119-hr2692

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2692 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 2692

 To amend the Internal Revenue Code of 1986 to end the tax subsidy for 
 employer efforts to influence their workers' exercise of their rights 
 around labor organizations and engaging in collective action.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 April 7, 2025

 Mr. Norcross (for himself, Mr. Boyle of Pennsylvania, Ms. Chu, Mr. 
Smith of Washington, Mr. Green of Texas, Ms. Ocasio-Cortez, Ms. Adams, 
Ms. Craig, Mrs. McClain Delaney, Ms. Balint, Ms. McCollum, Mr. Foster, 
Mr. Sherman, Mr. Schneider, Ms. Pingree, Mr. Deluzio, Ms. Houlahan, Mr. 
Garcia of Illinois, Mr. Goldman of New York, Mr. Davis of Illinois, Mr. 
 Soto, Mrs. Dingell, Ms. Wasserman Schultz, Mrs. Ramirez, Ms. DeGette, 
 Ms. Titus, Mr. Evans of Pennsylvania, Ms. Norton, Mr. Cleaver, Mrs. 
Sykes, Mr. Sorensen, Mr. Mrvan, Mr. Pallone, Ms. Wilson of Florida, Mr. 
Latimer, Mr. Connolly, Mr. Cisneros, Ms. Meng, Mr. Casar, Ms. Stevens, 
Mr. Johnson of Georgia, Mr. Cuellar, Mr. Conaway, Ms. Omar, Mrs. Hayes, 
 Ms. Schakowsky, Mr. Golden of Maine, Mr. Nadler, Ms. Tokuda, Mr. 
 McGovern, Mr. Gomez, Mr. Panetta, Mr. Neguse, Mr. Larson of 
Connecticut, Mr. Garamendi, Mr. Mannion, Mr. Olszewski, Mr. Gottheimer, 
 Mrs. Beatty, Ms. Brownley, Ms. Morrison, Mr. Mullin, Ms. Schrier, Ms. 
 McDonald Rivet, Mr. Mfume, Mrs. McIver, Ms. Friedman, Ms. Underwood, 
 Ms. Sanchez, Mrs. Fletcher, Mr. Doggett, Ms. Lois Frankel of Florida, 
 Mrs. Trahan, Mrs. McBath, Ms. Dean of Pennsylvania, Mr. Veasey, Ms. 
Kaptur, Mr. DeSaulnier, Mr. Pocan, Mr. Takano, Ms. Scanlon, Ms. Dexter, 
 Ms. Waters, Mr. Frost, Ms. Stansbury, Mr. Quigley, Ms. Sherrill, Mr. 
 McGarvey, Ms. Barragan, Ms. Williams of Georgia, Ms. Budzinski, Ms. 
 Velazquez, Mr. Ryan, Mr. Tonko, Ms. Jayapal, Mr. Krishnamoorthi, Ms. 
 Tlaib, Mr. Larsen of Washington, Mr. Torres of New York, Mr. Khanna, 
 Mr. Garcia of California, Mr. Menendez, Ms. DeLauro, Mr. Bishop, Ms. 
 Elfreth, Ms. McBride, Mr. Casten, Mr. Magaziner, Mr. Moulton, Ms. 
Davids of Kansas, Ms. Brown, Mr. Thanedar, Mr. Lynch, Mr. Horsford, Ms. 
 Lee of Pennsylvania, Ms. DelBene, Ms. Bonamici, Ms. Garcia of Texas, 
Mr. Lieu, Mr. Suozzi, Mr. Carter of Louisiana, Ms. Hoyle of Oregon, Ms. 
Ansari, Ms. Clarke of New York, Mr. Kennedy of New York, and Mr. Crow) 
 introduced the following bill; which was referred to the Committee on 
 Ways and Means

_______________________________________________________________________

 A BILL

 To amend the Internal Revenue Code of 1986 to end the tax subsidy for 
 employer efforts to influence their workers' exercise of their rights 
 around labor organizations and engaging in collective action.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``No Tax Breaks for Union Busting

    (NTBUB) Act''.

SEC. 2. FINDINGS.

 Congress makes the following findings:

    (1) The National Labor Relations Act (29 U.S.C. 151 et 
 seq.) declares that it is the right of employees to form, join, 
 or assist labor organizations.

    (2) The National Labor Relations Act further declares that 
 it is ``the policy of the United States to eliminate the causes 
 of certain substantial obstructions to the free flow of 
 commerce and to mitigate and eliminate these obstructions when 
 they have occurred by encouraging the practice and procedure of 
 collective bargaining and by protecting the exercise by workers 
 of full freedom of association, self-organization, and 
 designation of representatives of their own choosing . . .''.

    (3) Despite Congress' intention to give workers full agency 
 in these matters, many employers regularly choose to involve 
 themselves, lawfully or unlawfully, in the decisions of their 
 employees about whether to avail themselves of their rights 
 under the National Labor Relations Act and the Railway Labor 
 Act (45 U.S.C. 151 et seq.).

    (4) Employers frequently violate labor laws around 
 organizing and collective action. The Economic Policy Institute 
 finds that in approximately 4 of 10 labor organization 
 elections in 2016-2017 employers were charged with committing 
 an unfair labor practice. Among larger bargaining units of 61 
 employees or more, over 54 percent of elections have an unfair 
 labor practice charge.

    (5) In practice, these unfair labor practices often include 
 charges such as employees being illegally fired for labor 
 organization activity, refusal to bargain in good faith with 
 labor organizations, or coercion and intimidation. Employers 
 also frequently use captive audience meetings, workplace 
 surveillance, and other lawful or unlawful tactics to sway 
 labor organization elections.

    (6) Whether or not there are charges of unlawful behavior, 
 employers spend millions of dollars to sway the opinions of 
 their employees with respect to whether or how to exercise 
 their rights under the National Labor Relations Act and the 
 Railway Labor Act. According to the Economic Policy Institute, 
 companies spent $340,000,000 yearly on outside consultants to 
 sway their workers' opinions about labor organization 
 activities. This and other spending interferes with the United 
 States goal of ``encouraging the practice and procedure of 
 collective bargaining''.

    (7) The Internal Revenue Code of 1986 has long recognized 
 that spending by businesses with the purpose of influencing the 
 general public with respect to elections, while it may be 
 lawful, is not tax deductible. Congress should extend that 
 principle to spending done by employers to influence workers' 
 elections and collective bargaining decisions. These free 
 choices to exercise the rights to engage in collective 
 bargaining, labor organization representation, and other lawful 
 collective activities should be made without taxpayer subsidies 
 of undue outside influence from employers.

SEC. 3. DENIAL OF DEDUCTION FOR ATTEMPTING TO INFLUENCE EMPLOYEES WITH 
 RESPECT TO LABOR ORGANIZATIONS OR LABOR ORGANIZATION 
 ACTIVITIES.

    (a) In General.--

Section 162

    (e)

    (1) of the Internal Revenue Code of 
1986 is amended by striking ``or'' at the end of subparagraph
            (C) , by 
striking the period at the end of subparagraph
            (D) and inserting ``, 
or'', and by adding at the end the following new subparagraph:
 ``
        (E) any attempt to influence the taxpayer's 
 employees with respect to labor organizations or labor 
 organization activities, including with respect to the 
 opinion of such employees regarding such organizations 
 or activities.''.

    (b) Labor Organizations; Labor Organization Activities Defined.--

Section 162

    (e) of the Internal Revenue Code of 1986 is amended by 
redesignating paragraph

    (6) as paragraph

    (7) and by inserting after 
paragraph

    (5) the following new paragraph:
 ``

    (6) Labor organizations and labor organization activity 
 defined.--For purposes of this subsection--
 ``
        (A) Labor organization.--The term `labor 
 organization' has the meaning given such term in 
 

section 3 of the Labor-Management Reporting and 
 Disclosure Act of 1959 (29 U.S.C. 402).
 ``
        (B) Labor organization activity.--
 ``
            (i) In general.--The term `labor 
 organization activity' means labor organization 
 elections, labor disputes, collective actions, 
 and such other related activities identified by 
 the Secretary.
 ``
            (ii) Other terms.--For purposes of clause
            (i) --
 ``
            (I) Collective action.--The term 
 `collective action' means any action, 
 including collective bargaining, 
 described in 

section 7 of the National 
 Labor Relations Act (29 U.S.C. 157) or 
 any action that is a right of employees 
 or labor organizations under the 
 Railway Labor Act (45 U.S.C. 151 et 
 seq.).
 ``
            (II) Labor dispute.--The term 
 `labor dispute' has the meaning given 
 such term under 

section 3 of the Labor-
 Management Reporting and Disclosure Act 
 of 1959 (29 U.S.C. 402).
 ``
            (III) Labor organization 
 election.--The term `labor organization 
 election' means any election described 
 in 

section 9 of the National Labor 
 Relations Act (29 U.S.C. 159) or 
 

section 2 of the Railway Labor Act (45 
 U.S.C. 152).''.
            (c) Special Rules.--

    (1) In general.--

Section 162

    (e)

    (4) of the Internal Revenue 
 Code of 1986 is amended by adding at the end the following new 
 subparagraph:
 ``
            (D) Expenses relating to labor organizations or 
 labor organization activities.--
 ``
            (i) In general.--For purposes of 
 paragraph

    (1)
        (E) , amounts paid or incurred in 
 connection with attempting to influence the 
 taxpayer's employees with respect to labor 
 organizations or labor organization activities 
 include--
 ``
            (I) any amount paid or incurred 
 directly or indirectly by the taxpayer, 
 including wages and other general and 
 administrative costs, in connection 
 with an action that results in--
 ``

    (aa) a complaint issued 
 under 

section 10 of the 
 National Labor Relations Act 
 (29 U.S.C. 160) against the 
 taxpayer for an unfair labor 
 practice under 

section 8

    (a) of 
 such Act (29 U.S.C. 158

    (a) ),
 ``

    (bb) a settlement offer 
 related to an investigation by 
 the National Labor Relations 
 Board of a charge of an unfair 
 labor practice under 

section 8

    (a) of such Act (29 U.S.C. 
 158

    (a) ) that results in a 
 settlement of such charge 
 without issuance of a complaint 
 under 

section 10 of such Act 
 (29 U.S.C. 160), or
 ``
            (cc) a finding of 
 interference, influence, or 
 coercion by a Federal court 
 under 

section 2 of the Railway 
 Labor Act (45 U.S.C. 152),
 ``
            (II) any amount paid or incurred 
 directly or indirectly by the taxpayer, 
 including wages and other general and 
 administrative costs, in producing, 
 conducting, or attending any meeting or 
 training--
 ``

    (aa) which includes 
 employees of the taxpayer who 
 are or who could become members 
 of a unit appropriate for the 
 purposes of collective 
 bargaining, and
 ``

    (bb) at which labor 
 organizations or a labor 
 organization activity is 
 discussed, and
 ``
            (III) any amount which is 
 required to be reported under the 
 Labor-Management Reporting and 
 Disclosure Act of 1959 (29 U.S.C. 401 
 et seq.).
 ``
            (ii) Exceptions.--The following amounts 
 shall not be treated as amounts paid or 
 incurred in connection with attempting to 
 influence the taxpayer's employees with respect 
 to labor organizations or labor organization 
 activities under paragraph

    (1)
        (E) :
 ``
            (I) Amounts paid or incurred for 
 communications or negotiations directly 
 with the designated or selected 
 representative of the employees of the 
 taxpayer described in 

section 9

    (a) of 
 the National Labor Relations Act (29 
 U.S.C. 159

    (a) ) or under the Railway 
 Labor Act (45 U.S.C. 151 et seq.).
 ``
            (II) Amounts paid or incurred for 
 communications directly with 
 shareholders, as may be required under 
 

section 13 of the Securities Exchange 
 Act of 1934 (15 U.S.C. 78m).
 ``
            (III) Amounts paid or incurred 
 for communications or consultations by 
 the taxpayer in the process of 
 voluntarily recognizing a labor 
 organization as a representative in 
 accordance with 

section 9 of the 
 National Labor Relations Act (29 U.S.C. 
 159).
 ``
            (IV) Amounts paid or incurred 
 with respect to the operation of a 
 labor-management partnership described 
 in a collective bargaining agreement in 
 effect between a representative of 
 employees of the taxpayer and the 
 taxpayer, including a labor management 
 committee established pursuant to 
 

section 205A

    (a) of the Labor Management 
 Relations Act, 1947 (29 U.S.C. 
 175a

    (a) ).
 ``
            (V) Amounts paid or incurred for 
 communications or consultations related 
 to the operation of a grievance 
 procedure described in a collective 
 bargaining agreement in effect between 
 a representative of employees of the 
 taxpayer and the taxpayer.
 ``
            (VI) Amounts paid or incurred by 
 a labor organization.
 ``
            (VII) Amounts paid or incurred 
 for communication materials, including 
 visual or audio media, required to be 
 posted for, or provided to, employees 
 of the taxpayer by law, including under 
 the National Labor Relations Act (29 
 U.S.C. 151 et seq.) or the Railway 
 Labor Act (45 U.S.C. 151 et seq.).
 ``
            (VIII) Amounts paid or incurred 
 relating to a complaint which is issued 
 by the National Labor Relations Board 
 and which is set aside in full in 
 accordance with subsection

    (e) or

    (f) of 

section 10 of such Act.''.

    (2) Regulatory authority.--
        (A) In general.--

Section 162

    (e) of such Code, as 
 amended by subsection

    (b) , is amended by redesignating 
 paragraph

    (7) as paragraph

    (8) and by inserting after 
 paragraph

    (6) the following new paragraph:
 ``

    (7) Regulations.--The Secretary shall prescribe such 
 guidance, rules, or regulations as are necessary to carry out 
 the purposes of this subsection, including rules relating to 
 the timing of any deductions in connection with amounts 
 described in paragraph

    (4)
            (D) 
            (ii) 
            (VIII) .''.
        (B) Timing.--Not later than the date that is 240 
 days after the date of the enactment of this Act, the 
 Secretary of the Treasury (or the Secretary's delegate) 
 shall prescribe guidance, rules, or regulations with 
 respect to the application of the amendments made by 
 this Act.
            (d) Information Reporting.--

    (1) Certain information included in tax returns.--
        (A) In general.--Part I of subchapter B of chapter 
 68 is amended by adding at the end the following new 
 section:

``

SEC. 6720D. FAILURE TO INCLUDE CERTAIN INFORMATION WITH RESPECT TO 
 EMPLOYER ACTIVITIES RELATING TO LABOR ORGANIZATIONS.

 ``

    (a) In General.--If any taxpayer who makes expenditures described 
in 

section 162

    (e)

    (1)
        (E) fails to provide with the return of tax for the 
taxable year to which such expenditures relate the information provided 
in subsection
            (c) with respect to such expenditures, or who fails to 
provide all of the information required under subsection

    (b) or fails 
to provide correct information, shall pay a penalty in the amount 
determined under subsection

    (b) .
 ``

    (b) Determination of Penalty Amount.--
 ``

    (1) In general.--The amount of the penalty under this 
 section for any failure described in subsection

    (a) shall be 
 the greater of--
 ``
        (A) $10,000, or
 ``
        (B) the product of $1,000 and the number of full 
 time equivalent employees of the employer (as 
 determined under 

section 45R
            (d) (2) ).
 ``

    (2) Increased penalty where failure continues.--
 ``
        (A) In general.--If any failure described in 
 subsection

    (a)

    (1) continues for more than 90 days after 
 the day on which the Secretary mails notice of such 
 failure to the taxpayer, the taxpayer shall pay a 
 penalty (in addition to the amount of any penalty under 
 paragraph

    (1) ) equal to the amount determined under 
 paragraph

    (1) for each 30-day period (or fraction 
 thereof) during which such failure continues after the 
 expiration of such 90-day period.
 ``
        (B) Limitation.--The penalty imposed under this 
 paragraph with respect to any failure shall not exceed 
 $100,000.
 ``
            (c) Information To Be Provided.--The information required under 
this subsection shall include--
 ``

    (1) the dates that such activities described in 

section 162

    (e)

    (1)
        (E) took place,
 ``

    (2) a statement indicating whether the activity was an 
 activity described in item

    (aa) ,

    (bb) , or
            (cc) of 

section 162

    (e)

    (4)
            (D) 
            (i) 
            (I) ,
 ``

    (3) the amounts paid or incurred for such activities,
 ``

    (4) a copy of any disclosures which are required to be 
 reported under the Labor-Management Reporting and Disclosure 
 Act of 1959 (29 U.S.C. 401 et seq.), and
 ``

    (5) such other information as the Secretary may 
 prescribe.
 ``
            (d) Reasonable Cause Exception.--No penalty shall be imposed by 
this section on any failure which is shown to be due to reasonable 
cause and not due to willful neglect.''.
        (B) Clerical amendment.--The table of sections for 
 part I of subchapter B of chapter 68 is amended by 
 adding at the end the following new item:

``

Sec. 6720D. Failure to include certain information with respect to 
 employer activities relating to labor 
 organizations.''.

    (2) Third-party information reporting.--
        (A) In general.--Subpart A of part III of 
 subchapter A of chapter 61 of the Internal Revenue Code 
 of 1986 is amended by inserting after 

section 6039J the 
 following new section:

``

SEC. 6039K. INFORMATION WITH RESPECT TO CERTAIN EMPLOYER ACTIVITIES 
 RELATING TO LABOR ORGANIZATIONS.

 ``

    (a) In General.--Any person conducting activities described in 

section 162

    (e)

    (1)
        (E) on behalf of another person shall file a return 
(at such time and in such manner as the Secretary may by regulations 
prescribe, which includes the information described in subsection

    (b) ).
 ``

    (b) Information To Be Provided.--Information required under 
subsection

    (a) shall include--
 ``

    (1) the person on behalf of whom the activities described 
 in 

section 162

    (e)

    (1)
        (E) were performed,
 ``

    (2) the dates that such activities described in such 
 section took place,
 ``

    (3) a statement indicating whether the activity was an 
 activity described in item

    (aa) ,

    (bb) , or
            (cc) of 

section 162

    (e)

    (4)
            (D) 
            (i) 
            (I) ,
 ``

    (4) the amounts paid or incurred for such activities, and
 ``

    (5) such other information as the Secretary may 
 prescribe.''.
        (B) Penalty.--Subparagraph
        (B) of 

section 6724
            (d) (1) of such Code is amended--
            (i) by striking the comma at the end of 
 clause
            (xxvii) , as added by the Infrastructure 
 Investment and Jobs Act, and inserting ``, 
 or'', and
            (ii) by adding at the end the following new 
 clause:
 ``
            (xxviii) section 6039K (relating to 
 information with respect to certain employer 
 activities relating to labor organizations), 
 and''.
            (C) Clerical amendment.--The table of sections for 
 subpart A of part III of subchapter A of chapter 61 of 
 such Code is amended by inserting after the item 
 relating to 

section 6039J the following new item:

``

Sec. 6039K. Information with respect to certain employer activities 
 relating to labor organizations.''.

    (e) Conforming Amendments.--

    (1) The heading for subsection

    (e) of 

section 162 of the 
 Internal Revenue Code of 1986 is amended by striking ``and 
 Political Expenditures'' and inserting ``, Political 
 Expenditures, and Labor Organization Expenditures''.

    (2) The heading of subparagraph
            (C) of 

section 162

    (e)

    (4) of 
 such Code is amended by striking ``and political activities'' 
 and inserting ``, political, and labor organization 
 activities''.

    (f) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred in taxable years beginning after the 
date that is 240 days after the date of the enactment of this Act.
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