1.Short title; table of
contents
(a)This Act may be cited as the Act For Our Kids
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—Reductions in Federal spending
Subtitle A—Specific reductions
Sec. 101. Prohibition on television broadcasting to
Cuba.
Sec. 102. Termination of United States Court of Federal
Claims.
Sec. 103. Reduction of administrative expenses of
agencies.
Sec. 104. Elimination of Medicare Advantage regional plan
stabilization (slush) fund.
Subtitle B—Reform of Federal contracting
Part I—Elimination of fraud and abuse
Sec. 111. Prohibition of war profiteering and
fraud.
Sec. 112. Suspension and debarment of unethical
contractors.
Sec. 113. Disclosure of audit reports.
Part II—Contract matters
SUBPART A—Competition in contracting
Sec. 114. Prohibition on award of monopoly
contracts.
Sec. 115. Competition in multiple award contracts.
SUBPART B—Contract personnel matters
Sec. 116. Contractor conflicts of interest.
Sec. 117. Elimination of revolving door between Federal
personnel and contractors.
Part III—Other personnel matters
Sec. 118. Minimum requirements for political appointees holding
public contracting and safety positions.
Sec. 119. Protection of certain disclosures of information by
Federal employees.
Subtitle C—Importation of prescription drugs
Sec. 121. Short title.
Sec. 122. Findings.
Sec. 123. Repeal of certain section regarding importation of
prescription drugs.
Sec. 124. Importation of prescription drugs; waiver of certain
import restrictions.
Sec. 125. Disposition of certain drugs denied admission into
United States.
Sec. 126. Wholesale distribution of drugs; statements regarding
prior sale, purchase, or trade.
Sec. 127. Internet sales of prescription drugs.
Sec. 128. Prohibiting payments to unregistered foreign
pharmacies.
Sec. 129. Importation exemption under Controlled Substances
Import and Export Act.
Sec. 130. Severability.
Subtitle D—Royalties under offshore oil and gas
leases
Sec. 141. Price thresholds for royalty suspension
provisions.
Sec. 142. Clarification of authority to impose price thresholds
for certain lease sales.
Sec. 143. Eligibility for new leases and the transfer of
leases; conservation of resources fees.
TITLE II—Revenue enhancements
Sec. 200. Amendment of 1986
Code.
Subtitle A—Rescission of various tax cuts for millionaire
taxpayers
Sec. 201. Repeal of top income tax rate reduction for taxpayers
with $1,000,000 or more of taxable income.
Sec. 202. Elimination of the scheduled phaseout of the
limitations on personal exemptions and itemized deductions for taxpayers
earning in excess of $1,000,000.
Sec. 203. Modification of tax rates on capital gains and
dividends for taxpayers with $1,000,000 or more of taxable income.
Subtitle B—Provisions to discourage offshore shelters and
expatriation
Sec. 211. Taxation of income of controlled foreign corporations
attributable to imported property.
Sec. 212. Tax treatment of controlled foreign corporations
established in tax havens.
Sec. 213. Revision of tax rules on expatriation of
individuals.
Sec. 214. Modification of effective date of leasing provisions
of the American Jobs Creation Act of 2004.
Sec. 215. Application of rules treating inverted corporations
as domestic corporations to certain transactions occurring after March 20,
2002.
Subtitle C—Economic substance doctrine
Sec. 221. Clarification of economic substance
doctrine.
Sec. 222. Penalty for understatements attributable to
transactions lacking economic substance, etc.
Sec. 223. Denial of deduction for interest on underpayments
attributable to noneconomic substance transactions.
Subtitle D—Penalties and fines
Sec. 231. Denial of deduction for certain fines, penalties, and
other amounts.
Sec. 232. Denial of deduction for punitive damages.
Subtitle E—Duty surcharge
Sec. 241. Temporary emergency duty surcharge.
Subtitle F—Other provisions
Sec. 251. Offshore oil and gas leasing in 181 Area of Gulf of
Mexico.
Sec. 252. Transfer of surplus funds of Federal Reserve Banks to
Treasury.
Sec. 253. Permanent extension of FCC authority to auction
licenses to use radio spectrum.
Sec. 254. Travel between the United States and
Cuba.
<enum>I</enum><header>Reductions in
Federal spending</header>
<subtitle id="id5340A6040362460594229FB65ECE3DB2"><enum>A</enum><header>Specific
reductions</header>
<section id="id301D9C2B8936445AABBA2B3EE5017AE3"><enum>101.</enum><header>Prohibition on
television broadcasting to Cuba</header>
<subsection id="idA418770EFECB41F9A41268064BBCECB5"><enum>(a)</enum><header>Repeal of the
Television Broadcasting to Cuba Act</header>
<paragraph id="id3737CB2A5B8F43648A44BADD13593DD0"><enum>(1)</enum><header>In
general</header><text>The Television Broadcasting to Cuba Act (22 U.S.C. 1465aa
et seq.) is repealed.</text>
</paragraph><paragraph id="id7E2874756C6A466F9A030E56C597CFB2"><enum>(2)</enum><header>Conforming
amendment</header><text>Section 107 of the Cuban Liberty and Democratic
Solidarity (LIBERTAD) Act of 1996 (22 U.S.C. 6037) is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="id8AEA3573538A46BEA1F9672C2CB5CF50" style="OLC">
<section id="id1707121764524C89B4A662240E0A5FD8"><enum>107.</enum><header>Termination of
radio broadcasting authority</header><text display-inline="no-display-inline">Upon transmittal of a determination under
section 203(c)(3), the Radio Broadcasting to Cuba Act (22 U.S.C. 1465 et seq.)
is
repealed.</text>
</section><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id4F08A37AA3064F7DB3236F4B44E165BC"><enum>(b)</enum><header>Prohibition on
funding of television broadcasting to Cuba</header><text>Notwithstanding any
other provision of law, no funds may appropriated or otherwise made available
to carry out any program of the United States Government to provide television
broadcasting to Cuba.</text>
</subsection></section><section id="IDFB06BCC5041B4BD883E7E6A35C885ABF"><enum>102.</enum><header>Termination of
United States Court of Federal Claims</header>
<subsection id="ID9CCA88765D6E44DA8C56FC3526A4D06F"><enum>(a)</enum><header>Filing of
Claims</header><text>Notwithstanding any other provision of law, no claim may
be filed in the United States Court of Federal Claims on or after the date of
enactment of this Act.</text>
</subsection><subsection id="ID0E7E31C9812C4E889CB3082896EE80E5"><enum>(b)</enum><header>Pending
Claims</header><text>Not later than 60 days after the date of enactment of this
Act, the Chief Justice of the United States shall promulgate regulations to
carry out an orderly transfer of all claims pending before the United States
Court of Federal Claims to appropriate courts of the United States. Such
transfers shall be completed during the 1-year period beginning on the date of
enactment of this Act. Regulations under this subsection may provide for some
claims to proceed in the United States Court of Federal Claims during that
1-year period. A congressional reference case for which a report is not
transmitted to the appropriate House of Congress before the end of that 1-year
period shall not be transferred and shall terminate.</text>
</subsection><subsection id="IDC5EB4364487B44A2BDB23F35B350EC50"><enum>(c)</enum><header>Termination</header><text>Notwithstanding
any other provision of law, the United States Court of Federal Claims is
terminated effective on and after the date occurring 1 year after the date of
enactment of this Act.</text>
</subsection></section><section id="id044B87429ECB444EAE9A28CE9C2CFCA2"><enum>103.</enum><header>Reduction of
administrative expenses of agencies</header>
<subsection id="id71038C5DC8A84F149F8E45D14A2A88EE"><enum>(a)</enum><header>Requirement To
reduce expenses</header><text>An agency (as defined under section 101 of title
31, United States Code) shall not make, or obligate to make, expenditures for
administrative expenses—</text>
<paragraph id="id0C5C030346B94C7986E134873362F3FB"><enum>(1)</enum><text>in the case of
each of the fiscal years 2008 through 2012, in an aggregate amount greater than
95 percent of the amount of such expenses for the preceding fiscal year
(determined after application of this section); and</text>
</paragraph><paragraph id="id003CAE085B5949B69647A093515F6D9D"><enum>(2)</enum><text>in the case of
fiscal year 2013 and each fiscal year thereafter, in an aggregate amount
greater than the aggregate amount of such expenses for fiscal year 2012
(determined after application of this section).</text>
</paragraph></subsection><subsection id="id1BFB3652A72143F6A58528BA48FF88F5"><enum>(b)</enum><header>Exception for
program expenses</header><text>Nothing in this section shall be treated as
requiring any reduction in program expenses.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id41A19D2EF7E64FB299A14C5BA72BDAC3"><enum>(c)</enum><header>Identification
of affected expenses</header><text>The Director of the Office of Management and
Budget shall, not later than September 1, 2007, establish guidelines for the
determination of what expenses constitute administrative expenses or program
expenses for purposes of this section. The guidelines shall identify specific
expenses, and classes of expenses, that are to be treated as administrative
expenses or program expenses.</text>
</subsection></section><section id="id29B65F2861254D9495C8826A71592968"><enum>104.</enum><header>Elimination of
Medicare Advantage regional plan stabilization (slush) fund</header>
<subsection id="ID458CFF35053A44CD814947025FC6E3F2"><enum>(a)</enum><header>Elimination</header>
<paragraph id="idDD0C22803C3848B0B4C8177E9A3A0B59"><enum>(1)</enum><header>In
general</header><text>Subsection (e) of section 1858 of the Social Security Act
(42 U.S.C. 1395w–27a) is repealed.</text>
</paragraph><paragraph id="IDD40D41DAD5564FDBB0CAD03D0BF6B8D0"><enum>(2)</enum><header>Conforming
Amendment</header><text>Section 1858(f)(1) of the Social Security Act (42
U.S.C. 1395w–27a(f)(1)) is amended by striking <quote>subject to subsection
(e),</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID6B4876D5F44341ECB1D3EC0EB73CD32B"><enum>(b)</enum><header>Effective
Date</header><text>The amendments made by this section shall take effect on the
date of enactment of this Act.</text>
</subsection></section></subtitle><subtitle id="idC48C1718570B4C5EB21A9BE41BFB0C8D"><enum>B</enum><header>Reform of Federal
contracting</header>
<part id="id9B5AC5F3E9374401AEE2FB005EE17415"><enum>I</enum><header>Elimination of
fraud and abuse</header>
<section id="IDD1E9FD337BAA44DEA1F4524FFA267BA0"><enum>111.</enum><header>Prohibition of
war profiteering and fraud</header>
<subsection id="IDA5017E69661D480800006F5DA9DDD800"><enum>(a)</enum><header>Prohibition</header>
<paragraph id="ID4B8F29868E38486D9EF466DF276F00EB"><enum>(1)</enum><header>In
general</header><text>Chapter 47 of title 18, United States Code, is amended by
adding at the end the following:</text>
<quoted-block id="ID2537536DC32049839337B4947F20E372" style="USC">
<section id="ID87DB64ACCFE94122952D486CCAB07474"><enum>1039.</enum><header>War
profiteering and fraud </header>
<subsection id="IDB252E1ED1F9B42E99B4DFD6FAE3840A4"><enum>(a)</enum><header>Prohibition</header>
<paragraph id="IDF52EE04A4CA94539A7363157A42C85BD"><enum>(1)</enum><header>In
general</header><text>Whoever, in any matter involving a contract or the
provision of goods or services, directly or indirectly, in connection with a
war or military action knowingly and willfully—</text>
<subparagraph id="ID049195E847CA461F915E32B67F61D871"><enum>(A)</enum><text>executes or
attempts to execute a scheme or artifice to defraud the United States or the
entity having jurisdiction over the area in which such activities occur;</text>
</subparagraph><subparagraph id="IDD9A4D1B4A9034C34BBC0C5E027FB734E"><enum>(B)</enum><text>falsifies,
conceals, or covers up by any trick, scheme, or device a material fact;</text>
</subparagraph><subparagraph id="IDC9CDBDDAE36B47BA826CD30067004907"><enum>(C)</enum><text>makes any
materially false, fictitious, or fraudulent statements or representations, or
makes or uses any materially false writing or document knowing the same to
contain any materially false, fictitious, or fraudulent statement or entry;
or</text>
</subparagraph><subparagraph id="ID5088DFD4608B4992A0259385A2F7D1A4"><enum>(D)</enum><text>materially
overvalues any good or service with the specific intent to excessively profit
from the war or military action;</text>
</subparagraph><continuation-text continuation-text-level="paragraph">shall be
fined under paragraph (2), imprisoned not more than 20 years, or both.</continuation-text></paragraph><paragraph id="ID5EB10BEE3B1047F685E53F1E917EA800"><enum>(2)</enum><header>Fine</header><text>A
person convicted of an offense under paragraph (1) may be fined the greater
of—</text>
<subparagraph id="ID21A5092A20A547D2BA4344AC28603178"><enum>(A)</enum><text>$1,000,000;
or</text>
</subparagraph><subparagraph id="ID0200AA4CEC1E42489BCCACF63417FF60"><enum>(B)</enum><text>if such person
derives profits or other proceeds from the offense, not more than twice the
gross profits or other proceeds.</text>
</subparagraph></paragraph></subsection><subsection id="IDD89AFA04B19445E5ACD24733006D6B43"><enum>(b)</enum><header>Extraterritorial
jurisdiction</header><text>There is extraterritorial Federal jurisdiction over
an offense under this section.</text>
</subsection><subsection id="ID590F8DAF2EBD4195A418C3A9D6E28E08"><enum>(c)</enum><header>Venue</header><text>A
prosecution for an offense under this section may be brought—</text>
<paragraph id="ID8B58BBE1F728437694F83E257465A5D3"><enum>(1)</enum><text>as authorized by
chapter 211 of this title;</text>
</paragraph><paragraph id="ID0671522D0FCA4736815B45031F3FE256"><enum>(2)</enum><text>in any district
where any act in furtherance of the offense took place; or</text>
</paragraph><paragraph id="ID3398068E7CF8444FA824E72F71DC4374"><enum>(3)</enum><text>in any district
where any party to the contract or provider of goods or services is
located.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="IDD89B5978157E4316B3D66B4E5E6F3200"><enum>(2)</enum><header>Clerical
amendment</header><text>The table of sections for chapter 47 of title 18,
United States Code, is amended by adding at the end the following:</text>
<quoted-block id="ID9A50AFB6D79D4F5099E5D4C7F500AB79" style="USC">
<toc regeneration="no-regeneration">
<toc-entry level="section">1039. War profiteering and
fraud.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="IDB1CD93C156874A2F8ED28DE0A449A06D"><enum>(b)</enum><header>Civil
forfeiture</header><text>Section 981(a)(1)(C) of title 18, United States Code,
is amended by inserting <quote>1039,</quote> after <quote>1032,</quote>.</text>
</subsection><subsection id="ID7E41C63D7A564550B900DB36BC1DD72D"><enum>(c)</enum><header>Criminal
forfeiture</header><text>Section 982(a)(2)(B) of title 18, United States Code,
is amended by striking <quote>or 1030</quote> and inserting <quote>1030, or
1039</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDD46EC18EEB25476B969365784892D320"><enum>(d)</enum><header>Treatment under
money laundering offense</header><text>Section 1956(c)(7)(D) of title 18,
United States Code, is amended by inserting the following: <quote>, section
1039 (relating to war profiteering and fraud)</quote> after <quote>liquidating
agent of financial institution),</quote>.</text>
</subsection></section><section id="ID84D58812077F49C3BEC7D360CCCA3B03"><enum>112.</enum><header>Suspension and
debarment of unethical contractors</header>
<subsection id="IDA27ECEE9A60D4265BB35D232006634DD"><enum>(a)</enum><header>In
General</header><text>Not later than 90 days after the date of enactment of
this Act, the Federal Acquisition Regulation issued pursuant to section 25 of
the Office of Federal Procurement Policy Act (41 U.S.C. 421) shall be revised
to provide that no prospective contractor shall be considered to have a
satisfactory record of integrity and business ethics if it—</text>
<paragraph id="ID87ADAEBC998B44349E4057844A3B3D25"><enum>(1)</enum><text>has exhibited a
pattern of overcharging the Government under Federal contracts; or</text>
</paragraph><paragraph id="ID0BAF2EF7E88947CD8FF3F57FD2C31987"><enum>(2)</enum><text>has exhibited a
pattern of failing to comply with the law, including tax, labor and employment,
environmental, antitrust, and consumer protection laws.</text>
</paragraph></subsection><subsection id="IDF3292E96559747A192E97C892ADF011E"><enum>(b)</enum><header>Effective
Date</header><text>The revised regulation required by this section shall apply
with respect to all contracts for which solicitations are issued after the date
that is 90 days after the date of the enactment of this Act.</text>
</subsection></section><section id="id7997D997C2534C248621950B7DB55A98"><enum>113.</enum><header>Disclosure of
audit reports</header>
<subsection id="id5E381EE2C9F84B3A89CD77940B01E675"><enum>(a)</enum><header>Disclosure of
information to Congress</header>
<paragraph id="IDff5906656b8b428cababdab5cd6e044a"><enum>(1)</enum><header>In
general</header><text>The head of each executive agency shall maintain a list
of audit reports issued by the agency during the current and previous calendar
years that—</text>
<subparagraph id="ID1acf585734ba40d98503abedec2e2bed"><enum>(A)</enum><text>describe
significant contractor costs that have been identified as unjustified,
unsupported, questioned, or unreasonable under any contract, task or delivery
order, or subcontract; or</text>
</subparagraph><subparagraph id="ID5a484f4aa05c4ddab02883cfa266b4c4"><enum>(B)</enum><text>identify
significant or substantial deficiencies in any business system of any
contractor under any contract, task or delivery order, or subcontract.</text>
</subparagraph></paragraph><paragraph id="ID9218d01f898949e48c1716108911ff44"><enum>(2)</enum><header>Submission of
individual audits</header><text>The head of each executive agency shall
provide, within 14 days of a request in writing by the chairman or ranking
member of a committee of jurisdiction, a full and unredacted copy of—</text>
<subparagraph id="id6A8F2D195F1E48699D49126B04D1F474"><enum>(A)</enum><text>the current
version of the list maintained pursuant to paragraph (1); or</text>
</subparagraph><subparagraph id="id5524108B44884CC592FC7FE7C7C19B0F"><enum>(B)</enum><text>any audit or
other report identified on such list.</text>
</subparagraph></paragraph></subsection><subsection id="id55C618EC42E04F10909B6AFDDE45CF59"><enum>(b)</enum><header>Publication of
information on Federal contractor penalties and violations</header>
<paragraph id="idEF8DC0096E8F465B8EA26B91F88F6F7A"><enum>(1)</enum><header>In
general</header><text>Not later than 180 days after the date of the enactment
of this Act, the Federal Procurement Data System shall be modified to
include—</text>
<subparagraph id="id5EC030D7FCE347B598F3BDBAE3A1444A"><enum>(A)</enum><text>information on
instances in which any major contractor has been fined, paid penalties or
restitution, settled, plead guilty to, or had judgments entered against it in
connection with allegations of improper conduct; and</text>
</subparagraph><subparagraph id="idDC3B58098A2C4BC58F799452297F1743"><enum>(B)</enum><text>information on
all sole source contract awards in excess of $2,000,000 entered into by an
executive agency.</text>
</subparagraph></paragraph><paragraph id="id27335E773F414E40BFBF3E3FFBB579CC"><enum>(2)</enum><header>Publicly
available website</header><text>The information required by paragraph (1) shall
be made available through the publicly available website of the Federal
Procurement Data System.</text>
</paragraph></subsection></section></part><part id="id9B239ED20DE441A7B9E4A53E1E103EA1"><enum>II</enum><header>Contract
matters</header>
<subpart id="idDFF3E4D086B141A18A7A9DE5796CE572"><enum>A</enum><header>Competition in
contracting</header>
<section id="ID215C1A09F6524FA8A6AB45F002F59DC7"><enum>114.</enum><header>Prohibition on
award of monopoly contracts</header>
<subsection id="ID835601D4E02647848F88C9A148516030"><enum>(a)</enum><header>Civilian Agency
Contracts</header><text>Section 303H(d) of the <act-name parsable-cite="FPASA">Federal Property and Administrative Services Act of
1949</act-name> (41 U.S.C. 253h(d)) is amended by adding at the end the
following new paragraph:</text>
<quoted-block act-name="Federal Property and Administrative Services Act of 1949" id="IDC607B02D18DE4E66BCAD464FF0152614" style="OLC">
<paragraph id="IDF9F1A1E50FF14E68A9606BB45A69004C" indent="up1"><enum>(4)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="id7643C71AB22A43B3AD5AB2AC266B65FF"><enum>(A)</enum><text>No task or delivery
order contract in an amount estimated to exceed $100,000,000 (including all
options) may be awarded to a single contractor unless the head of the agency
determines in writing that—</text>
<clause id="ID1B7168390E4F4207A86FA822833B9825" indent="up1"><enum>(i)</enum><text>because of the size, scope, or method
of performance of the requirement, it would not be practical to award multiple
task or delivery order contracts;</text>
</clause><clause id="IDC742944908A5419DB69D7A80C1AF8204" indent="up1"><enum>(ii)</enum><text>the task orders expected under the
contract are so integrally related that only a single contractor can reasonably
perform the work; or</text>
</clause><clause id="idD32C9B91FF8D427C9C6DB9AEB7412F51" indent="up1"><enum>(iii)</enum><text>for any other reason, it is
necessary in the public interest to award the contract to a single
contractor.</text>
</clause></subparagraph><subparagraph id="id7594C0D7703D4A35A68E4EFC565BB4E8" indent="up1"><enum>(B)</enum><text>The head of the agency shall notify
Congress within 30 days of any determination under subparagraph
(A)(iii).</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID1731365750F94873AB04293113E777F5"><enum>(b)</enum><header>Defense
Contracts</header><text>Section 2304a(d) of title 10, United States Code, is
amended by adding at the end the following new paragraph:</text>
<quoted-block id="ID78C1EA0E4DC149898A0A7FF586961D32" style="OLC">
<paragraph id="IDDE3735736C4741D09315522B5B13244F" indent="up1"><enum>(4)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="IDE9D331D1A19046B8ABF996DCBBC98733"><enum>(A)</enum><text>No task or delivery
order contract in an amount estimated to exceed $100,000,000 (including all
options) may be awarded to a single contractor unless the head of the agency
determines in writing that—</text>
<clause id="ID87B763E0BA3C4B0784B148EDC06FB8C9" indent="up1"><enum>(i)</enum><text>because of the size, scope, or method
of performance of the requirement, it would not be practical to award multiple
task or delivery order contracts;</text>
</clause><clause id="IDBB7AFCDBB16741E9886DD535B32916B1" indent="up1"><enum>(ii)</enum><text>the task orders expected under the
contract are so integrally related that only a single contractor can reasonably
perform the work; or</text>
</clause><clause id="id9127FEB68DD945649F6DCEB48AC474F5" indent="up1"><enum>(iii)</enum><text>for any other reason, it is
necessary in the public interest to award the contract to a single
contractor.</text>
</clause></subparagraph><subparagraph id="id102DDD7F85734ED78822D8E53FDA5D8C" indent="up1"><enum>(B)</enum><text>The head of the agency shall notify
Congress within 30 days of any determination under subparagraph
(A)(iii).</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="IDBC3D07DF4E834E1ABA83B6E3ED815920"><enum>115.</enum><header>Competition in
multiple award contracts</header>
<subsection id="IDF2F9991414AD4CD9A38DE2EB6862D1E7"><enum>(a)</enum><header>Regulations
Required</header><text>Not later than 180 days after the date of the enactment
of this section, the Federal Acquisition Regulation shall be revised to require
competition in the purchase of goods and services by each executive agency
pursuant to multiple award contracts.</text>
</subsection><subsection id="ID1DF0DC7177D4433FB3BA1D672FFB436B"><enum>(b)</enum><header>Content of
Regulations</header><paragraph commented="no" display-inline="yes-display-inline" id="ID6133FA6A2DE84946BC9CE9279CF2CE80"><enum>(1)</enum><text>The regulations
required by subsection (a) shall provide, at a minimum, that each individual
purchase of goods or services in excess of $1,000,000 that is made under a
multiple award contract shall be made on a competitive basis unless a
contracting officer of the executive agency—</text>
<subparagraph id="IDB9E494A9A1AA4EE3B4A143B2D09E553A" indent="up1"><enum>(A)</enum><text>waives the requirement on the basis of
a determination that—</text>
<clause id="ID721FF2D91ABB4433B68097B574CAE068"><enum>(i)</enum><text>one of the circumstances described
in paragraphs (1) through (4) of section 303J(b) of the Federal Property and
Administrative Services Act of 1949 (41 U.S.C. 253j(b)) applies to such
individual purchase; or</text>
</clause><clause id="IDAE906F2CC85C4E7081598D6089962625"><enum>(ii)</enum><text>a statute expressly authorizes or
requires that the purchase be made from a specified source; and</text>
</clause></subparagraph><subparagraph id="ID5F086A791A354FE8A39E55A43948024F" indent="up1"><enum>(B)</enum><text>justifies the determination in
writing.</text>
</subparagraph></paragraph><paragraph id="ID32B537B28781424CBCA2822229B43698" indent="up1"><enum>(2)</enum><text>For purposes of this subsection, an
individual purchase of goods or services is made on a competitive basis only if
it is made pursuant to procedures that—</text>
<subparagraph id="ID658A27CD118D4AD69D3D3501F6F4E30B"><enum>(A)</enum><text>require fair notice of the intent to
make that purchase (including a description of the work to be performed and the
basis on which the selection will be made) to be provided to all contractors
offering such goods or services under the multiple award contract; and</text>
</subparagraph><subparagraph id="ID4ACBD67363EB4F95BE87F4BC27C2A784"><enum>(B)</enum><text>afford all contractors responding to
the notice a fair opportunity to make an offer and have that offer fairly
considered by the official making the purchase.</text>
</subparagraph></paragraph><paragraph id="IDFB3F6599CFAC4A76AB694B73AC9E6109" indent="up1"><enum>(3)</enum><text>Notwithstanding paragraph (2), notice
may be provided to fewer than all contractors offering such goods or services
under a multiple award contract described in subsection (c)(2)(A) if notice is
provided to as many contractors as practicable.</text>
</paragraph><paragraph id="ID84FD4EBF8FE74C578E796FE9F34AFADD" indent="up1"><enum>(4)</enum><text>A purchase may not be made pursuant
to a notice that is provided to fewer than all contractors under paragraph (3)
unless—</text>
<subparagraph id="ID7CAABFA4A4BF46C9B85FE239F809AB20"><enum>(A)</enum><text>offers were received from at least
three qualified contractors; or</text>
</subparagraph><subparagraph id="ID27F05114E7D542289F2CD239DFB3497C"><enum>(B)</enum><text>a contracting officer of the executive
agency determines in writing that no additional qualified contractors were able
to be identified despite reasonable efforts to do so.</text>
</subparagraph></paragraph></subsection><subsection id="IDC75C782E2B664BBCA76807B22EBD9E29"><enum>(c)</enum><header>Definitions</header><text>In
this section:</text>
<paragraph id="ID657213B8099D4489BE225347C0001E41"><enum>(1)</enum><text>The term
<term>individual purchase</term> means a task order, delivery order, or other
purchase.</text>
</paragraph><paragraph id="ID2108FBD1A1B442DDB0369CF999C4FA1E"><enum>(2)</enum><text>The term
<term>multiple award contract</term> means—</text>
<subparagraph id="IDE413DE81DB8D4121A8C3A92006BEBCCC"><enum>(A)</enum><text>a contract that
is entered into by the Administrator of General Services under the multiple
award schedule program referred to in section 309(b)(3) of the Federal Property
and Administrative Services Act of 1949 (41 U.S.C. 259(b)(3));</text>
</subparagraph><subparagraph id="ID7EF1D7F9E750436C860DECDBF11ABB4A"><enum>(B)</enum><text>a multiple award
task order contract that is entered into under the authority of sections 2304a
through 2304d of title 10, United States Code, or sections 303H through 303K of
the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253h
through 253k); and</text>
</subparagraph><subparagraph id="ID507C7F390F834C04B7F931EAA4D2C301"><enum>(C)</enum><text>any other
indefinite delivery, indefinite quantity contract that is entered into by the
head of an executive agency with two or more sources pursuant to the same
solicitation.</text>
</subparagraph></paragraph></subsection><subsection id="IDE1E5FEEB1A7C4205B43030941DCC8BB9"><enum>(d)</enum><header>Applicability</header><text>The
revisions to the Federal Acquisition Regulation pursuant to subsection (a)
shall take effect not later than 180 days after the date of the enactment of
this Act, and shall apply to all individual purchases of goods or services that
are made under multiple award contracts on or after the effective date, without
regard to whether the multiple award contracts were entered into before, on, or
after such effective date.</text>
</subsection><subsection id="ID13A09A1C3B5F4C8A9F853423ABA5CEBD"><enum>(e)</enum><header>Conforming
Amendments to Defense Contract Provision</header><text>Section 803 of the
National Defense Authorization Act for Fiscal Year 2002 (Public Law 107–107; 10
U.S.C. 2304 note) is amended as follows:</text>
<paragraph id="ID644A4CBF967941F681C26318D66C7598"><enum>(1)</enum><header>Goods
covered</header><subparagraph commented="no" display-inline="yes-display-inline" id="idD16E705DF78247CC9038BE080E857085"><enum>(A)</enum><text>The section heading is
amended by inserting <quote><header-in-text>goods or</header-in-text></quote>
before <quote><header-in-text>services</header-in-text></quote>.</text>
</subparagraph><subparagraph id="ID43F8456CAF0E4B68AC53B12EA0DA8133" indent="up1"><enum>(B)</enum><text>Subsection (a) is amended by inserting
<quote>goods and</quote> before <quote>services</quote>.</text>
</subparagraph><subparagraph id="ID09878F91593948D3B2E7B70886E84BAB" indent="up1"><enum>(C)</enum><text>The following provisions are amended
by inserting <quote>goods or</quote> before <quote>services</quote> each place
it appears:</text>
<clause id="ID836116C63C1F4B41BB45CA6D06811683"><enum>(i)</enum><text>Paragraphs (1), (2), and (3) of
subsection (b).</text>
</clause><clause id="ID939A9ED3C89F4405806496934F75E51D"><enum>(ii)</enum><text>Subsection (d).</text>
</clause></subparagraph><subparagraph id="IDDB87BFF38F5D4908AF9DA52B9BD7BDF1" indent="up1"><enum>(D)</enum><text>Such section is amended by adding at
the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id7AE4032254CB45F8A1701D87662D49EB" style="OLC">
<subsection id="IDD49AE664813A4C39B0A48180BD7E356F"><enum>(e)</enum><header>Applicability
to Goods</header><text>The Secretary shall revise the regulations promulgated
pursuant to subsection (a) to cover purchases of goods by the Department of
Defense pursuant to multiple award contracts. The revised regulations shall
take effect in final form not later than 180 days after the date of the
enactment of this subsection and shall apply to all individual purchases of
goods that are made under multiple award contracts on or after the effective
date, without regard to whether the multiple award contracts were entered into
before, on, or after such effective
date.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection id="idD4CA3C61AB3447CDAF9806E2DE58B0C0"><enum>(f)</enum><header>Protest Rights
for Certain Awards</header>
<paragraph id="id61DB530B14EE46D2B7EC634C1E02A16F"><enum>(1)</enum><header>Civilian agency
contracts</header><text>Section 303J(d) of the Federal Property and
Administrative Services Act (41 U.S.C. 253j(d)) is amended by inserting
<quote>with a value of less than $500,000</quote> after <quote>task or delivery
order</quote>.</text>
</paragraph><paragraph id="id8779773054904505BCC65FA716335574"><enum>(2)</enum><header>Defense
contracts</header><text>Section 2304c(d) of title 10, United States Code, is
amended by inserting <quote>with a value of less than $500,000</quote> after
<quote>task or delivery order</quote>.</text>
</paragraph></subsection></section></subpart><subpart id="id9C55D6B078954658BCFBE645A286AB30"><enum>B</enum><header>Contract
personnel matters</header>
<section id="ID72F355CA73274B7DBE3C7E97B78807DA"><enum>116.</enum><header>Contractor
conflicts of interest</header>
<subsection id="IDB28A8BF0C9AC43BA933948221FA09EE4"><enum>(a)</enum><header>Prohibition on
Contracts Relating to Inherently Governmental Functions</header><text>The head
of an agency may not enter into a contract for the performance of any
inherently governmental function.</text>
</subsection><subsection id="ID312A56ABB4554CE0AB94E633BEA9034D"><enum>(b)</enum><header>Prohibition on
Contracts for Contract Oversight</header>
<paragraph id="id3212A9E0A9484889A093129DB94C91CF"><enum>(1)</enum><header>Prohibition</header><text>The
head of an agency may not enter into a contract for the performance of
acquisition functions closely associated with inherently governmental functions
with any entity unless the head of the agency determines in writing
that—</text>
<subparagraph id="id1A3E150D19D64C9FAD8F901C3FC254FA"><enum>(A)</enum><text>neither that
entity nor any related entity will be responsible for performing any of the
work under a contract which the entity will help plan, evaluate, select a
source, manage or oversee; and</text>
</subparagraph><subparagraph id="id17AFA8D7C739455A9DF4F4C20F03BE64"><enum>(B)</enum><text>the agency has
taken appropriate steps to prevent or mitigate any organizational conflict of
interest that may arise because the entity—</text>
<clause id="ID6F364F86B0114426A6CC5E364CCF2B9C"><enum>(i)</enum><text>has
a separate ongoing business relationship, such as a joint venture or contract,
with any of the contractors to be overseen;</text>
</clause><clause id="ID6AE7B542F1DF4A5DBFFEDE4075B15160"><enum>(ii)</enum><text>would be placed
in a position to affect the value or performance of work it or any related
entity is doing under any other Government contract;</text>
</clause><clause id="ID5B38FD9B9B0E46F9ABD4946D2B1F6B66"><enum>(iii)</enum><text>has a reverse
role with the contractor to be overseen under one or more separate Government
contracts; or</text>
</clause><clause id="IDB1AE447AC8FF487996F706BCBF704D15"><enum>(iv)</enum><text>has some other
relationship with the contractor to be overseen that could reasonably appear to
bias the contractor’s judgment.</text>
</clause></subparagraph></paragraph><paragraph id="ID3148CD8776874988B2D5EEBCAEDF96DA"><enum>(2)</enum><header>Related entity
defined</header><text>In this subsection, the term <term>related entity</term>,
with respect to a contractor, means any subsidiary, parent, affiliate, joint
venture, or other entity related to the contractor.</text>
</paragraph></subsection><subsection id="idC3A859E793A04E568268EC2CACA5160B"><enum>(c)</enum><header>Definitions</header><text>In
this section:</text>
<paragraph id="id47480B8D61D94C7A81CD3C38C15813AB"><enum>(1)</enum><text>The term
<term>inherently governmental functions</term> has the meaning given to such
term in part 7.5 of the Federal Acquisition Regulation.</text>
</paragraph><paragraph id="id3097EE1019BF497F92C576B0A0B1076B"><enum>(2)</enum><text>The term
<term>functions closely associated with governmental functions</term> means the
functions described in section 7.503(d) of the Federal Acquisition
Regulation.</text>
</paragraph><paragraph id="idCF35B783C0464CEC850E930800E93FCB"><enum>(3)</enum><text>The term
<term>organizational conflict of interest</term> has the meaning given such
term in part 9.5 of the Federal Acquisition Regulation.</text>
</paragraph></subsection><subsection id="ID9B8AC481E41E495CA72A84E9FB713D10"><enum>(d)</enum><header>Effective Date
and Applicability</header><text>This section shall take effect on the date of
the enactment of this Act and shall apply to—</text>
<paragraph id="ID6C27FAECA67B4EA58353179B2BCFA36A"><enum>(1)</enum><text>contracts entered
into on or after such date;</text>
</paragraph><paragraph id="ID35001391C6CB4C9F9C4202E701B46011"><enum>(2)</enum><text>any task or
delivery order issued on or after such date under a contract entered into
before, on, or after such date; and</text>
</paragraph><paragraph id="ID28F01E978A8140F3B7B9CA63C841F802"><enum>(3)</enum><text>any decision on
or after such date to exercise an option or otherwise extend a contract for the
performance of a function relating to contract oversight regardless of whether
such contract was entered into before, on, or after such date.</text>
</paragraph></subsection></section><section id="idFD4A41BA9ED5428EA2C9AD2EFAD5457C"><enum>117.</enum><header>Elimination of
revolving door between Federal personnel and contractors</header>
<subsection id="id354E74BB2AFB4A759E4EF0DC2654F1E4"><enum>(a)</enum><header>Elimination of
loopholes allowing former federal officials To accept compensation from
contractors or related entities</header>
<paragraph id="id22622C6270984668A64998B9996D4D04"><enum>(1)</enum><header>In
general</header><text>Paragraph (1) of subsection (d) of section 27 of the
Office of Federal Procurement Policy Act (41 U.S.C. 423) is amended—</text>
<subparagraph id="idC07B3722441D4580BC45C7DD11620DD6"><enum>(A)</enum><text>by striking
<quote>or consultant</quote> and inserting <quote>consultant, lawyer, or
lobbyist</quote>;</text>
</subparagraph><subparagraph id="id2E68C14297B7462599D518832CB60445"><enum>(B)</enum><text>by striking
<quote>one year</quote> and inserting <quote>two years</quote>; and</text>
</subparagraph><subparagraph id="id2D384E6C8CC84D2EB8D8EEE3AC121117"><enum>(C)</enum><text>in subparagraph
(C), by striking <quote>personally made for the Federal agency—</quote> and
inserting <quote>participated personally and substantially in—</quote>.</text>
</subparagraph></paragraph><paragraph id="idE1829010AB7041A2BE1B0A92F427A72D"><enum>(2)</enum><header>Definition</header><text>Paragraph
(2) of such subsection is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id363238494A7941E5BCA2434C15A46015" style="OLC">
<paragraph id="idC8B49F145EE94E21BA4C3C91A6233131" indent="up1"><enum>(2)</enum><text>For purposes of paragraph (1), the
term <term>contractor</term> includes any division, affiliate, subsidiary,
parent, joint venture, or other related entity of a
contractor.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="id3ED26C7C867447BFA11A53F60C3BD59D"><enum>(b)</enum><header>Prohibition on
award of government contracts to former employers</header><text>Such section is
further amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="idCA229D143F07467D839303E7D273089C" style="OLC">
<subsection id="idC81D100CF65244E7AD5756B3A00075F3"><enum>(i)</enum><header>Prohibition on
involvement by certain former contractor employees in
procurements</header><text>A former employee of a contractor who becomes an
employee of the Federal Government shall not be personally and substantially
involved with any Federal agency procurement involving the employee's former
employer, including any division, affiliate, subsidiary, parent, joint venture,
or other related entity of the former employer, for a period of two years
beginning on the date on which the employee leaves the employment of the
contractor unless the designated agency ethics officer for the agency
determines in writing that the government's interest in the former employee's
participation in a particular procurement outweighs any appearance of
impropriety.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idE1C215B89EA74F138733E25B4C316F0F"><enum>(c)</enum><header>Requirement for
federal procurement officers To disclose job offers made to
relatives</header><text>Subsection (c)(1) of such section is amended by
inserting after <quote>that official</quote> the following: <quote>, or for a
relative of that official (as defined in section 3110 of title 5, United States
Code),</quote>.</text>
</subsection><subsection id="id92F3F3D2AD8844D299D39F5B7F17405E"><enum>(d)</enum><header>Additional
criminal penalties</header><text>Paragraph (1) of subsection (e) of such
section is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id4018BBFF6A8C4127BEA0F1F627C1CF38" style="OLC">
<paragraph id="id29419901CAF84245B9560DB1D8D86B47"><enum>(1)</enum><header>Criminal
penalties</header><text>Whoever engages in conduct constituting a violation
of—</text>
<subparagraph id="id90C536C87C5E4FE1A344E53666D6998C"><enum>(A)</enum><text>subsection (a) or
(b) for the purpose of either—</text>
<clause id="id1607E578B1C34BD5A09A68B8647E3B0C"><enum>(i)</enum><text>exchanging the
information covered by such subsection for anything of value, or</text>
</clause><clause id="id60C348D138AB4CF1BE5779C720CABED4"><enum>(ii)</enum><text>obtaining or
giving anyone a competitive advantage in the award of a Federal agency
procurement contract; or</text>
</clause></subparagraph><subparagraph id="id8F6D736846E64EF5BDBA3A9FD28B53BA"><enum>(B)</enum><text>subsection (c) or
(d);</text>
</subparagraph><continuation-text continuation-text-level="paragraph">shall be
imprisoned for not more than 5 years, fined as provided under title 18, Untied
States Code, or
both.</continuation-text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id9C6A11F24E374135B09215CF989C8A16"><enum>(e)</enum><header>Regulations</header><text>Such
section is further amended by adding at the end the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="id4EBF0D0614B84BF4BC3D039CD9407EE0" style="OLC">
<subsection id="idE66F7952A230477BA98DD3566E24B19E"><enum>(j)</enum><header>Regulations</header><text>The
Director of the Office of Government Ethics, in consultation with the
Administrator, shall—</text>
<paragraph id="idBDB565D711FE465290BFFBF2C6DA3CED"><enum>(1)</enum><text>promulgate
regulations to carry out and ensure the enforcement of this section; and</text>
</paragraph><paragraph id="id937A3AD56894432A920974AE52452DB3"><enum>(2)</enum><text>monitor and
investigate individual and agency compliance with this
section.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section></subpart></part><part id="id9B1CA90D329749E4A0B7B844FC1B589B"><enum>III</enum><header>Other personnel
matters</header>
<section id="HC1908569C811426F0099EDB7B22D514F"><enum>118.</enum><header>Minimum
requirements for political appointees holding public contracting and safety
positions</header>
<subsection id="HB353EA78A4AF4A5D9E28918435A96722"><enum>(a)</enum><header>In
general</header><text>A position specified in subsection (b) may not be held by
any political appointee who does not meet the requirements of subsection
(c).</text>
</subsection><subsection id="id78624C515A344C48A8E008F4E19798F8"><enum>(b)</enum><header>Specified
positions</header><text>A position specified in this subsection is any position
as follows:</text>
<paragraph id="idC05723D7083A4D118C0D995C600C5AEA"><enum>(1)</enum><text>A public
contracting position.</text>
</paragraph><paragraph id="idB110CDC6A9304805BCB15F880FBEFEA9"><enum>(2)</enum><text>A public safety
position.</text>
</paragraph></subsection><subsection id="H61B6C4EF5F6A4E4AAAB3D32B373079E7"><enum>(c)</enum><header>Minimum
requirements</header><text display-inline="yes-display-inline">An individual
shall not, with respect to any position, be considered to meet the requirements
of this subsection unless such individual—</text>
<paragraph id="H96188038802E42D0AB4F25867EA3CE6"><enum>(1)</enum><text>has academic,
management, and leadership credentials in one or more areas relevant to such
position;</text>
</paragraph><paragraph id="H73CA059B4EBF44E195A233B179A48E59"><enum>(2)</enum><text>has a superior
record of achievement in one or more areas relevant to such position;</text>
</paragraph><paragraph id="H405E2C41CC0546DEA3482CECEB03D500"><enum>(3)</enum><text>has training and
expertise in one or more areas relevant to such position; and</text>
</paragraph><paragraph id="HF18E2D16ED4E4A84B24CE045FAF9CB19"><enum>(4)</enum><text display-inline="yes-display-inline">has not, within the 2-year period ending on
the date of such individual’s nomination for or appointment to such position,
been a lobbyist for any entity or other client that is subject to the authority
of the agency within which, if appointed, such individual would serve.</text>
</paragraph></subsection><subsection id="H421B80B211044F50A42CE68518C4C81E"><enum>(d)</enum><header>Political
appointee</header><text>For purposes of this section, the term <term>political
appointee</term> means any individual who—</text>
<paragraph id="HAB463E3652724551B9B29593854DA7BA"><enum>(1)</enum><text>is employed in a
position listed in sections 5312 through 5316 of title 5, United States Code
(relating to the Executive Schedule);</text>
</paragraph><paragraph id="HACADBCB44D4848F4A6106B17F76881B3"><enum>(2)</enum><text>is a limited term
appointee, limited emergency appointee, or noncareer appointee in the Senior
Executive Service; or</text>
</paragraph><paragraph id="HC543300F737A40D7908BD950DD00D3B7"><enum>(3)</enum><text>is employed in the
executive branch of the Government in a position which has been excepted from
the competitive service by reason of its policy-determining, policy-making, or
policy-advocating character.</text>
</paragraph></subsection><subsection id="id1007F834042141FBB9339B7557E5FDC5"><enum>(e)</enum><header>Public
contracting position</header><text>For purposes of this section, the term
<term>public contracting position</term> means the following:</text>
<paragraph id="idC73A2607968B407CABBCEC6851BA4516"><enum>(1)</enum><text>The Administrator
for Federal Procurement Policy.</text>
</paragraph><paragraph id="id66A31163A808415799CDDF921331C755"><enum>(2)</enum><text>The Administrator
of the General Services Administration.</text>
</paragraph><paragraph id="idD9574542050B4A7C8973D8DFB78182EC"><enum>(3)</enum><text>The Chief
Acquisition Officer of any executive agency, as appointed or designated
pursuant to section 16 of the Office of Federal Procurement Policy Act (41
U.S.C. 414).</text>
</paragraph><paragraph id="id208EE08F7E6A466C943DF8B14636202D"><enum>(4)</enum><text>The Under
Secretary of Defense for Acquisition, Technology, and Logistics.</text>
</paragraph><paragraph id="idF09CE5DE0C4E4048B8CD4400B135C05E"><enum>(5)</enum><text>Any position (not
otherwise identified under any of the preceding provisions of this subsection)
a primary function of which involves government procurement and procurement
policy, as identified by the head of each employing agency in consultation with
the Office of Personnel Management.</text>
</paragraph></subsection><subsection id="HCF75DA51A4144E7CBBE2144CB653D66"><enum>(f)</enum><header>Public safety
position</header><text>For purposes of this section, the term <term>public
safety position</term> means the following:</text>
<paragraph id="HCBBB9088E921429F009B6DE56E004754"><enum>(1)</enum><text display-inline="yes-display-inline">The Under Secretary for Emergency
Preparedness and Response, Department of Homeland Security.</text>
</paragraph><paragraph id="H7A383107E33E4CB6AE00F8B7A435E6F6"><enum>(2)</enum><text display-inline="yes-display-inline">The Director of the Federal Emergency
Management Agency, Department of Homeland Security.</text>
</paragraph><paragraph id="H0671CE6B29924F7BB91E128FB70037E1"><enum>(3)</enum><text display-inline="yes-display-inline">Each regional director of the Federal
Emergency Management Agency, Department of Homeland Security.</text>
</paragraph><paragraph id="HAC8E8E0A66BB47D89CCAFA5D8E39CAA4"><enum>(4)</enum><text display-inline="yes-display-inline">The Recovery Division Director of the
Federal Emergency Management Agency, Department of Homeland Security.</text>
</paragraph><paragraph id="H0060C72DD6F04D6AAF15C64D1D4D9772"><enum>(5)</enum><text>The Assistant
Secretary for Immigration and Customs Enforcement, Department of Homeland
Security.</text>
</paragraph><paragraph id="H0452E9C4636F4F6DB352905010C0857F"><enum>(6)</enum><text>The Assistant
Secretary for Public Health Emergency Preparedness, Department of Health and
Human Services.</text>
</paragraph><paragraph id="H21844A9CB3BD41A590CC87A36E7061CC"><enum>(7)</enum><text>The Assistant
Administrator for Solid Waste and Emergency Response, Environmental Protection
Agency.</text>
</paragraph><paragraph id="H1DD582B1FB724226BAE6C14B99D45106"><enum>(8)</enum><text>Any position (not
otherwise identified under any of the preceding provisions of this subsection)
a primary function of which involves responding to a direct threat to life or
property or a hazard to health, as identified by the head of each employing
agency in consultation with the Office of Personnel Management.</text>
</paragraph></subsection><subsection id="id3393CF47CA944CA4BACCDB9BC59B237D"><enum>(g)</enum><header>Publication of
positions</header><text>Beginning not later than 30 days after the date of the
enactment of this Act, the head of each agency shall maintain on such agency’s
public website a current list of all public contracting positions and public
safety positions within such agency.</text>
</subsection><subsection id="H546DD588D50A46B196964CF74945E740"><enum>(h)</enum><header>Coordination
with other requirements</header><text>The requirements set forth in subsection
(c) shall be in addition to, and not in lieu of, any requirements that might
otherwise apply with respect to any particular position.</text>
</subsection><subsection id="H40CE2166B33F4E058400003803EA34D9"><enum>(i)</enum><header>Definitions</header><text>In
this section:</text>
<paragraph id="HA4AA65B539D34551886B00303095FF49"><enum>(1)</enum><text>The term
<term>agency</term> means an Executive agency (as defined by section 105 of
title 5, United States Code).</text>
</paragraph><paragraph id="H2D92EFE1E6634FD48628FD789C5FF24"><enum>(2)</enum><text display-inline="yes-display-inline">The terms <term>limited term
appointee</term>, <term>limited emergency appointee</term>, and <term>noncareer
appointee</term> have the meanings given such terms in section 3132 of title 5,
United States Code.</text>
</paragraph><paragraph id="H8FBDFA4264BA45CB9C4F4DB7DF329260"><enum>(3)</enum><text>The term
<term>Senior Executive Service</term> has the meaning given such term by
section 2101a of title 5, United States Code.</text>
</paragraph><paragraph id="H7B78D83EBE8A4B8EAD274D18522591D1"><enum>(4)</enum><text>The term
<term>competitive service</term> has the meaning given such term by section
2102 of title 5, United States Code.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H23C7D05D0AB04D838D89B1D0053066E"><enum>(5)</enum><text>The terms
<term>lobbyist</term> and <term>client</term> have the respective meanings
given them by section 3 of the Lobbying Disclosure Act of 1995 (2 U.S.C.
1602).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id2A1AF920B7204E0790778D438391DFB9"><enum>(j)</enum><header>Conforming
amendment</header><text>Section 16(a) of the Office of Federal Procurement
Policy Act (41 U.S.C. 414(a)) is amended by striking <quote>non-career employee
as</quote>.</text>
</subsection></section><section id="ID30A7A2856D3B4BAB843642EB9B2646F8" section-type="subsequent-section"><enum>119.</enum><header>Protection of
certain disclosures of information by Federal employees</header>
<subsection id="ID160DCED2C53D4104B24FEE4785CE53AF"><enum>(a)</enum><header>Clarification
of disclosures covered</header><text>Section 2302(b)(8) of title 5, United
States Code, is amended—</text>
<paragraph id="ID2C9E6916245C401DB825F383F1B0729F"><enum>(1)</enum><text>in subparagraph
(A)—</text>
<subparagraph id="IDCF769C4F654C442ABBD0A89C46A3E38A"><enum>(A)</enum><text>by striking
<quote>which the employee or applicant reasonably believes evidences</quote>
and inserting <quote>, without restriction to time, place, form, motive,
context, or prior disclosure made to any person by an employee or applicant,
including a disclosure made in the ordinary course of an employee’s duties,
that the employee or applicant reasonably believes is evidence of</quote>;
and</text>
</subparagraph><subparagraph id="ID4D1D72DFB875416CB666463CDD77B892"><enum>(B)</enum><text>in clause (i), by
striking <quote>a violation</quote> and inserting <quote>any
violation</quote>;</text>
</subparagraph></paragraph><paragraph id="IDC82E396C0F3B44E4BB9BB0E1B820504E"><enum>(2)</enum><text>in subparagraph
(B)—</text>
<subparagraph id="ID6930ACAB1F39407283F84519A3A0D447"><enum>(A)</enum><text>by striking
<quote>which the employee or applicant reasonably believes evidences</quote>
and inserting <quote>, without restriction to time, place, form, motive,
context, or prior disclosure made to any person by an employee or applicant,
including a disclosure made in the ordinary course of an employee’s duties, of
information that the employee or applicant reasonably believes is evidence
of</quote>; and</text>
</subparagraph><subparagraph id="ID77DE718481B54A349518F6F564FF7662"><enum>(B)</enum><text>in clause (i), by
striking <quote>a violation</quote> and inserting <quote>any violation (other
than a violation of this section)</quote>; and</text>
</subparagraph></paragraph><paragraph id="ID26C691F105674EC2ADF5A6EFF1AD7449"><enum>(3)</enum><text>by adding at the
end the following:</text>
<quoted-block id="IDE297940BD6214006B33BEDD930C14B95">
<subparagraph id="ID4D942288EC884E869519BE2BDBD209EF"><enum>(C)</enum><text>any disclosure
that—</text>
<clause id="IDD600D08C8FEC4D57B213DE3BB3CA9B04"><enum>(i)</enum><text>is made by an
employee or applicant of information required by law or Executive order to be
kept secret in the interest of national defense or the conduct of foreign
affairs that the employee or applicant reasonably believes is direct and
specific evidence of—</text>
<subclause id="ID78EC0749037547C89A884CF4206346BC"><enum>(I)</enum><text>any violation of
any law, rule, or regulation;</text>
</subclause><subclause id="ID5401CE080C1048B29C5E358545DAE4EC"><enum>(II)</enum><text>gross
mismanagement, a gross waste of funds, an abuse of authority, or a substantial
and specific danger to public health or safety; or</text>
</subclause><subclause id="IDE7F04B29235349FB98954397AF13782A"><enum>(III)</enum><text>a false
statement to Congress on an issue of material fact; and</text>
</subclause></clause><clause id="IDFD2718F8F13C48B18BCDF31BA3DA75ED"><enum>(ii)</enum><text>is made
to—</text>
<subclause id="IDB52A425506E245EEA23545A252013D00"><enum>(I)</enum><text>a member of a
committee of Congress;</text>
</subclause><subclause id="ID0D08E82895B3444E8E3CB4B98A0F5C2D"><enum>(II)</enum><text>any other Member
of Congress; or</text>
</subclause><subclause id="ID6D3C492329244526B7406F29C225A7DE"><enum>(III)</enum><text>an employee of
Congress who has the appropriate security clearance and is authorized to
receive information of the type
disclosed.</text>
</subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="ID78634B768461497BB05D91C41FA66B63"><enum>(b)</enum><header>Covered
disclosures</header><text>Section 2302(a)(2) of title 5, United States Code, is
amended—</text>
<paragraph id="ID3CF7B5CB45554A0195C5C695003509B1"><enum>(1)</enum><text>in subparagraph
(B)(ii), by striking <quote>and</quote> at the end;</text>
</paragraph><paragraph id="ID015659F3B9554F0C8DBC1FF94A44CCA5"><enum>(2)</enum><text>in subparagraph
(C)(iii), by striking the period at the end and inserting <quote>; and</quote>;
and</text>
</paragraph><paragraph id="IDCFC005F824944F5E816FE93E3562BC7E"><enum>(3)</enum><text>by adding at the
end the following:</text>
<quoted-block id="ID6AAA4BC702614213893E9416275B6A9F">
<subparagraph id="ID80FD2D351DC440BCA7B44B06D1000969" indent="up1"><enum>(D)</enum><text><quote>disclosure</quote> means a
formal or informal communication or transmission, but does not include a
communication concerning policy decisions that lawfully exercise discretionary
authority unless the employee providing the disclosure reasonably believes that
the disclosure evidences—</text>
<clause id="id2E9F8053393E4CCDAD8F29524461B731"><enum>(i)</enum><text>any violation of any law, rule, or
regulation; or</text>
</clause><clause id="idDB924938EF6C4C8EBE777201413B4746"><enum>(ii)</enum><text>gross mismanagement, a gross waste
of funds, an abuse of authority, or a substantial and specific danger to public
health or
safety.</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="ID89F74ABB89F14E8F9EFC6AF8D6C77B5F"><enum>(c)</enum><header>Rebuttable
presumption</header><text>Section 2302(b) of title 5, United States Code, is
amended by amending the matter following paragraph (12) to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="id78D4399DEA1D48B5B82E2C297A314FF5" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="section">This
subsection shall not be construed to authorize the withholding of information
from Congress or the taking of any personnel action against an employee who
discloses information to Congress. For purposes of paragraph (8), any
presumption relating to the performance of a duty by an employee who has
authority to take, direct others to take, recommend, or approve any personnel
action may be rebutted by substantial evidence. For purposes of paragraph (8),
a determination as to whether an employee or applicant reasonably believes that
they have disclosed information that evidences any violation of law, rule,
regulation, gross mismanagement, a gross waste of funds, an abuse of authority,
or a substantial and specific danger to public health or safety shall be made
by determining whether a disinterested observer with knowledge of the essential
facts known to and readily ascertainable by the employee would reasonably
conclude that the actions of the Government evidence such violations,
mismanagement, waste, abuse, or
danger.</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID1096859583AF4806862560581BB907B0"><enum>(d)</enum><header>Nondisclosure
policies, forms, and agreements; security clearances; and retaliatory
investigations</header>
<paragraph id="IDD1CF37F52A0D4D2B9DDA809B68347BF3"><enum>(1)</enum><header>Personnel
action</header><text>Section 2302(a)(2)(A) of title 5, United States Code, is
amended—</text>
<subparagraph id="ID5470A93124EC4C9BACBF47FBC5CBC77F"><enum>(A)</enum><text>in clause (x), by
striking <quote>and</quote> after the semicolon; and</text>
</subparagraph><subparagraph id="IDDA460A0DA6784535A86B75A690888344"><enum>(B)</enum><text>by redesignating
clause (xi) as clause (xiv) and inserting after clause (x) the
following:</text>
<quoted-block id="IDE9D1C24465C141E8AC622DDF1A2032A9">
<clause id="idE2EBE0F9C61A4D64B0FE7D1997464733"><enum>(xi)</enum><text>the
implementation or enforcement of any nondisclosure policy, form, or
agreement;</text>
</clause><clause id="idEBD14D006311460CB4D6DC053D2449E7"><enum>(xii)</enum><text>a suspension,
revocation, or other determination relating to a security clearance or any
other access determination by a covered agency;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDD8B6D6B6DC2648D6AB307F7AC6D25D45"><enum>(xiii)</enum><text>an
investigation, other than any ministerial or nondiscretionary fact finding
activities necessary for the agency to perform its mission, of an employee or
applicant for employment because of any activity protected under this section;
and</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="IDB0A0CB04384C48AA8FC2D041E46306BB"><enum>(2)</enum><header>Prohibited
personnel practice</header><text>Section 2302(b) of title 5, United States
Code, is amended—</text>
<subparagraph id="ID5EE0CFDC9FBE4ED79179118AE8EB7FC6"><enum>(A)</enum><text>in paragraph
(11), by striking <quote>or</quote> at the end;</text>
</subparagraph><subparagraph id="ID589B94C28A2B40BC8B36917E42CFFB7E"><enum>(B)</enum><text>in paragraph
(12), by striking the period and inserting a semicolon; and</text>
</subparagraph><subparagraph id="ID4C84A661F16D456AB74E37954F677901"><enum>(C)</enum><text>by inserting
after paragraph (12) the following:</text>
<quoted-block display-inline="no-display-inline" id="id65C609D4C99440A991DB5C4679A4E617" style="OLC">
<paragraph id="ID73BA17C828904560ABCA9ACC8479AD1B"><enum>(13)</enum><text>implement or
enforce any nondisclosure policy, form, or agreement, if such policy, form, or
agreement does not contain the following statement: <quote>These provisions are
consistent with and do not supersede, conflict with, or otherwise alter the
employee obligations, rights, or liabilities created by Executive Order No.
12958; section 7211 (governing disclosures to Congress); section 1034 of title
10 (governing disclosure to Congress by members of the military); section
2302(b)(8) (governing disclosures of illegality, waste, fraud, abuse, or public
health or safety threats); the Intelligence Identities Protection Act of 1982
(50 U.S.C. 421 et seq.) (governing disclosures that could expose confidential
Government agents); and the statutes which protect against disclosures that
could compromise national security, including sections 641, 793, 794, 798, and
952 of title 18 and section 4(b) of the Subversive Activities Control Act of
1950 (50 U.S.C. 783(b)). The definitions, requirements, obligations, rights,
sanctions, and liabilities created by such Executive order and such statutory
provisions are incorporated into this agreement and are controlling</quote>;
or</text>
</paragraph><paragraph id="IDB7000BB4F67F4745881D1E1AC94C7D80"><enum>(14)</enum><text>conduct, or
cause to be conducted, an investigation, other than any ministerial or
nondiscretionary fact finding activities necessary for the agency to perform
its mission, of an employee or applicant for employment because of any activity
protected under this
section.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="ID9BF419665BE446C9BB8E916CE46FF110"><enum>(3)</enum><header>Board and court
review of actions relating to security clearances</header>
<subparagraph id="ID5C0A83F97EF447B5ACE86B185B5BA0C8"><enum>(A)</enum><header>In
general</header><text>Chapter 77 of title 5, United States Code, is amended by
inserting after section 7702 the following:</text>
<quoted-block act-name="" id="ID9E680C34CFD342719ACD6CAD56DE1112" style="USC">
<section id="ID9BDCD005916F4E519925EC32BCFAB1B7"><enum>7702a.</enum><header>Actions
relating to security clearances</header>
<subsection id="id27DBBFB37B684EF891A891F8D4597E0E"><enum>(a)</enum><text>In any appeal
relating to the suspension, revocation, or other determination relating to a
security clearance or access determination, the Merit Systems Protection Board
or any reviewing court—</text>
<paragraph id="ID5B248B9D70B04F2C9CC1D27071275DA8"><enum>(1)</enum><text>shall determine
whether paragraph (8) or (9) of section 2302(b) was violated;</text>
</paragraph><paragraph id="ID65C3F822D9A846909AA771FAA6963AFC"><enum>(2)</enum><text>may not order the
President or the designee of the President to restore a security clearance or
otherwise reverse a determination of clearance status or reverse an access
determination; and</text>
</paragraph><paragraph id="IDB14463CDB5B248C5B7676ECF2C90185B"><enum>(3)</enum><text>subject to
paragraph (2), may issue declaratory relief and any other appropriate
relief.</text>
</paragraph></subsection><subsection id="ID1311D2A0AC314EFE99D53D5277A7C5B3"><enum>(b)</enum><paragraph commented="no" display-inline="yes-display-inline" id="ID2734B5AC18D14A13A20401D14475C486"><enum>(1)</enum><text>If, in any final
judgment, the Board or court declares that any suspension, revocation, or other
determination with regards to a security clearance or access determination was
made in violation of paragraph (8) or (9) of section 2302(b), the affected
agency shall conduct a review of that suspension, revocation, access
determination, or other determination, giving great weight to the Board or
court judgment.</text>
</paragraph><paragraph id="ID3A660AAD6545415C9E5D2E4122355FD4" indent="up1"><enum>(2)</enum><text>Not later than 30 days after any
Board or court judgment declaring that a security clearance suspension,
revocation, access determination, or other determination was made in violation
of paragraph (8) or (9) of section 2302(b), the affected agency shall issue an
unclassified report to the congressional committees of jurisdiction (with a
classified annex if necessary), detailing the circumstances of the agency’s
security clearance suspension, revocation, other determination, or access
determination. A report under this paragraph shall include any proposed agency
action with regards to the security clearance or access determination.</text>
</paragraph></subsection><subsection id="ID859852BCBB344757AD811726BB544322"><enum>(c)</enum><text>An allegation
that a security clearance or access determination was revoked or suspended in
retaliation for a protected disclosure shall receive expedited review by the
Office of Special Counsel, the Merit Systems Protection Board, and any
reviewing court.</text>
</subsection><subsection id="ID851E96537411470D99C61D8DFF0F58A5"><enum>(d)</enum><text>For purposes of
this section, corrective action may not be ordered if the agency demonstrates
by a preponderance of the evidence that it would have taken the same personnel
action in the absence of such
disclosure.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="IDDE544DBD7FFF42BE92D5C8C7B60DBBA8"><enum>(B)</enum><header>Technical and
conforming amendment</header><text>The table of sections for chapter 77 of
title 5, United States Code, is amended by inserting after the item relating to
section 7702 the following:</text>
<quoted-block id="ID3BA0C9420A3A4027A6537F0A0714692E" style="USC">
<toc regeneration="no-regeneration">
<toc-entry level="section">7702a. Actions relating to security
clearances.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection id="IDC2D9AE61B4084B588D8AD8B647E05128"><enum>(e)</enum><header>Exclusion of
agencies by the President</header><text>Section 2302(a)(2)(C) of title 5,
United States Code, is amended by striking clause (ii) and inserting the
following:</text>
<quoted-block id="ID738698044F6643499D423EE108CDA086">
<clause id="ID6C0C0DEC014B41A8939C4FE01BBF8DEF" indent="up1"><enum>(ii)</enum><subclause commented="no" display-inline="yes-display-inline" id="IDD0821C5F6C8E4D96B0AD898F8796EDF8"><enum>(I)</enum><text>the Federal Bureau of
Investigation, the Office of the Director of National Intelligence, the Central
Intelligence Agency, the Defense Intelligence Agency, the National
Geospatial-Intelligence Agency, and the National Security Agency; and</text>
</subclause><subclause id="ID80126B5683F84F0EB2FFCE28FA7B3CFE" indent="up1"><enum>(II)</enum><text>as determined by the President,
any executive agency or unit thereof the principal function of which is the
conduct of foreign intelligence or counterintelligence activities, if the
determination (as that determination relates to a personnel action) is made
before that personnel action;
or</text>
</subclause></clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID2D49EDAB05674380A4BCCC60F9E304D0"><enum>(f)</enum><header>Attorney
fees</header><text>Section 1204(m)(1) of title 5, United States Code, is
amended by striking <quote>agency involved</quote> and inserting <quote>agency
where the prevailing party is employed or has applied for
employment</quote>.</text>
</subsection><subsection id="ID5916B6ABCDD940CE9EF33A0E9AD7E1BB"><enum>(g)</enum><header>Disciplinary
action</header><text>Section 1215(a)(3) of title 5, United States Code, is
amended to read as follows:</text>
<quoted-block id="ID9124B6598CF14AAEA2FC9EC8846742E4">
<paragraph id="ID653D89B890B54CCF817EB6725D44CCBB"><enum>(3)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="IDA8DDF72E5B914617B8A2A4AAF5C55FD6"><enum>(A)</enum><text>A final order of the
Board may impose—</text>
<clause id="IDC60FBB3EC8104992B0E4E61AEE862D2A" indent="up1"><enum>(i)</enum><text>disciplinary action consisting of
removal, reduction in grade, debarment from Federal employment for a period not
to exceed 5 years, suspension, or reprimand;</text>
</clause><clause id="IDB71DF4DEE03447E1BE8D5B955B02B8AC" indent="up1"><enum>(ii)</enum><text>an assessment of a civil penalty
not to exceed $1,000; or</text>
</clause><clause id="ID18F013E103254DB9BE538E3369076A4A" indent="up1"><enum>(iii)</enum><text>any combination of disciplinary
actions described under clause (i) and an assessment described under clause
(ii).</text>
</clause></subparagraph><subparagraph id="ID8D24FDF97FF04BB395DB5AB7C7F07FE6" indent="up1"><enum>(B)</enum><text>In any case in which the Board finds
that an employee has committed a prohibited personnel practice under paragraph
(8) or (9) of section 2302(b), the Board shall impose disciplinary action if
the Board finds that the activity protected under paragraph (8) or (9) of
section 2302(b) was a significant motivating factor, even if other factors also
motivated the decision, for the employee’s decision to take, fail to take, or
threaten to take or fail to take a personnel action, unless that employee
demonstrates, by preponderance of evidence, that the employee would have taken,
failed to take, or threatened to take or fail to take the same personnel
action, in the absence of such protected
activity.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID4FCD80949E094A2DA47E51967053793C"><enum>(h)</enum><header>Special Counsel
amicus curiae appearance</header><text>Section 1212 of title 5, United States
Code, is amended by adding at the end the following:</text>
<quoted-block id="IDC604A1E6570041A98420F6F4481DE888">
<subsection id="IDFD9D0EFFC5ED40079BEDF9DC974D4753"><enum>(h)</enum><paragraph commented="no" display-inline="yes-display-inline" id="ID0E1888545FE14EE8B8C1B48BC088A420"><enum>(1)</enum><text>The Special Counsel is
authorized to appear as amicus curiae in any action brought in a court of the
United States related to any civil action brought in connection with section
2302(b) (8) or (9), or subchapter III of chapter 73, or as otherwise authorized
by law. In any such action, the Special Counsel is authorized to present the
views of the Special Counsel with respect to compliance with section 2302(b)
(8) or (9) or subchapter III of chapter 77 and the impact court decisions would
have on the enforcement of such provisions of law.</text>
</paragraph><paragraph id="ID44BF6DFFF0EC470F840B8DAA1AF48C73" indent="up1"><enum>(2)</enum><text>A court of the United States shall
grant the application of the Special Counsel to appear in any such action for
the purposes described in subsection
(a).</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="IDE100D176917944009C25357675D82E28"><enum>(i)</enum><header>Judicial
review</header>
<paragraph id="ID9BE16E1291DA45B28FF828C349206A75"><enum>(1)</enum><header>In
general</header><text>Section 7703(b)(1) of title 5, United States Code, is
amended to read as follows:</text>
<quoted-block id="ID5E7C83E122674FC4A3EDD2711BFCEFE7">
<subsection id="ID5CC895FC2D2F44CBAE1F7EBEA245F9B3"><enum>(b)</enum><paragraph commented="no" display-inline="yes-display-inline" id="ID3C45EA7BB6CE4FE4B4853B3BFDEABE0A"><enum>(1)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="ID18A15B096DA845DABA6DBD243EE6EC00"><enum>(A)</enum><text>Except as provided in
subparagraph (B) and paragraph (2), a petition to review a final order or final
decision of the Board shall be filed in the United States Court of Appeals for
the Federal Circuit. Notwithstanding any other provision of law, any petition
for review must be filed within 60 days after the date the petitioner received
notice of the final order or decision of the Board.</text>
</subparagraph><subparagraph id="ID30AA1882F169484B94944772117D035D" indent="up2"><enum>(B)</enum><text>During the 5-year period beginning on
the effective date of this subsection, a petition to review a final order or
final decision of the Board in a case alleging a violation of paragraph (8) or
(9) of section 2302(b) shall be filed in the United States Court of Appeals for
the Federal Circuit or any court of appeals of competent jurisdiction as
provided under subsection
(b)(2).</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="ID5654BF259FAF44BAA69E268A46118950"><enum>(2)</enum><header>Review obtained
by office of personnel management</header><text>Section 7703(d) of title 5,
United States Code, is amended to read as follows:</text>
<quoted-block id="ID9D4C310609A047B08C1BF384C9834479">
<subsection id="IDDA64EB8A01B54DF88FF43CED07E80FEF"><enum>(d)</enum><paragraph commented="no" display-inline="yes-display-inline" id="IDC2CB6D6ABD0648C08E4492059A00C179"><enum>(1)</enum><text>Except as provided
under paragraph (2), this paragraph shall apply to any review obtained by the
Director of the Office of Personnel Management. The Director of the Office of
Personnel Management may obtain review of any final order or decision of the
Board by filing, within 60 days after the date the Director received notice of
the final order or decision of the Board, a petition for judicial review in the
United States Court of Appeals for the Federal Circuit if the Director
determines, in his discretion, that the Board erred in interpreting a civil
service law, rule, or regulation affecting personnel management and that the
Board’s decision will have a substantial impact on a civil service law, rule,
regulation, or policy directive. If the Director did not intervene in a matter
before the Board, the Director may not petition for review of a Board decision
under this section unless the Director first petitions the Board for a
reconsideration of its decision, and such petition is denied. In addition to
the named respondent, the Board and all other parties to the proceedings before
the Board shall have the right to appear in the proceeding before the Court of
Appeals. The granting of the petition for judicial review shall be at the
discretion of the Court of Appeals.</text>
</paragraph><paragraph id="IDB215CDE38CE54F779EE08DDE26A8A4F0" indent="up1"><enum>(2)</enum><text>During the 5-year period beginning on
the effective date of this subsection, this paragraph shall apply to any review
relating to paragraph (8) or (9) of section 2302(b) obtained by the Director of
the Office of Personnel Management. The Director of the Office of Personnel
Management may obtain review of any final order or decision of the Board by
filing, within 60 days after the date the Director received notice of the final
order or decision of the Board, a petition for judicial review in the United
States Court of Appeals for the Federal Circuit or any court of appeals of
competent jurisdiction as provided under subsection (b)(2) if the Director
determines, in his discretion, that the Board erred in interpreting paragraph
(8) or (9) of section 2302(b). If the Director did not intervene in a matter
before the Board, the Director may not petition for review of a Board decision
under this section unless the Director first petitions the Board for a
reconsideration of its decision, and such petition is denied. In addition to
the named respondent, the Board and all other parties to the proceedings before
the Board shall have the right to appear in the proceeding before the court of
appeals. The granting of the petition for judicial review shall be at the
discretion of the Court of
Appeals.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="IDC156DAB0E43F48CFA5620210852E9DBA"><enum>(j)</enum><header>Nondisclosure
policies, forms, and agreements</header>
<paragraph id="ID7085601E87DD4B5D8A6B1BCBCE6A9085"><enum>(1)</enum><header>In
general</header>
<subparagraph id="ID37A2599535F54EE6902244BE45EBEB51"><enum>(A)</enum><header>Requirement</header><text>Each
agreement in Standard Forms 312 and 4414 of the Government and any other
nondisclosure policy, form, or agreement of the Government shall contain the
following statement: <quote>These restrictions are consistent with and do not
supersede, conflict with, or otherwise alter the employee obligations, rights,
or liabilities created by Executive Order No. 12958; section 7211 of title 5,
United States Code (governing disclosures to Congress); section 1034 of title
10, United States Code (governing disclosure to Congress by members of the
military); section 2302(b)(8) of title 5, United States Code (governing
disclosures of illegality, waste, fraud, abuse or public health or safety
threats); the Intelligence Identities Protection Act of 1982 (50 U.S.C. 421 et
seq.) (governing disclosures that could expose confidential Government agents);
and the statutes which protect against disclosure that may compromise the
national security, including sections 641, 793, 794, 798, and 952 of title 18,
United States Code, and section 4(b) of the Subversive Activities Act of 1950
(50 U.S.C. 783(b)). The definitions, requirements, obligations, rights,
sanctions, and liabilities created by such Executive order and such statutory
provisions are incorporated into this agreement and are
controlling.</quote>.</text>
</subparagraph><subparagraph id="IDF64ED6D437914689BB44E976B43BD02B"><enum>(B)</enum><header>Enforceability</header><text>Any
nondisclosure policy, form, or agreement described under subparagraph (A) that
does not contain the statement required under subparagraph (A) may not be
implemented or enforced to the extent such policy, form, or agreement is
inconsistent with that statement.</text>
</subparagraph></paragraph><paragraph id="ID0278C3CCE9D8446AB68AE4EE6DA34AE6"><enum>(2)</enum><header>Persons other
than government employees</header><text>Notwithstanding paragraph (1), a
nondisclosure policy, form, or agreement that is to be executed by a person
connected with the conduct of an intelligence or intelligence-related activity,
other than an employee or officer of the United States Government, may contain
provisions appropriate to the particular activity for which such document is to
be used. Such form or agreement shall, at a minimum, require that the person
will not disclose any classified information received in the course of such
activity unless specifically authorized to do so by the United States
Government. Such nondisclosure forms shall also make it clear that such forms
do not bar disclosures to Congress or to an authorized official of an executive
agency or the Department of Justice that are essential to reporting a
substantial violation of law.</text>
</paragraph></subsection><subsection id="IDCCDCC77C08F64722BE975FBEDB190383"><enum>(k)</enum><header>Clarification
of whistleblower rights for critical infrastructure
information</header><text>Section 214(c) of the Homeland Security Act of 2002
(6 U.S.C. 133(c)) is amended by adding at the end the following: <quote>For
purposes of this section a permissible use of independently obtained
information includes the disclosure of such information under section
2302(b)(8) of title 5, United States Code.</quote>.</text>
</subsection><subsection id="ID59E5B899DC3D4E388306C67B8991F30A"><enum>(l)</enum><header>Advising
employees of rights</header><text>Section 2302(c) of title 5, United States
Code, is amended by inserting <quote>, including how to make a lawful
disclosure of information that is specifically required by law or Executive
order to be kept secret in the interest of national defense or the conduct of
foreign affairs to the Special Counsel, the Inspector General of an agency,
Congress, or other agency employee designated to receive such
disclosures</quote> after <quote>chapter 12 of this title</quote>.</text>
</subsection><subsection id="ID3E981BD03E514CA290EED688FD3E40D4"><enum>(m)</enum><header>Scope of due
process</header>
<paragraph id="ID1D278B3A26944260A6F55A3D9A5C65D9"><enum>(1)</enum><header>Special
counsel</header><text>Section 1214(b)(4)(B)(ii) of title 5, United States Code,
is amended by inserting <quote>, after a finding that a protected disclosure
was a contributing factor,</quote> after <quote>ordered if</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID4E16E9EBA3CA4163BDCE6E8314CD6816"><enum>(2)</enum><header>Individual
action</header><text>Section 1221(e)(2) of title 5, United States Code, is
amended by inserting <quote>, after a finding that a protected disclosure was a
contributing factor,</quote> after <quote>ordered if</quote>.</text>
</paragraph></subsection></section></part></subtitle><subtitle id="id66BB2987091B4F7CBE08DF59CA3CDB06"><enum>C</enum><header>Importation of
prescription drugs</header>
<section id="id285A8298CA1A4AEE95906993E7BF7BAA" section-type="subsequent-section"><enum>121.</enum><header>Short
title</header><text display-inline="no-display-inline">This subtitle may be
cited as the <quote><short-title>Pharmaceutical Market
Access and Drug Safety Act of 2007</short-title></quote>.</text>
</section><section id="id15A5E37213F14C90B8C3E7D143034724"><enum>122.</enum><header>Findings</header><text display-inline="no-display-inline">Congress finds that—</text>
<paragraph id="id7C3FF5D8C4EB487A9B19F71A41CB1D0D"><enum>(1)</enum><text>Americans
unjustly pay up to 5 times more to fill their prescriptions than consumers in
other countries;</text>
</paragraph><paragraph id="id299E7C1C24BF41499775A6DDA9448B8D"><enum>(2)</enum><text>the United States
is the largest market for pharmaceuticals in the world, yet American consumers
pay the highest prices for brand pharmaceuticals in the world;</text>
</paragraph><paragraph id="idFF583A0205494E0CAA7A4BA94DBF32A4"><enum>(3)</enum><text>a prescription
drug is neither safe nor effective to an individual who cannot afford
it;</text>
</paragraph><paragraph id="id76319AE358D04398AD89884C3F683DA5"><enum>(4)</enum><text>allowing and
structuring the importation of prescription drugs to ensure access to safe and
affordable drugs approved by the Food and Drug Administration will provide a
level of safety to American consumers that they do not currently enjoy;</text>
</paragraph><paragraph id="idFC59D6EFDA024E379BB0EBAE3AA4688F"><enum>(5)</enum><text>American spend
more than $200,000,000,000 on prescription drugs every year;</text>
</paragraph><paragraph id="id73D7A1BED1FC49F5B7ED303404B36E32"><enum>(6)</enum><text>the Congressional
Budget Office has found that the cost of prescription drugs are between 35 to
55 percent less in other highly-developed countries than in the United States;
and</text>
</paragraph><paragraph id="idDE0E4132E6F64F629E18AAB1B2F14294"><enum>(7)</enum><text>promoting
competitive market pricing would both contribute to health care savings and
allow greater access to therapy, improving health and saving lives.</text>
</paragraph></section><section id="idC1CFD06F1DC04AD7B79BD55D73F44E4E"><enum>123.</enum><header>Repeal of
certain section regarding importation of prescription drugs</header><text display-inline="no-display-inline">Chapter VIII of the
<act-name parsable-cite="FFDCA">Federal Food, Drug, and Cosmetic Act</act-name>
(21 U.S.C. 381 et seq.) is amended by striking section 804.</text>
</section><section id="idF7FB2416B7FA4BF2B435B1462FC10EBA"><enum>124.</enum><header>Importation of
prescription drugs; waiver of certain import restrictions</header>
<subsection id="id32EF98E487BC46A2810DDEA9D41094F1"><enum>(a)</enum><header>In
general</header><text>Chapter VIII of the <act-name parsable-cite="FFDCA">Federal Food, Drug, and Cosmetic Act</act-name> (21
U.S.C. 381 et seq.), as amended by section 123, is further amended by inserting
after section 803 the following:</text>
<quoted-block act-name="Federal Food, Drug, and Cosmetic Act" id="id040189F376BE442284FFF6066E648E17">
<section id="idEFFCB22B4B3B4576B3CD69E67609A3C7"><enum>804.</enum><header>Commercial and
personal importation of prescription drugs</header>
<subsection id="idE07D80E9A3CD4412B6AAC928DC27E653"><enum>(a)</enum><header>Importation of
prescription drugs</header>
<paragraph id="idD1C6D56686724BEB851F6EF868586C13"><enum>(1)</enum><header>In
general</header><text>In the case of qualifying drugs imported or offered for
import into the United States from registered exporters or by registered
importers—</text>
<subparagraph id="id44F1AC05C1E14B45BA8333693094C43F"><enum>(A)</enum><text>the limitation on
importation that is established in section 801(d)(1) is waived; and</text>
</subparagraph><subparagraph id="id4EEC42EE83A145AFA44D5482EA9D605C"><enum>(B)</enum><text>the standards
referred to in section 801(a) regarding admission of the drugs are subject to
subsection (g) of this section (including with respect to qualifying drugs to
which section 801(d)(1) does not apply).</text>
</subparagraph></paragraph><paragraph id="idF2BB81147F7D412190672664047DBE6D"><enum>(2)</enum><header>Importers</header><text>A
qualifying drug may not be imported under paragraph (1) unless—</text>
<subparagraph id="id38EDAE8ED5714E949DCE9311D47E7803"><enum>(A)</enum><text>the drug is
imported by a pharmacy, group of pharmacies, or a wholesaler that is a
registered importer; or</text>
</subparagraph><subparagraph id="idDE7A189187F949D0AACD4FC007525026"><enum>(B)</enum><text>the drug is
imported by an individual for personal use or for the use of a family member of
the individual (not for resale) from a registered exporter.</text>
</subparagraph></paragraph><paragraph id="id671009E4F2FD4031AA21AA694748A13F"><enum>(3)</enum><header>Rule of
construction</header><text>This section shall apply only with respect to a drug
that is imported or offered for import into the United States—</text>
<subparagraph id="idD110346C3D5D485DB90B844FA0092C21"><enum>(A)</enum><text>by a registered
importer; or</text>
</subparagraph><subparagraph id="id83C2888321CC48EE9715B10464AB12E9"><enum>(B)</enum><text>from a registered
exporter to an individual.</text>
</subparagraph></paragraph><paragraph id="id6914198C12BE413CA3DC7A10C7C65A5D"><enum>(4)</enum><header>Definitions</header>
<subparagraph id="id894BD8EE82AD4376B3FCBA3D55F70859"><enum>(A)</enum><header>Registered
exporter; registered importer</header><text>For purposes of this
section:</text>
<clause id="id51AC2F33239D4B989EC414518B332C03"><enum>(i)</enum><text>The term
<term>registered exporter</term> means an exporter for which a registration
under subsection (b) has been approved and is in effect.</text>
</clause><clause id="idA5FBABDED51A47B180C73DD00EA10887"><enum>(ii)</enum><text>The term
<term>registered importer</term> means a pharmacy, group of pharmacies, or a
wholesaler for which a registration under subsection (b) has been approved and
is in effect.</text>
</clause><clause id="id19E4E6AF3F9F42CAB0C2EFC39486D932"><enum>(iii)</enum><text>The term
<term>registration condition</term> means a condition that must exist for a
registration under subsection (b) to be approved.</text>
</clause></subparagraph><subparagraph id="id8233D56066C8487BB22D409DF1C5EEBF"><enum>(B)</enum><header>Qualifying
drug</header><text>For purposes of this section, the term <term>qualifying
drug</term> means a drug for which there is a corresponding U.S. label
drug.</text>
</subparagraph><subparagraph id="id123930FF8FA94EA081EB1D613A9C783F"><enum>(C)</enum><header>U.S. label
drug</header><text>For purposes of this section, the term <term>U.S. label
drug</term> means a prescription drug that—</text>
<clause id="id47335E2E34E14321B9808671ACF0CDE8"><enum>(i)</enum><text>with respect to a
qualifying drug, has the same active ingredient or ingredients, route of
administration, dosage form, and strength as the qualifying drug;</text>
</clause><clause id="id88C97F2477944886BA548C6BE37B5B1E"><enum>(ii)</enum><text>with respect to
the qualifying drug, is manufactured by or for the person that manufactures the
qualifying drug;</text>
</clause><clause id="idDAC73CBCF5F545E68E8A847CBB9B4271"><enum>(iii)</enum><text>is approved
under section 505(c); and</text>
</clause><clause id="idF13475CC2E8C422291BAA7F16DF4E1D0"><enum>(iv)</enum><text>is not—</text>
<subclause id="id3BA88AEE71FB4336A5E1FD1B72FDFF2C"><enum>(I)</enum><text>a controlled
substance, as defined in section 102 of the <act-name parsable-cite="CSA">Controlled Substances Act</act-name> (21 U.S.C.
802);</text>
</subclause><subclause id="idD8FFE8D19AA342FF94E965B37F12E413"><enum>(II)</enum><text>a biological
product, as defined in section 351 of the <act-name parsable-cite="PHSA">Public
Health Service Act</act-name> (42 U.S.C. 262), including—</text>
<item id="idA9647472940E4EA180726BD65A0214E5"><enum>(aa)</enum><text>a
therapeutic DNA plasmid product;</text>
</item><item id="id89E7542A2C574E37933D14C172BC6D88"><enum>(bb)</enum><text>a
therapeutic synthetic peptide product;</text>
</item><item id="idD9643023DDAC400CBEDE23B1CC71133D"><enum>(cc)</enum><text>a
monoclonal antibody product for in vivo use; and</text>
</item><item id="id8A953645030140948B5C3ECB9623083D"><enum>(dd)</enum><text>a
therapeutic recombinant DNA-derived product;</text>
</item></subclause><subclause id="id11A6BA2BA3F347218F12C16367E24A6C"><enum>(III)</enum><text>an infused
drug, including a peritoneal dialysis solution;</text>
</subclause><subclause id="idAEE669CBE70B44D593CF7F391692C6B9"><enum>(IV)</enum><text>an injected
drug;</text>
</subclause><subclause id="id9702CF3B544B4313A8A1FDEB612C62F1"><enum>(V)</enum><text>a drug that is
inhaled during surgery;</text>
</subclause><subclause id="idDE18D56E8CCF48E68C6343FE86EAD61C"><enum>(VI)</enum><text>a drug that is
the listed drug referred to in 2 or more abbreviated new drug applications
under which the drug is commercially marketed; or</text>
</subclause><subclause id="id2605B2D3F69544799BC7727C33219A44"><enum>(VII)</enum><text>a sterile
opthlamic drug intended for topical use on or in the eye.</text>
</subclause></clause></subparagraph><subparagraph id="id48D17B3271A24A6697BEC65BA17FDC1C"><enum>(D)</enum><header>Other
definitions</header><text>For purposes of this section:</text>
<clause id="id5738648BE053464E837EB1E8CF54DC10"><enum>(i)</enum><subclause commented="no" display-inline="yes-display-inline" id="id6DD0E6D68261452EB1A1C14FB396E125"><enum>(I)</enum><text>The term
<term>exporter</term> means a person that is in the business of exporting a
drug to individuals in the United States from Canada or from a permitted
country designated by the Secretary under subclause (II), or that, pursuant to
submitting a registration under subsection (b), seeks to be in such
business.</text>
</subclause><subclause id="id9A90077299A54567B320F2AA3DEDDA64" indent="up1"><enum>(II)</enum><text>The Secretary shall designate a
permitted country under subparagraph (E) (other than Canada) as a country from
which an exporter may export a drug to individuals in the United States if the
Secretary determines that—</text>
<item id="idDBB0AB2E730B4B11A1036C572EF781D2"><enum>(aa)</enum><text>the country has statutory or
regulatory standards that are equivalent to the standards in the United States
and Canada with respect to—</text>
<subitem id="id321565C3F3A4460CB32DC959FEBB878C"><enum>(AA)</enum><text>the training of pharmacists;</text>
</subitem><subitem id="id55CEDBFB01F6483883C50DED78242BDB"><enum>(BB)</enum><text>the practice of pharmacy; and</text>
</subitem><subitem id="id38B39F3ECF6C48EAAD8953F5CBE6F1A6"><enum>(CC)</enum><text>the protection of the privacy of personal
medical information; and</text>
</subitem></item><item id="idC9A8EB0C36F64556BF3E55B6DC6309DD"><enum>(bb)</enum><text>the importation of drugs to
individuals in the United States from the country will not adversely affect
public health.</text>
</item></subclause></clause><clause id="id3778B7FB0F3B48D78AB94A95DD5ABBBB"><enum>(ii)</enum><text>The term
<term>importer</term> means a pharmacy, a group of pharmacies, or a wholesaler
that is in the business of importing a drug into the United States or that,
pursuant to submitting a registration under subsection (b), seeks to be in such
business.</text>
</clause><clause id="idAAA9B3D910CD496291A272872F4DB43F"><enum>(iii)</enum><text>The term
<term>pharmacist</term> means a person licensed by a State to practice
pharmacy, including the dispensing and selling of prescription drugs.</text>
</clause><clause id="id199B20F981A144D28BEAACF5ABFF9AAD"><enum>(iv)</enum><text>The term
<term>pharmacy</term> means a person that—</text>
<subclause id="idFCD1745E42674020804F3EC35B143B9E"><enum>(I)</enum><text>is licensed by a
State to engage in the business of selling prescription drugs at retail;
and</text>
</subclause><subclause id="id4F47E94CA23C478DA7429B2FC0BDA7A4"><enum>(II)</enum><text>employs 1 or
more pharmacists.</text>
</subclause></clause><clause id="idEA052FDB3CB1475DB1F1C7649A8301EA"><enum>(v)</enum><text>The term
<term>prescription drug</term> means a drug that is described in section
503(b)(1).</text>
</clause><clause id="id748DCE4BFC0447C38045CB5F5788B828"><enum>(vi)</enum><text>The term
<term>wholesaler</term>—</text>
<subclause id="idF89B6AA0C4714445AAF04B1D32069EAB"><enum>(I)</enum><text>means a person
licensed as a wholesaler or distributor of prescription drugs in the United
States under section 503(e)(2)(A); and</text>
</subclause><subclause id="id8F638117634747F1BE7DCD3E4FE9F465"><enum>(II)</enum><text>does not include
a person authorized to import drugs under section 801(d)(1).</text>
</subclause></clause></subparagraph><subparagraph id="idD530F1D08512475C98A9E4D4716F6F09"><enum>(E)</enum><header>Permitted
country</header><text>The term <term>permitted country</term> means—</text>
<clause id="id61E0FBA9A9AC4889AF719288C8987FA6"><enum>(i)</enum><text>Australia;</text>
</clause><clause id="idDA7BFC69EF2744BBAE25CC2B0AF9FF60"><enum>(ii)</enum><text>Canada;</text>
</clause><clause id="id435E1397EB684741B0018DE0A8C69F1A"><enum>(iii)</enum><text>a member
country of the European Union, but does not include a member country with
respect to which—</text>
<subclause id="idCDD471C8C4AB4968975F24383D8BDE9A"><enum>(I)</enum><text>the country’s
Annex to the Treaty of Accession to the European Union 2003 includes a
transitional measure for the regulation of human pharmaceutical products that
has not expired; or</text>
</subclause><subclause id="id79C174C7DA194E3F8BB1C965C4EFEA4E"><enum>(II)</enum><text>the Secretary
determines that the requirements described in subclauses (I) and (II) of clause
(vii) will not be met by the date on which such transitional measure for the
regulation of human pharmaceutical products expires;</text>
</subclause></clause><clause id="id2F32157865E14AFF9DB428D2CE9DD791"><enum>(iv)</enum><text>Japan;</text>
</clause><clause id="id8FEEAC7385084022BB113A11859A4A75"><enum>(v)</enum><text>New
Zealand;</text>
</clause><clause id="idFDB4AABD998948D29360C58BE9F38A82"><enum>(vi)</enum><text>Switzerland;
and</text>
</clause><clause id="id266D404F926B4024BA60FEAE2E30275D"><enum>(vii)</enum><text>a country in
which the Secretary determines the following requirements are met:</text>
<subclause id="id3C02B7ABBA0946E3A1EDC761A26EEE55"><enum>(I)</enum><text>The country has
statutory or regulatory requirements—</text>
<item id="idF5D2339728DE4881B693E5E29185A8D1"><enum>(aa)</enum><text>that require the
review of drugs for safety and effectiveness by an entity of the government of
the country;</text>
</item><item id="id095785014F5D4E45B21C9EA0E4C8464E"><enum>(bb)</enum><text>that authorize
the approval of only those drugs that have been determined to be safe and
effective by experts employed by or acting on behalf of such entity and
qualified by scientific training and experience to evaluate the safety and
effectiveness of drugs on the basis of adequate and well-controlled
investigations, including clinical investigations, conducted by experts
qualified by scientific training and experience to evaluate the safety and
effectiveness of drugs;</text>
</item><item id="id1E49BF2C95004119B024CE7B7435A1E5"><enum>(cc)</enum><text>that require the
methods used in, and the facilities and controls used for the manufacture,
processing, and packing of drugs in the country to be adequate to preserve
their identity, quality, purity, and strength;</text>
</item><item id="idC95D7FF0371041C3A54660C4B4C244E9"><enum>(dd)</enum><text>for the
reporting of adverse reactions to drugs and procedures to withdraw approval and
remove drugs found not to be safe or effective; and</text>
</item><item id="idCE02162B9BFA46B0B33E59FD82A0307C"><enum>(ee)</enum><text>that require the
labeling and promotion of drugs to be in accordance with the approval of the
drug.</text>
</item></subclause><subclause id="idDC4C7CE736C3453293034CDE4A0C351C"><enum>(II)</enum><text>The valid
marketing authorization system in the country is equivalent to the systems in
the countries described in clauses (i) through (vi).</text>
</subclause><subclause id="id3EF6C901B07947E9B74E2302D4494500"><enum>(III)</enum><text>The importation
of drugs to the United States from the country will not adversely affect public
health.</text>
</subclause></clause></subparagraph></paragraph></subsection><subsection id="id9842D746294E48F8B32C2CE4A47E02E3"><enum>(b)</enum><header>Registration of
importers and exporters</header>
<paragraph id="idBB49F862B584434C83210536B16DB31F"><enum>(1)</enum><header>Registration of
importers and exporters</header><text>A registration condition is that the
importer or exporter involved (referred to in this subsection as a
<quote>registrant</quote>) submits to the Secretary a registration containing
the following:</text>
<subparagraph id="id6675DD79339D4037ABA8645080D961A1"><enum>(A)</enum><clause commented="no" display-inline="yes-display-inline" id="id501538A54E2A4AA6AEDC010E612B7319"><enum>(i)</enum><text>In the case of an
exporter, the name of the exporter and an identification of all places of
business of the exporter that relate to qualifying drugs, including each
warehouse or other facility owned or controlled by, or operated for, the
exporter.</text>
</clause><clause id="id90EB637AAD8A450CBC861F7FD07CAE66" indent="up1"><enum>(ii)</enum><text>In the case of an importer, the
name of the importer and an identification of the places of business of the
importer at which the importer initially receives a qualifying drug after
importation (which shall not exceed 3 places of business except by permission
of the Secretary).</text>
</clause></subparagraph><subparagraph id="id7B5199EA3C444909971B8DCE8A370D57"><enum>(B)</enum><text>Such information
as the Secretary determines to be necessary to demonstrate that the registrant
is in compliance with registration conditions under—</text>
<clause id="idA15EE0B836B1481A9E9A3787C96DE9FC"><enum>(i)</enum><text>in the case of an
importer, subsections (c), (d), (e), (g), and (j) (relating to the sources of
imported qualifying drugs; the inspection of facilities of the importer; the
payment of fees; compliance with the standards referred to in section 801(a);
and maintenance of records and samples); or</text>
</clause><clause id="id1CF61EE487BB4FC58BDE676C1423C442"><enum>(ii)</enum><text>in the case of
an exporter, subsections (c), (d), (f), (g), (h), (i), and (j) (relating to the
sources of exported qualifying drugs; the inspection of facilities of the
exporter and the marking of compliant shipments; the payment of fees; and
compliance with the standards referred to in section 801(a); being licensed as
a pharmacist; conditions for individual importation; and maintenance of records
and samples).</text>
</clause></subparagraph><subparagraph id="idC95C04D9BB0C4F4CA7E673633D2C2222"><enum>(C)</enum><text>An agreement by
the registrant that the registrant will not under subsection (a) import or
export any drug that is not a qualifying drug.</text>
</subparagraph><subparagraph id="id7884D43DF8F54626B0271964D3935BB5"><enum>(D)</enum><text>An agreement by
the registrant to—</text>
<clause id="id3424EFB931074137B212D179FAFF7F4E"><enum>(i)</enum><text>notify the
Secretary of a recall or withdrawal of a qualifying drug distributed in a
permitted country that the registrant has exported or imported, or intends to
export or import, to the United States under subsection (a);</text>
</clause><clause id="id8B8ED77C17C943DA8878C1EB66C89638"><enum>(ii)</enum><text>provide for the
return to the registrant of such drug; and</text>
</clause><clause id="idA9144ACF042A4D0B83788835DEA6D9A4"><enum>(iii)</enum><text>cease, or not
begin, the exportation or importation of such drug unless the Secretary has
notified the registrant that exportation or importation of such drug may
proceed.</text>
</clause></subparagraph><subparagraph id="idCFDC1AAC1EAC4348AC440FECACD291FA"><enum>(E)</enum><text>An agreement by
the registrant to ensure and monitor compliance with each registration
condition, to promptly correct any noncompliance with such a condition, and to
promptly report to the Secretary any such noncompliance.</text>
</subparagraph><subparagraph id="id5AB6D109F8FF4340B0C228BBD634B379"><enum>(F)</enum><text>A plan describing
the manner in which the registrant will comply with the agreement under
subparagraph (E).</text>
</subparagraph><subparagraph id="id4A4CA4213ED349A2B36A7CCF7C3B6781"><enum>(G)</enum><text>An agreement by
the registrant to enforce a contract under subsection (c)(3)(B) against a party
in the chain of custody of a qualifying drug with respect to the authority of
the Secretary under clauses (ii) and (iii) of that subsection.</text>
</subparagraph><subparagraph id="id7B5BE60911E24B47BBC437A7D2F9E5EA"><enum>(H)</enum><text>An agreement by
the registrant to notify the Secretary not more than 30 days before the
registrant intends to make the change, of—</text>
<clause id="id488A47CF4FC7489D88B9BFBDFF5FB4DC"><enum>(i)</enum><text>any change that
the registrant intends to make regarding information provided under
subparagraph (A) or (B); and</text>
</clause><clause id="id087B6B0C14984743A9177268AAA3C752"><enum>(ii)</enum><text>any change that
the registrant intends to make in the compliance plan under subparagraph
(F).</text>
</clause></subparagraph><subparagraph id="id74648706AF144AE8BA96F9855F755AC5"><enum>(I)</enum><text>In the case of an
exporter—</text>
<clause id="id077C1D961C28463AA401A5A2B123E598"><enum>(i)</enum><text>An agreement by
the exporter that a qualifying drug will not under subsection (a) be exported
to any individual not authorized pursuant to subsection (a)(2)(B) to be an
importer of such drug.</text>
</clause><clause id="id1059EF369364420AAF9A8C3B0991C917"><enum>(ii)</enum><text>An agreement to
post a bond, payable to the Treasury of the United States that is equal in
value to the lesser of—</text>
<subclause id="idF9E644AB2ED14A128DD907F76FB6B34E"><enum>(I)</enum><text>the value of
drugs exported by the exporter to the United States in a typical 4-week period
over the course of a year under this section; or</text>
</subclause><subclause id="id8ACA9887D0C64A108F2C64AFB26D4764"><enum>(II)</enum><text>$1,000,000;</text>
</subclause></clause><clause id="id3F1CA3F82F6742BD8443D4D136B0B7F3"><enum>(iii)</enum><text>An agreement by
the exporter to comply with applicable provisions of Canadian law, or the law
of the permitted country designated under subsection (a)(4)(D)(i)(II) in which
the exporter is located, that protect the privacy of personal information with
respect to each individual importing a prescription drug from the exporter
under subsection (a)(2)(B).</text>
</clause><clause id="idC857FF94E0C04DB69000338178F1C035"><enum>(iv)</enum><text>An agreement by
the exporter to report to the Secretary—</text>
<subclause id="idF5000765D772470D849B1AF40F75ED5E"><enum>(I)</enum><text>not later than
August 1 of each fiscal year, the total price and the total volume of drugs
exported to the United States by the exporter during the 6-month period from
January 1 through June 30 of that year; and</text>
</subclause><subclause id="id50CAD639A59F40E4AD4178383AEA91A5"><enum>(II)</enum><text>not later than
January 1 of each fiscal year, the total price and the total volume of drugs
exported to the United States by the exporter during the previous fiscal
year.</text>
</subclause></clause></subparagraph><subparagraph id="id3C19E0B6B3F6485C8C465AC112E6D991"><enum>(J)</enum><text>In the case of an
importer, an agreement by the importer to report to the Secretary—</text>
<clause id="idEB3CA3C0ED064F93B4B2447E077F8E72"><enum>(i)</enum><text>not later than
August 1 of each fiscal year, the total price and the total volume of drugs
imported to the United States by the importer during the 6-month period from
January 1 through June 30 of that fiscal year; and</text>
</clause><clause id="id9FD3442374F6466DA17B9C9D7C662FC4"><enum>(ii)</enum><text>not later than
January 1 of each fiscal year, the total price and the total volume of drugs
imported to the United States by the importer during the previous fiscal
year.</text>
</clause></subparagraph><subparagraph id="id52F26BD1E43C4515970C03D11A1D013B"><enum>(K)</enum><text>Such other
provisions as the Secretary may require by regulation to protect the public
health while permitting—</text>
<clause id="idE69748F6F273493382C6BB85C6CC6E6A"><enum>(i)</enum><text>the importation
by pharmacies, groups of pharmacies, and wholesalers as registered importers of
qualifying drugs under subsection (a); and</text>
</clause><clause id="id293A2DD5B67A4F21A3435AF776F8D18B"><enum>(ii)</enum><text>importation by
individuals of qualifying drugs under subsection (a).</text>
</clause></subparagraph></paragraph><paragraph id="id4BA0DDC86B99432585EAB64D76FF3FD2"><enum>(2)</enum><header>Approval or
disapproval of registration</header>
<subparagraph id="idC4D995D53C374BC3BD67A0049B7D970B"><enum>(A)</enum><header>In
general</header><text>Not later than 90 days after the date on which a
registrant submits to the Secretary a registration under paragraph (1), the
Secretary shall notify the registrant whether the registration is approved or
is disapproved. The Secretary shall disapprove a registration if there is
reason to believe that the registrant is not in compliance with one or more
registration conditions, and shall notify the registrant of such reason. In the
case of a disapproved registration, the Secretary shall subsequently notify the
registrant that the registration is approved if the Secretary determines that
the registrant is in compliance with such conditions.</text>
</subparagraph><subparagraph id="id080691D81ECF49CEBEFF27ECF211EC04"><enum>(B)</enum><header>Changes in
registration information</header><text>Not later than 30 days after receiving a
notice under paragraph (1)(H) from a registrant, the Secretary shall determine
whether the change involved affects the approval of the registration of the
registrant under paragraph (1), and shall inform the registrant of the
determination.</text>
</subparagraph></paragraph><paragraph id="id51DD4BB0A3254B4F8B678246719D6FE4"><enum>(3)</enum><header>Publication of
contact information for registered exporters</header><text>Through the Internet
website of the Food and Drug Administration and a toll-free telephone number,
the Secretary shall make readily available to the public a list of registered
exporters, including contact information for the exporters. Promptly after the
approval of a registration submitted under paragraph (1), the Secretary shall
update the Internet website and the information provided through the toll-free
telephone number accordingly.</text>
</paragraph><paragraph id="id45853B34C77B40FFA07C7835CF0C5FA3"><enum>(4)</enum><header>Suspension and
termination</header>
<subparagraph id="id1115CA31E943492F9F17F5AC7215FAD1"><enum>(A)</enum><header>Suspension</header><text>With
respect to the effectiveness of a registration submitted under paragraph
(1):</text>
<clause id="idD2C658F40A17404AABE21B91E0178930"><enum>(i)</enum><text>Subject to clause
(ii), the Secretary may suspend the registration if the Secretary determines,
after notice and opportunity for a hearing, that the registrant has failed to
maintain substantial compliance with a registration condition.</text>
</clause><clause id="id158271E0A28349AB9FACC279E39B03B5"><enum>(ii)</enum><text>If the Secretary
determines that, under color of the registration, the exporter has exported a
drug or the importer has imported a drug that is not a qualifying drug, or a
drug that does not comply with subsection (g)(2)(A) or (g)(4), or has exported
a qualifying drug to an individual in violation of subsection (i)(2)(F), the
Secretary shall immediately suspend the registration. A suspension under the
preceding sentence is not subject to the provision by the Secretary of prior
notice, and the Secretary shall provide to the registrant an opportunity for a
hearing not later than 10 days after the date on which the registration is
suspended.</text>
</clause><clause id="id4B625960036B4596AB42EBA7D2B44C43"><enum>(iii)</enum><text>The Secretary
may reinstate the registration, whether suspended under clause (i) or (ii), if
the Secretary determines that the registrant has demonstrated that further
violations of registration conditions will not occur.</text>
</clause></subparagraph><subparagraph id="id2553EBD5E1A84B07A86C44DC114EFCDC"><enum>(B)</enum><header>Termination</header><text>The
Secretary, after notice and opportunity for a hearing, may terminate the
registration under paragraph (1) of a registrant if the Secretary determines
that the registrant has engaged in a pattern or practice of violating 1 or more
registration conditions, or if on 1 or more occasions the Secretary has under
subparagraph (A)(ii) suspended the registration of the registrant. The
Secretary may make the termination permanent, or for a fixed period of not less
than 1 year. During the period in which the registration is terminated, any
registration submitted under paragraph (1) by the registrant, or a person that
is a partner in the export or import enterprise, or a principal officer in such
enterprise, and any registration prepared with the assistance of the registrant
or such a person, has no legal effect under this section.</text>
</subparagraph></paragraph><paragraph id="idA16C44B2F72D405D97C449A69837CF5B"><enum>(5)</enum><header>Default of
bond</header><text>A bond required to be posted by an exporter under paragraph
(1)(I)(ii) shall be defaulted and paid to the Treasury of the United States if,
after opportunity for an informal hearing, the Secretary determines that the
exporter has—</text>
<subparagraph id="id94C70C35B6B046FDB55392C4DA53F779"><enum>(A)</enum><text>exported a drug
to the United States that is not a qualifying drug or that is not in compliance
with subsection (g)(2)(A), (g)(4), or (i); or</text>
</subparagraph><subparagraph id="idD616E042FCF24A498396CD4017FA54EE"><enum>(B)</enum><text>failed to permit
the Secretary to conduct an inspection described under subsection (d).</text>
</subparagraph></paragraph></subsection><subsection id="idF2F85CD6919C4584949B330D65457FF0"><enum>(c)</enum><header>Sources of
qualifying drugs</header><text>A registration condition is that the exporter or
importer involved agrees that a qualifying drug will under subsection (a) be
exported or imported into the United States only if there is compliance with
the following:</text>
<paragraph id="idF7DB77B3AF0F4ECA9C5720174C3244C1"><enum>(1)</enum><text>The drug was
manufactured in an establishment—</text>
<subparagraph id="idDE2367B20CFF440082625849AEDD9FE1"><enum>(A)</enum><text>required to
register under subsection (h) or (i) of section 510; and</text>
</subparagraph><subparagraph id="idDE4C509C4C234F1896DE17B48B87BE23"><enum>(B)</enum><clause commented="no" display-inline="yes-display-inline" id="id1DB23B5153224B4097D712C13BA44AE1"><enum>(i)</enum><text>inspected by the
Secretary; or</text>
</clause><clause id="id33F4FD276E89462A93188258986A6808" indent="up1"><enum>(ii)</enum><text>for which the Secretary has
elected to rely on a satisfactory report of a good manufacturing practice
inspection of the establishment from a permitted country whose regulatory
system the Secretary recognizes as equivalent under a mutual recognition
agreement, as provided for under section 510(i)(3), section 803, or part 26 of
title 21, Code of Federal Regulations (or any corresponding successor rule or
regulation).</text>
</clause></subparagraph></paragraph><paragraph id="id6BD64529CE7640528215EC5D201CCFF8"><enum>(2)</enum><text>The establishment
is located in any country, and the establishment manufactured the drug for
distribution in the United States or for distribution in 1 or more of the
permitted countries (without regard to whether in addition the drug is
manufactured for distribution in a foreign country that is not a permitted
country).</text>
</paragraph><paragraph id="idFEDED024EDF2458A9C191ACC1035DE79"><enum>(3)</enum><text>The exporter or
importer obtained the drug—</text>
<subparagraph id="id62B176A05B0E42D5823A973F701384AF"><enum>(A)</enum><text>directly from the
establishment; or</text>
</subparagraph><subparagraph id="id8ED7701E367E4F1B9F6E7FFF9CE9ECE0"><enum>(B)</enum><text>directly from an
entity that, by contract with the exporter or importer—</text>
<clause id="id4ADF5C25F59B4D11A88DEE0788002290"><enum>(i)</enum><text>provides to the
exporter or importer a statement (in such form and containing such information
as the Secretary may require) that, for the chain of custody from the
establishment, identifies each prior sale, purchase, or trade of the drug
(including the date of the transaction and the names and addresses of all
parties to the transaction);</text>
</clause><clause id="id85020C6D86AA405599C7888B8DCD8541"><enum>(ii)</enum><text>agrees to permit
the Secretary to inspect such statements and related records to determine their
accuracy;</text>
</clause><clause id="idC9D7D0F259554D01BAA5767F580C10C1"><enum>(iii)</enum><text>agrees, with
respect to the qualifying drugs involved, to permit the Secretary to inspect
warehouses and other facilities, including records, of the entity for purposes
of determining whether the facilities are in compliance with any standards
under this Act that are applicable to facilities of that type in the United
States; and</text>
</clause><clause id="id13570299AB974E939AFEF6E2FBFB514A"><enum>(iv)</enum><text>has ensured,
through such contractual relationships as may be necessary, that the Secretary
has the same authority regarding other parties in the chain of custody from the
establishment that the Secretary has under clauses (ii) and (iii) regarding
such entity.</text>
</clause></subparagraph></paragraph><paragraph id="id0BB2FCB98B414C60914F7000B387E84E"><enum>(4)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="id757B907D995445898C7242D81E4932C0"><enum>(A)</enum><text>The foreign country
from which the importer will import the drug is a permitted country; or</text>
</subparagraph><subparagraph id="id6CF69E26446B453B9A5B0478CA4C91F3" indent="up1"><enum>(B)</enum><text>The foreign country from which the
exporter will export the drug is the permitted country in which the exporter is
located.</text>
</subparagraph></paragraph><paragraph id="id851E5AD3B2CE43569590D9547399A10C"><enum>(5)</enum><text>During any period
in which the drug was not in the control of the manufacturer of the drug, the
drug did not enter any country that is not a permitted country.</text>
</paragraph><paragraph id="id9729342B97AE4127812590CF96D330CE"><enum>(6)</enum><text>The exporter or
importer retains a sample of each lot of the drug for testing by the
Secretary.</text>
</paragraph></subsection><subsection id="id61970772E8724F1B82B170A30F69993F"><enum>(d)</enum><header>Inspection of
facilities; marking of shipments</header>
<paragraph id="idF5D45F97A7CD4D0CA6FEC30823D11ADE"><enum>(1)</enum><header>Inspection of
facilities</header><text>A registration condition is that, for the purpose of
assisting the Secretary in determining whether the exporter involved is in
compliance with all other registration conditions—</text>
<subparagraph id="idC8C38130C5594010A66E30676D5EA410"><enum>(A)</enum><text>the exporter
agrees to permit the Secretary—</text>
<clause id="id19B0552DE8864D6EA21E9BC60A567C17"><enum>(i)</enum><text>to conduct onsite
inspections, including monitoring on a day-to-day basis, of places of business
of the exporter that relate to qualifying drugs, including each warehouse or
other facility owned or controlled by, or operated for, the exporter;</text>
</clause><clause id="idD7CCA124263C4DFAADDDC0E43C26FF38"><enum>(ii)</enum><text>to have access,
including on a day-to-day basis, to—</text>
<subclause id="id11E121524D6B425F962F46544A6A1940"><enum>(I)</enum><text>records of the
exporter that relate to the export of such drugs, including financial records;
and</text>
</subclause><subclause id="id4D2DBFC951B84AD4BE89BCDEA1B0170E"><enum>(II)</enum><text>samples of such
drugs;</text>
</subclause></clause><clause id="id0249DDD62E5348D6AF1398924091BDE5"><enum>(iii)</enum><text>to carry out
the duties described in paragraph (3); and</text>
</clause><clause id="id7D9F5AAAE382439A93C7EE91A3860724"><enum>(iv)</enum><text>to carry out any
other functions determined by the Secretary to be necessary regarding the
compliance of the exporter; and</text>
</clause></subparagraph><subparagraph id="id56FC23B49D8A463CA67A37D040DF8A4E"><enum>(B)</enum><text>the Secretary has
assigned 1 or more employees of the Secretary to carry out the functions
described in this subsection for the Secretary randomly, but not less than 12
times annually, on the premises of places of businesses referred to in
subparagraph (A)(i), and such an assignment remains in effect on a continuous
basis.</text>
</subparagraph></paragraph><paragraph id="id6F13A939DC9341AE93AED63997B897DC"><enum>(2)</enum><header>Marking of
compliant shipments</header><text>A registration condition is that the exporter
involved agrees to affix to each shipping container of qualifying drugs
exported under subsection (a) such markings as the Secretary determines to be
necessary to identify the shipment as being in compliance with all registration
conditions. Markings under the preceding sentence shall—</text>
<subparagraph id="id69AD080CDEC54CDB9FA7E7BA2136A5CC"><enum>(A)</enum><text>be designed to
prevent affixation of the markings to any shipping container that is not
authorized to bear the markings; and</text>
</subparagraph><subparagraph id="idDA2BDE51AFA6482E89E729B3534B2C3C"><enum>(B)</enum><text>include
anticounterfeiting or track-and-trace technologies, taking into account the
economic and technical feasibility of those technologies.</text>
</subparagraph></paragraph><paragraph id="idB8551221EE964E6BBA9CD92C1FF51B10"><enum>(3)</enum><header>Certain duties
relating to exporters</header><text>Duties of the Secretary with respect to an
exporter include the following:</text>
<subparagraph id="idCC72239AAC864FF5AC08BA129E4DFA9C"><enum>(A)</enum><text>Inspecting,
randomly, but not less than 12 times annually, the places of business of the
exporter at which qualifying drugs are stored and from which qualifying drugs
are shipped.</text>
</subparagraph><subparagraph id="idFC083C1B4151456AA299A0ACF827F638"><enum>(B)</enum><text>During the
inspections under subparagraph (A), verifying the chain of custody of a
statistically significant sample of qualifying drugs from the establishment in
which the drug was manufactured to the exporter, which shall be accomplished or
supplemented by the use of anticounterfeiting or track-and-trace technologies,
taking into account the economic and technical feasibility of those
technologies, except that a drug that lacks such technologies from the point of
manufacture shall not for that reason be excluded from importation by an
exporter.</text>
</subparagraph><subparagraph id="id51E4CE8CDEA64A0794C0C04EF557F820"><enum>(C)</enum><text>Randomly
reviewing records of exports to individuals for the purpose of determining
whether the drugs are being imported by the individuals in accordance with the
conditions under subsection (i). Such reviews shall be conducted in a manner
that will result in a statistically significant determination of compliance
with all such conditions.</text>
</subparagraph><subparagraph id="id5A5E0BA4C16D4D24BAEE26E459E7D020"><enum>(D)</enum><text>Monitoring the
affixing of markings under paragraph (2).</text>
</subparagraph><subparagraph id="idA97069DE379245C0AB5D8F43962D656C"><enum>(E)</enum><text>Inspecting as the
Secretary determines is necessary the warehouses and other facilities,
including records, of other parties in the chain of custody of qualifying
drugs.</text>
</subparagraph><subparagraph id="id857B7E97BC1E446D88020D5317C5E484"><enum>(F)</enum><text>Determining
whether the exporter is in compliance with all other registration
conditions.</text>
</subparagraph></paragraph><paragraph id="idB6612BDC6C3743CB8A3309EBF3868E41"><enum>(4)</enum><header>Prior notice of
shipments</header><text>A registration condition is that, not less than 8 hours
and not more than 5 days in advance of the time of the importation of a
shipment of qualifying drugs, the importer involved agrees to submit to the
Secretary a notice with respect to the shipment of drugs to be imported or
offered for import into the United States under subsection (a). A notice under
the preceding sentence shall include—</text>
<subparagraph id="idCE9800ED1F6C47998218E689FA8B0753"><enum>(A)</enum><text>the name and
complete contact information of the person submitting the notice;</text>
</subparagraph><subparagraph id="id6D298B53A0D24BC691B013B2AC4E6BCE"><enum>(B)</enum><text>the name and
complete contact information of the importer involved;</text>
</subparagraph><subparagraph id="id73816C6E7EAC4B91980FD6E612987EE7"><enum>(C)</enum><text>the identity of
the drug, including the established name of the drug, the quantity of the drug,
and the lot number assigned by the manufacturer;</text>
</subparagraph><subparagraph id="id1560B4370415430687208DA6C7A3669F"><enum>(D)</enum><text>the identity of
the manufacturer of the drug, including the identity of the establishment at
which the drug was manufactured;</text>
</subparagraph><subparagraph id="id4C3C385FDD3448B88601D1077AB3C2ED"><enum>(E)</enum><text>the country from
which the drug is shipped;</text>
</subparagraph><subparagraph id="id6FBF1F7724F54454A4C32D69E169EEBB"><enum>(F)</enum><text>the name and
complete contact information for the shipper of the drug;</text>
</subparagraph><subparagraph id="id4EDA8043B1524CA4A913FCE06057FAAE"><enum>(G)</enum><text>anticipated
arrival information, including the port of arrival and crossing location within
that port, and the date and time;</text>
</subparagraph><subparagraph id="id7302D1461BDA4D43A1640CF74AE8D84D"><enum>(H)</enum><text>a summary of the
chain of custody of the drug from the establishment in which the drug was
manufactured to the importer;</text>
</subparagraph><subparagraph id="id05FBEAF0B099485B883ED92B3E1FBCF5"><enum>(I)</enum><text>a declaration as
to whether the Secretary has ordered that importation of the drug from the
permitted country cease under subsection (g)(2)(C) or (D); and</text>
</subparagraph><subparagraph id="id569F1B64FFF14C33812CBD27D07FCFB2"><enum>(J)</enum><text>such other
information as the Secretary may require by regulation.</text>
</subparagraph></paragraph><paragraph id="id0AC6641F2D7641E08C6E061AF2E6FCDC"><enum>(5)</enum><header>Marking of
compliant shipments</header><text>A registration condition is that the importer
involved agrees, before wholesale distribution (as defined in section 503(e))
of a qualifying drug that has been imported under subsection (a), to affix to
each container of such drug such markings or other technology as the Secretary
determines necessary to identify the shipment as being in compliance with all
registration conditions, except that the markings or other technology shall not
be required on a drug that bears comparable, compatible markings or technology
from the manufacturer of the drug. Markings or other technology under the
preceding sentence shall—</text>
<subparagraph id="idCE316B3610A642B2AEFB4B1DBF142CD1"><enum>(A)</enum><text>be designed to
prevent affixation of the markings or other technology to any container that is
not authorized to bear the markings; and</text>
</subparagraph><subparagraph id="idF49C65C16E30472ABA7312A14822B5C3"><enum>(B)</enum><text>shall include
anticounterfeiting or track-and-trace technologies, taking into account the
economic and technical feasibility of such technologies.</text>
</subparagraph></paragraph><paragraph id="idB2BA4B9228AA4799B0E6F92C923C8A08"><enum>(6)</enum><header>Certain duties
relating to importers</header><text>Duties of the Secretary with respect to an
importer include the following:</text>
<subparagraph id="idF1BC9A37265644DEB2EF539954CB05A5"><enum>(A)</enum><text>Inspecting,
randomly, but not less than 12 times annually, the places of business of the
importer at which a qualifying drug is initially received after
importation.</text>
</subparagraph><subparagraph id="id91D9C726026B4EA0A012FB7DA19B4573"><enum>(B)</enum><text>During the
inspections under subparagraph (A), verifying the chain of custody of a
statistically significant sample of qualifying drugs from the establishment in
which the drug was manufactured to the importer, which shall be accomplished or
supplemented by the use of anticounterfeiting or track-and-trace technologies,
taking into account the economic and technical feasibility of those
technologies, except that a drug that lacks such technologies from the point of
manufacture shall not for that reason be excluded from importation by an
importer.</text>
</subparagraph><subparagraph id="idDD2B181B128E45688384C204C6F589EF"><enum>(C)</enum><text>Reviewing notices
under paragraph (4).</text>
</subparagraph><subparagraph id="id567FB1126210493D92A06F60DFE11B62"><enum>(D)</enum><text>Inspecting as the
Secretary determines is necessary the warehouses and other facilities,
including records of other parties in the chain of custody of qualifying
drugs.</text>
</subparagraph><subparagraph id="id0B8C4470455544FE9425AA3A5B60630E"><enum>(E)</enum><text>Determining
whether the importer is in compliance with all other registration
conditions.</text>
</subparagraph></paragraph></subsection><subsection id="id1663A44F7C9C484DA7907671A2554123"><enum>(e)</enum><header>Importer
fees</header>
<paragraph id="id4B9851CD8FFD45408FF5310A9DB6F9AD"><enum>(1)</enum><header>Registration
fee</header><text>A registration condition is that the importer involved pays
to the Secretary a fee of $10,000 due on the date on which the importer first
submits the registration to the Secretary under subsection (b).</text>
</paragraph><paragraph id="id0FA13A79EE104D9493C3B5E8919AFF99"><enum>(2)</enum><header>Inspection
fee</header><text>A registration condition is that the importer involved pays a
fee to the Secretary in accordance with this subsection. Such fee shall be paid
not later than October 1 and April 1 of each fiscal year in the amount provided
for under paragraph (3).</text>
</paragraph><paragraph id="idE0A9717CDE5B48F2AB4683D453FED9BF"><enum>(3)</enum><header>Amount of
inspection fee</header>
<subparagraph id="idEE1727B45D674106B85FA9876D97670F"><enum>(A)</enum><header>Aggregate total
of fees</header><text>Not later than 30 days before the start of each fiscal
year, the Secretary, in consultation with the Secretary of Homeland Security
and the Secretary of the Treasury, shall establish an aggregate total of fees
to be collected under paragraph (2) for importers for that fiscal year that is
sufficient, and not more than necessary, to pay the costs for that fiscal year
of administering this section with respect to registered importers, including
the costs associated with—</text>
<clause id="idE5F979FB6D404362907B570A3350EA6D"><enum>(i)</enum><text>inspecting the
facilities of registered importers, and of other entities in the chain of
custody of a qualifying drug as necessary, under subsection (d)(6);</text>
</clause><clause id="idA67AC3A4138642D7B69BC21FEF7E22F2"><enum>(ii)</enum><text>developing,
implementing, and operating under such subsection an electronic system for
submission and review of the notices required under subsection (d)(4) with
respect to shipments of qualifying drugs under subsection (a) to assess
compliance with all registration conditions when such shipments are offered for
import into the United States; and</text>
</clause><clause id="idEA10A3F8AB3246E4BF8420CFB04A8F08"><enum>(iii)</enum><text>inspecting such
shipments as necessary, when offered for import into the United States to
determine if such a shipment should be refused admission under subsection
(g)(5).</text>
</clause></subparagraph><subparagraph id="idAAEAA97C906F42FB80836CB1BFEB8939"><enum>(B)</enum><header>Limitation</header><text>Subject
to subparagraph (C), the aggregate total of fees collected under paragraph (2)
for a fiscal year shall not exceed 2.5 percent of the total price of qualifying
drugs imported during that fiscal year into the United States by registered
importers under subsection (a).</text>
</subparagraph><subparagraph id="id58766AE9D1324619A97DA6ED3F719EE1"><enum>(C)</enum><header>Total price of
drugs</header>
<clause id="id3008B93C873B453C871724AD516AB866"><enum>(i)</enum><header>Estimate</header><text>For
the purposes of complying with the limitation described in subparagraph (B)
when establishing under subparagraph (A) the aggregate total of fees to be
collected under paragraph (2) for a fiscal year, the Secretary shall estimate
the total price of qualifying drugs imported into the United States by
registered importers during that fiscal year by adding the total price of
qualifying drugs imported by each registered importer during the 6-month period
from January 1 through June 30 of the previous fiscal year, as reported to the
Secretary by each registered importer under subsection (b)(1)(J).</text>
</clause><clause id="id801C6554F18B4FB8B1F1D3539E38D08E"><enum>(ii)</enum><header>Calculation</header><text>Not
later than March 1 of the fiscal year that follows the fiscal year for which
the estimate under clause (i) is made, the Secretary shall calculate the total
price of qualifying drugs imported into the United States by registered
importers during that fiscal year by adding the total price of qualifying drugs
imported by each registered importer during that fiscal year, as reported to
the Secretary by each registered importer under subsection (b)(1)(J).</text>
</clause><clause id="id87A66C6050C94C228451515612776EDB"><enum>(iii)</enum><header>Adjustment</header><text>If
the total price of qualifying drugs imported into the United States by
registered importers during a fiscal year as calculated under clause (ii) is
less than the aggregate total of fees collected under paragraph (2) for that
fiscal year, the Secretary shall provide for a pro-rata reduction in the fee
due from each registered importer on April 1 of the subsequent fiscal year so
that the limitation described in subparagraph (B) is observed.</text>
</clause></subparagraph><subparagraph id="id1FCC559744154EBEA513A8A610E5FDE4"><enum>(D)</enum><header>Individual
importer fee</header><text>Subject to the limitation described in subparagraph
(B), the fee under paragraph (2) to be paid on October 1 and April 1 by an
importer shall be an amount that is proportional to a reasonable estimate by
the Secretary of the semiannual share of the importer of the volume of
qualifying drugs imported by importers under subsection (a).</text>
</subparagraph></paragraph><paragraph id="idA631D29CA62746A381E7900746CB4637"><enum>(4)</enum><header>Use of
fees</header>
<subparagraph id="id487904E8AD9249DBA32BC907466F9F68"><enum>(A)</enum><header>In
general</header><text>Subject to appropriations Acts, fees collected by the
Secretary under paragraphs (1) and (2) shall be credited to the appropriation
account for salaries and expenses of the Food and Drug Administration until
expended (without fiscal year limitation), and the Secretary may, in
consultation with the Secretary of Homeland Security and the Secretary of the
Treasury, transfer some proportion of such fees to the appropriation account
for salaries and expenses of the Bureau of Customs and Border Protection until
expended (without fiscal year limitation).</text>
</subparagraph><subparagraph id="idDD3EC2F8E2234B15BD811C8861A4CFFC"><enum>(B)</enum><header>Sole
purpose</header><text>Fees collected by the Secretary under paragraphs (1) and
(2) are only available to the Secretary and, if transferred, to the Secretary
of Homeland Security, and are for the sole purpose of paying the costs referred
to in paragraph (3)(A).</text>
</subparagraph></paragraph><paragraph id="idD7960BF2646A4E54A032971D0449821D"><enum>(5)</enum><header>Collection of
fees</header><text>In any case where the Secretary does not receive payment of
a fee assessed under paragraph (1) or (2) within 30 days after it is due, such
fee shall be treated as a claim of the United States Government subject to
subchapter II of chapter 37 of title 31, United States Code.</text>
</paragraph></subsection><subsection id="idE119F6CFA1D543D9817649452B03FEC2"><enum>(f)</enum><header>Exporter
fees</header>
<paragraph id="id77C181E2865A44C38578555C6396ED64"><enum>(1)</enum><header>Registration
fee</header><text>A registration condition is that the exporter involved pays
to the Secretary a fee of $10,000 due on the date on which the exporter first
submits that registration to the Secretary under subsection (b).</text>
</paragraph><paragraph id="id4CC7BF88C2C54B25A64F3A7D916F8364"><enum>(2)</enum><header>Inspection
fee</header><text>A registration condition is that the exporter involved pays a
fee to the Secretary in accordance with this subsection. Such fee shall be paid
not later than October 1 and April 1 of each fiscal year in the amount provided
for under paragraph (3).</text>
</paragraph><paragraph id="idB9B2CD0C923742139F6E4DDDAC2F8842"><enum>(3)</enum><header>Amount of
inspection fee</header>
<subparagraph id="id311C2ACEFCC0473A85E16C0DB32BE5C3"><enum>(A)</enum><header>Aggregate total
of fees</header><text>Not later than 30 days before the start of each fiscal
year, the Secretary, in consultation with the Secretary of Homeland Security
and the Secretary of the Treasury, shall establish an aggregate total of fees
to be collected under paragraph (2) for exporters for that fiscal year that is
sufficient, and not more than necessary, to pay the costs for that fiscal year
of administering this section with respect to registered exporters, including
the costs associated with—</text>
<clause id="idE23C1FD52F98490FAAAC3E74521645DC"><enum>(i)</enum><text>inspecting the
facilities of registered exporters, and of other entities in the chain of
custody of a qualifying drug as necessary, under subsection (d)(3);</text>
</clause><clause id="id4618B37A65A242D4B8DC952D756A1BAD"><enum>(ii)</enum><text>developing,
implementing, and operating under such subsection a system to screen marks on
shipments of qualifying drugs under subsection (a) that indicate compliance
with all registration conditions, when such shipments are offered for import
into the United States; and</text>
</clause><clause id="id2AAAEB00AD404051996AC1EC1C3E05F0"><enum>(iii)</enum><text>screening such
markings, and inspecting such shipments as necessary, when offered for import
into the United States to determine if such a shipment should be refused
admission under subsection (g)(5).</text>
</clause></subparagraph><subparagraph id="id8C9401068C6046FFA5084DB3139BB8DA"><enum>(B)</enum><header>Limitation</header><text>Subject
to subparagraph (C), the aggregate total of fees collected under paragraph (2)
for a fiscal year shall not exceed 2.5 percent of the total price of qualifying
drugs imported during that fiscal year into the United States by registered
exporters under subsection (a).</text>
</subparagraph><subparagraph id="id3642F5D45DFC419992F7115AA59DFC99"><enum>(C)</enum><header>Total price of
drugs</header>
<clause id="idEFB7EE4B54B44A428A1CE5CB99B1F2AB"><enum>(i)</enum><header>Estimate</header><text>For
the purposes of complying with the limitation described in subparagraph (B)
when establishing under subparagraph (A) the aggregate total of fees to be
collected under paragraph (2) for a fiscal year, the Secretary shall estimate
the total price of qualifying drugs imported into the United States by
registered exporters during that fiscal year by adding the total price of
qualifying drugs exported by each registered exporter during the 6-month period
from January 1 through June 30 of the previous fiscal year, as reported to the
Secretary by each registered exporter under subsection (b)(1)(I)(iv).</text>
</clause><clause id="id34546F3AE89F4D20A31A944D7E55316A"><enum>(ii)</enum><header>Calculation</header><text>Not
later than March 1 of the fiscal year that follows the fiscal year for which
the estimate under clause (i) is made, the Secretary shall calculate the total
price of qualifying drugs imported into the United States by registered
exporters during that fiscal year by adding the total price of qualifying drugs
exported by each registered exporter during that fiscal year, as reported to
the Secretary by each registered exporter under subsection
(b)(1)(I)(iv).</text>
</clause><clause id="id72B17F42432445C0BC502D24BA40B9E9"><enum>(iii)</enum><header>Adjustment</header><text>If
the total price of qualifying drugs imported into the United States by
registered exporters during a fiscal year as calculated under clause (ii) is
less than the aggregate total of fees collected under paragraph (2) for that
fiscal year, the Secretary shall provide for a pro-rata reduction in the fee
due from each registered exporter on April 1 of the subsequent fiscal year so
that the limitation described in subparagraph (B) is observed.</text>
</clause></subparagraph><subparagraph id="idC24D5EA0CAE94DD19C5A0E77209A6C3C"><enum>(D)</enum><header>Individual
exporter fee</header><text>Subject to the limitation described in subparagraph
(B), the fee under paragraph (2) to be paid on October 1 and April 1 by an
exporter shall be an amount that is proportional to a reasonable estimate by
the Secretary of the semiannual share of the exporter of the volume of
qualifying drugs exported by exporters under subsection (a).</text>
</subparagraph></paragraph><paragraph id="id24B55DDC0F6A407EBC39B995618D118B"><enum>(4)</enum><header>Use of
fees</header>
<subparagraph id="id54C23E6613D2488497475965E8C7CA85"><enum>(A)</enum><header>In
general</header><text>Subject to appropriations Acts, fees collected by the
Secretary under paragraphs (1) and (2) shall be credited to the appropriation
account for salaries and expenses of the Food and Drug Administration until
expended (without fiscal year limitation), and the Secretary may, in
consultation with the Secretary of Homeland Security and the Secretary of the
Treasury, transfer some proportion of such fees to the appropriation account
for salaries and expenses of the Bureau of Customs and Border Protection until
expended (without fiscal year limitation).</text>
</subparagraph><subparagraph id="id56E16B3C50AD4C3FA13A2340E891FEA3"><enum>(B)</enum><header>Sole
purpose</header><text>Fees collected by the Secretary under paragraphs (1) and
(2) are only available to the Secretary and, if transferred, to the Secretary
of Homeland Security, and are for the sole purpose of paying the costs referred
to in paragraph (3)(A).</text>
</subparagraph></paragraph><paragraph id="id648A1AB8717446879D9BA45E597D8EDC"><enum>(5)</enum><header>Collection of
fees</header><text>In any case where the Secretary does not receive payment of
a fee assessed under paragraph (1) or (2) within 30 days after it is due, such
fee shall be treated as a claim of the United States Government subject to
subchapter II of chapter 37 of title 31, United States Code.</text>
</paragraph></subsection><subsection id="idDFB74B23ABB34E1F950A0D0D97B95AFF"><enum>(g)</enum><header>Compliance with
Section <enum-in-header>801(a)</enum-in-header></header>
<paragraph id="idB594B2873D754B5C9BB57D46BC5A2416"><enum>(1)</enum><header>In
general</header><text>A registration condition is that each qualifying drug
exported under subsection (a) by the registered exporter involved or imported
under subsection (a) by the registered importer involved is in compliance with
the standards referred to in section 801(a) regarding admission of the drug
into the United States, subject to paragraphs (2), (3), and (4).</text>
</paragraph><paragraph id="id22E0F78EF0D04E9F8DB7B609CA7C5013"><enum>(2)</enum><header>Section 505;
approval status</header>
<subparagraph id="id95CB393C8EB14E52B9FDD8B8D0C07C45"><enum>(A)</enum><header>In
general</header><text>A qualifying drug that is imported or offered for import
under subsection (a) shall comply with the conditions established in the
approved application under section 505(b) for the U.S. label drug as described
under this subsection.</text>
</subparagraph><subparagraph id="id98F3353295994CB989A934EB6650DFA2"><enum>(B)</enum><header>Notice by
manufacturer; general provisions</header>
<clause id="id51950D6673C04350B2116A396CD2ED68"><enum>(i)</enum><header>In
general</header><text>The person that manufactures a qualifying drug that is,
or will be, introduced for commercial distribution in a permitted country shall
in accordance with this paragraph submit to the Secretary a notice that—</text>
<subclause id="id16B057B76FEC40FC8A4003874349594E"><enum>(I)</enum><text>includes each
difference in the qualifying drug from a condition established in the approved
application for the U.S. label drug beyond—</text>
<item id="id93222BFB72E64ABCA28E00945BA5D8FA"><enum>(aa)</enum><text>the variations
provided for in the application; and</text>
</item><item id="id359F115C4F844DCDB4CD2BA8F1AF18E8"><enum>(bb)</enum><text>any difference
in labeling (except ingredient labeling); or</text>
</item></subclause><subclause id="id97A9202C3B1443B8A4BF8998CBDF301B"><enum>(II)</enum><text>states that
there is no difference in the qualifying drug from a condition established in
the approved application for the U.S. label drug beyond—</text>
<item id="idC1B67B4B7A72476D9F990CD7E90D9514"><enum>(aa)</enum><text>the variations
provided for in the application; and</text>
</item><item id="id2D1D478C60F3469B9EB0C6C688E85AE7"><enum>(bb)</enum><text>any difference
in labeling (except ingredient labeling).</text>
</item></subclause></clause><clause id="id5B08201D13C04D27915FF9337A982223"><enum>(ii)</enum><header>Information in
notice</header><text>A notice under clause (i)(I) shall include the information
that the Secretary may require under section 506A, any additional information
the Secretary may require (which may include data on bioequivalence if such
data are not required under section 506A), and, with respect to the permitted
country that approved the qualifying drug for commercial distribution, or with
respect to which such approval is sought, include the following:</text>
<subclause id="id97BC369F66AE4B26853CF96548E651C5"><enum>(I)</enum><text>The date on which
the qualifying drug with such difference was, or will be, introduced for
commercial distribution in the permitted country.</text>
</subclause><subclause id="idCB546AD29AAA440D9500D45D15760F75"><enum>(II)</enum><text>Information
demonstrating that the person submitting the notice has also notified the
government of the permitted country in writing that the person is submitting to
the Secretary a notice under clause (i)(I), which notice describes the
difference in the qualifying drug from a condition established in the approved
application for the U.S. label drug.</text>
</subclause><subclause id="idFD45FC01CC264D9AAA4670E8DD98967C"><enum>(III)</enum><text>The information
that the person submitted or will submit to the government of the permitted
country for purposes of obtaining approval for commercial distribution of the
drug in the country which, if in a language other than English, shall be
accompanied by an English translation verified to be complete and accurate,
with the name, address, and a brief statement of the qualifications of the
person that made the translation.</text>
</subclause></clause><clause id="id784CE50AB90F46C6B5616A2A07F14E8A"><enum>(iii)</enum><header>Certifications</header><text>The
chief executive officer and the chief medical officer of the manufacturer
involved shall each certify in the notice under clause (i) that—</text>
<subclause id="idEA75DD89DF7947BD828B54353E3407FB"><enum>(I)</enum><text>the information
provided in the notice is complete and true; and</text>
</subclause><subclause id="id9FE0CAA37FB848DDAF35AB53502A2B17"><enum>(II)</enum><text>a copy of the
notice has been provided to the Federal Trade Commission and to the State
attorneys general.</text>
</subclause></clause><clause id="id7B81126825E44DA8BFE90B4C0A2E439D"><enum>(iv)</enum><header>Fee</header><text>If
a notice submitted under clause (i) includes a difference that would, under
section 506A, require the submission of a supplemental application if made as a
change to the U.S. label drug, the person that submits the notice shall pay to
the Secretary a fee in the same amount as would apply if the person were paying
a fee pursuant to section 736(a)(1)(A)(ii). Subject to appropriations Acts,
fees collected by the Secretary under the preceding sentence are available only
to the Secretary and are for the sole purpose of paying the costs of reviewing
notices submitted under clause (i).</text>
</clause><clause id="id14E67565A10841708A39E5DC7780B6EB"><enum>(v)</enum><header>Timing of
submission of notices</header>
<subclause id="idA855A0E4CCC1453888665F55C6CC4F48"><enum>(I)</enum><header>Prior approval
notices</header><text>A notice under clause (i) to which subparagraph (C)
applies shall be submitted to the Secretary not later than 120 days before the
qualifying drug with the difference is introduced for commercial distribution
in a permitted country, unless the country requires that distribution of the
qualifying drug with the difference begin less than 120 days after the country
requires the difference.</text>
</subclause><subclause id="idF771ABF6F99A4F99AA278BBDE3FAAC48"><enum>(II)</enum><header>Other approval
notices</header><text>A notice under clause (i) to which subparagraph (D)
applies shall be submitted to the Secretary not later than the day on which the
qualifying drug with the difference is introduced for commercial distribution
in a permitted country.</text>
</subclause><subclause id="idC2BE75DCD22E4D58815116B53A2DEFCF"><enum>(III)</enum><header>Other
notices</header><text>A notice under clause (i) to which subparagraph (E)
applies shall be submitted to the Secretary on the date that the qualifying
drug is first introduced for commercial distribution in a permitted country and
annually thereafter.</text>
</subclause></clause><clause id="id1865275984C74CBCB8CFBCFB37CB3DE4"><enum>(vi)</enum><header>Review by
Secretary</header>
<subclause id="id038E5C8AD70A4916B7CD56E4AE9D46F2"><enum>(I)</enum><header>In
general</header><text>In this paragraph, the difference in a qualifying drug
that is submitted in a notice under clause (i) from the U.S. label drug shall
be treated by the Secretary as if it were a manufacturing change to the U.S.
label drug under section 506A.</text>
</subclause><subclause id="idF3E19BB087994202BF42B3D58196A3F3"><enum>(II)</enum><header>Standard of
review</header><text>Except as provided in subclause (III), the Secretary shall
review and approve or disapprove the difference in a notice submitted under
clause (i), if required under section 506A, using the safe and effective
standard for approving or disapproving a manufacturing change under section
506A.</text>
</subclause><subclause id="id17A1CCAFF8E6475D8D365AA33CD5F6AF"><enum>(III)</enum><header>Bioequivalence</header><text>If
the Secretary would approve the difference in a notice submitted under clause
(i) using the safe and effective standard under section 506A and if the
Secretary determines that the qualifying drug is not bioequivalent to the U.S.
label drug, the Secretary shall—</text>
<item id="idDF3DFDE620B4444A86C6F0596F4A2F1A"><enum>(aa)</enum><text>include in the
labeling provided under paragraph (3) a prominent advisory that the qualifying
drug is safe and effective but is not bioequivalent to the U.S. label drug if
the Secretary determines that such an advisory is necessary for health care
practitioners and patients to use the qualifying drug safely and effectively;
or</text>
</item><item id="id5125ACB0CBF1464A9293E147E05C07D8"><enum>(bb)</enum><text>decline to
approve the difference if the Secretary determines that the availability of
both the qualifying drug and the U.S. label drug would pose a threat to the
public health.</text>
</item></subclause><subclause id="id3E12C833CC8D4D49BA6F061710B6D15A"><enum>(IV)</enum><header>Review by the
Secretary</header><text>The Secretary shall review and approve or disapprove
the difference in a notice submitted under clause (i), if required under
section 506A, not later than 120 days after the date on which the notice is
submitted.</text>
</subclause><subclause id="id8D35ECFEFA2C474DAE5688AF2E297D45"><enum>(V)</enum><header>Establishment
inspection</header><text>If review of such difference would require an
inspection of the establishment in which the qualifying drug is
manufactured—</text>
<item id="id1466CAB16D754B4493BBE975B069A5C8"><enum>(aa)</enum><text>such inspection
by the Secretary shall be authorized; and</text>
</item><item id="idECEE5EF840FF4ECFB57528E2F5176B3C"><enum>(bb)</enum><text>the Secretary
may rely on a satisfactory report of a good manufacturing practice inspection
of the establishment from a permitted country whose regulatory system the
Secretary recognizes as equivalent under a mutual recognition agreement, as
provided under section 510(i)(3), section 803, or part 26 of title 21, Code of
Federal Regulations (or any corresponding successor rule or regulation).</text>
</item></subclause></clause><clause id="id00138669964E4CC786579637B0A227E6"><enum>(vii)</enum><header>Publication
of information on notices</header>
<subclause id="id3EC4C751CE654CD4A55C2470E8268349"><enum>(I)</enum><header>In
general</header><text>Through the Internet website of the Food and Drug
Administration and a toll-free telephone number, the Secretary shall readily
make available to the public a list of notices submitted under clause
(i).</text>
</subclause><subclause id="idE00FD4CC6CF3408996AC0AB02E19B494"><enum>(II)</enum><header>Contents</header><text>The
list under subclause (I) shall include the date on which a notice is submitted
and whether—</text>
<item id="id88AEC3ABCCCD4A8BA4EE4DD42B28E8AA"><enum>(aa)</enum><text>a
notice is under review;</text>
</item><item id="idEBBFD4ED3ADC488A9610C647C9826C28"><enum>(bb)</enum><text>the Secretary
has ordered that importation of the qualifying drug from a permitted country
cease; or</text>
</item><item id="id3BB67DE17FA744BCB412494652C21619"><enum>(cc)</enum><text>the importation
of the drug is permitted under subsection (a).</text>
</item></subclause><subclause id="id6E0556625EDD4559B05934A82C8730EA"><enum>(III)</enum><header>Update</header><text>The
Secretary shall promptly update the Internet website with any changes to the
list.</text>
</subclause></clause></subparagraph><subparagraph id="id48B651796F1047539EC5E5FE11E1106E"><enum>(C)</enum><header>Notice; drug
difference requiring prior approval</header><text>In the case of a notice under
subparagraph (B)(i) that includes a difference that would, under section
506A(c) or (d)(3)(B)(i), require the approval of a supplemental application
before the difference could be made to the U.S. label drug the following shall
occur:</text>
<clause id="id743441BCDB294E4EB9C6BC303E90718D"><enum>(i)</enum><text>Promptly after
the notice is submitted, the Secretary shall notify registered exporters,
registered importers, the Federal Trade Commission, and the State attorneys
general that the notice has been submitted with respect to the qualifying drug
involved.</text>
</clause><clause id="id9CC29E373B7B40DF9A247689FA157F44"><enum>(ii)</enum><text>If the Secretary
has not made a determination whether such a supplemental application regarding
the U.S. label drug would be approved or disapproved by the date on which the
qualifying drug involved is to be introduced for commercial distribution in a
permitted country, the Secretary shall—</text>
<subclause id="id7BF96981F95547B1A6E5270F4BBB738C"><enum>(I)</enum><text>order that the
importation of the qualifying drug involved from the permitted country not
begin until the Secretary completes review of the notice; and</text>
</subclause><subclause id="idF03CD8E010CF45AFA7FAC0FAEB3E1905"><enum>(II)</enum><text>promptly notify
registered exporters, registered importers, the Federal Trade Commission, and
the State attorneys general of the order.</text>
</subclause></clause><clause id="id4BF574148A694A1C9D8A5B4349A9800A"><enum>(iii)</enum><text>If the
Secretary determines that such a supplemental application regarding the U.S.
label drug would not be approved, the Secretary shall—</text>
<subclause id="idF129DCD165A84A01AD41E831B3E2034A"><enum>(I)</enum><text>order that the
importation of the qualifying drug involved from the permitted country cease,
or provide that an order under clause (ii), if any, remains in effect;</text>
</subclause><subclause id="id8AA547B5E84444B3A38394EA75580994"><enum>(II)</enum><text>notify the
permitted country that approved the qualifying drug for commercial distribution
of the determination; and</text>
</subclause><subclause id="id17FD243F43674C24A55306708286B416"><enum>(III)</enum><text>promptly notify
registered exporters, registered importers, the Federal Trade Commission, and
the State attorneys general of the determination.</text>
</subclause></clause><clause id="id7F537BD474C143D89E8F26C09ABCFB7C"><enum>(iv)</enum><text>If the Secretary
determines that such a supplemental application regarding the U.S. label drug
would be approved, the Secretary shall—</text>
<subclause id="id41A38581FDC541A99EEDED7249746678"><enum>(I)</enum><text>vacate the order
under clause (ii), if any;</text>
</subclause><subclause id="id3593C7311A774B9F8A4BB620107CFE17"><enum>(II)</enum><text>consider the
difference to be a variation provided for in the approved application for the
U.S. label drug;</text>
</subclause><subclause id="idC5E28F777A474D1DBA83FFDC169C471E"><enum>(III)</enum><text>permit
importation of the qualifying drug under subsection (a); and</text>
</subclause><subclause id="id9A60DB2863134796AED2324FAE3BF50F"><enum>(IV)</enum><text>promptly notify
registered exporters, registered importers, the Federal Trade Commission, and
the State attorneys general of the determination.</text>
</subclause></clause></subparagraph><subparagraph id="id919B555EB26746EA898E4EB5E8DB3D9D"><enum>(D)</enum><header>Notice; drug
difference not requiring prior approval</header><text>In the case of a notice
under subparagraph (B)(i) that includes a difference that would, under section
506A(d)(3)(B)(ii), not require the approval of a supplemental application
before the difference could be made to the U.S. label drug the following shall
occur:</text>
<clause id="idF02480F5BC8948C9AA3E60666CE23477"><enum>(i)</enum><text>During the period
in which the notice is being reviewed by the Secretary, the authority under
this subsection to import the qualifying drug involved continues in
effect.</text>
</clause><clause id="id18611C893BFA4A14A23C8B04631564F1"><enum>(ii)</enum><text>If the Secretary
determines that such a supplemental application regarding the U.S. label drug
would not be approved, the Secretary shall—</text>
<subclause id="id722DD0FAEC0E4E34AB0AA0A5B00B75EF"><enum>(I)</enum><text>order that the
importation of the qualifying drug involved from the permitted country
cease;</text>
</subclause><subclause id="id54B4514A9CEF4BAC99A140E237751E1D"><enum>(II)</enum><text>notify the
permitted country that approved the qualifying drug for commercial distribution
of the determination; and</text>
</subclause><subclause id="id6AF30FEDBB3A44D899E81C109E3EBDA0"><enum>(III)</enum><text>promptly notify
registered exporters, registered importers, the Federal Trade Commission, and
the State attorneys general of the determination.</text>
</subclause></clause><clause id="id9F3A3FB026A64B528A169BB1832BAA3F"><enum>(iii)</enum><text>If the
Secretary determines that such a supplemental application regarding the U.S.
label drug would be approved, the difference shall be considered to be a
variation provided for in the approved application for the U.S. label
drug.</text>
</clause></subparagraph><subparagraph id="id5B78D531585146788CE9773FDC6AA614"><enum>(E)</enum><header>Notice; drug
difference not requiring approval; no difference</header><text>In the case of a
notice under subparagraph (B)(i) that includes a difference for which, under
section 506A(d)(1)(A), a supplemental application would not be required for the
difference to be made to the U.S. label drug, or that states that there is no
difference, the Secretary—</text>
<clause id="id5469B983C64C4F6AA11A806311AC27BC"><enum>(i)</enum><text>shall consider
such difference to be a variation provided for in the approved application for
the U.S. label drug;</text>
</clause><clause id="id81DF4AAAC45844769B7C82BD476B8CEC"><enum>(ii)</enum><text>may not order
that the importation of the qualifying drug involved cease; and</text>
</clause><clause id="id5783842901DA404586E325AE5116CF60"><enum>(iii)</enum><text>shall promptly
notify registered exporters and registered importers.</text>
</clause></subparagraph><subparagraph id="id747BB95D11CB4618BEFF4B897A4DC6C1"><enum>(F)</enum><header>Differences in
active ingredient, route of administration, dosage form, or strength</header>
<clause id="id3E34017BF62B4EBCBDB7D8B8F9F5CC6D"><enum>(i)</enum><header>In
general</header><text>A person who manufactures a drug approved under section
505(b) shall submit an application under section 505(b) for approval of another
drug that is manufactured for distribution in a permitted country by or for the
person that manufactures the drug approved under section 505(b) if—</text>
<subclause id="id3F990643B8D442E19E9129EA5D167EBC"><enum>(I)</enum><text>there is no
qualifying drug in commercial distribution in permitted countries whose
combined population represents at least 50 percent of the total population of
all permitted countries with the same active ingredient or ingredients, route
of administration, dosage form, and strength as the drug approved under section
505(b); and</text>
</subclause><subclause id="id94DC8296AD314DFE92F317972C2BC775"><enum>(II)</enum><text>each active
ingredient of the other drug is related to an active ingredient of the drug
approved under section 505(b), as defined in clause (v).</text>
</subclause></clause><clause id="id1C565DACA3E0438AA6756703D9D1812D"><enum>(ii)</enum><header>Application
under Section <enum-in-header>505(b)</enum-in-header></header><text>The
application under section 505(b) required under clause (i) shall—</text>
<subclause id="id5480D147243346768F6505FBB54F4883"><enum>(I)</enum><text>request approval
of the other drug for the indication or indications for which the drug approved
under section 505(b) is labeled;</text>
</subclause><subclause id="idA1A73880BA0C4FEE8E9DEE535004CCEE"><enum>(II)</enum><text>include the
information that the person submitted to the government of the permitted
country for purposes of obtaining approval for commercial distribution of the
other drug in that country, which if in a language other than English, shall be
accompanied by an English translation verified to be complete and accurate,
with the name, address, and a brief statement of the qualifications of the
person that made the translation;</text>
</subclause><subclause id="id08AF107D78434A0591872C31B5AC67A1"><enum>(III)</enum><text>include a right
of reference to the application for the drug approved under section 505(b);
and</text>
</subclause><subclause id="id5DECE31DF5A44BB39E8F980DB75BEF1B"><enum>(IV)</enum><text>include such
additional information as the Secretary may require.</text>
</subclause></clause><clause id="id550A1319E7C14A998676E6398B0BA353"><enum>(iii)</enum><header>Timing of
submission of application</header><text>An application under section 505(b)
required under clause (i) shall be submitted to the Secretary not later than
the day on which the information referred to in clause (ii)(II) is submitted to
the government of the permitted country.</text>
</clause><clause id="id0BD0B4766EE14B6698165041BCC0B8E3"><enum>(iv)</enum><header>Notice of
decision on application</header><text>The Secretary shall promptly notify
registered exporters, registered importers, the Federal Trade Commission, and
the State attorneys general of a determination to approve or to disapprove an
application under section 505(b) required under clause (i).</text>
</clause><clause id="id013C873D61764D5592AD9ECE1D235463"><enum>(v)</enum><header>Related active
ingredients</header><text>For purposes of clause (i)(II), 2 active ingredients
are related if they are—</text>
<subclause id="id3BFEDAB6DB3440E186B8E75AEEEF6769"><enum>(I)</enum><text>the same;
or</text>
</subclause><subclause id="idF7FE8ABCDDBB48D48C2CE45C7A3B0290"><enum>(II)</enum><text>different salts,
esters, or complexes of the same moiety.</text>
</subclause></clause></subparagraph></paragraph><paragraph id="id8268802483FC4640B8BC3D749C4924FC"><enum>(3)</enum><header>Section 502;
labeling</header>
<subparagraph id="id44CFCBC623A449A39BA2AC1C950EF5B3"><enum>(A)</enum><header>Importation by
registered importer</header>
<clause id="id387DF3E226D641EF9982B5503AA6B742"><enum>(i)</enum><header>In
general</header><text>In the case of a qualifying drug that is imported or
offered for import by a registered importer, such drug shall be considered to
be in compliance with section 502 and the labeling requirements under the
approved application for the U.S. label drug if the qualifying drug
bears—</text>
<subclause id="id65C934A0954245339C41FAFB460F9A23"><enum>(I)</enum><text>a copy of the
labeling approved for the U.S. label drug under section 505, without regard to
whether the copy bears any trademark involved;</text>
</subclause><subclause id="id346A3E06623D4AC2A92680CDFA304374"><enum>(II)</enum><text>the name of the
manufacturer and location of the manufacturer;</text>
</subclause><subclause id="id0B088102B1214476B16957FDAFBDD4A8"><enum>(III)</enum><text>the lot number
assigned by the manufacturer;</text>
</subclause><subclause id="idB5B2A1C7275848FDA11D7D557F8F4EAA"><enum>(IV)</enum><text>the name,
location, and registration number of the importer; and</text>
</subclause><subclause id="id3C474841E044439EAD2F7FBC30816F9C"><enum>(V)</enum><text>the National Drug
Code number assigned to the qualifying drug by the Secretary.</text>
</subclause></clause><clause id="id1BAADC83F8FF4C548F5A9687862DD859"><enum>(ii)</enum><header>Request for
copy of the labeling</header><text>The Secretary shall provide such copy to the
registered importer involved, upon request of the importer.</text>
</clause><clause id="id2579C280F5384AEE9218E4D9839D04BF"><enum>(iii)</enum><header>Requested
labeling</header><text>The labeling provided by the Secretary under clause (ii)
shall—</text>
<subclause id="id47E155DFCA194A3DB29A506A9269555D"><enum>(I)</enum><text>include the
established name, as defined in section 502(e)(3), for each active ingredient
in the qualifying drug;</text>
</subclause><subclause id="id6A9B084A54694E3684C0EB725ADE963D"><enum>(II)</enum><text>not include the
proprietary name of the U.S. label drug or any active ingredient
thereof;</text>
</subclause><subclause id="id382F037AC8874593A491BD4E0D147691"><enum>(III)</enum><text>if required
under paragraph (2)(B)(vi)(III), a prominent advisory that the qualifying drug
is safe and effective but not bioequivalent to the U.S. label drug; and</text>
</subclause><subclause id="id0CB315C9D6BB440A873E03267CA67936"><enum>(IV)</enum><text>if the inactive
ingredients of the qualifying drug are different from the inactive ingredients
for the U.S. label drug, include—</text>
<item id="id2F22BD052E4A4B2DB4AFEACD6D11A14C"><enum>(aa)</enum><text>a
prominent notice that the ingredients of the qualifying drug differ from the
ingredients of the U.S. label drug and that the qualifying drug must be
dispensed with an advisory to people with allergies about this difference and a
list of ingredients; and</text>
</item><item id="id4040FFB3BA894E6EB6080FB0D19277C7"><enum>(bb)</enum><text>a
list of the ingredients of the qualifying drug as would be required under
section 502(e).</text>
</item></subclause></clause></subparagraph><subparagraph id="id7841B3A251F94AC89D485AFAC568EE3C"><enum>(B)</enum><header>Importation by
individual</header>
<clause id="idEABE993F681149059609A8FF4606753E"><enum>(i)</enum><header>In
general</header><text>In the case of a qualifying drug that is imported or
offered for import by a registered exporter to an individual, such drug shall
be considered to be in compliance with section 502 and the labeling
requirements under the approved application for the U.S. label drug if the
packaging and labeling of the qualifying drug complies with all applicable
regulations promulgated under sections 3 and 4 of the Poison Prevention
Packaging Act of 1970 (15 U.S.C. 1471 et seq.) and the labeling of the
qualifying drug includes—</text>
<subclause id="idE9EF97133F78484C95D827A6FB345C85"><enum>(I)</enum><text>directions for
use by the consumer;</text>
</subclause><subclause id="idC7194FA11A49487585F157A1491E8D08"><enum>(II)</enum><text>the lot number
assigned by the manufacturer;</text>
</subclause><subclause id="id9A258126FF1A442EABB95E9BC53875FD"><enum>(III)</enum><text>the name and
registration number of the exporter;</text>
</subclause><subclause id="id34C5F44735CA480180EC7C9FFE8A70A8"><enum>(IV)</enum><text>if required
under paragraph (2)(B)(vi)(III), a prominent advisory that the drug is safe and
effective but not bioequivalent to the U.S. label drug;</text>
</subclause><subclause id="idD141218E62D947F099705DE48CEB609B"><enum>(V)</enum><text>if the inactive
ingredients of the drug are different from the inactive ingredients for the
U.S. label drug—</text>
<item id="idBAA00FE1558C498FAD33DEA1337A38D4"><enum>(aa)</enum><text>a
prominent advisory that persons with an allergy should check the ingredient
list of the drug because the ingredients of the drug differ from the
ingredients of the U.S. label drug; and</text>
</item><item id="id76E2993B89B54561ADA1AB4A23B2B3E1"><enum>(bb)</enum><text>a
list of the ingredients of the drug as would be required under section 502(e);
and</text>
</item></subclause><subclause id="id1C3822F87ECC45728E119D005FBD41DD"><enum>(VI)</enum><text>a copy of any
special labeling that would be required by the Secretary had the U.S. label
drug been dispensed by a pharmacist in the United States, without regard to
whether the special labeling bears any trademark involved.</text>
</subclause></clause><clause id="idAADBD83B238344768B9AF7C7DCBB9719"><enum>(ii)</enum><header>Packaging</header><text>A
qualifying drug offered for import to an individual by an exporter under this
section that is packaged in a unit-of-use container (as those items are defined
in the United States Pharmacopeia and National Formulary) shall not be
repackaged, provided that—</text>
<subclause id="id46B94B6107424EFCA4DFDA4FF67791BC"><enum>(I)</enum><text>the packaging
complies with all applicable regulations under sections 3 and 4 of the Poison
Prevention Packaging Act of 1970 (15 U.S.C. 1471 et seq.); or</text>
</subclause><subclause id="id3ACB05FAC2094B2CAC506E73B3E3FC21"><enum>(II)</enum><text>the consumer
consents to waive the requirements of such Act, after being informed that the
packaging does not comply with such Act and that the exporter will provide the
drug in packaging that is compliant at no additional cost.</text>
</subclause></clause><clause id="idB1C38C256CA1433EADE1531601E90F54"><enum>(iii)</enum><header>Request for
copy of special labeling and ingredient list</header><text>The Secretary shall
provide to the registered exporter involved a copy of the special labeling, the
advisory, and the ingredient list described under clause (i), upon request of
the exporter.</text>
</clause><clause id="idD3EF3FEA676F402AB89662E7284CA236"><enum>(iv)</enum><header>Requested
labeling and ingredient list</header><text>The labeling and ingredient list
provided by the Secretary under clause (iii) shall—</text>
<subclause id="idBCC6F926EA344B0FAE63153EEB9FA234"><enum>(I)</enum><text>include the
established name, as defined in section 502(e)(3), for each active ingredient
in the drug; and</text>
</subclause><subclause id="idDF7CD7FA0F7A46ADAA473D398B0B1E74"><enum>(II)</enum><text>not include the
proprietary name of the U.S. label drug or any active ingredient
thereof.</text>
</subclause></clause></subparagraph></paragraph><paragraph id="idD56EDB4A8F3C4BAEAEBDDF738D269E64"><enum>(4)</enum><header>Section 501;
adulteration</header><text>A qualifying drug that is imported or offered for
import under subsection (a) shall be considered to be in compliance with
section 501 if the drug is in compliance with subsection (c).</text>
</paragraph><paragraph id="idFBD7BC18CBAA40958FB29C7999D63BD3"><enum>(5)</enum><header>Standards for
refusing admission</header><text>A drug exported under subsection (a) from a
registered exporter or imported by a registered importer may be refused
admission into the United States if 1 or more of the following applies:</text>
<subparagraph id="id04828BE321C14BA9B61BB2170B35D770"><enum>(A)</enum><text>The drug is not a
qualifying drug.</text>
</subparagraph><subparagraph id="id563F9DA445C644679A8962E1ABD21004"><enum>(B)</enum><text>A notice for the
drug required under paragraph (2)(B) has not been submitted to the
Secretary.</text>
</subparagraph><subparagraph id="id9BB439C4FC4048CA95A6C814F050A82F"><enum>(C)</enum><text>The Secretary has
ordered that importation of the drug from the permitted country cease under
paragraph (2) (C) or (D).</text>
</subparagraph><subparagraph id="idB2E0E6AD667A4F458E8DA3AC7D953AB1"><enum>(D)</enum><text>The drug does not
comply with paragraph (3) or (4).</text>
</subparagraph><subparagraph id="idD803576018CF4DFFB57791EA3F328C9D"><enum>(E)</enum><text>The shipping
container appears damaged in a way that may affect the strength, quality, or
purity of the drug.</text>
</subparagraph><subparagraph id="id25B8A56ADF8E4ECCA293CD098994F7DA"><enum>(F)</enum><text>The Secretary
becomes aware that—</text>
<clause id="idA82908FD7E9C4930BF8FAADF7548D969"><enum>(i)</enum><text>the drug may be
counterfeit;</text>
</clause><clause id="id9143B711D6A1470791675E887DD33143"><enum>(ii)</enum><text>the drug may
have been prepared, packed, or held under insanitary conditions; or</text>
</clause><clause id="id9B574AFC87DC44058B79DB4354F1A15F"><enum>(iii)</enum><text>the methods
used in, or the facilities or controls used for, the manufacturing, processing,
packing, or holding of the drug do not conform to good manufacturing
practice.</text>
</clause></subparagraph><subparagraph id="id9A921FA3E4A544C5A04EF2483ABE8399"><enum>(G)</enum><text>The Secretary has
obtained an injunction under section 302 that prohibits the distribution of the
drug in interstate commerce.</text>
</subparagraph><subparagraph id="idD4B7C14233DE4F90A4A1871D28E98219"><enum>(H)</enum><text>The Secretary has
under section 505(e) withdrawn approval of the drug.</text>
</subparagraph><subparagraph id="id39B0C516CC954797A0704D6C70D97B53"><enum>(I)</enum><text>The manufacturer
of the drug has instituted a recall of the drug.</text>
</subparagraph><subparagraph id="id8897F2CCCB9342A8A1E3839DFB48428E"><enum>(J)</enum><text>If the drug is
imported or offered for import by a registered importer without submission of a
notice in accordance with subsection (d)(4).</text>
</subparagraph><subparagraph id="idECA0E80055CE4CDC875D9B1BA4B17377"><enum>(K)</enum><text>If the drug is
imported or offered for import from a registered exporter to an individual and
1 or more of the following applies:</text>
<clause id="id72615A3DEC6D4E38A2170F0E602BA609"><enum>(i)</enum><text>The shipping
container for such drug does not bear the markings required under subsection
(d)(2).</text>
</clause><clause id="id0D7C20A5BB3142968C9C757CADBB839A"><enum>(ii)</enum><text>The markings on
the shipping container appear to be counterfeit.</text>
</clause><clause id="id975FE148D5BE4BB699186E9172505DDC"><enum>(iii)</enum><text>The shipping
container or markings appear to have been tampered with.</text>
</clause></subparagraph></paragraph></subsection><subsection id="id386A193B13FD461F8591A8146B252A14"><enum>(h)</enum><header>Exporter
licensure in permitted country</header><text>A registration condition is that
the exporter involved agrees that a qualifying drug will be exported to an
individual only if the Secretary has verified that—</text>
<paragraph id="idD9410D35B2994AAAB6151156C84A86AF"><enum>(1)</enum><text>the exporter is
authorized under the law of the permitted country in which the exporter is
located to dispense prescription drugs; and</text>
</paragraph><paragraph id="id4CF68D71B0A04F0EAC242F48C67D5738"><enum>(2)</enum><text>the exporter
employs persons that are licensed under the law of the permitted country in
which the exporter is located to dispense prescription drugs in sufficient
number to dispense safely the drugs exported by the exporter to individuals,
and the exporter assigns to those persons responsibility for dispensing such
drugs to individuals.</text>
</paragraph></subsection><subsection id="id4B6EF987E72B4395997AE1040CA5EB39"><enum>(i)</enum><header>Individuals;
conditions for importation</header>
<paragraph id="idDCFCF93729D14D3987B244A1AA7C692B"><enum>(1)</enum><header>In
general</header><text>For purposes of subsection (a)(2)(B), the importation of
a qualifying drug by an individual is in accordance with this subsection if the
following conditions are met:</text>
<subparagraph id="id852609A0A08148CD9DF164B61A38BC46"><enum>(A)</enum><text>The drug is
accompanied by a copy of a prescription for the drug, which
prescription—</text>
<clause id="idA4869FF23227493AAF7336A5DB64A3E9"><enum>(i)</enum><text>is valid under
applicable Federal and State laws; and</text>
</clause><clause id="id93AAC9A4CD8D4CB0AA03D413C58AEACC"><enum>(ii)</enum><text>was issued by a
practitioner who, under the law of a State of which the individual is a
resident, or in which the individual receives care from the practitioner who
issues the prescription, is authorized to administer prescription drugs.</text>
</clause></subparagraph><subparagraph id="id97028317AB0B46EFBDDB2A04B2A7A6F0"><enum>(B)</enum><text>The drug is
accompanied by a copy of the documentation that was required under the law or
regulations of the permitted country in which the exporter is located, as a
condition of dispensing the drug to the individual.</text>
</subparagraph><subparagraph id="id48514B64F9874A238F10053B40866E3E"><enum>(C)</enum><text>The copies
referred to in subparagraphs (A)(i) and (B) are marked in a manner
sufficient—</text>
<clause id="idC00E98E0182F4D6799EEEE081FF58E06"><enum>(i)</enum><text>to indicate that
the prescription, and the equivalent document in the permitted country in which
the exporter is located, have been filled; and</text>
</clause><clause id="id8074E03C539B42F991513AC2F7E8C6BD"><enum>(ii)</enum><text>to prevent a
duplicative filling by another pharmacist.</text>
</clause></subparagraph><subparagraph id="idFB354C5D973247B5B18574F52EEAC4DD"><enum>(D)</enum><text>The individual
has provided to the registered exporter a complete list of all drugs used by
the individual for review by the individuals who dispense the drug.</text>
</subparagraph><subparagraph id="id2EDCF906EEF84B2ABA8674E2BF8EB43A"><enum>(E)</enum><text>The quantity of
the drug does not exceed a 90-day supply.</text>
</subparagraph><subparagraph id="idA2C796AA6F1546D1912AA2CA12DE3D9F"><enum>(F)</enum><text>The drug is not
an ineligible subpart H drug. For purposes of this section, a prescription drug
is an <quote>ineligible subpart H drug</quote> if the drug was approved by the
Secretary under subpart H of part 314 of title 21, Code of Federal Regulations
(relating to accelerated approval), with restrictions under section 520 of such
part to assure safe use, and the Secretary has published in the Federal
Register a notice that the Secretary has determined that good cause exists to
prohibit the drug from being imported pursuant to this subsection.</text>
</subparagraph></paragraph><paragraph id="id5135D81F0989464298BF0995C679DFB6"><enum>(2)</enum><header>Notice
regarding drug refused admission</header><text>If a registered exporter ships a
drug to an individual pursuant to subsection (a)(2)(B) and the drug is refused
admission to the United States, a written notice shall be sent to the
individual and to the exporter that informs the individual and the exporter of
such refusal and the reason for the refusal.</text>
</paragraph></subsection><subsection id="idDCA9DCCAE6AE458AA16CAD5561D90E34"><enum>(j)</enum><header>Maintenance of
records and samples</header>
<paragraph id="idAA38E815EB4C437BB5DC92F6D1E43FEA"><enum>(1)</enum><header>In
general</header><text>A registration condition is that the importer or exporter
involved shall—</text>
<subparagraph id="idFD5CF7583A8741DCBCED76C096C667D5"><enum>(A)</enum><text>maintain records
required under this section for not less than 2 years; and</text>
</subparagraph><subparagraph id="idC2167585699343C1A49DBBC962474BD4"><enum>(B)</enum><text>maintain samples
of each lot of a qualifying drug required under this section for not more than
2 years.</text>
</subparagraph></paragraph><paragraph id="idE73B183A7E904C4C82E705246855245D"><enum>(2)</enum><header>Place of record
maintenance</header><text>The records described under paragraph (1) shall be
maintained—</text>
<subparagraph id="idA64072614C85493983890AEAB79EE75B"><enum>(A)</enum><text>in the case of an
importer, at the place of business of the importer at which the importer
initially receives the qualifying drug after importation; or</text>
</subparagraph><subparagraph id="id54773B6292A14CC7B3A29CF82A9B6EC4"><enum>(B)</enum><text>in the case of an
exporter, at the facility from which the exporter ships the qualifying drug to
the United States.</text>
</subparagraph></paragraph></subsection><subsection id="idBD19F2F786B3475AB5E23644B6E34C4C"><enum>(k)</enum><header>Drug
recalls</header>
<paragraph id="idFDC01EE2B4674F309CAE7FB365DB222A"><enum>(1)</enum><header>Manufacturers</header><text>A
person that manufactures a qualifying drug imported from a permitted country
under this section shall promptly inform the Secretary—</text>
<subparagraph id="id8253DBCECC384F26B7FB96A57191D890"><enum>(A)</enum><text>if the drug is
recalled or withdrawn from the market in a permitted country;</text>
</subparagraph><subparagraph id="idCB43C82320024CB1A154F8AAABB1664A"><enum>(B)</enum><text>how the drug may
be identified, including lot number; and</text>
</subparagraph><subparagraph id="id635BCC6F45C449AC9710D104E7EA0F43"><enum>(C)</enum><text>the reason for
the recall or withdrawal.</text>
</subparagraph></paragraph><paragraph id="id6973918340CD490DA260E584B7878AB5"><enum>(2)</enum><header>Secretary</header><text>With
respect to each permitted country, the Secretary shall—</text>
<subparagraph id="idE81852D575F14AA6896B0F397CAD13FA"><enum>(A)</enum><text>enter into an
agreement with the government of the country to receive information about
recalls and withdrawals of qualifying drugs in the country; or</text>
</subparagraph><subparagraph id="id3F19992A4FC1453CA0B9D7E867E25C52"><enum>(B)</enum><text>monitor recalls
and withdrawals of qualifying drugs in the country using any information that
is available to the public in any media.</text>
</subparagraph></paragraph><paragraph id="id6050908AB91242B6A304770ED00429CD"><enum>(3)</enum><header>Notice</header><text>The
Secretary may notify, as appropriate, registered exporters, registered
importers, wholesalers, pharmacies, or the public of a recall or withdrawal of
a qualifying drug in a permitted country.</text>
</paragraph></subsection><subsection id="id6B09ECA516FF4DEB9A46B69CD616B59D"><enum>(l)</enum><header>Drug labeling
and packaging</header>
<paragraph id="id3D67E089CD5F40F288C64CC5CE26935F"><enum>(1)</enum><header>In
general</header><text>When a qualifying drug that is imported into the United
States by an importer under subsection (a) is dispensed by a pharmacist to an
individual, the pharmacist shall provide that the packaging and labeling of the
drug complies with all applicable regulations promulgated under sections 3 and
4 of the Poison Prevention Packaging Act of 1970 (15 U.S.C. 1471 et seq.) and
shall include with any other labeling provided to the individual the
following:</text>
<subparagraph id="id157B878264204A839F9D894C7BF6A834"><enum>(A)</enum><text>The lot number
assigned by the manufacturer.</text>
</subparagraph><subparagraph id="id12E4FE6ED7D44DF39E0EB0170E057F1E"><enum>(B)</enum><text>The name and
registration number of the importer.</text>
</subparagraph><subparagraph id="id7F3CA1E64BC54DDAB08E065E1D503E51"><enum>(C)</enum><text>If required under
paragraph (2)(B)(vi)(III) of subsection (g), a prominent advisory that the drug
is safe and effective but not bioequivalent to the U.S. label drug.</text>
</subparagraph><subparagraph id="id61C0FC54BC54423E8F9E94FF38D411D1"><enum>(D)</enum><text>If the inactive
ingredients of the drug are different from the inactive ingredients for the
U.S. label drug—</text>
<clause id="id7DB7824CFA2E4A0388D5C1F3866A4F05"><enum>(i)</enum><text>a
prominent advisory that persons with allergies should check the ingredient list
of the drug because the ingredients of the drug differ from the ingredients of
the U.S. label drug; and</text>
</clause><clause id="id15E1A33665224C05B76A7CAF77ED5CC0"><enum>(ii)</enum><text>a list of the
ingredients of the drug as would be required under section 502(e).</text>
</clause></subparagraph></paragraph><paragraph id="idE68A0D279F544113983D481C5BF2237C"><enum>(2)</enum><header>Packaging</header><text>A
qualifying drug that is packaged in a unit-of-use container (as those terms are
defined in the United States Pharmacopeia and National Formulary) shall not be
repackaged, provided that—</text>
<subparagraph id="id1E33A8E4E82E4EF7B46876E9B548856F"><enum>(A)</enum><text>the packaging
complies with all applicable regulations under sections 3 and 4 of the Poison
Prevention Packaging Act of 1970 (15 U.S.C. 1471 et seq.); or</text>
</subparagraph><subparagraph id="id047354EE89954C48B8A0D8E806223D83"><enum>(B)</enum><text>the consumer
consents to waive the requirements of such Act, after being informed that the
packaging does not comply with such Act and that the pharmacist will provide
the drug in packaging that is compliant at no additional cost.</text>
</subparagraph></paragraph></subsection><subsection id="id6D4FB1A8E9DD4EDD9383AF24F5D20A35"><enum>(m)</enum><header>Charitable
contributions</header><text>Notwithstanding any other provision of this
section, this section does not authorize the importation into the United States
of a qualifying drug donated or otherwise supplied for free or at nominal cost
by the manufacturer of the drug to a charitable or humanitarian organization,
including the United Nations and affiliates, or to a government of a foreign
country.</text>
</subsection><subsection id="idCC7CBF9FA56B4B099D49755F4B125871"><enum>(n)</enum><header>Unfair and
discriminatory Acts and practices</header>
<paragraph id="idB9C9D6D3F56B4FBF86DA40E2A2FA5529"><enum>(1)</enum><header>In
general</header><text>It is unlawful for a manufacturer, directly or indirectly
(including by being a party to a licensing agreement or other agreement),
to—</text>
<subparagraph id="id39DB1CA9AA254A94A089B3F23129731B"><enum>(A)</enum><text>discriminate by
charging a higher price for a prescription drug sold to a registered exporter
or other person in a permitted country that exports a qualifying drug to the
United States under this section than the price that is charged, inclusive of
rebates or other incentives to the permitted country or other person, to
another person that is in the same country and that does not export a
qualifying drug into the United States under this section;</text>
</subparagraph><subparagraph id="id5C154C0640DD4D2AB10DFACC97F5E43D"><enum>(B)</enum><text>discriminate by
charging a higher price for a prescription drug sold to a registered importer
or other person that distributes, sells, or uses a qualifying drug imported
into the United States under this section than the price that is charged to
another person in the United States that does not import a qualifying drug
under this section, or that does not distribute, sell, or use such a
drug;</text>
</subparagraph><subparagraph id="idCAECBFF495214141B4514D84850B6F41"><enum>(C)</enum><text>discriminate by
denying, restricting, or delaying supplies of a prescription drug to a
registered exporter or other person in a permitted country that exports a
qualifying drug to the United States under this section or to a registered
importer or other person that distributes, sells, or uses a qualifying drug
imported into the United States under this section;</text>
</subparagraph><subparagraph id="idDAFC1B77B9FC4853A3B6E6D3A4642C6B"><enum>(D)</enum><text>discriminate by
publicly, privately, or otherwise refusing to do business with a registered
exporter or other person in a permitted country that exports a qualifying drug
to the United States under this section or with a registered importer or other
person that distributes, sells, or uses a qualifying drug imported into the
United States under this section;</text>
</subparagraph><subparagraph id="idC3A7081EF52D4C3FBDE0968D59F155F2"><enum>(E)</enum><text>knowingly fail to
submit a notice under subsection (g)(2)(B)(i), knowingly fail to submit such a
notice on or before the date specified in subsection (g)(2)(B)(v) or as
otherwise required under subsection (e) (3), (4), and (5) of section 4 of the
<short-title>Pharmaceutical Market Access and Drug Safety
Act of 2007</short-title>, knowingly submit such a notice that makes a
materially false, fictitious, or fraudulent statement, or knowingly fail to
provide promptly any information requested by the Secretary to review such a
notice;</text>
</subparagraph><subparagraph id="id8EAD1B6065F44EF8B56EBD3BE7436442"><enum>(F)</enum><text>knowingly fail to
submit an application required under subsection (g)(2)(F), knowingly fail to
submit such an application on or before the date specified in subsection
(g)(2)(F)(ii), knowingly submit such an application that makes a materially
false, fictitious, or fraudulent statement, or knowingly fail to provide
promptly any information requested by the Secretary to review such an
application;</text>
</subparagraph><subparagraph id="idBB8EBB07D808469D9856D4A9B3D0A675"><enum>(G)</enum><text>cause there to be
a difference (including a difference in active ingredient, route of
administration, dosage form, strength, formulation, manufacturing
establishment, manufacturing process, or person that manufactures the drug)
between a prescription drug for distribution in the United States and the drug
for distribution in a permitted country;</text>
</subparagraph><subparagraph id="id2E2AB981ED1C45CFBEC0EB8556658467"><enum>(H)</enum><text>refuse to allow
an inspection authorized under this section of an establishment that
manufactures a qualifying drug that is, or will be, introduced for commercial
distribution in a permitted country;</text>
</subparagraph><subparagraph id="id8DA034DFCE4A4E92A9E4175B75F4AEFE"><enum>(I)</enum><text>fail to conform
to the methods used in, or the facilities used for, the manufacturing,
processing, packing, or holding of a qualifying drug that is, or will be,
introduced for commercial distribution in a permitted country to good
manufacturing practice under this Act;</text>
</subparagraph><subparagraph id="id6F0399C3FE9D4F59BD170DBD50368FB4"><enum>(J)</enum><text>become a party to
a licensing agreement or other agreement related to a qualifying drug that
fails to provide for compliance with all requirements of this section with
respect to such drug;</text>
</subparagraph><subparagraph id="id849E9DC8B92A4EA49F29BCC8A02DF41E"><enum>(K)</enum><text>enter into a
contract that restricts, prohibits, or delays the importation of a qualifying
drug under this section;</text>
</subparagraph><subparagraph id="id1AAE34AA774B432BB08ED8F0F1D5D455"><enum>(L)</enum><text>engage in any
other action to restrict, prohibit, or delay the importation of a qualifying
drug under this section; or</text>
</subparagraph><subparagraph id="id2FA612DE7C704DF2B8C24092AD90ADFF"><enum>(M)</enum><text>engage in any
other action that the Federal Trade Commission determines to discriminate
against a person that engages or attempts to engage in the importation of a
qualifying drug under this section.</text>
</subparagraph></paragraph><paragraph id="idDBFC2A31C88B4E36B5A717D400513463"><enum>(2)</enum><header>Referral of
potential violations</header><text>The Secretary shall promptly refer to the
Federal Trade Commission each potential violation of subparagraph (E), (F),
(G), (H), or (I) of paragraph (1) that becomes known to the Secretary.</text>
</paragraph><paragraph id="id8F50DC47457B4EB18566965E91D20EC9"><enum>(3)</enum><header>Affirmative
defense</header>
<subparagraph id="idFEAAD60CE2B44D43B606F2B54EA72FA5"><enum>(A)</enum><header>Discrimination</header><text>It
shall be an affirmative defense to a charge that a manufacturer has
discriminated under subparagraph (A), (B), (C), (D), or (M) of paragraph (1)
that the higher price charged for a prescription drug sold to a person, the
denial, restriction, or delay of supplies of a prescription drug to a person,
the refusal to do business with a person, or other discriminatory activity
against a person, is not based, in whole or in part, on—</text>
<clause id="idE0812AF87B2642109ECD300893CDB420"><enum>(i)</enum><text>the person
exporting or importing a qualifying drug into the United States under this
section; or</text>
</clause><clause id="idD5C5FF2A09174582966C061EC504EE70"><enum>(ii)</enum><text>the person
distributing, selling, or using a qualifying drug imported into the United
States under this section.</text>
</clause></subparagraph><subparagraph id="idB2315115AFAB40CE9E9797B1FF635340"><enum>(B)</enum><header>Drug
differences</header><text>It shall be an affirmative defense to a charge that a
manufacturer has caused there to be a difference described in subparagraph (G)
of paragraph (1) that—</text>
<clause id="idE5A24A495A7B4FF885A04C04639245CC"><enum>(i)</enum><text>the difference
was required by the country in which the drug is distributed;</text>
</clause><clause id="id6E5C83034B2548DCA1B2F4889262C1D1"><enum>(ii)</enum><text>the Secretary
has determined that the difference was necessary to improve the safety or
effectiveness of the drug;</text>
</clause><clause id="idA52C624AD55441CA8F78AEACA3D05557"><enum>(iii)</enum><text>the person
manufacturing the drug for distribution in the United States has given notice
to the Secretary under subsection (g)(2)(B)(i) that the drug for distribution
in the United States is not different from a drug for distribution in permitted
countries whose combined population represents at least 50 percent of the total
population of all permitted countries; or</text>
</clause><clause id="id6CE12730BF274E1EB400115378209C9E"><enum>(iv)</enum><text>the difference
was not caused, in whole or in part, for the purpose of restricting importation
of the drug into the United States under this section.</text>
</clause></subparagraph></paragraph><paragraph id="id90199D8D9C7B4E7AA80F086155364DE9"><enum>(4)</enum><header>Effect of
subsection</header>
<subparagraph id="id2079B125EAE0499AB6C0C9E2E4507C66"><enum>(A)</enum><header>Sales in other
countries</header><text>This subsection applies only to the sale or
distribution of a prescription drug in a country if the manufacturer of the
drug chooses to sell or distribute the drug in the country. Nothing in this
subsection shall be construed to compel the manufacturer of a drug to
distribute or sell the drug in a country.</text>
</subparagraph><subparagraph id="idBC2856D6CF0F4526AA3BAE8E3C518090"><enum>(B)</enum><header>Discounts to
insurers, health plans, pharmacy benefit managers, and covered
entities</header><text>Nothing in this subsection shall be construed to—</text>
<clause id="id86A2EA90AC914B43A75FF4FE36A7486C"><enum>(i)</enum><text>prevent or
restrict a manufacturer of a prescription drug from providing discounts to an
insurer, health plan, pharmacy benefit manager in the United States, or covered
entity in the drug discount program under section 340B of the
<act-name parsable-cite="PHSA">Public Health Service Act</act-name> (42 U.S.C.
256b) in return for inclusion of the drug on a formulary;</text>
</clause><clause id="idE9298A6B06514FEEB3D0FFD30A400FCF"><enum>(ii)</enum><text>require that
such discounts be made available to other purchasers of the prescription drug;
or</text>
</clause><clause id="idF98D8264D802473A9F8155DEC62C0391"><enum>(iii)</enum><text>prevent or
restrict any other measures taken by an insurer, health plan, or pharmacy
benefit manager to encourage consumption of such prescription drug.</text>
</clause></subparagraph><subparagraph id="idD9EC7AFFA9EC42E3A3C3A29667D552B3"><enum>(C)</enum><header>Charitable
contributions</header><text>Nothing in this subsection shall be construed
to—</text>
<clause id="id8A01299197954D6AA4F121C6F06FCFE2"><enum>(i)</enum><text>prevent a
manufacturer from donating a prescription drug, or supplying a prescription
drug at nominal cost, to a charitable or humanitarian organization, including
the United Nations and affiliates, or to a government of a foreign country;
or</text>
</clause><clause id="id773C40D6CB8A47A3A3DC1B3FA0B93D46"><enum>(ii)</enum><text>apply to such
donations or supplying of a prescription drug.</text>
</clause></subparagraph></paragraph><paragraph id="id8B3D81689E4C41B4B63BFD01302F8035"><enum>(5)</enum><header>Enforcement</header>
<subparagraph id="idE26DDC17B817483EBCD20AE861F4FFCB"><enum>(A)</enum><header>Unfair or
deceptive Act or practice</header><text>A violation of this subsection shall be
treated as a violation of a rule defining an unfair or deceptive act or
practice prescribed under section 18(a)(1)(B) of the
<act-name parsable-cite="FTCA">Federal Trade Commission Act</act-name> (15
U.S.C. 57a(a)(1)(B)).</text>
</subparagraph><subparagraph id="id791E841E8AD640399AB525D16B39F4C6"><enum>(B)</enum><header>Actions by the
commission</header><text>The Federal Trade Commission—</text>
<clause id="idB2E9EF4D32584F5AA7D9C4FC72B022E6"><enum>(i)</enum><text>shall enforce
this subsection in the same manner, by the same means, and with the same
jurisdiction, powers, and duties as though all applicable terms and provisions
of the <act-name parsable-cite="FTCA">Federal Trade Commission Act</act-name>
(15 U.S.C. 41 et seq.) were incorporated into and made a part of this section;
and</text>
</clause><clause id="idD38E4CA4702A40D3AF14DB557A705A7E"><enum>(ii)</enum><text>may seek
monetary relief threefold the damages sustained, in addition to any other
remedy available to the Federal Trade Commission under the
<act-name parsable-cite="FTCA">Federal Trade Commission Act</act-name> (15
U.S.C. 41 et seq.).</text>
</clause></subparagraph></paragraph><paragraph id="idBE5E14878D134E97B38B2F2FA6204B07"><enum>(6)</enum><header>Actions by
States</header>
<subparagraph id="id25D0C0FAE99341FBB75EA2A88A5449B7"><enum>(A)</enum><header>In
general</header>
<clause id="idE0C3D9FD7E39408F8A4398CE19FD68FD"><enum>(i)</enum><header>Civil
actions</header><text>In any case in which the attorney general of a State has
reason to believe that an interest of the residents of that State have been
adversely affected by any manufacturer that violates paragraph (1), the
attorney general of a State may bring a civil action on behalf of the residents
of the State, and persons doing business in the State, in a district court of
the United States of appropriate jurisdiction to—</text>
<subclause id="id6813884B43C247E592D6C0234052E21A"><enum>(I)</enum><text>enjoin that
practice;</text>
</subclause><subclause id="idADDAD13BC0244F43B76B5CFE5B623107"><enum>(II)</enum><text>enforce
compliance with this subsection;</text>
</subclause><subclause id="id489510774EDB46ECA35803293F4855FF"><enum>(III)</enum><text>obtain damages,
restitution, or other compensation on behalf of residents of the State and
persons doing business in the State, including threefold the damages; or</text>
</subclause><subclause id="id77C2B25E04894EFEA629DD21A58A079E"><enum>(IV)</enum><text>obtain such
other relief as the court may consider to be appropriate.</text>
</subclause></clause><clause id="idDD7C01F64E99403391D658D6C8E2DFBC"><enum>(ii)</enum><header>Notice</header>
<subclause id="id50D6B810920144419E4CCE9EBE9333D5"><enum>(I)</enum><header>In
general</header><text>Before filing an action under clause (i), the attorney
general of the State involved shall provide to the Federal Trade
Commission—</text>
<item id="id3C9EE7B2C24A4E599437D56352596C47"><enum>(aa)</enum><text>written notice
of that action; and</text>
</item><item id="id56E5E8028A32401D934FC7680038E9B2"><enum>(bb)</enum><text>a
copy of the complaint for that action.</text>
</item></subclause><subclause id="idAB30A490BC944E769EE015ADEFF2FAE1"><enum>(II)</enum><header>Exemption</header><text>Subclause
(I) shall not apply with respect to the filing of an action by an attorney
general of a State under this paragraph, if the attorney general determines
that it is not feasible to provide the notice described in that subclause
before filing of the action. In such case, the attorney general of a State
shall provide notice and a copy of the complaint to the Federal Trade
Commission at the same time as the attorney general files the action.</text>
</subclause></clause></subparagraph><subparagraph id="idC0FC37F89DB14E3D9CF00A53771B93F4"><enum>(B)</enum><header>Intervention</header>
<clause id="id187650E3E2C445A2A010165BCDFD9652"><enum>(i)</enum><header>In
general</header><text>On receiving notice under subparagraph (A)(ii), the
Federal Trade Commission shall have the right to intervene in the action that
is the subject of the notice.</text>
</clause><clause id="id7FD2EA8B0F164DDB992F77CABA313EEF"><enum>(ii)</enum><header>Effect of
intervention</header><text>If the Federal Trade Commission intervenes in an
action under subparagraph (A), it shall have the right—</text>
<subclause id="idEA673B6EE32B4831AE7355A2391D854C"><enum>(I)</enum><text>to be heard with
respect to any matter that arises in that action; and</text>
</subclause><subclause id="id0B13963D80214142A759B36C73904CC4"><enum>(II)</enum><text>to file a
petition for appeal.</text>
</subclause></clause></subparagraph><subparagraph id="idBE5F521F9EF04C539FB9B9B53B12E51D"><enum>(C)</enum><header>Construction</header><text>For
purposes of bringing any civil action under subparagraph (A), nothing in this
subsection shall be construed to prevent an attorney general of a State from
exercising the powers conferred on the attorney general by the laws of that
State to—</text>
<clause id="id4D85E41FC36C4A879CC465D0D5EAD1A9"><enum>(i)</enum><text>conduct
investigations;</text>
</clause><clause id="id2DB4374D8680455D9A868F0F08C32EF9"><enum>(ii)</enum><text>administer oaths
or affirmations; or</text>
</clause><clause id="id4E23A2286D094A3C9062B3C25B480FBC"><enum>(iii)</enum><text>compel the
attendance of witnesses or the production of documentary and other
evidence.</text>
</clause></subparagraph><subparagraph id="id814D5FF440674BE8ACD8BD3D2B351603"><enum>(D)</enum><header>Actions by the
commission</header><text>In any case in which an action is instituted by or on
behalf of the Federal Trade Commission for a violation of paragraph (1), a
State may not, during the pendency of that action, institute an action under
subparagraph (A) for the same violation against any defendant named in the
complaint in that action.</text>
</subparagraph><subparagraph id="id6AC643CD47284C9695C467D16D1213CB"><enum>(E)</enum><header>Venue</header><text>Any
action brought under subparagraph (A) may be brought in the district court of
the United States that meets applicable requirements relating to venue under
section 1391 of title 28, United States Code.</text>
</subparagraph><subparagraph id="idE71C08FACC1041E28C33B4EEBBA4DD5C"><enum>(F)</enum><header>Service of
process</header><text>In an action brought under subparagraph (A), process may
be served in any district in which the defendant—</text>
<clause id="id2F5C5A989DBC442792EB3CC91DF50B2B"><enum>(i)</enum><text>is an inhabitant;
or</text>
</clause><clause id="id87DDC40E66CA460594933F766240E7FA"><enum>(ii)</enum><text>may be
found.</text>
</clause></subparagraph><subparagraph id="idEA9DE8F7A9554295A88BA83511F9E046"><enum>(G)</enum><header>Measurement of
damages</header><text>In any action under this paragraph to enforce a cause of
action under this subsection in which there has been a determination that a
defendant has violated a provision of this subsection, damages may be proved
and assessed in the aggregate by statistical or sampling methods, by the
computation of illegal overcharges or by such other reasonable system of
estimating aggregate damages as the court in its discretion may permit without
the necessity of separately proving the individual claim of, or amount of
damage to, persons on whose behalf the suit was brought.</text>
</subparagraph><subparagraph id="idF2E17E6727014472A98C8BBA03469F44"><enum>(H)</enum><header>Exclusion on
duplicative relief</header><text>The district court shall exclude from the
amount of monetary relief awarded in an action under this paragraph brought by
the attorney general of a State any amount of monetary relief which duplicates
amounts which have been awarded for the same injury.</text>
</subparagraph></paragraph><paragraph id="idBC952B4246A94BF2BBC006CF95058739"><enum>(7)</enum><header>Effect on
antitrust laws</header><text>Nothing in this subsection shall be construed to
modify, impair, or supersede the operation of the antitrust laws. For the
purpose of this subsection, the term <term>antitrust laws</term> has the
meaning given it in the first section of the <act-name parsable-cite="CLAY">Clayton Act</act-name>, except that it includes section 5
of the <act-name parsable-cite="FTCA">Federal Trade Commission Act</act-name>
to the extent that such section 5 applies to unfair methods of
competition.</text>
</paragraph><paragraph id="idD6695A5511884AC3B05698A779AA6394"><enum>(8)</enum><header>Manufacturer</header><text>In
this subsection, the term <term>manufacturer</term> means any entity, including
any affiliate or licensee of that entity, that is engaged in—</text>
<subparagraph id="id6933FF103C7147798DF87787287A4883"><enum>(A)</enum><text>the production,
preparation, propagation, compounding, conversion, or processing of a
prescription drug, either directly or indirectly by extraction from substances
of natural origin, or independently by means of chemical synthesis, or by a
combination of extraction and chemical synthesis; or</text>
</subparagraph><subparagraph id="idAFFB07E42E044B9A8E4A7912E1A27190"><enum>(B)</enum><text>the packaging,
repackaging, labeling, relabeling, or distribution of a prescription
drug.</text>
</subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id89398767F894418B87E685C9BAFAC472"><enum>(b)</enum><header>Prohibited
Acts</header><text>The <act-name parsable-cite="FFDCA">Federal Food, Drug, and
Cosmetic Act</act-name> is amended—</text>
<paragraph id="id41AEFAFDAF3B4935BE75F6CE91822924"><enum>(1)</enum><text>in section 301
(21 U.S.C. 331), by striking paragraph (aa) and inserting the following:</text>
<quoted-block id="idB6F02D4F21ED48B6B02A6197D87ABFD4">
<item id="id1AA656D199324AA88BA68963F525A902" indent="up5"><enum>(aa)</enum><subitem commented="no" display-inline="yes-display-inline" id="id2ABE6C4AEB75415682676F7458F0B7A8"><enum>(1)</enum><text>The sale or trade by a
pharmacist, or by a business organization of which the pharmacist is a part, of
a qualifying drug that under section 804(a)(2)(A) was imported by the
pharmacist, other than—</text>
</subitem></item><subparagraph id="idAAE45A05DE7A4321BDB5D1FB52C6D023" indent="up1"><enum>(A)</enum><text>a sale at retail made pursuant to
dispensing the drug to a customer of the pharmacist or organization; or</text>
</subparagraph><subparagraph id="idA4317620ED234D41AE9F89A81FF37E3C" indent="up1"><enum>(B)</enum><text>a sale or trade of the drug to a
pharmacy or a wholesaler registered to import drugs under section 804.</text>
</subparagraph><paragraph id="id1CFF9B67B3D846DCBFE469887DA7DAF1" indent="up1"><enum>(2)</enum><text>The sale or trade by an individual of
a qualifying drug that under section 804(a)(2)(B) was imported by the
individual.</text>
</paragraph><paragraph id="idCB48EF15C1BE416DBA489E25CFE6CCC9" indent="up1"><enum>(3)</enum><text>The making of a materially false,
fictitious, or fraudulent statement or representation, or a material omission,
in a notice under clause (i) of section 804(g)(2)(B) or in an application
required under section 804(g)(2)(F), or the failure to submit such a notice or
application.</text>
</paragraph><paragraph id="id9E09425F11354F529D35F568D1314895" indent="up1"><enum>(4)</enum><text>The importation of a drug in
violation of a registration condition or other requirement under section 804,
the falsification of any record required to be maintained, or provided to the
Secretary, under such section, or the violation of any registration condition
or other requirement under such
section.</text>
</paragraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</paragraph><paragraph id="idBE2869F18D0E42BA8B608057FDF23B78"><enum>(2)</enum><text>in section 303(a)
(21 U.S.C. 333(a)), by striking paragraph (6) and inserting the
following:</text>
<quoted-block id="idD4821F2718424F7E9C4EB1C4F7DEBE08">
<paragraph id="id367489B24DBC476D9CEA7EDCD3E69EFA" indent="up1"><enum>(6)</enum><text>Notwithstanding subsection (a), any
person that knowingly violates section 301(i) (2) or (3) or section 301(aa)(4)
shall be imprisoned not more than 10 years, or fined in accordance with title
18, United States Code, or
both.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="id6E9A3201883D41B89F766EC1380871F5"><enum>(c)</enum><header>Amendment of
certain provisions</header>
<paragraph id="id3225225FBEE345A4B446A138F8985D81"><enum>(1)</enum><header>In
general</header><text>Section 801 of the <act-name parsable-cite="FFDCA">Federal Food, Drug, and Cosmetic Act</act-name> (21
U.S.C. 381) is amended by striking subsection (g) and inserting the
following:</text>
<quoted-block act-name="Federal Food, Drug, and Cosmetic Act" id="id36D7C229201B402AACE2CB41580DEF26">
<subsection id="idD7654E66E3A2437EBC6C12B28BED145E"><enum>(g)</enum><text>With respect to a
prescription drug that is imported or offered for import into the United States
by an individual who is not in the business of such importation, that is not
shipped by a registered exporter under section 804, and that is refused
admission under subsection (a), the Secretary shall notify the individual
that—</text>
<paragraph id="idE748A94205D3485AA311444E6EC14F0F"><enum>(1)</enum><text>the drug has been
refused admission because the drug was not a lawful import under section
804;</text>
</paragraph><paragraph id="id670DE912A33742AB8C04A1C5464E2146"><enum>(2)</enum><text>the drug is not
otherwise subject to a waiver of the requirements of subsection (a);</text>
</paragraph><paragraph id="idE493DCD2E2194633A604C02C71025F17"><enum>(3)</enum><text>the individual
may under section 804 lawfully import certain prescription drugs from exporters
registered with the Secretary under section 804; and</text>
</paragraph><paragraph id="id9B93EC4851B64A5F93DA9A33BCB62553"><enum>(4)</enum><text>the individual
can find information about such importation, including a list of registered
exporters, on the Internet website of the Food and Drug Administration or
through a toll-free telephone number required under section
804.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id6BF9245A8FD54C4AAEE83C83B5133E1D"><enum>(2)</enum><header>Establishment
registration</header><text>Section 510(i) of the
<act-name parsable-cite="FFDCA">Federal Food, Drug, and Cosmetic Act</act-name>
(21 U.S.C. 360(i)) is amended in paragraph (1) by inserting after <quote>import
into the United States</quote> the following: <quote>, including a drug that
is, or may be, imported or offered for import into the United States under
section 804,</quote>.</text>
</paragraph><paragraph id="id355A144B157A4A188C947A75C2FA2281"><enum>(3)</enum><header>Effective
date</header><text>The amendments made by this subsection shall take effect on
the date that is 90 days after the date of enactment of this Act.</text>
</paragraph></subsection><subsection id="idB0197871A52E4ECC9E392003F2AD9E9F"><enum>(d)</enum><header>Exhaustion</header>
<paragraph id="id30FD04E8D77E422A86C0DFCA1D532C72"><enum>(1)</enum><header>In
general</header><text>Section 271 of title 35, United States Code, is
amended—</text>
<subparagraph id="idB45049A8DA554197A6D86DBD8F388607"><enum>(A)</enum><text>by redesignating
subsections (h) and (i) as (i) and (j), respectively; and</text>
</subparagraph><subparagraph id="id9F4CEA5285E24F9198A1FEEFF40742EF"><enum>(B)</enum><text>by inserting
after subsection (g) the following:</text>
<quoted-block id="id2C91F1EC0EA843DE9C6F4F2D5144B2A5">
<subsection id="idAB320EB27D3C4EFCA31C261BDBD71A18"><enum>(h)</enum><text>It shall not be
an act of infringement to use, offer to sell, or sell within the United States
or to import into the United States any patented invention under section 804 of
the <act-name parsable-cite="FFDCA">Federal Food, Drug, and Cosmetic
Act</act-name> that was first sold abroad by or under authority of the owner or
licensee of such
patent.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="id63BC8B10B90D404585B6F3328DF6C18B"><enum>(2)</enum><header>Rule of
construction</header><text>Nothing in the amendment made by paragraph (1) shall
be construed to affect the ability of a patent owner or licensee to enforce
their patent, subject to such amendment.</text>
</paragraph></subsection><subsection id="idB074C868C57A43E38B625C6E4E5F6A1E"><enum>(e)</enum><header>Effect of
Section <enum-in-header>804</enum-in-header></header>
<paragraph id="idAD180D2980164EED9FCCE9386DED506B"><enum>(1)</enum><header>In
general</header><text>Section 804 of the <act-name parsable-cite="FFDCA">Federal Food, Drug, and Cosmetic Act</act-name>, as added
by subsection (a), shall permit the importation of qualifying drugs (as defined
in such section 804) into the United States without regard to the status of the
issuance of implementing regulations—</text>
<subparagraph id="id5B60E4AA561E4BEEB5C0BF2BCE6F30A9"><enum>(A)</enum><text>from exporters
registered under such section 804 on the date that is 90 days after the date of
enactment of this Act; and</text>
</subparagraph><subparagraph id="idDEA53DA21F83481697A9847AECF3ADF5"><enum>(B)</enum><text>from permitted
countries, as defined in such section 804, by importers registered under such
section 804 on the date that is 1 year after the date of enactment of this
Act.</text>
</subparagraph></paragraph><paragraph id="id4A111E7A3F7E484DA61B789040265338"><enum>(2)</enum><header>Review of
registration by certain exporters</header>
<subparagraph id="id86312A87EFF84719BA2086ED1E9B18D0"><enum>(A)</enum><header>Review
priority</header><text>In the review of registrations submitted under
subsection (b) of such section 804, registrations submitted by entities in
Canada that are significant exporters of prescription drugs to individuals in
the United States as of the date of enactment of this Act will have priority
during the 90 day period that begins on such date of enactment.</text>
</subparagraph><subparagraph id="idEEAE2B2D812543E99A51B5903093BD2E"><enum>(B)</enum><header>Period for
review</header><text>During such 90-day period, the reference in subsection
(b)(2)(A) of such section 804 to 90 days (relating to approval or disapproval
of registrations) is, as applied to such entities, deemed to be 30 days.</text>
</subparagraph><subparagraph id="idC0A06CE359A347F3937B030CFB5CC0DB"><enum>(C)</enum><header>Limitation</header><text>That
an exporter in Canada exports, or has exported, prescription drugs to
individuals in the United States on or before the date that is 90 days after
the date of enactment of this Act shall not serve as a basis, in whole or in
part, for disapproving a registration under such section 804 from the
exporter.</text>
</subparagraph><subparagraph id="id2015EF3084ED435C820201D16C0B0312"><enum>(D)</enum><header>First year
limit on number of exporters</header><text>During the 1-year period beginning
on the date of enactment of this Act, the Secretary of Health and Human
Services (referred to in this section as the <quote>Secretary</quote>) may
limit the number of registered exporters under such section 804 to not less
than 50, so long as the Secretary gives priority to those exporters with
demonstrated ability to process a high volume of shipments of drugs to
individuals in the United States.</text>
</subparagraph><subparagraph id="id396CA2DC0563460496EAA27EB5132558"><enum>(E)</enum><header>Second year
limit on number of exporters</header><text>During the 1-year period beginning
on the date that is 1 year after the date of enactment of this Act, the
Secretary may limit the number of registered exporters under such section 804
to not less than 100, so long as the Secretary gives priority to those
exporters with demonstrated ability to process a high volume of shipments of
drugs to individuals in the United States.</text>
</subparagraph><subparagraph id="idDD80E3D283A4428F9CD78E73F289152D"><enum>(F)</enum><header>Further limit
on number of exporters</header><text>During any 1-year period beginning on a
date that is 2 or more years after the date of enactment of this Act, the
Secretary may limit the number of registered exporters under such section 804
to not less than 25 more than the number of such exporters during the previous
1-year period, so long as the Secretary gives priority to those exporters with
demonstrated ability to process a high volume of shipments of drugs to
individuals in the United States.</text>
</subparagraph></paragraph><paragraph id="id26E093ECFA4F4572A11C93192C59685C"><enum>(3)</enum><header>Limits on
number of importers</header>
<subparagraph id="id606767D6096149D49FDA6375A8E3851B"><enum>(A)</enum><header>First year
limit on number of importers</header><text>During the 1-year period beginning
on the date that is 1 year after the date of enactment of this Act, the
Secretary may limit the number of registered importers under such section 804
to not less than 100 (of which at least a significant number shall be groups of
pharmacies, to the extent feasible given the applications submitted by such
groups), so long as the Secretary gives priority to those importers with
demonstrated ability to process a high volume of shipments of drugs imported
into the United States.</text>
</subparagraph><subparagraph id="id3B388381DF4342969206054907660407"><enum>(B)</enum><header>Second year
limit on number of importers</header><text>During the 1-year period beginning
on the date that is 2 years after the date of enactment of this Act, the
Secretary may limit the number of registered importers under such section 804
to not less than 200 (of which at least a significant number shall be groups of
pharmacies, to the extent feasible given the applications submitted by such
groups), so long as the Secretary gives priority to those importers with
demonstrated ability to process a high volume of shipments of drugs into the
United States.</text>
</subparagraph><subparagraph id="idF00F3E18D40148FDAFCE9AAA7B73C9D4"><enum>(C)</enum><header>Further limit
on number of importers</header><text>During any 1-year period beginning on a
date that is 3 or more years after the date of enactment of this Act, the
Secretary may limit the number of registered importers under such section 804
to not less than 50 more (of which at least a significant number shall be
groups of pharmacies, to the extent feasible given the applications submitted
by such groups) than the number of such importers during the previous 1-year
period, so long as the Secretary gives priority to those importers with
demonstrated ability to process a high volume of shipments of drugs to the
United States.</text>
</subparagraph></paragraph><paragraph id="id49094F1E4DC0472CB1A6B3E0511A57C7"><enum>(4)</enum><header>Notices for
drugs for import from Canada</header><text>The notice with respect to a
qualifying drug introduced for commercial distribution in Canada as of the date
of enactment of this Act that is required under subsection (g)(2)(B)(i) of such
section 804 shall be submitted to the Secretary not later than 30 days after
the date of enactment of this Act if—</text>
<subparagraph id="id006B0216B9F842EFB6171E1EE1C03298"><enum>(A)</enum><text>the U.S. label
drug (as defined in such section 804) for the qualifying drug is 1 of the 100
prescription drugs with the highest dollar volume of sales in the United States
based on the 12 calendar month period most recently completed before the date
of enactment of this Act; or</text>
</subparagraph><subparagraph id="id42131BE287F445FCA13975724FDDDF4E"><enum>(B)</enum><text>the notice is a
notice under subsection (g)(2)(B)(i)(II) of such section 804.</text>
</subparagraph></paragraph><paragraph id="id3440D7C5FA9E4C71AB9347B53D5D9963"><enum>(5)</enum><header>Notice for
drugs for import from other countries</header><text>The notice with respect to
a qualifying drug introduced for commercial distribution in a permitted country
other than Canada as of the date of enactment of this Act that is required
under subsection (g)(2)(B)(i) of such section 804 shall be submitted to the
Secretary not later than 180 days after the date of enactment of this Act
if—</text>
<subparagraph id="id3AE7F64484C3478282AB6EE7F0D76D6F"><enum>(A)</enum><text>the U.S. label
drug for the qualifying drug is 1 of the 100 prescription drugs with the
highest dollar volume of sales in the United States based on the 12 calendar
month period that is first completed on the date that is 120 days after the
date of enactment of this Act; or</text>
</subparagraph><subparagraph id="id9A258E8C69504AEE82DC488D49F52D91"><enum>(B)</enum><text>the notice is a
notice under subsection (g)(2)(B)(i)(II) of such section 804.</text>
</subparagraph></paragraph><paragraph id="idD74E912B843A436DA9C93E82E3386BE9"><enum>(6)</enum><header>Notice for
other drugs for import</header>
<subparagraph id="idDDDFE80BBA6C44E294C7F69885FAEC44"><enum>(A)</enum><header>Guidance on
submission dates</header><text>The Secretary shall by guidance establish a
series of submission dates for the notices under subsection (g)(2)(B)(i) of
such section 804 with respect to qualifying drugs introduced for commercial
distribution as of the date of enactment of this Act and that are not required
to be submitted under paragraph (4) or (5).</text>
</subparagraph><subparagraph id="idE0757C50C26443CAA5AD516ABDFFC5FD"><enum>(B)</enum><header>Consistent and
efficient use of resources</header><text>The Secretary shall establish the
dates described under subparagraph (A) so that such notices described under
subparagraph (A) are submitted and reviewed at a rate that allows consistent
and efficient use of the resources and staff available to the Secretary for
such reviews. The Secretary may condition the requirement to submit such a
notice, and the review of such a notice, on the submission by a registered
exporter or a registered importer to the Secretary of a notice that such
exporter or importer intends to import such qualifying drug to the United
States under such section 804.</text>
</subparagraph><subparagraph id="idBAF24F72703D4D7D8F1ABD8EEB6FB417"><enum>(C)</enum><header>Priority for
drugs with higher sales</header><text>The Secretary shall establish the dates
described under subparagraph (A) so that the Secretary reviews the notices
described under such subparagraph with respect to qualifying drugs with higher
dollar volume of sales in the United States before the notices with respect to
drugs with lower sales in the United States.</text>
</subparagraph></paragraph><paragraph id="id81A70696DE4944FF8BBE8D4D05CE9B0E"><enum>(7)</enum><header>Notices for
drugs approved after effective date</header><text>The notice required under
subsection (g)(2)(B)(i) of such section 804 for a qualifying drug first
introduced for commercial distribution in a permitted country (as defined in
such section 804) after the date of enactment of this Act shall be submitted to
and reviewed by the Secretary as provided under subsection (g)(2)(B) of such
section 804, without regard to paragraph (4), (5), or (6).</text>
</paragraph><paragraph id="idA2285C3385694891B7D729DC174E2369"><enum>(8)</enum><header>Report</header><text>Beginning
with the first full fiscal year after the date of enactment of this Act, not
later than 90 days after the end of each fiscal year during which the Secretary
reviews a notice referred to in paragraph (4), (5), or (6), the Secretary shall
submit a report to Congress concerning the progress of the Food and Drug
Administration in reviewing the notices referred to in paragraphs (4), (5), and
(6).</text>
</paragraph><paragraph id="id2F01DF24FB6D41F5BB47F327E8B12A3F"><enum>(9)</enum><header>User
fees</header>
<subparagraph id="idC112E317275545A38769BB75C9B9421F"><enum>(A)</enum><header>Exporters</header><text>When
establishing an aggregate total of fees to be collected from exporters under
subsection (f)(2) of such section 804, the Secretary shall, under subsection
(f)(3)(C)(i) of such section 804, estimate the total price of drugs imported
under subsection (a) of such section 804 into the United States by registered
exporters during the first fiscal year in which this Act takes effect to be an
amount equal to the amount which bears the same ratio to $1,000,000,000 as the
number of days in such fiscal year during which this Act is effective bears to
365.</text>
</subparagraph><subparagraph id="idF42D6DD9882B46D8A8CCA3B03AD17FCA"><enum>(B)</enum><header>Importers</header><text>When
establishing an aggregate total of fees to be collected from importers under
subsection (e)(2) of such section 804, the Secretary shall, under subsection
(e)(3)(C)(i) of such section 804, estimate the total price of drugs imported
under subsection (a) of such section 804 into the United States by registered
importers during—</text>
<clause id="id9659D866146B40D1B38E54AF8673507B"><enum>(i)</enum><text>the
first fiscal year in which this Act takes effect to be an amount equal to the
amount which bears the same ratio to $1,000,000,000 as the number of days in
such fiscal year during which this Act is effective bears to 365; and</text>
</clause><clause id="id9B8DBBDB2C6E4E69B4293C8E858D1A30"><enum>(ii)</enum><text>the second
fiscal year in which this Act is in effect to be $3,000,000,000.</text>
</clause></subparagraph><subparagraph id="idE6312B5A504E47F195B7AAE8CF40E59B"><enum>(C)</enum><header>Second year
adjustment</header>
<clause id="idFC8ABC883F7D47E9A8B3B036F317B509"><enum>(i)</enum><header>Reports</header><text>Not
later than February 20 of the second fiscal year in which this Act is in
effect, registered importers shall report to the Secretary the total price and
the total volume of drugs imported to the United States by the importer during
the 4-month period from October 1 through January 31 of such fiscal
year.</text>
</clause><clause id="id0E30D23F4EC34581BB51B1AA2835DB64"><enum>(ii)</enum><header>Reestimate</header><text>Notwithstanding
subsection (e)(3)(C)(ii) of such section 804 or subparagraph (B), the Secretary
shall reestimate the total price of qualifying drugs imported under subsection
(a) of such section 804 into the United States by registered importers during
the second fiscal year in which this Act is in effect. Such reestimate shall be
equal to—</text>
<subclause id="idEB8F95C4EC404E2BB4DA3B39B70195B4"><enum>(I)</enum><text>the total price
of qualifying drugs imported by each importer as reported under clause (i);
multiplied by</text>
</subclause><subclause id="id96219B03A06C46C1AAE4A63184ADE6E9"><enum>(II)</enum><text>3.</text>
</subclause></clause><clause id="id0EFA170836E940BD80033EB969637C73"><enum>(iii)</enum><header>Adjustment</header><text>The
Secretary shall adjust the fee due on April 1 of the second fiscal year in
which this Act is in effect, from each importer so that the aggregate total of
fees collected under subsection (e)(2) for such fiscal year does not exceed the
total price of qualifying drugs imported under subsection (a) of such section
804 into the United States by registered importers during such fiscal year as
reestimated under clause (ii).</text>
</clause></subparagraph><subparagraph id="idFA1ECC2613F14D98AB699B105175AA25"><enum>(D)</enum><header>Failure to pay
fees</header><text>Notwithstanding any other provision of this section, the
Secretary may prohibit a registered importer or exporter that is required to
pay user fees under subsection (e) or (f) of such section 804 and that fails to
pay such fees within 30 days after the date on which it is due, from importing
or offering for importation a qualifying drug under such section 804 until such
fee is paid.</text>
</subparagraph><subparagraph id="id02C9B92D777343C48D555D6D93492EE3"><enum>(E)</enum><header>Annual
report</header>
<clause id="idF1EDD476E4784BDE882D2419542DE457"><enum>(i)</enum><header>Food and Drug
Administration</header><text>Not later than 180 days after the end of each
fiscal year during which fees are collected under subsection (e), (f), or
(g)(2)(B)(iv) of such section 804, the Secretary shall prepare and submit to
the House of Representatives and the Senate a report on the implementation of
the authority for such fees during such fiscal year and the use, by the Food
and Drug Administration, of the fees collected for the fiscal year for which
the report is made and credited to the Food and Drug Administration.</text>
</clause><clause id="id56BA905D36EB42B2994BCC2EC6857A09"><enum>(ii)</enum><header>Customs and
border control</header><text>Not later than 180 days after the end of each
fiscal year during which fees are collected under subsection (e) or (f) of such
section 804, the Secretary of Homeland Security, in consultation with the
Secretary of the Treasury, shall prepare and submit to the House of
Representatives and the Senate a report on the use, by the Bureau of Customs
and Border Protection, of the fees, if any, transferred by the Secretary to the
Bureau of Customs and Border Protection for the fiscal year for which the
report is made.</text>
</clause></subparagraph></paragraph><paragraph id="idA44485E38AF84036B73EF809079F974B"><enum>(10)</enum><header>Special rule
regarding importation by individuals</header>
<subparagraph id="id1DBB72BE4C344D0DB605F92D912FCDAD"><enum>(A)</enum><header>In
general</header><text>Notwithstanding any provision of this Act (or an
amendment made by this Act), the Secretary shall expedite the designation of
any additional countries from which an individual may import a qualifying drug
into the United States under such section 804 if any action implemented by the
Government of Canada has the effect of limiting or prohibiting the importation
of qualifying drugs into the United States from Canada.</text>
</subparagraph><subparagraph id="idC94031F1743943E68D32A0ED2423E38D"><enum>(B)</enum><header>Timing and
criteria</header><text>The Secretary shall designate such additional countries
under subparagraph (A)—</text>
<clause id="id762A615F0E3344F69B9CB7AE79528D24"><enum>(i)</enum><text>not
later than 6 months after the date of the action by the Government of Canada
described under such subparagraph; and</text>
</clause><clause id="id8342ADAC4B994044920A59B413B7F9C9"><enum>(ii)</enum><text>using the
criteria described under subsection (a)(4)(D)(i)(II) of such section
804.</text>
</clause></subparagraph></paragraph></subsection><subsection id="idF733D0641F4A4A6A894279B68184977C"><enum>(f)</enum><header>Implementation
of Section <enum-in-header>804</enum-in-header></header>
<paragraph id="id38431BF70FA044FF956BE0B78113D303"><enum>(1)</enum><header>Interim
rule</header><text>The Secretary may promulgate an interim rule for
implementing section 804 of the <act-name parsable-cite="FFDCA">Federal Food,
Drug, and Cosmetic Act</act-name>, as added by subsection (a) of this
section.</text>
</paragraph><paragraph id="id71527B481DEE4DBBAB8F14A7466F8E51"><enum>(2)</enum><header>No notice of
proposed rulemaking</header><text>The interim rule described under paragraph
(1) may be developed and promulgated by the Secretary without providing general
notice of proposed rulemaking.</text>
</paragraph><paragraph id="id056092966E0D41DFA7A69F06E06EC963"><enum>(3)</enum><header>Final
rule</header><text>Not later than 1 year after the date on which the Secretary
promulgates an interim rule under paragraph (1), the Secretary shall, in
accordance with procedures under section 553 of title 5, United States Code,
promulgate a final rule for implementing such section 804, which may
incorporate by reference provisions of the interim rule provided for under
paragraph (1), to the extent that such provisions are not modified.</text>
</paragraph></subsection><subsection id="id023ACD5A9C134A23BC6C6CBE564CA682"><enum>(g)</enum><header>Consumer
education</header><text>The Secretary shall carry out activities that educate
consumers—</text>
<paragraph id="id802D58EC753A4A7FBB0CA11D6DB72392"><enum>(1)</enum><text>with regard to
the availability of qualifying drugs for import for personal use from an
exporter registered with and approved by the Food and Drug Administration under
section 804 of the <act-name parsable-cite="FFDCA">Federal Food, Drug, and
Cosmetic Act</act-name>, as added by this section, including information on how
to verify whether an exporter is registered and approved by use of the Internet
website of the Food and Drug Administration and the toll-free telephone number
required by this Act;</text>
</paragraph><paragraph id="id262CF7BCEB0049F9A09E2C05E04E0E24"><enum>(2)</enum><text>that drugs that
consumers attempt to import from an exporter that is not registered with and
approved by the Food and Drug Administration can be seized by the United States
Customs Service and destroyed, and that such drugs may be counterfeit,
unapproved, unsafe, or ineffective;</text>
</paragraph><paragraph id="idFC628D829D5B4BD3A1899132B3D9C958"><enum>(3)</enum><text>with regard to
the suspension and termination of any registration of a registered importer or
exporter under such section 804; and</text>
</paragraph><paragraph id="idF0F76A86A8434DAA95A7A0FBE524FF10"><enum>(4)</enum><text>with regard to
the availability at domestic retail pharmacies of qualifying drugs imported
under such section 804 by domestic wholesalers and pharmacies registered with
and approved by the Food and Drug Administration.</text>
</paragraph></subsection><subsection id="idECA59BCA142A409C844F9391E403168B"><enum>(h)</enum><header>Effect on
administration practices</header><text>Notwithstanding any provision of this
Act (and the amendments made by this Act), the practices and policies of the
Food and Drug Administration and Bureau of Customs and Border Protection, in
effect on January 1, 2004, with respect to the importation of prescription
drugs into the United States by an individual, on the person of such
individual, for personal use, shall remain in effect.</text>
</subsection><subsection id="id0E074513D8C244958B3BDC16F80426DD"><enum>(i)</enum><header>Report to
Congress</header><text>The Federal Trade Commission shall, on an annual basis,
submit to Congress a report that describes any action taken during the period
for which the report is being prepared to enforce the provisions of section
804(n) of the Federal Food, Drug, and Cosmetic Act (as added by this Act),
including any pending investigations or civil actions under such
section.</text>
</subsection></section><section id="id482F734ABC0B4EC8BEE41657ADEC93FB"><enum>125.</enum><header>Disposition of
certain drugs denied admission into United States</header>
<subsection id="idE0BCF1DE6CE946ADBC69852AB2F5D693"><enum>(a)</enum><header>In
general</header><text>Chapter VIII of the <act-name parsable-cite="FFDCA">Federal Food, Drug, and Cosmetic Act</act-name> (21
U.S.C. 381 et seq.), as amended by section 124, is further amended by adding at
the end the following section:</text>
<quoted-block act-name="Federal Food, Drug, and Cosmetic Act" id="id3CA4BE79E0984A6585FC6E5459299441">
<section id="id192E994EE7234E678405AB18DB5C584D"><enum>805.</enum><header>Disposition of
certain drugs denied admission</header>
<subsection id="id6DE4DE2500F84649BCE01E959DD76945"><enum>(a)</enum><header>In
general</header><text>The Secretary of Homeland Security shall deliver to the
Secretary a shipment of drugs that is imported or offered for import into the
United States if—</text>
<paragraph id="id07C586B38E7747C5BDD628D1F89B8396"><enum>(1)</enum><text>the shipment has
a declared value of less than $10,000; and</text>
</paragraph><paragraph id="id8DF60CCA0CF84E3DB0FC3187921421C3"><enum>(2)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="id0FE637BDD5D044AA92C36B055B776DE7"><enum>(A)</enum><text>the shipping container
for such drugs does not bear the markings required under section 804(d)(2);
or</text>
</subparagraph><subparagraph id="id5339527C84D14001BC2FE7C36A37E73D" indent="up1"><enum>(B)</enum><text>the Secretary has requested delivery
of such shipment of drugs.</text>
</subparagraph></paragraph></subsection><subsection id="idAA492C2D04A842C4B1E66E9A25746137"><enum>(b)</enum><header>No bond or
export</header><text>Section 801(b) does not authorize the delivery to the
owner or consignee of drugs delivered to the Secretary under subsection (a)
pursuant to the execution of a bond, and such drugs may not be exported.</text>
</subsection><subsection id="idBD437F8D24514EE69CABD70E230EFE0B"><enum>(c)</enum><header>Destruction of
violative shipment</header><text>The Secretary shall destroy a shipment of
drugs delivered by the Secretary of Homeland Security to the Secretary under
subsection (a) if—</text>
<paragraph id="idA54B680598264AAEB7B7F43E1F503A5C"><enum>(1)</enum><text>in the case of
drugs that are imported or offered for import from a registered exporter under
section 804, the drugs are in violation of any standard described in section
804(g)(5); or</text>
</paragraph><paragraph id="id720B1CECB1864AA7AAEFCBF0D2D872B6"><enum>(2)</enum><text>in the case of
drugs that are not imported or offered for import from a registered exporter
under section 804, the drugs are in violation of a standard referred to in
section 801(a) or 801(d)(1).</text>
</paragraph></subsection><subsection id="idF8BACCB1FC564E38916613179BF567B3"><enum>(d)</enum><header>Certain
procedures</header>
<paragraph id="id9A8F42649FE6410B81B3876F045A0804"><enum>(1)</enum><header>In
general</header><text>The delivery and destruction of drugs under this section
may be carried out without notice to the importer, owner, or consignee of the
drugs except as required by section 801(g) or section 804(i)(2). The issuance
of receipts for the drugs, and recordkeeping activities regarding the drugs,
may be carried out on a summary basis.</text>
</paragraph><paragraph id="id7F90B28A3F7E4C6D9E178025868F580F"><enum>(2)</enum><header>Objective of
procedures</header><text>Procedures promulgated under paragraph (1) shall be
designed toward the objective of ensuring that, with respect to efficiently
utilizing Federal resources available for carrying out this section, a
substantial majority of shipments of drugs subject to described in subsection
(c) are identified and destroyed.</text>
</paragraph></subsection><subsection id="id26C6787B89B8408DB080382F429132E3"><enum>(e)</enum><header>Evidence
exception</header><text>Drugs may not be destroyed under subsection (c) to the
extent that the Attorney General of the United States determines that the drugs
should be preserved as evidence or potential evidence with respect to an
offense against the United States.</text>
</subsection><subsection id="idF19F5C480E374FC89D0010EED961CB0B"><enum>(f)</enum><header>Rule of
construction</header><text>This section may not be construed as having any
legal effect on applicable law with respect to a shipment of drugs that is
imported or offered for import into the United States and has a declared value
equal to or greater than
$10,000.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idA44DC4C221EA4515978A47375FF50B21"><enum>(b)</enum><header>Procedures</header><text>Procedures
for carrying out section 805 of the <act-name parsable-cite="FFDCA">Federal
Food, Drug, and Cosmetic Act</act-name>, as added by subsection (a), shall be
established not later than 90 days after the date of the enactment of this
Act.</text>
</subsection><subsection id="idCD8A68ACF2DF4C5CA39DD63BFFC1F813"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall take effect on the
date that is 90 days after the date of enactment of this Act.</text>
</subsection></section><section id="idF1DFAF3920064422B1B7F7A9B726B3D5"><enum>126.</enum><header>Wholesale
distribution of drugs; statements regarding prior sale, purchase, or
trade</header>
<subsection id="id6CE64E57370C4D7E857B899AADF9F400"><enum>(a)</enum><header>Striking of
exemptions; applicability to registered exporters</header><text>Section 503(e)
of the <act-name parsable-cite="FFDCA">Federal Food, Drug, and Cosmetic
Act</act-name> (21 U.S.C. 353(e)) is amended—</text>
<paragraph id="idAB32EDF928A24A29A63BE43B7C370C00"><enum>(1)</enum><text>in paragraph
(1)—</text>
<subparagraph id="id01FD5B8738FC4DC49CCECDB36B3A3C73"><enum>(A)</enum><text>by striking
<quote>and who is not the manufacturer or an authorized distributor of record
of such drug</quote>;</text>
</subparagraph><subparagraph id="id65B704D6690F4E71B333CAB1A9D6A8FB"><enum>(B)</enum><text>by striking
<quote>to an authorized distributor of record or</quote>; and</text>
</subparagraph><subparagraph id="id9AAC540613974263ACC04D806DBB392C"><enum>(C)</enum><text>by striking
subparagraph (B) and inserting the following:</text>
<quoted-block id="idBE1D5CC7BAA14F41B8CB7ED26163E781">
<subparagraph id="id00ED7D3819CF486A96FA94C8120B28FB" indent="up2"><enum>(B)</enum><text>The fact that a drug subject to
subsection (b) is exported from the United States does not with respect to such
drug exempt any person that is engaged in the business of the wholesale
distribution of the drug from providing the statement described in subparagraph
(A) to the person that receives the drug pursuant to the export of the
drug.</text>
</subparagraph><subparagraph id="id9C0F9B1ECB40480F8BF176D71EE3EE99" indent="up2"><enum>(C)</enum><clause commented="no" display-inline="yes-display-inline" id="id49B68552126A44C3906FDE775C2AFF11"><enum>(i)</enum><text>The Secretary shall by
regulation establish requirements that supersede subparagraph (A) (referred to
in this subparagraph as <quote>alternative requirements</quote>) to identify
the chain of custody of a drug subject to subsection (b) from the manufacturer
of the drug throughout the wholesale distribution of the drug to a pharmacist
who intends to sell the drug at retail if the Secretary determines that the
alternative requirements, which may include standardized anti-counterfeiting or
track-and-trace technologies, will identify such chain of custody or the
identity of the discrete package of the drug from which the drug is dispensed
with equal or greater certainty to the requirements of subparagraph (A), and
that the alternative requirements are economically and technically
feasible.</text>
</clause><clause id="id6220367A899042F8A44E1870E4DB7BBF" indent="up1"><enum>(ii)</enum><text>When the Secretary promulgates a
final rule to establish such alternative requirements, the final rule in
addition shall, with respect to the registration condition established in
clause (i) of section 804(c)(3)(B), establish a condition equivalent to the
alternative requirements, and such equivalent condition may be met in lieu of
the registration condition established in such clause
(i).</text>
</clause></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="idD8A0D4DD595A4D17922F8CDEB1A2CAAF"><enum>(2)</enum><text>in paragraph
(2)(A), by adding at the end the following: <quote>The preceding sentence may
not be construed as having any applicability with respect to a registered
exporter under section 804.</quote>; and</text>
</paragraph><paragraph id="idCACECF7753834D2196B7A078E2E73AC9"><enum>(3)</enum><text>in paragraph (3),
by striking <quote>and subsection (d)—</quote> in the matter preceding
subparagraph (A) and all that follows through <quote>the term <term>wholesale
distribution</term> means</quote> in subparagraph (B) and inserting the
following: <quote>and subsection (d), the term <term>wholesale
distribution</term> means</quote>.</text>
</paragraph></subsection><subsection id="id3572118F6F1B4D1D8AEB225041C31E34"><enum>(b)</enum><header>Conforming
amendment</header><text>Section 503(d) of the <act-name parsable-cite="FFDCA">Federal Food, Drug, and Cosmetic Act</act-name> (21
U.S.C. 353(d)) is amended by adding at the end the following:</text>
<quoted-block act-name="Federal Food, Drug, and Cosmetic Act" id="id7339E56E23C244C594E6FAA9EF66669F">
<paragraph id="idCF97082C0DE74B6C9E3EEF5F0534F3E9" indent="up1"><enum>(4)</enum><text>Each manufacturer of a drug subject
to subsection (b) shall maintain at its corporate offices a current list of the
authorized distributors of record of such drug.</text>
</paragraph><paragraph id="idFFDC4235016B45078EA3BEABED440587" indent="up1"><enum>(5)</enum><text>For purposes of this subsection, the
term <term>authorized distributors of record</term> means those distributors
with whom a manufacturer has established an ongoing relationship to distribute
such manufacturer’s
products.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id404BCB3D6BFF4C5A82D5E1324B4C7970"><enum>(c)</enum><header>Effective
date</header>
<paragraph id="id04C3A35819104882961E323FCE1A33E0"><enum>(1)</enum><header>In
general</header><text>The amendments made by paragraphs (1) and (3) of
subsection (a) and by subsection (b) shall take effect on January 1,
2010.</text>
</paragraph><paragraph id="id57ECEF2C0A9B47A5B9B97B495E6D3038"><enum>(2)</enum><header>Drugs imported
by registered importers under Section
<enum-in-header>804</enum-in-header></header><text>Notwithstanding paragraph
(1), the amendments made by paragraphs (1) and (3) of subsection (a) and by
subsection (b) shall take effect on the date that is 90 days after the date of
enactment of this Act with respect to qualifying drugs imported under section
804 of the <act-name parsable-cite="FFDCA">Federal Food, Drug, and Cosmetic
Act</act-name>, as added by section 4.</text>
</paragraph><paragraph id="id5E69895F24A94DB3BBA1A3950B12B565"><enum>(3)</enum><header>Effect with
respect to registered exporters</header><text>The amendment made by subsection
(a)(2) shall take effect on the date that is 90 days after the date of
enactment of this Act.</text>
</paragraph><paragraph id="idF3C6F3E086484186BC4C8D4A6651594B"><enum>(4)</enum><header>Alternative
requirements</header><text>The Secretary shall issue regulations to establish
the alternative requirements, referred to in the amendment made by subsection
(a)(1), that take effect not later than January 1, 2010.</text>
</paragraph><paragraph id="id511EA227351745098A76684929D487A9"><enum>(5)</enum><header>Intermediate
requirements</header><text>The Secretary shall by regulation require the use of
standardized anti-counterfeiting or track-and-trace technologies on
prescription drugs at the case and pallet level effective not later than 1 year
after the date of enactment of this Act.</text>
</paragraph><paragraph id="idE9ED9FF922CD4E73AC10871FE6C81E7A"><enum>(6)</enum><header>Additional
requirements</header>
<subparagraph id="idA5006D1FD8F54151B68106988DBF200D"><enum>(A)</enum><header>In
general</header><text>Notwithstanding any other provision of this section, the
Secretary shall, not later than 18 months after the date of enactment of this
Act, require that the packaging of any prescription drug incorporates—</text>
<clause id="id860A8883E244474F830AE8978DEDC839"><enum>(i)</enum><text>a
standardized numerical identifier unique to each package of such drug, applied
at the point of manufacturing and repackaging (in which case the numerical
identifier shall be linked to the numerical identifier applied at the point of
manufacturing); and</text>
</clause><clause id="idCB3340764FAD4AB1BAC565583901AD7E"><enum>(ii)</enum><subclause commented="no" display-inline="yes-display-inline" id="idC739E8AEDA8C465CB662AEA4A139697B"><enum>(I)</enum><text>overt optically
variable counterfeit-resistant technologies that—</text>
<item id="id3C91EAD645FF4AB69ED9B7B713AFAC59" indent="up1"><enum>(aa)</enum><text>are visible to the naked eye,
providing for visual identification of product authenticity without the need
for readers, microscopes, lighting devices, or scanners;</text>
</item><item id="idEDA54D2A5CDA426095E2DA1797573C30" indent="up1"><enum>(bb)</enum><text>are similar to that used by the
Bureau of Engraving and Printing to secure United States currency;</text>
</item><item id="idFA8A20D9CE9C4AC991F0DD3C6E92A609" indent="up1"><enum>(cc)</enum><text>are manufactured and distributed in a
highly secure, tightly controlled environment; and</text>
</item><item id="id290C167948A2456DA4DFA3309B80B3D8" indent="up1"><enum>(dd)</enum><text>incorporate additional layers of
nonvisible convert security features up to and including forensic capability,
as described in subparagraph (B); or</text>
</item></subclause><subclause id="id499E2482B2114B07ADBEB04BC59EE7F7" indent="up1"><enum>(II)</enum><text>technologies that have a function of
security comparable to that described in subclause (I), as determined by the
Secretary.</text>
</subclause></clause></subparagraph><subparagraph id="idCCA626AE2B9042CA8BBB6082F4483D72"><enum>(B)</enum><header>Standards for
packaging</header><text>For the purpose of making it more difficult to
counterfeit the packaging of drugs subject to this paragraph, the manufacturers
of such drugs shall incorporate the technologies described in subparagraph (A)
into at least 1 additional element of the physical packaging of the drugs,
including blister packs, shrink wrap, package labels, package seals, bottles,
and boxes.</text>
</subparagraph></paragraph></subsection></section><section id="id6B8994F78BA84970A0CC2E4A6D114CDA"><enum>127.</enum><header>Internet sales
of prescription drugs</header>
<subsection id="idBDA2C195F0A84E22AABDAF29E8DB5F20"><enum>(a)</enum><header>In
general</header><text>Chapter V of the <act-name parsable-cite="FFDCA">Federal
Food, Drug, and Cosmetic Act</act-name> (21 U.S.C. 351 et seq.) is amended by
inserting after section 503A the following:</text>
<quoted-block act-name="Federal Food, Drug, and Cosmetic Act" id="id13074A67935046B5985C63EE25D1E7EC">
<section id="id34D5234D82FA4264976C6E0D24DA312D"><enum>503B.</enum><header>Internet
sales of prescription drugs</header>
<subsection id="id6E1AA0BAAFF14D158EDF94B6F856A5BF"><enum>(a)</enum><header>Requirements
regarding information on Internet site</header>
<paragraph id="idE381B18E498144249383CEF2B0CEEBDF"><enum>(1)</enum><header>In
general</header><text>A person may not dispense a prescription drug pursuant to
a sale of the drug by such person if—</text>
<subparagraph id="id9DF2876AD09E44649EB5566826F1C40C"><enum>(A)</enum><text>the purchaser of
the drug submitted the purchase order for the drug, or conducted any other part
of the sales transaction for the drug, through an Internet site;</text>
</subparagraph><subparagraph id="id763BCDBAA1FC46A5911F7E2BAD211ADB"><enum>(B)</enum><text>the person
dispenses the drug to the purchaser by mailing or shipping the drug to the
purchaser; and</text>
</subparagraph><subparagraph id="idB8C1F20250374FDC93253EB06ADACB58"><enum>(C)</enum><text>such site, or any
other Internet site used by such person for purposes of sales of a prescription
drug, fails to meet each of the requirements specified in paragraph (2), other
than a site or pages on a site that—</text>
<clause id="id5583E6EE591A4068BEC728A6F686BC01"><enum>(i)</enum><text>are not intended
to be accessed by purchasers or prospective purchasers; or</text>
</clause><clause id="idE8C5C79FC1BC4746970FB4955DE5D09E"><enum>(ii)</enum><text>provide an
Internet information location tool within the meaning of section 231(e)(5) of
the <act-name parsable-cite="CA34">Communications Act of 1934</act-name> (47
U.S.C. 231(e)(5)).</text>
</clause></subparagraph></paragraph><paragraph id="id352B1097A62949629BFB0F725364AB40"><enum>(2)</enum><header>Requirements</header><text>With
respect to an Internet site, the requirements referred to in subparagraph (C)
of paragraph (1) for a person to whom such paragraph applies are as
follows:</text>
<subparagraph id="id34EC355809F547EB887F23CC64310588"><enum>(A)</enum><text>Each page of the
site shall include either the following information or a link to a page that
provides the following information:</text>
<clause id="idD2050C4CAB8F4088BC1E42115E41BBE4"><enum>(i)</enum><text>The name of such
person.</text>
</clause><clause id="id4877BB44D4EE4B498B872AF7D264AD91"><enum>(ii)</enum><text>Each State in
which the person is authorized by law to dispense prescription drugs.</text>
</clause><clause id="id0AAF8ADCA41D4844B867CDC268F5E993"><enum>(iii)</enum><text>The address and
telephone number of each place of business of the person with respect to sales
of prescription drugs through the Internet, other than a place of business that
does not mail or ship prescription drugs to purchasers.</text>
</clause><clause id="id3EB9789E91EC42D09F17E12F5AE31FA2"><enum>(iv)</enum><text>The name of each
individual who serves as a pharmacist for prescription drugs that are mailed or
shipped pursuant to the site, and each State in which the individual is
authorized by law to dispense prescription drugs.</text>
</clause><clause id="idE56488271E2F4E46BE0B05CE9EF8A138"><enum>(v)</enum><text>If the person
provides for medical consultations through the site for purposes of providing
prescriptions, the name of each individual who provides such consultations;
each State in which the individual is licensed or otherwise authorized by law
to provide such consultations or practice medicine; and the type or types of
health professions for which the individual holds such licenses or other
authorizations.</text>
</clause></subparagraph><subparagraph id="idD1D769532AAB461EB1232BD730D9C9F7"><enum>(B)</enum><text>A link to which
paragraph (1) applies shall be displayed in a clear and prominent place and
manner, and shall include in the caption for the link the words
<quote>licensing and contact information</quote>.</text>
</subparagraph></paragraph></subsection><subsection id="id750C4D1009FE4657A41AB7494D341CCA"><enum>(b)</enum><header>Internet sales
without appropriate medical relationships</header>
<paragraph id="id6574150F724F415EA83170B6B9373C65"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), a person may not
dispense a prescription drug, or sell such a drug, if—</text>
<subparagraph id="id947E7592FEAF4A6F8085FD98B28FEFBE"><enum>(A)</enum><text>for purposes of
such dispensing or sale, the purchaser communicated with the person through the
Internet;</text>
</subparagraph><subparagraph id="idF91197E6381F483597EFACFAB6A9F29C"><enum>(B)</enum><text>the patient for
whom the drug was dispensed or purchased did not, when such communications
began, have a prescription for the drug that is valid in the United
States;</text>
</subparagraph><subparagraph id="id484C33BEED7A4A5EA98FF0FE345FEF85"><enum>(C)</enum><text>pursuant to such
communications, the person provided for the involvement of a practitioner, or
an individual represented by the person as a practitioner, and the practitioner
or such individual issued a prescription for the drug that was
purchased;</text>
</subparagraph><subparagraph id="idC6E6AAE505C44C1C8FA09435BEE4C058"><enum>(D)</enum><text>the person knew,
or had reason to know, that the practitioner or the individual referred to in
subparagraph (C) did not, when issuing the prescription, have a qualifying
medical relationship with the patient; and</text>
</subparagraph><subparagraph id="id1175076ABEC74A07BB3D47DF50C1EA8C"><enum>(E)</enum><text>the person
received payment for the dispensing or sale of the drug.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">For
purposes of subparagraph (E), payment is received if money or other valuable
consideration is received.</continuation-text></paragraph><paragraph id="idA942ABE069B14B8D804E17522276D163"><enum>(2)</enum><header>Exceptions</header><text>Paragraph
(1) does not apply to—</text>
<subparagraph id="id6478C0D0FF7F430EA29F457F2F7831D5"><enum>(A)</enum><text>the dispensing or
selling of a prescription drug pursuant to telemedicine practices sponsored
by—</text>
<clause id="idD5D7C27EEB0345DDBB23008E69680D24"><enum>(i)</enum><text>a
hospital that has in effect a provider agreement under title XVIII of the
<act-name parsable-cite="SSA">Social Security Act</act-name> (relating to the
Medicare program); or</text>
</clause><clause id="id4FA01BE31F3546C1A48331C3126A20CC"><enum>(ii)</enum><text>a group practice
that has not fewer than 100 physicians who have in effect provider agreements
under such title; or</text>
</clause></subparagraph><subparagraph id="id40E3DCC9BE224E2BAEEE9D1F37626659"><enum>(B)</enum><text>the dispensing or
selling of a prescription drug pursuant to practices that promote the public
health, as determined by the Secretary by regulation.</text>
</subparagraph></paragraph><paragraph id="id95F5E2CF577F4F0E9807916F1D4D8F31"><enum>(3)</enum><header>Qualifying
medical relationship</header>
<subparagraph id="id2D7BA28AFE7D4EE2A5C4DCF78A3FF1B1"><enum>(A)</enum><header>In
general</header><text>With respect to issuing a prescription for a drug for a
patient, a practitioner has a qualifying medical relationship with the patient
for purposes of this section if—</text>
<clause id="id9B1A8C64B2ED44FEAFDB27FA209158F8"><enum>(i)</enum><text>at least one
in-person medical evaluation of the patient has been conducted by the
practitioner; or</text>
</clause><clause id="id74CB7B82044B49C9B563E85517B93811"><enum>(ii)</enum><text>the practitioner
conducts a medical evaluation of the patient as a covering practitioner.</text>
</clause></subparagraph><subparagraph id="id73F4D8CC527743F4965CE7EF2CEF2DE1"><enum>(B)</enum><header>In-person
medical evaluation</header><text>A medical evaluation by a practitioner is an
in-person medical evaluation for purposes of this section if the practitioner
is in the physical presence of the patient as part of conducting the
evaluation, without regard to whether portions of the evaluation are conducted
by other health professionals.</text>
</subparagraph><subparagraph id="idE31BCF6FDEE34977A50E6ABB1E1DC8C4"><enum>(C)</enum><header>Covering
practitioner</header><text>With respect to a patient, a practitioner is a
covering practitioner for purposes of this section if the practitioner conducts
a medical evaluation of the patient at the request of a practitioner who has
conducted at least one in-person medical evaluation of the patient and is
temporarily unavailable to conduct the evaluation of the patient. A
practitioner is a covering practitioner without regard to whether the
practitioner has conducted any in-person medical evaluation of the patient
involved.</text>
</subparagraph></paragraph><paragraph id="id56ABC1506D5E4D389B968FFB9DA21D6B"><enum>(4)</enum><header>Rules of
construction</header>
<subparagraph id="idDF1BCF1CB6ED404A84F1E0B4139A15FB"><enum>(A)</enum><header>Individuals
represented as practitioners</header><text>A person who is not a practitioner
(as defined in subsection (e)(1)) lacks legal capacity under this section to
have a qualifying medical relationship with any patient.</text>
</subparagraph><subparagraph id="idBA4F4C9B00444CAE884086C6DEA6989E"><enum>(B)</enum><header>Standard
practice of pharmacy</header><text>Paragraph (1) may not be construed as
prohibiting any conduct that is a standard practice in the practice of
pharmacy.</text>
</subparagraph><subparagraph id="id95FAAC53843843A38AB39854BDC509C8"><enum>(C)</enum><header>Applicability
of requirements</header><text>Paragraph (3) may not be construed as having any
applicability beyond this section, and does not affect any State law, or
interpretation of State law, concerning the practice of medicine.</text>
</subparagraph></paragraph></subsection><subsection id="id72CE22064AEE40358B299617DC9FDC69"><enum>(c)</enum><header>Actions by
States</header>
<paragraph id="idF81AF012CAC749B9821D9531D7351DE5"><enum>(1)</enum><header>In
general</header><text>Whenever an attorney general of any State has reason to
believe that the interests of the residents of that State have been or are
being threatened or adversely affected because any person has engaged or is
engaging in a pattern or practice that violates section 301(l), the State may
bring a civil action on behalf of its residents in an appropriate district
court of the United States to enjoin such practice, to enforce compliance with
such section (including a nationwide injunction), to obtain damages,
restitution, or other compensation on behalf of residents of such State, to
obtain reasonable attorneys fees and costs if the State prevails in the civil
action, or to obtain such further and other relief as the court may deem
appropriate.</text>
</paragraph><paragraph id="id9B9ECED6F72847CDB0B4F2819A0F5054"><enum>(2)</enum><header>Notice</header><text>The
State shall serve prior written notice of any civil action under paragraph (1)
or (5)(B) upon the Secretary and provide the Secretary with a copy of its
complaint, except that if it is not feasible for the State to provide such
prior notice, the State shall serve such notice immediately upon instituting
such action. Upon receiving a notice respecting a civil action, the Secretary
shall have the right—</text>
<subparagraph id="id2F5F2D07389249ECB15CC2FD2DA5E7B4"><enum>(A)</enum><text>to intervene in
such action;</text>
</subparagraph><subparagraph id="id2715BDDFDAA24A62870158FA0C47DA70"><enum>(B)</enum><text>upon so
intervening, to be heard on all matters arising therein; and</text>
</subparagraph><subparagraph id="id3B151EF31FF24C099C300D396702FA86"><enum>(C)</enum><text>to file petitions
for appeal.</text>
</subparagraph></paragraph><paragraph id="id510FCEEF52C94EB8ABF57DF36CC986E3"><enum>(3)</enum><header>Construction</header><text>For
purposes of bringing any civil action under paragraph (1), nothing in this
chapter shall prevent an attorney general of a State from exercising the powers
conferred on the attorney general by the laws of such State to conduct
investigations or to administer oaths or affirmations or to compel the
attendance of witnesses or the production of documentary and other
evidence.</text>
</paragraph><paragraph id="idE454C5422D93434494A242634EE756A8"><enum>(4)</enum><header>Venue; service
of process</header><text>Any civil action brought under paragraph (1) in a
district court of the United States may be brought in the district in which the
defendant is found, is an inhabitant, or transacts business or wherever venue
is proper under section 1391 of title 28, United States Code. Process in such
an action may be served in any district in which the defendant is an inhabitant
or in which the defendant may be found.</text>
</paragraph><paragraph id="id832F9A4D85F4431FBF25A64EA744C47B"><enum>(5)</enum><header>Actions by
other State officials</header>
<subparagraph id="idD8B6DEC9F6134789941EBA3AD2D972F4"><enum>(A)</enum><text>Nothing contained
in this section shall prohibit an authorized State official from proceeding in
State court on the basis of an alleged violation of any civil or criminal
statute of such State.</text>
</subparagraph><subparagraph id="idF61027CAEC3646E5A2EDD5633971AD64"><enum>(B)</enum><text>In addition to
actions brought by an attorney general of a State under paragraph (1), such an
action may be brought by officers of such State who are authorized by the State
to bring actions in such State on behalf of its residents.</text>
</subparagraph></paragraph></subsection><subsection id="id42E2F121520E4200A1DAB409E1FCE261"><enum>(d)</enum><header>Effect of
Section</header><text>This section shall not apply to a person that is a
registered exporter under section 804.</text>
</subsection><subsection id="id37CCE1B688744EF4ABFB8BB537B85B1F"><enum>(e)</enum><header>General
definitions</header><text>For purposes of this section:</text>
<paragraph id="idB56B07F97E7747079B9033747199368C"><enum>(1)</enum><text>The term
<term>practitioner</term> means a practitioner referred to in section 503(b)(1)
with respect to issuing a written or oral prescription.</text>
</paragraph><paragraph id="idA69127EA27764FAB88DCFFE6AB7D1925"><enum>(2)</enum><text>The term
<term>prescription drug</term> means a drug that is described in section
503(b)(1).</text>
</paragraph><paragraph id="id635D786744A94E4BA68132EF0D92D2B8"><enum>(3)</enum><text>The term
<term>qualifying medical relationship</term>, with respect to a practitioner
and a patient, has the meaning indicated for such term in subsection
(b).</text>
</paragraph></subsection><subsection id="idEB2CDBF54846438E8557A75E946FFFAB"><enum>(f)</enum><header>Internet-Related
definitions</header>
<paragraph id="idC7FBFA84AF6047E9B28B3FFC68D883BC"><enum>(1)</enum><header>In
general</header><text>For purposes of this section:</text>
<subparagraph id="idBE0935FED7FC436DB9CA314B0D32683F"><enum>(A)</enum><text>The term
<term>Internet</term> means collectively the myriad of computer and
telecommunications facilities, including equipment and operating software,
which comprise the interconnected world-wide network of networks that employ
the transmission control protocol/internet protocol, or any predecessor or
successor protocols to such protocol, to communicate information of all kinds
by wire or radio.</text>
</subparagraph><subparagraph id="id2DD0B0216AEF4397B7A5ADDE328A2B9E"><enum>(B)</enum><text>The term
<term>link</term>, with respect to the Internet, means one or more letters,
words, numbers, symbols, or graphic items that appear on a page of an Internet
site for the purpose of serving, when activated, as a method for executing an
electronic command—</text>
<clause id="id6ACEFBDA0C3C4BF68FE558438BEE84DA"><enum>(i)</enum><text>to move from
viewing one portion of a page on such site to another portion of the
page;</text>
</clause><clause id="idD8A1E712689C49AFA6EFB0DD93D14A5E"><enum>(ii)</enum><text>to move from
viewing one page on such site to another page on such site; or</text>
</clause><clause id="id4D20F86DC62E4B06A223BA1440D5E203"><enum>(iii)</enum><text>to move from
viewing a page on one Internet site to a page on another Internet site.</text>
</clause></subparagraph><subparagraph id="idD81D43EABFF7440DAE6DD5F25332FB7B"><enum>(C)</enum><text>The term
<term>page</term>, with respect to the Internet, means a document or other file
accessed at an Internet site.</text>
</subparagraph><subparagraph id="idB6DC8D33A507428CA6B509DC40AAFD80"><enum>(D)</enum><clause commented="no" display-inline="yes-display-inline" id="idFECBC718347D4571A5E4F8D751CF1459"><enum>(i)</enum><text>The terms
<term>site</term> and <term>address</term>, with respect to the Internet, mean
a specific location on the Internet that is determined by Internet Protocol
numbers. Such term includes the domain name, if any.</text>
</clause><clause id="idF961EEE9A13A4F3292B399713046FAD8" indent="up1"><enum>(ii)</enum><text>The term <term>domain name</term>
means a method of representing an Internet address without direct reference to
the Internet Protocol numbers for the address, including methods that use
designations such as <quote>.com</quote>, <quote>.edu</quote>,
<quote>.gov</quote>, <quote>.net</quote>, or <quote>.org</quote>.</text>
</clause><clause id="idB501076F1D684742B59B12AD1BDC62BB" indent="up1"><enum>(iii)</enum><text>The term <term>Internet Protocol
numbers</term> includes any successor protocol for determining a specific
location on the Internet.</text>
</clause></subparagraph></paragraph><paragraph id="idFCE466B5CBA943A6849FC5977D6E5EFB"><enum>(2)</enum><header>Authority of
Secretary</header><text>The Secretary may by regulation modify any definition
under paragraph (1) to take into account changes in technology.</text>
</paragraph></subsection><subsection id="id39A4B7B12F3C4D4D8DEA14BC7F9A5EC2"><enum>(g)</enum><header>Interactive
computer service; advertising</header><text>No provider of an interactive
computer service, as defined in section 230(f)(2) of the
<act-name parsable-cite="CA34">Communications Act of 1934</act-name> (47 U.S.C.
230(f)(2)), or of advertising services shall be liable under this section for
dispensing or selling prescription drugs in violation of this section on
account of another person’s selling or dispensing such drugs, provided that the
provider of the interactive computer service or of advertising services does
not own or exercise corporate control over such
person.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id69D4EFFEE59C406EBF9519E499892140"><enum>(b)</enum><header>Inclusion as
prohibited Act</header><text>Section 301 of the <act-name parsable-cite="FFDCA">Federal Food, Drug, and Cosmetic Act</act-name> (21
U.S.C. 331) is amended by inserting after paragraph (k) the following:</text>
<quoted-block act-name="Federal Food, Drug, and Cosmetic Act" id="id81F0D2A5EE614C3CA096C739FD8FEF07">
<subsection id="id2A666E13D3EB49E28699D44038C128BC"><enum>(l)</enum><text>The dispensing or
selling of a prescription drug in violation of section
503B.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id6A2247DC26844600ABF0E0061B8F45DD"><enum>(c)</enum><header>Internet sales
of prescription drugs; consideration by Secretary of practices and procedures
for certification of legitimate businesses</header><text>In carrying out
section 503B of the <act-name parsable-cite="FFDCA">Federal Food, Drug, and
Cosmetic Act</act-name> (as added by subsection (a) of this section), the
Secretary of Health and Human Services shall take into consideration the
practices and procedures of public or private entities that certify that
businesses selling prescription drugs through Internet sites are legitimate
businesses, including practices and procedures regarding disclosure formats and
verification programs.</text>
</subsection><subsection id="id6E973222DC364A1BB088241E8AA81177"><enum>(d)</enum><header>Reports
regarding Internet-Related violations of Federal and State laws on dispensing
of drugs</header>
<paragraph id="id701B4B8438E04F358D84F3175B5593E4"><enum>(1)</enum><header>In
general</header><text>The Secretary of Health and Human Services (referred to
in this subsection as the <quote>Secretary</quote>) shall, pursuant to the
submission of an application meeting the criteria of the Secretary, make an
award of a grant or contract to the National Clearinghouse on Internet
Prescribing (operated by the Federation of State Medical Boards) for the
purpose of—</text>
<subparagraph id="idB8FE738D58A147DA8B8A1BC2AA9CDC11"><enum>(A)</enum><text>identifying
Internet sites that appear to be in violation of Federal or State laws
concerning the dispensing of drugs;</text>
</subparagraph><subparagraph id="id1AEC4D04D4144C97908539CB7DCFA0D8"><enum>(B)</enum><text>reporting such
sites to State medical licensing boards and State pharmacy licensing boards,
and to the Attorney General and the Secretary, for further investigation;
and</text>
</subparagraph><subparagraph id="id501AE180B3D2456081810E973E19E9E8"><enum>(C)</enum><text>submitting, for
each fiscal year for which the award under this subsection is made, a report to
the Secretary describing investigations undertaken with respect to violations
described in subparagraph (A).</text>
</subparagraph></paragraph><paragraph id="idD00B896D88AF422A85C405AB4DE41E61"><enum>(2)</enum><header>Authorization
of appropriations</header><text>For the purpose of carrying out paragraph (1),
there is authorized to be appropriated $100,000 for each of the first 3 fiscal
years in which this section is in effect.</text>
</paragraph></subsection><subsection id="id3260161788314B3AAD97E65EA5474864"><enum>(e)</enum><header>Effective
date</header><text>The amendments made by subsections (a) and (b) take effect
90 days after the date of enactment of this Act, without regard to whether a
final rule to implement such amendments has been promulgated by the Secretary
of Health and Human Services under section 701(a) of the
<act-name parsable-cite="FFDCA">Federal Food, Drug, and Cosmetic
Act</act-name>. The preceding sentence may not be construed as affecting the
authority of such Secretary to promulgate such a final rule.</text>
</subsection></section><section id="id08D2DEB2A14D4DB280E1976FBCDFDF00"><enum>128.</enum><header>Prohibiting
payments to unregistered foreign pharmacies</header>
<subsection id="id69F5738740754B9BBCC7A94C88F4FFE0"><enum>(a)</enum><header>In
general</header><text>Section 303 of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 333) is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="idDA5EFA04DABA47EB8C1B6E8DAE63A8E7" style="OLC">
<subsection id="id86F0668A7B634EC3B32248CD093FB060"><enum>(g)</enum><header>Restricted
transactions</header>
<paragraph id="id33A6CE3B83554DA79FBE3E3F38D3DD51"><enum>(1)</enum><header>In
general</header><text>The introduction of restricted transactions into a
payment system or the completion of restricted transactions using a payment
system is prohibited.</text>
</paragraph><paragraph id="id363CE4B9C1A543DCA9976F253EE7C771"><enum>(2)</enum><header>Payment
system</header>
<subparagraph id="id3BD911E6314947DC839A1A00DD1235C7"><enum>(A)</enum><header>In
general</header><text>The term <quote>payment system</quote> means a system
used by a person described in subparagraph (B) to effect a credit transaction,
electronic fund transfer, or money transmitting service that may be used in
connection with, or to facilitate, a restricted transaction, and
includes—</text>
<clause id="id8684E6026EEF4E1993A78263AC9DD754"><enum>(i)</enum><text>a
credit card system;</text>
</clause><clause id="id11CAF4DC85BB428FBFE8644B1FB95C24"><enum>(ii)</enum><text>an
international, national, regional, or local network used to effect a credit
transaction, an electronic fund transfer, or a money transmitting service;
and</text>
</clause><clause id="idC495CB7E5CF24CBD85A81348B0738107"><enum>(iii)</enum><text>any other
system that is centrally managed and is primarily engaged in the transmission
and settlement of credit transactions, electronic fund transfers, or money
transmitting services.</text>
</clause></subparagraph><subparagraph id="id294413806A584E3698C5116220A6A901"><enum>(B)</enum><header>Persons
described</header><text>A person referred to in subparagraph (A) is—</text>
<clause id="id6C7FF52E009A4370AEF591E26CC6BAEA"><enum>(i)</enum><text>a
creditor;</text>
</clause><clause id="idE1B546E70876477AB74A76026257144E"><enum>(ii)</enum><text>a credit card
issuer;</text>
</clause><clause id="idAA5D473D3775427A8FD019B47B58AC40"><enum>(iii)</enum><text>a financial
institution;</text>
</clause><clause id="idD60D6D00F61F48E1BAFC2F71FE0A6E8A"><enum>(iv)</enum><text>an operator of a
terminal at which an electronic fund transfer may be initiated;</text>
</clause><clause id="id9DE497B1CD404AF884DEB851A8C1F7D7"><enum>(v)</enum><text>a
money transmitting business; or</text>
</clause><clause id="id06C181414BC54AAA8B997DEEB0E93193"><enum>(vi)</enum><text>a participant in
an international, national, regional, or local network used to effect a credit
transaction, electronic fund transfer, or money transmitting service.</text>
</clause></subparagraph></paragraph><paragraph id="idC80306B0F33D449CB6C37837150DADA4"><enum>(3)</enum><header>Restricted
transaction</header><text>The term <quote>restricted transaction</quote> means
a transaction or transmittal, on behalf of an individual who places an unlawful
drug importation request to any person engaged in the operation of an
unregistered foreign pharmacy, of—</text>
<subparagraph id="id27077B658DA64F57B33C80791B50AC3C"><enum>(A)</enum><text>credit, or the
proceeds of credit, extended to or on behalf of the individual for the purpose
of the unlawful drug importation request (including credit extended through the
use of a credit card);</text>
</subparagraph><subparagraph id="id35099919AE894C07854C22BD734D8C45"><enum>(B)</enum><text>an electronic
fund transfer or funds transmitted by or through a money transmitting business,
or the proceeds of an electronic fund transfer or money transmitting service,
from or on behalf of the individual for the purpose of the unlawful drug
importation request;</text>
</subparagraph><subparagraph id="id699A54569EC4499896ED11BB39C3CD62"><enum>(C)</enum><text>a check, draft,
or similar instrument which is drawn by or on behalf of the individual for the
purpose of the unlawful drug importation request and is drawn on or payable at
or through any financial institution; or</text>
</subparagraph><subparagraph id="id1076734D3DC847E599F64C259D2A9B40"><enum>(D)</enum><text>the proceeds of
any other form of financial transaction (identified by the Board by regulation)
that involves a financial institution as a payor or financial intermediary on
behalf of or for the benefit of the individual for the purpose of the unlawful
drug importation request.</text>
</subparagraph></paragraph><paragraph id="id7317E607D6BC44ECBF58D0DFE55ECB19"><enum>(4)</enum><header>Unlawful drug
importation request</header><text>The term <quote>unlawful drug importation
request</quote> means the request, or transmittal of a request, made to an
unregistered foreign pharmacy for a prescription drug by mail (including a
private carrier), facsimile, phone, or electronic mail, or by a means that
involves the use, in whole or in part, of the Internet.</text>
</paragraph><paragraph id="idCC80ACB415D64A6B8B1E1103ADBAB3E1"><enum>(5)</enum><header>Unregistered
foreign pharmacy</header><text>The term <quote>unregistered foreign
pharmacy</quote> means a person in a country other than the United States that
is not a registered exporter under section 804.</text>
</paragraph><paragraph id="id03CAF7F0E8EF4B42B795DF759B8FF2EB"><enum>(6)</enum><header>Other
definitions</header>
<subparagraph id="idA6D629817F694127A66863D680CB7A5B"><enum>(A)</enum><header>Credit;
creditor; credit card</header><text>The terms <quote>credit</quote>,
‘creditor’, and <quote>credit card</quote> have the meanings given the terms in
section 103 of the Truth in Lending Act (15 U.S.C. 1602).</text>
</subparagraph><subparagraph id="idB3CAA36ED4DE4642AB6FB44598402F13"><enum>(B)</enum><header>Access device;
electronic fund transfer</header><text>The terms <quote>access device</quote>
and <quote>electronic fund transfer</quote>—</text>
<clause id="idF7AAE30A1931459381E73BC21C519662"><enum>(i)</enum><text>have the meaning
given the term in section 903 of the Electronic Fund Transfer Act (15 U.S.C.
1693a); and</text>
</clause><clause id="id1FA070FD99E04EC29F6A32D577C0AA28"><enum>(ii)</enum><text>the term
<quote>electronic fund transfer</quote> also includes any fund transfer covered
under Article 4A of the Uniform Commercial Code, as in effect in any
State.</text>
</clause></subparagraph><subparagraph id="id816E8F86108245EABA75F8CAAFE61FBC"><enum>(C)</enum><header>Financial
institution</header><text>The term <quote>financial institution</quote>—</text>
<clause id="idDC1DB0CC227D4F9096C61FAB8570548F"><enum>(i)</enum><text>has the meaning
given the term in section 903 of the Electronic Transfer Fund Act (15 U.S.C.
1693a); and</text>
</clause><clause id="id1049FFE5156F4B92AE3E2A9F4C4ECB2B"><enum>(ii)</enum><text>includes a
financial institution (as defined in section 509 of the Gramm-Leach-Bliley Act
(15 U.S.C. 6809)).</text>
</clause></subparagraph><subparagraph id="idB2018A75B3794E79B804B4437B47E6FD"><enum>(D)</enum><header>Money
transmitting business; money transmitting service</header><text>The terms
<quote>money transmitting business</quote> and <quote>money transmitting
service</quote> have the meaning given the terms in section 5330(d) of title
31, United States Code.</text>
</subparagraph><subparagraph id="id140EA1A7B21E45809F0881D3B14FBFA5"><enum>(E)</enum><header>Board</header><text>The
term <quote>Board</quote> means the Board of Governors of the Federal Reserve
System.</text>
</subparagraph></paragraph><paragraph id="id989BF02C42D54F92811E121FA14334D3"><enum>(7)</enum><header>Policies and
procedures required to prevent restricted transactions</header>
<subparagraph id="id0FF4D2571B3149F39E17652D09AF94EB"><enum>(A)</enum><header>Regulations</header><text>The
Board shall promulgate regulations requiring—</text>
<clause id="idB859F94311BB4148B34FB5B638EE2C25"><enum>(i)</enum><text>an operator of a
credit card system;</text>
</clause><clause id="id93C1BA970CA1422E9683393336E2AAF9"><enum>(ii)</enum><text>an operator of
an international, national, regional, or local network used to effect a credit
transaction, an electronic fund transfer, or a money transmitting
service;</text>
</clause><clause id="id47D014502D4C431F85812337DCCFEA92"><enum>(iii)</enum><text>an operator of
any other payment system that is centrally managed and is primarily engaged in
the transmission and settlement of credit transactions, electronic transfers or
money transmitting services where at least one party to the transaction or
transfer is an individual; and</text>
</clause><clause id="idB9F90003CBEA499EB7A83A37535DD34F"><enum>(iv)</enum><text>any other person
described in paragraph (2)(B) and specified by the Board in such
regulations,</text>
</clause><continuation-text continuation-text-level="subparagraph">to
establish policies and procedures that are reasonably designed to prevent the
introduction of a restricted transaction into a payment system or the
completion of a restricted transaction using a payment system</continuation-text></subparagraph><subparagraph id="id99FF0D2D38BB4B909597BC87C7637359"><enum>(B)</enum><header>Requirements
for policies and procedures</header><text>In promulgating regulations under
subparagraph (A), the Board shall—</text>
<clause id="idA55CD6B487224CCCBD0D25C68764D4EE"><enum>(i)</enum><text>identify types of
policies and procedures, including nonexclusive examples, that shall be
considered to be reasonably designed to prevent the introduction of restricted
transactions into a payment system or the completion of restricted transactions
using a payment system; and</text>
</clause><clause id="id58935A21AA784AAEB9AE092D21BA5535"><enum>(ii)</enum><text>to the extent
practicable, permit any payment system, or person described in paragraph
(2)(B), as applicable, to choose among alternative means of preventing the
introduction or completion of restricted transactions.</text>
</clause></subparagraph><subparagraph id="id496EA167D9EF4D0DA66D099622F60220"><enum>(C)</enum><header>No liability
for blocking or refusing to honor restricted transaction</header>
<clause id="id161436E6620444ED98D7890CFB50F4D2"><enum>(i)</enum><header>In
general</header><text>A payment system, or a person described in paragraph
(2)(B) that is subject to a regulation issued under this subsection, and any
participant in such payment system that prevents or otherwise refuses to honor
transactions in an effort to implement the policies and procedures required
under this subsection or to otherwise comply with this subsection shall not be
liable to any party for such action.</text>
</clause><clause id="idD5C3915AE0B34AEB81D0C1A594FA1C68"><enum>(ii)</enum><header>Compliance</header><text>A
person described in paragraph (2)(B) meets the requirements of this subsection
if the person relies on and complies with the policies and procedures of a
payment system of which the person is a member or in which the person is a
participant, and such policies and procedures of the payment system comply with
the requirements of the regulations promulgated under subparagraph (A).</text>
</clause></subparagraph><subparagraph id="id4CAC4381C74D47E49A2CE954DC866835"><enum>(D)</enum><header>Enforcement</header>
<clause id="idDFB6A8723D8443B5810952149B67646D"><enum>(i)</enum><header>In
general</header><text>This section shall be enforced by the Federal functional
regulators and the Federal Trade Commission under applicable law in the manner
provided in section 505(a) of the Gramm-Leach-Bliley Act (15 U.S.C.
6805(a)).</text>
</clause><clause id="idAD0FB7457F3344698A3A22D7F8DE1704"><enum>(ii)</enum><header>Factors to be
considered</header><text>In considering any enforcement action under this
subsection against a payment system or person described in paragraph (2)(B),
the Federal functional regulators and the Federal Trade Commission shall
consider the following factors:</text>
<subclause id="idA34AEE583D3C49979A1BBD19F112782F"><enum>(I)</enum><text>The extent to
which the payment system or person knowingly permits restricted
transactions.</text>
</subclause><subclause id="id22FD456EC8AF4561A00D5188CC1F9AED"><enum>(II)</enum><text>The history of
the payment system or person in connection with permitting restricted
transactions.</text>
</subclause><subclause id="idAD5873C992664C3DB319F2DAA6C54BE1"><enum>(III)</enum><text>The extent to
which the payment system or person has established and is maintaining policies
and procedures in compliance with regulations prescribed under this
subsection.</text>
</subclause></clause></subparagraph></paragraph><paragraph id="id0919D46A52DB49EBB382789DF03439AE"><enum>(8)</enum><header>Transactions
permitted</header><text>A payment system, or a person described in paragraph
(2)(B) that is subject to a regulation issued under this subsection, is
authorized to engage in transactions with foreign pharmacies in connection with
investigating violations or potential violations of any rule or requirement
adopted by the payment system or person in connection with complying with
paragraph (7). A payment system, or such a person, and its agents and employees
shall not be found to be in violation of, or liable under, any Federal, State
or other law by virtue of engaging in any such transaction.</text>
</paragraph><paragraph id="id5C5BD2A6F0334BFEB6DBFD1600108EFA"><enum>(9)</enum><header>Relation to
State laws</header><text>No requirement, prohibition, or liability may be
imposed on a payment system, or a person described in paragraph (2)(B) that is
subject to a regulation issued under this subsection, under the laws of any
state with respect to any payment transaction by an individual because the
payment transaction involves a payment to a foreign pharmacy.</text>
</paragraph><paragraph id="idED710C4F964944F68C5C04C6CA016A22"><enum>(10)</enum><header>Timing of
requirements</header><text>A payment system, or a person described in paragraph
(2)(B) that is subject to a regulation issued under this subsection, must adopt
policies and procedures reasonably designed to comply with any regulations
required under paragraph (7) within 60 days after such regulations are issued
in final
form.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id186E25957E3F4EDEA93A2D80B708EC2D"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall take effect on the
day that is 90 days after the date of enactment of this Act.</text>
</subsection><subsection id="idEEF223B527BD42E587E1924F0BD01717"><enum>(c)</enum><header>Implementation</header><text>The
Board of Governors of the Federal Reserve System shall promulgate regulations
as required by subsection (g)(7) of section 303 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 333), as added by subsection (a), not later than 90
days after the date of enactment of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id1172B7070EBB4EF0AFDF81AC7B128BB7" section-type="subsequent-section"><enum>129.</enum><header>Importation
exemption under Controlled Substances Import and Export Act</header><text display-inline="no-display-inline">Section 1006(a)(2) of the Controlled
Substances Import and Export Act (21 U.S.C. 956(a)(2)) is amended by striking
<quote>not import the controlled substance into the United States in an amount
that exceeds 50 dosage units of the controlled substance.</quote> and inserting
<quote>import into the United States not more than 10 dosage units combined of
all such controlled substances.</quote>.</text>
</section><section commented="no" display-inline="no-display-inline" id="id77EFAF8A4FF14D8CBF48E6E32F743B00" section-type="subsequent-section"><enum>130.</enum><header>Severability</header><text display-inline="no-display-inline">If any provision of this subtitle, an
amendment by this subtitle, or the application of such provision or amendment
to any person or circumstance is held to be unconstitutional, the remainder of
this subtitle, the amendments made by this subtitle, and the application of the
provisions of such to any person or circumstance shall not affected
thereby.</text>
</section></subtitle><subtitle id="id46D4A7112A8649F4B9BFC7871834ED08"><enum>D</enum><header>Royalties under
offshore oil and gas leases</header>
<section display-inline="no-display-inline" id="HC677FC63BE0742C0BE3F00FE93492100"><enum>141.</enum><header>Price
thresholds for royalty suspension provisions</header>
<subsection display-inline="no-display-inline" id="idAF92AC3C8DED4AD3848BF7D6A3A57C46"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">The Secretary of the
Interior (referred to in this subtitle as the <quote>Secretary</quote>) shall
agree to a request by any lessee to amend any lease issued for any Central and
Western Gulf of Mexico tract during the period of January 1, 1998, through
December 31, 1999, to incorporate price thresholds applicable to royalty
suspension provisions, that are equal to or less than the price thresholds
described in clauses (v) through (vii) of section 8(a)(3)(C) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)).</text>
</subsection><subsection display-inline="no-display-inline" id="id43CB4B2513D54076B37B715A3C6F51BC"><enum>(b)</enum><header>Effective
date</header>
<paragraph display-inline="no-display-inline" id="idA2155024837744A4B2FD9AFFAD809C11"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Any lease amended
under subsection (a) shall impose the new or revised price thresholds effective
beginning October 1, 2006.</text>
</paragraph><paragraph display-inline="no-display-inline" id="idCAFFE8FEAFC640F991026404632809C5"><enum>(2)</enum><header>Existing
provisions</header><text display-inline="yes-display-inline">Existing lease
provisions in a lease amended under subsection (a) shall apply through
September 30, 2006.</text>
</paragraph></subsection></section><section id="H087AC78FB0C44D11AC6BB9B1CF6DEF63"><enum>142.</enum><header>Clarification
of authority to impose price thresholds for certain lease sales</header><text display-inline="no-display-inline">Congress reaffirms the authority of the
Secretary under section 8(a)(1)(H) of the Outer Continental Shelf Lands Act (43
U.S.C. 1337(a)(1)(H)) to vary, based on the price of production from a lease,
the suspension of royalties under any lease subject to section 304 of the Outer
Continental Shelf Deep Water Royalty Relief Act (43 U.S.C. 1337; Public Law
104–58).</text>
</section><section display-inline="no-display-inline" id="id6A856C2BD3354DAAAA8AC7A2FC4B962F" section-type="subsequent-section"><enum>143.</enum><header>Eligibility for new
leases and the transfer of leases; conservation of resources fees</header>
<subsection id="H28056D70F9424C3883BB00F283EAF784"><enum>(a)</enum><header>Definitions</header><text>In
this section—</text>
<paragraph id="H6B7022DD023F4F88884D85A2FBEE739"><enum>(1)</enum><header>Covered
lease</header><text>The term <term>covered lease</term> means a lease for oil
or gas production in the Gulf of Mexico that is—</text>
<subparagraph id="HD3111832ADFC4FB183991C97CE29573B"><enum>(A)</enum><text>in existence on
the date of enactment of this Act;</text>
</subparagraph><subparagraph id="HE1B152E99BBE47E793F828909261B1FF"><enum>(B)</enum><text>issued by the
Department of the Interior under section 304 of the Outer Continental Shelf
Deep Water Royalty Relief Act (43 U.S.C. 1337 note; Public Law 104–58);
and</text>
</subparagraph><subparagraph id="H240028E59DD0447F9818FAB8DBFE5F64"><enum>(C)</enum><text>not subject to
limitations on royalty relief based on market price that are equal to or less
than the price thresholds described in clauses (v) through (vii) of section
8(a)(3)(C) of the Outer Continental Shelf Lands Act (43 U.S.C.
1337(a)(3)(C)).</text>
</subparagraph></paragraph><paragraph id="H7AC3DCB1EFC84497918BEBFD6D161CA8"><enum>(2)</enum><header>Lessee</header><text>The
term <term>lessee</term> includes any person or other entity that controls, is
controlled by, or is in or under common control with, a lessee.</text>
</paragraph></subsection><subsection id="HAADC93CF4E0148748DF653E9FD8DE8C"><enum>(b)</enum><header>Issuance of new
leases</header>
<paragraph id="H3845FB59AE3041D2BE67EC1D258272CA"><enum>(1)</enum><header>In
general</header><text>The Secretary shall not issue any new lease that
authorizes the production of oil or natural gas in the Gulf of Mexico under the
Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) to a person
described in paragraph (2) unless—</text>
<subparagraph id="HAC77FE233A034891A9DB452671B77301"><enum>(A)</enum><text>the person has
renegotiated each covered lease with respect to which the person is a lessee,
to modify the payment responsibilities of the person to include price
thresholds that are equal to or less than the price thresholds described in
clauses (v) through (vii) of section 8(a)(3)(C) of the Outer Continental Shelf
Lands Act (43 U.S.C. 1337(a)(3)(C)); or</text>
</subparagraph><subparagraph id="H8511FE04C7934AB08BE0DA1C112E7E6"><enum>(B)</enum><text>the person
has—</text>
<clause id="HE5D9FBDC63C546F092ED8FCA28DBB234"><enum>(i)</enum><text>paid
all fees established by the Secretary under subsection (c) that are due with
respect to each covered lease for which the person is a lessee; or</text>
</clause><clause id="HAB0FDE72FA30458898D2352D00A3C0AB"><enum>(ii)</enum><text>entered into an
agreement with the Secretary under which the person is obligated to pay the
fees.</text>
</clause></subparagraph></paragraph><paragraph id="H9FB5C16B046F491B9B1B9CE9C4B176C5"><enum>(2)</enum><header>Persons
described</header><text>A person referred to in paragraph (1) is—</text>
<subparagraph id="HC2B5F0F8F1A446B2BD87F142F282F02C"><enum>(A)</enum><text>a lessee
that—</text>
<clause id="H7C1789C25DFA442EABFAD9A7BD2C6D72"><enum>(i)</enum><text>holds a covered
lease on the date on which the Secretary considers the issuance of the new
lease; or</text>
</clause><clause id="HA1B6DDE7864F4FC8BDE9BCDEAF098FD3"><enum>(ii)</enum><text>was
issued a covered lease before the date of enactment of this Act, but
transferred the covered lease to another person or entity (including a
subsidiary or affiliate of the lessee) after the date of enactment of this Act;
or</text>
</clause></subparagraph><subparagraph id="H4736C5E89A2849FE9D12176ED10014F3"><enum>(B)</enum><text>any other person
or entity who has any direct or indirect interest in, or who derives any
benefit from, a covered lease.</text>
</subparagraph></paragraph><paragraph id="HC010DD7DC9494C5E814EB58700763C1E"><enum>(3)</enum><header>Multiple
lessees</header>
<subparagraph id="HCF01C13E281F4DDE9DCD03064594AC9"><enum>(A)</enum><header>In
general</header><text>For purposes of paragraph (1), if there are multiple
lessees that own a share of a covered lease, the Secretary may implement
separate agreements with any lessee with a share of the covered lease that
modifies the payment responsibilities with respect to the share of the lessee
to include price thresholds that are equal to or less than the price thresholds
described in clauses (v) through (vii) of section 8(a)(3)(C) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)).</text>
</subparagraph><subparagraph id="H2D32DECAD77A48A3A67EDBDD3CFE287D"><enum>(B)</enum><header>Treatment of
share as covered lease</header><text>Beginning on the effective date of an
agreement under subparagraph (A), any share subject to the agreement shall not
constitute a covered lease with respect to any lessees that entered into the
agreement.</text>
</subparagraph></paragraph></subsection><subsection display-inline="no-display-inline" id="id6A30553290414902A26E817108AD69FB"><enum>(c)</enum><header>Conservation of
resources fees</header>
<paragraph id="H260A4F95063046D5A550F42CE52D0053"><enum>(1)</enum><header>In
general</header><text>Not later than 60 days after the date of enactment of
this Act, the Secretary shall establish, by regulation, a conservation of
resources fee for producing Federal oil and gas leases in the Gulf of
Mexico.</text>
</paragraph><paragraph id="HF06CE5BCAF16452D96A7794CED50EE15"><enum>(2)</enum><header>Producing lease
fee terms</header><text>The fee under paragraph (1)—</text>
<subparagraph id="HC9EB1A03305D49478FB9DCF1B3000641"><enum>(A)</enum><text>subject to
subparagraph (C), shall apply to covered leases that are producing
leases;</text>
</subparagraph><subparagraph id="H070748F261134961A1916B4FF62D081F"><enum>(B)</enum><text display-inline="yes-display-inline">shall be set at $9 per barrel for oil and
$1.25 per million Btu for gas, respectively, in 2005 dollars; and</text>
</subparagraph><subparagraph id="H1385884A94014030B78C724DEA27573B"><enum>(C)</enum><text display-inline="yes-display-inline">shall apply only to production of oil or
gas occurring—</text>
<clause id="H8EE25BF4D0344F47BC20BDC5682090BC"><enum>(i)</enum><text>in
any calendar year in which the arithmetic average of the daily closing prices
for light sweet crude oil on the New York Mercantile Exchange (NYMEX) exceeds
$34.73 per barrel for oil and $4.34 per million Btu for gas in 2005 dollars;
and</text>
</clause><clause id="H4C075E858E5340B4B84735004C7CBE80"><enum>(ii)</enum><text>on
or after October 1, 2006.</text>
</clause></subparagraph></paragraph><paragraph id="HF7415C937A9540898F00753FD82C7819"><enum>(3)</enum><header>Treatment of
receipts</header><text>Amounts received by the United States as fees under this
subsection shall be treated as offsetting receipts.</text>
</paragraph></subsection><subsection commented="no" id="H54E9E0D1C1E34C92A0A3EA322C41144"><enum>(d)</enum><header>Transfers</header><text>A
lessee or any other person who has any direct or indirect interest in, or who
derives a benefit from, a lease shall not be eligible to obtain by sale or
other transfer (including through a swap, spinoff, servicing, or other
agreement) any covered lease, the economic benefit of any covered lease, or any
other lease for the production of oil or natural gas in the Gulf of Mexico
under the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.),
unless—</text>
<paragraph commented="no" id="H1193E24EBA21443D86D17E7FE4AF0073"><enum>(1)</enum><text>the lessee or
other person has—</text>
<subparagraph commented="no" id="H74BB42AB6D2645F49CE8DB66E5353660"><enum>(A)</enum><text>renegotiated all
covered leases of the lessee or other person; and</text>
</subparagraph><subparagraph commented="no" id="HDAFF0F883111409FBCEEB8E713C30999"><enum>(B)</enum><text>entered into an
agreement with the Secretary to modify the terms of all covered leases of the
lessee or other person to include limitations on royalty relief based on market
prices that are equal to or less than the price thresholds described in clauses
(v) through (vii) of section 8(a)(3)(C) of the Outer Continental Shelf Lands
Act (43 U.S.C. 1337(a)(3)(C)); or</text>
</subparagraph></paragraph><paragraph commented="no" id="HF0136E5BCE3747378BFFB3074EF67DA7"><enum>(2)</enum><text>the lessee or
other person has—</text>
<subparagraph id="HFECACE90863F417A98A53F86B132C4EE"><enum>(A)</enum><text>paid all fees
established by the Secretary under subsection (c) that are due with respect to
each covered lease for which the person is a lessee; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="HC28A5F1A12A9454895CA6293BAA360D7"><enum>(B)</enum><text>entered into an
agreement with the Secretary under which the person is obligated to pay the
fees.</text>
</subparagraph></paragraph></subsection></section></subtitle><enum>II</enum><header>Revenue
enhancements</header>
<section id="S1" section-type="subsequent-section"><enum>200.</enum><header>Amendment of 1986
Code</header><text display-inline="no-display-inline">Except as otherwise
expressly provided, whenever in this title an amendment or repeal is expressed
in terms of an amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or other provision of the
Internal Revenue Code of 1986.</text>
</section><subtitle id="id56A47B24F4104DDCBCF3A577A49C9B0A"><enum>A</enum><header>Rescission of
various tax cuts for millionaire taxpayers</header>
<section changed="not-changed" id="id6836DE11CF864C0183237E62AB103D6F"><enum>201.</enum><header>Repeal of top
income tax rate reduction for taxpayers with $1,000,000 or more of taxable
income</header>
<subsection id="id6389E7FA88E64A3FB0459A6DA520C603"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 1(i)
(relating to rate reductions) is amended by redesignating paragraph (3) as
paragraph (4) and by inserting after paragraph (2) the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id928E25E759CA4CA68DD8C02EFB22BBF2" style="OLC">
<paragraph id="id2CC465BB0EA047E0BABF58035559E693"><enum>(3)</enum><header>Exception for
taxpayers with taxable income of $1,000,000, or more</header><text display-inline="yes-display-inline">Notwithstanding paragraph (2), in the case
of taxable years beginning in a calender year after 2007, the last item in the
fourth column of the table under paragraph (2) shall be applied by substituting
<quote>39.6%</quote> for <quote>35.0%</quote> with respect to taxable income in
excess of $1,000,000 ($500,000 in the case of taxpayers to whom subsection (d)
applies).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="IDA83BD8A9B9BA4CEB8993BE5EF4F8071E"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection><subsection id="ID85D28D58BF4E47E9804F0CE0C855AFB3"><enum>(c)</enum><header>Application of
egtrra sunset</header><text>The amendment made by this section shall be subject
to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 to
the same extent and in the same manner as the provision of such Act to which
such amendment relates.</text>
</subsection></section><section id="idA658FF8BF5DF4508816BCA04685A4D3C"><enum>202.</enum><header>Elimination of
the scheduled phaseout of the limitations on personal exemptions and itemized
deductions for taxpayers earning in excess of $1,000,000</header>
<subsection id="id6461DF4DB19A476591C9B3BBD8F947B1"><enum>(a)</enum><header>Personal
exemptions</header><text>Section 151(d)(3)(E) is amended by adding at the end
the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="idE71791A96DFE45AEAFC92DC8322D835A" style="OLC">
<clause id="idC1D950A756CD4753B36E2565EC036D7A"><enum>(iii)</enum><header>Exception</header><text>This
subparagraph shall not apply with respect to any taxpayer whose adjusted gross
income for the taxable year exceeds $1,000,000 ($500,000 in the case of a
married individual filing a separate
return).</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="IDC6B543BA92094733BEB4BD78A77D03B8"><enum>(b)</enum><header>Itemized
deductions</header><text>Section 68(f) amended by adding at the end the
following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id4AE820283FCB43519D427D6230DE131E" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="id613A490059A645A191E620D192E4D281"><enum>(3)</enum><header>Exception</header><text display-inline="yes-display-inline">This subsection shall not apply with
respect to any taxpayer whose adjusted gross income for the taxable year
exceeds $1,000,000 ($500,000 in the case of a married individual filing a
separate
return).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="IDC11F5478B1C54700B68B13694C44A4EF"><enum>(c)</enum><header>Effective
Date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id42690E173FC4423FA385A588B926216C"><enum>(d)</enum><header>Application of
EGTRRA sunset</header><text>The amendments made by this section shall be
subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of
2001 to the same extent and in the same manner as the provision of such Act to
which such amendment relates.</text>
</subsection></section><section id="idAD5EA8AF90F34809A27A1111C4F11606"><enum>203.</enum><header>Modification
of tax rates on capital gains and dividends for taxpayers with $1,000,000 or
more of taxable income</header>
<subsection id="IDF4E70F4A57514C8FBF98A8444816B8E0"><enum>(a)</enum><header>In
general</header><text>Section 1(h) is amended by adding at the end the
following new paragraph:</text>
<quoted-block id="IDF27F966D548248C09ECE86AB5B912F0A" style="OLC">
<paragraph id="ID22A1830A9B054A788CFEFEF3E395EF27"><enum>(12)</enum><header>Modified rates
for individuals with $1,000,000 or more of taxable income</header><text>If a
taxpayer has taxable income of $1,000,000 ($500,000 in the case of taxpayers to
whom subsection (d) applies) or more for any taxable year—</text>
<subparagraph id="id43D9127C37914A2EACF7D0130A011A13"><enum>(A)</enum><text>paragraph (11)
(relating to dividends taxed as capital gain) shall not apply to any qualified
dividend income of the taxpayer for the taxable year, and</text>
</subparagraph><subparagraph id="idB6C7A44F15914AFCB1C9481FC6EDE948"><enum>(B)</enum><text>paragraph (1)(C)
shall be applied by substituting <quote>20 percent</quote> for <quote>15
percent</quote> with respect to the adjusted net capital gain of the taxpayer
for the taxable year, determined by only taking into account gain or loss
properly allocable to the portion of the taxable year after December 31,
2007.</text>
</subparagraph></paragraph><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection id="IDA18E5CED0BB7488697AD1FE2719F96FA"><enum>(b)</enum><header>Application to
minimum tax</header><text>Section 55(b)(3) is amended by adding at the end the
following new sentence: <quote>In the case of a taxpayer with alternative
minimum taxable income of $1,000,000 ($500,000 in the case of taxpayers to whom
section 1(d) applies) or more for any taxable year, the rules of section
1(h)(12) shall apply for purposes of this paragraph.</quote></text>
</subsection><subsection id="ID1E2E9566DA0D419E9D54E2156FBE2642"><enum>(c)</enum><header>Effective
dates</header>
<paragraph id="IDCC2EBCFAC17F4579B2637C0747CDBB10"><enum>(1)</enum><header>Capital
gains</header><text>Section 1(h)(12)(B) of the Internal Revenue Code of 1986
(as added by paragraph (1)) shall apply to taxable years beginning after
December 31, 2007.</text>
</paragraph><paragraph id="IDB53BFDC4F2D344BAB521A0BD4F1C01F9"><enum>(2)</enum><header>Dividend
rates</header><text>Section 1(h)(12)(A) of such Code (as added by paragraph
(1)) shall apply to dividends received after December 31, 2007.</text>
</paragraph></subsection><subsection id="id604021999177499FB1665A12291EC77C"><enum>(d)</enum><header>Application of
jgtrra sunset</header><text>The amendments made by this section shall be
subject to section 303 of the Jobs and Growth Tax Relief Reconciliation Act of
2003 to the same extent and in the same manner as the provision of such Act to
which such amendment relates.</text>
</subsection></section></subtitle><subtitle id="id5D29D8737D5441368BDD12580AE6CD31"><enum>B</enum><header>Provisions to
discourage offshore shelters and expatriation</header>
<section id="IDAE09C2569DA0445788AD04DB47A65E83" section-type="subsequent-section"><enum>211.</enum><header>Taxation of income
of controlled foreign corporations attributable to imported property</header>
<subsection id="ID9E32A51BD8214F51A137396818EA5BF5"><enum>(a)</enum><header>General
Rule</header><text>Subsection (a) of section 954 (defining foreign base company
income) is amended by striking <quote>and</quote> at the end of paragraph (4),
by striking the period at the end of paragraph (5) and inserting <quote>,
and</quote>, and by adding at the end the following new paragraph:</text>
<quoted-block id="ID5F1EE640C8B2430F94EBA2D84368DC00" style="OLC">
<paragraph id="IDC15F23BAABB3409096AECFEB242B97AF"><enum>(6)</enum><text>imported property
income for the taxable year (determined under subsection (j) and reduced as
provided in subsection
(b)(5)).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID8E728CD22C7F461CB91A571D07B592C0"><enum>(b)</enum><header>Definition of
Imported Property Income</header><text>Section 954 is amended by adding at the
end the following new subsection:</text>
<quoted-block id="ID724D93E590474F1E80A5AAFBD7A00A91" style="OLC">
<subsection id="IDA73C7E1F50994D0BA17BFD5FBEB7FFFC"><enum>(j)</enum><header>Imported
Property Income</header>
<paragraph id="ID414FAFBEED514D0A8FEEEFD8C44C9BE8"><enum>(1)</enum><header>In
general</header><text>For purposes of subsection (a)(6), the term
<term>imported property income</term> means income (whether in the form of
profits, commissions, fees, or otherwise) derived in connection with—</text>
<subparagraph id="ID406FB09FF5654453ACBD0F52CBE7BA53"><enum>(A)</enum><text>manufacturing,
producing, growing, or extracting imported property;</text>
</subparagraph><subparagraph id="ID3E00BD78027246E9959BC808C932FA6E"><enum>(B)</enum><text>the sale,
exchange, or other disposition of imported property; or</text>
</subparagraph><subparagraph id="ID100E22F302E146E3BC69645A21FF4453"><enum>(C)</enum><text>the lease,
rental, or licensing of imported property.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">Such term
shall not include any foreign oil and gas extraction income (within the meaning
of section 907(c)) or any foreign oil related income (within the meaning of
section 907(c)).</continuation-text></paragraph><paragraph id="ID8BB90709FA904E429C5D5CFB8AF1502F"><enum>(2)</enum><header>Imported
property</header><text>For purposes of this subsection—</text>
<subparagraph id="IDF39B8DF1481C4B3AA0CA6C3A7C8E01F4"><enum>(A)</enum><header>In
general</header><text>Except as otherwise provided in this paragraph, the term
<term>imported property</term> means property which is imported into the United
States by the controlled foreign corporation or a related person.</text>
</subparagraph><subparagraph id="ID6748CEEF11384AF5AD5BC096FEEEA176"><enum>(B)</enum><header>Imported
property includes certain property imported by unrelated
persons</header><text>The term <term>imported property</term> includes any
property imported into the United States by an unrelated person if, when such
property was sold to the unrelated person by the controlled foreign corporation
(or a related person), it was reasonable to expect that—</text>
<clause id="IDFBAD6DEC755A4B2EA28F0114B883D129"><enum>(i)</enum><text>such property
would be imported into the United States; or</text>
</clause><clause id="ID2B93C83B0AA04DDF8E10462082849643"><enum>(ii)</enum><text>such property
would be used as a component in other property which would be imported into the
United States.</text>
</clause></subparagraph><subparagraph id="IDA668850F42CC4089931DE03B6227840C"><enum>(C)</enum><header>Exception for
property subsequently exported</header><text>The term <term>imported
property</term> does not include any property which is imported into the United
States and which—</text>
<clause id="IDA8AD2D0F08EE427197F64AA7EA6CC127"><enum>(i)</enum><text>before
substantial use in the United States, is sold, leased, or rented by the
controlled foreign corporation or a related person for direct use, consumption,
or disposition outside the United States; or</text>
</clause><clause id="ID0DA0C8FB0A054DE291B6168319B06CE7"><enum>(ii)</enum><text>is used by the
controlled foreign corporation or a related person as a component in other
property which is so sold, leased, or rented.</text>
</clause></subparagraph><subparagraph id="idEEC634691CCE41E1ACCC3800C192CADE"><enum>(D)</enum><header>Exception for
certain agricultural commodities</header><text>The term <term>imported
property</term> does not include any agricultural commodity which is not grown
in the United States in commercially marketable quantities.</text>
</subparagraph></paragraph><paragraph id="ID305773852F354602A52195E48B19BAF9"><enum>(3)</enum><header>Definitions and
special rules</header>
<subparagraph id="IDB50CE72A676244099371CF9590E81C3E"><enum>(A)</enum><header>Import</header><text>For
purposes of this subsection, the term <term>import</term> means entering, or
withdrawal from warehouse, for consumption or use. Such term includes any grant
of the right to use intangible property (as defined in section 936(h)(3)(B)) in
the United States.</text>
</subparagraph><subparagraph id="ID46D82A5362F843A1B41C92B92F5A78D6"><enum>(B)</enum><header>United
states</header><text>For purposes of this subsection, the term <term>United
States</term> includes the Commonwealth of Puerto Rico, the Virgin Islands of
the United States, Guam, American Samoa, and the Commonwealth of the Northern
Mariana Islands.</text>
</subparagraph><subparagraph id="IDCB383886046D45378F359D998BD98F0D"><enum>(C)</enum><header>Unrelated
person</header><text>For purposes of this subsection, the term <term>unrelated
person</term> means any person who is not a related person with respect to the
controlled foreign corporation.</text>
</subparagraph><subparagraph id="ID7FF9DA926A784ED793E1E6BA697D92E1"><enum>(D)</enum><header>Coordination
with foreign base company sales income</header><text>For purposes of this
section, the term <term>foreign base company sales income</term> shall not
include any imported property
income.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="IDAA8BDAA0F708464CB4F5DF9DA098403B"><enum>(c)</enum><header>Separate
Application of Limitations on Foreign Tax Credit for Imported Property
Income</header>
<paragraph id="IDB682297302334C7F838CAAD9D9CCB002"><enum>(1)</enum><header>In
general</header><text>Paragraph (1) of section 904(d) (relating to separate
application of section with respect to certain categories of income) is amended
by striking <quote>and</quote> at the end of subparagraph (A), by redesignating
subparagraph (B) as subparagraph (C), and by inserting after subparagraph (A)
the following new subparagraph:</text>
<quoted-block id="ID67A257E836914F67B6C1B28FB4A180DF" style="OLC">
<subparagraph id="ID1ED47AEE7ABB4777A33ECA8842DC63CB"><enum>(B)</enum><text>imported property
income,
and</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="ID08D0963A88CB435D96FD0BBEAD16994D"><enum>(2)</enum><header>Imported
property income defined</header><text>Paragraph (2) of section 904(d) is
amended by redesignating subparagraphs (I) and (J) as subparagraphs (J) and
(K), respectively, and by inserting after subparagraph (H) the following new
subparagraph:</text>
<quoted-block id="ID865A8A4EC5A5443D9FFE25737451A2E6" style="OLC">
<subparagraph id="IDC45FFB9B0CB84B51A6BC81B1CBA39CD6"><enum>(I)</enum><header>Imported
property income</header><text>The term <term>imported property income</term>
means any income received or accrued by any person which is of a kind which
would be imported property income (as defined in section
954(j)).</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="ID8A3EBA0A17014DB8A0738F06835B399D"><enum>(3)</enum><header>Conforming
amendment</header><text>Clause (ii) of section 904(d)(2)(A) is amended by
inserting <quote>or imported property income</quote> after <quote>passive
category income</quote>.</text>
</paragraph></subsection><subsection id="ID7D426F9038CE43CD9280EC9DE06122EF"><enum>(d)</enum><header>Technical
Amendments</header>
<paragraph id="ID823D94585B804FF1AD86FE1082189CA6"><enum>(1)</enum><text>Clause (iii) of
section 952(c)(1)(B) (relating to certain prior year deficits may be taken into
account) is amended—</text>
<subparagraph id="ID00DFFF022FA44E448CD6AE3507000EA4"><enum>(A)</enum><text>by redesignating
subclauses (II), (III), (IV), and (V) as subclauses (III), (IV), (V), and (VI),
and</text>
</subparagraph><subparagraph id="ID4E68760DEAE84B838BD1DC9CFE0B058B"><enum>(B)</enum><text>by inserting
after subclause (I) the following new subclause:</text>
<quoted-block id="IDFC1F2076C3DB4C1DAB2988207487D558" style="OLC">
<subclause id="ID8579F6F3A8AC451B86CD0B1EF43980AB"><enum>(II)</enum><text>imported
property
income,</text>
</subclause><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="ID4FCE81FBD9434845B71195E9A99CC246"><enum>(2)</enum><text>Paragraph (5) of
section 954(b) (relating to deductions to be taken into account) is amended by
striking <quote>and the foreign base company oil related income</quote> and
inserting <quote>the foreign base company oil related income, and the imported
property income</quote>.</text>
</paragraph></subsection><subsection id="ID9FF6ABD7FE6E4BF58A636F93D6718D2C"><enum>(e)</enum><header>Effective
Date</header><text>The amendments made by this section shall apply to taxable
years of foreign corporations beginning after the date of the enactment of this
Act, and to taxable years of United States shareholders within which or with
which such taxable years of such foreign corporations end.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDBB66AD6B9AF9422B9AF12D0455E9F0E1" section-type="subsequent-section"><enum>212.</enum><header>Tax treatment of
controlled foreign corporations established in tax havens</header>
<subsection commented="no" display-inline="no-display-inline" id="ID17D2FCA7C9F842519CF302E292FFC735"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subchapter C of
chapter 80 (relating to provisions affecting more than one subtitle) is amended
by adding at the end the following new section:</text>
<quoted-block display-inline="no-display-inline" id="IDA90C9712E87D4613B6E7318477D92EC1" style="OLC">
<section commented="no" display-inline="no-display-inline" id="ID25935219BE9244FE8229C1C28C390EA6" section-type="subsequent-section"><enum>7875.</enum><header>Controlled foreign
corporations in tax havens treated as domestic corporations</header>
<subsection commented="no" display-inline="no-display-inline" id="ID72A9854DAFFF430EAA4F1818F9CB785C"><enum>(a)</enum><header>General
rule</header><text display-inline="yes-display-inline">If a controlled foreign
corporation is a tax-haven CFC, then, notwithstanding section 7701(a)(4), such
corporation shall be treated for purposes of this title as a domestic
corporation.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID0909EADA6C714BDB8BB13CCEFA9BD758"><enum>(b)</enum><header>Tax-Haven
CFC</header><text display-inline="yes-display-inline">For purposes of this
section—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDB9A9331DB25A4D75BDDABC0D9FDCC61D"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The term
<term>tax-haven CFC</term> means, with respect to any taxable year, a foreign
corporation which—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID6F9CCB9FBAA041ED9AE6C7EA01424E53"><enum>(A)</enum><text display-inline="yes-display-inline">was created or organized under the laws of
a tax-haven country, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID2CA6B2860BDC4A9A9704384FEDB0FD3A"><enum>(B)</enum><text display-inline="yes-display-inline">is a controlled foreign corporation
(determined without regard to this section) for an uninterrupted period of 30
days or more during the taxable year.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCD6A56D2458B4B8DAAADFECAFBC2CD79"><enum>(2)</enum><header>Exception</header><text display-inline="yes-display-inline">The term <term>tax-haven CFC</term> does
not include a foreign corporation for any taxable year if substantially all of
its income for the taxable year is derived from the active conduct of trades or
businesses within the country under the laws of which the corporation was
created or organized.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID898675AA07CA4D6893CDFBFF99972520"><enum>(c)</enum><header>Tax-Haven
country</header><text display-inline="yes-display-inline">For purposes of this
section—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID807092B2AA6E4981B07B5561DE64663B"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The term
<term>tax-haven country</term> means any of the following:</text>
<table align-to-level="section" blank-lines-before="1" frame="topbot" line-rules="hor-ver" rule-weights="0.0.0.0.0.0" subformat="S6211" table-type="3-Generic:-3-text,-even-cols">
<tgroup cols="3" grid-typeface="1.1" thead-tbody-ldg-size="0.10.10" ttitle-size="0"><colspec align="left" coldef="txt-no-ldr" colname="col1" colsep="1" colwidth="155" min-data-value="100" rowsep="0"></colspec><colspec align="left" coldef="txt-no-ldr" colname="col2" colsep="1" colwidth="155" min-data-value="100" rowsep="0"></colspec><colspec align="left" coldef="txt" colname="col3" colsep="1" colwidth="155" min-data-value="100" rowsep="0"></colspec>
<tbody>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1">Andorra</entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0">Guernsey</entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0">Panama</entry>
</row>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1">Anguilla</entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0">Isle of
Man</entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0">Samoa</entry>
</row>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1">Antigua and
Barbuda</entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0">Jersey</entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0">San Marino</entry>
</row>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1">Aruba</entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0">Liberia</entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0">Federation of </entry>
</row>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1">Commonwealth of the
</entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0">Principality of</entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0"> Saint </entry>
</row>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1"> Bahamas</entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0"> Liechtenstein</entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0"> Christopher </entry>
</row>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1">Bahrain</entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0">Republic of the
</entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0"> and Nevis</entry>
</row>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1">Barbados</entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0"> Maldives</entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0">Saint Lucia</entry>
</row>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1">Belize</entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0">Malta</entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0">Saint Vincent </entry>
</row>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1">Bermuda</entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0">Republic of the
</entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0"> and the </entry>
</row>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1">British Virgin
Islands</entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0"> Marshall Islands</entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0"> Grenadines </entry>
</row>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1">Cayman
Islands</entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0">Mauritius</entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0">Republic of the </entry>
</row>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1">Cook
Islands</entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0">Principality of Monaco</entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0"> Seychelles</entry>
</row>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1">Cyprus</entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0">Montserrat</entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0">Tonga</entry>
</row>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1">Commonwealth of
the</entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0">Republic of Nauru</entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0">Turks and Caicos </entry>
</row>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1">
Dominica</entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0">Netherlands </entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0">Republic of </entry>
</row>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1">Gibraltar</entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0"> Antilles</entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0"> Vanuatu</entry>
</row>
<row><entry align="left" colname="col1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-clr" stub-hierarchy="1">Grenada </entry><entry align="left" colname="col2" leader-modify="clr-ldr" rowsep="0">Niue</entry><entry align="left" colname="col3" leader-modify="clr-ldr" rowsep="0"></entry>
</row>
</tbody>
</tgroup>
</table>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID4E6F1CD653824DAD9B5E6B1E70E0A9AB"><enum>(2)</enum><header>Secretarial
authority</header><text display-inline="yes-display-inline">The Secretary may
remove or add a foreign jurisdiction from the list of tax-haven countries under
paragraph (1) if the Secretary determines such removal or addition is
consistent with the purposes of this
section.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID4EB44265E8044C3CA9C21F4A978400B8"><enum>(b)</enum><header>Conforming
amendment</header><text display-inline="yes-display-inline">The table of
sections for subchapter C of chapter 80 is amended by adding at the end the
following new item:</text>
<quoted-block display-inline="no-display-inline" id="ID3CE1F3D9410F4EF8A5DBBFF7B52A8B37" style="USC">
<toc regeneration="no-regeneration">
<toc-entry bold="off" level="section">Sec. 7875. Controlled foreign
corporations in tax havens treated as domestic
corporations.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID329CE1B1A34A4D30BAFA5FA5C8C972F4"><enum>(c)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this section shall apply to taxable years beginning after December 31,
2008.</text>
</subsection></section><section changed="added" id="HBA75AB7EC6EB4150AD61BCE8D3723C1F"><enum>213.</enum><header>Revision of tax
rules on expatriation of individuals</header>
<subsection id="H8CFB14D7D5814A468B5D838DEF0624A9"><enum>(a)</enum><header>In
general</header><text>Subpart A of part II of subchapter N of chapter 1 is
amended by inserting after section 877 the following new section:</text>
<quoted-block changed="added" id="HDD6D7D6083B64E508DD8CE7A6AA4288B">
<section id="H90AF3B268F7344D6AB866D59AAB6E3AD"><enum>877A.</enum><header>Tax
responsibilities of expatriation</header>
<subsection id="H348F9A39334A43738B22859F6A53507B"><enum>(a)</enum><header>General
rules</header><text>For purposes of this subtitle—</text>
<paragraph id="HEFF3CB8CFD9D4CB0AFA8E3FFB929F9C5"><enum>(1)</enum><header>Mark to
market</header><text>Except as provided in subsections (d) and (f), all
property of a covered expatriate to whom this section applies shall be treated
as sold on the day before the expatriation date for its fair market
value.</text>
</paragraph><paragraph id="H7B17B419AAEE456597A34B87F1F77DE0"><enum>(2)</enum><header>Recognition of
gain or loss</header><text>In the case of any sale under paragraph (1)—</text>
<subparagraph id="H4D8E4536C8294455B3CDF1BF246F5EDE"><enum>(A)</enum><text>notwithstanding
any other provision of this title, any gain arising from such sale shall be
taken into account for the taxable year of the sale, and</text>
</subparagraph><subparagraph id="HE926A7FD456548B4B36EC07AB1012821"><enum>(B)</enum><text>any loss arising
from such sale shall be taken into account for the taxable year of the sale to
the extent otherwise provided by this title, except that section 1091 shall not
apply to any such loss.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">Proper adjustment shall be made in
the amount of any gain or loss subsequently realized for gain or loss taken
into account under the preceding sentence.</continuation-text></paragraph><paragraph id="HC99F896EA0324E98A19F393D244D7CCA"><enum>(3)</enum><header>Exclusion for
certain gain</header>
<subparagraph id="H4A3C93D15CA2439CA607E681F3E20962"><enum>(A)</enum><header>In
general</header><text>The amount which, but for this paragraph, would be
includible in the gross income of any individual by reason of this section
shall be reduced (but not below zero) by $600,000. For purposes of this
paragraph, allocable expatriation gain taken into account under subsection
(f)(2) shall be treated in the same manner as an amount required to be
includible in gross income.</text>
</subparagraph><subparagraph id="H8F656FAB5056404FAC4F2153B4E557C3"><enum>(B)</enum><header>Cost-of-living
adjustment</header>
<clause id="H2192D2C379BD482597095B7B6FB8E6B3"><enum>(i)</enum><header>In
general</header><text>In the case of an expatriation date occurring in any
calendar year after 2008, the $600,000 amount under subparagraph (A) shall be
increased by an amount equal to—</text>
<subclause id="H2F6585D683DB43988B662A2F2CFA9AD8"><enum>(I)</enum><text>such dollar
amount, multiplied by</text>
</subclause><subclause id="H10F9EC3D17464570AFE18B2680FFC299"><enum>(II)</enum><text>the
cost-of-living adjustment determined under section 1(f)(3) for such calendar
year, determined by substituting <quote>calendar year 2007</quote> for
<quote>calendar year 1992</quote> in subparagraph (B) thereof.</text>
</subclause></clause><clause id="H4348A17378CA45FD919F10EC32BDB250"><enum>(ii)</enum><header>Rounding
rules</header><text>If any amount after adjustment under clause (i) is not a
multiple of $1,000, such amount shall be rounded to the next lower multiple of
$1,000.</text>
</clause></subparagraph></paragraph><paragraph id="H51F4F90780A849F9981F074503FF0741"><enum>(4)</enum><header>Election to
continue to be taxed as United States citizen</header>
<subparagraph id="H2A253F06232342F78798F440EEA54847"><enum>(A)</enum><header>In
general</header><text>If a covered expatriate elects the application of this
paragraph—</text>
<clause id="H1AB7FB8BD0914ABF9B297ABA436A9FBA"><enum>(i)</enum><text>this section
(other than this paragraph and subsection (i)) shall not apply to the
expatriate, but</text>
</clause><clause id="H3E630F95FE104C37AA11D59DBBF8CED6"><enum>(ii)</enum><text>in the case of
property to which this section would apply but for such election, the
expatriate shall be subject to tax under this title in the same manner as if
the individual were a United States citizen.</text>
</clause></subparagraph><subparagraph id="HAD6EF18F99ED4662BC97FF7B00F3B1C1"><enum>(B)</enum><header>Requirements</header><text>Subparagraph
(A) shall not apply to an individual unless the individual—</text>
<clause id="H10895338E7F84DB0BC9ED791CB0E7066"><enum>(i)</enum><text>provides security
for payment of tax in such form and manner, and in such amount, as the
Secretary may require,</text>
</clause><clause id="HB5CFC1E222074BEA9F11A3C52DC3C574"><enum>(ii)</enum><text>consents to the
waiver of any right of the individual under any treaty of the United States
which would preclude assessment or collection of any tax which may be imposed
by reason of this paragraph, and</text>
</clause><clause id="H42CB1DEE2E7F420889A5E7AEB917C438"><enum>(iii)</enum><text>complies with
such other requirements as the Secretary may prescribe.</text>
</clause></subparagraph><subparagraph id="HA61A9A36B50F47049FD8857C74FCB9FC"><enum>(C)</enum><header>Election</header><text>An
election under subparagraph (A) shall apply to all property to which this
section would apply but for the election and, once made, shall be irrevocable.
Such election shall also apply to property the basis of which is determined in
whole or in part by reference to the property with respect to which the
election was made.</text>
</subparagraph></paragraph></subsection><subsection id="HC03FB75B6A04482C813763AB849E676B"><enum>(b)</enum><header>Election to
defer tax</header>
<paragraph id="HF31E0959E04E43A2AA448C5BDF2A7E5C"><enum>(1)</enum><header>In
general</header><text>If the taxpayer elects the application of this subsection
with respect to any property treated as sold by reason of subsection (a), the
payment of the additional tax attributable to such property shall be postponed
until the due date of the return for the taxable year in which such property is
disposed of (or, in the case of property disposed of in a transaction in which
gain is not recognized in whole or in part, until such other date as the
Secretary may prescribe).</text>
</paragraph><paragraph id="H6E7CE6F6343E4AD6B6D9ACAC89B9B054"><enum>(2)</enum><header>Determination of
tax with respect to property</header><text>For purposes of paragraph (1), the
additional tax attributable to any property is an amount which bears the same
ratio to the additional tax imposed by this chapter for the taxable year solely
by reason of subsection (a) as the gain taken into account under subsection (a)
with respect to such property bears to the total gain taken into account under
subsection (a) with respect to all property to which subsection (a)
applies.</text>
</paragraph><paragraph id="H910D2EA439C2473A98EBF1A9AA88E7DB"><enum>(3)</enum><header>Termination of
postponement</header><text>No tax may be postponed under this subsection later
than the due date for the return of tax imposed by this chapter for the taxable
year which includes the date of death of the expatriate (or, if earlier, the
time that the security provided with respect to the property fails to meet the
requirements of paragraph (4), unless the taxpayer corrects such failure within
the time specified by the Secretary).</text>
</paragraph><paragraph id="HE9B1B06928F646878FFFB25D8091D6A9"><enum>(4)</enum><header>Security</header>
<subparagraph id="HB5AC9920BBAD4E7E90C42EF2C99AF1B8"><enum>(A)</enum><header>In
general</header><text>No election may be made under paragraph (1) with respect
to any property unless adequate security is provided to the Secretary with
respect to such property.</text>
</subparagraph><subparagraph id="H0FB247A4CF5044C7A1B7DF81C7607DAE"><enum>(B)</enum><header>Adequate
security</header><text>For purposes of subparagraph (A), security with respect
to any property shall be treated as adequate security if—</text>
<clause id="H8D77AE2156EB4A03800289C2E7F6B9B6"><enum>(i)</enum><text>it is a bond in an
amount equal to the deferred tax amount under paragraph (2) for the property,
or</text>
</clause><clause id="H232D78DF742C46BABECD921CB3C62343"><enum>(ii)</enum><text>the taxpayer
otherwise establishes to the satisfaction of the Secretary that the security is
adequate.</text>
</clause></subparagraph></paragraph><paragraph id="H24AD43277AD741C5A91E02DE1DD09112"><enum>(5)</enum><header>Waiver of
certain rights</header><text>No election may be made under paragraph (1) unless
the taxpayer consents to the waiver of any right under any treaty of the United
States which would preclude assessment or collection of any tax imposed by
reason of this section.</text>
</paragraph><paragraph id="H6FBB789F5EF54C119A7CC7468DB87075"><enum>(6)</enum><header>Elections</header><text>An
election under paragraph (1) shall only apply to property described in the
election and, once made, is irrevocable. An election may be made under
paragraph (1) with respect to an interest in a trust with respect to which gain
is required to be recognized under subsection (f)(1).</text>
</paragraph><paragraph id="H71DB0DEE667D4365936A68FC89C17421"><enum>(7)</enum><header>Interest</header><text>For
purposes of section 6601—</text>
<subparagraph id="HC1E029C9D796406EB06FD38C867D7721"><enum>(A)</enum><text>the last date for
the payment of tax shall be determined without regard to the election under
this subsection, and</text>
</subparagraph><subparagraph id="H2262D06E16F34192AC170A0254A6B127"><enum>(B)</enum><text>section 6621(a)(2)
shall be applied by substituting <quote>5 percentage points</quote> for
<quote>3 percentage points</quote> in subparagraph (B) thereof.</text>
</subparagraph></paragraph></subsection><subsection id="H267C0EE0400A420F908A14C483BEBA36"><enum>(c)</enum><header>Covered
expatriate</header><text>For purposes of this section—</text>
<paragraph id="H10819D25EEA0413BBF9E8908E8E01941"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), the term
<term>covered expatriate</term> means an expatriate.</text>
</paragraph><paragraph id="HF1CBF6B4E5354DBF92F1CB9D43BC473F"><enum>(2)</enum><header>Exceptions</header><text>An
individual shall not be treated as a covered expatriate if—</text>
<subparagraph id="H60A958A7FA2B46C388AE23628F420642"><enum>(A)</enum><text>the
individual—</text>
<clause id="H22ABBB94572F425C8DB944A7FEEA13D5"><enum>(i)</enum><text>became at birth a
citizen of the United States and a citizen of another country and, as of the
expatriation date, continues to be a citizen of, and is taxed as a resident of,
such other country, and</text>
</clause><clause id="H0554822CCA614343BE085E6EEE64B151"><enum>(ii)</enum><text>has not been a
resident of the United States (as defined in section 7701(b)(1)(A)(ii)) during
the 5 taxable years ending with the taxable year during which the expatriation
date occurs, or</text>
</clause></subparagraph><subparagraph id="H9745A8F32032454192D557BB5D777509"><enum>(B)</enum><clause commented="no" display-inline="yes-display-inline" id="ID55B7BBAA28DA452E920975B02EC3BD6B"><enum>(i)</enum><text>the individual’s
relinquishment of United States citizenship occurs before such individual
attains age 18<fraction>1/2</fraction>, and</text>
</clause><clause changed="added" id="HC3F1CB1748A14CC9BBFF01C5B2E05CDE" indent="up1"><enum>(ii)</enum><text>the individual has been a resident
of the United States (as so defined) for not more than 5 taxable years before
the date of relinquishment.</text>
</clause></subparagraph></paragraph></subsection><subsection id="HF34CF5F2D3F04946BF66FCA1087EF1DF"><enum>(d)</enum><header>Exempt property;
special rules for pension plans</header>
<paragraph id="H61B1896547DB4CF0BDB6DEB9E49C0C14"><enum>(1)</enum><header>Exempt
property</header><text>This section shall not apply to the following:</text>
<subparagraph id="H5F26FE4595794BF5A15966D714AE640E"><enum>(A)</enum><header>United States
real property interests</header><text>Any United States real property interest
(as defined in section 897(c)(1)), other than stock of a United States real
property holding corporation which does not, on the day before the expatriation
date, meet the requirements of section 897(c)(2).</text>
</subparagraph><subparagraph id="H61FFE7B5010240C5A0D882D8A3011C6D"><enum>(B)</enum><header>Specified
property</header><text>Any property or interest in property not described in
subparagraph (A) which the Secretary specifies in regulations.</text>
</subparagraph></paragraph><paragraph id="H752C5F6263C840C59BFE6946EFF7A8D7"><enum>(2)</enum><header>Special rules
for certain retirement plans</header>
<subparagraph id="H7C4A76C636284F90A7FAFADD8AB75103"><enum>(A)</enum><header>In
general</header><text>If a covered expatriate holds on the day before the
expatriation date any interest in a retirement plan to which this paragraph
applies—</text>
<clause id="HAB070DCA2B2A434DADB7BB517726B2F5"><enum>(i)</enum><text>such interest
shall not be treated as sold for purposes of subsection (a)(1), but</text>
</clause><clause id="H3CE136CCF95A45B5831FD8066C6612E0"><enum>(ii)</enum><text>an amount equal
to the present value of the expatriate’s nonforfeitable accrued benefit shall
be treated as having been received by such individual on such date as a
distribution under the plan.</text>
</clause></subparagraph><subparagraph id="H1ED876268DF04A12B124D606208633CC"><enum>(B)</enum><header>Treatment of
subsequent distributions</header><text>In the case of any distribution on or
after the expatriation date to or on behalf of the covered expatriate from a
plan from which the expatriate was treated as receiving a distribution under
subparagraph (A), the amount otherwise includible in gross income by reason of
the subsequent distribution shall be reduced by the excess of the amount
includible in gross income under subparagraph (A) over any portion of such
amount to which this subparagraph previously applied.</text>
</subparagraph><subparagraph id="H029986F525DC48F7ABBD4264059D6ACA"><enum>(C)</enum><header>Treatment of
subsequent distributions by plan</header><text>For purposes of this title, a
retirement plan to which this paragraph applies, and any person acting on the
plan’s behalf, shall treat any subsequent distribution described in
subparagraph (B) in the same manner as such distribution would be treated
without regard to this paragraph.</text>
</subparagraph><subparagraph id="HCEA998AA25BD41C2A753C69D4C55DC61"><enum>(D)</enum><header>Applicable
plans</header><text>This paragraph shall apply to—</text>
<clause id="HE5207F3FA8CE43369F664FE28ABFE440"><enum>(i)</enum><text>any qualified
retirement plan (as defined in section 4974(c)),</text>
</clause><clause id="HCED1188D84474905B943D0AB24CFFCF4"><enum>(ii)</enum><text>an eligible
deferred compensation plan (as defined in section 457(b)) of an eligible
employer described in section 457(e)(1)(A), and</text>
</clause><clause id="H9C01282DF0C44D5FA922FE060CD073CD"><enum>(iii)</enum><text>to the extent
provided in regulations, any foreign pension plan or similar retirement
arrangements or programs.</text>
</clause></subparagraph></paragraph></subsection><subsection id="HC5F98CC760DB466D9D325175A5F22DF2"><enum>(e)</enum><header>Definitions</header><text>For
purposes of this section—</text>
<paragraph id="H36F8242DB673420BA6B6650036F5819F"><enum>(1)</enum><header>Expatriate</header><text>The
term <term>expatriate</term> means—</text>
<subparagraph id="HA058966F5B25429AB3006007A04FBCBB"><enum>(A)</enum><text>any United States
citizen who relinquishes citizenship, and</text>
</subparagraph><subparagraph id="H5DF240016B5848E483733777F84A7881"><enum>(B)</enum><text>any long-term
resident of the United States who—</text>
<clause id="HA02425FB18E14D7BB0D0714514310158"><enum>(i)</enum><text>ceases to be a
lawful permanent resident of the United States (within the meaning of section
7701(b)(6)), or</text>
</clause><clause id="HBBE89670DA284E09B3E3D7A0048C9B26"><enum>(ii)</enum><text>commences to be
treated as a resident of a foreign country under the provisions of a tax treaty
between the United States and the foreign country and who does not waive the
benefits of such treaty applicable to residents of the foreign country.</text>
</clause></subparagraph></paragraph><paragraph id="HEBFDA903E06944EBA2763BB44EC04269"><enum>(2)</enum><header>Expatriation
date</header><text>The term <term>expatriation date</term> means—</text>
<subparagraph id="H6654ED43B87141319B0086460C050B27"><enum>(A)</enum><text>the date an
individual relinquishes United States citizenship, or</text>
</subparagraph><subparagraph id="H18DEB785125E49AD8A5AD561632E3A2A"><enum>(B)</enum><text>in the case of a
long-term resident of the United States, the date of the event described in
clause (i) or (ii) of paragraph (1)(B).</text>
</subparagraph></paragraph><paragraph id="H1281542F98284B238C93E437CDE97209"><enum>(3)</enum><header>Relinquishment
of citizenship</header><text>A citizen shall be treated as relinquishing United
States citizenship on the earliest of—</text>
<subparagraph id="H1EEBF43F15ED4C17AA49C0484B43CC29"><enum>(A)</enum><text>the date the
individual renounces such individual’s United States nationality before a
diplomatic or consular officer of the United States pursuant to paragraph (5)
of section 349(a) of the <act-name parsable-cite="INA">Immigration and
Nationality Act</act-name> (8 U.S.C. 1481(a)(5)),</text>
</subparagraph><subparagraph id="H89CDF3B19BB444658B3D75AEFC635C66"><enum>(B)</enum><text>the date the
individual furnishes to the United States Department of State a signed
statement of voluntary relinquishment of United States nationality confirming
the performance of an act of expatriation specified in paragraph (1), (2), (3),
or (4) of section 349(a) of the <act-name parsable-cite="INA">Immigration and
Nationality Act</act-name> (8 U.S.C. 1481(a)(1)–(4)),</text>
</subparagraph><subparagraph id="H264DF71CFAAE433BA63DA7F50ED1E6F7"><enum>(C)</enum><text>the date the
United States Department of State issues to the individual a certificate of
loss of nationality, or</text>
</subparagraph><subparagraph id="H3DE063DA38D74E7DA2423CA1C6DE8B8B"><enum>(D)</enum><text>the date a court
of the United States cancels a naturalized citizen’s certificate of
naturalization.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">Subparagraph (A) or (B) shall not
apply to any individual unless the renunciation or voluntary relinquishment is
subsequently approved by the issuance to the individual of a certificate of
loss of nationality by the United States Department of State.</continuation-text></paragraph><paragraph id="HB9B3E0ECADD8423799221590D2E5FFAD"><enum>(4)</enum><header>Long-term
resident</header><text>The term <term>long-term resident</term> has the meaning
given to such term by section 877(e)(2).</text>
</paragraph></subsection><subsection id="H396E280B0C0341D1BC3BC8A5DE177A77"><enum>(f)</enum><header>Special rules
applicable to beneficiaries’ interests in trust</header>
<paragraph id="H6936D7C9FF904DD3B34012F7A8214347"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), if an individual is
determined under paragraph (3) to hold an interest in a trust on the day before
the expatriation date—</text>
<subparagraph id="H9E94BF8258CD4F7681789F4504AB30A3"><enum>(A)</enum><text>the individual
shall not be treated as having sold such interest,</text>
</subparagraph><subparagraph id="HDBA2C26E7CAC4B9695F60C5A48A2B9B0"><enum>(B)</enum><text>such interest
shall be treated as a separate share in the trust, and</text>
</subparagraph><subparagraph id="HBED7DAC084934041AE450C17C064F20B"><enum>(C)</enum><clause commented="no" display-inline="yes-display-inline" id="ID1855C9F0D0004282BED16ED64335663F"><enum>(i)</enum><text>such separate share
shall be treated as a separate trust consisting of the assets allocable to such
share,</text>
</clause><clause changed="added" id="HCB8C60BD040E4548ACA64598D90C424E" indent="up1"><enum>(ii)</enum><text>the separate trust shall be
treated as having sold its assets on the day before the expatriation date for
their fair market value and as having distributed all of its assets to the
individual as of such time, and</text>
</clause><clause changed="added" id="H3ACBFAF29E4E4B5A8AE2965695CE6DF2" indent="up1"><enum>(iii)</enum><text>the individual shall be treated
as having recontributed the assets to the separate trust.</text>
</clause></subparagraph><continuation-text continuation-text-level="paragraph">Subsection (a)(2) shall apply to any
income, gain, or loss of the individual arising from a distribution described
in subparagraph (C)(ii). In determining the amount of such distribution, proper
adjustments shall be made for liabilities of the trust allocable to an
individual’s share in the trust.</continuation-text></paragraph><paragraph id="H93BB55EAF7BF4964B2FC58753835919C"><enum>(2)</enum><header>Special rules
for interests in qualified trusts</header>
<subparagraph id="HE0B1FB769C58494EA9B40FC4CDDAF157"><enum>(A)</enum><header>In
general</header><text>If the trust interest described in paragraph (1) is an
interest in a qualified trust—</text>
<clause id="H5D69AB4A1A634DA5AA8305F1EB68AA3C"><enum>(i)</enum><text>paragraph (1) and
subsection (a) shall not apply, and</text>
</clause><clause id="H20DF702A29F742EB8EA8E92949C85E1A"><enum>(ii)</enum><text>in addition to
any other tax imposed by this title, there is hereby imposed on each
distribution with respect to such interest a tax in the amount determined under
subparagraph (B).</text>
</clause></subparagraph><subparagraph id="H67AD1264324E4E8E92784FB3BF377394"><enum>(B)</enum><header>Amount of
tax</header><text>The amount of tax under subparagraph (A)(ii) shall be equal
to the lesser of—</text>
<clause id="HA3156C3946A346BBBD7ED01B21F96E3A"><enum>(i)</enum><text>the highest rate
of tax imposed by section 1(e) for the taxable year which includes the day
before the expatriation date, multiplied by the amount of the distribution,
or</text>
</clause><clause id="HFDACB7163DC34D77A3DC13F371B66E7F"><enum>(ii)</enum><text>the balance in
the deferred tax account immediately before the distribution determined without
regard to any increases under subparagraph (C)(ii) after the 30th day preceding
the distribution.</text>
</clause></subparagraph><subparagraph id="HB91115A144264C7690FD93BAD652F2DF"><enum>(C)</enum><header>Deferred tax
account</header><text>For purposes of subparagraph (B)(ii)—</text>
<clause id="HD2F1523FF44F46EF97A5C3961FB71ED2"><enum>(i)</enum><header>Opening
balance</header><text>The opening balance in a deferred tax account with
respect to any trust interest is an amount equal to the tax which would have
been imposed on the allocable expatriation gain with respect to the trust
interest if such gain had been included in gross income under subsection
(a).</text>
</clause><clause id="HF4F03D4B5B9F470AA22593073E682D23"><enum>(ii)</enum><header>Increase for
interest</header><text>The balance in the deferred tax account shall be
increased by the amount of interest determined (on the balance in the account
at the time the interest accrues), for periods after the 90th day after the
expatriation date, by using the rates and method applicable under section 6621
for underpayments of tax for such periods, except that section 6621(a)(2) shall
be applied by substituting <quote>5 percentage points</quote> for <quote>3
percentage points</quote> in subparagraph (B) thereof.</text>
</clause><clause id="H267A3ECCC3AA457D88E03DC1DE859A9B"><enum>(iii)</enum><header>Decrease for
taxes previously paid</header><text>The balance in the tax deferred account
shall be reduced—</text>
<subclause id="H2B710C299F74432590D8AD35DBE23203"><enum>(I)</enum><text>by the amount of
taxes imposed by subparagraph (A) on any distribution to the person holding the
trust interest, and</text>
</subclause><subclause id="H5F85D143A1AA44F7959739915C9E0DF0"><enum>(II)</enum><text>in the case of a
person holding a nonvested interest, to the extent provided in regulations, by
the amount of taxes imposed by subparagraph (A) on distributions from the trust
with respect to nonvested interests not held by such person.</text>
</subclause></clause></subparagraph><subparagraph id="HB0DFDFDA4D3349EB98F0F927645EC044"><enum>(D)</enum><header>Allocable
expatriation gain</header><text>For purposes of this paragraph, the allocable
expatriation gain with respect to any beneficiary’s interest in a trust is the
amount of gain which would be allocable to such beneficiary’s vested and
nonvested interests in the trust if the beneficiary held directly all assets
allocable to such interests.</text>
</subparagraph><subparagraph id="H172114F7BF324D269A5D2B6B3B1F7D3D"><enum>(E)</enum><header>Tax deducted and
withheld</header>
<clause id="H924B0584866E40DF832A0B907A11B85F"><enum>(i)</enum><header>In
general</header><text>The tax imposed by subparagraph (A)(ii) shall be deducted
and withheld by the trustees from the distribution to which it relates.</text>
</clause><clause id="HAC4870F0C4BC4EF8831679E89C329841"><enum>(ii)</enum><header>Exception where
failure to waive treaty rights</header><text>If an amount may not be deducted
and withheld under clause (i) by reason of the distributee failing to waive any
treaty right with respect to such distribution—</text>
<subclause id="H39AF48DF417A4ABCBD575AE0968F40E3"><enum>(I)</enum><text>the tax imposed by
subparagraph (A)(ii) shall be imposed on the trust and each trustee shall be
personally liable for the amount of such tax, and</text>
</subclause><subclause id="HA90854CD42DD4C1E93DE155F5EFE67EC"><enum>(II)</enum><text>any other
beneficiary of the trust shall be entitled to recover from the distributee the
amount of such tax imposed on the other beneficiary.</text>
</subclause></clause></subparagraph><subparagraph id="HA7E048ADFACB4541A8FEC6AA65114DC6"><enum>(F)</enum><header>Disposition</header><text>If
a trust ceases to be a qualified trust at any time, a covered expatriate
disposes of an interest in a qualified trust, or a covered expatriate holding
an interest in a qualified trust dies, then, in lieu of the tax imposed by
subparagraph (A)(ii), there is hereby imposed a tax equal to the lesser
of—</text>
<clause id="H5E7BE7CD226345018A2B65E2B1307AEC"><enum>(i)</enum><text>the tax determined
under paragraph (1) as if the day before the expatriation date were the date of
such cessation, disposition, or death, whichever is applicable, or</text>
</clause><clause id="H7D2CE1E067534CB4914273F98E54AEF7"><enum>(ii)</enum><text>the balance in
the tax deferred account immediately before such date.</text>
</clause><continuation-text continuation-text-level="subparagraph">Such tax shall be imposed on the
trust and each trustee shall be personally liable for the amount of such tax
and any other beneficiary of the trust shall be entitled to recover from the
covered expatriate or the estate the amount of such tax imposed on the other
beneficiary.</continuation-text></subparagraph><subparagraph id="HEA80A340C1DC4BEEBCEFE6A7B66D6DED"><enum>(G)</enum><header>Definitions and
special rules</header><text>For purposes of this paragraph—</text>
<clause id="H1E9C60B007E447B796E883D3A792B6CD"><enum>(i)</enum><header>Qualified
trust</header><text>The term <term>qualified trust</term> means a trust which
is described in section 7701(a)(30)(E).</text>
</clause><clause id="HD3D5F12A70FA4ECF9A87F4E0A119734B"><enum>(ii)</enum><header>Vested
interest</header><text>The term <term>vested interest</term> means any interest
which, as of the day before the expatriation date, is vested in the
beneficiary.</text>
</clause><clause id="HA3D38131718940B49CD4E7E0C553A307"><enum>(iii)</enum><header>Nonvested
interest</header><text>The term <term>nonvested interest</term> means, with
respect to any beneficiary, any interest in a trust which is not a vested
interest. Such interest shall be determined by assuming the maximum exercise of
discretion in favor of the beneficiary and the occurrence of all contingencies
in favor of the beneficiary.</text>
</clause><clause id="H27DCF067E1724173ADCE3A1D00D17ABC"><enum>(iv)</enum><header>Adjustments</header><text>The
Secretary may provide for such adjustments to the bases of assets in a trust or
a deferred tax account, and the timing of such adjustments, in order to ensure
that gain is taxed only once.</text>
</clause><clause id="HF6D5C12B11BC42F2A63CD5AEF9D686A9"><enum>(v)</enum><header>Coordination
with retirement plan rules</header><text>This subsection shall not apply to an
interest in a trust which is part of a retirement plan to which subsection
(d)(2) applies.</text>
</clause></subparagraph></paragraph><paragraph id="HA5F5E41DA5974BD08D7A29907621DB4E"><enum>(3)</enum><header>Determination of
beneficiaries’ interest in trust</header>
<subparagraph id="H5686F0B98E1A4BB293FE1ADCFF43608C"><enum>(A)</enum><header>Determinations
under paragraph <enum-in-header>(1)</enum-in-header></header><text>For purposes
of paragraph (1), a beneficiary’s interest in a trust shall be based upon all
relevant facts and circumstances, including the terms of the trust instrument
and any letter of wishes or similar document, historical patterns of trust
distributions, and the existence of and functions performed by a trust
protector or any similar adviser.</text>
</subparagraph><subparagraph id="H0E3D7E9AA7FA40D1A28214D4CB6408FA"><enum>(B)</enum><header>Other
determinations</header><text>For purposes of this section—</text>
<clause id="HEE351EAB198342CAA4043E179F503829"><enum>(i)</enum><header>Constructive
ownership</header><text>If a beneficiary of a trust is a corporation,
partnership, trust, or estate, the shareholders, partners, or beneficiaries
shall be deemed to be the trust beneficiaries for purposes of this
section.</text>
</clause><clause id="H7815886E1D094EB5A4DFA2AC46FCE6F8"><enum>(ii)</enum><header>Taxpayer return
position</header><text>A taxpayer shall clearly indicate on its income tax
return—</text>
<subclause id="HF63DB265CE3E4020987CB0C936F7E57E"><enum>(I)</enum><text>the methodology
used to determine that taxpayer’s trust interest under this section, and</text>
</subclause><subclause id="H2E31D4C3E64F4783A60777316A821249"><enum>(II)</enum><text>if the taxpayer
knows (or has reason to know) that any other beneficiary of such trust is using
a different methodology to determine such beneficiary’s trust interest under
this section.</text>
</subclause></clause></subparagraph></paragraph></subsection><subsection id="HEC1012E0CFE3438F85AD54300EA61223"><enum>(g)</enum><header>Termination of
deferrals, etc</header><text>In the case of any covered expatriate,
notwithstanding any other provision of this title—</text>
<paragraph id="HE887E2CA9D0746EA981893233C0E5585"><enum>(1)</enum><text>any period during
which recognition of income or gain is deferred shall terminate on the day
before the expatriation date, and</text>
</paragraph><paragraph id="H6B0C2A0B189C442FACF4D36FBA775142"><enum>(2)</enum><text>any extension of
time for payment of tax shall cease to apply on the day before the expatriation
date and the unpaid portion of such tax shall be due and payable at the time
and in the manner prescribed by the Secretary.</text>
</paragraph></subsection><subsection id="H9EA35F876F5549318ED62F79C1B93F07"><enum>(h)</enum><header>Imposition of
tentative tax</header>
<paragraph id="HFD30FDE1D0204A8B8A26E8669D158604"><enum>(1)</enum><header>In
general</header><text>If an individual is required to include any amount in
gross income under subsection (a) for any taxable year, there is hereby
imposed, immediately before the expatriation date, a tax in an amount equal to
the amount of tax which would be imposed if the taxable year were a short
taxable year ending on the expatriation date.</text>
</paragraph><paragraph id="H823F3345972240818717834B747814BE"><enum>(2)</enum><header>Due
date</header><text>The due date for any tax imposed by paragraph (1) shall be
the 90th day after the expatriation date.</text>
</paragraph><paragraph id="H67BF823F01EE464D820706F0D08FCF08"><enum>(3)</enum><header>Treatment of
tax</header><text>Any tax paid under paragraph (1) shall be treated as a
payment of the tax imposed by this chapter for the taxable year to which
subsection (a) applies.</text>
</paragraph><paragraph id="H26F90F80A0B4477DA143E8229A5301C0"><enum>(4)</enum><header>Deferral of
tax</header><text>The provisions of subsection (b) shall apply to the tax
imposed by this subsection to the extent attributable to gain includible in
gross income by reason of this section.</text>
</paragraph></subsection><subsection id="H9AA0DDD82A254B799DFF9C4D4BC45A7F"><enum>(i)</enum><header>Special liens
for deferred tax amounts</header>
<paragraph id="H467DE15FC53B4901B3BB731A54DF2C3C"><enum>(1)</enum><header>Imposition of
lien</header>
<subparagraph id="HEBFA43A6CA5042F7AC4389478F3B9F29"><enum>(A)</enum><header>In
general</header><text>If a covered expatriate makes an election under
subsection (a)(4) or (b) which results in the deferral of any tax imposed by
reason of subsection (a), the deferred amount (including any interest,
additional amount, addition to tax, assessable penalty, and costs attributable
to the deferred amount) shall be a lien in favor of the United States on all
property of the expatriate located in the United States (without regard to
whether this section applies to the property).</text>
</subparagraph><subparagraph id="H9D2399CC28D644FE9CD8C59946B04EBD"><enum>(B)</enum><header>Deferred
amount</header><text>For purposes of this subsection, the deferred amount is
the amount of the increase in the covered expatriate’s income tax which, but
for the election under subsection (a)(4) or (b), would have occurred by reason
of this section for the taxable year including the expatriation date.</text>
</subparagraph></paragraph><paragraph id="H19EAC16C77FC4E25957071009763E546"><enum>(2)</enum><header>Period of
lien</header><text>The lien imposed by this subsection shall arise on the
expatriation date and continue until—</text>
<subparagraph id="HDC3CF1E98B134990A652554C76AC2C59"><enum>(A)</enum><text>the liability for
tax by reason of this section is satisfied or has become unenforceable by
reason of lapse of time, or</text>
</subparagraph><subparagraph id="HFD0E25479F2141A8ABEE69ABAB0A9743"><enum>(B)</enum><text>it is established
to the satisfaction of the Secretary that no further tax liability may arise by
reason of this section.</text>
</subparagraph></paragraph><paragraph id="H3CA5EB90AD6F49EEB84DEEB25DAE9A49"><enum>(3)</enum><header>Certain rules
apply</header><text>The rules set forth in paragraphs (1), (3), and (4) of
section 6324A(d) shall apply with respect to the lien imposed by this
subsection as if it were a lien imposed by section 6324A.</text>
</paragraph></subsection><subsection id="HB6CD3AFA72464751A5E4E33A41164585"><enum>(j)</enum><header>Regulations</header><text>The
Secretary shall prescribe such regulations as may be necessary or appropriate
to carry out the purposes of this
section.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H457C90FAFE2B4EA98AA6BA71607AF0BA"><enum>(b)</enum><header>Inclusion in
income of gifts and bequests received by United States citizens and residents
from expatriates</header><text>Section 102 (relating to gifts, etc. not
included in gross income) is amended by adding at the end the following new
subsection:</text>
<quoted-block changed="added" id="H22DD865B33E1481E8482CD054B66F71E">
<subsection id="HC1FB04002BA64F92A99DF6B4D4BD7503"><enum>(d)</enum><header>Gifts and
inheritances from covered expatriates</header>
<paragraph id="H39584E5E08594E8D8CC0FE44F6903360"><enum>(1)</enum><header>In
general</header><text>Subsection (a) shall not exclude from gross income the
value of any property acquired by gift, bequest, devise, or inheritance from a
covered expatriate after the expatriation date. For purposes of this
subsection, any term used in this subsection which is also used in section 877A
shall have the same meaning as when used in section 877A.</text>
</paragraph><paragraph id="H367C564A65C94B0BA724B6EEDF258D90"><enum>(2)</enum><header>Exceptions for
transfers otherwise subject to estate or gift tax</header><text>Paragraph (1)
shall not apply to any property if either—</text>
<subparagraph id="H50744DC6D77845E7BD12EF3CCAB0D24C"><enum>(A)</enum><text>the gift, bequest,
devise, or inheritance is—</text>
<clause id="HEB7AE174D48E48629D2B7100E68C325A"><enum>(i)</enum><text>shown on a timely
filed return of tax imposed by chapter 12 as a taxable gift by the covered
expatriate, or</text>
</clause><clause id="H609AEEFCC5164A388F1425807AA71D8A"><enum>(ii)</enum><text>included in the
gross estate of the covered expatriate for purposes of chapter 11 and shown on
a timely filed return of tax imposed by chapter 11 of the estate of the covered
expatriate, or</text>
</clause></subparagraph><subparagraph id="H9454B4A4C1EF47BF8E132B2601E50588"><enum>(B)</enum><text>no such return was
timely filed but no such return would have been required to be filed even if
the covered expatriate were a citizen or long-term resident of the United
States.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HF69C811132714CF899929E406F309298"><enum>(c)</enum><header>Definition of
termination of United States citizenship</header><text>Section 7701(a) is
amended by adding at the end the following new paragraph:</text>
<quoted-block changed="added" id="H56233449DF4A4613AE7F0D1A1D900AE9">
<paragraph id="H5BFBA4A22419439B87F486E04AF6474F"><enum>(49)</enum><header>Termination of
United States citizenship</header>
<subparagraph id="H0F63C406882743DDB921E2AF31943989"><enum>(A)</enum><header>In
general</header><text>An individual shall not cease to be treated as a United
States citizen before the date on which the individual’s citizenship is treated
as relinquished under section 877A(e)(3).</text>
</subparagraph><subparagraph id="H4C3FAAE6BDC948A49355209A6E4FD96F"><enum>(B)</enum><header>Dual
citizens</header><text>Under regulations prescribed by the Secretary,
subparagraph (A) shall not apply to an individual who became at birth a citizen
of the United States and a citizen of another
country.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H9B0F21D2875243D691ABA5DB2D1BBA98"><enum>(d)</enum><header>Ineligibility
for visa or admission to United States</header>
<paragraph id="HCB134DF7A07B4F7E9CE7BB66BC1C7A22"><enum>(1)</enum><header>In
general</header><text>Section 212(a)(10)(E) of the
<act-name parsable-cite="INA">Immigration and Nationality Act</act-name> (8
U.S.C. 1182(a)(10)(E)) is amended to read as follows:</text>
<quoted-block act-name="Immigration and Nationality Act" changed="added" id="HB961EF3D2B93489383A37E3E75DA99BE">
<subparagraph id="H525037ED1E3D49F4BDAF62C741C5764E"><enum>(E)</enum><header>Former citizens
not in compliance with expatriation revenue provisions</header><text>Any alien
who is a former citizen of the United States who relinquishes United States
citizenship (within the meaning of section 877A(e)(3) of the Internal Revenue
Code of 1986) and who is not in compliance with section 877A of such Code
(relating to expatriation) is
inadmissible.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H55786E7E4BE94543869F224427C2DE76"><enum>(2)</enum><header>Availability of
information</header>
<subparagraph id="H71BA98F338DD4EF98FF2990B10D4BFE1"><enum>(A)</enum><header>In
general</header><text>Section 6103(l) (relating to disclosure of returns and
return information for purposes other than tax administration) is amended by
adding at the end the following new paragraph:</text>
<quoted-block changed="added" id="H70690045201643038879DFAFCEF71979">
<paragraph id="HE56C970D438048D1BCF401B82F1FE35A"><enum>(21)</enum><header>Disclosure to
deny visa or admission to certain expatriates</header><text>Upon written
request of the Attorney General or the Attorney General’s delegate, the
Secretary shall disclose whether an individual is in compliance with section
877A (and if not in compliance, any items of noncompliance) to officers and
employees of the Federal agency responsible for administering section
212(a)(10)(E) of the <act-name parsable-cite="INA">Immigration and Nationality
Act</act-name> solely for the purpose of, and to the extent necessary in,
administering such section
212(a)(10)(E).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="H67C06DBB635D42EA9293F66B16F3F659"><enum>(B)</enum><header>Safeguards</header><text>Section
6103(p)(4) (relating to safeguards) is amended by striking <quote>or
(20)</quote> each place it appears and inserting <quote>(20), or
(21)</quote>.</text>
</subparagraph></paragraph><paragraph id="HEADAB3F5523040F1AAFE4AB6013A210C"><enum>(3)</enum><header>Effective
dates</header><text>The amendments made by this subsection shall apply to
individuals who relinquish United States citizenship on or after the date of
the enactment of this Act.</text>
</paragraph></subsection><subsection id="H3642E96DADAF49E09FA9B98E83C406B7"><enum>(e)</enum><header>Conforming
amendments</header>
<paragraph id="H3CC51EC35B7F4FA597C26F8CDD3E3C6B"><enum>(1)</enum><text>Section 877 is
amended by adding at the end the following new subsection:</text>
<quoted-block changed="added" id="H8C2AE0286E704316B1382855844C0CE3">
<subsection id="HBCC2DC16D4EA4CE5A20A64D28399AB2B"><enum>(h)</enum><header>Application</header><text>This
section shall not apply to an expatriate (as defined in section 877A(e)) whose
expatriation date (as so defined) occurs on or after the date of the enactment
of this
subsection.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HEDAB0EA5BFC34C8A8B1926F0A29DCAD3"><enum>(2)</enum><text>Section 2107 is
amended by adding at the end the following new subsection:</text>
<quoted-block changed="added" id="H1B09A36B17CF42FDA1BD53FCBC1F72D6">
<subsection id="H1B241F1BCE684BCFB2DD0148F6E79D10"><enum>(f)</enum><header>Application</header><text>This
section shall not apply to any expatriate subject to section
877A.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H624C05F838FA46A181AB26FE06BAB70B"><enum>(3)</enum><text>Section 2501(a)(3)
is amended by adding at the end the following new subparagraph:</text>
<quoted-block changed="added" id="HC46C09CC106640DAACE64C56B4C2D2EC">
<subparagraph id="HC701CAF2843340A1B353090600BE8FDB"><enum>(C)</enum><header>Application</header><text>This
paragraph shall not apply to any expatriate subject to section
877A.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H7FE6B4A67A7B4F75BADB8ADCE224E6E7"><enum>(4)</enum><text>Section 6039G(a)
is amended by inserting <quote>or 877A</quote> after <quote>section
877(b)</quote>.</text>
</paragraph><paragraph id="H34E7C8912EE74949906A7F76AA732CD5"><enum>(5)</enum><text>The second
sentence of section 6039G(d) is amended by inserting <quote>or who relinquishes
United States citizenship (within the meaning of section 877A(e)(3))</quote>
after <quote>section 877(a))</quote>.</text>
</paragraph></subsection><subsection id="HD6E87452CB1F44F485C4AFA041D45D6D"><enum>(f)</enum><header>Clerical
amendment</header><text>The table of sections for subpart A of part II of
subchapter N of chapter 1 is amended by inserting after the item relating to
section 877 the following new item:</text>
<quoted-block changed="added" id="HAD9B20A5048E41DB93B8F74B61B7D2F0" style="USC">
<toc changed="added" regeneration="no-regeneration">
<toc-entry level="section">Sec. 877A. Tax
responsibilities of
expatriation.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H09A97FE9E01D4B76AD15314468A54119"><enum>(g)</enum><header>Effective
date</header>
<paragraph id="H5D3B5E7D6D6D4912BF8C83FCD1169B1A"><enum>(1)</enum><header>In
general</header><text>Except as provided in this subsection, the amendments
made by this section shall apply to expatriates (within the meaning of section
877A(e) of the Internal Revenue Code of 1986, as added by this section) whose
expatriation date (as so defined) occurs on or after the date of the enactment
of this Act.</text>
</paragraph><paragraph id="H281D52EF5C2A4213A9BC0E61DE98344B"><enum>(2)</enum><header>Gifts and
bequests</header><text>Section 102(d) of the Internal Revenue Code of 1986 (as
added by subsection (b)) shall apply to gifts and bequests received on or after
the date of the enactment of this Act, from an individual or the estate of an
individual whose expatriation date (as so defined) occurs after such
date.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H58A1A95EEE7646678D44A49CCEE944FB"><enum>(3)</enum><header>Due date for
tentative tax</header><text>The due date under section 877A(h)(2) of the
Internal Revenue Code of 1986, as added by this section, shall in no event
occur before the 90th day after the date of the enactment of this Act.</text>
</paragraph></subsection></section><section id="ID7A0F9762D7BB4E3DADF8C40E34EB0944"><enum>214.</enum><header>Modification
of effective date of leasing provisions of the American Jobs Creation Act of
2004</header>
<subsection id="ID009B37610F52456AAD03F9E909AA753E"><enum>(a)</enum><header>Leases to
Foreign Entities</header><text>Section 849(b) of the American Jobs Creation Act
of 2004 is amended by adding at the end the following new paragraph:</text>
<quoted-block id="ID4EF01EDE45E540EDB24C9AF5D911EFD1" style="OLC">
<paragraph id="ID7B8B5F1D27834AB2AFDE303805453E73"><enum>(5)</enum><header>Leases to
foreign entities</header><text>In the case of tax-exempt use property leased to
a tax-exempt entity which is a foreign person or entity, the amendments made by
this part shall apply to taxable years beginning after December 31, 2006, with
respect to leases entered into on or before March 12,
2004.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="IDEA6D9B9FA577493CBF4E692960E55978"><enum>(b)</enum><header>Effective
Date</header><text>The amendment made by this section shall take effect as if
included in the enactment of the American Jobs Creation Act of 2004.</text>
</subsection></section><section id="id20B1129B37E64FFA9A840502F1AA6EFA"><enum>215.</enum><header>Application of
rules treating inverted corporations as domestic corporations to certain
transactions occurring after March 20, 2002</header>
<subsection id="id15CBA640847E432BB0A5D6958A7AF17E"><enum>(a)</enum><header>In
general</header><text>Section 7874(b) (relating to inverted corporations
treated as domestic corporations) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="idB32C13F8A9A44725B0505BA0047A3314" style="OLC">
<subsection id="id7859869A231140ADBC207C7EAA12E5A5"><enum>(b)</enum><header>Inverted
corporations treated as domestic corporations</header>
<paragraph id="idF3CFDA32A4214083B05C64A338283DF0"><enum>(1)</enum><header>In
general</header><text>Notwithstanding section 7701(a)(4), a foreign corporation
shall be treated for purposes of this title as a domestic corporation if such
corporation would be a surrogate foreign corporation if subsection (a)(2) were
applied by substituting <quote>80 percent</quote> for <quote>60
percent</quote>.</text>
</paragraph><paragraph id="idE7852872DC1D42A9966FEDC469FC8372"><enum>(2)</enum><header>Special rule
for certain transactions occurring after March 20, 2002</header>
<subparagraph id="id3C3946EC1AB7400F90D30F4C1954A016"><enum>(A)</enum><header>In
general</header><text>If—</text>
<clause id="id5396046EBF684D40874C6CA37E382912"><enum>(i)</enum><text>paragraph (1)
does not apply to a foreign corporation, but</text>
</clause><clause id="idEE3553A0578D46A586D1269160D80723"><enum>(ii)</enum><text>paragraph (1)
would apply to such corporation if, in addition to the substitution under
paragraph (1), subsection (a)(2) were applied by substituting <quote>March 20,
2002</quote> for <quote>March 4, 2003</quote> each place it appears,</text>
</clause><continuation-text continuation-text-level="subparagraph">then
paragraph (1) shall apply to such corporation but only with respect to taxable
years of such corporation beginning after December 31, 2006.</continuation-text></subparagraph><subparagraph id="id250B62A8C5B442769D557CF59D712E5A"><enum>(B)</enum><header>Special
rules</header><text>Subject to such rules as the Secretary may prescribe, in
the case of a corporation to which paragraph (1) applies by reason of this
paragraph—</text>
<clause id="idA848A178A0844056819ADE076217F577"><enum>(i)</enum><text>the corporation
shall be treated, as of the close of its last taxable year beginning before
January 1, 2007, as having transferred all of its assets, liabilities, and
earnings and profits to a domestic corporation in a transaction with respect to
which no tax is imposed under this title,</text>
</clause><clause id="idAFD04A9658A34031BD65EC5FBF87FF77"><enum>(ii)</enum><text>the bases of the
assets transferred in the transaction to the domestic corporation shall be the
same as the bases of the assets in the hands of the foreign corporation,
subject to any adjustments under this title for built-in losses,</text>
</clause><clause id="id3CD0D255E8DD4098BA543BD22760DF47"><enum>(iii)</enum><text>the basis of
the stock of any shareholder in the domestic corporation shall be the same as
the basis of the stock of the shareholder in the foreign corporation for which
it is treated as exchanged, and</text>
</clause><clause id="idDC3156FD8905485B9B16205D7C26DA67"><enum>(iv)</enum><text>the transfer of
any earnings and profits by reason of clause (i) shall be disregarded in
determining any deemed dividend or foreign tax creditable to the domestic
corporation with respect to such transfer.</text>
</clause></subparagraph><subparagraph id="id7D637F10CF5F484F853D4CC4B0CE1727"><enum>(C)</enum><header>Regulations</header><text>The
Secretary may prescribe such regulations as may be necessary or appropriate to
carry out this paragraph, including regulations to prevent the avoidance of the
purposes of this
paragraph.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id3FD612093A8745CDA6B94D9BBA96562C"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after December 31, 2006.</text>
</subsection></section></subtitle><subtitle changed="added" id="HA63E46EF175141F9A98241A3A3893DCA"><enum>C</enum><header>Economic substance
doctrine</header>
<section id="H02E3481346D3482B8ACF83FD73FD067E"><enum>221.</enum><header>Clarification
of economic substance doctrine</header>
<subsection id="H00F3713D884142848E8B3285F90106FB"><enum>(a)</enum><header>In
general</header><text>Section 7701 is amended by redesignating subsection (o)
as subsection (p) and by inserting after subsection (n) the following new
subsection:</text>
<quoted-block changed="added" id="HFC92AE5B47CB45DEBF09090AA0635B1A">
<subsection id="HDB665F16D0FC48FC9CFF88EEFB60B925"><enum>(o)</enum><header>Clarification of
economic substance doctrine; etc</header>
<paragraph id="H195FE14336F04A9694E7C904448F8362"><enum>(1)</enum><header>General
rules</header>
<subparagraph id="H33861807FE9742ABA872225B47573DF9"><enum>(A)</enum><header>In
general</header><text>In any case in which a court determines that the economic
substance doctrine is relevant for purposes of this title to a transaction (or
series of transactions), such transaction (or series of transactions) shall
have economic substance only if the requirements of this paragraph are
met.</text>
</subparagraph><subparagraph id="HCAB820ECACBB43EA92AC1582250229A3"><enum>(B)</enum><header>Definition of
economic substance</header><text>For purposes of subparagraph (A)—</text>
<clause id="HE2D649C7BEFC46AABB97BB4891FAAAA0"><enum>(i)</enum><header>In
general</header><text>A transaction has economic substance only if—</text>
<subclause id="H0E00A99312564D3BBD9A0BDE885FEBA8"><enum>(I)</enum><text>the transaction
changes in a meaningful way (apart from Federal tax effects) the taxpayer’s
economic position, and</text>
</subclause><subclause id="H02112531B0C54A3696E22F8F9FF6381C"><enum>(II)</enum><text>the taxpayer has
a substantial nontax purpose for entering into such transaction and the
transaction is a reasonable means of accomplishing such purpose.</text>
</subclause><continuation-text continuation-text-level="clause">In applying subclause (II), a purpose of
achieving a financial accounting benefit shall not be taken into account in
determining whether a transaction has a substantial nontax purpose if the
origin of such financial accounting benefit is a reduction of income
tax.</continuation-text></clause><clause id="HFDA18C9DDCAD49FDAA06382A5229D7EC"><enum>(ii)</enum><header>Special rule
where taxpayer relies on profit potential</header><text>A transaction shall not
be treated as having economic substance by reason of having a potential for
profit unless—</text>
<subclause id="HECE74803EF2244B2B74FB8BC98F8822C"><enum>(I)</enum><text>the present value
of the reasonably expected pre-tax profit from the transaction is substantial
in relation to the present value of the expected net tax benefits that would be
allowed if the transaction were respected, and</text>
</subclause><subclause id="H315E2ECB26A94ED6852BF8A32E35B2E4"><enum>(II)</enum><text>the reasonably
expected pre-tax profit from the transaction exceeds a risk-free rate of
return.</text>
</subclause></clause></subparagraph><subparagraph id="id1C6FBA853A5C4F40817AF5C98E595208"><enum>(C)</enum><header>Treatment of
fees and foreign taxes</header><text>Fees and other transaction expenses and
foreign taxes shall be taken into account as expenses in determining pre-tax
profit under subparagraph (B)(ii).</text>
</subparagraph></paragraph><paragraph id="HBADEEED02E794025B3868AD57E77815C"><enum>(2)</enum><header>Special rules
for transactions with tax-indifferent parties</header>
<subparagraph id="H39D65BD09308403F9623B330BDA6D988"><enum>(A)</enum><header>Special rules
for financing transactions</header><text>The form of a transaction which is in
substance the borrowing of money or the acquisition of financial capital
directly or indirectly from a tax-indifferent party shall not be respected if
the present value of the deductions to be claimed with respect to the
transaction is substantially in excess of the present value of the anticipated
economic returns of the person lending the money or providing the financial
capital. A public offering shall be treated as a borrowing, or an acquisition
of financial capital, from a tax-indifferent party if it is reasonably expected
that at least 50 percent of the offering will be placed with tax-indifferent
parties.</text>
</subparagraph><subparagraph id="HD8DDF7BC80014977A81A8C5FC6593B43"><enum>(B)</enum><header>Artificial
income shifting and basis adjustments</header><text>The form of a transaction
with a tax-indifferent party shall not be respected if—</text>
<clause id="HB69E332B5A904A4680A36545713F1E12"><enum>(i)</enum><text>it results in an
allocation of income or gain to the tax-indifferent party in excess of such
party’s economic income or gain, or</text>
</clause><clause id="H8281EBA695F84F74A64D6155053CC9AE"><enum>(ii)</enum><text>it results in a
basis adjustment or shifting of basis on account of overstating the income or
gain of the tax-indifferent party.</text>
</clause></subparagraph></paragraph><paragraph id="HF33E0536FD0E4AA1BE87B9DA29C95AC5"><enum>(3)</enum><header>Definitions and
special rules</header><text>For purposes of this subsection—</text>
<subparagraph id="H799495CF1D174D5EBE087B00BA5618FD"><enum>(A)</enum><header>Economic
substance doctrine</header><text>The term <term>economic substance
doctrine</term> means the common law doctrine under which tax benefits under
subtitle A with respect to a transaction are not allowable if the transaction
does not have economic substance or lacks a business purpose.</text>
</subparagraph><subparagraph id="H9138CB285B5447B6AED95B7AB60D860B"><enum>(B)</enum><header>Tax-indifferent
party</header><text>The term <term>tax-indifferent party</term> means any
person or entity not subject to tax imposed by subtitle A. A person shall be
treated as a tax-indifferent party with respect to a transaction if the items
taken into account with respect to the transaction have no substantial impact
on such person’s liability under subtitle A.</text>
</subparagraph><subparagraph id="HF455F3E9BC3647F38C23E1D3F7E39892"><enum>(C)</enum><header>Exception for
personal transactions of individuals</header><text>In the case of an
individual, this subsection shall apply only to transactions entered into in
connection with a trade or business or an activity engaged in for the
production of income.</text>
</subparagraph><subparagraph id="H4ECC2F1563BF4DB4B91B45F80FE29826"><enum>(D)</enum><header>Treatment of
lessors</header><text>In applying paragraph (1)(B)(ii) to the lessor of
tangible property subject to a lease—</text>
<clause id="HB9C28E85EAD140A19FE23AAF69E26683"><enum>(i)</enum><text>the expected net
tax benefits with respect to the leased property shall not include the benefits
of—</text>
<subclause id="HB52BB325C5964F3598B61BA591CB8EDE"><enum>(I)</enum><text>depreciation,</text>
</subclause><subclause id="H48C4C94721114FD8BD8E46C5C41F1918"><enum>(II)</enum><text>any tax credit,
or</text>
</subclause><subclause id="H139101BFF01647B0823B7C7E959D7FDA"><enum>(III)</enum><text>any other
deduction as provided in guidance by the Secretary, and</text>
</subclause></clause><clause id="H21C8F0A916024516AC3514A6602C4AD1"><enum>(ii)</enum><text>subclause (II) of
paragraph (1)(B)(ii) shall be disregarded in determining whether any of such
benefits are allowable.</text>
</clause></subparagraph></paragraph><paragraph id="HA14FABCBBC594072BC9E8C0BDF095299"><enum>(4)</enum><header>Other common law
doctrines not affected</header><text>Except as specifically provided in this
subsection, the provisions of this subsection shall not be construed as
altering or supplanting any other rule of law, and the requirements of this
subsection shall be construed as being in addition to any such other rule of
law.</text>
</paragraph><paragraph id="H6F01BCF8E57B415E91F389AA9C9445E9"><enum>(5)</enum><header>Regulations</header><text>The
Secretary shall prescribe such regulations as may be necessary or appropriate
to carry out the purposes of this subsection. Such regulations may include
exemptions from the application of this
subsection.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H837D94619A3945D0A1CE05133AC06023"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
transactions entered into after the date of the enactment of this Act.</text>
</subsection></section><section id="HE99C88586C9542F386009EC284A54E80"><enum>222.</enum><header>Penalty for
understatements attributable to transactions lacking economic substance,
etc</header>
<subsection id="H37B456CCEC2044C98C401C8CD5B9189B"><enum>(a)</enum><header>In
general</header><text>Subchapter A of chapter 68 is amended by inserting after
section 6662A the following new section:</text>
<quoted-block changed="added" id="H15A9CFD739014103A8A985E5A5800590">
<section id="H90EA597EB377436AA2642E9551BDF5E1"><enum>6662B.</enum><header>Penalty for
understatements attributable to transactions lacking economic substance,
etc</header>
<subsection id="HD31706A5DABA4BDEAE8F6A249ED15450"><enum>(a)</enum><header>Imposition of
penalty</header><text>If a taxpayer has an noneconomic substance transaction
understatement for any taxable year, there shall be added to the tax an amount
equal to 40 percent of the amount of such understatement.</text>
</subsection><subsection id="H2581DA097D304181A5BF2D58D1460BBE"><enum>(b)</enum><header>Reduction of
penalty for disclosed transactions</header><text>Subsection (a) shall be
applied by substituting <quote>20 percent</quote> for <quote>40 percent</quote>
with respect to the portion of any noneconomic substance transaction
understatement with respect to which the relevant facts affecting the tax
treatment of the item are adequately disclosed in the return or a statement
attached to the return.</text>
</subsection><subsection id="HDB8B2EADAD17435A906BF17B99E6F092"><enum>(c)</enum><header>Noneconomic
substance transaction understatement</header><text>For purposes of this
section—</text>
<paragraph id="H6F5137FC6D5346F18D0255F98D375F52"><enum>(1)</enum><header>In
general</header><text>The term <term>noneconomic substance transaction
understatement</term> means any amount which would be an understatement under
section 6662A(b)(1) if section 6662A were applied by taking into account items
attributable to noneconomic substance transactions rather than items to which
section 6662A would apply without regard to this paragraph.</text>
</paragraph><paragraph id="HEC74D27A194D4955835A8A052FD23EFF"><enum>(2)</enum><header>Noneconomic
substance transaction</header><text>The term <term>noneconomic substance
transaction</term> means any transaction if—</text>
<subparagraph id="HF76BC3C81B9C417C97C73A51A8C88EBA"><enum>(A)</enum><text>there is a lack of
economic substance (within the meaning of section 7701(o)(1)) for the
transaction giving rise to the claimed benefit or the transaction was not
respected under section 7701(o)(2), or</text>
</subparagraph><subparagraph id="H2508D0E44D074DA0AF96D485CFEEC5E8"><enum>(B)</enum><text>the transaction
fails to meet the requirements of any similar rule of law.</text>
</subparagraph></paragraph></subsection><subsection id="H7DAFA8D9B92444248E701968E3AE76A1"><enum>(d)</enum><header>Rules applicable
to compromise of penalty</header>
<paragraph id="H7183DFF15D944D0AA7AED56BDD0869AE"><enum>(1)</enum><header>In
general</header><text>If the 1st letter of proposed deficiency which allows the
taxpayer an opportunity for administrative review in the Internal Revenue
Service Office of Appeals has been sent with respect to a penalty to which this
section applies, only the Commissioner of Internal Revenue may compromise all
or any portion of such penalty.</text>
</paragraph><paragraph id="HDFE2B0B9E3F4498D8A2D2A55792F23AE"><enum>(2)</enum><header>Applicable
rules</header><text>The rules of paragraphs (2) and (3) of section 6707A(d)
shall apply for purposes of paragraph (1).</text>
</paragraph></subsection><subsection id="H4C592289DF8744BAB2B6A7D634DC4E12"><enum>(e)</enum><header>Coordination
with other penalties</header><text>Except as otherwise provided in this part,
the penalty imposed by this section shall be in addition to any other penalty
imposed by this title.</text>
</subsection><subsection id="H7A068A5C5D9C42FAA7B6D83F1BE4DFD7"><enum>(f)</enum><header>Cross
references</header>
<toc changed="added" regeneration="no-regeneration">
<toc-entry level="paragraph">(1) For coordination
of penalty with understatements under section 6662 and other special rules, see
section 6662A(e).</toc-entry>
<toc-entry level="paragraph">(2) For reporting of
penalty imposed under this section to the Securities and Exchange Commission,
see section 6707A(e).</toc-entry>
</toc>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H6E71A553874347F19E62474DDCB2C1A1"><enum>(b)</enum><header>Coordination
with other understatements and penalties</header>
<paragraph id="H50EECA7AE8D2416CB3B740C24C548B6A"><enum>(1)</enum><text>The second
sentence of section 6662(d)(2)(A) is amended by inserting <quote>and without
regard to items with respect to which a penalty is imposed by section
6662B</quote> before the period at the end.</text>
</paragraph><paragraph id="HB1F51C2C49DB4863B385847A2498F8CA"><enum>(2)</enum><text>Subsection (e) of
section 6662A is amended—</text>
<subparagraph id="H9B60FF4EC7094487B16F3F33D9A6BAED"><enum>(A)</enum><text>in paragraph (1),
by inserting <quote>and noneconomic substance transaction
understatements</quote> after <quote>reportable transaction
understatements</quote> both places it appears,</text>
</subparagraph><subparagraph id="HC458A7B4742644EE9C8E0DA7C5ABE540"><enum>(B)</enum><text>in paragraph
(2)(A), by inserting <quote>and a noneconomic substance transaction
understatement</quote> after <quote>reportable transaction
understatement</quote>,</text>
</subparagraph><subparagraph id="H75395014DF134E05B3CC00CFEE2DD4F9"><enum>(C)</enum><text>in paragraph
(2)(B), by inserting <quote>6662B or</quote> before <quote>6663</quote>,</text>
</subparagraph><subparagraph id="H44A73A47FDCB47A8A792F5536F266EAD"><enum>(D)</enum><text>in paragraph
(2)(C)(i), by inserting <quote>or section 6662B</quote> before the period at
the end,</text>
</subparagraph><subparagraph id="HE68F0D94FC1547ABB741A0F26EB5C171"><enum>(E)</enum><text>in paragraph
(2)(C)(ii), by inserting <quote>and section 6662B</quote> after <quote>This
section</quote>,</text>
</subparagraph><subparagraph id="HD2A774681EA84C5481286367FBD5F260"><enum>(F)</enum><text>in paragraph (3),
by inserting <quote>or noneconomic substance transaction understatement</quote>
after <quote>reportable transaction understatement</quote>, and</text>
</subparagraph><subparagraph id="HE75E79C4E558468A82DB79820505BD74"><enum>(G)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block changed="added" id="H2516828382DA497F891614B2E34A5AB8">
<paragraph id="H8D802DB75E0943CAA27114F616E658B3"><enum>(4)</enum><header>Noneconomic
substance transaction understatement</header><text>For purposes of this
subsection, the term <term>noneconomic substance transaction
understatement</term> has the meaning given such term by section
6662B(c).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="H7DA1A77F0742486686DD48501CF2DDB5"><enum>(3)</enum><text>Subsection (e) of
section 6707A is amended—</text>
<subparagraph id="H0905B11143114556B40F5AC93D9FAF41"><enum>(A)</enum><text>by striking
<quote>or</quote> at the end of subparagraph (B), and</text>
</subparagraph><subparagraph id="H86EA7E412EE745B9BAEA948D422C29C4"><enum>(B)</enum><text>by striking
subparagraph (C) and inserting the following new subparagraphs:</text>
<quoted-block changed="added" id="HFB338C21468C4B7294A68A0A563BB511">
<subparagraph id="H00325046EA974E59B2B4D6F56BFF5BEF"><enum>(C)</enum><text>is required to pay
a penalty under section 6662B with respect to any noneconomic substance
transaction, or</text>
</subparagraph><subparagraph id="H2C9CD7CF4A5F4DFDAF5F651E1056CA82"><enum>(D)</enum><text>is required to pay
a penalty under section 6662(h) with respect to any transaction and would (but
for section 6662A(e)(2)(C)) have been subject to penalty under section 6662A at
a rate prescribed under section 6662A(c) or under section
6662B,</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection id="HCD78EB6173B648239EED6373BFD9CC83"><enum>(c)</enum><header>Clerical
amendment</header><text>The table of sections for part II of subchapter A of
chapter 68 is amended by inserting after the item relating to section 6662A the
following new item:</text>
<quoted-block changed="added" id="H8506A62356ED4E95977F388E36A41847" style="USC">
<toc changed="added" regeneration="no-regeneration">
<toc-entry level="section">Sec. 6662B. Penalty for
understatements attributable to transactions lacking economic substance,
etc.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HD25516F3A2D441E39BFB4E85C6E92932"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
transactions entered into after the date of the enactment of this Act.</text>
</subsection></section><section id="H61623EA5CAA347EF97389111513C54AB"><enum>223.</enum><header>Denial of
deduction for interest on underpayments attributable to noneconomic substance
transactions</header>
<subsection id="HEAE4A3E321D5414DA61C746987CBDF2C"><enum>(a)</enum><header>In
general</header><text>Section 163(m) (relating to interest on unpaid taxes
attributable to nondisclosed reportable transactions) is amended—</text>
<paragraph id="H70A3C86B4EFF40E2B3A68FE1B67192FB"><enum>(1)</enum><text>by striking
“attributable” and all that follows and inserting the following: “attributable
to—</text>
<quoted-block changed="added" id="HE7D0074CE24B4182AD0847882062EEF4">
<paragraph id="H889960CA50624452A7D21040EDA5B97C"><enum>(1)</enum><text>the portion of any
reportable transaction understatement (as defined in section 6662A(b)) with
respect to which the requirement of section 6664(d)(2)(A) is not met, or</text>
</paragraph><paragraph id="HFDA86BA0365E448B9D5129AEE2769708"><enum>(2)</enum><text>any noneconomic
substance transaction understatement (as defined in section
6662B(c)).</text>
</paragraph><after-quoted-block>,
and</after-quoted-block></quoted-block>
</paragraph><paragraph id="H611381043A464822B3E7C284CDB8CA84"><enum>(2)</enum><text>by inserting
<quote>And Noneconomic Substance Transactions</quote> in the heading thereof
after <quote>Transactions</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="H928277A33E704D53A95F9D867DFCE07B"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
transactions after the date of the enactment of this Act in taxable years
ending after such date.</text>
</subsection></section></subtitle><subtitle changed="added" id="H248717677D2243EFA0C3D45EFCD2E120"><enum>D</enum><header>Penalties and
fines</header>
<section id="H2ACDDD34E99043E48FCE083DD455565A"><enum>231.</enum><header>Denial of
deduction for certain fines, penalties, and other amounts</header>
<subsection id="H7CFCDB21A014475FBC6B252569195CF6"><enum>(a)</enum><header>In
general</header><text>Subsection (f) of section 162 (relating to trade or
business expenses) is amended to read as follows:</text>
<quoted-block changed="added" id="HD9074331A57945078984580209360EE1">
<subsection id="HF66125F189BC49A6BF61D244A0FB3CF2"><enum>(f)</enum><header>Fines,
penalties, and other amounts</header>
<paragraph id="HA8DCBF99783745BBBD931DFD97FB6125"><enum>(1)</enum><header>In
General</header><text>Except as provided in paragraph (2), no deduction
otherwise allowable shall be allowed under this chapter for any amount paid or
incurred (whether by suit, agreement, or otherwise) to, or at the direction of,
a government or entity described in paragraph (4) in relation to the violation
of any law or the investigation or inquiry by such government or entity into
the potential violation of any law.</text>
</paragraph><paragraph id="HC21EF18E23854CBD93646964E650DC1F"><enum>(2)</enum><header>Exception for
amounts constituting restitution or paid to come into compliance with
law</header><text>Paragraph (1) shall not apply to any amount which—</text>
<subparagraph id="HCDD0D19195C94941A524CE5035C26038"><enum>(A)</enum><text>the taxpayer
establishes—</text>
<clause id="H8D8DAAB635D44750810512981CD70C0C"><enum>(i)</enum><text>constitutes
restitution (including remediation of property) for damage or harm caused by or
which may be caused by the violation of any law or the potential violation of
any law, or</text>
</clause><clause id="H0E2ECBA96FBE44A68BCD456AD635F491"><enum>(ii)</enum><text>is paid to come
into compliance with any law which was violated or involved in the
investigation or inquiry, and</text>
</clause></subparagraph><subparagraph id="H2ED08E8A7D694B8C9CF83D569E13BC80"><enum>(B)</enum><text>is identified as
restitution or as an amount paid to come into compliance with the law, as the
case may be, in the court order or settlement agreement.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">Identification pursuant to
subparagraph (B) alone shall not satisfy the requirement under subparagraph
(A). This paragraph shall not apply to any amount paid or incurred as
reimbursement to the government or entity for the costs of any investigation or
litigation.</continuation-text></paragraph><paragraph id="HE71FE24882934EF6950AF9D0B45FB57C"><enum>(3)</enum><header>Exception for
amounts paid or incurred as the result of certain court
orders</header><text>Paragraph (1) shall not apply to any amount paid or
incurred by order of a court in a suit in which no government or entity
described in paragraph (4) is a party.</text>
</paragraph><paragraph id="HEB2A52E5EA7B4D0FA03D9EDC24B9640C"><enum>(4)</enum><header>Certain
nongovernmental regulatory entities</header><text>An entity is described in
this paragraph if it is—</text>
<subparagraph id="HB4584801616C4AFEA185F2AFFF50A2B2"><enum>(A)</enum><text>a nongovernmental
entity which exercises self-regulatory powers (including imposing sanctions) in
connection with a qualified board or exchange (as defined in section
1256(g)(7)), or</text>
</subparagraph><subparagraph id="HFCDC84A4A9294A54AB62BEA210ADFB21"><enum>(B)</enum><text>to the extent
provided in regulations, a nongovernmental entity which exercises
self-regulatory powers (including imposing sanctions) as part of performing an
essential governmental function.</text>
</subparagraph></paragraph><paragraph id="H69C0EE962AD94E25908E9CDC285355AE"><enum>(5)</enum><header>Exception for
taxes due</header><text>Paragraph (1) shall not apply to any amount paid or
incurred as taxes
due.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HFC3864D41DB041CA841BDDC14F7D3D05"><enum>(b)</enum><header>Reporting of
deductible amounts</header>
<paragraph id="H57A4C70815AC4D99A88944C38DEE21E8"><enum>(1)</enum><header>In
General</header><text>Subpart B of part III of subchapter A of chapter 61, as
amended by this Act, is amended by adding at the end the following new
section:</text>
<quoted-block changed="added" id="H2FEB44AEC6284ADD8E8797A51F94E8F4">
<section id="H471BB2AE40174CAE959CB75760717980"><enum>6050V.</enum><header>Information
with respect to certain fines, penalties, and other amounts</header>
<subsection id="H27E93FAA32604A948D8EE8D9194E298C"><enum>(a)</enum><header>Requirement of
reporting</header>
<paragraph id="H77078DFB434B4986B65A86657BCAC18B"><enum>(1)</enum><header>In
General</header><text>The appropriate official of any government or entity
which is described in section 162(f)(4) which is involved in a suit or
agreement described in paragraph (2) shall make a return in such form as
determined by the Secretary setting forth—</text>
<subparagraph id="H730F5889066D4E3CB889ADA9E7DD657C"><enum>(A)</enum><text>the amount
required to be paid as a result of the suit or agreement to which paragraph (1)
of section 162(f) applies,</text>
</subparagraph><subparagraph id="H6984C0A568924660BDB761395459F8FE"><enum>(B)</enum><text>any amount
required to be paid as a result of the suit or agreement which constitutes
restitution or remediation of property, and</text>
</subparagraph><subparagraph id="H9FCC8C6D18324CAB8BFCE8497A135CF5"><enum>(C)</enum><text>any amount
required to be paid as a result of the suit or agreement for the purpose of
coming into compliance with any law which was violated or involved in the
investigation or inquiry.</text>
</subparagraph></paragraph><paragraph id="H4A29B831A30E4727953C2FF63B61E3CE"><enum>(2)</enum><header>Suit or
agreement described</header>
<subparagraph id="H704CE1DEA55540E58B73CD3A541AEAEA"><enum>(A)</enum><header>In
general</header><text>A suit or agreement is described in this paragraph
if—</text>
<clause id="HA16407EEEF03489D84798CFBAB0E1AF3"><enum>(i)</enum><text>it is—</text>
<subclause id="H38E6122C161A44508307B161CC455001"><enum>(I)</enum><text>a suit with
respect to a violation of any law over which the government or entity has
authority and with respect to which there has been a court order, or</text>
</subclause><subclause id="HCDE89A0323F44094A997EC0D9EEEBC73"><enum>(II)</enum><text>an agreement
which is entered into with respect to a violation of any law over which the
government or entity has authority, or with respect to an investigation or
inquiry by the government or entity into the potential violation of any law
over which such government or entity has authority, and</text>
</subclause></clause><clause id="HE2A67BEC83F54F558B3460496A173AEF"><enum>(ii)</enum><text>the aggregate
amount involved in all court orders and agreements with respect to the
violation, investigation, or inquiry is $600 or more.</text>
</clause></subparagraph><subparagraph id="HA1494594FEAD45CC979AB0A022D17940"><enum>(B)</enum><header>Adjustment of
reporting threshold</header><text>The Secretary may adjust the $600 amount in
subparagraph (A)(ii) as necessary in order to ensure the efficient
administration of the internal revenue laws.</text>
</subparagraph></paragraph><paragraph id="H68CF0A0567D1463093E4192006711F06"><enum>(3)</enum><header>Time of
filing</header><text>The return required under this subsection shall be filed
not later than—</text>
<subparagraph id="H4B3AE4522DCC4905BB6F664746385A18"><enum>(A)</enum><text>30 days after the
date on which a court order is issued with respect to the suit or the date the
agreement is entered into, as the case may be, or</text>
</subparagraph><subparagraph id="HD31A5669B2054FD1B79C7EDC056AABC8"><enum>(B)</enum><text>the date specified
Secretary.</text>
</subparagraph></paragraph></subsection><subsection id="H627B205407FD4E758F925C35D9002A4D"><enum>(b)</enum><header>Statements to be
furnished to individuals involved in the settlement</header><text>Every person
required to make a return under subsection (a) shall furnish to each person who
is a party to the suit or agreement a written statement showing—</text>
<paragraph id="HCDBA0A52A8234996BBD5E92236D990EC"><enum>(1)</enum><text>the name of the
government or entity, and</text>
</paragraph><paragraph id="H13B5A80B1C4C476CA486B89600B191BE"><enum>(2)</enum><text>the information
supplied to the Secretary under subsection (a)(1).</text>
</paragraph><continuation-text continuation-text-level="subsection">The written statement required under
the preceding sentence shall be furnished to the person at the same time the
government or entity provides the Secretary with the information required under
subsection (a).</continuation-text></subsection><subsection id="H3CEE14E9D1454162934CF128D8875D84"><enum>(c)</enum><header>Appropriate
official defined</header><text>For purposes of this section, the term
<term>appropriate official</term> means the officer or employee having control
of the suit, investigation, or inquiry or the person appropriately designated
for purposes of this
section.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HFFCD5FE0AF014196A8092EC90DD53F41"><enum>(2)</enum><header>Conforming
amendment</header><text>The table of sections for subpart B of part III of
subchapter A of chapter 61, as amended by this Act, is amended by adding at the
end the following new item:</text>
<quoted-block changed="added" id="H329CA9167CBD45AE8B6086BF78ACEA6C" style="USC">
<toc changed="added" regeneration="no-regeneration">
<toc-entry level="section">Sec. 6050V. Information
with respect to certain fines, penalties, and other
amounts.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HE376790569A04C93BCCFC8CA50652FE2"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to amounts
paid or incurred on or after the date of the enactment of this Act, except that
such amendments shall not apply to amounts paid or incurred under any binding
order or agreement entered into before such date. Such exception shall not
apply to an order or agreement requiring court approval unless the approval was
obtained before such date.</text>
</subsection></section><section id="H6DEAE466F4BF4F739444BB61C59756BE"><enum>232.</enum><header>Denial of
deduction for punitive damages</header>
<subsection id="H4557806D3C274D08A5778DEBA9184935"><enum>(a)</enum><header>Disallowance of
deduction</header>
<paragraph id="HC240BB290B634624829A446291282F54"><enum>(1)</enum><header>In
General</header><text>Section 162(g) (relating to treble damage payments under
the antitrust laws) is amended—</text>
<subparagraph id="HD99B81D2134E463D961B282304C69A73"><enum>(A)</enum><text>by redesignating
paragraphs (1) and (2) as subparagraphs (A) and (B), respectively,</text>
</subparagraph><subparagraph id="H6E0E010256F446C0BC2E986AF922A5FB"><enum>(B)</enum><text>by striking
<quote>If</quote> and inserting:</text>
<quoted-block changed="added" id="HAC7D600235FC4929A06BDBB74CEDA595">
<paragraph id="HEA7500EE791B49AF8A3B871C265E24D3"><enum>(1)</enum><header>Treble
damages</header><text>If</text>
</paragraph><after-quoted-block>,
and</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="HB48CA3AE69B7475D840A13E76526F559"><enum>(C)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block changed="added" id="HCA3F8D971ED74B1AB72E45B1694A9039">
<paragraph id="HB7EDF11DE939496A95C76D77D319F00D"><enum>(2)</enum><header>Punitive
damages</header><text>No deduction shall be allowed under this chapter for any
amount paid or incurred for punitive damages in connection with any judgment
in, or settlement of, any action. This paragraph shall not apply to punitive
damages described in section
104(c).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="H0CECFBA026EF439198D2087413CF96B8"><enum>(2)</enum><header>Conforming
amendment</header><text>The heading for section 162(g) is amended by inserting
<quote>Or Punitive Damages</quote> after <quote>Laws</quote>.</text>
</paragraph></subsection><subsection id="HD511DADCD94E4739A99F8D87D62F268C"><enum>(b)</enum><header>Inclusion in
income of punitive damages paid by insurer or otherwise</header>
<paragraph id="H4530008525A541F8AF77FFE41A220ABC"><enum>(1)</enum><header>In
general</header><text>Part II of subchapter B of chapter 1 (relating to items
specifically included in gross income) is amended by adding at the end the
following new section:</text>
<quoted-block changed="added" id="H8CF4ADF091F7437EA86FA9413BFC0587">
<section id="HBA61816B776C470AB6CAC62CF244BECA"><enum>91.</enum><header>Punitive damages
compensated by insurance or otherwise</header><text display-inline="no-display-inline">Gross income shall include any amount paid
to or on behalf of a taxpayer as insurance or otherwise by reason of the
taxpayer’s liability (or agreement) to pay punitive
damages.</text>
</section><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H0FEA0F0BE1C447FE8418111933064E29"><enum>(2)</enum><header>Reporting
requirements</header><text>Section 6041 (relating to information at source) is
amended by adding at the end the following new subsection:</text>
<quoted-block changed="added" id="H97BF53E937FF4E6A889E7951A7B6C321">
<subsection id="HE99ABB1BE196473EB94317D1FDEF7A3E"><enum>(f)</enum><header>Section to apply
to punitive damages compensation</header><text>This section shall apply to
payments by a person to or on behalf of another person as insurance or
otherwise by reason of the other person’s liability (or agreement) to pay
punitive
damages.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H1B3F8F6877C248DFBD25E76481B32F12"><enum>(3)</enum><header>Conforming
amendment</header><text>The table of sections for part II of subchapter B of
chapter 1 is amended by adding at the end the following new item:</text>
<quoted-block changed="added" id="H1F50DB9DF9D9472C8FBA30F509B722D7" style="USC">
<toc changed="added" regeneration="no-regeneration">
<toc-entry level="section">Sec. 91. Punitive damages
compensated by insurance or
otherwise.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="H36AD387C61E04559B6D212AFCCA07BDD"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to damages
paid or incurred on or after the date of the enactment of this Act.</text>
</subsection></section></subtitle><subtitle id="id62B94D03458B436DA1D435E4E7832C37"><enum>E</enum><header>Duty
surcharge</header>
<section id="id1914C9299FF8452CA42AB97F428D87CB"><enum>241.</enum><header>Temporary
emergency duty surcharge</header>
<subsection id="id2024C4F45E1F489AB5A7A473DC822EFF"><enum>(a)</enum><header>In
general</header><text>Notwithstanding any other provision of law, in addition
to any other duty, there is hereby imposed a duty on the entry of any good
during the 2-year period beginning on the day that is 15 days after the date of
the enactment of this Act.</text>
</subsection><subsection id="id78C8C53D28E84519AF328F88DAA428C9"><enum>(b)</enum><header>Rate of
duty</header><text>The rate of duty imposed by subsection (a) is 2 percent ad
valorem.</text>
</subsection><subsection id="id489B262BF5994161A942F5F22E08724D"><enum>(c)</enum><header>Entry</header><text>For
purposes of this section, the term <term>entry</term> means entry, or
withdrawal from warehouse, for consumption in the customs territory of the
United States.</text>
</subsection></section></subtitle><subtitle id="idA0B3FF6520ED474193FA8C077A761B4B"><enum>F</enum><header>Other
provisions</header>
<section id="idDABC757628584F66BFEED73DF5CE83F1" section-type="subsequent-section"><enum>251.</enum><header>Offshore oil and gas
leasing in 181 Area of Gulf of Mexico</header>
<subsection id="idEF3C234C52E541C682A4AE8708B44734"><enum>(a)</enum><header>Definitions</header><text>In
this section:</text>
<paragraph id="id3E9ED27CD1E94E14963D8C5A1A96A9DF"><enum>(1)</enum><header>181
Area</header><text>The term <term>181 Area</term> means the area identified in
map 15, page 58, of the Proposed Final Outer Continental Shelf Oil and Gas
Leasing Program for 1997–2002 of the Minerals Management Service.</text>
</paragraph><paragraph id="id49D87A1B14834684AE3612825B60E8C5"><enum>(2)</enum><header>Secretary</header><text>The
term <term>Secretary</term> means the Secretary of the Interior, acting through
the Minerals Management Service.</text>
</paragraph></subsection><subsection id="id9E2AF07F23C9403D861B8FAD2D992010"><enum>(b)</enum><header>Lease
sale</header><text>Except as otherwise provided in this section, the Secretary
shall offer the 181 Area for oil and gas leasing pursuant to the Outer
Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) as soon as practicable,
but not later than 1 year, after the date of enactment of this Act.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id4F1E99FC32534005848F7F5603D821C3"><enum>(c)</enum><header>Leasing
Program</header><text>The 181 Area shall be offered for lease under this
section notwithstanding the omission of the 181 Area from any outer Continental
Shelf leasing program under section 18 of the Outer Continental Shelf Lands Act
(43 U.S.C. 1344).</text>
</subsection></section><section changed="not-changed" id="id90DEF6C9600E455D9D63DB994D9534F7"><enum>252.</enum><header>Transfer of
surplus funds of Federal Reserve Banks to Treasury</header><text display-inline="no-display-inline">Section
7 of the Federal Reserve Act (12 U.S.C. 789 et seq.) is amended by adding at
the end the following:</text>
<quoted-block display-inline="no-display-inline" id="id28EBCC1591A64386A68BB1ED549A356D" style="OLC">
<subsection id="id029E58099204461D9570ABFF0DDAB453"><enum>(d)</enum><header>Additional
Transfers for Fiscal Year 2008</header>
<paragraph id="id6AEECA65FFAA4EE4B499D4B0F89E2159"><enum>(1)</enum><header>In
general</header><text>The Federal reserve banks shall transfer from the surplus
funds of such banks to the Board for transfer to the Secretary of the Treasury
for deposit in the General Fund of the Treasury, a total amount of
$13,000,000,000 for fiscal year 2008.</text>
</paragraph><paragraph id="id1A8E2CD51D5B41E49BC41EB1463B523B"><enum>(2)</enum><header>Allocation by
fed</header><text>Of the total amount required to be paid by the Federal
reserve banks under paragraph (1) for fiscal year 2008, the Board shall
determine the amount that each such bank shall pay in such fiscal year.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id02E5A17B53AC4683BCE145BFF5BCF2C0"><enum>(3)</enum><header>Replenishment
of surplus fund prohibited</header><text>No Federal reserve bank may replenish
the surplus fund of such bank by the amount of any transfer by such bank under
paragraph (1) during fiscal year
2008.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="id1957561CF8394FE5A2557A107D3FB15E"><enum>253.</enum><header>Permanent
extension of FCC authority to auction licenses to use radio
spectrum</header><text display-inline="no-display-inline">Section 309(j)(11) of
the Communications Act of 1934 (47 U.S.C. 309(j)(11)) is repealed.</text>
</section><section id="idD78D74041C744CF1BCDF00308A1A316A"><enum>254.</enum><header>Travel between
the United States and Cuba</header>
<subsection id="id34D6DCDDBFC848DD848436784CA945E2"><enum>(a)</enum><header>Short
title</header><text>This section may be cited as the <quote><short-title>Freedom to Travel to Cuba Act of
2007</short-title></quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id443EEBF69ECC4CF9991DFB2406A8478B"><enum>(b)</enum><header>Travel to
cuba</header>
<paragraph id="idCB1243ECD1E1413EA0AFB9EA0A7D8E01"><enum>(1)</enum><header>Freedom of
Travel for United States Citizens and Legal
Residents</header><text>Notwithstanding any other provision of law, subject to
subsection (c), the President shall not regulate or prohibit, directly or
indirectly, travel to or from Cuba by a United States citizen or legal
resident, or any of the transactions incident to such travel that are set forth
in paragraph (2).</text>
</paragraph><paragraph id="id7BE22B127ED64883A98BECC82E54470D"><enum>(2)</enum><header>Transactions
Incident to Travel</header><text>The transactions referred to in paragraph (1)
are—</text>
<subparagraph id="idDAC7724DC38B4C818FD44EB487744E8B"><enum>(A)</enum><text>any transactions
ordinarily incident to travel to or from Cuba, including the importation into
Cuba or the United States of accompanied baggage for personal use only;</text>
</subparagraph><subparagraph id="id90BB04346E5A4FA794C554A6A8A374ED"><enum>(B)</enum><text>any transactions
ordinarily incident to travel to or from Cuba, or maintenance within Cuba,
including the payment of living expenses and the acquisition of goods or
services for personal use;</text>
</subparagraph><subparagraph id="idB3D96D314E82498CB6C358FF88FFABF5"><enum>(C)</enum><text>any transactions
ordinarily incident to the arrangement, promotion, or facilitation of travel
to, from, or within Cuba;</text>
</subparagraph><subparagraph id="id29B94A5C4D6943D8ABD3C0E19E288DAE"><enum>(D)</enum><text>any transactions
incident to nonscheduled air, sea, or land voyages, except that this paragraph
does not authorize the carriage of articles into Cuba or the United States
other than accompanied baggage; and</text>
</subparagraph><subparagraph id="idCA23E2E6B2BC43139F8CA94BC0A3AF3D"><enum>(E)</enum><text>normal banking
transactions incident to the activities described in the preceding provisions
of this subsection, including the issuance, clearing, processing, or payment of
checks, drafts, traveler’s checks, credit or debit card instruments, or similar
instruments.</text>
</subparagraph></paragraph></subsection><subsection id="id27B604F305F54C43B0F45AED4E44C616"><enum>(c)</enum><header>Exceptions</header>
<paragraph id="id0459744073DA4AEBB079F29E05F3D2EC"><enum>(1)</enum><header>Special
Circumstances</header><text>The restrictions on authority contained in
subsection (b) do not apply in a case in which the United States is at war with
Cuba, armed hostilities between the two countries are in progress, or there is
imminent danger to the public health or the physical safety of United States
citizens or legal residents traveling to or from Cuba.</text>
</paragraph><paragraph id="id5B8A536702D148D5AEDA239D3A4D3608"><enum>(2)</enum><header>Importation of
Goods for Personal Consumption</header><text>Subsection (b) does not authorize
the importation into the United States of any goods for personal consumption
acquired in Cuba.</text>
</paragraph></subsection><subsection id="id54BE7F20E6C1446E8F1EC051F0360F06"><enum>(d)</enum><header>Applicability</header><text display-inline="yes-display-inline">This section applies to actions taken by
the President before the date of the enactment of this Act that are in effect
on such date of enactment, and to actions taken on or after such date.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idF86ADF60BA1E4D429F22A2DC95AA42C7"><enum>(e)</enum><header>Inapplicability
of other provisions</header><text display-inline="yes-display-inline">This
section applies notwithstanding section 102(h) of the Cuban Liberty and
Democratic Solidarity (LIBERTAD) Act of 1996 (22 U.S.C. 6032(h)) and section
910(b) of the Trade Sanctions Reform and Export Enhancement Act of 2000 (22
U.S.C. 7209(b)).</text>
</subsection></section></subtitle>