Summary: H.R.5769 — 102nd Congress (1991-1992)All Information (Except Text)

There is one summary for H.R.5769. Bill summaries are authored by CRS.

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Introduced in House (08/04/1992)

Small Business Revitalization and Job Growth Act of 1992 - Title I: Amendments to Securities Acts - Amends the Securities Act of 1933 to increase from $5,000,000 to $10,000,000 the aggregate amount of an issue of securities that may be exempted by the Securities and Exchange Commission (SEC) from the regulatory requirements of such Act.

Amends the Investment Company Act of 1940 (the ICA) to exempt from the definition of an investment company any securities issuer whose outstanding securities are owned exclusively by persons who, at the time of acquisition, are qualified purchasers, except that such issuer shall be deemed an investment company for purposes of limitations governing the purchase by such issuer of any security issued by a registered investment company and the sale of any security issued by a registered open-end investment company to such issuer. Defines as a "qualified purchaser" under the ICA any person whom the SEC has determined does not need the protections of the ICA, taking into consideration financial sophistication, net worth, and certain other financial knowledge and experience. Revises the definition of the beneficial ownership of securities for purposes of the ICA.

Provides an additional exemption from the definition of an investment company under the ICA in the case of any company that is not engaged in the business of issuing redeemable securities and the operations of which are subject to regulation by the State in which it is organized under statutes governing entities that provide financial or managerial assistance to enterprises doing or proposing to do business primarily in such State if: (1) the purpose of such company is limited to the provision of such assistance; (2) at least 80 percent of the securities being offered for sale by such company represent persons who reside or have a substantial business presence in such State; (3) the securities are sold to accredited investors or other persons that the SEC may permit to purchase such securities; and (4) the company does not purchase any security issued by an investment company, or by a company that would be an investment company except for the exclusions from the definition of an investment company, other than investment-grade securities or securities required by its investment policies to invest in investment-grade or comparable securities. Requires any company proposing to meet such exemption to file with the SEC a notification of intent to do so, subject to SEC approval.

Amends the ICA to: (1) increase from $100,000 to $10,000,000 the aggregate sums received by a closed-end investment company for the sale of its securities plus the value of remaining securities allowed to be held while still being exempted from provisions regulating investment companies; (2) include within the definition of "eligible portfolio company" any issuer that has total assets of not more than $4,000,000, and capital and surplus in excess of $2,000,000, allowing the SEC to adjust such figures to reflect changes in generally accepted indices for small businesses; (3) provide that a business development company, in order to be so considered, need not make available significant managerial assistance with respect to eligible portfolio companies or to any other company that meets such criteria as the SEC may permit; (4) allow acquisition by business development companies of the securities of eligible portfolio companies; (5) allow business development companies to issue without condition more than one class of senior securities representing indebtedness; (6) allow such companies to issue warrants, options, or other rights to convert securities to voting securities either alone or accompanied by securities; and (7) prohibit such warrants, options, or other rights of business development companies from being separately transferable unless no class of such rights and the securities (currently, senior securities) representing them has been publicly distributed.

Title II: Credit Relief - Amends the Small Business Act to provide that the amount of deferred participation loans authorized under such Act shall: (1) mean the net amount of the loan principal guaranteed by the Small Business Administration (SBA) and does not include any amount not guaranteed; and (2) be available for a national program, except that the SBA may use up to ten percent of the amount authorized each year for special or pilot programs directed to identified sectors of the small business community or to specific U.S. geographic region. Increases the amount the SBA is authorized to make in deferred participation loans and other financings to small businesses, and, from such authorized sums, the amount authorized to make general business loans for specified purposes under the Small Business Act and the Small Business Investment Act of 1958.

Directs the Secretary of the Treasury, the Director of the Congressional Budget Office, and the Chairman of the SEC, in consultation with the SBA Administrator, to conduct a study of the potential benefits of, and legal, regulatory, and market-based barriers to, developing a secondary market for commercial real estate mortgage loans and loans to small businesses. Outlines study consideration requirements. Requires a report.

Directs the chief executive officer of the Resolution Trust Corporation (RTC) to conduct a study and report to the Congress on the impact of its commercial real estate loan securitization program and the impact of the RTC's programs on the commercial real estate mortgage loan and small business loan secondary market.

Directs the SBA Administrator to simplify the application process for a small business concern to receive a loan guarantee under the Small Business Act, including loan applications in connection with an additional loan guarantee application that is filed not later than two years after the initial application is filed.

Title III: Capital Formation - Enterprise Capital Formation Act of 1992 - Amends the Internal Revenue Code to allow a deduction for gain on investments in new small business stock (seed capital) held for at least five years. Establishes special rules for such investments. Provides for determining the maximum capital gains rate for small business net capital gain or seed capital gain. Treats capital gains on the sale of such stock as a preference item for purposes of the minimum tax.

Title IV: Health Care Provisions - Subtitle A: Small Business Purchasing Groups - Defines a "qualified small employer purchasing group," for purposes of this Subtitle, as an entity that the Secretary of Health and Human Services determines: (1) is administered solely under authority and control of its member employers; (2) has as its membership solely small employers; (3) with respect to each State in which its members are located, consists of no fewer than 100 employers; (4) has member employers whose health care insurance plans are in compliance with applicable State law and model benefits plans and are not self-insured plans; (5) will be a nonprofit entity; and (6) has a board of directors with full authority to act on the part of the group.

Directs the board of directors of the small employer purchasing group to: (1) establish geographic areas within which participating carriers may offer health care insurance coverage to eligible employees and dependents; and (2) enter into contracts with qualified carriers for providing health insurance coverage to eligible employees and dependents, and to pay such carriers on at least a monthly basis at the contracted rates. Outlines provisions relating to: (1) general qualifications of carriers, including financial solvency; (2) program standards, including review of the quality and appropriateness of care covered; (3) uniformity of benefits; (4) the collection of insurance premiums from small employers; (5) notification from the board to employers of the availability of sponsored health insurance coverage from the program; and (6) conditions of participation in the program, including a requirement that an entity is a valid small employer and not formed solely to secure health insurance coverage.

Finds that qualified small employer purchasing groups organized to obtain health insurance for its employer members affect interstate commerce, and that no State law shall preempt provisions of the model benefit health insurance plan as outlined above. Amends the Internal Revenue Code to define the amount of the employer health insurance credit for a taxable year for Federal income tax purposes. Prohibits the taking of both a credit and a deduction for health insurance premiums paid under the model plan.

Subtitle B: Deductible Health Insurance Costs for Self-Employed Individuals - Amends the Internal Revenue Code to increase from 25 to 100 percent the allowable deduction of health insurance costs for self-employed individuals and their spouses and dependents. Makes such increased deduction permanent (currently ends December 31, 1992).

Subtitle C: Improvements in Health Insurance for Small Employers - Adds a new Title XXI to the Social Security Act entitled "Standards for Small Employer Health Insurance and Certification of Managed Care Plans." Treats as meeting the requirements of title XXI an insurer offering a health insurance plan to a small employer in a State on or after January 1, 1994, if: (1) the Secretary of Health and Human Services determines that the State has be established a regulatory program that provides for the application and enforcement of appropriate requirements under this title; and (2) the State has not established such a program or if the program has been decertified by the Secretary, the health plan has been certified by the Secretary as meeting the requirements of part B of title XXI. Provides an extension of the date by which a regulatory program must be adopted by a State for States requiring legislation to be passed and which has a legislature which does not meet in 1993 in a legislative session. States that requirements under title XXI shall not apply to pre-existing health insurance plans. Requires each State to report to the Secretary on the implementation and enforcement of standards with respect to health insurance plans offered to small employers. Allows State standards more stringent than the requirements of title XXI.

Directs the Secretary to require the National Association of Insurance Commissioners (NAIC) to: (1) develop specific standards for small employer health insurance plans; and (2) report to the Secretary on implementation. Directs the Secretary to develop appropriate standards if the NAIC fails to do so. Requires such standards to provide alternative standards for guaranteeing the availability of health insurance plans for all small employers in a State. Directs the Secretary to periodically review State regulatory programs, allow a State to adopt a plan of correction if necessary, and to decertify a State program and assume program responsibility, if necessary. Directs the Comptroller General to periodically audit sample State regulatory programs. Defines a "small employer" for purposes of title XXI as an employee who employs more than one but less than 51 employees on a typical business day.

Requires each health insurer to register with the applicable regulatory authority for each State in which it issues or offers a health insurance plan to small employers. Prohibits such insurer from excluding any eligible employee, or their spouse or dependent, under a plan, with the exception of waiting periods required generally under health insurance coverage. Requires insurers offering a health insurance plan to small employers in a State to meet the standards for such insurance adopted by such State. Outlines provisions concerning: (1) State standards on the guaranteed availability of small employer health insurance; (2) the State adopted of a regulatory program for such standards; (3) standards for guaranteed insurance availability for States not adopting such standards; (4) appropriate grounds for refusal by an insurer to renew, and for termination of, a health insurance plan (including nonpayment of premiums, fraud or misrepresentation, of failure to maintain minimum participation rates); (5) authority of an insurer to require minimum participation rates; (6) guaranteed renewability of such insurance unless reasons enumerated in; (4) above, occur; (7) nonrenewability of health insurance by an insurer who elects to terminate all of the health insurance plans issued to small employers in a State; and (8) a prohibition against an insurer denying, limiting, or conditioning health insurance coverage based on health status, claims experience, receipt of health care, medical history, or lack of evidence of insurability of an individual. Allows a plan offered to a small employer under this title to exclude coverage with respect to a preexisting condition, but limits the period of such exclusion to six months. Reduces such authorized preexisting condition exclusionary period by one month for each month in which as individual was already in a plan of continuous coverage with respect to particular servies on the date of initial coverage of the new plan.

Prohibits the base premium rate charged by an insurer for any block of business (all of the small employers within a health insurance plan issued by the insurer) from exceeding by more than 20 percent the base premium rate charged for any other block of business, with exceptions. Limits similarly the variation of rates charged during a rating period to small employers within the same block of business of an insurer when such employers have similar demographic characteristics.

Provides that, in establishing premium rates for health insurance plans offered to small employers: (1) an insurer making adjustments with respect to age, sex, or geography must apply such adjustments consistently across all small employers; and (2) no insurer may use a geographic area smaller than a county or a certain zip code area. Places limitations on the transfer by an insurer of employers among blocks of business, requiring employer consent. Limits to five percent over the base premium rate the percentage increase in the premium rate authorized to be charged to a small employer for a new rating period. Requires an insurer, at the time of offering a health insurance plan to a small employer, to fully disclose specified information relating to the insurer's rating practices with respect to small employers under a plan, and the insurer's right to change premium rates. Requires at least 60 days' prior notice of the renewal terms of a plan about to expire. Requires each participating insurer to file with the applicable regulatory authority a written actuarial certification of insurer compliance with standards and requirements of this title.

Outlines the basic medical benefits which must be included in a benefits package offered by an insurer to small employers in a State as part of the health insurance plan. Requires such insurer to offer a managed care plan to such small employers if the insurer offers a managed care plan in such State to employers that are not small employers. Provides for cost sharing (premiums, deductibles, copayments) and out-of-pocket limits for health insurance plans containing basic benefit packages. Preempts State-mandated benefit packages in favor of the benefits package described in the small employer health insurance plan.

Amends the Internal Revenue Code relating to taxes on group health plans to impose upon any person issuing a health insurance plan to a small employer a tax on the failure to meet at any time the applicable requirements of title XXI of the Social Security Act (as added by this Act). Directs the Secretary of Health and Human Services to determine whether a person meets such requirements. States that such tax shall be 25 percent of the gross premiums on health insurance plans issued to a small employer during a taxable year. Treats corporations which are members of the same controlled group of corporations as one person for purposes of such tax, as well as partnerships and proprietorships under common control. Waives the application of such tax where the failure to meet such requirements: (1) could not have reasonably been discovered; and (2) is corrected within 30 days of discovery. Allows the Secretary to waive all or part of such tax in the case of a failure due to reasonable cause and not to willful neglect. Makes nondeductible for income tax purposes any tax so imposed.

Direct the Comptroller General to study and report to the Congress on the standards for rating practices and the requirements for benefit packages established under the new title XXI of the Social Security Act, as well as on certain other aspects of insurance offered to small employers under this Act. Requires the Comptroller General to include as part of such report any recommendations for adjusting rating standards under title XXI to eliminate variation in premiums.

Subtitle D: Improvements in Portability of Private Health Insurance - Amends the Internal Revenue Code to impose an excise tax on any person or group health plan that fails to satisfy the preexisting condition requirements of group health insurance plans as enumerated under title XXI of the Social Security Act. Makes such tax $100 for each day of noncompliance. Outlines actions to be taken in order for a failed requirement to be considered corrected. Waives the application of such excise tax where the failure to meet such requirements: (1) could not have reasonably been discovered; and (2) is corrected within 30 days of discovery. Allows the Secretary to waive all or part of such tax in the case of a failure due to reasonable cause and not to willful neglect. Stats that group health plans: (1) may not deny, limit, or condition coverage based on health status, claims experience, receipt of health care, medical history, or lack of evidence of insurability of an individual; and (2) may exclude coverage with respect to the treatment of a preexisting condition, limiting the period of exclusion to six months. Reduces such authorized preexisting condition exclusionary period by one month for each month for each month in which an individual was already in a plan of continuous coverage with respect to particular services on the date of initial coverage in the group health plan. Requires any person who had provided previous coverage during a period of continuous coverage with respect to a covered individual to disclose to the group health plan the coverage and benefits provided to such individual.

Subtitle E: Health Care Cost Containment - Amends title XXI of the Social Security Act to add a new Part entitled "Federal Certification of Managed Care Plans." Directs the Secretary of Health and Human Services to establish a process for certification of managed care plans and utilization review programs meeting the requirements of this Part. Defines a "utilization review program" as a system of reviewing the medical necessity, appropriateness, or quality of health care services and supplies provided under a health insurance plan or a managed care plan using specified guidelines. Defines a "managed care plan" as a plan operated by a managed care entity that provides for the financing and delivery of health care services to persons enrolled in such plan through: (1) arrangements with selected provders; (2) explicit standards for the selection of participating providers; (3) organizational arrangements for ongoing quality assurance and utilization review programs; and (4) financial incentives for persons enrolled in the plan to use the participating providers and procedures provided for by the plan. Defines related terms. Directs the Secretary to: (1) establish procedures for the periodic review and recertification of qualified managed care plans and qualified utilization review programs; and (2) terminate such certification when such plan or program no longer meets the applicable requirements for certification. Permits certification through the recognition of a State licensure program or national accreditation body that establishes requirements at least equivalent to the requirements under this part.

Directs the Secretary, in consultation with the Health Care Cost Commission, to establish Federal standards for the certification of qualified managed care plans and qualified utilization review programs. Requires such standards to first established within two years after enactment of this Subtitle. Directs the Secretary to periodically review and update such standards, as appropriate. Prohibits the imposition by State law or regulation of specified limitations and restrictions on qualified managed care plans and qualified utilization review programs, with exceptions.

Extends to January 1, 1992, the date by which the Administrator of Health Care Policy and Research must develop an initial set of guidelines and standards with respect to treatments and conditions that constitute a significant portion of national health expenditures. Directs the Administrator, in consultation with the National Institute of Mental Health and mental health providers, to develop outcomes research and practice parameters for mental health services, including diagnosis and treatment of childhood attention deficit syndrome disorders and manic depression. Amends the Social Security Act with respect to research on outcomes of health cre services to change from 70 to 50 percent of authorized FY 1993 and 1994 funds for such research the amount to be obtained from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund. Increases the general authorization of FY 1992 through 1994 funds under such Act for such purpose.

Subtitle F: Medical Liability Reform - Chapter 1: Definitions and Findings - Finds that the health care and insurance industries are industries affecting interstate commerce, and that the medical malpractice litigation system throughout the United States affects interstate commerce by contributing to the high cost of health care and premiums for malpractice insurance purchased by health care providers.

Chapter 2: Expedited Medical Malpractice Settlements - Allows any claimant to bring a civil action for damages for harm caused during the provision of medical care pursuant to applicable State law, except to the extent that such law is superseded by this Chapter.

Allows any claimant to file with the claim for damages a settlement offer for a specific amount. Directs the defendant, within 60 days or the time permitted by State law to respond to pleadings, whichever is longer, to make a settlement offer of a specific amount, except that if such pleadings include a motion to dismiss under applicable State law, the defendant may tender such relief to the claimant within ten days after the determination of the court regarding such motion. Provides for time extensions in certain cases. Outlines procedures for the rejection of settlement offers by the claimant and defendant in such cases. Provides for the calculation of attorney's fees in such cases by an hourly rate.

Chapter 3: Alternative Dispute Resolution Procedures - Directs the Secretary of Health and Human Services to establish an Alternative Dispute Resolution Board of Advisors to make recommendations to the Secretary concerning the establishment of a model voluntary alternative dispute resolution program (dispute program). Directs the Secretary to approve a model dispute submitted by the Board, with any modifications that the Secretary deems appropriate.

Directs the Secretary to develop and implement a program to encourage States to develop and implement voluntary alternative dispute resolution procedures that meet the requirements of this Subtitle. Requires each State to adopt its own dispute program or the Federal program submitted by the Board to the Secretary within two years after enactment of this Act.

Provides that, with respect to a State that has a dispute program in effect, in lieu of or in addition to making a settlement offer a claimant or defendant may offer to proceed pursuant to the dispute program and its procedures. Creates a rebuttable presumption that a refusal by an offeree to proceed under a dispute program was unreasonable or not in good faith if the verdict is rendered in favor of the offeror.

Chapter 4: Uniform Standards for Medical Malpractice Cases - Applies provisions of this chapter to any medical malpractice case brought in Federal or State court and any such case resolved through a dispute program. Provides that in either such action, no person may be required to pay more than $100,000 in a single payment for future losses, but such person shall be permitted to make such payments on a periodic basis. Limits in a civil medical malpractice action the total amount of damages that may be awarded for noneconomic losses resulting from an injury to $250,000, regardless of the number of health care professionals and providers against whom the claim is brought. Reduces the total amount of damages received under such limits by any other payment that has been made to the injured individual (i.e., other insurance). Places specified limits on attorney's fees authorizee to be collected under Chapter 4 actions.

Provides that in either such action, the liability of each defendant for noneconomic damages shall be several only and not joint (requiring each such defendant to be liable only for their specific percentage of responsibility for the damages). Provides a statute of limitations with respect to such cases. Provides special medical malpractice liability provisions with respect to services provided during the delivery of a baby.

Chapter 5: Uniform Disciplinary Reforms - Requires a State to comply with requirements of this chapter within two years after enactment of this Act.

Directs each State to: (1) allocate the total amount of fees paid to the State in each year for the licensing or certification of each type of health care practitioner, or State funds equal to such amount, to the agencies responsible for the conduct of licensing and disciplinary actions with respect to such practitioners; and (2) permit the general public to be respresented on State health care practitioner disciplary boards. Provides immunity from liability for any member, consultant, witness, or other individual serving or having served on such a disciplinary board for either the board's operation or duties performed in good faith.

Requires each State to have in effect within two years after enactment of this Act a Statewide risk management program to reduce the incidence of medical malpractice which meets any promulgated regulations. Directs each State to establish a health care disciplinary trust fund to provide resources to disciplinary boards for their functions and to provide additional resouces for State consumer protection activities.

Chapter 6: Medical Products - Provides that punitive damages otherwise permitted by law shall not be awarded in an action against a health care producer of a drug or device that caused the harm complained of if the drug or device: (1) was subject to approval or premarket approval under applicable Federal regulations with respect to the safety of the formulation or performance of the drug or device, or the adequacy of the packaging or labeling of the drug or device; and (2) by the the Food and Drug Administration (FDA); or (3) is generally recognized as safe and effective pursuant to conditions established by the FDA. States that such provision shall not apply when the defendant: (1) withheld from, or misrepresented to, the FDA or other Federal agency official material and relevant information as to the performance of the drug or device; or (2) made an illegal payment to an FDA official to secure approval of the drug or device. Outlines provisions with respect to evidence, punitive damages, and positive defense to strict liability against the health care producers of the drug or device.

Subtitle G: Uniform Claims Criteria - Directs the Secretary of Health and Human Services, after consultation with group health plan entities and health care providers, to develop uniform claims criteria for use by beneficiaries and health care providers in submitting claims under this Act an under title XXI of the Social Security Act. Provides a claims criteria deadline.

Title V: Miscellaneous Provisions - Amends the Congressional Budget Act of 1974 to require the Director of the Congressional Budget Office to prepare an estimate, for that fiscal year and the succeeding four fiscal years, of the cost which would be incurred by small business in carrying out or complying with any bill or resolution which is likely to result in an average annual cost to a small business of $1,000 or more.

Amends the Internal Revenue Code to provide that Federal provisions with respect to general notice requirements of proposed rule making shall apply to all rules and regulations prescribed by the Secretary under the Code.

Directs the SBA Administrator to establish a panel to provide recommendations to the Congress for a uniform statutory definition of the terms "small business" and "small business concern." Directs the Administrator to report to the Congress on the panel's findings and recommendations.

Directs the Council of Economic Advisers, at the request of the Chief Counsel for Advocacy of the SBA, to review the appropriateness of any determination made by the head of a Federal agency with respect to the results of a regulatory flexibility analysis (the impact of a proposed rule or regulation on small entities) required before implementation of a proposed rule or regulation. Directs the Council, upon review completion, to notify the President, the Chief Counsel, and the affected agency of its review determination, and to require the affected agency to modify its analysis, if found necessary. Expresses the sense of the Congress that the Regulatory Flexibility Act, an Act designed to protect small business from excessive Federal regulation, is of significant importance to small business, and that Federal department and agency heads, as well as the Chief Counsel, must take all appropriate steps to ensure compliance with and enforcement of such Act.

Expresses the sense of the Congress that each Federal agency that issues rules, regulations, or orders which affect small business concerns or otherwise has some relationship with or affects small business concerns or that otherwise has some relationship with or affects small business should appoint one individual to serve as a small business ombudsman for that agency. Requires such ombudsman to represent the issues of small business to such agency, assist in the arbitration of disputes between agencies and small business concerns, and make certain reports to the Congress and the SBA Administrator.

Expresses the sense of the Congress that the Chief Counsel for Advocacy of the SBA should be permitted to appear as amicus curae (friend of the court) in any action or case brought in a U.S. court for the purpose of reviewing a rule.