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 pur-
poses. 
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 Fed-
eral grants, Federal contracts, Federal loan guarantees, 
and other Federal funding, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. FEDERAL FUNDING PROHIBITION. 
(a) PROHIBITION.—Except as provided in subsection 
(b) or (f), and unless the Federal agency is acting under 
an obligation entered into before the effective date of this 
Act, no Federal agency shall award a grant or contract, 
make a loan guarantee, or provide any other funding, or
enter into an obligation to award a grant or contract, 
make a loan guarantee, or provide any other funding, to 
a company of interest that has outsourced any jobs during 
the previous five years unless the company of interest—
(1) has not outsourced any jobs during the pre-
vious two years; and 
(2) has created in the United States since the 
company of interest last outsourced any jobs, and 
continues to maintain in the United States, a num-
ber of new jobs within the same company of interest 
that is equal to at least 50 percent of the total num-
ber of jobs that were outsourced by the company of 
interest during the previous five years. 
(b) AGREEMENT TO CREATE NEW JOBS.—A Federal 
agency may award a grant or contract, make a loan guar-
antee, or provide any other funding, or enter into an obli-
gation to award a grant or contract, make a loan guar-
antee, or provide any other funding, to a company of inter-
est that has outsourced jobs during the previous five years 
only if the company of interest agrees—
(1) to create in the United States, not later 
than 18 months after the company has received the 
grant, contract, loan guarantee, or other funding, a 
number of new jobs within the same company of in-
terest that is equal to at least 50 percent of the total
number of jobs that were outsourced by the company 
of interest during the previous five years, and to 
maintain such new jobs in the United States for at 
least 18 months; 
(2) to pay to the Federal agency that awards 
the grant or contract, makes the loan guarantee, or 
provides the other funding an amount equal to 125 
percent of the total value of the grant, contract, loan 
guarantee, or other funding if the company of inter-
est does not create the new jobs described in para-
graph (1); and 
(3) to pay to the Federal agency that awards 
the grant or contract, makes the loan guarantee, or 
provides the other funding an amount, to be deter-
mined by the Federal agency, that is not more than 
125 percent of the total value of the grant, contract, 
loan guarantee, or other funding if the Federal 
agency finds that the company of interest did not in 
good faith attempt to maintain for at least 18 
months the new jobs that the company of interest 
created pursuant to the agreement described in 
paragraph (1). 
(c) DOCUMENTATION.—Except as provided in sub-
section (f), and unless the Federal agency is acting under 
an obligation entered into before the effective date of this
Act, no Federal agency shall award a grant or contract, 
make a loan guarantee, or provide any other funding, or 
enter into an obligation to award a grant or contract, 
make a loan guarantee, or provide any other funding, to 
a company of interest unless the company of interest has 
provided documentation to the Federal agency that indi-
cates either that the company has not outsourced jobs dur-
ing the previous five years or that the company has ful-
filled the requirements under subsection (a) or (b). 
(d) OBLIGATION CONDITION.—Any obligation en-
tered into by a Federal agency to award a grant or con-
tract, make a loan guarantee, or provide any other funding 
to a company of interest shall include the condition that 
if the company of interest outsources any jobs after such 
obligation is entered into and before the company of inter-
est is to receive the grant, contract, loan guarantee, or 
other funding, the Federal agency shall not award the 
grant or contract, make the loan guarantee, or provide the 
other funding. 
(e) OUTSOURCING AGREEMENT.—A Federal agency 
may award a grant or contract, make a loan guarantee, 
or provide any other funding, or enter into an obligation 
to award a grant or contract, make a loan guarantee, or 
provide any other funding, to a company of interest only 
if the company of interest agrees—
(1) not to outsource any jobs within 18 months 
after the Federal agency awards the grant or con-
tract, makes the loan guarantee, or provides the 
other funding; and 
(2) if the company of interest does not satisfy 
the agreement described in paragraph (1), to pay to 
the Federal agency that awards the grant or con-
tract, makes the loan guarantee, or provides the 
other funding an amount equal to the total value be-
fore the outsourcing of one year’s wages and bene-
fits for each of the jobs outsourced within 18 
months after the company of interest receives the 
grant, contract, loan guarantee, or other funding. 
(f) NATIONAL SECURITY EXCEPTION.—The restric-
tions and penalties under this section shall not apply if 
the Federal agency awards a grant or contract, makes a 
loan guarantee, or provides any other funding, or enters 
into an obligation to award a grant or contract, make a 
loan guarantee, or provide any other funding, for purposes 
of national security. 
(g) IMPLEMENTATION
AND
REGULATIONS.—The 
Secretary of Commerce shall coordinate the Federal agen-
cies’ implementation of the documentation requirement 
described in subsection (c). The Secretary of Commerce
shall prescribe regulations necessary to carry out this sec-
tion. 
SEC. 2. DEFINITIONS. 
For purposes of this Act: 
(1) COMPANY OF INTEREST.—The term ‘‘com-
pany of interest’’ means—
(A) a corporation or other legal entity or-
ganized under the laws of the United States; 
(B) a subsidiary of a corporation or legal 
entity described in subparagraph (A); 
(C) a corporation or other legal entity that 
employed at least 50 employees to perform serv-
ices in the United States at any one time on or 
after January 1, 1980; or 
(D) a corporation or other legal entity with 
$1,000,000 or more annual gross income that is 
effectively connected with the conduct of a 
trade or business within the United States. 
(2) NEW JOBS.—The term ‘‘new jobs’’ means 
jobs created by a company of interest such that with 
respect to each new job the total value of wages and 
benefits is equal to or greater than the average total 
value of wages and benefits of the jobs outsourced 
by the company of interest during the previous five 
years.
(3) OUTSOURCE.—The term ‘‘outsource’’ means 
to hire employees to perform services outside the 
United States when the services previously had been 
performed in the United States. 
(4) 
UNITED
STATES.—The 
term 
‘‘United 
States’’ means the several States, the District of Co-
lumbia, the Commonwealth of Puerto Rico, the Com-
monwealth of the Northern Mariana Islands, Amer-
ican Samoa, Guam, the Virgin Islands, and any 
other territory or possession of the United States. 
SEC. 3. EFFECTIVE DATE. 
This Act shall take effect one year after the date of 
its enactment.
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