article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Corporate Welfare Reduction and Job Preservation Act of 2006''. SEC. 2. CONGRESSIONAL FINDINGS. The Congress finds the following: (1) Corporations are subject to a tax rate of up to 34 percent or 35 percent. (2) Over the past several years, one of the most serious problems affecting the middle-class has been corporate downsizing. Many large, wealthy, and profitable corporations have reduced the number of their American employees by transferring those jobs to foreign countries or have reduced the number of their employees in order to realize an immediate short-term profit or increase in stock value. SEC. 3. REDUCTION OF TAX BENEFITS FOR PROFITABLE LARGE CORPORATIONS WHICH REDUCE WORKFORCE. (a) In General.--Subchapter C of chapter 1 of the Internal Revenue Code of 1986 (relating to corporate distributions and adjustments) is amended by adding at the end the following new part: ``PART VII--REDUCTION OF TAX BENEFITS FOR PROFITABLE LARGE CORPORATIONS WHICH REDUCE WORKFORCE ``Sec. 386. Reduction of tax benefits for profitable large corporations which reduce workforce. ``SEC. 386. REDUCTION OF TAX BENEFITS FOR PROFITABLE LARGE CORPORATIONS WHICH REDUCE WORKFORCE. ``(a) In General.--For any taxable year, if any profitable large corporation reduces by 15 percent or more the number of employees who perform any task or function at any facility in the United States, the amount of each facility-related tax benefit shall be reduced by 50 percent. ``(b) Definitions and Special Rules.--For purposes of this section-- ``(1) Facility-related tax benefit.-- ``(A) In general.--The term `facility-related tax benefit' means-- ``(i) any tax benefit to the extent attributable to a facility described in subsection (a), or ``(ii) to the extent that a tax benefit is not attributable to any facility, a pro rata portion of such tax benefit (as determined under regulations prescribed by the Secretary). ``(B) Exception.--Such term shall not include-- ``(i) any exclusion from gross income under section 127 or 129 or any other deduction for the cost of employee health care, child care, job training, or retraining, or ``(ii) any other tax benefit (other than wages) which the Secretary determines by regulation to be a tax benefit for costs incurred primarily for the benefit of employees rather than the employer. ``(2) Large corporation.--The term `large corporation' means a corporation or partnership which is not a small- business concern (within the meaning of section 3 of the Small Business Act, as in effect on the date of the enactment of this section). ``(3) Profitable.--Any large corporation shall be treated as profitable, for any taxable year, if the sum of taxable income (if any) for the 5-taxable-year period ending with the preceding taxable year (or, if shorter, the period consisting of all preceding taxable years of such large corporation) equals or exceeds the sum of the net operating losses (if any) attributable to such period. ``(4) Related persons.-- ``(A) In general.--All related persons shall be treated as one person. ``(B) Related persons defined.--The term `related persons' means-- ``(i) persons bearing a relationship described in section 267 or 707(b), and ``(ii) persons treated as a single employer under subsection (a) or (b) of section 52. ``(5) Tax benefit.--The term `tax benefit' means a credit, deduction, or exclusion allowable under this title.'' (b) Transmission of Data by Secretary of Labor.--The Secretary of Labor shall transmit to the Secretary of the Treasury, not less than annually, a list of corporations and partnerships described in section 386(a) of the Internal Revenue Code of 1986 (as added by this section). (c) Clerical Amendment.--The table of parts for subchapter C of chapter 1 of such Code is amended by adding at the end the following new item: ``Part VII. Reduction of tax benefits for profitable large corporations which reduce workforce'' (d) Effective Date.--This section and the amendments made by this section shall apply to taxable years beginning after December 31, 2006. SEC. 4. ACCELERATION OF LOANS MADE BY CERTAIN GOVERNMENT ENTITIES AS PENALTY AGAINST PROFITABLE LARGE CORPORATIONS WHICH REDUCE WORKFORCE. (a) OPIC Loans.--Section 235 of the Foreign Assistance Act of 1961 (22 U.S.C. 2195) is amended by adding at the end the following: ``(g) Limitations on Assistance to Profitable Large Corporations That Reduce Workforce.-- ``(1) In general.--If a facility-related tax benefit of an entity for a taxable year is reduced by reason of section 386(a) of the Internal Revenue Code of 1986, then-- ``(A) the entity shall immediately repay to the Corporation the amount of any loan made by the Corporation to the entity under section 234; ``(B) any insurance policy provided by the Corporation to the entity under such section is rescinded; and ``(C) until the Secretary of the Treasury determines that the activity on the basis of which the facility-related tax benefit of the entity was so reduced has ceased, the Corporation may not, during the immediately succeeding taxable year of the entity, extend credit, participate in an extension of credit, or provide any insurance, directly to the entity under such section. ``(2) Effect of failure to repay loan.--Interest shall accrue on any amount required by paragraph (1)(A) to be repaid to the Corporation at a rate of 10 percent per month.''. (b) Export-Import Bank Loans.--Section 2 of the Export-Import Bank Act of 1945 (12 U.S.C. 635) is amended by adding at the end the following: ``(g) Limitations on Assistance to Profitable Large Corporations That Reduce Workforce.-- ``(1) In general.--If a facility-related tax benefit of an entity for a taxable year is reduced by reason of section 386(a) of the Internal Revenue Code of 1986, then-- ``(A) the entity shall immediately repay to the Bank the amount of any loan made by the Bank to the entity; ``(B) any insurance policy provided by the Bank to the entity is rescinded; and ``(C) until the Secretary of the Treasury determines that the activity on the basis of which the facility-related tax benefit of the entity was so reduced has ceased, the Bank may not, during the immediately succeeding taxable year of the entity, extend credit, participate in an extension of credit, or provide any insurance, directly to the entity. ``(2) Effect of failure to repay loan.--Interest shall accrue on any amount required by paragraph (1)(A) to be repaid to the Bank at a rate of 10 percent per month.''.
summary: Corporate Welfare Reduction and Job Preservation Act of 2006 - Amends the Internal Revenue Code to require a 50% reduction in tax benefits for certain large profitable corporations that reduce their employee workforce by 15% or more. Defines "large profitable corporation" as a corporation or partnership that is not defined as a small business concern under the Small Business Act and which has a taxable income that exceeds net operating losses during a specified five-year period. Amends the Foreign Assistance Act of 1961 and the Export-Import Act of 1945 to require large profitable corporations (as defined by this Act) that reduce their employee workforce by 15% or more to immediately repay loans and forfeit insurance benefits and credit lines provided by such Acts.