I

106TH CONGRESS

1ST SESSION H. R. 1600

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

APRIL 28, 1999

Mr. FATTAH (for himself, Mr. FILNER, Mr. HASTINGS of Florida, Mr. MEEKS

of New York, Mrs. CHRISTENSEN, Mr. SABO, Mr. HILLIARD, Mr.

CUMMINGS, Mr. TOWNS, Mr. SANDERS, Mr. HINCHEY, Ms. BROWN of

Florida, Mr. THOMPSON of Mississippi, Ms. MILLENDER-MCDONALD, Mr.

OWENS, Mr. CLAY, Mr. GUTIERREZ, and Ms. JACKSON-LEE of Texas) introduced the following bill; which was referred to the Committee on Government Reform, and in addition to the Committee on Education and the

Workforce, 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’’.
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1 SEC. 2. FINDINGS.

2 The Congress finds that—

3 (1) reducing income disparities will stimulate

4 and stabilize the national economy;

5 (2) the best solutions to prevailing income dis6 parities are structural changes in our income dis7 tribution system;

8 (3) it is important that American corporations

9 retain the flexibility to compete effectively in this

10 global economy;

11 (4) it is equally important that the well-being of

12 the American worker be protected in this changing

13 economic environment;

14 (5) the most effective incomes policy approach

15 in such an environment is diversification of sources

16 and types of income for the American worker;

17 (6) return to capital in terms of interest, divi18 dends, and capital gains have soared in recent years

19 and is the single most robust source of income

20 growth;

21 (7) a significant percentage of this increase in

22 the return to capital has been a direct result of pub23 lic policy and public investment;

24 (8) in this country, profit sharing has been

25 shown to contribute to increased productivity and

26 profitability; and
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1 (9) it is appropriate that taxpayers participate

2 in capital expansions created and financed with tax

3 dollars.

4 SEC. 3. PROVISION OF FEDERAL CONTRACTS AND CERTAIN

5 FEDERAL SUBSIDIES ONLY TO BUSINESSES

6 WITH QUALIFIED PROFIT-SHARING PLANS.

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

8 Federal subsidies may be provided only to businesses

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

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

11 Revenue Code of 1986.

12 (b) EXCEPTION FOR START-UP SMALL BUSI13 NESSES.—Subsection (a) shall not apply to any business

14 for a year unless—

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

16 least 10 prior years,

17 (2) such business has more than 5 full-time em18 ployees (or their equivalent) at any time during the

19 year, and

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

21 year exceeds $5,000,000.

22 Rules similar to the rules of paragraph (2), and subpara23 graphs (B), (C), and (D) of paragraph (3), of section

24 448(c) shall apply for purposes of the preceding sentence.
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1 SEC. 4. DEFINITIONS.

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

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

4 directly or indirectly with Federal funds.

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

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

7 of the following Federal benefits which benefit the busi8 ness:

9 (1) Any grant or other payment funded directly

10 or indirectly with Federal funds.

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

12 any Federal agency or any payment under the guar13 antee is directly or indirectly from Federal funds.

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

15 other terms of which, are more favorable than loans

16 otherwise available to the borrower from non-Federal

17 sources if the more favorable interest rate or other

18 terms are funded directly or indirectly by Federal

19 funds.

20 Paragraphs (2) and (3) shall not apply to loans under dis21 aster loan programs.

22 SEC. 5. EFFECTIVE DATE.

23 This Act shall take effect on the first day of the first

24 fiscal year beginning after the date of the enactment of

25 this Act.

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