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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 737 Introduced in Senate (IS)]

<DOC>

118th CONGRESS
  1st Session
                                 S. 737

 To amend the Internal Revenue Code of 1986 to end the tax subsidy for 
 employer efforts to influence their workers' exercise of their rights 
     around labor organizations and engaging in collective action.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 9, 2023

  Mr. Casey (for himself, Mrs. Murray, Mr. Wyden, Mr. Van Hollen, Mr. 
  Booker, Mr. Schatz, Ms. Smith, Mr. Reed, Mr. Murphy, Mr. Welch, Mr. 
Durbin, Mr. Markey, Ms. Warren, Ms. Baldwin, Mr. Lujan, Ms. Klobuchar, 
 Mr. Merkley, Mr. Sanders, Mr. Whitehouse, Mr. Cardin, Mr. Brown, Mr. 
 Blumenthal, Ms. Stabenow, Mr. Padilla, Mr. Menendez, Ms. Hirono, Mr. 
 Fetterman, Mr. Peters, and Ms. Cortez Masto) 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 end the tax subsidy for 
 employer efforts to influence their workers' exercise of their rights 
     around labor organizations and engaging in collective action.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``No Tax Breaks for Union Busting 
(NTBUB) Act''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) The National Labor Relations Act (29 U.S.C. 151 et 
        seq.) declares that it is the right of employees to form, join, 
        or assist labor organizations.
            (2) The National Labor Relations Act further declares that 
        it is ``the policy of the United States to eliminate the causes 
        of certain substantial obstructions to the free flow of 
        commerce and to mitigate and eliminate these obstructions when 
        they have occurred by encouraging the practice and procedure of 
        collective bargaining and by protecting the exercise by workers 
        of full freedom of association, self-organization, and 
        designation of representatives of their own choosing . . .''.
            (3) Despite Congress' intention to give workers full agency 
        in these matters, many employers regularly choose to involve 
        themselves, lawfully or unlawfully, in the decisions of their 
        employees about whether to avail themselves of their rights 
        under the National Labor Relations Act and the Railway Labor 
        Act (45 U.S.C. 151 et seq.).
            (4) Employers frequently violate labor laws around 
        organizing and collective action. The Economic Policy Institute 
        finds that in approximately 4 of 10 labor organization 
        elections in 2016-2017 employers were charged with committing 
        an unfair labor practice. Among larger bargaining units of 61 
        employees or more, over 54 percent of elections have an unfair 
        labor practice charge.
            (5) In practice, these unfair labor practices often include 
        charges such as employees being illegally fired for labor 
        organization activity, refusal to bargain in good faith with 
        labor organizations, or coercion and intimidation. Employers 
        also frequently use captive audience meetings, workplace 
        surveillance, and other lawful or unlawful tactics to sway 
        labor organization elections.
            (6) Whether or not there are charges of unlawful behavior, 
        employers spend millions of dollars to sway the opinions of 
        their employees with respect to whether or how to exercise 
        their rights under the National Labor Relations Act and the 
        Railway Labor Act. According to the Economic Policy Institute, 
        companies spent $340,000,000 yearly on outside consultants to 
        sway their workers' opinions about labor organization 
        activities. This and other spending interfere with the United 
        States' goal of ``encouraging the practice and procedure of 
        collective bargaining''.
            (7) The Internal Revenue Code of 1986 has long recognized 
        that spending by businesses with the purpose of influencing the 
        general public with respect to elections, while it may be 
        lawful, is not tax deductible. Congress should extend that 
        principle to spending done by employers to influence workers' 
        elections and collective bargaining decisions. These free 
        choices to exercise the rights to engage in collective 
        bargaining, labor organization representation, and other lawful 
        collective activities should be made without taxpayer subsidies 
        of undue outside influence from employers.

SEC. 3. DENIAL OF DEDUCTION FOR ATTEMPTING TO INFLUENCE EMPLOYEES WITH 
              RESPECT TO LABOR ORGANIZATIONS OR LABOR ORGANIZATION 
              ACTIVITIES.

    (a) In General.--Section 162(e)(1) of the Internal Revenue Code of 
1986 is amended by striking ``or'' at the end of subparagraph (C), by 
striking the period at the end of subparagraph (D) and inserting ``, 
or'', and by adding at the end the following new subparagraph:
                    ``(E) any attempt to influence the taxpayer's 
                employees with respect to labor organizations or labor 
                organization activities, including with respect to the 
                opinion of such employees regarding such organizations 
                or activities.''.
    (b) Labor Organizations; Labor Organization Activities Defined.--
Section 162(e) of the Internal Revenue Code of 1986 is amended by 
redesignating paragraph (6) as paragraph (7) and by inserting after 
paragraph (5) the following new paragraph:
            ``(6) Labor organizations and labor organization activity 
        defined.--For purposes of this subsection--
                    ``(A) Labor organization.--The term `labor 
                organization' has the meaning given such term in 
                section 3 of the Labor-Management Reporting and 
                Disclosure Act of 1959 (29 U.S.C. 402).
                    ``(B) Labor organization activity.--
                            ``(i) In general.--The term `labor 
                        organization activity' means labor organization 
                        elections, labor disputes, collective actions, 
                        and such other related activities identified by 
                        the Secretary.
                            ``(ii) Other terms.--For purposes of clause 
                        (i)--
                                    ``(I) Collective action.--The term 
                                `collective action' means any action, 
                                including collective bargaining, 
                                described in section 7 of the National 
                                Labor Relations Act (29 U.S.C. 157) or 
                                any action that is a right of employees 
                                or labor organizations under the 
                                Railway Labor Act (45 U.S.C. 151 et 
                                seq.).
                                    ``(II) Labor dispute.--The term 
                                `labor dispute' has the meaning given 
                                such term under section 3 of the Labor-
                                Management Reporting and Disclosure Act 
                                of 1959 (29 U.S.C. 402).
                                    ``(III) Labor organization 
                                election.--The term `labor organization 
                                election' means any election described 
                                in section 9 of the National Labor 
                                Relations Act (29 U.S.C. 159) or 
                                section 2 of the Railway Labor Act (45 
                                U.S.C. 152).''.
    (c) Special Rules.--
            (1) In general.--Section 162(e)(4) of the Internal Revenue 
        Code of 1986 is amended by adding at the end the following new 
        subparagraph:
                    ``(D) Expenses relating to labor organizations or 
                labor organization activities.--
                            ``(i) In general.--For purposes of 
                        paragraph (1)(E), amounts paid or incurred in 
                        connection with attempting to influence the 
                        taxpayer's employees with respect to labor 
                        organizations or labor organization activities 
                        include--
                                    ``(I) any amount paid or incurred 
                                directly or indirectly by the taxpayer, 
                                including wages and other general and 
                                administrative costs, in connection 
                                with an action that results in--
                                            ``(aa) a complaint issued 
                                        under section 10 of the 
                                        National Labor Relations Act 
                                        (29 U.S.C. 160) against the 
                                        taxpayer for an unfair labor 
                                        practice under section 8(a) of 
                                        such Act (29 U.S.C. 158(a)),
                                            ``(bb) a settlement offer 
                                        related to an investigation by 
                                        the National Labor Relations 
                                        Board of a charge of an unfair 
                                        labor practice under section 
                                        8(a) of such Act (29 U.S.C. 
                                        158(a)) that results in a 
                                        settlement of such charge 
                                        without issuance of a complaint 
                                        under section 10 of such Act 
                                        (29 U.S.C. 160), or
                                            ``(cc) a finding of 
                                        interference, influence, or 
                                        coercion by a Federal court 
                                        under section 2 of the Railway 
                                        Labor Act (45 U.S.C. 152),
                                    ``(II) any amount paid or incurred 
                                directly or indirectly by the taxpayer, 
                                including wages and other general and 
                                administrative costs, in producing, 
                                conducting, or attending any meeting or 
                                training--
                                            ``(aa) which includes 
                                        employees of the taxpayer who 
                                        are or who could become members 
                                        of a unit appropriate for the 
                                        purposes of collective 
                                        bargaining, and
                                            ``(bb) at which labor 
                                        organizations or a labor 
                                        organization activity is 
                                        discussed, and
                                    ``(III) any amount which is 
                                required to be reported under the 
                                Labor-Management Reporting and 
                                Disclosure Act of 1959 (29 U.S.C. 401 
                                et seq.).
                            ``(ii) Exceptions.--The following amounts 
                        shall not be treated as amounts paid or 
                        incurred in connection with attempting to 
                        influence the taxpayer's employees with respect 
                        to labor organizations or labor organization 
                        activities under paragraph (1)(E):
                                    ``(I) Amounts paid or incurred for 
                                communications or negotiations directly 
                                with the designated or selected 
                                representative of the employees of the 
                                taxpayer described in section 9(a) of 
                                the National Labor Relations Act (29 
                                U.S.C. 159(a)) or under the Railway 
                                Labor Act (45 U.S.C. 151 et seq.).
                                    ``(II) Amounts paid or incurred for 
                                communications directly with 
                                shareholders, as may be required under 
                                section 13 of the Securities Exchange 
                                Act of 1934 (15 U.S.C. 78m).
                                    ``(III) Amounts paid or incurred 
                                for communications or consultations by 
                                the taxpayer in the process of 
                                voluntarily recognizing a labor 
                                organization as a representative in 
                                accordance with section 9 of the 
                                National Labor Relations Act (29 U.S.C. 
                                159).
                                    ``(IV) Amounts paid or incurred 
                                with respect to the operation of a 
                                labor-management partnership described 
                                in a collective bargaining agreement in 
                                effect between a representative of 
                                employees of the taxpayer and the 
                                taxpayer, including a labor management 
                                committee established pursuant to 
                                section 205A(a) of the Labor Management 
                                Relations Act, 1947 (29 U.S.C. 
                                175a(a)).
                                    ``(V) Amounts paid or incurred for 
                                communications or consultations related 
                                to the operation of a grievance 
                                procedure described in a collective 
                                bargaining agreement in effect between 
                                a representative of employees of the 
                                taxpayer and the taxpayer.
                                    ``(VI) Amounts paid or incurred by 
                                a labor organization.
                                    ``(VII) Amounts paid or incurred 
                                for communication materials, including 
                                visual or audio media, required to be 
                                posted for, or provided to, employees 
                                of the taxpayer by law, including under 
                                the National Labor Relations Act (29 
                                U.S.C. 151 et seq.) or the Railway 
                                Labor Act (45 U.S.C. 151 et seq.).
                                    ``(VIII) Amounts paid or incurred 
                                relating to a complaint which is issued 
                                by the National Labor Relations Board 
                                and which is set aside in full in 
                                accordance with subsection (e) or (f) 
                                of section 10 of such Act.''.
            (2) Regulatory authority.--
                    (A) In general.--Section 162(e) of such Code, as 
                amended by subsection (b), is amended by redesignating 
                paragraph (7) as paragraph (8) and by inserting after 
                paragraph (6) the following new paragraph:
            ``(7) Regulations.--The Secretary shall prescribe such 
        guidance, rules, or regulations as are necessary to carry out 
        the purposes of this subsection, including rules relating to 
        the timing of any deductions in connection with amounts 
        described in paragraph (4)(D)(ii)(VIII).''.
                    (B) Timing.--Not later than the date that is 240 
                days after the date of the enactment of this Act, the 
                Secretary of the Treasury (or the Secretary's delegate) 
                shall prescribe guidance, rules, or regulations with 
                respect to the application of the amendments made by 
                this Act.
    (d) Information Reporting.--
            (1) Certain information included in tax returns.--
                    (A) In general.--Part I of subchapter B of chapter 
                68 is amended by adding at the end the following new 
                section:

``SEC. 6720D. FAILURE TO INCLUDE CERTAIN INFORMATION WITH RESPECT TO 
              EMPLOYER ACTIVITIES RELATING TO LABOR ORGANIZATIONS.

    ``(a) In General.--If any taxpayer who makes expenditures described 
in section 162(e)(1)(E) fails to provide with the return of tax for the 
taxable year to which such expenditures relate the information provided 
in subsection (c) with respect to such expenditures, or who fails to 
provide all of the information required under subsection (b) or fails 
to provide correct information, shall pay a penalty in the amount 
determined under subsection (b).
    ``(b) Determination of Penalty Amount.--
            ``(1) In general.--The amount of the penalty under this 
        section for any failure described in subsection (a) shall be 
        the greater of--
                    ``(A) $10,000, or
                    ``(B) the product of $1,000 and the number of full 
                time equivalent employees of the employer (as 
                determined under section 45R(d)(2)).
            ``(2) Increased penalty where failure continues.--
                    ``(A) In general.--If any failure described in 
                subsection (a) (1) continues for more than 90 days 
                after the day on which the Secretary mails notice of 
                such failure to the taxpayer, the taxpayer shall pay a 
                penalty (in addition to the amount of any penalty under 
                paragraph (1)) equal to the amount determined under 
                paragraph (1) for each 30-day period (or fraction 
                thereof) during which such failure continues after the 
                expiration of such 90-day period.
                    ``(B) Limitation.--The penalty imposed under this 
                paragraph with respect to any failure shall not exceed 
                $100,000.
    ``(c) Information To Be Provided.--The information required under 
this subsection shall include--
            ``(1) the dates that such activities described in section 
        162(e)(1)(E) took place,
            ``(2) a statement indicating whether the activity was an 
        activity described in item (aa), (bb), or (cc) of section 
        162(e)(4)(D)(i)(I),
            ``(3) the amounts paid or incurred for such activities,
            ``(4) a copy of any disclosures which are required to be 
        reported under the Labor-Management Reporting and Disclosure 
        Act of 1959 (29 U.S.C. 401 et seq.), and
            ``(5) such other information as the Secretary may 
        prescribe.
    ``(d) Reasonable Cause Exception.--No penalty shall be imposed by 
this section on any failure which is shown to be due to reasonable 
cause and not due to willful neglect.''.
                    (B) Clerical amendment.--The table of sections for 
                part I of subchapter B of chapter 68 is amended by 
                adding at the end the following new item:

``Sec. 6720D. Failure to include certain information with respect to 
                            employer activities relating to labor 
                            organizations.''.
            (2) Third-party information reporting.--
                    (A) In general.--Subpart A of part III of 
                subchapter A of chapter 61 of the Internal Revenue Code 
                of 1986 is amended by inserting after section 6039J the 
                following new section:

``SEC. 6039K. INFORMATION WITH RESPECT TO CERTAIN EMPLOYER ACTIVITIES 
              RELATING TO LABOR ORGANIZATIONS.

    ``(a) In General.--Any person conducting activities described in 
section 162(e)(1)(E) on behalf of another person shall file a return 
(at such time and in such manner as the Secretary may by regulations 
prescribe, which includes the information described in subsection (b)).
    ``(b) Information To Be Provided.--Information required under 
subsection (a) shall include--
            ``(1) the person on behalf of whom the activities described 
        in section 162(e)(1)(E) were performed,
            ``(2) the dates that such activities described in such 
        section took place,
            ``(3) a statement indicating whether the activity was an 
        activity described in item (aa), (bb), or (cc) of section 
        162(e)(4)(D)(i)(I),
            ``(4) the amounts paid or incurred for such activities, and
            ``(5) such other information as the Secretary may 
        prescribe.''.
                    (B) Penalty.--Subparagraph (B) of section 
                6724(d)(1) of such Code is amended--
                            (i) by striking the comma at the end of 
                        clause (xxvii), as added by the Infrastructure 
                        Investment and Jobs Act, and inserting ``, 
                        or'', and
                            (ii) by adding at the end the following new 
                        clause:
                            ``(xxviii) section 6039K (relating to 
                        information with respect to certain employer 
                        activities relating to labor organizations), 
                        and''.
                    (C) Clerical amendment.--The table of sections for 
                subpart A of part III of subchapter A of chapter 61 of 
                such Code is amended by inserting after the item 
                relating to section 6039J the following new item:

``Sec. 6039K. Information with respect to certain employer activities 
                            relating to labor organizations.''.
    (e) Conforming Amendments.--
            (1) The heading for subsection (e) of section 162 of the 
        Internal Revenue Code of 1986 is amended by striking ``and 
        Political Expenditures'' and inserting ``, Political 
        Expenditures, and Labor Organization Expenditures''.
            (2) The heading of subparagraph (C) of section 162(e)(4) of 
        such Code is amended by striking ``and political activities'' 
        and inserting ``, political, and labor organization 
        activities''.
    (f) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred in taxable years beginning after the 
date that is 240 days after the date of the enactment of this Act.
                                 <all>
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