I 

108TH CONGRESS 

2D SESSION H. R. 3911

To make certain companies that have outsourced jobs during the previous 

five years ineligible for the receipt of Federal grants, Federal contracts, 

Federal loan guarantees, and other Federal funding, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 4, 2004

Ms. WATERS introduced the following bill; which was referred to the 

Committee on Government Reform 

A BILL

To make certain companies that have outsourced jobs during 

the previous five years ineligible for the receipt of Federal grants, Federal contracts, Federal loan guarantees, 

and other Federal funding, and for other purposes.

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

3 SECTION 1. FEDERAL FUNDING PROHIBITION. 

4 (a) PROHIBITION.—Except as provided in subsection 

5 (b) or (f), and unless the Federal agency is acting under 

6 an obligation entered into before the effective date of this 

7 Act, no Federal agency shall award a grant or contract, 

8 make a loan guarantee, or provide any other funding, or 
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1 enter into an obligation to award a grant or contract, 

2 make a loan guarantee, or provide any other funding, to 

3 a company of interest that has outsourced any jobs during 

4 the previous five years unless the company of interest—

5 (1) has not outsourced any jobs during the pre6 vious two years; and 

7 (2) has created in the United States since the 

8 company of interest last outsourced any jobs, and 

9 continues to maintain in the United States, a num10 ber of new jobs within the same company of interest 

11 that is equal to at least 50 percent of the total num12 ber of jobs that were outsourced by the company of 

13 interest during the previous five years. 

14 (b) AGREEMENT TO CREATE NEW JOBS.—A Federal 

15 agency may award a grant or contract, make a loan guar16 antee, or provide any other funding, or enter into an obli17 gation to award a grant or contract, make a loan guar18 antee, or provide any other funding, to a company of inter19 est that has outsourced jobs during the previous five years 

20 only if the company of interest agrees—

21 (1) to create in the United States, not later 

22 than 18 months after the company has received the 

23 grant, contract, loan guarantee, or other funding, a 

24 number of new jobs within the same company of in25 terest that is equal to at least 50 percent of the total 
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1 number of jobs that were outsourced by the company 

2 of interest during the previous five years, and to 

3 maintain such new jobs in the United States for at 

4 least 18 months; 

5 (2) to pay to the Federal agency that awards 

6 the grant or contract, makes the loan guarantee, or 

7 provides the other funding an amount equal to 125 

8 percent of the total value of the grant, contract, loan 

9 guarantee, or other funding if the company of inter10 est does not create the new jobs described in para11 graph (1); and 

12 (3) to pay to the Federal agency that awards 

13 the grant or contract, makes the loan guarantee, or 

14 provides the other funding an amount, to be deter15 mined by the Federal agency, that is not more than 

16 125 percent of the total value of the grant, contract, 

17 loan guarantee, or other funding if the Federal 

18 agency finds that the company of interest did not in 

19 good faith attempt to maintain for at least 18 

20 months the new jobs that the company of interest 

21 created pursuant to the agreement described in 

22 paragraph (1). 

23 (c) DOCUMENTATION.—Except as provided in sub24 section (f), and unless the Federal agency is acting under 

25 an obligation entered into before the effective date of this 
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1 Act, no Federal agency shall award a grant or contract, 

2 make a loan guarantee, or provide any other funding, or 

3 enter into an obligation to award a grant or contract, 

4 make a loan guarantee, or provide any other funding, to 

5 a company of interest unless the company of interest has 

6 provided documentation to the Federal agency that indi7 cates either that the company has not outsourced jobs dur8 ing the previous five years or that the company has ful9 filled the requirements under subsection (a) or (b). 

10 (d) OBLIGATION CONDITION.—Any obligation en11 tered into by a Federal agency to award a grant or con12 tract, make a loan guarantee, or provide any other funding 

13 to a company of interest shall include the condition that 

14 if the company of interest outsources any jobs after such 

15 obligation is entered into and before the company of inter16 est is to receive the grant, contract, loan guarantee, or 

17 other funding, the Federal agency shall not award the 

18 grant or contract, make the loan guarantee, or provide the 

19 other funding. 

20 (e) OUTSOURCING AGREEMENT.—A Federal agency 

21 may award a grant or contract, make a loan guarantee, 

22 or provide any other funding, or enter into an obligation 

23 to award a grant or contract, make a loan guarantee, or 

24 provide any other funding, to a company of interest only 

25 if the company of interest agrees—
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1 (1) not to outsource any jobs within 18 months 

2 after the Federal agency awards the grant or con3 tract, makes the loan guarantee, or provides the 

4 other funding; and 

5 (2) if the company of interest does not satisfy 

6 the agreement described in paragraph (1), to pay to 

7 the Federal agency that awards the grant or con8 tract, makes the loan guarantee, or provides the 

9 other funding an amount equal to the total value be10 fore the outsourcing of one year’s wages and bene11 fits for each of the jobs outsourced within 18 

12 months after the company of interest receives the 

13 grant, contract, loan guarantee, or other funding. 

14 (f) NATIONAL SECURITY EXCEPTION.—The restric15 tions and penalties under this section shall not apply if 

16 the Federal agency awards a grant or contract, makes a 

17 loan guarantee, or provides any other funding, or enters 

18 into an obligation to award a grant or contract, make a 

19 loan guarantee, or provide any other funding, for purposes 

20 of national security. 

21 (g) IMPLEMENTATION AND REGULATIONS.—The 

22 Secretary of Commerce shall coordinate the Federal agen23 cies’ implementation of the documentation requirement 

24 described in subsection (c). The Secretary of Commerce 
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1 shall prescribe regulations necessary to carry out this sec2 tion. 

3 SEC. 2. DEFINITIONS. 

4 For purposes of this Act: 

5 (1) COMPANY OF INTEREST.—The term ‘‘com6 pany of interest’’ means—

7 (A) a corporation or other legal entity or8 ganized under the laws of the United States; 

9 (B) a subsidiary of a corporation or legal 

10 entity described in subparagraph (A); 

11 (C) a corporation or other legal entity that 

12 employed at least 50 employees to perform serv13 ices in the United States at any one time on or 

14 after January 1, 1980; or 

15 (D) a corporation or other legal entity with 

16 $1,000,000 or more annual gross income that is 

17 effectively connected with the conduct of a 

18 trade or business within the United States. 

19 (2) NEW JOBS.—The term ‘‘new jobs’’ means 

20 jobs created by a company of interest such that with 

21 respect to each new job the total value of wages and 

22 benefits is equal to or greater than the average total 

23 value of wages and benefits of the jobs outsourced 

24 by the company of interest during the previous five 

25 years. 
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1 (3) OUTSOURCE.—The term ‘‘outsource’’ means 

2 to hire employees to perform services outside the 

3 United States when the services previously had been 

4 performed in the United States. 

5 (4) UNITED STATES.—The term ‘‘United 

6 States’’ means the several States, the District of Co7 lumbia, the Commonwealth of Puerto Rico, the Com8 monwealth of the Northern Mariana Islands, Amer9 ican Samoa, Guam, the Virgin Islands, and any 

10 other territory or possession of the United States. 

11 SEC. 3. EFFECTIVE DATE. 

12 This Act shall take effect one year after the date of 

13 its enactment.

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