I
103D CONGRESS
1ST SESSION
H. R. 1207
To amend the Worker Adjustment and Retraining Notification Act to require
notice of certain plant closings to be provided to the Secretary of the
Treasury and to amend the Internal Revenue Code of 1986 to deny
the benefits of the Puerto Rico and possession tax credit in the case
of runaway plants.
IN THE HOUSE OF REPRESENTATIVES
MARCH 3, 1993
Mr. ROEMER (for himself and Mr. STARK) introduced the following bill; which
was referred jointly to the Committees on Ways and Means and
Education and Labor
A BILL
To amend the Worker Adjustment and Retraining Notifica-
tion Act to require notice of certain plant closings to
be provided to the Secretary of the Treasury and to
amend the Internal Revenue Code of 1986 to deny the
benefits of the Puerto Rico and possession tax credit
in the case of runaway plants.
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 ‘‘Jobs Preservation Act
of 1993’’.
SEC. 2. NOTIFICATION OF CERTAIN PLANT CLOSINGS TO
THE SECRETARY OF THE TREASURY; ADDI-
TIONAL INFORMATION REQUIRED ON CER-
TAIN NOTICES.
(a) GENERAL RULE.—Subsection (a) of section 3 of
the Worker Adjustment and Retraining Notification Act
(29 U.S.C. 2102) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(1), by striking the period at the end of paragraph
(2) and inserting ‘‘; and’’, and by inserting after
paragraph (2) the following new paragraph:
‘‘(3) to the Secretary of the Treasury if the em-
ployer or any person related to the employer (within
the meaning of section 936(h)(3)(D) of the Internal
Revenue Code of 1986) holds (directly or indirectly)
any stock in a corporation eligible for the credit
provided by section 936 of such Code.’’, and
(2) by adding at the end thereof the following
new sentence: ‘‘If any notice is required under para-
graph (3), each notice required under paragraph (1)
or (2) shall include a statement that the employer
directly or indirectly holds stock in a corporation eli-
gible for the credit provided by section 936 of the
Internal Revenue Code of 1986.’’.
(b) CLERICAL AMENDMENT.—The subsection head-
ing for subsection (a) of such section 3 is amended by
striking ‘‘LOCAL GOVERNMENTS’’ and inserting ‘‘CER-
TAIN GOVERNMENTAL UNITS’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
SEC. 3. LIMITATION ON PUERTO RICO AND POSSESSION
TAX CREDIT.
(a) GENERAL RULE.—Section 936 of the Internal
Revenue Code of 1986 (relating to Puerto Rico and pos-
session tax credit) is amended by adding at the end there-
of the following new subsection:
‘‘(i) DENIAL
OF CREDIT
FOR INCOME ATTRIB-
UTABLE TO RUNAWAY PLANTS.—
‘‘(1) IN GENERAL.—
‘‘(A) INCOME ATTRIBUTABLE TO SHARE-
HOLDERS.—The runaway plant income of a cor-
poration electing the application of this section
for any taxable year (hereinafter in this sub-
section referred to as the ‘electing corporation’)
shall be included on a pro rata basis in the
gross income of all shareholders of such electing
corporation at the close of the taxable year of
such electing corporation as income from
sources within the United States for the taxable
year of such shareholder in which or with which
the taxable year of such electing corporation
ends.
‘‘(B) EXCLUSION FROM THE INCOME OF
AN ELECTING CORPORATION.—The taxable in-
come of an electing corporation shall be reduced
by the amount which is included in the gross
income of a shareholder of such corporation by
reason of subparagraph (A).
‘‘(2) FOREIGN
SHAREHOLDERS; SHAREHOLD-
ERS NOT SUBJECT TO TAX.—
‘‘(A) IN
GENERAL.—Paragraph (1)(A)
shall not apply with respect to any share-
holder—
‘‘(i)
who
is
not
a
United
States
person, or
‘‘(ii) who is not subject to tax under
this title on runaway plant income which
would be allocated to such shareholder (but
for this subparagraph).
‘‘(B) 
TREATMENT
OF
NONALLOCATED
RUNAWAY
PLANT
INCOME.—For purposes of
this subtitle, runaway plant income of an elect-
ing corporation which is not included in the
gross income of a shareholder of such corpora-
tion by reason of subparagraph (A) shall be
treated as taxable income from sources within
the United States.
‘‘(3) EXCLUSION OF INCOME FOR QUALIFICA-
TION TESTS.—Any gross income taken into account
in determining the amount of the runaway plant in-
come of any electing corporation shall not be taken
into account for purposes of subsection (a)(2).
‘‘(4) RUNAWAY PLANT INCOME.—For purposes
of this subsection, the term ‘runaway plant income’
means the portion of the taxable income of the elect-
ing corporation which is attributable to a disquali-
fied facility.
‘‘(5) DISQUALIFIED
FACILITY.—For purposes
of this subsection—
‘‘(A) IN GENERAL.—The term ‘disqualified
facility’ means any facility at which operations
are commenced with respect to the electing cor-
poration after llllllllll unless—
‘‘(i) the Secretary determines that op-
erations at such facility—
‘‘(I) will not result in a substan-
tial adverse effect on the level of em-
ployment at any facility in the United
States operated by the electing cor-
poration or a person related to the
electing corporation, and
‘‘(II) will not result in such an
effect with respect to any other facil-
ity in the United States on account of
changes in a supplier relationship to
the electing corporation or a person
related to the electing corporation,
and
‘‘(ii) the electing corporation files a
request with the Secretary for a determina-
tion under clause (i) on or before the
earlier of—
‘‘(I) the day 90 days after the
date on which an application is sub-
mitted to the possession for tax incen-
tives for such facility, or
‘‘(II) the day 1 year before the
date on which operations at such
facility commence.
The Secretary may treat a request not filed be-
fore the time required under clause (ii) as time-
ly filed if the Secretary determines that there
was reasonable cause for not filing the request
before the time required.