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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 474 Introduced in House (IH)]

106th CONGRESS
  1st Session
                                H. R. 474

To provide authorities to, and impose requirements on, the Secretary of 
    Defense in order to facilitate State enforcement of State tax, 
      employment, and licensing laws against Federal construction 
                              contractors.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            February 2, 1999

 Mrs. Mink of Hawaii introduced the following bill; which was referred 
                   to the Committee on Armed Services

_______________________________________________________________________

                                 A BILL

 
To provide authorities to, and impose requirements on, the Secretary of 
    Defense in order to facilitate State enforcement of State tax, 
      employment, and licensing laws against Federal construction 
                              contractors.

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

SECTION 1. ENHANCEMENT OF STATE ENFORCEMENT OF STATE TAX, EMPLOYMENT, 
              AND LICENSING LAWS AGAINST DEFENSE CONSTRUCTION 
              CONTRACTORS.

    (a) Requirement for State Tax Clearance From Potential Construction 
Contractors.--Section 2305(b) of title 10, United States Code, is 
amended by adding at the end the following new paragraph:
    ``(10) In order to be considered a responsible bidder or offeror 
for a contract for the construction of a public building, facility, or 
work, a bidder or offeror shall submit with the bid or offer a tax 
clearance from the State in which the contract is to be performed. For 
purposes of this paragraph, a tax clearance is a document from an 
appropriate State agency indicating that the bidder or offeror is in 
compliance with all the tax laws of the State in which the contract is 
to be performed.''.
    (b) Requirement To Withhold Final Contract Payment Until Receipt of 
State Tax Clearance and Certification of Compliance With Employment 
Laws From Contractor.--Section 2307 of title 10, United States Code, is 
amended by adding at the end the following new subsection:
    ``(j) Requirement To Withhold Final Payment.--(1) The head of an 
agency shall withhold final payment under a contract for the 
construction of a public building, facility, or work until the 
contractor submits to the agency both of the following:
            ``(A) A tax clearance from the State in which the contract 
        is or was performed.
            ``(B) A certification stating that the contractor is in 
        compliance (or was in compliance during the performance of the 
        contract) with all applicable State laws that require employers 
        to make payments to or for the benefit of employees, including 
        laws relating to unemployment insurance, workers compensation, 
        health insurance, and disability insurance.
    ``(2) For purposes of this subsection, a tax clearance is a 
document from an appropriate State agency indicating that the 
contractor is or was in compliance with all the tax laws of the State 
in which the contract is or was performed.''.
    (c) Authority To Withhold Payment to Contractor of Amounts 
Necessary To Meet State Tax Obligations.--Section 2307 of such title is 
further amended by adding at the end the following new subsection:
    ``(k) Authority To Withhold Payment To Meet State Tax 
Obligations.--The head of an agency may withhold, from any payment due 
to a contractor under a contract made by the agency for the 
construction of a public building, facility, or work, an amount 
considered necessary by the head of the agency to pay to the State in 
which the contract is being performed the amount of the contractor's 
State tax liability that is attributable to the contract. The head of 
the agency that so withholds a payment may, upon request of the State 
in which the contract is being performed and with such documentation as 
the head of the agency considers necessary, pay such tax liability 
amount directly to the State from the withheld payment. Any amount of a 
withheld payment that exceeds the actual State tax liability amount 
shall be paid to the contractor.''.
    (d) Requirement for Construction Contractors To Obtain Applicable 
State Licenses.--(1) Chapter 141 of title 10, United States Code, is 
amended by adding at the end the following new section:
``Sec. 2410n. Construction contracts: requirement to obtain applicable 
              State licenses
    ``The Secretary of Defense shall require, in any contract entered 
into by the Secretary for the construction of a public building, 
facility, or work which is to be performed in a State that requires 
persons performing the type of work to be performed under the contract 
to be licensed, that the contractor be so licensed.''.
    (2) The table of sections at the beginning of such chapter is 
amended by adding at the end the following new item:

``2410n. Construction contracts: requirement to obtain applicable State 
                            licenses.''.
    (e) Requirement To Explain Hawaii Excise Tax in Federal Acquisition 
Regulation.--The Federal Acquisition Regulation shall be revised to 
contain provisions explaining the general excise tax law of the State 
of Hawaii.
    (f) Effective Date.--The amendments made by this Act shall apply 
with respect to contracts entered into after the date of the enactment 
of this Act.
                                 <all>
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