[Congressional Record Volume 163, Number 126 (Wednesday, July 26, 2017)]
[Senate]
[Pages S4317-S4318]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 321. Mr. NELSON submitted an amendment intended to be proposed by 
him to the bill H.R. 1628, to provide for reconciliation pursuant to 
title II of the concurrent resolution on the budget for fiscal year 
2017; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. ____. HEALTHCARE FRAUD REMOVAL.

       (a) 10-year Prohibition on Deduction of Trade or Business 
     Expenses for Businesses Engaged in Fraud or Illegal 
     Transactions.--Subsection (c) of section 162 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new paragraph:
       ``(4) 10-year prohibition on deduction of trade or business 
     expenses.--In the case of a taxpayer subject to a criminal 
     penalty for

[[Page S4318]]

     engaging in fraud, an illegal bribe or kickback, or any other 
     illegal transaction (as such term is defined by the 
     Secretary) under any law of the United States, or under any 
     law of a State (but only if such State law is generally 
     enforced), no deduction shall be allowed under subsection (a) 
     for any taxable year during the 10-year period subsequent to 
     the date on which such criminal penalty was imposed.''.
       (b) Health Care Fraud Penalties.--Section 1347(a) of title 
     18, United States Code, is amended, in the undesignated 
     matter following paragraph (2)--
       (1) by striking ``10 years'' and inserting ``15 years''; 
     and
       (2) by striking ``20 years'' and inserting ``25 years''.
       (c) Establishment of Health Care Fraud Excise Tax.--
       (1) Health care fraud excise tax.--
       (A) In general.--Subchapter C of chapter 100 of subtitle K 
     of the Internal Revenue Code of 1986 is amended by adding at 
     the end the following new section:

     ``SEC. 9835. HEALTH CARE FRAUD EXCISE TAX.

       ``(a) In General.--In the case of any payment relating to 
     health care benefits, items, or services which is made by 
     health insurance issuer (as defined in section 9832(c)(2)) to 
     a person engaged in a violation of section 1347(a) of title 
     18, United States Code, there is hereby imposed a tax equal 
     to 20 percent of such payment.
       ``(b) No Knowledge Requirement.--With respect the tax 
     imposed under subsection (a), the health insurance issuer 
     shall not be required to have knowledge of the violation 
     under section 1347(a) of title 18, United States Code.''.
       (B) Clerical amendment.--The table of sections for such 
     subchapter is amended by adding at the end the following new 
     item:

``Sec. 9835. Health care fraud excise tax.''.
       (C) Effective date.--The amendments made by this paragraph 
     shall apply to payments made after the date of the enactment 
     of this Act.
       (2) Health care fraud trust fund.--
       (A) In general.--Subchapter A of chapter 98 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following section:

     ``SEC. 9512. HEALTH CARE FRAUD TRUST FUND.

       ``(a) Creation of Trust Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     `Health Care Fraud Trust Fund', consisting of any amount 
     appropriated or credited to the Trust Fund as provided in 
     this section or section 9602(b).
       ``(b) Transfers to Trust Fund.--There is hereby 
     appropriated to the Health Care Fraud Trust Fund amounts 
     equivalent to the revenues received in the Treasury from the 
     tax imposed by section 9835.
       ``(c) Expenditures.--Amounts in the Health Care Fraud Trust 
     Fund shall be available, without further appropriation, to 
     the Secretary of Health and Human Services for providing 
     grants to--
       ``(1) local law enforcement authorities for health care 
     fraud prevention efforts, with priority given to authorities 
     operating in areas experiencing high rates of health care 
     fraud or drug abuse, and
       ``(2) qualified drug addiction treatment centers.
       ``(d) Definitions.--
       ``(1) Local law enforcement authority.--The term `local law 
     enforcement authority' means any officially recognized law 
     enforcement agency legally organized under a political 
     subdivision of a state or possession of the United States.
                                 ______