S. 3291 — Introduced in Senate

II 114th CONGRESS 2d Session S. 3291 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. 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. 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). I Lower tax environment A Business friendly environment for disadvantaged areas 101. Short title This subtitle may be cited as the Bringing Business Back Act of 2016. 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: 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. B Capital Gains 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. C Tax benefits for Start-Ups 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. D Miscellaneous 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. 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. II Limitation on regulations 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). 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: 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). III Death Tax Repeal 301. Short title This title may be cited as the Death Tax Repeal Act of 2016. 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: 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: 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. 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 to be computed is:The tentative tax is:Not over $10,00018% 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. IV Healthcare: expanding choice and lowering costs 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. 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. 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. 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) 331/3 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. 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)). 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. 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. 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. 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. 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. 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. 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. 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. V Workforce Integrity 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. . 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. VI Incentives for energy efficiency 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. 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). 603. Make permanent the energy efficiency commercial buildings deduction Section 179D of the Internal Revenue Code of 1986 is amended by striking subsection (h). VII Guidance about new rules 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. VIII Small business provisions A Small Business General Provisions 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. 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. 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. 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. . 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. . B Small Business Goals 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. . 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. 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. 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. . C Contract Bundling 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. . 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.. 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.. 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. . D Small Business Subcontracting 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..