Bill Text: NJ SCR64 | 2016-2017 | Regular Session | Introduced
Bill Title: Urges Congress and President to enact H.R.5278, which prohibits awarding federal contracts to inverted domestic corporations.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2016-02-16 - Introduced in the Senate, Referred to Senate Economic Growth Committee [SCR64 Detail]
Download: New_Jersey-2016-SCR64-Introduced.html
SENATE CONCURRENT RESOLUTION No. 64
STATE OF NEW JERSEY
217th LEGISLATURE
INTRODUCED FEBRUARY 16, 2016
Sponsored by:
Senator SHIRLEY K. TURNER
District 15 (Hunterdon and Mercer)
SYNOPSIS
Urges Congress and President to enact H.R.5278, which prohibits awarding federal contracts to inverted domestic corporations.
CURRENT VERSION OF TEXT
As introduced.
A Concurrent Resolution urging the United States Congress and the President to enact H.R.5278, which prohibits the awarding of federal contracts to inverted domestic corporations.
Whereas, Pursuant to a rule adopted by the federal government, an inverted domestic corporation is defined as a corporation that used to be incorporated in the United States, or used to be a partnership in the United States, but is now incorporated in a foreign country, or is a subsidiary whose parent corporation is incorporated in a foreign country; and
Whereas, Business analysts note that commonly in an inversion, a U.S. company sets up or buys another company in a country with a lower corporate tax rate and then calls the new country home, thereby avoiding the taxes it would otherwise be obligated to pay; and
Whereas, Critics of the practice note that when a company undertakes an inversion, it moves its legal address outside of this country and some of its personnel and office operation from the United States--where the combined State and local tax rate is close to 40 percent--to a country such as Ireland where the corporate tax rate is 12.5 percent; and
Whereas, Although the practice has existed for several decades, several high-profile companies, including banana distributer Chiquita Brands International and drug maker AbbVie, have used the practice and several other companies, including the pharmaceutical company Myland and the drugstore chain Walgreens, are reported to have considered undertaking an inversion; and
Whereas, United States Treasury Secretary Jack Lew, speaking for the Obama administration, has called on Congress to pass legislation to crack down on mergers in which companies use an inversion, and invoked the need for "economic patriotism" in reversing a practice that has flourished in recent years; and
Whereas, The Congressional Research Service has found that the number of corporate inversions has accelerated, with 47 such mergers in just the last decade, and at the same time the White House has estimated that the Treasury could lose as much as $20 billion in taxes over the next decade if more U.S. companies employ the practice; and
Whereas, It has been noted by business analysts that although the United States has the highest corporate tax rate of all countries that are members of the Organization for Economic Co-operation and Development, most U.S. companies can take advantage of a long list of tax credits, subsidies, incentives and other programs that enable them to pay much less than the top tax rates; and
Whereas, Several members of Congress are responding to the concerns about the detrimental effect on the country of inversions by sponsoring legislation to impede the practice; and
Whereas, H.R.5278, titled the "No Federal Contracts for Corporate Deserters Act of 2014," prohibits the awarding of contracts by any executive agency, including the Department of the Defense, to any entity, including a foreign incorporated entity, that is determined to be an inverted domestic corporation or any subsidiary of such an entity, unless a waiver is granted to the entity because of its importance for national security; and
Whereas, It is fitting and proper for this Legislature to express its concern over the inversion process and to urge Congress and the President to enact H.R.5278; now, therefore,
Be It Resolved by the Senate of the State of New Jersey (the General Assembly concurring):
1. This Legislature urges the United States Congress and the President to enact H.R.5278, which prohibits the awarding of federal contracts to inverted domestic corporations.
2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by Clerk of the General Assembly or the Secretary of the Senate to the Vice President of the United States, to the President Pro-Tem and to the Majority Leader and the Minority Leader of the United States Senate, and to the Speaker and the Majority Leader and the Minority Leader of the United States House of Representatives, to every member of Congress elected from this State, and to President Barack Obama,
STATEMENT
This concurrent resolution urges the United States Congress and the President to enact H.R.5278, which prohibits the awarding of federal contracts to inverted domestic corporations. Pursuant to a rule adopted by the federal government, an inverted domestic corporation is defined as a corporation that used to be incorporated in the United States, or used to be a partnership in the United States, but is now incorporated in a foreign country, or is a subsidiary whose parent corporation is incorporated in a foreign country.
