[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4038 Introduced in Senate (IS)]
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119th CONGRESS
2d Session
S. 4038
To exempt small business concerns from duties imposed by the President
under section 122 of the Trade Act of 1974 and to prevent price gouging
with respect to goods subject to such duties.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 10, 2026
Mr. Markey (for himself, Ms. Hirono, Mr. Schumer, Mrs. Gillibrand, Mr.
Hickenlooper, Ms. Klobuchar, Mr. Van Hollen, and Ms. Rosen) introduced
the following bill; which was read twice and referred to the Committee
on Finance
_______________________________________________________________________
A BILL
To exempt small business concerns from duties imposed by the President
under section 122 of the Trade Act of 1974 and to prevent price gouging
with respect to goods subject to such duties.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
The Act may be cited as the ``Small Business Liberation 2.0 Act''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Commission.--The term ``Commission'' means the Federal
Trade Commission.
(2) Component.--The term ``component'' means a good that is
offered for sale to consumers through incorporation into a
final good.
(3) Covered duty.--The term ``covered duty'' means a duty
imposed under the authority provided by section 122 of the
Trade Act of 1974 (19 U.S.C. 2132).
(4) Covered good.--The term ``covered good'' means the
following:
(A) A final good or a component that is subject to
a covered duty imposed on or after January 20, 2026.
(B) A good that is assembled, in whole or in part,
in the United States and that includes a component
described in subparagraph (A).
(C) A final good or a component with respect to
which there is a planned duty.
(D) A good that is assembled, in whole or in part,
in the United States and that includes a component
described in subparagraph (C).
(5) Duty-related shock date.--
(A) In general.--The term ``duty-related shock
date'' means any date if, during the 30-day period
preceding that date--
(i) covered duties with respect to goods
classifiable under 5 or more subheadings of the
Harmonized Tariff Schedule of the United States
took effect; or
(ii) planned duties with respect to goods
classifiable under 5 or more such subheadings
were demonstrated by a written or spoken
statement.
(B) Consideration of number of trading partners.--
Subparagraph (A) applies without regard to the number
of trading partners to which a covered duty or planned
duty is applicable.
(6) Final good.--The term ``final good'' means a good that
does not require any further assembly to be ready for sale to
consumers.
(7) Good.--The term ``good'' means any good offered for
sale in commerce.
(8) Planned duty.--The term ``planned duty'' means a
covered duty that is intended to be imposed or increased, as
demonstrated by a written or spoken statement by the President,
the United States Trade Representative, the Secretary of
Commerce, or another senior Federal official determined
appropriate by the Commission, including by means of a press
release, a comment at a press conference, meeting, or public
event, or any other public communication.
(9) Small business concern.--The term ``small business
concern'' has the meaning given that term in section 3 of the
Small Business Act (15 U.S.C. 632).
(10) State.--The term ``State'' means each of the several
States, the District of Columbia, each commonwealth, territory,
or possession of the United States, and each federally
recognized Indian Tribe.
(11) Ultimate parent entity.--The term ``ultimate parent
entity'' has the meaning given such term in section 801.1 of
title 16, Code of Federal Regulations (or any successor
regulation).
SEC. 3. EXEMPTION AND REFUNDS FOR SMALL BUSINESS CONCERNS FROM DUTIES
UNDER BALANCE-OF-PAYMENTS AUTHORITY.
(a) Exemption.--A covered duty shall not apply with respect to
goods imported by or for the use of a small business concern.
(b) Refunds.--Not later than 90 days after the date of the
enactment of this Act, the President shall refund the amount of any
covered duties paid on goods imported by or for the use of a small
business concern.
SEC. 4. PREVENTION OF PRICE GOUGING WITH RESPECT TO GOODS SUBJECT TO
DUTIES UNDER BALANCE-OF-PAYMENTS AUTHORITY.
(a) Prohibition on Price Gouging.--
(1) In general.--No person may sell or offer for sale in
the United States a covered good at an unreasonably high price
during the 5-year period that follows the date on which--
(A) a covered duty with respect to the good took
effect or was increased; or
(B) a planned duty with respect to the good was
demonstrated by a written or spoken statement.
(2) Role in supply chain immaterial.--The prohibition under
paragraph (1) applies without regard to the position of a
person in a supply chain or distribution network.
(3) Unreasonably high price.--
(A) In general.--For purposes of this subsection, a
person sells or offers for sale a covered good at an
unreasonably high price if the person--
(i) has raised the price of a covered good
that is a final good by more than the amount
of--
(I) the costs directly generated by
the imposition of or an increase in a
covered duty with respect to the good;
and
(II) additional costs incurred by
the person in providing the good that
demonstrate that the covered duty was
not used by the person as a pretext for
a price increase; or
(ii) has raised the price of a covered good
that is or includes a component by more than
the amount of--
(I) the costs directly generated by
the imposition of or an increase in a
covered duty with respect to the
component; and
(II) additional costs incurred by
the person in providing the good that
demonstrate that the covered duty was
not used by the person as a pretext for
a price increase.
(B) Planned duties.--With respect to a covered
good, no costs may be determined to be directly
generated by the imposition of a covered duty with
respect to the good before the date on which the
covered duty takes effect with respect to the good.
(C) Baseline price determinations.--For purposes of
this paragraph, the price of a covered good before the
date on which any covered duty or planned duty
applicable to the good took effect or was demonstrated
by a written or spoken statement, as the case may be,
shall be determined by reference to the average price
of the good during the 180-day period preceding that
date.
(b) Exemption for Small Businesses.--Subsection (a) does not apply
to the sale, or offering for sale, of a covered good by a small
business concern.
(c) Presumption of Violation.--
(1) In general.--With respect to any duty-related shock
date, a person shall be presumed to be in violation of
subsection (a) if a preponderance of the evidence demonstrates
that the person--
(A) has unfair leverage (as described in paragraph
(3)); and
(B) sold or offered for sale on that date a covered
good at a price that was greater than the average price
of the good during the 180-day period preceding the
date on which the most recent covered duty or planned
duty applicable to the good took effect or was
demonstrated by a written or spoken statement, as the
case may be.
(2) Rebuttal.--A person may rebut a presumption under
paragraph (1) if the person demonstrates by clear and
convincing evidence that the relevant increase in the price of
a covered good is attributable, in full, to--
(A) costs directly generated by the imposition of
or an increase in a covered duty with respect to the
good; and
(B) additional costs incurred by the person in
providing the good that demonstrate that the covered
duty was not used by the person as a pretext for such
increase.
(3) Unfair leverage.--
(A) Characteristics.--For purposes of this
subsection, a person has unfair leverage if the person
or the ultimate parent entity of the person--
(i) is not a small business concern; or
(ii) satisfies another characteristic set
forth in a regulation promulgated by the
Commission with respect to determining unfair
leverage.
(B) Inflation adjustment.--In January of the first
year beginning after the date of the enactment of this
Act, and annually thereafter, the Commission shall
adjust the amount specified in subparagraph (A)(i) by
the percentage change in the Consumer Price Index for
All Urban Consumers published by the Bureau of Labor
Statistics with respect to the 12-month period
preceding the date of such adjustment.
(C) Considerations.--In promulgating regulations
under subparagraph (A)(ii), the Commission shall
consider the capacity of a person to do the following:
(i) Absorb, in whole or in part, costs
directly generated by a covered duty.
(ii) Increase production, in the United
States, of a good that is identical or
substantially similar to a covered good.
(d) Regulations.--
(1) In general.--The Commission may promulgate, in
accordance with section 553 of title 5, United States Code,
such regulations as may be necessary to carry out this section.
(2) Interagency consultation.--The Commission, in
promulgating regulations under this subsection, shall consult
with the United States Trade Representative, the United States
International Trade Commission, the Commissioner of U.S.
Customs and Border Protection, and the Commissioner of the
Bureau of Labor Statistics.
(e) Enforcement by Commission.--
(1) Unfair or deceptive acts or practices.--A violation of
this section or a regulation promulgated under this section
shall be treated as a violation of a regulation under section
18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C.
57a(a)(1)(B)) regarding unfair or deceptive acts or practices.
(2) Powers of commission.--The Commission shall enforce
this section and the regulations promulgated under this section
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 Federal Trade Commission Act (15 U.S.C.
41 et seq.) were incorporated into and made a part of this
section. Any person who violates this section or a regulation
promulgated under this section shall be subject to the
penalties and entitled to the privileges and immunities
provided in the Federal Trade Commission Act.
(3) Authority preserved.--Nothing in this section may be
construed to limit the authority of the Commission under any
other provision of law.
(f) Actions by States.--
(1) In general.--In any case in which the attorney general
of a State, or an official or agency of a State, has reason to
believe that an interest of the residents of such State has
been or is threatened or adversely affected by an act or
practice in violation of this section or a regulation
promulgated under this section, the State, as parens patriae,
may bring a civil action on behalf of the residents of the
State in an appropriate State court or an appropriate district
court of the United States to--
(A) enjoin such act or practice;
(B) enforce compliance with this section or such
regulation;
(C) obtain damages, restitution, or other
compensation on behalf of residents of the State; or
(D) obtain such other legal and equitable relief as
the court may consider to be appropriate.
(2) Notice.--Before filing an action under this subsection,
the attorney general, official, or agency of the State involved
shall provide to the Commission a written notice of such action
and a copy of the complaint for such action. If the attorney
general, official, or agency determines that it is not feasible
to provide the notice described in this paragraph before the
filing of the action, the attorney general, official, or agency
shall provide written notice of the action and a copy of the
complaint to the Commission immediately upon the filing of the
action.
(3) Authority of commission.--On receiving notice under
paragraph (2) of an action under this subsection, the
Commission shall have the right--
(A) to intervene in the action;
(B) upon so intervening, to be heard on all matters
arising therein; and
(C) to file petitions for appeal.
(4) Rules of construction.--
(A) Exercising of certain powers.--For purposes of
bringing a civil action under this subsection, nothing
in this Act may be construed to prevent an attorney
general, official, or agency of a State from exercising
the powers conferred on the attorney general, official,
or agency by the laws of such State to conduct
investigations, administer oaths and affirmations, or
compel the attendance of witnesses or the production of
documentary and other evidence.
(B) State proceedings.--Nothing in this subsection
may be construed to prohibit an authorized official of
a State from initiating or continuing any proceeding in
a court of the State for a violation of any civil or
criminal law of the State.
(g) Effect on Other Laws.--Nothing in this section may be construed
to preempt or otherwise affect any State or local law.
(h) Reporting by Consumers and Related Investigations.--
(1) In general.--Not later than 180 days after the date of
the enactment of this Act, the Commission shall establish a
mechanism for consumers to report to the Commission potential
violations of this section.
(2) Requirements.--The mechanism established under
paragraph (1) shall allow a consumer to report a potential
violation by a variety of means, including the following:
(A) A telephone number.
(B) A mailing address.
(C) A website.
(3) Consideration.--Not later than 180 days after the date
of the enactment of this Act, the Commission shall promulgate
regulations establishing, and providing a detailed description
of, the process by which the Commission shall consider reports
provided through the mechanism established under paragraph (1)
and, if applicable, open investigations into potential
violations of this section.
(4) Rule of construction.--Nothing in this subsection may
be construed to preclude the Commission from unilaterally
initiating an investigation of a potential violation of this
section.
SEC. 5. REPORTS.
(a) International Trade Commission and Bureau of Labor Statistics
Report.--
(1) In general.--Not later than 1 year after the date of
the enactment of this Act, and annually thereafter, the United
States International Trade Commission and the Commissioner of
the Bureau of Labor Statistics shall jointly submit to
Congress, and make available to the public, a report on the
prices of goods sold by any entity that is not a small business
concern, with a focus on identifying changes in the prices of
covered goods.
(2) Sufficiency of surveys.--
(A) In general.--Before submitting the first report
required by paragraph (1), the Commissioner of the
Bureau of Labor Statistics shall identify whether the
existing surveys of the Bureau collect sufficiently
granular data with respect to pricing decisions and
consumer prices to effectively identify price increases
for covered goods.
(B) Development of new surveys.--If the
Commissioner determines under subparagraph (A) that the
surveys of the Bureau are insufficient, the Bureau
shall develop and include in such surveys new questions
to collect the data necessary for the report required
under paragraph (1).
(b) Federal Trade Commission Report.--Not later than 1 year after
the date of the enactment of this Act, and annually thereafter, the
Commission shall submit to Congress, and make available to the public,
a report on the enforcement activities of the Commission under this
Act, which shall include an assessment of the impact of the enforcement
of this Act on consumer prices, both for covered goods and all goods.
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