H. R. 5005—94
(1) the entity completes after the date of enactment of
this Act, the direct or indirect acquisition of substantially all
of the properties held directly or indirectly by a domestic cor-
poration or substantially all of the properties constituting a
trade or business of a domestic partnership;
(2) after the acquisition at least 80 percent of the stock
(by vote or value) of the entity is held—
(A) in the case of an acquisition with respect to a
domestic corporation, by former shareholders of the
domestic corporation by reason of holding stock in the
domestic corporation; or
(B) in the case of an acquisition with respect to a
domestic partnership, by former partners of the domestic
partnership by reason of holding a capital or profits interest
in the domestic partnership; and
(3) the expanded affiliated group which after the acquisition
includes the entity does not have substantial business activities
in the foreign country in which or under the law of which
the entity is created or organized when compared to the total
business activities of such expanded affiliated group.
(c) DEFINITIONS AND SPECIAL RULES.—
(1) RULES FOR APPLICATION OF SUBSECTION (b).—In applying
subsection (b) for purposes of subsection (a), the following rules
shall apply:
(A) CERTAIN STOCK DISREGARDED.—There shall not be
taken into account in determining ownership for purposes
of subsection (b)(2)—
(i) stock held by members of the expanded affili-
ated group which includes the foreign incorporated
entity; or
(ii) stock of such entity which is sold in a public
offering related to the acquisition described in sub-
section (b)(1).
(B) PLAN DEEMED IN CERTAIN CASES.—If a foreign incor-
porated entity acquires directly or indirectly substantially
all of the properties of a domestic corporation or partner-
ship during the 4-year period beginning on the date which
is after the date of enactment of this Act and which is
2 years before the ownership requirements of subsection
(b)(2) are met, such actions shall be treated as pursuant
to a plan.
(C) CERTAIN TRANSFERS DISREGARDED.—The transfer
of properties or liabilities (including by contribution or
distribution) shall be disregarded if such transfers are part
of a plan a principal purpose of which is to avoid the
purposes of this section.
(D) SPECIAL RULE FOR RELATED PARTNERSHIPS.—For
purposes of applying subsection (b) to the acquisition of
a domestic partnership, except as provided in regulations,
all domestic partnerships which are under common control
(within the meaning of section 482 of the Internal Revenue
Code of 1986) shall be treated as I partnership.
(E) TREATMENT
OF
CERTAIN
RIGHTS.—The Secretary
shall prescribe such regulations as may be necessary to—
(i) treat warrants, options, contracts to acquire
stock, convertible debt instruments, and other similar
interests as stock; and
H. R. 5005—95
(ii) treat stock as not stock.
(2) EXPANDED
AFFILIATED
GROUP.—The term ‘‘expanded
affiliated group’’ means an affiliated group as defined in section
1504(a) of the Internal Revenue Code of 1986 (without regard
to section 1504(b) of such Code), except that section 1504 of
such Code shall be applied by substituting ‘‘more than 50
percent’’ for ‘‘at least 80 percent’’ each place it appears.
(3) FOREIGN
INCORPORATED
ENTITY.—The term ‘‘foreign
incorporated entity’’ means any entity which is, or but for
subsection (b) would be, treated as a foreign corporation for
purposes of the Internal Revenue Code of 1986.
(4) OTHER DEFINITIONS.—The terms ‘‘person’’, ‘‘domestic’’,
and ‘‘foreign’’ have the meanings given such terms by para-
graphs (1), (4), and (5) of section 7701(a) of the Internal Rev-
enue Code of 1986, respectively.
(d) WAIVERS.—The Secretary shall waive subsection (a) with
respect to any specific contract if the Secretary determines that
the waiver is required in the interest of homeland security, or
to prevent the loss of any jobs in the United States or prevent
the Government from incurring any additional costs that otherwise
would not occur.
Subtitle E—Human Resources
Management
SEC. 841. ESTABLISHMENT OF HUMAN RESOURCES MANAGEMENT
SYSTEM.
(a) AUTHORITY.—
(1) SENSE OF CONGRESS.—It is the sense of Congress that—
(A) it is extremely important that employees of the
Department be allowed to participate in a meaningful way
in the creation of any human resources management
system affecting them;
(B) such employees have the most direct knowledge
of the demands of their jobs and have a direct interest
in ensuring that their human resources management
system is conducive to achieving optimal operational effi-
ciencies;
(C) the 21st century human resources management
system envisioned for the Department should be one that
benefits from the input of its employees; and
(D) this collaborative effort will help secure our home-
land.
(2) IN GENERAL.—Subpart I of part III of title 5, United
States Code, is amended by adding at the end the following:
‘‘CHAPTER 97—DEPARTMENT OF HOMELAND SECURITY
‘‘Sec.
‘‘9701. Establishment of human resources management system.
H. R. 5005—96
‘‘§ 9701. Establishment of human resources management
system
‘‘(a) IN GENERAL.—Notwithstanding any other provision of this
part, the Secretary of Homeland Security may, in regulations pre-
scribed jointly with the Director of the Office of Personnel Manage-
ment, establish, and from time to time adjust, a human resources
management system for some or all of the organizational units
of the Department of Homeland Security.
‘‘(b) SYSTEM REQUIREMENTS.—Any system established under
subsection (a) shall—
‘‘(1) be flexible;
‘‘(2) be contemporary;
‘‘(3) not waive, modify, or otherwise affect—
‘‘(A) the public employment principles of merit and
fitness set forth in section 2301, including the principles
of hiring based on merit, fair treatment without regard
to political affiliation or other nonmerit considerations,
equal pay for equal work, and protection of employees
against reprisal for whistleblowing;
‘‘(B) any provision of section 2302, relating to prohib-
ited personnel practices;
‘‘(C)(i) any provision of law referred to in section
2302(b)(1), (8), and (9); or
‘‘(ii) any provision of law implementing any provision
of law referred to in section 2302(b)(1), (8), and (9) by—
‘‘(I) providing for equal employment opportunity
through affirmative action; or
‘‘(II) providing any right or remedy available to
any employee or applicant for employment in the civil
service;
‘‘(D) any other provision of this part (as described
in subsection (c)); or
‘‘(E) any rule or regulation prescribed under any provi-
sion of law referred to in any of the preceding subpara-
graphs of this paragraph;
‘‘(4) ensure that employees may organize, bargain collec-
tively, and participate through labor organizations of their own
choosing in decisions which affect them, subject to any exclusion
from coverage or limitation on negotiability established by law;
and
‘‘(5) permit the use of a category rating system for evalu-
ating applicants for positions in the competitive service.
‘‘(c) OTHER NONWAIVABLE PROVISIONS.—The other provisions
of this part as referred to in subsection (b)(3)(D), are (to the extent
not otherwise specified in subparagraph (A), (B), (C), or (D) of
subsection (b)(3))—
‘‘(1) subparts A, B, E, G, and H of this part; and
‘‘(2) chapters 41, 45, 47, 55, 57, 59, 72, 73, and 79, and
this chapter.
‘‘(d) LIMITATIONS RELATING TO PAY.—Nothing in this section
shall constitute authority—
‘‘(1) to modify the pay of any employee who serves in—
‘‘(A) an Executive Schedule position under subchapter
II of chapter 53 of title 5, United States Code; or
‘‘(B) a position for which the rate of basic pay is fixed
in statute by reference to a section or level under sub-
chapter II of chapter 53 of such title 5;
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‘‘(2) to fix pay for any employee or position at an annual
rate greater than the maximum amount of cash compensation
allowable under section 5307 of such title 5 in a year; or
‘‘(3) to exempt any employee from the application of such
section 5307.
‘‘(e) PROVISIONS TO ENSURE COLLABORATION WITH EMPLOYEE
REPRESENTATIVES.—
‘‘(1) IN GENERAL.—In order to ensure that the authority
of this section is exercised in collaboration with, and in a
manner that ensures the participation of employee representa-
tives in the planning, development, and implementation of any
human resources management system or adjustments to such
system under this section, the Secretary of Homeland Security
and the Director of the Office of Personnel Management shall
provide for the following:
‘‘(A) NOTICE
OF
PROPOSAL.—The Secretary and the
Director shall, with respect to any proposed system or
adjustment—
‘‘(i) provide to each employee representative rep-
resenting any employees who might be affected, a writ-
ten description of the proposed system or adjustment
(including the reasons why it is considered necessary);
‘‘(ii) give each representative 30 calendar days
(unless extraordinary circumstances require earlier
action) to review and make recommendations with
respect to the proposal; and
‘‘(iii) give any recommendations received from any
such representatives under clause (ii) full and fair
consideration in deciding whether or how to proceed
with the proposal.
‘‘(B) PRE-IMPLEMENTATION
CONGRESSIONAL
NOTIFICA-
TION, CONSULTATION, AND MEDIATION.—Following receipt
of recommendations, if any, from employee representatives
with respect to a proposal described in subparagraph (A),
the Secretary and the Director shall accept such modifica-
tions to the proposal in response to the recommendations
as they determine advisable and shall, with respect to
any parts of the proposal as to which they have not accepted
the recommendations—
‘‘(i) notify Congress of those parts of the proposal,
together with the recommendations of employee rep-
resentatives;
‘‘(ii) meet and confer for not less than 30 calendar
days with any representatives who have made rec-
ommendations, in order to attempt to reach agreement
on whether or how to proceed with those parts of
the proposal; and
‘‘(iii) at the Secretary’s option, or if requested by
a majority of the employee representatives who have
made recommendations, use the services of the Federal
Mediation and Conciliation Service during such meet
and confer period to facilitate the process of attempting
to reach agreement.
‘‘(C) IMPLEMENTATION.—
‘‘(i) Any part of the proposal as to which the rep-
resentatives do not make a recommendation, or as
to which their recommendations are accepted by the