II 118th CONGRESS 1st Session S. 973 IN THE SENATE OF THE UNITED STATES March 23, 2023 Mr. Cotton (for himself, Mr. Scott of Florida , Mr. Hagerty , and Mr. Hawley ) introduced the following bill; which was read twice and referred to the Committee on Homeland Security and Governmental Affairs A BILL To prohibit Federal contractors from imposing racial hiring quotas, benchmarks, or goals.

1. Short title This Act may be cited as the Protecting Equal Opportunity from ESG Act . 2. Purpose Acknowledging that distinctions between citizens solely because of their ancestry are, by their very nature, odious to a free people whose institutions are founded upon the doctrine of equality, and recognizing that existing regulations have failed to eradicate the use of racial hiring quotas among Federal contractors, the purpose of this Act is to require contracts with the Federal Government to include an equal opportunity clause prohibiting racial hiring quotas, benchmarks, or goals. 3. Definitions For purposes of this Act: (1) Contractor The term contractor — (A) means any person that is awarded a contract with the Federal Government or a subcontract under such a contract, including any subcontractor (at any tier) of such person; and (B) includes a person that— (i) is a lessor or lessee; or (ii) is an employer of a worker performing work on a contract with the Federal Government whose wages are calculated pursuant to a special certificate issued under section 14(c) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 214(c) ). (2) Employment practices The term employment practices — (A) means all terms and conditions of employment (including of any paid or unpaid fellowship or internship), including all practices relating to the screening, recruitment, referral, nomination, selection, training, appointment, promotion, demotion, and assignment of personnel; and (B) includes advertising, hiring, assignments, classification, discipline, layoff and termination, upgrading, transfer, leave practices, rate of pay, fringe benefits, or other forms of pay or credit for services rendered and use of facilities. (3) Executive agency The term executive agency has the meaning given that term in section 133 of title 41, United States Code. (4) National interest The term national interest — (A) means a national security interest, economic interest, or public health and welfare interest; and (B) does not include any purported interest in— (i) racial or social justice objectives, affirmative action agendas, or any other race-based considerations; or (ii) promoting, enabling, or excusing any policy, initiative, or practice of an employer concerning— (I) environmental, social, and governance (commonly known as ESG ); (II) diversity, equity, and inclusion (commonly known as DEI ); or (III) corporate social responsibility (commonly known as CSR ). (5) Secretary The term Secretary means the Secretary of Labor. 4. Prohibition on imposing racial hiring quotas (a) In general The head of each executive agency shall, except as provided in subsection (b), ensure that each contract entered into by the executive agency on or after the date of enactment of this Act includes requirements that the contractor shall— (1) certify that, during the 5-year period immediately preceding the date on which the contract is entered into, the contractor did not initiate, carry out, or enforce any system of quotas, benchmarks, or goals in regard to employment practices that encourage or require any discrimination on the basis of race; and (2) not, during the performance of the contract, initiate, carry out, or enforce any system of quotas, benchmarks, or goals in regard to employment practices which encourage or require any discrimination on the basis of race. (b) Exception for lookback requirement Notwithstanding subsection (a), the Secretary may exempt the head of an executive agency from the requirement to include the certification described in subsection (a)(1) in a specific contract, subcontract, or purchase order if the Secretary determines that special circumstances in the national interest so require. 5. Regulations and implementation (a) Regulations required (1) Department of labor Not later than 90 days after the date of enactment of this Act, the Secretary shall issue such regulations as are necessary to implement this Act. (2) Federal acquisition regulation Not later than 90 days after the date on which the Secretary issues regulations under paragraph (1), the Federal Acquisition Regulatory Council shall amend the Federal Acquisition Regulation, consistent with such regulations, to provide for inclusion in any Federal procurement solicitation or contract the requirements under section 4. (b) Agency implementation Not later than 90 days after the date on which the Secretary issues any regulations under subsection (a)(1) and except as provided in section 4(b), the head of each executive agency shall ensure that any contract entered into by the executive agency complies with the requirements set forth in section 4(a). 6. Enforcement (a) In general The Secretary shall have the authority to investigate potential violations of this Act and obtain compliance, including as provided in subsection (b). (b) Penalties for noncompliance In the case of a contractor that violates a contract requirement under section 4— (1) the relevant executive agency may cancel, terminate, or suspend (in whole or in part) the applicable contract; and (2) the Secretary may initiate a debarment proceeding with respect to the contractor.