[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 3291 Introduced in Senate (IS)]
<DOC>
114th CONGRESS
2d Session
S. 3291
To establish tax, regulatory, and legal structure in the United States
that encourages small businesses to expand and innovate, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 7, 2016
Mr. Kirk introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To establish tax, regulatory, and legal structure in the United States
that encourages small businesses to expand and innovate, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Small Business
Bill of Rights''.
(b) Table of Contents.--The table of the contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
TITLE I--LOWER TAX ENVIRONMENT
Subtitle A--Business Friendly Environment for Disadvantaged Areas
Sec. 101. Short title.
Sec. 102. Exclusion for income attributable to certain real property.
Subtitle B--Capital Gains
Sec. 111. Temporary reduction of capital gains tax on qualified small
business stock.
Subtitle C--Tax Benefits for Start-Ups
Sec. 121. Increase in amount allowed as deduction for start-up
expenditures.
Subtitle D--Miscellaneous
Sec. 131. GAO to certify no increase in unemployment.
Sec. 132. Exemption from taxes imposed after the date of enactment of
this Act.
TITLE II--LIMITATION ON REGULATIONS
Sec. 201. Limitation on regulations.
Sec. 202. Regulatory sunsets.
TITLE III--DEATH TAX REPEAL
Sec. 301. Short title.
Sec. 302. Repeal of estate and generation-skipping transfer taxes.
Sec. 303. Modifications of gift tax.
TITLE IV--HEALTHCARE: EXPANDING CHOICE AND LOWERING COSTS
Sec. 401. Findings and purpose.
Sec. 402. Encouraging speedy resolution of claims.
Sec. 403. Compensating patient injury.
Sec. 404. Maximizing patient recovery.
Sec. 405. Additional health benefits.
Sec. 406. Punitive damages.
Sec. 407. Authorization of payment of future damages to claimants in
health care lawsuits.
Sec. 408. Definitions.
Sec. 409. Effect on other laws.
Sec. 410. State flexibility and protection of States' rights.
Sec. 411. Applicability; effective date.
Sec. 412. Sense of Congress.
Sec. 413. SECA tax deduction for health insurance costs.
TITLE V--WORKFORCE INTEGRITY
Sec. 501. Verification under E-Verify Program by telephone.
Sec. 502. Grace period to correct paperwork.
TITLE VI--INCENTIVES FOR ENERGY EFFICIENCY
Sec. 601. Extend the tax credit for residential energy-efficient
property.
Sec. 602. Make permanent the energy efficiency credit for existing
homes.
Sec. 603. Make permanent the energy efficiency commercial buildings
deduction.
TITLE VII--GUIDANCE ABOUT NEW RULES
Sec. 701. Guidance and advice about new rules.
TITLE VIII--SMALL BUSINESS PROVISIONS
Subtitle A--Small Business General Provisions
Sec. 801. Administration prohibited from capping executive
compensation.
Sec. 802. Reduction of regulatory burden.
Sec. 803. Litigation burden on small business concerns to be limited to
current levels.
Sec. 804. Expansion of volunteer representation and benchmark reports.
Sec. 805. Mentoring and networking.
Subtitle B--Small Business Goals
Sec. 811. Small business goals.
Sec. 812. Agency goal negotiation.
Sec. 813. Procedures and methods for goal achievement.
Sec. 814. Reporting requirements.
Subtitle C--Contract Bundling
Sec. 821. Definitions of bundling of contract requirements.
Sec. 822. Justification.
Sec. 823. Appeals.
Sec. 824. Third-party review.
Subtitle D--Small Business Subcontracting
Sec. 831. Criminal violations.
SEC. 2. DEFINITIONS.
In this Act--
(1) the terms ``Administration'' and ``Administrator'' mean
the Small Business Administration and the Administrator
thereof; and
(2) the term ``small business concern'' has the meaning
given the term in section 3 of the Small Business Act (15
U.S.C. 632).
TITLE I--LOWER TAX ENVIRONMENT
Subtitle A--Business Friendly Environment for Disadvantaged Areas
SEC. 101. SHORT TITLE.
This subtitle may be cited as the ``Bringing Business Back Act of
2016''.
SEC. 102. EXCLUSION FOR INCOME ATTRIBUTABLE TO CERTAIN REAL PROPERTY.
(a) In General.--Part III of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after section
139F the following new section:
``SEC. 139G. INCOME ATTRIBUTABLE TO QUALIFIED REAL PROPERTY EXCLUDED
FROM GROSS INCOME.
``(a) In General.--Gross income shall not include income or gain
attributable to qualified real property for any taxable year beginning
during the exclusion period.
``(b) Definitions.--For purposes of this section--
``(1) Qualified real property.--
``(A) In general.--The term `qualified real
property' means any real property--
``(i) which is certified by the State or
local zoning authority, and any economic
development board, with respect to such
property as meeting the requirements of
subparagraph (B), and
``(ii) with respect to which an election
has been made (at such time and in such form
and manner as the Secretary shall by regulation
prescribe) to have this section apply.
``(B) Requirements.--Property meets the
requirements of this subparagraph if such property--
``(i) is zoned for commercial use,
``(ii) has been undeveloped and vacant
during the 2-year period ending on the date of
certification, and
``(iii) is located within a qualified
census tract.
``(C) Qualified census tract.--The term `qualified
census tract' means any census tract which--
``(i)(I) has an average poverty rate
exceeding the national average poverty rate, or
``(II) has an unemployment rate above the
national unemployment rate, and
``(ii) exhibits another condition of
distress, such as deteriorating infrastructure
or population decline.
Poverty rates shall be determined by using 2010 census
data, and unemployment rates shall be determined by
reference to the rate of unemployment announced by the
Bureau of Labor Statistics of the Department of Labor
for the months in the 2 most recently ended calendar
quarters.
``(D) Economic development board.--The term
`economic development board' means, with respect to any
property, any entity established by law to oversee the
economic development of an area within which such
property is located.
``(2) Exclusion period.--The term `exclusion period' means,
with respect to a taxable year, the 1-taxable-year period
beginning with the first taxable year beginning after the date
of the enactment of this section for which the income
attributable to the qualified real property exceeds the pre-
depreciation expenses attributable to such real property.
``(c) Special Rules.--For purposes of this section--
``(1) Subsequent taxpayers.--Subsection (a) shall only
apply to a taxpayer who has an ownership interest in the
qualified real property on the first day of the exclusion
period with respect to such property.
``(2) Limitation on application of section.--An election to
have this section apply may only be made once with respect to
any property.
``(3) Tax-exempt use property.--This section shall not
apply to any property which is tax-exempt use property (as
defined in section 168(h)).
``(d) Regulations.--The Secretary may prescribe such regulations as
may be necessary or appropriate to carry out the purposes of this
section, including methods for allocating income and expenses to
property and rules to prevent abuse of this section.''.
(b) Clerical Amendment.--The table of parts for part III of
subchapter B of chapter 1 of such Code is amended by inserting after
the item relating to section 139F the following new item:
``Sec. 139G. Income attributable to qualified real property excluded
from gross income.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
Subtitle B--Capital Gains
SEC. 111. TEMPORARY REDUCTION OF CAPITAL GAINS TAX ON QUALIFIED SMALL
BUSINESS STOCK.
(a) Temporary Reduced Rate for Qualified Small Business Stock.--
Subparagraph (A)(ii) of section 1(h)(4) of the Internal Revenue Code of
1986 is amended to read as follows:
``(ii) in the case of any taxable year
beginning after December 31, 2026, section 1202
gain, over''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to taxable years beginning after December 31, 2016.
Subtitle C--Tax Benefits for Start-Ups
SEC. 121. INCREASE IN AMOUNT ALLOWED AS DEDUCTION FOR START-UP
EXPENDITURES.
(a) In General.--Paragraph (3) of section 195(b) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(3) Special rule for taxable years beginning in 2016,
2017, or 2018.--In the case of a taxable year beginning in
2016, 2017, or 2018, paragraph (1)(A)(ii) shall be applied--
``(A) by substituting `$20,000' for `$5,000'; and
``(B) by substituting `$75,000' for `$50,000'.''.
(b) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning after
December 31, 2015.
Subtitle D--Miscellaneous
SEC. 131. GAO TO CERTIFY NO INCREASE IN UNEMPLOYMENT.
(a) In General.--Each report of a committee of the Senate on a
public bill or a public joint resolution shall contain a statement by
the Comptroller General certifying that the bill or resolution will not
cause an increase in the number of unemployed individuals in the United
States.
(b) Enforcement.--In the Senate, if the report to accompany a
public bill or a public joint resolution does not contain the statement
required under subsection (a), or there is not a report to accompany
the bill or resolution, the bill or resolution shall only be agreed to
upon an affirmative vote of three-fifths of the Members voting, a
quorum being present.
(c) Exercise of Rulemaking Powers.--This section is enacted by
Congress--
(1) as an exercise of the rulemaking power of the Senate,
and as such is deemed a part of the rules of the Senate and
shall supersede other rules only to the extent that it is
inconsistent with such rules; and
(2) with full recognition of the constitutional right of
the Senate to change the rules (so far as relating to the
procedure of the Senate) at any time, in the same manner, and
to the same extent as in the case of any other rule of the
Senate.
SEC. 132. EXEMPTION FROM TAXES IMPOSED AFTER THE DATE OF ENACTMENT OF
THIS ACT.
Except as otherwise expressly provided, any amendment to the
Internal Revenue Code of 1986 that would (but for the application of
this section) result in an increase in taxes of a taxpayer which is a
small business concern shall not apply to such taxpayer.
TITLE II--LIMITATION ON REGULATIONS
SEC. 201. LIMITATION ON REGULATIONS.
(a) In General.--The Administrator, acting through the Chief
Counsel of the Office of Advocacy of the Administration, is authorized
to provide such support as may be necessary with regard to any Federal
regulation to ensure that a small business concern is not required to
expend more than a total of 200 man-hours annually on applications,
filings, petitions, or other paperwork submitted to Federal departments
or agencies.
(b) Commonly Required Information Form.--
(1) In general.--Support provided under subsection (a)
shall include the establishment of a form on the website of the
Administration, by means of which a small business concern may
provide to the Administrator information that the Administrator
determines to be frequently required as part of any
applications, filings, petitions, or other paperwork described
in subsection (a).
(2) Use of information.--The Administrator shall use
information provided by a small business concern under
paragraph (1) to assist in the expedited completion of any
applications, filings, petitions, or other paperwork described
in subsection (a).
SEC. 202. REGULATORY SUNSETS.
(a) Definitions.--In this section:
(1) Agency.--The term ``agency'' has the meaning given the
term in section 551 of title 5, United States Code.
(2) Covered rule.--The term ``covered rule'' means any rule
or group of rules--
(A) for which an agency is required to prepare a
regulatory flexibility analysis under section 603 or
604 of title 5, United States Code; and
(B) that is a major rule.
(3) Major rule.--The term ``major rule'' has the meaning
given the term in section 804 of title 5, United States Code.
(4) Rule.--The term ``rule'' has the meaning given the term
in section 601 of title 5, United States Code.
(5) Small entity.--The term ``small entity'' has the
meaning given the term in section 601 of title 5, United States
Code.
(b) Periodic Review of Rules.--Section 610 of title 5, United
States Code, is amended to read as follows:
``Sec. 610. Periodic review of rules
``(a)(1) Not later than 180 days after the date of enactment of the
Small Business Bill of Rights, each agency shall establish a plan for
the periodic review of--
``(A) each rule issued by the agency that the head of the
agency determines has a significant economic impact on a
substantial number of small entities, without regard to whether
the agency performed an analysis under section 604 with respect
to the rule; and
``(B) any small entity compliance guide required to be
published by the agency under section 212 of the Small Business
Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 601
note).
``(2) In reviewing rules and small entity compliance guides under
paragraph (1), the agency shall determine whether the rules and guides
should--
``(A) be amended or rescinded, consistent with the stated
objectives of applicable statutes, to minimize any significant
adverse economic impacts on a substantial number of small
entities (including an estimate of any adverse impacts on job
creation and employment by small entities); or
``(B) continue in effect without change.
``(3) Each agency shall publish the plan established under
paragraph (1) in the Federal Register and on the Web site of the
agency.
``(4) An agency may amend the plan established under paragraph (1)
at any time by publishing the amendment in the Federal Register and on
the Web site of the agency.
``(b) Each plan established under subsection (a) shall provide
for--
``(1) the review of each rule and small entity compliance
guide described in subsection (a)(1) in effect on the date of
enactment of the Small Business Bill of Rights--
``(A) not later than 9 years after the date of
publication of the plan in the Federal Register; and
``(B) every 9 years thereafter; and
``(2) the review of each rule adopted and small entity
compliance guide described in subsection (a)(1) that is
published after the date of enactment of the Small Business
Bill of Rights--
``(A) not later than 9 years after the date of
publication of the final rule in the Federal Register;
and
``(B) every 9 years thereafter.
``(c) In reviewing rules under the plan required under subsection
(a), the agency shall consider--
``(1) the continued need for the rule;
``(2) the nature of complaints received by the agency from
small entities concerning the rule;
``(3) comments by the Regulatory Enforcement Ombudsman and
the Chief Counsel for Advocacy of the Small Business
Administration;
``(4) the complexity of the rule;
``(5) the extent to which the rule overlaps, duplicates, or
conflicts with other Federal rules and, unless the head of the
agency determines it to be infeasible, State and local rules;
``(6) the contribution of the rule to the cumulative
economic impact of all Federal rules on the class of small
entities affected by the rule, unless the head of the agency
determines that such a calculation cannot be made;
``(7) the length of time since the rule has been evaluated,
or the degree to which technology, economic conditions, or
other factors have changed in the area affected by the rule;
and
``(8) the economic impact of the rule, including--
``(A) the estimated number of small entities to
which the rule will apply;
``(B) the estimated number of small entity jobs
that will be lost or created due to the rule; and
``(C) the projected reporting, recordkeeping, and
other compliance requirements of the proposed rule,
including--
``(i) an estimate of the classes of small
entities that will be subject to the
requirement; and
``(ii) the type of professional skills
necessary for preparation of the report or
record.
``(d)(1) Each agency shall submit an annual report regarding the
results of the review required under subsection (a) to--
``(A) Congress; and
``(B) in the case of an agency that is not an independent
regulatory agency (as defined in section 3502(5) of title 44),
the Administrator of the Office of Information and Regulatory
Affairs of the Office of Management and Budget.
``(2) Each report required under paragraph (1) shall include a
description of any rule or small entity compliance guide with respect
to which the agency made a determination of infeasibility under
paragraph (5) or (6) of subsection (c), together with a detailed
explanation of the reasons for the determination.
``(e) Each agency shall publish in the Federal Register and on the
Web site of the agency a list of the rules and small entity compliance
guides to be reviewed under the plan required under subsection (a) that
includes--
``(1) a brief description of each rule or guide;
``(2) for each rule, the reason why the head of the agency
determined that the rule has a significant economic impact on a
substantial number of small entities (without regard to whether
the agency had prepared a final regulatory flexibility analysis
for the rule); and
``(3) a request for comments from the public, the Chief
Counsel for Advocacy of the Small Business Administration, and
the Regulatory Enforcement Ombudsman concerning the enforcement
of the rules or publication of the guides.
``(f)(1) Not later than 6 months after each date described in
paragraphs (1) and (2) of subsection (b), the Inspector General for
each agency shall--
``(A) determine whether the agency has conducted the review
required under subsection (b) appropriately; and
``(B) notify the head of the agency of--
``(i) the results of the determination under
subparagraph (A); and
``(ii) any issues preventing the Inspector General
from determining that the agency has conducted the
review required under subsection (b) appropriately.
``(2)(A) Not later than 6 months after the date on which the head
of an agency receives a notice under paragraph (1)(B) that the agency
has not conducted the review required under subsection (b)
appropriately, the agency shall address the issues identified in the
notice.
``(B) Not later than 30 days after the last day of the 6-month
period described in subparagraph (A), the Inspector General for an
agency that receives a notice described in subparagraph (A) shall--
``(i) determine whether the agency has addressed the issues
identified in the notice; and
``(ii) notify Congress if the Inspector General determines
that the agency has not addressed the issues identified in the
notice.
``(C) Not later than 30 days after the date on which the Inspector
General for an agency transmits a notice under subparagraph (B)(ii), an
amount equal to 1 percent of the amount appropriated for the fiscal
year to the appropriations account of the agency that is used to pay
salaries shall be rescinded.
``(D) Nothing in this paragraph may be construed to prevent
Congress from acting to prevent a rescission under subparagraph (C).''.
(c) Sunset of New Small Business Regulations.--
(1) In general.--Except as provided in paragraph (2) and
beginning on the date of enactment of this Act, each covered
rule promulgated by an agency shall cease to have effect on the
date that is 7 years after the date on which the final version
of the covered rule is published.
(2) Extension of rule.--
(A) In general.--Before the end of the 7-year
period described in paragraph (1), an agency may take
action to renew a covered rule in accordance with the
process described in subparagraph (B) and if such
action is taken, the covered rule shall remain in
effect until modified or repealed by the agency action
or statute.
(B) Renewal process.--
(i) In general.--An agency may renew a
covered rule by using the notice and comment
rulemaking process.
(ii) Requirements.--In conducting a
rulemaking to renew a covered rule under clause
(i), an agency shall--
(I) solicit and respond to public
comment from entities affected by the
covered rule;
(II) compare the projected costs of
the covered rule to the actual costs
realized by implementation of the
covered rule and determine whether
modifications can be made to the
covered rule to lower the cost of the
covered rule;
(III) consider whether any
regulatory alternatives exist that
would accomplish the same regulatory
objective as the covered rule with less
of an impact on affected small
entities; and
(IV) make modifications to the
covered rule, if necessary, to
reflect--
(aa) comments solicited
under subclause (I);
(bb) modifications
described in subclause (II);
and
(cc) any regulatory
alternatives described in
subclause (III).
TITLE III--DEATH TAX REPEAL
SEC. 301. SHORT TITLE.
This title may be cited as the ``Death Tax Repeal Act of 2016''.
SEC. 302. REPEAL OF ESTATE AND GENERATION-SKIPPING TRANSFER TAXES.
(a) Estate Tax Repeal.--Subchapter C of chapter 11 of subtitle B of
the Internal Revenue Code of 1986 is amended by adding at the end the
following new section:
``SEC. 2210. TERMINATION.
``(a) In General.--Except as provided in subsection (b), this
chapter shall not apply to the estates of decedents dying on or after
the date of the enactment of the Death Tax Repeal Act of 2016.
``(b) Certain Distributions From Qualified Domestic Trusts.--In
applying section 2056A with respect to the surviving spouse of a
decedent dying before the date of the enactment of the Death Tax Repeal
Act of 2016--
``(1) section 2056A(b)(1)(A) shall not apply to
distributions made after the 10-year period beginning on such
date, and
``(2) section 2056A(b)(1)(B) shall not apply on or after
such date.''.
(b) Generation-Skipping Transfer Tax Repeal.--Subchapter G of
chapter 13 of subtitle B of such Code is amended by adding at the end
the following new section:
``SEC. 2664. TERMINATION.
``This chapter shall not apply to generation-skipping transfers on
or after the date of the enactment of the Death Tax Repeal Act of
2016.''.
(c) Conforming Amendments.--
(1) The table of sections for subchapter C of chapter 11 of
the Internal Revenue Code of 1986 is amended by adding at the
end the following new item:
``Sec. 2210. Termination.''.
(2) The table of sections for subchapter G of chapter 13 of
such Code is amended by adding at the end the following new
item:
``Sec. 2664. Termination.''.
(d) Effective Date.--The amendments made by this section shall
apply to the estates of decedents dying, and generation-skipping
transfers, after the date of the enactment of this Act.
SEC. 303. MODIFICATIONS OF GIFT TAX.
(a) Computation of Gift Tax.--Subsection (a) of section 2502 of the
Internal Revenue Code of 1986 is amended to read as follows:
``(a) Computation of Tax.--
``(1) In general.--The tax imposed by section 2501 for each
calendar year shall be an amount equal to the excess of--
``(A) a tentative tax, computed under paragraph
(2), on the aggregate sum of the taxable gifts for such
calendar year and for each of the preceding calendar
periods, over
``(B) a tentative tax, computed under paragraph
(2), on the aggregate sum of the taxable gifts for each
of the preceding calendar periods.
``(2) Rate schedule.--
``If the amount with respect to which The tentative tax is:
the tentative tax to be computed is:.
Not over $10,000....................... 18% of such amount.
Over $10,000 but not over $20,000...... $1,800, plus 20% of the excess
over $10,000.
Over $20,000 but not over $40,000...... $3,800, plus 22% of the excess
over $20,000.
Over $40,000 but not over $60,000...... $8,200, plus 24% of the excess
over $40,000.
Over $60,000 but not over $80,000...... $13,000, plus 26% of the excess
over $60,000.
Over $80,000 but not over $100,000..... $18,200, plus 28% of the excess
over $80,000.
Over $100,000 but not over $150,000.... $23,800, plus 30% of the excess
over $100,000.
Over $150,000 but not over $250,000.... $38,800, plus 32% of the excess
over $150,000.
Over $250,000 but not over $500,000.... $70,800, plus 34% of the excess
over $250,000.
Over $500,000.......................... $155,800, plus 35% of the
excess over $500,000.''.
(b) Treatment of Certain Transfers in Trust.--Section 2511 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new subsection:
``(c) Treatment of Certain Transfers in Trust.--Notwithstanding any
other provision of this section and except as provided in regulations,
a transfer in trust shall be treated as a taxable gift under section
2503, unless the trust is treated as wholly owned by the donor or the
donor's spouse under subpart E of part I of subchapter J of chapter
1.''.
(c) Lifetime Gift Exemption.--
(1) In general.--Paragraph (1) of section 2505(a) of the
Internal Revenue Code of 1986 is amended to read as follows:
``(1) the amount of the tentative tax which would be
determined under the rate schedule set forth in section
2502(a)(2) if the amount with respect to which such tentative
tax is to be computed were $5,000,000, reduced by''.
(2) Inflation adjustment.--Section 2505 of such Code is
amended by adding at the end the following new subsection:
``(d) Inflation Adjustment.--
``(1) In general.--In the case of any calendar year after
2011, the dollar amount in subsection (a)(1) shall be increased
by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for such calendar year by
substituting `calendar year 2010' for `calendar year
1992' in subparagraph (B) thereof.
``(2) Rounding.--If any amount as adjusted under paragraph
(1) is not a multiple of $10,000, such amount shall be rounded
to the nearest multiple of $10,000.''.
(d) Conforming Amendments.--
(1) Section 2505(a) of such Code is amended by striking the
last sentence.
(2) The heading for section 2505 of such Code is amended by
striking ``unified''.
(3) The item in the table of sections for subchapter A of
chapter 12 of such Code relating to section 2505 is amended to
read as follows:
``Sec. 2505. Credit against gift tax.''.
(e) Effective Date.--The amendments made by this section shall
apply to gifts made on or after the date of the enactment of this Act.
(f) Transition Rule.--
(1) In general.--For purposes of applying sections 1015(d),
2502, and 2505 of the Internal Revenue Code of 1986, the
calendar year in which this Act is enacted shall be treated as
2 separate calendar years one of which ends on the day before
the date of the enactment of this Act and the other of which
begins on such date of enactment.
(2) Application of section 2504(b).--For purposes of
applying section 2504(b) of the Internal Revenue Code of 1986,
the calendar year in which this Act is enacted shall be treated
as 1 preceding calendar period.
TITLE IV--HEALTHCARE: EXPANDING CHOICE AND LOWERING COSTS
SEC. 401. FINDINGS AND PURPOSE.
(a) Findings.--
(1) Effect on health care access and costs.--Congress finds
that the current civil justice system in the United States is
adversely affecting patient access to health care services,
better patient care, and cost-efficient health care, in that
the health care liability system is--
(A) a costly and ineffective mechanism for
resolving claims of health care liability and
compensating injured patients, and
(B) a deterrent to the sharing of information among
health care professionals, which impedes efforts to
improve patient safety and quality of care.
(2) Effect on interstate commerce.--Congress finds that the
health care and insurance industries are industries affecting
interstate commerce and the health care liability litigation
systems existing throughout the United States are activities
that affect interstate commerce by contributing to the high
costs of health care and premiums for health care liability
insurance purchased by health care system providers.
(3) Effect on federal spending.--Congress finds that the
health care liability litigation systems existing throughout
the United States have a significant effect on the amount,
distribution, and use of Federal funds because of--
(A) the large number of individuals who receive
health care benefits under programs operated or
financed by the Federal Government;
(B) the large number of individuals who benefit
because of the exclusion from Federal taxes of the
amounts spent to provide them with health insurance
benefits; and
(C) the large number of health care providers who
provide items or services for which the Federal
Government makes payments.
(b) Purpose.--It is the purpose of this title to implement
reasonable, comprehensive, and effective health care liability reforms
designed to--
(1) improve the availability of health care services in
cases in which health care liability actions have been shown to
be a factor in the decreased availability of services;
(2) reduce the incidence of defensive medicine and lower
the cost of health care liability insurance, all of which
contribute to the escalation of health care costs;
(3) ensure that persons with meritorious health care injury
claims receive fair and adequate compensation, including
reasonable noneconomic damages;
(4) improve the fairness and cost-effectiveness of the
current health care liability system in the United States to
resolve disputes over, and provide compensation for, health
care liability by reducing uncertainty in the amount of
compensation provided to injured individuals; and
(5) provide an increased sharing of information in the
health care system which will reduce unintended injury and
improve patient care.
SEC. 402. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.
(a) Actions by Adults.--
(1) In general.--Except as provided in paragraph (2), no
health care lawsuit may be commenced after the earlier of--
(A) the expiration of the 3-year period beginning
on the date of the manifestation of injury; or
(B) the expiration of the 1-year period beginning
on the date on which the claimant discovers, or through
the use of reasonable diligence should have discovered,
the injury.
(2) Exception.--A health care lawsuit may be commenced
after the expiration of the 3-year period described in
paragraph (1) if the claimant demonstrates--
(A) fraud;
(B) intentional concealment; or
(C) the presence of a foreign body, which has no
therapeutic or diagnostic purpose or effect, in the
person of the injured person.
(b) Actions by a Minor.--
(1) In general.--Except as provided in paragraph (2), a
health care lawsuit by a minor shall be commenced not later
than 3 years after the date of the alleged manifestation of
injury except that actions by a minor under the full age of 6
years shall be commenced within 3 years of manifestation of
injury or prior to the minor's 8th birthday, whichever provides
a longer period.
(2) Exception.--The limitation in paragraph (1) shall be
tolled for minors for any period during which a parent or
guardian and a health care provider or health care organization
have committed fraud or collusion in the failure to bring an
action on behalf of the injured minor.
SEC. 403. COMPENSATING PATIENT INJURY.
(a) Unlimited Amount of Damages for Actual Economic Losses in
Health Care Lawsuits.--Notwithstanding the limitation in subsection
(b), in any health care lawsuit, nothing in this title shall limit the
recovery by a claimant of the full amount of the available economic
damages.
(b) Additional Noneconomic Damages.--In any health care lawsuit,
the amount of noneconomic damages, if available, may be not more than
$250,000, regardless of the number of parties against whom the action
is brought or the number of separate claims or actions brought with
respect to the same injury.
(c) No Discount of Award for Noneconomic Damages.--
(1) In general.--For purposes of applying the limitation in
subsection (b), future noneconomic damages shall not be
discounted to present value.
(2) Jury not informed.--The jury shall not be informed
about the maximum award for noneconomic damages.
(3) Reduction in award.--An award for noneconomic damages
more than $250,000 shall be reduced either before the entry of
judgment, or by amendment of the judgment after entry of
judgment, and such reduction shall be made before accounting
for any other reduction in damages required by law.
(4) Separate awards.--If separate awards are rendered for
past and future noneconomic damages and the combined awards are
more than $250,000, the future noneconomic damages shall be
reduced first.
(d) Fair Share Rule.--
(1) In general.--In any health care lawsuit, each party
shall be liable for that party's several share of any damages
only and not for the share of any other person.
(2) Proportion to percentage of responsibility.--Each party
shall be liable only for the amount of damages allocated to
such party in direct proportion to such party's percentage of
responsibility.
(3) Separate judgments.--Whenever a judgment of liability
is rendered as to any party, a separate judgment shall be
rendered against each such party for the amount allocated to
such party.
(4) Determination.--For purposes of this section, the trier
of fact shall determine the proportion of responsibility of
each party for the harm to the claimant.
SEC. 404. MAXIMIZING PATIENT RECOVERY.
(a) Court Supervision of Share of Damages Actually Paid to
Claimants.--
(1) In general.--In any health care lawsuit, the court
shall supervise the arrangements for payment of damages to
protect against conflicts of interest that may have the effect
of reducing the amount of damages awarded that are actually
paid to claimants.
(2) Contingent fees.--
(A) In general.--In particular, in any health care
lawsuit in which the attorney for a party claims a
financial stake in the outcome by virtue of a
contingent fee, the court shall have the power to
restrict the payment of a claimant's damage recovery to
such attorney, and to redirect such damages to the
claimant based upon the interests of justice and
principles of equity.
(B) Maximum.--In no event shall the total of all
contingent fees for representing all claimants in a
health care lawsuit exceed the following limits:
(i) 40 percent of the first $50,000
recovered by all such claimants.
(ii) 33\1/3\ percent of the next $50,000
recovered by all such claimants.
(iii) 25 percent of the next $500,000
recovered by all such claimants.
(iv) 15 percent of any amount by which the
recovery by all such claimants is in excess of
$600,000.
(b) Applicability.--
(1) In general.--The limitations in this section shall
apply whether the recovery is by judgment, settlement,
mediation, arbitration, or any other form of alternative
dispute resolution.
(2) Minor or incompetent persons.--In a health care lawsuit
involving a minor or incompetent person, a court retains the
authority to authorize or approve a fee that is less than the
maximum permitted under this section.
(3) Court supervision.--The requirement for court
supervision in paragraphs (1) and (2) of subsection (a) shall
apply only in civil actions.
SEC. 405. ADDITIONAL HEALTH BENEFITS.
(a) In General.--In any health care lawsuit involving injury or
wrongful death, any party may introduce evidence of collateral source
benefits.
(b) Election.--If a party elects to introduce such evidence, any
opposing party may introduce evidence of any amount paid or contributed
or reasonably likely to be paid or contributed in the future by or on
behalf of the opposing party to secure the right to such collateral
source benefits.
(c) Providers of Collateral Benefits.--No provider of collateral
source benefits shall recover any amount against the claimant or
receive any lien or credit against the claimant's recovery or be
equitably or legally subrogated to the right of the claimant in a
health care lawsuit involving injury or wrongful death.
(d) Application.--This section--
(1) shall apply to any health care lawsuit that is settled
as well as a health care lawsuit that is resolved by a fact
finder; and
(2) shall not apply to section 1862(b) of the Social
Security Act (42 U.S.C. 1395y(b)) or section 1902(a)(25) of
such Act (42 U.S.C. 1396a(a)(25)).
SEC. 406. PUNITIVE DAMAGES.
(a) In General.--
(1) Malicious intent or deliberate failure.--Punitive
damages may, if otherwise permitted by applicable State or
Federal law, be awarded against any person in a health care
lawsuit only if it is proven by clear and convincing evidence
that such person acted with malicious intent to injure the
claimant, or that such person deliberately failed to avoid
unnecessary injury that such person knew the claimant was
substantially certain to suffer.
(2) No judgment for compensatory damages.--In any health
care lawsuit for which no judgment for compensatory damages is
rendered against such person, no punitive damages may be
awarded with respect to the claim in such lawsuit.
(3) Demand for punitive damages.--No demand for punitive
damages shall be included in a health care lawsuit as initially
filed.
(4) Amended pleading.--A court may allow a claimant to file
an amended pleading for punitive damages only upon a motion by
the claimant and after a finding by the court, upon review of
supporting and opposing affidavits or after a hearing, after
weighing the evidence, that the claimant has established by a
substantial probability that the claimant will prevail on the
claim for punitive damages.
(5) Separate proceedings.--
(A) In general.--At the request of any party in a
health care lawsuit, the trier of fact shall consider
in a separate proceeding--
(i) whether punitive damages are to be
awarded and the amount of such award; and
(ii) the amount of punitive damages
following a determination of punitive
liability.
(B) Relevant evidence.--If a separate proceeding is
requested, evidence relevant only to the claim for
punitive damages, as determined by applicable State
law, shall be inadmissible in any proceeding to
determine whether compensatory damages are to be
awarded.
(b) Determining Amount of Punitive Damages.--
(1) Factors considered.--In determining the amount of
punitive damages, if awarded, in a health care lawsuit, the
trier of fact shall consider only the following:
(A) The severity of the harm caused by the conduct
of such party.
(B) The duration of the conduct or any concealment
of it by such party.
(C) The profitability of the conduct to such party.
(D) The number of products sold or medical
procedures rendered for compensation, as the case may
be, by such party, of the kind causing the harm
complained of by the claimant.
(E) Any criminal penalties imposed on such party,
as a result of the conduct complained of by the
claimant.
(F) The amount of any civil fines assessed against
such party as a result of the conduct complained of by
the claimant.
(2) Maximum award.--The amount of punitive damages, if
awarded, in a health care lawsuit may be as much as $250,000 or
as much as two times the amount of economic damages awarded,
whichever is greater. The jury shall not be informed of this
limitation.
(c) No Punitive Damages for Products That Comply With FDA
Standards.--
(1) Liability of certain manufacturers, distributors, and
suppliers.--
(A) In general.--No punitive damages may be awarded
against the manufacturer or distributor of a medical
product, or a supplier of any component or raw material
of such medical product, based on a claim that such
product caused the claimant's harm where--
(i)(I) such medical product was subject to
premarket approval, clearance, or licensure by
the Food and Drug Administration with respect
to the safety of the formulation or performance
of the aspect of such medical product which
caused the claimant's harm or the adequacy of
the packaging or labeling of such medical
product; and
(II) such medical product was so approved,
cleared, or licensed; or
(ii) such medical product is generally
recognized among qualified experts as safe and
effective pursuant to conditions established by
the Food and Drug Administration and applicable
Food and Drug Administration regulations,
including without limitation those related to
packaging and labeling, unless the Food and
Drug Administration has determined that such
medical product was not manufactured or
distributed in substantial compliance with
applicable Food and Drug Administration
statutes and regulations.
(B) Rule of construction.--Subparagraph (A) may not
be construed as establishing the obligation of the Food
and Drug Administration to demonstrate affirmatively
that a manufacturer, distributor, or supplier referred
to in such subparagraph meets any of the conditions
described in such subparagraph.
(2) Liability of health care providers.--
(A) In general.--A health care provider who
prescribes, or who dispenses pursuant to a
prescription, a medical product approved, licensed, or
cleared by the Food and Drug Administration shall not
be named as a party to a product liability lawsuit
involving such product and shall not be liable to a
claimant in a class action lawsuit against the
manufacturer, distributor, or seller of such product.
(B) Consolidation.--Nothing in this paragraph
prevents a court from consolidating cases involving
health care providers and cases involving products
liability claims against the manufacturer, distributor,
or product seller of such medical product.
(3) Packaging.--In a health care lawsuit for harm which is
alleged to relate to the adequacy of the packaging or labeling
of a drug which is required to have tamper-resistant packaging
under regulations of the Secretary of Health and Human Services
(including labeling regulations related to such packaging), the
manufacturer or product seller of the drug shall not be held
liable for punitive damages unless such packaging or labeling
is found by the trier of fact by clear and convincing evidence
to be substantially out of compliance with such regulations.
(4) Exception.--Paragraph (1) shall not apply with respect
to any health care lawsuit in which--
(A) a person, before or after premarket approval,
clearance, or licensure of such medical product,
knowingly misrepresented to or withheld from the Food
and Drug Administration information that is required to
be submitted under the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 301 et seq.) or section 351 of the
Public Health Service Act (42 U.S.C. 262) that is
material and is causally related to the harm which the
claimant allegedly suffered; or
(B) a person made an illegal payment to an official
of the Food and Drug Administration for the purpose of
either securing or maintaining approval, clearance, or
licensure of such medical product.
SEC. 407. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO CLAIMANTS IN
HEALTH CARE LAWSUITS.
(a) In General.--In any health care lawsuit, if an award of future
damages, without reduction to present value, equaling or exceeding
$50,000 is made against a party with sufficient insurance or other
assets to fund a periodic payment of such a judgment, the court shall,
at the request of any party, enter a judgment ordering that the future
damages be paid by periodic payments. In any health care lawsuit, the
court may be guided by the Uniform Periodic Payment of Judgments Act
promulgated by the National Conference of Commissioners on Uniform
State Laws.
(b) Applicability.--This section applies to all actions which have
not been first set for trial or retrial before the date of the
enactment of this title.
SEC. 408. DEFINITIONS.
In this title:
(1) Alternative dispute resolution system; adr.--The term
``alternative dispute resolution system'' or ``ADR'' means a
system that provides for the resolution of health care lawsuits
in a manner other than through a civil action brought in a
State or Federal court.
(2) Claimant.--The term ``claimant'' means any person who
brings a health care lawsuit, including a person who asserts or
claims a right to legal or equitable contribution, indemnity,
or subrogation, arising out of a health care liability claim or
action, and any person on whose behalf such a claim is asserted
or such an action is brought, whether deceased, incompetent, or
a minor.
(3) Collateral source benefits.--The term ``collateral
source benefits'' means any amount paid or reasonably likely to
be paid in the future to, or on behalf of, the claimant, or any
service, product, or other benefit provided or reasonably
likely to be provided in the future to, or on behalf of, the
claimant, as a result of the injury or wrongful death, pursuant
to--
(A) any State or Federal health, sickness, income-
disability, accident, or workers' compensation law;
(B) any health, sickness, income-disability, or
accident insurance that provides health benefits or
income-disability coverage;
(C) any contract or agreement of any group,
organization, partnership, or corporation to provide,
pay for, or reimburse the cost of medical, hospital,
dental, or income-disability benefits; and
(D) any other publicly or privately funded program.
(4) Compensatory damages.--The term ``compensatory
damages'' means objectively verifiable monetary losses incurred
as a result of the provision of, use of, or payment for (or
failure to provide, use, or pay for) health care services or
medical products, such as past and future medical expenses,
loss of past and future earnings, cost of obtaining domestic
services, loss of employment, and loss of business or
employment opportunities, damages for physical and emotional
pain, suffering, inconvenience, physical impairment, mental
anguish, disfigurement, loss of enjoyment of life, loss of
society and companionship, loss of consortium (other than loss
of domestic service), hedonic damages, injury to reputation,
and all other nonpecuniary losses of any kind or nature. The
term ``compensatory damages'' includes economic damages and
noneconomic damages, as such terms are defined in this section.
(5) Contingent fee.--The term ``contingent fee'' includes
all compensation to any person or persons which is payable only
if a recovery is effected on behalf of one or more claimants.
(6) Economic damages.--The term ``economic damages'' means
objectively verifiable monetary losses incurred as a result of
the provision of, use of, or payment for (or failure to
provide, use, or pay for) health care services or medical
products, such as past and future medical expenses, loss of
past and future earnings, cost of obtaining domestic services,
loss of employment, and loss of business or employment
opportunities.
(7) Health care lawsuit.--The term ``health care lawsuit''
means any health care liability claim concerning the provision
of health care goods or services or any medical product
affecting interstate commerce, or any health care liability
action concerning the provision of health care goods or
services or any medical product affecting interstate commerce,
brought in a State or Federal court or pursuant to an
alternative dispute resolution system, against a health care
provider, a health care organization, or the manufacturer,
distributor, supplier, marketer, promoter, or seller of a
medical product, regardless of the theory of liability on which
the claim is based, or the number of claimants, plaintiffs,
defendants, or other parties, or the number of claims or causes
of action, in which the claimant alleges a health care
liability claim. Such term does not include a claim or action
which is based on criminal liability; which seeks civil fines
or penalties paid to Federal, State, or local government; or
which is grounded in antitrust.
(8) Health care liability action.--The term ``health care
liability action'' means a civil action brought in a State or
Federal court or pursuant to an alternative dispute resolution
system, against a health care provider, a health care
organization, or the manufacturer, distributor, supplier,
marketer, promoter, or seller of a medical product, regardless
of the theory of liability on which the claim is based, or the
number of plaintiffs, defendants, or other parties, or the
number of causes of action, in which the claimant alleges a
health care liability claim.
(9) Health care liability claim.--The term ``health care
liability claim'' means a demand by any person, whether or not
pursuant to ADR, against a health care provider, health care
organization, or the manufacturer, distributor, supplier,
marketer, promoter, or seller of a medical product, including,
but not limited to, third-party claims, cross-claims, counter-
claims, or contribution claims, which are based upon the
provision of, use of, or payment for (or the failure to
provide, use, or pay for) health care services or medical
products, regardless of the theory of liability on which the
claim is based, or the number of plaintiffs, defendants, or
other parties, or the number of causes of action.
(10) Health care organization.--The term ``health care
organization'' means any person or entity which is obligated to
provide or pay for health benefits under any health plan,
including any person or entity acting under a contract or
arrangement with a health care organization to provide or
administer any health benefit.
(11) Health care provider.--The term ``health care
provider'' means any person or entity required by State or
Federal laws or regulations to be licensed, registered, or
certified to provide health care services, and being either so
licensed, registered, or certified, or exempted from such
requirement by other statute or regulation.
(12) Health care goods or services.--The term ``health care
goods or services'' means any goods or services provided by a
health care organization, provider, or by any individual
working under the supervision of a health care provider, that
relates to the diagnosis, prevention, or treatment of any human
disease or impairment, or the assessment or care of the health
of human beings.
(13) Malicious intent to injure.--The term ``malicious
intent to injure'' means intentionally causing or attempting to
cause physical injury other than providing health care goods or
services.
(14) Medical product.--The term ``medical product'' means a
drug, device, or biological product intended for humans, and
the terms ``drug'', ``device'', and ``biological product'' have
the meanings given such terms in sections 201(g)(1) and 201(h)
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
321(g)(1) and (h)) and section 351(a) of the Public Health
Service Act (42 U.S.C. 262(a)), respectively, including any
component or raw material used therein, but excluding health
care services.
(15) Noneconomic damages.--The term ``noneconomic damages''
means damages for physical and emotional pain, suffering,
inconvenience, physical impairment, mental anguish,
disfigurement, loss of enjoyment of life, loss of society and
companionship, loss of consortium (other than loss of domestic
service), hedonic damages, injury to reputation, and all other
nonpecuniary losses of any kind or nature.
(16) Punitive damages.--The term ``punitive damages'' means
damages awarded, for the purpose of punishment or deterrence,
and not solely for compensatory purposes, against a health care
provider, health care organization, or a manufacturer,
distributor, or supplier of a medical product. Punitive damages
are neither economic nor noneconomic damages.
(17) Recovery.--The term ``recovery'' means the net sum
recovered after deducting any disbursements or costs incurred
in connection with prosecution or settlement of the claim,
including all costs paid or advanced by any person. Costs of
health care incurred by the plaintiff and the attorneys' office
overhead costs or charges for legal services are not deductible
disbursements or costs for such purpose.
(18) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the United States Virgin Islands, Guam, American Samoa,
the Commonwealth of the Northern Mariana Islands, the Trust
Territory of the Pacific Islands, and any other territory or
possession of the United States, or any political subdivision
thereof.
SEC. 409. EFFECT ON OTHER LAWS.
(a) Vaccine Injury.--
(1) To the extent that title XXI of the Public Health
Service Act (42 U.S.C. 300aa-1 et seq.) establishes a Federal
rule of law applicable to a civil action brought for a vaccine-
related injury or death--
(A) this title does not affect the application of
the rule of law applicable to such an action; and
(B) any rule of law prescribed by this title in
conflict with a rule of law of title XXI of the Public
Health Service Act (42 U.S.C. 300aa-1 et seq.) shall
not apply to such action.
(2) If there is an aspect of a civil action brought for a
vaccine-related injury or death to which a Federal rule of law
under title XXI of the Public Health Service Act (42 U.S.C.
300aa-1 et seq.) does not apply, then this title or otherwise
applicable law (as determined under this title) will apply to
such aspect of such action.
(b) Other Federal Law.--Except as provided in this section, nothing
in this title shall be deemed to affect any defense available to a
defendant in a health care lawsuit or action under any other provision
of Federal law.
SEC. 410. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.
(a) Health Care Lawsuits.--The provisions governing health care
lawsuits set forth in this title preempt, subject to subsections (b)
and (c), State law to the extent that State law prevents the
application of any provisions of law established by or under this
title. The provisions governing health care lawsuits set forth in this
title supersede chapter 171 of title 28, United States Code, to the
extent that such chapter--
(1) provides for a greater amount of damages or contingent
fees, a longer period in which a health care lawsuit may be
commenced, or a reduced applicability or scope of periodic
payment of future damages, than provided in this title; or
(2) prohibits the introduction of evidence regarding
collateral source benefits, or mandates or permits subrogation
or a lien on collateral source benefits.
(b) Protection of States' Rights and Other Laws.--
(1) In general.--Any issue that is not governed by any
provision of law established by or under this title (including
State standards of negligence) shall be governed by otherwise
applicable State or Federal law.
(2) Laws that provide greater protections.--This title
shall not preempt or supersede any State or Federal law that
imposes greater procedural or substantive protections for
health care providers and health care organizations from
liability, loss, or damages than those provided by this title
or create a cause of action.
(c) State Flexibility.--No provision of this title shall be
construed to preempt--
(1) any State law (whether effective before, on, or after
the date of the enactment of this title) that specifies a
particular monetary amount of compensatory or punitive damages
(or the total amount of damages) that may be awarded in a
health care lawsuit, regardless of whether such monetary amount
is greater or lesser than is provided for under this title,
notwithstanding section 403(a); or
(2) any defense available to a party in a health care
lawsuit under any other provision of State or Federal law.
SEC. 411. APPLICABILITY; EFFECTIVE DATE.
This title shall apply to any health care lawsuit brought in a
Federal or State court, or subject to an alternative dispute resolution
system, that is initiated on or after the date of the enactment of this
title, except that any health care lawsuit arising from an injury
occurring prior to the date of the enactment of this title shall be
governed by the applicable statute of limitations provisions in effect
at the time the injury occurred.
SEC. 412. SENSE OF CONGRESS.
It is the sense of Congress that a health insurer should be liable
for damages for harm caused when it makes a decision as to what care is
medically necessary and appropriate.
SEC. 413. SECA TAX DEDUCTION FOR HEALTH INSURANCE COSTS.
(a) In General.--Subsection (l) of section 162 of the Internal
Revenue Code of 1986 is amended by striking paragraph (4) and by
redesignating paragraph (5) as paragraph (4).
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this
title.
TITLE V--WORKFORCE INTEGRITY
SEC. 501. VERIFICATION UNDER E-VERIFY PROGRAM BY TELEPHONE.
Section 404(d) of the Illegal Immigration Reform and Immigrant
Responsibility Act of 1996 (division C of Public Law 104-208; 8 U.S.C.
1324a note) is amended--
(1) in paragraph (3), by striking ``and'' at the end;
(2) in paragraph (4)(C), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following:
``(5) in such a manner that the confirmation or
nonconfirmation may be provided by telephone.''.
SEC. 502. GRACE PERIOD TO CORRECT PAPERWORK.
Any small business concern that violates any provision of the
Immigration and Nationality Act (8 U.S.C. 1101 et seq.) relating to the
filing of an application, petition, or other paperwork, resulting in
the assessment of a fine or penalty shall not be subject to that fine
or other penalty if that small business concern remedies that violation
during the 30-day period beginning on the date on which notice of the
violation is received by the small business concern.
TITLE VI--INCENTIVES FOR ENERGY EFFICIENCY
SEC. 601. EXTEND THE TAX CREDIT FOR RESIDENTIAL ENERGY-EFFICIENT
PROPERTY.
(a) Extension of Credit.--Subsection (h) of section 25D of the
Internal Revenue Code of 1986 is amended by striking ``December 31,
2016 (December 31, 2021, in the case of any qualified solar electric
property expenditures and qualified solar water heating property
expenditures)'' and inserting ``December 31, 2021''.
(b) Effective Date.--The amendment made by this section shall take
effect on January 1, 2017.
SEC. 602. MAKE PERMANENT THE ENERGY EFFICIENCY CREDIT FOR EXISTING
HOMES.
Section 25C of the Internal Revenue Code of 1986 is amended by
striking subsection (g).
SEC. 603. MAKE PERMANENT THE ENERGY EFFICIENCY COMMERCIAL BUILDINGS
DEDUCTION.
Section 179D of the Internal Revenue Code of 1986 is amended by
striking subsection (h).
TITLE VII--GUIDANCE ABOUT NEW RULES
SEC. 701. GUIDANCE AND ADVICE ABOUT NEW RULES.
(a) Determination Regarding Impact of New Rules.--
(1) In general.--The head of each department or agency of
the Federal Government may not issue a rule until that head has
conducted a study to determine whether the rule will have an
unduly burdensome effect on small business concerns.
(2) Guidance.--If the head of a department or agency of the
Federal Government determines that the effect described in
paragraph (1) would occur, the head shall, not later than the
date that is 3 months after the date on which the determination
is made, submit to the Administrator guidance on how that
effect may be mitigated.
(b) Advice.--The Administrator shall, on request, provide such
other advice to small business concerns about those matters as the
Administrator determines appropriate.
(c) Publication.--The Administrator shall publish and maintain all
guidance received under subsection (a) and all advice provided under
subsection (b) on the website of the Administration, in a manner that
ensures the continuing availability of that guidance to small business
concerns.
TITLE VIII--SMALL BUSINESS PROVISIONS
Subtitle A--Small Business General Provisions
SEC. 801. ADMINISTRATION PROHIBITED FROM CAPPING EXECUTIVE
COMPENSATION.
In carrying out any program under the Small Business Act (15 U.S.C.
631 et seq.) or the Small Business Investment Act of 1958 (15 U.S.C.
661 et seq.), the Administrator may not impose any limit on executive
compensation by any small business concern.
SEC. 802. REDUCTION OF REGULATORY BURDEN.
(a) GAO Report.--Not later than 9 months after the date of
enactment of this Act, the Comptroller General of the United States
shall submit to the Administrator the results of a study of each
regulation of each Federal agency or department that determines the
burden that each such regulation imposes on small business concerns.
(b) SBA Recommendations.--Not later than 6 months after receiving
the report under subsection (a), the Administrator shall publish and
maintain on the public website of the Administration recommendations on
how to reduce the burden imposed by such regulations on small business
concerns.
(c) Reduction of Paperwork.--
(1) In general.--In carrying out any program under the
Small Business Act (15 U.S.C. 631 et seq.) or the Small
Business Investment Act of 1958 (15 U.S.C. 661 et seq.), the
Administrator, acting through the Chief Counsel of the Office
of Advocacy of the Administration, shall take any actions that
the Administrator determines appropriate to reduce the amount
of paperwork, including any application, filing, or petition,
that any Federal department or agency may require a small
business concern to complete.
(2) Electronic and telephonic filing.--The actions taken by
the Administrator under paragraph (1) shall include providing
for the replacement of the paperwork described in that
paragraph with electronic or telephone filing or reporting.
SEC. 803. LITIGATION BURDEN ON SMALL BUSINESS CONCERNS TO BE LIMITED TO
CURRENT LEVELS.
It is the sense of Congress that Congress should not pass
legislation amending substantive or procedural law if the amendment
would cause more small business concerns to be involved in litigation.
SEC. 804. EXPANSION OF VOLUNTEER REPRESENTATION AND BENCHMARK REPORTS.
Section 8(b)(1)(B) of the Small Business Act (15 U.S.C.
637(b)(1)(B)) is amended--
(1) by inserting ``(i)'' after ``(B)''; and
(2) by adding at the end the following:
``(ii) The Administrator shall ensure that the
Service Corps of Retired Executives--
``(I) carries out a plan to increase the
number of mentors in the Service Corps of
Retired Executives; and
``(II) annually reports to the
Administrator on the implementation of this
subparagraph.
``(iii) The Administrator shall ensure that the
Service Corps of Retired Executives, when evaluating
the performance of the activities and the volunteers of
the Service Corps of Retired Executives, establishes
benchmarks, which shall include benchmarks relating
to--
``(I) the number of hours spent mentoring
by volunteers; and
``(II) the performance of the persons
assisted by the Service Corps of Retired
Executives.
``(iv) The Service Corps of Retired Executives
shall annually report to the Administrator on whether
the benchmarks established under clause (iii) are being
met.''.
SEC. 805. MENTORING AND NETWORKING.
Section 8(b)(1)(B) of the Small Business Act (15 U.S.C.
637(b)(1)(B)), as amended by this Act, is further amended by adding at
the end the following:
``(v) The Administrator shall ensure that the
Service Corps of Retired Executives establishes a
mentoring program for small business concerns that
provides individualized advice to each small business
concern from a qualified counselor. For purposes of
this clause, a qualified counselor is a counselor with
not fewer than 10 years of experience in the industry
sector or area of responsibility of the small business
concern seeking advice.
``(vi) The Administrator shall carry out a
networking program through the Service Corps of Retired
Executives that provides a small business concern with
the opportunity to make business contacts in the
industry or geographic region of the small business
concern.''.
Subtitle B--Small Business Goals
SEC. 811. SMALL BUSINESS GOALS.
Section 15(g) of the Small Business Act (15 U.S.C. 644(g)) is
amended--
(1) in paragraph (1)(A)(i), by striking ``shall be
established at not less than 23 percent'' and inserting
``except as provided in paragraph (4), shall be established at
not less than 30 percent''; and
(2) by adding at the end the following:
``(4)(A) The President may authorize the National Aeronautics and
Space Administration and the Department of Energy to treat the
Governmentwide goal for participation by small business concerns as
though such goal were 23 percent.
``(B) Not later than 60 days after providing an authorization under
subparagraph (A), the President shall provide notice to the Office of
Advocacy.''.
SEC. 812. AGENCY GOAL NEGOTIATION.
(a) Negotiation.--Section 15(g)(1)(A) of the Small Business Act (15
U.S.C. 644(g)(1)(A)) is amended, in the matter preceding clause (i), by
striking ``The President shall annually establish Governmentwide goals
for procurement contracts'' and inserting ``The President shall, before
the end of each fiscal year, establish new Governmentwide procurement
goals for the following fiscal year for procurement contracts''.
(b) Minimum Level.--Section 15(g)(1)(B) of the Small Business Act
(15 U.S.C. 644(g)(1)(B)) is amended, in the first sentence, by
inserting ``, which shall not be lower than the Governmentwide goal,''
after ``Each agency shall have an annual goal''.
SEC. 813. PROCEDURES AND METHODS FOR GOAL ACHIEVEMENT.
(a) Goal Responsibility.--Section 15(g)(2)(A) of the Small Business
Act (15 U.S.C. 644(g)(2)(A)) is amended by inserting ``The goals
established by the head of each Federal agency shall be apportioned
within the Federal agency to 1 or more contracting offices (as that
term is defined in section 2.101 of title 48, Code of Federal
Regulations, on the date of enactment of the Small Business Bill of
Rights) that reports to a career appointee in the Senior Executive
Service.'' after the first sentence.
(b) Senior Executive Service.--
(1) Purposes.--Section 3131 of title 5, United States Code,
is amended--
(A) in paragraph (13) by striking the ``and'' at
the end;
(B) in paragraph (14) by striking the period at the
end and inserting ``; and''; and
(C) by adding at the end the following:
``(15) ensure that the Government achieves the small
business procurement goals under section 15(g) of the Small
Business Act (15 U.S.C. 644(g)).''.
(2) Training.--Section 3396(a) of title 5, United States
Code, is amended by adding at the end the following: ``The
training provided to senior executives shall include Federal
procurement policy, including the procurement provisions under
the Small Business Act (15 U.S.C. 631 et seq.).''.
(3) Limitation on sabbaticals.--Section 3396(c)(2) of title
5, United States Code, is amended--
(A) in subparagraph (B)(iii) by striking the
``and'' at the end;
(B) in subparagraph (C) by striking the period at
the end and inserting ``; or''; and
(C) by inserting after subparagraph (C) the
following:
``(D) who oversees a contracting office that did not meet
its small business procurement goals established annually in
accordance with the procedures under section 15(g)(2) of the
Small Business Act (15 U.S.C. 644(g)(2)).''.
(4) Limitation on incentive awards.--
(A) In general.--An employee in the Senior
Executive Service shall not be eligible for any
incentive award specified in subchapter I of chapter 45
of title 5, United States Code, during a fiscal year if
the contracting office which reports to that employee
fails to meet the procurement goals established for the
previous fiscal year in accordance with the procedures
under section 15(g)(2) of the Small Business Act (15
U.S.C. 644(g)(2)).
(B) Supervisors.--Any career or noncareer member of
the Senior Executive Service to whom an employee who is
not eligible for an incentive award for a fiscal year
under subparagraph (A) reports shall not be eligible
for any incentive award specified in subchapter I of
chapter 45 of title 5, United States Code, during that
fiscal year.
SEC. 814. REPORTING REQUIREMENTS.
Section 15(h) of the Small Business Act (15 U.S.C. 644(h)) is
amended by adding at the end the following:
``(4) Agency reports to congress.--
``(A) In general.--Not later than November 1 of
each fiscal year, the head of each Federal agency shall
submit to Congress a report providing the percentage of
contracts awarded by that Federal agency for the
previous fiscal year that were awarded to small
business concerns.
``(B) Failure to meet goals.--If the percentage
reported under subparagraph (A) for a fiscal year is
less than the goal established by the head of the
Federal agency under subsection (g), the head of the
Federal agency shall include in the report--
``(i) an explanation of why the Federal
agency did not reach the goal; and
``(ii) a discussion of the actions the
Federal agency will take to ensure that the
goal for the following fiscal year will be
achieved.''.
Subtitle C--Contract Bundling
SEC. 821. DEFINITIONS OF BUNDLING OF CONTRACT REQUIREMENTS.
Section 3(o) of the Small Business Act (15 U.S.C. 632(o)) is
amended to read as follows:
``(o) Definitions of Bundling of Contract Requirements and Related
Terms.--In this Act:
``(1) Bundled contract.--
``(A) In general.--The term `bundled contract'
means a contract or order that is entered into to meet
procurement requirements that are consolidated in a
bundling of contract requirements, without regard to
its designation by the procuring agency or whether a
study of the effects of the solicitation on civilian or
military personnel has been made.
``(B) Exceptions.--The term `bundled contract' does
not include--
``(i) a contract or order with an aggregate
dollar value below the dollar threshold
specified in paragraph (4); or
``(ii) a contract or order that is entered
into to meet procurement requirements, all of
which are exempted requirements under paragraph
(5).
``(2) Bundling of contract requirements.--
``(A) In general.--The term `bundling of contract
requirements' means the use of any bundling methodology
to satisfy 2 or more procurement requirements for new
or existing goods or services, including any
construction services, that is likely to be unsuitable
for award to a small business concern due to--
``(i) the diversity, size, or specialized
nature of the elements of the performance
specified;
``(ii) the aggregate dollar value of the
anticipated award;
``(iii) the geographical dispersion of the
contract or order performance; or
``(iv) any combination of the factors
described in clauses (i), (ii), and (iii).
``(B) Exceptions.--The term does not include--
``(i) the use of a bundling methodology for
an anticipated award with an aggregate dollar
value below the threshold specified in
paragraph (4); or
``(ii) the use of a bundling methodology to
meet procurement requirements, all of which are
exempted under paragraph (5).
``(3) Bundling methodology.--The term `bundling
methodology' means--
``(A) a solicitation to obtain offers for a single
contract or order, or a multiple award contract or
order;
``(B) a solicitation of offers for the issuance of
a task or a delivery order under an existing single or
multiple award contract or order; or
``(C) the creation of any new procurement
requirements that permit a consolidation of contract or
order requirements.
``(4) Dollar threshold.--The term `dollar threshold'
means--
``(A) $65,000,000 if solely for construction
services; and
``(B) $1,500,000 in all other cases.
``(5) Exempted requirements.--The term `exempted
requirement' means 1 or more of the following:
``(A) A procurement requirement solely for items
that are not commercial items (as the term `commercial
item' is defined in section 4(12) of the Office of
Federal Procurement Policy Act (41 U.S.C. 403(12)),
except this subparagraph shall not apply to any
procurement requirement for a contract for goods or
services provided by a business classified in sector 23
of the North American Industrial Classification System.
``(B) A procurement requirement with respect to
which a determination that it is unsuitable for award
to a small business concern has previously been made by
the agency. The Administrator shall have authority to
review and reverse such a determination for purposes of
this paragraph and, if the Administrator does reverse
that determination, the term `exempted requirement'
shall not apply to that procurement requirement.
``(6) Procurement requirement.--The term `procurement
requirement' means a determination by an agency that a
specified good or service is needed to satisfy the mission of
the agency.''.
SEC. 822. JUSTIFICATION.
(a) Statement of Bundled Contract Requirements.--Section 15(a) of
the Small Business Act (15 U.S.C. 644(a)) is amended--
(1) by striking ``is in a quantity or estimated dollar
value the magnitude of which renders small business prime
contract participation unlikely'' and inserting ``would now be
combined with other requirements for goods and services'';
(2) by striking ``(2) why delivery schedules'' and
inserting ``(2) the names, addresses, and size of the incumbent
contract holders, if applicable; (3) a description of the
industries that might be interested in bidding on the contract
requirements; (4) the number of small businesses listed in the
industry categories that could be excluded from future bidding
if the contract is combined or packaged, including any small
business bidders that had bid on previous procurement
requirements that are included in the bundling of contract
requirements; (5) why delivery schedules'';
(3) by striking ``(3) why the proposed acquisition'' and
inserting ``(6) why the proposed acquisition'';
(4) by striking ``(4) why construction'' and inserting
``(7) why construction'';
(5) by striking ``(5) why the agency'' and inserting ``(8)
why the agency'';
(6) by inserting after ``justified.'' the following: ``The
statement also shall set forth the proposed procurement
strategy required by subsection (e) and, if applicable, the
specifications required by subsection (e)(3). Concurrently, the
statement shall be made available to the public, including
through dissemination in the Federal contracting opportunities
database.''; and
(7) by inserting after ``prime contracting opportunities.''
the following: ``If no notification of the procurement and
accompanying statement is received, but the Administrator
determines that there is cause to believe the contract combines
requirements or a contract (single or multiple award) or task
or delivery order for construction services or includes
unjustified bundling, the Administrator may demand that such a
statement of work goods or services be completed by the
procurement activity and sent to the Procurement Center
Representative and the solicitation process postponed for not
less than 10 days but not more than 30 days to allow the
Administrator to review the statement and make recommendations
as described in this section before procurement is
continued.''.
(b) Substantial Measurable Benefits.--Section 15(e)(2)(C) of the
Small Business Act (15 U.S.C. 644(e)(C)) is amended by adding at the
end the following: ``Cost savings shall not include any reduction in
the use of military interdepartmental purchase requests or any similar
transfer funds among Federal agencies for the use of a contract issued
by another Federal agency.''.
SEC. 823. APPEALS.
Section 15(a) of the Small Business Act (15 U.S.C. 644(a)), as
amended by this Act, is further amended--
(1) by striking ``If a proposed procurement includes in its
statement'' and inserting ``If a proposed procurement would
adversely affect 1 or more small business concerns, including
the potential loss of an existing contract, or if a proposed
procurement includes in its statement''; and
(2) by inserting before ``Whenever the Administration and
the contracting procurement agency fail to agree,'' the
following: ``If a small business concern would be adversely
affected, directly or indirectly, by the procurement as
proposed, and that small business concern or a trade
association of which that small business concern is a member so
requests, the Administrator may take action to further the
interests of the small business concern.''.
SEC. 824. THIRD-PARTY REVIEW.
Section 7105(e) of title 41, United States Code, is amended by
adding at the end the following:
``(3) Contract bundling.--
``(A) In general.--Whenever the head of a
contracting agency makes a decision in accordance with
section 15(a) of the Small Business Act concerning the
Administrator of the Small Business Administration's
challenge to a bundling of contract requirements, the
Administrator, within 10 days after such decision, may
file a challenge with the appropriate agency board of
contract appeals.
``(B) Procedure.--The board shall provide the
Administrator and the head of the contracting agency
the opportunity to provide their views on the disputed
contract. No oral testimony or oral argument shall be
permitted. The board shall render its decision not
later than 30 days after the appeal has been filed. The
decision of the board shall be final.''.
Subtitle D--Small Business Subcontracting
SEC. 831. CRIMINAL VIOLATIONS.
Section 1001(a) of title 18, United States Code, is amended--
(1) in paragraph (2), by striking ``or'' at the end;
(2) in paragraph (3), by adding ``or'' at the end;
(3) by inserting after paragraph (3) the following:
``(4) makes in writing or electronically a false statement
concerning status as a small business concern (as defined in
section 3 of the Small Business Act (15 U.S.C. 632)) or
compliance with the requirements of the Small Business Act (15
U.S.C. 631 et seq.) in an effort to obtain, retain, or complete
a Federal Government contract;''; and
(4) by adding at the end the following: ``Notwithstanding
section 3571(e), for a violation of paragraph (4) of this
subsection, the fine under this title shall be the total value
of the contract or $1,000,000, whichever is greater.''.
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