10 prior years,

20 (2) such business has more than 5 full-time em21 ployees (or their equivalent) at any time during the

22 year, and

23 (3) the gross income of the business for the

24 year exceeds $10,000,000.
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1 Rules similar to the rules of paragraph (2), and subpara2 graphs (B), (C), and (D) of paragraph (3), of section

3 448(c) shall apply for purposes of the preceding sentence.

4 SEC. 4. DEFINITIONS.

5 (a) FEDERAL CONTRACT.—For purposes of this Act,

6 the term ‘‘Federal contract’’ means any contract funded

7 directly or indirectly with Federal funds.

8 (b) SPECIFIED FEDERAL SUBSIDY.—For purposes of

9 this Act, the term ‘‘specified Federal subsidy’’ means any

10 of the following Federal benefits which benefit the busi11 ness:

12 (1) Any grant or other payment funded directly

13 or indirectly with Federal funds.

14 (2) Any guaranteed loan if such guarantee is by

15 any Federal agency or any payment under the guar16 antee is directly or indirectly from Federal funds.

17 (3) Any loan the interest rate on which, or the

18 other terms of which, are more favorable than loans

19 otherwise available to the borrower from non-Federal

20 sources if the more favorable interest rate or other

21 terms are funded directly or indirectly by Federal

22 funds.

23 Paragraphs (2) and (3) shall not apply to loans under dis24 aster loan programs.
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1 SEC. 5. EFFECTIVE DATE.

2 This Act shall take effect on the date of the enact3 ment of this Act.

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