I 
108TH CONGRESS 
1ST SESSION H. R. 3653
To provide authorities to, and impose requirements on, the heads of executive 
agencies in order to facilitate State enforcement of State tax, employ-
ment, and licensing laws against Federal construction contractors. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 8, 2003
Mr. CASE (for himself and Mr. ABERCROMBIE) introduced the following bill; 
which was referred to the Committee on Government Reform, and in ad-
dition to the Committee on Armed Services, for a period to be subse-
quently 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 authorities to, and impose requirements on, the 
heads of executive agencies 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 Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Fairness to Local Con-
tractors Act’’.
SEC. 2. ENHANCEMENT OF STATE ENFORCEMENT OF 
STATE TAX, EMPLOYMENT, AND LICENSING 
LAWS AGAINST CONSTRUCTION CONTRAC-
TORS. 
(a) REQUIREMENT
FOR STATE TAX CLEARANCE 
FROM POTENTIAL CONSTRUCTION CONTRACTORS.—
(1) DEFENSE CONTRACTS.—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 of-
feror is in compliance with all the tax laws of the State 
in which the contract is to be performed.’’. 
(2) CIVILIAN
AGENCY
CONTRACTS.—Section 
303B of title III of the Federal Property and Ad-
ministrative Services Act of 1949 (41 U.S.C. 253b) 
is amended by adding at the end the following new 
subsection: 
‘‘(n) TAX CLEARANCE.—In order to be considered a 
responsible bidder or offeror for a contract for the con-
struction 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 docu-
ment 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 EMPLOY-
MENT LAWS FROM CONTRACTOR.—
(1) DEFENSE
CONTRACTS.—Section 2307 of 
title 10, United States Code, is amended by adding 
at the end the following new subsection: 
‘‘(j) REQUIREMENT TO WITHHOLD FINAL PAY-
MENT.—(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 re-
lating to unemployment insurance, workers com-
pensation, 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 per-
formed.’’. 
(2) CIVILIAN
AGENCY
CONTRACTS.—Section 
305 of title III of the Federal Property and Admin-
istrative Services Act of 1949 (41 U.S.C. 255) is 
amended by adding at the end the following new 
subsection: 
‘‘(h) REQUIREMENT TO WITHHOLD FINAL PAY-
MENT.—(1) The head of an executive agency shall with-
hold 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 re-