[House Report 117-276]
[From the U.S. Government Publishing Office]
117th Congress } { Rept. 117-276
HOUSE OF REPRESENTATIVES
2d Session } { Part 1
======================================================================
MARIJUANA OPPORTUNITY REINVESTMENT AND EXPUNGEMENT ACT
_______
March 24, 2022.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Nadler, from the Committee on the Judiciary, submitted the
following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 3617]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 3617) to decriminalize and deschedule cannabis, to
provide for reinvestment in certain persons adversely impacted
by the War on Drugs, to provide for expungement of certain
cannabis offenses, and for other purposes, having considered
the same, reports favorably thereon with an amendment and
recommends that the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 24
Background and Need for the Legislation.......................... 25
Hearings......................................................... 32
Committee Consideration.......................................... 33
Committee Votes.................................................. 33
Committee Oversight Findings..................................... 43
Committee Estimate of Budgetary Effects.......................... 43
New Budget Authority and Congressional Budget Office Cost
Estimate....................................................... 43
Duplication of Federal Programs.................................. 43
Performance Goals and Objectives................................. 43
Advisory on Earmarks............................................. 43
Section-by-Section Analysis...................................... 43
Changes in Existing Law Made by the Bill, as Reported............ 51
Committee Correspondence......................................... 461
Minority Views................................................... 480
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Marijuana Opportunity Reinvestment and
Expungement Act'' or the ``MORE Act''.
SEC. 2. FINDINGS.
The Congress finds as follows:
(1) The communities that have been most harmed by cannabis
prohibition are benefiting the least from the legal marijuana
marketplace.
(2) A legacy of racial and ethnic injustices, compounded by
the disproportionate collateral consequences of 80 years of
cannabis prohibition enforcement, now limits participation in
the industry.
(3) 37 States, the District of Columbia, Puerto Rico, Guam,
and the U.S. Virgin Islands have adopted laws allowing legal
access to cannabis, and 15 States, the District of Columbia,
the Commonwealth of the Northern Mariana Islands, and Guam have
adopted laws legalizing cannabis for adult recreational use.
(4) A total of 47 States have reformed their laws pertaining
to cannabis despite the Schedule I status of marijuana and its
Federal criminalization.
(5) Legal cannabis sales totaled $20,000,000,000 in 2020 and
are projected to reach $40,500,000,000 by 2025.
(6) According to the American Civil Liberties Union (ACLU),
enforcing cannabis prohibition laws costs taxpayers
approximately $3.6 billion a year.
(7) The continued enforcement of cannabis prohibition laws
results in over 600,000 arrests annually, disproportionately
impacting people of color who are almost 4 times more likely to
be arrested for cannabis possession than their White
counterparts, despite equal rates of use across populations.
(8) People of color have been historically targeted by
discriminatory sentencing practices resulting in Black men
receiving drug sentences that are 13.1 percent longer than
sentences imposed for White men and Latinos being nearly 6.5
times more likely to receive a Federal sentence for cannabis
possession than non-Hispanic Whites.
(9) In 2013, simple cannabis possession was the fourth most
common cause of deportation for any offense and the most common
cause of deportation for drug law violations.
(10) Fewer than one-fifth of cannabis business owners
identify as minorities and only approximately 4 percent are
black.
(11) Applicants for cannabis licenses are limited by numerous
laws, regulations, and exorbitant permit applications,
licensing fees, and costs in these States, which can require
more than $700,000.
(12) Historically disproportionate arrest and conviction
rates make it particularly difficult for people of color to
enter the legal cannabis marketplace, as most States bar these
individuals from participating.
(13) Federal law severely limits access to loans and capital
for cannabis businesses, disproportionately impacting minority
small business owners.
(14) Some States and municipalities have taken proactive
steps to mitigate inequalities in the legal cannabis
marketplace and ensure equal participation in the industry.
SEC. 3. DECRIMINALIZATION OF CANNABIS.
(a) Cannabis Removed From Schedule of Controlled Substances.--
(1) Removal in statute.--Subsection (c) of schedule I of
section 202(c) of the Controlled Substances Act (21 U.S.C. 812)
is amended--
(A) by striking ``(10) Marihuana.''; and
(B) by striking ``(17) Tetrahydrocannabinols, except
for tetrahydrocannabinols in hemp (as defined under
section 297A of the Agricultural Marketing Act of
1946).''.
(2) Removal from schedule.--Not later than 180 days after the
date of the enactment of this Act, the Attorney General shall
finalize a rulemaking under section 201(a)(2) removing
marihuana and tetrahydrocannabinols from the schedules of
controlled substances. For the purposes of the Controlled
Substances Act, marihuana and tetrahydrocannabinols shall each
be deemed to be a drug or other substance that does not meet
the requirements for inclusion in any schedule. A rulemaking
under this paragraph shall be considered to have taken effect
as of the date of enactment of this Act for purposes of any
offense committed, case pending, conviction entered, and, in
the case of a juvenile, any offense committed, case pending,
and adjudication of juvenile delinquency entered before, on, or
after the date of enactment of this Act.
(b) Conforming Amendments to Controlled Substances Act.--The
Controlled Substances Act (21 U.S.C. 801 et seq.) is amended--
(1) in section 102(44) (21 U.S.C. 802(44)), by striking
``marihuana,'';
(2) in section 401(b) (21 U.S.C. 841(b))--
(A) in paragraph (1)--
(i) in subparagraph (A)--
(I) in clause (vi), by inserting
``or'' after the semicolon;
(II) by striking clause (vii); and
(III) by redesignating clause (viii)
as clause (vii);
(ii) in subparagraph (B)--
(I) in clause (vi), by inserting
``or'' after the semicolon;
(II) by striking clause (vii); and
(III) by redesignating clause (viii)
as clause (vii);
(iii) in subparagraph (C), in the first
sentence, by striking ``subparagraphs (A), (B),
and (D)'' and inserting ``subparagraphs (A) and
(B)'';
(iv) by striking subparagraph (D);
(v) by redesignating subparagraph (E) as
subparagraph (D); and
(vi) in subparagraph (D)(i), as so
redesignated, by striking ``subparagraphs (C)
and (D)'' and inserting ``subparagraph (C)'';
(B) by striking paragraph (4); and
(C) by redesignating paragraphs (5), (6), and (7) as
paragraphs (4), (5), and (6), respectively;
(3) in section 402(c)(2)(B) (21 U.S.C. 842(c)(2)(B)), by
striking ``, marihuana,'';
(4) in section 403(d)(1) (21 U.S.C. 843(d)(1)), by striking
``, marihuana,'';
(5) in section 418(a) (21 U.S.C. 859(a)), by striking the
last sentence;
(6) in section 419(a) (21 U.S.C. 860(a)), by striking the
last sentence;
(7) in section 422(d) (21 U.S.C. 863(d))--
(A) in the matter preceding paragraph (1), by
striking ``marijuana,''; and
(B) in paragraph (5), by striking ``, such as a
marihuana cigarette,''; and
(8) in section 516(d) (21 U.S.C. 886(d)), by striking
``section 401(b)(6)'' each place the term appears and inserting
``section 401(b)(5)''.
(c) Other Conforming Amendments.--
(1) National forest system drug control act of 1986.--The
National Forest System Drug Control Act of 1986 (16 U.S.C. 559b
et seq.) is amended--
(A) in section 15002(a) (16 U.S.C. 559b(a)) by
striking ``marijuana and other'';
(B) in section 15003(2) (16 U.S.C. 559c(2)) by
striking ``marijuana and other''; and
(C) in section 15004(2) (16 U.S.C. 559d(2)) by
striking ``marijuana and other''.
(2) Interception of communications.--Section 2516 of title
18, United States Code, is amended--
(A) in subsection (1)(e), by striking ``marihuana,'';
and
(B) in subsection (2) by striking ``marihuana''.
(3) FMCSA provisions.--
(A) Conforming amendment.--Section 31301(5) of title
49, United States Code, is amended by striking
``section 31306,'' and inserting ``sections 31306,
31306a, and subsections (b) and (c) of section
31310,''.
(B) Definition.--Section 31306(a) of title 49, United
States Code, is amended--
(i) by striking ``means any substance'' and
inserting the following: ``means--
``(A) any substance''; and
(ii) by striking the period at the end and
inserting ``; and
``(B) any substance not covered under subparagraph
(A) that was a substance under such section as of
December 1, 2018, and specified by the Secretary of
Transportation.''.
(C) Disqualifications.--Section 31310(b) of title 49,
United States Code, is amended by adding at the end the
following:
``(3) In this subsection and subsection (c), the term `controlled
substance' has the meaning given such term in section 31306(a).''.
(4) FAA provisions.--Section 45101 of title 49, United States
Code, is amended--
(A) by striking ``means any substance'' and inserting
the following: ``means--
``(A) any substance''; and
(B) by striking the period at the end and inserting
``; and
``(B) any substance not covered under subparagraph
(A) that was a substance under such section as of
December 1, 2018, and specified by the Secretary of
Transportation.''.
(5) FRA provisions.--Section 20140(a) of title 49, United
States Code, is amended--
(A) by striking ``means any substance'' and inserting
the following: ``means--
``(A) any substance''; and
(B) by striking the period at the end and inserting
``; and
``(B) any substance not covered under subparagraph
(A) that was a substance under such section as of
December 1, 2018, and specified by the Secretary of
Transportation.''.
(6) FTA provisions.--Section 5331(a)(1) of title 49, United
States Code, is amended--
(A) by striking ``means any substance'' and inserting
the following: ``means--
``(A) any substance''; and
(B) by striking the period at the end and inserting
``; and
``(B) any substance not covered under subparagraph
(A) that was a substance under such section as of
December 1, 2018, and whose use the Secretary of
Transportation decides has a risk to transportation
safety.''.
(d) Retroactivity.--The amendments made by this section to the
Controlled Substances Act (21 U.S.C. 801 et seq.) are retroactive and
shall apply to any offense committed, case pending, conviction entered,
and, in the case of a juvenile, any offense committed, case pending, or
adjudication of juvenile delinquency entered before, on, or after the
date of enactment of this Act.
(e) Effect on Other Law.--Nothing in this subtitle shall affect or
modify--
(1) the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301
et seq.);
(2) section 351 of the Public Health Service Act (42 U.S.C.
262); or
(3) the authority of the Commissioner of Food and Drugs and
the Secretary of Health and Human Services--
(A) under--
(i) the Federal Food, Drug, and Cosmetic Act
(21 U.S. 301 et seq.); or
(ii) section 351 of the Public Health Service
Act (42 U.S.C. 262); or
(B) to promulgate Federal regulations and guidelines
that relate to products containing cannabis or
cannabis-derived compounds under the Act described in
subparagraph (A)(i) or the section described in
subparagraph (A)(ii).
(f) Public Meetings.--Not later than one year after the date of
enactment of this Act, the Secretary of Health and Human Services,
acting through the Commissioner of Food and Drugs, shall hold not less
than one public meeting to address the regulation, safety,
manufacturing, product quality, marketing, labeling, and sale of
products containing cannabis or cannabis-derived compounds.
(g) Special Rule for Federal Employee Testing.--Section 503 of the
Supplemental Appropriations Act, 1987 (5 U.S.C. 7301 note) is amended
by adding at the end the following:
``(h) Marijuana.--
``(1) Continued testing.--Notwithstanding the Marijuana
Opportunity Reinvestment and Expungement Act and the amendments
made thereby, the Secretary of Health and Human Services may
continue to include marijuana for purposes of drug testing of
Federal employees subject to this section, Executive Order
12564, or other applicable Federal laws and orders.
``(2) Definition.--The term `marijuana' has the meaning given
to the term `marihuana' in section 102 of the Controlled
Substances Act (21 6 U.S.C. 802) on the day before the date of
enactment of the Marijuana Opportunity Reinvestment and
Expungement Act.''.
(h) Special Rule for Certain Regulations.--
(1) In general.--The amendments made by this section may not
be construed to abridge the authority of the Secretary of
Transportation, or the Secretary of the department in which the
Coast Guard is operating, to regulate and screen for the use of
a controlled substance.
(2) Controlled substance defined.--In this subsection, the
term ``controlled substance'' means--
(A) any substance covered under section 102 of the
Controlled Substances Act (21 U.S.C. 802) on the day
before the date of enactment of this Act; and
(B) any substance not covered under subparagraph (A)
that was a substance covered under section 102 of the
Controlled Substances Act (21 U.S.C. 802) on December
1, 2018, and specified by the Secretary of
Transportation.
SEC. 4. DEMOGRAPHIC DATA OF CANNABIS BUSINESS OWNERS AND EMPLOYEES.
(a) In General.--The Bureau of Labor Statistics shall regularly
compile, maintain, and make public data on the demographics of--
(1) individuals who are business owners in the cannabis
industry; and
(2) individuals who are employed in the cannabis industry.
(b) Demographic Data.--The data collected under subsection (a) shall
include data regarding--
(1) age;
(2) certifications and licenses;
(3) disability status;
(4) educational attainment;
(5) family and marital status;
(6) nativity;
(7) race and Hispanic ethnicity;
(8) school enrollment;
(9) veteran status; and
(10) sex.
(c) Confidentiality.--The name, address, and other identifying
information of individuals employed in the cannabis industry shall be
kept confidential by the Bureau and not be made available to the
public.
(d) Definitions.--In this section:
(1) Cannabis.--The term ``cannabis'' means either marijuana
or cannabis as defined under the State law authorizing the sale
or use of cannabis in which the individual or entity is
located.
(2) Cannabis industry.--The term ``cannabis industry'' means
an individual or entity that is licensed or permitted under a
State or local law to engage in commercial cannabis-related
activity.
(3) Owner.--The term ``owner'' means an individual or entity
that is defined as an owner under the State or local law where
the individual or business is licensed or permitted.
SEC. 5. CREATION OF OPPORTUNITY TRUST FUND AND IMPOSITION OF TAXES WITH
RESPECT TO CANNABIS PRODUCTS.
(a) Establishment of Trust Fund.--Subchapter A of chapter 98 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new section:
``SEC. 9512. ESTABLISHMENT OF OPPORTUNITY 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 `Opportunity Trust
Fund' (referred to in this section as the `Trust Fund'), consisting of
such amounts as may be appropriated or credited to such fund as
provided in this section or section 9602(b).
``(b) Transfers to Trust Fund.--There are hereby appropriated to the
Trust Fund amounts equivalent to the net revenues received in the
Treasury from the taxes imposed under chapter 56.
``(c) Expenditures.--Amounts in the Trust Fund shall be available,
without further appropriation, only as follows:
``(1) 50 percent to the Attorney General to carry out section
3052(a) of part OO of the Omnibus Crime Control and Safe
Streets Act of 1968.
``(2) 10 percent to the Attorney General to carry out section
3052(b) of part OO of the Omnibus Crime Control and Safe
Streets Act of 1968.
``(3) 20 percent to the Administrator of the Small Business
Administration to carry out section 6(b)(1) of the Marijuana
Opportunity Reinvestment and Expungement Act.
``(4) 20 percent to the Administrator of the Small Business
Administration to carry out section 6(b)(2) of the Marijuana
Opportunity Reinvestment and Expungement Act.''.
(b) Cannabis Revenue and Regulation Act.--Subtitle E of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
chapter:
``CHAPTER 56--CANNABIS PRODUCTS
``subchapter a. tax on cannabis products
``subchapter b. occupational tax
``subchapter c. bond and permits
``subchapter d. operations
``subchapter e. penalties
``Subchapter A--Tax on Cannabis Products
``Sec. 5901. Imposition of tax.
``Sec. 5902. Definitions.
``Sec. 5903. Liability and method of payment.
``Sec. 5904. Exemption from tax; transfers in bond.
``Sec. 5905. Credit, refund, or drawback of tax.
``SEC. 5901. IMPOSITION OF TAX.
``(a) Imposition of Tax.--There is hereby imposed on any cannabis
product produced in or imported into the United States a tax equal to--
``(1) for any such product removed during the first 5
calendar years ending after the date on which this chapter
becomes effective, the applicable percentage of such product's
removal price, and
``(2) for any product removed during any calendar year after
the calendar years described in paragraph (1), the applicable
equivalent amount.
``(b) Applicable Percentage.--For purposes of subsection (a)(1), the
applicable percentage shall be determined as follows:
``(1) For any cannabis product removed during the first 2
calendar years ending after the date on which this chapter
becomes effective, 5 percent.
``(2) For any cannabis product removed during the calendar
year after the last calendar year to which paragraph (1)
applies, 6 percent.
``(3) For any cannabis product removed during the calendar
year after the calendar year to which paragraph (2) applies, 7
percent.
``(4) For any cannabis product removed during the calendar
year after the calendar year to which paragraph (3) applies, 8
percent.
``(c) Applicable Equivalent Amount.--
``(1) In general.--For purposes of subsection (a)(2), the
term `applicable equivalent amount' means, with respect to any
cannabis product removed during any calendar year, an amount
equal to--
``(A) in the case of any cannabis product not
described in subparagraph (B), the product of the
applicable rate per ounce multiplied by the number of
ounces of such product (and a proportionate tax at the
like rate on all fractional parts of an ounce of such
product), and
``(B) in the case of any THC-measurable cannabis
product, the product of the applicable rate per gram
multiplied by the number of grams of
tetrahydrocannabinol in such product (and a
proportionate tax at the like rate on all fractional
parts of a gram of tetrahydrocannabinol in such
product).
``(2) Applicable rates.--
``(A) In general.--For purposes of paragraph (1)(A),
the term `applicable rate per ounce' means, with
respect to any cannabis product removed during any
calendar year, 8 percent of the prevailing sales price
of cannabis flowers sold in the United States during
the 12-month period ending one calendar quarter before
such calendar year, expressed on a per ounce basis, as
determined by the Secretary.
``(B) THC-measurable cannabis products.--For purposes
of paragraph (1)(B), the term `applicable rate per
gram' means, with respect to any cannabis product
removed during any calendar year, 8 percent of the
prevailing sales price of tetrahydrocannabinol sold in
the United States during the 12-month period ending one
calendar quarter before such calendar year, expressed
on a per gram basis, as determined by the Secretary.
``(d) Time of Attachment on Cannabis Products.--The tax under this
section shall attach to any cannabis product as soon as such product is
in existence as such, whether it be subsequently separated or
transferred into any other substance, either in the process of original
production or by any subsequent process.
``SEC. 5902. DEFINITIONS.
``(a) Definitions Related to Cannabis Products.--For purposes of this
chapter--
``(1) Cannabis product.--
``(A) In general.--Except as provided in subparagraph
(B), the term `cannabis product' means any article
which contains (or consists of) cannabis.
``(B) Exceptions.--The term `cannabis product' shall
not include an FDA-approved article or industrial hemp.
``(C) FDA-approved article.--The term `FDA-approved
article' means any article if the producer or importer
thereof demonstrates to the satisfaction of the
Secretary of Health and Human Services that such
article is--
``(i) a drug--
``(I) that is approved under section
505 of the Federal Food, Drug, and
Cosmetic Act or licensed under section
351 of the Public Health Service Act,
or
``(II) for which an investigational
use exemption has been authorized under
section 505(i) of the Federal Food,
Drug, and Cosmetic Act or under section
351(a) of the Public Health Service
Act, or
``(ii) a combination product (as described in
section 503(g) of the Federal Food, Drug, and
Cosmetic Act), the constituent parts of which
were approved or cleared under section 505,
510(k), or 515 of such Act.
``(D) Industrial hemp.--The term `industrial hemp'
means the plant Cannabis sativa L. and any part of such
plant, whether growing or not, with a delta-9
tetrahydrocannabinol concentration of not more than 0.3
percent on a dry weight basis.
``(2) THC-measurable cannabis product.--The term `THC-
measurable cannabis product' means any cannabis product--
``(A) with respect to which the Secretary has made a
determination that the amount of tetrahydrocannabinol
in such product can be measured with a high degree of
accuracy, or
``(B) which is not cannabis flower and the
concentration of tetrahydrocannabinol in which is
significantly higher than the average such
concentration in cannabis flower.
``(3) Cannabis.--The term `cannabis' has the meaning given
such term under section 102(16) of the Controlled Substances
Act (21 U.S.C. 802(16)).
``(b) Definitions Related to Cannabis Enterprises.--For purposes of
this chapter--
``(1) Cannabis enterprise.--The term `cannabis enterprise'
means a producer, importer, or export warehouse proprietor.
``(2) Producer.--
``(A) In general.--The term `producer' means any
person who plants, cultivates, harvests, grows,
manufactures, produces, compounds, converts, processes,
prepares, or packages any cannabis product.
``(B) Personal use exception.--Subject to regulation
prescribed by the Secretary, the term `producer' shall
not include any individual otherwise described in
subparagraph (A) if the only cannabis product described
in such subparagraph with respect to such individual is
for personal or family use and not for sale.
``(3) Importer.--The term `importer' means any person who--
``(A) is in the United States and to whom non-tax-
paid cannabis products, produced in a foreign country
or a possession of the United States, are shipped or
consigned,
``(B) removes cannabis products for sale or
consumption in the United States from a customs bonded
warehouse, or
``(C) smuggles or otherwise unlawfully brings any
cannabis product into the United States.
``(4) Export warehouse proprietor.--
``(A) In general.--The term `export warehouse
proprietor' means any person who operates an export
warehouse.
``(B) Export warehouse.--The term `export warehouse'
means a bonded internal revenue warehouse for the
storage of cannabis products, upon which the internal
revenue tax has not been paid--
``(i) for subsequent shipment to a foreign
country or a possession of the United States,
or
``(ii) for consumption beyond the
jurisdiction of the internal revenue laws of
the United States.
``(5) Cannabis production facility.--The term `cannabis
production facility' means an establishment which is qualified
under subchapter C to perform any operation for which such
qualification is required under such subchapter.
``(c) Other Definitions.--For purposes of this chapter--
``(1) Produce.--The term `produce' includes any activity
described in subsection (b)(2)(A).
``(2) Removal; remove.--The terms `removal' or `remove'
means--
``(A) the transfer of cannabis products from the
premises of a producer (or the transfer of such
products from the bonded premises of a producer to a
non-bonded premises of such producer),
``(B) release of such products from customs custody,
or
``(C) smuggling or other unlawful importation of such
products into the United States.
``(3) Removal price.--The term `removal price' means--
``(A) except as otherwise provided in this paragraph,
the price for which the cannabis product is sold in the
sale which occurs in connection with the removal of
such product,
``(B) in the case of any such sale which is described
in section 5903(c), the price determined under such
section, and
``(C) if there is no sale which occurs in connection
with such removal, the price which would be determined
under section 5903(c) if such product were sold at a
price which cannot be determined.
``SEC. 5903. LIABILITY AND METHOD OF PAYMENT.
``(a) Liability for Tax.--
``(1) Original liability.--The producer or importer of any
cannabis product shall be liable for the taxes imposed thereon
by section 5901.
``(2) Transfer of liability.--
``(A) In general.--When cannabis products are
transferred, without payment of tax, pursuant to
subsection (b) or (c) of section 5904--
``(i) except as provided in clause (ii), the
transferee shall become liable for the tax upon
receipt by the transferee of such articles, and
the transferor shall thereupon be relieved of
their liability for such tax, and
``(ii) in the case of cannabis products which
are released in bond from customs custody for
transfer to the bonded premises of a producer,
the transferee shall become liable for the tax
on such articles upon release from customs
custody, and the importer shall thereupon be
relieved of their liability for such tax.
``(B) Returned to bond.--All provisions of this
chapter applicable to cannabis products in bond shall
be applicable to such articles returned to bond upon
withdrawal from the market or returned to bond after
previous removal for a tax-exempt purpose.
``(b) Method of Payment of Tax.--
``(1) In general.--
``(A) Taxes paid on basis of return.--The taxes
imposed by section 5901 shall be paid on the basis of
return. The Secretary shall, by regulations, prescribe
the period or the event to be covered by such return
and the information to be furnished on such return.
``(B) Application to transferees.--In the case of any
transfer to which subsection (a)(2)(A) applies, the tax
under section 5901 on the transferee shall (if not
otherwise relieved by reason of a subsequent transfer
to which such subsection applies) be imposed with
respect to the removal of the cannabis product from the
bonded premises of the transferee.
``(C) Postponement.--Any postponement under this
subsection of the payment of taxes determined at the
time of removal shall be conditioned upon the filing of
such additional bonds, and upon compliance with such
requirements, as the Secretary may prescribe for the
protection of the revenue. The Secretary may, by
regulations, require payment of tax on the basis of a
return prior to removal of the cannabis products where
a person defaults in the postponed payment of tax on
the basis of a return under this subsection or
regulations prescribed thereunder.
``(D) Administration and penalties.--All
administrative and penalty provisions of this title,
insofar as applicable, shall apply to any tax imposed
by section 5901.
``(2) Time for payment of taxes.--
``(A) In general.--Except as otherwise provided in
this paragraph, in the case of taxes on cannabis
products removed during any semimonthly period under
bond for deferred payment of tax, the last day for
payment of such taxes shall be the 14th day after the
last day of such semimonthly period.
``(B) Imported articles.--In the case of cannabis
products which are imported into the United States, the
following provisions shall apply:
``(i) In general.--The last day for payment
of tax shall be the 14th day after the last day
of the semimonthly period during which the
article is entered into the customs territory
of the United States.
``(ii) Special rule for entry of
warehousing.--Except as provided in clause
(iv), in the case of an entry for warehousing,
the last day for payment of tax shall not be
later than the 14th day after the last day of
the semimonthly period during which the article
is removed from the first such warehouse.
``(iii) Foreign trade zones.--Except as
provided in clause (iv) and in regulations
prescribed by the Secretary, articles brought
into a foreign trade zone shall,
notwithstanding any other provision of law, be
treated for purposes of this subsection as if
such zone were a single customs warehouse.
``(iv) Exception for articles destined for
export.--Clauses (ii) and (iii) shall not apply
to any article which is shown to the
satisfaction of the Secretary to be destined
for export.
``(C) Cannabis products brought into the united
states from puerto rico.--In the case of cannabis
products which are brought into the United States from
Puerto Rico and subject to tax under section 7652, the
last day for payment of tax shall be the 14th day after
the last day of the semimonthly period during which the
article is brought into the United States.
``(D) Special rule where due date falls on saturday,
sunday, or holiday.--Notwithstanding section 7503, if,
but for this subparagraph, the due date under this
paragraph would fall on a Saturday, Sunday, or a legal
holiday (as defined in section 7503), such due date
shall be the immediately preceding day which is not a
Saturday, Sunday, or such a holiday.
``(E) Special rule for unlawfully produced cannabis
products.--In the case of any cannabis products
produced in the United States at any place other than
the premises of a producer that has filed the bond and
obtained the permit required under this chapter, tax
shall be due and payable immediately upon production.
``(3) Payment by electronic fund transfer.--Any person who in
any 12-month period, ending December 31, was liable for a gross
amount equal to or exceeding $5,000,000 in taxes imposed on
cannabis products by section 5901 (or section 7652) shall pay
such taxes during the succeeding calendar year by electronic
fund transfer (as defined in section 5061(e)(2)) to a Federal
Reserve Bank. Rules similar to the rules of section 5061(e)(3)
shall apply to the $5,000,000 amount specified in the preceding
sentence.
``(c) Determination of Price.--
``(1) Constructive sale price.--
``(A) In general.--If an article is sold directly to
consumers, sold on consignment, or sold (otherwise than
through an arm's length transaction) at less than the
fair market price, or if the price for which the
article sold cannot be determined, the tax under
section 5901(a) shall be computed on the price for
which such articles are sold, in the ordinary course of
trade, by producers thereof, as determined by the
Secretary.
``(B) Arm's length.--
``(i) In general.--For purposes of this
section, a sale is considered to be made under
circumstances otherwise than at arm's length
if--
``(I) the parties are members of the
same controlled group, whether or not
such control is actually exercised to
influence the sale price,
``(II) the parties are members of a
family, as defined in section
267(c)(4), or
``(III) the sale is made pursuant to
special arrangements between a producer
and a purchaser.
``(ii) Controlled groups.--
``(I) In general.--The term
`controlled group' has the meaning
given to such term by subsection (a) of
section 1563, except that `more than 50
percent' shall be substituted for `at
least 80 percent' each place it appears
in such subsection.
``(II) Controlled groups which
include nonincorporated persons.--Under
regulations prescribed by the
Secretary, principles similar to the
principles of subclause (I) shall apply
to a group of persons under common
control where one or more of such
persons is not a corporation.
``(2) Containers, packing and transportation charges.--In
determining, for the purposes of this chapter, the price for
which an article is sold, there shall be included any charge
for coverings and containers of whatever nature, and any charge
incident to placing the article in condition packed ready for
shipment, but there shall be excluded the amount of tax imposed
by this chapter, whether or not stated as a separate charge. A
transportation, delivery, insurance, installation, or other
charge (not required by the preceding sentence to be included)
shall be excluded from the price only if the amount thereof is
established to the satisfaction of the Secretary in accordance
with regulations.
``(3) Determination of applicable equivalent amounts.--
Paragraphs (1) and (2) shall apply for purposes of section
5901(c) only to the extent that the Secretary determines
appropriate.
``(d) Partial Payments and Installment Accounts.--
``(1) Partial payments.--In the case of--
``(A) a contract for the sale of an article wherein
it is provided that the price shall be paid by
installments and title to the article sold does not
pass until a future date notwithstanding partial
payment by installments,
``(B) a conditional sale, or
``(C) a chattel mortgage arrangement wherein it is
provided that the sales price shall be paid in
installments,
there shall be paid upon each payment with respect to the
article a percentage of such payment equal to the rate of tax
in effect on the date such payment is due.
``(2) Sales of installment accounts.--If installment
accounts, with respect to payments on which tax is being
computed as provided in paragraph (1), are sold or otherwise
disposed of, then paragraph (1) shall not apply with respect to
any subsequent payments on such accounts (other than subsequent
payments on returned accounts with respect to which credit or
refund is allowable by reason of section 6416(b)(5)), but
instead--
``(A) there shall be paid an amount equal to the
difference between--
``(i) the tax previously paid on the payments
on such installment accounts, and
``(ii) the total tax which would be payable
if such installment accounts had not been sold
or otherwise disposed of (computed as provided
in paragraph (1)), except that
``(B) if any such sale is pursuant to the order of,
or subject to the approval of, a court of competent
jurisdiction in a bankruptcy or insolvency proceeding,
the amount computed under subparagraph (A) shall not
exceed the sum of the amounts computed by multiplying--
``(i) the proportionate share of the amount
for which such accounts are sold which is
allocable to each unpaid installment payment,
by
``(ii) the rate of tax under this chapter in
effect on the date such unpaid installment
payment is or was due.
The sum of the amounts payable under this subsection in
respect of the sale of any article shall not exceed the
total tax.
``SEC. 5904. EXEMPTION FROM TAX; TRANSFERS IN BOND.
``(a) Exemption From Tax.--Cannabis products on which the internal
revenue tax has not been paid or determined may, subject to such
regulations as the Secretary shall prescribe, be withdrawn from the
bonded premises of any producer in approved containers free of tax and
not for resale for use--
``(1) exclusively in scientific research by a laboratory,
``(2) by a proprietor of a cannabis production facility in
research, development, or testing (other than consumer testing
or other market analysis) of processes, systems, materials, or
equipment, relating to cannabis or cannabis operations, under
such limitations and conditions as to quantities, use, and
accountability as the Secretary may by regulations require for
the protection of the revenue, or
``(3) by the United States or any governmental agency
thereof, any State, any political subdivision of a State, or
the District of Columbia, for nonconsumption purposes.
``(b) Cannabis Products Transferred or Removed in Bond From Domestic
Factories and Export Warehouses.--
``(1) In general.--Subject to such regulations and under such
bonds as the Secretary shall prescribe, a producer or export
warehouse proprietor may transfer cannabis products, without
payment of tax, to the bonded premises of another producer or
export warehouse proprietor, or remove such articles, without
payment of tax, for shipment to a foreign country or a
possession of the United States, or for consumption beyond the
jurisdiction of the internal revenue laws of the United States.
``(2) Labeling.--Cannabis products may not be transferred or
removed under this subsection unless such products bear such
marks, labels, or notices as the Secretary shall by regulations
prescribe.
``(c) Cannabis Products Released in Bond From Customs Custody.--
Cannabis products imported or brought into the United States may be
released from customs custody, without payment of tax, for delivery to
a producer or export warehouse proprietor if such articles are not put
up in packages, in accordance with such regulations and under such bond
as the Secretary shall prescribe.
``(d) Cannabis Products Exported and Returned.--Cannabis products
classifiable under item 9801.00.10 of the Harmonized Tariff Schedule of
the United States (relating to duty on certain articles previously
exported and returned), as in effect on the date of the enactment of
the Marijuana Opportunity Reinvestment and Expungement Act, may be
released from customs custody, without payment of that part of the duty
attributable to the internal revenue tax for delivery to the original
producer of such cannabis products or to the export warehouse
proprietor authorized by such producer to receive such products, in
accordance with such regulations and under such bond as the Secretary
shall prescribe. Upon such release such products shall be subject to
this chapter as if they had not been exported or otherwise removed from
internal revenue bond.
``SEC. 5905. CREDIT, REFUND, OR DRAWBACK OF TAX.
``(a) Credit or Refund.--
``(1) In general.--Credit or refund of any tax imposed by
this chapter or section 7652 shall be allowed or made (without
interest) to the cannabis enterprise on proof satisfactory to
the Secretary that the claimant cannabis enterprise has paid
the tax on--
``(A) cannabis products withdrawn from the market by
the claimant, or
``(B) such products lost (otherwise than by theft) or
destroyed, by fire, casualty, or act of God, while in
the possession or ownership of the claimant.
``(2) Cannabis products lost or destroyed in bond.--
``(A) Extent of loss allowance.--No tax shall be
collected in respect of cannabis products lost or
destroyed while in bond, except that such tax shall be
collected--
``(i) in the case of loss by theft, unless
the Secretary finds that the theft occurred
without connivance, collusion, fraud, or
negligence on the part of the proprietor of the
cannabis production facility, owner, consignor,
consignee, bailee, or carrier, or their
employees or agents,
``(ii) in the case of voluntary destruction,
unless such destruction is carried out as
provided in paragraph (3), and
``(iii) in the case of an unexplained
shortage of cannabis products.
``(B) Proof of loss.--In any case in which cannabis
products are lost or destroyed, whether by theft or
otherwise, the Secretary may require the proprietor of
a cannabis production facility or other person liable
for the tax to file a claim for relief from the tax and
submit proof as to the cause of such loss. In every
case where it appears that the loss was by theft, the
burden shall be upon the proprietor of the cannabis
production facility or other person responsible for the
tax under section 5901 to establish to the satisfaction
of the Secretary that such loss did not occur as the
result of connivance, collusion, fraud, or negligence
on the part of the proprietor of the cannabis
production facility, owner, consignor, consignee,
bailee, or carrier, or their employees or agents.
``(C) Refund of tax.--In any case where the tax would
not be collectible by virtue of subparagraph (A), but
such tax has been paid, the Secretary shall refund such
tax.
``(D) Limitations.--Except as provided in
subparagraph (E), no tax shall be abated, remitted,
credited, or refunded under this paragraph where the
loss occurred after the tax was determined. The
abatement, remission, credit, or refund of taxes
provided for by subparagraphs (A) and (C) in the case
of loss of cannabis products by theft shall only be
allowed to the extent that the claimant is not
indemnified against or recompensed in respect of the
tax for such loss.
``(E) Applicability.--The provisions of this
paragraph shall extend to and apply in respect of
cannabis products lost after the tax was determined and
before completion of the physical removal of the
cannabis products from the bonded premises.
``(3) Voluntary destruction.--The proprietor of a cannabis
production facility or other persons liable for the tax imposed
by this chapter or by section 7652 with respect to any cannabis
product in bond may voluntarily destroy such products, but only
if such destruction is under such supervision and under such
regulations as the Secretary may prescribe.
``(4) Limitation.--Any claim for credit or refund of tax
under this subsection shall be filed within 6 months after the
date of the withdrawal from the market, loss, or destruction of
the products to which the claim relates, and shall be in such
form and contain such information as the Secretary shall by
regulations prescribe.
``(b) Drawback of Tax.--There shall be an allowance of drawback of
tax paid on cannabis products, when shipped from the United States, in
accordance with such regulations and upon the filing of such bond as
the Secretary shall prescribe.
``Subchapter B--Occupational Tax
``Sec. 5911. Imposition and rate of tax.
``Sec. 5912. Payment of tax.
``Sec. 5913. Provisions relating to liability for occupational taxes.
``Sec. 5914. Application to State laws.
``SEC. 5911. IMPOSITION AND RATE OF TAX.
``(a) In General.--Any person engaged in business as a producer or an
export warehouse proprietor shall pay a tax of $1,000 per year
(referred to in this subchapter as an `occupational tax') in respect of
each premises at which such business is carried on.
``(b) Penalty for Failure To Register.--Any person engaged in
business as a producer or an export warehouse proprietor who willfully
fails to pay the occupation tax shall be fined not more than $5,000, or
imprisoned not more than 2 years, or both, for each such offense.
``SEC. 5912. PAYMENT OF TAX.
``(a) Condition Precedent to Carrying on Business.--No person shall
be engaged in or carry on any trade or business subject to the
occupational tax until such person has paid such tax.
``(b) Computation.--
``(1) In general.--The occupational tax shall be imposed--
``(A) as of on the first day of July in each year, or
``(B) on commencing any trade or business on which
such tax is imposed.
``(2) Period.--In the case of a tax imposed under
subparagraph (A) of paragraph (1), the occupational tax shall
be reckoned for 1 year, and in the case of subparagraph (B) of
such paragraph, it shall be reckoned proportionately, from the
first day of the month in which the liability to such tax
commenced, to and including the 30th day of June following.
``(c) Method of Payment.--
``(1) Payment by return.--The occupational tax shall be paid
on the basis of a return under such regulations as the
Secretary shall prescribe.
``(2) Stamp denoting payment of tax.--After receiving a
properly executed return and remittance of any occupational
tax, the Secretary shall issue to the taxpayer an appropriate
stamp as a receipt denoting payment of the tax. This paragraph
shall not apply in the case of a return covering liability for
a past period.
``SEC. 5913. PROVISIONS RELATING TO LIABILITY FOR OCCUPATIONAL TAXES.
``(a) Partners.--Any number of persons doing business in partnership
at any one place shall be required to pay a single occupational tax.
``(b) Different Businesses of Same Ownership and Location.--Whenever
more than one of the pursuits or occupations described in this
subchapter are carried on in the same place by the same person at the
same time, except as otherwise provided in this subchapter, the
occupational tax shall be paid for each according to the rates
severally prescribed.
``(c) Businesses in More Than One Location.--
``(1) Liability for tax.--The payment of the occupational tax
shall not exempt from an additional occupational tax the person
carrying on a trade or business in any other place than that
stated in the records of the Internal Revenue Service.
``(2) Storage.--Nothing contained in paragraph (1) shall
require imposition of an occupational tax for the storage of
cannabis products at a location other than the place where such
products are sold or offered for sale.
``(3) Place.--
``(A) In general.--For purposes of this section, the
term `place' means the entire office, plant or area of
the business in any one location under the same
proprietorship.
``(B) Divisions.--For purposes of this paragraph, any
passageways, streets, highways, rail crossings,
waterways, or partitions dividing the premises shall
not be deemed sufficient separation to require an
additional occupational tax, if the various divisions
are otherwise contiguous.
``(d) Death or Change of Location.--
``(1) In general.--In addition to the person who has paid the
occupational tax for the carrying on of any business at any
place, any person described in paragraph (2) may secure the
right to carry on, without incurring any additional
occupational tax, the same business at the same place for the
remainder of the taxable period for which the occupational tax
was paid.
``(2) Eligible persons.--The persons described in this
paragraph are the following:
``(A) The surviving spouse or child, or executor or
administrator or other legal representative, of a
deceased taxpayer.
``(B) A husband or wife succeeding to the business of
his or her living spouse.
``(C) A receiver or trustee in bankruptcy, or an
assignee for benefit of creditors.
``(D) The partner or partners remaining after death
or withdrawal of a member of a partnership.
``(3) Change of location.--When any person moves to any place
other than the place for which occupational tax was paid for
the carrying on of any business, such person may secure the
right to carry on, without incurring additional occupational
tax, the same business at the new location for the remainder of
the taxable period for which the occupational tax was paid. To
secure the right to carry on the business without incurring
additional occupational tax, the successor, or the person
relocating their business, must register the succession or
relocation with the Secretary in accordance with regulations
prescribed by the Secretary.
``(e) Federal Agencies or Instrumentalities.--Any tax imposed by this
subchapter shall apply to any agency or instrumentality of the United
States unless such agency or instrumentality is granted by statute a
specific exemption from such tax.
``SEC. 5914. APPLICATION TO STATE LAWS.
``The payment of any tax imposed by this subchapter for carrying on
any trade or business shall not be held to--
``(1) exempt any person from any penalty or punishment
provided by the laws of any State for carrying on such trade or
business within such State, or in any manner to authorize the
commencement or continuance of such trade or business contrary
to the laws of such State or in places prohibited by municipal
law, or
``(2) prohibit any State from placing a duty or tax on the
same trade or business, for State or other purposes.
``Subchapter C--Bond and Permits
``Sec. 5921. Establishment and bond.
``Sec. 5922. Application for permit.
``Sec. 5923. Permit.
``SEC. 5921. ESTABLISHMENT AND BOND.
``(a) Prohibition on Production Outside of Bonded Cannabis Production
Facility.--
``(1) In general.--Except as authorized by the Secretary or
on the bonded premises of a cannabis production facility duly
authorized to produce cannabis products according to law, no
cannabis product may planted, cultivated, harvested, grown,
manufactured, produced, compounded, converted, processed,
prepared, or packaged in any building or on any premises.
``(2) Authorized producers only.--No person other than a
producer which has filed the bond required under subsection (b)
and received a permit described in section 5923 may produce any
cannabis product.
``(3) Personal use exception.--This subsection shall not
apply with respect the activities of an individual who is not
treated as a producer by reason of section 5902(b)(2)(B).
``(b) Bond.--
``(1) When required.--Every person, before commencing
business as a producer or an export warehouse proprietor, shall
file such bond, conditioned upon compliance with this chapter
and regulations issued thereunder, in such form, amount, and
manner as the Secretary shall by regulation prescribe. A new or
additional bond may be required whenever the Secretary
considers such action necessary for the protection of the
revenue.
``(2) Approval or disapproval.--No person shall engage in
such business until he receives notice of approval of such
bond. A bond may be disapproved, upon notice to the principal
on the bond, if the Secretary determines that the bond is not
adequate to protect the revenue.
``(3) Cancellation.--Any bond filed hereunder may be
canceled, upon notice to the principal on the bond, whenever
the Secretary determines that the bond no longer adequately
protects the revenue.
``SEC. 5922. APPLICATION FOR PERMIT.
``(a) In General.--Every person, before commencing business as a
cannabis enterprise, and at such other time as the Secretary shall by
regulation prescribe, shall make application for the permit provided
for in section 5923. The application shall be in such form as the
Secretary shall prescribe and shall set forth, truthfully and
accurately, the information called for on the form. Such application
may be rejected and the permit denied if the Secretary, after notice
and opportunity for hearing, finds that--
``(1) the premises on which it is proposed to conduct the
cannabis enterprise are not adequate to protect the revenue, or
``(2) such person (including, in the case of a corporation,
any officer, director, or principal stockholder and, in the
case of a partnership, a partner) has failed to disclose any
material information required or made any material false
statement in the application therefor.
``SEC. 5923. PERMIT.
``(a) Issuance.--A person shall not engage in business as a cannabis
enterprise without a permit to engage in such business. Such permit,
conditioned upon compliance with this chapter and regulations issued
thereunder, shall be issued in such form and in such manner as the
Secretary shall by regulation prescribe. A new permit may be required
at such other time as the Secretary shall by regulation prescribe.
``(b) Suspension or Revocation.--
``(1) Show cause hearing.--If the Secretary has reason to
believe that any person holding a permit--
``(A) has not in good faith complied with this
chapter, or with any other provision of this title
involving intent to defraud,
``(B) has violated the conditions of such permit,
``(C) has failed to disclose any material information
required or made any material false statement in the
application for such permit, or
``(D) has failed to maintain their premises in such
manner as to protect the revenue,
the Secretary shall issue an order, stating the facts charged,
citing such person to show cause why their permit should not be
suspended or revoked.
``(2) Action following hearing.--If, after hearing, the
Secretary finds that such person has not shown cause why their
permit should not be suspended or revoked, such permit shall be
suspended for such period as the Secretary deems proper or
shall be revoked.
``(c) Information Reporting.--The Secretary may require--
``(1) information reporting by any person issued a permit
under this section, and
``(2) information reporting by such other persons as the
Secretary deems necessary to carry out this chapter.
``(d) Inspection or Disclosure of Information.--For rules relating to
inspection and disclosure of returns and return information, see
section 6103(o).
``Subchapter D--Operations
``Sec. 5931. Inventories, reports, and records.
``Sec. 5932. Packaging and labeling.
``Sec. 5933. Purchase, receipt, possession, or sale of cannabis
products after removal.
``Sec. 5934. Restrictions relating to marks, labels, notices, and
packages.
``Sec. 5935. Restriction on importation of previously exported cannabis
products.
``SEC. 5931. INVENTORIES, REPORTS, AND RECORDS.
``Every cannabis enterprise shall--
``(1) make a true and accurate inventory at the time of
commencing business, at the time of concluding business, and at
such other times, in such manner and form, and to include such
items, as the Secretary shall by regulation prescribe, with
such inventories to be subject to verification by any internal
revenue officer,
``(2) make reports containing such information, in such form,
at such times, and for such periods as the Secretary shall by
regulation prescribe, and
``(3) keep such records in such manner as the Secretary shall
by regulation prescribe, with such records to be available for
inspection by any internal revenue officer during business
hours.
``SEC. 5932. PACKAGING AND LABELING.
``(a) Packages.--All cannabis products shall, before removal, be put
up in such packages as the Secretary shall by regulation prescribe.
``(b) Marks, Labels, and Notices.--Every package of cannabis products
shall, before removal, bear the marks, labels, and notices if any, that
the Secretary by regulation prescribes.
``(c) Lottery Features.--No certificate, coupon, or other device
purporting to be or to represent a ticket, chance, share, or an
interest in, or dependent on, the event of a lottery shall be contained
in, attached to, or stamped, marked, written, or printed on any package
of cannabis products.
``(d) Indecent or Immoral Material Prohibited.--No indecent or
immoral picture, print, or representation shall be contained in,
attached to, or stamped, marked, written, or printed on any package of
cannabis products.
``(e) Exceptions.--Subject to regulations prescribed by the
Secretary, cannabis products may be exempted from subsections (a) and
(b) if such products are--
``(1) for experimental purposes, or
``(2) transferred to the bonded premises of another producer
or export warehouse proprietor or released in bond from customs
custody for delivery to a producer.
``SEC. 5933. PURCHASE, RECEIPT, POSSESSION, OR SALE OF CANNABIS
PRODUCTS AFTER REMOVAL.
``(a) Restriction.--No person shall--
``(1) with intent to defraud the United States, purchase,
receive, possess, offer for sale, or sell or otherwise dispose
of, after removal, any cannabis products--
``(A) upon which the tax has not been paid or
determined in the manner and at the time prescribed by
this chapter or regulations thereunder, or
``(B) which, after removal without payment of tax
pursuant to section 5904(a), have been diverted from
the applicable purpose or use specified in that
section,
``(2) with intent to defraud the United States, purchase,
receive, possess, offer for sale, or sell or otherwise dispose
of, after removal, any cannabis products which are not put up
in packages as required under section 5932 or which are put up
in packages not bearing the marks, labels, and notices, as
required under such section, or
``(3) otherwise than with intent to defraud the United
States, purchase, receive, possess, offer for sale, or sell or
otherwise dispose of, after removal, any cannabis products
which are not put up in packages as required under section 5932
or which are put up in packages not bearing the marks, labels,
and notices, as required under such section.
``(b) Exception.--Paragraph (3) of subsection (a) shall not prevent
the sale or delivery of cannabis products directly to consumers from
proper packages, nor apply to such articles when so sold or delivered.
``(c) Liability to Tax.--Any person who possesses cannabis products
in violation of paragraph (1) or (2) of subsection (a) shall be liable
for a tax equal to the tax on such articles.
``SEC. 5934. RESTRICTIONS RELATING TO MARKS, LABELS, NOTICES, AND
PACKAGES.
``No person shall, with intent to defraud the United States, destroy,
obliterate, or detach any mark, label, or notice prescribed or
authorized, by this chapter or regulations thereunder, to appear on, or
be affixed to, any package of cannabis products before such package is
emptied.
``SEC. 5935. RESTRICTION ON IMPORTATION OF PREVIOUSLY EXPORTED CANNABIS
PRODUCTS.
``(a) Export Labeled Cannabis Products.--
``(1) In general.--Cannabis products produced in the United
States and labeled for exportation under this chapter--
``(A) may be transferred to or removed from the
premises of a producer or an export warehouse
proprietor only if such articles are being transferred
or removed without tax in accordance with section 5904,
``(B) may be imported or brought into the United
States, after their exportation, only if such articles
either are eligible to be released from customs custody
with the partial duty exemption provided in section
5904(d) or are returned to the original producer of
such article as provided in section 5904(c), and
``(C) may not be sold or held for sale for domestic
consumption in the United States unless such articles
are removed from their export packaging and repackaged
by the original producer into new packaging that does
not contain an export label.
``(2) Alterations by persons other than original producer.--
This section shall apply to articles labeled for export even if
the packaging or the appearance of such packaging to the
consumer of such articles has been modified or altered by a
person other than the original producer so as to remove or
conceal or attempt to remove or conceal (including by the
placement of a sticker over) any export label.
``(3) Exports include shipments to puerto rico.--For purposes
of this section, section 5904(d), section 5941, and such other
provisions as the Secretary may specify by regulations,
references to exportation shall be treated as including a
reference to shipment to the Commonwealth of Puerto Rico.
``(b) Export Label.--For purposes of this section, an article is
labeled for export or contains an export label if it bears the mark,
label, or notice required under section 5904(b).
``Subchapter E--Penalties
``Sec. 5941. Civil penalties.
``Sec. 5942. Criminal penalties.
``SEC. 5941. CIVIL PENALTIES.
``(a) Omitting Things Required or Doing Things Forbidden.--Whoever
willfully omits, neglects, or refuses to comply with any duty imposed
upon them by this chapter, or to do, or cause to be done, any of the
things required by this chapter, or does anything prohibited by this
chapter, shall in addition to any other penalty provided in this title,
be liable to a penalty of $10,000, to be recovered, with costs of suit,
in a civil action, except where a penalty under subsection (b) or (c)
or under section 6651 or 6653 or part II of subchapter A of chapter 68
may be collected from such person by assessment.
``(b) Failure To Pay Tax.--Whoever fails to pay any tax imposed by
this chapter at the time prescribed by law or regulations, shall, in
addition to any other penalty provided in this title, be liable to a
penalty of 10 percent of the tax due but unpaid.
``(c) Sale of Cannabis or Cannabis Products for Export.--
``(1) Every person who sells, relands, or receives within the
jurisdiction of the United States any cannabis products which
have been labeled or shipped for exportation under this
chapter,
``(2) every person who sells or receives such relanded
cannabis products, and
``(3) every person who aids or abets in such selling,
relanding, or receiving,
shall, in addition to the tax and any other penalty provided in this
title, be liable for a penalty equal to the greater of $10,000 or 10
times the amount of the tax imposed by this chapter. All cannabis
products relanded within the jurisdiction of the United States shall be
forfeited to the United States and destroyed. All vessels, vehicles,
and aircraft used in such relanding or in removing such cannabis
products from the place where relanded, shall be forfeited to the
United States.
``(d) Applicability of Section 6665.--The penalties imposed by
subsections (b) and (c) shall be assessed, collected, and paid in the
same manner as taxes, as provided in section 6665(a).
``(e) Cross References.--For penalty for failure to make deposits or
for overstatement of deposits, see section 6656.
``SEC. 5942. CRIMINAL PENALTIES.
``(a) Fraudulent Offenses.--Whoever, with intent to defraud the
United States--
``(1) engages in business as a cannabis enterprise without
filing the application and obtaining the permit where required
by this chapter or regulations thereunder,
``(2) fails to keep or make any record, return, report, or
inventory, or keeps or makes any false or fraudulent record,
return, report, or inventory, required by this chapter or
regulations thereunder,
``(3) refuses to pay any tax imposed by this chapter, or
attempts in any manner to evade or defeat the tax or the
payment thereof,
``(4) sells or otherwise transfers, contrary to this chapter
or regulations thereunder, any cannabis products subject to tax
under this chapter, or
``(5) purchases, receives, or possesses, with intent to
redistribute or resell, any cannabis product--
``(A) upon which the tax has not been paid or
determined in the manner and at the time prescribed by
this chapter or regulations thereunder, or
``(B) which, without payment of tax pursuant to
section 5904, have been diverted from the applicable
purpose or use specified in that section,
shall, for each such offense, be fined not more than $10,000, or
imprisoned not more than 5 years, or both.
``(b) Liability to Tax.--Any person who possesses cannabis products
in violation of subsection (a) shall be liable for a tax equal to the
tax on such articles.''.
(c) Study.--Not later than 2 years after the date of the enactment of
this Act, and every 5 years thereafter, the Secretary of the Treasury,
or the Secretary's delegate, shall--
(1) conduct a study concerning the characteristics of the
cannabis industry, including the number of persons operating
cannabis enterprises at each level of such industry, the volume
of sales, the amount of tax collected each year, and the areas
of evasion, and
(2) submit to Congress recommendations to improve the
regulation of the industry and the administration of the
related tax.
(d) Annual Reports Regarding Determination of Applicable Rates.--Not
later than 6 months before the beginning of each calendar year to which
section 5901(a)(2) of the Internal Revenue Code of 1986 (as added by
this section) applies, the Secretary of the Treasury, or the
Secretary's delegate, shall make publicly available a detailed
description of the methodology which the Secretary anticipates using to
determine the applicable rate per ounce and the applicable rate per
gram which will apply for such calendar year under section 5901(c)(2)
of such Code.
(e) Conforming Amendments.--
(1) Section 6103(o)(1)(A) of the Internal Revenue Code of
1986 is amended by striking ``and firearms'' and inserting
``firearms, and cannabis products''.
(2) The table of chapters for subtitle E of such Code is
amended by adding at the end the following new item:
``Chapter 56. Cannabis Products''.
(3) The table of sections for subchapter A of chapter 98 of
such Code is amended by adding at the end the following new
item:
``Sec. 9512. Establishment of Opportunity Trust Fund.''.
(f) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
removals, and applications for permits under section 5922 of
the Internal Revenue Code of 1986 (as added by subsection (b)),
after 180 days after the date of the enactment of this Act.
(2) Establishment of trust fund.--The amendment made by
subsection (a) shall take effect on the date of the enactment
of this Act.
SEC. 6. OPPORTUNITY TRUST FUND PROGRAMS.
(a) Cannabis Justice Office; Community Reinvestment Grant Program.--
(1) Cannabis justice office.--Part A of title I of the
Omnibus Crime Control and Safe Streets Act of 1968 (34 U.S.C.
10101 et seq.) is amended by inserting after section 109 the
following:
``SEC. 110. CANNABIS JUSTICE OFFICE.
``(a) Establishment.--There is established within the Office of
Justice Programs a Cannabis Justice Office.
``(b) Director.--The Cannabis Justice Office shall be headed by a
Director who shall be appointed by the Assistant Attorney General for
the Office of Justice Programs. The Director shall report to the
Assistant Attorney General for the Office of Justice Programs. The
Director shall award grants and may enter into compacts, cooperative
agreements, and contracts on behalf of the Cannabis Justice Office. The
Director may not engage in any employment other than that of serving as
the Director, nor may the Director hold any office in, or act in any
capacity for, any organization, agency, or institution with which the
Office makes any contract or other arrangement.
``(c) Employees.--
``(1) In general.--The Director shall employ as many full-
time employees as are needed to carry out the duties and
functions of the Cannabis Justice Office under subsection (d).
Such employees shall be exclusively assigned to the Cannabis
Justice Office.
``(2) Initial hires.--Not later than 6 months after the date
of enactment of this section, the Director shall--
``(A) hire no less than one-third of the total number
of employees of the Cannabis Justice Office; and
``(B) no more than one-half of the employees assigned
to the Cannabis Justice Office by term appointment that
may after 2 years be converted to career appointment.
``(3) Legal counsel.--At least one employee hired for the
Cannabis Justice Office shall serve as legal counsel to the
Director and shall provide counsel to the Cannabis Justice
Office.
``(d) Duties and Functions.--The Cannabis Justice Office is
authorized to--
``(1) administer the Community Reinvestment Grant Program;
and
``(2) perform such other functions as the Assistant Attorney
General for the Office of Justice Programs may delegate, that
are consistent with the statutory obligations of this
section.''.
(2) Community reinvestment grant program.--Title I of the
Omnibus Crime Control and Safe Streets Act of 1968 (34 U.S.C.
et seq.) is amended by adding at the end the following:
``PART PP--COMMUNITY REINVESTMENT GRANT PROGRAM
``SEC. 3056. AUTHORIZATION.
``(a) In General.--The Director of the Cannabis Justice Office shall
establish and carry out a grant program, known as the `Community
Reinvestment Grant Program', to provide eligible entities with funds to
administer services for individuals adversely impacted by the War on
Drugs, including--
``(1) job training;
``(2) reentry services;
``(3) legal aid for civil and criminal cases, including
expungement of cannabis convictions;
``(4) literacy programs;
``(5) youth recreation or mentoring programs; and
``(6) health education programs.
``(b) Substance Use Disorder Services.--The Director, in consultation
with the Secretary of Health and Human Services, shall provide eligible
entities with funds to administer substance use disorder services for
individuals adversely impacted by the War on Drugs or connect patients
with substance use disorder services. Also eligible for such services
are individuals who have been arrested for or convicted of the sale,
possession, use, manufacture, or cultivation of a controlled substance
other than cannabis (except for a conviction involving distribution to
a minor).
``SEC. 3057. FUNDING FROM OPPORTUNITY TRUST FUND.
``The Director shall carry out the program under this part using
funds made available under section 9512(c)(1) and (2) of the Internal
Revenue Code.
``SEC. 3058. DEFINITIONS.
``In this part:
``(1) The term `cannabis conviction' means a conviction, or
adjudication of juvenile delinquency, for a cannabis offense
(as such term is defined in section 13 of the Marijuana
Opportunity Reinvestment and Expungement Act).
``(2) The term `eligible entity' means a nonprofit
organization, as defined in section 501(c)(3) of the Internal
Revenue Code, that is representative of a community or a
significant segment of a community with experience in providing
relevant services to individuals adversely impacted by the War
on Drugs in that community.
``(3) The term `individuals adversely impacted by the War on
Drugs' has the meaning given that term in section 6 of the
Marijuana Opportunity Reinvestment and Expungement Act.''.
(b) Cannabis Restorative Opportunity Program; Equitable Licensing
Grant Program.--
(1) Cannabis restorative opportunity program.--The
Administrator of the Small Business Administration shall
establish and carry out a program, to be known as the
``Cannabis Restorative Opportunity Program'', to provide loans
and technical assistance under section 7(m) of the Small
Business Act (15 U.S.C. 636(m)) to assist small business
concerns owned and controlled by socially and economically
disadvantaged individuals that operate in eligible States or
localities.
(2) Equitable licensing grant program.--The Administrator of
the Small Business Administration shall establish and carry out
a grant program, to be known as the ``Equitable Licensing Grant
Program'', to provide any eligible State or locality funds to
develop and implement equitable cannabis licensing programs
that minimize barriers to cannabis licensing and employment for
individuals adversely impacted by the War on Drugs, provided
that each grantee includes in its cannabis licensing program at
least four of the following elements:
(A) A waiver of cannabis license application fees for
individuals who report an income below 250 percent of
the Federal Poverty Level for at least 5 of the past 10
years and who are first-time applicants for a cannabis
license.
(B) A prohibition on the denial of a cannabis license
based on a conviction for a cannabis offense that took
place prior to State legalization of cannabis or the
date of enactment of this Act, as appropriate.
(C) A prohibition on restrictions for licensing
relating to criminal convictions except with respect to
a criminal conviction related to owning and operating a
business.
(D) A prohibition on cannabis license holders
engaging in suspicionless cannabis drug testing of
their prospective or current employees, except with
respect to drug testing for safety-sensitive positions
required under part 40 of title 49, Code of Federal
Regulations.
(E) The establishment of a cannabis licensing board
that is reflective of the racial, ethnic, economic, and
gender composition of the eligible State or locality,
to serve as an oversight body of the equitable
licensing program.
(3) Definitions.--In this subsection:
(A) Eligible state or locality.--The term ``eligible
State or locality'' means a State or locality that has
taken steps to--
(i) create an automatic process, at no cost
to the individual, for the expungement,
destruction, or sealing of criminal records for
cannabis offenses; and
(ii) eliminate violations or other penalties
for persons under parole, probation, pre-trial,
or other State or local criminal supervision
for a cannabis offense.
(B) Individual adversely impacted by the war on
drugs.--The term ``individual adversely impacted by the
War on Drugs'' means an individual--
(i) who reports an income below 250 percent
of the Federal Poverty Level for at least 5 of
the past 10 years; and
(ii) who has been arrested for or convicted
of the sale, possession, use, manufacture, or
cultivation of cannabis (except for a
conviction involving distribution to a minor),
or whose parent, sibling, spouse, or child has
been arrested for or convicted of such an
offense.
(C) Small business concern owned and controlled by
socially and economically disadvantaged individuals.--
The term ``small business concern owned and controlled
by socially and economically disadvantaged
individuals'' has the meaning given in section
8(d)(3)(C) of the Small Business Act (15 U.S.C.
637(d)(3)(C)).
(D) State.--The term ``State'' means each of the
several States, the District of Columbia, Puerto Rico,
any territory or possession of the United States, and
any Indian Tribe (as defined in section 201 of Public
Law 90-294 (25 U.S.C. 1301) (commonly known as the
``Indian Civil Rights Act of 1968'')).
(c) Study on Programs.--
(1) GAO study.--The Comptroller General of the United States,
in consultation with the Administrator of the Small Business
Administration, shall conduct an annual study on the
individuals and entities receiving assistance under the
Cannabis Restorative Opportunity and Equitable Licensing
Programs. This study shall include the types of assistance by
state, and a description of the efforts by the Small Business
Administration to increase access to capital for cannabis-
related small business concerns owned and controlled by
socially and economically disadvantaged individuals,
individuals adversely impacted by the War on Drugs, as well as
the racial, ethnic, economic and gender composition of the
eligible State or locality.
(2) Report.--Not later than 1 year after the date of
enactment of this Act, the Comptroller General of the United
States shall submit a report on the results of the study
conducted under paragraph (1) to--
(A) the Committee on Small Business of the House of
Representatives;
(B) the Committee on Small Business and
Entrepreneurship of the Senate;
(C) the Committee on the Judiciary of the House of
Representatives; and
(D) the Committee on the Judiciary of the Senate.
SEC. 7. AVAILABILITY OF SMALL BUSINESS ADMINISTRATION PROGRAMS AND
SERVICES TO CANNABIS-RELATED LEGITIMATE BUSINESSES
AND SERVICE PROVIDERS.
(a) Definitions Relating to Cannabis-Related Legitimate Businesses
and Service Providers.--Section 3 of the Small Business Act (15 U.S.C.
632) is amended by adding at the end the following new subsection:
``(gg) Cannabis-Related Legitimate Businesses and Service
Providers.--In this Act:
``(1) Cannabis.--The term `cannabis'--
``(A) means--
``(i) all parts of the plant Cannabis sativa
L., whether growing or not;
``(ii) the seeds thereof;
``(iii) the resin extracted from any part of
such plant; and
``(iv) every compound, manufacture, salt,
derivative, mixture, or preparation of such
plant, its seeds or resin; and
``(B) does not include--
``(i) hemp, as defined in section 297A of the
Agricultural Marketing Act of 1946;
``(ii) the mature stalks of such plant, fiber
produced from such stalks, oil or cake made
from the seeds of such plant, any other
compound, manufacture, salt, derivative,
mixture, or preparation of such mature stalks
(except the resin extracted therefrom), fiber,
oil, or cake, or the sterilized seed of such
plant which is incapable of germination; or
``(iii) any drug product approved under
section 505 of the Federal Food, Drug, and
Cosmetic Act, or biological product licensed
under section 351 of the Public Health Service
Act.
``(2) Cannabis-related legitimate business.--The term
`cannabis-related legitimate business' means a manufacturer,
producer, or any person or company that is a small business
concern and that--
``(A) engages in any activity described in
subparagraph (B) pursuant to a law established by a
State or a political subdivision of a State, as
determined by such State or political subdivision; and
``(B) participates in any business or organized
activity that involves handling cannabis or cannabis
products, including cultivating, producing,
manufacturing, selling, transporting, displaying,
dispensing, distributing, or purchasing cannabis or
cannabis products.
``(3) Service provider.--The term `service provider'--
``(A) means a business, organization, or other person
that--
``(i) sells goods or services to a cannabis-
related legitimate business; or
``(ii) provides any business services,
including the sale or lease of real or any
other property, legal or other licensed
services, or any other ancillary service,
relating to cannabis; and
``(B) does not include a business, organization, or
other person that participates in any business or
organized activity that involves handling cannabis or
cannabis products, including cultivating, producing,
manufacturing, selling, transporting, displaying,
dispensing, distributing, or purchasing cannabis or
cannabis products.''.
(b) Small Business Development Centers.--Section 21(c) of the Small
Business Act (15 U.S.C. 648(c)) is amended by adding at the end the
following new paragraph:
``(9) Services for cannabis-related legitimate businesses and
service providers.--A small business development center may not
decline to provide services to an otherwise eligible small
business concern under this section solely because such concern
is a cannabis-related legitimate business or service
provider.''.
(c) Women's Business Centers.--Section 29 of the Small Business Act
(15 U.S.C. 656) is amended by adding at the end the following new
subsection:
``(p) Services for Cannabis-Related Legitimate Businesses and Service
Providers.--A women's business center may not decline to provide
services to an otherwise eligible small business concern under this
section solely because such concern is a cannabis-related legitimate
business or service provider.''.
(d) Score.--Section 8(b)(1)(B) of the Small Business Act (15 U.S.C.
637(b)(1)(B)) is amended by adding at the end the following new
sentence: ``The head of the SCORE program established under this
subparagraph may not decline to provide services to an otherwise
eligible small business concern solely because such concern is a
cannabis-related legitimate business or service provider.''.
(e) Veteran Business Outreach Centers.--Section 32 of the Small
Business Act (15 U.S.C. 657b) is amended by adding at the end the
following new subsection:
``(h) Services for Cannabis-Related Legitimate Businesses and Service
Providers.--A Veteran Business Outreach Center may not decline to
provide services to an otherwise eligible small business concern under
this section solely because such concern is a cannabis-related
legitimate business or service provider.''.
(f) Section 7(a) Loans.--Section 7(a) of the Small Business Act (15
U.S.C. 636(a)) is amended by adding at the end the following new
paragraph:
``(38) Loans to cannabis-related legitimate businesses and
service providers.--The Administrator may not decline to
provide a guarantee for a loan under this subsection, and a
lender may not decline to make a loan under this subsection, to
an otherwise eligible small business concern solely because
such concern is a cannabis-related legitimate business or
service provider.''.
(g) Disaster Loans.--Section 7(b) of the Small Business Act (15
U.S.C. 636(b)) is amended by inserting after paragraph (15) the
following new paragraph:
``(16) Assistance to cannabis-related legitimate businesses
and service providers.--The Administrator may not decline to
provide assistance under this subsection to an otherwise
eligible small business concern solely because such concern is
a cannabis-related legitimate business or service provider.''.
(h) Microloans.--Section 7(m) of the Small Business Act (15 U.S.C.
636(m)) is amended by adding at the end the following new paragraph:
``(14) Assistance to cannabis-related legitimate businesses
and service providers.--The Administrator may not decline to
make a loan or a grant under this subsection, and an eligible
intermediary may not decline to provide assistance under this
subsection to an otherwise eligible borrower, eligible
intermediary, or eligible nonprofit entity (as applicable)
solely because such borrower, intermediary, or nonprofit entity
is a cannabis-related legitimate business or service
provider.''.
(i) Small Business Investment Company Debentures to Finance Cannabis-
Related Legitimate Businesses and Service Providers.--Part A of title
III of the Small Business Investment Act of 1958 (15 U.S.C. 681 et
seq.) is amended by adding at the end the following new section:
``SEC. 321. DEBENTURES TO FINANCE CANNABIS-RELATED LEGITIMATE
BUSINESSES AND SERVICE PROVIDERS.
``(a) Guarantees.--The Administrator may not decline to purchase or
guarantee a debenture made under this title to an otherwise eligible
small business investment company solely because such small business
investment company provides financing to an entity that is a cannabis-
related legitimate business or service provider (as defined in section
7(a)(38) of the Small Business Act).
``(b) Other Assistance.--A small business investment company may not
decline to provide assistance under this title to an otherwise eligible
small business concern solely because such small business concern is a
cannabis-related legitimate business or service provider (as defined in
section 7(a)(38) of the Small Business Act).''.
(j) State or Local Development Company Loans.--Title V of the Small
Business Investment Act of 1958 (15 U.S.C. 695 et seq.) is amended by
adding at the end the following new section:
``SEC. 511. LOANS TO FINANCE CANNABIS-RELATED LEGITIMATE BUSINESSES AND
SERVICE PROVIDERS.
``(a) Loans and Loan Guarantees.--The Administrator may not decline
to make or provide a guarantee for a loan under this title to an
otherwise eligible qualified State or local development company solely
because such qualified State or local development company provides
financing to an entity that is a cannabis-related legitimate business
or service provider (as defined in section 7(a)(38) of the Small
Business Act).
``(b) Other Assistance.--A qualified State or local development
company may not decline to provide assistance under this title to an
otherwise eligible small business concern solely because such small
business concern is a cannabis-related legitimate business or service
provider (as defined in section 7(a)(38) of the Small Business Act).''.
SEC. 8. NO DISCRIMINATION IN THE PROVISION OF A FEDERAL PUBLIC BENEFIT
ON THE BASIS OF CANNABIS.
(a) In General.--No person may be denied any Federal public benefit
(as such term is defined in section 401(c) of the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996 (8
U.S.C. 1611(c))) on the basis of any use or possession of cannabis, or
on the basis of a conviction or adjudication of juvenile delinquency
for a cannabis offense, by that person.
(b) Security Clearances.--Federal agencies may not use past or
present cannabis or marijuana use as criteria for granting, denying, or
rescinding a security clearance.
SEC. 9. NO ADVERSE EFFECT FOR PURPOSES OF THE IMMIGRATION LAWS.
(a) In General.--For purposes of the immigration laws (as such term
is defined in section 101 of the Immigration and Nationality Act),
cannabis may not be considered a controlled substance, and an alien may
not be denied any benefit or protection under the immigration laws
based on any event, including conduct, a finding, an admission,
addiction or abuse, an arrest, a juvenile adjudication, or a
conviction, relating to cannabis, regardless of whether the event
occurred before, on, or after the effective date of this Act.
(b) Cannabis Defined.--The term ``cannabis''--
(1) means all parts of the plant Cannabis sativa L., whether
growing or not; the seeds thereof; the resin extracted from any
part of such plant; and every compound, manufacture, salt,
derivative, mixture, or preparation of such plant, its seeds or
resin; and
(2) does not include--
(A) hemp, as defined in section 297A of the
Agricultural Marketing Act of 1946;
(B) the mature stalks of such plant, fiber produced
from such stalks, oil or cake made from the seeds of
such plant, any other compound, manufacture, salt,
derivative, mixture, or preparation of such mature
stalks (except the resin extracted therefrom), fiber,
oil, or cake, or the sterilized seed of such plant
which is incapable of germination; or
(C) any drug product approved under section 505 of
the Federal Food, Drug, and Cosmetic Act, or biological
product licensed under section 351 of the Public Health
Service Act.
(c) Conforming Amendments to Immigration and Nationality Act.--The
Immigration and Nationality Act (8 U.S.C. 1101 et seq.) is amended--
(1) in section 212(h), by striking ``and subparagraph
(A)(i)(II) of such subsection insofar as it relates to a single
offense of simple possession of 30 grams or less of
marijuana'';
(2) in section 237(a)(2)(B)(i), by striking ``other than a
single offense involving possession for one's own use of 30
grams or less of marijuana'';
(3) in section 101(f)(3), by striking ``(except as such
paragraph relates to a single offense of simple possession of
30 grams or less of marihuana)'';
(4) in section 244(c)(2)(A)(iii)(II) by striking ``except for
so much of such paragraph as relates to a single offense of
simple possession of 30 grams or less of marijuana'';
(5) in section 245(h)(2)(B) by striking ``(except for so much
of such paragraph as related to a single offense of simple
possession of 30 grams or less of marijuana)'';
(6) in section 210(c)(2)(B)(ii)(III) by striking ``, except
for so much of such paragraph as relates to a single offense of
simple possession of 30 grams or less of marihuana''; and
(7) in section 245A(d)(2)(B)(ii)(II) by striking ``, except
for so much of such paragraph as relates to a single offense of
simple possession of 30 grams or less of marihuana''.
SEC. 10. RESENTENCING AND EXPUNGEMENT.
(a) Expungement of Non-Violent Federal Cannabis Offense Convictions
for Individuals Not Under a Criminal Justice Sentence.--
(1) In general.--Not later than 1 year after the date of the
enactment of this Act, each Federal district shall conduct a
comprehensive review and issue an order expunging each
conviction or adjudication of juvenile delinquency for a non-
violent Federal cannabis offense entered by each Federal court
in the district before the date of enactment of this Act and on
or after May 1, 1971. Each Federal court shall also issue an
order expunging any arrests associated with each expunged
conviction or adjudication of juvenile delinquency.
(2) Notification.--To the extent practicable, each Federal
district shall notify each individual whose arrest, conviction,
or adjudication of delinquency has been expunged pursuant to
this subsection that their arrest, conviction, or adjudication
of juvenile delinquency has been expunged, and the effect of
such expungement.
(3) Right to petition court for expungement.--At any point
after the date of enactment of this Act, any individual with a
prior conviction or adjudication of juvenile delinquency for a
non-violent Federal cannabis offense, who is not under a
criminal justice sentence, may file a motion for expungement.
If the expungement of such a conviction or adjudication of
juvenile delinquency is required pursuant to this Act, the
court shall expunge the conviction or adjudication, and any
associated arrests. If the individual is indigent, counsel
shall be appointed to represent the individual in any
proceedings under this subsection.
(4) Sealed record.--The court shall seal all records related
to a conviction or adjudication of juvenile delinquency that
has been expunged under this subsection. Such records may only
be made available by further order of the court.
(b) Sentencing Review for Individuals Under a Criminal Justice
Sentence.--
(1) In general.--For any individual who is under a criminal
justice sentence for a non-violent Federal cannabis offense,
the court that imposed the sentence shall, on motion of the
individual, the Director of the Bureau of Prisons, the attorney
for the Government, or the court, conduct a sentencing review
hearing. If the individual is indigent, counsel shall be
appointed to represent the individual in any sentencing review
proceedings under this subsection.
(2) Potential reduced resentencing.--After a sentencing
hearing under paragraph (1), a court shall--
(A) expunge each conviction or adjudication of
juvenile delinquency for a non-violent Federal cannabis
offense entered by the court before the date of
enactment of this Act, and any associated arrest;
(B) vacate the existing sentence or disposition of
juvenile delinquency and, if applicable, impose any
remaining sentence or disposition of juvenile
delinquency on the individual as if this Act, and the
amendments made by this Act, were in effect at the time
the offense was committed; and
(C) order that all records related to a conviction or
adjudication of juvenile delinquency that has been
expunged or a sentence or disposition of juvenile
delinquency that has been vacated under this Act be
sealed and only be made available by further order of
the court.
(c) Effect of Expungement.--An individual who has had an arrest, a
conviction, or juvenile delinquency adjudication expunged under this
section--
(1) may treat the arrest, conviction, or adjudication as if
it never occurred; and
(2) shall be immune from any civil or criminal penalties
related to perjury, false swearing, or false statements, for a
failure to disclose such arrest, conviction, or adjudication.
(d) Exception.--An individual who at sentencing received an
aggravating role adjustment pursuant to United States Sentencing
Guideline 3B1.1(a) in relation to a Federal cannabis offense conviction
shall not be eligible for expungement of that Federal cannabis offense
conviction under this section.
(e) Definitions.--In this section:
(1) The term ``Federal cannabis offense'' means an offense
that is no longer punishable pursuant to this Act or the
amendments made under this Act.
(2) The term ``expunge'' means, with respect to an arrest, a
conviction, or a juvenile delinquency adjudication, the removal
of the record of such arrest, conviction, or adjudication from
each official index or public record.
(3) The term ``under a criminal justice sentence'' means,
with respect to an individual, that the individual is serving a
term of probation, parole, supervised release, imprisonment,
official detention, pre-release custody, or work release,
pursuant to a sentence or disposition of juvenile delinquency
imposed on or after the effective date of the Controlled
Substances Act (May 1, 1971).
(f) Study.--The Comptroller General of the United States, in
consultation with the Secretary of Health and Human Services, shall
conduct a demographic study of individuals convicted of a Federal
cannabis offense. Such study shall include information about the age,
race, ethnicity, sex, and gender identity of those individuals, the
type of community such users dwell in, and such other demographic
information as the Comptroller General determines should be included.
(g) Report.--Not later than 2 years after the date of the enactment
of this Act, the Comptroller General of the United States shall report
to Congress the results of the study conducted under subsection (f).
SEC. 11. REFERENCES IN EXISTING LAW TO MARIJUANA OR MARIHUANA.
Wherever, in the statutes of the United States or in the rulings,
regulations, or interpretations of various administrative bureaus and
agencies of the United States--
(1) there appears or may appear the term ``marihuana'' or
``marijuana'', that term shall be struck and the term
``cannabis'' shall be inserted; and
(2) there appears or may appear the term ``Marihuana'' or
``Marijuana'', that term shall be struck and the term
``Cannabis'' shall be inserted.
SEC. 12. SEVERABILITY.
If any provision of this Act or an amendment made by this Act, or any
application of such provision to any person or circumstance, is held to
be unconstitutional, the remainder of this Act, the amendments made by
this Act, and the application of this Act and the amendments made by
this Act to any other person or circumstance shall not be affected.
SEC. 13. CANNABIS OFFENSE DEFINED.
For purposes of this Act, the term ``cannabis offense'' means a
criminal offense related to cannabis--
(1) that, under Federal law, is no longer punishable pursuant
to this Act or the amendments made under this Act; or
(2) that, under State law, is no longer an offense or that
was designated a lesser offense or for which the penalty was
reduced under State law pursuant to or following the adoption
of a State law authorizing the sale or use of cannabis.
SEC. 14. RULEMAKING.
Unless otherwise provided in this Act, not later than 1 year after
the date of enactment of this Act, the Department of the Treasury, the
Department of Justice, and the Small Business Administration shall
issue or amend any rules, standard operating procedures, and other
legal or policy guidance necessary to carry out implementation of this
Act. After the 1-year period, any publicly issued sub-regulatory
guidance, including any compliance guides, manuals, advisories and
notices, may not be issued without 60-day notice to appropriate
congressional committees. Notice shall include a description and
justification for additional guidance.
SEC. 15. SOCIETAL IMPACT OF MARIJUANA LEGALIZATION STUDY.
The Comptroller General of the United States shall, not later than 2
years after the date of enactment of this Act, provide to Congress a
study that addresses the societal impact of the legalization of
recreational cannabis by States, including--
(1) sick days reported to employers;
(2) workers compensations claims;
(3) tax revenue remitted to States resulting from legal
marijuana sales;
(4) changes in government spending related to enforcement
actions and court proceedings;
(5) Federal welfare assistance applications;
(6) rate of arrests related to methamphetamine possession;
(7) hospitalization rates related to methamphetamine and
narcotics use;
(8) uses of marijuana and its byproducts for medical
purposes;
(9) uses of marijuana and its byproducts for purposes
relating to the health, including the mental health, of
veterans;
(10) arrest rates of individuals driving under the influence
or driving while intoxicated by marijuana;
(11) traffic-related deaths and injuries where the driver is
impaired by marijuana;
(12) arrest of minors for marijuana-related charges;
(13) violent crime rates;
(14) school suspensions, expulsions, and law enforcement
referrals that are marijuana-related;
(15) high school dropout rates;
(16) changes in district-wide and State-wide standardized
test scores;
(17) marijuana-related hospital admissions and poison control
calls;
(18) marijuana-related juvenile admittances into substance
rehabilitation facilities and mental health clinics;
(19) diversion of marijuana into neighboring States and drug
seizures in neighboring States;
(20) marijuana plants grown on public lands in contravention
to Federal and State laws; and
(21) court filings under a State's organized crime statutes.
Purpose and Summary
H.R. 3617, the ``Marijuana Opportunity Reinvestment and
Expungement Act,'' or the ``MORE Act'' would (1) remove
marijuana, or cannabis, from the list of substances controlled
under the Controlled Substances Act (CSA); (2) create an
Opportunity Trust Fund to be funded through an excise tax on
the sale of cannabis products; (3) establish a Cannabis Justice
Office within the Department of Justice to administer a
Community Reinvestment Grant Program to fund nonprofits that
provide services to individuals most adversely impacted by the
War on Drugs; (4) create a Cannabis Opportunity Program within
the Small Business Administration (SBA) to provide eligible
states and localities with funds for loans to business concerns
owned and controlled by socially and economically disadvantaged
individuals and an Equitable Licensing Program, also within
SBA, to provide funds to eligible states and localities for
developing cannabis licensing programs that minimize barriers
to cannabis licensing and employment for individuals most
adversely impacted by the War on Drugs; (5) ensure that SBA
programs and services are made available to cannabis-related
legitimate businesses and service providers; (6) provide for
the expungement of Federal cannabis arrests and offenses, the
vacating and sealing of cannabis offenses and for resentencing
hearings, where appropriate; (7) protect individuals from
discrimination in the provision of public benefits on the basis
of use, possession, or convictions, or juvenile adjudications
for cannabis offenses; and (8) prohibit consideration of
cannabis as a controlled substance for purposes of federal
immigration laws.
On May 28, 2021, Chairman Jerrold Nadler (D-NY) introduced
H.R. 3617, with Crime Subcommittee Chair Sheila Jackson Lee (D-
TX), Representatives Barbara Lee (D-CA), Earl Blumenauer (D-
OR), Hakeem E. Jeffries (D-NY), and Nydia Velazquez (D-NY) as
original cosponsors.
Background and Need for Legislation
Marijuana (or cannabis), as defined in the Controlled
Substances Act (CSA),\1\ includes ``all parts of the plant
Cannabis sativa L., whether growing or not; the seeds thereof;
the resin extracted from any part of such plant; and every
compound, manufacture, salt, derivative, mixture, or
preparation of such plant, its seeds or resin.''\2\ The CSA
definition of marijuana exempts cannabis plant material that
falls into four categories--mature stalks, fiber produced from
mature stalks, oil or cake made from seeds, and seeds incapable
of germination--as well as ``any other compound, manufacture,
salt, derivative, mixture, or preparation'' of the exempt plant
material.\3\ In addition, the Agriculture Improvement Act of
2018\4\ explicitly exempted hemp from the definition of
marijuana under the CSA.\5\
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\1\21 U.S.C. Sec. Sec. 801 et seq. (2019).
\2\21 U.S.C. Sec. 802(16)(A) (2019). In different parts of the
U.S. Code, including the CSA, marijuana is referred to as
``marihuana.''
\3\21 U.S.C. Sec. 802(16)(B)(ii) (2019).
\4\Pub. L. No. 115-334, 132 Stat. 4490 (2018).
\5\21 U.S.C. Sec. 802(16)(B)(i) (2019).
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The current federal statutory scheme relative to marijuana
comes from the CSA. The CSA makes it unlawful to manufacture,
import, possess, use, and distribute the substances it
regulates, including marijuana. Historically, states also
prohibited marijuana use, although there has been an increasing
trend towards state legalization in the last two decades. In
1996, California became the first state to legalize medical
cannabis with the approval of Proposition 215.\6\ Since then,
36 states and the District of Columbia have legalized medical
cannabis.\7\ In 2012, Colorado and Washington became the first
two states to legalize the recreational use of cannabis.\8\ At
this time, 19 states and the District of Columbia have
legalized cannabis for adult recreational use.\9\ In addition,
the U.S. territories of Guam,\10\ the Northern Mariana
Islands,\11\ Puerto Rico,\12\ and the U.S. Virgin Islands\13\
have legalized marijuana for medical or recreational purposes.
The legalization of cannabis at the state level, whether for
medical or recreational use, has in many instances put state
laws in apparent conflict with federal statutes that broadly
proscribe the possession or use of marijuana.
---------------------------------------------------------------------------
\6\John Balzar, Voters Approve Measure to Use Pot as Medicine, L.A.
Times (Nov. 6, 1996), available at https://www.latimes.com/archives/la-
xpm-1996-11-06-mn-62740-story.html.
\7\The 36 states are: Alabama, Alaska, Arizona, Arkansas,
California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois,
Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota,
Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New
Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania,
Rhode Island, Utah, Vermont, Virginia, Washington, and West Virginia.
\8\ Keith Coffman & Nicole Neroulias, Colorado, Washington first
states to legalize recreational pot, Reuters (Nov. 6, 2012), https://
www.reuters.com/article/us-usa-marijuana-legalization/colorado-
washington-first-states-to-legalize-recreational-pot-
idUSBRE8A602D20121107.
\9\The 19 states are: Alaska, Arizona, California, Colorado,
Connecticut, Illinois, Maine, Massachusetts, Michigan, Montana, Nevada,
New Jersey, New Mexico, New York, Oregon, South Dakota, Vermont,
Virginia, and Washington.
\10\See Christopher Ingraham, Medical Marijuana Advocates Notch an
Early Victory in Guam, Wash. Post (Nov. 4, 2014), https://
www.washingtonpost.com/news/wonk/wp/2014/11/04/medical-marijuana-
advocates-notch-an-early-victory-in-guam/.
\11\See Tom Angell, Governor Signs Marijuana Legalization Bill,
Making History in U.S. Territory, Forbes (Sep. 21, 2018), https://
www.forbes.com/sites/tomangell/2018/09/21/governor-signs-marijuana-
legalization-bill-making-history-in-us-territory/#1709d6dc27ea.
\12\Alexandra Sifferlin, Puerto Rico Governor Signs Executive Order
to Legalize Medical Marijuana, Time (May 4, 2015), https://time.com/
3845638/puerto-rico-medical-marijuana/.
\13\Kyle Jaeger, Governor Signs Bill Legalizing Medical Marijuana
in the U.S. Virgin Islands, Marijuana Moment (Jan. 19, 2019), https://
www.marijuanamoment.net/governor-signs-bill-legalizing-medical-
marijuana-in-the-u-s-virgin-islands/.
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The CSA is Title II of the Comprehensive Drug Abuse
Prevention and Control Act.\14\ At the time of its passage, in
1970, President Nixon sent a message to Congress declaring drug
abuse ``public enemy number one'' and announcing a ``new, all-
out offensive.''\15\ This policy initiative came to be known as
the ``War on Drugs.''
---------------------------------------------------------------------------
\14\See Pub. L. No. 91-513, 84 Stat. 1242 (1970).
\15\Drug Pol'y All., A Brief History of the Drug War, https://
drugpolicy.org/issues/brief-history-drug-war.
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The CSA directed the President to establish a Commission on
Marihuana and Drug Abuse and issue a study report.\16 \Among
other things, the Commission's first report concluded that
criminalization was ``too harsh a tool to apply to personal
possession even in the effort to discourage use,'' and that
``the actual and potential harm of use of the drug is not great
enough to justify intrusion by the criminal law into private
behavior, a step which our society takes only with the greatest
reluctance.''\17 \Although the Nixon Administration dismissed
these recommendations at the federal level, during the mid-
1970s, virtually all states softened their penalties for
marijuana possession.\18\ Despite some relaxation at the state
level, President Nixon created the Drug Enforcement Agency in
1973, within the Department of Justice, establishing a single
federal agency to enforce federal drug laws and to consolidate
and coordinate the government's drug control activities.\19\
---------------------------------------------------------------------------
\16\See Pub. L. No. 91-513, 84 Stat. 1280-81, Sec. 601 (1970).
\17\National Commission on Marihuana and Drug Abuse, Marihuana: A
Signal of Misunderstanding--The Official Report of the National
Commission on Marihuana and Drug Abuse 176 (1972).
\18\Brent Staples, The Federal Marijuana Ban is Rooted in Myth and
Xenophobia, N.Y. Times (July 29, 2014), https://www.nytimes.com/2014/
07/30/opinion/high-time-federal-marijuana-ban-is-rooted-in-myth.html.
\19\See https://www.dea.gov/history.
---------------------------------------------------------------------------
The CSA instituted a ``scheduling'' system, through which
the federal government regulates the lawful production,
possession and distribution of controlled substances. Placement
on each of the five schedules is based upon the substance's
medical use, potential for abuse, and safety or dependence
liability. Marijuana was initially placed, and today remains,
on Schedule I.\20\ THC is also on Schedule I.\21\ By virtue of
their placement on Schedule I, marijuana and THC have been
deemed by the federal government to have: (1) a high potential
for abuse; (2) no currently accepted medical use in treatment
in the United States; and (3) a lack of accepted safety for use
under medical supervision.\22\ Because of this, Schedule I
substances may not be dispensed under a prescription, and such
substances may only be used for bona fide, federal government-
approved research studies.\23\
---------------------------------------------------------------------------
\20\See 21 U.S.C. Sec. 812(c)(c)(10) (2019).
\21\21 U.S.C. Sec. 812(c)(c)(17) (2019).
\22\21 U.S.C. Sec. 812(b)(1) (2019).
\23\21 U.S.C. Sec. 823(f) (2019). Under the CSA, only DEA-licensed
doctors are allowed to prescribe controlled substances listed in
Schedules II-V to patients. See 21 C.F.R. Sec. 1306.03 (persons
entitled to issue prescriptions). Federal regulations stipulate that a
lawful prescription for a controlled substance may only be ``issued for
a legitimate medical purpose by an individual practitioner acting in
the usual course of his professional practice.'' 21 C.F.R.
Sec. 1306.04.
---------------------------------------------------------------------------
Individuals who want to conduct research on marijuana must
do so in accordance with the CSA and other federal laws. If
availability of a controlled substance is sought for purposes
of research, the researcher must obtain a registration issued
by the DEA.\24\ There are strict storage requirements with
which all registrants are expected to comply.\25\ Since 1968,
the DEA has issued only one license for the cultivation of
marijuana for research to the University of Mississippi.\26\
The University of Mississippi's application was renewed in
2015,\27\ but no other applications have been approved by the
DEA.\28\ However, in early 2020, the DEA proposed a process to
expand marijuana research in the United States. More recently,
in May 2021, the DEA announced that it may register additional
entities; however, formal agreements with those select entities
are still being finalized.
---------------------------------------------------------------------------
\24\See 21 U.S.C. Sec. 822; see also 21 C.F.R. Sec. 1301.11(a)
(``Every person who manufactures, distributes, dispenses, imports, or
exports any controlled substance or who proposes to engage in the
manufacture, distribution, dispensing, importation or exportation of
any controlled substance shall obtain a registration unless exempted by
law or pursuant to Sec. Sec. 1301.22 through 1301.26.'').
\25\All applicants and registrants must ``provide effective
controls and procedures to guard against theft and diversion of
controlled substances.'' 21 C.F.R. Sec. 1301.71.
\26\National Institute on Drug Abuse, NIDA's Role in Providing
Marijuana for Research, available at https://www.drugabuse.gov/drugs-
abuse/marijuana/nidas-role-in-providing-marijuana-research.
\27\Id.
\28\Andrew Joseph, DEA Solicited Applications to Grow Marijuana for
Research. It Hasn't Approved One, STAT (July 24, 2017), https://
www.statnews.com/2017/07/24/dea-marijuana-licenses-research/. In August
of 2016, the DEA had announced the adoption of a new policy ``designed
to increase the number of entities registered under the Controlled
Substances Act (CSA) to grow (manufacture) marijuana to supply
legitimate researchers in the United States.'' Applications to Become
Registered Under the Controlled Substances Act to Manufacture Marijuana
to Supply Researchers in the United Sates, 81 Fed. Reg. 53,846 (Aug.
12, 2016) (codified at 21 C.F.R. pt. 1301).
---------------------------------------------------------------------------
During the 1980s, Congress and President Ronald Reagan
enacted many mandatory minimum penalties and increased the
length of existing penalties, particularly for drug and violent
felonies.\29\ The Reagan Administration also launched the
``Just Say No'' campaign against drug use and enforced a ``zero
tolerance'' policy in relation to drugs.\30\ Congress created
the U.S. Sentencing Commission during this time period, as part
of the Sentencing Reform Act provisions of the Comprehensive
Crime Control Act of 1984,\31\ to establish sentencing policies
and practices for the federal courts, ``including guidelines to
be consulted regarding the appropriate form and severity of
punishment for offenders convicted of federal crimes.''\32\ The
Sentencing Commission began to develop guidelines that operated
by establishing a mandatory minimum term of imprisonment where
none had existed before,\33\ but Congress also began to reenact
mandatory minimums, many of which were put in place through the
Anti-Drug Abuse Act of 1986.\34\
---------------------------------------------------------------------------
\29\See U.S. Sentencing Comm'n, 2011 Report to the Congress:
Mandatory Minimum Penalties in the Criminal Justice System 23 (2011).
\30\See Michael McGrath, Nancy Reagan and the Negative Impact of
the `Just Say No' Anti-Drug Campaign, The Guardian (Mar. 8, 2016),
https://www.theguardian.com/society/2016/mar/08/nancy-reagan-drugs-
just-say-no-dare-program-opioid-epidemic.
\31\Pub. L. No. 98-473, 98 Stat. 1837, 1987 (1984).
\32\U.S. Sentencing Comm'n, Mission, available at https://
www.ussc.gov/about-page.
\33\See 18 U.S.C. Sec. 3553(b)(1) (provision severed and excised by
United States v. Booker, 543 U.S. 220 (2005)).
\34\Pub. L. No. 99-570, 100 Stat. 3207 (1986). The Act established
mandatory minimums in 21 U.S.C. Sec. Sec. 841 (possession with intent
to distribute controlled substances); 844 (simple possession); 845
(distribution to a person under 21 years of age); 845a (distribution
near a school); 845b (use of a child in a drug operation); 960
(controlled substance import or export offenses); and in 18 U.S.C.
Sec. 924(e) (adding drug offenses to the Armed Career Criminal Act's
predicate offense list).
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The Anti-Drug Abuse Act of 1986 set forth the basic
framework of mandatory minimum penalties for federal drug
trafficking offenses. The Act established quantities that
triggered those mandatory minimum penalties, ranging from five
years to life imprisonment, which differed for various
drugs.\35\ The Anti-Drug Abuse Act established mandatory
minimums of ten years for possessing with intent to distribute,
importing, or exporting 1000 kilograms or more of a mixture or
substance containing a detectable amount of marijuana, and five
years for possessing with intent to distribute, importing, or
exporting 100 kilograms or more of a mixture or substance
containing a detectable amount of marijuana.\36\ In addition,
the Act established that a person convicted of possessing with
intent to distribute, importing, or exporting a controlled
substance in Schedule I (including marijuana) could be
sentenced to up to 20 years in prison.\37\
---------------------------------------------------------------------------
\35\Pub. L. No. 99-570, 100 Stat. 3207-2 (1984).
\36\Pub. L. No. 99-570, 100 Stat. 3207-2 and 3207-15 (1986). The
Act established additional mandatory minimums of 10 years, 20 years and
life imprisonment depending on whether death or serious bodily injury
resulted from use of the drug or whether the offense was committed
following a prior felony drug conviction. See id.
\37\Pub. L. No. 99-570, 100 Stat. 3207-4 and 3207-17 (1986). With a
drug prior, the maximum sentence increased to 30 years. Id. If death or
bodily injury resulted from use of the substance, the Act mandated a
mandatory minimum term of 20 years, and, with a drug prior, a sentence
of life in prison. Id.
---------------------------------------------------------------------------
The current federal statutory scheme prohibits the
cultivation or distribution of marijuana, the possession of
marijuana with the intent to distribute, as well as the
importation and exportation of marijuana.\38\ Marijuana
offenses involve some of the same mandatory minimums as were
mandated by Congress in the Anti-Drug Abuse Act (ten years\39\
and five years,\40\ depending on the amount at issue, and
higher mandatory minimums ranging from 15 years to life in
prison, depending on recidivism and whether death or serious
bodily injury resulted).\41\
---------------------------------------------------------------------------
\38\See 21 U.S.C. Sec. Sec. 841(b)(1)(A)-(D) and 960(b)(1)-(4)
(2019).
\39\This mandatory minimum now includes the possession of ``1,000
or more marihuana plants, regardless of weight.'' See 21 U.S.C.
Sec. 841(b)(1)(A)(vii) (2019).
\40\This mandatory minimum now includes the possession of ``100 or
more marihuana plants, regardless of weight.'' See 21 U.S.C.
Sec. 841(b)(1)(B)(vii) (2019).
\41\See 21 U.S.C. Sec. Sec. 841(b)(1)(A)-(B); 960(b)(1)-(2) (2019);
see also 21 U.S.C. Sec. 851 (2019) (provides a procedure for a
government filing seeking an enhanced penalty for a drug offender
previously convicted of a ``felony drug offense'').
---------------------------------------------------------------------------
The mere possession of marijuana, without intent to
distribute, is generally a misdemeanor subject to up to one
year of imprisonment.\42\ A violation of this federal ``simple
possession'' statute after a single prior conviction under any
federal or state drug law triggers a mandatory minimum
imprisonment term of 15 days (up to a maximum of two years) and
this increases to a minimum of 90 days (and a maximum of three
years) with multiple prior drug convictions.\43\ In a case
concerning less than 50 kilograms of marijuana, a person can be
subject to up to five years of imprisonment.\44\
---------------------------------------------------------------------------
\42\21 U.S.C. Sec. 844(a) (2019).
\43\Id.
\44\21 U.S.C. Sec. 841(b)(1)(D) (2019).
---------------------------------------------------------------------------
Pursuant to the CSA, the federal government prosecutes a
large number of drug trafficking offenses. In fiscal year 2020,
there were 64,565 cases reported to the United States
Sentencing Commission.\45\ Of these, 16,501 cases involved drug
trafficking, and 6.9% of the cases involving drug trafficking
involved marijuana.\46\ Marijuana trafficking offenders have
decreased by 67.3% since FY 2016.\47\ In fiscal year 2020,
there were 1,118 marijuana trafficking offenders, which
reflects the continuing trend of a decreasing number of
offenders since FY 2016.\48\ The vast majority of marijuana
trafficking offenders were men, at 88.8%, in fiscal year
2020.\49\ Over half (59.8%) were United States citizens.\50\
62% of marijuana trafficking offenders prosecuted in federal
court in fiscal year 2020 were Hispanic or Latino, 17.9% were
Black, 14.9% were White, and 5.2% were offenders from other
races.\51\ 65.4% had little or no prior criminal history and
37.1% received a decreased sentence due to minimal
participation in the offense. 88% were sentenced to prison and
the average sentence of all marijuana trafficking offenders was
29 months.\52\ 33.1% of all marijuana trafficking offenders
were convicted of an offense carrying a mandatory minimum,
although 73.9% were not subject to a mandatory minimum for the
following reasons: (1) 51.4% were determined to be eligible for
a ``safety valve'' reduction; (2) 8.9% provided substantial
assistance to the government; and (3) 13.6% provided
substantial assistance and were eligible for the safety
valve.\53\
---------------------------------------------------------------------------
\45\U.S. Sentencing Comm'n, Quick Facts: Marijuana Trafficking
Offenses, at 1, https://www.ussc.gov/sites/default/files/pdf/research-
and-publications/quick-facts/Marijuana--FY20.pdf.
\46\Id.
\47\Id.
\48\Id.
\49\Id.
\50\Id.
\51\Id.
\52\Id.
\53\Id.
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The Federal Bureau of Investigation reported that police
arrested 545,602 people for cannabis-related crimes in 2019.
That arrest rate is 9% higher than the 495,871 people arrested
for violent crimes the same year.\54\ Of the 1,067,764 arrests
for all drug offenses reported in the United States in Fiscal
Year 2019,\55\ 13.3% were for the sale or manufacture of any
drug and, of these, 3.3%--or approximately 7,424 arrests--were
for marijuana.\56\ In 2018, the percentage of drug possession
arrests relative to arrests for all drug offenses was 86.7%; of
these, 32.1% were for marijuana.\57\
---------------------------------------------------------------------------
\54\See Federal Bureau of Investigation, Uniform Crime Report, 2019
Crime in the United States, Estimated Number of Arrests, United States,
2018 (Table 29), https://ucr.fbi.gov/crime-in-the-u.s/2019/crime-in-
the-u.s.-2019/topic-pages/persons-arrested. See also https://
www.forbes.com/sites/emilyearlenbaugh/2020/10/06/more-people-were-
arrested-for-cannabis-last-year-than-for-all-violent-crimes-put-
together-according-to-fbi-data/?sh=31c6fd71122f.
\55\See Federal Bureau of Investigation, Uniform Crime Report, 2018
Crime in the United States, Estimated Number of Arrests, United States,
2018 (Table 29), https://ucr.fbi.gov/crime-in-the-u.s/2018/crime-in-
the-u.s.-2018/tables/table-29.
\56\See id.
\57\See id.
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The possession, cultivation, or distribution of marijuana
remains a federal crime within every state that has legalized
it. As a result, a person who grows, possesses, uses, sells,
transports, or distributes marijuana, even if done in a way
that is consistent with state law or authorized by a state
license, is nonetheless in violation of the CSA and remains
subject to federal prosecution. In addition, because marijuana
is still a federally-controlled substance, the application of
various money laundering and banking laws has hampered the
ability of commercial marijuana establishments to obtain the
necessary financing and financial services to establish and
grow their businesses.\58\ On April 19, 2021, the House of
Representatives passed H.R. 1996, the ``Secure And Fair
Enforcement Banking Act of 2021'' (the ``SAFE Banking Act of
2021'') by a vote of 321-101. This bipartisan bill addresses
the barriers affecting cannabis companies' access to financial
services; however, the bill does not address the status of
cannabis as an illegal substance under federal law.
---------------------------------------------------------------------------
\58\See generally Gustav Stickley, The SAFE Banking Act: A
Reasonable and Narrowly Tailed Approach to Addressing Public Safety
Concerns and Lack of Financial Services in Today's Cannabis Industry,
JD Supra (July 8, 2021) https://www.jdsupra.com/legalnews/the-safe-
banking-act-a-reasonable-and-2393575/.
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1. IMPACT ON MINORITY COMMUNITIES
As noted above, cannabis policies with a disproportionate
impact on minority communities began in the early part of the
20th century. Beginning in the 1960s, national policies
emphasized a law enforcement-focused approach that exacerbated
problems in cities throughout the country.\59\ The War on Drugs
amplified these problems by distorting the statistics that tied
drug addiction to instances of crime.\60\ The national
conversation thus shifted away from eradicating the causes of
crime and focused it on punishing the criminal.\61\ ``Drug
users'' became synonymous with people of color. As noted in The
Atlantic, ``Shifting public perception in this way ultimately
served to reinforce the `necessity' of Nixon's drug war. Once
addicts were no longer seen as sick victims of a society that
systematically excluded them, no one would mind when they were
simply locked up. In fact, incarceration was for the nation's
own good.''\62\ This ``lock them up'' mentality continued
through the 1980s and 1990s.\63\
---------------------------------------------------------------------------
\59\See Emily Dufton, The War on Drugs: How President Nixon Tied
Addiction to Crime, The Atlantic (Mar. 26, 2012), https://
www.theatlantic.com/health/archive/2012/03/the-war-on-drugs-how-
president-nixon-tied-addiction-to-crime/254319/.
\60\Id.
\61\See id.
\62\Id. (emphasis in original).
\63\Matthew Yglesias, The Real Reason Mass Incarceration Happened,
Vox (Apr. 11, 2016), https://www.vox.com/2016/4/11/11399870/mass-
incarceration-cause.
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Enforcement of marijuana laws has been a key driver of mass
criminalization in the United States. As noted above, in 2018,
there were over 533,400 marijuana-related arrests.\64\ Of
these, almost 526,000 were arrests for marijuana
possession.\65\ The drug war has produced profoundly unequal
outcomes across racial groups, manifested through significant
racial disparities throughout the criminal justice system.
---------------------------------------------------------------------------
\64\See supra notes 62 and 63.
\65\See supra note 63.
---------------------------------------------------------------------------
The higher arrest and incarceration rates for communities
of color do not reflect a greater prevalence of drug use, but
rather the focus on law enforcement on urban areas, lower
income communities, and communities of color.\66\ In fact,
nearly 80% of people in federal prison and almost 60% of people
in state prison for drug offenses are Black or Latino.\67\ In
its seminal 2013 report, ``The War on Marijuana in Black and
White,'' the American Civil Liberties Union found:
---------------------------------------------------------------------------
\66\See Drug Policy Alliance, Race and the Drug War, http://
www.drugpolicy.org/issues/race-and-drug-war.
\67\See id.
[O]n average, a Black person is 3.73 times more
likely to be arrested for marijuana possession than a
white person, even though Blacks and whites use
marijuana at similar rates. Such racial disparities in
marijuana possession arrests exist in all regions of
the country, in counties large and small, urban and
rural, wealthy and poor, and with large and small Black
populations. Indeed, in over 96% of counties with more
than 30,000 people in which at least 2% of the
residents are Black, Blacks are arrested at higher
rates than whites for marijuana possession.\68\
---------------------------------------------------------------------------
\68\Amer. Civil Liberties Union, The War on Marijuana in Black and
White (June 2013), at 4.
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2. COLLATERAL CONSEQUENCES
The collateral consequences of even an arrest for marijuana
possession can be devastating, especially if a felony
conviction results. Those arrested can be saddled with a
criminal conviction that can make it difficult or impossible to
vote, obtain educational loans, get a job, maintain a
professional license, secure housing, receive government
assistance, or even adopt a child.\69\ These exclusions create
an often-permanent second-class status for millions of
Americans. Like drug war enforcement itself, these consequences
fall disproportionately on people of color. For non-citizens, a
conviction can trigger deportation, sometimes with almost no
possibility of discretionary relief.\70\ In fact, simple
marijuana possession was the fourth most common cause of
deportation for any crime in 2013.\71\ More than 13,000 people
were deported in 2012 and 2013 just for personal marijuana
possession.\72\
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\69\See Drug Policy Alliance, Just a Slap on the Wrist?: The Life-
Changing Consequences of a Marijuana Arrest (Feb. 2016), at http://
www.drugpolicy.org/sites/default/files/
DPA_Fact%20sheet_Harms%20of%20Marijuana%20Criminalization_%28Feb.%202016
%29.pdf.
\70\See Jason Cade, The Plea Bargain Crisis for Noncitizens in
Misdemeanor Court, 34 Cardozo L. Rev. 1754 (2013).
\71\See Drug Policy Alliance, supra note 77, at 1.
\72\See id.
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Today, overcriminalized communities continue to suffer the
consequences of failed drug policies, even in states that have
legalized marijuana, where arrests have dropped for marijuana
crimes.\73\ Legalization has not generated a reduction of the
rate at which Black and Latino people are arrested in these
states.\74\ In fact, many states have seen an even steeper rise
in the percentage of African-Americans and Latinos having their
lives impacted by a marijuana arrest.\75\ Two years after
decriminalization in Washington, DC, a Black person was 11
times more likely than a white person to be arrested for public
use of marijuana.\76\
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\73\See German Lopez, After Legalization, Black People Are Still
Arrested at Higher Rates for Marijuana than White People, Vox (Jan. 29,
2018), https://www.vox.com/policy-and-politics/2018/1/29/16936908/
marijuana-legalization-racial-disparities-arrests.
\74\See id.
\75\See id.
\76\Drug Policy Alliance, From Prohibition to Progress: A Status
Report on Marijuana Legalization (Jan. 2018), at 31, http://
www.drugpolicy.org/sites/default/files/
dpa_marijuana_legalization_report_feb14_2018_0.pdf.
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Public support for making marijuana legal has increased
over the past two decades.\77\ The resulting trend in state-
level legalization of marijuana has placed states in apparent
conflict with federal law and, as a result, the Justice
Department has struggled with how to continue to uphold federal
law in this context. Meanwhile, numerous difficulties have
arisen as states seek to develop a framework for a legal
cannabis industry without easy access to banking and credit.
Because marijuana is still a controlled substance under the
CSA, the specter of prosecution for participation in the
cannabis industry looms large, even though medicinal or
recreational marijuana is legal in 33 states and the District
of Columbia.
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\77\See Hannah Hartig & A.W. Geiger, About Six-in-Ten Americans
Support Marijuana Legalization, Pew Research Center (Oct. 8, 2018),
https://www.pewresearch.org/fact-tank/2018/10/08/americans-support-
marijuana-legalization/.
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In addition, the collateral consequences suffered by those
with marijuana convictions are numerous and vast. Many criminal
justice advocates argue that expunging marijuana convictions is
a necessary addition to any legalization measure.\78\ Moreover,
they believe that people who have been harmed by marijuana
enforcement should have a place in the burgeoning marketplace
created by legalization. They further argue that reform efforts
should enable people who have struggled to find employment due
to drug convictions to participate meaningfully in the
marijuana industry.\79\ They contend that excluding people
directly impacted by criminalization from the marijuana
industry further entrenches the outsized impact that the War on
Drugs has had on communities of color.\80\
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\78\See Sophie Quinton, In These States, Past Marijuana Crimes Can
Go Away, Pew Charitable Trusts (Nov. 20, 2017), https://
www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2017/11/20/
in-these-states-past-marijuana-crimes-can-go-away; Charlotte Resing,
Marijuana Legalization is a Racial Justice Issue, Amer. Civil Liberties
Union (Apr. 20, 2019), https://www.aclu.org/blog/criminal-law-reform/
drug-law-reform/marijuana-legalization-racial-justice-issue; Margaret
Stevenson, Expungement: A Gateway to Work, Sargent Shriver National
Center on Poverty Law (Apr. 2015), https://www.povertylaw.org/
clearinghouse/articles/expungement.
\79\See id.
\80\See Resing, supra note 86.
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Hearings
For the purposes of clause 3(c)(6)(A) of House Rule XIII,
the following hearings were used to develop H.R. 3617: On March
11, 2021, the Crime Subcommittee held a hearing entitled,
``Controlled Substances: Federal Policies and Enforcement,''
which included testimony on the harsh impact of current federal
laws and policies related to marijuana and the pressing need
for reform. The witnesses at the hearing were: Nicole M.
Austin-Hillery, Executive Director, US Program, Human Rights
Watch; Howard Henderson, Founding Director, Center for Justice
Research, Texas Southern University and Nonresident Senior
Fellow, Governance Studies, Brookings Institution; Derek Maltz,
Former Special Agent in Charge, Special Operations Division,
U.S. Department of Justice; and Katharine Neill Harris, Alfred
C. Glassell, III, Fellow in Drug Policy, Rice University's
Baker Institute for Public Policy.
Last Congress, the Committee's hearing on ``Marijuana Laws
in America: Racial Justice and the Need for Reform,'' held on
July 10, 2019, discussed a variety of issues relative to the
need for reform of marijuana laws in America, including
criminal justice equity concerns and public health
considerations. The witnesses at the hearing were: G. Malik
Burnett, Washington, DC; Marilyn Mosby, State's Attorney for
Baltimore City; David L. Nathan, Doctors for Cannabis
Regulation; Neal Levine, Chief Executive Officer, Cannabis
Trade Federation. Subsequently, the Committee reported out a
previous version of this bill, the ``MORE Act of 2020,'' which
later passed the House by a bipartisan vote of 228-164.
Committee Consideration
On September 30, 2021, the Committee met in open session
and ordered the bill, H.R. 3617, favorably reported as amended,
by a rollcall vote of 26-15, a quorum being present.
Committee Votes
In compliance with clause 3(b) of House Rule XIII, the
following rollcall votes occurred during the Committee's
consideration of H.R. 3617:
1. An amendment by Mr. Tiffany of Wisconsin to change the
definition of ``eligible entities'' to include individuals
``whose leadership does not include an individual who has been
convicted of an offense under State or Federal law involving
rioting, looting, or destruction of property,'' was defeated by
a rollcall vote of 15 in favor and 19 against. The vote was as
follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
2. An amendment by Mr. Fitzgerald of Wisconsin to change
the definition of individuals eligible to participate in
substance use disorder services to exclude individuals
convicted of an offense under section 924(c) of title 18 of the
United States Code was defeated by a rollcall vote of 15 in
favor and 20 against. The vote was as follows:
3. An amendment by Mr. Fitzgerald of Wisconsin to amend the
bill's definition of an ``individual adversely impacted by the
War on Drugs,'' by striking the word ``reports'' and replacing
it with ``has'' was defeated by a rollcall vote of 16 in favor
and 20 against. The vote was as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
4. An amendment by Mr. Bishop of North Carolina was offered
to add a provision to the bill related to nondiscrimination
``on the basis of the COVID-19 vaccination status of an
individual or the advocacy by an individual or entity with
respect to any COVID-19 vaccination mandate'' was defeated by a
rollcall vote of 18 in favor and 21 against. The vote was as
follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
5. A motion to report H.R. 3617, as amended, favorably was
agreed to by a rollcall vote of 26 in favor and 15 against. The
vote was as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Committee Oversight Findings
In compliance with clause 3(c)(1) of House Rule XIII, the
Committee advises that the findings and recommendations of the
Committee, based on oversight activities under clause 2(b)(1)
of House Rule X, are incorporated in the descriptive portions
of this report.
Committee Estimate of Budgetary Effects
Pursuant to clause 3(d)(1) of House Rule XIII, the
Committee adopts as its own the cost estimate prepared by the
Director of the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974.
New Budget Authority and Congressional Budget Office Cost Estimate
Pursuant to clause 3(c)(2) of House Rule XIII and section
308(a) of the Congressional Budget Act of 1974, and pursuant to
clause (3)(c)(3) of House Rule XIII and section 402 of the
Congressional Budget Act of 1974, the Committee has requested
but not received from the Director of Congressional Budget
Office a budgetary analysis and a cost estimate of this bill.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of House Rule XIII, no provision
of H.R. 3617 establishes or reauthorizes a program of the
federal government known to be duplicative of another federal
program.
Performance Goals and Objectives
The Committee states that pursuant to clause 3(c)(4) of
House Rule XIII, H.R. 3617 would be consistent with its general
goals and objectives by removing marijuana from the schedule of
controlled substances, expunging federal marijuana-related
convictions, and creating programs within the Department of
Justice and the Small Business Administration to ensure the
benefits of the excise tax on sales of marijuana products
imposed pursuant to H.R. 3617 are made available for
individuals and communities most adversely impacted by the War
on Drugs.
Advisory on Earmarks
In accordance with clause 9 of House Rule XXI, H.R. 3617
does not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits as defined in clause 9(d),
9(e), or 9(f) of House Rule XXI.
Section-by-Section Analysis
The following discussion describes the bill as reported by
the Committee as an amendment in the nature of a substitute.
Sec. 1. Short Title. The title of this Act is the
``Marijuana Opportunity Reinvestment and Expungement Act'' or
the ``MORE Act.''
Sec. 2. Findings. Based on Representative Barbara Lee's
Marijuana Justice Act, Section 2 sets forth findings pertaining
to the purpose of the legislation.
Sec. 3. Decriminalization of Cannabis. Section 3 would
decriminalize cannabis by removing two items--marihuana and
tetrahydrocannabinols--from Schedule I of the Controlled
Substances Act (CSA) along with a series of conforming
amendments. This section would make the descheduling of
cannabis retroactive, including cases involving juvenile
adjudications.
Section 3 would also direct the Attorney General to
finalize a rule, no later than 180 days after enactment of the
MORE Act, removing marihuana and tetrahydrocannabinols from the
schedules of controlled substances, for the purposes of the
CSA. The conforming amendments in this section clarify that, in
the interest of safety, the Secretary of Transportation, and
the Coast Guard shall continue to prescribe regulations setting
standards for testing or medical certifications to detect
illegal use of or the unauthorized presence marijuana and other
substances by safety-sensitive employees regulated by the
Federal Aviation Administration, the Federal Motor Carrier
Safety Administration, the Federal Railroad Administration, the
Federal Transit Administration and the Pipeline and Hazardous
Materials Safety Administration, or the United States Coast
Guard.
Section 3 would also mandate that the Secretary of Health
and Human Services hold not less than one public meeting, not
later than one year after the date of enactment of the MORE
Act, to address the regulation, safety, manufacturing, product
quality, marketing, labeling, and sale of products containing
cannabis or cannabis-derived compounds.
The bill includes provisions to ensure that employees
working in safety-sensitive transportation positions regulated
by the Federal government would still be tested for the illegal
or unauthorized use of alcohol, marijuana, or other substances.
The section contains a provision ensuring that the Department
of Transportation and the Coast Guard may continue to issue
regulations and test for the unauthorized presence of or
illegal use of marijuana by certain transportation employees in
sensitive-safety positions. Existing and ongoing drug testing
of federal employees by federal agencies remains unchanged.
In addition, the bill includes a provision stating that the
FDA can still issue regulations on cannabis products.
Sec. 4. Demographic Data of Cannabis Business Owners and
Employees. Section 4 would direct the Bureau of Labor
Statistics to regularly compile, maintain, and make public data
on the demographics (i.e., age, race and ethnicity, sex, etc.)
of the individuals who are business owners in the cannabis
industry and individuals who are employed in the cannabis
industry. Section 4 would preserve confidentiality by ensuring
that no names, addresses, or other identifying information
collected under this section are made available to the public.
Sec. 5. Creation of Opportunity Trust Fund and Imposition
of Taxes with Respect to Cannabis Products. The bill creates a
comprehensive tax regime for cannabis, including excise and
occupational taxes.
This section would establish an excise tax regime on
cannabis products produced in, or imported into, the United
States by adding a new chapter, chapter 56, relating to
``Cannabis Products.'' This section would also establish an
occupational tax on producers and exporters of cannabis
products. Net revenues from these taxes are designated for a
newly-established Opportunity Trust Fund.
Subsection 5(a)--Establishment of Trust Fund. Subsection
5(a) establishes the Opportunity Trust Fund, without a request
for new appropriations. This trust fund shall be funded by the
net revenues generated by the tax on cannabis products, and the
tax on producers and exporters, established in subsection 5(b)
of this legislation. The funds of this trust fund shall be
available, without further appropriation, as follows:
50% to the Attorney General to carry out the
Community Reinvestment Grant Program, as established by
this legislation.
10% to the Attorney General to provide
substance use treatment services to 501(c)(3)
organizations with experience providing relevant
services to individuals adversely impacted by the War
on Drugs.
20% to the Small Business Administrator to
carry out the Cannabis Opportunity Program, as
established by this legislation.
20% to the Small Business Administrator to
carry out the Equitable Licensing Grant Program, as
established by this legislation.
Subsection 5(b)--Cannabis Revenue and Regulation Act. This
subsection: (1) establishes a tax on cannabis products, (2)
establishes bond and permitting rules for producers of cannabis
products, (3) establishes an occupational tax, (4) provides
certain rules related to recordkeeping, packaging and labeling,
as well as other operations matters, and (5) provides penalties
for failure to comply with these rules.
Rates
First, this section imposes a tax on any cannabis product
produced or imported into the United States for the first five
calendar years after this legislation becomes effective equal
to:
5% of the sale price at removal for years
one and two,
6% of the sale price at removal for year
three,
7% of the sale price at removal for year
four, and
8% of the sale price at removal for year
five.
Beginning after the fifth year, the tax due on cannabis
products shall be the applicable equivalent amount. For any
THC-measurable cannabis product, the applicable equivalent
amount is 8% of the prevailing sales price for
tetrahydrocannabinol (THC) during the prior year (as determined
by the Secretary), multiplied by the THC content in the
cannabis product. For cannabis products that are not THC-
measurable, the applicable equivalent amount is 8% of the sale
price of cannabis flowers and buds during the prior year (as
determined by the Secretary of the Treasury), multiplied by the
weight of the product. The Secretary determines what products
are THC-measurable cannabis products.
A ``cannabis product'' generally includes any article
containing (or consisting of) cannabis. However, industrial
hemp and FDA-approved articles containing cannabis are
excepted. In addition, cannabis products used exclusively for
scientific research, by a proprietor of a cannabis production
facility for research, development, or testing, or by any
United States, state, or local government agency for non-
consumption purposes, are exempt from tax.
Cannabis produced solely for personal or family use (and
not for sale) are also exempt from tax and the requirements set
forth by this newly-created subchapter.
Permits, Bonding, and Payment of Tax
The excise tax on cannabis products is paid by the producer
or importer of the product. Producers and importers must obtain
permits from the federal government before commencing business.
In addition, they must secure a bond for their cannabis
production facilities.
In general, the tax is due when the cannabis product is
removed from bond. In the case of cannabis products transferred
amongst bonded premises of producers and export warehouse
proprietors, no tax is owed at the time of transfer, but each
bonded transferee shall become liable for the tax on such
product upon receipt of such product. In the case of cannabis
products which are released in bond from customs custody to
transfer to a bonded premises of a producer, the transferee
shall become liable for the tax on such product upon receipt of
such product.
Taxes on any cannabis products removed from bond by a
taxpayer shall be paid no later than 14 days after the semi-
monthly period during which such products are removed from
bond. In the case of cannabis products imported into the United
States, taxes on such products shall be paid no later than 14
days after the semi-monthly period during which such products
are entered into the customs territory of the United States, or
in the event of entry for warehousing, 14 days after the semi-
monthly period during which such products are removed from the
first such warehouse. Foreign trade zones shall be treated as a
single customs warehouse for purposes of this subsection.
In the case of products sold at below the fair market
price, sold under circumstances otherwise than arm's length, or
removed without sale or in a circumstance where the price for
which products sold cannot be determined, the tax under this
chapter shall be determined based on the price for which such
articles are sold in the course of ordinary trade as determined
by the Secretary.
Occupational Taxes
In addition to the excise tax, an occupational tax is also
established. Any person engaged in business as a producer or an
export tax proprietor shall pay a tax of $1,000 per year for
each premises of which such businesses is carried on. Any
person who willfully fails to do so shall be fined not more
than $5,000 or imprisoned for no more than two years for each
such offense.
Recordkeeping, Packaging, Labeling, etc.
Subsection 5(b) also provides rules related to
recordkeeping, packaging and labeling, as well as other
operations matters. Recordkeeping rules require that every
producer, importer, and export warehouse shall keep a true and
accurate inventory, subject to verification by an internal
revenue officer, and make reports and keep records in such a
manner as prescribed by the Secretary of the Treasury.
Certain labeling requirements are also provided. Cannabis
products labeled for export may be removed from the premises of
a producer or export warehouse if such products are transferred
or removed under bond. Cannabis products labeled for export may
not be sold for domestic consumption in the United State unless
such products are removed from their export packaging and
repackaged by the original producers into new packaging that
does not include an export label.
Cannabis products removed from bond by producers and export
warehouse proprietors for shipment to a foreign country, Puerto
Rico, the US Virgin Islands, or other US territory, are not
subject to tax.
Penalties
Any person who illegally produces or imports cannabis
products is still liable for the tax. Any person who, with
intent to defraud the United States, purchases or sells
cannabis product after removal for which tax has not been paid
shall be liable for a tax equal to the tax on the products.
Any person who willfully omits, neglects or refused to
comply with a duty imposed on them by this chapter, or does
anything prohibited by this chapter, shall, in addition to any
other penalty provided by this title, be liable to pay a
penalty of $10,000.
Whoever fails to pay any tax imposed by this chapter at the
time prescribed shall, in addition to any other penalty
provided in this title, be liable to pay a penalty of 10% of
taxes unpaid. Any person who sells, receives, or relands
cannabis labeled for export within the United States, or
otherwise aids or abets such activity, shall be liable for a
penalty equal to the greater of $10,000 or 10 times the amount
of tax imposed by this chapter. All such cannabis products and
related vessels, vehicles, and aircrafts used in such relanding
shall be forfeited to the United Stated and destroyed.
Any person who, with intent to defraud the United States,
engages in a business as a cannabis enterprise without
obtaining the permit required; fails to keep adequate records
or keeps false records; refuses to pay or attempts to evade
tax; sells or transfers cannabis products outside of the
regulations prescribed under this chapter; or purchases,
receives, or possesses, with intent to redistribute or resell,
any cannabis products upon which tax has not been paid, shall
be fined not more than $10,000 or imprisoned not more than five
years, or both, for each such offense. Any person found in
possession of articles in violation shall be subject to tax on
such articles.
This provision also would require a study by the Secretary
of the Treasury on the characteristics of the cannabis
industry, with recommendations to improve the regulation of the
industry and related taxes. In addition, the Secretary would
have ongoing reporting requirements related to the
determination of the applicable tax rate for cannabis and THC.
Sec. 6. Opportunity Trust Fund Grant Programs. Section 6
would establish programs in the Department of Justice and the
Small Business Administration (SBA) to be funded from the
Opportunity Trust Fund established in Section 5 of the bill.
The bill now targets the benefits of the Opportunity Trust Fund
to those individuals with prior cannabis convictions and their
families, while allowing programs focused on substance use
disorders treatment and related services remain available to
serve individuals with convictions for controlled substances
other than cannabis.
Subsection 6(a)--Cannabis Justice Office; Community
Reinvestment Grant Program. Subsection 6(a) would create a
Cannabis Justice Office (CJO), with a Director (appointed by,
and who would report to, the Assistant Attorney General for the
Office of Justice Programs). The Director would be exclusively
assigned to the CJO. The CJO would administer the Community
Reinvestment Grant Program.
The Community Reinvestment Grant Program would fund
eligible non-profit community organizations to provide a
variety of services for individuals adversely impacted by the
War on Drugs (as defined in subsection 6(b)), to include job
training, reentry services, legal aid for civil and criminal
cases (including for expungement of cannabis convictions),
among others. The Community Reinvestment Grant Program would
separately fund eligible non-profit community organizations to
administer substance use disorder services for individuals
adversely impacted by the War on Drugs. These substance use
disorder services would also be available to individuals
arrested for or convicted of the sale, possession, use,
manufacture, or cultivation of a controlled substance other
than cannabis (except for a conviction involving distribution
to a minor).
Subsection 6(b)--Cannabis Restorative Opportunity Program;
Equitable Licensing Grant Program. Subsection 6(b) would direct
the SBA to establish and carry out a Cannabis Restorative
Opportunity Program and an Equitable Licensing Grant Program.
Eligible entities under these two SBA programs would be States
and localities that (1) have taken steps to create an automatic
process for the expungement, destruction, or sealing of
criminal records for cannabis offenses and (2) have taken steps
to eliminate violations or other penalties for persons still
under State or local criminal supervision for a cannabis-
related offense or violation for conduct now lawful under State
or local law.
Under the Cannabis Restorative Opportunity Program, funds
would be made available for loans to assist small business
concerns that are owned and controlled by individuals adversely
impacted by the War on Drugs in eligible States and localities.
Under the Equitable Licensing Grant Program, funds would be
made available to eligible States and localities to develop and
implement equitable cannabis licensing programs that minimize
barriers to cannabis licensing and employment for individuals
adversely impacted by the War on Drugs. These individuals are
defined in this section as those: (1) who have had an income
below 250 percent of the Federal Poverty level for at least 5
of the past 10 years, and (2) who have been arrested for the
sale, possession, use, manufacture, or cultivation of cannabis
(except for a conviction involving distribution to a minor), or
whose parent, sibling, spouse, or child has been arrested for
or convicted of such an offense.
This section would also require the GAO, in consultation
with the SBA, to conduct a study on the individuals and
entities receiving assistance under these newly-established SBA
programs. The study shall include the types of assistance by
state as well as a description of the SBA's efforts to increase
access to capital for cannabis-related small business concerns
owned and controlled by socially and economically disadvantaged
individuals, individuals adversely impacted by the War on Drugs
as well as the racial, ethnic, economic and gender composition
of the eligible state or locality.
Sec. 7. Availability of Small Business Administration
Programs and Services to Cannabis-Related Legitimate Businesses
and Service Providers. Section 7 would ensure cannabis-related
legitimate businesses and service providers are not prohibited
from having access to: (1) services from Small Business
Development Centers; (2) services from Women's Business
Centers; (3) services from the SCORE program; (4) services from
Veteran Business Outreach Centers; (5) loan guarantees under
the Loan Guaranty Program in section 7(a) of the Small Business
Act; (6) assistance under SBA's Disaster Assistance Program; or
(7) assistance under SBA's Microloan program from
intermediaries participating in SBA's Microloan program.
Section 7 would also prohibit the SBA from declining to provide
a loan guarantee under the 504/Certified Development Company to
an otherwise eligible State or local development company solely
because such State or local development company provides
financing to an entity that is a cannabis-related legitimate
business or service provider. For purposes of this section
``cannabis'' means all parts of the plant Cannabis sativa L,
whether growing or not, seeds, resin, and compounds, but does
not include hemp, the mature stalks of Cannabis sativa L.,
products from such stalks or sterilized seeds, or related
approved drugs or licensed biological products.
Sec. 8. No Discrimination in the Provision of a Federal
Public Benefit on the Basis of Cannabis. Section 8 would make
clear that no person may be denied a Federal public benefit on
the basis of any use or possession of cannabis, or on the basis
of a conviction or adjudication of juvenile delinquency for a
cannabis offense. In addition, federal agencies would be
precluded from using past or present cannabis or marijuana use
as criteria for granting, denying, or rescinding a security
clearance.
Sec. 9. No Adverse Effect for Purposes of the Immigration
Laws. Section 9 would ensure that cannabis is not considered a
controlled substance for purposes of the immigration laws, and
it would establish that no alien may be denied any benefit or
protection under the immigration laws, regardless of whether
the conduct, finding, admission, addiction or abuse, arrest,
conviction, or juvenile adjudication relating to cannabis
occurred before, on, or after the effective date of the MORE
Act. Section 9 would define cannabis in the same manner as
under Section 7 and make a series of conforming amendments
striking marihuana from the Immigration and Nationality Act.
Sec. 10. Resentencing and Expungement. Section 10 has
different expungement and sentencing review procedures for
individuals (1) who have completed their Federal sentences or
adjudications of juvenile delinquency and are no longer under
court supervision (i.e., ``not under a criminal justice
sentence'') and (2) who are still serving their Federal
sentences or adjudications or are otherwise under court
supervision (i.e., ``under a criminal justice sentence'').
Section 10 would ensure the appointment of counsel for indigent
individuals seeking expungement or sentencing review.
Individuals who received an aggravating role adjustment
pursuant to United States Sentencing Guideline 3B1.1(a) in
relation to a federal cannabis conviction would be ineligible
for expungement under the bill.
Subsection 10(a)--Expungement of Non-Violent Federal
Cannabis Offense Convictions for Individuals Not Under a
Criminal Justice Sentence. For individuals not under a criminal
justice sentence, subsection 10(a) would direct each Federal
district, not later than one year after enactment of the MORE
Act, to order the expungement of each conviction and juvenile
adjudication for a cannabis offense entered by each court in
the district, retroactive to the effective date of the
Controlled Substances Act (May 1, 1971). However, any
individual ``not under a criminal justice sentence'' would have
a right to petition the court for expungement at any point
after the enactment of the MORE Act (e.g., if any such
individual would need or desire expungement earlier than one
year after enactment, or if a court fails to pursue expungement
where an individual believes they are eligible). Subsection
10(a) would also direct the court to order the expungement of
any associated arrests. Records expunged under subsection 10(a)
would be sealed and could only be made available by further
order of the court. Finally, subsection 10(a) would direct that
each Federal district, to the extent practicable, notify each
individual whose conviction or juvenile adjudication has been
expunged about such expungement and the effect of the
expungement.
Subsection 10(b)--Sentencing Review for Individuals Under a
Criminal Justice Sentence. For individuals still under a
criminal justice sentence, subsection 10(b) would direct the
district court that imposed the sentence or disposition to hold
a sentencing review hearing. Sentencing review could be
initiated by the individual, the Director of the Bureau of
Prisons, the attorney for the Government, or the court.
Subsection 10(b) would direct courts to expunge each conviction
or adjudication of juvenile delinquency and any associated
arrests; vacate any existing sentence or disposition of
juvenile delinquency and, if applicable, impose any remaining
sentence as if the MORE Act (and its amendments) were in effect
at the time the offense was committed; and order all records
that have been expunged or vacated under subsection 10(b) be
sealed and only be made available by further order of the
court.
Subsection 10(c)--Effect of Expungement. In the case of an
expungement under subsection 10(a) or 10(b), the effect of the
expungement would be the same: an individual may treat an
expunged arrest, conviction, or juvenile delinquency
adjudication as if it never occurred and the individual would
be immune from civil or criminal penalties for perjury, false
swearing, or false statements, for failing to disclose the
expunged arrest, conviction, or juvenile delinquency
adjudication.
Subsection 10(d)--Exception. Under subsection 10(d),
individuals who received an aggravating role adjustment
pursuant to United States Sentencing Guideline 3B1.1(a) in
relation to a federal cannabis conviction would be ineligible
for expungement under the bill.
Subsection 10(e)--Definitions. This subsection sets forth
the definitions to be used in the expungement provisions of the
bill--specifically, ``Federal cannabis offense,'' ``expunge,''
and ``under a criminal justice sentence.''
Subsections 10(f) and 10(g)--Study and Report. Subsection
(f) would direct that the Comptroller General, in consultation
with the Secretary of Health and Human Services, conduct a
demographic study of the individuals convicted of a Federal
cannabis offense, including information about the age, race,
ethnicity, sex, and gender identity of those individuals.
Subsection (g) would direct the Comptroller General to report
to Congress the results of the study in subsection (f), no
later than 2 years after enactment of the MORE Act.
Sec. 11. References in Existing Law to Marijuana or
Marihuana. Section 11 inserts the term ``cannabis'' wherever
the term ``marijuana'' (or ``marihuana'') appears in existing
law.
Sec. 12. Severability. Section 12 provides that if any
provision of the MORE Act is held to be unconstitutional, the
remainder of the Act and its application to any other person or
circumstances will not be affected.
Sec. 13. Cannabis Offense Defined. Section 13 defines a
``cannabis offense'' as a criminal offense related to cannabis
that (1) under Federal law, is no longer punishable pursuant to
the MORE Act (or its amendments) and (2) under State law, is no
longer an offense or was designated a lesser offense, or whose
penalty was reduced under State law pursuant to or following
the adoption of a State law authorizing the sale or use of
cannabis.
Sec. 14. Rulemaking. Section 14 would direct the Department
of the Treasury, the Department of Justice, and the Small
Business Administration, not later than one year after the
enactment of the MORE Act, to issue or amend any rules,
standard operating procedures, and other legal or policy
guidance necessary to carry out implementation of the MORE Act.
After the one-year period, Section 14 would prohibit the
issuance of sub-regulatory guidance without 60-day notice to
the appropriate Congressional committee.
Sec. 15. Societal Impact of Marijuana Legalization Study.
Section 15 would direct the Comptroller General to conduct a
study and report to Congress concerning the societal impacts of
the legalization of recreational cannabis by States.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
CONTROLLED SUBSTANCES ACT
TITLE II--CONTROL AND ENFORCEMENT
Part A--Short Title; Findings and Declaration; Definitions
* * * * * * *
definitions
Sec. 102. As used in this title:
(1) The term ``addict'' means any individual who habitually
uses any narcotic drug so as to endanger the public morals,
health, safety, or welfare, or who is so far addicted to the
use of narcotic drugs as to have lost the power of self-control
with reference to his addiction.
(2) The term ``administer'' refers to the direct application
of a controlled substance to the body of a patient or research
subject by--
(A) a practitioner (or, in his presence, by his
authorized agent), or
(B) the patient or research subject at the direction
and in the presence of the practitioner,
whether such application be by injection, inhalation,
ingestion, or any other means.
(3) The term ``agent'' means an authorized person who acts on
behalf of or at the direction of a manufacturer, distributor,
or dispenser; except that such term does not include a common
or contract carrier, public warehouseman, or employee of the
carrier or warehouseman, when acting in the usual and lawful
course of the carrier's or warehouseman's business.
(4) The term ``Drug Enforcement Administration'' means the
Drug Enforcement Administration in the Department of Justice.
(5) The term ``control'' means to add a drug or other
substance, or immediate precursor, to a schedule under part B
of this title, whether by transfer from another schedule or
otherwise.
(6) The term ``controlled substance'' means a drug or other
substance, or immediate precursor, included in schedule I, II,
III, IV, or V of part B of this title. The term does not
include distilled spirits, wine, malt beverages, or tobacco, as
those terms are defined or used in subtitle E of the Internal
Revenue Code of 1954.
(7) The term ``counterfeit substance'' means a controlled
substance which, or the container or labeling of which, without
authorization, bears the trademark, trade name, or other
identifying mark, imprint, number, or device, or any likeness
thereof, of a manufacturer, distributor, or dispenser other
than the person or persons who in fact manufactured,
distributed, or dispensed such substance and which thereby
falsely purports or is represented to be the product of, or to
have been distributed by, such other manufacturer, distributor,
or dispenser.
(8) The terms ``deliver'' or ``delivery'' mean the actual,
constructive, or attempted transfer of a controlled substance
or a listed chemical, whether or not there exists an agency
relationship.
(9) The term ``depressant or stimulant substance'' means--
(A) a drug which contains any quantity of barbituric
acid or any of the salts of barbituric acid; or
(B) a drug which contains any quantity of (i)
amphetamine or any of its optical isomers; (ii) any
salt of amphetamine or any salt of an optical isomer of
amphetamine; or (iii) any substance which the Attorney
General, after investigation, has found to be, and by
regulation designated as, habit forming because of its
stimulant effect on the central nervous system; or
(C) lysergic acid diethylamide; or
(D) any drug which contains any quantity of a
substance which the Attorney General, after
investigation, has found to have, and by regulation
designated as having, a potential for abuse because of
its depressant or stimulant effect on the central
nervous system or its hallucinogenic effect.
(10) The term ``dispense'' means to deliver a controlled
substance to an ultimate user or research subject by, or
pursuant to the lawful order of, a practitioner, including the
prescribing and administering of a controlled substance and the
packaging, labeling, or compounding necessary to prepare the
substance for such delivery. The term ``dispenser'' means a
practitioner who so delivers a controlled substance to an
ultimate user or research subject.
(11) The term ``distribute'' means to deliver (other than by
administering or dispensing) a controlled substance or a listed
chemical. The term ``distributor'' means a person who so
delivers a controlled substance or a listed chemical.
(12) The term ``drug'' has the meaning given that term by
section 201(g)(1) of the Federal Food, Drug, and Cosmetic Act.
(13) The term ``felony'' means any Federal or State offense
classified by applicable Federal or State law as a felony.
(14) The term ``isomer'' means the optical isomer, except as
used in schedule I(c) and schedule II(a)(4). As used in
schedule I(c), the term ``isomer'' means any optical,
positional, or geometric isomer. As used in schedule II(a)(4),
the term ``isomer'' means any optical or geometric isomer.
(15) The term ``manufacture'' means the production,
preparation, propagation, compounding, or processing of a drug
or other substance, either directly or indirectly or by
extraction from substances of natural origin, or independently
by means of chemical synthesis or by a combination of
extraction and chemical synthesis, and includes any packaging
or repackaging of such substance or labeling or relabeling of
its container; except that such term does not include the
preparation, compounding, packaging, or labeling of a drug or
other substance in conformity with applicable State or local
law by a practitioner as an incident to his administration or
dispensing of such drug or substance in the course of his
professional practice. The term ``manufacturer'' means a person
who manufactures a drug or other substance.
(16)(A) Subject to subparagraph (B), the term ``marihuana''
means all parts of the plant Cannabis sativa L., whether
growing or not; the seeds thereof; the resin extracted from any
part of such plant; and every compound, manufacture, salt,
derivative, mixture, or preparation of such plant, its seeds or
resin.
(B) The term ``marihuana'' does not include--
(i) hemp, as defined in section 297A of the
Agricultural Marketing Act of 1946; or
(ii) the mature stalks of such plant, fiber produced
from such stalks, oil or cake made from the seeds of
such plant, any other compound, manufacture, salt,
derivative, mixture, or preparation of such mature
stalks (except the resin extracted therefrom), fiber,
oil, or cake, or the sterilized seed of such plant
which is incapable of germination.
(17) The term ``narcotic drug'' means any of the following
whether produced directly or indirectly by extraction from
substances of vegetable origin, or independently by means of
chemical synthesis, or by a combination of extraction and
chemical synthesis:
(A) Opium, opiates, derivatives of opium and opiates,
including their isomers, esters, whenever the existence
of such isomers, esters, ethers, and salts is possible
within the specific chemical designation. Such term
does not include the isoquinoline alkaloids of opium.
(B) Poppy straw and concentrate of poppy straw.
(C) Coca leaves, except coca leaves and extracts of
coca leaves from which cocaine, ecgonine, and
derivatives of ecgonine or their salts have been
removed.
(D) Cocaine, its salts, optical and geometric
isomers, and salts of isomers.
(E) Ecgonine, its derivatives, their salts, isomers,
and salts of isomers.
(F) Any compound, mixture, or preparation which
contains any quantity of any of the substances referred
to in subparagraphs (A) through (E).
(18) The term ``opiate''or ``opioid'' means any drug or other
substance having an addiction-forming or addiction-sustaining
liability similar to morphine or being capable of conversion
into a drug having such addiction-forming or addiction-
sustaining liability.
(19) The term ``opium poppy'' means the plant of the species
Papaver somniferum L., except the seed thereof.
(20) The term ``poppy straw'' means all parts, except the
seeds, of the opium poppy, after mowing.
(21) The term ``practitioner'' means a physician, dentist,
veterinarian, scientific investigator, pharmacy, hospital, or
other person licensed, registered, or otherwise permitted, by
the United States or the jurisdiction in which he practices or
does research, to distribute, dispense, conduct research with
respect to, administer, or use in teaching or chemical
analysis, a controlled substance in the course of professional
practice or research.
(22) The term ``production'' includes the manufacture,
planting, cultivation, growing, or harvesting of a controlled
substance.
(23) The term ``immediate precursor'' means a substance--
(A) which the Attorney General has found to be and by
regulation designated as being the principal compound
used, or produced primarily for use, in the manufacture
of a controlled substance;
(B) which is an immediate chemical intermediary used
or likely to be used in the manufacture of such
controlled substance; and
(C) the control of which is necessary to prevent,
curtail, or limit the manufacture of such controlled
substance.
(24) The term ``Secretary'', unless the context otherwise
indicates, means the Secretary of Health and Human Services.
(25) The term ``serious bodily injury'' means bodily injury
which involves--
(A) a substantial risk of death;
(B) protracted and obvious disfigurement; or
(C) protracted loss or impairment of the function of
a bodily member, or organ, or mental faculty.
(26) The term ``State'' means a State of the United
States, the District of Columbia, and any commonwealth,
territory, or possession of the United States.
(27) The term ``ultimate user'' means a person who has
lawfully obtained, and who possesses, a controlled substance
for his own use or for the use of a member of his household or
for an animal owned by him or by a member of his household.
(28) The term ``United States'', when used in a geographic
sense, means all places and waters, continental or insular,
subject to the jurisdiction of the United States.
(29) The term ``maintenance treatment'' means the dispensing,
for a period in excess of twenty-one days, of a narcotic drug
in the treatment of an individual for dependence upon heroin or
other morphine-like drugs.
(30) The term ``detoxification treatment'' means the
dispensing, for a period not in excess of one hundred and
eighty days, of a narcotic drug in decreasing doses to an
individual in order to alleviate adverse physiological or
psychological effects incident to withdrawal from the
continuous or sustained use of a narcotic drug and as a method
of bringing the individual to a narcotic drug-free state within
such period.
(31) The term ``Convention on Psychotropic Substances'' means
the Convention on Psychotropic Substances signed at Vienna,
Austria, on February 21, 1971; and the term ``Single Convention
on Narcotic Drugs'' means the Single Convention on Narcotic
Drugs signed at New York, New York, on March 30, 1961.
(32)(A) Except as provided in subparagraph (C), the term
``controlled substance analogue'' means a substance--
(i) the chemical structure of which is substantially
similar to the chemical structure of a controlled
substance in schedule I or II;
(ii) which has a stimulant, depressant, or
hallucinogenic effect on the central nervous system
that is substantially similar to or greater than the
stimulant, depressant, or hallucinogenic effect on the
central nervous system of a controlled substance in
schedule I or II; or
(iii) with respect to a particular person, which such
person represents or intends to have a stimulant,
depressant, or hallucinogenic effect on the central
nervous system that is substantially similar to or
greater than the stimulant, depressant, or
hallucinogenic effect on the central nervous system of
a controlled substance in schedule I or II.
(B) The designation of gamma butyrolactone or any other
chemical as a listed chemical pursuant to paragraph (34) or
(35) does not preclude a finding pursuant to subparagraph (A)
of this paragraph that the chemical is a controlled substance
analogue.
(C) Such term does not include--
(i) a controlled substance;
(ii) any substance for which there is an approved new
drug application;
(iii) with respect to a particular person any
substance, if an exemption is in effect for
investigational use, for that person, under section 505
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
355) to the extent conduct with respect to such
substance is pursuant to such exemption; or
(iv) any substance to the extent not intended for
human consumption before such an exemption takes effect
with respect to that substance.
(33) The term ``listed chemical'' means any list I chemical
or any list II chemical.
(34) The term ``list I chemical'' means a chemical specified
by regulation to the Attorney General as a chemical that is
used in manufacturing a controlled substance in violation of
this title and is important to the manufacture of the
controlled substances, and such term includes (until otherwise
specified by regulation of the Attorney General, as considered
appropriate by the Attorney General or upon petition to the
Attorney General by any person) the following:
(A) Anthranilic acid, its esters, and its salts.
(B) Benzyl cyanide.
(C) Ephedrine, its salts, optical isomers, and salts
of optical isomers.
(D) Ergonovine and its salts.
(E) Ergotamine and its salts.
(F) N-Acetylanthranilic acid, its esters, and its
salts.
(G) Norpseudoephedrine, its salts, optical isomers,
and salts of
(H) Phenylacetic acid, its esters, and its salts.
(I) Phenylpropanolamine, its salts, optical isomers,
and salts of optical isomers.
(J) Piperidine and its salts.
(K) Pseudoephedrine, its salts, optical isomers, and
salts of optical isomers.
(L) 3,4-Methylenedioxyphenyl-2-propanone.
(M) Methylamine.
(N) Ethylamine.
(O) Propionic anhydride.
(P) Isosafrole.
(Q) Safrole.
(R) Piperonal.
(S) N-Methylephedrine.
(T) N-methylpseudoephedrine.
(U) Hydriodic acid.
(V) Benzaldehyde.
(W) Nitroethane.
(X) Gamma butyrolactone.
(Y) Any salt, optical isomer, or salt of an optical
isomer of the chemicals listed in subparagraphs (M)
through (U) of this paragraph.
(35) The term ``list II chemical'' means a chemical (other
than a list I chemical) specified by regulation of the Attorney
General as a chemical that is used in manufacturing a
controlled substance in violation of this title, and such term
includes (until otherwise specified by regulation of the
Attorney General, as considered appropriate by the Attorney
General or upon petition to the Attorney General by any person)
the following chemicals:
(A) Acetic anhydride.
(B) Acetone.
(C) Benzyl chloride.
(D) Ethyl ether.
(F) Potassium permanaganate.
(G) 2-Butanone (or Methyl Ethyl Ketone).
(H) Toluene.
(I) Iodine.
(J) Hydrochloric gas.
(36) The term ``regular customer'' means, with respect to a
regulated person, a customer with whom the regulated person has
an established business relationship that is reported to the
Attorney General.
(37) The term ``regular importer'' means, with respect to a
listed chemical, a person that has an established record as an
importer of that listed chemical that is reported to the
Attorney General.
(38) The term ``regulated person'' means a person who
manufactures, distributes, imports, or exports a listed
chemical, a tableting machine, or an encapsulating machine or
who acts as a broker or trader for an international transaction
involving a listed chemical, a tableting machine, or an
encapsulating machine.
(39) The term ``regulated transaction'' means--
(A) a distribution, receipt, sale, importation, or
exportation of, or an international transaction
involving shipment of, a listed chemical, or if the
Attorney General establishes a threshold amount for a
specific listed chemical, a threshold amount, including
a cumulative threshold amount for multiple transactions
(as determined by the Attorney General, in consultation
with the chemical industry and taking into
consideration the quantities normally used for lawful
purposes), of a listed chemical, except that such term
does not include--
(i) a domestic lawful distribution in the
usual course of business between agents or
employees of a single regulated person;
(ii) a delivery of a listed chemical to or by
a common or contract carrier for carriage in
the lawful and usual course of the business of
the common or contract carrier, or to or by a
warehouseman for storage in the lawful and
usual course of the business of the
warehouseman, except that if the carriage or
storage is in connection with the distribution,
importation, or exportation of a listed
chemical to a third person, this clause does
not relieve a distributor, importer, or
exporter from compliance with section 310;
(iii) any category of transaction or any
category of transaction for a specific listed
chemical or chemicals specified by regulation
of the Attorney General as excluded from this
definition as unnecessary for enforcement of
this title or title III;
(iv) any transaction in a listed chemical
that is contained in a drug that may be
marketed or distributed lawfully in the United
States under the Federal Food, Drug, and
Cosmetic Act, subject to clause (v), unless--
(I) the Attorney General has
determined under section 204 that the
drug or group of drugs is being
diverted to obtain the listed chemical
for use in the illicit production of a
controlled substance; and
(II) the quantity of the listed
chemical contained in the drug included
in the transaction or multiple
transactions equals or exceeds the
threshold established for that chemical
by the Attorney General;
(v) any transaction in a scheduled listed
chemical product that is a sale at retail by a
regulated seller or a distributor required to
submit reports under section 310(b)(3); or
(vi) any transaction in a chemical mixture
which the Attorney General has by regulation
designated as exempt from the application of
this title and title III based on a finding
that the mixture is formulated in such a way
that it cannot be easily used in the illicit
production of a controlled substance and that
the listed chemical or chemicals contained in
the mixture cannot be readily recovered; and
(B) a distribution, importation, or exportation of a
tableting machine or encapsulating machine.
(40) The term ``chemical mixture'' means a combination of two
or more chemical substances, at least one of which is not a
list I chemical or a list II chemical, except that such term
does not include any combination of a list I chemical or a list
II chemical with another chemical that is present solely as an
impurity.
(41)(A) The term ``anabolic steroid'' means any drug or
hormonal substance, chemically and pharmacologically related to
testosterone (other than estrogens, progestins,
corticosteroids, and dehydroepiandrosterone), and includes--
(i) androstanediol--
(I) 3b,17b-dihydroxy-5a-androstane; and
(II) 3a,17b-dihydroxy-5a-androstane;
(ii) androstanedione (5a-androstan-3,17-dione);
(iii) androstenediol--
(I) 1-androstenediol (3b,17b-dihydroxy-5a-
androst-1-ene);
(II) 1-androstenediol (3a,17b-dihydroxy-5a-
androst-1-ene);
(III) 4-androstenediol (3b,17b-dihydroxy-
androst-4-ene); and
(IV) 5-androstenediol (3b,17b-dihydroxy-
androst-5-ene);
(iv) androstenedione--
(I) 1-androstenedione ([5a]-androst-1-en-
3,17-dione);
(II) 4-androstenedione (androst-4-en-3,17-
dione); and
(III) 5-androstenedione (androst-5-en-3,17-
dione);
(v) bolasterone (7a,17a-dimethyl-17b-hydroxyandrost-
4-en-3-one);
(vi) boldenone (17b-hydroxyandrost-1,4,-diene-3-one);
(vii) calusterone (7b,17a-dimethyl-17b-
hydroxyandrost-4-en-3-one);
(viii) clostebol (4-chloro-17b-hydroxyandrost-4-en-3-
one);
(ix) dehydrochloromethyltestosterone (4-chloro-17b-
hydroxy-17a-methyl-androst-1,4-dien-3-one);
(x) 1-dihydrotestosterone (a.k.a. ``1-
testosterone'') (17b-hydroxy-5a-androst-1-en-3-one);
(xi) 4-dihydrotestosterone (17b-hydroxy-androstan-3-
one);
(xii) drostanolone (17b-hydroxy-2a-methyl-5a-
androstan-3-one);
(xiii) ethylestrenol (17a-ethyl-17b-hydroxyestr-4-
ene);
(xiv) fluoxymesterone (9-fluoro-17a-methyl-11b,17b-
dihydroxyandrost-4-en-3-one);
(xv) formebolone (2-formyl-17a-methyl-11a,17b-
dihydroxyandrost-1,4-dien-3-one);
(xvi) furazabol (17a-methyl-17b-
hydroxyandrostano[2,3-c]-furazan);
(xvii) 13b-ethyl-17b-hydroxygon-4-en-3-one;
(xviii) 4-hydroxytestosterone (4,17b-dihydroxy-
androst-4-en-3-one);
(xix) 4-hydroxy-19-nortestosterone (4,17b-dihydroxy-
estr-4-en-3-one);
(xx) mestanolone (17a-methyl-17b-hydroxy-5a-
androstan-3-one);
(xxi) mesterolone (1a-methyl-17b-hydroxy-[5a]-
androstan-3-one);
(xxii) methandienone (17a-methyl-17b-hydroxyandrost-
1,4-dien-3-one);
(xxiii) methandriol (17a-methyl-3b,17b-
dihydroxyandrost-5-ene);
(xxiv) methenolone (1-methyl-17b-hydroxy-5a-androst-
1-en-3-one);
(xxv) 17a-methyl-3b, 17b-dihydroxy-5a-androstane;
(xxvi) 17a-methyl-3a,17b-dihydroxy-5a-androstane;
(xxvii) 17a-methyl-3b,17b-dihydroxyandrost-4-ene.
(xxviii) 17a-methyl-4-hydroxynandrolone (17a-methyl-
4-hydroxy-17b-hydroxyestr-4-en-3-one);
(xxix) methyldienolone (17a-methyl-17b-hydroxyestra-
4,9(10)-dien-3-one);
(xxx) methyltrienolone (17a-methyl-17b-hydroxyestra-
4,9-11-trien-3-one);
(xxxi) methyltestosterone (17a-methyl-17b-
hydroxyandrost-4-en-3-one);
(xxxii) mibolerone (7a,17a-dimethyl-17b-hydroxyestr-
4-en-3-one);
(xxxiii) 17a-methyl-D1-dihydrotestosterone (17b-
hydroxy-17a-methyl-5a-androst-1-en-3-one) (a.k.a. ``17-
a-methyl-1-testosterone'');
(xxxiv) nandrolone (17b-hydroxyestr-4-en-3-one);
(xxxv) norandrostenediol--
(I) 19-nor-4-androstenediol (3b, 17b-
dihydroxyestr-4-ene);
(II) 19-nor-4-androstenediol (3a, 17b-
dihydroxyestr-4-ene);
(III) 19-nor-5-androstenediol (3b, 17b-
dihydroxyestr-5-ene); and
(IV) 19-nor-5-androstenediol (3a, 17b-
dihydroxyestr-5-ene);
(xxxvi) norandrostenedione--
(I) 19-nor-4-androstenedione (estr-4-en-3,17-
dione); and
(II) 19-nor-5-androstenedione (estr-5-en-
3,17-dione;
(xxxvii) norbolethone (13b,17a-diethyl-17b-
hydroxygon-4-en-3-one);
(xxxviii) norclostebol (4-chloro-17b-hydroxyestr-4-
en-3-one);
(xxxix) norethandrolone (17a-ethyl-17b-hydroxyestr-4-
en-3-one);
(xl) normethandrolone (17a-methyl-17b-hydroxyestr-4-
en-3-one);
(xli) oxandrolone (17a-methyl-17b-hydroxy-2-oxa-[5a]-
androstan-3-one);
(xlii) oxymesterone (17a-methyl-4,17b-
dihydroxyandrost-4-en-3-one);
(xliii) oxymetholone (17a-methyl-2-hydroxymethylene-
17b-hydroxy-[5a]-androstan-3-one);
(xliv) stanozolol (17a-methyl-17b-hydroxy-[5a]-
androst-2-eno[3,2-c]-pyrazole);
(xlv) stenbolone (17b-hydroxy-2-methyl-[5a]-androst-
1-en-3-one);
(xlvi) testolactone (13-hydroxy-3-oxo-13,17-
secoandrosta-1,4-dien-17-oic acid lactone);
(xlvii) testosterone (17b-hydroxyandrost-4-en-3-one);
(xlviii) tetrahydrogestrinone (13b,17a-diethyl-17b-
hydroxygon-4,9,11-trien-3-one);
(xlix) trenbolone (17b-hydroxyestr-4,9,11-trien-3-
one);
(l) 5a-Androstan-3,6,17-trione;
(li) 6-bromo-androstan-3,17-dione;
(lii) 6-bromo-androsta-1,4-diene-3,17-dione;
(liii) 4-chloro-17a-methyl-androsta-1,4-diene-3,17b-
diol;
(liv) 4-chloro-17a-methyl-androst-4-ene-3b,17b-diol;
(lv) 4-chloro-17a-methyl-17b-hydroxy-androst-4-en-3-
one;
(lvi) 4-chloro-17a-methyl-17b-hydroxy-androst-4-ene-
3,11-dione;
(lvii) 4-chloro-17a-methyl-androsta-1,4-diene-3,17b-
diol;
(lviii) 2a,17a-dimethyl-17b-hydroxy-5a-androstan-3-
one;
(lix) 2a,17a-dimethyl-17b-hydroxy-5b-androstan-3-one;
(lx) 2a,3a-epithio-17a-methyl-5a-androstan-17b-ol;
(lxi) [3,2-c]-furazan-5a-androstan-17b-ol;
(lxii) 3b-hydroxy-estra-4,9,11-trien-17-one;
(lxiii) 17a-methyl-androst-2-ene-3,17b-diol;
(lxiv) 17a-methyl-androsta-1,4-diene-3,17b-diol;
(lxv) Estra-4,9,11-triene-3,17-dione;
(lxvi) 18a-Homo-3-hydroxy-estra-2,5(10)-dien-17-one;
(lxvii) 6a-Methyl-androst-4-ene-3,17-dione;
(lxviii) 17a-Methyl-androstan-3-hydroxyimine-17b-ol;
(lxix) 17a-Methyl-5a-androstan-17b-ol;
(lxx) 17b-Hydroxy-androstano[2,3-d]isoxazole;
(lxxi) 17b-Hydroxy-androstano[3,2-c]isoxazole;
(lxxii) 4-Hydroxy-androst-4-ene-3,17-dione[3,2-
c]pyrazole-5a-androstan-17b-ol;
(lxxiii) [3,2-c]pyrazole-androst-4-en-17b-ol;
(lxxiv) [3,2-c]pyrazole-5a-androstan-17b-ol; and
(lxxv) any salt, ester, or ether of a drug or
substance described in this paragraph.
The substances excluded under this subparagraph may at any time
be scheduled by the Attorney General in accordance with the
authority and requirements of subsections (a) through (c) of
section 201.
(B)(i) Except as provided in clause (ii), such term
does not include an anabolic steroid which is expressly
intended for administration through implants to cattle
or other nonhuman species and which has been approved
by the Secretary of Health and Human Services for such
administration.
(ii) If any person prescribes, dispenses, or
distributes such steroid for human use, such person
shall be considered to have prescribed, dispensed, or
distributed an anabolic steroid within the meaning of
subparagraph (A).
(C)(i) Subject to clause (ii), a drug or hormonal substance
(other than estrogens, progestins, corticosteroids, and
dehydroepiandrosterone) that is not listed in subparagraph (A)
and is derived from, or has a chemical structure substantially
similar to, 1 or more anabolic steroids listed in subparagraph
(A) shall be considered to be an anabolic steroid for purposes
of this Act if--
(I) the drug or substance has been created or
manufactured with the intent of producing a drug or
other substance that either--
(aa) promotes muscle growth; or
(bb) otherwise causes a pharmacological
effect similar to that of testosterone; or
(II) the drug or substance has been, or is intended
to be, marketed or otherwise promoted in any manner
suggesting that consuming it will promote muscle growth
or any other pharmacological effect similar to that of
testosterone.
(ii) A substance shall not be considered to be a drug or
hormonal substance for purposes of this subparagraph if it--
(I) is--
(aa) an herb or other botanical;
(bb) a concentrate, metabolite, or extract
of, or a constituent isolated directly from, an
herb or other botanical; or
(cc) a combination of 2 or more substances
described in item (aa) or (bb);
(II) is a dietary ingredient for purposes of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et
seq.); and
(III) is not anabolic or androgenic.
(iii) In accordance with section 515(a), any person claiming
the benefit of an exemption or exception under clause (ii)
shall bear the burden of going forward with the evidence with
respect to such exemption or exception.
(42) The term ``international transaction'' means a
transaction involving the shipment of a listed chemical across
an international border (other than a United States border) in
which a broker or trader located in the United States
participates.
(43) The terms ``broker'' and ``trader'' mean a person that
assists in arranging an international transaction in a listed
chemical by--
(A) negotiating contracts;
(B) serving as an agent or intermediary; or
(C) bringing together a buyer and seller, a buyer and
transporter, or a seller and transporter.
(44) The term ``felony drug offense'' means an offense that
is punishable by imprisonment for more than one year under any
law of the United States or of a State or foreign country that
prohibits or restricts conduct relating to narcotic drugs,
[marihuana,] anabolic steroids, or depressant or stimulant
substances.
(45)(A) The term ``scheduled listed chemical product'' means,
subject to subparagraph (B), a product that--
(i) contains ephedrine, pseudoephedrine, or
phenylpropanolamine; and
(ii) may be marketed or distributed lawfully in the
United States under the Federal, Food, Drug, and
Cosmetic Act as a nonprescription drug.
Each reference in clause (i) to ephedrine, pseudoephedrine, or
phenylpropanolamine includes each of the salts, optical
isomers, and salts of optical isomers of such chemical.
(B) Such term does not include a product described in
subparagraph (A) if the product contains a chemical specified
in such subparagraph that the Attorney General has under
section 201(a) added to any of the schedules under section
202(c). In the absence of such scheduling by the Attorney
General, a chemical specified in such subparagraph may not be
considered to be a controlled substance.
(46) The term ``regulated seller'' means a retail distributor
(including a pharmacy or a mobile retail vendor), except that
such term does not include an employee or agent of such
distributor.
(47) The term ``mobile retail vendor'' means a person or
entity that makes sales at retail from a stand that is intended
to be temporary, or is capable of being moved from one location
to another, whether the stand is located within or on the
premises of a fixed facility (such as a kiosk at a shopping
center or an airport) or whether the stand is located on
unimproved real estate (such as a lot or field leased for
retail purposes).
(48) The term ``at retail'', with respect to the sale or
purchase of a scheduled listed chemical product, means a sale
or purchase for personal use, respectively.
(49)(A) The term ``retail distributor'' means a
grocery store, general merchandise store, drug store,
or other entity or person whose activities as a
distributor relating to ephedrine, pseudoephedrine, or
phenylpropanolamine products are limited almost
exclusively to sales for personal use, both in number
of sales and volume of sales, either directly to walk-
in customers or in face-to-face transactions by direct
sales.
(B) For purposes of this paragraph, entities are
defined by reference to the Standard Industrial
Classification (SIC) code, as follows:
(i) A grocery store is an entity within SIC
code 5411.
(ii) A general merchandise store is an entity
within SIC codes 5300 through 5399 and 5499.
(iii) A drug store is an entity within SIC
code 5912.
(50) The term ``Internet'' means collectively the myriad of
computer and telecommunications facilities, including equipment
and operating software, which comprise the interconnected
worldwide network of networks that employ the Transmission
Control Protocol/Internet Protocol, or any predecessor or
successor protocol to such protocol, to communicate information
of all kinds by wire or radio.
(51) The term ``deliver, distribute, or dispense by means of
the Internet'' refers, respectively, to any delivery,
distribution, or dispensing of a controlled substance that is
caused or facilitated by means of the Internet.
(52) The term ``online pharmacy''--
(A) means a person, entity, or Internet site, whether
in the United States or abroad, that knowingly or
intentionally delivers, distributes, or dispenses, or
offers or attempts to deliver, distribute, or dispense,
a controlled substance by means of the Internet; and
(B) does not include--
(i) manufacturers or distributors registered
under subsection (a), (b), (d), or (e) of
section 303 who do not dispense controlled
substances to an unregistered individual or
entity;
(ii) nonpharmacy practitioners who are
registered under section 303(f) and whose
activities are authorized by that registration;
(iii) any hospital or other medical facility
that is operated by an agency of the United
States (including the Armed Forces), provided
such hospital or other facility is registered
under section 303(f);
(iv) a health care facility owned or operated
by an Indian tribe or tribal organization, only
to the extent such facility is carrying out a
contract or compact under the Indian Self-
Determination and Education Assistance Act;
(v) any agent or employee of any hospital or
facility referred to in clause (iii) or (iv),
provided such agent or employee is lawfully
acting in the usual course of business or
employment, and within the scope of the
official duties of such agent or employee, with
such hospital or facility, and, with respect to
agents or employees of health care facilities
specified in clause (iv), only to the extent
such individuals are furnishing services
pursuant to the contracts or compacts described
in such clause;
(vi) mere advertisements that do not attempt
to facilitate an actual transaction involving a
controlled substance;
(vii) a person, entity, or Internet site that
is not in the United States and does not
facilitate the delivery, distribution, or
dispensing of a controlled substance by means
of the Internet to any person in the United
States;
(viii) a pharmacy registered under section
303(f) whose dispensing of controlled
substances via the Internet consists solely
of--
(I) refilling prescriptions for
controlled substances in schedule III,
IV, or V, as defined in paragraph (55);
or
(II) filling new prescriptions for
controlled substances in schedule III,
IV, or V, as defined in paragraph (56);
or
(ix) any other persons for whom the Attorney
General and the Secretary have jointly, by
regulation, found it to be consistent with
effective controls against diversion and
otherwise consistent with the public health and
safety to exempt from the definition of an
``online pharmacy''.
(53) The term ``homepage'' means the opening or main page or
screen of the website of an online pharmacy that is viewable on
the Internet.
(54) The term ``practice of telemedicine'' means, for
purposes of this title, the practice of medicine in accordance
with applicable Federal and State laws by a practitioner (other
than a pharmacist) who is at a location remote from the patient
and is communicating with the patient, or health care
professional who is treating the patient, using a
telecommunications system referred to in section 1834(m) of the
Social Security Act, which practice--
(A) is being conducted--
(i) while the patient is being treated by,
and physically located in, a hospital or clinic
registered under section 303(f); and
(ii) by a practitioner--
(I) acting in the usual course of
professional practice;
(II) acting in accordance with
applicable State law; and
(III) registered under section 303(f)
in the State in which the patient is
located, unless the practitioner--
(aa) is exempted from such
registration in all States
under section 302(d); or
(bb) is--
(AA) an employee or
contractor of the
Department of Veterans
Affairs who is acting
in the scope of such
employment or contract;
and
(BB) registered under
section 303(f) in any
State or is utilizing
the registration of a
hospital or clinic
operated by the
Department of Veterans
Affairs registered
under section 303(f);
(B) is being conducted while the patient is being
treated by, and in the physical presence of, a
practitioner--
(i) acting in the usual course of
professional practice;
(ii) acting in accordance with applicable
State law; and
(iii) registered under section 303(f) in the
State in which the patient is located, unless
the practitioner--
(I) is exempted from such
registration in all States under
section 302(d); or
(II) is--
(aa) an employee or
contractor of the Department of
Veterans Affairs who is acting
in the scope of such employment
or contract; and
(bb) registered under section
303(f) in any State or is using
the registration of a hospital
or clinic operated by the
Department of Veterans Affairs
registered under section
303(f);
(C) is being conducted by a practitioner--
(i) who is an employee or contractor of the
Indian Health Service, or is working for an
Indian tribe or tribal organization under its
contract or compact with the Indian Health
Service under the Indian Self-Determination and
Education Assistance Act;
(ii) acting within the scope of the
employment, contract, or compact described in
clause (i); and
(iii) who is designated as an Internet
Eligible Controlled Substances Provider by the
Secretary under section 311(g)(2);
(D)(i) is being conducted during a public health
emergency declared by the Secretary under section 319
of the Public Health Service Act; and
(ii) involves patients located in such areas, and
such controlled substances, as the Secretary, with the
concurrence of the Attorney General, designates,
provided that such designation shall not be subject to
the procedures prescribed by subchapter II of chapter 5
of title 5, United States Code;
(E) is being conducted by a practitioner who has
obtained from the Attorney General a special
registration under section 311(h);
(F) is being conducted--
(i) in a medical emergency situation--
(I) that prevents the patient from
being in the physical presence of a
practitioner registered under section
303(f) who is an employee or contractor
of the Veterans Health Administration
acting in the usual course of business
and employment and within the scope of
the official duties or contract of that
employee or contractor;
(II) that prevents the patient from
being physically present at a hospital
or clinic operated by the Department of
Veterans Affairs registered under
section 303(f);
(III) during which the primary care
practitioner of the patient or a
practitioner otherwise practicing
telemedicine within the meaning of this
paragraph is unable to provide care or
consultation; and
(IV) that requires immediate
intervention by a health care
practitioner using controlled
substances to prevent what the
practitioner reasonably believes in
good faith will be imminent and serious
clinical consequences, such as further
injury or death; and
(ii) by a practitioner that--
(I) is an employee or contractor of
the Veterans Health Administration
acting within the scope of that
employment or contract;
(II) is registered under section
303(f) in any State or is utilizing the
registration of a hospital or clinic
operated by the Department of Veterans
Affairs registered under section
303(f); and
(III) issues a controlled substance
prescription in this emergency context
that is limited to a maximum of a 5-day
supply which may not be extended or
refilled; or
(G) is being conducted under any other circumstances
that the Attorney General and the Secretary have
jointly, by regulation, determined to be consistent
with effective controls against diversion and otherwise
consistent with the public health and safety.
(55) The term ``refilling prescriptions for controlled
substances in schedule III, IV, or V''--
(A) means the dispensing of a controlled substance in
schedule III, IV, or V in accordance with refill
instructions issued by a practitioner as part of a
valid prescription that meets the requirements of
subsections (b) and (c) of section 309, as appropriate;
and
(B) does not include the issuance of a new
prescription to an individual for a controlled
substance that individual was previously prescribed.
(56) The term ``filling new prescriptions for controlled
substances in schedule III, IV, or V'' means filling a
prescription for an individual for a controlled substance in
schedule III, IV, or V, if--
(A) the pharmacy dispensing that prescription has
previously dispensed to the patient a controlled
substance other than by means of the Internet and
pursuant to the valid prescription of a practitioner
that meets the applicable requirements of subsections
(b) and (c) of section 309 (in this paragraph referred
to as the ``original prescription'');
(B) the pharmacy contacts the practitioner who issued
the original prescription at the request of that
individual to determine whether the practitioner will
authorize the issuance of a new prescription for that
individual for the controlled substance described in
subparagraph (A); and
(C) the practitioner, acting in the usual course of
professional practice, determines there is a legitimate
medical purpose for the issuance of the new
prescription.
(57) The term ``suspicious order'' may include, but
is not limited to--
(A) an order of a controlled substance of
unusual size;
(B) an order of a controlled substance
deviating substantially from a normal pattern;
and
(C) orders of controlled substances of
unusual frequency.
(57) The term ``serious drug felony'' means an
offense described in section 924(e)(2) of title 18,
United States Code, for which--
(A) the offender served a term of
imprisonment of more than 12 months; and
(B) the offender's release from any term of
imprisonment was within 15 years of the
commencement of the instant offense.
(58) The term ``serious violent felony'' means--
(A) an offense described in section
3559(c)(2) of title 18, United States Code, for
which the offender served a term of
imprisonment of more than 12 months; and
(B) any offense that would be a felony
violation of section 113 of title 18, United
States Code, if the offense were committed in
the special maritime and territorial
jurisdiction of the United States, for which
the offender served a term of imprisonment of
more than 12 months.
Part B--Authority To Control; Standards and Schedules
* * * * * * *
schedules of controlled substances
Sec. 202. (a) There are established five schedules of
controlled substances, to be known as schedules I, II, III, IV,
and V. Such schedules shall initially consist of the substances
listed in this section. The schedules established by this
section shall be updated and republished on a semiannual basis
during the two-year period beginning one year after the date of
enactment of this title and shall be updated and republished on
an annual basis thereafter.
(b) Except where control is required by United States
obligations under an international treaty, convention, or
protocol, in effect on the effective date of this part, and
except in the case of an immediate precursor, a drug or other
substance may not be placed in any schedule unless the findings
required for such schedule are made with respect to such drug
or other substance. The findings required for each of the
schedules are as follows:
(1) Schedule I.--
(A) The drug or other substance has a high potential
for abuse.
(B) The drug or other substance has no currently
accepted medical use in treatment in the United States.
(C) There is a lack of accepted safety for use of the
drug or other substance under medical supervision.
(2) Schedule II.--
(A) The drug or other substance has a high potential
for abuse.
(B) The drug or other substance has a currently
accepted medical use in treatment in the United States
or a currently accepted medical use with severe
restrictions.
(C) Abuse of the drug or other substances may lead to
severe psychological or physical dependence.
(3) Schedule III.--
(A) The drug or other substance has a potential for
abuse less than the drugs or other substances in
schedules I and II.
(B) The drug or other substance has a currently
accepted medical use in treatment in the United States.
(C) Abuse of the drug or other substance may lead to
moderate or low physical dependence or high
psychological dependence.
(4) Schedule IV.--
(A) The drug or other substance has a low potential
for abuse relative to the drugs or other substances in
schedule III.
(B) The drug or other substance has a currently
accepted medical use in treatment in the United States.
(C) Abuse of the drug or other substance may lead to
limited physical dependence or psychological dependence
relative to the drugs or other substances in schedule
III.
(5) Schedule V.--
(A) The drug or other substance has a low potential
for abuse relative to the drugs or other substances in
schedule IV.
(B) The drug or other substance has a currently
accepted medical use in treatment in the United States.
(C) Abuse of the drug or other substance may lead to
limited physical dependence or psychological dependence
relative to the drugs or other substances in schedule
IV.
(c) Schedules I, II, III, IV, and V shall, unless and until
amended pursuant to section 201, consist of the following drugs
or other substances, by whatever official name, common or usual
name, chemical name, or brand name designated:
Schedule I
(a) Unless specifically excepted or unless listed in another
schedule, any of the following opiates, including their
isomers, esters, ethers, salts, and salts of isomers, esters,
and ethers, whenever the existence of such isomers, esters,
ethers, and salts is possible within the specific chemical
designation:
(1) Acetylmethadol.
(2) Allylprodine.
(3) Alphacetylmathadol.
(4) Alphameprodine.
(5) Alphamethadol.
(6) Benzethidine.
(7) Betacetylmethadol.
(8) Betameprodine.
(9) Betamethadol.
(10) Betaprodine.
(11) Clonitazene.
(12) Dextromoramide.
(13) Dextrorphan.
(14) Diampromide.
(15) Diethylthiambutene.
(16) Dimenoxadol.
(17) Dimepheptanol.
(18) Dimethylthiambutene.
(19) Dioxaphetyl butyrate.
(20) Dipipanone.
(21) Ethylmethylthiambutene.
(22) Etonitazene.
(23) Etoxeridine.
(24) Furethidine.
(25) Hydroxypethidine.
(26) Ketobemidone.
(27) Levomoramide.
(28) Levophenacylmorphan.
(29) Morpheridine.
(30) Noracymethadol.
(31) Norlevorphanol.
(32) Normethadone.
(33) Norpipanone.
(34) Phenadoxone.
(35) Phenampromide.
(36) Phenomorphan.
(37) Phenoperidine.
(38) Piritramide.
(39) Proheptazine.
(40) Properidine.
(41) Racemoramide.
(42) Trimeperidine.
(b) Unless specifically excepted or unless listed in another
schedule, any of the following opium derivatives, their salts,
isomers, and salts of isomers whenever the existence of such
salts, isomers, and salts of isomers is possible within the
specific chemical designation:
(1) Acetorphine.
(2) Acetyldihydrocodeine.
(3) Benzylmorphine.
(4) Codeine methylbromide.
(5) Codeine-N-Oxide.
(6) Cyprenorphine.
(7) Desomorphine.
(8) Dihydromorphine.
(9) Etorphine.
(10) Heroin.
(11) Hydromorphinol.
(12) Methyldesorphine.
(13) Methylhydromorphine.
(14) Morphine methylbromide.
(15) Morphine methylsulfonate.
(16) Morphine-N-Oxide.
(17) Myrophine.
(18) Nicocodeine.
(19) Nicomorphine.
(20) Normorphine.
(21) Pholcodine.
(22) Thebacon.
(c) Unless specifically excepted or unless listed in another
schedule, any material, compound, mixture, or preparation,
which contains any quantity of the following hallucinogenic
substances, or which contains any of their salts, isomers, and
salts of isomers whenever the existence of such salts, isomers,
and salts of isomers is possible within the specific chemical
designation:
(1) 3,4-methylenedioxy amphetamine.
(2) 5-methoxy-3,4-methylenedioxy amphetamine.
(3) 3,4,5-trimethoxy amphetamine.
(4) Bufotenine.
(5) Diethyltryptamine.
(6) Dimethyltryptamine.
(7) 4-methyl-2,5-dimethoxy amphetamine.
(8) Ibogaine.
(9) Lysergic acid diethylamide.
[(10) Marihuana.]
(11) Mescaline.
(12) Peyote.
(13) N-ethyl-3-piperidyl benzilate.
(14) N-methyl-3-piperidyl benzilate.
(15) Psilocybin.
(16) Psilocyn.
[(17) Tetrahydrocannabinols, except for
tetrahydrocannabinols in hemp (as defined under section
297A of the Agricultural Marketing Act of 1946).]
(18) 4-methylmethcathinone (Mephedrone).
(19) 3,4-methylenedioxypyrovalerone (MDPV).
(20) 2-(2,5-Dimethoxy-4-ethylphenyl)ethanamine (2C-
E).
(21) 2-(2,5-Dimethoxy-4-methylphenyl)ethanamine (2C-
D).
(22) 2-(4-Chloro-2,5-dimethoxyphenyl)ethanamine (2C-
C).
(23) 2-(4-Iodo-2,5-dimethoxyphenyl)ethanamine (2C-I).
(24) 2-[4-(Ethylthio)-2,5-dimethoxyphenyl]ethanamine
(2C-T-2).
(25) 2-[4-(Isopropylthio)-2,5-
dimethoxyphenyl]ethanamine (2C-T-4).
(26) 2-(2,5-Dimethoxyphenyl)ethanamine (2C-H).
(27) 2-(2,5-Dimethoxy-4-nitro-phenyl)ethanamine (2C-
N).
(28) 2-(2,5-Dimethoxy-4-(n)-propylphenyl)ethanamine
(2C-P).
(d)(1) Unless specifically exempted or unless listed in
another schedule, any material, compound, mixture, or
preparation which contains any quantity of cannabimimetic
agents, or which contains their salts, isomers, and salts of
isomers whenever the existence of such salts, isomers, and
salts of isomers is possible within the specific chemical
designation.
(2) In paragraph (1):
(A) The term ``cannabimimetic agents'' means any
substance that is a cannabinoid receptor type 1 (CB1
receptor) agonist as demonstrated by binding studies
and functional assays within any of the following
structural classes:
(i) 2-(3-hydroxycyclohexyl)phenol with
substitution at the 5-position of the phenolic
ring by alkyl or alkenyl, whether or not
substituted on the cyclohexyl ring to any
extent.
(ii) 3-(1-naphthoyl)indole or 3-(1-
naphthylmethane)indole by substitution at the
nitrogen atom of the indole ring, whether or
not further substituted on the indole ring to
any extent, whether or not substituted on the
naphthoyl or naphthyl ring to any extent.
(iii) 3-(1-naphthoyl)pyrrole by substitution
at the nitrogen atom of the pyrrole ring,
whether or not further substituted in the
pyrrole ring to any extent, whether or not
substituted on the naphthoyl ring to any
extent.
(iv) 1-(1-naphthylmethylene)indene by
substitution of the 3-position of the indene
ring, whether or not further substituted in the
indene ring to any extent, whether or not
substituted on the naphthyl ring to any extent.
(v) 3-phenylacetylindole or 3-benzoylindole
by substitution at the nitrogen atom of the
indole ring, whether or not further substituted
in the indole ring to any extent, whether or
not substituted on the phenyl ring to any
extent.
(B) Such term includes--
(i) 5-(1,1-dimethylheptyl)-2-[(1R,3S)-3-
hydroxycyclohexyl]-phenol (CP-47,497);
(ii) 5-(1,1-dimethyloctyl)-2-[(1R,3S)-3-
hydroxycyclohexyl]-phenol (cannabicyclohexanol
or CP-47,497 C8-homolog);
(iii) 1-pentyl-3-(1-naphthoyl)indole (JWH-018
and AM678);
(iv) 1-butyl-3-(1-naphthoyl)indole (JWH-073);
(v) 1-hexyl-3-(1-naphthoyl)indole (JWH-019);
(vi) 1-[2-(4-morpholinyl)ethyl]-3-(1-
naphthoyl)indole (JWH-200);
(vii) 1-pentyl-3-(2-
methoxyphenylacetyl)indole (JWH-250);
(viii) 1-pentyl-3-[1-(4-
methoxynaphthoyl)]indole (JWH-081);
(ix) 1-pentyl-3-(4-methyl-1-naphthoyl)indole
(JWH-122);
(x) 1-pentyl-3-(4-chloro-1-naphthoyl)indole
(JWH-398);
(xi) 1-(5-fluoropentyl)-3-(1-naphthoyl)indole
(AM2201);
(xii) 1-(5-fluoropentyl)-3-(2-
iodobenzoyl)indole (AM694);
(xiii) 1-pentyl-3-[(4-methoxy)-benzoyl]indole
(SR-19 and RCS-4);
(xiv) 1-cyclohexylethyl-3-(2-
methoxyphenylacetyl)indole (SR-18 and RCS-8);
and
(xv) 1-pentyl-3-(2-chlorophenylacetyl)indole
(JWH-203).
* * * * * * *
Part D--Offenses and Penalties
prohibited acts a--penalties
Sec. 401. (a) Except as authorized by this title, it shall be
unlawful for any person knowingly or intentionally--
(1) to manufacture, distribute, or dispense, or
possess with intent to manufacture, distribute, or
dispense, a controlled substance; or
(2) to create, distribute, or dispense, or possess
with intent to distribute or dispense, a counterfeit
substance.
(b) Except as otherwise provided in section 409, 418, 419, or
420 any person who violates subsection (a) of this section
shall be sentenced as follows:
(1)(A) In the case of a violation of subsection (a) of this
section involving--
(i) 1 kilogram or more of a mixture or substance
containing a detectable amount of heroin;
(ii) 5 kilograms or more of a mixture or substance
containing a detectable amount of--
(I) coca leaves, except coca leaves and
extracts of coca leaves from which cocaine,
ecgonine, and derivatives of ecgonine or their
salts have been removed;
(II) cocaine, its salts, optical and
geometric isomers, and salts of isomers;
(III) ecgonine, its derivatives, their salts,
isomers, and salts of isomers; or
(IV) any compound, mixture, or preparation
which contains any quantity of any of the
substances referred to in subclauses (I)
through (III);
(iii) 280 grams or more of a mixture or substance
described in clause (ii) which contains cocaine base;
(iv) 100 grams or more of phencyclidine (PCP) or 1
kilogram or more of a mixture or substance containing a
detectable amount of phencyclidine (PCP);
(v) 10 grams or more of a mixture or substance
containing a detectable amount of lysergic acid
diethylamide (LSD);
(vi) 400 grams or more of a mixture or substance
containing a detectable amount of N-phenyl-N-[1-(2-
phenylethyl)-4-piperidinyl] propanamide or 100 grams or
more of a mixture or substance containing a detectable
amount of any analogue of N-phenyl-N-[1-(2-
phenylethyl)-4-piperidinyl] propanamide; or
[(vii) 1000 kilograms or more of a mixture or
substance containing a detectable amount of marihuana,
or 1,000 or more marihuana plants regardless of weight;
or]
[(viii)] (vii) 50 grams or more of methamphetamine,
its salts, isomers, and salts of its isomers or 500
grams or more of a mixture or substance containing a
detectable amount of methamphetamine, its salts,
isomers, or salts of its isomers;
such person shall be sentenced to a term of imprisonment which
may not be less than 10 years or more than life and if death or
serious bodily injury results from the use of such substance
shall be not less than 20 years or more than life, a fine not
to exceed the greater of that authorized in accordance with the
provisions of title 18, United States Code, or $10,000,000 if
the defendant is an individual or $50,000,000 if the defendant
is other than an individual, or both. If any person commits
such a violation after a prior conviction for a serious drug
felony or serious violent felony has become final, such person
shall be sentenced to a term of imprisonment of not less than
15 years and not more than life imprisonment and if death or
serious bodily injury results from the use of such substance
shall be sentenced to life imprisonment, a fine not to exceed
the greater of twice that authorized in accordance with the
provisions of title 18, United States Code, or $20,000,000 if
the defendant is an individual or $75,000,000 if the defendant
is other than an individual, or both. If any person commits a
violation of this subparagraph or of section 409, 418, 419, or
420 after 2 or more prior convictions for a serious drug felony
or serious violent felony have become final, such person shall
be sentenced to a term of imprisonment of not less than 25
years and fined in accordance with the preceding sentence.
Notwithstanding section 3583 of title 18, any sentence under
this subparagraph shall, in the absence of such a prior
conviction, impose a term of supervised release of at least 5
years in addition to such term of imprisonment and shall, if
there was such a prior conviction, impose a term of supervised
release of at least 10 years in addition to such term of
imprisonment. Notwithstanding any other provision of law, the
court shall not place on probation or suspend the sentence of
any person sentenced under this subparagraph. No person
sentenced under this subparagraph shall be eligible for parole
during the term of imprisonment imposed therein.
(B) In the case of a violation of subsection (a) of this
section involving--
(i) 100 grams or more of a mixture or substance
containing a detectable amount of heroin;
(ii) 500 grams or more of a mixture or substance
containing a detectable amount of--
(I) coca leaves, except coca leaves and
extracts of coca leaves from which cocaine,
ecgonine, and derivatives of ecgonine or their
salts have been removed;
(II) cocaine, its salts, optical and
geometric isomers, and salts of isomers;
(III) ecgonine, its derivatives, their salts,
isomers, and salts of isomers; or
(IV) any compound, mixture, or preparation
which contains any quantity of any of the
substances referred to in subclauses (I)
through (III);
(iii) 28 grams or more of a mixture or substance
described in clause (ii) which contains cocaine base;
(iv) 10 grams or more of phencyclidine (PCP) or 100
grams or more of a mixture or substance containing a
detectable amount of phencyclidine (PCP);
(v) 1 gram or more of a mixture or substance
containing a detectable amount of lysergic acid
diethylamide (LSD);
(vi) 40 grams or more of a mixture or substance
containing a detectable amount of N-phenyl-N-[1-(2-
phenylethyl)-4-piperidinyl] propanamide or 10 grams or
more of a mixture or substance containing a detectable
amount of any analogue of N-phenyl-N-[1-(2-
phenylethyl)-4-piperidinyl] propanamide; or
[(vii) 100 kilograms or more of a mixture or
substance containing a detectable amount of marihuana,
or 100 or more marihuana plants regardless of weight;
or]
[(viii)] (vii) 5 grams or more of methamphetamine,
its salts, isomers, and salts of its isomers or 50
grams or more of a mixture or substance containing a
detectable amount of methamphetamine, its salts,
isomers, or salts of its isomers;
such person shall be sentenced to a term of imprisonment which
may not be less than 5 years and not more than 40 years and if
death or serious bodily injury results from the use of such
substance shall be not less than 20 years or more than life, a
fine not to exceed the greater of that authorized in accordance
with the provisions of title 18, United States Code, or
$5,000,000 if the defendant is an individual or $25,000,000 if
the defendant is other than an individual, or both. If any
person commits such a violation after a prior conviction for a
serious drug felony or serious violent felony has become final,
such person shall be sentenced to a term of imprisonment which
may not be less than 10 years and not more than life
imprisonment and if death or serious bodily injury results from
the use of such substance shall be sentenced to life
imprisonment, a fine not to exceed the greater of twice that
authorized in accordance with the provisions of title 18,
United States Code, or $8,000,000 if the defendant is an
individual or $50,000,000 if the defendant is other than an
individual, or both. Notwithstanding section 3583 of title 18,
any sentence under this subparagraph shall, in the absence of
such a prior conviction, include a term of supervised release
of at least 4 years in addition to such term of imprisonment
and shall, if there was such a prior conviction, include a term
of supervised release of at least 8 years in addition to such
term of imprisonment. Notwithstanding any other provision of
law, the court shall not place on probation or suspend the
sentence of any person sentenced under this subparagraph. No
person sentenced under this subparagraph shall be eligible for
parole during the term of imprisonment imposed therein.
(C) In the case of a controlled substance in schedule I or
II, gamma hydroxybutyric acid (including when scheduled as an
approved drug product for purposes of section 3(a)(1)(B) of the
Hillory J. Farias and Samantha Reid Date-Rape Drug Prohibition
Act of 2000), or 1 gram of flunitrazepam, except as provided in
[subparagraphs (A), (B), and (D)] subparagraphs (A) and (B),
such person shall be sentenced to a term of imprisonment of not
more than 20 years and if death or serious bodily injury
results from the use of such substance shall be sentenced to a
term of imprisonment of not less than twenty years or more than
life, a fine not to exceed the greater of that authorized in
accordance with the provisions of title 18, United States Code,
or $1,000,000 if the defendant is an individual or $5,000,000
if the defendant is other than an individual, or both. If any
person commits such a violation after a prior conviction for a
felony drug offense has become final, such person shall be
sentenced to a term of imprisonment of not more than 30 years
and if death or serious bodily injury results from the use of
such substance shall be sentenced to life imprisonment, a fine
not to exceed the greater of twice that authorized in
accordance with the provisions of title 18, United States Code,
or $2,000,000 if the defendant is an individual or $10,000,000
if the defendant is other than an individual, or both.
Notwithstanding section 3583 of title 18, any sentence imposing
a term of imprisonment under this paragraph shall, in the
absence of such a prior conviction, impose a term of supervised
release of at least 3 years in addition to such term of
imprisonment and shall, if there was such a prior conviction,
impose a term of supervised release of at least 6 years in
addition to such term of imprisonment. Notwithstanding any
other provision of law, the court shall not place on probation
or suspend the sentence of any person sentenced under the
provisions of this subparagraph which provide for a mandatory
term of imprisonment if death or serious bodily injury results,
nor shall a person so sentenced be eligible for parole during
the term of such a sentence.
[(D) In the case of less than 50 kilograms of marihuana,
except in the case of 50 or more marihuana plants regardless of
weight, 10 kilograms of hashish, or one kilogram of hashish
oil, such person shall, except as provided in paragraphs (4)
and (5) of this subsection, be sentenced to a term of
imprisonment of not more than 5 years, a fine not to exceed the
greater of that authorized in accordance with the provisions of
title 18, United States Code, or $250,000 if the defendant is
an individual or $1,000,000 if the defendant is other than an
individual, or both. If any person commits such a violation
after a prior conviction for a felony drug offense has become
final, such person shall be sentenced to a term of imprisonment
of not more than 10 years, a fine not to exceed the greater of
twice that authorized in accordance with the provisions of
title 18, United State Code, or $500,000 if the defendant is an
individual or $2,000,000 if the defendant is other than an
individual, or both. Notwithstanding section 3583 of title 18,
any sentence imposing a term of imprisonment under this
paragraph shall, in the absence of such a prior conviction,
impose a special parole term of at least 2 years in addition to
such term of imprisonment and shall, if there was such a prior
conviction, impose a term of supervised release of at least 4
years in addition to such term of imprisonment.]
[(E)] (D)(i) Except as provided in [subparagraphs (C) and
(D)] subparagraph (C), in the case of any controlled substance
in schedule III, such person shall be sentenced to a term of
imprisonment of not more than 10 years and if death or serious
bodily injury results from the use of such substance shall be
sentenced to a term of imprisonment of not more than 15 years,
a fine not to exceed the greater of that authorized in
accordance with the provisions of title 18, United States Code,
or $500,000 if the defendant is an individual or $2,500,000 if
the defendant is other than an individual, or both.
(ii) If any person commits such a violation after a prior
conviction for a felony drug offense has become final, such
person shall be sentenced to a term of imprisonment of not more
than 20 years and if death or serious bodily injury results
from the use of such substance shall be sentenced to a term of
imprisonment of not more than 30 years, a fine not to exceed
the greater of twice that authorized in accordance with the
provisions of title 18, United States Code, or $1,000,000 if
the defendant is an individual or $5,000,000 if the defendant
is other than an individual, or both.
(iii) Any sentence imposing a term of imprisonment under this
subparagraph shall, in the absence of such a prior conviction,
impose a term of supervised release of at least 2 years in
addition to such term of imprisonment and shall, if there was
such a prior conviction, impose a term of supervised release of
at least 4 years in addition to such term of imprisonment.
(2) In the case of a controlled substance in schedule IV,
such person shall be sentenced to a term of imprisonment of not
more than 5 years, a fine not to exceed the greater of that
authorized in accordance with the provisions of title 18,
United States Code, or $250,000 if the defendant is an
individual or $1,000,000 if the defendant is other than an
individual, or both. If any person commits such a violation
after a prior conviction for a felony drug offense has become
final, such person shall be sentenced to a term of imprisonment
of not more than 10 years, a fine not to exceed the greater of
twice the authorized in accordance with the provisions of title
18, United States Code, or $500,000 if the defendant is an
individual or $2,000,000 if the defendant is other than an
individual, or both. Any sentence imposing a term of
imprisonment under this paragraph shall, in the absence of such
a prior conviction, impose a term of supervised release of at
least one year in addition to such term of imprisonment and
shall, if there was such a prior conviction, impose a term of
supervised release of at least 2 years in addition to such term
of imprisonment.
(3) In the case of a controlled substance in schedule V, such
person shall be sentenced to a term of imprisonment of not more
than 1 year, a fine not to exceed the greater of that
authorized in accordance with the provisions of title 18,
United States Code, or $100,000 if the defendant is an
individual or $250,000 if the defendant is other than an
individual, or both. If any person commits such a violation
after a prior conviction for a felony drug offense has become
final, such person shall be sentenced to a term of imprisonment
of not more than 4 years, a fine not to exceed the provisions
of title 18, United States Code, or $200,000 if the defendant
is an individual or $500,000 if the defendant is other than an
individual, or both. Any sentence imposing a term of
imprisonment under this paragraph may, if there was a prior
conviction, impose a term of supervised release of not more
than 1 year, in addition to such term of imprisonment.
[(4) Notwithstanding paragraph (1)(D) of this subsection, any
person who violates subsection (a) of this section by
distributing a small amount of marihuana for no remuneration
shall be treated as provided in section 404 and section 3607 of
title 18, United States Code.]
[(5)] (4) Any person who violates subsection (a) of this
section by cultivating or manufacturing a controlled substance
on Federal property shall be imprisoned as provided in this
subsection and shall be fined any amount not to exceed--
(A) the amount authorized in accordance with this
section;
(B) the amount authorized in accordance with the
provisions of title 18, United States Code;
(C) $500,000 if the defendant is an individual; or
(D) $1,000,000 if the defendant is other than an
individual;
or both.
[(6)] (5) Any person who violates subsection (a), or attempts
to do so, and knowingly or intentionally uses a poison,
chemical, or other hazardous substance on Federal land, and, by
such use--
(A) creates a serious hazard to humans, wildlife, or
domestic animals,
(B) degrades or harms the environment or natural
resources, or
(C) pollutes an aquifer, spring, stream, river, or
body of water,
shall be fined in accordance with title 18, United States Code,
or imprisoned not more than five years, or both.
[(7)] (6) Penalties for distribution.--
(A) In general.--Whoever, with intent to commit a
crime of violence, as defined in section 16 of title
18, United States Code (including rape), against an
individual, violates subsection (a) by distributing a
controlled substance or controlled substance analogue
to that individual without that individual's knowledge,
shall be imprisoned not more than 20 years and fined in
accordance with title 18, United States Code.
(B) Definition.--For purposes of this paragraph, the
term ``without that individual's knowledge'' means that
the individual is unaware that a substance with the
ability to alter that individual's ability to appraise
conduct or to decline participation in or communicate
unwillingness to participate in conduct is administered
to the individual.
(c) Any person who knowingly or intentionally--
(1) possesses a listed chemical with intent to
manufacture a controlled substance except as authorized
by this title;
(2) possesses or distributes, a listed chemical
knowing, or having reasonable cause to believe, that
the listed chemical will be used to manufacture a
controlled substance except as authorized by this
title; or
(3) with the intent of causing the evasion of the
recordkeeping or reporting requirements of section 310,
or the regulations issued under that section, receives
or distributes a reportable amount of any listed
chemical in units small enough so that the making of
records or filing of reports under that section is not
required;
shall be fined in accordance with title 18, United States Code,
or imprisoned not more than 20 years in the case of a violation
of paragraph (1) or (2) involving a list I chemical or not more
than 10 years in the case of a violation of this subsection
other than a violation of paragraph (1) or (2) involving a list
I chemical, or both.
(d)(1) Any person who assembles, maintains, places, or causes
to be placed a boobytrap on Federal property where a controlled
substance is being manufactured, distributed, or dispensed
shall be sentenced to a term of imprisonment for not more than
10 years or fined under title 18, United States Code, or both.
(2) If any person commits such a violation after 1 or more
prior convictions for an offense punishable under this
subsection, such person shall be sentenced to a term of
imprisonment of not more than 20 years or fined under title 18,
United States Code, or both.
(3) For the purposes of this subsection, the term
``boobytrap'' means any concealed or camouflaged device
designed to cause bodily injury when triggered by any action of
any unsuspecting person making contact with the device. Such
term includes guns, ammunition, or explosive devices attached
to trip wires or other triggering mechanisms, sharpened stakes,
and lines or wires with hooks attached.
(e) In addition to any other applicable penalty, any person
convicted of a felony violation of this section relating to the
receipt, distribution, manufacture, exportation, or importation
of a listed chemical may be enjoined from engaging in any
transaction involving a listed chemical for not more than ten
years.
(f)(1) Whoever knowingly distributes a listed chemical in
violation of this title (other than in violation of a
recordkeeping or reporting requirement of section 310) shall,
except to the extent that paragraph (12), (13), or (14) of
section 402(a) applies, be fined under title 18, United States
Code, or imprisoned not more than 5 years, or both.
(2) Whoever possesses any listed chemical, with knowledge
that the recordkeeping or reporting requirements of section 310
have not been adhered to, if, after such knowledge is acquired,
such person does not take immediate steps to remedy the
violation shall be fined under title 18, United States Code, or
imprisoned not more than one year, or both.
(g) Internet Sales of Date Rape Drugs.--
(1) Whoever knowingly uses the Internet to distribute
a date rape drug to any person, knowing or with
reasonable cause to believe that--
(A) the drug would be used in the commission
of criminal sexual conduct; or
(B) the person is not an authorized
purchaser;
shall be fined under this title or imprisoned not more
than 20 years, or both.
(2) As used in this subsection:
(A) The term ``date rape drug'' means--
(i) gamma hydroxybutyric acid (GHB)
or any controlled substance analogue of
GHB, including gamma butyrolactone
(GBL) or 1,4-butanediol;
(ii) ketamine;
(iii) flunitrazepam; or
(iv) any substance which the Attorney
General designates, pursuant to the
rulemaking procedures prescribed by
section 553 of title 5, United States
Code, to be used in committing rape or
sexual assault.
The Attorney General is authorized to remove
any substance from the list of date rape drugs
pursuant to the same rulemaking authority.
(B) The term ``authorized purchaser'' means
any of the following persons, provided such
person has acquired the controlled substance in
accordance with this Act:
(i) A person with a valid
prescription that is issued for a
legitimate medical purpose in the usual
course of professional practice that is
based upon a qualifying medical
relationship by a practitioner
registered by the Attorney General. A
``qualifying medical relationship''
means a medical relationship that
exists when the practitioner has
conducted at least 1 medical evaluation
with the authorized purchaser in the
physical presence of the practitioner,
without regard to whether portions of
the evaluation are conducted by other
heath professionals. The preceding
sentence shall not be construed to
imply that 1 medical evaluation
demonstrates that a prescription has
been issued for a legitimate medical
purpose within the usual course of
professional practice.
(ii) Any practitioner or other
registrant who is otherwise authorized
by their registration to dispense,
procure, purchase, manufacture,
transfer, distribute, import, or export
the substance under this Act.
(iii) A person or entity providing
documentation that establishes the
name, address, and business of the
person or entity and which provides a
legitimate purpose for using any ``date
rape drug'' for which a prescription is
not required.
(3) The Attorney General is authorized to promulgate
regulations for record-keeping and reporting by persons
handling 1,4-butanediol in order to implement and
enforce the provisions of this section. Any record or
report required by such regulations shall be considered
a record or report required under this Act.
(h) Offenses Involving Dispensing of Controlled Substances by
Means of the Internet.--
(1) In general.--It shall be unlawful for any person
to knowingly or intentionally--
(A) deliver, distribute, or dispense a
controlled substance by means of the Internet,
except as authorized by this title; or
(B) aid or abet (as such terms are used in
section 2 of title 18, United States Code) any
activity described in subparagraph (A) that is
not authorized by this title.
(2) Examples.--Examples of activities that violate
paragraph (1) include, but are not limited to,
knowingly or intentionally--
(A) delivering, distributing, or dispensing a
controlled substance by means of the Internet
by an online pharmacy that is not validly
registered with a modification authorizing such
activity as required by section 303(f) (unless
exempt from such registration);
(B) writing a prescription for a controlled
substance for the purpose of delivery,
distribution, or dispensation by means of the
Internet in violation of section 309(e);
(C) serving as an agent, intermediary, or
other entity that causes the Internet to be
used to bring together a buyer and seller to
engage in the dispensing of a controlled
substance in a manner not authorized by
sections 303(f) or 309(e);
(D) offering to fill a prescription for a
controlled substance based solely on a
consumer's completion of an online medical
questionnaire; and
(E) making a material false, fictitious, or
fraudulent statement or representation in a
notification or declaration under subsection
(d) or (e), respectively, of section 311.
(3) Inapplicability.--
(A) This subsection does not apply to--
(i) the delivery, distribution, or
dispensation of controlled substances
by nonpractitioners to the extent
authorized by their registration under
this title;
(ii) the placement on the Internet of
material that merely advocates the use
of a controlled substance or includes
pricing information without attempting
to propose or facilitate an actual
transaction involving a controlled
substance; or
(iii) except as provided in
subparagraph (B), any activity that is
limited to--
(I) the provision of a
telecommunications service, or
of an Internet access service
or Internet information
location tool (as those terms
are defined in section 231 of
the Communications Act of
1934); or
(II) the transmission,
storage, retrieval, hosting,
formatting, or translation (or
any combination thereof) of a
communication, without
selection or alteration of the
content of the communication,
except that deletion of a
particular communication or
material made by another person
in a manner consistent with
section 230(c) of the
Communications Act of 1934
shall not constitute such
selection or alteration of the
content of the communication.
(B) The exceptions under subclauses (I) and
(II) of subparagraph (A)(iii) shall not apply
to a person acting in concert with a person who
violates paragraph (1).
(4) Knowing or intentional violation.--Any person who
knowingly or intentionally violates this subsection
shall be sentenced in accordance with subsection (b).
prohibited acts b--penalties
Sec. 402. (a) It shall be unlawful for any person--
(1) who is subject to the requirements of part C to
distribute or dispense a controlled substance in
violation of section 309;
(2) who is a registrant to distribute or dispense a
controlled substance not authorized by his registration
to another registrant or other authorized person or to
manufacture a controlled substance not authorized by
his registration;
(3) who is a registrant to distribute a controlled
substance in violation of section 305 of this title;
(4) to remove, alter, or obliterate a symbol or label
required by section 305 of this title;
(5) to refuse or negligently fail to make, keep, or
furnish any record, report, notification, declaration,
order or order form, statement, invoice, or information
required under this title or title III;
(6) to refuse any entry into any premises or
inspection authorized by this title or title III;
(7) to remove, break, injure, or deface a seal placed
upon controlled substances pursuant to section 304(f)
or 511 or to remove or dispose of substances so placed
under seal;
(8) to use, to his own advantage, or to reveal, other
than to duly authorized officers or employees of the
United States, or to the courts when relevant in any
judicial proceeding under this title or title III, any
information acquired in the course of an inspection
authorized by this title concerning any method or
process which as a trade secret is entitled to
protection, or to use to his own advantage or reveal
(other than as authorized by section 310) any
information that is confidential under such section;
(9) who is a regulated person to engage in a
regulated transaction without obtaining the
identification required by 310(a)(3);
(10) negligently to fail to keep a record or make a
report under section 310 or negligently to fail to
self-certify as required under section 310;
(11) to distribute a laboratory supply to a person
who uses, or attempts to use, that laboratory supply to
manufacture a controlled substance or a listed
chemical, in violation of this title or title III, with
reckless disregard for the illegal uses to which such a
laboratory supply will be put;
(12) who is a regulated seller, or a distributor
required to submit reports under subsection (b)(3) of
section 310--
(A) to sell at retail a scheduled listed
chemical product in violation of paragraph (1)
of subsection (d) of such section, knowing at
the time of the transaction involved
(independent of consulting the logbook under
subsection (e)(1)(A)(iii) of such section) that
the transaction is a violation; or
(B) to knowingly or recklessly sell at retail
such a product in violation of paragraph (2) of
such subsection (d);
(13) who is a regulated seller to knowingly or
recklessly sell at retail a scheduled listed chemical
product in violation of subsection (e) of such section;
(14) who is a regulated seller or an employee or
agent of such seller to disclose, in violation of
regulations under subparagraph (C) of section
310(e)(1), information in logbooks under subparagraph
(A)(iii) of such section, or to refuse to provide such
a logbook to Federal, State, or local law enforcement
authorities;
(15) to distribute a scheduled listed chemical
product to a regulated seller, or to a regulated person
referred to in section 310(b)(3)(B), unless such
regulated seller or regulated person is, at the time of
such distribution, currently registered with the Drug
Enforcement Administration, or on the list of persons
referred to under section 310(e)(1)(B)(v);
(16) to violate subsection (e) of section 825 of this
title; or
(17) in the case of a registered manufacturer or
distributor of opioids, to fail to review the most
recent information, directly related to the customers
of the manufacturer or distributor, made available by
the Attorney General in accordance with section 307(f).
As used in paragraph (11), the term ``laboratory supply'' means
a listed chemical or any chemical, substance, or item on a
special surveillance list published by the Attorney General,
which contains chemicals, products, materials, or equipment
used in the manufacture of controlled substances and listed
chemicals. For purposes of paragraph (11), there is a
rebuttable presumption of reckless disregard at trial if the
Attorney General notifies a firm in writing that a laboratory
supply sold by the firm, or any other person or firm, has been
used by a customer of the notified firm, or distributed further
by that customer, for the unlawful production of controlled
substances or listed chemicals a firm distributes and 2 weeks
or more after the notification the notified firm distributes a
laboratory supply to the customer. For purposes of paragraph
(15), if the distributor is temporarily unable to access the
list of persons referred to under section 310(e)(1)(B)(v), the
distributor may rely on a written, faxed, or electronic copy of
a certificate of self-certification submitted by the regulated
seller or regulated person, provided the distributor confirms
within 7 business days of the distribution that such regulated
seller or regulated person is on the list referred to under
section 310(e)(1)(B)(v).
(b) It shall be unlawful for any person who is a registrant
to manufacture a controlled substance in schedule I or II, or
ephedrine, pseudoephedrine, or phenylpropanolamine or any of
the salts, optical isomers, or salts of optical isomers of such
chemical, which is--
(1) not expressly authorized by his registration and
by a quota assigned to him pursuant to section 306; or
(2) in excess of a quota assigned to him pursuant to
section 306.
(c)(1)(A) Except as provided in subparagraph (B), (C), or (D)
of this paragraph and paragraph (2), any person who violates
this section shall, with respect to any such violation, be
subject to a civil penalty of not more than $25,000. The
district courts of the United States (or, where there is no
such court in the case of any territory or possession of the
United States, then the court in such territory or possession
having the jurisdiction of a district court of the United
States in cases arising under the Constitution and laws of the
United States) shall have jurisdiction in accordance with
section 1355 of title 28 of the United States Code to enforce
this paragraph.
(B)(i) Except as provided in clause (ii), in the case of a
violation of paragraph (5), (10), or (17) of subsection (a),
the civil penalty shall not exceed $10,000.
(ii) In the case of a violation described in clause (i)
committed by a registered manufacturer or distributor of
opioids and related to the reporting of suspicious orders for
opioids, failing to maintain effective controls against
diversion of opioids, or failing to review the most recent
information made available by the Attorney General in
accordance with section 307(f), the penalty shall not exceed
$100,000.
(C) In the case of a violation of paragraph (16) of
subsection (a) of this section by an importer, exporter,
manufacturer, or distributor (other than as provided in
subparagraph (D)), up to $500,000 per violation. For purposes
of this subparagraph, a violation is defined as each instance
of importation, exportation, manufacturing, distribution, or
possession with intent to manufacture or distribute, in
violation of paragraph (16) of subsection (a).
(D) In the case of a distribution, dispensing, or possession
with intent to distribute or dispense in violation of paragraph
(16) of subsection (a) of this section at the retail level, up
to $1000 per violation. For purposes of this paragraph, the
term ``at the retail level'' refers to products sold, or held
for sale, directly to the consumer for personal use. Each
package, container or other separate unit containing an
anabolic steroid that is distributed, dispensed, or possessed
with intent to distribute or dispense at the retail level in
violation of such paragraph (16) of subsection (a) shall be
considered a separate violation.
(2)(A) If a violation of this section is prosecuted by an
information or indictment which alleges that the violation was
committed knowingly and the trier of fact specifically finds
that the violation was so committed, such person shall, except
as otherwise provided in subparagraph (B) or (D) of this
paragraph, be sentenced to imprisonment of not more than one
year or a fine under title 18, United States Code, or both.
(B) If a violation referred to in subparagraph (A) was
committed after one or more prior convictions of the offender
for an offense punishable under this paragraph (2), or for a
crime under any other provision of this title or title III or
other law of the United States relating to narcotic drugs[,
marihuana,] or depressant or stimulant substances, have become
final, such person shall be sentenced to a term of imprisonment
of not more than 2 years, a fine under title 18, United States
Code, or both.
(C) In addition to the penalties set forth elsewhere in this
title or title III, any business that violates paragraph (11)
of subsection (a) shall, with respect to the first such
violation, be subject to a civil penalty of not more than
$250,000, but shall not be subject to criminal penalties under
this section, and shall, for any succeeding violation, be
subject to a civil fine of not more than $250,000 or double the
last previously imposed penalty, whichever is greater.
(D) In the case of a violation described in subparagraph (A)
that was a violation of paragraph (5), (10), or (17) of
subsection (a) committed by a registered manufacturer or
distributor of opioids that relates to the reporting of
suspicious orders for opioids, failing to maintain effective
controls against diversion of opioids, or failing to review the
most recent information made available by the Attorney General
in accordance with section 307(f), the criminal fine under
title 18, United States Code, shall not exceed $500,000.
(3) Except under the conditions specified in paragraph (2) of
this subsection, a violation of this section does not
constitute a crime, and a judgment for the United States and
imposition of a civil penalty pursuant to paragraph (1) shall
not give rise to any disability or legal disadvantage based on
conviction for a criminal offense.
(4)(A) If a regulated seller, or a distributor required to
submit reports under section 310(b)(3), violates paragraph (12)
of subsection (a) of this section, or if a regulated seller
violates paragraph (13) of such subsection, the Attorney
General may by order prohibit such seller or distributor (as
the case may be) from selling any scheduled listed chemical
product. Any sale of such a product in violation of such an
order is subject to the same penalties as apply under paragraph
(2).
(B) An order under subparagraph (A) may be imposed only
through the same procedures as apply under section 304(c) for
an order to show cause.
prohibited acts c--penalties
Sec. 403. (a) It shall be unlawful for any person knowingly
or intentionally--
(1) who is a registrant to distribute a controlled
substance classified in schedule I or II, in the course
of his legitimate business, except pursuant to an order
or an order form as required by section 308 of this
title;
(2) to use in the course of the manufacture,
distribution, or dispensing of a controlled substance,
or to use for the purpose of acquiring or obtaining a
controlled substance, a registration number which is
fictitious, revoked, suspended, expired, or issued to
another person;
(3) to acquire or obtain possession of a controlled
substance by misrepresentation, fraud, forgery,
deception, or subterfuge;
(4)(A) to furnish false or fraudulent material
information in, or omit any material information from,
any application, report, record, or other document
required to be made, kept, or filed under this title or
title III, or (B) to present false or fraudulent
identification where the person is receiving or
purchasing a listed chemical and the person is required
to present identification under section 310(a);
(5) to make, distribute, or possess any punch, die,
plate, stone, or other thing designed to print,
imprint, or reproduce the trademark, trade name, or
other identifying mark, imprint, or device of another
or any likeness of any of the foregoing upon any drug
or container or labeling thereof so as to render such
drug a counterfeit substance;
(6) to possess any three-neck round-bottom flask,
tableting machine, encapsulating machine, or gelatin
capsule, or any equipment, chemical, product, or
material which may be used to manufacture a controlled
substance or listed chemical, knowing, intending, or
having reasonable cause to believe, that it will be
used to manufacture a controlled substance or listed
chemical in violation of this title or title III;
(7) to manufacture, distribute, export, or import any
three-neck round-bottom flask, tableting machine,
encapsulating machine, or gelatin capsule, or any
equipment, chemical, product, or material which may be
used to manufacture a controlled substance or listed
chemical, knowing, intending, or having reasonable
cause to believe, that it will be used to manufacture a
controlled substance or listed chemical in violation of
this title or title III or, in the case of an
exportation, in violation of this title or title III or
of the laws of the country to which it is exported;
(8) to create a chemical mixture for the purpose of
evading a requirement of section 310 or to receive a
chemical mixture created for that purpose; or
(9) to distribute, import, or export a list I
chemical without the registration required by this
title or title III.
(b) It shall be unlawful for any person knowingly or
intentionally to use any communication facility in committing
or in causing or facilitating the commission of any act or acts
constituting a felony under any provision of this title or
title III. Each separate use of a communication facility shall
be a separate offense under this subsection. For purposes of
this subsection, the term ``communication facility'' means any
and all public and private instrumentalities used or useful in
the transmission of writing, signs, signals, pictures, or
sounds of all kinds and includes mail, telephone, wire, radio,
and all other means of communication.
(c)(1) It shall be unlawful for any person to place in any
newspaper, magazine, handbill, or other publications, any
written advertisement knowing that it has the purpose of
seeking or offering illegally to receive, buy, or distribute a
Schedule I controlled substance. As used in this section the
term ``advertisement'' includes, in addition to its ordinary
meaning, such advertisements as those for a catalog of Schedule
I controlled substances and any similar written advertisement
that has the purpose of seeking or offering illegally to
receive, buy, or distribute a Schedule I controlled substance.
The term ``advertisement'' does not include material which
merely advocates the use of a similar material, which advocates
a position or practice, and does not attempt to propose or
facilitate an actual transaction in a Schedule I controlled
substance.
(2)(A) It shall be unlawful for any person to knowingly or
intentionally use the Internet, or cause the Internet to be
used, to advertise the sale of, or to offer to sell,
distribute, or dispense, a controlled substance where such
sale, distribution, or dispensing is not authorized by this
title or by the Controlled Substances Import and Export Act.
(B) Examples of activities that violate subparagraph (A)
include, but are not limited to, knowingly or intentionally
causing the placement on the Internet of an advertisement that
refers to or directs prospective buyers to Internet sellers of
controlled substances who are not registered with a
modification under section 303(f).
(C) Subparagraph (A) does not apply to material that either--
(i) merely advertises the distribution of controlled
substances by nonpractitioners to the extent authorized
by their registration under this title; or
(ii) merely advocates the use of a controlled
substance or includes pricing information without
attempting to facilitate an actual transaction
involving a controlled substance.
(d)(1) Except as provided in paragraph (2), any person who
violates this section shall be sentenced to a term of
imprisonment of not more than 4 years, a fine under title 18,
United States Code, or both; except that if any person commits
such a violation after one or more prior convictions of him for
violation of this section, or for a felony under any other
provision of this title or title III or other law of the United
States relating to narcotic drugs[, marihuana,] or depressant
or stimulant substances, have become final, such person shall
be sentenced to a term of imprisonment of not more than 8
years, a fine under title 18, United States Code, or both.
(2) Any person who, with the intent to manufacture or to
facilitate the manufacture of methamphetamine, violates
paragraph (6) or (7) of subsection (a), shall be sentenced to a
term of imprisonment of not more than 10 years, a fine under
title 18, United States Code, or both; except that if any
person commits such a violation after one or more prior
convictions of that person--
(A) for a violation of paragraph (6) or (7) of
subsection (a);
(B) for a felony under any other provision of this
subchapter or subchapter II of this chapter; or
(C) under any other law of the United States or any
State relating to controlled substances or listed
chemicals,
has become final, such person shall be sentenced to a term of
imprisonment of not more than 20 years, a fine under title 18,
United States Code, or both.
(e) In addition to any other applicable penalty, any person
convicted of a felony violation of this section relating to the
receipt, distribution, manufacture, exportation, or importation
of a listed chemical may be enjoined from engaging in any
transaction involving a listed chemical for not more than ten
years.
(f) Injunctions.--(1) In addition to any penalty provided in
this section, the Attorney General is authorized to commence a
civil action for appropriate declaratory or injunctive relief
relating to violations of this section, section 402, or 416.
(2) Any action under this subsection may be brought in the
district court of the United States for the district in which
the defendant is located or resides or is doing business.
(3) Any order or judgment issued by the court pursuant to
this subsection shall be tailored to restrain violations of
this section or section 402.
(4) The court shall proceed as soon as practicable to the
hearing and determination of such an action. An action under
this subsection is governed by the Federal Rules of Civil
Procedure except that, if an indictment has been returned
against the respondent, discovery is governed by the Federal
Rules of Criminal Procedure.
* * * * * * *
distribution to persons under age twenty-one
Sec. 418. (a) Except as provided in section 419, any person
at least eighteen years of age who violates section 401(a)(1)
by distributing a controlled substance to a person under
twenty-one years of age is (except as provided in subsection
(b)) subject to (1) twice the maximum punishment authorized by
section 401(b), and (2) at least twice any term of supervised
release authorized by section 401(b), for a first offense
involving the same controlled substance and schedule. Except to
the extent a greater minimum sentence is otherwise provided by
section 401(b), a term of imprisonment under this subsection
shall be not less than one year. [The mandatory minimum
sentencing provisions of this subsection shall not apply to
offenses involving 5 grams or less of marihuana.]
(b) Except as provided in section 419, any person at least
eighteen years of age who violates section 401(a)(1) by
distributing a controlled substance to a person under twenty-
one years of age after a prior conviction under subsection (a)
of this section (or under section 303(b)(2) of the Federal
Food, Drug, and Cosmetic Act as in effect prior to the
effective date of section 701(b) of this Act) has become final,
is subject to (1) three times the maximum punishment authorized
by section 401(b), and (2) at least three times any term of
supervised release authorized by section 401(b), for a second
offense or subsequent offense involving the same controlled
substance and schedule. Except to the extent a greater minimum
sentence is otherwise provided by section 401(b), a term of
imprisonment under this subsection shall be not less than one
year. Penalties for third and subsequent convictions shall be
governed by section 401(b)(1)(A).
Sec. 419. Distribution in or Near Schools(a) Any person who
violates section 401(a)(1) or section 416 by distributing,
possessing with intent to distribute, or manufacturing a
controlled substance in or on, or within one thousand feet of,
the real property comprising a public or private elementary,
vocational, or secondary school or a public or private college,
junior college, or university, or a playground, or housing
facility owned by a public housing authority, or within 100
feet of a public or private youth center, public swimming pool,
or video arcade facility, is (except as provided in subsection
(b)) subject to (1) twice the maximum punishment authorized by
section 401(b) of this title; and (2) at least twice any term
of supervised release authorized by section 401(b) for a first
offense. A fine up to twice that authorized by section 401(b)
may be imposed in addition to any term of imprisonment
authorized by this subsection. Except to the extent a greater
minimum sentence is otherwise provided by section 401(b), a
person shall be sentenced under this subsection to a term of
imprisonment of not less than one year. [The mandatory minimum
sentencing provisions of this paragraph shall not apply to
offenses involving 5 grams or less of marihuana.]
(b) Any person who violates section 401(a)(1) or section 416
by distributing, possessing with intent to distribute, or
manufacturing a controlled substance in or on, or within one
thousand feet of, the real property comprising a public or
private elementary, vocational, or secondary school or a public
or private college, junior college, or university, or a
playground, or housing facility owned by a public housing
authority, or within 100 feet of a public or private youth
center, public swimming pool, or video arcade facility, after a
prior conviction under subsection (a) has become final is
punishable (1) by the greater of (A) a term of imprisonment of
not less than three years and not more than life imprisonment
or (B) three times the maximum punishment authorized by section
401(b) for a first offense, and (2) at least three times any
term of supervised release authorized by section 401(b) of this
title for a first offense. A fine up to three times that
authorized by section 401(b) may be imposed in addition to any
term of imprisonment authorized by this subsection. Except to
the extent a greater minimum sentence is otherwise provided by
section 401(b), a person shall be sentenced under this
subsection to a term of imprisonment of not less than three
years. Penalties for third and subsequent convictions shall be
governed by section 401(b)(1)(A).
(c) Notwithstanding any other law, any person at least 21
years of age who knowingly and intentionally--
(1) employs, hires, uses, persuades, induces,
entices, or coerces a person under 18 years of age to
violate this section; or
(2) employs, hires, uses, persuades, induces,
entices, or coerces a person under 18 years of age to
assist in avoiding detection or apprehension for any
offense under this section by any Federal, State, or
local law enforcement official,
is punishable by a term of imprisonment, a fine, or both, up to
triple those authorized by section 401.
(d) In the case of any mandatory minimum sentence imposed
under subsection (b), imposition or execution of such sentence
shall not be suspended and probation shall not be granted. An
individual convicted under this section shall not be eligible
for parole until the individual has served the mandatory
minimum term of imprisonment as provided by this section.
(e) For the purposes of this section--
(1) The term ``playground'' means any outdoor
facility (including any parking lot appurtenant
thereto) intended for recreation, open to the public,
and with any portion thereof containing three or more
separate apparatus intended for the recreation of
children including, but not limited to, sliding boards,
swingsets, and teeterboards.
(2) The term ``youth center'' means any recreational
facility and/or gymnasium (including any parking lot
appurtenant thereto), intended primarily for use by
persons under 18 years of age, which regularly provides
athletic, civic, or cultural activities.
(3) The term ``video arcade facility'' means any
facility, legally accessible to persons under 18 years
of age, intended primarily for the use of pinball and
video machines for amusement containing a minimum of
ten pinball and/or video machines.
(4) The term ``swimming pool'' includes any parking
lot appurtenant thereto.
* * * * * * *
drug paraphernalia
Sec. 422. (a) It is unlawful for any person--
(1) to sell or offer for sale drug paraphernalia;
(2) to use the mails or any other facility of
interstate commerce to transport drug paraphernalia; or
(3) to import or export drug paraphernalia.
(b) Anyone convicted of an offense under subsection (a) of
this section shall be imprisoned for not more than three years
and fined under title 18, United States Code.
(c) Any drug paraphernalia involved in any violation of
subsection (a) of this section shall be subject to seizure and
forfeiture upon the conviction of a person for such violation.
Any such paraphernalia shall be delivered to the Administrator
of General Services, General Services Administration, who may
order such paraphernalia destroyed or may authorize its use for
law enforcement or educational purposes by Federal, State, or
local authorities.
(d) The term ``drug paraphernalia'' means any equipment,
product, or material of any kind which is primarily intended or
designed for use in manufacturing, compounding, converting,
concealing, producing, processing, preparing, injecting,
ingesting, inhaling, or otherwise introducing into the human
body a controlled substance, possession of which is unlawful
under the Controlled Substances Act (title II of Public Law 91-
513). It includes items primarily intended or designed for use
in ingesting, inhaling, or otherwise introducing [marijuana,]
cocaine, hashish, hashish oil, PCP, methamphetamine, or
amphetamines into the human body, such as--
(1) metal, wooden, acrylic, glass, stone, plastic, or
ceramic pipes with or without screens, permanent
screens, hashish heads, or punctured metal bowls;
(2) water pipes;
(3) carburetion tubes and devices;
(4) smoking and carburetion masks;
(5) roach clips: meaning objects used to hold burning
material[, such as a marihuana cigarette,] that has
become too small or too short to be held in the hand;
(6) miniature spoons with level capacities of one-
tenth cubic centimeter or less;
(7) chamber pipes;
(8) carburetor pipes;
(9) electric pipes;
(10) air-driven pipes;
(11) chillums;
(12) bongs;
(13) ice pipes or chillers;
(14) wired cigarette papers; or
(15) cocaine freebase kits.
(e) In determining whether an item constitutes drug
paraphernalia, in addition to all other logically relevant
factors, the following may be considered:
(1) instructions, oral or written, provided with the
item concerning its use;
(2) descriptive materials accompanying the item which
explain or depict its use;
(3) national and local advertising concerning its
use;
(4) the manner in which the item is displayed for
sale;
(5) whether the owner, or anyone in control of the
item, is a legitimate supplier of like or related items
to the community, such as a licensed distributor or
dealer of tobacco products;
(6) direct or circumstantial evidence of the radio of
sales of the item(s) to the total sales of the business
enterprise;
(7) the existence and scope of legitimate uses of the
item in the community; and
(8) expert testimony concerning its use.
(f) This section shall not apply to--
(1) any person authorized by local, State, or Federal
law to manufacture, possess, or distribute such items;
or
(2) any item that, in the normal lawful course of
business, is imported, exported, transported, or sold
through the mail or by any other means, and
traditionally intended for use with tobacco products,
including any pipe, paper, or accessory.
* * * * * * *
Part E--Administrative and Enforcement Provisions
* * * * * * *
payments and advances
Sec. 516. (a) The Attorney General is authorized to pay any
person, from funds appropriated for the Drug Enforcement
Administration, for information concerning a violation of this
title, such sum or sums of money as he may deem appropriate,
without reference to any moieties or rewards to which such
person may otherwise be entitled by law.
(b) Moneys expended from appropriations of the Drug
Enforcement Administration for purchase of controlled
substances and subsequently recovered shall be reimbursed to
the current appropriation for the Bureau.
(c) The Attorney General is authorized to direct the advance
of funds by the Treasury Department in connection with the
enforcement of this title. Section 16 of Public Law 96-132 (93
Stat. 1049) amended this title in several other places by
striking references to the Bureau of Narcotics and Dangerous
Drugs and inserting references to the Drug Enforcement
Administration.
(d)(1) There is established in the Treasury a trust fund to
be known as the ``Drug Pollution Fund'' (hereinafter referred
to in this subsection as the ``Fund''), consisting of amounts
appropriated or credited to such Fund under [section 401(b)(6)]
section 401(b)(5).
(2) There are hereby appropriated to the Fund amounts
equivalent to the fines imposed under [section 401(b)(6)]
section 401(b)(5).
(3) Amounts in the Fund shall be available, as provided in
appropriations Acts, for the purpose of making payments in
accordance with paragraph (4) for the clean up of certain
pollution resulting from the actions referred to in [section
401(b)(6)] section 401(b)(5).
(4)(A) The Secretary of the Treasury, after consultation with
the Attorney General, shall make payments under paragraph (3),
in such amounts as the Secretary determines appropriate, to the
heads of executive agencies or departments that meet the
requirements of subparagraph (B).
(B) In order to receive a payment under paragraph (3), the
head of an executive agency or department shall submit an
application in such form and containing such information as the
Secretary of the Treasury shall by regulation require. Such
application shall contain a description of the fine imposed
under [section 401(b)(6)] section 401(b)(5), the circumstances
surrounding the imposition of such fine, and the type and
severity of pollution that resulted from the actions to which
such fine applies.
(5) For purposes of subchapter B of chapter 98 of the
Internal Revenue Code of 1986, the Fund established under this
paragraph shall be treated in the same manner as a trust fund
established under subchapter A of such chapter.
* * * * * * *
----------
NATIONAL FOREST SYSTEM DRUG CONTROL ACT OF 1986
* * * * * * *
TITLE XV--NATIONAL FOREST SYSTEM DRUG CONTROL
* * * * * * *
SEC. 15002. PURPOSE.
(a) The purpose of this title is to authorize the Secretary
of Agriculture (hereinafter in this title referred to as the
``Secretary'') to take actions necessary, in connection with
the administration and use of the National Forest System, to
prevent the manufacture, distribution, or dispensing of
[marijuana and other] controlled substances.
(b) Nothing in this title shall diminish in any way the law
enforcement authority of the Forest Service.
(c) As used in this title, the terms ``manufacture'',
``dispense'', and ``distribute'' shall have the same meaning
given such terms in section 102 of the Controlled Substances
Act (21 U.S.C. 802).
SEC. 15003. POWERS.
For the purposes of this title, if specifically designated by
the Secretary and specially trained, not to exceed 1,000
special agents and law enforcement officers of the Forest
Service when in the performance of their duties shall have
authority to--
(1) carry firearms;
(2) conduct, within the exterior boundaries of the
National Forest System, investigations of violations of
and enforce section 401 of Controlled Substances Act
(21 U.S.C. 841) and other criminal violations relating
to [marijuana and other] controlled substances that are
manufactured, distributed, or dispensed on National
Forest System lands and to conduct such investigations
and enforcement of such laws outside the exterior
boundaries of the National Forest System for offenses
committed within the National Forest System or which
affect the administration of the National Forest System
(including the pursuit of persons suspected of such
offenses who flee the National Forest System to avoid
arrest);
(3) make arrests with a warrant or process for
misdemeanor violations, or without a warrant or process
for violations of such misdemeanors that any such
officer or employee has probable cause to believe are
being committed in his presence or view, or for a
felony with a warrant or without a warrant if he has
probable cause to believe that the person to be
arrested has committed or is committing such felony,
for offenses committed within the National Forest
System or which affect the administration of the
National Forest System;;
(4) serve warrants and other process issued by a
court or officer of competent jurisdiction;
(5) search with or without warrant or process any
person, place, or conveyance according to Federal law
or rule of law; and
(6) seize with or without warrant or process any
evidentiary item according to Federal law or rule of
law.
SEC. 15004. COOPERATION.
For the purposes of this title, in exercising the authority
provided by section 15003--
(1) the Forest Service shall cooperate with any other
Federal law enforcement agency having primary
investigative jurisdiction over the offense committed;
(2) the Secretary may authorize the Forest Service to
cooperate with the law enforcement officials of any
Federal agency, State, or political subdivision in the
investigation of violations of and enforcement of
section 401 of the Controlled Substances Act (21 U.S.C.
8411), other laws and regulations relating to
[marijuana and other] controlled substances, and State
drug control laws or ordinances for offenses committed
within the National Forest System or which affect the
administration of the National Forest System.
(3) the Forest Service shall cooperate with the
Attorney General in carrying out the seizure and
forfeiture provisions of section 511 of the Controlled
Substances Act (21 U.S.C. 881) for violations of the
Controlled Substances Act relating to offenses
committed within the National Forest System, or which
affect the administration of the National Forest
System;
(4) the Secretary is authorized to designate law
enforcement officers of any other Federal agency, when
the Secretary determines such designation to be
economical and in the public interest, and with the
concurrence of that agency, to exercise the powers and
authorities of the Forest Service while assisting the
Forest Service in the National Forest System, or for
activities administered by the Forest Service; and
(5) the Forest Service is authorized to accept law
enforcement designation from any other Federal agency
or agency of a State or political subdivision thereof
for the purpose of cooperating in a multi-agency law
enforcement task force investigation of violations of
the Controlled Substances Act and other offenses
committed in the course of or in connection with such
violations.
* * * * * * *
----------
TITLE 18, UNITED STATES CODE
* * * * * * *
PART I--CRIMES
* * * * * * *
CHAPTER 119--WIRE AND ELECTRONIC COMMUNICATIONS INTERCEPTION AND
INTERCEPTION OF ORAL COMMUNICATIONS
* * * * * * *
Sec. 2516. Authorization for interception of wire, oral, or electronic
communications
(1) The Attorney General, Deputy Attorney General,
Associate Attorney General, or any Assistant Attorney
General, any acting Assistant Attorney General, or any
Deputy Assistant Attorney General or acting Deputy
Assistant Attorney General in the Criminal Division or
National Security Division specially designated by the
Attorney General, may authorize an application to a
Federal judge of competent jurisdiction for, and such
judge may grant in conformity with section 2518 of this
chapter an order authorizing or approving the
interception of wire or oral communications by the
Federal Bureau of Investigation, or a Federal agency
having responsibility for the investigation of the
offense as to which the application is made, when such
interception may provide or has provided evidence of--
(a) any offense punishable by death or by
imprisonment for more than one year under
sections 2122 and 2274 through 2277 of title 42
of the United States Code (relating to the
enforcement of the Atomic Energy Act of 1954),
section 2284 of title 42 of the United States
Code (relating to sabotage of nuclear
facilities or fuel), or under the following
chapters of this title: chapter 10 (relating to
biological weapons), chapter 37 (relating to
espionage), chapter 55 (relating to
kidnapping), chapter 90 (relating to protection
of trade secrets), chapter 105 (relating to
sabotage), chapter 115 (relating to treason),
chapter 102 (relating to riots), chapter 65
(relating to malicious mischief), chapter 111
(relating to destruction of vessels), or
chapter 81 (relating to piracy);
(b) a violation of section 186 or section
501(c) of title 29, United States Code (dealing
with restrictions on payments and loans to
labor organizations), or any offense which
involves murder, kidnapping, robbery, or
extortion, and which is punishable under this
title;
(c) any offense which is punishable under the
following sections of this title: section 37
(relating to violence at international
airports), section 43 (relating to animal
enterprise terrorism), section 81 (arson within
special maritime and territorial jurisdiction),
section 201 (bribery of public officials and
witnesses), section 215 (relating to bribery of
bank officials), section 224 (bribery in
sporting contests), subsection (d), (e), (f),
(g), (h), or (i) of section 844 (unlawful use
of explosives), section 1032 (relating to
concealment of assets), section 1084
(transmission of wagering information), section
751 (relating to escape), section 832 (relating
to nuclear and weapons of mass destruction
threats), section 842 (relating to explosive
materials), section 930 (relating to possession
of weapons in Federal facilities), section 1014
(relating to loans and credit applications
generally; renewals and discounts), section
1114 (relating to officers and employees of the
United States), section 1116 (relating to
protection of foreign officials), sections
1503, 1512, and 1513 (influencing or injuring
an officer, juror, or witness generally),
section 1510 (obstruction of criminal
investigations), section 1511 (obstruction of
State or local law enforcement), section 1581
(peonage), section 1582 (vessels for slave
trade), section 1583 (enticement into slavery),
section 1584 (involuntary servitude), section
1585 (seizure, detention, transportation or
sale of slaves), section 1586 (service on
vessels in slave trade), section 1587
(possession of slaves aboard vessel), section
1588 (transportation of slaves from United
States), section 1589 (forced labor), section
1590 (trafficking with respect to peonage,
slavery, involuntary servitude, or forced
labor), section 1591 (sex trafficking of
children by force, fraud, or coercion), section
1592 (unlawful conduct with respect to
documents in furtherance of trafficking,
peonage, slavery, involuntary servitude, or
forced labor), section 1751 (Presidential and
Presidential staff assassination, kidnapping,
and assault), section 1951 (interference with
commerce by threats or violence), section 1952
(interstate and foreign travel or
transportation in aid of racketeering
enterprises), section 1958 (relating to use of
interstate commerce facilities in the
commission of murder for hire), section 1959
(relating to violent crimes in aid of
racketeering activity), section 1954 (offer,
acceptance, or solicitation to influence
operations of employee benefit plan), section
1955 (prohibition of business enterprises of
gambling), section 1956 (laundering of monetary
instruments), section 1957 (relating to
engaging in monetary transactions in property
derived from specified unlawful activity),
section 659 (theft from interstate shipment),
section 664 (embezzlement from pension and
welfare funds), section 1343 (fraud by wire,
radio, or television), section 1344 (relating
to bank fraud), section 1992 (relating to
terrorist attacks against mass transportation),
sections 2251 and 2252 (sexual exploitation of
children), section 2251A (selling or buying of
children), section 2252A (relating to material
constituting or containing child pornography),
section 1466A (relating to child obscenity),
section 2260 (production of sexually explicit
depictions of a minor for importation into the
United States), sections 2421, 2422, 2423, and
2425 (relating to transportation for illegal
sexual activity and related crimes), sections
2312, 2313, 2314, and 2315 (interstate
transportation of stolen property), section
2321 (relating to trafficking in certain motor
vehicles or motor vehicle parts), section 2340A
(relating to torture), section 1203 (relating
to hostage taking), section 1029 (relating to
fraud and related activity in connection with
access devices), section 3146 (relating to
penalty for failure to appear), section
3521(b)(3) (relating to witness relocation and
assistance), section 32 (relating to
destruction of aircraft or aircraft
facilities), section 38 (relating to aircraft
parts fraud), section 1963 (violations with
respect to racketeer influenced and corrupt
organizations), section 115 (relating to
threatening or retaliating against a Federal
official), section 1341 (relating to mail
fraud), a felony violation of section 1030
(relating to computer fraud and abuse), section
351 (violations with respect to congressional,
Cabinet, or Supreme Court assassinations,
kidnapping, and assault), section 831 (relating
to prohibited transactions involving nuclear
materials), section 33 (relating to destruction
of motor vehicles or motor vehicle facilities),
section 175 (relating to biological weapons),
section 175c (relating to variola virus),
section 956 (conspiracy to harm persons or
property overseas), a felony violation of
section 1028 (relating to production of false
identification documentation), section 1425
(relating to the procurement of citizenship or
nationalization unlawfully), section 1426
(relating to the reproduction of naturalization
or citizenship papers), section 1427 (relating
to the sale of naturalization or citizenship
papers), section 1541 (relating to passport
issuance without authority), section 1542
(relating to false statements in passport
applications), section 1543 (relating to
forgery or false use of passports), section
1544 (relating to misuse of passports), section
1546 (relating to fraud and misuse of visas,
permits, and other documents), or section 555
(relating to construction or use of
international border tunnels);
(d) any offense involving counterfeiting
punishable under section 471, 472, or 473 of
this title;
(e) any offense involving fraud connected
with a case under title 11 or the manufacture,
importation, receiving, concealment, buying,
selling, or otherwise dealing in narcotic
drugs, [marihuana,] or other dangerous drugs,
punishable under any law of the United States;
(f) any offense including extortionate credit
transactions under sections 892, 893, or 894 of
this title;
(g) a violation of section 5322 of title 31,
United States Code (dealing with the reporting
of currency transactions), or section 5324 of
title 31, United States Code (relating to
structuring transactions to evade reporting
requirement prohibited);
(h) any felony violation of sections 2511 and
2512 (relating to interception and disclosure
of certain communications and to certain
intercepting devices) of this title;
(i) any felony violation of chapter 71
(relating to obscenity) of this title;
(j) any violation of section 60123(b)
(relating to destruction of a natural gas
pipeline), section 46502 (relating to aircraft
piracy), the second sentence of section 46504
(relating to assault on a flight crew with
dangerous weapon), or section 46505(b)(3) or
(c) (relating to explosive or incendiary
devices, or endangerment of human life, by
means of weapons on aircraft) of title 49;
(k) any criminal violation of section 2778 of
title 22 (relating to the Arms Export Control
Act);
(l) the location of any fugitive from justice
from an offense described in this section;
(m) a violation of section 274, 277, or 278
of the Immigration and Nationality Act (8
U.S.C. 1324, 1327, or 1328) (relating to the
smuggling of aliens);
(n) any felony violation of sections 922 and
924 of title 18, United States Code (relating
to firearms);
(o) any violation of section 5861 of the
Internal Revenue Code of 1986 (relating to
firearms);
(p) a felony violation of section 1028
(relating to production of false identification
documents), section 1542 (relating to false
statements in passport applications), section
1546 (relating to fraud and misuse of visas,
permits, and other documents), section 1028A
(relating to aggravated identity theft) of this
title or a violation of section 274, 277, or
278 of the Immigration and Nationality Act
(relating to the smuggling of aliens); or
(q) any criminal violation of section 229
(relating to chemical weapons) or section 2332,
2332a, 2332b, 2332d, 2332f, 2332g, 2332h 2339,
2339A, 2339B, 2339C, or 2339D of this title
(relating to terrorism);
(r) any criminal violation of section 1
(relating to illegal restraints of trade or
commerce), 2 (relating to illegal monopolizing
of trade or commerce), or 3 (relating to
illegal restraints of trade or commerce in
territories or the District of Columbia) of the
Sherman Act (15 U.S.C. 1, 2, 3);
(s) any violation of section 670 (relating to
theft of medical products);
(t) any violation of the Export Control
Reform Act of 2018; or
(u) any conspiracy to commit any offense
described in any subparagraph of this
paragraph.
(2) The principal prosecuting attorney of any State, or the
principal prosecuting attorney of any political subdivision
thereof, if such attorney is authorized by a statute of that
State to make application to a State court judge of competent
jurisdiction for an order authorizing or approving the
interception of wire, oral, or electronic communications, may
apply to such judge for, and such judge may grant in conformity
with section 2518 of this chapter and with the applicable State
statute an order authorizing, or approving the interception of
wire, oral, or electronic communications by investigative or
law enforcement officers having responsibility for the
investigation of the offense as to which the application is
made, when such interception may provide or has provided
evidence of the commission of the offense of murder,
kidnapping, human trafficking, child sexual exploitation, child
pornography production, prostitution, gambling, robbery,
bribery, extortion, or dealing in narcotic drugs, [marihuana]
or other dangerous drugs, or other crime dangerous to life,
limb, or property, and punishable by imprisonment for more than
one year, designated in any applicable State statute
authorizing such interception, or any conspiracy to commit any
of the foregoing offenses.
(3) Any attorney for the Government (as such term is defined
for the purposes of the Federal Rules of Criminal Procedure)
may authorize an application to a Federal judge of competent
jurisdiction for, and such judge may grant, in conformity with
section 2518 of this title, an order authorizing or approving
the interception of electronic communications by an
investigative or law enforcement officer having responsibility
for the investigation of the offense as to which the
application is made, when such interception may provide or has
provided evidence of any Federal felony.
* * * * * * *
----------
TITLE 49, UNITED STATES CODE
* * * * * * *
SUBTITLE V--RAIL PROGRAMS
* * * * * * *
PART A--SAFETY
* * * * * * *
CHAPTER 201--GENERAL
* * * * * * *
SUBCHAPTER II--PARTICULAR ASPECTS OF SAFETY
* * * * * * *
Sec. 20140. Alcohol and controlled substances testing
(a) Definition.--In this section, ``controlled substance''
[means any substance] means--
(A) any substance under section 102 of the
Comprehensive Drug Abuse Prevention and Control
Act of 1970 (21 U.S.C. 802) specified by the
Secretary of Transportation[.] ; and
(B) any substance not covered under
subparagraph (A) that was a substance under
such section as of December 1, 2018, and
specified by the Secretary of Transportation.
(b) General.--(1) In the interest of safety, the Secretary of
Transportation shall prescribe regulations and issue orders,
not later than October 28, 1992, related to alcohol and
controlled substances use in railroad operations. The
regulations shall establish a program requiring--
(A) a railroad carrier to conduct preemployment,
reasonable suspicion, random, and post-accident testing
of all railroad employees responsible for safety-
sensitive functions (as decided by the Secretary) for
the use of a controlled substance in violation of law
or a United States Government regulation, and to
conduct reasonable suspicion, random, and post-accident
testing of such employees for the use of alcohol in
violation of law or a United States Government
regulation; the regulations shall permit such railroad
carriers to conduct preemployment testing of such
employees for the use of alcohol; and
(B) when the Secretary considers it appropriate,
disqualification for an established period of time or
dismissal of any employee found--
(i) to have used or been impaired by alcohol
when on duty; or
(ii) to have used a controlled substance,
whether or not on duty, except as allowed for
medical purposes by law or a regulation or
order under this chapter.
(2) When the Secretary of Transportation considers it
appropriate in the interest of safety, the Secretary may
prescribe regulations and issue orders requiring railroad
carriers to conduct periodic recurring testing of railroad
employees responsible for safety-sensitive functions (as
decided by the Secretary) for the use of alcohol or a
controlled substance in violation of law or a Government
regulation.
(c) Testing and Laboratory Requirements.--In carrying out
this section, the Secretary of Transportation shall develop
requirements that shall--
(1) promote, to the maximum extent practicable,
individual privacy in the collection of specimens;
(2) for laboratories and testing procedures for
controlled substances, incorporate the Department of
Health and Human Services scientific and technical
guidelines dated April 11, 1988, and any amendments to
those guidelines, including mandatory guidelines
establishing--
(A) comprehensive standards for every aspect
of laboratory controlled substances testing and
laboratory procedures to be applied in carrying
out this section, including standards requiring
the use of the best available technology to
ensure the complete reliability and accuracy of
controlled substances tests and strict
procedures governing the chain of custody of
specimens collected for controlled substances
testing;
(B) the minimum list of controlled substances
for which individuals may be tested; and
(C) appropriate standards and procedures for
periodic review of laboratories and criteria
for certification and revocation of
certification of laboratories to perform
controlled substances testing in carrying out
this section;
(3) require that a laboratory involved in controlled
substances testing under this section have the
capability and facility, at the laboratory, of
performing screening and confirmation tests;
(4) provide that all tests indicating the use of
alcohol or a controlled substance in violation of law
or a Government regulation be confirmed by a
scientifically recognized method of testing capable of
providing quantitative information about alcohol or a
controlled substance;
(5) provide that each specimen be subdivided,
secured, and labeled in the presence of the tested
individual and that a part of the specimen be retained
in a secure manner to prevent the possibility of
tampering, so that if the individual's confirmation
test results are positive the individual has an
opportunity to have the retained part tested by a 2d
confirmation test done independently at another
certified laboratory if the individual requests the 2d
confirmation test not later than 3 days after being
advised of the results of the first confirmation test;
(6) ensure appropriate safeguards for testing to
detect and quantify alcohol in breath and body fluid
samples, including urine and blood, through the
development of regulations that may be necessary and in
consultation with the Secretary of Health and Human
Services;
(7) provide for the confidentiality of test results
and medical information (other than information about
alcohol or a controlled substance) of employees, except
that this clause does not prevent the use of test
results for the orderly imposition of appropriate
sanctions under this section; and
(8) ensure that employees are selected for tests by
nondiscriminatory and impartial methods, so that no
employee is harassed by being treated differently from
other employees in similar circumstances.
(d) Rehabilitation.--The Secretary of Transportation shall
prescribe regulations or issue orders establishing requirements
for rehabilitation programs that at least provide for the
identification and opportunity for treatment of railroad
employees responsible for safety-sensitive functions (as
decided by the Secretary) in need of assistance in resolving
problems with the use of alcohol or a controlled substance in
violation of law or a Government regulation. The Secretary
shall decide on the circumstances under which employees shall
be required to participate in a program. Each railroad carrier
is encouraged to make such a program available to all of its
employees in addition to employees responsible for safety-
sensitive functions. This subsection does not prevent a
railroad carrier from establishing a program under this
subsection in cooperation with another railroad carrier.
(e) International Obligations and Foreign Laws and
Regulations.--In carrying out this section, the Secretary of
Transportation--
(1) shall establish only requirements that are
consistent with international obligations of the United
States; and
(2) shall consider applicable laws and regulations of
foreign countries.
(f) Other Regulations Allowed.--This section does not prevent
the Secretary of Transportation from continuing in effect,
amending, or further supplementing a regulation prescribed or
order issued before October 28, 1991, governing the use of
alcohol or a controlled substance in railroad operations.
* * * * * * *
SUBTITLE VI--MOTOR VEHICLE AND DRIVER PROGRAMS
* * * * * * *
PART B--COMMERCIAL
* * * * * * *
CHAPTER 313--COMMERCIAL MOTOR VEHICLE OPERATORS
* * * * * * *
Sec. 31301. Definitions
In this chapter--
(1) ``alcohol'' has the same meaning given the term
``alcoholic beverage'' in section 158(c) of title 23.
(2) ``commerce'' means trade, traffic, and
transportation--
(A) in the jurisdiction of the United States
between a place in a State and a place outside
that State (including a place outside the
United States); or
(B) in the United States that affects trade,
traffic, and transportation described in
subclause (A) of this clause.
(3) ``commercial driver's license'' means a license
issued by a State to an individual authorizing the
individual to operate a class of commercial motor
vehicles.
(4) ``commercial motor vehicle'' means a motor
vehicle used in commerce to transport passengers or
property that--
(A) has a gross vehicle weight rating or
gross vehicle weight of at least 26,001 pounds,
whichever is greater, or a lesser gross vehicle
weight rating or gross vehicle weight the
Secretary of Transportation prescribes by
regulation, but not less than a gross vehicle
weight rating of 10,001 pounds;
(B) is designed to transport at least 16
passengers including the driver; or
(C) is used to transport material found by
the Secretary to be hazardous under section
5103 of this title, except that a vehicle shall
not be included as a commercial motor vehicle
under this subclause if--
(i) the vehicle does not satisfy the
weight requirements of subclause (A) of
this clause;
(ii) the vehicle is transporting
material listed as hazardous under
section 306(a) of the Comprehensive
Environmental Response, Compensation,
and Liability Act of 1980 (42 U.S.C.
9656(a)) and is not otherwise regulated
by the Secretary or is transporting a
consumer commodity or limited quantity
of hazardous material as defined in
section 171.8 of title 49, Code of
Federal Regulations; and
(iii) the Secretary does not deny the
application of this exception to the
vehicle (individually or as part of a
class of motor vehicles) in the
interest of safety.
(5) except in [section 31306,] sections 31306,
31306a, and subsections (b) and (c) of section 31310,
``controlled substance'' has the same meaning given
that term in section 102 of the Comprehensive Drug
Abuse Prevention and Control Act of 1970 (21 U.S.C.
802).
(6) ``driver's license'' means a license issued by a
State to an individual authorizing the individual to
operate a motor vehicle on highways.
(7) ``employee'' means an operator of a commercial
motor vehicle (including an independent contractor when
operating a commercial motor vehicle) who is employed
by an employer.
(8) ``employer'' means a person (including the United
States Government, a State, or a political subdivision
of a State) that owns or leases a commercial motor
vehicle or assigns employees to operate a commercial
motor vehicle.
(9) ``felony'' means an offense under a law of the
United States or a State that is punishable by death or
imprisonment for more than one year.
(10) ``foreign commercial driver'' means an
individual licensed to operate a commercial motor
vehicle by an authority outside the United States, or a
citizen of a foreign country who operates a commercial
motor vehicle in the United States.
(11) ``hazardous material'' has the same meaning
given that term in section 5102 of this title.
(12) ``motor vehicle'' means a vehicle, machine,
tractor, trailer, or semitrailer propelled or drawn by
mechanical power and used on public streets, roads, or
highways, but does not include a vehicle, machine,
tractor, trailer, or semitrailer operated only on a
rail line or custom harvesting farm machinery.
(13) ``serious traffic violation'' means--
(A) excessive speeding, as defined by the
Secretary by regulation;
(B) reckless driving, as defined under State
or local law;
(C) a violation of a State or local law on
motor vehicle traffic control (except a parking
violation) and involving a fatality, other than
a violation to which section 31310(b)(1)(E) or
31310(c)(1)(E) applies;
(D) driving a commercial motor vehicle when
the individual has not obtained a commercial
driver's license;
(E) driving a commercial motor vehicle when
the individual does not have in his or her
possession a commercial driver's license unless
the individual provides, by the date that the
individual must appear in court or pay any fine
with respect to the citation, to the
enforcement authority that issued the citation
proof that the individual held a valid
commercial driver's license on the date of the
citation;
(F) driving a commercial motor vehicle when
the individual has not met the minimum testing
standards--
(i) under section 31305(a)(3) for the
specific class of vehicle the
individual is operating; or
(ii) under section 31305(a)(5) for
the type of cargo the vehicle is
carrying; and
(G) any other similar violation of a State or
local law on motor vehicle traffic control
(except a parking violation) that the Secretary
designates by regulation as serious.
(14) ``State'' means a State of the United States and
the District of Columbia.
(15) ``United States'' means the States of the United
States and the District of Columbia.
* * * * * * *
Sec. 31306. Alcohol and controlled substances testing
(a) Definition.--In this section and section 31306a,
``controlled substance'' [means any substance] means--
(A) any substance under section 102 of the
Comprehensive Drug Abuse Prevention and Control
Act of 1970 (21 U.S.C. 802) specified by the
Secretary of Transportation[.] ; and
(B) any substance not covered under
subparagraph (A) that was a substance under
such section as of December 1, 2018, and
specified by the Secretary of Transportation.
(b) Testing Program for Operators of Commercial Motor
Vehicles.--(1)(A) In the interest of commercial motor vehicle
safety, the Secretary of Transportation shall prescribe
regulations that establish a program requiring motor carriers
to conduct preemployment, reasonable suspicion, random, and
post-accident testing of operators of commercial motor vehicles
for the use of a controlled substance in violation of law or a
United States Government regulation and to conduct reasonable
suspicion, random, and post-accident testing of such operators
for the use of alcohol in violation of law or a United States
Government regulation.
(B) The regulations prescribed under subparagraph (A) shall
permit motor carriers--
(i) to conduct preemployment testing of commercial
motor vehicle operators for the use of alcohol; and
(ii) to use hair testing as an acceptable alternative
to urine testing--
(I) in conducting preemployment testing for
the use of a controlled substance; and
(II) in conducting random testing for the use
of a controlled substance if the operator was
subject to hair testing for preemployment
testing.
(C) When the Secretary of Transportation considers it
appropriate in the interest of safety, the Secretary may
prescribe regulations for conducting periodic recurring testing
of operators of commercial motor vehicles for the use of
alcohol or a controlled substance in violation of law or a
Government regulation.
(2) In prescribing regulations under this subsection, the
Secretary of Transportation--
(A) shall require that post-accident testing of an
operator of a commercial motor vehicle be conducted
when loss of human life occurs in an accident involving
a commercial motor vehicle;
(B) may require that post-accident testing of such an
operator be conducted when bodily injury or significant
property damage occurs in any other serious accident
involving a commercial motor vehicle; and
(C) shall provide an exemption from hair testing for
commercial motor vehicle operators with established
religious beliefs that prohibit the cutting or removal
of hair.
(c) Testing and Laboratory Requirements.--In carrying out
subsection (b) of this section, the Secretary of Transportation
shall develop requirements that shall--
(1) promote, to the maximum extent practicable,
individual privacy in the collection of specimens;
(2) for laboratories and testing procedures for
controlled substances, incorporate the Department of
Health and Human Services scientific and technical
guidelines dated April 11, 1988, and any amendments to
those guidelines, for urine testing, and technical
guidelines for hair testing, including mandatory
guidelines establishing--
(A) comprehensive standards for every aspect
of laboratory controlled substances testing and
laboratory procedures to be applied in carrying
out this section, including standards requiring
the use of the best available technology to
ensure the complete reliability and accuracy of
controlled substances tests and strict
procedures governing the chain of custody of
specimens collected for controlled substances
testing;
(B) the minimum list of controlled substances
for which individuals may be tested;
(C) appropriate standards and procedures for
periodic review of laboratories and criteria
for certification and revocation of
certification of laboratories to perform
controlled substances testing in carrying out
this section; and
(D) laboratory protocols and cut-off levels
for hair testing to detect the use of a
controlled substance;
(3) require that a laboratory involved in testing
under this section have the capability and facility, at
the laboratory, of performing screening and
confirmation tests;
(4) provide that any test indicating the use of
alcohol or a controlled substance in violation of law
or a Government regulation be confirmed by a
scientifically recognized method of testing capable of
providing quantitative information about alcohol or a
controlled substance;
(5) provide that each specimen be subdivided,
secured, and labeled in the presence of the tested
individual and that a part of the specimen be retained
in a secure manner to prevent the possibility of
tampering, so that if the individual's confirmation
test results are positive the individual has an
opportunity to have the retained part tested by a 2d
confirmation test done independently at another
certified laboratory if the individual requests the 2d
confirmation test not later than 3 days after being
advised of the results of the first confirmation test;
(6) ensure appropriate safeguards for testing to
detect and quantify alcohol in breath and body fluid
samples, including urine and blood, through the
development of regulations that may be necessary and in
consultation with the Secretary of Health and Human
Services;
(7) provide for the confidentiality of test results
and medical information (except information about
alcohol or a controlled substance) of employees, except
that this clause does not prevent the use of test
results for the orderly imposition of appropriate
sanctions under this section; and
(8) ensure that employees are selected for tests by
nondiscriminatory and impartial methods, so that no
employee is harassed by being treated differently from
other employees in similar circumstances.
(d) Testing as Part of Medical Examination.--The Secretary of
Transportation may provide that testing under subsection (a) of
this section for operators subject to subpart E of part 391 of
title 49, Code of Federal Regulations, be conducted as part of
the medical examination required under that subpart.
(e) Rehabilitation.--The Secretary of Transportation shall
prescribe regulations establishing requirements for
rehabilitation programs that provide for the identification and
opportunity for treatment of operators of commercial motor
vehicles who are found to have used alcohol or a controlled
substance in violation of law or a Government regulation. The
Secretary shall decide on the circumstances under which those
operators shall be required to participate in a program. This
section does not prevent a motor carrier from establishing a
program under this section in cooperation with another motor
carrier.
(f) Sanctions.--The Secretary of Transportation shall decide
on appropriate sanctions for a commercial motor vehicle
operator who is found, based on tests conducted and confirmed
under this section, to have used alcohol or a controlled
substance in violation of law or a Government regulation but
who is not under the influence of alcohol or a controlled
substance as provided in this chapter.
(g) Effect on State and Local Government Regulations.--A
State or local government may not prescribe or continue in
effect a law, regulation, standard, or order that is
inconsistent with regulations prescribed under this section.
However, a regulation prescribed under this section may not be
construed to preempt a State criminal law that imposes
sanctions for reckless conduct leading to loss of life, injury,
or damage to property.
(h) International Obligations and Foreign Laws.--In
prescribing regulations under this section, the Secretary of
Transportation--
(1) shall establish only requirements that are
consistent with international obligations of the United
States; and
(2) shall consider applicable laws and regulations of
foreign countries.
(i) Other Regulations Allowed.--This section does not prevent
the Secretary of Transportation from continuing in effect,
amending, or further supplementing a regulation prescribed
before October 28, 1991, governing the use of alcohol or a
controlled substance by commercial motor vehicle employees.
(j) Application of Penalties.--This section does not
supersede a penalty applicable to an operator of a commercial
motor vehicle under this chapter or another law.
* * * * * * *
Sec. 31310. Disqualifications
(a) Blood Alcohol Concentration Level.--In this section, the
blood alcohol concentration level at or above which an
individual when operating a commercial motor vehicle is deemed
to be driving under the influence of alcohol is .04 percent.
(b) First Violation or Committing Felony.--(1) Except as
provided in paragraph (2) of this subsection and subsection (c)
of this section, the Secretary of Transportation shall
disqualify from operating a commercial motor vehicle for at
least one year an individual--
(A) committing a first violation of driving a
commercial motor vehicle under the influence of alcohol
or a controlled substance;
(B) committing a first violation of leaving the scene
of an accident involving a commercial motor vehicle
operated by the individual;
(C) using a commercial motor vehicle in committing a
felony (except a felony described in subsection (d) of
this section);
(D) committing a first violation of driving a
commercial motor vehicle when the individual's
commercial driver's license is revoked, suspended, or
canceled based on the individual's operation of a
commercial motor vehicle or when the individual is
disqualified from operating a commercial motor vehicle
based on the individual's operation of a commercial
motor vehicle; or
(E) convicted of causing a fatality through negligent
or criminal operation of a commercial motor vehicle.
(2) If the vehicle involved in a violation referred to in
paragraph (1) of this subsection is transporting hazardous
material required to be placarded under section 5103 of this
title, the Secretary shall disqualify the individual for at
least 3 years.
(3) In this subsection and subsection (c), the term
``controlled substance'' has the meaning given such term in
section 31306(a).
(c) Second and Multiple Violations.--(1) Subject to paragraph
(2) of this subsection, the Secretary shall disqualify from
operating a commercial motor vehicle for life an individual--
(A) committing more than one violation of driving a
commercial motor vehicle under the influence of alcohol
or a controlled substance;
(B) committing more than one violation of leaving the
scene of an accident involving a commercial motor
vehicle operated by the individual;
(C) using a commercial motor vehicle in committing
more than one felony arising out of different criminal
episodes;
(D) committing more than one violation of driving a
commercial motor vehicle when the individual's
commercial driver's license is revoked, suspended, or
canceled based on the individual's operation of a
commercial motor vehicle or when the individual is
disqualified from operating a commercial motor vehicle
based on the individual's operation of a commercial
motor vehicle;
(E) convicted of more than one offense of causing a
fatality through negligent or criminal operation of a
commercial motor vehicle; or
(F) committing any combination of single violations
or use described in subparagraphs (A) through (E).
(2) The Secretary may prescribe regulations establishing
guidelines (including conditions) under which a
disqualification for life under paragraph (1) of this
subsection may be reduced to a period of not less than 10
years.
(d) Lifetime Disqualification Without Reinstatement.--
(1) Controlled substance violations.--The Secretary
shall disqualify from operating a commercial motor
vehicle for life an individual who uses a commercial
motor vehicle in committing a felony involving
manufacturing, distributing, or dispensing a controlled
substance, or possession with intent to manufacture,
distribute, or dispense a controlled substance.
(2) Human trafficking violations.--The Secretary
shall disqualify from operating a commercial motor
vehicle for life an individual who uses a commercial
motor vehicle in committing a felony involving an act
or practice described in paragraph (9) of section 103
of the Trafficking Victims Protection Act of 2000 (22
U.S.C. 7102(9)).
(e) Serious Traffic Violations.--(1) The Secretary shall
disqualify from operating a commercial motor vehicle for at
least 60 days an individual who, in a 3-year period, commits 2
serious traffic violations involving a commercial motor vehicle
operated by the individual.
(2) The Secretary shall disqualify from operating a
commercial motor vehicle for at least 120 days an individual
who, in a 3-year period, commits 3 serious traffic violations
involving a commercial motor vehicle operated by the
individual.
(f) Emergency Disqualification.--
(1) Limited duration.--The Secretary shall disqualify
an individual from operating a commercial motor vehicle
for not to exceed 30 days if the Secretary determines
that allowing the individual to continue to operate a
commercial motor vehicle would create an imminent
hazard (as such term is defined in section 521 or
section 5102).
(2) After notice and hearing.--The Secretary shall
disqualify an individual from operating a commercial
motor vehicle for more than 30 days if the Secretary
determines, after notice and an opportunity for a
hearing, that allowing the individual to continue to
operate a commercial motor vehicle would create an
imminent hazard (as such term is defined in section 521
or section 5102).
(g) Noncommercial Motor Vehicle Convictions.--
(1) Issuance of regulations.--The Secretary shall
issue regulations providing for the disqualification by
the Secretary from operating a commercial motor vehicle
of an individual who holds a commercial driver's
license and who has been convicted of--
(A) a serious offense involving a motor
vehicle (other than a commercial motor vehicle)
that has resulted in the revocation,
cancellation, or suspension of the individual's
license; or
(B) a drug or alcohol related offense
involving a motor vehicle (other than a
commercial motor vehicle).
(2) Requirements for regulations.--Regulations issued
under paragraph (1) shall establish the minimum periods
for which the disqualifications shall be in effect, but
in no case shall the time periods for disqualification
for noncommercial motor vehicle violations be more
stringent than those for offenses or violations
involving a commercial motor vehicle. The Secretary
shall determine such periods based on the seriousness
of the offenses on which the convictions are based.
(h) State Disqualification.--Notwithstanding subsections (b)
through (g) of this section, the Secretary does not have to
disqualify an individual from operating a commercial motor
vehicle if the State that issued the individual a license
authorizing the operation has disqualified the individual from
operating a commercial motor vehicle under subsections (b)
through (g). Revocation, suspension, or cancellation of the
license is deemed to be disqualification under this subsection.
(i) Out-of-Service Orders.--(1)(A) To enforce section 392.5
of title 49, Code of Federal Regulations, the Secretary shall
prescribe regulations establishing and enforcing an out-of-
service period of 24 hours for an individual who violates
section 392.5. An individual may not violate an out-of-service
order issued under those regulations.
(B) The Secretary shall prescribe regulations establishing
and enforcing requirements for reporting out-of-service orders
issued under regulations prescribed under subparagraph (A) of
this paragraph. Regulations prescribed under this subparagraph
shall require at least that an operator of a commercial motor
vehicle who is issued an out-of-service order to report the
issuance to the individual's employer and to the State that
issued the operator a driver's license.
(2) The Secretary shall prescribe regulations establishing
sanctions and penalties related to violations of out-of-service
orders by individuals operating commercial motor vehicles. The
regulations shall require at least that--
(A) an operator of a commercial motor vehicle found
to have committed a first violation of an out-of-
service order shall be disqualified from operating such
a vehicle for at least 180 days and liable for a civil
penalty of at least $2,500;
(B) an operator of a commercial motor vehicle found
to have committed a 2d violation of an out-of-service
order shall be disqualified from operating such a
vehicle for at least 2 years and not more than 5 years
and liable for a civil penalty of at least $5,000;
(C) an employer that knowingly allows or requires an
employee to operate a commercial motor vehicle in
violation of an out-of-service order shall be liable
for a civil penalty of not more than $25,000; and
(D) an employer that knowingly and willfully allows
or requires an employee to operate a commercial motor
vehicle in violation of an out-of-service order shall,
upon conviction, be subject for each offense to
imprisonment for a term not to exceed one year or a
fine under title 18, or both.
(j) Grade-Crossing Violations.--
(1) Sanctions.--The Secretary shall issue regulations
establishing sanctions and penalties relating to
violations, by persons operating commercial motor
vehicles, of laws and regulations pertaining to
railroad-highway grade crossings.
(2) Minimum requirements.--The regulations issued
under paragraph (1) shall, at a minimum, require that--
(A) the penalty for a single violation is not
less than a 60-day disqualification of the
driver's commercial driver's license; and
(B) any employer that knowingly allows,
permits, authorizes, or requires an employee to
operate a commercial motor vehicle in violation
of such a law or regulation shall be subject to
a civil penalty of not more than $10,000.
(k) Foreign Commercial Drivers.--A foreign commercial driver
shall be subject to disqualification under this section.
* * * * * * *
SUBTITLE VII--AVIATION PROGRAMS
* * * * * * *
PART A--AIR COMMERCE AND SAFETY
* * * * * * *
SUBPART iii--SAFETY
* * * * * * *
CHAPTER 451--ALCOHOL AND CONTROLLED SUBSTANCES TESTING
* * * * * * *
Sec. 45101. Definition
In this chapter, ``controlled substance'' [means any
substance] means--
(A) any substance under section 102 of the
Comprehensive Drug Abuse Prevention and Control
Act of 1970 (21 U.S.C. 802) specified by the
Administrator of the Federal Aviation
Administration[.] ; and
(B) any substance not covered under
subparagraph (A) that was a substance under
such section as of December 1, 2018, and
specified by the Secretary of Transportation.
* * * * * * *
SUBTITLE III--GENERAL AND INTERMODAL PROGRAMS
* * * * * * *
CHAPTER 53--PUBLIC TRANSPORTATION
* * * * * * *
Sec. 5331. Alcohol and controlled substances testing
(a) Definitions.--In this section--
(1) ``controlled substance'' [means any substance]
means--
(A) any substance under section 102 of the
Comprehensive Drug Abuse Prevention and Control
Act of 1970 (21 U.S.C. 802) whose use the
Secretary decides has a risk to transportation
safety[.] ; and
(B) any substance not covered under
subparagraph (A) that was a substance under
such section as of December 1, 2018, and whose
use the Secretary of Transportation decides has
a risk to transportation safety.
(2) ``person'' includes any entity organized or
existing under the laws of the United States, a State,
territory, or possession of the United States, or a
foreign country.
(3) ``public transportation'' means any form of
public transportation, except a form the Secretary
decides is covered adequately, for employee alcohol and
controlled substances testing purposes, under section
20140 or 31306 of this title or section 2303a, 7101(i),
or 7302(e) of title 46. The Secretary may also decide
that a form of public transportation is covered
adequately, for employee alcohol and controlled
substances testing purposes, under the alcohol and
controlled substance statutes or regulations of an
agency within the Department of Transportation or the
Coast Guard.
(b) Testing Program for Public Transportation Employees.--
(1)(A) In the interest of public transportation safety, the
Secretary shall prescribe regulations that establish a program
requiring public transportation operations that receive
financial assistance under section 5307, 5309, or 5311 of this
title to conduct preemployment, reasonable suspicion, random,
and post-accident testing of public transportation employees
responsible for safety-sensitive functions (as decided by the
Secretary) for the use of a controlled substance in violation
of law or a United States Government regulation, and to conduct
reasonable suspicion, random, and post-accident testing of such
employees for the use of alcohol in violation of law or a
United States Government regulation. The regulations shall
permit such operations to conduct preemployment testing of such
employees for the use of alcohol.
(B) When the Secretary considers it appropriate in the
interest of safety, the Secretary may prescribe regulations for
conducting periodic recurring testing of public transportation
employees responsible for safety-sensitive functions (as
decided by the Secretary) for the use of alcohol or a
controlled substance in violation of law or a Government
regulation.
(2) In prescribing regulations under this subsection, the
Secretary--
(A) shall require that post-accident testing of such
a public transportation employee be conducted when loss
of human life occurs in an accident involving public
transportation; and
(B) may require that post-accident testing of such a
public transportation employee be conducted when bodily
injury or significant property damage occurs in any
other serious accident involving public transportation.
(c) Disqualifications for Use.--(1) When the Secretary
considers it appropriate, the Secretary shall require
disqualification for an established period of time or dismissal
of any employee referred to in subsection (b)(1) of this
section who is found--
(A) to have used or been impaired by alcohol when on
duty; or
(B) to have used a controlled substance, whether or
not on duty, except as allowed for medical purposes by
law or regulation.
(2) This section does not supersede any penalty applicable to
a public transportation employee under another law.
(d) Testing and Laboratory Requirements.--In carrying out
subsection (b) of this section, the Secretary shall develop
requirements that shall--
(1) promote, to the maximum extent practicable,
individual privacy in the collection of specimens;
(2) for laboratories and testing procedures for
controlled substances, incorporate the Department of
Health and Human Services scientific and technical
guidelines dated April 11, 1988, and any amendments to
those guidelines, including mandatory guidelines
establishing--
(A) comprehensive standards for every aspect
of laboratory controlled substances testing and
laboratory procedures to be applied in carrying
out this section, including standards requiring
the use of the best available technology to
ensure the complete reliability and accuracy of
controlled substances tests and strict
procedures governing the chain of custody of
specimens collected for controlled substances
testing;
(B) the minimum list of controlled substances
for which individuals may be tested; and
(C) appropriate standards and procedures for
periodic review of laboratories and criteria
for certification and revocation of
certification of laboratories to perform
controlled substances testing in carrying out
this section;
(3) require that a laboratory involved in controlled
substances testing under this section have the
capability and facility, at the laboratory, of
performing screening and confirmation tests;
(4) provide that all tests indicating the use of
alcohol or a controlled substance in violation of law
or a Government regulation be confirmed by a
scientifically recognized method of testing capable of
providing quantitative information about alcohol or a
controlled substance;
(5) provide that each specimen be subdivided,
secured, and labeled in the presence of the tested
individual and that a part of the specimen be retained
in a secure manner to prevent the possibility of
tampering, so that if the individual's confirmation
test results are positive the individual has an
opportunity to have the retained part tested by a 2d
confirmation test done independently at another
certified laboratory if the individual requests the 2d
confirmation test not later than 3 days after being
advised of the results of the first confirmation test;
(6) ensure appropriate safeguards for testing to
detect and quantify alcohol in breath and body fluid
samples, including urine and blood, through the
development of regulations that may be necessary and in
consultation with the Secretary of Health and Human
Services;
(7) provide for the confidentiality of test results
and medical information (except information about
alcohol or a controlled substance) of employees, except
that this clause does not prevent the use of test
results for the orderly imposition of appropriate
sanctions under this section; and
(8) ensure that employees are selected for tests by
nondiscriminatory and impartial methods, so that no
employee is harassed by being treated differently from
other employees in similar circumstances.
(e) Rehabilitation.--The Secretary shall prescribe
regulations establishing requirements for rehabilitation
programs that provide for the identification and opportunity
for treatment of any public transportation employee referred to
in subsection (b)(1) of this section who is found to have used
alcohol or a controlled substance in violation of law or a
Government regulation. The Secretary shall decide on the
circumstances under which employees shall be required to
participate in a program. This subsection does not prevent a
public transportation operation from establishing a program
under this section in cooperation with another public
transportation operation.
(f) Relationship to Other Laws, Regulations, Standards, and
Orders.--(1) A State or local government may not prescribe,
issue, or continue in effect a law, regulation, standard, or
order that is inconsistent with regulations prescribed under
this section. However, a regulation prescribed under this
section does not preempt a State criminal law that imposes
sanctions for reckless conduct leading to loss of life, injury,
or damage to property.
(2) In prescribing regulations under this section, the
Secretary--
(A) shall establish only requirements that are
consistent with international obligations of the United
States; and
(B) shall consider applicable laws and regulations of
foreign countries.
(g) Conditions on Federal Assistance.--
(1) Ineligibility for assistance.--A person that
receives funds under this chapter is not eligible for
financial assistance under section 5307, 5309, or 5311
of this title if the person is required, under
regulations the Secretary prescribes under this
section, to establish a program of alcohol and
controlled substances testing and does not establish
the program in accordance with this section.
(2) Additional remedies.--If the Secretary determines
that a person that receives funds under this chapter is
not in compliance with regulations prescribed under
this section, the Secretary may bar the person from
receiving Federal transit assistance in an amount the
Secretary considers appropriate.
* * * * * * *
----------
SECTION 503 OF THE SUPPLEMENTAL APPROPRIATIONS ACT, 1987
SEC. 503. (A)(1) EXCEPT AS PROVIDED IN SUBSECTION (B) OR (C), NONE OF
THE FUNDS APPROPRIATED OR MADE AVAILABLE BY THIS
ACT, OR ANY OTHER ACT, WITH RESPECT TO ANY FISCAL
YEAR, SHALL BE AVAILABLE TO ADMINISTER OR IMPLEMENT
ANY DRUG TESTING PURSUANT TO EXECUTIVE ORDER
NUMBERED 12564 (DATED SEPTEMBER 15, 1986), OR ANY
SUBSEQUENT ORDER, UNLESS AND UNTIL--
(A) the Secretary of Health and Human Services
certifies in writing to the Committees on
Appropriations of the House of Representatives and the
Senate, and other appropriate committees of the
Congress, that--
(i) each agency has developed a plan for
achieving a drug-free workplace in accordance
with Executive Order Numbered 12564 and
applicable provisions of law (including
applicable provisions of this section);
(ii) the Department of Health and Human
Services, in addition to the scientific and
technical guidelines dated February 13, 1987,
and any subsequent amendments thereto, has, in
accordance with paragraph (3), published
mandatory guidelines which--
(I) establish comprehensive standards
for all aspects of laboratory drug
testing and laboratory procedures to be
applied in carrying out Executive Order
Numbered 12564, including standards
which require the use of the best
available technology for ensuring the
full reliability and accuracy of drug
tests and strict procedures governing
the chain of custody of specimens
collected for drug testing;
(II) specify the drugs for which
Federal employees may be tested; and
(III) establish appropriate standards
and procedures for periodic review of
laboratories and criteria for
certification and revocation of
certification of laboratories to
perform drug testing in carrying out
Executive Order Numbered 12564; and
(iii) all agency drug-testing programs and
plans established pursuant to Executive Order
Numbered 12564 comply with applicable
provisions of law, including applicable
provisions of the Rehabilitation Act of 1973
(29 U.S.C. 701 et seq.), title 5 of the United
States Code, and the mandatory guidelines under
clause (ii);
(B) the Secretary of Health and Human Services has
submitted to the Congress, in writing, a detailed,
agency-by-agency analysis relating to--
(i) the criteria and procedures to be applied
in designating employees or positions for drug
testing, including the justification for such
criteria and procedures;
(ii) the position titles designated for
random drug testing; and
(iii) the nature, frequency, and type of drug
testing proposed to be instituted; and
(C) the Director of the Office of Management and
Budget has submitted in writing to the Committees on
Appropriations of the House of Representatives and the
Senate a detailed, agency-by-agency analysis (as of the
time of certification under subparagraph (A)) of the
anticipated annual costs associated with carrying out
Executive Order Numbered 12564 and all other
requirements under this section during the 5-year
period beginning on the date of the enactment of this
Act.
(2) Notwithstanding subsection (g), for purposes of this
subsection, the term ``agency'' means--
(A) the Executive Office of the President;
(B) an Executive department under section 101 of
title 5, United States Code;
(C) the Environmental Protection Agency;
(D) the General Services Administration;
(E) the National Aeronautics and Space
Administration;
(F) the Office of Personnel Management;
(G) the Small Business Administration;
(H) the United States Information Agency; and
(I) the Department of Veterans Affairs;
except that such term does not include the Department of
Transportation or any other entity (or component thereof)
covered by subsection (b).
(3) Notwithstanding any provision of chapter 5 of title 5,
United States Code, the mandatory guidelines to be published
pursuant to subsection (a)(1)(A)(ii) shall be published and
made effective exclusively according to the provisions of this
paragraph. Notice of the mandatory guidelines proposed by the
Secretary of Health and Human Services shall be published in
the Federal Register, and interested persons shall be given not
less than 60 days to submit written comments on the proposed
mandatory guidelines. Following review and consideration of
written comments, final mandatory guidelines shall be published
in the Federal Register and shall become effective upon
publication.
(b)(1) Nothing in subsection (a) shall limit or otherwise
affect the availability of funds for drug testing by--
(A) the Department of Transportation;
(B) Department of Energy, for employees specifically
involved in the handling of nuclear weapons or nuclear
materials;
(C) any agency with an agency-wide drug-testing
program in existence as of September 15, 1986; or
(D) any component of an agency if such component had
a drug-testing program in existence as of September 15,
1986.
(2) The Departments of Transportation and Energy and any
agency or component thereof with a drug-testing program in
existence as of September 15, 1986--
(A) shall be brought into full compliance with
Executive Order Numbered 12564 no later than the end of
the 6-month period beginning on the date of the
enactment of this Act; and
(B) shall take such actions as may be necessary to
ensure that their respective drug-testing programs or
plans are brought into full compliance with the
mandatory guidelines published under subsection
(a)(1)(A)(ii) no later than 90 days after such
mandatory guidelines take effect, except that any
judicial challenge that affects such guidelines should
not affect drug-testing programs or plans subject to
this paragraph.
(c) In the case of an agency (or component thereof) other
than an agency as defined by subsection (a)(2) or an agency (or
component thereof) covered by subsection (b), none of the funds
appropriated or made available by this Act, or any other Act,
with respect to any fiscal year, shall be available to
administer or implement any drug testing pursuant to Executive
Order Numbered 12564, or any subsequent order, unless and
until--
(1) the Secretary of Health and Human Services provides
written certification with respect to that agency (or
component) in accordance with clauses (i) and (iii) of
subsection (a)(1)(A);
(2) the Secretary of Health and Human Services has submitted
a written, detailed analysis with respect to that agency (or
component) in accordance with subsection (a)(1)(B); and
(3) the Director of the Office of Management and Budget has
submitted a written, detailed analysis with respect to that
agency (or component) in accordance with subsection (a)(1)(C).
(d) Any Federal employee who is the subject of a drug test
under any program or plan shall, upon written request, have
access to--
(1) any records relating to such employee's drug test; and
(2) any records relating to the results of any relevant
certification, review, or revocation-of-certification
proceedings, as referred to in subsection (a)(1)(A)(ii)(III).
(e) The results of a drug test of a Federal employee may not
be disclosed without the prior written consent of such
employee, unless the disclosure would be--
(1) to the employee's medical review official (as defined in
the scientific and technical guidelines referred to in
subsection (a)(1)(A)(ii));
(2) to the administrator of any Employee Assistance Program
in which the employee is receiving counseling or treatment or
is otherwise participating;
(3) to any supervisory or management official within the
employee's agency having authority to take the adverse
personnel action against such employee; or
(4) pursuant to the order of a court of competent
jurisdiction where required by the United States Government to
defend against any challenge against any adverse personnel
action.
(f) Each agency covered by Executive Order Numbered 12564
shall submit to the Committees on Appropriations of the House
of Representatives and the Senate, and other appropriate
committees of the Congress, an annual report relating to drug-
testing activities conducted by such agency pursuant to such
executive order. Each such annual report shall be submitted at
the time of the President's budget submission to the Congress
under section 1105(a) of title 31, United States Code
(g) For purposes of this section, the terms ``agency'' and
``Employee Assistance Program'' each has the meaning given such
term under section 7(b) of Executive Order Numbered 12564, as
in effect on September 15, 1986.
(h) Marijuana.--
(1) Continued testing.--Notwithstanding the Marijuana
Opportunity Reinvestment and Expungement Act and the
amendments made thereby, the Secretary of Health and
Human Services may continue to include marijuana for
purposes of drug testing of Federal employees subject
to this section, Executive Order 12564, or other
applicable Federal laws and orders.
(2) Definition.--The term ``marijuana'' has the
meaning given to the term ``marihuana'' in section 102
of the Controlled Substances Act (21 6 U.S.C. 802) on
the day before the date of enactment of the Marijuana
Opportunity Reinvestment and Expungement Act.
----------
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle E--Alcohol, Tobacco, and Certain Other Excise Taxes
Chapter 51. Distilled Spirits, Wines, and Beer
* * * * * * *
Chapter 56. Cannabis Products
* * * * * * *
CHAPTER 56--CANNABIS PRODUCTS
Subchapter A. Tax on Cannabis Products.
Subchapter B. Occupational Tax.
Subchapter C. Bond and Permits.
Subchapter D. Operations.
Subchapter E. Penalties.
Subchapter A--Tax on Cannabis Products
Sec. 5901. Imposition of tax.
Sec. 5902. Definitions.
Sec. 5903. Liability and method of payment.
Sec. 5904. Exemption from tax; transfers in bond.
Sec. 5905. Credit, refund, or drawback of tax.
SEC. 5901. IMPOSITION OF TAX.
(a) Imposition of Tax.--There is hereby imposed on any
cannabis product produced in or imported into the United States
a tax equal to--
(1) for any such product removed during the first 5
calendar years ending after the date on which this
chapter becomes effective, the applicable percentage of
such product's removal price, and
(2) for any product removed during any calendar year
after the calendar years described in paragraph (1),
the applicable equivalent amount.
(b) Applicable Percentage.--For purposes of subsection
(a)(1), the applicable percentage shall be determined as
follows:
(1) For any cannabis product removed during the first
2 calendar years ending after the date on which this
chapter becomes effective, 5 percent.
(2) For any cannabis product removed during the
calendar year after the last calendar year to which
paragraph (1) applies, 6 percent.
(3) For any cannabis product removed during the
calendar year after the calendar year to which
paragraph (2) applies, 7 percent.
(4) For any cannabis product removed during the
calendar year after the calendar year to which
paragraph (3) applies, 8 percent.
(c) Applicable Equivalent Amount.--
(1) In general.--For purposes of subsection (a)(2),
the term ``applicable equivalent amount'' means, with
respect to any cannabis product removed during any
calendar year, an amount equal to--
(A) in the case of any cannabis product not
described in subparagraph (B), the product of
the applicable rate per ounce multiplied by the
number of ounces of such product (and a
proportionate tax at the like rate on all
fractional parts of an ounce of such product),
and
(B) in the case of any THC-measurable
cannabis product, the product of the applicable
rate per gram multiplied by the number of grams
of tetrahydrocannabinol in such product (and a
proportionate tax at the like rate on all
fractional parts of a gram of
tetrahydrocannabinol in such product).
(2) Applicable rates.--
(A) In general.--For purposes of paragraph
(1)(A), the term ``applicable rate per ounce''
means, with respect to any cannabis product
removed during any calendar year, 8 percent of
the prevailing sales price of cannabis flowers
sold in the United States during the 12-month
period ending one calendar quarter before such
calendar year, expressed on a per ounce basis,
as determined by the Secretary.
(B) Thc-measurable cannabis products.--For
purposes of paragraph (1)(B), the term
``applicable rate per gram'' means, with
respect to any cannabis product removed during
any calendar year, 8 percent of the prevailing
sales price of tetrahydrocannabinol sold in the
United States during the 12-month period ending
one calendar quarter before such calendar year,
expressed on a per gram basis, as determined by
the Secretary.
(d) Time of Attachment on Cannabis Products.--The tax under
this section shall attach to any cannabis product as soon as
such product is in existence as such, whether it be
subsequently separated or transferred into any other substance,
either in the process of original production or by any
subsequent process.
SEC. 5902. DEFINITIONS.
(a) Definitions Related to Cannabis Products.--For purposes
of this chapter--
(1) Cannabis product.--
(A) In general.--Except as provided in
subparagraph (B), the term ``cannabis product''
means any article which contains (or consists
of) cannabis.
(B) Exceptions.--The term ``cannabis
product'' shall not include an FDA-approved
article or industrial hemp.
(C) Fda-approved article.--The term ``FDA-
approved article'' means any article if the
producer or importer thereof demonstrates to
the satisfaction of the Secretary of Health and
Human Services that such article is--
(i) a drug--
(I) that is approved under
section 505 of the Federal
Food, Drug, and Cosmetic Act or
licensed under section 351 of
the Public Health Service Act,
or
(II) for which an
investigational use exemption
has been authorized under
section 505(i) of the Federal
Food, Drug, and Cosmetic Act or
under section 351(a) of the
Public Health Service Act, or
(ii) a combination product (as
described in section 503(g) of the
Federal Food, Drug, and Cosmetic Act),
the constituent parts of which were
approved or cleared under section 505,
510(k), or 515 of such Act.
(D) Industrial hemp.--The term ``industrial
hemp'' means the plant Cannabis sativa L. and
any part of such plant, whether growing or not,
with a delta-9 tetrahydrocannabinol
concentration of not more than 0.3 percent on a
dry weight basis.
(2) Thc-measurable cannabis product.--The term ``THC-
measurable cannabis product'' means any cannabis
product--
(A) with respect to which the Secretary has
made a determination that the amount of
tetrahydrocannabinol in such product can be
measured with a high degree of accuracy, or
(B) which is not cannabis flower and the
concentration of tetrahydrocannabinol in which
is significantly higher than the average such
concentration in cannabis flower.
(3) Cannabis.--The term ``cannabis'' has the meaning
given such term under section 102(16) of the Controlled
Substances Act (21 U.S.C. 802(16)).
(b) Definitions Related to Cannabis Enterprises.--For
purposes of this chapter--
(1) Cannabis enterprise.--The term ``cannabis
enterprise'' means a producer, importer, or export
warehouse proprietor.
(2) Producer.--
(A) In general.--The term ``producer'' means
any person who plants, cultivates, harvests,
grows, manufactures, produces, compounds,
converts, processes, prepares, or packages any
cannabis product.
(B) Personal use exception.--Subject to
regulation prescribed by the Secretary, the
term ``producer'' shall not include any
individual otherwise described in subparagraph
(A) if the only cannabis product described in
such subparagraph with respect to such
individual is for personal or family use and
not for sale.
(3) Importer.--The term ``importer'' means any person
who--
(A) is in the United States and to whom non-
tax-paid cannabis products, produced in a
foreign country or a possession of the United
States, are shipped or consigned,
(B) removes cannabis products for sale or
consumption in the United States from a customs
bonded warehouse, or
(C) smuggles or otherwise unlawfully brings
any cannabis product into the United States.
(4) Export warehouse proprietor.--
(A) In general.--The term ``export warehouse
proprietor'' means any person who operates an
export warehouse.
(B) Export warehouse.--The term ``export
warehouse'' means a bonded internal revenue
warehouse for the storage of cannabis products,
upon which the internal revenue tax has not
been paid--
(i) for subsequent shipment to a
foreign country or a possession of the
United States, or
(ii) for consumption beyond the
jurisdiction of the internal revenue
laws of the United States.
(5) Cannabis production facility.--The term
``cannabis production facility'' means an establishment
which is qualified under subchapter C to perform any
operation for which such qualification is required
under such subchapter.
(c) Other Definitions.--For purposes of this chapter--
(1) Produce.--The term ``produce'' includes any
activity described in subsection (b)(2)(A).
(2) Removal; remove.--The terms ``removal'' or
``remove'' means--
(A) the transfer of cannabis products from
the premises of a producer (or the transfer of
such products from the bonded premises of a
producer to a non-bonded premises of such
producer),
(B) release of such products from customs
custody, or
(C) smuggling or other unlawful importation
of such products into the United States.
(3) Removal price.--The term ``removal price''
means--
(A) except as otherwise provided in this
paragraph, the price for which the cannabis
product is sold in the sale which occurs in
connection with the removal of such product,
(B) in the case of any such sale which is
described in section 5903(c), the price
determined under such section, and
(C) if there is no sale which occurs in
connection with such removal, the price which
would be determined under section 5903(c) if
such product were sold at a price which cannot
be determined.
SEC. 5903. LIABILITY AND METHOD OF PAYMENT.
(a) Liability for Tax.--
(1) Original liability.--The producer or importer of
any cannabis product shall be liable for the taxes
imposed thereon by section 5901.
(2) Transfer of liability.--
(A) In general.--When cannabis products are
transferred, without payment of tax, pursuant
to subsection (b) or (c) of section 5904--
(i) except as provided in clause
(ii), the transferee shall become
liable for the tax upon receipt by the
transferee of such articles, and the
transferor shall thereupon be relieved
of their liability for such tax, and
(ii) in the case of cannabis products
which are released in bond from customs
custody for transfer to the bonded
premises of a producer, the transferee
shall become liable for the tax on such
articles upon release from customs
custody, and the importer shall
thereupon be relieved of their
liability for such tax.
(B) Returned to bond.--All provisions of this
chapter applicable to cannabis products in bond
shall be applicable to such articles returned
to bond upon withdrawal from the market or
returned to bond after previous removal for a
tax-exempt purpose.
(b) Method of Payment of Tax.--
(1) In general.--
(A) Taxes paid on basis of return.--The taxes
imposed by section 5901 shall be paid on the
basis of return. The Secretary shall, by
regulations, prescribe the period or the event
to be covered by such return and the
information to be furnished on such return.
(B) Application to transferees.--In the case
of any transfer to which subsection (a)(2)(A)
applies, the tax under section 5901 on the
transferee shall (if not otherwise relieved by
reason of a subsequent transfer to which such
subsection applies) be imposed with respect to
the removal of the cannabis product from the
bonded premises of the transferee.
(C) Postponement.--Any postponement under
this subsection of the payment of taxes
determined at the time of removal shall be
conditioned upon the filing of such additional
bonds, and upon compliance with such
requirements, as the Secretary may prescribe
for the protection of the revenue. The
Secretary may, by regulations, require payment
of tax on the basis of a return prior to
removal of the cannabis products where a person
defaults in the postponed payment of tax on the
basis of a return under this subsection or
regulations prescribed thereunder.
(D) Administration and penalties.--All
administrative and penalty provisions of this
title, insofar as applicable, shall apply to
any tax imposed by section 5901.
(2) Time for payment of taxes.--
(A) In general.--Except as otherwise provided
in this paragraph, in the case of taxes on
cannabis products removed during any
semimonthly period under bond for deferred
payment of tax, the last day for payment of
such taxes shall be the 14th day after the last
day of such semimonthly period.
(B) Imported articles.--In the case of
cannabis products which are imported into the
United States, the following provisions shall
apply:
(i) In general.--The last day for
payment of tax shall be the 14th day
after the last day of the semimonthly
period during which the article is
entered into the customs territory of
the United States.
(ii) Special rule for entry of
warehousing.--Except as provided in
clause (iv), in the case of an entry
for warehousing, the last day for
payment of tax shall not be later than
the 14th day after the last day of the
semimonthly period during which the
article is removed from the first such
warehouse.
(iii) Foreign trade zones.--Except as
provided in clause (iv) and in
regulations prescribed by the
Secretary, articles brought into a
foreign trade zone shall,
notwithstanding any other provision of
law, be treated for purposes of this
subsection as if such zone were a
single customs warehouse.
(iv) Exception for articles destined
for export.--Clauses (ii) and (iii)
shall not apply to any article which is
shown to the satisfaction of the
Secretary to be destined for export.
(C) Cannabis products brought into the united
states from puerto rico.--In the case of
cannabis products which are brought into the
United States from Puerto Rico and subject to
tax under section 7652, the last day for
payment of tax shall be the 14th day after the
last day of the semimonthly period during which
the article is brought into the United States.
(D) Special rule where due date falls on
saturday, sunday, or holiday.--Notwithstanding
section 7503, if, but for this subparagraph,
the due date under this paragraph would fall on
a Saturday, Sunday, or a legal holiday (as
defined in section 7503), such due date shall
be the immediately preceding day which is not a
Saturday, Sunday, or such a holiday.
(E) Special rule for unlawfully produced
cannabis products.--In the case of any cannabis
products produced in the United States at any
place other than the premises of a producer
that has filed the bond and obtained the permit
required under this chapter, tax shall be due
and payable immediately upon production.
(3) Payment by electronic fund transfer.--Any person
who in any 12-month period, ending December 31, was
liable for a gross amount equal to or exceeding
$5,000,000 in taxes imposed on cannabis products by
section 5901 (or section 7652) shall pay such taxes
during the succeeding calendar year by electronic fund
transfer (as defined in section 5061(e)(2)) to a
Federal Reserve Bank. Rules similar to the rules of
section 5061(e)(3) shall apply to the $5,000,000 amount
specified in the preceding sentence.
(c) Determination of Price.--
(1) Constructive sale price.--
(A) In general.--If an article is sold
directly to consumers, sold on consignment, or
sold (otherwise than through an arm's length
transaction) at less than the fair market
price, or if the price for which the article
sold cannot be determined, the tax under
section 5901(a) shall be computed on the price
for which such articles are sold, in the
ordinary course of trade, by producers thereof,
as determined by the Secretary.
(B) Arm's length.--
(i) In general.--For purposes of this
section, a sale is considered to be
made under circumstances otherwise than
at arm's length if--
(I) the parties are members
of the same controlled group,
whether or not such control is
actually exercised to influence
the sale price,
(II) the parties are members
of a family, as defined in
section 267(c)(4), or
(III) the sale is made
pursuant to special
arrangements between a producer
and a purchaser.
(ii) Controlled groups.--
(I) In general.--The term
``controlled group'' has the
meaning given to such term by
subsection (a) of section 1563,
except that ``more than 50
percent'' shall be substituted
for ``at least 80 percent''
each place it appears in such
subsection.
(II) Controlled groups which
include nonincorporated
persons.--Under regulations
prescribed by the Secretary,
principles similar to the
principles of subclause (I)
shall apply to a group of
persons under common control
where one or more of such
persons is not a corporation.
(2) Containers, packing and transportation charges.--
In determining, for the purposes of this chapter, the
price for which an article is sold, there shall be
included any charge for coverings and containers of
whatever nature, and any charge incident to placing the
article in condition packed ready for shipment, but
there shall be excluded the amount of tax imposed by
this chapter, whether or not stated as a separate
charge. A transportation, delivery, insurance,
installation, or other charge (not required by the
preceding sentence to be included) shall be excluded
from the price only if the amount thereof is
established to the satisfaction of the Secretary in
accordance with regulations.
(3) Determination of applicable equivalent amounts.--
Paragraphs (1) and (2) shall apply for purposes of
section 5901(c) only to the extent that the Secretary
determines appropriate.
(d) Partial Payments and Installment Accounts.--
(1) Partial payments.--In the case of--
(A) a contract for the sale of an article
wherein it is provided that the price shall be
paid by installments and title to the article
sold does not pass until a future date
notwithstanding partial payment by
installments,
(B) a conditional sale, or
(C) a chattel mortgage arrangement wherein it
is provided that the sales price shall be paid
in installments,
there shall be paid upon each payment with respect to
the article a percentage of such payment equal to the
rate of tax in effect on the date such payment is due.
(2) Sales of installment accounts.--If installment
accounts, with respect to payments on which tax is
being computed as provided in paragraph (1), are sold
or otherwise disposed of, then paragraph (1) shall not
apply with respect to any subsequent payments on such
accounts (other than subsequent payments on returned
accounts with respect to which credit or refund is
allowable by reason of section 6416(b)(5)), but
instead--
(A) there shall be paid an amount equal to
the difference between--
(i) the tax previously paid on the
payments on such installment accounts,
and
(ii) the total tax which would be
payable if such installment accounts
had not been sold or otherwise disposed
of (computed as provided in paragraph
(1)), except that
(B) if any such sale is pursuant to the order
of, or subject to the approval of, a court of
competent jurisdiction in a bankruptcy or
insolvency proceeding, the amount computed
under subparagraph (A) shall not exceed the sum
of the amounts computed by multiplying--
(i) the proportionate share of the
amount for which such accounts are sold
which is allocable to each unpaid
installment payment, by
(ii) the rate of tax under this
chapter in effect on the date such
unpaid installment payment is or was
due.
The sum of the amounts payable under this
subsection in respect of the sale of any
article shall not exceed the total tax.
SEC. 5904. EXEMPTION FROM TAX; TRANSFERS IN BOND.
(a) Exemption From Tax.--Cannabis products on which the
internal revenue tax has not been paid or determined may,
subject to such regulations as the Secretary shall prescribe,
be withdrawn from the bonded premises of any producer in
approved containers free of tax and not for resale for use--
(1) exclusively in scientific research by a
laboratory,
(2) by a proprietor of a cannabis production facility
in research, development, or testing (other than
consumer testing or other market analysis) of
processes, systems, materials, or equipment, relating
to cannabis or cannabis operations, under such
limitations and conditions as to quantities, use, and
accountability as the Secretary may by regulations
require for the protection of the revenue, or
(3) by the United States or any governmental agency
thereof, any State, any political subdivision of a
State, or the District of Columbia, for nonconsumption
purposes.
(b) Cannabis Products Transferred or Removed in Bond From
Domestic Factories and Export Warehouses.--
(1) In general.--Subject to such regulations and
under such bonds as the Secretary shall prescribe, a
producer or export warehouse proprietor may transfer
cannabis products, without payment of tax, to the
bonded premises of another producer or export warehouse
proprietor, or remove such articles, without payment of
tax, for shipment to a foreign country or a possession
of the United States, or for consumption beyond the
jurisdiction of the internal revenue laws of the United
States.
(2) Labeling.--Cannabis products may not be
transferred or removed under this subsection unless
such products bear such marks, labels, or notices as
the Secretary shall by regulations prescribe.
(c) Cannabis Products Released in Bond From Customs
Custody.--Cannabis products imported or brought into the United
States may be released from customs custody, without payment of
tax, for delivery to a producer or export warehouse proprietor
if such articles are not put up in packages, in accordance with
such regulations and under such bond as the Secretary shall
prescribe.
(d) Cannabis Products Exported and Returned.--Cannabis
products classifiable under item 9801.00.10 of the Harmonized
Tariff Schedule of the United States (relating to duty on
certain articles previously exported and returned), as in
effect on the date of the enactment of the Marijuana
Opportunity Reinvestment and Expungement Act, may be released
from customs custody, without payment of that part of the duty
attributable to the internal revenue tax for delivery to the
original producer of such cannabis products or to the export
warehouse proprietor authorized by such producer to receive
such products, in accordance with such regulations and under
such bond as the Secretary shall prescribe. Upon such release
such products shall be subject to this chapter as if they had
not been exported or otherwise removed from internal revenue
bond.
SEC. 5905. CREDIT, REFUND, OR DRAWBACK OF TAX.
(a) Credit or Refund.--
(1) In general.--Credit or refund of any tax imposed
by this chapter or section 7652 shall be allowed or
made (without interest) to the cannabis enterprise on
proof satisfactory to the Secretary that the claimant
cannabis enterprise has paid the tax on--
(A) cannabis products withdrawn from the
market by the claimant, or
(B) such products lost (otherwise than by
theft) or destroyed, by fire, casualty, or act
of God, while in the possession or ownership of
the claimant.
(2) Cannabis products lost or destroyed in bond.--
(A) Extent of loss allowance.--No tax shall
be collected in respect of cannabis products
lost or destroyed while in bond, except that
such tax shall be collected--
(i) in the case of loss by theft,
unless the Secretary finds that the
theft occurred without connivance,
collusion, fraud, or negligence on the
part of the proprietor of the cannabis
production facility, owner, consignor,
consignee, bailee, or carrier, or their
employees or agents,
(ii) in the case of voluntary
destruction, unless such destruction is
carried out as provided in paragraph
(3), and
(iii) in the case of an unexplained
shortage of cannabis products.
(B) Proof of loss.--In any case in which
cannabis products are lost or destroyed,
whether by theft or otherwise, the Secretary
may require the proprietor of a cannabis
production facility or other person liable for
the tax to file a claim for relief from the tax
and submit proof as to the cause of such loss.
In every case where it appears that the loss
was by theft, the burden shall be upon the
proprietor of the cannabis production facility
or other person responsible for the tax under
section 5901 to establish to the satisfaction
of the Secretary that such loss did not occur
as the result of connivance, collusion, fraud,
or negligence on the part of the proprietor of
the cannabis production facility, owner,
consignor, consignee, bailee, or carrier, or
their employees or agents.
(C) Refund of tax.--In any case where the tax
would not be collectible by virtue of
subparagraph (A), but such tax has been paid,
the Secretary shall refund such tax.
(D) Limitations.--Except as provided in
subparagraph (E), no tax shall be abated,
remitted, credited, or refunded under this
paragraph where the loss occurred after the tax
was determined. The abatement, remission,
credit, or refund of taxes provided for by
subparagraphs (A) and (C) in the case of loss
of cannabis products by theft shall only be
allowed to the extent that the claimant is not
indemnified against or recompensed in respect
of the tax for such loss.
(E) Applicability.--The provisions of this
paragraph shall extend to and apply in respect
of cannabis products lost after the tax was
determined and before completion of the
physical removal of the cannabis products from
the bonded premises.
(3) Voluntary destruction.--The proprietor of a
cannabis production facility or other persons liable
for the tax imposed by this chapter or by section 7652
with respect to any cannabis product in bond may
voluntarily destroy such products, but only if such
destruction is under such supervision and under such
regulations as the Secretary may prescribe.
(4) Limitation.--Any claim for credit or refund of
tax under this subsection shall be filed within 6
months after the date of the withdrawal from the
market, loss, or destruction of the products to which
the claim relates, and shall be in such form and
contain such information as the Secretary shall by
regulations prescribe.
(b) Drawback of Tax.--There shall be an allowance of drawback
of tax paid on cannabis products, when shipped from the United
States, in accordance with such regulations and upon the filing
of such bond as the Secretary shall prescribe.
Subchapter B--Occupational Tax
Sec. 5911. Imposition and rate of tax.
Sec. 5912. Payment of tax.
Sec. 5913. Provisions relating to liability for occupational taxes.
Sec. 5914. Application to State laws.
SEC. 5911. IMPOSITION AND RATE OF TAX.
(a) In General.--Any person engaged in business as a producer
or an export warehouse proprietor shall pay a tax of $1,000 per
year (referred to in this subchapter as an ``occupational
tax'') in respect of each premises at which such business is
carried on.
(b) Penalty for Failure to Register.--Any person engaged in
business as a producer or an export warehouse proprietor who
willfully fails to pay the occupation tax shall be fined not
more than $5,000, or imprisoned not more than 2 years, or both,
for each such offense.
SEC. 5912. PAYMENT OF TAX.
(a) Condition Precedent to Carrying on Business.--No person
shall be engaged in or carry on any trade or business subject
to the occupational tax until such person has paid such tax.
(b) Computation.--
(1) In general.--The occupational tax shall be
imposed--
(A) as of on the first day of July in each
year, or
(B) on commencing any trade or business on
which such tax is imposed.
(2) Period.--In the case of a tax imposed under
subparagraph (A) of paragraph (1), the occupational tax
shall be reckoned for 1 year, and in the case of
subparagraph (B) of such paragraph, it shall be
reckoned proportionately, from the first day of the
month in which the liability to such tax commenced, to
and including the 30th day of June following.
(c) Method of Payment.--
(1) Payment by return.--The occupational tax shall be
paid on the basis of a return under such regulations as
the Secretary shall prescribe.
(2) Stamp denoting payment of tax.--After receiving a
properly executed return and remittance of any
occupational tax, the Secretary shall issue to the
taxpayer an appropriate stamp as a receipt denoting
payment of the tax. This paragraph shall not apply in
the case of a return covering liability for a past
period.
SEC. 5913. PROVISIONS RELATING TO LIABILITY FOR OCCUPATIONAL TAXES.
(a) Partners.--Any number of persons doing business in
partnership at any one place shall be required to pay a single
occupational tax.
(b) Different Businesses of Same Ownership and Location.--
Whenever more than one of the pursuits or occupations described
in this subchapter are carried on in the same place by the same
person at the same time, except as otherwise provided in this
subchapter, the occupational tax shall be paid for each
according to the rates severally prescribed.
(c) Businesses in More Than One Location.--
(1) Liability for tax.--The payment of the
occupational tax shall not exempt from an additional
occupational tax the person carrying on a trade or
business in any other place than that stated in the
records of the Internal Revenue Service.
(2) Storage.--Nothing contained in paragraph (1)
shall require imposition of an occupational tax for the
storage of cannabis products at a location other than
the place where such products are sold or offered for
sale.
(3) Place.--
(A) In general.--For purposes of this
section, the term ``place'' means the entire
office, plant or area of the business in any
one location under the same proprietorship.
(B) Divisions.--For purposes of this
paragraph, any passageways, streets, highways,
rail crossings, waterways, or partitions
dividing the premises shall not be deemed
sufficient separation to require an additional
occupational tax, if the various divisions are
otherwise contiguous.
(d) Death or Change of Location.--
(1) In general.--In addition to the person who has
paid the occupational tax for the carrying on of any
business at any place, any person described in
paragraph (2) may secure the right to carry on, without
incurring any additional occupational tax, the same
business at the same place for the remainder of the
taxable period for which the occupational tax was paid.
(2) Eligible persons.--The persons described in this
paragraph are the following:
(A) The surviving spouse or child, or
executor or administrator or other legal
representative, of a deceased taxpayer.
(B) A husband or wife succeeding to the
business of his or her living spouse.
(C) A receiver or trustee in bankruptcy, or
an assignee for benefit of creditors.
(D) The partner or partners remaining after
death or withdrawal of a member of a
partnership.
(3) Change of location.--When any person moves to any
place other than the place for which occupational tax
was paid for the carrying on of any business, such
person may secure the right to carry on, without
incurring additional occupational tax, the same
business at the new location for the remainder of the
taxable period for which the occupational tax was paid.
To secure the right to carry on the business without
incurring additional occupational tax, the successor,
or the person relocating their business, must register
the succession or relocation with the Secretary in
accordance with regulations prescribed by the
Secretary.
(e) Federal Agencies or Instrumentalities.--Any tax imposed
by this subchapter shall apply to any agency or instrumentality
of the United States unless such agency or instrumentality is
granted by statute a specific exemption from such tax.
SEC. 5914. APPLICATION TO STATE LAWS.
The payment of any tax imposed by this subchapter for
carrying on any trade or business shall not be held to--
(1) exempt any person from any penalty or punishment
provided by the laws of any State for carrying on such
trade or business within such State, or in any manner
to authorize the commencement or continuance of such
trade or business contrary to the laws of such State or
in places prohibited by municipal law, or
(2) prohibit any State from placing a duty or tax on
the same trade or business, for State or other
purposes.
Subchapter C--Bond and Permits
Sec. 5921. Establishment and bond.
Sec. 5922. Application for permit.
Sec. 5923. Permit.
SEC. 5921. ESTABLISHMENT AND BOND.
(a) Prohibition on Production Outside of Bonded Cannabis
Production Facility.--
(1) In general.--Except as authorized by the
Secretary or on the bonded premises of a cannabis
production facility duly authorized to produce cannabis
products according to law, no cannabis product may
planted, cultivated, harvested, grown, manufactured,
produced, compounded, converted, processed, prepared,
or packaged in any building or on any premises.
(2) Authorized producers only.--No person other than
a producer which has filed the bond required under
subsection (b) and received a permit described in
section 5923 may produce any cannabis product.
(3) Personal use exception.--This subsection shall
not apply with respect the activities of an individual
who is not treated as a producer by reason of section
5902(b)(2)(B).
(b) Bond.--
(1) When required.--Every person, before commencing
business as a producer or an export warehouse
proprietor, shall file such bond, conditioned upon
compliance with this chapter and regulations issued
thereunder, in such form, amount, and manner as the
Secretary shall by regulation prescribe. A new or
additional bond may be required whenever the Secretary
considers such action necessary for the protection of
the revenue.
(2) Approval or disapproval.--No person shall engage
in such business until he receives notice of approval
of such bond. A bond may be disapproved, upon notice to
the principal on the bond, if the Secretary determines
that the bond is not adequate to protect the revenue.
(3) Cancellation.--Any bond filed hereunder may be
canceled, upon notice to the principal on the bond,
whenever the Secretary determines that the bond no
longer adequately protects the revenue.
SEC. 5922. APPLICATION FOR PERMIT.
(a) In General.--Every person, before commencing business as
a cannabis enterprise, and at such other time as the Secretary
shall by regulation prescribe, shall make application for the
permit provided for in section 5923. The application shall be
in such form as the Secretary shall prescribe and shall set
forth, truthfully and accurately, the information called for on
the form. Such application may be rejected and the permit
denied if the Secretary, after notice and opportunity for
hearing, finds that--
(1) the premises on which it is proposed to conduct
the cannabis enterprise are not adequate to protect the
revenue, or
(2) such person (including, in the case of a
corporation, any officer, director, or principal
stockholder and, in the case of a partnership, a
partner) has failed to disclose any material
information required or made any material false
statement in the application therefor.
SEC. 5923. PERMIT.
(a) Issuance.--A person shall not engage in business as a
cannabis enterprise without a permit to engage in such
business. Such permit, conditioned upon compliance with this
chapter and regulations issued thereunder, shall be issued in
such form and in such manner as the Secretary shall by
regulation prescribe. A new permit may be required at such
other time as the Secretary shall by regulation prescribe.
(b) Suspension or Revocation.--
(1) Show cause hearing.--If the Secretary has reason
to believe that any person holding a permit--
(A) has not in good faith complied with this
chapter, or with any other provision of this
title involving intent to defraud,
(B) has violated the conditions of such
permit,
(C) has failed to disclose any material
information required or made any material false
statement in the application for such permit,
or
(D) has failed to maintain their premises in
such manner as to protect the revenue,
the Secretary shall issue an order, stating the facts
charged, citing such person to show cause why their
permit should not be suspended or revoked.
(2) Action following hearing.--If, after hearing, the
Secretary finds that such person has not shown cause
why their permit should not be suspended or revoked,
such permit shall be suspended for such period as the
Secretary deems proper or shall be revoked.
(c) Information Reporting.--The Secretary may require--
(1) information reporting by any person issued a
permit under this section, and
(2) information reporting by such other persons as
the Secretary deems necessary to carry out this
chapter.
(d) Inspection or Disclosure of Information.--For rules
relating to inspection and disclosure of returns and return
information, see section 6103(o).
Subchapter D--Operations
Sec. 5931. Inventories, reports, and records.
Sec. 5932. Packaging and labeling.
Sec. 5933. Purchase, receipt, possession, or sale of cannabis products
after removal.
Sec. 5934. Restrictions relating to marks, labels, notices, and
packages.
Sec. 5935. Restriction on importation of previously exported cannabis
products.
SEC. 5931. INVENTORIES, REPORTS, AND RECORDS.
Every cannabis enterprise shall--
(1) make a true and accurate inventory at the time of
commencing business, at the time of concluding
business, and at such other times, in such manner and
form, and to include such items, as the Secretary shall
by regulation prescribe, with such inventories to be
subject to verification by any internal revenue
officer,
(2) make reports containing such information, in such
form, at such times, and for such periods as the
Secretary shall by regulation prescribe, and
(3) keep such records in such manner as the Secretary
shall by regulation prescribe, with such records to be
available for inspection by any internal revenue
officer during business hours.
SEC. 5932. PACKAGING AND LABELING.
(a) Packages.--All cannabis products shall, before removal,
be put up in such packages as the Secretary shall by regulation
prescribe.
(b) Marks, Labels, and Notices.--Every package of cannabis
products shall, before removal, bear the marks, labels, and
notices if any, that the Secretary by regulation prescribes.
(c) Lottery Features.--No certificate, coupon, or other
device purporting to be or to represent a ticket, chance,
share, or an interest in, or dependent on, the event of a
lottery shall be contained in, attached to, or stamped, marked,
written, or printed on any package of cannabis products.
(d) Indecent or Immoral Material Prohibited.--No indecent or
immoral picture, print, or representation shall be contained
in, attached to, or stamped, marked, written, or printed on any
package of cannabis products.
(e) Exceptions.--Subject to regulations prescribed by the
Secretary, cannabis products may be exempted from subsections
(a) and (b) if such products are--
(1) for experimental purposes, or
(2) transferred to the bonded premises of another
producer or export warehouse proprietor or released in
bond from customs custody for delivery to a producer.
SEC. 5933. PURCHASE, RECEIPT, POSSESSION, OR SALE OF CANNABIS PRODUCTS
AFTER REMOVAL.
(a) Restriction.--No person shall--
(1) with intent to defraud the United States,
purchase, receive, possess, offer for sale, or sell or
otherwise dispose of, after removal, any cannabis
products--
(A) upon which the tax has not been paid or
determined in the manner and at the time
prescribed by this chapter or regulations
thereunder, or
(B) which, after removal without payment of
tax pursuant to section 5904(a), have been
diverted from the applicable purpose or use
specified in that section,
(2) with intent to defraud the United States,
purchase, receive, possess, offer for sale, or sell or
otherwise dispose of, after removal, any cannabis
products which are not put up in packages as required
under section 5932 or which are put up in packages not
bearing the marks, labels, and notices, as required
under such section, or
(3) otherwise than with intent to defraud the United
States, purchase, receive, possess, offer for sale, or
sell or otherwise dispose of, after removal, any
cannabis products which are not put up in packages as
required under section 5932 or which are put up in
packages not bearing the marks, labels, and notices, as
required under such section.
(b) Exception.--Paragraph (3) of subsection (a) shall not
prevent the sale or delivery of cannabis products directly to
consumers from proper packages, nor apply to such articles when
so sold or delivered.
(c) Liability to Tax.--Any person who possesses cannabis
products in violation of paragraph (1) or (2) of subsection (a)
shall be liable for a tax equal to the tax on such articles.
SEC. 5934. RESTRICTIONS RELATING TO MARKS, LABELS, NOTICES, AND
PACKAGES.
No person shall, with intent to defraud the United States,
destroy, obliterate, or detach any mark, label, or notice
prescribed or authorized, by this chapter or regulations
thereunder, to appear on, or be affixed to, any package of
cannabis products before such package is emptied.
SEC. 5935. RESTRICTION ON IMPORTATION OF PREVIOUSLY EXPORTED CANNABIS
PRODUCTS.
(a) Export Labeled Cannabis Products.--
(1) In general.--Cannabis products produced in the
United States and labeled for exportation under this
chapter--
(A) may be transferred to or removed from the
premises of a producer or an export warehouse
proprietor only if such articles are being
transferred or removed without tax in
accordance with section 5904,
(B) may be imported or brought into the
United States, after their exportation, only if
such articles either are eligible to be
released from customs custody with the partial
duty exemption provided in section 5904(d) or
are returned to the original producer of such
article as provided in section 5904(c), and
(C) may not be sold or held for sale for
domestic consumption in the United States
unless such articles are removed from their
export packaging and repackaged by the original
producer into new packaging that does not
contain an export label.
(2) Alterations by persons other than original
producer.--This section shall apply to articles labeled
for export even if the packaging or the appearance of
such packaging to the consumer of such articles has
been modified or altered by a person other than the
original producer so as to remove or conceal or attempt
to remove or conceal (including by the placement of a
sticker over) any export label.
(3) Exports include shipments to puerto rico.--For
purposes of this section, section 5904(d), section
5941, and such other provisions as the Secretary may
specify by regulations, references to exportation shall
be treated as including a reference to shipment to the
Commonwealth of Puerto Rico.
(b) Export Label.--For purposes of this section, an article
is labeled for export or contains an export label if it bears
the mark, label, or notice required under section 5904(b).
Subchapter E--Penalties
Sec. 5941. Civil penalties.
Sec. 5942. Criminal penalties.
SEC. 5941. CIVIL PENALTIES.
(a) Omitting Things Required or Doing Things Forbidden.--
Whoever willfully omits, neglects, or refuses to comply with
any duty imposed upon them by this chapter, or to do, or cause
to be done, any of the things required by this chapter, or does
anything prohibited by this chapter, shall in addition to any
other penalty provided in this title, be liable to a penalty of
$10,000, to be recovered, with costs of suit, in a civil
action, except where a penalty under subsection (b) or (c) or
under section 6651 or 6653 or part II of subchapter A of
chapter 68 may be collected from such person by assessment.
(b) Failure to Pay Tax.--Whoever fails to pay any tax imposed
by this chapter at the time prescribed by law or regulations,
shall, in addition to any other penalty provided in this title,
be liable to a penalty of 10 percent of the tax due but unpaid.
(c) Sale of Cannabis or Cannabis Products for Export.--
(1) Every person who sells, relands, or receives
within the jurisdiction of the United States any
cannabis products which have been labeled or shipped
for exportation under this chapter,
(2) every person who sells or receives such relanded
cannabis products, and
(3) every person who aids or abets in such selling,
relanding, or receiving,
shall, in addition to the tax and any other penalty provided in
this title, be liable for a penalty equal to the greater of
$10,000 or 10 times the amount of the tax imposed by this
chapter. All cannabis products relanded within the jurisdiction
of the United States shall be forfeited to the United States
and destroyed. All vessels, vehicles, and aircraft used in such
relanding or in removing such cannabis products from the place
where relanded, shall be forfeited to the United States.
(d) Applicability of Section 6665.--The penalties imposed by
subsections (b) and (c) shall be assessed, collected, and paid
in the same manner as taxes, as provided in section 6665(a).
(e) Cross References.--For penalty for failure to make
deposits or for overstatement of deposits, see section 6656.
SEC. 5942. CRIMINAL PENALTIES.
(a) Fraudulent Offenses.--Whoever, with intent to defraud the
United States--
(1) engages in business as a cannabis enterprise
without filing the application and obtaining the permit
where required by this chapter or regulations
thereunder,
(2) fails to keep or make any record, return, report,
or inventory, or keeps or makes any false or fraudulent
record, return, report, or inventory, required by this
chapter or regulations thereunder,
(3) refuses to pay any tax imposed by this chapter,
or attempts in any manner to evade or defeat the tax or
the payment thereof,
(4) sells or otherwise transfers, contrary to this
chapter or regulations thereunder, any cannabis
products subject to tax under this chapter, or
(5) purchases, receives, or possesses, with intent to
redistribute or resell, any cannabis product--
(A) upon which the tax has not been paid or
determined in the manner and at the time
prescribed by this chapter or regulations
thereunder, or
(B) which, without payment of tax pursuant to
section 5904, have been diverted from the
applicable purpose or use specified in that
section,
shall, for each such offense, be fined not more than $10,000,
or imprisoned not more than 5 years, or both.
(b) Liability to Tax.--Any person who possesses cannabis
products in violation of subsection (a) shall be liable for a
tax equal to the tax on such articles.
Subtitle F--Procedure and Administration
* * * * * * *
CHAPTER 61--INFORMATION AND RETURNS
* * * * * * *
Subchapter B--MISCELLANEOUS PROVISIONS
* * * * * * *
SEC. 6103. CONFIDENTIALITY AND DISCLOSURE OF RETURNS AND RETURN
INFORMATION.
(a) General rule.--Returns and return information shall be
confidential, and except as authorized by this title--
(1) no officer or employee of the United States,
(2) no officer or employee of any State, any local
law enforcement agency receiving information under
subsection (i)(1)(C) or (7)(A), any local child support
enforcement agency, or any local agency administering a
program listed in subsection (l)(7)(D) who has or had
access to returns or return information under this
section or section 6104(c), and
(3) no other person (or officer or employee thereof)
who has or had access to returns or return information
under subsection (c), subsection (e)(1)(D)(iii),
paragraph (10), (13), (14), or (15) of subsection (k),
paragraph (6), (10), (12), (13) (other than
subparagraphs (D)(v) and (D)(vi) thereof), (16), (19),
(20), or (21) of subsection (l), paragraph (2) or
(4)(B) of subsection (m), or subsection (n),
shall disclose any return or return information obtained by him
in any manner in connection with his service as such an officer
or an employee or otherwise or under the provisions of this
section. For purposes of this subsection, the term ``officer or
employee'' includes a former officer or employee.
(b) Definitions.--For purposes of this section--
(1) Return.--The term ``return'' means any tax or
information return, declaration of estimated tax, or
claim for refund required by, or provided for or
permitted under, the provisions of this title which is
filed with the Secretary by, on behalf of, or with
respect to any person, and any amendment or supplement
thereto, including supporting schedules, attachments,
or lists which are supplemental to, or part of, the
return so filed.
(2) Return information.--The term ``return
information'' means--
(A) a taxpayer's identity, the nature,
source, or amount of his income, payments,
receipts, deductions, exemptions, credits,
assets, liabilities, net worth, tax liability,
tax withheld, deficiencies, overassessments, or
tax payments, whether the taxpayer's return
was, is being, or will be examined or subject
to other investigation or processing, or any
other data, received by, recorded by, prepared
by, furnished to, or collected by the Secretary
with respect to a return or with respect to the
determination of the existence, or possible
existence, of liability (or the amount thereof)
of any person under this title for any tax,
penalty, interest, fine, forfeiture, or other
imposition, or offense,
(B) any part of any written determination or
any background file document relating to such
written determination (as such terms are
defined in section 6110(b)) which is not open
to public inspection under section 6110,
(C) any advance pricing agreement entered
into by a taxpayer and the Secretary and any
background information related to such
agreement or any application for an advance
pricing agreement, and
(D) any agreement under section 7121, and any
similar agreement, and any background
information related to such an agreement or
request for such an agreement,
but such term does not include data in a form which
cannot be associated with, or otherwise identify,
directly or indirectly, a particular taxpayer. Nothing
in the preceding sentence, or in any other provision of
law, shall be construed to require the disclosure of
standards used or to be used for the selection of
returns for examination, or data used or to be used for
determining such standards, if the Secretary determines
that such disclosure will seriously impair assessment,
collection, or enforcement under the internal revenue
laws.
(3) Taxpayer return information.--The term ``taxpayer
return information'' means return information as
defined in paragraph (2) which is filed with, or
furnished to, the Secretary by or on behalf of the
taxpayer to whom such return information relates.
(4) Tax administration.--The term ``tax
administration''--
(A) means--
(i) the administration, management,
conduct, direction, and supervision of
the execution and application of the
internal revenue laws or related
statutes (or equivalent laws and
statutes of a State) and tax
conventions to which the United States
is a party, and
(ii) the development and formulation
of Federal tax policy relating to
existing or proposed internal revenue
laws, related statutes, and tax
conventions, and
(B) includes assessment, collection,
enforcement, litigation, publication, and
statistical gathering functions under such
laws, statutes, or conventions.
(5) State.--
(A) In general.--The term ``State'' means--
(i) any of the 50 States, the
District of Columbia, the Commonwealth
of Puerto Rico, the Virgin Islands,
Guam, American Samoa, and the
Commonwealth of the Northern Mariana
Islands,
(ii) for purposes of subsections
(a)(2), (b)(4), (d)(1), (h)(4), and
(p), any municipality--
(I) with a population in
excess of 250,000 (as
determined under the most
recent decennial United States
census data available),
(II) which imposes a tax on
income or wages, and
(III) with which the
Secretary (in his sole
discretion) has entered into an
agreement regarding disclosure,
and
(iii) for purposes of subsections
(a)(2), (b)(4), (d)(1), (h)(4), and
(p), any governmental entity--
(I) which is formed and
operated by a qualified group
of municipalities, and
(II) with which the Secretary
(in his sole discretion) has
entered into an agreement
regarding disclosure.
(B) Regional income tax agencies.--For
purposes of subparagraph (A)(iii)--
(i) Qualified group of
municipalities.--The term ``qualified
group of municipalities'' means, with
respect to any governmental entity, 2
or more municipalities--
(I) each of which imposes a
tax on income or wages,
(II) each of which, under the
authority of a State statute,
administers the laws relating
to the imposition of such taxes
through such entity, and
(III) which collectively have
a population in excess of
250,000 (as determined under
the most recent decennial
United States census data
available).
(ii) References to State law, etc..--
For purposes of applying subparagraph
(A)(iii) to the subsections referred to
in such subparagraph, any reference in
such subsections to State law,
proceedings, or tax returns shall be
treated as references to the law,
proceedings, or tax returns, as the
case may be, of the municipalities
which form and operate the governmental
entity referred to in such
subparagraph.
(iii) Disclosure to contractors and
other agents.--Notwithstanding any
other provision of this section, no
return or return information shall be
disclosed to any contractor or other
agent of a governmental entity referred
to in subparagraph (A)(iii) unless such
entity, to the satisfaction of the
Secretary--
(I) has requirements in
effect which require each such
contractor or other agent which
would have access to returns or
return information to provide
safeguards (within the meaning
of subsection (p)(4)) to
protect the confidentiality of
such returns or return
information,
(II) agrees to conduct an on-
site review every 3 years (or a
mid-point review in the case of
contracts or agreements of less
than 3 years in duration) of
each contractor or other agent
to determine compliance with
such requirements,
(III) submits the findings of
the most recent review
conducted under subclause (II)
to the Secretary as part of the
report required by subsection
(p)(4)(E), and
(IV) certifies to the
Secretary for the most recent
annual period that such
contractor or other agent is in
compliance with all such
requirements.
The certification required by subclause (IV)
shall include the name and address of each
contractor and other agent, a description of
the contract or agreement with such contractor
or other agent, and the duration of such
contract or agreement. The requirements of this
clause shall not apply to disclosures pursuant
to subsection (n) for purposes of Federal tax
administration and a rule similar to the rule
of subsection (p)(8)(B) shall apply for
purposes of this clause.
(6) Taxpayer identity.--The term ``taxpayer
identity'' means the name of a person with respect to
whom a return is filed, his mailing address, his
taxpayer identifying number (as described in section
6109), or a combination thereof.
(7) Inspection.--The terms ``inspected'' and
``inspection'' mean any examination of a return or
return information.
(8) Disclosure.--The term ``disclosure'' means the
making known to any person in any manner whatever a
return or return information.
(9) Federal agency.--The term ``Federal agency''
means an agency within the meaning of section 551(1) of
title 5, United States Code.
(10) Chief executive officer.--The term ``chief
executive officer'' means, with respect to any
municipality, any elected official and the chief
official (even if not elected) of such municipality.
(11) Terrorist incident, threat, or activity.--The
term ``terrorist incident, threat, or activity'' means
an incident, threat, or activity involving an act of
domestic terrorism (as defined in section 2331(5) of
title 18, United States Code) or international
terrorism (as defined in section 2331(1) of such
title).
(c) Disclosure of returns and return information to designee
of taxpayer.--The Secretary may, subject to such requirements
and conditions as he may prescribe by regulations, disclose the
return of any taxpayer, or return information with respect to
such taxpayer, to such person or persons as the taxpayer may
designate in a request for or consent to such disclosure, or to
any other person at the taxpayer's request to the extent
necessary to comply with a request for information or
assistance made by the taxpayer to such other person. However,
return information shall not be disclosed to such person or
persons if the Secretary determines that such disclosure would
seriously impair Federal tax administration. Persons designated
by the taxpayer under this subsection to receive return
information shall not use the information for any purpose other
than the express purpose for which consent was granted and
shall not disclose return information to any other person
without the express permission of, or request by, the taxpayer.
(d) Disclosure to State tax officials and State and local law
enforcement agencies.--
(1) In general.--Returns and return information with
respect to taxes imposed by chapters 1, 2, 6, 11, 12,
21, 23, 24, 31, 32, 44, 51, and 52 and subchapter D of
chapter 36 shall be open to inspection by, or
disclosure to, any State agency, body, or commission,
or its legal representative, which is charged under the
laws of such State with responsibility for the
administration of State tax laws for the purpose of,
and only to the extent necessary in, the administration
of such laws, including any procedures with respect to
locating any person who may be entitled to a refund.
Such inspection shall be permitted, or such disclosure
made, only upon written request by the head of such
agency, body, or commission, and only to the
representatives of such agency, body, or commission
designated in such written request as the individuals
who are to inspect or to receive the returns or return
information on behalf of such agency, body, or
commission. Such representatives shall not include any
individual who is the chief executive officer of such
State or who is neither an employee or legal
representative of such agency, body, or commission nor
a person described in subsection (n). However, such
return information shall not be disclosed to the extent
that the Secretary determines that such disclosure
would identify a confidential informant or seriously
impair any civil or criminal tax investigation.
(2) Disclosure to State audit agencies.--
(A) In general.--Any returns or return
information obtained under paragraph (1) by any
State agency, body, or commission may be open
to inspection by, or disclosure to, officers
and employees of the State audit agency for the
purpose of, and only to the extent necessary
in, making an audit of the State agency, body,
or commission referred to in paragraph (1).
(B) State audit agency.--For purposes of
subparagraph (A), the term ``State audit
agency'' means any State agency, body, or
commission which is charged under the laws of
the State with the responsibility of auditing
State revenues and programs.
(3) Exception for reimbursement under section 7624.--
Nothing in this section shall be construed to prevent
the Secretary from disclosing to any State or local law
enforcement agency which may receive a payment under
section 7624 the amount of the recovered taxes with
respect to which such a payment may be made.
(4) Availability and use of death information.--
(A) In general.--No returns or return
information may be disclosed under paragraph
(1) to any agency, body, or commission of any
State (or any legal representative thereof)
during any period during which a contract
meeting the requirements of subparagraph (B) is
not in effect between such State and the
Secretary of Health and Human Services.
(B) Contractual requirements.--A contract
meets the requirements of this subparagraph
if--
(i) such contract requires the State
to furnish the Secretary of Health and
Human Services information concerning
individuals with respect to whom death
certificates (or equivalent documents
maintained by the State or any
subdivision thereof) have been
officially filed with it, and
(ii) such contract does not include
any restriction on the use of
information obtained by such Secretary
pursuant to such contract, except that
such contract may provide that such
information is only to be used by the
Secretary (or any other Federal agency)
for purposes of ensuring that Federal
benefits or other payments are not
erroneously paid to deceased
individuals.
Any information obtained by the Secretary of
Health and Human Services under such a contract
shall be exempt from disclosure under section
552 of title 5, United States Code, and from
the requirements of section 552a of such title
5.
(C) Special exception.--The provisions of
subparagraph (A) shall not apply to any State
which on July 1, 1993, was not, pursuant to a
contract, furnishing the Secretary of Health
and Human Services information concerning
individuals with respect to whom death
certificates (or equivalent documents
maintained by the State or any subdivision
thereof) have been officially filed with it.
(5) Disclosure for combined employment tax
reporting.--
(A) In general.--The Secretary may disclose
taxpayer identity information and signatures to
any agency, body, or commission of any State
for the purpose of carrying out with such
agency, body, or commission a combined Federal
and State employment tax reporting program
approved by the Secretary. Subsections (a)(2)
and (p)(4) and sections 7213 and 7213A shall
not apply with respect to disclosures or
inspections made pursuant to this paragraph.
(B) Termination.--The Secretary may not make
any disclosure under this paragraph after
December 31, 2007.
(6) Limitation on disclosure regarding regional
income tax agencies treated as States.--For purposes of
paragraph (1), inspection by or disclosure to an entity
described in subsection (b)(5)(A)(iii) shall be for the
purpose of, and only to the extent necessary in, the
administration of the laws of the member municipalities
in such entity relating to the imposition of a tax on
income or wages. Such entity may not redisclose any
return or return information received pursuant to
paragraph (1) to any such member municipality.
(e) Disclosure to persons having material interest.--
(1) In general.--The return of a person shall, upon
written request, be open to inspection by or disclosure
to--
(A) in the case of the return of an
individual--
(i) that individual,
(ii) the spouse of that individual if
the individual and such spouse have
signified their consent to consider a
gift reported on such return as made
one-half by him and one-half by the
spouse pursuant to the provisions of
section 2513; or
(iii) the child of that individual
(or such child's legal representative)
to the extent necessary to comply with
the provisions of section 1(g);
(B) in the case of an income tax return filed
jointly, either of the individuals with respect
to whom the return is filed;
(C) in the case of the return of a
partnership, any person who was a member of
such partnership during any part of the period
covered by the return;
(D) in the case of the return of a
corporation or a subsidiary thereof--
(i) any person designated by
resolution of its board of directors or
other similar governing body,
(ii) any officer or employee of such
corporation upon written request signed
by any principal officer and attested
to by the secretary or other officer,
(iii) any bona fide shareholder of
record owning 1 percent or more of the
outstanding stock of such corporation,
(iv) if the corporation was an S
corporation, any person who was a
shareholder during any part of the
period covered by such return during
which an election under section 1362(a)
was in effect, or
(v) if the corporation has been
dissolved, any person authorized by
applicable State law to act for the
corporation or any person who the
Secretary finds to have a material
interest which will be affected by
information contained therein;
(E) in the case of the return of an estate--
(i) the administrator, executor, or
trustee of such estate, and
(ii) any heir at law, next of kin, or
beneficiary under the will, of the
decedent, but only if the Secretary
finds that such heir at law, next of
kin, or beneficiary has a material
interest which will be affected by
information contained therein; and
(F) in the case of the return of a trust--
(i) the trustee or trustees, jointly
or separately, and
(ii) any beneficiary of such trust,
but only if the Secretary finds that
such beneficiary has a material
interest which will be affected by
information contained therein.
(2) Incompetency.--If an individual described in
paragraph (1) is legally incompetent, the applicable
return shall, upon written request, be open to
inspection by or disclosure to the committee, trustee,
or guardian of his estate.
(3) Deceased individuals.--The return of a decedent
shall, upon written request, be open to inspection by
or disclosure to--
(A) the administrator, executor, or trustee
of his estate, and
(B) any heir at law, next of kin, or
beneficiary under the will, of such decedent,
or a donee of property, but only if the
Secretary finds that such heir at law, next of
kin, beneficiary, or donee has a material
interest which will be affected by information
contained therein.
(4) Title 11 cases and receivership proceedings.--
If--
(A) there is a trustee in a title 11 case in
which the debtor is the person with respect to
whom the return is filed, or
(B) substantially all of the property of the
person with respect to whom the return is filed
is in the hands of a receiver,
such return or returns for prior years of such person
shall, upon written request, be open to inspection by
or disclosure to such trustee or receiver, but only if
the Secretary finds that such trustee or receiver, in
his fiduciary capacity, has a material interest which
will be affected by information contained therein.
(5) Individual's title 11 case.--
(A) In general.--In any case to which section
1398 applies (determined without regard to
section 1398(b)(1)), any return of the debtor
for the taxable year in which the case
commenced or any preceding taxable year shall,
upon written request, be open to inspection by
or disclosure to the trustee in such case.
(B) Return of estate available to debtor.--
Any return of an estate in a case to which
section 1398 applies shall, upon written
request, be open to inspection by or disclosure
to the debtor in such case.
(C) Special rule for involuntary cases.--In
an involuntary case, no disclosure shall be
made under subparagraph (A) until the order for
relief has been entered by the court having
jurisdiction of such case unless such court
finds that such disclosure is appropriate for
purposes of determining whether an order for
relief should be entered.
(6) Attorney in fact.--Any return to which this
subsection applies shall, upon written request, also be
open to inspection by or disclosure to the attorney in
fact duly authorized in writing by any of the persons
described in paragraph (1), (2), (3), (4), (5), (8), or
(9) to inspect the return or receive the information on
his behalf, subject to the conditions provided in such
paragraphs.
(7) Return information.--Return information with
respect to any taxpayer may be open to inspection by or
disclosure to any person authorized by this subsection
to inspect any return of such taxpayer if the Secretary
determines that such disclosure would not seriously
impair Federal tax administration.
(8) Disclosure of collection activities with respect
to joint return.--If any deficiency of tax with respect
to a joint return is assessed and the individuals
filing such return are no longer married or no longer
reside in the same household, upon request in writing
by either of such individuals, the Secretary shall
disclose in writing to the individual making the
request whether the Secretary has attempted to collect
such deficiency from such other individual, the general
nature of such collection activities, and the amount
collected. The preceding sentence shall not apply to
any deficiency which may not be collected by reason of
section 6502.
(9) Disclosure of certain information where more than
1 person subject to penalty under section 6672.--If the
Secretary determines that a person is liable for a
penalty under section 6672(a) with respect to any
failure, upon request in writing of such person, the
Secretary shall disclose in writing to such person--
(A) the name of any other person whom the
Secretary has determined to be liable for such
penalty with respect to such failure, and
(B) whether the Secretary has attempted to
collect such penalty from such other person,
the general nature of such collection
activities, and the amount collected.
(10) Limitation on certain disclosures under this
subsection.--In the case of an inspection or disclosure
under this subsection relating to the return of a
partnership, S corporation, trust, or an estate, the
information inspected or disclosed shall not include
any supporting schedule, attachment, or list which
includes the taxpayer identity information of a person
other than the entity making the return or the person
conducting the inspection or to whom the disclosure is
made.
(11) Disclosure of information regarding status of
investigation of violation of this section.--In the
case of a person who provides to the Secretary
information indicating a violation of section 7213,
7213A, or 7214 with respect to any return or return
information of such person, the Secretary may disclose
to such person (or such person's designee)--
(A) whether an investigation based on the
person's provision of such information has been
initiated and whether it is open or closed,
(B) whether any such investigation
substantiated such a violation by any
individual, and
(C) whether any action has been taken with
respect to such individual (including whether a
referral has been made for prosecution of such
individual).
(f) Disclosure to Committees of Congress.--
(1) Committee on Ways and Means, Committee on
Finance, and Joint Committee on Taxation.--Upon written
request from the chairman of the Committee on Ways and
Means of the House of Representatives, the chairman of
the Committee on Finance of the Senate, or the chairman
of the Joint Committee on Taxation, the Secretary shall
furnish such committee with any return or return
information specified in such request, except that any
return or return information which can be associated
with, or otherwise identify, directly or indirectly, a
particular taxpayer shall be furnished to such
committee only when sitting in closed executive session
unless such taxpayer otherwise consents in writing to
such disclosure.
(2) Chief of Staff of Joint Committee on Taxation.--
Upon written request by the Chief of Staff of the Joint
Committee on Taxation, the Secretary shall furnish him
with any return or return information specified in such
request. Such Chief of Staff may submit such return or
return information to any committee described in
paragraph (1), except that any return or return
information which can be associated with, or otherwise
identify, directly or indirectly, a particular taxpayer
shall be furnished to such committee only when sitting
in closed executive session unless such taxpayer
otherwise consents in writing to such disclosure.
(3) Other committees.--Pursuant to an action by, and
upon written request by the chairman of, a committee of
the Senate or the House of Representatives (other than
a committee specified in paragraph (1)) specially
authorized to inspect any return or return information
by a resolution of the Senate or the House of
Representatives or, in the case of a joint committee
(other than the joint committee specified in paragraph
(1)) by concurrent resolution, the Secretary shall
furnish such committee, or a duly authorized and
designated subcommittee thereof, sitting in closed
executive session, with any return or return
information which such resolution authorizes the
committee or subcommittee to inspect. Any resolution
described in this paragraph shall specify the purpose
for which the return or return information is to be
furnished and that such information cannot reasonably
be obtained from any other source.
(4) Agents of committees and submission of
information to Senate or House of Representatives.--
(A) Committees described in paragraph (1).--
Any committee described in paragraph (1) or the
Chief of Staff of the Joint Committee on
Taxation shall have the authority, acting
directly, or by or through such examiners or
agents as the chairman of such committee or
such chief of staff may designate or appoint,
to inspect returns and return information at
such time and in such manner as may be
determined by such chairman or chief of staff.
Any return or return information obtained by or
on behalf of such committee pursuant to the
provisions of this subsection may be submitted
by the committee to the Senate or the House of
Representatives, or to both. The Joint
Committee on Taxation may also submit such
return or return information to any other
committee described in paragraph (1), except
that any return or return information which can
be associated with, or otherwise identify,
directly or indirectly, a particular taxpayer
shall be furnished to such committee only when
sitting in closed executive session unless such
taxpayer otherwise consents in writing to such
disclosure.
(B) Other committees.--Any committee or
subcommittee described in paragraph (3) shall
have the right, acting directly, or by or
through no more than four examiners or agents,
designated or appointed in writing in equal
numbers by the chairman and ranking minority
member of such committee or subcommittee, to
inspect returns and return information at such
time and in such manner as may be determined by
such chairman and ranking minority member. Any
return or return information obtained by or on
behalf of such committee or subcommittee
pursuant to the provisions of this subsection
may be submitted by the committee to the Senate
or the House of Representatives, or to both,
except that any return or return information
which can be associated with, or otherwise
identify, directly or indirectly, a particular
taxpayer, shall be furnished to the Senate or
the House of Representatives only when sitting
in closed executive session unless such
taxpayer otherwise consents in writing to such
disclosure.
(5) Disclosure by whistleblower.--Any person who
otherwise has or had access to any return or return
information under this section may disclose such return
or return information to a committee referred to in
paragraph (1) or any individual authorized to receive
or inspect information under paragraph (4)(A) if such
person believes such return or return information may
relate to possible misconduct, maladministration, or
taxpayer abuse.
(g) Disclosure to President and certain other persons.--
(1) In general.--Upon written request by the
President, signed by him personally, the Secretary
shall furnish to the President, or to such employee or
employees of the White House Office as the President
may designate by name in such request, a return or
return information with respect to any taxpayer named
in such request. Any such request shall state--
(A) the name and address of the taxpayer
whose return or return information is to be
disclosed,
(B) the kind of return or return information
which is to be disclosed,
(C) the taxable period or periods covered by
such return or return information, and
(D) the specific reason why the inspection or
disclosure is requested.
(2) Disclosure of return information as to
Presidential appointees and certain other Federal
Government appointees.--The Secretary may disclose to a
duly authorized representative of the Executive Office
of the President or to the head of any Federal agency,
upon written request by the President or head of such
agency, or to the Federal Bureau of Investigation on
behalf of and upon written request by the President or
such head, return information with respect to an
individual who is designated as being under
consideration for appointment to a position in the
executive or judicial branch of the Federal Government.
Such return information shall be limited to whether
such individual--
(A) has filed returns with respect to the
taxes imposed under chapter 1 for not more than
the immediately preceding 3 years;
(B) has failed to pay any tax within 10 days
after notice and demand, or has been assessed
any penalty under this title for negligence, in
the current year or immediately preceding 3
years;
(C) has been or is under investigation for
possible criminal offenses under the internal
revenue laws and the results of any such
investigation; or
(D) has been assessed any civil penalty under
this title for fraud.
Within 3 days of the receipt of any request for any
return information with respect to any individual under
this paragraph, the Secretary shall notify such
individual in writing that such information has been
requested under the provisions of this paragraph.
(3) Restriction on disclosure.--The employees to whom
returns and return information are disclosed under this
subsection shall not disclose such returns and return
information to any other person except the President or
the head of such agency without the personal written
direction of the President or the head of such agency.
(4) Restriction on disclosure to certain employees.--
Disclosure of returns and return information under this
subsection shall not be made to any employee whose
annual rate of basic pay is less than the annual rate
of basic pay specified for positions subject to section
5316 of title 5, United States Code.
(5) Reporting requirements.--Within 30 days after the
close of each calendar quarter, the President and the
head of any agency requesting returns and return
information under this subsection shall each file a
report with the Joint Committee on Taxation setting
forth the taxpayers with respect to whom such requests
were made during such quarter under this subsection,
the returns or return information involved, and the
reasons for such requests. The President shall not be
required to report on any request for returns and
return information pertaining to an individual who was
an officer or employee of the executive branch of the
Federal Government at the time such request was made.
Reports filed pursuant to this paragraph shall not be
disclosed unless the Joint Committee on Taxation
determines that disclosure thereof (including
identifying details) would be in the national interest.
Such reports shall be maintained by the Joint Committee
on Taxation for a period not exceeding 2 years unless,
within such period, the Joint Committee on Taxation
determines that a disclosure to the Congress is
necessary.
(h) Disclosure to certain Federal officers and employees for
purposes of tax administration, etc..--
(1) Department of the Treasury.--Returns and return
information shall, without written request, be open to
inspection by or disclosure to officers and employees
of the Department of the Treasury whose official duties
require such inspection or disclosure for tax
administration purposes.
(2) Department of Justice.--In a matter involving tax
administration, a return or return information shall be
open to inspection by or disclosure to officers and
employees of the Department of Justice (including
United States attorneys) personally and directly
engaged in, and solely for their use in, any proceeding
before a Federal grand jury or preparation for any
proceeding (or investigation which may result in such a
proceeding) before a Federal grand jury or any Federal
or State court, but only if--
(A) the taxpayer is or may be a party to the
proceeding, or the proceeding arose out of, or
in connection with, determining the taxpayer's
civil or criminal liability, or the collection
of such civil liability in respect of any tax
imposed under this title;
(B) the treatment of an item reflected on
such return is or may be related to the
resolution of an issue in the proceeding or
investigation; or
(C) such return or return information relates
or may relate to a transactional relationship
between a person who is or may be a party to
the proceeding and the taxpayer which affects,
or may affect, the resolution of an issue in
such proceeding or investigation.
(3) Form of request.--In any case in which the
Secretary is authorized to disclose a return or return
information to the Department of Justice pursuant to
the provisions of this subsection--
(A) if the Secretary has referred the case to
the Department of Justice, or if the proceeding
is authorized by subchapter B of chapter 76,
the Secretary may make such disclosure on his
own motion, or
(B) if the Secretary receives a written
request from the Attorney General, the Deputy
Attorney General, or an Assistant Attorney
General for a return of, or return information
relating to, a person named in such request and
setting forth the need for the disclosure, the
Secretary shall disclose return or return the
information so requested.
(4) Disclosure in judicial and administrative tax
proceedings.--A return or return information may be
disclosed in a Federal or State judicial or
administrative proceeding pertaining to tax
administration, but only--
(A) if the taxpayer is a party to the
proceeding, or the proceeding arose out of, or
in connection with, determining the taxpayer's
civil or criminal liability, or the collection
of such civil liability, in respect of any tax
imposed under this title;
(B) if the treatment of an item reflected on
such return is directly related to the
resolution of an issue in the proceeding;
(C) if such return or return information
directly relates to a transactional
relationship between a person who is a party to
the proceeding and the taxpayer which directly
affects the resolution of an issue in the
proceeding; or
(D) to the extent required by order of a
court pursuant to section 3500 of title 18,
United States Code, or rule 16 of the Federal
Rules of Criminal Procedure, such court being
authorized in the issuance of such order to
give due consideration to congressional policy
favoring the confidentiality of returns and
return information as set forth in this title.
However, such return or return information shall not be
disclosed as provided in subparagraph (A), (B), or (C)
if the Secretary determines that such disclosure would
identify a confidential informant or seriously impair a
civil or criminal tax investigation.
(5) Withholding of tax from social security
benefits.--Upon written request of the payor agency,
the Secretary may disclose available return information
from the master files of the Internal Revenue Service
with respect to the address and status of an individual
as a nonresident alien or as a citizen or resident of
the United States to the Social Security Administration
or the Railroad Retirement Board (whichever is
appropriate) for purposes of carrying out its
responsibilities for withholding tax under section 1441
from social security benefits (as defined in section
86(d)).
(6) Internal Revenue Service Oversight Board.--
(A) In general.--Notwithstanding paragraph
(1), and except as provided in subparagraph
(B), no return or return information may be
disclosed to any member of the Oversight Board
described in subparagraph (A) or (D) of section
7802(b)(1) or to any employee or detailee of
such Board by reason of their service with the
Board. Any request for information not
permitted to be disclosed under the preceding
sentence, and any contact relating to a
specific taxpayer, made by any such individual
to an officer or employee of the Internal
Revenue Service shall be reported by such
officer or employee to the Secretary, the
Treasury Inspector General for Tax
Administration, and the Joint Committee on
Taxation.
(B) Exception for reports to the Board.--If--
(i) the Commissioner or the Treasury
Inspector General for Tax
Administration prepares any report or
other matter for the Oversight Board in
order to assist the Board in carrying
out its duties; and
(ii) the Commissioner or such
Inspector General determines it is
necessary to include any return or
return information in such report or
other matter to enable the Board to
carry out such duties,
such return or return information (other than
information regarding taxpayer identity) may be
disclosed to members, employees, or detailees
of the Board solely for the purpose of carrying
out such duties.
(i) Disclosure to Federal officers or employees for
administration of Federal laws not relating to tax
administration.--
(1) Disclosure of returns and return information for
use in criminal investigations.--
(A) In general.--Except as provided in
paragraph (6), any return or return information
with respect to any specified taxable period or
periods shall, pursuant to and upon the grant
of an ex parte order by a Federal district
court judge or magistrate judge under
subparagraph (B), be open (but only to the
extent necessary as provided in such order) to
inspection by, or disclosure to, officers and
employees of any Federal agency who are
personally and directly engaged in--
(i) preparation for any judicial or
administrative proceeding pertaining to
the enforcement of a specifically
designated Federal criminal statute
(not involving tax administration) to
which the United States or such agency
is or may be a party, or pertaining to
the case of a missing or exploited
child,
(ii) any investigation which may
result in such a proceeding, or
(iii) any Federal grand jury
proceeding pertaining to enforcement of
such a criminal statute to which the
United States or such agency is or may
be a party, or to such a case of a
missing or exploited child,
solely for the use of such officers and
employees in such preparation, investigation,
or grand jury proceeding.
(B) Application for order.--The Attorney
General, the Deputy Attorney General, the
Associate Attorney General, any Assistant
Attorney General, any United States attorney,
any special prosecutor appointed under section
593 of title 28, United States Code, or any
attorney in charge of a criminal division
organized crime strike force established
pursuant to section 510 of title 28, United
States Code, may authorize an application to a
Federal district court judge or magistrate
judge for the order referred to in subparagraph
(A). Upon such application, such judge or
magistrate judge may grant such order if he
determines on the basis of the facts submitted
by the applicant that--
(i) there is reasonable cause to
believe, based upon information
believed to be reliable, that a
specific criminal act has been
committed,
(ii) there is reasonable cause to
believe that the return or return
information is or may be relevant to a
matter relating to the commission of
such act, and
(iii) the return or return
information is sought exclusively for
use in a Federal criminal investigation
or proceeding concerning such act (or
any criminal investigation or
proceeding, in the case of a matter
relating to a missing or exploited
child), and the information sought to
be disclosed cannot reasonably be
obtained, under the circumstances, from
another source.
(C) Disclosure to state and local law
enforcement agencies in the case of matters
pertaining to a missing or exploited child.--
(i) In general.--In the case of an
investigation pertaining to a missing
or exploited child, the head of any
Federal agency, or his designee, may
disclose any return or return
information obtained under subparagraph
(A) to officers and employees of any
State or local law enforcement agency,
but only if--
(I) such State or local law
enforcement agency is part of a
team with the Federal agency in
such investigation, and
(II) such information is
disclosed only to such officers
and employees who are
personally and directly engaged
in such investigation.
(ii) Limitation on use of
information.--Information disclosed
under this subparagraph shall be solely
for the use of such officers and
employees in locating the missing
child, in a grand jury proceeding, or
in any preparation for, or
investigation which may result in, a
judicial or administrative proceeding.
(iii) Missing child.--For purposes of
this subparagraph, the term ``missing
child'' shall have the meaning given
such term by section 403 of the Missing
Children's Assistance Act (42 U.S.C.
5772).
(iv) Exploited child.--For purposes
of this subparagraph, the term
``exploited child'' means a minor with
respect to whom there is reason to
believe that a specified offense
against a minor (as defined by section
111(7) of the Sex Offender Registration
and Notification Act (42 U.S.C.
16911(7))) 1 has or is
occurring.
(2) Disclosure of return information other than
taxpayer return information for use in criminal
investigations.--
(A) In general.--Except as provided in
paragraph (6), upon receipt by the Secretary of
a request which meets the requirements of
subparagraph (B) from the head of any Federal
agency or the Inspector General thereof, or, in
the case of the Department of Justice, the
Attorney General, the Deputy Attorney General,
the Associate Attorney General, any Assistant
Attorney General, the Director of the Federal
Bureau of Investigation, the Administrator of
the Drug Enforcement Administration, any United
States attorney, any special prosecutor
appointed under section 593 of title 28, United
States Code, or any attorney in charge of a
criminal division organized crime strike force
established pursuant to section 510 of title
28, United States Code, the Secretary shall
disclose return information (other than
taxpayer return information) to officers and
employees of such agency who are personally and
directly engaged in--
(i) preparation for any judicial or
administrative proceeding described in
paragraph (1)(A)(i),
(ii) any investigation which may
result in such a proceeding, or
(iii) any grand jury proceeding
described in paragraph (1)(A)(iii),
solely for the use of such officers and
employees in such preparation, investigation,
or grand jury proceeding.
(B) Requirements.--A request meets the
requirements of this subparagraph if the
request is in writing and sets forth--
(i) the name and address of the
taxpayer with respect to whom the
requested return information relates;
(ii) the taxable period or periods to
which such return information relates;
(iii) the statutory authority under
which the proceeding or investigation
described in subparagraph (A) is being
conducted; and
(iv) the specific reason or reasons
why such disclosure is, or may be,
relevant to such proceeding or
investigation.
(C) Taxpayer identity.--For purposes of this
paragraph, a taxpayer's identity shall not be
treated as taxpayer return information.
(3) Disclosure of return information to apprise
appropriate officials of criminal or terrorist
activities or emergency circumstances.--
(A) Possible violations of Federal criminal
law.--
(i) In general.--Except as provided
in paragraph (6), the Secretary may
disclose in writing return information
(other than taxpayer return
information) which may constitute
evidence of a violation of any Federal
criminal law (not involving tax
administration) to the extent necessary
to apprise the head of the appropriate
Federal agency charged with the
responsibility of enforcing such law.
The head of such agency may disclose
such return information to officers and
employees of such agency to the extent
necessary to enforce such law.
(ii) Taxpayer identity.--If there is
return information (other than taxpayer
return information) which may
constitute evidence of a violation by
any taxpayer of any Federal criminal
law (not involving tax administration),
such taxpayer's identity may also be
disclosed under clause (i).
(B) Emergency circumstances.--
(i) Danger of death or physical
injury.--Under circumstances involving
an imminent danger of death or physical
injury to any individual, the Secretary
may disclose return information to the
extent necessary to apprise appropriate
officers or employees of any Federal or
State law enforcement agency of such
circumstances.
(ii) Flight from Federal
prosecution.--Under circumstances
involving the imminent flight of any
individual from Federal prosecution,
the Secretary may disclose return
information to the extent necessary to
apprise appropriate officers or
employees of any Federal law
enforcement agency of such
circumstances.
(C) Terrorist activities, etc..--
(i) In general.--Except as provided
in paragraph (6), the Secretary may
disclose in writing return information
(other than taxpayer return
information) that may be related to a
terrorist incident, threat, or activity
to the extent necessary to apprise the
head of the appropriate Federal law
enforcement agency responsible for
investigating or responding to such
terrorist incident, threat, or
activity. The head of the agency may
disclose such return information to
officers and employees of such agency
to the extent necessary to investigate
or respond to such terrorist incident,
threat, or activity.
(ii) Disclosure to the Department of
Justice.--Returns and taxpayer return
information may also be disclosed to
the Attorney General under clause (i)
to the extent necessary for, and solely
for use in preparing, an application
under paragraph (7)(D).
(iii) Taxpayer identity.--For
purposes of this subparagraph, a
taxpayer's identity shall not be
treated as taxpayer return information.
(4) Use of certain disclosed returns and return
information in judicial or administrative
proceedings.--
(A) Returns and taxpayer return
information.--Except as provided in
subparagraph (C), any return or taxpayer return
information obtained under paragraph (1) or
(7)(C) may be disclosed in any judicial or
administrative proceeding pertaining to
enforcement of a specifically designated
Federal criminal statute or related civil
forfeiture (not involving tax administration)
to which the United States or a Federal agency
is a party--
(i) if the court finds that such
return or taxpayer return information
is probative of a matter in issue
relevant in establishing the commission
of a crime or the guilt or liability of
a party, or
(ii) to the extent required by order
of the court pursuant to section 3500
of title 18, United States Code, or
rule 16 of the Federal Rules of
Criminal Procedure.
(B) Return information (other than taxpayer
return information).--Except as provided in
subparagraph (C), any return information (other
than taxpayer return information) obtained
under paragraph (1), (2), (3)(A) or (C), or (7)
may be disclosed in any judicial or
administrative proceeding pertaining to
enforcement of a specifically designated
Federal criminal statute or related civil
forfeiture (not involving tax administration)
to which the United States or a Federal agency
is a party.
(C) Confidential informant; impairment of
investigations.--No return or return
information shall be admitted into evidence
under subparagraph (A)(i) or (B) if the
Secretary determines and notifies the Attorney
General or his delegate or the head of the
Federal agency that such admission would
identify a confidential informant or seriously
impair a civil or criminal tax investigation.
(D) Consideration of confidentiality
policy.--In ruling upon the admissibility of
returns or return information, and in the
issuance of an order under subparagraph
(A)(ii), the court shall give due consideration
to congressional policy favoring the
confidentiality of returns and return
information as set forth in this title.
(E) Reversible error.--The admission into
evidence of any return or return information
contrary to the provisions of this paragraph
shall not, as such, constitute reversible error
upon appeal of a judgment in the proceeding.
(5) Disclosure to locate fugitives from justice.--
(A) In general.--Except as provided in
paragraph (6), the return of an individual or
return information with respect to such
individual shall, pursuant to and upon the
grant of an ex parte order by a Federal
district court judge or magistrate judge under
subparagraph (B), be open (but only to the
extent necessary as provided in such order) to
inspection by, or disclosure to, officers and
employees of any Federal agency exclusively for
use in locating such individual.
(B) Application for order.--Any person
described in paragraph (1)(B) may authorize an
application to a Federal district court judge
or magistrate judge for an order referred to in
subparagraph (A). Upon such application, such
judge or magistrate judge may grant such order
if he determines on the basis of the facts
submitted by the applicant that--
(i) a Federal arrest warrant relating
to the commission of a Federal felony
offense has been issued for an
individual who is a fugitive from
justice,
(ii) the return of such individual or
return information with respect to such
individual is sought exclusively for
use in locating such individual, and
(iii) there is reasonable cause to
believe that such return or return
information may be relevant in
determining the location of such
individual.
(6) Confidential informants; impairment of
investigations.--The Secretary shall not disclose any
return or return information under paragraph (1), (2),
(3)(A) or (C), (5), (7), or (8) if the Secretary
determines (and, in the case of a request for
disclosure pursuant to a court order described in
paragraph (1)(B) or (5)(B), certifies to the court)
that such disclosure would identify a confidential
informant or seriously impair a civil or criminal tax
investigation.
(7) Disclosure upon request of information relating
to terrorist activities, etc..--
(A) Disclosure to law enforcement agencies.--
(i) In general.--Except as provided
in paragraph (6), upon receipt by the
Secretary of a written request which
meets the requirements of clause (iii),
the Secretary may disclose return
information (other than taxpayer return
information) to officers and employees
of any Federal law enforcement agency
who are personally and directly engaged
in the response to or investigation of
any terrorist incident, threat, or
activity.
(ii) Disclosure to State and local
law enforcement agencies.--The head of
any Federal law enforcement agency may
disclose return information obtained
under clause (i) to officers and
employees of any State or local law
enforcement agency but only if such
agency is part of a team with the
Federal law enforcement agency in such
response or investigation and such
information is disclosed only to
officers and employees who are
personally and directly engaged in such
response or investigation.
(iii) Requirements.--A request meets
the requirements of this clause if--
(I) the request is made by
the head of any Federal law
enforcement agency (or his
delegate) involved in the
response to or investigation of
any terrorist incident, threat,
or activity, and
(II) the request sets forth
the specific reason or reasons
why such disclosure may be
relevant to a terrorist
incident, threat, or activity.
(iv) Limitation on use of
information.--Information disclosed
under this subparagraph shall be solely
for the use of the officers and
employees to whom such information is
disclosed in such response or
investigation.
(v) Taxpayer identity.--For purposes
of this subparagraph, a taxpayer's
identity shall not be treated as
taxpayer return information.
(B) Disclosure to intelligence agencies.--
(i) In general.--Except as provided
in paragraph (6), upon receipt by the
Secretary of a written request which
meets the requirements of clause (ii),
the Secretary may disclose return
information (other than taxpayer return
information) to those officers and
employees of the Department of Justice,
the Department of the Treasury, and
other Federal intelligence agencies who
are personally and directly engaged in
the collection or analysis of
intelligence and counterintelligence
information or investigation concerning
any terrorist incident, threat, or
activity. For purposes of the preceding
sentence, the information disclosed
under the preceding sentence shall be
solely for the use of such officers and
employees in such investigation,
collection, or analysis.
(ii) Requirements.--A request meets
the requirements of this subparagraph
if the request--
(I) is made by an individual
described in clause (iii), and
(II) sets forth the specific
reason or reasons why such
disclosure may be relevant to a
terrorist incident, threat, or
activity.
(iii) Requesting individuals.--An
individual described in this
subparagraph is an individual--
(I) who is an officer or
employee of the Department of
Justice or the Department of
the Treasury who is appointed
by the President with the
advice and consent of the
Senate or who is the Director
of the United States Secret
Service, and
(II) who is responsible for
the collection and analysis of
intelligence and
counterintelligence information
concerning any terrorist
incident, threat, or activity.
(iv) Taxpayer identity.--For purposes
of this subparagraph, a taxpayer's
identity shall not be treated as
taxpayer return information.
(C) Disclosure under ex parte orders.--
(i) In general.--Except as provided
in paragraph (6), any return or return
information with respect to any
specified taxable period or periods
shall, pursuant to and upon the grant
of an ex parte order by a Federal
district court judge or magistrate
under clause (ii), be open (but only to
the extent necessary as provided in
such order) to inspection by, or
disclosure to, officers and employees
of any Federal law enforcement agency
or Federal intelligence agency who are
personally and directly engaged in any
investigation, response to, or analysis
of intelligence and counterintelligence
information concerning any terrorist
incident, threat, or activity. Return
or return information opened to
inspection or disclosure pursuant to
the preceding sentence shall be solely
for the use of such officers and
employees in the investigation,
response, or analysis, and in any
judicial, administrative, or grand jury
proceedings, pertaining to such
terrorist incident, threat, or
activity.
(ii) Application for order.--The
Attorney General, the Deputy Attorney
General, the Associate Attorney
General, any Assistant Attorney
General, or any United States attorney
may authorize an application to a
Federal district court judge or
magistrate for the order referred to in
clause (i). Upon such application, such
judge or magistrate may grant such
order if he determines on the basis of
the facts submitted by the applicant
that--
(I) there is reasonable cause
to believe, based upon
information believed to be
reliable, that the return or
return information may be
relevant to a matter relating
to such terrorist incident,
threat, or activity, and
(II) the return or return
information is sought
exclusively for use in a
Federal investigation,
analysis, or proceeding
concerning any terrorist
incident, threat, or activity.
(D) Special rule for ex parte disclosure by
the IRS.--
(i) In general.--Except as provided
in paragraph (6), the Secretary may
authorize an application to a Federal
district court judge or magistrate for
the order referred to in subparagraph
(C)(i). Upon such application, such
judge or magistrate may grant such
order if he determines on the basis of
the facts submitted by the applicant
that the requirements of subparagraph
(C)(ii)(I) are met.
(ii) Limitation on use of
information.--Information disclosed
under clause (i)--
(I) may be disclosed only to
the extent necessary to apprise
the head of the appropriate
Federal law enforcement agency
responsible for investigating
or responding to a terrorist
incident, threat, or activity,
and
(II) shall be solely for use
in a Federal investigation,
analysis, or proceeding
concerning any terrorist
incident, threat, or activity.
The head of such Federal agency may disclose
such information to officers and employees of
such agency to the extent necessary to
investigate or respond to such terrorist
incident, threat, or activity.
(8) Comptroller General.--
(A) Returns available for inspection.--Except
as provided in subparagraph (C), upon written
request by the Comptroller General of the
United States, returns and return information
shall be open to inspection by, or disclosure
to, officers and employees of the Government
Accountability Office for the purpose of, and
to the extent necessary in, making--
(i) an audit of the Internal Revenue
Service, the Bureau of Alcohol,
Tobacco, Firearms, and Explosives,
Department of Justice, or the Tax and
Trade Bureau, Department of the
Treasury, which may be required by
section 713 of title 31, United States
Code, or
(ii) any audit authorized by
subsection (p)(6),
except that no such officer or employee shall,
except to the extent authorized by subsection
(f) or (p)(6), disclose to any person, other
than another officer or employee of such office
whose official duties require such disclosure,
any return or return information described in
section 4424(a) in a form which can be
associated with, or otherwise identify,
directly or indirectly, a particular taxpayer,
nor shall such officer or employee disclose any
other return or return information, except as
otherwise expressly provided by law, to any
person other than such other officer or
employee of such office in a form which can be
associated with, or otherwise identify,
directly or indirectly, a particular taxpayer.
(B) Audits of other agencies.--
(i) In general.--Nothing in this
section shall prohibit any return or
return information obtained under this
title by any Federal agency (other than
an agency referred to in subparagraph
(A)) or by a Trustee as defined in the
District of Columbia Retirement
Protection Act of 1997, for use in any
program or activity from being open to
inspection by, or disclosure to,
officers and employees of the
Government Accountability Office if
such inspection or disclosure is--
(I) for purposes of, and to
the extent necessary in, making
an audit authorized by law of
such program or activity, and
(II) pursuant to a written
request by the Comptroller
General of the United States to
the head of such Federal
agency.
(ii) Information from Secretary.--If
the Comptroller General of the United
States determines that the returns or
return information available under
clause (i) are not sufficient for
purposes of making an audit of any
program or activity of a Federal agency
(other than an agency referred to in
subparagraph (A)), upon written request
by the Comptroller General to the
Secretary, returns and return
information (of the type authorized by
subsection (l) or (m) to be made
available to the Federal agency for use
in such program or activity) shall be
open to inspection by, or disclosure
to, officers and employees of the
Government Accountability Office for
the purpose of, and to the extent
necessary in, making such audit.
(iii) Requirement of notification
upon completion of audit.--Within 90
days after the completion of an audit
with respect to which returns or return
information were opened to inspection
or disclosed under clause (i) or (ii),
the Comptroller General of the United
States shall notify in writing the
Joint Committee on Taxation of such
completion. Such notice shall include--
(I) a description of the use
of the returns and return
information by the Federal
agency involved,
(II) such recommendations
with respect to the use of
returns and return information
by such Federal agency as the
Comptroller General deems
appropriate, and
(III) a statement on the
impact of any such
recommendations on
confidentiality of returns and
return information and the
administration of this title.
(iv) Certain restrictions made
applicable.--The restrictions contained
in subparagraph (A) on the disclosure
of any returns or return information
open to inspection or disclosed under
such subparagraph shall also apply to
returns and return information open to
inspection or disclosed under this
subparagraph.
(C) Disapproval by Joint Committee on
Taxation.--Returns and return information shall
not be open to inspection or disclosed under
subparagraph (A) or (B) with respect to an
audit--
(i) unless the Comptroller General of
the United States notifies in writing
the Joint Committee on Taxation of such
audit, and
(ii) if the Joint Committee on
Taxation disapproves such audit by a
vote of at least two-thirds of its
members within the 30-day period
beginning on the day the Joint
Committee on Taxation receives such
notice.
(j) Statistical use.--
(1) Department of Commerce.--Upon request in writing
by the Secretary of Commerce, the Secretary shall
furnish--
(A) such returns, or return information
reflected thereon, to officers and employees of
the Bureau of the Census, and
(B) such return information reflected on
returns of corporations to officers and
employees of the Bureau of Economic Analysis,
as the Secretary may prescribe by regulation for the
purpose of, but only to the extent necessary in, the
structuring of censuses and national economic accounts
and conducting related statistical activities
authorized by law.
(2) Federal Trade Commission.--Upon request in
writing by the Chairman of the Federal Trade
Commission, the Secretary shall furnish such return
information reflected on any return of a corporation
with respect to the tax imposed by chapter 1 to
officers and employees of the Division of Financial
Statistics of the Bureau of Economics of such
commission as the Secretary may prescribe by regulation
for the purpose of, but only to the extent necessary
in, administration by such division of legally
authorized economic surveys of corporations.
(3) Department of Treasury.--Returns and return
information shall be open to inspection by or
disclosure to officers and employees of the Department
of the Treasury whose official duties require such
inspection or disclosure for the purpose of, but only
to the extent necessary in, preparing economic or
financial forecasts, projections, analyses, and
statistical studies and conducting related activities.
Such inspection or disclosure shall be permitted only
upon written request which sets forth the specific
reason or reasons why such inspection or disclosure is
necessary and which is signed by the head of the bureau
or office of the Department of the Treasury requesting
the inspection or disclosure.
(4) Anonymous form.--No person who receives a return
or return information under this subsection shall
disclose such return or return information to any
person other than the taxpayer to whom it relates
except in a form which cannot be associated with, or
otherwise identify, directly or indirectly, a
particular taxpayer.
(5) Department of Agriculture.--Upon request in
writing by the Secretary of Agriculture, the Secretary
shall furnish such returns, or return information
reflected thereon, as the Secretary may prescribe by
regulation to officers and employees of the Department
of Agriculture whose official duties require access to
such returns or information for the purpose of, but
only to the extent necessary in, structuring,
preparing, and conducting the census of agriculture
pursuant to the Census of Agriculture Act of 1997
(Public Law 105-113).
(6) Congressional Budget Office.--Upon written
request by the Director of the Congressional Budget
Office, the Secretary shall furnish to officers and
employees of the Congressional Budget Office return
information for the purpose of, but only to the extent
necessary for, long-term models of the social security
and medicare programs.
(k) Disclosure of certain returns and return information for
tax administration purposes.--
(1) Disclosure of accepted offers-in-compromise.--
Return information shall be disclosed to members of the
general public to the extent necessary to permit
inspection of any accepted offer-in-compromise under
section 7122 relating to the liability for a tax
imposed by this title.
(2) Disclosure of amount of outstanding lien.--If a
notice of lien has been filed pursuant to section
6323(f), the amount of the outstanding obligation
secured by such lien may be disclosed to any person who
furnishes satisfactory written evidence that he has a
right in the property subject to such lien or intends
to obtain a right in such property.
(3) Disclosure of return information to correct
misstatements of fact.--The Secretary may, but only
following approval by the Joint Committee on Taxation,
disclose such return information or any other
information with respect to any specific taxpayer to
the extent necessary for tax administration purposes to
correct a misstatement of fact published or disclosed
with respect to such taxpayer's return or any
transaction of the taxpayer with the Internal Revenue
Service.
(4) Disclosure to competent authority under tax
convention.--A return or return information may be
disclosed to a competent authority of a foreign
government which has an income tax or gift and estate
tax convention, or other convention or bilateral
agreement relating to the exchange of tax information,
with the United States but only to the extent provided
in, and subject to the terms and conditions of, such
convention or bilateral agreement.
(5) State agencies regulating tax return preparers.--
Taxpayer identity information with respect to any tax
return preparer, and information as to whether or not
any penalty has been assessed against such tax return
preparer under section 6694, 6695, or 7216, may be
furnished to any agency, body, or commission lawfully
charged under any State or local law with the
licensing, registration, or regulation of tax return
preparers. Such information may be furnished only upon
written request by the head of such agency, body, or
commission designating the officers or employees to
whom such information is to be furnished. Information
may be furnished and used under this paragraph only for
purposes of the licensing, registration, or regulation
of tax return preparers.
(6) Disclosure by certain officers and employees for
investigative purposes.--An internal revenue officer or
employee and an officer or employee of the Office of
Treasury Inspector General for Tax Administration may,
in connection with his official duties relating to any
audit, collection activity, or civil or criminal tax
investigation or any other offense under the internal
revenue laws, disclose return information to the extent
that such disclosure is necessary in obtaining
information, which is not otherwise reasonably
available, with respect to the correct determination of
tax, liability for tax, or the amount to be collected
or with respect to the enforcement of any other
provision of this title. Such disclosures shall be made
only in such situations and under such conditions as
the Secretary may prescribe by regulation. This
paragraph shall not apply to any disclosure to an
individual providing information relating to any
purpose described in paragraph (1) or (2) of section
7623(a) which is made under paragraph (13)(A).
(7) Disclosure of excise tax registration
information.--To the extent the Secretary determines
that disclosure is necessary to permit the effective
administration of subtitle D, the Secretary may
disclose--
(A) the name, address, and registration
number of each person who is registered under
any provision of subtitle D (and, in the case
of a registered terminal operator, the address
of each terminal operated by such operator),
and
(B) the registration status of any person.
(8) Levies on certain government payments.--
(A) Disclosure of return information in
levies on Financial Management Service.--In
serving a notice of levy, or release of such
levy, with respect to any applicable government
payment, the Secretary may disclose to officers
and employees of the Financial Management
Service--
(i) return information, including
taxpayer identity information,
(ii) the amount of any unpaid
liability under this title (including
penalties and interest), and
(iii) the type of tax and tax period
to which such unpaid liability relates.
(B) Restriction on use of disclosed
information.--Return information disclosed
under subparagraph (A) may be used by officers
and employees of the Financial Management
Service only for the purpose of, and to the
extent necessary in, transferring levied funds
in satisfaction of the levy, maintaining
appropriate agency records in regard to such
levy or the release thereof, notifying the
taxpayer and the agency certifying such payment
that the levy has been honored, or in the
defense of any litigation ensuing from the
honor of such levy.
(C) Applicable government payment.--For
purposes of this paragraph, the term
``applicable government payment'' means--
(i) any Federal payment (other than a
payment for which eligibility is based
on the income or assets (or both) of a
payee) certified to the Financial
Management Service for disbursement,
and
(ii) any other payment which is
certified to the Financial Management
Service for disbursement and which the
Secretary designates by published
notice.
(9) Disclosure of information to administer section
6311.--The Secretary may disclose returns or return
information to financial institutions and others to the
extent the Secretary deems necessary for the
administration of section 6311. Disclosures of
information for purposes other than to accept payments
by checks or money orders shall be made only to the
extent authorized by written procedures promulgated by
the Secretary.
(10) Disclosure of certain returns and return
information to certain prison officials.--
(A) In general.--Under such procedures as the
Secretary may prescribe, the Secretary may
disclose to officers and employees of the
Federal Bureau of Prisons and of any State
agency charged with the responsibility for
administration of prisons any returns or return
information with respect to individuals
incarcerated in Federal or State prison systems
whom the Secretary has determined may have
filed or facilitated the filing of a false or
fraudulent return to the extent that the
Secretary determines that such disclosure is
necessary to permit effective Federal tax
administration.
(B) Disclosure to contractor-run prisons.--
Under such procedures as the Secretary may
prescribe, the disclosures authorized by
subparagraph (A) may be made to contractors
responsible for the operation of a Federal or
State prison on behalf of such Bureau or
agency.
(C) Restrictions on use of disclosed
information.--Any return or return information
received under this paragraph shall be used
only for the purposes of and to the extent
necessary in taking administrative action to
prevent the filing of false and fraudulent
returns, including administrative actions to
address possible violations of administrative
rules and regulations of the prison facility
and in administrative and judicial proceedings
arising from such administrative actions.
(D) Restrictions on redisclosure and
disclosure to legal representatives.--
Notwithstanding subsection (h)--
(i) Restrictions on redisclosure.--
Except as provided in clause (ii), any
officer, employee, or contractor of the
Federal Bureau of Prisons or of any
State agency charged with the
responsibility for administration of
prisons shall not disclose any
information obtained under this
paragraph to any person other than an
officer or employee or contractor of
such Bureau or agency personally and
directly engaged in the administration
of prison facilities on behalf of such
Bureau or agency.
(ii) Disclosure to legal
representatives.--The returns and
return information disclosed under this
paragraph may be disclosed to the duly
authorized legal representative of the
Federal Bureau of Prisons, State
agency, or contractor charged with the
responsibility for administration of
prisons, or of the incarcerated
individual accused of filing the false
or fraudulent return who is a party to
an action or proceeding described in
subparagraph (C), solely in preparation
for, or for use in, such action or
proceeding.
(11) Disclosure of return information to Department
of State for purposes of passport revocation under
section 7345.--
(A) In general.--The Secretary shall, upon
receiving a certification described in section
7345, disclose to the Secretary of State return
information with respect to a taxpayer who has
a seriously delinquent tax debt described in
such section. Such return information shall be
limited to--
(i) the taxpayer identity information
with respect to such taxpayer, and
(ii) the amount of such seriously
delinquent tax debt.
(B) Restriction on disclosure.--Return
information disclosed under subparagraph (A)
may be used by officers and employees of the
Department of State for the purposes of, and to
the extent necessary in, carrying out the
requirements of section 32101 of the FAST Act.
(12) Qualified tax collection contractors.--Persons
providing services pursuant to a qualified tax
collection contract under section 6306 may, if speaking
to a person who has identified himself or herself as
having the name of the taxpayer to which a tax
receivable (within the meaning of such section)
relates, identify themselves as contractors of the
Internal Revenue Service and disclose the business name
of the contractor, and the nature, subject, and reason
for the contact. Disclosures under this paragraph shall
be made only in such situations and under such
conditions as have been approved by the Secretary.
(13) Disclosure to whistleblowers.--
(A) In general.--The Secretary may disclose,
to any individual providing information
relating to any purpose described in paragraph
(1) or (2) of section 7623(a), return
information related to the investigation of any
taxpayer with respect to whom the individual
has provided such information, but only to the
extent that such disclosure is necessary in
obtaining information, which is not otherwise
reasonably available, with respect to the
correct determination of tax liability for tax,
or the amount to be collected with respect to
the enforcement of any other provision of this
title.
(B) Updates on whistleblower
investigations.--The Secretary shall disclose
to an individual providing information relating
to any purpose described in paragraph (1) or
(2) of section 7623(a) the following:
(i) Not later than 60 days after a
case for which the individual has
provided information has been referred
for an audit or examination, a notice
with respect to such referral.
(ii) Not later than 60 days after a
taxpayer with respect to whom the
individual has provided information has
made a payment of tax with respect to
tax liability to which such information
relates, a notice with respect to such
payment.
(iii) Subject to such requirements
and conditions as are prescribed by the
Secretary, upon a written request by
such individual--
(I) information on the status
and stage of any investigation
or action related to such
information, and
(II) in the case of a
determination of the amount of
any award under section
7623(b), the reasons for such
determination.
Clause (iii) shall not apply to any information
if the Secretary determines that disclosure of
such information would seriously impair Federal
tax administration. Information described in
clauses (i), (ii), and (iii) may be disclosed
to a designee of the individual providing such
information in accordance with guidance
provided by the Secretary.
(14) Disclosure of return information for purposes of
cybersecurity and the prevention of identity theft tax
refund fraud.--
(A) In general.--Under such procedures and
subject to such conditions as the Secretary may
prescribe, the Secretary may disclose specified
return information to specified ISAC
participants to the extent that the Secretary
determines such disclosure is in furtherance of
effective Federal tax administration relating
to the detection or prevention of identity
theft tax refund fraud, validation of taxpayer
identity, authentication of taxpayer returns,
or detection or prevention of cybersecurity
threats.
(B) Specified ISAC participants.--For
purposes of this paragraph--
(i) In general.--The term ``specified
ISAC participant'' means--
(I) any person designated by
the Secretary as having primary
responsibility for a function
performed with respect to the
information sharing and
analysis center described in
section 2003(a) of the Taxpayer
First Act, and
(II) any person subject to
the requirements of section
7216 and which is a participant
in such information sharing and
analysis center.
(ii) Information sharing agreement.--
Such term shall not include any person
unless such person has entered into a
written agreement with the Secretary
setting forth the terms and conditions
for the disclosure of information to
such person under this paragraph,
including requirements regarding the
protection and safeguarding of such
information by such person.
(C) Specified return information.--For
purposes of this paragraph, the term
``specified return information'' means--
(i) in the case of a return which is
in connection with a case of potential
identity theft refund fraud--
(I) in the case of such
return filed electronically,
the internet protocol address,
device identification, email
domain name, speed of
completion, method of
authentication, refund method,
and such other return
information related to the
electronic filing
characteristics of such return
as the Secretary may identify
for purposes of this subclause,
and
(II) in the case of such
return prepared by a tax return
preparer, identifying
information with respect to
such tax return preparer,
including the preparer taxpayer
identification number and
electronic filer identification
number of such preparer,
(ii) in the case of a return which is
in connection with a case of a identity
theft refund fraud which has been
confirmed by the Secretary (pursuant to
such procedures as the Secretary may
provide), the information referred to
in subclauses (I) and (II) of clause
(i), the name and taxpayer
identification number of the taxpayer
as it appears on the return, and any
bank account and routing information
provided for making a refund in
connection with such return, and
(iii) in the case of any
cybersecurity threat to the Internal
Revenue Service, information similar to
the information described in subclauses
(I) and (II) of clause (i) with respect
to such threat.
(D) Restriction on use of disclosed
information.--
(i) Designated third parties.--Any
return information received by a person
described in subparagraph (B)(i)(I)
shall be used only for the purposes of
and to the extent necessary in--
(I) performing the function
such person is designated to
perform under such
subparagraph,
(II) facilitating disclosures
authorized under subparagraph
(A) to persons described in
subparagraph (B)(i)(II), and
(III) facilitating
disclosures authorized under
subsection (d) to participants
in such information sharing and
analysis center.
(ii) Return preparers.--Any return
information received by a person
described in subparagraph (B)(i)(II)
shall be treated for purposes of
section 7216 as information furnished
to such person for, or in connection
with, the preparation of a return of
the tax imposed under chapter 1.
(E) Data protection and safeguards.--Return
information disclosed under this paragraph
shall be subject to such protections and
safeguards as the Secretary may require in
regulations or other guidance or in the written
agreement referred to in subparagraph (B)(ii).
Such written agreement shall include a
requirement that any unauthorized access to
information disclosed under this paragraph, and
any breach of any system in which such
information is held, be reported to the
Treasury Inspector General for Tax
Administration.
(15) Disclosures to Social Security Administration to
identify tax receivables not eligible for collection
pursuant to qualified tax collection contracts.--In the
case of any individual involved with a tax receivable
which the Secretary has identified for possible
collection pursuant to a qualified tax collection
contract (as defined in section 6306(b)), the Secretary
may disclose the taxpayer identity and date of birth of
such individual to officers, employees, and contractors
of the Social Security Administration to determine if
such tax receivable is not eligible for collection
pursuant to such a qualified tax collection contract by
reason of section 6306(d)(3)(E).
(l) Disclosure of returns and return information for purposes
other than tax administration.--
(1) Disclosure of certain returns and return
information to Social Security Administration and
Railroad Retirement Board.--The Secretary may, upon
written request, disclose returns and return
information with respect to--
(A) taxes imposed by chapters 2, 21, and 24,
to the Social Security Administration for
purposes of its administration of the Social
Security Act;
(B) a plan to which part I of subchapter D of
chapter 1 applies, to the Social Security
Administration for purposes of carrying out its
responsibility under section 1131 of the Social
Security Act, limited, however to return
information described in section 6057(d); and
(C) taxes imposed by chapter 22, to the
Railroad Retirement Board for purposes of its
administration of the Railroad Retirement Act.
(2) Disclosure of returns and return information to
the Department of Labor and Pension Benefit Guaranty
Corporation.--The Secretary may, upon written request,
furnish returns and return information to the proper
officers and employees of the Department of Labor and
the Pension Benefit Guaranty Corporation for purposes
of, but only to the extent necessary in, the
administration of titles I and IV of the Employee
Retirement Income Security Act of 1974.
(3) Disclosure that applicant for Federal loan has
tax delinquent account.--
(A) In general.--Upon written request, the
Secretary may disclose to the head of the
Federal agency administering any included
Federal loan program whether or not an
applicant for a loan under such program has a
tax delinquent account.
(B) Restriction on disclosure.--Any
disclosure under subparagraph (A) shall be made
only for the purpose of, and to the extent
necessary in, determining the creditworthiness
of the applicant for the loan in question.
(C) Included Federal loan program defined.--
For purposes of this paragraph, the term
``included Federal loan program'' means any
program under which the United States or a
Federal agency makes, guarantees, or insures
loans.
(4) Disclosure of returns and return information for
use in personnel or claimant representative matters.--
The Secretary may disclose returns and return
information--
(A) upon written request--
(i) to an employee or former employee
of the Department of the Treasury, or
to the duly authorized legal
representative of such employee or
former employee, who is or may be a
party to any administrative action or
proceeding affecting the personnel
rights of such employee or former
employee; or
(ii) to any person, or to the duly
authorized legal representative of such
person, whose rights are or may be
affected by an administrative action or
proceeding under section 330 of title
31, United States Code,
solely for use in the action or proceeding, or
in preparation for the action or proceeding,
but only to the extent that the Secretary
determines that such returns or return
information is or may be relevant and material
to the action or proceeding; or
(B) to officers and employees of the
Department of the Treasury for use in any
action or proceeding described in subparagraph
(A), or in preparation for such action or
proceeding, to the extent necessary to advance
or protect the interests of the United States.
(5) Social Security Administration.--Upon written
request by the Commissioner of Social Security, the
Secretary may disclose information returns filed
pursuant to part III of subchapter A of chapter 61 of
this subtitle for the purpose of--
(A) carrying out, in accordance with an
agreement entered into pursuant to section 232
of the Social Security Act, an effective return
processing program; or
(B) providing information regarding the
mortality status of individuals for
epidemiological and similar research in
accordance with section 1106(d) of the Social
Security Act.
(6) Disclosure of return information to Federal,
State, and local child support enforcement agencies.--
(A) Return information from Internal Revenue
Service.--The Secretary may, upon written
request, disclose to the appropriate Federal,
State, or local child support enforcement
agency--
(i) available return information from
the master files of the Internal
Revenue Service relating to the social
security account number (or numbers, if
the individual involved has more than
one such number), address, filing
status, amounts and nature of income,
and the number of dependents reported
on any return filed by, or with respect
to, any individual with respect to whom
child support obligations are sought to
be established or enforced pursuant to
the provisions of part D of title IV of
the Social Security Act and with
respect to any individual to whom such
support obligations are owing, and
(ii) available return information
reflected on any return filed by, or
with respect to, any individual
described in clause (i) relating to the
amount of such individual's gross
income (as defined in section 61) or
consisting of the names and addresses
of payors of such income and the names
of any dependents reported on such
return, but only if such return
information is not reasonably available
from any other source.
(B) Disclosure to certain agents.--The
following information disclosed to any child
support enforcement agency under subparagraph
(A) with respect to any individual with respect
to whom child support obligations are sought to
be established or enforced may be disclosed by
such agency to any agent of such agency which
is under contract with such agency to carry out
the purposes described in subparagraph (C):
(i) The address and social security
account number (or numbers) of such
individual.
(ii) The amount of any reduction
under section 6402(c) (relating to
offset of past-due support against
overpayments) in any overpayment
otherwise payable to such individual.
(C) Restriction on disclosure.--Information
may be disclosed under this paragraph only for
purposes of, and to the extent necessary in,
establishing and collecting child support
obligations from, and locating, individuals
owing such obligations.
(7) Disclosure of return information to Federal,
State, and local agencies administering certain
programs under the Social Security Act, the Food and
Nutrition Act of 2008, or title 38, United States Code,
or certain housing assistance programs.--
(A) Return information from Social Security
Administration.--The Commissioner of Social
Security shall, upon written request, disclose
return information from returns with respect to
net earnings from self-employment (as defined
in section 1402), wages (as defined in section
3121(a) or 3401(a)), and payments of retirement
income, which have been disclosed to the Social
Security Administration as provided by
paragraph (1) or (5) of this subsection, to any
Federal, State, or local agency administering a
program listed in subparagraph (D).
(B) Return information from Internal Revenue
Service.--The Secretary shall, upon written
request, disclose current return information
from returns with respect to unearned income
from the Internal Revenue Service files to any
Federal, State, or local agency administering a
program listed in subparagraph (D).
(C) Restriction on disclosure.--The
Commissioner of Social Security and the
Secretary shall disclose return information
under subparagraphs (A) and (B) only for
purposes of, and to the extent necessary in,
determining eligibility for, or the correct
amount of, benefits under a program listed in
subparagraph (D).
(D) Programs to which rule applies.--The
programs to which this paragraph applies are:
(i) a State program funded under part
A of title IV of the Social Security
Act;
(ii) medical assistance provided
under a State plan approved under title
XIX of the Social Security Act or
subsidies provided under section 1860D-
14 of such Act;
(iii) supplemental security income
benefits provided under title XVI of
the Social Security Act, and federally
administered supplementary payments of
the type described in section 1616(a)
of such Act (including payments
pursuant to an agreement entered into
under section 212(a) of Public Law 93-
66);
(iv) any benefits provided under a
State plan approved under title I, X,
XIV, or XVI of the Social Security Act
(as those titles apply to Puerto Rico,
Guam, and the Virgin Islands);
(v) unemployment compensation
provided under a State law described in
section 3304 of this title;
(vi) assistance provided under the
Food and Nutrition Act of 2008;
(vii) State-administered
supplementary payments of the type
described in section 1616(a) of the
Social Security Act (including payments
pursuant to an agreement entered into
under section 212(a) of Public Law 93-
66);
(viii)(I) any needs-based pension
provided under chapter 15 of title 38,
United States Code, or under any other
law administered by the Secretary of
Veterans Affairs;
(II) parents' dependency and
indemnity compensation provided under
section 1315 of title 38, United States
Code;
(III) health-care services furnished
under sections 1710(a)(2)(G),
1710(a)(3), and 1710(b) of such title;
and
(IV) compensation paid under chapter
11 of title 38, United States Code, at
the 100 percent rate based solely on
unemployability and without regard to
the fact that the disability or
disabilities are not rated as 100
percent disabling under the rating
schedule; and
(ix) any housing assistance program
administered by the Department of
Housing and Urban Development that
involves initial and periodic review of
an applicant's or participant's income,
except that return information may be
disclosed under this clause only on
written request by the Secretary of
Housing and Urban Development and only
for use by officers and employees of
the Department of Housing and Urban
Development with respect to applicants
for and participants in such programs.
Only return information from returns with
respect to net earnings from self-employment
and wages may be disclosed under this paragraph
for use with respect to any program described
in clause (viii)(IV).
(8) Disclosure of certain return information by
Social Security Administration to Federal, State, and
local child support enforcement agencies.--
(A) In general.--Upon written request, the
Commissioner of Social Security shall disclose
directly to officers and employees of a Federal
or State or local child support enforcement
agency return information from returns with
respect to social security account numbers, net
earnings from self-employment (as defined in
section 1402), wages (as defined in section
3121(a) or 3401(a)), and payments of retirement
income which have been disclosed to the Social
Security Administration as provided by
paragraph (1) or (5) of this subsection.
(B) Restriction on disclosure.--The
Commissioner of Social Security shall disclose
return information under subparagraph (A) only
for purposes of, and to the extent necessary
in, establishing and collecting child support
obligations from, and locating, individuals
owing such obligations. For purposes of the
preceding sentence, the term ``child support
obligations'' only includes obligations which
are being enforced pursuant to a plan described
in section 454 of the Social Security Act which
has been approved by the Secretary of Health
and Human Services under part D of title IV of
such Act.
(C) State or local child support enforcement
agency.--For purposes of this paragraph, the
term ``State or local child support enforcement
agency'' means any agency of a State or
political subdivision thereof operating
pursuant to a plan described in subparagraph
(B).
(9) Disclosure of alcohol fuel producers to
administrators of State alcohol laws.--Notwithstanding
any other provision of this section, the Secretary may
disclose--
(A) the name and address of any person who is
qualified to produce alcohol for fuel use under
section 5181, and
(B) the location of any premises to be used
by such person in producing alcohol for fuel,
to any State agency, body, or commission, or its legal
representative, which is charged under the laws of such
State with responsibility for administration of State
alcohol laws solely for use in the administration of
such laws.
(10) Disclosure of certain information to agencies
requesting a reduction under subsection (c), (d), (e),
or (f) of section 6402.--
(A) Return information from Internal Revenue
Service.--The Secretary may, upon receiving a
written request, disclose to officers and
employees of any agency seeking a reduction
under subsection (c), (d), (e), or (f) of
section 6402, to officers and employees of the
Department of Labor for purposes of
facilitating the exchange of data in connection
with a notice submitted under subsection
(f)(5)(C) of section 6402, and to officers and
employees of the Department of the Treasury in
connection with such reduction--
(i) taxpayer identity information
with respect to the taxpayer against
whom such a reduction was made or not
made and with respect to any other
person filing a joint return with such
taxpayer,
(ii) the fact that a reduction has
been made or has not been made under
such subsection with respect to such
taxpayer,
(iii) the amount of such reduction,
(iv) whether such taxpayer filed a
joint return, and
(v) the fact that a payment was made
(and the amount of the payment) to the
spouse of the taxpayer on the basis of
a joint return.
(B) Restriction on use of disclosed
information.--(i) Any officers and employees of
an agency receiving return information under
subparagraph (A) shall use such information
only for the purposes of, and to the extent
necessary in, establishing appropriate agency
records, locating any person with respect to
whom a reduction under subsection (c), (d),
(e), or (f) of section 6402 is sought for
purposes of collecting the debt with respect to
which the reduction is sought, or in the
defense of any litigation or administrative
procedure ensuing from a reduction made under
subsection (c), (d), (e), or (f) of section
6402.
(ii) Notwithstanding clause (i), return
information disclosed to officers and employees
of the Department of Labor may be accessed by
agents who maintain and provide technological
support to the Department of Labor's Interstate
Connection Network (ICON) solely for the
purpose of providing such maintenance and
support.
(11) Disclosure of return information to carry out
Federal Employees' Retirement System.--
(A) In general.--The Commissioner of Social
Security shall, on written request, disclose to
the Office of Personnel Management return
information from returns with respect to net
earnings from self-employment (as defined in
section 1402), wages (as defined in section
3121(a) or 3401(a)), and payments of retirement
income, which have been disclosed to the Social
Security Administration as provided by
paragraph (1) or (5).
(B) Restriction on disclosure.--The
Commissioner of Social Security shall disclose
return information under subparagraph (A) only
for purposes of, and to the extent necessary
in, the administration of chapters 83 and 84 of
title 5, United States Code.
(12) Disclosure of certain taxpayer identity
information for verification of employment status of
medicare beneficiary and spouse of medicare
beneficiary.--
(A) Return information from Internal Revenue
Service.--The Secretary shall, upon written
request from the Commissioner of Social
Security, disclose to the Commissioner
available filing status and taxpayer identity
information from the individual master files of
the Internal Revenue Service relating to
whether any medicare beneficiary identified by
the Commissioner was a married individual (as
defined in section 7703) for any specified year
after 1986, and, if so, the name of the spouse
of such individual and such spouse's TIN.
(B) Return information from Social Security
Administration.--The Commissioner of Social
Security shall, upon written request from the
Administrator of the Centers for Medicare &
Medicaid Services, disclose to the
Administrator the following information:
(i) The name and TIN of each medicare
beneficiary who is identified as having
received wages (as defined in section
3401(a)), above an amount (if any)
specified by the Secretary of Health
and Human Services, from a qualified
employer in a previous year.
(ii) For each medicare beneficiary
who was identified as married under
subparagraph (A) and whose spouse is
identified as having received wages,
above an amount (if any) specified by
the Secretary of Health and Human
Services, from a qualified employer in
a previous year--
(I) the name and TIN of the
medicare beneficiary, and
(II) the name and TIN of the
spouse.
(iii) With respect to each such
qualified employer, the name, address,
and TIN of the employer and the number
of individuals with respect to whom
written statements were furnished under
section 6051 by the employer with
respect to such previous year.
(C) Disclosure by Centers for Medicare &
Medicaid Services.--With respect to the
information disclosed under subparagraph (B),
the Administrator of the Centers for Medicare &
Medicaid Services may disclose--
(i) to the qualified employer
referred to in such subparagraph the
name and TIN of each individual
identified under such subparagraph as
having received wages from the employer
(hereinafter in this subparagraph
referred to as the ``employee'') for
purposes of determining during what
period such employee or the employee's
spouse may be (or have been) covered
under a group health plan of the
employer and what benefits are or were
covered under the plan (including the
name, address, and identifying number
of the plan),
(ii) to any group health plan which
provides or provided coverage to such
an employee or spouse, the name of such
employee and the employee's spouse (if
the spouse is a medicare beneficiary)
and the name and address of the
employer, and, for the purpose of
presenting a claim to the plan--
(I) the TIN of such employee
if benefits were paid under
title XVIII of the Social
Security Act with respect to
the employee during a period in
which the plan was a primary
plan (as defined in section
1862(b)(2)(A) of the Social
Security Act), and
(II) the TIN of such spouse
if benefits were paid under
such title with respect to the
spouse during such period, and
(iii) to any agent of such
Administrator the information referred
to in subparagraph (B) for purposes of
carrying out clauses (i) and (ii) on
behalf of such Administrator.
(D) Special rules.--
(i) Restrictions on disclosure.--
Information may be disclosed under this
paragraph only for purposes of, and to
the extent necessary in, determining
the extent to which any medicare
beneficiary is covered under any group
health plan.
(ii) Timely response to requests.--
Any request made under subparagraph (A)
or (B) shall be complied with as soon
as possible but in no event later than
120 days after the date the request was
made.
(E) Definitions.--For purposes of this
paragraph--
(i) Medicare beneficiary.--The term
``medicare beneficiary'' means an
individual entitled to benefits under
part A, or enrolled under part B, of
title XVIII of the Social Security Act,
but does not include such an individual
enrolled in part A under section 1818.
(ii) Group health plan.--The term
``group health plan'' means any group
health plan (as defined in section
5000(b)(1)).
(iii) Qualified employer.--The term
``qualified employer'' means, for a
calendar year, an employer which has
furnished written statements under
section 6051 with respect to at least
20 individuals for wages paid in the
year.
(13) Disclosure of return information to carry out
the Higher Education Act of 1965.--
(A) Applications and recertifications for
income-contingent or income-based repayment.--
The Secretary shall, upon written request from
the Secretary of Education, disclose to any
authorized person, only for the purpose of (and
to the extent necessary in) determining
eligibility for, or repayment obligations
under, income-contingent or income-based
repayment plans under title IV of the Higher
Education Act of 1965 with respect to loans
under part D of such title, the following
return information from returns (for any
taxable year specified by the Secretary of
Education as relevant to such purpose) of an
individual certified by the Secretary of
Education as having provided approval under
section 494(a)(2) of such Act (as in effect on
the date of enactment of this paragraph) for
such disclosure:
(i) Taxpayer identity information.
(ii) Filing status.
(iii) Adjusted gross income.
(iv) Total number of exemptions
claimed, if applicable.
(v) Number of dependents taken into
account in determining the credit
allowed under section 24.
(vi) If applicable, the fact that
there was no return filed.
(B) Discharge of loan based on total and
permanent disability.--The Secretary shall,
upon written request from the Secretary of
Education, disclose to any authorized person,
only for the purpose of (and to the extent
necessary in) monitoring and reinstating loans
under title IV of the Higher Education Act of
1965 that were discharged based on a total and
permanent disability (within the meaning of
section 437(a) of such Act), the following
return information from returns (for any
taxable year specified by the Secretary of
Education as relevant to such purpose) of an
individual certified by the Secretary of
Education as having provided approval under
section 494(a)(3) of such Act (as in effect on
the date of enactment of this paragraph) for
such disclosure:
(i) The return information described
in clauses (i), (ii), and (vi) of
subparagraph (A).
(ii) The return information described
in subparagraph (C)(ii).
(C) Federal student financial aid.--The
Secretary shall, upon written request from the
Secretary of Education, disclose to any
authorized person, only for the purpose of (and
to the extent necessary in) determining
eligibility for, and amount of, Federal student
financial aid under a program authorized under
subpart 1 of part A, part C, or part D of title
IV of the Higher Education Act of 1965 the
following return information from returns (for
the taxable year used for purposes of section
480(a) of such Act) of an individual certified
by the Secretary of Education as having
provided approval under section 494(a)(1) of
such Act (as in effect on the date of enactment
of this paragraph) for such disclosure:
(i) Return information described in
clauses (i) through (vi) of
subparagraph (A).
(ii) The amount of any net earnings
from self-employment (as defined in
section 1402(a)), wages (as defined in
section 3121(a) or 3401(a)), and
taxable income from a farming business
(as defined in section 263A(e)(4)).
(iii) Amount of total income tax.
(iv) Amount of any credit allowed
under section 25A.
(v) Amount of individual retirement
account distributions not included in
adjusted gross income.
(vi) Amount of individual retirement
account contributions and payments to
self-employed SEP, Keogh, and other
qualified plans which were deducted
from income.
(vii) Amount of tax-exempt interest
received.
(viii) Amounts from retirement
pensions and annuities not included in
adjusted gross income.
(ix) If applicable, the fact that any
of the following schedules (or
equivalent successor schedules) were
filed with the return:
(I) Schedule A.
(II) Schedule B.
(III) Schedule D.
(IV) Schedule E.
(V) Schedule F.
(VI) Schedule H.
(x) If applicable, the amount
reported on Schedule C (or an
equivalent successor schedule) as net
profit or loss.
(D) Additional uses of disclosed
information.--
(i) In general.--In addition to the
purposes for which information is
disclosed under subparagraphs (A), (B),
and (C), return information so
disclosed may be used by an authorized
person, with respect to income-
contingent or income-based repayment
plans, awards of Federal student
financial aid under a program
authorized under subpart 1 of part A,
part C, or part D of title IV of the
Higher Education Act of 1965, and
discharges of loans based on a total
and permanent disability (within the
meaning of section 437(a) of such Act),
for purposes of--
(I) reducing the net cost of
improper payments under such
plans, relating to such awards,
or relating to such discharges,
(II) oversight activities by
the Office of Inspector General
of the Department of Education
as authorized by the Inspector
General Act of 1978, and
(III) conducting analyses and
forecasts for estimating costs
related to such plans, awards,
or discharges.
(ii) Limitation.--The purposes
described in clause (i) shall not
include the conduct of criminal
investigations or prosecutions.
(iii) Redisclosure to institutions of
higher education, State higher
education agencies, and designated
scholarship organizations.--Authorized
persons may redisclose return
information received under subparagraph
(C), solely for the use in the
application, award, and administration
of financial aid awarded by the Federal
government or awarded by a person
described in subclause (I), (II), or
(III), to the following persons:
(I) An institution of higher
education participating in a
program under subpart 1 of part
A, part C, or part D of title
IV of the Higher Education Act
of 1965.
(II) A State higher education
agency.
(III) A scholarship
organization which is an entity
designated (prior to the date
of the enactment of this
clause) by the Secretary of
Education under section
483(a)(3)(E) of such Act.
This clause shall only apply to the extent
that the taxpayer with respect to whom the
return information relates provides written
consent for such redisclosure to the Secretary
of Education. Under such terms and conditions
as may be prescribed by the Secretary, after
consultation with the Department of Education,
an institution of higher education described in
subclause (I) or a State higher education
agency described in subclause (II) may
designate a contractor of such institution or
state agency to receive return information on
behalf of such institution or state agency to
administer aspects of the institution's or
state agency's activities for the application,
award, and administration of such financial
aid.
(iv) Redisclosure to Office of
Inspector General, independent
auditors, and contractors.--Any return
information which is redisclosed under
clause (iii)--
(I) may be further disclosed
by persons described in
subclauses (I), (II), or (III)
of clause (iii) or persons
designated in the last sentence
of clause (iii) to the Office
of Inspector General of the
Department of Education and
independent auditors conducting
audits of such person's
administration of the programs
for which the return
information was received, and
(II) may be further disclosed
by persons described in
subclauses (I), (II), or (III)
of clause (iii) to contractors
of such entities,
but only to the extent necessary in carrying
out the purposes described in such clause
(iii).
(v) Redisclosure to family members.--
In addition to the purposes for which
information is disclosed and used under
subparagraphs (A) and (C), or
redisclosed under clause (iii), any
return information so disclosed or
redisclosed may be further disclosed to
any individual certified by the
Secretary of Education as having
provided approval under paragraph (1)
or (2) of section 494(a) of the Higher
Education Act of 1965, as the case may
be, for disclosure related to the
income-contingent or income-based
repayment plan under subparagraph (A)
or the eligibility for, and amount of,
Federal student financial aid described
in subparagraph (C).
(vi) Redisclosure of FAFSA
information.--Return information
received under subparagraph (C) may be
redisclosed in accordance with
subsection (c) of section 494 of the
Higher Education Act of 1965 (as in
effect on the date of enactment of the
COVID-related Tax Relief Act of 2020)
to carry out the purposes specified in
such subsection.
(E) Authorized person.--For purposes of this
paragraph, the term ``authorized person''
means, with respect to information disclosed
under subparagraph (A), (B), or (C), any person
who--
(i) is an officer, employee, or
contractor, of the Department of
Education, and
(ii) is specifically authorized and
designated by the Secretary of
Education for purposes of such
subparagraph (applied separately with
respect to each such subparagraph).
(F) Joint returns.--In the case of a joint
return, any disclosure authorized under
subparagraph (A), (B), or (C), and any
redisclosure authorized under clause (iii),
(iv) (v), or (vi) of subparagraph (D), with
respect to an individual shall be treated for
purposes of this paragraph as applying with
respect to the taxpayer.
(14) Disclosure of return information to United
States Customs Service.--The Secretary may, upon
written request from the Commissioner of the United
States Customs Service, disclose to officers and
employees of the Department of the Treasury such return
information with respect to taxes imposed by chapters 1
and 6 as the Secretary may prescribe by regulations,
solely for the purpose of, and only to the extent
necessary in--
(A) ascertaining the correctness of any entry
in audits as provided for in section 509 of the
Tariff Act of 1930 (19 U.S.C. 1509), or
(B) other actions to recover any loss of
revenue, or to collect duties, taxes, and fees,
determined to be due and owing pursuant to such
audits.
(15) Disclosure of returns filed under section
6050I.--The Secretary may, upon written request,
disclose to officers and employees of--
(A) any Federal agency,
(B) any agency of a State or local
government, or
(C) any agency of the government of a foreign
country,
information contained on returns filed under section
6050I. Any such disclosure shall be made on the same
basis, and subject to the same conditions, as apply to
disclosures of information on reports filed under
section 5313 of title 31, United States Code; except
that no disclosure under this paragraph shall be made
for purposes of the administration of any tax law.
(16) Disclosure of return information for purposes of
administering the District of Columbia Retirement
Protection Act of 1997.--
(A) In general.--Upon written request
available return information (including such
information disclosed to the Social Security
Administration under paragraph (1) or (5) of
this subsection), relating to the amount of
wage income (as defined in section 3121(a) or
3401(a)), the name, address, and identifying
number assigned under section 6109, of payors
of wage income, taxpayer identity (as defined
in section 6103(b)(6)), and the occupational
status reflected on any return filed by, or
with respect to, any individual with respect to
whom eligibility for, or the correct amount of,
benefits under the District of Columbia
Retirement Protection Act of 1997, is sought to
be determined, shall be disclosed by the
Commissioner of Social Security, or to the
extent not available from the Social Security
Administration, by the Secretary, to any duly
authorized officer or employee of the
Department of the Treasury, or a Trustee or any
designated officer or employee of a Trustee (as
defined in the District of Columbia Retirement
Protection Act of 1997), or any actuary engaged
by a Trustee under the terms of the District of
Columbia Retirement Protection Act of 1997,
whose official duties require such disclosure,
solely for the purpose of, and to the extent
necessary in, determining an individual's
eligibility for, or the correct amount of,
benefits under the District of Columbia
Retirement Protection Act of 1997.
(B) Disclosure for use in judicial or
administrative proceedings.--Return information
disclosed to any person under this paragraph
may be disclosed in a judicial or
administrative proceeding relating to the
determination of an individual's eligibility
for, or the correct amount of, benefits under
the District of Columbia Retirement Protection
Act of 1997.
(17) Disclosure to National Archives and Records
Administration.--The Secretary shall, upon written
request from the Archivist of the United States,
disclose or authorize the disclosure of returns and
return information to officers and employees of the
National Archives and Records Administration for
purposes of, and only to the extent necessary in, the
appraisal of records for destruction or retention. No
such officer or employee shall, except to the extent
authorized by subsection (f), (i)(8), or (p), disclose
any return or return information disclosed under the
preceding sentence to any person other than to the
Secretary, or to another officer or employee of the
National Archives and Records Administration whose
official duties require such disclosure for purposes of
such appraisal.
(18) Disclosure of return information for purposes of
carrying out a program for advance payment of credit
for health insurance costs of eligible individuals.--
The Secretary may disclose to providers of health
insurance for any certified individual (as defined in
section 7527(c)) return information with respect to
such certified individual only to the extent necessary
to carry out the program established by section 7527
(relating to advance payment of credit for health
insurance costs of eligible individuals).
(19) Disclosure of return information for purposes of
providing transitional assistance under medicare
discount card program.--
(A) In general.--The Secretary, upon written
request from the Secretary of Health and Human
Services pursuant to carrying out section
1860D-31 of the Social Security Act, shall
disclose to officers, employees, and
contractors of the Department of Health and
Human Services with respect to a taxpayer for
the applicable year--
(i)(I) whether the adjusted gross
income, as modified in accordance with
specifications of the Secretary of
Health and Human Services for purposes
of carrying out such section, of such
taxpayer and, if applicable, such
taxpayer's spouse, for the applicable
year, exceeds the amounts specified by
the Secretary of Health and Human
Services in order to apply the 100 and
135 percent of the poverty lines under
such section, (II) whether the return
was a joint return, and (III) the
applicable year, or
(ii) if applicable, the fact that
there is no return filed for such
taxpayer for the applicable year.
(B) Definition of applicable year.--For the
purposes of this subsection, the term
``applicable year'' means the most recent
taxable year for which information is available
in the Internal Revenue Service's taxpayer data
information systems, or, if there is no return
filed for such taxpayer for such year, the
prior taxable year.
(C) Restriction on use of disclosed
information.--Return information disclosed
under this paragraph may be used only for the
purposes of determining eligibility for and
administering transitional assistance under
section 1860D-31 of the Social Security Act.
(20) Disclosure of return information to carry out
Medicare part B premium subsidy adjustment and part D
base beneficiary premium increase.--
(A) In general.--The Secretary shall, upon
written request from the Commissioner of Social
Security, disclose to officers, employees, and
contractors of the Social Security
Administration return information of a taxpayer
whose premium (according to the records of the
Secretary) may be subject to adjustment under
section 1839(i) or increase under section
1860D-13(a)(7) of the Social Security Act. Such
return information shall be limited to--
(i) taxpayer identity information
with respect to such taxpayer,
(ii) the filing status of such
taxpayer,
(iii) the adjusted gross income of
such taxpayer,
(iv) the amounts excluded from such
taxpayer's gross income under sections
135 and 911 to the extent such
information is available,
(v) the interest received or accrued
during the taxable year which is exempt
from the tax imposed by chapter 1 to
the extent such information is
available,
(vi) the amounts excluded from such
taxpayer's gross income by sections 931
and 933 to the extent such information
is available,
(vii) such other information relating
to the liability of the taxpayer as is
prescribed by the Secretary by
regulation as might indicate in the
case of a taxpayer who is an individual
described in subsection (i)(4)(B)(iii)
of section 1839 of the Social Security
Act that the amount of the premium of
the taxpayer under such section may be
subject to adjustment under subsection
(i) of such section or increase under
section 1860D-13(a)(7) of such Act and
the amount of such adjustment, and
(viii) the taxable year with respect
to which the preceding information
relates.
(B) Restriction on use of disclosed
information.--
(i) In general.--Return information
disclosed under subparagraph (A) may be
used by officers, employees, and
contractors of the Social Security
Administration only for the purposes
of, and to the extent necessary in,
establishing the appropriate amount of
any premium adjustment under such
section 1839(i) or increase under such
section 1860D-13(a)(7) or for the
purpose of resolving taxpayer appeals
with respect to any such premium
adjustment or increase.
(ii) Disclosure to other agencies.--
Officers, employees, and contractors of
the Social Security Administration may
disclose--
(I) the taxpayer identity
information and the amount of
the premium subsidy adjustment
or premium increase with
respect to a taxpayer described
in subparagraph (A) to
officers, employees, and
contractors of the Centers for
Medicare and Medicaid Services,
to the extent that such
disclosure is necessary for the
collection of the premium
subsidy amount or the increased
premium amount,
(II) the taxpayer identity
information and the amount of
the premium subsidy adjustment
or the increased premium amount
with respect to a taxpayer
described in subparagraph (A)
to officers and employees of
the Office of Personnel
Management and the Railroad
Retirement Board, to the extent
that such disclosure is
necessary for the collection of
the premium subsidy amount or
the increased premium amount,
(III) return information with
respect to a taxpayer described
in subparagraph (A) to officers
and employees of the Department
of Health and Human Services to
the extent necessary to resolve
administrative appeals of such
premium subsidy adjustment or
increased premium, and
(IV) return information with
respect to a taxpayer described
in subparagraph (A) to officers
and employees of the Department
of Justice for use in judicial
proceedings to the extent
necessary to carry out the
purposes described in clause
(i).
(21) Disclosure of return information to carry out
eligibility requirements for certain programs.--
(A) In general.--The Secretary, upon written
request from the Secretary of Health and Human
Services, shall disclose to officers,
employees, and contractors of the Department of
Health and Human Services return information of
any taxpayer whose income is relevant in
determining any premium tax credit under
section 36B or any cost-sharing reduction under
section 1402 of the Patient Protection and
Affordable Care Act or eligibility for
participation in a State medicaid program under
title XIX of the Social Security Act, a State's
children's health insurance program under title
XXI of the Social Security Act, or a basic
health program under section 1331 of Patient
Protection and Affordable Care Act. Such return
information shall be limited to--
(i) taxpayer identity information
with respect to such taxpayer,
(ii) the filing status of such
taxpayer,
(iii) the number of individuals for
whom a deduction is allowed under
section 151 with respect to the
taxpayer (including the taxpayer and
the taxpayer's spouse),
(iv) the modified adjusted gross
income (as defined in section 36B) of
such taxpayer and each of the other
individuals included under clause (iii)
who are required to file a return of
tax imposed by chapter 1 for the
taxable year,
(v) such other information as is
prescribed by the Secretary by
regulation as might indicate whether
the taxpayer is eligible for such
credit or reduction (and the amount
thereof), and
(vi) the taxable year with respect to
which the preceding information relates
or, if applicable, the fact that such
information is not available.
(B) Information to exchange and State
agencies.--The Secretary of Health and Human
Services may disclose to an Exchange
established under the Patient Protection and
Affordable Care Act or its contractors, or to a
State agency administering a State program
described in subparagraph (A) or its
contractors, any inconsistency between the
information provided by the Exchange or State
agency to the Secretary and the information
provided to the Secretary under subparagraph
(A).
(C) Restriction on use of disclosed
information.--Return information disclosed
under subparagraph (A) or (B) may be used by
officers, employees, and contractors of the
Department of Health and Human Services, an
Exchange, or a State agency only for the
purposes of, and to the extent necessary in--
(i) establishing eligibility for
participation in the Exchange, and
verifying the appropriate amount of,
any credit or reduction described in
subparagraph (A),
(ii) determining eligibility for
participation in the State programs
described in subparagraph (A).
(22) Disclosure of return information to Department
of Health and Human Services for purposes of enhancing
Medicare program integrity.--
(A) In general.--The Secretary shall, upon
written request from the Secretary of Health
and Human Services, disclose to officers and
employees of the Department of Health and Human
Services return information with respect to a
taxpayer who has applied to enroll, or
reenroll, as a provider of services or supplier
under the Medicare program under title XVIII of
the Social Security Act. Such return
information shall be limited to--
(i) the taxpayer identity information
with respect to such taxpayer;
(ii) the amount of the delinquent tax
debt owed by that taxpayer; and
(iii) the taxable year to which the
delinquent tax debt pertains.
(B) Restriction on disclosure.--Return
information disclosed under subparagraph (A)
may be used by officers and employees of the
Department of Health and Human Services for the
purposes of, and to the extent necessary in,
establishing the taxpayer's eligibility for
enrollment or reenrollment in the Medicare
program, or in any administrative or judicial
proceeding relating to, or arising from, a
denial of such enrollment or reenrollment, or
in determining the level of enhanced oversight
to be applied with respect to such taxpayer
pursuant to section 1866(j)(3) of the Social
Security Act.
(C) Delinquent tax debt.--For purposes of
this paragraph, the term ``delinquent tax
debt'' means an outstanding debt under this
title for which a notice of lien has been filed
pursuant to section 6323, but the term does not
include a debt that is being paid in a timely
manner pursuant to an agreement under section
6159 or 7122, or a debt with respect to which a
collection due process hearing under section
6330 is requested, pending, or completed and no
payment is required.
(m) Disclosure of taxpayer identity information.--
(1) Tax refunds.--The Secretary may disclose taxpayer
identity information to the press and other media for
purposes of notifying persons entitled to tax refunds
when the Secretary, after reasonable effort and lapse
of time, has been unable to locate such persons.
(2) Federal claims.--
(A) In general.--Except as provided in
subparagraph (B), the Secretary may, upon
written request, disclose the mailing address
of a taxpayer for use by officers, employees,
or agents of a Federal agency for purposes of
locating such taxpayer to collect or compromise
a Federal claim against the taxpayer in
accordance with sections 3711, 3717, and 3718
of title 31.
(B) Special rule for consumer reporting
agency.--In the case of an agent of a Federal
agency which is a consumer reporting agency
(within the meaning of section 603(f) of the
Fair Credit Reporting Act (15 U.S.C.
1681a(f))), the mailing address of a taxpayer
may be disclosed to such agent under
subparagraph (A) only for the purpose of
allowing such agent to prepare a commercial
credit report on the taxpayer for use by such
Federal agency in accordance with sections
3711, 3717, and 3718 of title 31.
(3) National Institute for Occupational Safety and
Health.--Upon written request, the Secretary may
disclose the mailing address of taxpayers to officers
and employees of the National Institute for
Occupational Safety and Health solely for the purpose
of locating individuals who are, or may have been,
exposed to occupational hazards in order to determine
the status of their health or to inform them of the
possible need for medical care and treatment.
(4) Individuals who owe an overpayment of Federal
Pell Grants or who have defaulted on student loans
administered by the Department of Education.--
(A) In general.--Upon written request by the
Secretary of Education, the Secretary may
disclose the mailing address of any taxpayer--
(i) who owes an overpayment of a
grant awarded to such taxpayer under
subpart 1 of part A of title IV of the
Higher Education Act of 1965, or
(ii) who has defaulted on a loan--
(I) made under part B, D, or
E of title IV of the Higher
Education Act of 1965, or
(II) made pursuant to section
3(a)(1) of the Migration and
Refugee Assistance Act of 1962
to a student at an institution
of higher education,
for use only by officers, employees, or agents
of the Department of Education for purposes of
locating such taxpayer for purposes of
collecting such overpayment or loan.
(B) Disclosure to educational institutions,
etc..--Any mailing address disclosed under
subparagraph (A)(i) may be disclosed by the
Secretary of Education to--
(i) any lender, or any State or
nonprofit guarantee agency, which is
participating under part B or D of
title IV of the Higher Education Act of
1965, or
(ii) any educational institution with
which the Secretary of Education has an
agreement under subpart 1 of part A, or
part D or E, of title IV of such Act,
for use only by officers, employees, or agents
of such lender, guarantee agency, or
institution whose duties relate to the
collection of student loans for purposes of
locating individuals who have defaulted on
student loans made under such loan programs for
purposes of collecting such loans.
(5) Individuals who have defaulted on student loans
administered by the Department of Health and Human
Services.--
(A) In general.--Upon written request by the
Secretary of Health and Human Services, the
Secretary may disclose the mailing address of
any taxpayer who has defaulted on a loan made
under part C 1 of title VII of the
Public Health Service Act or under subpart II
of part B of title VIII of such Act, for use
only by officers, employees, or agents of the
Department of Health and Human Services for
purposes of locating such taxpayer for purposes
of collecting such loan.
(B) Disclosure to schools and eligible
lenders.--Any mailing address disclosed under
subparagraph (A) may be disclosed by the
Secretary of Health and Human Services to--
(i) any school with which the
Secretary of Health and Human Services
has an agreement under subpart II
1 of part C of title VII of
the Public Health Service Act or
subpart II 1 of part B of
title VIII of such Act, or
(ii) any eligible lender (within the
meaning of section 737(4) 1
of such Act) participating under
subpart I 1 of part C of
title VII of such Act,
for use only by officers, employees, or agents
of such school or eligible lender whose duties
relate to the collection of student loans for
purposes of locating individuals who have
defaulted on student loans made under such
subparts for the purposes of collecting such
loans.
(6) Blood Donor Locator Service.--
(A) In general.--Upon written request
pursuant to section 1141 of the Social Security
Act, the Secretary shall disclose the mailing
address of taxpayers to officers and employees
of the Blood Donor Locator Service in the
Department of Health and Human Services.
(B) Restriction on disclosure.--The Secretary
shall disclose return information under
subparagraph (A) only for purposes of, and to
the extent necessary in, assisting under the
Blood Donor Locator Service authorized persons
(as defined in section 1141(h)(1) of the Social
Security Act) in locating blood donors who, as
indicated by donated blood or products derived
therefrom or by the history of the subsequent
use of such blood or blood products, have or
may have the virus for acquired immune
deficiency syndrome, in order to inform such
donors of the possible need for medical care
and treatment.
(C) Safeguards.--The Secretary shall destroy
all related blood donor records (as defined in
section 1141(h)(2) of the Social Security Act)
in the possession of the Department of the
Treasury upon completion of their use in making
the disclosure required under subparagraph (A),
so as to make such records undisclosable.
(7) Social security account statement furnished by
Social Security Administration.--Upon written request
by the Commissioner of Social Security, the Secretary
may disclose the mailing address of any taxpayer who is
entitled to receive a social security account statement
pursuant to section 1143(c) of the Social Security Act,
for use only by officers, employees or agents of the
Social Security Administration for purposes of mailing
such statement to such taxpayer.
(n) Certain other persons.--Pursuant to regulations
prescribed by the Secretary, returns and return information may
be disclosed to any person, including any person described in
section 7513(a), to the extent necessary in connection with the
processing, storage, transmission, and reproduction of such
returns and return information, the programming, maintenance,
repair, testing, and procurement of equipment, and the
providing of other services, for purposes of tax
administration.
(o) Disclosure of returns and return information with respect
to certain taxes.--
(1) Taxes imposed by subtitle E.--
(A) In general.--Returns and return
information with respect to taxes imposed by
subtitle E (relating to taxes on alcohol,
tobacco, [and firearms] firearms, and cannabis
products) shall be open to inspection by or
disclosure to officers and employees of a
Federal agency whose official duties require
such inspection or disclosure.
(B) Use in certain proceedings.--Returns and
return information disclosed to a Federal
agency under subparagraph (A) may be used in an
action or proceeding (or in preparation for
such action or proceeding) brought under
section 625 of the American Jobs Creation Act
of 2004 for the collection of any unpaid
assessment or penalty arising under such Act.
(2) Taxes imposed by chapter 35.--Returns and return
information with respect to taxes imposed by chapter 35
(relating to taxes on wagering) shall, notwithstanding
any other provision of this section, be open to
inspection by or disclosure only to such person or
persons and for such purpose or purposes as are
prescribed by section 4424.
(3) Taxes imposed by section 4481.--Returns and
return information with respect to taxes imposed by
section 4481 shall be open to inspection by or
disclosure to officers and employees of United States
Customs and Border Protection of the Department of
Homeland Security whose official duties require such
inspection or disclosure for purposes of administering
such section.
(p) Procedure and recordkeeping.--
(1) Manner, time, and place of inspections.--Requests
for the inspection or disclosure of a return or return
information and such inspection or disclosure shall be
made in such manner and at such time and place as shall
be prescribed by the Secretary.
(2) Procedure.--
(A) Reproduction of returns.--A reproduction
or certified reproduction of a return shall,
upon written request, be furnished to any
person to whom disclosure or inspection of such
return is authorized under this section. A
reasonable fee may be prescribed for furnishing
such reproduction or certified reproduction.
(B) Disclosure of return information.--Return
information disclosed to any person under the
provisions of this title may be provided in the
form of written documents, reproductions of
such documents, films or photoimpressions, or
electronically produced tapes, disks, or
records, or by any other mode or means which
the Secretary determines necessary or
appropriate. A reasonable fee may be prescribed
for furnishing such return information.
(C) Use of reproductions.--Any reproduction
of any return, document, or other matter made
in accordance with this paragraph shall have
the same legal status as the original, and any
such reproduction shall, if properly
authenticated, be admissible in evidence in any
judicial or administrative proceeding as if it
were the original, whether or not the original
is in existence.
(3) Records of inspection and disclosure.--
(A) System of recordkeeping.--Except as
otherwise provided by this paragraph, the
Secretary shall maintain a permanent system of
standardized records or accountings of all
requests for inspection or disclosure of
returns and return information (including the
reasons for and dates of such requests) and of
returns and return information inspected or
disclosed under this section and section
6104(c). Notwithstanding the provisions of
section 552a(c) of title 5, United States Code,
the Secretary shall not be required to maintain
a record or accounting of requests for
inspection or disclosure of returns and return
information, or of returns and return
information inspected or disclosed, under the
authority of subsection (c), (e), (f)(5),
(h)(1), (3)(A), or (4), (i)(4), or (8)(A)(ii),
(k)(1), (2), (6), (8), or (9), (l)(1), (4)(B),
(5), (7), (8), (9), (10), (11), (12),
(13)(D)(iv), (13)(D)(v), (13)(D)(vi) (14),
(15), (16), (17), or (18), (m), or (n). The
records or accountings required to be
maintained under this paragraph shall be
available for examination by the Joint
Committee on Taxation or the Chief of Staff of
such joint committee. Such record or accounting
shall also be available for examination by such
person or persons as may be, but only to the
extent, authorized to make such examination
under section 552a(c)(3) of title 5, United
States Code.
(B) Report by the Secretary.--The Secretary
shall, within 90 days after the close of each
calendar year, furnish to the Joint Committee
on Taxation a report with respect to, or
summary of, the records or accountings
described in subparagraph (A) in such form and
containing such information as such joint
committee or the Chief of Staff of such joint
committee may designate. Such report or summary
shall not, however, include a record or
accounting of any request by the President
under subsection (g) for, or the disclosure in
response to such request of, any return or
return information with respect to any
individual who, at the time of such request,
was an officer or employee of the executive
branch of the Federal Government. Such report
or summary, or any part thereof, may be
disclosed by such joint committee to such
persons and for such purposes as the joint
committee may, by record vote of a majority of
the members of the joint committee, determine.
(C) Public report on disclosures.--The
Secretary shall, within 90 days after the close
of each calendar year, furnish to the Joint
Committee on Taxation for disclosure to the
public a report with respect to the records or
accountings described in subparagraph (A)
which--
(i) provides with respect to each
Federal agency, each agency, body, or
commission described in subsection (d),
(i)(3)(B)(i) or (7)(A)(ii), or (l)(6),
and the Government Accountability
Office the number of--
(I) requests for disclosure
of returns and return
information,
(II) instances in which
returns and return information
were disclosed pursuant to such
requests or otherwise,
(III) taxpayers whose
returns, or return information
with respect to whom, were
disclosed pursuant to such
requests, and
(ii) describes the general purposes
for which such requests were made.
(4) Safeguards.--Any Federal agency described in
subsection (h)(2), (h)(5), (i)(1), (2), (3), (5), or
(7), (j)(1), (2), or (5), (k)(8), (10), (11), or (15),
(l)(1), (2), (3), (5), (10), (11), (13)(A), (13)(B),
(13)(C), (13)(D)(i), (14), (17), or (22), (o)(1)(A), or
(o)(3), the Government Accountability Office, the
Congressional Budget Office, or any agency, body, or
commission described in subsection (d), (i)(1)(C),
(3)(B)(i), or (7)(A)(ii), or (k)(10), (l)(6), (7), (8),
(9), (12), (15), or (16), any appropriate State officer
(as defined in section 6104(c)), or any other person
described in subsection (k)(10) or (15), subsection
(l)(10), (13)(A), (13)(B), (13)(C), (13)(D)(i), (16),
(18), (19), or (20), or any entity described in
subsection (l)(21), shall, as a condition for receiving
returns or return information--
(A) establish and maintain, to the
satisfaction of the Secretary, a permanent
system of standardized records with respect to
any request, the reason for such request, and
the date of such request made by or of it and
any disclosure of return or return information
made by or to it;
(B) establish and maintain, to the
satisfaction of the Secretary, a secure area or
place in which such returns or return
information shall be stored;
(C) restrict, to the satisfaction of the
Secretary, access to the returns or return
information only to persons whose duties or
responsibilities require access and to whom
disclosure may be made under the provisions of
this title;
(D) provide such other safeguards which the
Secretary determines (and which he prescribes
in regulations) to be necessary or appropriate
to protect the confidentiality of the returns
or return information;
(E) furnish a report to the Secretary, at
such time and containing such information as
the Secretary may prescribe, which describes
the procedures established and utilized by such
agency, body, or commission, the Government
Accountability Office, or the Congressional
Budget Office for ensuring the confidentiality
of returns and return information required by
this paragraph; and
(F) upon completion of use of such returns or
return information--
(i) in the case of an agency, body,
or commission described in subsection
(d), (i)(3)(B)(i), (k)(10), or (l)(6),
(7), (8), (9), or (16), any appropriate
State officer (as defined in section
6104(c)), or any other person described
in subsection (k)(10) or (15) or
subsection (l)(10), (13)(A), (13)(B),
(13)(C), (13)(D)(i), (16), (18), (19),
or (20) return to the Secretary such
returns or return information (along
with any copies made therefrom) or make
such returns or return information
undisclosable in any manner and furnish
a written report to the Secretary
describing such manner,
(ii) in the case of an agency
described in subsection (h)(2), (h)(5),
(i)(1), (2), (3), (5) or (7), (j)(1),
(2), or (5), (k)(8), (10), (11), or
(15), (l)(1), (2), (3), (5), (10),
(11), (12), (13)(A), (13)(B), (13)(C),
(13)(D)(i), (14), (15), (17), or
(22),,2 (o)(1)(A), or (o)(3)
or any entity described in subsection
(l)(21), the Government Accountability
Office, or the Congressional Budget
Office, either--
(I) return to the Secretary
such returns or return
information (along with any
copies made therefrom),
(II) otherwise make such
returns or return information
undisclosable, or
(III) to the extent not so
returned or made undisclosable,
ensure that the conditions of
subparagraphs (A), (B), (C),
(D), and (E) of this paragraph
continue to be met with respect
to such returns or return
information, and
(iii) in the case of the Department
of Health and Human Services for
purposes of subsection (m)(6), destroy
all such return information upon
completion of its use in providing the
notification for which the information
was obtained, so as to make such
information undisclosable;
except that the conditions of subparagraphs (A), (B),
(C), (D), and (E) shall cease to apply with respect to
any return or return information if, and to the extent
that, such return or return information is disclosed in
the course of any judicial or administrative proceeding
and made a part of the public record thereof. If the
Secretary determines that any such agency, body, or
commission, including an agency, an appropriate State
officer (as defined in section 6104(c)), or any other
person described in subsection (k)(10) or (15) or
subsection (l)(10), (13)(A), (13)(B), (13)(C),
(13)(D)(i), (16), (18), (19), or (20) or any entity
described in subsection (l)(21), or the Government
Accountability Office or the Congressional Budget
Office, has failed to, or does not, meet the
requirements of this paragraph, he may, after any
proceedings for review established under paragraph (7),
take such actions as are necessary to ensure such
requirements are met, including refusing to disclose
returns or return information to such agency, body, or
commission, including an agency, an appropriate State
officer (as defined in section 6104(c)), or any other
person described in subsection (k)(10) or (15) or
subsection (l)(10), (13)(A), (13)(B), (13)(C),
(13)(D)(i), (16), (18), (19), or (20) or any entity
described in subsection (l)(21), or the Government
Accountability Office or the Congressional Budget
Office, until he determines that such requirements have
been or will be met. In the case of any agency which
receives any mailing address under paragraph (2), (4),
(6), or (7) of subsection (m) and which discloses any
such mailing address to any agent or which receives any
information under paragraph (6)(A), (10), (12)(B), or
(16) of subsection (l) and which discloses any such
information to any agent, or any person including an
agent described in subsection (l)(10), (13)(A),
(13)(B), (13)(C), (13)(D)(i), or (16), this paragraph
shall apply to such agency and each such agent or other
person (except that, in the case of an agent, or any
person including an agent described in subsection
(l)(10), (13)(A), (13)(B), (13)(C), (13)(D)(i), or
(16), any report to the Secretary or other action with
respect to the Secretary shall be made or taken through
such agency). For purposes of applying this paragraph
in any case to which subsection (m)(6) applies, the
term ``return information'' includes related blood
donor records (as defined in section 1141(h)(2) of the
Social Security Act).
(5) Report on procedures and safeguards.--After the
close of each calendar year, the Secretary shall
furnish to each committee described in subsection
(f)(1) a report which describes the procedures and
safeguards established and utilized by such agencies,
bodies, or commissions, the Government Accountability
Office, and the Congressional Budget Office for
ensuring the confidentiality of returns and return
information as required by this subsection. Such report
shall also describe instances of deficiencies in, and
failure to establish or utilize, such procedures.
(6) Audit of procedures and safeguards.--
(A) Audit by Comptroller General.--The
Comptroller General may audit the procedures
and safeguards established by such agencies,
bodies, or commissions and the Congressional
Budget Office pursuant to this subsection to
determine whether such safeguards and
procedures meet the requirements of this
subsection and ensure the confidentiality of
returns and return information. The Comptroller
General shall notify the Secretary before any
such audit is conducted.
(B) Records of inspection and reports by the
Comptroller General.--The Comptroller General
shall--
(i) maintain a permanent system of
standardized records and accountings of
returns and return information
inspected by officers and employees of
the Government Accountability Office
under subsection (i)(8)(A)(ii) and
shall, within 90 days after the close
of each calendar year, furnish to the
Secretary a report with respect to, or
summary of, such records or accountings
in such form and containing such
information as the Secretary may
prescribe, and
(ii) furnish an annual report to each
committee described in subsection (f)
and to the Secretary setting forth his
findings with respect to any audit
conducted pursuant to subparagraph (A).
The Secretary may disclose to the Joint
Committee any report furnished to him under
clause (i).
(7) Administrative review.--The Secretary shall by
regulations prescribe procedures which provide for
administrative review of any determination under
paragraph (4) that any agency, body, or commission
described in subsection (d) has failed to meet the
requirements of such paragraph.
(8) State law requirements.--
(A) Safeguards.--Notwithstanding any other
provision of this section, no return or return
information shall be disclosed after December
31, 1978, to any officer or employee of any
State which requires a taxpayer to attach to,
or include in, any State tax return a copy of
any portion of his Federal return, or
information reflected on such Federal return,
unless such State adopts provisions of law
which protect the confidentiality of the copy
of the Federal return (or portion thereof)
attached to, or the Federal return information
reflected on, such State tax return.
(B) Disclosure of returns or return
information in State returns.--Nothing in
subparagraph (A) shall be construed to prohibit
the disclosure by an officer or employee of any
State of any copy of any portion of a Federal
return or any information on a Federal return
which is required to be attached or included in
a State return to another officer or employee
of such State (or political subdivision of such
State) if such disclosure is specifically
authorized by State law.
(q) Regulations.--The Secretary is authorized to prescribe
such other regulations as are necessary to carry out the
provisions of this section.
* * * * * * *
Subtitle I--Trust Fund Code
* * * * * * *
CHAPTER 98--TRUST FUND CODE
* * * * * * *
Subchapter A--ESTABLISHMENT OF TRUST FUNDS
Sec. 9501. Black Lung Disability Trust Fund.
* * * * * * *
Sec. 9512. Establishment of Opportunity Trust Fund.
* * * * * * *
SEC. 9512. ESTABLISHMENT OF OPPORTUNITY 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
``Opportunity Trust Fund'' (referred to in this section as the
``Trust Fund''), consisting of such amounts as may be
appropriated or credited to such fund as provided in this
section or section 9602(b).
(b) Transfers to Trust Fund.--There are hereby appropriated
to the Trust Fund amounts equivalent to the net revenues
received in the Treasury from the taxes imposed under chapter
56.
(c) Expenditures.--Amounts in the Trust Fund shall be
available, without further appropriation, only as follows:
(1) 50 percent to the Attorney General to carry out
section 3052(a) of part OO of the Omnibus Crime Control
and Safe Streets Act of 1968.
(2) 10 percent to the Attorney General to carry out
section 3052(b) of part OO of the Omnibus Crime Control
and Safe Streets Act of 1968.
(3) 20 percent to the Administrator of the Small
Business Administration to carry out section 6(b)(1) of
the Marijuana Opportunity Reinvestment and Expungement
Act.
(4) 20 percent to the Administrator of the Small
Business Administration to carry out section 6(b)(2) of
the Marijuana Opportunity Reinvestment and Expungement
Act.
* * * * * * *
----------
OMNIBUS CRIME CONTROL AND SAFE STREETS ACT OF 1968
* * * * * * *
TITLE I--JUSTICE SYSTEM IMPROVEMENT
Part A--Office of Justice Programs
* * * * * * *
SEC. 110. CANNABIS JUSTICE OFFICE.
(a) Establishment.--There is established within the Office of
Justice Programs a Cannabis Justice Office.
(b) Director.--The Cannabis Justice Office shall be headed by
a Director who shall be appointed by the Assistant Attorney
General for the Office of Justice Programs. The Director shall
report to the Assistant Attorney General for the Office of
Justice Programs. The Director shall award grants and may enter
into compacts, cooperative agreements, and contracts on behalf
of the Cannabis Justice Office. The Director may not engage in
any employment other than that of serving as the Director, nor
may the Director hold any office in, or act in any capacity
for, any organization, agency, or institution with which the
Office makes any contract or other arrangement.
(c) Employees.--
(1) In general.--The Director shall employ as many
full-time employees as are needed to carry out the
duties and functions of the Cannabis Justice Office
under subsection (d). Such employees shall be
exclusively assigned to the Cannabis Justice Office.
(2) Initial hires.--Not later than 6 months after the
date of enactment of this section, the Director shall--
(A) hire no less than one-third of the total
number of employees of the Cannabis Justice
Office; and
(B) no more than one-half of the employees
assigned to the Cannabis Justice Office by term
appointment that may after 2 years be converted
to career appointment.
(3) Legal counsel.--At least one employee hired for
the Cannabis Justice Office shall serve as legal
counsel to the Director and shall provide counsel to
the Cannabis Justice Office.
(d) Duties and Functions.--The Cannabis Justice Office is
authorized to--
(1) administer the Community Reinvestment Grant
Program; and
(2) perform such other functions as the Assistant
Attorney General for the Office of Justice Programs may
delegate, that are consistent with the statutory
obligations of this section.
* * * * * * *
PART OO--CRISIS STABILIZATION AND COMMUNITY REENTRY PROGRAM.
* * * * * * *
PART PP--COMMUNITY REINVESTMENT GRANT PROGRAM
SEC. 3056. AUTHORIZATION.
(a) In General.--The Director of the Cannabis Justice Office
shall establish and carry out a grant program, known as the
``Community Reinvestment Grant Program'', to provide eligible
entities with funds to administer services for individuals
adversely impacted by the War on Drugs, including--
(1) job training;
(2) reentry services;
(3) legal aid for civil and criminal cases, including
expungement of cannabis convictions;
(4) literacy programs;
(5) youth recreation or mentoring programs; and
(6) health education programs.
(b) Substance Use Disorder Services.--The Director, in
consultation with the Secretary of Health and Human Services,
shall provide eligible entities with funds to administer
substance use disorder services for individuals adversely
impacted by the War on Drugs or connect patients with substance
use disorder services. Also eligible for such services are
individuals who have been arrested for or convicted of the
sale, possession, use, manufacture, or cultivation of a
controlled substance other than cannabis (except for a
conviction involving distribution to a minor).
SEC. 3057. FUNDING FROM OPPORTUNITY TRUST FUND.
The Director shall carry out the program under this part
using funds made available under section 9512(c)(1) and (2) of
the Internal Revenue Code.
SEC. 3058. DEFINITIONS.
In this part:
(1) The term ``cannabis conviction'' means a
conviction, or adjudication of juvenile delinquency,
for a cannabis offense (as such term is defined in
section 13 of the Marijuana Opportunity Reinvestment
and Expungement Act).
(2) The term ``eligible entity'' means a nonprofit
organization, as defined in section 501(c)(3) of the
Internal Revenue Code, that is representative of a
community or a significant segment of a community with
experience in providing relevant services to
individuals adversely impacted by the War on Drugs in
that community.
(3) The term ``individuals adversely impacted by the
War on Drugs'' has the meaning given that term in
section 6 of the Marijuana Opportunity Reinvestment and
Expungement Act.
* * * * * * *
----------
SMALL BUSINESS ACT
* * * * * * *
SEC. 3. DEFINITIONS.
(a) Small Business Concerns.--
(1) In general.--For the purposes of this Act, a
small-business concern, including but not limited to
enterprises that are engaged in the business of
production of food and fiber, ranching and raising of
livestock, aquaculture, and all other farming and
agricultural related industries, shall be deemed to be
one which is independently owned and operated and which
is not dominant in its field of operation.
(2) Establishment of size standards.--
(A) In general.--In addition to the criteria
specified in paragraph (1), the Administrator
may specify detailed definitions or standards
by which a business concern may be determined
to be a small business concern for the purposes
of this Act or any other Act.
(B) Additional criteria.--The standards
described in paragraph (1) may utilize number
of employees, dollar volume of business, net
worth, net income, a combination thereof, or
other appropriate factors.
(C) Requirements.--Unless specifically
authorized by statute, no Federal department or
agency may prescribe a size standard for
categorizing a business concern as a small
business concern, unless such proposed size
standard--
(i) is proposed after an opportunity
for public notice and comment;
(ii) provides for determining--
(I) the size of a
manufacturing concern as
measured by the manufacturing
concern's average employment
based upon employment during
each of the manufacturing
concern's pay periods for the
preceding 12 months;
(II) the size of a business
concern providing services on
the basis of the annual average
gross receipts of the business
concern over a period of not
less than 5 years;
(III) the size of other
business concerns on the basis
of data over a period of not
less than 3 years; or
(IV) other appropriate
factors; and
(iii) is approved by the
Administrator.
(3) Variation by industry and consideration of other
factors.--When establishing or approving any size
standard pursuant to paragraph (2), the Administrator
shall ensure that the size standard varies from
industry to industry to the extent necessary to reflect
the differing characteristics of the various industries
and consider other factors deemed to be relevant by the
Administrator.
(4) Exclusion of certain security expenses from
consideration for purpose of small business size
standards.--
(A) Determination required.--Not later than
30 days after the date of enactment of this
paragraph, the Administrator shall review the
application of size standards established
pursuant to paragraph (2) to small business
concerns that are performing contracts in
qualified areas and determine whether it would
be fair and appropriate to exclude from
consideration in the average annual gross
receipts of such small business concerns any
payments made to such small business concerns
by Federal agencies to reimburse such small
business concerns for the cost of subcontracts
entered for the sole purpose of providing
security services in a qualified area.
(B) Action required.--Not later than 60 days
after the date of enactment of this paragraph,
the Administrator shall either--
(i) initiate an adjustment to the
size standards, as described in
subparagraph (A), if the Administrator
determines that such an adjustment
would be fair and appropriate; or
(ii) provide a report to the
Committee on Small Business and
Entrepreneurship of the Senate and the
Committee on Small Business of the
House of Representatives explaining in
detail the basis for the determination
by the Administrator that such an
adjustment would not be fair and
appropriate.
(C) Qualified areas.--In this paragraph, the
term ``qualified area'' means--
(i) Iraq,
(ii) Afghanistan, and
(iii) any foreign country which
included a combat zone, as that term is
defined in section 112(c)(2) of the
Internal Revenue Code of 1986, at the
time of performance of the relevant
Federal contract or subcontract.
(5) Alternative Size Standard.--
(A) In general.--The Administrator shall
establish an alternative size standard for
applicants for business loans under section
7(a) and applicants for development company
loans under title V of the Small Business
Investment Act of 1958 (15 U.S.C. 695 et seq.),
that uses maximum tangible net worth and
average net income as an alternative to the use
of industry standards.
(B) Interim rule.--Until the date on which
the alternative size standard established under
subparagraph (A) is in effect, an applicant for
a business loan under section 7(a) or an
applicant for a development company loan under
title V of the Small Business Investment Act of
1958 may be eligible for such a loan if--
(i) the maximum tangible net worth of
the applicant is not more than
$15,000,000; and
(ii) the average net income after
Federal income taxes (excluding any
carry-over losses) of the applicant for
the 2 full fiscal years before the date
of the application is not more than
$5,000,000.
(6) Proposed rulemaking.--In conducting rulemaking to
revise, modify or establish size standards pursuant to
this section, the Administrator shall consider, and
address, and make publicly available as part of the
notice of proposed rulemaking and notice of final rule
each of the following:
(A) a detailed description of the industry
for which the new size standard is proposed;
(B) an analysis of the competitive
environment for that industry;
(C) the approach the Administrator used to
develop the proposed standard including the
source of all data used to develop the proposed
rule making; and
(D) the anticipated effect of the proposed
rulemaking on the industry, including the
number of concerns not currently considered
small that would be considered small under the
proposed rule making and the number of concerns
currently considered small that would be deemed
other than small under the proposed rulemaking.
(7) Common size standards.--In carrying out this
subsection, the Administrator may establish or approve
a single size standard for a grouping of 4-digit North
American Industry Classification System codes only if
the Administrator makes publicly available, not later
than the date on which such size standard is
established or approved, a justification demonstrating
that such size standard is appropriate for each
individual industry classification included in the
grouping.
(8) Number of size standards.--The Administrator
shall not limit the number of size standards
established pursuant to paragraph (2), and shall assign
the appropriate size standard to each North American
Industry Classification System Code.
(9) Petitions for reconsideration of size
standards.--
(A) In general.--A person may file a petition
for reconsideration with the Office of Hearings
and Appeals (as established under section 5(i))
of a size standard revised, modified, or
established by the Administrator pursuant to
this subsection.
(B) Time limit.--A person filing a petition
for reconsideration described in subparagraph
(A) shall file such petition not later than 30
days after the publication in the Federal
Register of the notice of final rule to revise,
modify, or establish size standards described
in paragraph (6).
(C) Process for agency review.--The Office of
Hearings and Appeals shall use the same process
it uses to decide challenges to the size of a
small business concern to decide a petition for
review pursuant to this paragraph.
(D) Judicial review.--The publication of a
final rule in the Federal Register described in
subparagraph (B) shall be considered final
agency action for purposes of seeking judicial
review. Filing a petition for reconsideration
under subparagraph (A) shall not be a condition
precedent to judicial review of any such size
standard.
(E) Rules or guidance.--The Office of
Hearings and Appeals shall begin accepting
petitions for reconsideration described in
subparagraph (A) after the date on which the
Administration issues a rule or other guidance
implementing this paragraph. Notwithstanding
the provisions of subparagraph (B), petitions
for reconsideration of size standards revised,
modified, or established in a Federal Register
final rule published between November 25, 2015,
and the effective date of such rule or other
guidance shall be considered timely if filed
within 30 days of such effective date.
(b) For purposes of this Act, any reference to an agency or
department of the United States, and the term ``Federal
agency,'' shall have the meaning given the term ``agency'' by
section 551(1) of title 5, United States Code, but does not
include the United States Postal Service or the General
Accounting Office.
(c)(1) For purposes of this Act, a qualified employee trust
shall be eligible for any loan guarantee under section 7(a)
with respect to a small business concern on the same basis as
if such trust were the same legal entity as such concern.
(2) For purposes of this Act, the term ``qualified employee
trust'' means, with respect to a small business concern, a
trust--
(A) which forms part of an employee stock ownership
plan (as defined in section 4975(e)(7) of the Internal
Revenue Code of 1954)--
(i) which is maintained by such concern, and
(ii) which provides that each participant is
entitled to direct the plan trustee as to the
manner of how to vote the qualified employer
securities (as defined in section 4975(e)(8) of
the Internal Revenue Code of 1986), which are
allocated to the account of such participant
with respect to a corporate matter which (by
law or charter) must be decided by a vote
conducted in accordance with section 409(e) of
the Internal Revenue Code of 1986; and
(B) in the case of any loan guarantee under section
7(a), the trustee of which enters into an agreement
with the Administrator of which enters into an
agreement with the Administrator which is binding on
the trust and no such small business concern and which
provides that--
(i) the loan guaranteed under section 7(a)
shall be used solely for the purchase of
qualifying employer securities of such concern.
(ii) all funds acquired by the concern in
such purchase shall be used by such concern
solely for the purposes for which such loan was
guaranteed,
(iii) such concern will provide such funds as
may be necessary for the timely repayment of
such loan, and the property of such concern
shall be available as security for repayment of
such loan, and
(iv) all qualifying employer securities
acquired by such trust in such purchase shall
be allocated to the accounts of participants in
such plan who are entitled to share in such
allocation, and each participant has a
nonforfeitable right, not later than the date
such loan is repaid, to all such qualifying
employer securities which are so allocated to
the participant's account.
(3) Under regulations which may be prescribed by the
Administrator, a trust may be treated as a qualified employee
trust with respect to a small business concern if--
(A) the trust is maintained by an employee
organization which represents at least 51 percent of
the employee of such concern, and
(B) such concern maintains a plan--
(i) which is an employee benefit plan which
is designed to invest primarily in qualifying
employer securities (as defined in section
4975(e)(8) of the Internal Revenue Code of
1954).
(ii) which provides that each participant in
the plan is entitled to direct the plan as to
the manner in which voting rights under
qualifying employer securities which are
allocated to the account of such participant
are to be exercised with respect to a corporate
matter which (by law or charter) must be
decided by a majority vote of the outstanding
common shares voted,
(iii) which provides that each participant
who is entitled to distribution from the plan
has a right, in the case of qualifying employer
securities which are not readily tradable on an
established market, to require that the concern
repurchase such securities under a fair
valuation formula, and
(iv) which meets such other requirements
(similar to requirements applicable to employee
ownership plans as defined in section
4975(e)(7) of the Internal Revenue Code of
1954) as the Administrator may prescribe, and
(C) in the case of a loan guarantee under section
7(a), such organization enters into an agreement with
the Administration which is described in paragraph
(2)(B).
(d) For purposes of section 7 of this Act, the term
``qualified Indian tribe'' means an Indian tribe as defined in
section 4(a) of the Indian Self-Determination and Education
Assistance Act, which owns and controls 100 per centum of a
small business concern.
(e) For purposes of section 7 of this Act, the term ``public
or private organization for the handicapped'' means one--
(1) which is organized under the laws of the United
States or of any State, operated in the interest of
handicapped individuals, the net income of which does
not insure in whole or in part to the benefit of any
shareholder or other individual;
(2) which complies with any applicable occupational
health and safety standard prescribed by the Secretary
of Labor; and
(3) which, in the production of commodities and in
the provision of services during any fiscal year in
which it received financial assistance under this
subsection, employs handicapped individuals for not
less than 75 per centum of the man-hours required for
the production or provision of the commodities or
services.
(f) For purposes of section 7 of this Act, the term
``handicapped individual'' means an individual--
(1) who has a physical, mental, or emotional
impairment, defect, ailment, disease, or disability of
a permanent nature which in any way limits the
selection of any type of employment for which the
person would otherwise be qualified or qualifiable; or
(2) who is a service-disabled veteran.
(g) For purposes of section 7 of this Act, the term ``energy
measures'' includes--
(1) solar thermal energy equipment which is either of
the active type based upon mechanically forced energy
transfer or of the passive type based on convective,
conductive, or radiant energy transfer or some
combination equipment;
(2) photovoltaic cells and related equipment;
(3) a product or service the primary purpose of which
is conservation of energy through devices or techniques
which increase the energy through devices or techniques
which increase the energy efficiency of existing
equipment, methods of operation, or systems which use
fossil fuels, and which is on the Energy Conservation
Measures list of the Secretary of Energy or which the
Administrator determines to be consistent with the
intent of this subsection;
(4) equipment the primary purpose of which is
production of energy from wood, biological waste,
grain, or other biomass source of energy;
(5) equipment the primary purpose of which is
industrial cogeneration of energy, district heating, or
production of energy from industrial waste;
(6) hydroelectric power equipment;
(7) wind energy conversion equipment; and
(8) engineering, architectural, consulting, or other
professional services which are necessary or
appropriate to aid citizens in using any of the
measures described in paragraph (1) through (7).
(h) The term ``credit elsewhere'' means--
(1) for the purposes of this Act (except as used in
section 7(b)), the availability of credit on reasonable
terms and conditions to the individual loan applicant
from non-Federal, non-State, or non-local government
sources, considering factors associated with
conventional lending practices, including--
(A) the business industry in which the loan
applicant operates;
(B) whether the loan applicant is an
enterprise that has been in operation for a
period of not more than 2 years;
(C) the adequacy of the collateral available
to secure the requested loan;
(D) the loan term necessary to reasonably
assure the ability of the loan applicant to
repay the debt from the actual or projected
cash flow of the business; and
(E) any other factor relating to the
particular credit application, as documented in
detail by the lender, that cannot be overcome
except through obtaining a Federal loan
guarantee under prudent lending standards; and
(2) for the purposes of section 7(b), the
availability of credit on reasonable terms and
conditions from non-Federal sources taking into
consideration the prevailing rates and terms in the
community in or near where the applicant business
concern transacts business, or the applicant homeowner
resides, for similar purposes and periods of time.
(i) For purposes of section 7 of this Act, the term
``homeowners'' includes owners and lessees of residential
property and also includes personal property.
(j) For the purposes of this Act, the term ``small
agricultural cooperative'' means an association (corporate or
otherwise) acting pursuant to the provisions of the
Agricultural Marketing Act (12 U.S.C. 1141j), whose size does
not exceed the size standard established by the Administration
for other similar agricultural small business concerns. In
determining such size, the Administration shall regard the
association as a business concern and shall not include the
income or employees of any member shareholder of such
cooperative.
(k)(1) For the purposes of this Act, the term ``disaster''
means a sudden event which causes severe damage including, but
not limited to, floods, hurricanes, tornadoes, earthquakes,
fires, explosions, volcanoes, windstorms, landslides or
mudslides, tidal waves, commercial fishery failures or fishery
resource disasters (as determined by the Secretary of Commerce
under section 308(b) of the Interjurisdictional Fisheries Act
of 1986), ocean conditions resulting in the closure of
customary fishing waters, riots, civil disorders or other
catastrophes, except it does not include economic dislocations.
(2) For purposes of section 7(b)(2), the term ``disaster''
includes--
(A) drought;
(B) below average water levels in the Great Lakes, or
on any body of water in the United States that supports
commerce by small business concerns; and
(C) ice storms and blizzards.
(l) For purposes of this Act--
(1) the term ``computer crime'' means''--
(A) any crime committed against a small
business concern by means of the use of a
computer; and
(B) any crime involving the illegal use of,
or tampering with, a computer owned or utilized
by a small business concern.
(m) Definitions Relating to Contracting.--In this Act:
(1) Prime contract.--The term ``prime contract'' has
the meaning given such term in section 8701(4) of title
41, United States Code.
(2) Prime contractor.--The term ``prime contractor''
has the meaning given such term in section 8701(5) of
title 41, United States Code.
(3) Simplified acquisition threshold.--The term
``simplified acquisition threshold'' has the meaning
given such term in section 134 of title 41, United
States Code.
(4) Micro-purchase threshold.--The term ``micro-
purchase threshold'' has the meaning given such term in
section 1902 of title 41, United States Code.
(5) Total purchases and contracts for property and
services.--The term ``total purchases and contracts for
property and services'' shall mean total number and
total dollar amount of contracts and orders for
property and services.
(n) For the purposes of this Act, a small business concern is
a small business concern owned and controlled by women if--
(1) at least 51 percent of small business concern is
owned by one or more women or, in the case of any
publicly owned business, at least 51 percent of the
stock of which is owned by one or more women; and
(2) the management and daily business operations of
the business are controlled by one or more women.
(o) Definitions of Bundling of Contract Requirements and
Related Terms.--In this Act:
(1) Bundled contract.--The term ``bundled contract''
means a contract that is entered into to meet
requirements that are consolidated in a bundling of
contract requirements.
(2) Bundling of contract requirements.--The term
``bundling of contract requirements'' means
consolidating 2 or more procurement requirements for
goods or services previously provided or performed
under separate smaller contracts into a solicitation of
offers for a single contract that is likely to be
unsuitable for award to a small-business concern due
to--
(A) the diversity, size, or specialized
nature of the elements of the performance
specified;
(B) the aggregate dollar value of the
anticipated award;
(C) the geographical dispersion of the
contract performance sites; or
(D) any combination of the factors described
in subparagraphs (A), (B), and (C).
(3) Separate smaller contract.--The term ``separate
smaller contract'', with respect to a bundling of
contract requirements, means a contract that has been
performed by 1 or more small business concerns or was
suitable for award to 1 or more small business
concerns.
(p) Qualified Hubzone Small Business Concern.--In this Act,
the term ``qualified HUBZone small business concern'' has the
meaning given such term in section 31(b).
(q) Definitions Relating to Veterans.--In this Act, the
following definitions apply:
(1) Service-disabled veteran.--The term ``service-
disabled veteran'' means a veteran with a disability
that is service-connected (as defined in section
101(16) of title 38, United States Code).
(2) Small business concern owned and controlled by
service-disabled veterans.--The term ``small business
concern owned and controlled by service-disabled
veterans'' means any of the following:
(A) A small business concern--
(i) not less than 51 percent of which
is owned by one or more service-
disabled veterans or, in the case of
any publicly owned business, not less
than 51 percent of the stock (not
including any stock owned by an ESOP)
of which is owned by one or more
service-disabled veterans; and
(ii) the management and daily
business operations of which are
controlled by one or more service-
disabled veterans or, in the case of a
veteran with permanent and severe
disability, the spouse or permanent
caregiver of such veteran.
(B) A small business concern--
(i) not less than 51 percent of which
is owned by one or more service-
disabled veterans with a disability
that is rated by the Secretary of
Veterans Affairs as a permanent and
total disability who are unable to
manage the daily business operations of
such concern; or
(ii) in the case of a publicly owned
business, not less than 51 percent of
the stock (not including any stock
owned by an ESOP) of which is owned by
one or more such veterans.
(C)(i) During the time period described in
clause (ii), a small business concern that was
a small business concern described in
subparagraph (A) or (B) immediately prior to
the death of a service-disabled veteran who was
the owner of the concern, the death of whom
causes the concern to be less than 51 percent
owned by one or more service-disabled veterans,
if--
(I) the surviving spouse of
the deceased veteran acquires
such veteran's ownership
interest in such concern;
(II) such veteran had a
service-connected disability
(as defined in section 101(16)
of title 38, United States
Code); and
(III) immediately prior to
the death of such veteran, and
during the period described in
clause (ii), the small business
concern is included in the
database described in section
36.
(ii) The time period described in
this clause is the time period
beginning on the date of the veteran's
death and ending on the earlier of--
(I) the date on which the
surviving spouse remarries;
(II) the date on which the
surviving spouse relinquishes
an ownership interest in the
small business concern; or
(III) the date that--
(aa) in the case of a
surviving spouse of a veteran
with a service-connected
disability rated as 100 percent
disabling or who dies as a
result of a service-connected
disability, is 10 years after
the date of the death of the
veteran; or
(bb) in the case of a
surviving spouse of a veteran
with a service-connected
disability rated as less than
100 percent disabling who does
not die as a result of a
service-connected disability,
is 3 years after the date of
the death of the veteran.
(3) Small business concern owned and controlled by
veterans.--The term ``small business concern owned and
controlled by veterans'' means a small business
concern--
(A) not less than 51 percent of which is
owned by one or more veterans or, in the case
of any publicly owned business, not less than
51 percent of the stock of which is owned by
one or more veterans; and
(B) the management and daily business
operations of which are controlled by one or
more veterans.
(4) Veteran.--The term ``veteran'' has the meaning
given the term in section 101(2) of title 38, United
States Code.
(5) Relief from time limitations.--
(A) In general.--Any time limitation on any
qualification, certification, or period of
participation imposed under this Act on any
program that is available to small business
concerns shall be extended for a small business
concern that--
(i) is owned and controlled by--
(I) a veteran who was called
or ordered to active duty under
a provision of law specified in
section 101(a)(13)(B) of title
10, United States Code, on or
after September 11, 2001; or
(II) a service-disabled
veteran who became such a
veteran due to an injury or
illness incurred or aggravated
in the active military, naval,
or air service during a period
of active duty pursuant to a
call or order to active duty
under a provision of law
referred to in subclause (I) on
or after September 11, 2001;
and
(ii) was subject to the time
limitation during such period of active
duty.
(B) Duration.--Upon submission of proper
documentation to the Administrator, the
extension of a time limitation under
subparagraph (A) shall be equal to the period
of time that such veteran who owned or
controlled such a concern was on active duty as
described in that subparagraph.
(C) Exception for programs subject to federal
credit reform act of 1990.--The provisions of
subparagraphs (A) and (B) shall not apply to
any programs subject to the Federal Credit
Reform Act of 1990 (2 U.S.C. 661 et seq.).
(6) ESOP.--The term ``ESOP'' has the meaning given
the term ``employee stock ownership plan'' in section
4975(e)(7) of the Internal Revenue Code of 1986 (26
U.S.C. 4975(e)(7)).
(7) Surviving spouse.--The term ``surviving spouse''
has the meaning given such term in section 101(3) of
title 38, United States Code.
(r) Definitions Relating to Small Business Lending
Companies.--As used in section 23 of this Act:
(1) Small business lending company.--The term ``small
business lending company'' means a business concern
that is authorized by the Administrator to make loans
pursuant to section 7(a) and whose lending activities
are not subject to regulation by any Federal or State
regulatory agency.
(2) Non-federally regulated lender.--The term ``non-
Federally regulated lender'' means a business concern
if--
(A) such concern is authorized by the
Administrator to make loans under section 7;
(B) such concern is subject to regulation by
a State; and
(C) the lending activities of such concern
are not regulated by any Federal banking
authority.
(s) Major Disaster.--In this Act, the term ``major disaster''
has the meaning given that term in section 102 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (42
U.S.C. 5122).
(t) Small Business Development Center.--In this Act, the term
``small business development center'' means a small business
development center described in section 21.
(u) Region of the Administration.--In this Act, the term
``region of the Administration'' means the geographic area
served by a regional office of the Administration established
under section 4(a).
(v) Multiple Award Contract.--In this Act, the term
``multiple award contract'' means--
(1) a multiple award task order contract or delivery
order contract that is entered into under the authority
of sections 303H through 303K of the Federal Property
and Administrative Services Act of 1949 (41 U.S.C. 253h
through 253k); and
(2) any other indefinite delivery, indefinite
quantity contract that is entered into by the head of a
Federal agency with 2 or more sources pursuant to the
same solicitation.
(w) Presumption.--
(1) In general.--In every contract, subcontract,
cooperative agreement, cooperative research and
development agreement, or grant which is set aside,
reserved, or otherwise classified as intended for award
to small business concerns, there shall be a
presumption of loss to the United States based on the
total amount expended on the contract, subcontract,
cooperative agreement, cooperative research and
development agreement, or grant whenever it is
established that a business concern other than a small
business concern willfully sought and received the
award by misrepresentation.
(2) Deemed certifications.--The following actions
shall be deemed affirmative, willful, and intentional
certifications of small business size and status:
(A) Submission of a bid or proposal for a
Federal grant, contract, subcontract,
cooperative agreement, or cooperative research
and development agreement reserved, set aside,
or otherwise classified as intended for award
to small business concerns.
(B) Submission of a bid or proposal for a
Federal grant, contract, subcontract,
cooperative agreement, or cooperative research
and development agreement which in any way
encourages a Federal agency to classify the bid
or proposal, if awarded, as an award to a small
business concern.
(C) Registration on any Federal electronic
database for the purpose of being considered
for award of a Federal grant, contract,
subcontract, cooperative agreement, or
cooperative research agreement, as a small
business concern.
(3) Certification by signature of responsible
official.--
(A) In general.--Each solicitation, bid, or
application for a Federal contract,
subcontract, or grant shall contain a
certification concerning the small business
size and status of a business concern seeking
the Federal contract, subcontract, or grant.
(B) Content of certifications.--A
certification that a business concern qualifies
as a small business concern of the exact size
and status claimed by the business concern for
purposes of bidding on a Federal contract or
subcontract, or applying for a Federal grant,
shall contain the signature of an authorized
official on the same page on which the
certification is contained.
(4) Regulations.--The Administrator shall promulgate
regulations to provide adequate protections to
individuals and business concerns from liability under
this subsection in cases of unintentional errors,
technical malfunctions, and other similar situations.
(x) Annual Certification.--
(1) In general.--Each business certified as a small
business concern under this Act shall annually certify
its small business size and, if appropriate, its small
business status, by means of a confirming entry on the
Online Representations and Certifications Application
database of the Administration, or any successor
thereto.
(2) Regulations.--Not later than 1 year after the
date of enactment of this subsection, the
Administrator, in consultation with the Inspector
General and the Chief Counsel for Advocacy of the
Administration, shall promulgate regulations to ensure
that--
(A) no business concern continues to be
certified as a small business concern on the
Online Representations and Certifications
Application database of the Administration, or
any successor thereto, without fulfilling the
requirements for annual certification under
this subsection; and
(B) the requirements of this subsection are
implemented in a manner presenting the least
possible regulatory burden on small business
concerns.
(y) Policy on Prosecutions of Small Business Size and Status
Fraud.--Not later than 1 year after the date of enactment of
this subsection, the Administrator, in consultation with the
Attorney General, shall issue a Government-wide policy on
prosecution of small business size and status fraud, which
shall direct Federal agencies to appropriately publicize the
policy.
(z) Aquaculture Business Disaster Assistance.--Subject to
section 18(a) and notwithstanding section 18(b)(1), the
Administrator may provide disaster assistance under section
7(b)(2) to aquaculture enterprises that are small businesses.
(aa) Venture Capital Operating Company.--In this Act, the
term ``venture capital operating company'' means an entity
described in clause (i), (v), or (vi) of section 121.103(b)(5)
of title 13, Code of Federal Regulations (or any successor
thereto).
(bb) Hedge Fund.--In this Act, the term ``hedge fund'' has
the meaning given that term in section 13(h)(2) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1851(h)(2)).
(cc) Private Equity Firm.--In this Act, the term ``private
equity firm'' has the meaning given the term ``private equity
fund'' in section 13(h)(2) of the Bank Holding Company Act of
1956 (12 U.S.C. 1851(h)(2)).
(dd) Definitions Pertaining to Subcontracting.--In this Act:
(1) Subcontract.--The term ``subcontract'' means a
legally binding agreement between a contractor that is
already under contract to another party to perform
work, and a third party, hereinafter referred to as the
subcontractor, for the subcontractor to perform a part,
or all, of the work that the contractor has undertaken.
(2) First tier subcontractor.--The term ``first tier
subcontractor'' means a subcontractor who has a
subcontract directly with the prime contractor.
(3) At any tier.--The term ``at any tier'' means any
subcontractor other than a subcontractor who is a first
tier subcontractor.
(ee) Puerto Rico Business.--In this Act, the term ``Puerto
Rico business'' means a small business concern that has its
principal office located in the Commonwealth of Puerto Rico.
(ff) Covered Territory Business.--In this Act, the term
``covered territory business'' means a small business concern
that has its principal office located in one of the following:
(1) The United States Virgin Islands.
(2) American Samoa.
(3) Guam.
(4) The Northern Mariana Islands.
(gg) Cannabis-Related Legitimate Businesses and Service
Providers.--In this Act:
(1) Cannabis.--The term ``cannabis''--
(A) means--
(i) all parts of the plant Cannabis
sativa L., whether growing or not;
(ii) the seeds thereof;
(iii) the resin extracted from any
part of such plant; and
(iv) every compound, manufacture,
salt, derivative, mixture, or
preparation of such plant, its seeds or
resin; and
(B) does not include--
(i) hemp, as defined in section 297A
of the Agricultural Marketing Act of
1946;
(ii) the mature stalks of such plant,
fiber produced from such stalks, oil or
cake made from the seeds of such plant,
any other compound, manufacture, salt,
derivative, mixture, or preparation of
such mature stalks (except the resin
extracted therefrom), fiber, oil, or
cake, or the sterilized seed of such
plant which is incapable of
germination; or
(iii) any drug product approved under
section 505 of the Federal Food, Drug,
and Cosmetic Act, or biological product
licensed under section 351 of the
Public Health Service Act.
(2) Cannabis-related legitimate business.--The term
``cannabis-related legitimate business'' means a
manufacturer, producer, or any person or company that
is a small business concern and that--
(A) engages in any activity described in
subparagraph (B) pursuant to a law established
by a State or a political subdivision of a
State, as determined by such State or political
subdivision; and
(B) participates in any business or organized
activity that involves handling cannabis or
cannabis products, including cultivating,
producing, manufacturing, selling,
transporting, displaying, dispensing,
distributing, or purchasing cannabis or
cannabis products.
(3) Service provider.--The term ``service
provider''--
(A) means a business, organization, or other
person that--
(i) sells goods or services to a
cannabis-related legitimate business;
or
(ii) provides any business services,
including the sale or lease of real or
any other property, legal or other
licensed services, or any other
ancillary service, relating to
cannabis; and
(B) does not include a business,
organization, or other person that participates
in any business or organized activity that
involves handling cannabis or cannabis
products, including cultivating, producing,
manufacturing, selling, transporting,
displaying, dispensing, distributing, or
purchasing cannabis or cannabis products.
* * * * * * *
Sec. 7. (a) Loans to Small Business Concerns; Allowable
Purposes; Qualified Business; Restrictions and Limitations.--
The Administration is empowered to the extent and in such
amounts as provided in advance in appropriation Acts to make
loans for plant acquisition, construction, conversion, or
expansion, including the acquisition of land, material,
supplies, equipment, and working capital, and to make loans to
any qualified small business concern, including those owned by
qualified Indian tribes, for purposes of this Act. Such
financings may be made either directly or in cooperation with
banks or other financial institutions through agreements to
participate on an immediate or deferred (guaranteed) basis.
These powers shall be subject, however, to the following
restrictions, limitations, and provisions:
(1) In general.--
(A) Credit elsewhere.--
(i) In general.--The Administrator
has the authority to direct, and
conduct oversight for, the methods by
which lenders determine whether a
borrower is able to obtain credit
elsewhere. No financial assistance
shall be extended pursuant to this
subsection if the applicant can obtain
credit elsewhere. No immediate
participation may be purchased unless
it is shown that a deferred
participation is not available; and no
direct financing may be made unless it
is shown that a participation is not
available.
(ii) Liquidity.--On and after October
1, 2015, the Administrator may not
guarantee a loan under this subsection
if the lender determines that the
borrower is unable to obtain credit
elsewhere solely because the liquidity
of the lender depends upon the
guaranteed portion of the loan being
sold on the secondary market.
(B) Background checks.--Prior to the approval
of any loan made pursuant to this subsection,
or section 503 of the Small Business Investment
Act of 1958, the Administrator may verify the
applicant's criminal background, or lack
thereof, through the best available means,
including, if possible, use of the National
Crime Information Center computer system at the
Federal Bureau of Investigation.
(C) Lending limits of lenders.--On and after
October 1, 2015, the Administrator may not
guarantee a loan under this subsection if the
sole purpose for requesting the guarantee is to
allow the lender to exceed the legal lending
limit of the lender.
(2) Level of participation in guaranteed loans.--
(A) In general.--Except as provided in
subparagraphs (B), (D), (E), and (F), in an
agreement to participate in a loan on a
deferred basis under this subsection (including
a loan made under the Preferred Lenders
Program), such participation by the
Administration shall be equal to--
(i) 75 percent of the balance of the
financing outstanding at the time of
disbursement of the loan, if such
balance exceeds $150,000; or
(ii) 85 percent of the balance of the
financing outstanding at the time of
disbursement of the loan, if such
balance is less than or equal to
$150,000.
(B) Reduced participation upon request.--
(i) In general.--The guarantee
percentage specified by subparagraph
(A) for any loan under this subsection
may be reduced upon the request of the
participating lender.
(ii) Prohibition.--The Administration
shall not use the guarantee percentage
requested by a participating lender
under clause (i) as a criterion for
establishing priorities in approving
loan guarantee requests under this
subsection.
(C) Interest rate under preferred lenders
program.--
(i) In general.--The maximum interest
rate for a loan guaranteed under the
Preferred Lenders Program shall not
exceed the maximum interest rate, as
determined by the Administration,
applicable to other loans guaranteed
under this subsection.
(ii) Export-import bank lenders.--Any
lender that is participating in the
Delegated Authority Lender Program of
the Export-Import Bank of the United
States (or any successor to the
Program) shall be eligible to
participate in the Preferred Lenders
Program.
(iii) Preferred lenders program
defined.--For purposes of this
subparagraph, the term ``Preferred
Lenders Program'' means any program
established by the Administrator, as
authorized under the proviso in section
5(b)(7), under which a written
agreement between the lender and the
Administration delegates to the
lender--
(I) complete authority to
make and close loans with a
guarantee from the
Administration without
obtaining the prior specific
approval of the Administration;
and
(II) complete authority to
service and liquidate such
loans without obtaining the
prior specific approval of the
Administration for routine
servicing and liquidation
activities, but shall not take
any actions creating an actual
or apparent conflict of
interest.
(D) Participation under export working
capital program.--In an agreement to
participate in a loan on a deferred basis under
the Export Working Capital Program established
pursuant to paragraph (14)(A), such
participation by the Administration shall be 90
percent.
(E) Participation in international trade
loan.--In an agreement to participate in a loan
on a deferred basis under paragraph (16), the
participation by the Administration may not
exceed 90 percent.
(F) Participation in the paycheck protection
program.--In an agreement to participate in a
loan on a deferred basis under paragraph (36),
the participation by the Administration shall
be 100 percent.
(3) No loan shall be made under this subsection--
(A) if the total amount outstanding and
committed (by participation or otherwise) to
the borrower from the business loan and
investment fund established by this Act would
exceed $3,750,000 (or if the gross loan amount
would exceed $5,000,000), except as provided in
subparagraph (B);
(B) if the total amount outstanding and
committed (on a deferred basis) solely for the
purposes provided in paragraph (16) to the
borrower from the business loan and investment
fund established by this Act would exceed
$4,500,000 (or if the gross loan amount would
exceed $5,000,000), of which not more than
$4,000,000 may be used for working capital,
supplies, or financings under section 7(a)(14)
for export purposes; and
(C) if effected either directly or in
cooperation with banks or other lending
institutions through agreements to participate
on an immediate basis if the amount would
exceed $350,000.
(4) Interest rates and prepayment charges.--
(A) Interest rates.--Notwithstanding the
provisions of the constitution of any State or
the laws of any State limiting the rate or
amount of interest which may be charged, taken,
received, or reserved, the maximum legal rate
of interest on any financing made on a deferred
basis pursuant to this subsection shall not
exceed a rate prescribed by the Administration,
and the rate of interest for the
Administration's share of any direct or
immediate participation loan shall not exceed
the current average market yield on outstanding
marketable obligations of the United States
with remaining periods to maturity comparable
to the average maturities of such loans and
adjusted to the nearest one-eighth of 1 per
centum, and an additional amount as determined
by the Administration, but not to exceed 1 per
centum per annum: Provided, That for those
loans to assist any public or private
organization for the handicapped or to assist
any handicapped individual as provided in
paragraph (10) of this subsection, the interest
rate shall be 3 per centum per annum.
(B) Payment of accrued interest.--
(i) In general.--Any bank or other
lending institution making a claim for
payment on the guaranteed portion of a
loan made under this subsection shall
be paid the accrued interest due on the
loan from the earliest date of default
to the date of payment of the claim at
a rate not to exceed the rate of
interest on the loan on the date of
default, minus one percent.
(ii) Loans sold on secondary
market.--If a loan described in clause
(i) is sold on the secondary market,
the amount of interest paid to a bank
or other lending institution described
in that clause from the earliest date
of default to the date of payment of
the claim shall be no more than the
agreed upon rate, minus one percent.
(iii) Applicability.--Clauses (i) and
(ii) shall not apply to loans made on
or after October 1, 2000.
(C) Prepayment charges.--
(i) In general.--A borrower who
prepays any loan guaranteed under this
subsection shall remit to the
Administration a subsidy recoupment fee
calculated in accordance with clause
(ii) if--
(I) the loan is for a term of
not less than 15 years;
(II) the prepayment is
voluntary;
(III) the amount of
prepayment in any calendar year
is more than 25 percent of the
outstanding balance of the
loan; and
(IV) the prepayment is made
within the first 3 years after
disbursement of the loan
proceeds.
(ii) Subsidy recoupment fee.--The
subsidy recoupment fee charged under
clause (i) shall be--
(I) 5 percent of the amount
of prepayment, if the borrower
prepays during the first year
after disbursement;
(II) 3 percent of the amount
of prepayment, if the borrower
prepays during the second year
after disbursement; and
(III) 1 percent of the amount
of prepayment, if the borrower
prepays during the third year
after disbursement.
(5) No such loans including renewals and extensions
thereof may be made for a period or periods exceeding
twenty-five years, except that such portion of a loan
made for the purpose of acquiring real property or
constructing, converting, or expanding facilities may
have a maturity of twenty-five years plus such
additional period as is estimated may be required to
complete such construction, conversion, or expansion.
(6) All loans made under this subsection shall be of
such sound value or so secured as reasonably to assure
repayment: Provided, however, That--
(A) for loans to assist any public or private
organization or to assist any handicapped
individual as provided in paragraph (10) of
this subsection any reasonable doubt shall be
resolved in favor of the applicant;
(B) recognizing that greater risk may be
associated with loans for energy measures as
provided in paragraph (12) of this subsection,
factors in determining ``sound value'' shall
include, but not be limited to, quality of the
product or service; technical qualifications of
the applicant or his employees; sales
projections; and the financial status of the
business concern: Provided further, That such
status need not be as sound as that required
for general loans under this subsection; and
On that portion of the loan used to refinance existing
indebtedness held by a bank or other lending
institution, the Administration shall limit the amount
of deferred participation to 80 per centum of the
amount of the loan at the time of disbursement:
Provided further, That any authority conferred by this
subparagraph on the Administration shall be exercised
solely by the Administration and shall not be delegated
to other than Administration personnel.
(7)(A) In general.--The Administrator may defer
payments on the principal and interest of such loans
for a grace period and use such other methods as it
deems necessary and appropriate to assure the
successful establishment and operation of such concern.
(B) Deferral requirements.--With respect to a
deferral provided under this paragraph, the
Administrator may allow lenders under this
subsection--
(i) to provide full payment deferment
relief (including payment of principal
and interest) for a period of not more
than 1 year; and
(ii) to provide an additional
deferment period if the borrower
provides documentation justifying such
additional deferment.
(C) Secondary market.--
(i) In general.--Except as provided
in clause (ii), if an investor declines
to approve a deferral or additional
deferment requested by a lender under
subparagraph (B), the Administrator
shall exercise the authority to
purchase the loan so that the borrower
may receive full payment deferment
relief (including payment of principal
and interest) or an additional
deferment as described in subparagraph
(B).
(ii) Exception.--If, in a fiscal
year, the Administrator determines that
the cost of implementing clause (i) is
greater than zero, the Administrator
shall not implement that clause.
(8) The Administration may make loans under this
subsection to small business concerns owned and
controlled by disabled veterans (as defined in section
4211(3) of title 38, United States Code).
(9) The Administration may provide loans under this
subsection to finance residential or commercial
construction or rehabilitation for sale: Provided,
however, That such loans shall not be used primarily
for the acquisition of land.
(10) The Administration may provide guaranteed loans
under this subsection to assist any public or private
organization for the handicapped or to assist any
handicapped individual, including service-disabled
veterans, in establishing, acquiring, or operating a
small business concern.
(11) The Administration may provide loans under this
subsection to any small business concern, or to any
qualified person seeking to establish such a concern
when it determines that such loan will further the
policies established in section 2(c) of this Act, with
particular emphasis on the preservation or
establishment of small business concerns located in
urban or rural areas with high proportions of
unemployed or low-income individuals or owned by low-
income individuals.
(12)(A) The Administration may provide loans under
this subsection to assist any small business concern,
including start up, to enable such concern to design
architecturally or engineer, manufacture, distribute,
market, install, or service energy measures: Provided,
however, That such loan proceeds shall not be used
primarily for research and development.
(b) The Administration may provide deferred participation
loans under this subsection to finance the planning, design, or
installation of pollution control facilities for the purposes
set forth in section 404 of the Small Business Investment Act
of 1958. Notwithstanding the limitation expressed in paragraph
(3) of this subsection, a loan made under this paragraph may
not result in a total amount outstanding and committed to a
borrower from the business loan and investment fund of more
than $1,000,000.
(13) The Administration may provide financing under
this subsection to State and local development
companies for the purposes of, and subject to the
restrictions in, title V of the Small Business
Investment Act of 1958.
(14) Export working capital program.--
(A) In general.--The Administrator may
provide extensions of credit, standby letters
of credit, revolving lines of credit for export
purposes, and other financing to enable small
business concerns, including small business
export trading companies and small business
export management companies, to develop foreign
markets. A bank or participating lending
institution may establish the rate of interest
on such financings as may be legal and
reasonable.
(B) Terms.--
(i) Loan amount.--The Administrator
may not guarantee a loan under this
paragraph of more than $5,000,000.
(ii) Fees.--
(I) In general.--For a loan
under this paragraph, the
Administrator shall collect the
fee assessed under paragraph
(23) not more frequently than
once each year.
(II) Untapped credit.--The
Administrator may not assess a
fee on capital that is not
accessed by the small business
concern.
(C) Considerations.--When considering loan or
guarantee applications, the Administration
shall give weight to export-related benefits,
including opening new markets for United States
goods and services abroad and encouraging the
involvement of small businesses, including
agricultural concerns, in the export market.
(D) Marketing.--The Administrator shall
aggressively market its export financing
program to small businesses.
(15)(A) The Administration may guarantee loans under
this subsection--
(i) to qualified employee trusts with respect
to a small business concern for the purpose of
purchasing, and for any transaction costs
associated with purchasing, stock of the
concern under a plan approved by the
Administrator which, when carried out, results
in the qualified employee trust owning at least
51 per centum of the stock of the concern; and
(ii) to a small business concern under a plan
approved by the Administrator, if the proceeds
from the loan are only used to make a loan to a
qualified employee trust, and for any
transaction costs associated with making that
loan, that results in the qualified employee
trust owning at least 51 percent of the small
business concern.
(B) The plan requiring the Administrator's approval
under subparagraph (A) shall be submitted to the
Administration by the trustee of such trust or by the
small business concern with its application for the
guarantee. Such plan shall include an agreement with
the Administrator which is binding on such trust and on
the small business concern and which provides that--
(i) not later than the date the loan
guaranteed under subparagraph (A) is repaid (or
as soon thereafter as is consistent with the
requirements of section 401(a) of the Internal
Revenue Code of 1954), at least 51 per centum
of the total stock of such concern shall be
allocated to the accounts of at least 51 per
centum of the employees of such concern who are
entitled to share in such allocation,
(ii) there will be periodic reviews of the
role in the management of such concern of
employees to whose accounts stock is allocated,
(iii) there will be adequate management to
assure management expertise and continuity, and
(iv) with respect to a loan made to a trust,
or to a cooperative in accordance with
paragraph (35)--
(I) a seller of the small business
concern may remain involved as an
officer, director, or key employee of
the small business concern when a
qualified employee trust or cooperative
has acquired 100 percent of ownership
of the small business concern; and
(II) any seller of the small business
concern who remains as an owner of the
small business concern, regardless of
the percentage of ownership interest,
shall be required to provide a personal
guarantee by the Administration.
(C) In determining whether to guarantee any loan
under this paragraph, the individual business
experience or personal assets of employee-owners shall
not be used as criteria, except inasmuch as certain
employee-owners may assume managerial responsibilities,
in which case business experience may be considered.
(D) For purposes of this paragraph, a corporation
which is controlled by any other person shall be
treated as a small business concern if such corporation
would, after the plan described in subparagraph (B) is
carried out, be treated as a small business concern.
(E) The Administration shall compile a separate list
of applications for assistance under this paragraph,
indicating which applications were accepted and which
were denied, and shall report periodically to the
Congress on the status of employee-owned firms assisted
by the Administration, which shall include--
(i) the total number of loans made to
employee-owned business concerns that were
guaranteed by the Administrator under section
7(a) of the Small Business Act (15 U.S.C.
636(a)) or section 502 of the Small Business
Investment Act of 1958 (15 U.S.C. 696),
including the number of loans made--
(I) to small business concerns owned
and controlled by socially and
economically disadvantaged individuals;
and
(II) to cooperatives;
(ii) the total number of financings made to
employee-owned business concerns by companies
licensed under section 301(c) of the Small
Business Investment Act of 1958 (15 U.S.C.
696(c)), including the number of financings
made--
(I) to small business concerns owned
and controlled by socially and
economically disadvantaged individuals;
and
(II) to cooperatives; and
(iii) any outreach and educational activities
conducted by the Administration with respect to
employee-owned business concerns.
(F) A small business concern that makes a loan to a
qualified employee trust under subparagraph (A)(ii) is
not required to contain the same terms and conditions
as the loan made to the small business concern that is
guaranteed by the Administration under such
subparagraph.
(G) With respect to a loan made to a qualified
employee trust under this paragraph, or to a
cooperative in accordance with paragraph (35), the
Administrator may, as deemed appropriate, elect to not
require any mandatory equity to be provided by the
qualified employee trust or cooperative to make the
loan.
(16) International trade.--
(A) In general.--If the Administrator
determines that a loan guaranteed under this
subsection will allow an eligible small
business concern that is engaged in or
adversely affected by international trade to
improve its competitive position, the
Administrator may make such loan to assist such
concern--
(i) in the financing of the
acquisition, construction, renovation,
modernization, improvement, or
expansion of productive facilities or
equipment to be used in the United
States in the production of goods and
services involved in international
trade;
(ii) in the refinancing of existing
indebtedness that is not structured
with reasonable terms and conditions,
including any debt that qualifies for
refinancing under any other provision
of this subsection; or
(iii) by providing working capital.
(B) Security.--
(i) In general.--Except as provided
in clause (ii), each loan made under
this paragraph shall be secured by a
first lien position or first mortgage
on the property or equipment financed
by the loan or on other assets of the
small business concern.
(ii) Exception.--A loan under this
paragraph may be secured by a second
lien position on the property or
equipment financed by the loan or on
other assets of the small business
concern, if the Administrator
determines the lien provides adequate
assurance of the payment of the loan.
(C) Engaged in international trade.--For
purposes of this paragraph, a small business
concern is engaged in international trade if,
as determined by the Administrator, the small
business concern is in a position to expand
existing export markets or develop new export
markets.
(D) Adversely affected by international
trade.--For purposes of this paragraph, a small
business concern is adversely affected by
international trade if, as determined by the
Administrator, the small business concern--
(i) is confronting increased
competition with foreign firms in the
relevant market; and
(ii) is injured by such competition.
(E) Findings by certain federal agencies.--
For purposes of subparagraph (D)(ii) the
Administrator shall accept any finding of
injury by the International Trade Commission or
any finding of injury by the Secretary of
Commerce pursuant to chapter 3 of title II of
the Trade Act of 1974.
(F) List of export finance lenders.--
(i) Publication of list required.--
The Administrator shall publish an
annual list of the banks and
participating lending institutions
that, during the 1-year period ending
on the date of publication of the list,
have made loans guaranteed by the
Administration under--
(I) this paragraph;
(II) paragraph (14); or
(III) paragraph (34).
(ii) Availability of list.--The
Administrator shall--
(I) post the list published
under clause (i) on the website
of the Administration; and
(II) make the list published
under clause (i) available,
upon request, at each district
office of the Administration.
(17) The Administration shall authorize lending
institutions and other entities in addition to banks to
make loans authorized under this subsection.
(18) Guarantee fees.--
(A) In general.--With respect to each loan
guaranteed under this subsection (other than a
loan that is repayable in 1 year or less), the
Administration shall collect a guarantee fee,
which shall be payable by the participating
lender, and may be charged to the borrower, as
follows:
(i) A guarantee fee not to exceed 2
percent of the deferred participation
share of a total loan amount that is
not more than $150,000.
(ii) A guarantee fee not to exceed 3
percent of the deferred participation
share of a total loan amount that is
more than $150,000, but not more than
$700,000.
(iii) A guarantee fee not to exceed
3.5 percent of the deferred
participation share of a total loan
amount that is more than $700,000.
(iv) In addition to the fee under
clause (iii), a guarantee fee equal to
0.25 percent of any portion of the
deferred participation share that is
more than $1,000,000.
(B) Retention of certain fees.--Lenders
participating in the programs established under
this subsection may retain not more than 25
percent of a fee collected under subparagraph
(A)(i).
(19)(A) In addition to the Preferred Lenders Program
authorized by the proviso in section 5(b)(7), the
Administration is authorized to establish a Certified
Lenders Program for lenders who establish their
knowledge of Administration laws and regulations
concerning the guaranteed loan program and their
proficiency in program requirements. The designation of
a lender as a certified lender shall be suspended or
revoked at any time that the Administration determines
that the lender is not adhering to its rules and
regulations or that the loss experience of the lender
is excessive as compared to other lenders, but such
suspension or revocation shall not affect any
outstanding guarantee.
(B) In order to encourage all lending institutions
and other entities making loans authorized under this
subsection to provide loans of $50,000 or less in
guarantees to eligible small business loan applicants,
the Administration shall develop and allow
participating lenders to solely utilize a uniform and
simplified loan form for such loans.
(C) Authority to liquidate loans.--
(i) In general.--The Administrator
may permit lenders participating in the
Certified Lenders Program to liquidate
loans made with a guarantee from the
Administration pursuant to a
liquidation plan approved by the
Administrator.
(ii) Automatic approval.--If the
Administrator does not approve or deny
a request for approval of a liquidation
plan within 10 business days of the
date on which the request is made (or
with respect to any routine liquidation
activity under such a plan, within 5
business days) such request shall be
deemed to be approved.
(20)(A) The Administration is empowered to make loans
either directly or in cooperation with banks or other
financial institutions through agreements to
participate on an immediate or deferred (guaranteed)
basis to small business concerns eligible for
assistance under subsection (j)(10) and section 8(a).
Such assistance may be provided only if the
Administration determines that--
(i) the type and amount of such assistance
requested by such concern is not otherwise
available on reasonable terms from other
sources;
(ii) with such assistance such concern has a
reasonable prospect for operating soundly and
profitably within a reasonable period of time;
(iii) the proceeds of such assistance will be
used within a reasonable time for plant
construction, conversion, or expansion,
including the acquisition of equipment,
facilities, machinery, supplies, or material or
to supply such concern with working capital to
be used in the manufacture of articles,
equipment, supplies, or material for defense or
civilian production or as may be necessary to
insure a well-balanced national economy; and
(iv) such assistance is of such sound value
as reasonably to assure that the terms under
which it is provided will not be breached by
the small business concern.
(B)(i) No loan shall be made under this paragraph if
the total amount outstanding and committed (by
participation or otherwise) to the borrower would
exceed $750,000.
(ii) Subject to the provisions of clause (i), in
agreements to participate in loans on a deferred
(guaranteed) basis, participation by the Administration
shall be not less than 85 per centum of the balance of
the financing outstanding at the time of disbursement.
(iii) The rate of interest on financings made on a
deferred (guaranteed) basis shall be legal and
reasonable.
(iv) Financings made pursuant to this paragraph shall
be subject to the following limitations:
(I) No immediate participation may be
purchased unless it is shown that a deferred
participation is not available.
(II) No direct financing may be made unless
it is shown that a participation is
unavailable.
(C) A direct loan or the Administration's share of an
immediate participation loan made pursuant to this
paragraph shall be any secured debt instrument--
(i) that is subordinated by its terms to all
other borrowings of the issuer;
(ii) the rate of interest on which shall not
exceed the current average market yield on
outstanding marketable obligations of the
United States with remaining periods to
maturity comparable to the average maturities
of such loan and adjusted to the nearest one-
eighth of 1 per centum;
(iii) the term of which is not more than
twenty-five years; and
(iv) the principal on which is amortized at
such rate as may be deemed appropriate by the
Administration, and the interest on which is
payable not less often than annually.
(21)(A) The Administration may make loans on a guaranteed
basis under the authority of this subsection--
(i) to a small business concern that has been (or can
reasonably be expected to be) detrimentally affected
by--
(I) the closure (or substantial reduction) of
a Department of Defense installation; or
(II) the termination (or substantial
reduction) of a Department of Defense program
on which such small business was a prime
contractor or subcontractor (or supplier) at
any tier; or
(ii) to a qualified individual or a veteran seeking
to establish (or acquire) and operate a small business
concern.
(B) Recognizing that greater risk may be associated with a
loan to a small business concern described in subparagraph
(A)(i), any reasonable doubts concerning the firm's proposed
business plan for transition to nondefense-related markets
shall be resolved in favor of the loan applicant when making
any determination regarding the sound value of the proposed
loan in accordance with paragraph (6).
(C) Loans pursuant to this paragraph shall be authorized in
such amounts as provided in advance in appropriation Acts for
the purposes of loans under this paragraph.
(D) For purposes of this paragraph a qualified individual
is--
(i) a member of the Armed Forces of the United
States, honorably discharged from active duty
involuntarily or pursuant to a program providing
bonuses or other inducements to encourage voluntary
separation or early retirement;
(ii) a civilian employee of the Department of Defense
involuntarily separated from Federal service or retired
pursuant to a program offering inducements to encourage
early retirement; or
(iii) an employee of a prime contractor,
subcontractor, or supplier at any tier of a Department
of Defense program whose employment is involuntarily
terminated (or voluntarily terminated pursuant to a
program offering inducements to encourage voluntary
separation or early retirement) due to the termination
(or substantial reduction) of a Department of Defense
program.
(E) Job creation and community benefit.--In providing
assistance under this paragraph, the Administration
shall develop procedures to ensure, to the maximum
extent practicable, that such assistance is used for
projects that--
(i) have the greatest potential for--
(I) creating new jobs for individuals
whose employment is involuntarily
terminated due to reductions in Federal
defense expenditures; or
(II) preventing the loss of jobs by
employees of small business concerns
described in subparagraph (A)(i); and
(ii) have substantial potential for
stimulating new economic activity in
communities most affected by reductions in
Federal defense expenditures.
(22) The Administration is authorized to permit
participating lenders to impose and collect a
reasonable penalty fee on late payments of loans
guaranteed under this subsection in an amount not to
exceed 5 percent of the monthly loan payment per month
plus interest.
(23) Yearly fee.--
(A) In general.--With respect to each loan
approved under this subsection, the
Administration shall assess, collect, and
retain a fee, not to exceed 0.55 percent per
year of the outstanding balance of the deferred
participation share of the loan, in an amount
established once annually by the Administration
in the Administration's annual budget request
to Congress, as necessary to reduce to zero the
cost to the Administration of making guarantees
under this subsection. As used in this
paragraph, the term ``cost'' has the meaning
given that term in section 502 of the Federal
Credit Reform Act of 1990 (2 U.S.C. 661a).
(B) Payer.--The yearly fee assessed under
subparagraph (A) shall be payable by the
participating lender and shall not be charged
to the borrower.
(C) Lowering of borrower fees.--If the
Administration determines that fees paid by
lenders and by small business borrowers for
guarantees under this subsection may be
reduced, consistent with reducing to zero the
cost to the Administration of making such
guarantees--
(i) the Administration shall first
consider reducing fees paid by small
business borrowers under clauses (i)
through (iii) of paragraph (18)(A), to
the maximum extent possible; and
(ii) fees paid by small business
borrowers shall not be increased above
the levels in effect on the date of
enactment of this subparagraph.
(24) Notification requirement.--The Administration
shall notify the Committees on Small Business of the
Senate and the House of Representatives not later than
15 days before making any significant policy or
administrative change affecting the operation of the
loan program under this subsection.
(25) Limitation on conducting pilot projects.--
(A) In general.--Not more than 10 percent of
the total number of loans guaranteed in any
fiscal year under this subsection may be
awarded as part of a pilot program which is
commenced by the Administrator on or after
October 1, 1996.
(B) Pilot program defined.--In this
paragraph, the term ``pilot program'' means any
lending program initiative, project,
innovation, or other activity not specifically
authorized by law.
(C) Low documentation loan program.--The
Administrator may carry out the low
documentation loan program for loans of
$100,000 or less only through lenders with
significant experience in making small business
loans. Not later than 90 days after the date of
enactment of this subsection, the Administrator
shall promulgate regulations defining the
experience necessary for participation as a
lender in the low documentation loan program.
(26) Calculation of subsidy rate.--All fees,
interest, and profits received and retained by the
Administration under this subsection shall be included
in the calculations made by the Director of the Office
of Management and Budget to offset the cost (as that
term is defined in section 502 of the Federal Credit
Reform Act of 1990) to the Administration of purchasing
and guaranteeing loans under this Act.
(28) Leasing.--In addition to such other lease
arrangements as may be authorized by the
Administration, a borrower may permanently lease to one
or more tenants not more than 20 percent of any
property constructed with the proceeds of a loan
guaranteed under this subsection, if the borrower
permanently occupies and uses not less than 60 percent
of the total business space in the property.
(29) Real estate appraisals.--
(A) In general.--With respect to a loan under
this subsection that is secured by commercial
real property, an appraisal of such property by
a State licensed or certified appraiser--
(i) shall be required by the
Administration in connection with any
such loan, if such loan is in an amount
greater than the Federal banking
regulator appraisal threshold; or
(ii) may be required by the
Administration or the lender in
connection with any such loan, if such
loan is in an amount equal to or less
than the Federal banking regulator
appraisal threshold, if such appraisal
is necessary for appropriate evaluation
of creditworthiness.
(B) Federal banking regulator appraisal
threshold defined.--For purposes of this
paragraph, the term ``Federal banking regulator
appraisal threshold'' means the lesser of the
threshold amounts set by the Board of Governors
of the Federal Reserve System, the Comptroller
of the Currency, and the Federal Deposit
Insurance Corporation for when a federally
related transaction that is a commercial real
estate transaction requires an appraisal
prepared by a State licensed or certified
appraiser.
(30) Ownership requirements.--Ownership requirements
to determine the eligibility of a small business
concern that applies for assistance under any credit
program under this Act shall be determined without
regard to any ownership interest of a spouse arising
solely from the application of the community property
laws of a State for purposes of determining marital
interests.
(31) Express loans.--
(A) Definitions.--As used in this paragraph:
(i) The term ``disaster area'' means
the area for which the President has
declared a major disaster, during the
5-year period beginning on the date of
the declaration.
(ii) The term ``express lender''
means any lender authorized by the
Administration to participate in the
Express Loan Program.
(iii) The term ``express loan'' means
any loan made pursuant to this
paragraph in which a lender utilizes to
the maximum extent practicable its own
loan analyses, procedures, and
documentation.
(iv) The term ``Express Loan
Program'' means the program for express
loans established by the Administration
under paragraph (25)(B), as in
existence on April 5, 2004, with a
guaranty rate of not more than 50
percent.
(B) Restriction to express lender.--The
authority to make an express loan shall be
limited to those lenders deemed qualified to
make such loans by the Administration.
Designation as an express lender for purposes
of making an express loan shall not prohibit
such lender from taking any other action
authorized by the Administration for that
lender pursuant to this subsection.
(C) Grandfathering of existing lenders.--Any
express lender shall retain such designation
unless the Administration determines that the
express lender has violated the law or
regulations promulgated by the Administration
or modifies the requirements to be an express
lender and the lender no longer satisfies those
requirements.
(D) Maximum loan amount.--The maximum loan
amount under the Express Loan Program is
$1,000,000.
(E) Option to participate.--Except as
otherwise provided in this paragraph, the
Administration shall take no regulatory,
policy, or administrative action, without
regard to whether such action requires
notification pursuant to paragraph (24), that
has the effect of requiring a lender to make an
express loan pursuant to subparagraph (D).
(F) Express loans for renewable energy and
energy efficiency.--
(i) Definitions.--In this
subparagraph--
(I) the term ``biomass''--
(aa) means any
organic material that
is available on a
renewable or recurring
basis, including--
(AA)
agricultural
crops;
(BB) trees
grown for
energy
production;
(CC) wood
waste and wood
residues;
(DD) plants
(including
aquatic plants
and grasses);
(EE)
residues;
(FF) fibers;
(GG) animal
wastes and
other waste
materials; and
(HH) fats,
oils, and
greases
(including
recycled fats,
oils, and
greases); and
(bb) does not
include--
(AA) paper
that is
commonly
recycled; or
(BB)
unsegregated
solid waste;
(II) the term ``energy
efficiency project'' means the
installation or upgrading of
equipment that results in a
significant reduction in energy
usage; and
(III) the term ``renewable
energy system'' means a system
of energy derived from--
(aa) a wind, solar,
biomass (including
biodiesel), or
geothermal source; or
(bb) hydrogen derived
from biomass or water
using an energy source
described in item (aa).
(ii) Loans.--The Administrator may
make a loan under the Express Loan
Program for the purpose of--
(I) purchasing a renewable
energy system; or
(II) carrying out an energy
efficiency project for a small
business concern.
(G) Guarantee fee waiver for veterans.--
(i) Guarantee fee waiver.--The
Administrator may not collect a
guarantee fee described in paragraph
(18) in connection with a loan made
under this paragraph to a veteran or
spouse of a veteran on or after October
1, 2015.
(ii) Definition.--In this
subparagraph, the term ``veteran or
spouse of a veteran'' means--
(I) a veteran, as defined in
section 3(q)(4);
(II) an individual who is
eligible to participate in the
Transition Assistance Program
established under section 1144
of title 10, United States
Code;
(III) a member of a reserve
component of the Armed Forces
named in section 10101 of title
10, United States Code;
(IV) the spouse of an
individual described in
subclause (I), (II), or (III);
or
(V) the surviving spouse (as
defined in section 101 of title
38, United States Code) of an
individual described in
subclause (I), (II), or (III)
who died while serving on
active duty or as a result of a
disability that is service-
connected (as defined in such
section).
(H) Recovery opportunity loans.--
(i) In general.--The Administrator
may guarantee an express loan to a
small business concern located in a
disaster area in accordance with this
subparagraph.
(ii) Maximums.--For a loan guaranteed
under clause (i)--
(I) the maximum loan amount
is $150,000; and
(II) the guarantee rate shall
be not more than 85 percent.
(iii) Overall cap.--A loan guaranteed
under clause (i) shall not be counted
in determining the amount of loans made
to a borrower for purposes of
subparagraph (D).
(iv) Operations.--A small business
concern receiving a loan guaranteed
under clause (i) shall certify that the
small business concern was in operation
on the date on which the applicable
major disaster occurred as a condition
of receiving the loan.
(v) Repayment ability.--A loan
guaranteed under clause (i) may only be
made to a small business concern that
demonstrates, to the satisfaction of
the Administrator, sufficient capacity
to repay the loan.
(vi) Timing of payment of
guarantees.--
(I) In general.--Not later
than 90 days after the date on
which a request for purchase is
filed with the Administrator,
the Administrator shall
determine whether to pay the
guaranteed portion of the loan.
(II) Recapture.--
Notwithstanding any other
provision of law, unless there
is a subsequent finding of
fraud by a court of competent
jurisdiction relating to a loan
guaranteed under clause (i), on
and after the date that is 6
months after the date on which
the Administrator determines to
pay the guaranteed portion of
the loan, the Administrator may
not attempt to recapture the
paid guarantee.
(vii) Fees.--
(I) In general.--Unless the
Administrator has waived the
guarantee fee that would
otherwise be collected by the
Administrator under paragraph
(18) for a loan guaranteed
under clause (i), and except as
provided in subclause (II), the
guarantee fee for the loan
shall be equal to the guarantee
fee that the Administrator
would collect if the guarantee
rate for the loan was 50
percent.
(II) Exception.--Subclause
(I) shall not apply if the cost
of carrying out the program
under this subsection in a
fiscal year is more than zero
and such cost is directly
attributable to the cost of
guaranteeing loans under clause
(i).
(viii) Rules.--Not later than 270
days after the date of enactment of
this subparagraph, the Administrator
shall promulgate rules to carry out
this subparagraph.
(32) Loans for energy efficient technologies.--
(A) Definitions.--In this paragraph--
(i) the term ``cost'' has the meaning
given that term in section 502 of the
Federal Credit Reform Act of 1990 (2
U.S.C. 661a);
(ii) the term ``covered energy
efficiency loan'' means a loan--
(I) made under this
subsection; and
(II) the proceeds of which
are used to purchase energy
efficient designs, equipment,
or fixtures, or to reduce the
energy consumption of the
borrower by 10 percent or more;
and
(iii) the term ``pilot program''
means the pilot program established
under subparagraph (B)
(B) Establishment.--The Administrator shall
establish and carry out a pilot program under
which the Administrator shall reduce the fees
for covered energy efficiency loans.
(C) Duration.--The pilot program shall
terminate at the end of the second full fiscal
year after the date that the Administrator
establishes the pilot program.
(D) Maximum participation.--A covered energy
efficiency loan shall include the maximum
participation levels by the Administrator
permitted for loans made under this subsection.
(E) Fees.--
(i) In general.--The fee on a covered
energy efficiency loan shall be equal
to 50 percent of the fee otherwise
applicable to that loan under paragraph
(18).
(ii) Waiver.--The Administrator may
waive clause (i) for a fiscal year if--
(I) for the fiscal year
before that fiscal year, the
annual rate of default of
covered energy efficiency loans
exceeds that of loans made
under this subsection that are
not covered energy efficiency
loans;
(II) the cost to the
Administration of making loans
under this subsection is
greater than zero and such cost
is directly attributable to the
cost of making covered energy
efficiency loans; and
(III) no additional sources
of revenue authority are
available to reduce the cost of
making loans under this
subsection to zero.
(iii) Effect of waiver.--If the
Administrator waives the reduction of
fees under clause (ii), the
Administrator--
(I) shall not assess or
collect fees in an amount
greater than necessary to
ensure that the cost of the
program under this subsection
is not greater than zero; and
(II) shall reinstate the fee
reductions under clause (i)
when the conditions in clause
(ii) no longer apply.
(iv) No increase of fees.--The
Administrator shall not increase the
fees under paragraph (18) on loans made
under this subsection that are not
covered energy efficiency loans as a
direct result of the pilot program.
(F) GAO report.--
(i) In general.--Not later than 1
year after the date that the pilot
program terminates, the Comptroller
General of the United States shall
submit to the Committee on Small
Business of the House of
Representatives and the Committee on
Small Business and Entrepreneurship of
the Senate a report on the pilot
program.
(ii) Contents.--The report submitted
under clause (i) shall include--
(I) the number of covered
energy efficiency loans for
which fees were reduced under
the pilot program;
(II) a description of the
energy efficiency savings with
the pilot program;
(III) a description of the
impact of the pilot program on
the program under this
subsection;
(IV) an evaluation of the
efficacy and potential fraud
and abuse of the pilot program;
and
(V) recommendations for
improving the pilot program.
(33) Increased veteran participation program.--
(A) Definitions.--In this paragraph--
(i) the term ``cost'' has the meaning
given that term in section 502 of the
Federal Credit Reform Act of 1990 (2
U.S.C. 661a);
(ii) the term ``pilot program'' means
the pilot program established under
subparagraph (B); and
(iii) the term ``veteran
participation loan'' means a loan made
under this subsection to a small
business concern owned and controlled
by veterans of the Armed Forces or
members of the reserve components of
the Armed Forces.
(B) Establishment.--The Administrator shall
establish and carry out a pilot program under
which the Administrator shall reduce the fees
for veteran participation loans.
(C) Duration.--The pilot program shall
terminate at the end of the second full fiscal
year after the date that the Administrator
establishes the pilot program.
(D) Maximum participation.--A veteran
participation loan shall include the maximum
participation levels by the Administrator
permitted for loans made under this subsection.
(E) Fees.--
(i) In general.--The fee on a veteran
participation loan shall be equal to 50
percent of the fee otherwise applicable
to that loan under paragraph (18).
(ii) Waiver.--The Administrator may
waive clause (i) for a fiscal year if--
(I) for the fiscal year
before that fiscal year, the
annual estimated rate of
default of veteran
participation loans exceeds
that of loans made under this
subsection that are not veteran
participation loans;
(II) the cost to the
Administration of making loans
under this subsection is
greater than zero and such cost
is directly attributable to the
cost of making veteran
participation loans; and
(III) no additional sources
of revenue authority are
available to reduce the cost of
making loans under this
subsection to zero.
(iii) Effect of waiver.--If the
Administrator waives the reduction of
fees under clause (ii), the
Administrator--
(I) shall not assess or
collect fees in an amount
greater than necessary to
ensure that the cost of the
program under this subsection
is not greater than zero; and
(II) shall reinstate the fee
reductions under clause (i)
when the conditions in clause
(ii) no longer apply.
(iv) No increase of fees.--The
Administrator shall not increase the
fees under paragraph (18) on loans made
under this subsection that are not
veteran participation loans as a direct
result of the pilot program.
(F) GAO report.--
(i) In general.--Not later than 1
year after the date that the pilot
program terminates, the Comptroller
General of the United States shall
submit to the Committee on Small
Business of the House of
Representatives and the Committee on
Small Business and Entrepreneurship of
the Senate a report on the pilot
program.
(ii) Contents.--The report submitted
under clause (i) shall include--
(I) the number of veteran
participation loans for which
fees were reduced under the
pilot program;
(II) a description of the
impact of the pilot program on
the program under this
subsection;
(III) an evaluation of the
efficacy and potential fraud
and abuse of the pilot program;
and
(IV) recommendations for
improving the pilot program.
(34) Export express program.--
(A) Definitions.--In this paragraph--
(i) the term ``export development
activity'' includes--
(I) obtaining a standby
letter of credit when required
as a bid bond, performance
bond, or advance payment
guarantee;
(II) participation in a trade
show that takes place outside
the United States;
(III) translation of product
brochures or catalogues for use
in markets outside the United
States;
(IV) obtaining a general line
of credit for export purposes;
(V) performing a service
contract from buyers located
outside the United States;
(VI) obtaining transaction-
specific financing associated
with completing export orders;
(VII) purchasing real estate
or equipment to be used in the
production of goods or services
for export;
(VIII) providing term loans
or other financing to enable a
small business concern,
including an export trading
company and an export
management company, to develop
a market outside the United
States; and
(IX) acquiring, constructing,
renovating, modernizing,
improving, or expanding a
production facility or
equipment to be used in the
United States in the production
of goods or services for
export; and
(ii) the term ``express loan'' means
a loan in which a lender uses to the
maximum extent practicable the loan
analyses, procedures, and documentation
of the lender to provide expedited
processing of the loan application.
(B) Authority.--The Administrator may
guarantee the timely payment of an express loan
to a small business concern made for an export
development activity.
(C) Level of participation.--
(i) Maximum amount.--The maximum
amount of an express loan guaranteed
under this paragraph shall be $500,000.
(ii) Percentage.--For an express loan
guaranteed under this paragraph, the
Administrator shall guarantee--
(I) 90 percent of a loan that
is not more than $350,000; and
(II) 75 percent of a loan
that is more than $350,000 and
not more than $500,000.
(35) Loans to cooperatives.--
(A) Definition.--In this paragraph, the term
``cooperative'' means an entity that is
determined to be a cooperative by the
Administrator, in accordance with applicable
Federal and State laws and regulation.
(B) Authority.--The Administration shall
guarantee loans made to a cooperative for the
purpose described in paragraph (15).
(36) Paycheck protection program.--
(A) Definitions.--In this paragraph--
(i) the terms ``appropriate Federal
banking agency'' and ``insured
depository institution'' have the
meanings given those terms in section 3
of the Federal Deposit Insurance Act
(12 U.S.C. 1813);
(ii) the term ``covered loan'' means
a loan made under this paragraph during
the covered period;
(iii) the term ``covered period''
means the period beginning on February
15, 2020 and ending on June 30, 2021;
(iv) the term ``eligible recipient''
means an individual or entity that is
eligible to receive a covered loan;
(v) the term ``eligible self-employed
individual'' has the meaning given the
term in section 7002(b) of the Families
First Coronavirus Response Act (Public
Law 116-127);
(vi) the term ``insured credit
union'' has the meaning given the term
in section 101 of the Federal Credit
Union Act (12 U.S.C. 1752);
(vii) the term ``nonprofit
organization'' means an organization
that is described in section 501(c)(3)
of the Internal Revenue Code of 1986
and that is exempt from taxation under
section 501(a) of such Code;
(viii) the term ``payroll costs''--
(I) means--
(aa) the sum of
payments of any
compensation with
respect to employees
that is a--
(AA) salary,
wage,
commission, or
similar
compensation;
(BB) payment
of cash tip or
equivalent;
(CC) payment
for vacation,
parental,
family,
medical, or
sick leave;
(DD)
allowance for
dismissal or
separation;
(EE) payment
required for
the provisions
of group health
care or group
life,
disability,
vision, or
dental
insurance
benefits,
including
insurance
premiums;
(FF) payment
of any
retirement
benefit; or
(GG) payment
of State or
local tax
assessed on the
compensation of
employees; and
(bb) the sum of
payments of any
compensation to or
income of a sole
proprietor or
independent contractor
that is a wage,
commission, income, net
earnings from self-
employment, or similar
compensation and that
is in an amount that is
not more than $100,000
on an annualized basis,
as prorated for the
period during which the
payments are made or
the obligation to make
the payments is
incurred; and
(II) shall not include--
(aa) the compensation
of an individual
employee in excess of
$100,000 on an
annualized basis, as
prorated for theperiod
during which the
compensation is paid or
the obligationto pay
the compensation is
incurred;
(bb) taxes imposed or
withheld under chapters
21, 22, or 24 of the
Internal Revenue Code
of 1986 during the
applicable period;
(cc) any compensation
of an employee whose
principal place of
residence is outside of
the United States;
(dd) qualified sick
leave wages for which a
credit is allowed under
section 7001 of the
Families First
Coronavirus Response
Act (Public Law 116-
127); or
(ee) qualified family
leave wages for which a
credit is allowed under
section 7003 of the
Families First
Coronavirus Response
Act (Public Law 116-
127);
(ix) the term ``veterans
organization'' means an organization
that is described in section 501(c)(19)
of the Internal Revenue Code that is
exempt from taxation under section
501(a) of such Code;
(x) the term ``community development
financial institution'' has the meaning
given the term in section 103 of the
Riegle Community Development and
Regulatory Improvement Act of 1994 (12
U.S.C. 4702));
(xi) the term ``community financial
institutions'' means--
(I) a community development
financial institution;
(II) a minority depository
institution, as defined in
section 308 of the Financial
Institutions Reform, Recovery,
and Enforcement Act of 1989 (12
U.S.C. 1463 note);
(III) a development company
that is certified under title V
of the Small Business
Investment Act of 1958 (15
U.S.C. 695 et seq.); and
(IV) an intermediary, as
defined in section 7(m)(11);
(xii) the term ``credit union'' means
a State credit union or a Federal
credit union, as those terms are
defined, respectively, in section 101
of the Federal Credit Union Act (12
U.S.C. 1752);
(xiii) the term ``seasonal employer''
means an eligible recipient that--
(I) does not operate for more
than 7 months in any calendar
year; or
(II) during the preceding
calendar year, had gross
receipts for any 6 months of
that year that were not more
than 33.33 percent of the gross
receipts of the employer for
the other 6 months of that
year;
(xiv) the term ``housing
cooperative'' means a cooperative
housing corporation (as defined in
section 216(b) of the Internal Revenue
Code of 1986) that employs not more
than 300 employees;
(xv) the term ``destination marketing
organization'' means a nonprofit entity
that is--
(I) an organization described
in section 501(c) of the
Internal Revenue Code of 1986
and exempt from tax under
section 501(a) of such Code; or
(II) a State, or a political
subdivision of a State
(including any instrumentality
of such entities)--
(aa) engaged in
marketing and promoting
communities and
facilities to
businesses and leisure
travelers through a
range of activities,
including--
(AA)
assisting with
the location of
meeting and
convention
sites;
(BB)
providing
travel
information on
area
attractions,
lodging
accommodations,
and
restaurants;
(CC)
providing maps;
and
(DD)
organizing
group tours of
local
historical,
recreational,
and cultural
attractions; or
(bb) that is engaged
in, and derives the
majority of the
operating budget of the
entity from revenue
attributable to,
providing live events;
(xvi) the terms ``exchange'',
``issuer'', and ``security'' have the
meanings given those terms in section
3(a) of the Securities Exchange Act of
1934 (15 U.S.C. 78c(a)); and
(xvii) the term ``additional covered
nonprofit entity''--
(I) means an organization
described in any paragraph of
section 501(c) of the Internal
Revenue Code of 1986, other
than paragraph (3), (4), (6),
or (19), and exempt from tax
under section 501(a) of such
Code; and
(II) does not include any
entity that, if the entity were
a business concern, would be
described in section 120.110 of
title 13, Code of Federal
Regulations (or in any
successor regulation or other
related guidance or rule that
may be issued by the
Administrator) other than a
business concern described in
paragraph (a) or (k) of such
section.
(B) Paycheck protection loans.--Except as
otherwise provided in this paragraph, the
Administrator may guarantee covered loans under
the same terms, conditions, and processes as a
loan made under this subsection.
(C) Registration of loans.--Not later than 15
days after the date on which a loan is made
under this paragraph, the Administration shall
register the loan using the TIN (as defined in
section 7701 of the Internal Revenue Code of
1986) assigned to the borrower.
(D) Increased eligibility for certain small
businesses and organizations.--
(i) In general.--During the covered
period, in addition to small business
concerns, any business concern,
nonprofit organization, housing
cooperative, veterans organization, or
Tribal business concern described in
section 31(b)(2)(C) shall be eligible
to receive a covered loan if the
business concern, nonprofit
organization, housing cooperative,
veterans organization, or Tribal
business concern employs not more than
the greater of--
(I) 500 employees; or
(II) if applicable, the size
standard in number of employees
established by the
Administration for the industry
in which the business concern,
nonprofit organization, housing
cooperative, veterans
organization, or Tribal
business concern operates.
(ii) Inclusion of sole proprietors,
independent contractors, and eligible
self-employed individuals.--
(I) In general.--During the
covered period, individuals who
operate under a sole
proprietorship or as an
independent contractor and
eligible self-employed
individuals shall be eligible
to receive a covered loan.
(II) Documentation.--An
eligible self-employed
individual, independent
contractor, or sole
proprietorship seeking a
covered loan shall submit such
documentation as determined
necessary by the Administrator
and the Secretary, to establish
the applicant as eligible.
(iii) Business concerns with more
than 1 physical location.--
(I) In general.--During the
covered period, any business
concern that employs not more
than 500 employees per physical
location of the business
concern and that is assigned a
North American Industry
Classification System code
beginning with 72 at the time
of disbursal shall be eligible
to receive a covered loan.
(II) Eligibility of news
organizations.--
(aa) Definition.--In
this subclause, the
term ``included
business concern''
means a business
concern, including any
station which
broadcasts pursuant to
a license granted by
the Federal
Communications
Commission under title
III of the
Communications Act of
1934 (47 U.S.C. 301 et
seq.) without regard
for whether such a
station is a concern as
defined in section
121.105 of title 13,
Code of Federal
Regulations, or any
successor thereto--
(AA) that
employs not
more than 500
employees, or
the size
standard
established by
the
Administrator
for the North
American
Industry
Classification
System code
applicable to
the business
concern, per
physical
location of
such business
concern; or
(BB) any
nonprofit
organization or
any
organization
otherwise
subject to
section
511(a)(2)(B) of
the Internal
Revenue Code of
1986 that is a
public
broadcasting
entity (as
defined in
section 397(11)
of the
Communications
Act of 1934 (47
U.S.C.
397(11))).
(bb) Eligibility.--
During the covered
period, an included
business concern shall
be eligible to receive
a covered loan if--
(AA) the
included
business
concern is
majority owned
or controlled
by a business
concern that is
assigned a
North American
Industry
Classification
System code
beginning with
511110 or 5151
or, with
respect to a
public
broadcasting
entity (as
defined in
section 397(11)
of the
Communications
Act of 1934 (47
U.S.C.
397(11))), has
a trade or
business that
falls under
such a code;
and
(BB) the
included
business
concern makes a
good faith
certification
that proceeds
of the loan
will be used to
support
expenses at the
component of
the included
business
concern that
produces or
distributes
locally focused
or emergency
information.
(III) Eligibility of certain
organizations.--Subject to the
provisions in this
subparagraph, during the
covered period--
(aa) a nonprofit
organization shall be
eligible to receive a
covered loan if the
nonprofit organization
employs not more than
500 employees per
physical location of
the organization; and
(bb) an additional
covered nonprofit
entity and an
organization that, but
for subclauses (I)(dd)
and (II)(dd) of clause
(vii), would be
eligible for a covered
loan under clause (vii)
shall be eligible to
receive a covered loan
if the entity or
organization employs
not more than 300
employees per physical
location of the entity
or organization.
(IV) Eligibility of internet
publishing organizations.--A
business concern or other
organization that was not
eligible to receive a covered
loan the day before the date of
enactment of this subclause, is
assigned a North American
Industry Classification System
code of 519130, certifies in
good faith as an Internet-only
news publisher or Internet-only
periodical publisher, and is
engaged in the collection and
distribution of local or
regional and national news and
information shall be eligible
to receive a covered loan for
the continued provision of
news, information, content, or
emergency information if--
(aa) the business
concern or organization
employs not more than
500 employees, or the
size standard
established by the
Administrator for that
North American Industry
Classification code,
per physical location
of the business concern
or organization; and
(bb) the business
concern or organization
makes a good faith
certification that
proceeds of the loan
will be used to support
expenses at the
component of the
business concern or
organization that
supports local or
regional news.
(iv) Waiver of affiliation rules.--
During the covered period, the
provisions applicable to affiliations
under section 121.103 of title 13, Code
of Federal Regulations, or any
successor regulation, are waived with
respect to eligibility for a covered
loan for--
(I) any business concern with
not more than 500 employees
that, as of the date on which
the covered loan is disbursed,
is assigned a North American
Industry Classification System
code beginning with 72;
(II) any business concern
operating as a franchise that
is assigned a franchise
identifier code by the
Administration;
(III) any business concern
that receives financial
assistance from a company
licensed under section 301 of
the Small Business Investment
Act of 1958 (15 U.S.C. 681);
(IV)(aa) any business concern
(including any station which
broadcasts pursuant to a
license granted by the Federal
Communications Commission under
title III of the Communications
Act of 1934 (47 U.S.C. 301 et
seq.) without regard for
whether such a station is a
concern as defined in section
121.105 of title 13, Code of
Federal Regulations, or any
successor thereto) that employs
not more than 500 employees, or
the size standard established
by the Administrator for the
North American Industry
Classification System code
applicable to the business
concern, per physical location
of such business concern and is
majority owned or controlled by
a business concern that is
assigned a North American
Industry Classification System
code beginning with 511110 or
5151; or
(bb) any nonprofit
organization that is assigned a
North American Industry
Classification System code
beginning with 5151; and
(V) any business concern or
other organization that was not
eligible to receive a covered
loan the day before the date of
enactment of this subclause, is
assigned a North American
Industry Classification System
code of 519130, certifies in
good faith as an Internet-only
news publisher or Internet-only
periodical publisher, and is
engaged in the collection and
distribution of local or
regional and national news and
information, if the business
concern or organization--
(aa) employs not more
than 500 employees, or
the size standard
established by the
Administrator for that
North American Industry
Classification code,
per physical location
of the business concern
or organization; and
(bb) is majority
owned or controlled by
a business concern or
organization that is
assigned a North
American Industry
Classification System
code of 519130.
(v) Employee.--For purposes of
determining whether a business concern,
nonprofit organization, veterans
organization, or Tribal business
concern described in section
31(b)(2)(C) employs not more than 500
employees under clause (i)(I), or for
purposes of determining the number of
employees of a housing cooperative or a
business concern or organization made
eligible for a loan under this
paragraph under subclause (II), (III),
or (IV) of clause (iii), subclause (IV)
or (V) of clause (iv), clause (vii), or
clause (ix), the term ``employee''
includes individuals employed on a
full-time, part-time, or other basis.
(vi) Affiliation.--The provisions
applicable to affiliations under
section 121.103 of title 13, Code of
Federal Regulations, or any successor
thereto, shall apply with respect to a
nonprofit organization and, a housing
cooperative, a veterans organization in
the same manner as with respect to a
small business concern.
(vii) Eligibility for certain
501(c)(6) organizations.--
(I) In general.--Any
organization that is described
in section 501(c)(6) of the
Internal Revenue Code and that
is exempt from taxation under
section 501(a) of such Code
(excluding professional sports
leagues and organizations with
the purpose of promoting or
participating in a political
campaign or other activity)
shall be eligible to receive a
covered loan if--
(aa) the organization
does not receive more
than 15 percent of its
receipts from lobbying
activities;
(bb) the lobbying
activities of the
organization do not
comprise more than 15
percent of the total
activities of the
organization;
(cc) the cost of the
lobbying activities of
the organization did
not exceed $1,000,000
during the most recent
tax year of the
organization that ended
prior to February 15,
2020; and
(dd) the organization
employs not more than
300 employees.
(II) Destination marketing
organizations.--Any destination
marketing organization shall be
eligible to receive a covered
loan if--
(aa) the destination
marketing organization
does not receive more
than 15 percent of its
receipts from lobbying
activities;
(bb) the lobbying
activities of the
destination marketing
organization do not
comprise more than 15
percent of the total
activities of the
organization;
(cc) the cost of the
lobbying activities of
the destination
marketing organization
did not exceed
$1,000,000 during the
most recent tax year of
the destination
marketing organization
that ended prior to
February 15, 2020; and
(dd) the destination
marketing organization
employs not more than
300 employees; and
(ee) the destination
marketing
organization--
(AA) is
described in
section 501(c)
of the Internal
Revenue Code
and is exempt
from taxation
under section
501(a) of such
Code; or
(BB) is a
quasi-
governmental
entity or is a
political
subdivision of
a State or
local
government,
including any
instrumentality
of those
entities.
(viii) Ineligibility of publicly-
traded entities.--
(I) In general.--Subject to
subclause (II), and
notwithstanding any other
provision of this paragraph, on
and after the date of enactment
of the Economic Aid to Hard-Hit
Small Businesses, Nonprofits,
and Venues Act, an entity that
is an issuer, the securities of
which are listed on an exchange
registered as a national
securities exchange under
section 6 of the Securities
Exchange Act of 1934 (15 U.S.C.
78f), shall be ineligible to
receive a covered loan under
this paragraph.
(II) Rule for affiliated
entities.--With respect to a
business concern made eligible
by subclause (II) or (IV) of
clause (iii) or subclause (IV)
or (V) of clause (iv) of this
subparagraph, the Administrator
shall not consider whether any
affiliated entity, which for
purposes of this subclause
shall include any entity that
owns or controls such business
concern or organization, is an
issuer.
(ix) Eligibility of additional
covered nonprofit entities.--An
additional covered nonprofit entity
shall be eligible to receive a covered
loan if--
(I) the additional covered
nonprofit entity does not
receive more than 15 percent of
its receipts from lobbying
activities;
(II) the lobbying activities
of the additional covered
nonprofit entity do not
comprise more than 15 percent
of the total activities of the
organization;
(III) the cost of the
lobbying activities of the
additional covered nonprofit
entity did not exceed
$1,000,000 during the most
recent tax year of the
additional covered nonprofit
entity that ended prior to
February 15, 2020; and
(IV) the additional covered
nonprofit entity employs not
more than 300 employees.
(E) Maximum loan amount.--Except as provided
in subparagraph (V), during the covered period,
with respect to a covered loan, the maximum
loan amount shall be the lesser of--
(i)(I) the sum of--
(aa) the product obtained by
multiplying--
(AA) the average
total monthly payments
by the applicant for
payroll costs incurred
during the 1-year
period before the date
on which the loan is
made, except thatan
applicant that is a
seasonal employer shall
use the average total
monthly payments for
payroll for any 12-week
period selected by the
seasonal employer
between February 15,
2019, and February 15,
2020; by
(BB) 2.5; and
(bb) the outstanding amount
of a loan under subsection
(b)(2) that was made during the
period beginning on January 31,
2020 and ending on the date on
which covered loans are made
available to be refinanced
under the covered loan; or
(II) if requested by an otherwise
eligible recipient that was not in
business during the period beginning on
February 15, 2019 and ending on June
30, 2019, the sum of--
(aa) the product obtained by
multiplying--
(AA) the average
total monthly payments
by the applicant for
payroll costs incurred
during the period
beginning on January 1,
2020 and ending on
February 29, 2020; by
(BB) 2.5; and
(bb) the outstanding amount
of a loan under subsection
(b)(2) that was made during the
period beginning on January 31,
2020 and ending on the date on
which covered loans are made
available to be refinanced
under the covered loan; or
(ii) $10,000,000.
(F) Allowable uses of covered loans.--
(i) In general.--During the covered
period, an eligible recipient may, in
addition to the allowable uses of a
loan made under this subsection, use
the proceeds of the covered loan for--
(I) payroll costs;
(II) costs related to the
continuation of group health
care benefits during periods of
paid sick, medical, or family
leave, and insurance premiums;
(III) employee salaries,
commissions, or similar
compensations;
(IV) payments of interest on
any mortgage obligation (which
shall not include any
prepayment of or payment of
principal on a mortgage
obligation);
(V) rent (including rent
under a lease agreement);
(VI) utilities;
(VII) interest on any other
debt obligations that were
incurred before the covered
period;
(VIII) covered operations
expenditures, as defined in
section 7A(a);
(IX) covered property damage
costs, as defined in section
7A(a);
(X) covered supplier costs,
as defined in section 7A(a);
and
(XI) covered worker
protection expenditures, as
defined in section 7A(a).
(ii) Delegated authority.--
(I) In general.--For purposes
of making covered loans for the
purposes described in clause
(i), a lender approved to make
loans under this subsection
shall be deemed to have been
delegated authority by the
Administrator to make and
approve covered loans, subject
to the provisions of this
paragraph.
(II) Considerations.--In
evaluating the eligibility of a
borrower for a covered loan
with the terms described in
this paragraph, a lender shall
consider whether the borrower--
(aa) was in operation
on February 15, 2020;
and
(bb)(AA) had
employees for whom the
borrower paid salaries
and payroll taxes; or
(BB) paid independent
contractors, as
reported on a Form
1099-MISC.
(iii) Additional lenders.--The
authority to make loans under this
paragraph shall be extended to
additional lenders determined by the
Administrator and the Secretary of the
Treasury to have the necessary
qualifications to process, close,
disburse and service loans made with
the guarantee of the Administration.
(iv) Refinance.--A loan made under
subsection (b)(2) during the period
beginning on January 31, 2020 and
ending on the date on which covered
loans are made available may be
refinanced as part of a covered loan.
(v) Nonrecourse.--Notwithstanding the
waiver of the personal guarantee
requirement or collateral under
subparagraph (J), the Administrator
shall have no recourse against any
individual shareholder, member, or
partner of an eligible recipient of a
covered loan for nonpayment of any
covered loan, except to the extent that
such shareholder, member, or partner
uses the covered loan proceeds for a
purpose not authorized under clause (i)
or (iv).
(vi) Prohibition.--None of the
proceeds of a covered loan may be used
for--
(I) lobbying activities, as
defined in section 3 of the
Lobbying Disclosure Act of 1995
(2 U.S.C. 1602);
(II) lobbying expenditures
related to a State or local
election; or
(III) expenditures designed
to influence the enactment of
legislation, appropriations,
regulation, administrative
action, or Executive order
proposed or pending before
Congress or any State
government, State legislature,
or local legislature or
legislative body.
(G) Borrower requirements.--
(i) Certification.--An eligible
recipient applying for a covered loan
shall make a good faith certification--
(I) that the uncertainty of
current economic conditions
makes necessary the loan
request to support the ongoing
operations of the eligible
recipient;
(II) acknowledging that funds
will be used to retain workers
and maintain payroll or make
mortgage payments, lease
payments, and utility payments;
(III) that the eligible
recipient does not have an
application pending for a loan
under this subsection for the
same purpose and duplicative of
amounts applied for or received
under a covered loan; and
(IV) during the period
beginning on February 15, 2020
and ending on December 31,
2020, that the eligible
recipient has not received
amounts under this subsection
for the same purpose and
duplicative of amounts applied
for or received under a covered
loan.
(H) Fee waiver.--With respect to a covered
loan--
(i) in lieu of the fee otherwise
applicable under paragraph (23)(A), the
Administrator shall collect no fee; and
(ii) in lieu of the fee otherwise
applicable under paragraph (18)(A), the
Administrator shall collect no fee.
(I) Credit elsewhere.--During the covered
period, the requirement that a small business
concern is unable to obtain credit elsewhere,
as defined in section 3(h), shall not apply to
a covered loan.
(J) Waiver of personal guarantee
requirement.--With respect to a covered loan--
(i) no personal guarantee shall be
required for the covered loan; and
(ii) no collateral shall be required
for the covered loan.
(K) Maturity for loans with remaining balance
after application of forgiveness.--With respect
to a covered loan that has a remaining balance
after reduction based on the loan forgiveness
amount under section 7A--
(i) the remaining balance shall
continue to be guaranteed by the
Administration under this subsection;
and
(ii) the covered loan shall have a
minimum maturity of 5 years and a
maximum maturity of 10 years from the
date on which the borrower applies for
loan forgiveness under that section.
(L) Interest rate requirements.--A covered
loan shall bear an interest rate not to exceed
4 percent, calculated on a non-compounding,
non-adjustable basis.
(M) Loan deferment.--
(i) Definition of impacted
borrower.--
(I) In general.--In this
subparagraph, the term
``impacted borrower'' means an
eligible recipient that--
(aa) is in operation
on February 15, 2020;
and
(bb) has an
application for a
covered loan that is
approved or pending
approval on or after
the date of enactment
of this paragraph.
(II) Presumption.--For
purposes of this subparagraph,
an impacted borrower is
presumed to have been adversely
impacted by COVID-19.
(ii) Deferral.--The Administrator
shall--
(I) consider each eligible
recipient that applies for a
covered loan to be an impacted
borrower; and
(II) require lenders under
this subsection to provide
complete payment deferment
relief for impacted borrowers
with covered loans, including
payment of principal, interest,
and fees, until the date on
which the amount of forgiveness
determined under section 7A is
remitted to the lender.
(iii) Secondary market.--With respect
to a covered loan that is sold on the
secondary market, if an investor
declines to approve a deferral
requested by a lender under clause
(ii), the Administrator shall exercise
the authority to purchase the loan so
that the impacted borrower may receive
a deferral, including payment of
principal, interest, and fees, until
the date on which the amount of
forgiveness determined under section 7A
is remitted to the lender.
(iv) Guidance.--Not later than 30
days after the date of enactment of
this paragraph, the Administrator shall
provide guidance to lenders under this
paragraph on the deferment process
described in this subparagraph.
(v) Rule of construction.--If an
eligible recipient fails to apply for
forgiveness of a covered loan within 10
months after the last day of the
covered period defined in section
7A(a), such eligible recipient shall
make payments of principal, interest,
and fees on such covered loan beginning
on the day that is not earlier than the
date that is 10 months after the last
day of such covered period.
(N) Secondary market sales.--A covered loan
shall be eligible to be sold in the secondary
market consistent with this subsection. The
Administrator may not collect any fee for any
guarantee sold into the secondary market under
this subparagraph.
(O) Regulatory capital requirements.--
(i) Risk weight.--With respect to the
appropriate Federal banking agencies or
the National Credit Union
Administration Board applying capital
requirements under their respective
risk-based capital requirements, a
covered loan shall receive a risk
weight of zero percent.
(ii) Temporary relief from tdr
disclosures.--Notwithstanding any other
provision of law, an insured depository
institution or an insured credit union
that modifies a covered loan in
relation to COVID-19-related
difficulties in a troubled debt
restructuring on or after March 13,
2020, shall not be required to comply
with the Financial Accounting Standards
Board Accounting Standards Codification
Subtopic 310-40 (``Receivables -
Troubled Debt Restructurings by
Creditors'') for purposes of compliance
with the requirements of the Federal
Deposit Insurance Act (12 U.S.C. 1811
et seq.), until such time and under
such circumstances as the appropriate
Federal banking agency or the National
Credit Union Administration Board, as
applicable, determines appropriate.
(P) Reimbursement for processing.--
(i) In general.--The Administrator
shall reimburse a lender authorized to
make a covered loan as follows:
(I) With respect to a covered
loan made during the period
beginning on the date of
enactment of this paragraph and
ending on the day before the
date of enactment of the
Economic Aid to Hard-Hit Small
Businesses, Nonprofits, and
Venues Act, the Administrator
shall reimburse such a lender
at a rate, based on the balance
of the financing outstanding at
the time of disbursement of the
covered loan, of--
(aa) 5 percent for
loans of not more than
$350,000;
(bb) 3 percent for
loans of more than
$350,000 and less than
$2,000,000; and
(cc) 1 percent for
loans of not less than
$2,000,000.
(II) With respect to a
covered loan made on or after
the date of enactment of the
Economic Aid to Hard-Hit Small
Businesses, Nonprofits, and
Venues Act, the Administrator
shall reimburse such a lender--
(aa) for a covered
loan of not more than
$50,000, in an amount
equal to the lesser
of--
(AA) 50
percent of the
balance of the
financing
outstanding at
the time of
disbursement of
the covered
loan; or
(BB) $2,500;
and
(bb) at a rate, based
on the balance of the
financing outstanding
at the time of
disbursement of the
covered loan, of--
(AA) 5
percent for a
covered loan of
more than
$50,000 and not
more than
$350,000;
(BB) 3
percent for a
covered loan of
more than
$350,000 and
less than
$2,000,000; and
(CC) 1
percent for a
covered loan of
not less than
$2,000,000.
(ii) Fee limits.--An agent that
assists an eligible recipient to
prepare an application for a covered
loan may not collect a fee in excess of
the limits established by the
Administrator. If an eligible recipient
has knowingly retained an agent, such
fees shall be paid by the eligible
recipient and may not be paid out of
the proceeds of a covered loan. A
lender shall only be responsible for
paying fees to an agent for services
for which the lender directly contracts
with the agent.
(iii) Timing.--A reimbursement
described in clause (i) shall be made
not later than 5 days after the
reported disbursement of the covered
loan and may not be required to be
repaid by a lender unless the lender is
found guilty of an act of fraud in
connection with the covered loan.
(iv) Sense of the senate.--It is the
sense of the Senate that the
Administrator should issue guidance to
lenders and agents to ensure that the
processing and disbursement of covered
loans prioritizes small business
concerns and entities in underserved
and rural markets, including veterans
and members of the military community,
small business concerns owned and
controlled by socially and economically
disadvantaged individuals (as defined
in section 8(d)(3)(C)), women, and
businesses in operation for less than 2
years.
(Q) Duplication.--Nothing in this paragraph
shall prohibit a recipient of an economic
injury disaster loan made under subsection
(b)(2) during the period beginning on January
31, 2020 and ending on the date on which
covered loans are made available that is for a
purpose other than paying payroll costs and
other obligations described in subparagraph (F)
from receiving assistance under this paragraph.
(R) Waiver of prepayment penalty.--
Notwithstanding any other provision of law,
there shall be no prepayment penalty for any
payment made on a covered loan.
(S) Set-aside for insured depository
institutions, credit unions, and community
financial institutions.--
(i) Insured depository institutions
and credit unions.--In making loan
guarantees under this paragraph after
the date of enactment of this clause,
the Administrator shall guarantee not
less than $30,000,000,000 in loans made
by--
(I) insured depository
institutions with consolidated
assets of not less than
$10,000,000,000 and less than
$50,000,000,000; and
(II) credit unions with
consolidated assets of not less
than $10,000,000,000 and less
than $50,000,000,000.
(ii) Community financial
institutions, small insured depository
institutions, and credit unions.--In
making loan guarantees under this
paragraph after the date of enactment
of this clause, the Administrator shall
guarantee not less than $30,000,000,000
in loans made by--
(I) community financial
institutions;
(II) insured depository
institutions with consolidated
assets of less than
$10,000,000,000; and
(III) credit unions with
consolidated assets of less
than $10,000,000,000.
(T) Requirement for date in operation.--A
business or organization that was not in
operation on February 15, 2020 shall not be
eligible for a loan under this paragraph.
(U) Exclusion of entities receiving shuttered
venue operator grants.--An eligible person or
entity (as defined under of section 24 of the
Economic Aid to Hard-Hit Small Businesses,
Nonprofits, and Venues Act) that receives a
grant under such section 24 shall not be
eligible for a loan under this paragraph.
(V) Calculation of maximum loan amount for
farmers and ranchers.--
(i) Definition.--In this
subparagraph, the term ``covered
recipient'' means an eligible recipient
that--
(I) operates as a sole
proprietorship or as an
independent contractor, or is
an eligible self-employed
individual;
(II) reports farm income or
expenses on a Schedule F (or
any equivalent successor
schedule); and
(III) was in business as of
February 15, 2020.
(ii) No employees.--With respect to
covered recipient without employees,
the maximum covered loan amount shall
be the lesser of--
(I) the sum of--
(aa) the product
obtained by
multiplying--
(AA) the
gross income of
the covered
recipient in
2019, as
reported on a
Schedule F (or
any equivalent
successor
schedule), that
is not more
than $100,000,
divided by 12;
and
(BB) 2.5; and
(bb) the outstanding
amount of a loan under
subsection (b)(2) that
was made during the
period beginning on
January 31, 2020 and
ending on April 3, 2020
that the borrower
intends to refinance
under the covered loan,
not including any
amount of any advance
under the loan that is
not required to be
repaid; or
(II) $2,000,000.
(iii) With employees.--With respect
to a covered recipient with employees,
the maximum covered loan amount shall
be calculated using the formula
described in subparagraph (E), except
that the gross income of the covered
recipient described in clause
(ii)(I)(aa)(AA) of this subparagraph,
as divided by 12, shall be added to the
sum calculated under subparagraph
(E)(i)(I).
(iv) Recalculation.--A lender that
made a covered loan to a covered
recipient before the date of enactment
of this subparagraph may, at the
request of the covered recipient--
(I) recalculate the maximum
loan amount applicable to that
covered loan based on the
formula described in clause
(ii) or (iii), as applicable,
if doing so would result in a
larger covered loan amount; and
(II) provide the covered
recipient with additional
covered loan amounts based on
that recalculation.
(37) Paycheck protection program second draw loans.--
(A) Definitions.--In this paragraph--
(i) the terms ``additional covered
nonprofit entity'',``eligible self-
employed individual'', ``housing
cooperative'', ``nonprofit
organization'', ``payroll costs'',
``seasonal employer'', and ``veterans
organization'' have the meanings given
those terms in paragraph (36), except
that ``eligible entity'' shall be
substituted for ``eligible recipient''
each place it appears in the
definitions of those terms;
(ii) the term ``covered loan'' means
a loan made under this paragraph;
(iii) the terms ``covered mortgage
obligation'', ``covered operating
expenditure'', ``covered property
damage cost'', ``covered rent
obligation'', ``covered supplier
cost'', ``covered utility payment'',
and ``covered worker protection
expenditure'' have the meanings given
those terms in section 7A(a);
(iv) the term ``eligible entity''--
(I) means any business
concern, nonprofit
organization, housing
cooperative, veterans
organization, Tribal business
concern, eligible self-employed
individual, sole proprietor,
independent contractor, or
small agricultural cooperative
that--
(aa) employs not more
than 300 employees; and
(bb)(AA) except as
provided in subitems
(BB), (CC), and (DD),
had gross receipts
during the first,
second, third, or, only
with respect to an
application submitted
on or after January 1,
2021, fourth quarter in
2020 that demonstrate
not less than a 25
percent reduction from
the gross receipts of
the entity during the
same quarter in 2019;
(BB) if the entity
was not in business
during the first or
second quarter of 2019,
but was in business
during the third and
fourth quarter of 2019,
had gross receipts
during the first,
second, third, or, only
with respect to an
application submitted
on or after January 1,
2021, fourth quarter of
2020 that demonstrate
not less than a 25
percent reduction from
the gross receipts of
the entity during the
third or fourth quarter
of 2019;
(CC) if the entity
was not in business
during the first,
second, or third
quarter of 2019, but
was in business during
the fourth quarter of
2019, had gross
receipts during the
first, second, third,
or, only with respect
to an application
submitted on or after
January 1, 2021, fourth
quarter of 2020 that
demonstrate not less
than a 25 percent
reduction from the
gross receipts of the
entity during the
fourth quarter of 2019;
or
(DD) if the entity
was not in business
during 2019, but was in
operation on February
15, 2020, had gross
receipts during the
second, third, or, only
with respect to an
application submitted
on or after January 1,
2021, fourth quarter of
2020 that demonstrate
not less than a 25
percent reduction from
the gross receipts of
the entity during the
first quarter of 2020;
(II) includes a business
concern or organization made
eligible for a loan under
paragraph (36) under subclause
(II), (III), or (IV) of clause
(iii), subclause (IV) or (V) of
clause (iv), clause (vii), or
clause (ix) of subparagraph (D)
of paragraph (36) and that
meets the requirements
described in items (aa) and
(bb) of subclause (I); and
(III) does not include--
(aa) any entity that
is a type of business
concern (or would be,
if such entity were a
business concern)
described in section
120.110 of title 13,
Code of Federal
Regulations (or in any
successor regulation or
other related guidance
or rule that may be
issued by the
Administrator) other
than a business concern
described in subsection
(a) or (k) of such
section; or
(bb) any business
concern or entity
primarily engaged in
political or lobbying
activities, which shall
include any entity that
is organized for
research or for
engaging in advocacy in
areas such as public
policy or political
strategy or otherwise
describes itself as a
think tank in any
public documents;
(cc) any business
concern or entity--
(AA) for
which an entity
created in or
organized under
the laws of the
People's
Republic of
China or the
Special
Administrative
Region of Hong
Kong, or that
has significant
operations in
the People's
Republic of
China or the
Special
Administrative
Region of Hong
Kong, owns or
holds, directly
or indirectly,
not less than
20 percent of
the economic
interest of the
business
concern or
entity,
including as
equity shares
or a capital or
profit interest
in a limited
liability
company or
partnership; or
(BB) that
retains, as a
member of the
board of
directors of
the business
concern, a
person who is a
resident of the
People's
Republic of
China;
(dd) any person
required to submit a
registration statement
under section 2 of the
Foreign Agents
Registration Act of
1938 (22 U.S.C. 612);
or
(ee) an eligible
person or entity (as
defined under section
24 of the Economic Aid
to Hard-Hit Small
Businesses, Nonprofits,
and Venues Act) that
receives a grant under
such section 24; and
(v) the term ``Tribal business
concern'' means a Tribal business
concern described in section
31(b)(2)(C).
(B) Loans.--Except as otherwise provided in
this paragraph, the Administrator may guarantee
covered loans to eligible entities under the
same terms, conditions, and processes as a loan
made under paragraph (36).
(C) Maximum loan amount.--
(i) In general.--Except as otherwise
provided in this subparagraph, the
maximum amount of a covered loan made
to an eligible entity is the lesser
of--
(I) the product obtained by
multiplying--
(aa) at the election
of the eligible entity,
the average total
monthly payment for
payroll costs incurred
or paid by the eligible
entity during--
(AA) the 1-
year period
before the date
on which the
loan is made;
or
(BB) calendar
year 2019; by
(bb) 2.5; or
(II) $2,000,000.
(ii) Seasonal employers.--The maximum
amount of a covered loan made to an
eligible entity that is a seasonal
employer is the lesser of--
(I) the product obtained by
multiplying--
(aa) at the election
of the eligible entity,
the average total
monthly payments for
payroll costs incurred
or paid by the eligible
entity for any 12-week
period between February
15, 2019 and February
15, 2020; by
(bb) 2.5; or
(II) $2,000,000.
(iii) New entities.--The maximum
amount of a covered loan made to an
eligible entity that did not exist
during the 1-year period preceding
February 15, 2020 is the lesser of--
(I) the product obtained by
multiplying--
(aa) the quotient
obtained by dividing--
(AA) the sum
of the total
monthly
payments by the
eligible entity
for payroll
costs paid or
incurred by the
eligible entity
as of the date
on which the
eligible entity
applies for the
covered loan;
by
(BB) the
number of
months in which
those payroll
costs were paid
or incurred; by
(bb) 2.5; or
(II) $2,000,000.
(iv) NAICS 72 entities.--The maximum
amount of a covered loan made to an
eligible entity that is assigned a
North American Industry Classification
System code beginning with 72 at the
time of disbursal is the lesser of--
(I) the product obtained by
multiplying--
(aa) at the election
of the eligible entity,
the average total
monthly payment for
payroll costs incurred
or paid by the eligible
entity during--
(AA) the 1-
year period
before the date
on which the
loan is made;
or
(BB) calendar
year 2019; by
(bb) 3.5; or
(II) $2,000,000.
(D) Business concerns with more than 1
physical location.--
(i) In general.--For a business
concern with more than 1 physical
location, the business concern shall be
an eligible entity if the business
concern would be eligible for a loan
under paragraph (36) pursuant to clause
(iii) of subparagraph (D) of such
paragraph, as applied in accordance
with clause (ii) of this subparagraph,
and meets the revenue reduction
requirements described in item (bb) of
subparagraph (A)(iv)(I).
(ii) Size limit.--For purposes of
applying clause (i), the Administrator
shall substitute ``not more than 300
employees'' for ``not more than 500
employees'' in paragraph (36)(D)(iii).
(E) Waiver of affiliation rules.--
(i) In general.--The waiver described
in paragraph (36)(D)(iv) shall apply
for purposes of determining eligibility
under this paragraph.
(ii) Size limit.--For purposes of
applying clause (i), the Administrator
shall substitute ``not more than 300
employees'' for ``not more than 500
employees'' in subclause (I) and (IV)
of paragraph (36)(D)(iv).
(F) Loan number limitation.--An eligible
entity may only receive 1 covered loan.
(G) Exception from certain certification
requirements.--An eligible entity applying for
a covered loan shall not be required to make
the certification described in clause (iii) or
(iv) of paragraph (36)(G).
(H) Fee waiver.--With respect to a covered
loan--
(i) in lieu of the fee otherwise
applicable under paragraph (23)(A), the
Administrator shall collect no fee; and
(ii) in lieu of the fee otherwise
applicable under paragraph (18)(A), the
Administrator shall collect no fee.
(I) Gross receipts and simplified
certification of revenue test.--
(i) Loans of up to $150,000.--For a
covered loan of not more than $150,000,
the eligible entity--
(I) may submit a
certification attesting that
the eligible entity meets the
applicable revenue loss
requirement under subparagraph
(A)(iv)(I)(bb); and
(II) if the eligible entity
submits a certification under
subclause (I), shall, on or
before the date on which the
eligible entity submits an
application for forgiveness
under subparagraph (J), produce
adequate documentation that the
eligible entity met such
revenue loss standard.
(ii) For nonprofit and veterans
organizations.--For purposes of
calculating gross receipts under
subparagraph (A)(iv)(I)(bb) for an
eligible entity that is a nonprofit
organization, a veterans organization,
or an organization described in
subparagraph (A)(iv)(II), gross
receipts means gross receipts within
the meaning of section 6033 of the
Internal Revenue Code of 1986.
(J) Loan forgiveness.--
(i) Definition of covered period.--In
this subparagraph, the term ``covered
period'' has the meaning given that
term in section 7A(a).
(ii) Forgiveness generally.--Except
as otherwise provided in this
subparagraph, an eligible entity shall
be eligible for forgiveness of
indebtedness on a covered loan in the
same manner as an eligible recipient
with respect to a loan made under
paragraph (36) of this section, as
described in section 7A.
(iii) Forgiveness amount.--An
eligible entity shall be eligible for
forgiveness of indebtedness on a
covered loan in an amount equal to the
sum of the following costs incurred or
expenditures made during the covered
period:
(I) Payroll costs, excluding
any payroll costs that are--
(aa) qualified wages,
as defined in
subsection (c)(3) of
section 2301 of the
CARES Act (26 U.S.C.
3111 note), taken into
account in determining
the credit allowed
under such section;
(bb) qualified wages
taken into account in
determining the credit
allowed under
subsection (a) or (d)
of section 303 of the
Taxpayer Certainty and
Disaster Relief Act of
2020; or
(cc) premiums taken
into account in
determining the credit
allowed under section
6432 of the Internal
Revenue Code of 1986.
(II) Any payment of interest
on any covered mortgage
obligation (which shall not
include any prepayment of or
payment of principal on a
covered mortgage obligation).
(III) Any covered operations
expenditure.
(IV) Any covered property
damage cost.
(V) Any payment on any
covered rent obligation.
(VI) Any covered utility
payment.
(VII) Any covered supplier
cost.
(VIII) Any covered worker
protection expenditure.
(iv) Limitation on forgiveness for
all eligible entities.--Subject to any
reductions under section 7A(d), the
forgiveness amount under this
subparagraph shall be equal to the
lesser of--
(I) the amount described in
clause (ii); and
(II) the amount equal to the
quotient obtained by dividing--
(aa) the amount of
the covered loan used
for payroll costs
during the covered
period; and
(bb) 0.60.
(v) Submission of materials for
forgiveness.--For purposes of applying
subsection (l)(1) of section 7A to a
covered loan of not more than $150,000
under this paragraph, an eligible
entity may be required to provide, at
the time of the application for
forgiveness, documentation required to
substantiate revenue loss in accordance
with subparagraph (I).
(K) Lender eligibility.--Except as otherwise
provided in this paragraph, a lender approved
to make loans under paragraph (36) may make
covered loans under the same terms and
conditions as in paragraph (36).
(L) Reimbursement for loan processing and
servicing.--The Administrator shall reimburse a
lender authorized to make a covered loan--
(i) for a covered loan of not more
than $50,000, in an amount equal to the
lesser of--
(I) 50 percent of the balance
of the financing outstanding at
the time of disbursement of the
covered loan; or
(II) $2,500;
(ii) at a rate, based on the balance
of the financing outstanding at the
time of disbursement of the covered
loan, of--
(I) 5 percent for a covered
loan of more than $50,000 and
not more than $350,000; and
(II) 3 percent for a covered
loan of more than $350,000.
(M) Publication of guidance.--Not later than
10 days after the date of enactment of this
paragraph, the Administrator shall issue
guidance addressing barriers to accessing
capital for minority, underserved, veteran, and
women-owned business concerns for the purpose
of ensuring equitable access to covered loans.
(N) Standard operating procedure.--The
Administrator shall, to the maximum extent
practicable, allow a lender approved to make
covered loans to use existing program guidance
and standard operating procedures for loans
made under this subsection.
(O) Supplemental covered loans.--A covered
loan under this paragraph may only be made to
an eligible entity that--
(i) has received a loan under
paragraph (36); and
(ii) on or before the expected date
on which the covered loan under this
paragraph is disbursed to the eligible
entity, has used, or will use, the full
amount of the loan received under
paragraph (36).
(38) Loans to cannabis-related legitimate businesses
and service providers.--The Administrator may not
decline to provide a guarantee for a loan under this
subsection, and a lender may not decline to make a loan
under this subsection, to an otherwise eligible small
business concern solely because such concern is a
cannabis-related legitimate business or service
provider.
(b) Except as to agricultural enterprises as defined in
section 18(b)(1) of this Act, the Administration also is
empowered to the extent and in such amounts as provided in
advance in appropriation Acts--
(1)(A) to make such loans (either directly or in
cooperation with banks or other lending institutions
through agreements to participate on an immediate or
deferred (guaranteed) basis) as the Administration may
determine to be necessary or appropriate to repair,
rehabilitate or replace property, real or personal,
damaged or destroyed by or as a result of natural or
other disasters: Provided, That such damage or
destruction is not compensated for by insurance or
otherwise: And provided further, That the
Administration may increase the amount of the loan by
up to an additional 20 per centum of the aggregate
costs of such damage or destruction (whether or not
compensated for by insurance or otherwise) if it
determines such increase to be necessary or appropriate
in order to protect the damaged or destroyed property
from possible future disasters by taking mitigating
measures, including--
(i) construction of retaining walls and sea
walls;
(ii) grading and contouring land; and
(iii) relocating utilities and modifying
structures, including construction of a safe
room or similar storm shelter designed to
protect property and occupants from tornadoes
or other natural disasters, if such safe room
or similar storm shelter is constructed in
accordance with applicable standards issued by
the Federal Emergency Management Agency;
(B) to refinance any mortgage or other lien against a
totally destroyed or substantially damaged home or
business concern: Provided, That no loan or guarantee
shall be extended unless the Administration finds that
(i) the applicant is not able to obtain credit
elsewhere; (ii) such property is to be repaired,
rehabilitated, or replaced; (iii) the amount refinanced
shall not exceed the amount of physical loss sustained;
and (iv) such amount shall be reduced to the extent
such mortgage or lien is satisfied by insurance or
otherwise; and
(C) during fiscal years 2000 through 2004, to
establish a predisaster mitigation program to make such
loans (either directly or in cooperation with banks or
other lending institutions through agreements to
participate on an immediate or deferred (guaranteed)
basis), as the Administrator may determine to be
necessary or appropriate, to enable small businesses to
use mitigation techniques in support of a formal
mitigation program established by the Federal Emergency
Management Agency, except that no loan or guarantee may
be extended to a small business under this subparagraph
unless the Administration finds that the small business
is otherwise unable to obtain credit for the purposes
described in this subparagraph;
(2) to make such loans (either directly or in
cooperation with banks or other lending institutions
through agreements to participate on an immediate or
deferred (guaranteed) basis) as the Administration may
determine to be necessary or appropriate to any small
business concern, private nonprofit organization, or
small agricultural cooperative located in an area
affected by a disaster, (including drought), with
respect to both farm-related and nonfarm-related small
business concerns, if the Administration determines
that the concern, the organization, or the cooperative
has suffered a substantial economic injury as a result
of such disaster and if such disaster constitutes--
(A) a major disaster, as determined by the
President under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (42 U.S.C.
5121 et seq.);
(B) a natural disaster, as determined by the
Secretary of Agriculture pursuant to section
321 of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1961), in which case,
assistance under this paragraph may be provided
to farm-related and nonfarm-related small
business concerns, subject to the other
applicable requirements of this paragraph;
(C) a disaster, as determined by the
Administrator of the Small Business
Administration;
(D) an emergency involving Federal primary
responsibility determined to exist by the
President under the section 501(b) of the
Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5191(b));
or
(E) if no disaster or emergency declaration
has been issued pursuant to subparagraph (A),
(B), (C), or (D), the Governor of a State in
which a disaster or emergency has occurred may
certify to the Small Business Administration
that small business concerns, private nonprofit
organizations, or small agricultural
cooperatives (1) have suffered economic injury
as a result of such disaster or emergency, and
(2) are in need of financial assistance which
is not available on reasonable terms in the
disaster- or emergency-stricken area. Not later
than 30 days after the date of receipt of such
certification by a Governor of a State, the
Administration shall respond in writing to that
Governor on its determination and the reasons
therefore, and may then make such loans as
would have been available under this paragraph
if a disaster or emergency declaration had been
issued.
Provided, That no loan or guarantee shall be extended
pursuant to this paragraph (2) unless the
Administration finds that the applicant is not able to
obtain credit elsewhere: Provided further, That for
purposes of subparagraph (D), the Administrator shall
deem that such an emergency affects each State or
subdivision thereof (including counties), and that each
State or subdivision has sufficient economic damage to
small business concerns to qualify for assistance under
this paragraph and the Administrator shall accept
applications for such assistance immediately.
(3)(A) In this paragraph--
(i) the term ``active service'' has the
meaning given that term in section 101(d)(3) of
title 10, United States Code;
(ii) the term ``essential employee'' means an
individual who is employed by a small business
concern and whose managerial or technical
expertise is critical to the successful day-to-
day operations of that small business concern;
and
(iii) the term ``substantial economic
injury'' means an economic harm to a business
concern that results in the inability of the
business concern--
(I) to meet its obligations as they
mature;
(II) to pay its ordinary and
necessary operating expenses; or
(III) to market, produce, or provide
a product or service ordinarily
marketed, produced, or provided by the
business concern.
(B) The Administration may make such disaster loans
(either directly or in cooperation with banks or other
lending institutions through agreements to participate
on an immediate or deferred basis) to assist a small
business concern that has suffered or that is likely to
suffer substantial economic injury as the result of an
essential employee of such small business concern being
ordered to perform active service for a period of more
than 30 consecutive days.
(C) A small business concern described in
subparagraph (B) shall be eligible to apply for
assistance under this paragraph during the period
beginning on the date on which the essential employee
is ordered to active service and ending on the date
that is 1 year after the date on which such essential
employee is discharged or released from active service.
The Administrator may, when appropriate (as determined
by the Administrator), extend the ending date specified
in the preceding sentence by not more than 1 year.
(D) Any loan or guarantee extended pursuant to this
paragraph shall be made at the same interest rate as
economic injury loans under paragraph (2).
(E) No loan may be made under this paragraph, either
directly or in cooperation with banks or other lending
institutions through agreements to participate on an
immediate or deferred basis, if the total amount
outstanding and committed to the borrower under this
subsection would exceed $1,500,000, unless such
applicant constitutes, or have become due to changed
economic circumstances, a major source of employment in
its surrounding area, as determined by the
Administration, in which case the Administration, in
its discretion, may waive the $1,500,000 limitation.
(F) For purposes of assistance under this paragraph,
no declaration of a disaster area shall be required.
(G)(i) Notwithstanding any other provision of
law, the Administrator may make a loan under
this paragraph of not more than $50,000 without
collateral.
(ii) The Administrator may defer payment of
principal and interest on a loan described in
clause (i) during the longer of--
(I) the 1-year period beginning on
the date of the initial disbursement of
the loan; and
(II) the period during which the
relevant essential employee is on
active service.
(H) The Administrator shall give priority to
any application for a loan under this paragraph
and shall process and make a determination
regarding such applications prior to processing
or making a determination on other loan
applications under this subsection, on a
rolling basis.
(4) Coordination with fema.--
(A) In general.--Notwithstanding any other
provision of law, for any disaster declared
under this subsection or major disaster
(including any major disaster relating to which
the Administrator declares eligibility for
additional disaster assistance under paragraph
(9)), the Administrator, in consultation with
the Administrator of the Federal Emergency
Management Agency, shall ensure, to the maximum
extent practicable, that all application
periods for disaster relief under this Act
correspond with application deadlines
established under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act
(42 U.S.C. 5121 et seq.), or as extended by the
President.
(B) Deadlines.--Notwithstanding any other
provision of law, not later than 10 days before
the closing date of an application period for a
major disaster (including any major disaster
relating to which the Administrator declares
eligibility for additional disaster assistance
under paragraph (9)), the Administrator, in
consultation with the Administrator of the
Federal Emergency Management Agency, shall
submit to the Committee on Small Business and
Entrepreneurship of the Senate and the
Committee on Small Business of the House of
Representatives a report that includes--
(i) the deadline for submitting
applications for assistance under this
Act relating to that major disaster;
(ii) information regarding the number
of loan applications and disbursements
processed by the Administrator relating
to that major disaster for each day
during the period beginning on the date
on which that major disaster was
declared and ending on the date of that
report; and
(iii) an estimate of the number of
potential applicants that have not
submitted an application relating to
that major disaster.
(5) Public awareness of disasters.--If a disaster is
declared under this subsection or the Administrator
declares eligibility for additional disaster assistance
under paragraph (9), the Administrator shall make every
effort to communicate through radio, television, print,
and web-based outlets, all relevant information needed
by disaster loan applicants, including--
(A) the date of such declaration;
(B) cities and towns within the area of such
declaration;
(C) loan application deadlines related to
such disaster;
(D) all relevant contact information for
victim services available through the
Administration (including links to small
business development center websites);
(E) links to relevant Federal and State
disaster assistance websites, including links
to websites providing information regarding
assistance available from the Federal Emergency
Management Agency;
(F) information on eligibility criteria for
Administration loan programs, including where
such applications can be found; and
(G) application materials that clearly state
the function of the Administration as the
Federal source of disaster loans for homeowners
and renters.
(6) Authority for qualified private contractors.--
(A) Disaster loan processing.--The
Administrator may enter into an agreement with
a qualified private contractor, as determined
by the Administrator, to process loans under
this subsection in the event of a major
disaster (including any major disaster relating
to which the Administrator declares eligibility
for additional disaster assistance under
paragraph (9)), under which the Administrator
shall pay the contractor a fee for each loan
processed.
(B) Loan loss verification services.--The
Administrator may enter into an agreement with
a qualified lender or loss verification
professional, as determined by the
Administrator, to verify losses for loans under
this subsection in the event of a major
disaster (including any major disaster relating
to which the Administrator declares eligibility
for additional disaster assistance under
paragraph (9)), under which the Administrator
shall pay the lender or verification
professional a fee for each loan for which such
lender or verification professional verifies
losses.
(7) Disaster assistance employees.--
(A) In general.--In carrying out this
section, the Administrator may, where
practicable, ensure that the number of full-
time equivalent employees--
(i) in the Office of the Disaster
Assistance is not fewer than 800; and
(ii) in the Disaster Cadre of the
Administration is not fewer than 1,000.
(B) Report.--In carrying out this subsection,
if the number of full-time employees for either
the Office of Disaster Assistance or the
Disaster Cadre of the Administration is below
the level described in subparagraph (A) for
that office, not later than 21 days after the
date on which that staffing level decreased
below the level described in subparagraph (A),
the Administrator shall submit to the Committee
on Appropriations and the Committee on Small
Business and Entrepreneurship of the Senate and
the Committee on Appropriations and Committee
on Small Business of the House of
Representatives, a report--
(i) detailing staffing levels on that
date;
(ii) requesting, if practicable and
determined appropriate by the
Administrator, additional funds for
additional employees; and
(iii) containing such additional
information, as determined appropriate
by the Administrator.
(8) Increased loan caps.--
(A) Aggregate loan amounts.--Except as
provided in subparagraph (B), and
notwithstanding any other provision of law, the
aggregate loan amount outstanding and committed
to a borrower under this subsection may not
exceed $2,000,000.
(B) Waiver authority.--The Administrator may,
at the discretion of the Administrator,
increase the aggregate loan amount under
subparagraph (A) for loans relating to a
disaster to a level established by the
Administrator, based on appropriate economic
indicators for the region in which that
disaster occurred.
(9) Declaration of eligibility for additional
disaster assistance.--
(A) In general.--If the President declares a
major disaster, the Administrator may declare
eligibility for additional disaster assistance
in accordance with this paragraph.
(B) Threshold.--A major disaster for which
the Administrator declares eligibility for
additional disaster assistance under this
paragraph shall--
(i) have resulted in extraordinary
levels of casualties or damage or
disruption severely affecting the
population (including mass
evacuations), infrastructure,
environment, economy, national morale,
or government functions in an area;
(ii) be comparable to the description
of a catastrophic incident in the
National Response Plan of the
Administration, or any successor
thereto, unless there is no successor
to such plan, in which case this clause
shall have no force or effect; and
(iii) be of such size and scope
that--
(I) the disaster assistance
programs under the other
paragraphs under this
subsection are incapable of
providing adequate and timely
assistance to individuals or
business concerns located
within the disaster area; or
(II) a significant number of
business concerns outside the
disaster area have suffered
disaster-related substantial
economic injury as a result of
the incident.
(C) Additional economic injury disaster loan
assistance.--
(i) In general.--If the Administrator
declares eligibility for additional
disaster assistance under this
paragraph, the Administrator may make
such loans under this subparagraph
(either directly or in cooperation with
banks or other lending institutions
through agreements to participate on an
immediate or deferred basis) as the
Administrator determines appropriate to
eligible small business concerns
located anywhere in the United States.
(ii) Processing time.--
(I) In general.--If the
Administrator determines that
the average processing time for
applications for disaster loans
under this subparagraph
relating to a specific major
disaster is more than 15 days,
the Administrator shall give
priority to the processing of
such applications submitted by
eligible small business
concerns located inside the
disaster area, until the
Administrator determines that
the average processing time for
such applications is not more
than 15 days.
(II) Suspension of
applications from outside
disaster area.--If the
Administrator determines that
the average processing time for
applications for disaster loans
under this subparagraph
relating to a specific major
disaster is more than 30 days,
the Administrator shall suspend
the processing of such
applications submitted by
eligible small business
concerns located outside the
disaster area, until the
Administrator determines that
the average processing time for
such applications is not more
than 15 days.
(iii) Loan terms.--A loan under this
subparagraph shall be made on the same
terms as a loan under paragraph (2).
(D) Definitions.--In this paragraph--
(i) the term ``disaster area'' means
the area for which the applicable major
disaster was declared;
(ii) the term ``disaster-related
substantial economic injury'' means
economic harm to a business concern
that results in the inability of the
business concern to--
(I) meet its obligations as
it matures;
(II) meet its ordinary and
necessary operating expenses;
or
(III) market, produce, or
provide a product or service
ordinarily marketed, produced,
or provided by the business
concern because the business
concern relies on materials
from the disaster area or sells
or markets in the disaster
area; and
(iii) the term ``eligible small
business concern'' means a small
business concern--
(I) that has suffered
disaster-related substantial
economic injury as a result of
the applicable major disaster;
and
(II)(aa) for which not less
than 25 percent of the market
share of that small business
concern is from business
transacted in the disaster
area;
(bb) for which not less than
25 percent of an input into a
production process of that
small business concern is from
the disaster area; or
(cc) that relies on a
provider located in the
disaster area for a service
that is not readily available
elsewhere.
(10) Reducing closing and disbursement delays.--The
Administrator shall provide a clear and concise
notification on all application materials for loans
made under this subsection and on relevant websites
notifying an applicant that the applicant may submit
all documentation necessary for the approval of the
loan at the time of application and that failure to
submit all documentation could delay the approval and
disbursement of the loan.
(11) Increasing transparency in loan approvals.--The
Administrator shall establish and implement clear,
written policies and procedures for analyzing the
ability of a loan applicant to repay a loan made under
this subsection.
(12) Additional awards to small business development
centers, women's business centers, and score for
disaster recovery.--
(A) In general.--The Administration may
provide financial assistance to a small
business development center, a women's business
center described in section 29, the Service
Corps of Retired Executives, or any proposed
consortium of such individuals or entities to
spur disaster recovery and growth of small
business concerns located in an area for which
the President has declared a major disaster.
(B) Form of financial assistance.--Financial
assistance provided under this paragraph shall
be in the form of a grant, contract, or
cooperative agreement.
(C) No matching funds required.--Matching
funds shall not be required for any grant,
contract, or cooperative agreement under this
paragraph.
(D) Requirements.--A recipient of financial
assistance under this paragraph shall provide
counseling, training, and other related
services, such as promoting long-term
resiliency, to small business concerns and
entrepreneurs impacted by a major disaster.
(E) Performance.--
(i) In general.--The Administrator,
in cooperation with the recipients of
financial assistance under this
paragraph, shall establish metrics and
goals for performance of grants,
contracts, and cooperative agreements
under this paragraph, which shall
include recovery of sales, recovery of
employment, reestablishment of business
premises, and establishment of new
small business concerns.
(ii) Use of estimates.--The
Administrator shall base the goals and
metrics for performance established
under clause (i), in part, on the
estimates of disaster impact prepared
by the Office of Disaster Assistance
for purposes of estimating loan-making
requirements.
(F) Term.--
(i) In general.--The term of any
grant, contract, or cooperative
agreement under this paragraph shall be
for not more than 2 years.
(ii) Extension.--The Administrator
may make 1 extension of a grant,
contract, or cooperative agreement
under this paragraph for a period of
not more than 1 year, upon a showing of
good cause and need for the extension.
(G) Exemption from other program
requirements.--Financial assistance provided
under this paragraph is in addition to, and
wholly separate from, any other form of
assistance provided by the Administrator under
this Act.
(H) Competitive basis.--The Administration
shall award financial assistance under this
paragraph on a competitive basis.
(13) Supplemental assistance for contractor
malfeasance.--
(A) In general.--If a contractor or other
person engages in malfeasance in connection
with repairs to, rehabilitation of, or
replacement of real or personal property
relating to which a loan was made under this
subsection and the malfeasance results in
substantial economic damage to the recipient of
the loan or substantial risks to health or
safety, upon receiving documentation of the
substantial economic damage or the substantial
risk to health and safety from an independent
loss verifier, and subject to subparagraph (B),
the Administrator may increase the amount of
the loan under this subsection, as necessary
for the cost of repairs, rehabilitation, or
replacement needed to address the cause of the
economic damage or health or safety risk.
(B) Requirements.--The Administrator may only
increase the amount of a loan under
subparagraph (A) upon receiving an appropriate
certification from the borrower and person
performing the mitigation attesting to the
reasonableness of the mitigation costs and an
assignment of any proceeds received from the
person engaging in the malfeasance. The
assignment of proceeds recovered from the
person engaging in the malfeasance shall be
equal to the amount of the loan under this
section. Any mitigation activities shall be
subject to audit and independent verification
of completeness and cost reasonableness.
(14) Business recovery centers.--
(A) In general.--The Administrator, acting
through the district offices of the
Administration, shall identify locations that
may be used as recovery centers by the
Administration in the event of a disaster
declared under this subsection or a major
disaster.
(B) Requirements for identification.--Each
district office of the Administration shall--
(i) identify a location described in
subparagraph (A) in each county,
parish, or similar unit of general
local government in the area served by
the district office; and
(ii) ensure that the locations
identified under subparagraph (A) may
be used as a recovery center without
cost to the Government, to the extent
practicable.
(15) Increased oversight of economic injury disaster
loans.--The Administrator shall increase oversight of
entities receiving loans under paragraph (2), and may
consider--
(A) scheduled site visits to ensure borrower
eligibility and compliance with requirements
established by the Administrator; and
(B) reviews of the use of the loan proceeds
by an entity described in paragraph (2) to
ensure compliance with requirements established
by the Administrator.
(16) Assistance to cannabis-related legitimate
businesses and service providers.--The Administrator
may not decline to provide assistance under this
subsection to an otherwise eligible small business
concern solely because such concern is a cannabis-
related legitimate business or service provider.
No loan under this subsection, including renewals and
extensions thereof, may be made for a period or periods
exceeding thirty years: Provided, That the Administrator may
consent to a suspension in the payment of principal and
interest charges on, and to an extension in the maturity of,
the Federal share of any loan under this subsection for a
period not to exceed five years, if (A) the borrower under such
loan is a homeowner or a small business concern, (B) the loan
was made to enable (i) such homeowner to repair or replace his
home, or (ii) such concern to repair or replace plant or
equipment which was damaged or destroyed as the result of a
disaster meeting the requirements of clause (A) or (B) of
paragraph (2) of this subsection, and (C) the Administrator
determines such action is necessary to avoid severe financial
hardship: Provided further, That the provisions of paragraph
(1) of subsection (d) of this section shall not be applicable
to any such loan having a maturity in excess of twenty years.
Notwithstanding any other provision of law, and except as
provided in subsection (d), the interest rate on the
Administration's share of any loan made under subsection (b),
shall not exceed the average annual interest rate on all
interest-bearing obligations of the United States then forming
a part of the public debt as computed at the end of the fiscal
year next preceding the date of the loan and adjusted to the
nearest one-eight of 1 per centum plus one-quarter of 1 per
centum: Provided, however, That the interest rate for loans
made under paragraphs (1) and (2) hereof shall not exceed the
rate of interest which is in effect at the time of the
occurrence of the disaster. In agreements to participate in
loans on a deferred basis under this subsection, such
participation by the Administration shall not be in excess of
90 per centum of the balance of the loan outstanding at the
time of disbursement. Notwithstanding any other provision of
law, the interest rate on the Administration's share of any
loan made pursuant to paragraph (1) of this subsection to
repair or replace a primary residence and/or replace or repair
damaged or destroyed personal property, less the amount of
compensation by insurance or otherwise, with respect to a
disaster occurring on or after July 1, 1976, and prior to
October 1, 1978, shall be: 1 per centum on the amount of such
loan not exceeding $10,000, and 3 per centum on the amount of
such loan over $10,000 but not exceeding $40,000. The interest
rate on the Administration's share of the first $250,000 of all
other loans made pursuant to paragraph (1) of this subsection,
with respect to a disaster occurring on or after July 1, 1976,
and prior to October 1, 1978, shall be 3 per centum. All
repayments of principal on the Administration's share of any
loan made under the above provisions shall first be applied to
reduce the principal sum of such loan which bears interest at
the lower rates provided in this paragraph. The principal
amount of any loan made pursuant to paragraph (1) in connection
with a disaster which occurs on or after April 1, 1977, but
prior to January 1, 1978, may be increased by such amount, but
not more than $2,000, as the Administration determines to be
reasonable in light of the amount and nature of loss, damage,
or injury sustained in order to finance the installation of
insulation in the property which was lost, damaged, or injured,
if the uninsured, damaged portion of the property is 10 per
centum or more of the market value of the property at the time
of the disaster. No later than June 1, 1978, the Administration
shall prepare and transmit to the Select Committee on Small
Business of the Senate, the Committee on Small Business of the
House of Representatives, and the Committee of the Senate and
House of Representatives having jurisdiction over measures
relating to energy conservation, a report on its activities
under this paragraph, including therein an evaluation of the
effect of such activities on encouraging the installation of
insulation in property which is repaired or replaced after a
disaster which is subject to this paragraph, and its
recommendations with respect to the continuation, modification,
or termination of such activities.
In the administration of the disaster loan program under
paragraphs (1) and (2) of this subsection, in the case of
property loss or damage or injury resulting from a major
disaster as determined by the President or a disaster as
determined by the Administrator which occurs on or after
January 1, 1971, and prior to July 1, 1973, the Small Business
Administration, to the extent such loss or damage or injury is
not compensated for by insurance or otherwise--
(A) may make any loan for repair, rehabilitation, or
replacement of property damaged or destroyed without
regard to whether the required financial assistance is
otherwise available from private sources;
(B) may, in the case of the total destruction or
substantial property damage of a home or business
concern, refinance any mortgage or other liens
outstanding against the destroyed or damaged property
if such project is to be repaired, rehabilitated, or
replaced, except that (1) in the case of a business
concern, the amount refinanced shall not exceed the
amount of the physical loss sustained, and (2) in the
case of a home, the amount of each monthly payment of
principal and interest on the loan after refinancing
under this clause shall be not less than the amount of
each such payment made prior to such refinancing;
(C) may, in the case of a loan made under clause (A)
or a mortgage or other lien refinanced under clause (B)
in connection with the destruction of, or substantial
damage to, property owned and used as a residence by an
individual who by reason of retirement, disability, or
other similar circumstances relies for support on
survivor, disability, or retirement benefits under a
pension, insurance, or other program, consent to the
suspension of the payments of the principal of that
loan, mortgage, or lien during the lifetime of that
individual and his souse for so long as the
Administration determines that making such payments
would constitute a substantial hardship;
(D) shall, notwithstanding the provisions of any
other law and upon presentation by the applicant of
proof of loss or damage or injury and a bona fide
estimate of cost of repair, rehabilitation, or
replacement, cancel the principal of any loan made to
cover a loss or damage or injury resulting from such
disaster, except that--
(i) with respect to a loan made in connection
with a disaster occurring on or after January
1, 1971 but prior to January 1, 1972, the total
amount so canceled shall not exceed $2,500, and
the interest on the balance of the loan shall
be at a rate of 3 per centum per annum; and
(ii) with respect to a loan made in
connection with a disaster occurring on or
after January 1, 1972 but prior to July 1,
1973, the total amount so canceled shall not
exceed $5,000, and the interest on the balance
of the loan shall be at a rate of 1 per centum
per annum.
With respect to any loan referred to in clause (D) which is
outstanding on the date of enactment of this paragraph, the
Administrator shall--
(i) make sure change in the interest rate on the
balance of such loan as is required under that clause
effective as of such date of enactment; and
(ii) in applying the limitation set forth in that
clause with respect to the total amount of such loan
which may be canceled, consider as part of the amount
so canceled any part of such loan which was previously
canceled pursuant to section 231 of the Disaster Relief
Act of 1970.
Whoever wrongfully misapplies the proceeds of a loan obtained
under this subsection shall be civilly liable to the
Administrator in an amount equal to one-and-one-half times the
original principal amount of the loan.
(E) A State grant made on or prior to July 1, 1979,
shall not be considered compensation for the purpose of
applying the provisions of section 312(a) of the
Disaster Relief and Emergency Assistance Act to a
disaster loan under paragraph (1) (2)of this
subsection.
(c) Private Disaster Loans.--
(1) Definitions.--In this subsection--
(A) the term ``disaster area'' means any area
for which the President declared a major
disaster relating to which the Administrator
declares eligibility for additional disaster
assistance under subsection (b)(9), during the
period of that major disaster declaration;
(B) the term ``eligible individual'' means an
individual who is eligible for disaster
assistance under subsection (b)(1) relating to
a major disaster relating to which the
Administrator declares eligibility for
additional disaster assistance under subsection
(b)(9);
(C) the term ``eligible small business
concern'' means a business concern that is--
(i) a small business concern, as
defined under this Act; or
(ii) a small business concern, as
defined in section 103 of the Small
Business Investment Act of 1958;
(D) the term ``preferred lender'' means a
lender participating in the Preferred Lender
Program;
(E) the term ``Preferred Lender Program'' has
the meaning given that term in subsection
(a)(2)(C)(ii); and
(F) the term ``qualified private lender''
means any privately-owned bank or other lending
institution that--
(i) is not a preferred lender; and
(ii) the Administrator determines
meets the criteria established under
paragraph (10).
(2) Program required.--The Administrator shall carry
out a program, to be known as the Private Disaster
Assistance program, under which the Administration may
guarantee timely payment of principal and interest, as
scheduled, on any loan made to an eligible small
business concern located in a disaster area and to an
eligible individual.
(3) Use of loans.--A loan guaranteed by the
Administrator under this subsection may be used for any
purpose authorized under subsection (b).
(4) Online applications.--
(A) Establishment.--The Administrator may
establish, directly or through an agreement
with another entity, an online application
process for loans guaranteed under this
subsection.
(B) Other federal assistance.--The
Administrator may coordinate with the head of
any other appropriate Federal agency so that
any application submitted through an online
application process established under this
paragraph may be considered for any other
Federal assistance program for disaster relief.
(C) Consultation.--In establishing an online
application process under this paragraph, the
Administrator shall consult with appropriate
persons from the public and private sectors,
including private lenders.
(5) Maximum amounts.--
(A) Guarantee percentage.--The Administrator
may guarantee not more than 85 percent of a
loan under this subsection.
(B) Loan amount.--The maximum amount of a
loan guaranteed under this subsection shall be
$2,000,000.
(6) Terms and conditions.--A loan guaranteed under
this subsection shall be made under the same terms and
conditions as a loan under subsection (b).
(7) Lenders.--
(A) In general.--A loan guaranteed under this
subsection made to--
(i) a qualified individual may be
made by a preferred lender; and
(ii) a qualified small business
concern may be made by a qualified
private lender or by a preferred lender
that also makes loans to qualified
individuals.
(B) Compliance.--If the Administrator
determines that a preferred lender knowingly
failed to comply with the underwriting
standards for loans guaranteed under this
subsection or violated the terms of the
standard operating procedure agreement between
that preferred lender and the Administration,
the Administrator shall do 1 or more of the
following:
(i) Exclude the preferred lender from
participating in the program under this
subsection.
(ii) Exclude the preferred lender
from participating in the Preferred
Lender Program for a period of not more
than 5 years.
(8) Fees.--
(A) In general.--The Administrator may not
collect a guarantee fee under this subsection.
(B) Origination fee.--The Administrator may
pay a qualified private lender or preferred
lender an origination fee for a loan guaranteed
under this subsection in an amount agreed upon
in advance between the qualified private lender
or preferred lender and the Administrator.
(9) Documentation.--A qualified private lender or
preferred lender may use its own loan documentation for
a loan guaranteed by the Administrator under this
subsection, to the extent authorized by the
Administrator. The ability of a lender to use its own
loan documentation for a loan guaranteed under this
subsection shall not be considered part of the criteria
for becoming a qualified private lender under the
regulations promulgated under paragraph (10).
(10) Implementation regulations.--
(A) In general.--Not later than 1 year after
the date of enactment of the Small Business
Disaster Response and Loan Improvements Act of
2008, the Administrator shall issue final
regulations establishing permanent criteria for
qualified private lenders.
(B) Report to congress.--Not later than 6
months after the date of enactment of the Small
Business Disaster Response and Loan
Improvements Act of 2008, the Administrator
shall submit a report on the progress of the
regulations required by subparagraph (A) to the
Committee on Small Business and
Entrepreneurship of the Senate and the
Committee on Small Business of the House of
Representatives.
(11) Authorization of appropriations.--
(A) In general.--Amounts necessary to carry
out this subsection shall be made available
from amounts appropriated to the Administration
to carry out subsection (b).
(B) Authority to reduce interest rates and
other terms and conditions.--Funds appropriated
to the Administration to carry out this
subsection, may be used by the Administrator to
meet the loan terms and conditions specified in
paragraph (6).
(12) Purchase of loans.--The Administrator may enter
into an agreement with a qualified private lender or
preferred lender to purchase any loan guaranteed under
this subsection.
(d)(1) The Administration may further extend the maturity of
or renew any loan made pursuant to this section, or any loan
transferred to the Administration pursuant to Reorganization
Plan Numbered 2 of 1954, or Reorganization Plan Numbered 1 of
1957, for additional periods not to exceed ten years beyond the
period stated therein, if such extension or renewal will aid in
the orderly liquidation of such loan.
(2) During any period in which principal and interest
charges are suspended on the Federal share of any loan,
as provided in subsection (b), the Administrator shall,
upon the request of any person, firm, or corporation
having a participation in such loan, purchase such
participation, or assume the obligation of the
borrower, for the balance of such period, to make
principal and interest payments on the non-Federal
share of such loan: Provided, That no such payments
shall be made by the Administrator in behalf of any
borrower unless (i) the Administrator determines that
such action is necessary in order to avoid a default,
and (ii) the borrower agrees to make payments to the
Administration in an agreegate amount equal to the
amount paid in its behalf by the Administrator, in such
manner and at such time (during or after the term of
the loan) as the Administrator shall determine having
due regard to the purposes sought to be achieved by
this paragraph.
(3) With respect to a disaster occurring on or after
October 1, 1978, and prior the effective date of this
Act, on the Administration's share of loans made
pursuant to paragraph (1) of subsection (b)--
(A) if the loan proceeds are to
repair or replace a primary residence
and/or repair or replace damaged or
destroyed personal property, the
interest rate shall be 3 percent on the
first $55,000 of such loan;
(B) if the loan proceeds are to
repair or replace property damaged or
destroyed and if the applicant is a
business concern which is unable to
obtain sufficient credit elsewhere, the
interest rate shall be as determined by
the Administration, but not in excess
of 5 percent per annum; and
(C) if the loan proceeds are to repair or
replace property damaged or destroyed and if
the applicant is a business concern which is
able to obtain sufficient credit elsewhere, the
interest rate shall not exceed the current
average market yield on outstanding marketable
obligations of the United States with remaining
periods to maturity comparable to the average
maturities of such loans and adjusted to the
nearest one-eight of 1 percent, and an
additional amount as determined by the
Administration, but not to exceed 1 percent:
Provided, That three years after such loan is
fully disbursed and every two years thereafter
for the term of the loan, if the Administration
determines that the borrower is able to obtain
a loan from one-Federal sources at reasonable
rates and terms for loans of similar purposes
and periods of time, the borrower shall, upon
request by the Administration, apply for and
accept such a loan in sufficient amount to
repay the Administration: Provided further,
That no loan under subsection (b)(1) shall be
made, either directly or in cooperation with
banks or other lending institutions through
agreements to participate on an immediate or
deferred basis, if the total amount outstanding
and committed to the borrower under such
subsection would exceed $500,000 for each
disaster, unless an applicant constitutes a
major source of employment in an area suffering
a disaster, in which case the Administration,
in its discretion, may waive the $500,000
limitation.
(4) Notwithstanding the provisions of any other law,
the interest rate on the Federal share of any loan made
under subsection (b) shall be--
(A) in the case of a homeowner unable to
secure credit elsewhere, the rate prescribed by
the Administration but not more than one-half
the rate determined by the Secretary of the
Treasury taking into consideration the current
average market yield on outstanding marketable
obligations of the United States with remaining
periods to maturity comparable to the average
maturities of such loans plus an additional
charge of not to exceed 1 per centum per annum
as determined by the Administrator, and
adjusted to the nearest one-eight of 1 per
centum but not to exceed 8 per centum per
annum;
(B) in the case of a homeowner able to secure
credit elsewhere, the rate prescribed by the
Administration but not more than the rate
determined by the Secretary of the Treasury
taking into consideration the current average
market yield on outstanding marketable
obligations of the United States with remaining
periods to maturity comparable to the average
maturities of such loans plus an additional
charge of not to exceed 1 per centum per annum
as determined by the Administrator, and
adjusted to the nearest one-eighth of 1 per
centum;
(C) in the case of a business concern unable
to obtain credit elsewhere, not to exceed 8 per
centum per annum;
(D) in the case of a business concern able to
obtain credit elsewhere, the rate prescribed by
the Administration but not in excess of the
rate prevailing in private market for similar
loans and not more than the rate prescribed by
the Administration as the maximum interest rate
for deferred participation (guaranteed) loans
under section 7(a) of this Act. Loans under
this subparagraph shall be limited to a maximum
term of three years.
(5) Notwithstanding the provisions of any other law,
the interest rate on the Federal share of any loan made
under subsection (b)(1) and (b)(2) on account of a
disaster commencing on or after October 1, 1982, shall
be--
(A) in the case of a homeowner unable to
secure credit elsewhere, the rate prescribed by
the Administration but not more than one-half
the rate determined by the Secretary of the
Treasury taking into consideration the current
average market yield on outstanding marketable
obligations of the United States with remaining
periods to maturity comparable to the average
maturities of such loan plus an additional
charge of not to exceed 1 per centum per annum
as determined by the Administrator, and
adjusted to the nearest one-eighth of 1 per
centum, but not to exceed 4 per centum per
annum;
(B) in the case of a homeowner, able to
secure credit elsewhere, the rate prescribed by
the Administration but not more than the rate
determined by the Secretary of the Treasury
taking into consideration the current average
market yield on outstanding marketable
obligations of the United States with remaining
periods to maturity comparable to the average
maturities of such loans plus an additional
charge of not to exceed 1 per centum per annum
as determined by the Administrator, and
adjusted to the nearest one-eighth of 1 per
centum, but not to exceed 8 per centum per
annum;
(C) in the case of a business, private
nonprofit organization, or other concern,
including agricultural cooperatives, unable to
obtain credit elsewhere, not to exceed 4 per
centum per annum;
(D) in the case of a business concern able to
obtain credit elsewhere, the rate prescribed by
the Administration but not in excess of the
lowest of (i) the rate prevailing in the
private market for similar loans, (ii) the rate
prescribed by the Administration as the maximum
interest rate for deferred participation
(guaranteed) loans under section 7(a) of this
Act, or (iii) 8 per centum per annum. Loans
under this subparagraph shall be limited to a
maximum term of 7 years.
(6) Notwithstanding the provisions of any other law,
such loans, subject to the reductions required by
subparagraphs (A) and (B) of paragraph 7(b)(1), shall
be in amounts equal to 100 per centum of loss. The
interest rate for loans made under paragraphs 7(b)(1)
and (2), as determined pursuant to paragraph (5), shall
be the rate of interest which is in effect on the date
of the disaster commenced: Provided, That no loan under
paragraphs 7(b) (1) and (2) shall be made, either
directly or in cooperation with banks or other lending
institutions through agreements to participate on an
immediate or deferred (guaranteed) basis, if the total
amount outstanding and committed to the borrower under
subsection 7(b) would exceed $500,000 for each disaster
unless an applicant constitutes a major source of
employment in an area suffering a disaster, in which
case the Administration, in its discretion, may waive
the $500,000 limitation: Provided further, That the
Administration, subject to the reductions required by
subparagraphs (A) and (B) of paragraph 7(b)(1), shall
not reduce the amount of eligibility for any homeowner
on account of loss of real estate to less than $100,000
for each disaster nor for any homeowner or lessee on
account of loss of personal property to less than
$20,000 for each disaster, such sums being in addition
to any eligible refinancing: Provided further, That the
Administration shall not require collateral for loans
of $25,000 or less (or such higher amount as the
Administrator determines appropriate in the event of a
disaster) which are made under paragraph (1) of
subsection (b): Provided further, That the
Administrator, in obtaining the best available
collateral for a loan of not more than $200,000 under
paragraph (1) or (2) of subsection (b) relating to
damage to or destruction of the property of, or
economic injury to, a small business concern, shall not
require the owner of the small business concern to use
the primary residence of the owner as collateral if the
Administrator determines that the owner has other
assets of equal quality and with a value equal to or
greater than the amount of the loan that could be used
as collateral for the loan: Provided further, That
nothing in the preceding proviso may be construed to
reduce the amount of collateral required by the
Administrator in connection with a loan described in
the preceding proviso or to modify the standards used
to evaluate the quality (rather than the type) of such
collateral. Employees of concerns sharing a common
business premises shall be aggregated in determining
``major source of employment'' status for nonprofit
applicants owning such premises.
With respect to any loan which is outstanding on the date of
enactment of this paragraph and which was made on account of a
disaster commencing on or after October 1, 1982, the
Administrator shall made such change in the interest rate on
the balance of such loan as is required herein effective as of
the date of enactment.
(7) The Administration shall not withhold disaster assistance
pursuant to this paragraph to nurseries who are victims of
drought disasters. As used in section 7(b)(2) the term ``an
area affected by a disaster'' includes any county, or county
contiguous thereto, determined to be a disaster by the
President, the Secretary of Agriculture or the Administrator of
the Small Business Administration.
(8) Disaster loans for superstorm sandy.--
(A) In general.--Notwithstanding any other
provision of law, and subject to the same
requirements and procedures that are used to
make loans pursuant to subsection (b), a small
business concern, homeowner, nonprofit entity,
or renter that was located within an area and
during the time period with respect to which a
major disaster was declared by the President
under section 401 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act
(42 U.S.C. 5170) by reason of Superstorm Sandy
may apply to the Administrator--
(i) for a loan to repair,
rehabilitate, or replace property
damaged or destroyed by reason of
Superstorm Sandy; or
(ii) if such a small business concern
has suffered substantial economic
injury by reason of Superstorm Sandy,
for a loan to assist such a small
business concern.
(B) Timing.--The Administrator shall select
loan recipients and make available loans for a
period of not less than 1 year after the date
on which the Administrator carries out this
authority.
(C) Inspector general review.--Not later than
6 months after the date on which the
Administrator begins carrying out this
authority, the Inspector General of the
Administration shall initiate a review of the
controls for ensuring applicant eligibility for
loans made under this paragraph.
(e) The Administration shall not fund any Small Business
Development Center or any variation thereof, except as
authorized in section 21 of this Act.
(f) Additional Requirements for 7(b) Loans.--
(1) Increased deferment authorized.--
(A) In general.--In making loans under
subsection (b), the Administrator may provide,
to the person receiving the loan, an option to
defer repayment on the loan.
(B) Period.--The period of a deferment under
subparagraph (A) may not exceed 4 years.
(g) Net Earnings Clauses Prohibited for 7(b) Loans.--In
making loans under subsection (b), the Administrator shall not
require the borrower to pay any non-amortized amount for the
first five years after repayment begins.
(h)(1) The Administration also is empowered, where other
financial assistance is not available on reasonable terms, to
make such loans (either directly or in cooperation with Banks
or other lending institutions through agreements to participate
on an immediate or deferred basis) as the Administration may
determine to be necessary or appropriate--
(A) to assist any public or private organization--
(i) which is organized under the laws of the
United States or of any State, operated in the
interest of handicapped individuals, the net
income of which does not inure in whole or in
part to the benefit of any shareholder or other
individual;
(ii) which complies with any applicable
occupational health and safety standard
prescribed by the Secretary of Labor; and
(iii) which, in the production of commodities
and in the provision of services during any
fiscal year in which it receives financial
assistance under this subsection, employs
handicapped individuals for not less than 75
per centum of the man-hours required for the
production or provision of the commodities or
services; or
(B) to assist any handicapped individual in
establishing, acquiring, or operating a small business
concern.
(2) The Administration's share of any loan made under this
subsection shall not exceed $350,000, nor may any such loan be
made if the total amount outstanding and committed (by
participation or otherwise) to the borrower from the business
loan and investment fund established by section 4(c)(1)(B) of
this Act would exceed $350,000. In agreements to participate in
loans on a deferred basis under this subsection, the
Administration's participation may total 100 per centum of the
balance of the loan at the time of disbursement. The
Administration's share of any loan made under this subsection
shall bear interest at the rate of 3 per centum per annum. The
maximum term of any such loan, including extensions and
renewals thereof, may not exceed fifteen years. All loans made
under this subsection shall be of such sound value or so
secured as reasonably to assure repayment: Provided, however,
That any reasonable doubt shall be resolved in favor of the
applicant.
(3) For purposes of this subsection, the term ``handicapped
individual'' means a person who has a physical, mental, or
emotional impairment, defect, ailment, disease, or disability
of a permanent nature which in any way limits the selection of
any type of employment for which the person would otherwise be
qualified or qualifiable.
(i)(1) The Administration also is empowered to make,
participate (on an immediate basis) in, or guarantee loans,
repayable in not more than fifteen years, to any small business
concern, or to any qualified person seeking to establish such a
concern, when it determines that such loans will further the
policies established in section 2(b) of this Act, with
particular emphasis on the preservation or establishment of
small business concerns located in urban or rural areas with
high proportions of unemployed or low-income individuals, or
owned by low-income individuals: Provided, however, That no
such loans shall be made, participated in, or guaranteed if the
total of such Federal assistance to a single borrower
outstanding at any one time would exceed $100,000. The
Administration may defer payments on the principal of such
loans for a grace period and use such other methods as it deems
necessary and appropriate to assure the successful
establishment and operation of such concern. The Administration
may, in its discretion, as a condition of such financial
assistance, require that the borrower take steps to improve his
management skills by participating in a management training
program approved by the Administration: Provided, however, That
any management training program so approved must be of
sufficient scope and duration to provide reasonable opportunity
for the individuals served to develop entrepreneurial and
managerial self-sufficiency.
(2) The Administration shall encourage, as far as possible,
the participation of the private business community in the
program of assistance to such concerns, and shall seek to
stimulate new private lending activities to such concerns
through the use of the loan guarantees, participations in
loans, and pooling arrangements authorized by this subsection.
(3) To insure an equitable distribution between urban and
rural areas for loans between $3,500 and $100,000 made under
this subsection, the Administration is authorized to use the
agencies and agreements and delegations developed under title
III of the Economic Opportunity Act of 1964, as amended, as it
shall determine necessary.
(4) The Administration shall provide for the continuing
evaluation of programs under this subsection, including full
information on the location, income characteristics, and types
of businesses and individuals assisted, and on new private
lending activity stimulated, and the results of such evaluation
together with recommendations shall be included in the report
required by section 10(a) of this Act.
(5) Loans made pursuant to this subsection (including
immediate participation in and guarantees of such loans) shall
have such terms and conditions as the Administration shall
determine, subject to the following limitations--
(A) there is reasonable assurance of repayment of the
loan;
(B) the financial assistance is not otherwise
available on reasonable terms from private sources or
other Federal, State, or local programs;
(C) the amount of the loan, together with other funds
available, is adequate to assure completion of the
project or achievement of the purposes for which the
loan is made;
(D) the loan bears interest at a rate not less than
(i) a rate determined by the Secretary of the Treasury,
taking into consideration the average market yield on
outstanding Treasury obligations of comparable
maturity, plus (ii) such additional charge, if any,
toward covering other costs of the program as the
Administration may determine to be consistent with its
purposes: Provided, however, That the rate of interest
charged on loans made in redevelopment areas designated
under the Public Works and Economic Development Act of
1965 (42 U.S.C. 3108 et seq.) shall not exceed the rate
currently applicable to new loans made under section
201 of that Act (42 U.S.C. 3142); and
(E) fees not in excess of amounts necessary to cover
administrative expenses and probable losses may be
required on loan guarantees.
(6) The Administration shall take such steps as may be
necessary to insure that, in any fiscal year, at least 50 per
centum of the amounts loaned or guaranteed pursuant to this
subsection are allotted to small business concerns located in
urban areas identified by the Administration as having high
concentrations of unemployed or low-income individuals or to
small business concerns owned by low-income individuals. The
Administration shall define the meaning of low income as it
applies to owners of small business concerns eligible to be
assisted under this subsection.
(7) No financial assistance shall be extended pursuant to
this subsection when the Administration determines that the
assistance will be used in relocating establishments from one
area to another if such relocation would result in an increase
in unemployment in the area of original location.
(j)(1) the Administration shall provide financial assistance
to public or private organizations to pay all or part of the
cost of projects designated to provide technical or management
assistance to individuals or enterprises eligible for
assistance under sections 7(i), 7(j)(10), and 8(a) of this Act,
with special attention to small businesses located in areas of
high concentration of unemployed or low-income individuals, to
small businesses eligible to receive contracts pursuant to
section 8(a) of this Act.
(2) Financial assistance under this subsection may be
provided for projects, including, but not limited to--
(A) planning and research, including feasibility
studies and market research;
(B) the identification and development of new
business opportunities;
(C) the furnishing of centralized services with
regard to public services and Federal Government
programs including programs authorized under sections
7(i), (7)(j)(10), and 8(a) of this Act;
(D) the establishment and strengthening of business
service agencies, including trade associations and
cooperative; and
(E) the furnishing of business counseling, management
training, and legal and other related services, with
special emphasis on the development of management
training programs using the resources of the business
community, including the development of management
training opportunities in existing business, and with
emphasis in all cases upon providing management
training of sufficient scope and duration to develop
entrepreneurial and managerial self-sufficiency on the
part of the individuals served.
(3) The Administration shall encourage the placement of
subcontracts by businesses with small business concerns located
in area of high concentration of unemployed or low-income
individuals, with small businesses owned by low-income
individuals, and with small businesses eligible to receive
contracts pursuant to section 8(a) of this Act. The
Administration may provide incentives and assistance to such
businesses that will aid in the training and upgrading of
potential subcontractors or other small business concerns
eligible for assistance under section 7(i), 7(j), and 8(a), of
this Act.
(4) The Administration shall give preference to projects
which promote the ownership, participation in ownership, or
management of small businesses owned by low-income individuals
and small businesses eligible to receive contracts pursuant to
section 8(a) of this Act.
(5) The financial assistance authorized for projects under
this subsection includes assistance advanced by grant,
agreement, or contract.
(6) The Administration is authorized to make payments under
grants and contracts entered into under this subsection in lump
sum or installments, and in advance or by way of reimbursement,
and in the case of grants, with necessary adjustments on
account of overpayments or underpayments.
(7) To the extent feasible, services under this subsection
shall be provided in a location which is easily accessible to
the individuals and small business concerns served.
(9) The Administration shall take such steps as may be
necessary and appropriate, in coordination and cooperation with
the heads of other Federal departments and agencies, to insure
that contracts, subcontracts, and deposits made by the Federal
Government or with programs aided with Federal funds are placed
in such way as to further the purposes of sections 7(i), 7(j),
and 8(a) of this Act.
(10) There is established with the Administration a small
business and capital ownership development program (hereinafter
referred to as the ``Program'') which shall provide assistance
exclusively for small business concerns eligible to receive
contracts pursuant to section 8(a) of this Act. The program,
and all other services and activities authorized under section
7(j) and 8(a) of this Act, shall be managed by the Associate
Administrator for Minority Small Business and Capital Ownership
Development under the supervision of, and responsible to, the
Administrator.
(A) The Program shall--
(i) assist small business concerns
participating in the Program (either through
public or private organizations) to develop and
maintain comprehensive business plans which set
forth the Program Participant's specific
business targets, objectives, and goals
developed and maintained in conformity with
subparagraph (D).
(ii) provide for such other nonfinancial
services as deemed necessary for the
establishment, preservation, and growth of
small business concerns participating in the
Program, including but not limited to (I) loan
packaging, (II) financing counseling, (III)
accounting and bookkeeping assistance, (IV)
marketing assistance, and (V) management
assistance;
(iii) assist small business concerns
participating in the Program to obtain equity
and debt financing;
(iv) establish regular performance monitoring
and reporting systems for small business
concerns participating in the Program to assure
compliance with their business plans;
(v) analyze and report the causes of success
and failure of small business concerns
participating in the Program; and
(vi) provide assistance necessary to help
small business concerns participating in the
Program to procure surety bonds, with such
assistance including, but not limited to, (I)
the preparation of application forms required
to receive a surety bond, (II) special
management and technical assistance designed to
meet the specific needs of small business
concerns participating in the Program and which
have received or are applying to receive a
surety bond, and (III) guarantee from the
Administration pursuant to title IV, part B of
the Small Business Investment Act of 1958.
(B) Small business concerns eligible to receive
contracts pursuant to section 8(a) of this Act shall
participate in the Program.
(C)(i) A small business concern participating in any
program or activity conducted under the authority of
this paragraph or eligible for the award of contracts
pursuant to section 8(a) on September 1, 1988, shall be
permitted continued participation and eligibility in
such program or activity for a period of time which is
the greater of--
(I) 9 years less the number of years since
the award of its first contract pursuant to
section 8(a); or
(II) its original fixed program participation
term (plus any extension thereof) assigned
prior to the effective date of this paragraph
plus eighteen months.
(ii) Nothing contained in this subparagraph shall be
deemed to prevent the Administration from instituting a
termination or graduation pursuant to subparagraph (F)
or (H) for issues unrelated to the expiration of any
time period limitation.
(D)(i) Promptly after certification under paragraph
(11) a Program Participant shall submit a business plan
(hereinafter referred to as the plan'') as described in
clause (ii) of this subparagraph for review by the
Business Opportunity Specialist assigned to assist such
Program Participant. The plan may be a revision of a
preliminary business plan submitted by the Program
Participant or required by the Administration as a part
of the application for certification under this section
and shall be designed to result in the Program
Participant eliminating the conditions or circumstances
upon which the Administration determined eligibility
pursuant to section 8(a)(6). Such plan, and subsequent
modifications submitted under clause (iii) of this
subparagraph, shall be approved by the business
opportunity specialist prior to the Program Participant
being eligible for award of a contract pursuant to
section 8(a).
(ii) The plans submitted under this
subparagraph shall include the following:
(I) An analysis of market potential,
competitive environment, and other
business analyses estimating the
Program Participant's prospects for
profitable operations during the term
of program participation and after
graduation.
(II) An analysis of the Program
Participant's strengths and weaknesses
with particular attention to correcting
any financial, managerial, technical,
or personnel conditions which are
likely to impede the small business
concern from receiving contracts other
than those awarded under section 8(a).
(III) Specific targets, objectives,
and goals, for the business development
of the Program Participant during the
next and succeeding years utilizing the
results of the analyses conducted
pursuant to subclauses (I) and (II).
(IV) A transition management plan
outlining specific steps to assure
profitable business operations after
graduation (to be incorporated into the
Program Participant's plan during the
first year of the transitional stage of
Program participation).
(V) Estimates of contract awards
pursuant to section 8(a) and from other
sources, which the Program Participant
will require to meet the specific
targets, objectives, and goals for the
years covered by its plan. The
estimates established shall be
consistent with the provisions of
subparagraph (I) and section 8(a).
(iii) Each Program Participant shall annually
review its currently approved plan with its
Business Opportunity Specialist and modify such
plan as may be appropriate. Any modified plan
shall be submitted to the Administration for
approval. The currently approved plan shall be
considered valid until such time as a modified
plan is approved by the Business Opportunity
Specialist. Annual reviews pertaining to years
in the transitional stage of program
participation shall require, as appropriate, a
written verification that such Program
Participant has complied with the requirements
of subparagraph (I) relating to attaining
business activity from sources other than
contracts awarded pursuant to section 8(a).
(iv) Each Program Participant shall annually
forecast its needs for contract awards under
section 8(a) for the next program year and the
succeeding program year during the review of
its business plan, conducted pursuant to clause
(iii). Such forecast shall be known as the
section 8(a) contract support level and shall
be included in the Program Participant's
business plan. Such forecast shall include--
(I) the aggregate dollar value of
contract support to be sought on a
noncompetitive basis under section
8(a), reflecting compliance with the
requirements of subparagraph (I)
relating to attaining business activity
from sources other than contracts
awarded pursuant to section 8(a),
(II) the types of contract
opportunities being sought, identified
by Standard Industrial Classification
(SIC) Code or otherwise,
(III) an estimate of the dollar value
of contract support to be sought on a
competitive basis, and
(IV) such other information as may be
requested by the Business Opportunity
Specialist to provide effective
business development assistance to the
Program Participant.
(E) A small business concern participating in the
program conducted under the authority of this paragraph
and eligible for the award of contracts pursuant to
section 8(a) shall be denied all such assistance if
such concern--
(i) voluntarily elects not to continue
participation;
(ii) completes the period of Program
participation as prescribed by paragraph (15);
(iii) is terminated pursuant to a termination
proceeding conducted in accordance with section
8(a)(9); or
(iv) is graduated pursuant to a graduation
proceeding conducted in accordance with section
8(a)(9).
(F) For the purposes of section and 8(a), the terms
``terminated'' or ``termination'' means the total
denial or suspension of assistance under this paragraph
or under section 8(a) prior to the graduation of the
participating small business concern or prior to the
expiration of the maximum program participation in
term. An action for termination shall be based upon
good cause, including--
(i) the failure by such concern to maintain
its eligibility for Program participation;
(ii) the failure of the concern to engage in
business practices that will promote its
competitiveness within a reasonable period of
time as evidenced by, among other indicators, a
pattern of unjustified delinquent performance
or terminations for default with respect to
contracts awarded under the authority of
section 8(a);
(iii) a demonstrated pattern of failing to
make required submissions or responses to the
Administration in a timely manner;
(iv) the willful violation of any rule or
regulation of the Administration pertaining to
material issues;
(v) the debarment of the concern or its
disadvantaged owners by any agency pursuant to
subpart 9.4 of title 48, Code of Federal
Regulations (or any successor regulation); or
(vi) the conviction of the disadvantaged
owner or an officer of the concern for any
offense indicating a lack of business integrity
including any conviction for embezzlement,
theft, forgery, bribery, falsification or
violation of section 16. For purposes of this
clause, no termination action shall be taken
with respect to a disadvantaged owner solely
because of the conviction of an officer of the
concern (who is other than a disadvantaged
owner) unless such owner conspired with,
abetted, or otherwise knowingly acquiesced in
the activity or omission that was the basis of
such officer's conviction.
(G) The Director of the Division may initiate a
termination proceeding by recommending such action to
the Associate Administrator for Minority Small Business
and Capital Ownership Development. Whenever the
Associate Administrator, or a designee of such officer,
determines such termination is appropriate, within 15
days after making such a determination the Program
Participant shall be provided a written notice of
intent to terminate, specifying the reasons for such
action. No Program Participant shall be terminated from
the Program pursuant to subparagraph (F) without first
being afforded an opportunity for a hearing in
accordance with section 8(a)(9).
(H) For the purposes of sections 7(j) and 8(a) the
term ``graduated'' or ``graduation'' means that the
Program Participant is recognized as successfully
completing the program by substantially achieving the
targets, objectives, and goals contained in the
concern's business plan thereby demonstrating its
ability to compete in the marketplace without
assistance under this section or section 8(a).
(I)(i) During the developmental stage of its
participation in the Program, a Program Participant
shall take all reasonable efforts within its control to
attain the targets contained in its business plan for
contracts awarded other than pursuant to section 8(a)
(hereinafter referred to as ``business activity
targets.''). Such efforts shall be made a part of the
business plan and shall be sufficient in scope and
duration to satisfy the Administration that the Program
Participant will engage a reasonable marketing strategy
that will maximize its potential to achieve its
business activity targets.
(ii) During the transitional stage of the Program a
Program Participant shall be subject to regulations
regarding business activity targets that are
promulgated by the Administration pursuant to clause
(iii);
(iii) The regulations referred to in clause (ii)
shall:
(I) establish business activity targets
applicable to Program Participants during the
fifth year and each succeeding year of Program
Participation; such targets, for such period of
time, shall reflect a reasonably consistent
increase in contracts awarded other than
pursuant to section 8(a), expressed as a
percentage of total sales; when promulgating
business activity targets the Administration
may establish modified targets for Program
Participants that have participated in the
Program for a period of longer than four years
on the effective date of this subparagraph;
(II) require a Program Participant to attain
its business activity targets;
(III) provide that, before the receipt of any
contract to be awarded pursuant to section
8(a), the Program Participant (if it is in the
transitional stage) must certify that it has
complied with the regulations promulgated
pursuant to subclause (II), or that it is in
compliance with such remedial measures as may
have been ordered pursuant to regulations
issued under subclause (V);
(IV) require the Administration to review
each Program Participant's performance
regarding attainment of business activity
targets during periodic reviews of such
Participant's business plan; and
(V) authorize the Administration to take
appropriate remedial measures with respect to a
Program Participant that has failed to attain a
required business activity target for the
purpose of reducing such Participant's
dependence on contracts awarded pursuant to
section 8(a); such remedial actions may
include, but are not limited to assisting the
Program Participant to expand the dollar volume
of its competitive business activity or
limiting the dollar volume of contracts awarded
to the Program Participant pursuant to section
8(a); except for actions that would constitute
a termination, remedial measures taken pursuant
to this subclause shall not be reviewable
pursuant to section 8(a)(9).
(J)(i) The Administration shall conduct an evaluation
of a Program Participant's eligibility for continued
participation in the Program whenever it receives
specific and credible information alleging that such
Program Participant no longer meets the requirements
for Program eligibility. Upon making a finding that a
Program Participant is no longer eligible, the
Administration shall initiate a termination proceeding
in accordance with subparagraph (F). A Program
Participant's eligibility for award of any contract
under the authority of section 8(a) may be suspended
pursuant to subpart 9.4 of title 48, Code of Federal
Regulations (or any successor regulation).
(ii)(I) Except as authorized by subclauses (II) or
(III), no award shall be made pursuant to section 8(a)
to a concern other than a small business concern.
(II) In determining the size of a small business
concern owned by a socially and economically
disadvantaged Indian tribe (or a wholly owned business
entity of such tribe), each firm's size shall be
independently determined without regard to its
affiliation with the tribe, any entity of the tribal
government, or any other business enterprise owned by
the tribe, unless the Administrator determines that one
or more such tribally owned business concerns have
obtained, or are likely to obtain, a substantial unfair
competitive advantage within an industry category.
(III) Any joint venture established under the
authority of section 602(b) of Public Law 100-656, the
``Business Opportunity Development Reform Act of
1988'', shall be eligible for award of a contract
pursuant to section 8(a).
(11)(A) The Associate Administrator for Minority Small
Business and Capital Ownership Development shall be responsible
for coordinating and formulating policies relating to Federal
assistance to small business concerns eligible for assistance
under section 7(i) of this Act and small business concerns
eligible to receive contracts pursuant to section 8(a) of this
Act.
(B)(i) Except as provided in clause (iii), no
individual who was determined pursuant to section 8(a)
to be socially and economically disadvantaged before
the effective date of this subparagraph shall be
permitted to assert such disadvantage with respect to
any other concern making application for certification
after such effective date.
(ii) Except as provided in clause (iii), any
individual upon whom eligibility is based
pursuant to section 8(a)(4) shall be permitted
to assert such eligibility for only one small
business concern.
(iii) A socially and economically
disadvantaged Indian tribe may own more than
one small business concern eligible for
assistance pursuant to section 7(j)(10) and
section 8(a) if--
(I) the Indian tribe does not own
another firm in the same industry which
has been determined to be eligible to
receive contracts under this program,
and
(II) the individuals responsible for
the management and daily operations of
the concern do not manage more than two
Program Participants.
(C) No concern, previously eligible for the award of
contracts pursuant to section 8(a), shall be subsequently
recertified for program participation if its prior
participation in the program was concluded for any of the
reasons described in paragraph (10)(E).
(D) A concern eligible for the award of contracts pursuant to
this subsection shall remain eligible for such contracts if
there is a transfer of ownership and control (as defined
pursuant to section 8(a)(4)) to individuals who are determined
to be socially and economically disadvantaged pursuant to
section 8(a). In the event of such a transfer, the concern, if
not terminated or graduated, shall be eligible for a period of
continued participation in the program not to exceed the time
limitations prescribed in paragraph (15).
(E) There is established a Division of Program Certification
and Eligibility (hereinafter referred to in this paragraph as
the Division'') that shall be made part of the Office of
Minority Small Business and Capital Ownership Development. The
Division shall be headed by a Director who shall report
directly to the Associate Administrator for Minority Small
Business and Capital Ownership Development. The Division shall
establish field offices within such regional offices of the
Administration as may be necessary to perform efficiently its
functions and responsibilities.
(F) Subject to the provisions of section 8(a)(9), the
functions and responsibility of the Division are to--
(i) receive, review and evaluate applications for
certification pursuant to paragraphs (4), (5), (6) and
(7) of section 8(a);
(ii) advise each program applicant within 15 days
after the receipt of an application as to whether such
application is complete and suitable for evaluation
and, if not, what matters must be rectified;
(iii) render recommendations on such applications to
the Associate Administrator for Minority Small Business
and Capital Ownership Development;
(iv) review and evaluate financial statements and
other submissions from concerns participating in the
program established by paragraph (10) to ascertain
continued eligibility to receive subcontracts pursuant
to section 8(a);
(v) make a request for the initiation of termination
or graduation proceedings, as appropriate, to the
Associate Administrator for Minority Small Business and
Capital Ownership Development;
(vi) make recommendations to the Associate
Administrator for Minority Small Business and Capital
Ownership Development concerning protests from
applicants that have been denied program admission;
(vii) decide protests regarding the status of a
concern as a disadvantaged concern for purposes of any
program or activity conducted under the authority of
subsection (d) of section 8, or any other provision of
Federal law that references such subsection for a
definition of program eligibility; and
(viii) implement such policy directives as may be
issued by the Associate Administrator for Minority
Small Business and Capital Ownership Development
pursuant to subparagraph (I) regarding, among other
things, the geographic distribution of concerns to be
admitted to the program and the industrial make-up of
such concerns.
(G) An applicant shall not be denied admission into the
program established by paragraph (10) due solely to a
determination by the Division that specific contract
opportunities are unavailable to assist in the development of
such concern unless--
(i) the Government has not previously procured and is
unlikely to procure the types of products or services
offered by the concern; or
(ii) the purchases of such products or services by
the Federal Government will not be in quantities
sufficient to support the developmental needs of the
applicant and other Program Participants providing the
same or similar items or services.
(H) Not later than 90 days after receipt of a
completed application for Program certification, the
Associate Administrator for Minority Small Business and
Capital Ownership Development shall certify a small
business concern as a Program Participant or shall deny
such application.
(I) Thirty days before the conclusion of each fiscal year,
the Director of the Division shall review all concerns that
have been admitted into the Program during the preceding 12-
month period. The review shall ascertain the number of
entrants, their geographic distribution and industrial
classification. The Director shall also estimate the expected
growth of the Program during the next fiscal year and the
number of additional Business Opportunity Specialists, if any,
that will be needed to meet the anticipated demand for the
Program. The findings and conclusions of the Director shall be
reported to the Associate Administrator for Minority Small
Business and Capital Ownership Development by September 30 of
each year. Based on such report and such additional data as may
be relevant, the Associate Administrator shall, by October 31
of each year, issue policy and program directives applicable to
such fiscal year that--
(i) establish priorities for the solicitation of
program applications from underrepresented regions and
industry categories;
(ii) assign staffing levels and allocate other
program resources as necessary to meet program needs;
and
(iii) establish priorities in the processing and
admission of new Program Participants as may be
necessary to achieve an equitable geographic
distribution of concerns and a distribution of concerns
across all industry categories in proportions needed to
increase significantly contract awards to small
business concerns owned and controlled by socially and
economically disadvantaged individuals. When
considering such increase the Administration shall give
due consideration to those industrial categories where
Federal purchases have been substantial but where the
participation rate of such concerns has been limited.
(12)(A) The Administration shall segment the Capital
Ownership Development Program into two stages: a developmental
stage; and a transitional stage.
(B) The developmental stage of program participation shall be
designed to assist the concern in its effort to overcome its
economic disadvantage by providing such assistance as may be
necessary and appropriate to access its markets and to
strengthen its financial and managerial skills.
(C) The transitional stage of program participation shall be
designed to overcome, insofar as practicable, the remaining
elements of economic disadvantage and to prepare such concern
for graduation from the program.
(13) A Program Participant, if otherwise eligible, shall be
qualified to receive the following assistance during the stages
of program participation specified in paragraph 12:
(A) Contract support pursuant to section 8(a).
(B) Financial assistance pursuant to section
7(a)(20).
(C) A maximum of two exemptions from the requirements
of section 1(a) of the Act entitled ``An Act providing
conditions for the purchase of supplies and the making
of contracts by the United States, and for other
purposes'', approved June 30, 1936 (49 Stat. 2036),
which exemptions shall apply only to contracts awarded
pursuant to section (8)(a) and shall only be used to
allow for contingent agreements by a small business
concern to acquire the machinery, equipment,
facilities, or labor needed to perform such contracts.
No exemption shall be made pursuant to this
subparagraph if the contract to which it pertains has
an anticipated value in excess of $10,000,000. This
subparagraph shall cease to be effective on October 1,
1992.
(D) A maximum of five exemptions from the
requirements of the Act entitled ``An Act requiring
contracts for the construction, alteration and repair
of any public building or public work of the United
States to be accompanied by a performance bond
protecting the United States and by an additional bond
for the protection of persons furnishing material and
labor for the construction, alteration, or repair of
said public buildings or public works'', approved
August 24, 1935 (49 Stat. 793), which exemptions shall
apply only to contracts awarded pursuant to section
8(a), except that, such exemptions may be granted under
this subparagraph only if--
(i) the Administration finds that such
concern is unable to obtain the requisite bond
or bonds from a surety and that no surety is
willing to issue a bond subject to the
guarantee provision of title IV of the Small
Business Investment Act of 1958 (15 U.S.C. 692
et seq.);
(ii) the Administration and the agency
providing the contracting opportunity have
provided for the protection of persons
furnishing materials or labor to the Program
Participant by arranging for the direct
disbursement of funds due to such persons by
the procuring agency or through any bank the
deposits of which are insured by the Federal
Deposit Insurance Corporation; and
(iii) the contract to which it pertains does
not exceed $3,000,000 in amount. This
subparagraph shall cease to be effective on
October 1, 1994.
(E) Financial assistance whereby the Administration
may purchase in whole or in part, and on behalf of such
concerns, skills training or upgrading for employees or
potential employees of such concerns. Such assistance
may be made without regard to section 18(a). Assistance
may be made by direct payment to the training provider
or by reimbursing the Program Participant or the
Participant's employee, if such reimbursement is found
to be reasonable and appropriate. For purposes of this
subparagraph the term ``training provider'' shall mean
an institution of higher education, a community or
vocational college, or an institution eligible to
provide skills training or upgrading under title I of
the Workforce Innovation and Opportunity Act. The
Administration shall, in consultation with the
Secretary of Labor, promulgate rules and regulations to
implement this subparagraph that establish acceptable
training and upgrading performance standards and
provide for such monitoring or audit requirements as
may be necessary to ensure the integrity of the
training effort. No financial assistance shall be
granted under the subparagraph unless the Administrator
determines that--
(i) such concern has documented that it has
first explored the use of existing cost-free or
cost-subsidized training programs offered by
public and private sector agencies working with
programs of employment and training and
economic development;
(ii) no more than five employees or potential
employees of such concern are recipients of any
benefits under this subparagraph at any one
time;
(iii) no more than $2,500 shall be made
available for any one employee or potential
employee;
(iv) the length of training or upgrading
financed by this subparagraph shall be no less
than one month nor more than six months;
(v) such concern has given adequate assurance
it will employ the trainee or upgraded employee
for at least six months after the training or
upgrading financed by this subparagraph has
been completed and each trainee or upgraded
employee has provided a similar assurance to
remain within the employ of such concern for
such period; if such concern, trainee, or
upgraded employee breaches this agreement, the
Administration shall be entitled to and shall
make diligent efforts to obtain from the
violating party the repayment of all funds
expended on behalf of the violating party, such
repayment shall be made to the Administration
together with such interest and costs of
collection as may be reasonable; the violating
party shall be barred from receiving any
further assistance under this subparagraph;
(vi) the training to be financed may take
place either at such concern's facilities or at
those of the training provider; and
(vii) such concern will maintain such records
as the Administration deems appropriate to
ensure that the provisions of this paragraph
and any other applicable law have not been
violated.
(F)(i) The transfer of technology or surplus property
owned by the United States to such a concern.
Activities designed to effect such transfer shall be
developed in cooperation with the heads of Federal
agencies and shall include the transfer by grant,
license, or sale of such technology or property to such
a concern. Such property may be transferred to Program
Participants on a priority basis. Technology or
property transferred under this subparagraph shall be
used by the concern during the normal conduct of its
business operation and shall not be sold or transferred
to any other party (other than the Government) during
such concern's term of participation in the Program and
for one year thereafter.
(ii)(I) In this clause--
(aa) the term ``covered period''
means the 2-year period beginning on
the date on which the President
declared the applicable major disaster;
and
(bb) the term ``disaster area'' means
the area for which the President has
declared a major disaster, during the
covered period.
(II) The Administrator may transfer
technology or surplus property under clause (i)
on a priority basis to a small business concern
located in a disaster area if--
(aa) the small business concern meets
the requirements for such a transfer,
without regard to whether the small
business concern is a Program
Participant; and
(bb) for a small business concern
that is a Program Participant, on and
after the date on which the President
declared the applicable major disaster,
the small business concern has not
received property under this
subparagraph on the basis of the status
of the small business concern as a
Program Participant.
(III) For any transfer of property under this
clause to a small business concern, the terms
and conditions shall be the same as a transfer
to a Program Participant, except that the small
business concern shall agree not to sell or
transfer the property to any party other than
the Federal Government during the covered
period.
(IV) A small business concern that receives a
transfer of property under this clause may not
receive a transfer of property under clause (i)
during the covered period.
(V) If a small business concern sells or
transfers property in violation of the
agreement described in subclause (III), the
Administrator may initiate proceedings to
prohibit the small business concern from
receiving a transfer of property under this
clause or clause (i), in addition to any other
remedy available to the Administrator.
(iii)(I) In this clause, the term ``covered
period''means--
(aa) in the case of a Puerto Rico
business, the period beginning on
August 13, 2018, and ending on the date
on which the Oversight Board
established under section 2121 of title
48 terminates; and
(bb) in the case of a covered
territory business, the period
beginning on the date of the enactment
of this item and ending on the date
that is 4 years after such date of
enactment.
(II) The Administrator may transfer technology or
surplus property under clause (i) to a Puerto Rico
business or a covered territory business if either such
business meets the requirements for such a transfer,
without regard to whether either such business is a
Program Participant.
(G) Training assistance whereby the Administration
shall conduct training sessions to assist individuals
and enterprises eligible to receive contracts under
section 8(a) in the development of business principles
and strategies to enhance their ability to successfully
compete for contracts in the marketplace.
(H) Joint ventures, leader-follower arrangements, and
teaming agreements between the Program Participant and
other Program Participants and other business concerns
with respect to contracting opportunities for the
research, development, full-scale engineering or
production of major systems. Such activities shall be
undertaken on the basis of programs developed by the
agency responsible for the procurement of the major
system, with the assistance of the Administration.
(I) Transitional management business planning
training and technical assistance.
(J) Program Participants in the developmental stage
of Program participation shall be eligible for the
assistance provided by subparagraphs (A), (B), (C),
(D), (E), (F), and (G).
(14) Program Participants in the transitional stage of
Program participation shall be eligible for the assistance
provided by subparagraphs (A), (B), (F), (G), (H), and (I) of
paragraph (13).
(15) Subject to the provisions of paragraph (10)(C), a small
business concern may receive developmental assistance under the
Program and contracts under section 8(a) for a total period of
not longer than nine years, measured from the date of its
certification under the authority of such section, of which--
(A) no more than four years may be spent in the
developmental stage of Program Participation; and
(B) no more than five years may be spent in the
transitional stage of Program Participation.
(16)(A) The Administrator shall develop and implement a
process for the systematic collection of data on the operations
of the Program established pursuant to paragraph (10).
(B) Not later than April 30 of each year, the Administrator
shall submit a report to the Congress on the Program that shall
include the following:
(i) The average personal net worth of individuals who
own and control concerns that were initially certified
for participation in the Program during the immediately
preceding fiscal year. The Administrator shall also
indicate the dollar distribution of net worths, at
$50,000 increments, of all such individuals found to be
socially and economically disadvantaged. For the first
report required pursuant to this paragraph the
Administrator shall also provide the data specified in
the preceding sentence for all eligible individuals in
the Program as of the effective date of this paragraph.
(ii) A description and estimate of the benefits and
costs that have accrued to the economy and the
Government in the immediately preceding fiscal year due
to the operations of those business concerns that were
performing contracts awarded pursuant to section 8(a).
(iii) A compilation and evaluation of those business
concerns that have exited the Program during the
immediately preceding three fiscal years. Such
compilation and evaluation shall detail the number of
concerns actively engaged in business operations, those
that have ceased or substantially curtailed such
operations, including the reasons for such actions, and
those concerns that have been acquired by other firms
or organizations owned and controlled by other than
socially and economically disadvantaged individuals.
For those businesses that have continued operations
after they exited from the Program, the Administrator
shall also separately detail the benefits and costs
that have accrued to the economy during the immediately
preceding fiscal year due to the operations of such
concerns.
(iv) A listing of all participants in the Program
during the preceding fiscal year identifying, by State
and by Region, for each firm: the name of the concern,
the race or ethnicity, and gender of the disadvantaged
owners, the dollar value of all contracts received in
the preceding year, the dollar amount of advance
payments received by each concern pursuant to contracts
awarded under section 8(a), and a description including
(if appropriate) an estimate of the dollar value of all
benefits received pursuant to paragraphs (13) and (14)
and section 7(a)(20) during such year.
(v) The total dollar value of contracts and options
awarded during the preceding fiscal year pursuant to
section 8(a) and such amount expressed as a percentage
of total sales of (I) all firms participating in the
Program during such year; and (II) of firms in each of
the nine years of program participation.
(vi) A description of such additional resources or
program authorities as may be required to provide the
types of services needed over the next two-year period
to service the expected portfolio of firms certified
pursuant to section 8(a).
(vii) The total dollar value of contracts and options
awarded pursuant to section 8(a), at such dollar
increments as the Administrator deems appropriate, for
each four digit standard industrial classification code
under which such contracts and options were classified.
(C) The first report required by subparagraph (B) shall
pertain to fiscal year 1990.
(k) In carrying out its functions under subsections 7(i),
7(j), and 8(a) of this Act, the Administration is authorized--
(1) to utilize, with their consent, the services and
facilities of Federal agencies without reimbursement,
and, with the consent of any State or political
subdivision of a State, accept and utilize the services
and facilities of such State or subdivision without
reimbursement;
(2) to accept, in the name of the Administration, and
employ or dispose of in furtherance of the purposes of
this Act, any money or property, real, personal, or
mixed, tangible, or intangible, received by gift,
device, bequest, or otherwise;
(3) to accept voluntary and uncompensated services,
notwithstanding the provisions of section 3679(b) of
the Revised Statutes (31 U.S.C. 655(b)); and
(4) to employ experts and consultants or
organizations thereof as authorized by section 15 of
the Administrative Expenses Act of 1946 (5 U.S.C. 55a),
except that no individual may be employed under the
authority of this subsection for more than one hundred
days in any fiscal year; to compensate individuals so
employed at rates not in excess of the daily equivalent
of the highest rate payable under section 5332 of title
5, United States Code, including traveltime; and to
allow them, while away from their homes or regular
places of business, travel expenses (including per diem
in lieu of subsistence) a authorized by section 5 of
such Act (5 U.S.C. 73b-2) for persons in the Government
service employed intermittently, while so employed:
Provided, however, That contracts for such employment
may be renewed annually.
(l) Small Business Intermediary Lending Pilot Program.--
(1) Definitions.--In this subsection--
(A) the term ``eligible intermediary''--
(i) means a private, nonprofit entity
that--
(I) seeks or has been awarded
a loan from the Administrator
to make loans to small business
concerns under this subsection;
and
(II) has not less than 1 year
of experience making loans to
startup, newly established, or
growing small business
concerns; and
(ii) includes--
(I) a private, nonprofit
community development
corporation;
(II) a consortium of private,
nonprofit organizations or
nonprofit community development
corporations; and
(III) an agency of or
nonprofit entity established by
a Native American Tribal
Government; and
(B) the term ``Program'' means the small
business intermediary lending pilot program
established under paragraph (2).
(2) Establishment.--There is established a 3-year
small business intermediary lending pilot program,
under which the Administrator may make direct loans to
eligible intermediaries, for the purpose of making
loans to startup, newly established, and growing small
business concerns.
(3) Purposes.--The purposes of the Program are--
(A) to assist small business concerns in
areas suffering from a lack of credit due to
poor economic conditions or changes in the
financial market; and
(B) to establish a loan program under which
the Administrator may provide loans to eligible
intermediaries to enable the eligible
intermediaries to provide loans to startup,
newly established, and growing small business
concerns for working capital, real estate, or
the acquisition of materials, supplies, or
equipment.
(4) Loans to eligible intermediaries.--
(A) Application.--Each eligible intermediary
desiring a loan under this subsection shall
submit an application to the Administrator that
describes--
(i) the type of small business
concerns to be assisted;
(ii) the size and range of loans to
be made;
(iii) the interest rate and terms of
loans to be made;
(iv) the geographic area to be served
and the economic, poverty, and
unemployment characteristics of the
area;
(v) the status of small business
concerns in the area to be served and
an analysis of the availability of
credit; and
(vi) the qualifications of the
applicant to carry out this subsection.
(B) Loan limits.--No loan may be made to an
eligible intermediary under this subsection if
the total amount outstanding and committed to
the eligible intermediary by the Administrator
would, as a result of such loan, exceed
$1,000,000 during the participation of the
eligible intermediary in the Program.
(C) Loan duration.--Loans made by the
Administrator under this subsection shall be
for a term of 20 years.
(D) Applicable interest rates.--Loans made by
the Administrator to an eligible intermediary
under the Program shall bear an annual interest
rate equal to 1.00 percent.
(E) Fees; collateral.--The Administrator may
not charge any fees or require collateral with
respect to any loan made to an eligible
intermediary under this subsection.
(F) Delayed payments.--The Administrator
shall not require the repayment of principal or
interest on a loan made to an eligible
intermediary under the Program during the 2-
year period beginning on the date of the
initial disbursement of funds under that loan.
(G) Maximum participants and amounts.--During
each of fiscal years 2011, 2012, and 2013, the
Administrator may make loans under the
Program--
(i) to not more than 20 eligible
intermediaries; and
(ii) in a total amount of not more
than $20,000,000.
(5) Loans to small business concerns.--
(A) In general.--The Administrator, through
an eligible intermediary, shall make loans to
startup, newly established, and growing small
business concerns for working capital, real
estate, and the acquisition of materials,
supplies, furniture, fixtures, and equipment.
(B) Maximum loan.--An eligible intermediary
may not make a loan under this subsection of
more than $200,000 to any 1 small business
concern.
(C) Applicable interest rates.--A loan made
by an eligible intermediary to a small business
concern under this subsection, may have a fixed
or a variable interest rate, and shall bear an
interest rate specified by the eligible
intermediary in the application of the eligible
intermediary for a loan under this subsection.
(D) Review restrictions.--The Administrator
may not review individual loans made by an
eligible intermediary to a small business
concern before approval of the loan by the
eligible intermediary.
(6) Termination.--The authority of the Administrator
to make loans under the Program shall terminate 3 years
after the date of enactment of the Small Business Job
Creation and Access to Capital Act of 2010.
(m) Microloan Program.--
(1)(A) Purposes.--The purposes of the Microloan
Program are--
(i) to assist women, low-income, veteran
(within the meaning of such term under section
3(q)), and minority entrepreneurs and business
owners and other individuals possessing the
capability to operate successful business
concerns;
(ii) to assist small business concerns in
those areas suffering from a lack of credit due
to economic downturns;
(iii) to establish a microloan program to be
administered by the Small Business
Administration--
(I) to make loans to eligible
intermediaries to enable such
intermediaries to provide small-scale
loans, particularly loans in amounts
averaging not more than $10,000, to
startup, newly established, or growing
small business concerns for working
capital or the acquisition of
materials, supplies, or equipment;
(II) to make grants to eligible
intermediaries that, together with non-
Federal matching funds, will enable
such intermediaries to provide
intensive marketing, management, and
technical assistance to microloan
borrowers;
(III) to make grants to eligible
nonprofit entities that, together with
non-Federal matching funds, will enable
such entities to provide intensive
marketing, management, and technical
assistance to assist low-income
entrepreneurs and other low-income
individuals obtain private sector
financing for their businesses, with or
without loan guarantees; and
(IV) to report to the Committees on
Small Business of the Senate and the
House of Representatives on the
effectiveness of the microloan program
and the advisability and feasibility of
implementing such a program nationwide;
and
(iv) to establish a welfare-to-work microloan
initiative, which shall be administered by the
Administration, in order to test the
feasibility of supplementing the technical
assistance grants provided under clauses (ii)
and (iii) of subparagraph (B) to individuals
who are receiving assistance under the State
program funded under part A of title IV of the
Social Security Act (42 U.S.C. 601 et seq.), or
under any comparable State funded means tested
program of assistance for low-income
individuals, in order to adequately assist
those individuals in--
(I) establishing small businesses;
and
(II) eliminating their dependence on
that assistance.
(B) Establishment.--There is established a microloan
program, under which the Administration may--
(i) make direct loans to eligible
intermediaries, as provided under paragraph
(3), for the purpose of making short-term,
fixed interest rate microloans to startup,
newly established, and growing small business
concerns under paragraph (6);
(ii) in conjunction with such loans and
subject to the requirements of paragraph (4),
make grants to such intermediaries for the
purpose of providing intensive marketing,
management, and technical assistance to small
business concerns that are borrowers under this
subsection; and
(iii) subject to the requirements of
paragraph (5), make grants to nonprofit
entities for the purpose of providing
marketing, management, and technical assistance
to low-income individuals seeking to start or
enlarge their own businesses, if such
assistance includes working with the grant
recipient to secure loans in amounts not to
exceed $50,000 from private sector lending
institutions, with or without a loan guarantee
from the nonprofit entity.
(2) Eligibility for participation.--An intermediary
shall be eligible to receive loans and grants under
subparagraphs (B)(i) and (B)(ii) of paragraph (1) if
it--
(A) meets the definition in paragraph (10);
and
(B) has at least 1 year of experience making
microloans to startup, newly established, or
growing small business concerns and providing,
as an integral part of its microloan program,
intensive marketing, management, and technical
assistance to its borrowers.
(3) Loans to intermediaries.--
(A) Intermediary applications.--(i) In
general.--As part of its application for a
loan, each intermediary shall submit a
description to the Administration of--
(I) the type of businesses to be
assisted;
(II) the size and range of loans to
be made;
(III) the geographic area to be
served and its economic, proverty, and
unemployment characteristics;
(IV) the status of small business
concerns in the area to be served and
an analysis of their credit and
technical assistance needs;
(V) any marketing, management, and
technical assistance to be provided in
connection with a loan made under this
subsection;
(VI) the local economic credit
markets, including the costs associated
with obtaining credit locally;
(VII) the qualifications of the
applicant to carry out the purpose of
this subsection; and
(VIII) any plan to involve other
technical assistance providers (such as
counselors from the Service Corps of
Retired Executives or small business
development centers) or private sector
lenders in assisting selected business
concerns.
(ii) Selection of intermediaries.--In
selecting intermediaries to participate in the
program established under this subsection, the
Administration shall give priority to those
applicants that provide loans in amounts
averaging not more than $10,000.
(B) Intermediary contribution.--As a
condition of any loan made to an intermediary
under subparagraph (B)(i) of paragraph (1), the
Administrator shall require the intermediary to
contribute not less than 15 percent of the loan
amount in cash from non-Federal sources.
(C) Loan limits.--Notwithstanding subsection
(a)(3), no loan shall be made under this
subsection if the total amount outstanding and
committed to one intermediary (excluding
outstanding grants) from the business loan and
investment fund established by this Act would,
as a result of such loan, exceed $750,000 in
the first year of such intermediary's
participation in the program, $7,000,000 (in
the aggregate) in the remaining years of the
intermediary's participation in the program,
and $3,000,000 in any of those remaining years.
(D)(i) In general.--The Administrator shall,
by regulation, require each intermediary to
establish a loan loss reserve fund, and to
maintain such reserve fund until all
obligations owed to the Administration under
this subsection are repaid.
(ii) Level of loan loss reserve fund.--
(I) In general.--Subject to subclause
(III), the Administrator shall require
the loan loss reserve fund of an
intermediary to be maintained at a
level equal to 15 percent of the
outstanding balance of the notes
receivable owed to the intermediary.
(II) Review of loan loss reserve.--
After the initial 5 years of an
intermediary's participation in the
program authorized by this subsection,
the Administrator shall, at the request
of the intermediary, conduct a review
of the annual loss rate of the
intermediary. Any intermediary in
operation under this subsection prior
to October 1, 1994, that requests a
reduction in its loan loss reserve
shall be reviewed based on the most
recent 5-year period preceding the
request.
(III) Reduction of loan loss
reserve.--Subject to the requirements
of clause IV, the Administrator may
reduce the annual loan loss reserve
requirement of an intermediary to
reflect the actual average loan loss
rate for the intermediary during the
preceding 5-year period, except that in
no case shall the loan loss reserve be
reduced to less than 10 percent of the
outstanding balance of the notes
receivable owed to the intermediary.
(IV) Requirements.--The Administrator
may reduce the annual loan loss reserve
requirement of an intermediary only if
the intermediary demonstrates to the
satisfaction of the Administrator
that--
(aa) the average annual loss
rate for the intermediary
during the preceding 5-year
period is less than 15 percent;
and
(bb) that no other factors
exist that may impair the
ability of the intermediary to
repay all obligations owed to
the Administration under this
subsection.
(E) Unavailability of comparable credit.--An
intermediary may make a loan under this
subsection of more than $20,000 to a small
business concern only if such small business
concern demonstrates that it is unable to
obtain credit elsewhere at comparable interest
rates and that it has good prospects for
success. In no case shall an intermediary make
a loan under this subsection of more than
$50,000, or have outstanding or committed to
any 1 borrower more than $50,000.
(F) Loan duration; interest rates.--
(i) Loan duration.--Loans made by the
Administration under this subsection
shall be for a term of 10 years.
(ii) Applicable interest rates.--
Except as provided in clause (iii),
loans made by the Administration under
this subsection to an intermediary
shall bear an interest rate equal to
1.25 percentage points below the rate
determined by the Secretary of the
Treasury for obligations of the United
States with a period of maturity of 5
years, adjusted to the nearest one-
eighth of 1 percent.
(iii) Rates applicable to certain
small loans.--Loans made by the
Administration to an intermediary that
makes loans to small business concerns
and entrepreneurs averaging not more
than $7,500, shall bear an interest
rate that is 2 percentage points below
the rate determined by the Secretary of
the Treasury for obligations of the
United States with a period of maturity
of 5 years, adjusted to the nearest
one-eighth of 1 percent.
(iv) Rates applicable to multiple
sites or offices.--The interest rate
prescribed in clause (ii) or (iii)
shall apply to each separate loan-
making site or office of 1 intermediary
only if such site or office meets the
requirements of that clause.
(v) Rate basis.--The applicable rate
of interest under this paragraph
shall--
(I) be applied retroactively
for the first year of an
intermediary's participation in
the program, based upon the
actual lending practices of the
intermediary as determined by
the Administration prior to the
end of such year; and
(II) be based in the second
and subsequent years of an
intermediary's participation in
the program, upon the actual
lending practices of the
intermediary during the term of
the intermediary's
participation in the program.
(vii) Covered intermediaries.--The
interest rates prescribed in this
subparagraph shall apply to all loans
made to intermediaries under this
subsection on or after October 28,
1991.
(G) Delayed payments.--The Administration
shall not require repayment of interest or
principal of a loan made to an intermediary
under this subsection during the first year of
the loan.
(H) Fees; collateral.--Except as provided in
subparagraphs (B) and (D), the Administration
shall not charge any fees or require collateral
other than an assignment of the notes
receivable of the microloans with respect to
any loan made to an intermediary under this
subsection.
(4) Marketing, management and technical assistance
grants to intermediaries.--Grants made in accordance
with subparagraph (B)(ii) of paragraph (1) shall be
subject to the following requirements:
(A) Grant amounts.--Except as otherwise
provided in subparagraphs (C) and (G) and
subject to subparagraph (B), each intermediary
that receives a loan under subparagraph (B)(i)
of paragraph (1) shall be eligible to receive a
grant to provide marketing, management, and
technical assistance to small business concerns
that are borrowers under this subsection.
Except as provided in subparagraphs (C) and
(G), each intermediary meeting the requirements
of subparagraph (B) may receive a grant of not
more than 25 percent of the total outstanding
balance of loans made to it under this
subsection.
(B) Contribution.--As a condition of a grant
made under subparagraph (A), the Administrator
shall require the intermediary to contribute an
amount equal to 25 percent of the amount of the
grant, obtained solely from non-Federal
sources. In addition to cash or other direct
funding, the contribution may include indirect
costs or in-kind contributions paid for under
non-Federal programs.
(C) Additional technical assistance grants
for making certain loans.--
(i) In general.--In addition to
grants made under subparagraph (A) or
(G), each intermediary shall be
eligible to receive a grant equal to 5
percent of the total outstanding
balance of loans made to the
intermediary under this subsection if--
(I) the intermediary provides
not less than 25 percent of its
loans to small business
concerns located in or owned by
1 or more residents of an
economically distressed area;
or
(II) the intermediary has a
portfolio of loans made under
this subsection--
(aa) that averages
not more than $10,000
during the period of
the intermediary's
participation in the
program; or
(bb) of which not
less than 25 percent is
serving rural areas
during the period of
the intermediary's
participation in the
program.
(ii) Purposes.--A grant awarded under
clause (i) may be used to provide
marketing, management, and technical
assistance to small business concerns
that are borrowers under this
subsection.
(iii) Contribution exception.--The
contribution requirements in
subparagraph (B) do not apply to grants
made under this subparagraph.
(D) Eligibility for multiple sites or
offices.--The eligibility for a grant described
in subparagraph (A), or (C) shall be determined
separately for each loan-making site or office
of 1 intermediary.
(E) Assistance to certain small business
concerns.--
(i) In general.--Each intermediary
may expend an amount not to exceed 50
percent of the grant funds received
under paragraph (1)(B)(ii) to provide
information and technical assistance to
small business concerns that are
prospective borrowers under this
subsection.
(ii) Technical assistance.--An
intermediary may expend not more than
50 percent of the funds received under
paragraph (1)(B)(ii) to enter into
third party contracts for the provision
of technical assistance.
(F) Supplemental grant.--
(i) In general.--The Administration
may accept any funds transferred to the
Administration from other departments
or agencies of the Federal Government
to make grants in accordance with this
subparagraph and section 202(b) of the
Small Business Reauthorization Act of
1997 to participating intermediaries
and technical assistance providers
under paragraph (5), for use in
accordance with clause (iii) to provide
additional technical assistance and
related services to recipients of
assistance under a State program
described in paragraph (1)(A)(iv) at
the time they initially apply for
assistance under this subparagraph.
(ii) Eligible recipients; grant
amounts.--In making grants under this
subparagraph, the Administration may
select, from among participating
intermediaries and technical assistance
providers described in clause (i), not
more than 20 grantees in fiscal year
1998, not more than 25 grantees in
fiscal year 1999, and not more than 30
grantees in fiscal year 2000, each of
whom may receive a grant under this
subparagraph in an amount not to exceed
$200,000 per year.
(iii) Use of grant amounts.--Grants
under this subparagraph--
(I) are in addition to other
grants provided under this
subsection and shall not
require the contribution of
matching amounts as a condition
of eligibility; and
(II) may be used by a
grantee--
(aa) to pay or
reimburse a portion of
child care and
transportation costs of
recipients of
assistance described in
clause (i), to the
extent such costs are
not otherwise paid by
State block grants
under the Child Care
Development Block Grant
Act of 1990 (42 U.S.C.
9858 et seq.) or under
part A of title IV of
the Social Security Act
(42 U.S.C. 601 et
seq.); and
(bb) for marketing,
management, and
technical assistance to
recipients of
assistance described in
clause (i).
(iv) Memorandum of understanding.--
Prior to accepting any transfer of
funds under clause (i) from a
department or agency of the Federal
Government, the Administration shall
enter into a Memorandum of
Understanding with the department or
agency, which shall--
(I) specify the terms and
conditions of the grants under
this subparagraph; and
(II) provide for appropriate
monitoring of expenditures by
each grantee under this
subparagraph and each recipient
of assistance described in
clause (i) who receives
assistance from a grantee under
this subparagraph, in order to
ensure compliance with this
subparagraph by those grantees
and recipients of assistance.
(G) Grant amounts based on appropriations.--
In any fiscal year in which the amount
appropriated to make grants under subparagraph
(A) is sufficient to provide to each
intermediary that receives a loan under
paragraph (1)(B)(i) a grant of not less than 25
percent of the total outstanding balance of
loans made to the intermediary under this
subsection, the Administration shall make a
grant under subparagraph (A) to each
intermediary of not less than 25 percent and
not more than 30 percent of that total
outstanding balance for the intermediary.
(5) Private sector borrowing technical assistance
grants.--Grants made in accordance with subparagraph
(B)(iii) of paragraph (1) shall be subject to the
following requirements:
(A) Grant amounts.--Subject to the
requirements of subparagraph (B), the
Administration may make not more than 55 grants
annually, each in amounts not to exceed
$200,000 for the purposes specified in
subparagraph (B)(iii) of paragraph (1).
(B) Contribution.--As a condition of any
grant made under subparagraph (A), the
Administration shall require the grant
recipient to contribute an amount equal to 20
percent of the amount of the grant, obtained
solely from non-Federal sources. In addition to
cash or other direct funding, the contribution
may include indirect costs or in-kind
contributions paid for under non-Federal
programs.
(6) Loans to small business concerns from eligible
intermediaries.--
(A) In general.--An eligible intermediary
shall make short-term, fixed rate loans to
startup, newly established, and growing small
business concerns from the funds made available
to it under subparagraph (B)(i) of paragraph
(1) for working capital and the acquisition of
materials, supplies, furniture, fixtures, and
equipment.
(B) Portfolio requirement.--To the extent
practicable, each intermediary that operates a
microloan program under this subsection shall
maintain a microloan portfolio with an average
loan size of not more than $15,000.
(C) Interest limit.--Notwithstanding any
provision of the laws of any State or the
constitution of any State pertaining to the
rate or amount of interest that may be charged,
taken, received, or reserved on a loan, the
maximum rate of interest to be charged on a
microloan funded under this subsection shall
not exceed the rate of interest applicable to a
loan made to an intermediary by the
Administration--
(i) in the case of a loan of more
than $7,500 made by the intermediary to
a small business concern or
entrepreneur by more than 7.75
percentage points; and
(ii) in the case of a loan of not
more than $7,500 made by the
intermediary to a small business
concern or entrepreneur by more than
8.5 percentage points.
(D) Review restriction.--The Administration
shall not review individual microloans made by
intermediaries prior to approval.
(E) Establishment of child care or
transportation businesses.--In addition to
other eligible small businesses concerns,
borrowers under any program under this
subsection may include individuals who will use
the loan proceeds to establish for-profit or
nonprofit child care establishments or
businesses providing for-profit transportation
services.
(7) Program funding for microloans.--
(A) Number of participants.--Under the
program authorized by this subsection, the
Administration may fund, on a competitive
basis, not more than 300 intermediaries.
(B) Allocation.--
(i) Minimum allocation.--Subject to
the availability of appropriations, of
the total amount of new loan funds made
available for award under this
subsection in each fiscal year, the
Administration shall make available for
award in each State (including the
District of Columbia, the Commonwealth
of Puerto Rico, the United States
Virgin Islands, Guam, and American
Samoa) an amount equal to the sum of--
(I) the lesser of--
(aa) $800,000; or
(bb) \1/55\ of the
total amount of new
loan funds made
available for award
under this subsection
for that fiscal year;
and
(II) any additional amount,
as determined by the
Administration.
(ii) Redistribution.--If, at the
beginning of the third quarter of a
fiscal year, the Administration
determines that any portion of the
amount made available to carry out this
subsection is unlikely to be made
available under clause (i) during that
fiscal year, the Administration may
make that portion available for award
in any one or more States (including
the District of Columbia, the
Commonwealth of Puerto Rico, the United
States Virgin Islands, Guam, and
American Samoa) without regard to
clause (i).
(8) Equitable distribution of intermediaries.--In
approving microloan program applicants and providing
funding to intermediaries under this subsection, the
Administration shall select and provide funding to such
intermediaries as will ensure appropriate availability
of loans for small businesses in all industries located
throughout each State, particularly those located in
urban and in rural areas.
(9) Grants for management, marketing, technical
assistance, and related services.--
(A) In general.--The Administration may
procure technical assistance for intermediaries
participating in the Microloan Program to
ensure that such intermediaries have the
knowledge, skills, and understanding of
microlending practices necessary to operate
successful microloan programs.
(B) Assistance amount.--The Administration
shall transfer 7 percent of its annual
appropriation for loans and loan guarantees
under this subsection to the Administration's
Salaries and Expense Account for the specific
purpose of providing 1 or more technical
assistance grants to experienced microlending
organizations and national and regional
nonprofit organizations that have demonstrated
experience in providing training support for
microenterprise development and financing. to
achieve the purpose set forth in subparagraph
(A).
(C) Welfare-to-work microloan initiative.--Of
amounts made available to carry out the
welfare-to-work microloan initiative under
paragraph (1)(A)(iv) in any fiscal year, the
Administration may use not more than 5 percent
to provide technical assistance, either
directly or through contractors, to welfare-to-
work microloan initiative grantees, to ensure
that, as grantees, they have the knowledge,
skills, and understanding of microlending and
welfare-to-work transition, and other related
issues, to operate a successful welfare-to-work
microloan initiative.
(10) Report to congress.--On November 1, 1995, the
Administration shall submit to the Committees on Small
Business of the Senate and the House of Representatives
a report, including the Administration's evaluation of
the effectiveness of the first 3\1/2\ years of the
microloan program and the following:
(A) the numbers and locations of the
intermediaries funded to conduct microloan
programs;
(B) the amounts of each loan and each grant
to intermediaries;
(C) a description of the matching
contributions of each intermediary;
(D) the numbers and amounts of microloans
made by the intermediaries to small business
concern borrowers;
(E) the repayment history of each
intermediary;
(F) a description of the loan portfolio of
each intermediary including the extent to which
it provides microloans to small business
concerns in rural areas; and
(G) any recommendations for legislative
changes that would improve program operations.
(11) Definitions.--For purposes of this subsection--
(A) the term ``intermediary'' means--
(i) a private, nonprofit entity;
(ii) a private, nonprofit community
development corporation;
(iii) a consortium of private,
nonprofit organizations or nonprofit
community development corporations;
(iv) a quasi-governmental economic
development entity (such as a planning
and development district), other than a
State, county, municipal government, or
any agency thereof, if--
(I) no application is
received from an eligible
nonprofit organization; or
(II) the Administration
determines that the needs of a
region or geographic area are
not adequately served by an
existing, eligible nonprofit
organization that has submitted
an application; or
(v) an agency of or nonprofit entity
established by a Native American Tribal
Government,
that seeks to borrow or has borrowed funds from
the Administration to make microloans to small
business concerns under this subsection;
(B) the term ``microloan'' means a short-
term, fixed rate loan of not more than $50,000,
made by an intermediary to a startup, newly
established, or growing small business concern;
(C) the term ``rural area'' means any
political subdivision or unincorporated area--
(i) in a nonmetropolitan county (as
defined by the Secretary of
Agriculture) or its equivalent thereof;
or
(ii) in a metropolitan county or its
equivalent that has a resident
population of less than 20,000 if the
Small Business Administration has
determined such political subdivision
or area to be rural.
(D) the term ``economically distressed
area'', as used in paragraph (4), means a
county or equivalent division of local
government of a State in which the small
business concern is located, in which,
according to the most recent data available
from the Bureau of the Census, Department of
Commerce, not less than 40 percent of residents
have an annual income that is at or below the
poverty level.
(12) Deferred participation loan pilot.--In lieu of
making direct loans to intermediaries as authorized in
paragraph (1)(B), during fiscal years 1998 through
2000, the Administration may, on a pilot program basis,
participate on a deferred basis of not less than 90
percent and not more than 100 percent on loans made to
intermediaries by a for-profit or nonprofit entity or
by alliances of such entities, subject to the following
conditions:
(A) Number of loans.--In carrying out this
paragraph, the Administration shall not
participate in providing financing on a
deferred basis to more than 10 intermediaries
in urban areas or more than 10 intermediaries
in rural areas.
(B) Term of loans.--The term of each loan
shall be 10 years. During the first year of the
loan, the intermediary shall not be required to
repay any interest or principal. During the
second through fifth years of the loan, the
intermediary shall be required to pay interest
only. During the sixth through tenth years of
the loan, the intermediary shall be required to
make interest payments and fully amortize the
principal.
(C) Interest rate.--The interest rate on each
loan shall be the rate specified by paragraph
(3)(F) for direct loans.
(13) Evaluation of welfare-to-work microloan
initiative.--On January 31, 1999, and annually
thereafter, the Administration shall submit to the
Committees on Small Business of the House of
Representatives and the Senate a report on any monies
distributed pursuant to paragraph (4)(F).
(14) Assistance to cannabis-related legitimate
businesses and service providers.--The Administrator
may not decline to make a loan or a grant under this
subsection, and an eligible intermediary may not
decline to provide assistance under this subsection to
an otherwise eligible borrower, eligible intermediary,
or eligible nonprofit entity (as applicable) solely
because such borrower, intermediary, or nonprofit
entity is a cannabis-related legitimate business or
service provider.
(n) Repayment Deferred for Active Service Reservists.--
(1) Definitions.--In this subsection:
(A) Active service.--The term ``active
service'' has the meaning given that term in
section 101(d)(3) of title 10, United States
Code.
(B) Eligible reservist.--The term ``eligible
reservist'' means a member of a reserve
component of the Armed Forces ordered to
perform active service for a period of more
than 30 consecutive days.
(C) Essential employee.--The term ``essential
employee'' means an individual who is employed
by a small business concern and whose
managerial or technical expertise is critical
to the successful day-to-day operations of that
small business concern.
(D) Qualified borrower.--The term ``qualified
borrower'' means--
(i) an individual who is an eligible
reservist and who received a direct
loan under subsection (a) or (b) before
being ordered to active service; or
(ii) a small business concern that
received a direct loan under subsection
(a) or (b) before an eligible
reservist, who is an essential
employee, was ordered to active
service.
(2) Deferral of direct loans.--
(A) In general.--The Administration shall,
upon written request, defer repayment of
principal and interest due on a direct loan
made under subsection (a) or (b), if such loan
was incurred by a qualified borrower.
(B) Period of deferral.--The period of
deferral for repayment under this paragraph
shall begin on the date on which the eligible
reservist is ordered to active service and
shall terminate on the date that is 180 days
after the date such eligible reservist is
discharged or released from active service.
(C) Interest rate reduction during
deferral.--Notwithstanding any other provision
of law, during the period of deferral described
in subparagraph (B), the Administration may, in
its discretion, reduce the interest rate on any
loan qualifying for a deferral under this
paragraph.
(3) Deferral of loan guarantees and other
financings.--The Administration shall--
(A) encourage intermediaries participating in
the program under subsection (m) to defer
repayment of a loan made with proceeds made
available under that subsection, if such loan
was incurred by a small business concern that
is eligible to apply for assistance under
subsection (b)(3); and
(B) not later than 30 days after the date of
the enactment of this subsection, establish
guidelines to--
(i) encourage lenders and other
intermediaries to defer repayment of,
or provide other relief relating to,
loan guarantees under subsection (a)
and financings under section 504 of the
Small Business Investment Act of 1958
that were incurred by small business
concerns that are eligible to apply for
assistance under subsection (b)(3), and
loan guarantees provided under
subsection (m) if the intermediary
provides relief to a small business
concern under this paragraph; and
(ii) implement a program to provide
for the deferral of repayment or other
relief to any intermediary providing
relief to a small business borrower
under this paragraph.
* * * * * * *
Sec. 8. (a)(1) It shall be the duty of the Administration and
it is hereby empowered, whenever it determines such action is
necessary or appropriate--
(A) to enter into contracts with the United States
Government and any department, agency, or officer
thereof having procurement powers obligating the
Administration to furnish articles, equipment,
supplies, services, or materials to the Government or
to perform construction work for the Government. In any
case in which the Administration certifies to any
officer of the Government having procurement powers
that the Administration is competent and responsible to
perform any specific Government procurement contract to
be let by any such officer, such officer shall be
authorized in his discretion to let such procurement
contract to the Administration upon such terms and
conditions as may be agreed upon between the
Administration and the procurement officer. Whenever
the Administration and such procurement officer fail to
agree, the matter shall be submitted for determination
to the Secretary or the head of the appropriate
department or agency by the Administrator. Not later
than 5 days from the date the Administration is
notified of a procurement officer's adverse decision,
the Administration may notify the contracting officer
of the intent to appeal such adverse decision, and
within 15 days of such date the Administrator shall
file a written request for a reconsideration of the
adverse decision with the Secretary of the department
or agency head. For the purposes of this subparagraph,
a procurement officer's adverse decision includes a
decision not to make available for award pursuant to
this subsection a particular procurement requirement or
the failure to agree on the terms and conditions of a
contract to be awarded noncompetitively under the
authority of this subsection. Upon receipt of the
notice of intent to appeal, the Secretary of the
department or the agency head shall suspend further
action regarding the procurement until a written
decision on the Administrator's request for
reconsideration has been issued by such Secretary or
agency head, unless such officer makes a written
determination that urgent and compelling circumstances
which significantly affect interests of the United
States will not permit waiting for a reconsideration of
the adverse decision. If the Administrator's request
for reconsideration is denied, the Secretary of the
department or agency head shall specify the reasons why
the selected firm was determined to be incapable to
perform the procurement requirement, and the findings
supporting such determination, which shall be made a
part of the contract file for the requirement. A
contract may not be awarded under this subsection if
the award of the contract would result in a cost to the
awarding agency which exceeds a fair market price;
(B) to arrange for the performance of such
procurement contracts by negotiating or otherwise
letting subcontracts to socially and economically
disadvantaged small business concerns for construction
work, services, or the manufacture, supply, assembly of
such articles, equipment, supplies, materials, or parts
thereof, or servicing or processing in connection
therewith, or such management services as may be
necessary to enable the Administration to perform such
contracts;
(C) to make an award to a small business
concern owned and controlled by socially and
economically disadvantaged individuals which
has completed its period of Program
Participation as prescribed by section
7(j)(15), if--
(i) the contract will be awarded as a
result of an offer (including price)
submitted in response to a published
solicitation relating to a competition
conducted pursuant to subparagraph (D);
and
(ii) the prospective contract awardee
was a Program Participant eligible for
award of the contract on the date
specified for receipt of offers
contained in the contract solicitation;
and
(D)(i) A contract opportunity offered for award
pursuant to this subsection shall be awarded on the
basis of competition restricted to eligible Program
Participants if--
(I) there is a reasonable expectation that at
least two eligible Program Participants will
submit offers and that award can be made at a
fair market price, and
(II) the anticipated award price of the
contract (including options) will exceed
$7,000,000 in the case of a contract
opportunity assigned a standard industrial
classification code for manufacturing and
$3,000,000 (including options) in the case of
all other contract opportunities.
(ii) The Associate Administrator for Minority Small
Business and Capital Ownership Development, on a
nondelegable basis, is authorized to approve a request
from an agency to award a contract opportunity under
this subsection on the basis of a competition
restricted to eligible Program Participants even if the
anticipated award price is not expected to exceed the
dollar amounts specified in clause (i)(II). Such
approvals shall be granted only on a limited basis.
(2) Notwithstanding subsections (a) and (c) of the first
section of the Act entitled ``An Act requiring contracts for
the construction, alteration, and repair of any public building
or public work of the United States to be accompanied by a
performance bond protecting the United States and by additional
bond for the protection of persons furnishing material and
labor for the construction, alteration, or repair of said
public buildings or public work,'' approved August 24, 1935 (49
Stat. 793), no small business concern shall be required to
provide any amount of any bond as a condition or receiving any
subcontract under this subsection if the Administrator
determines that such amount is inappropriate for such concern
in performing such contract: Provided, That the Administrator
shall exercise the authority granted by the paragraph only if--
(A) the Administration takes such measures as it
deems appropriate for the protection of persons
furnishing materials and labor to a small business
receiving any benefit pursuant to this paragraph;
(B) the Administration assists, insofar as
practicable, a small business receiving the benefits of
this paragraph to develop, within a reasonable period
of time, such financial and other capability as may be
needed to obtain such bonds as the Administration may
subsequently require for the successful completion of
any program conducted under the authority of this
subsection;
(C) the Administration finds that such small business
is unable to obtain the requisite bond or bonds from a
surety and that no surety is willing to issue such bond
or bonds subject to the guarantee provisions of Title
IV of the Small Business Investment Act of 1958; and
(D) that small business is determined to be a start-
up concern and such concern has not been participating
in any program conducted under the authority of this
subsection for a period exceeding one year.
The authority to waive bonds provided in this paragraph (2) may
not be exercised after September 30, 1988.
(3)(A) Any Program Participant selected by the Administration
to perform a contract to be let noncompetitively pursuant to
this subsection shall, when practicable, participate in any
negotiation of the terms and conditions of such contract.
(B)(i) For purposes of paragraph (1) a ``fair market price''
shall be determined by the agency offering the procurement
requirement to the Administration, in accordance with clauses
(ii) and (iii).
(ii) The estimate of a current fair market price for a new
procurement requirement, or a requirement that does not have a
satisfactory procurement history, shall be derived from a price
or cost analysis. Such analysis may take into account
prevailing market conditions, commercial prices for similar
products or services, or data obtained from any other agency.
Such analysis shall consider such cost or pricing data as may
be timely submitted by the Administration.
(iii) The estimate of a current fair market price for a
procurement requirement that has a satisfactory procurement
history shall be based on recent award prices adjusted to
insure comparability. Such adjustments shall take into account
differences in quantities, performance times, plans,
specifications, transportation costs, packaging and packing
costs, labor and materials costs, overhead costs, and any other
additional costs which may be deemed appropriate.
(C) An agency offering a procurement requirement for
potential award pursuant to this subsection shall, upon the
request of the Administration, promptly submit to the
Administration a written statement detailing the method used by
the agency to estimate the current fair market price for such
contract, identifying the information, studies, analyses, and
other data used by such agency. The agency's estimate of the
current fair market price (and any supporting data furnished to
the Administration) shall not be disclosed to any potential
offeror (other than the Administration).
(D) A small business concern selected by the Administration
to perform or negotiate a contract to be let pursuant to this
subsection may request the Administration to protest the
agency's estimate of the fair market price for such contract
pursuant to paragraph (1)(A).
(4)(A) For purposes of this section, the term ``socially and
economically disadvantaged small business concern'' means any
small business concern which meets the requirements of
subparagraph (B) and--
(i) which is at least 51 per centum unconditionally
owned by--
(I) one or more socially and economically
disadvantaged individuals,
(II) an economically disadvantaged Indian
tribe (or a wholly owned business entity of
such tribe), or
(III) an economically disadvantaged Native
Hawaiian organization, or
(ii) in the case of any publicly owned business, at
least 51 per centum of the stock of which is
unconditionally owned by--
(I) one or more socially and economically
disadvantaged individuals,
(II) an economically disadvantaged Indian
tribe (or a wholly owned business entity of
such tribe), or
(III) an economically disadvantaged Native
Hawaiian organization.
(B) A small business concern meets the requirements of this
subparagraph if the management and daily business operations of
such small business concern are controlled by one or more--
(i) socially and economically disadvantaged
individuals described in subparagraph (A)(i)(I) or
subparagraph (A)(ii)(I),
(ii) members of an economically disadvantaged Indian
tribe described in subparagraph (A)(i)(II) or
subparagraph (A)(ii)(II), or
(iii) Native Hawaiian organizations described in
subparagraph (A)(i)(III) or subparagraph (A)(ii)(III).
(C) Each Program Participant shall certify, on an annual
basis, that it meets the requirements of this paragraph
regarding ownership and control.
(5) Socially disadvantaged individuals are those who have
been subjected to racial or ethnic prejudice or cultural bias
because of their identity as a member of a group without regard
to their individual qualities.
(6)(A) Economically disadvantaged individuals are those
socially disadvantaged individuals whose ability to compete in
the free enterprise system has been impaired due to diminished
capital and credit opportunities as compared to others in the
same business area who are not socially disadvantaged. In
determining the degree of diminished credit and capital
opportunities the Administration shall consider, but not be
limited to, the assets and net worth of such socially
disadvantaged individual. In determining the economic
disadvantage of an Indian tribe, the Administration shall
consider, where available, information such as the following:
the per capita income of members of the tribe excluding
judgment awards, the percentage of the local Indian population
below the poverty level, and the tribe's access to capital
markets.
(B) Each Program Participant shall annually submit to the
Administration--
(i) a personal financial statement for each
disadvantaged owner;
(ii) a record of all payments made by the Program
Participant to each of its disadvantaged owners or to
any person or entity affiliated with such owners; and
(iii) such other information as the Administration
may deem necessary to make the determinations required
by this paragraph.
(C)(i) Whenever, on the basis of information provided by a
Program Participant pursuant to subparagraph (B) or otherwise,
the Administration has reason to believe that the standards to
establish economic disadvantage pursuant to subparagraph (A)
have not been met, the Administration shall conduct a review to
determine whether such Program Participant and its
disadvantaged owners continue to be impaired in their ability
to compete in the free enterprise system due to diminished
capital and credit opportunities when compared to other
concerns in the same business area, which are not socially
disadvantaged.
(ii) If the Administration determines, pursuant to such
review, that a Program Participant and its disadvantaged owners
are no longer economically disadvantaged for the purpose of
receiving assistance under this subsection, the Program
Participant shall be graduated pursuant to section 7(j)(10)(G)
subject to the right to a hearing as provided for under
paragraph (9).
(D)(i) Whenever, on the basis of information provided by a
Program Participant pursuant to subparagraph (B) or otherwise,
the Administration has reason to believe that the amount of
funds or other assets withdrawn from a Program Participant for
the personal benefit of its disadvantaged owners or any person
or entity affiliated with such owners may have been unduly
excessive, the Administration shall conduct a review to
determine whether such withdrawal of funds or other assets was
detrimental to the achievement of the targets, objectives, and
goals contained in such Program Participant's business plan.
(ii) If the Administration determines, pursuant to such
review, that funds or other assets have been withdrawn to the
detriment of the Program Participant's business, the
Administration shall--
(I) initiate a proceeding to terminate the Program
Participant pursuant to section 7(j)(10)(F), subject to
the right to a hearing under paragraph (9); or
(II) require an appropriate reinvestment of funds or
other assets and such other steps as the Administration
may deem necessary to ensure the protection of the
concern.
(E) Whenever the Administration computes personal net worth
for any purpose under this paragraph, it shall exclude from
such computation--
(i) the value of investments that disadvantaged
owners have in their concerns, except that such value
shall be taken into account under this paragraph when
comparing such concerns to other concerns in the same
business area that are owned by other than socially
disadvantaged persons;
(ii) the equity that disadvantaged owners have in
their primary personal residences, except that any
portion of such equity that is attributable to unduly
excessive withdrawals from a Program Participant or a
concern applying for program participation shall be
taken into account.
(7)(A) No small business concern shall be deemed eligible for
any assistance pursuant to this subsection unless the
Administration determines that with contract, financial,
technical, and management support the small business concern
will be able to perform contracts which may be awarded to such
concern under paragraph (1)(C) and has reasonable prospects for
success in competing in the private sector.
(B) Limitations established by the Administration in its
regulations and procedures restricting the award of contracts
pursuant to this subsection to a limited number of standard
industrial classification codes in an approved business plan
shall not be applied in a manner that inhibits the logical
business progression by a participating small business concern
into areas of industrial endeavor where such concern has the
potential for success.
(8) All determinations made pursuant to paragraph (5) with
respect to whether a group has been subjected to prejudice or
bias shall be made by the Administrator after consultation with
the Associate Administrator for Minority Small Business and
Capital Ownership Development. All other determinations made
pursuant to paragraphs (4), (5), (6), and (7) shall be made by
the Associate Administrator for Minority Small Business and
Capital Ownership Development under the supervision of, and
responsible to, the Administrator.
(9)(A) Subject to the provisions of subparagraph (E), the
Administration, prior to taking any action described in
subparagraph (B), shall provide the small business concern that
is the subject of such action, an opportunity for a hearing on
the record, in accordance with chapter 5 of title 5, United
States Code.
(B) The actions referred to in subparagraph (A) are--
(i) denial of program admission based upon a negative
determination pursuant to paragraph (4), (5), or (6);
(ii) a termination pursuant to section 7(j)(10)(F);
(iii) a graduation pursuant to section 7(j)(10)(G);
and
(iv) the denial of a request to issue a waiver
pursuant to paragraph (21)(B).
(C) The Administration's proposed action, in any proceeding
conducted under the authority of this paragraph, shall be
sustained unless it is found to be arbitrary, capricious, or
contrary to law.
(D) A decision rendered pursuant to this paragraph shall be
the final decision of the Administration and shall be binding
upon the Administration and those within its employ.
(E) The adjudicator selected to preside over a proceeding
conducted under the authority of this paragraph shall decline
to accept jurisdiction over any matter that--
(i) does not, on its face, allege facts that, if
proven to be true, would warrant reversal or
modification of the Administration's position;
(ii) is untimely filed;
(iii) is not filed in accordance with the rules of
procedure governing such proceedings; or
(iv) has been decided by or is the subject of an
adjudication before a court of competent jurisdiction
over such matters.
(F) Proceedings conducted pursuant to the authority of this
paragraph shall be completed and a decision rendered, insofar
as practicable, within ninety days after a petition for a
hearing is filed with the adjudicating office.
(10) The Administration shall develop and implement an
outreach program to inform and recruit small business concerns
to apply for eligibility for assistance under this subsection.
Such program shall make a sustained and substantial effort to
solicit applications for certification from small business
concerns located in areas of concentrated unemployment or
underemployment or within labor surplus areas and within States
having relatively few Program Participants and from small
disadvantaged business concerns in industry categories that
have not substantially participated in the award of contracts
let under the authority of this subsection.
(11) To the maximum extent practicable, construction
subcontracts awarded by the Administration pursuant to this
subsection shall be awarded within the county or State where
the work is to be performed.
(12)(A) The Administration shall require each concern
eligible to receive subcontracts pursuant to this subsection to
annually prepare and submit to the Administration a capability
statement. Such statement shall briefly describe such concern's
various contract performance capabilities and shall contain the
name and telephone number of the Business Opportunity
Specialist assigned such concern. The Administration shall
separate such statements by those primarily dependent upon
local contract support and those primarily requiring a national
marketing effort. Statements primarily dependent upon local
contract support shall be disseminated to appropriate buying
activities in the marketing area of the concern. The remaining
statements shall be disseminated to the Directors of Small and
Disadvantaged Business Utilization for the appropriate agencies
who shall further distribute such statements to buying
activities with such agencies that may purchase the types of
items or services described on the capability statements.
(B) Contracting activities receiving capability statements
shall, within 60 days after receipt, contact the relevant
Business Opportunity Specialist to indicate the number, type,
and approximate dollar value of contract opportunities that
such activities may be awarding over the succeeding 12-month
period and which may be appropriate to consider for award to
those concerns for which it has received capability statements.
(C) Each executive agency reporting to the Federal
Procurement Data System contract actions with an aggregate
value in excess of $50,000,000 in fiscal year 1988, or in any
succeeding fiscal year, shall prepare a forecast of expected
contract opportunities or classes of contract opportunities for
the next and succeeding fiscal years that small business
concerns, including those owned and controlled by socially and
economically disadvantaged individuals, are capable of
performing. Such forecast shall be periodically revised during
such year. To the extent such information is available, the
agency forecasts shall specify:
(i) The approximate number of individual contract
opportunities (and the number of opportunities within a
class).
(ii) The approximate dollar value, or range of dollar
values, for each contract opportunity or class of
contract opportunities.
(iii) The anticipated time (by fiscal year quarter)
for the issuance of a procurement request.
(iv) The activity responsible for the award and
administration of the contract.
(D) The head of each executive agency subject to the
provisions of subparagraph (C) shall within 10 days of
completion furnish such forecasts to--
(i) the Director of the Office of Small and
Disadvantaged Business Utilization established pursuant
to section 15(k) for such agency; and
(ii) the Administrator.
(E) The information reported pursuant to subparagraph (D) may
be limited to classes of items and services for which there are
substantial annual purchases.
(F) Such forecasts shall be available to small business
concerns.
(13) For purposes of this subsection, the term ``Indian
tribe'' means any Indian tribe, band, nation, or other
organized group or community of Indians, including any Alaska
Native village or regional or village corporation (within the
meaning of the Alaska Native Claims Settlement Act) which--
(A) is recognized as eligible for the special
programs and services provided by the United States to
Indians because of their status as Indians, or
(B) is recognized as such by the State in which such
tribe, band, nation, group, or community resides.
(14) Limitations on subcontracting.--A concern may
not be awarded a contract under this subsection as a
small business concern unless the concern agrees to
satisfy the requirements of section 46.
(15) For purposes of this subsection, the term ``Native
Hawaiian Organization'' means any community service
organization serving Native Hawaiians in the State of Hawaii
which--
(A) is a nonprofit corporation that has filed
articles of incorporation with the director (or the
designee thereof) of the Hawaii Department of Commerce
and Consumer Affairs, or any successor agency,
(B) is controlled by Native Hawaiians, and
(C) whose business activities will principally
benefit such Native Hawaiians.
(16)(A) The Administration shall award sole source contracts
under this section to any small business concern recommended by
the procuring agency offering the contract opportunity if--
(i) the Program Participant is determined to be a
responsible contractor with respect to performance of
such contract opportunity;
(ii) the award of such contract would be consistent
with the Program Participant's business plan; and
(iii) the award of the contract would not result in
the Program Participant exceeding the requirements
established by section 7(j)(10)(I).
(B) To the maximum extent practicable, the Administration
shall promote the equitable geographic distribution of sole
source contracts awarded pursuant to this subsection.
(17)(A) An otherwise responsible business concern that is in
compliance with the requirements of subparagraph (B) shall not
be denied the opportunity to submit and have considered its
offer for any procurement contract, which contract has as its
principal purpose the supply of a product to be let pursuant to
this subsection, subsection (m), section 15(a), section 31, or
section 36, solely because such concern is other than the
actual manufacturer or processor of the product to be supplied
under the contract.
(B) To be in compliance with the requirements referred to in
subparagraph (A), such a business concern shall--
(i) be primarily engaged in the wholesale or retail
trade;
(ii) be a small business concern under the numerical
size standard for the Standard Industrial
Classification Code assigned to the contract
solicitation on which the offer is being made;
(iii) be a regular dealer, as defined pursuant to
section 35(a) of title 41, United States Code
(popularly referred to as the Walsh-Healey Public
Contracts Act), in the product to be offered the
Government or be specifically exempted from such
section by section 7(j)(13)(C); and
(iv) represent that it will supply the product of a
domestic small business manufacturer or processor,
unless a waiver of such requirement is granted--
(I) by the Administrator, after reviewing a
determination by the contracting officer that
no small business manufacturer or processor can
reasonably be expected to offer a product
meeting the specifications (including period
for performance) required of an offeror by the
solicitation; or
(II) by the Administrator for a product (or
class of products), after determining that no
small business manufacturer or processor is
available to participate in the Federal
procurement market.
(C) Limitation.--This paragraph shall not apply to a
contract that has as its principal purpose the
acquisition of services or construction.
(18)(A) No person within the employ of the Administration
shall, during the term of such employment and for a period of
two years after such employment has been terminated, engage in
any activity or transaction specified in subparagraph (B) with
respect to any Program Participant during such person's term of
employment, if such person participated personally (either
directly or indirectly) in decision-making responsibilities
relating to such Program Participant or with respect to the
administration of any assistance provided to Program
Participants generally under this subsection, section 7(j)(10),
or section 7(a)(20).
(B) The activities and transactions prohibited by
subparagraph (A) include--
(i) the buying, selling, or receiving (except by
inheritance) of any legal or beneficial ownership of
stock or any other ownership interest or the right to
acquire any such interest;
(ii) the entering into or execution of any written or
oral agreement (whether or not legally enforceable) to
purchase or otherwise obtain any right or interest
described in clause (i); or
(iii) the receipt of any other benefit or right that
may be an incident of ownership.
(C)(i) The employees designated in clause (ii) shall annually
submit a written certification to the Administration regarding
compliance with the requirements of this paragraph.
(ii) The employees referred to in clause (i) are--
(I) regional administrators;
(II) district directors;
(III) the Associate Administrator for Minority Small
Business and Capital Ownership Development;
(IV) employees whose principal duties relate to the
award of contracts or the provision of other assistance
pursuant to this subsection or section 7(j)(10); and
(V) such other employees as the Administrator may
deem appropriate.
(iii) Any present or former employee of the Administration
who violates this paragraph shall be subject to a civil
penalty, assessed by the Attorney General, that shall not
exceed 300 per centum of the maximum amount of gain such
employee realized or could have realized as a result of
engaging in those activities and transactions prescribed by
subparagraph (B).
(iv) In addition to any other remedy or sanction provided for
under law or regulation, any person who falsely certifies
pursuant to clause (i) shall be subject to a civil penalty
under the Program Fraud Civil Remedies Act of 1986 (31 U.S.C.
3801-3812).
(19)(A) Any employee of the Administration who has authority
to take, direct others to take, recommend, or approve any
action with respect to any program or activity conducted
pursuant to this subsection or section 7(j), shall not, with
respect to any such action, exercise or threaten to exercise
such authority on the basis of the political activity or
affiliation of any party. Employees of the Administration shall
expeditiously report to the Inspector General of the
Administration any such action for which such employee's
participation has been solicitated or directed.
(B) Any employee who willfully and knowingly violates
subparagraph (A) shall be subject to disciplinary action, which
may consist of separation from service, reduction in grade,
suspension, or reprimand.
(C) Subparagraph (A) shall not apply to any action taken as a
penalty or other enforcement of a violation of any law, rule,
or regulation prohibiting or restricting political activity.
(D) The prohibitions of subparagraph (A), and remedial
measures provided for under subparagraphs (B) and (C) with
regard to such prohibitions, shall be in addition to, and not
in lieu of, any other prohibitions, measures or liabilities
that may arise under any other provision of law.
(20)(A) Small business concerns participating in the Program
under section 7(j)(10) and eligible to receive contracts
pursuant to this section shall semiannually report to their
assigned Business Opportunity Specialist the following:
(i) A listing of any agents, representatives,
attorneys, accountants, consultants, and other parties
(other than employees) receiving compensation to assist
in obtaining a Federal contract for such Program
Participant.
(ii) The amount of compensation received by any
person listed under clause (i) during the relevant
reporting period and a description of the activities
performed in return for such compensation.
(B) The Business Opportunity Specialist shall promptly review
and forward such report to the Associate Administrator for
Minority Small Business and Capital Ownership Development. Any
report that raises a suspicion of improper activity shall be
reported immediately to the Inspector General of the
Administration.
(C) The failure to submit a report pursuant to the
requirements of this subsection and applicable regulations
shall be considered ``good cause'' for the initiation of a
termination proceeding pursuant to section 7(j)(10)(F).
(21)(A) Subject to the provisions of subparagraph (B), a
contract (including options) awarded pursuant to this
subsection shall be performed by the concern that initially
received such contract. Notwithstanding the provisions of the
preceding sentence, if the owner or owners upon whom
eligibility was based relinquish ownership or control of such
concern, or enter into any agreement to relinquish such
ownership or control, such contract or option shall be
terminated for the convenience of the Government, except that
no repurchase costs or other damages may be assessed against
such concerns due solely to the provisions of this
subparagraph.
(B) The Administrator may, on a nondelegable basis, waive the
requirements of subparagraph (A) only if one of the following
conditions exist:
(i) When it is necessary for the owners of the
concern to surrender partial control of such concern on
a temporary basis in order to obtain equity financing.
(ii) The head of the contracting agency for which the
contract is being performed certifies that termination
of the contract would severely impair attainment of the
agency's program objectives or missions;
(iii) Ownership and control of the concern that is
performing the contract will pass to another small
business concern that is a program participant, but
only if the acquiring firm would otherwise be eligible
to receive the award directly pursuant to subsection
(a);
(iv) The individuals upon whom eligibility was based
are no longer able to exercise control of the concern
due to incapacity or death; or
(v) When, in order to raise equity capital, it is
necessary for the disadvantaged owners of the concern
to relinquish ownership of a majority of the voting
stock of such concern, but only if--
(I) such concern has exited the Capital
Ownership Development Program;
(II) the disadvantaged owners will maintain
ownership of the largest single outstanding
block of voting stock (including stock held by
affiliated parties); and
(III) the disadvantaged owners will maintain
control of daily business operations.
(C) The Administrator may waive the requirements of
subparagraph (A) if--
(i) in the case of subparagraph (B) (i), (ii)
and (iv), he is requested to do so prior to the
actual relinquishment of ownership or control;
and
(ii) in the case of subparagraph (B)(iii), he
is requested to do so as soon as possible after
the incapacity or death occurs.
(D) Concerns performing contracts awarded pursuant to this
subsection shall be required to notify the Administration
immediately upon entering an agreement (either oral or in
writing) to transfer all or part of its stock or other
ownership interest to any other party.
(E) Notwithstanding any other provision of law, for the
purposes of determining ownership and control of a concern
under this section, any potential ownership interests held by
investment companies licensed under the Small Business
Investment Act of 1958 shall be treated in the same manner as
interests held by the individuals upon whom eligibility is
based.
(b) It shall also be the duty of the Administration and it is
hereby empowered, whenever it determines such action is
necessary--
(1)(A) to provide--
(i) technical, managerial, and informational
aids to small business concerns--
(I) by advising and counseling on
matters in connection with Government
procurement and policies, principles,
and practices of good management;
(II) by cooperating and advising
with--
(aa) voluntary business,
professional, educational, and
other nonprofit organizations,
associations, and institutions
(except that the Administration
shall take such actions as it
determines necessary to ensure
that such cooperation does not
constitute or imply an
endorsement by the
Administration of the
organization or its products or
services, and shall ensure that
it receives appropriate
recognition in all printed
materials); and
(bb) other Federal and State
agencies;
(III) by maintaining a clearinghouse
for information on managing, financing,
and operating small business
enterprises; and
(IV) by disseminating such
information, including through
recognition events, and by other
activities that the Administration
determines to be appropriate; and
(ii) through cooperation with a profit-making
concern (referred to in this paragraph as a
``cosponsor''), training, information, and
education to small business concerns, except
that the Administration shall--
(I) take such actions as it
determines to be appropriate to ensure
that--
(aa) the Administration
receives appropriate
recognition and publicity;
(bb) the cooperation does not
constitute or imply an
endorsement by the
Administration of any product
or service of the cosponsor;
(cc) unnecessary promotion of
the products or services of the
cosponsor is avoided; and
(dd) utilization of any one
cosponsor in a marketing area
is minimized; and
(II) develop an agreement, executed
on behalf of the Administration by an
employee of the Administration in
Washington, the District of Columbia,
that provides, at a minimum, that--
(aa) any printed material to
announce the cosponsorship or
to be distributed at the
cosponsored activity, shall be
approved in advance by the
Administration;
(bb) the terms and conditions
of the cooperation shall be
specified;
(cc) only minimal charges may
be imposed on any small
business concern to cover the
direct costs of providing the
assistance;
(dd) the Administration may
provide to the cosponsorship
mailing labels, but not lists
of names and addresses of small
business concerns compiled by
the Administration;
(ee) all printed materials
containing the names of both
the Administration and the
cosponsor shall include a
prominent disclaimer that the
cooperation does not constitute
or imply an endorsement by the
Administration of any product
or service of the cosponsor;
and
(ff) the Administration shall
ensure that it receives
appropriate recognition in all
cosponsorship printed
materials.
(B) To establish, conduct, and publicize, and to
recruit, select, and train volunteers for (and to enter
into contracts, grants, or cooperative agreements
therefor), volunteer programs, including a Service
Corps of Retired Executives (SCORE) and an Active Corps
of Executive (ACE) for the purposes of section
8(b)(1)(A) of this Act. To facilitate the
implementation of such volunteer programs the
Administration shall maintain at its headquarters and
pay the salaries, benefits, and expenses of a volunteer
and professional staff to manage and oversee the
program. Any such payments made pursuant to this
subparagraph shall be effective only to such extent or
in such amounts as are provided in advance in
appropriation Acts. Notwithstanding any other provision
of law, SCORE may solicit cash and in-kind
contributions from the private sector to be used to
carry out its functions under this Act, and may use
payments made by the Administration pursuant to this
subparagraph for such solicitation and the management
of the contributions received. The head of the SCORE
program established under this subparagraph may not
decline to provide services to an otherwise eligible
small business concern solely because such concern is a
cannabis-related legitimate business or service
provider.
(C) To allow any individual or group of persons
participating with it in furtherance of the purposes of
subparagraphs (A) and (B) to use the Administration's
office facilities and related material and services as
the Administration deems appropriate, including
clerical and stenographic service:
(i) such volunteers, while carrying out
activities under section 8(b)(1) of this Act
shall be deemed Federal employees for the
purposes of the Federal tort claims provisions
in title 28, United States Code; and for the
purposes of subchapter I of chapter 81 of title
5, United States Code (relative to compensation
to Federal employees for work injuries) shall
be deemed civil employees of the United States
within the meaning of the term ``employee'' as
defined in section 8101 of title 5, United
States Code, and the provisions of that
subchapter shall apply except that in computing
compensation benefits for disability or death,
the monthly pay of a volunteer shall be deemed
that received under the entrance salary for a
grade GS-11 employee:
(ii) the Administrator is authorized to
reimburse such volunteers for all necessary
out-of-pocket expenses incident to their
provision of services under this Act, or in
connection with attendance at meetings
sponsored by the Administration, or for the
cost of malpractice insurance, as the
Administrator shall determine, in accordance
with regulations which he or she shall
prescribe, and, while they are carrying out
such activities away from their homes or
regular places of business, for travel expenses
(including per diem in lieu of subsistence) as
authorized by section 5703 of title 5, United
States Code, for individuals serving without
pay; and
(iii) such volunteers shall in no way provide
services to a client of such Administration
with a delinquent loan outstanding, except upon
a specific request signed by such client for
assistance in connection with such matter.
(D) Notwithstanding any other provision of law, no
payment for supportive services or reimbursement of
out-of-pocket expenses made to persons serving pursuant
to section 8(b)(1) of this Act shall be subject to any
tax or charge or be treated as wages or compensation
for the purposes of unemployment, disability,
retirement, public assistance, or similar benefit
payments, or minimum wage laws.
(E) In carrying out its functions under subparagraph
(A), to make grants (including contracts and
cooperative agreements) to any public or private
institution of higher education for the establishment
and operation of a small business institute, which
shall be used to provide business counseling and
assistance to small business concerns through the
activities of students enrolled at the institution,
which students shall be entitled to receive educational
credits for their activities.
(F) Notwithstanding any other provision of law and
pursuant to regulations which the Administrator shall
provide, counsel may be employed and counsel fees,
court costs, bail, and other expenses incidental to the
defense of volunteers may be paid in judicial or
Administrative proceedings arising directly out of the
performance of activities pursuant to section 8(b)(1)
of this Act, as amended (15 U.S.C. 637(b)(1)) to which
volunteers have been made parties.
(G) In carrying out its functions under this Act and
to carry out the activities authorized by title IV of
the Women's Business Ownership Act of 1988, the
Administration is authorized to accept, in the name of
the Administration, and employ or dispose of in
furtherance of the purposes of this Act, any money or
property, real, personal, or mixed, tangible, or
intangible, received by gift, devise, bequest, or
otherwise; and, further, to accept gratuitous services
and facilities.
(2) to make a complete inventory of all productive
facilities of small-business concerns or to arrange for
such inventory to be made by any other governmental
agency which has the facilities. In making any such
inventory, the appropriate agencies in the several
States may be requested to furnish an inventory of the
productive facilities of small-business concerns in
each respective State if such an inventory is available
or in prospect;
(3) to coordinate and to ascertain the means by which
the productive capacity of small-business concerns can
be most effectively utilized;
(4) to consult and cooperative with officers of the
Government having procurement or property disposal
powers, in order to utilize the potential productive
capacity of plants operated by small-business concerns;
(5) to obtain information as to methods and practices
which Government prime contractors utilize in letting
subcontracts and to take action to encourage the
letting of subcontracts by prime contractors to small-
business concerns at prices and on conditions and terms
which are fair and equitable;
(6) to determine within any industry the concerns,
firms, persons, corporations, partnerships,
cooperatives, or other business enterprises which are
to be designated ``small-business concerns'' for the
purpose of effectuating the provisions of this Act. To
carry out this purpose the Administrator, when
requested to do so, shall issue in response to each
such request an appropriate certificate certifying an
individual concern as a ``small-business concern'' in
accordance with the criteria expressed in this Act. Any
such certificate shall be subject to revocation when
the concern covered thereby ceases to be a ``small-
business concern.'' Offices of the Government having
procurement or lending powers, or engaging in the
disposal of Federal property or allocating materials or
supplies, or promulgating regulations affecting the
distribution of materials or supplies, shall accept as
conclusive the Administration's determination as to
which enterprises are to be designated ``small-business
concerns'', as authorized and directed under this
paragraph;
(7)(A) to certify to Government procurement officers,
and officers engaged in the sale and disposal of
Federal property, with respect to all elements of
responsibility, including, but not limited to,
capability, competency, capacity, credit, integrity,
perseverance, and tenacity, of any small business
concern or group of such concerns to receive and
perform a specific Government contract. A Government
procurement officer or an officer engaged in the sale
and disposal of Federal property may not, for any
reason specified in the preceding sentence, preclude
any small business concern or group of such concerns
from being awarded such contract without referring the
matter for a final disposition to the Administration.
(B) if a Government procurement officer finds that an
otherwise qualified small business concern may be
ineligible due to the provisions of section 35(a) of
title 41, United States Code (the Walsh-Healey Public
Contracts Act), he shall notify the Administration in
writing of such finding. The Administration shall
review such finding and shall either dismiss it and
certify the small business concern to be an eligible
Government contractor for a specific Government
contract or if it concurs in the finding, forward the
matter to the Secretary of Labor for final disposition,
in which case the Administration may certify the small
business concern only if the Secretary of Labor finds
the small business concern not to be in violation.
(C) in any case in which a small business concern or
group of such concerns has been certified by the
Administration pursuant to (A) or (B) to be a
responsible or eligible Government contractor as to a
specific Government contract, the officers of the
Government having procurement or property disposal
powers are directed to accept such certification as
conclusive, and shall let such Government contract to
such concern or group of concerns without requiring it
to meet any other requirement of responsibility or
eligibility. Notwithstanding the first sentence of this
subparagraph, the Administration may not establish an
exemption from referral or notification or refuse to
accept a referral or notification from a Government
procurement officer made pursuant to subparagraph (A)
or (B) of this paragraph, but nothing in this paragraph
shall require the processing of an application for
certification if the small business concern to which
the referral pertains declines to have the application
processed.
(8) to obtain from any Federal department,
establishment, or agency engaged in procurement or in
the financing of procurement or production such reports
concerning the letting of contracts and subcontracts
and the making of loans to business concerns as it may
deem pertinent in carrying out its functions under this
Act;
(9) to obtain from any Federal department,
establishment, or agency engaged in the disposal of
Federal property such reports concerning the
solicitation of bids, time of sale, or otherwise as it
may deem pertinent in carrying out its functions under
this Act;
(10) to obtain from suppliers of materials
information pertaining to the method of filling orders
and the bases for allocating their supply, whenever it
appears that any small business is unable to obtain
materials from its normal sources;
(11) to make studies and recommendations to the
appropriate Federal agencies to insure that a fair
proportion of the total purchases and contracts for
property and services for the Government be placed with
small-business enterprises, to insure that a fair
proportion of Government contacts for research and
development be placed with small-business concerns, to
insure that a fair proportion of the total sales of
Government property be made to small-business concerns,
and to insure a fair and equitable share of materials,
supplies, and equipment to small-business concerns;
(12) to consult and cooperate with all Government
agencies for the purpose of insuring that small-
business concerns shall receive fair and reasonable
treatment from such agencies;
(13) to establish such advisory boards and committees
as may be necessary to achieve the purposes of this Act
and of the Small Business Investment Act of 1958; to
call meetings of such boards and committees from time
to time; to pay the transportation expenses and a per
diem allowance in accordance with section 5703 of title
5, United States Code, to the members of such boards
and committees for travel and subsistence expenses
incurred at the request of the Administration in
connection with travel to points more than fifty miles
distant from the homes of such members in attending the
meetings of such boards and committees; and to rent
temporarily, within the District of Columbia or
elsewhere, such hotel or other accommodations as are
needed to facilitate the conduct of such meetings;
(14) to provide at the earliest practicable time such
information and assistance as may be appropriate,
including information concerning eligibility for loans
under section 7(b)(3), to local public agencies (as
defined in section 110(h) of the Housing Act of 1949)
and to small-business concerns to be displaced by
federally aided urban renewal projects in order to
assist such small-business concerns in reestablishing
their operations;
(15) to disseminate, without regard to the provisions
of section 3204 of title 39, United States Code, data
and information, in such form as it shall deem
appropriate, to public agencies, private organizations,
and the general public;
(16) to make studies of matters materially affecting
the competitive strength of small business, and of the
effect on small business of Federal laws, programs, and
regulations, and to make recommendations to the
appropriate Federal agency or agencies for the
adjustment of such programs and regulations to the
needs of small business; and
(17) to make grants to, and enter into contracts and
cooperative agreements with, educational institutions,
private businesses, veterans' nonprofit community-based
organizations, and Federal, State, and local
departments and agencies for the establishment and
implementation of outreach programs for disabled
veterans (as defined in section 4211(3) of title 38,
United States Code), veterans, and members of a reserve
component of the Armed Forces.
(c) [Reserved.]
(d)(1) It is the policy of the United States that small
business concerns, small business concerns owned and controlled
by veterans, small business concerns owned and controlled by
service-disabled veterans, qualified HUBZone small business
concerns, small business concerns owned and controlled by
socially and economically disadvantaged individuals, and small
business concerns owned and controlled by women, shall have the
maximum practicable opportunity to participate in the
performance of contracts let by any Federal agency, including
contracts and subcontracts for subsystems, assemblies,
components, and related services for major systems. It is
further the policy of the United States that its prime
contractors establish procedures to ensure the timely payment
of amounts due pursuant to the terms of their subcontracts with
small business concerns, small business concerns owned and
controlled by veterans, small business concerns owned and
controlled by service-disabled veterans, qualified HUBZone
small business concerns, small business concerns owned and
controlled by socially and economically disadvantaged
individuals, and small business concerns owned and controlled
by women.
(2) The clause stated in paragraph (3) shall be included in
all contracts let by any Federal agency except any contract
which--
(A) does not exceed the simplified acquisition
threshold;
(B) including all subcontracts under such contracts
will be performed entirely outside of any State,
territory, or possession of the United States, the
District of Columbia, or the Commonwealth of Puerto
Rico; or
(C) is for services which are personal in nature.
(3) The clause required by paragraph (2) shall be as follows:
(A) It is the policy of the United States that small
business concerns, small business concerns owned and
controlled by veterans, small business concerns owned
and controlled by service-disabled veterans, qualified
HUBZone small business concerns, small business
concerns owned and controlled by socially and
economically disadvantaged individuals, and small
business concerns owned and controlled by women shall
have the maximum practicable opportunity to participate
in the performance of contracts let by any Federal
agency, including contracts and subcontracts for
subsystems, assemblies, components, and related
services for major systems. It is further the policy of
the United States that its prime contractors establish
procedures to ensure the timely payment of amounts due
pursuant to the terms of their subcontracts with small
business concerns, small business concerns owned and
controlled by veterans, small business concerns owned
and controlled by service-disabled veterans, qualified
HUBZone small business concerns, small business
concerns owned and controlled by socially and
economically disadvantaged individuals, and small
business concerns owned and controlled by women.
(B) The contractor hereby agrees to carry out this
policy in the awarding of subcontracts to the fullest
extent consistent with the efficient performance of
this contract. The contractor further agrees to
cooperate in any studies or surveys as may be conducted
by the United States Small Business Administration or
the awarding agency of the United States as may be
necessary to determine the extent of the contractor's
compliance with this clause.
(C) As used in this contract, the term ``small
business concern'' shall mean a small business as
defined pursuant to section 3 of the Small Business Act
and relevant regulations promulgated pursuant thereto.
The term ``small business concern owned and controlled
by socially and economically disadvantaged
individuals'' shall mean a small business concern--
(i) which is at least 51 per centum owned by
one or more socially and economically
disadvantaged individuals; or, in the case of
any publicly owned business, at least 51 per
centum of the stock of which is owned by one or
more socially and economically disadvantaged
individuals; and
(ii) whose management and daily business
operations are controlled by one or more of
such individuals.
The contractor shall presume that socially and
economically disadvantaged individuals include Black
Americans, Hispanic Americans, Native Americans, Asian
Pacific Americans, and other minorities, or any other
individual found to be disadvantaged by the
Administration pursuant to section 8(a) of the Small
Business Act.
(D) The term ``small business concern owned and
controlled by women'' shall mean a small business
concern--
(i) which is at least 51 per centum owned by
one or more women; or, in the case of any
publicly owned business, at least 51 per centum
of the stock of which is owned by one or more
women; and
(ii) whose management and daily business
operations are controlled by one or more women.
(E) The term ``small business concern owned and
controlled by veterans'' shall mean a small business
concern--
(i) which is at least 51 per centum owned by
one or more eligible veterans; or, in the case
of any publicly owned business, at least 51 per
centum of the stock of which is owned by one or
more veterans; and
(ii) whose management and daily business
operations are controlled by such veterans. The
contractor shall treat as veterans all
individuals who are veterans within the meaning
of the term under section 3(q) of the Small
Business Act.
(F) Contractors acting in good faith may rely on
written representations by their subcontractors
regarding their status as either a small business
concern, small business concern owned and controlled by
veterans, small business concern owned and controlled
by service-disabled veterans, a small business concern
owned and controlled by socially and economically
disadvantaged individuals, or a small business concern
owned and controlled by women.
(G) In this contract, the term ``qualified HUBZone
small business concern'' has the meaning given that
term in section 31(b).
(H) In this contract, the term ``small business
concern owned and controlled by service-disabled
veterans'' has the meaning given that term in section
3(q).
(4)(A) Each solicitation of an offer for a contract to be let
by a Federal agency which is to be awarded pursuant to the
negotiated method of procurement and which may exceed
$1,000,000, in the case of a contract for the construction of
any public facility, or $500,000, in the case of all other
contracts, shall contain a clause notifying potential offering
companies of the provisions of this subsection relating to
contracts awarded pursuant to the negotiated method of
procurement.
(B) Before the award of any contract to be let, or any
amendment or modification to any contract let, by any Federal
agency which--
(i) is to be awarded, or was let, pursuant to the
negotiated method of procurement,
(ii) is required to include the clause stated in
paragraph (3),
(iii) may exceed $1,000,000 in the case of a contract
for the construction of any public facility, or
$500,000 in the case of all other contracts, and
(iv) which offers subcontracting possibilities,
the apparent successful offeror shall negotiate with the
procurement authority a subcontracting plan which incorporates
the information prescribed in paragraph (6). The subcontracting
plan shall be included in and made a material part of the
contract.
(C) If, within the time limit prescribed in regulations of
the Federal agency concerned, the apparent successful offeror
fails to negotiate the subcontracting plan required by this
paragraph, such offeror shall become ineligible to be awarded
the contract. Prior compliance of the offeror with other such
subcontracting plans shall be considered by the Federal agency
in determining the responsibility of that offeror for the award
of the contract.
(D) No contract shall be awarded to any offeror unless the
procurement authority determines that the plan to be negotiated
by the offeror pursuant to this paragraph provides the maximum
practicable opportunity for small business concerns, qualified
HUBZone small business concerns, small business concerns owned
and controlled by veterans, small business concerns owned and
controlled by service-disabled veterans, small business
concerns owned and controlled by socially and economically
disadvantaged individuals, and small business concerns owned
and controlled by women to participate in the performance of
the contract.
(E) Notwithstanding any other provisions of law, every
Federal agency, in order to encourage subcontracting
opportunities for small business concerns, small business
concerns owned and controlled by veterans, small business
concerns owned and controlled by service-disabled veterans,
qualified HUBZone small business concerns, and small business
concerns owned and controlled by the socially and economically
disadvantaged individuals as defined in paragraph (3) of this
subsection and for small business concerns owned and controlled
by women, is hereby authorized to provide such incentives as
such Federal agency may deem appropriate in order to encourage
such subcontracting opportunities as may be commensurate with
the efficient and economical performance of the contact:
Provided, That, this subparagraph shall apply only to contracts
let pursuant to the negotiated method of procurement.
(F)(i) Each contract subject to the requirements of this
paragraph or paragraph (5) shall contain a clause for the
payment of liquidated damages upon a finding that a prime
contractor has failed to make a good faith effort to comply
with the requirements imposed on such contractor by this
subsection.
(ii) The contractor shall be afforded an opportunity to
demonstrate a good faith effort regarding compliance prior to
the contracting officer's final decision regarding the
impositon of damages and the amount thereof. The final decision
of a contracting officer regarding the contractor's obligation
to pay such damages, or the amounts thereof, shall be subject
to the Contract Disputes Act of 1978 (41 U.S.C. 601-613).
(iii) Each agency shall ensure that the goals offered by the
apparent successful bidder or offeror are attainable in
relation to--
(I) the subcontracting opportunities available to the
contractor, commensurate with the efficient and
economical performance of the contract;
(II) the pool of eligible subcontractors available to
fulfill the subcontracting opportunities; and
(III) the actual performance of such contractor in
fulfilling the subcontracting goals specified in prior
plans.
(G) The following factors shall be designated by the
Federal agency as significant factors for purposes of
evaluating offers for a bundled contract where the head
of the agency determines that the contract offers a
significant opportunity for subcontracting:
(i) A factor that is based on the rate
provided under the subcontracting plan for
small business participation in the performance
of the contract.
(ii) For the evaluation of past performance
of an offeror, a factor that is based on the
extent to which the offeror attained applicable
goals for small business participation in the
performance of contracts.
(5)(A) Each solicitation of a bid for any contract to be let,
or any amendment or modification to any contract let, by any
Federal agency which--
(i) is to be awarded pursuant to the formal
advertising method of procurement,
(ii) is required to contain the clause stated in
paragraph (3) of this subsection,
(iii) may exceed $1,000,000 in the case of a contract
for the construction of any public facility, or
$500,000, in the case of all other contracts, and
(iv) offers subcontracting possibilities,
shall contain a clause requiring any bidder who is selected to
be awarded a contract to submit to the Federal agency concerned
a subcontracting plan which incorporates the information
prescribed in paragraph (6).
(B) If, within the time limit prescribed in regulations of
the Federal agency concerned, the bidder selected to be awarded
the contract fails to submit the subcontracting plan required
by this paragraph, such bidder shall become ineligible to be
awarded the contract. Prior compliance of the bidder with other
such subcontracting plans shall be considered by the Federal
agency in determining the responsibility of such bidder for the
award of the contract. The subcontracting plan of the bidder
awarded the contract shall be included in and made a material
part of the contract.
(6) Each subcontracting plan required under paragraph (4) or
(5) shall include--
(A) percentage goals for the utilization as
subcontractors of small business concerns, small
business concerns owned and controlled by veterans,
small business concerns owned and controlled by
service-disabled veterans, qualified HUBZone small
business concerns, small business concerns owned and
controlled by socially and economically disadvantaged
individuals, and small business concerns owned and
controlled by women;
(B) the name of an individual within the employ of
the offeror or bidder who will administer the
subcontracting program of the offeror or bidder and a
description of the duties of such individual;
(C) a description of the efforts the offeror or
bidder will take to assure that small business
concerns, small business concerns owned and controlled
by veterans, small business concerns owned and
controlled by service-disabled veterans, qualified
HUBZone small business concerns, small business
concerns owned and controlled by socially and
economically disadvantaged individuals, and small
business concerns owned and controlled by women will
have an equitable opportunity to compete for
subcontracts;
(D) assurances that the offeror or bidder will
include the clause required by paragraph (2) of this
subsection in all subcontracts which offer further
subcontracting opportunities, and that the offeror or
bidder will require all subcontractors (except small
business concerns) who receive subcontracts in excess
of $1,000,000 in the case of a contract for the
construction of any public facility, or in excess of
$500,000 in the case of all other contracts, to adopt a
plan similar to the plan required under paragraph (4)
or (5), and assurances at a minimum that the offeror or
bidder, and all subcontractors required to maintain
subcontracting plans pursuant to this paragraph, will--
(i) review and approve subcontracting plans
submitted by their subcontractors;
(ii) monitor subcontractor compliance with
their approved subcontracting plans;
(iii) ensure that subcontracting reports are
submitted by their subcontractors when
required;
(iv) acknowledge receipt of their
subcontractors' reports;
(v) compare the performance of their
subcontractors to subcontracting plans and
goals; and
(vi) discuss performance with subcontractors
when necessary to ensure their subcontractors
make a good faith effort to comply with their
subcontracting plans;
(E) assurances that the offeror or bidder will submit
such periodic reports and cooperate in any studies or
surveys as may be required by the Federal agency or the
Administration in order to determine the extent of
compliance by the offeror or bidder with the
subcontracting plan;
(F) a recitation of the types of records the
successful offeror or bidder will maintain to
demonstrate procedures which have been adopted to
comply with the requirements and goals set forth in
this plan, including the establishment of source lists
of small business concerns, small business concerns
owned and controlled by veterans, small business
concerns owned and controlled by service-disabled
veterans, qualified HUBZone small business concerns,
small business concerns owned and controlled by
socially and economically disadvantaged individuals,
and small business concerns owned and controlled by
women; and efforts to identify and award subcontracts
to such small business concerns;
(G) a recitation of the types of records the
successful offeror or bidder will maintain to
demonstrate that procedures have been adopted to
substantiate the credit the successful offeror or
bidder will elect to receive under paragraph (16)(A);
(H) a recitation of the types of records the
successful offeror or bidder will maintain to
demonstrate procedures which have been adopted to
ensure subcontractors at all tiers comply with the
requirements and goals set forth in the plan
established in accordance with subparagraph (D) of this
paragraph, including--
(i) the establishment of source lists of
small business concerns, small business
concerns owned and controlled by veterans,
small business concerns owned and controlled by
service-disabled veterans, qualified HUBZone
small business concerns, small business
concerns owned and controlled by socially and
economically disadvantaged individuals, and
small business concerns owned and controlled by
women; and
(ii) efforts to identify and award
subcontracts to such small business concerns;
and
(I) a representation that the offeror or bidder
will--
(i) make a good faith effort to acquire
articles, equipment, supplies, services, or
materials, or obtain the performance of
construction work from the small business
concerns used in preparing and submitting to
the contracting agency the bid or proposal, in
the same amount and quality used in preparing
and submitting the bid or proposal; and
(ii) provide to the contracting officer a
written explanation if the offeror or bidder
fails to acquire articles, equipment, supplies,
services, or materials or obtain the
performance of construction work as described
in clause (i).
(7) The head of the contracting agency shall ensure
that--
(A) the agency collects and reports data on
the extent to which contractors of the agency
meet the goals and objectives set forth in
subcontracting plans submitted pursuant to this
subsection; and
(B) the agency periodically reviews data
collected and reported pursuant to subparagraph
(A) for the purpose of ensuring that such
contractors comply in good faith with the
requirements of this subsection and
subcontracting plans submitted by the
contractors pursuant to this subsection.
(8) The provisions of paragraphs (4), (5), and (6) shall not
apply to offerors or bidders who are small business concerns.
(9) Material breach.--The failure of any contractor
or subcontractor to comply in good faith with--
(A) the clause contained in paragraph (3) of
this subsection,
(B) any plan required of such contractor
pursuant to the authority of this subsection to
be included in its contract or subcontract, or
(C) assurances provided under paragraph
(6)(E),
shall be a material breach of such contract or
subcontract and may be considered in any past
performance evaluation of the contractor.
(10) Nothing contained in this subsection shall be construed
to supersede the requirements of Defense Manpower Policy Number
4A (32A CFR Chap. 1) or any successor policy.
(11) In the case of contracts within the provisions of
paragraphs (4), (5), and (6), the Administration is authorized
to--
(A) assist Federal agencies and businesses in
complying with their responsibilities under the
provisions of this subsection, including the
formulation of subcontracting plans pursuant to
paragraph (4);
(B) review any solicitation for any contract to be
let pursuant to paragraphs (4) and (5) to determine the
maximum practicable opportunity for small business
concerns, small business concerns owned and controlled
by veterans, small business concerns owned and
controlled by service-disabled veterans, qualified
HUBZone small business concerns, small business
concerns owned and controlled by socially and
economically disadvantaged individuals, and small
business concerns owned and controlled by women to
participate as subcontractors in the performance of any
contract resulting from any solicitation, and to submit
its findings, which shall be advisory in nature, to the
appropriate Federal agency; and
(C) evaluate compliance with subcontracting plans as
a supplement to evaluations performed by the
contracting agency, either on a contract-by-contract
basis or, in the case of contractors having multiple
contracts, on an aggregate basis.
(12) For purposes of determining the attainment of a
subcontract utilization goal under any subcontracting plan
entered into with any executive agency pursuant to this
subsection, a mentor firm providing development assistance to a
protege firm under the pilot Mentor-Protege Program established
pursuant to section 831 of the National Defense Authorization
Act for Fiscal Year 1991 (Public Law 101-510; 10 U.S.C. 2301
note) shall be granted credit for such assistance in accordance
with subsection (g) of such section.
(13) Payment of Subcontractors.--
(A) Definition.--In this paragraph, the term
``covered contract'' means a contract relating to which
a prime contractor is required to develop a
subcontracting plan under paragraph (4) or (5).
(B) Notice.--
(i) In general.--A prime contractor for a
covered contract shall notify in writing the
contracting officer for the covered contract if
the prime contractor pays a reduced price to a
subcontractor for goods and services upon
completion of the responsibilities of the
subcontractor or the payment to a subcontractor
is more than 90 days past due for goods or
services provided for the covered contract for
which the Federal agency has paid the prime
contractor.
(ii) Contents.--A prime contractor shall
include the reason for the reduction in a
payment to or failure to pay a subcontractor in
any notice made under clause (i).
(C) Performance.--A contracting officer for a covered
contract shall consider the unjustified failure by a
prime contractor to make a full or timely payment to a
subcontractor in evaluating the performance of the
prime contractor.
(D) Control of funds.--If the contracting officer for
a covered contract determines that a prime contractor
has a history of unjustified, untimely payments to
contractors, the contracting officer shall record the
identity of the contractor in accordance with the
regulations promulgated under subparagraph (E).
(E) Regulations.--Not later than 1 year after the
date of enactment of this paragraph, the Federal
Acquisition Regulatory Council established under
section 25(a) of the Office of Federal Procurement
Policy Act (41 U.S.C. 421(a)) shall amend the Federal
Acquisition Regulation issued under section 25 of such
Act to--
(i) describe the circumstances under which a
contractor may be determined to have a history
of unjustified, untimely payments to
subcontractors;
(ii) establish a process for contracting
officers to record the identity of a contractor
described in clause (i); and
(iii) require the identity of a contractor
described in clause (i) to be incorporated in,
and made publicly available through, the
Federal Awardee Performance and Integrity
Information System, or any successor thereto.
(14) An offeror for a covered contract that intends
to identify a small business concern as a potential
subcontractor in a bid or proposal for the contract, or
in a plan submitted pursuant to this subsection in
connection with the contract, shall notify the small
business concern prior to making such identification.
(15) The Administrator shall establish a reporting
mechanism that allows a subcontractor or potential
subcontractor to report fraudulent activity or bad
faith by a contractor with respect to a subcontracting
plan submitted pursuant to this subsection.
(16) Credit for certain small business concern
subcontractors.--
(A) In general.--For purposes of determining
whether or not a prime contractor has attained
the percentage goals specified in paragraph
(6)--
(i) if the subcontracting goals
pertain only to a single contract with
a Federal agency, the prime contractor
may elect to receive credit for small
business concerns performing as first
tier subcontractors or subcontractors
at any tier pursuant to the
subcontracting plans required under
paragraph (6)(D) in an amount equal to
the total dollar value of any
subcontracts awarded to such small
business concerns; and
(ii) if the subcontracting goals
pertain to more than one contract with
one or more Federal agencies, or to one
contract with more than one Federal
agency, the prime contractor may only
receive credit for first tier
subcontractors that are small business
concerns.
(B) Collection and review of data on
subcontracting plans.--The head of each
contracting agency shall ensure that the
agency--
(i) collects and reports data on the
extent to which prime contractors of
the agency meet the goals and
objectives set forth in subcontracting
plans submitted pursuant to this
subsection; and
(ii) periodically reviews data
collected and reported pursuant to
clause (i) for the purpose of ensuring
that such contractors comply in good
faith with the requirements of this
subsection.
(C) Rule of construction.--Nothing in this
paragraph shall be construed to allow a Federal
agency to establish a goal for an number of
subcontracts with a subcontractor at any tier
for a prime contractor otherwise eligible to
receive credit under this paragraph.
(17) Past performance ratings for certain small
business subcontractors.--Upon request by a small
business concern that performed as a first tier
subcontractor on a covered contract (as defined in
paragraph (13)(A)), the prime contractor for such
covered contract shall submit to such small business
concern a record of past performance for such small
business concern with respect to such covered contract.
If a small business concern elects to use such record
of past performance, a contracting officer shall
consider such record of past performance when
evaluating an offer for a prime contract made by such
small business concern.
(e)(1) Except as provided in subsection (g)--
(A) an executive agency intending to--
(i) solicit bids or proposals for a contract
for property or services for a price expected
to exceed $25,000; or
(ii) place an order, expected to exceed
$25,000, under a basic agreement, basis
ordering agreement, or similar arrangement,
shall publish a notice described in subsection (f);
(B) an executive agency intending to solicit bids or
proposals for a contract for property or services shall
post, for a period of not less than ten days, in a
public place at the contracting office issuing the
solicitation a notice of solicitation described in
subsection (f)--
(i) in the case of an executive agency other
than the Department of Defense, if the contract
is for a price expected to exceed $10,000, but
not to exceed $25,000; and
(ii) in the case of the Department of
Defense, if the contract is for a price
expected to exceed $5,000, but not to exceed
$25,000; and
(C) an executive agency awarding a contract for
property or services for a price exceeding $100,000, or
placing an order referred to in clause (A)(ii)
exceeding $100,000, shall furnish for publication by
the Secretary of Commerce a notice announcing the award
or order if there is likely to be any subcontract under
such contract or order.
(2)(A) A notice of solicitation required to be published
under paragraph (1) may be published--
(i) by electronic means that meet the accessibility
requirements under section 18(a)(7) of the Office of
Federal Procurement Policy Act (41 U.S.C. 416(a)(7));
or
(ii) by the Secretary of Commerce in the Commerce
Business Daily.
(B) The Secretary of Commerce shall promptly publish in the
Commerce Business Daily each notice or announcement received
under this subsection for publication by that means.
(3) Whenever an executive agency is required by paragraph
(1)(A) to publish a notice of solicitation, such executive
agency may not--
(A) issue the solicitation earlier than 15 days after
the date on which the notice is published; or
(B) in the case of a contract or order estimated to
be greater than the simplified acquisition threshold,
establish a deadline for the submission of all bids or
proposals in response to the notice required by
paragraph (1)(A) that--
(i) in the case of an order under a basic
agreement, basic ordering agreement, or similar
arrangement, is earlier than the date 30 days
after the date the notice required by paragraph
(1)(A)(ii) is published;
(ii) in the case of a solicitation for
research and development, is earlier than the
date 45 days after the date the notice required
by paragraph (1)(A)(i) is published; or
(iii) in any other case, is earlier than the
date 30 days after the date the solicitation is
issued.
(f) Each notice of solicitation required by subparagraph (A)
or (B) of subsection (e)(1) shall include--
(1) an accurate description of the property or
services to be contracted for, which description (A)
shall not be unnecessarily restrictive of competition,
and (B) shall include, as appropriate, the agency
nomenclature, National Stock Number or other part
number, and a brief description of the item's form,
fit, or function, physical dimensions, predominant
material of manufacture, or similar information that
will assist a prospective contractor to make an
informed business judgment as to whether a copy of the
solicitation should be requested;
(2) provisions that--
(A) state whether the technical data required
to respond to the solicitation will not be
furnished as part of such solicitation, and
identify the source in the Government, if any,
from which the technical data may be obtained;
and
(B) state whether an offeror, its product, or
service must meet a qualification requirement
in order to be eligible for award, and, if so,
identify the office from which a qualification
requirement may be obtained;
(3) the name, business address, and telephone number
of the contracting officer;
(4) a statement that all responsible sources may
submit a bid, proposal, or quotation (as appropriate)
which shall be considered by the agency;
(5) in the case of a procurement using procedures
other than competitive procedures, a statement of the
reason justifying the use of such procedures and the
identity of the intended source; and
(6) in the case of a contract in an amount estimated
to be greater than $25,000 but not greater than the
simplified acquisition threshold--
(A) a description of the procedures to be
used in awarding the contract; and
(B) a statement specifying the periods for
prospective offerors and the contracting
officer to take the necessary preaward and
award actions.
(g)(1) A notice is not required under subsection (e)(1) if--
(A) the proposed procurement is for an amount not
greater than the simplified acquisition threshold and
is to be conducted by--
(i) using widespread electronic public notice
of the solicitation in a form that allows
convenient and universal user access through a
single, Government-wide point of entry; and
(ii) permitting the public to respond to the
solicitation electronically.
(B) the notice would disclose the executive agency's
needs and the disclosure of such needs would compromise
the national security;
(C) the proposed procurement would result from
acceptance of--
(i) any unsolicited proposal that
demonstrates a unique and innovative research
concept and the publication of any notice of
such unsolicited research proposal would
disclose the originality of thought or
innovativeness of the proposal or would
disclose proprietary information associated
with the proposal; or
(ii) a proposal submitted under section 9 of
this Act;
(D) the procurement is made against an order placed
under a requirements contract;
(E) the procurement is made for perishable
subsistence supplies;
(F) the procurement is for utility services, other
than telecommunication services, and only one source is
available; or
(G) the procurement is for the services of an expert
for use in any litigation or dispute (including
preparation for any foreseeable litigation or dispute)
that involves or could involve the Federal Government
in any trial, hearing, or proceeding before any court,
administrative tribunal, or agency, or in any part of
an alternative dispute resolution process, whether or
not the expert is expected to testify.
(2) The requirements of subsection (a)(1)(A) do not apply to
any procurement under conditions described in paragraph (2),
(3), (4), (5), or (7) of section 303(c) of the Federal Property
and Administrative Services Act of 1949 (41 U.S.C. 253(c)) or
paragraph (2), (3), (4), (5), and (7) of section 2304(c) of
title 10, United States Code.
(3) The requirements of subsection (a)(1)(A) shall not apply
in the case of any procurement for which the head of the
executive agency makes a determination in writing, after
consultation with the Administrator for Federal Procurement
Policy and the Administrator of the Small Business
Administration, that it is not appropriate or reasonable to
publish a notice before issuing a solicitation.
(h)(1) An executive agency may not award a contract using
procedures other than competitive procedures unless--
(A) except as provided in paragraph (2), a written
justification for the use of such procedures has been
approved--
(i) in the case of a contract for an amount
exceeding $100,000 (but equal to or less than
$1,000,000), by the advocate for competition
for the procuring activity (without further
delegation);
(ii) in the case of a contract for an amount
exceeding $1,000,000 (but equal to or less than
$10,000,000), by the head of the procuring
activity or a delegate who, if a member of the
Armed Forces, is a general or flag officer, or,
if a civilian, is serving in a position in
grade GS-16 or above under the General Schedule
(or in a comparable or higher position under
another schedule); or
(iii) in the case of a contract for an amount
exceeding $10,000,000, by the senior
procurement executive of the agency designated
pursuant to section 16(3) of the Office of
Federal Procurement Policy Act (41 U.S.C.
414(3)) (without further delegation); and
(B) all other requirements applicable to the use of
such procedures under title III of the Federal Property
and Administrative Services Act of 1949 (41 U.S.C. 251
et sq.) or chapter 137 of title 10, United States Code,
as appropriate, have been satisfied.
(2) The same exceptions as are provided in section 303(f)(2)
of the Federal Property and Administrative Services Act of 1949
(41 U.S.C. 253(f)(2)) or section 2304(f)(2) of title 10, United
States Code, shall apply with respect to the requirements of
paragraph (1)(A) of this subsection in the same manner as such
exceptions apply to the requirements of section 303(f)(1) of
such Act or section 2304(f)(1) of such title, as appropriate.
(i) An executive agency shall make available to any business
concern, or the authorized representative of such concern, the
complete solicitation package for any on-going procurement
announced pursuant to a notice under subsection (e). An
executive agency may require the payment of a fee, not
exceeding the actual cost of duplication, for a copy of such
package.
(j) For purposes of this section, the term ``executive
agency'' has the meaning provided such term in section 4(1) of
the Office of Federal Procurement Policy Act (41 U.S.C.
403(1)).
(k) Notices of Subcontracting Opportunities.--
(1) In general.--Notices of subcontracting
opportunities may be submitted for publication on the
appropriate Federal Web site (as determined by the
Administrator) by--
(A) a business concern awarded a contract by
an executive agency subject to subsection
(e)(1)(C); and
(B) a business concern that is a
subcontractor or supplier (at any tier) to such
contractor having a subcontracting opportunity
in excess of $10,000.
(2) Content of notice.--The notice of a
subcontracting opportunity shall include--
(A) a description of the business opportunity
that is comparable to the description specified
in paragraphs (1), (2), (3), and (4) of
subsection (f); and
(B) the due date for receipt of offers.
(l) Management Assistance for Small Businesses Affected by
Military Operations.--
(1) In general.--The Administration shall utilize, as
appropriate, its entrepreneurial development and
management assistance programs, including programs
involving State or private sector partners, to provide
business counseling and training to any small business
concern adversely affected by the deployment of units
of the Armed Forces of the United States in support of
a period of military conflict.
(2) Definition of period of military conflict.--In
this subsection, the term ``period of military
conflict'' means--
(A) a period of war declared by the Congress;
(B) a period of national emergency declared
by the Congress or by the President; or
(C) a period of a contingency operation, as
defined in section 101(a) of title 10, United
States Code.
(m) Procurement Program for Women-owned Small Business
Concerns.--
(1) Definitions.--In this subsection, the following
definitions apply:
(A) Contracting officer.--The term
``contracting officer'' has the meaning given
such term in section 27(f)(5) of the Office of
Federal Procurement Policy Act (41 U.S.C.
423(f)(5)).
(B) Small business concern owned and
controlled by women.--The term ``small business
concern owned and controlled by women'' has the
meaning given such term in section 3(n), except
that ownership shall be determined without
regard to any community property law.
(2) Authority to restrict competition.--In accordance
with this subsection, a contracting officer may
restrict competition for any contract for the
procurement of goods or services by the Federal
Government to small business concerns owned and
controlled by women, if--
(A) each of the concerns is not less than 51
percent owned by one or more women who are
economically disadvantaged (and such ownership
is determined without regard to any community
property law);
(B) the contracting officer has a reasonable
expectation that two or more small business
concerns owned and controlled by women will
submit offers for the contract;
(C) the contract is for the procurement of
goods or services with respect to an industry
identified by the Administrator pursuant to
paragraph (3);
(D) in the estimation of the contracting
officer, the contract award can be made at a
fair and reasonable price; and
(E) each of the concerns is certified by a
Federal agency, a State government, the
Administrator, or a national certifying entity
approved by the Administrator as a small
business concern owned and controlled by women.
(3) Waiver.--With respect to a small business concern
owned and controlled by women, the Administrator may
waive subparagraph (2)(A) if the Administrator
determines that the concern is in an industry in which
small business concerns owned and controlled by women
are substantially underrepresented.
(4) Identification of industries.--The Administrator
shall conduct a study to identify industries in which
small business concerns owned and controlled by women
are underrepresented with respect to Federal
procurement contracting.
(5) Enforcement; penalties.--
(A) Verification of eligibility.--In carrying
out this subsection, the Administrator shall
establish procedures relating to--
(i) the filing, investigation, and
disposition by the Administration of
any challenge to the eligibility of a
small business concern to receive
assistance under this subsection
(including a challenge, filed by an
interested party, relating to the
veracity of a certification made or
information provided to the
Administration by a small business
concern under paragraph (2)(E)); and
(ii) verification by the
Administrator of the accuracy of any
certification made or information
provided to the Administration by a
small business concern under paragraph
(2)(E).
(B) Examinations.--The procedures established
under subparagraph (A) may provide for program
examinations (including random program
examinations) by the Administrator of any small
business concern making a certification or
providing information to the Administrator
under paragraph (2)(E).
(C) Penalties.--In addition to the penalties
described in section 16(d), any small business
concern that is determined by the Administrator
to have misrepresented the status of that
concern as a small business concern owned and
controlled by women for purposes of this
subsection, shall be subject to--
(i) section 1001 of title 18, United
States Code; and
(ii) sections 3729 through 3733 of
title 31, United States Code.
(6) Provision of data.--Upon the request of the
Administrator, the head of any Federal department or
agency shall promptly provide to the Administrator such
information as the Administrator determines to be
necessary to carry out this subsection.
(7) Authority for sole source contracts for
economically disadvantaged small business concerns
owned and controlled by women.--A contracting officer
may award a sole source contract under this subsection
to any small business concern owned and controlled by
women described in paragraph (2)(A) and certified under
paragraph (2)(E) if--
(A) such concern is determined to be a
responsible contractor with respect to
performance of the contract opportunity and the
contracting officer does not have a reasonable
expectation that 2 or more businesses described
in paragraph (2)(A) will submit offers;
(B) the anticipated award price of the
contract (including options) will not exceed--
(i) $7,000,000, in the case of a
contract opportunity assigned a
standard industrial classification code
for manufacturing; or
(ii) $4,000,000, in the case of any
other contract opportunity; and
(C) in the estimation of the contracting
officer, the contract award can be made at a
fair and reasonable price.
(8) Authority for sole source contracts for small
business concerns owned and controlled by women in
substantially underrepresented industries.--A
contracting officer may award a sole source contract
under this subsection to any small business concern
owned and controlled by women certified under paragraph
(2)(E) that is in an industry in which small business
concerns owned and controlled by women are
substantially underrepresented (as determined by the
Administrator under paragraph (3)) if--
(A) such concern is determined to be a
responsible contractor with respect to
performance of the contract opportunity and the
contracting officer does not have a reasonable
expectation that 2 or more businesses in an
industry that has received a waiver under
paragraph (3) will submit offers;
(B) the anticipated award price of the
contract (including options) will not exceed--
(i) $7,000,000, in the case of a
contract opportunity assigned a
standard industrial classification code
for manufacturing; or
(ii) $4,000,000, in the case of any
other contract opportunity; and
(C) in the estimation of the contracting
officer, the contract award can be made at a
fair and reasonable price.
(n) Business Grants and Cooperative Agreements.--
(1) In general.--In accordance with this subsection,
the Administrator may make grants to and enter into
cooperative agreements with any coalition of private
entities, public entities, or any combination of
private and public entities--
(A) to expand business-to-business
relationships between large and small
businesses; and
(B) to provide businesses, directly or
indirectly, with online information and a
database of companies that are interested in
mentor-protege programs or community-based,
statewide, or local business development
programs.
(2) Matching requirement.--Subject to subparagraph
(B), the Administrator may make a grant to a coalition
under paragraph (1) only if the coalition provides for
activities described in paragraph (1)(A) or (1)(B) an
amount, either in kind or in cash, equal to the grant
amount.
(3) Authorization of appropriations.--There is
authorized to be appropriated to carry out this
subsection $6,600,000, to remain available until
expended, for each of fiscal years 2001 through 2006.
* * * * * * *
Sec. 21. (a)(1) The Administration is authorized to make
grants (including contracts and cooperative agreements) to any
State government or any agency thereof, any regional entity,
any State-chartered development, credit or finance corporation,
any women's business center operating pursuant to section 29,
any public or private institution of higher education,
including but not limited to any land-grant college or
university, any college or school of business, engineering,
commerce, or agriculture, community college or junior college,
or to any entity formed by two or more of the above entities
(herein referred to as ``applicants'') to assist in
establishing small business development centers and to any such
labor for: small business oriented employment or natural
resources development programs; studies, research, and
counseling concerning the managing, financing, and operation of
small business enterprises, management and technical assistance
regarding small business participation in international
markets, export promotion and technology transfer; delivery or
distribution of such services and information; providing access
to business analysts who can refer small business concerns to
available experts; and, to the extent practicable, providing
assistance in furtherance of the Small Business Development
Center Cyber Strategy developed under section 1841(a) of the
National Defense Authorization Act for Fiscal Year 2017:
Provided, That after December 31, 1990, the Administration
shall not make a grant to any applicant other than an
institution of higher education or a women's business center
operating pursuant to section 29 as a Small Business
Development Center unless the applicant was receiving a grant
(including a contract or cooperative agreement) on such date.
The previous sentence shall not apply to an applicant that has
its principal office located in the Commonwealth of the
Northern Mariana Islands. The Administration shall require any
applicant for a small business development center grant with
performance commencing on or after January 1, 1992 to have its
own budget and to primarily utilize institutions of higher
education and women's business centers operating pursuant to
section 29 to provide services to the small business community.
The term of such grants shall be made on a calendar year basis
or to coincide with the Federal fiscal year.
(2) Cooperation to provide international trade
services.--
(A) Information and services.--The small
business development centers shall work in
close cooperation with the Administration's
regional and local offices, the Department of
Commerce, appropriate Federal, State and local
agencies (including State trade agencies), and
the small business community to serve as an
active information dissemination and service
delivery mechanism for existing trade
promotion, trade finance, trade adjustment,
trade remedy and trade data collection programs
of particular utility for small businesses.
(B) Cooperation with state trade agencies and
export assistance centers.--A small business
development center that counsels a small
business concern on issues relating to
international trade shall--
(i) consult with State trade agencies
and Export Assistance Centers to
provide appropriate services to the
small business concern; and
(ii) as necessary, refer the small
business concern to a State trade
agency or an Export Assistance Center
for further counseling or assistance.
(C) Definition.--In this paragraph, the term
``Export Assistance Center'' has the same
meaning as in section 22.
(3) The Small Business Development Center Program shall be
under the general management and oversight of the
Administration for the delivery of programs and services to the
small business community. Such programs and services shall be
jointly developed, negotiated, and agreed upon, with full
participation of both parties, pursuant to an executed
cooperative agreement between the Small Business Development
Center applicant and the Administration.
(A) Small business development centers are authorized to form
an association to pursue matters of common concern. If more
than a majority of the small business development centers which
are operating pursuant to agreements with the Administration
are members of such an association, the Administration is
authorized and directed to recognize the existence and
activities of such an association and to consult with it and
develop documents (i) announcing the annual scope of activities
pursuant to this section, (ii) requesting proposals to deliver
assistance as provided in this section and (iii) governing the
general operations and administration of the Small Business
Development Center Program, specifically including the
development of regulations and a uniform negotiated cooperative
agreement for use on an annual basis when entering into
individual negotiated agreements with small business
development centers.
(B) Provisions governing audits, cost principles and
administrative requirements for Federal grants, contracts and
cooperative agreements which are included in uniform
requirements of Office of Management and Budget (OMB) Circulars
shall be incorporated by reference and shall not be set forth
in summary or other form in regulations.
(C) Whereas On an annual basis, the Small Business
Development Center shall review and coordinate public
and private partnerships and cosponsorships with the
Administration for the purpose of more efficiently
leveraging available resources on a National and a
State basis.
(4) Small business development center program level.--
(A) In general.--The Administration shall require as
a condition of any grant (or amendment or modification
thereof) made to an applicant under this section, that
a matching amount (excluding any fees collected from
recipients of such assistance) equal to the amount of
such grant be provided from sources other than the
Federal Government, to be comprised of not less than 50
percent cash and not more than 50 percent of indirect
costs and in-kind contributions.
(B) Restriction.--The matching amount described in
subparagraph (A) shall not include any indirect costs
or in-kind contributions derived from any Federal
program.
(C) Funding formula.--
(i) In general.--Subject to clause (iii), the
amount of a formula grant received by a State
under this subparagraph shall be equal to an
amount determined in accordance with the
following formula:
(I) The annual amount made available
under section 20(a) for the Small
Business Development Center Program,
less any reductions made for expenses
authorized by clause (v) of this
subparagraph, shall be divided on a pro
rata basis, based on the percentage of
the population of each State, as
compared to the population of the
United States.
(II) If the pro rata amount
calculated under subclause (I) for any
State is less than the minimum funding
level under clause (iii), the
Administration shall determine the
aggregate amount necessary to achieve
that minimum funding level for each
such State.
(III) The aggregate amount calculated
under subclause (II) shall be deducted
from the amount calculated under
subclause (I) for States eligible to
receive more than the minimum funding
level. The deductions shall be made on
a pro rata basis, based on the
population of each such State, as
compared to the total population of all
such States.
(IV) The aggregate amount deducted
under subclause (III) shall be added to
the grants of those States that are not
eligible to receive more than the
minimum funding level in order to
achieve the minimum funding level for
each such State, except that the
eligible amount of a grant to any State
shall not be reduced to an amount below
the minimum funding level.
(ii) Grant determination.--The amount of a
grant that a State is eligible to apply for
under this subparagraph shall be the amount
determined under clause (i), subject to any
modifications required under clause (iii), and
shall be based on the amount available for the
fiscal year in which performance of the grant
commences, but not including amounts
distributed in accordance with clause (iv). The
amount of a grant received by a State under any
provision of this subparagraph shall not exceed
the amount of matching funds from sources other
than the Federal Government, as required under
subparagraph (A).
(iii) Minimum funding level.--The amount of
the minimum funding level for each State shall
be determined for each fiscal year based on the
amount made available for that fiscal year to
carry out this section, as follows:
(I) If the amount made available is
not less than $81,500,000 and not more
than $90,000,000, the minimum funding
level shall be $500,000.
(II) If the amount made available is
less than $81,500,000, the minimum
funding level shall be the remainder of
$500,000 minus a percentage of $500,000
equal to the percentage amount by which
the amount made available is less than
$81,500,000.
(III) If the amount made available is
more than $90,000,000, the minimum
funding level shall be the sum of
$500,000 plus a percentage of $500,000
equal to the percentage amount by which
the amount made available exceeds
$90,000,000.
(iv) Distributions.--Subject to clause (iii),
if any State does not apply for, or use, its
full funding eligibility for a fiscal year, the
Administration shall distribute the remaining
funds as follows:
(I) If the grant to any State is less
than the amount received by that State
in fiscal year 2000, the Administration
shall distribute such remaining funds,
on a pro rata basis, based on the
percentage of shortage of each such
State, as compared to the total amount
of such remaining funds available, to
the extent necessary in order to
increase the amount of the grant to the
amount received by that State in fiscal
year 2000, or until such funds are
exhausted, whichever first occurs.
(II) If any funds remain after the
application of subclause (I), the
remaining amount may be distributed as
supplemental grants to any State, as
the Administration determines, in its
discretion, to be appropriate, after
consultation with the association
referred to in subsection (a)(3)(A).
(v) Use of amounts.--
(I) In general.--Of the amounts made
available in any fiscal year to carry
out this section--
(aa) not more than $500,000
may be used by the
Administration to pay expenses
enumerated in subparagraphs (B)
through (D) of section
20(a)(1); and
(bb) not more than $500,000
may be used by the
Administration to pay the
examination expenses enumerated
in section 20(a)(1)(E).
(II) Limitation.--No funds described
in subclause (I) may be used for
examination expenses under section
20(a)(1)(E) if the usage would reduce
the amount of grants made available
under clause (i)(I) of this
subparagraph to less than $85,000,000
(after excluding any amounts provided
in appropriations Acts, or accompanying
report language, for specific
institutions or for purposes other than
the general small business development
center program) or would further reduce
the amount of such grants below such
amount.
(vi) Exclusions.--Grants provided to a State
by the Administration or another Federal agency
to carry out subsection (a)(6) or (c)(3)(G), or
for supplemental grants set forth in clause
(iv)(II) of this subparagraph, shall not be
included in the calculation of maximum funding
for a State under clause (ii) of this
subparagraph.
(vii) Authorization of appropriations.--There
are authorized to be appropriated to carry out
this subparagraph--
(I) $130,000,000 for fiscal year
2005; and
(II) $135,000,000 for fiscal year
2006.
(viii) Limitation.--From the funds
appropriated pursuant to clause (vii), the
Administration shall reserve not less than
$1,000,000 in each fiscal year to develop
portable assistance for startup and
sustainability non-matching grant programs to
be conducted by eligible small business
development centers in communities that are
economically challenged as a result of a
business or government facility down sizing or
closing, which has resulted in the loss of jobs
or small business instability. A non-matching
grant under this clause shall not exceed
$100,000, and shall be used for small business
development center personnel expenses and
related small business programs and services.
(ix) State defined.--In this subparagraph,
the term ``State'' means each of the several
States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin
Islands, Guam, American Samoa, and the
Commonwealth of the Northern Mariana Islands.
(5) Federal contracts with small business development
centers.--
(A) In general.--Subject to the conditions set forth
in subparagraph (B), a small business development
center may enter into a contract with a Federal
department or agency to provide specific assistance to
small business concerns.
(B) Contract prerequisites.--Before bidding on a
contract described in subparagraph (A), a small
business development center shall receive approval from
the Associate Administrator of the small business
development center program of the subject and general
scope of the contract. Each approval under subparagraph
(A) shall be based upon a determination that the
contract will provide assistance to small business
concerns and that performance of the contract will not
hinder the small business development center in
carrying out the terms of the grant received by the
small business development center from the
Administration.
(C) Exemption from matching requirement.--A contract
under this paragraph shall not be subject to the
matching funds or eligibility requirements of paragraph
(4).
(D) Additional provision.--Notwithstanding any other
provision of law, a contract for assistance under this
paragraph shall not be applied to any Federal
department or agency's small business, woman-owned
business, or socially and economically disadvantaged
business contracting goal under section 15(g).
(6) Any applicant which is funded by the
Administration as a Small Business Development Center
may apply for an additional grant to be used solely to
assist--
(A) with the development and enhancement of
exports by small business concerns;
(B) in technology transfer; and
(C) with outreach, development, and
enhancement of minority-owned small business
startups or expansions, HUBZone small business
concerns, veteran-owned small business startups
or expansions, and women-owned small business
startups or expansions, in communities impacted
by base closings or military or corporate
downsizing, or in rural or underserved
communities;
as provided under subparagraphs (B) through (G) of
subsection (c)(3). Applicants for such additional
grants shall comply with all of the provisions of this
section, including providing matching funds, except
that funding under this paragraph shall be effective
for any fiscal year to the extent provided in advance
in appropriations Acts and shall be in addition to the
dollar program limitations specified in paragraphs (4)
and (5). No recipient of funds under this paragraph
shall receive a grant which would exceed its pro rata
share of a $15,000,000 program based upon the
populations to be served by the Small Business
Development Center as compared to the total population
of the United States. The minimum amount of eligibility
for any State shall be $100,000.
(7) Privacy requirements.--
(A) In general.--A small business development
center, consortium of small business
development centers, or contractor or agent of
a small business development center may not
disclose the name, address, or telephone number
of any individual or small business concern
receiving assistance under this section without
the consent of such individual or small
business concern, unless--
(i) the Administrator is ordered to
make such a disclosure by a court in
any civil or criminal enforcement
action initiated by a Federal or State
agency; or
(ii) the Administrator considers such
a disclosure to be necessary for the
purpose of conducting a financial audit
of a small business development center,
but a disclosure under this clause
shall be limited to the information
necessary for such audit.
(B) Administrator use of information.--This
section shall not--
(i) restrict Administrator access to
program activity data; or
(ii) prevent the Administrator from
using client information to conduct
client surveys.
(C) Regulations.--
(i) In general.--The Administrator
shall issue regulations to establish
standards--
(I) for disclosures with
respect to financial audits
under subparagraph (A)(ii); and
(II) for client surveys under
subparagraph (B)(ii), including
standards for oversight of such
surveys and for dissemination
and use of client information.
(ii) Maximum privacy protection.--
Regulations under this subparagraph,
shall, to the extent practicable,
provide for the maximum amount of
privacy protection.
(iii) Inspector general.--Until the
effective date of regulations under
this subparagraph, any client survey
and the use of such information shall
be approved by the Inspector General
who shall include such approval in his
semi-annual report.
(8) Cybersecurity assistance.--
(A) In general.--The Department of Homeland
Security, and any other Federal department or
agency in coordination with the Department of
Homeland Security, may leverage small business
development centers to provide assistance to
small business concerns by disseminating
information relating to cybersecurity risks and
other homeland security matters to help small
business concerns in developing or enhancing
cybersecurity infrastructure, awareness of
cyber threat indicators, and cyber training
programs for employees.
(B) Definitions.--In this paragraph, the
terms ``cybersecurity risk'' and ``cyber threat
indicator'' have the meanings given such terms,
respectively, under section 2209(a) of the
Homeland Security Act of 2002.
(b)(1) Financial assistance shall not be made available to
any applicant if approving such assistance would be
inconsistent with a plan for the area involved which has been
adopted by an agency recognized by the State government as
authorized to do so and approved by the Administration in
accordance with the standards and requirements established
pursuant to this section.
(2) An applicant may apply to participate in the program by
submitting to the Administration for approval a plan naming
those authorized in subsection (a) to participate in the
program, the geographic area to be served, the services that it
would provide, the method for delivering services, a budget,
and any other information and assurances the Administration may
require to insure that the applicant will carry out the
activities eligible for assistance. The Administration is
authorized to approve, conditionally approve or reject a plan
or combination of plans submitted. In all cases, the
Administration shall review plans for conformity with the plan
submitted pursuant to paragraph (1) of this subsection, and
with a view toward providing small business with the most
comprehensive and coordinated assistance in the State or part
thereof to be served.
(3) Assistance to out-of-state small business
concerns.--
(A) In general.--At the discretion of the
Administration, the Administration is
authorized to permit a small business
development center to provide advice,
information and assistance, as described in
subsection (c), to small businesses located
outside the State, but only to the extent such
businesses are located within close
geographical proximity to the small business
development center, as determined by the
Administration.
(B) Disaster recovery assistance.--
(i) In general.--At the discretion of
the Administrator, the Administrator
may authorize a small business
development center to provide advice,
information, and assistance, as
described in subsection (c), to a small
business concern located outside of the
State, without regard to geographic
proximity to the small business
development center, if the small
business concern is located in an area
for which the President has declared a
major disaster.
(ii) Term.--
(I) In general.--A small
business development center may
provide advice, information,
and assistance to a small
business concern under clause
(i) for a period of not more
than 2 years after the date on
which the President declared a
major disaster for the area in
which the small business
concern is located.
(II) Extension.--The
Administrator may, at the
discretion of the
Administrator, extend the
period described in subclause
(I).
(iii) Continuity of services.--A
small business development center that
provides counselors to an area
described in clause (i) shall, to the
maximum extent practicable, ensure
continuity of services in any State in
which the small business development
center otherwise provides services.
(iv) Access to disaster recovery
facilities.--For purposes of this
subparagraph, the Administrator shall,
to the maximum extent practicable,
permit the personnel of a small
business development center to use any
site or facility designated by the
Administrator for use to provide
disaster recovery assistance.
(c)(1) Applicants receiving grants under this section shall
assist small businesses in solving problems concerning
operations, manufacturing, engineering, technology exchange and
development, personnel administration, marketing, sales,
merchandising, finance, accounting, business strategy
development, and other disciplines required for small business
growth and expansion, innovation, increased productivity, and
management improvement, and for decreasing industry economic
concentrations. Applicants receiving grants under this section
may also assist small businesses by providing, where
appropriate, education on the requirements applicable to small
businesses under the regulations issued under section 38 of the
Arms Export Control Act (22 U.S.C. 2778) and on compliance with
those requirements.
(2) A small business development center shall provide
services as close as possible to small businesses by providing
extension services and utilizing satellite locations when
necessary. The facilities and staff of each Small Business
Development Center shall be located in such places as to
provide maximum accessibility and benefits to the small
businesses which the center is intended to serve. To the extent
possible, it also shall make full use of other Federal and
State government programs that are concerned with aiding small
business. A small business development center shall have--
(A) a full-time staff, including a full-time director
who shall have the authority to make expenditures under
the center's budget and who shall manage the program
activities;
(B) access to business analysts to counsel, assist,
and inform small business clients;
(C) access to technology transfer agent to provide
state or art technology to small businesses through
coupling with national and regional technology data
sources;
(D) access to information specialists to assist in
providing information searches and referrals to small
business;
(E) access to part-time professional specialists to
conduct research or to provide counseling assistance
whenever the need arises;
(F) access to laboratory and adaptive engineering
facilities; and
(G) access to cybersecurity specialists to counsel,
assist, and inform small business concern clients, in
furtherance of the Small Business Development Center
Cyber Strategy developed under section 1841(a) of the
National Defense Authorization Act for Fiscal Year
2017.
(3) Services provided by a small business development center
shall include, but shall not be limited to--
(A) furnishing one-to-one individual counseling to
small businesses, including--
(i) working with individuals to increase
awareness of basic credit practices and credit
requirements;
(ii) working with individuals to develop
business plans, financial packages, credit
applications, and contract proposals;
(iii) working with the Administration to
develop and provide informational tools for use
in working with individuals on pre-business
startup planning, existing business expansion,
and export planning; and
(iv) working with individuals referred by the
local offices of the Administration and
Administration participating lenders;
(B) assisting in technology transfer, research and
development, including applied research, and coupling
from existing sources to small businesses, including--
(i) working to increase the access of small
businesses to the capabilities of automated
flexible manufacturing systems;
(ii) working through existing networks and
developing new networks for technology transfer
that encourage partnership between the small
business and academic communities to help
commercialize university-based research and
development and introduce university-based
engineers and scientists to their counterparts
in small technology-based firms; and
(iii) exploring the viability of developing
shared production facilities, under appropriate
circumstances;
(C) in cooperation with the Department of Commerce
and other relevant Federal agencies, actively assisting
small businesses in exporting by identifying and
developing potential export markets, facilitating
export transactions, developing linkages between United
States small business firms and prescreened foreign
buyers, assisting small businesses to participate in
international trade shows, assisting small businesses
in obtaining export financing, and facilitating the
development or reorientation of marketing and
production strategies; where appropriate, the Small
Business Development Center and the Administration may
work in cooperation with the State to establish a State
international trade center for these purposes;
(D) developing a program in conjunction with the
Export-Import Bank and local and regional
Administration offices that will enable Small Business
Development Centers to serve as an information network
and to assist small business applicants for Export-
Import Bank financing programs, and otherwise identify
and help to make available export financing programs to
small businesses;
(E) working closely with the small business
community, small business consultants, State agencies,
universities and other appropriate groups to make
translation services more readily available to small
business firms doing business, or attempting to develop
business, in foreign markets;
(F) in providing assistance under this subsection,
applicants shall cooperate with the Department of
Commerce and other relevant Federal agencies to
increase access to available export market information
systems, including the CIMS system;
(G) assisting small businesses to develop and
implement strategic business plans to timely and
effectively respond to the planned closure (or
reduction) of a Department of Defense facility within
the community, or actual or projected reductions in
such firms' business base due to the actual or
projected termination (or reduction) of a Department of
Defense program or a contract in support of such
program--
(i) by developing broad economic assessments
of the adverse impacts of--
(I) the closure (or reduction) of the
Department of Defense facility on the
small business concerns providing goods
or services to such facility or to the
military and civilian personnel
currently stationed or working at such
facility; and
(II) the termination (or reduction)
of a Department of Defense program (or
contracts under such program) on the
small business concerns participating
in such program as a prime contractor,
subcontractor or supplier at any tier;
(ii) by developing, in conjunction with
appropriate Federal, State, and local
governmental entities and other private sector
organizations, the parameters of a transition
adjustment program adaptable to the needs of
individual small business concerns;
(iii) by conducting appropriate programs to
inform the affected small business community
regarding the anticipated adverse impacts
identified under clause (i) and the economic
adjustment assistance available to such firms;
and
(iv) by assisting small business concerns to
develop and implement an individualized
transition business plan.
(H) maintaining current information concerning
Federal, State, and local regulations that affect small
businesses and counsel small businesses on methods of
compliance. Counseling and technology development shall
be provided when necessary to help small businesses
find solutions for complying with environmental,
energy, health, safety, and other Federal, State, and
local regulations;
(I) coordinating and conducting research into
technical and general small business problems for which
there are no ready solutions;
(J) providing and maintaining a comprehensive library
that contains current information and statistical data
needed by small businesses;
(K) maintaining a working relationship and open
communications with the financial and investment
communities, legal associations, local and regional
private consultants, and local and regional small
business groups and associations in order to help
address the various needs of the small business
community;
(L) conducting in-depth surveys for local small
business groups in order to develop general information
regarding the local economy and general small
businesses strengths and weaknesses in the locality;
(M) in cooperation with the Department of Commerce,
the Administration and other relevant Federal agencies,
actively assisting rural small businesses in exporting
by identifying and developing potential export markets
for rural small businesses, facilitating export
transactions for rural small businesses, developing
linkages between United States' rural small businesses
and prescreened foreign buyers, assisting rural small
businesses to participate in international trade shows,
assisting rural small businesses in obtaining export
financing and developing marketing and production
strategies;
(N) assisting rural small businesses--
(i) in developing marketing and production
strategies that will enable them to better
compete in the domestic market--
(ii) by providing technical assistance needed
by rural small businesses;
(iii) by making available managerial
assistance to rural small business concerns;
and
(iv) by providing information and assistance
in obtaining financing for business startups
and expansion;
(O) in conjunction with the United States Travel and
Tourism Administration, assist rural small business in
developing the tourism potential of rural communities
by--
(i) identifying the cultural, historic,
recreational, and scenic resources of such
communities;
(ii) providing assistance to small businesses
in developing tourism marketing and promotion
plans relating to tourism in rural areas; and
(iii) assisting small business concerns to
obtain capital for starting or expanding
businesses primarily serving tourists;
(P) maintaining lists of local and regional private
consultants to whom small business can be referred;
(Q) providing information to small business concerns
regarding compliance with regulatory requirements;
(R) developing informational publications,
establishing resource centers of reference materials,
and distributing compliance guides published under
section 312(a) of the Small Business Regulatory
Enforcement Fairness Act of 1996;
(S) providing small business owners with access to a
wide variety of export-related information by
establishing on-line computer linkages between small
business development centers and an international trade
data information network with ties to the Export
Assistance Center program;
(T) providing information and assistance to small
business concerns with respect to establishing drug-
free workplace programs on or before October 1, 2006;
and
(U) encouraging and assisting the provision of
succession planning to small business concerns with a
focus on transitioning to cooperatives, as defined in
section 7(a)(35), and qualified employee trusts
(collectively referred to in this subparagraph as
``employee-owned business concerns''), including by--
(i) providing training to individuals to
promote the successful management, governance,
or operation of a business purchased by those
individuals in the formation of an employee-
owned business concern;
(ii) assisting employee-owned business
concerns that meet applicable size standards
established under section 3(a) with education
and technical assistance with respect to
financing and contracting programs administered
by the Administration;
(iii) coordinating with lenders on conducting
outreach on financing through programs
administered by the Administration that may be
used to support the transition of ownership to
employees;
(iv) supporting small business concerns in
exploring or assessing the possibility of
transitioning to an employee-owned business
concern; and
(v) coordinating with the cooperative
development centers of the Department of
Agriculture, the land grant extension network,
the Manufacturing Extension Partnership,
community development financial institutions,
employee ownership associations and service
providers, and local, regional and national
cooperative associations.
(U) in conjunction with the United States Patent and
Trademark Office, providing training--
(i) to small business concerns relating to--
(I) domestic and international
intellectual property protections; and
(II) how the protections described in
subclause (I) should be considered in
the business plans and growth
strategies of the small business
concerns; and
(ii) that may be delivered--
(I) in person; or
(II) through a website.
(4) A small business development center shall continue to
upgrade and modify its services, as needed, in order to meet
the changing and evolving needs of the small business
community.
(5) In addition to the methods prescribed in section
21(c)(2), a small business development center shall utilize and
compensate as one of its resources qualified small business
vendors, including but not limited to, private management
consultants, private consulting engineers and private testing
laboratories, to provide services as described in this
subsection to small businesses on behalf of such small business
development center.
(6) In any State (A) in which the Administration has not made
a grant pursuant to paragraph (1) of subsection (a), or (B) in
which no application for a grant has been made by a Small
Business Development Center pursuant to paragraph (6) of such
subsection within 60 days after the effective date of any grant
under subsection (a)(1) to such center or the date the
Administration notifies the grantee funded under subsection
(a)(1) that funds are available for grant applications pursuant
to subsection (a)(6), whichever date occurs last, the
Administration may make grants to a non-profit entity in that
State to carry out the activities specified in paragraph (6) of
subsection (a). Any such applicants shall comply with the
matching funds requirement of paragraph (4) of subsection (a).
Such grants shall be effective for any fiscal year only to the
extent provided in advance in appropriations Acts, and each
State shall be limited to the pro rata share provisions of
paragraph (6) of subsection (a).
(7) In performing the services identified in
paragraph (3), the Small Business Development Centers
shall work in close cooperation with the
Administration's regional and local offices, the local
small business community, and appropriate State and
local agencies.
(8) The Associate Administrator for Small Business
Development Centers, in consultation with the Small
Business Development Centers, shall develop and
implement an information sharing system. Subject to
amounts approved in advance in appropriations Acts, the
Administration may make grants or enter cooperative
agreements with one or more centers to carry out the
provisions of this paragraph. Said grants or
cooperative agreements shall be awarded for periods of
no more than five years duration. The matching funds
provisions of subsection (a) shall not be applicable to
grants or cooperative agreements under this paragraph.
The system shall--
(A) allow Small Business Development Centers
participating in the program to exchange
information about their programs; and
(B) provide information central to technology
transfer.
(9) Services for cannabis-related legitimate
businesses and service providers.--A small business
development center may not decline to provide services
to an otherwise eligible small business concern under
this section solely because such concern is a cannabis-
related legitimate business or service provider.
(d) Where appropriate, the Small Business Development Centers
shall work in conjunction with the relevant State agency and
the Department of Commerce to develop a comprehensive plan for
enhancing the export potential of small businesses located
within the State. This plan may involve the cofunding and
staffing of a State Office of International Trade within the
State Small Business Development Center, using joint State and
Federal funding, and any other appropriate measures directed at
improving the export performance of small businesses within the
State.
(e) Laboratories operated and funded by the Federal
Government are authorized and directed to cooperate with the
Administration in developing and establishing programs to
support small business development centers by making facilities
and equipment available; providing experiment station
capabilities in adaptive engineering; providing library and
technical information processing capabilities; and providing
professional staff for consulting. The Administration is
authorized to reimburse the laboratories for such services.
(f) The National Science Foundation is authorized and
directed to cooperate with the Administration and with the
Small Business Development Centers in developing and
establishing programs to support the centers.
(g) National Aeronautics and Space Administration and
Regional Technology Transfer Centers.--The National Aeronautics
and Space Administration and regional technology transfer
centers supported by the National Aeronautics and Space
Administration are authorized and directed to cooperate with
small business development centers participating in the
program.
(h) Associate Administrator for Small Business Development
Centers.--
(1) Appointment and compensation.--The Administrator
shall appoint an Associate Administrator for Small
Business Development Centers who shall report to an
official who is not more than one level below the
Office of the Administrator and who shall serve without
regard to the provisions of title 5, governing
appointments in the competitive service, and without
regard to chapter 51, and subchapter III of chapter 53
of such title relating to classification and General
Schedule pay rates, but at a rate not less than the
rate of GS-17 of the General Schedule.
(2) Duties.--
(A) In general.--The sole responsibility of
the Associate Administrator for Small Business
Development Centers shall be to administer the
small business development center program.
Duties of the position shall include
recommending the annual program budget,
reviewing the annual budgets submitted by each
applicant, establishing appropriate funding
levels therefore, selecting applicants to
participate in this program, implementing the
provisions of this section, maintaining a
clearinghouse to provide for the dissemination
and exchange of information between small
business development centers and conducting
audits of recipients of grants under this
section.
(B) Consultation requirements.--In carrying
out the duties described in this subsection,
the Associate Administrator shall confer with
and seek the advice of the Board established by
subsection (i) and Administration officials in
areas served by the small business development
centers; however, the Associate Administrator
shall be responsible for the management and
administration of the program and shall not be
subject to the approval or concurrence of such
Administration officials.
(i)(1) There is established a National Small Business
Development Center Advisory Board (herein referred to as
``Board'') which shall consist of nine members appointed from
civilian life by the Administrator and who shall be persons of
outstanding qualifications known to be familiar and sympathetic
with small business needs and problems. No more than three
members shall be from universities or their affiliates and six
shall be from small businesses or associations representing
small businesses. At the time of the appointment of the Board,
the Administrator shall designate one-third of the members and
at least one from each category whose term shall end in two
years from the date of appointment, a second third whose term
shall end in three years from the date of appointment, and the
final third whose term shall end in four years from the date of
appointment. Succeeding Boards shall have three-year terms,
with one-third of the Board changing each year.
(2) The Board shall elect a Chairman and advise, counsel, and
confer with the Associate Administrator for Small Business
Development Centers in carrying out the duties described in
this section. The Board shall meet at least semiannually and at
the call of the Chairman of the Board. Each member of the Board
shall be entitled to be compensated at the rate not in excess
of the per diem equivalent of the highest rate of pay for
individuals occupying the position under GS-18 of the General
Schedule for each day engaged in activities of the Board and
shall be entitled to be reimbursed for expenses as a member of
the Board.
(j)(1) Each small business development center shall establish
an advisory board.
(2) Each small business development center advisory board
shall elect a chairman and advise, counsel, and confer with the
director of the small business development center on all policy
matters pertaining to the operation of the small business
development center, including who may be eligible to receive
assistance from, and how local and regional private consultants
may participate with the small business development center.
(k) Program Examination and Accreditation.--
(1) Examination.--Not later than 180 days after the
date of enactment of this subsection, the
Administration shall develop and implement a biennial
programmatic and financial examination of each small
business development center established pursuant to
this section.
(2) Accreditation.--The Administration may provide
financial support, by contract or otherwise, to the
association authorized by subsection (a)(3)(A) for the
purpose of developing a small business development
center accreditation program.
(3) Extension or renewal of cooperative agreements.--
(A) In general.--In extending or renewing a
cooperative agreement of a small business
development center, the Administration shall
consider the results of the examination and
accreditation program conducted pursuant to
paragraphs (1) and (2).
(B) Accreditation requirement.--After
September 30, 2000, the Administration may not
renew or extend any cooperative agreement with
a small business development center unless the
center has been approved under the
accreditation program conducted pursuant to
this subsection, except that the Associate
Administrator for Small Business Development
Centers may waive such accreditation
requirement, in the discretion of the Associate
Administrator, upon a showing that the center
is making a good faith effort to obtain
accreditation.
(l) Contract Authority.--The authority to enter into
contracts shall be in effect for each fiscal year only to the
extent and in the amounts as are provided in advance in
appropriations Acts. After the administration has entered a
contract, either as a grant or a cooperative agreement, with
any applicant under this section, it shall not suspend,
terminate, or fail to renew or extend any such contract unless
the Administration provides the applicant with written
notification setting forth the reasons therefore and affording
the applicant an opportunity for a hearing, appeal, or other
administrative proceeding under the provisions of chapter 5 of
title 5, United States Code. If any contract or cooperative
agreement under this section with an entity that is covered by
this section is not renewed or extended, any award of a
successor contract or cooperative agreement under this section
to another entity shall be made on a competitive basis.
(m) Prohibition on Certain Fees.--A small business
development center shall not impose or otherwise collect a fee
or other compensation in connection with the provision of
counseling services under this section.
(n) Veterans Assistance and Services Program.--
(1) In general.--A small business development center
may apply for a grant under this subsection to carry
out a veterans assistance and services program.
(2) Elements of program.--Under a program carried out
with a grant under this subsection, a small business
development center shall--
(A) create a marketing campaign to promote
awareness and education of the services of the
center that are available to veterans, and to
target the campaign toward veterans, service-
disabled veterans, military units, Federal
agencies, and veterans organizations;
(B) use technology-assisted online counseling
and distance learning technology to overcome
the impediments to entrepreneurship faced by
veterans and members of the Armed Forces; and
(C) increase coordination among organizations
that assist veterans, including by establishing
virtual integration of service providers and
offerings for a one-stop point of contact for
veterans who are entrepreneurs or owners of
small business concerns.
(3) Amount of grants.--A grant under this subsection
shall be for not less than $75,000 and not more than
$250,000.
(4) Funding.--Subject to amounts approved in advance
in appropriations Acts, the Administration may make
grants or enter into cooperative agreements to carry
out the provisions of this subsection.
* * * * * * *
SEC. 29. WOMEN'S BUSINESS CENTER PROGRAM.
(a) Definitions.--In this section--
(1) the term ``Assistant Administrator'' means the
Assistant Administrator of the Office of Women's
Business Ownership established under subsection (g);
(2) the term ``private nonprofit organization'' means
an entity that is described in section 501(c) of the
Internal Revenue Code of 1986 and exempt from taxation
under section 501(a) of such Code;
(3) the term ``small business concern owned and
controlled by women'', either startup or existing,
includes any small business concern--
(A) that is not less than 51 percent owned by
1 or more women; and
(B) the management and daily business
operations of which are controlled by 1 or more
women; and
(4) the term ``women's business center site'' means
the location of--
(A) a women's business center; or
(B) 1 or more women's business centers,
established in conjunction with another women's
business center in another location within a
State or region--
(i) that reach a distinct population
that would otherwise not be served;
(ii) whose services are targeted to
women; and
(iii) whose scope, function, and
activities are similar to those of the
primary women's business center or
centers in conjunction with which it
was established.
(b) Authority.--The Administration may provide financial
assistance to private nonprofit organizations to conduct 5-year
projects for the benefit of small business concerns owned and
controlled by women. The projects shall provide--
(1) financial assistance, including training and
counseling in how to apply for and secure business
credit and investment capital, preparing and presenting
financial statements, and managing cash flow and other
financial operations of a business concern;
(2) management assistance, including training and
counseling in how to plan, organize, staff, direct, and
control each major activity and function of a small
business concern; and
(3) marketing assistance, including training and
counseling in identifying and segmenting domestic and
international market opportunities, preparing and
executing marketing plans, developing pricing
strategies, locating contract opportunities,
negotiating contracts, and utilizing varying public
relations and advertising techniques.
(c) Conditions of Participation.--
(1) Non-federal contributions.--As a condition of
receiving financial assistance authorized by this
section, the recipient organization shall agree to
obtain, after its application has been approved and
notice of award has been issued, cash contributions
from non-Federal sources as follows:
(A) in the first and second years, 1 non-
Federal dollar for each 2 Federal dollars; and
(B) in the third, fourth, and fifth years, 1
non-Federal dollar for each Federal dollar.
(2) Form of non-federal contributions.--Not more than
one-half of the non-Federal sector matching assistance
may be in the form of in-kind contributions that are
budget line items only, including office equipment and
office space.
(3) Form of federal contributions.--The financial
assistance authorized pursuant to this section may be
made by grant, contract, or cooperative agreement and
may contain such provision, as necessary, to provide
for payments in lump sum or installments, and in
advance or by way of reimbursement. The Administration
may disburse up to 25 percent of each year's Federal
share awarded to a recipient organization after notice
of the award has been issued and before the non-Federal
sector matching funds are obtained.
(4) Failure to obtain non-federal funding.--If any
recipient of assistance fails to obtain the required
non-Federal contribution during any project, it shall
not be eligible thereafter for advance disbursements
pursuant to paragraph (3) during the remainder of that
project, or for any other project for which it is or
may be funded by the Administration, and prior to
approving assistance to such organization for any other
projects, the Administration shall specifically
determine whether the Administration believes that the
recipient will be able to obtain the requisite non-
Federal funding and enter a written finding setting
forth the reasons for making such determination.
(d) Contract Authority.--A women's business center may enter
into a contract with a Federal department or agency to provide
specific assistance to women and other underserved small
business concerns. Performance of such contract should not
hinder the women's business centers in carrying out the terms
of the grant received by the women's business centers from the
Administration.
(e) Submission of 5-Year Plan.--Each applicant organization
initially shall submit a 5-year plan to the Administration on
proposed fundraising and training activities, and a recipient
organization may receive financial assistance under this
program for a maximum of 5 years per women's business center
site.
(f) Criteria.--The Administration shall evaluate and rank
applicants in accordance with predetermined selection criteria
that shall be stated in terms of relative importance. Such
criteria and their relative importance shall be made publicly
available and stated in each solicitation for applications made
by the Administration. The criteria shall include--
(1) the experience of the applicant in conducting
programs or ongoing efforts designed to impart or
upgrade the business skills of women business owners or
potential owners;
(2) the present ability of the applicant to commence
a project within a minimum amount of time;
(3) the ability of the applicant to provide training
and services to a representative number of women who
are both socially and economically disadvantaged; and
(4) the location for the women's business center site
proposed by the applicant.
(g) Office of Women's Business Ownership.--
(1) Establishment.--There is established within the
Administration an Office of Women's Business Ownership,
which shall be responsible for the administration of
the Administration's programs for the development of
women's business enterprises (as defined in section 408
of the Women's Business Ownership Act of 1988 (15
U.S.C. 631 note)). The Office of Women's Business
Ownership shall be administered by an Assistant
Administrator, who shall be appointed by the
Administrator.
(2) Assistant administrator of the office of women's
business ownership.--
(A) Qualification.--The position of Assistant
Administrator shall be a Senior Executive
Service position under section 3132(a)(2) of
title 5, United States Code. The Assistant
Administrator shall serve as a noncareer
appointee (as defined in section 3132(a)(7) of
that title).
(B) Responsibilities and duties.--
(i) Responsibilities.--The
responsibilities of the Assistant
Administrator shall be to administer
the programs and services of the Office
of Women's Business Ownership
established to assist women
entrepreneurs in the areas of--
(I) starting and operating a
small business;
(II) development of
management and technical
skills;
(III) seeking Federal
procurement opportunities; and
(IV) increasing the
opportunity for access to
capital.
(ii) Duties.--The Assistant
Administrator shall--
(I) administer and manage the
Women's Business Center
program;
(II) recommend the annual
administrative and program
budgets for the Office of
Women's Business Ownership
(including the budget for the
Women's Business Center
program);
(III) establish appropriate
funding levels therefore;
(IV) review the annual
budgets submitted by each
applicant for the Women's
Business Center program;
(V) select applicants to
participate in the program
under this section;
(VI) implement this section;
(VII) maintain a
clearinghouse to provide for
the dissemination and exchange
of information between women's
business centers;
(VIII) serve as the vice
chairperson of the Interagency
Committee on Women's Business
Enterprise;
(IX) serve as liaison for the
National Women's Business
Council; and
(X) advise the Administrator
on appointments to the Women's
Business Council.
(C) Consultation requirements.--In carrying
out the responsibilities and duties described
in this paragraph, the Assistant Administrator
shall confer with and seek the advice of the
Administration officials in areas served by the
women's business centers.
(h) Program Examination.--
(1) In general.--The Administration shall--
(A) develop and implement an annual
programmatic and financial examination of each
women's business center established pursuant to
this section, pursuant to which each such
center shall provide to the Administration--
(i) an itemized cost breakdown of
actual expenditures for costs incurred
during the preceding year; and
(ii) documentation regarding the
amount of matching assistance from non-
Federal sources obtained and expended
by the center during the preceding year
in order to meet the requirements of
subsection (c) and, with respect to any
in-kind contributions described in
subsection (c)(2) that were used to
satisfy the requirements of subsection
(c), verification of the existence and
valuation of those contributions; and
(B) analyze the results of each such
examination and, based on that analysis, make a
determination regarding the programmatic and
financial viability of each women's business
center.
(2) Conditions for continued funding.--In determining
whether to award a contract (as a sustainability grant)
under subsection (l) or to renew a contract (either as
a grant or cooperative agreement) under this section
with a women's business center, the Administration--
(A) shall consider the results of the most
recent examination of the center under
paragraph (1); and
(B) may withhold such award or renewal, if
the Administration determines that--
(i) the center has failed to provide
any information required to be provided
under clause (i) or (ii) of paragraph
(1)(A), or the information provided by
the center is inadequate; or
(ii) the center has failed to provide
any information required to be provided
by the center for purposes of the
report of the Administration under
subsection (j), or the information
provided by the center is inadequate.
(i) Contract Authority.--The authority of the Administrator
to enter into contracts shall be in effect for each fiscal year
only to the extent and in the amounts as are provided in
advance in appropriations Acts. After the Administrator has
entered into a contract, either as a grant or a cooperative
agreement, with any applicant under this section, it shall not
suspend, terminate, or fail to renew or extend any such
contract unless the Administrator provides the applicant with
written notification setting forth the reasons therefore and
affords the applicant an opportunity for a hearing, appeal, or
other administrative proceeding under chapter 5 of title 5,
United States Code.
(j) Management Report.--
(1) In general.--The Administration shall prepare and
submit to the Committees on Small Business of the House
of Representatives and the Senate a report on the
effectiveness of all projects conducted under this
section.
(2) Contents.--Each report submitted under paragraph
(1) shall include information concerning, with respect
to each women's business center established pursuant to
this section--
(A) the number of individuals receiving
assistance;
(B) the number of startup business concerns
formed;
(C) the gross receipts of assisted concerns;
(D) the employment increases or decreases of
assisted concerns;
(E) to the maximum extent practicable,
increases or decreases in profits of assisted
concerns; and
(F) the most recent analysis, as required
under subsection (h)(1)(B), and the subsequent
determination made by the Administration under
that subsection.
(k) Authorization of Appropriations.--
(1) In general.--There is authorized to be
appropriated, to remain available until the expiration
of the pilot program under subsection (l)--
(A) $12,000,000 for fiscal year 2000;
(B) $12,800,000 for fiscal year 2001;
(C) $13,700,000 for fiscal year 2002; and
(D) $14,500,000 for fiscal year 2003.
(2) Use of amounts.--
(A) In general.--Except as provided in
subparagraph (B), amounts made available under
this subsection for fiscal year 1999, and each
fiscal year thereafter, may only be used for
grant awards and may not be used for costs
incurred by the Administration in connection
with the management and administration of the
program under this section.
(B) Exceptions.--Of the amount made available
under this subsection for a fiscal year, the
following amounts shall be available for
selection panel costs, post-award conference
costs, and costs related to monitoring and
oversight:
(i) For fiscal year 2000, 2 percent.
(ii) For fiscal year 2001, 1.9
percent.
(iii) For fiscal year 2002, 1.9
percent.
(iv) For fiscal year 2003, 1.6
percent.
(3) Expedited acquisition.--Notwithstanding any other
provision of law, the Administrator, acting through the
Assistant Administrator, may use such expedited
acquisition methods as the Administrator determines to
be appropriate to carry out this section, except that
the Administrator shall ensure that all small business
sources are provided a reasonable opportunity to submit
proposals.
(4) Reservation of funds for sustainability pilot
program.--
(A) In general.--Subject to subparagraph (B),
of the total amount made available under this
subsection for a fiscal year, the following
amounts shall be reserved for sustainability
grants under subsection (l):
(i) For fiscal year 2000, 17 percent.
(ii) For fiscal year 2001, 18.8
percent.
(iii) For fiscal year 2002, 30.2
percent.
(iv) For fiscal year 2003, 30.2
percent.
(B) Use of unawarded funds for sustainability
pilot program grants.--If the amount reserved
under subparagraph (A) for any fiscal year is
not fully awarded to private nonprofit
organizations described in subsection
(l)(1)(B), the Administration is authorized to
use the unawarded amount to fund additional
women's business center sites or to increase
funding of existing women's business center
sites under subsection (b).
[(l) Repealed effective October 1, 2007 by 8305(b) of Public
Law 110-28.]
(m) Continued Funding for Centers.--
(1) In general.--A nonprofit organization described
in paragraph (2) shall be eligible to receive, subject
to paragraph (3), a 3-year grant under this subsection.
(2) Applicability.--A nonprofit organization
described in this paragraph is a nonprofit organization
that has received funding under subsection (b) or (l).
(3) Application and approval criteria.--
(A) Criteria.--Subject to subparagraph (B),
the Administrator shall develop and publish
criteria for the consideration and approval of
applications by nonprofit organizations under
this subsection.
(B) Contents.--Except as otherwise provided
in this subsection, the conditions for
participation in the grant program under this
subsection shall be the same as the conditions
for participation in the program under
subsection (l), as in effect on the date of
enactment of this Act.
(C) Notification.--Not later than 60 days
after the date of the deadline to submit
applications for each fiscal year, the
Administrator shall approve or deny any
application under this subsection and notify
the applicant for each such application.
(4) Award of grants.--
(A) In general.--Subject to the availability
of appropriations, the Administrator shall make
a grant for the Federal share of the cost of
activities described in the application to each
applicant approved under this subsection.
(B) Amount.--A grant under this subsection
shall be for not more than $150,000, for each
year of that grant.
(C) Federal share.--The Federal share under
this subsection shall be not more than 50
percent.
(D) Priority.--In allocating funds made
available for grants under this section, the
Administrator shall give applications under
this subsection or subsection (l) priority over
first-time applications under subsection (b).
(5) Renewal.--
(A) In general.--The Administrator may renew
a grant under this subsection for additional 3-
year periods, if the nonprofit organization
submits an application for such renewal at such
time, in such manner, and accompanied by such
information as the Administrator may establish.
(B) Unlimited renewals.--There shall be no
limitation on the number of times a grant may
be renewed under subparagraph (A).
(n) Privacy Requirements.--
(1) In general.--A women's business center may not
disclose the name, address, or telephone number of any
individual or small business concern receiving
assistance under this section without the consent of
such individual or small business concern, unless--
(A) the Administrator is ordered to make such
a disclosure by a court in any civil or
criminal enforcement action initiated by a
Federal or State agency; or
(B) the Administrator considers such a
disclosure to be necessary for the purpose of
conducting a financial audit of a women's
business center, but a disclosure under this
subparagraph shall be limited to the
information necessary for such audit.
(2) Administration use of information.--This
subsection shall not--
(A) restrict Administration access to program
activity data; or
(B) prevent the Administration from using
client information (other than the information
described in subparagraph (A)) to conduct
client surveys.
(3) Regulations.--The Administrator shall issue
regulations to establish standards for requiring
disclosures during a financial audit under paragraph
(1)(B).
(o) Study and Report on Representation of Women.--
(1) Study.--The Administrator shall periodically
conduct a study to identify industries, as defined
under the North American Industry Classification
System, underrepresented by small business concerns
owned and controlled by women.
(2) Report.--Not later than 3 years after the date of
enactment of this subsection, and every 5 years
thereafter, the Administrator shall submit to the
Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Small Business of the House
of Representatives a report on the results of each
study under paragraph (1) conducted during the 5-year
period ending on the date of the report.
(p) Services for Cannabis-Related Legitimate Businesses and
Service Providers.--A women's business center may not decline
to provide services to an otherwise eligible small business
concern under this section solely because such concern is a
cannabis-related legitimate business or service provider.
* * * * * * *
SEC. 32. VETERANS PROGRAMS.
(a) Office of Veterans Business Development.--There is
established in the Administration an Office of Veterans
Business Development, which shall be administered by the
Associate Administrator for Veterans Business Development (in
this section referred to as the ``Associate Administrator'')
appointed under section 4(b)(1).
(b) Associate Administrator for Veterans Business
Development.--The Associate Administrator--
(1) shall be an appointee in the Senior Executive
Service;
(2) shall be responsible for the formulation,
execution, and promotion of policies and programs of
the Administration that provide assistance to small
business concerns owned and controlled by veterans and
small business concerns owned and controlled by
service-disabled veterans. The Associate Administrator
shall act as an ombudsman for full consideration of
veterans in all programs of the Administration; and
(3) shall report to and be responsible directly to
the Administrator.
(c) Interagency Task Force.--
(1) Establishment.--Not later than 90 days after the
date of enactment of this subsection, the President
shall establish an interagency task force to coordinate
the efforts of Federal agencies necessary to improve
capital and business development opportunities for, and
ensure achievement of the pre-established Federal
contracting goals for, small business concerns owned
and controlled by service-disabled veterans and small
business concerns owned and controlled by veterans (in
this section referred to as the ``task force'').
(2) Membership.--The members of the task force shall
include--
(A) the Administrator, who shall serve as
chairperson of the task force; and
(B) a senior level representative from--
(i) the Department of Veterans
Affairs;
(ii) the Department of Defense;
(iii) the Administration (in addition
to the Administrator);
(iv) the Department of Labor;
(v) the Department of the Treasury;
(vi) the General Services
Administration;
(vii) the Office of Management and
Budget; and
(viii) 4 representatives from a
veterans service organization or
military organization or association,
selected by the President.
(3) Duties.--The task force shall--
(A) consult regularly with veterans service
organizations and military organizations in
performing the duties of the task force; and
(B) coordinate administrative and regulatory
activities and develop proposals relating to--
(i) improving capital access and
capacity of small business concerns
owned and controlled by service-
disabled veterans and small business
concerns owned and controlled by
veterans through loans, surety bonding,
and franchising;
(ii) ensuring achievement of the pre-
established Federal contracting goals
for small business concerns owned and
controlled by service-disabled veterans
and small business concerns owned and
controlled by veterans through expanded
mentor-protege assistance and matching
such small business concerns with
contracting opportunities;
(iii) increasing the integrity of
certifications of status as a small
business concern owned and controlled
by service-disabled veterans or a small
business concern owned and controlled
by veterans;
(iv) reducing paperwork and
administrative burdens on veterans in
accessing business development and
entrepreneurship opportunities;
(v) increasing and improving training
and counseling services provided to
small business concerns owned and
controlled by veterans; and
(vi) making other improvements
relating to the support for veterans
business development by the Federal
Government.
(d) Participation in TAP Workshops.--
(1) In general.--The Associate Administrator shall
increase veteran outreach by ensuring that Veteran
Business Outreach Centers regularly participate, on a
nationwide basis, in the workshops of the Transition
Assistance Program of the Department of Labor.
(2) Presentations.--In carrying out paragraph (1), a
Veteran Business Outreach Center may provide grants to
entities located in Transition Assistance Program
locations to make presentations on the opportunities
available from the Administration for recently
separating or separated veterans. Each presentation
under this paragraph shall include, at a minimum, a
description of the entrepreneurial and business
training resources available from the Administration.
(3) Written materials.--The Associate Administrator
shall--
(A) create written materials that provide
comprehensive information on self-employment
and veterans entrepreneurship, including
information on resources available from the
Administration on such topics; and
(B) make the materials created under
subparagraph (A) available to the Secretary of
Labor for inclusion in the Transition
Assistance Program manual.
(4) Reports.--The Associate Administrator shall
submit to Congress progress reports on the
implementation of this subsection.
(e) Women Veterans Business Training.--The Associate
Administrator shall--
(1) compile information on existing resources
available to women veterans for business training,
including resources for--
(A) vocational and technical education;
(B) general business skills, such as
marketing and accounting; and
(C) business assistance programs targeted to
women veterans; and
(2) disseminate the information compiled under
paragraph (1) through Veteran Business Outreach Centers
and women's business centers.
(f) Authorization of Appropriations.--There are authorized to
be appropriated to carry out this section--
(1) $1,500,000 for fiscal year 2005; and
(2) $2,000,000 for fiscal year 2006.
(g) Access to Surplus Property for Veteran-owned Small
Businesses.--
(1) Definitions.--In this subsection--
(A) the term ``foreign excess property'' has
the meaning given the term in section 102 of
title 40, United States Code; and
(B) the term ``state agency'' has the meaning
given the term, including the roles and
responsibilities assigned, in section 549 of
title 40, United States Code.
(2) Requirement.--The Administrator, in coordination
with the Administrator of General Services, shall
provide access to and manage the distribution of
surplus property, and foreign excess property returned
to a State for handling as surplus property, owned by
the United States under chapter 7 of title 40, United
States Code, to small business concerns owned and
controlled by veterans (as verified by the Secretary of
Veterans Affairs under section 8127 of title 38, United
States Code) pursuant to a memorandum of agreement
between the Administrator, the Administrator of General
Services, and the head of the applicable state agency
for surplus properties and in accordance with section
549 of title 40, United States Code.
(h) Services for Cannabis-Related Legitimate Businesses and
Service Providers.--A Veteran Business Outreach Center may not
decline to provide services to an otherwise eligible small
business concern under this section solely because such concern
is a cannabis-related legitimate business or service provider.
* * * * * * *
----------
SMALL BUSINESS INVESTMENT ACT OF 1958
* * * * * * *
TITLE III--INVESTMENT DIVISION PROGRAMS
Part A--Small Business Investment Companies
* * * * * * *
SEC. 321. DEBENTURES TO FINANCE CANNABIS-RELATED LEGITIMATE BUSINESSES
AND SERVICE PROVIDERS.
(a) Guarantees.--The Administrator may not decline to
purchase or guarantee a debenture made under this title to an
otherwise eligible small business investment company solely
because such small business investment company provides
financing to an entity that is a cannabis-related legitimate
business or service provider (as defined in section 7(a)(38) of
the Small Business Act).
(b) Other Assistance.--A small business investment company
may not decline to provide assistance under this title to an
otherwise eligible small business concern solely because such
small business concern is a cannabis-related legitimate
business or service provider (as defined in section 7(a)(38) of
the Small Business Act).
* * * * * * *
TITLE V--LOANS TO STATE AND LOCAL DEVELOPMENT COMPANIES
* * * * * * *
SEC. 511. LOANS TO FINANCE CANNABIS-RELATED LEGITIMATE BUSINESSES AND
SERVICE PROVIDERS.
(a) Loans and Loan Guarantees.--The Administrator may not
decline to make or provide a guarantee for a loan under this
title to an otherwise eligible qualified State or local
development company solely because such qualified State or
local development company provides financing to an entity that
is a cannabis-related legitimate business or service provider
(as defined in section 7(a)(38) of the Small Business Act).
(b) Other Assistance.--A qualified State or local development
company may not decline to provide assistance under this title
to an otherwise eligible small business concern solely because
such small business concern is a cannabis-related legitimate
business or service provider (as defined in section 7(a)(38) of
the Small Business Act).
* * * * * * *
----------
IMMIGRATION AND NATIONALITY ACT
* * * * * * *
TITLE I--GENERAL
definitions
Section 101. (a) As used in this Act--
(1) The term ``administrator'' means the official designated
by the Secretary of State pursuant to section 104(b) of this
Act.
(2) The term ``advocates'' includes, but is not limited to,
advises, recommends, furthers by overt act, and admits belief
in.
(3) The term ``alien'' means any person not a citizen or
national of the United States.
(4) The term ``application for admission'' has reference to
the application for admission into the United States and not to
the application for the issuance of an immigrant or
nonimmigrant visa.
(5) The term ``Attorney General'' means the Attorney General
of the United States.
(6) The term ``border crossing identification card'' means a
document of identity bearing that designation issued to an
alien who is lawfully admitted for permanent residence, or to
an alien who is a resident in foreign contiguous territory, by
a consular officer or an immigration officer for the purpose of
crossing over the borders between the United States and foreign
contiguous territory in accordance with such conditions for its
issuance and use as may be prescribed by regulations. Such
regulations shall provide that (A) each such document include a
biometric identifier (such as the fingerprint or handprint of
the alien) that is machine readable and (B) an alien presenting
a border crossing identification card is not permitted to cross
over the border into the United States unless the biometric
identifier contained on the card matches the appropriate
biometric characteristic of the alien.
(7) The term ``clerk of court'' means a clerk of a
naturalization court.
(8) The terms ``Commissioner'' and ``Deputy Commissioner''
mean the Commissioner of Immigration and Naturalization and a
Deputy Commissioner of Immigration and Naturalization,
respectively.
(9) The term ``consular officer'' means any consular,
diplomatic, or other officer or employee of the United States
designated under regulations prescribed under authority
contained in this Act, for the purpose of issuing immigrant or
nonimmigrant visas or, when used in title III, for the purpose
of adjudicating nationality.
(10) The term ``crewman'' means a person serving in any
capacity on board a vessel or aircraft.
(11) The term ``diplomatic visa'' means a nonimmigrant visa
bearing that title and issued to a nonimmigrant in accordance
with such regulations as the Secretary of State may prescribe.
(12) The term ``doctrine'' includes, but is not limited to,
policies, practices, purposes, aims, or procedures.
(13)(A) The terms ``admission'' and ``admitted'' mean, with
respect to an alien, the lawful entry of the alien into the
United States after inspection and authorization by an
immigration officer.
(B) An alien who is paroled under section 212(d)(5) or
permitted to land temporarily as an alien crewman shall not be
considered to have been admitted.
(C) An alien lawfully admitted for permanent residence in the
United States shall not be regarded as seeking an admission
into the United States for purposes of the immigration laws
unless the alien--
(i) has abandoned or relinquished that status,
(ii) has been absent from the United States for a
continuous period in excess of 180 days,
(iii) has engaged in illegal activity after having
departed the United States,
(iv) has departed from the United States while under
legal process seeking removal of the alien from the
United States, including removal proceedings under this
Act and extradition proceedings,
(v) has committed an offense identified in section
212(a)(2), unless since such offense the alien has been
granted relief under section 212(h) or 240A(a), or
(vi) is attempting to enter at a time or place other
than as designated by immigration officers or has not
been admitted to the United States after inspection and
authorization by an immigration officer.
(14) The term ``foreign state'' includes outlying possessions
of a foreign state, but self-governing dominions and
territories under mandate or trusteeship shall be regarded as
separate foreign states.
(15) The term ``immigrant'' means every alien except an alien
who is within one of the following classes of nonimmigrant
aliens--
(A)(i) an ambassador, public minister, or career
diplomatic or consular officer who has been accredited
by a foreign government recognized de jure by the
United States and who is accepted by the President or
by the Secretary of State, and the members of the
alien's immediate family;
(ii) upon a basis of reciprocity, other officials and
employees who have been accredited by a foreign
government recognized de jure by the United States, who
are accepted by the Secretary of State, and the members
of their immediate families; and
(iii) upon a basis of reciprocity, attendants,
servants, personal employees, and members of their
immediate families, of the officials and employees who
have a nonimmigrant status under (i) and (ii) above;
(B) an alien (other than one coming for the purpose
of study or of performing skilled or unskilled labor or
as a representative of foreign press, radio, film, or
other foreign information media coming to engage in
such vocation) having a residence in a foreign country
which he has no intention of abandoning and who is
visiting the United States temporarily for business or
temporarily for pleasure;
(C) an alien in immediate and continuous transit
through the United States, or an alien who qualifies as
a person entitled to pass in transit to and from the
United Nations Headquarters District and foreign
countries, under the provisions of paragraphs (3), (4),
and (5) of section 11 of the Headquarters Agreement
with the United Nations (61 Stat. 758);
(D)(i) an alien crewman serving in good faith as such
in a capacity required for normal operation and service
on board a vessel, as defined in section 258(a) (other
than a fishing vessel having its home port or an
operating base in the United States), or aircraft, who
intends to land temporarily and solely in pursuit of
his calling as a crewman and to depart from the United
States with the vessel or aircraft on which he arrived
or some other vessel or aircraft;
(ii) an alien crewman serving in good faith as such
in any capacity required for normal operations and
service aboard a fishing vessel having its home port or
an operating base in the United States who intends to
land temporarily in Guam or the Commonwealth of the
Northern Mariana Islands and solely in pursuit of his
calling as a crewman and to depart from Guam or the
Commonwealth of the Northern Mariana Islands with the
vessel on which he arrived;
(E) an alien entitled to enter the United States
under and in pursuance of the provisions of a treaty of
commerce and navigation between the United States and
the foreign state of which he is a national, and the
spouse and children of any such alien if accompanying
or following to join him: (i) solely to carry on
substantial trade, including trade in services or trade
in technology, principally between the United States
and the foreign state of which he is a national; (ii)
solely to develop and direct the operations of an
enterprise in which he has invested, or of an
enterprise in which he is actively in the process of
investing, a substantial amount of capital; or (iii)
solely to perform services in a specialty occupation in
the United States if the alien is a national of the
Commonwealth of Australia and with respect to whom the
Secretary of Labor determines and certifies to the
Secretary of Homeland Security and the Secretary of
State that the intending employer has filed with the
Secretary of Labor an attestation under section
212(t)(1);
(F)(i) an alien having a residence in a foreign
country which he has no intention of abandoning, who is
a bona fide student qualified to pursue a full course
of study and who seeks to enter the United States
temporarily and solely for the purpose of pursuing such
a course of study consistent with section 214(l) at an
established college, university, seminary,
conservatory, academic high school, elementary school,
or other academic institution or in an accredited
language training program in the United States,
particularly designated by him and approved by the
Attorney General after consultation with the Secretary
of Education, which institution or place of study shall
have agreed to report to the Attorney General the
termination of attendance of each nonimmigrant student,
and if any such institution of learning or place of
study fails to make reports promptly the approval shall
be withdrawn, (ii) the alien spouse and minor children
of any alien described in clause (i) if accompanying or
following to join such an alien, and (iii) an alien who
is a national of Canada or Mexico, who maintains actual
residence and place of abode in the country of
nationality, who is described in clause (i) except that
the alien's qualifications for and actual course of
study may be full or part-time, and who commutes to the
United States institution or place of study from Canada
or Mexico;
(G)(i) a designated principal resident representative
of a foreign government recognized de jure by the
United States, which foreign government is a member of
an international organization entitled to enjoy
privileges, exemptions, and immunities as an
international organization under the International
Organizations Immunities Act (59 Stat. 669), accredited
resident members of the staff of such representatives,
and members of his or their immediate family;
(ii) other accredited representatives of such a
foreign government to such international organizations,
and the members of their immediate families;
(iii) an alien able to qualify under (i) or (ii)
above except for the fact that the government of which
such alien is an accredited representative is not
recognized de jure by the United States, or that the
government of which he is an accredited representative
is not a member of such international organization, and
the members of his immediate family;
(iv) officers, or employees of such international
organizations, and the members of their immediate
families;
(v) attendants, servants, and personal employees of
any such representative, officer, or employee, and the
members of the immediate families of such attendants,
servants, and personal employees;
(H) an alien (i) (b) subject to section 212(j)(2),
who is coming temporarily to the United States to
perform services (other than services described in
subclause (a) during the period in which such subclause
applies and other than services described in subclause
(ii)(a) or in subparagraph (O) or (P)) in a specialty
occupation described in section 214(i)(1) or as a
fashion model, who meets the requirements for the
occupation specified in section 214(i)(2) or, in the
case of a fashion model, is of distinguished merit and
ability, and with respect to whom the Secretary of
Labor determines and certifies to the Attorney General
that the intending employer has filed with the
Secretary an application under section 212(n)(1), or
(b1) who is entitled to enter the United States under
and in pursuance of the provisions of an agreement
listed in section 214(g)(8)(A), who is engaged in a
specialty occupation described in section 214(i)(3),
and with respect to whom the Secretary of Labor
determines and certifies to the Secretary of Homeland
Security and the Secretary of State that the intending
employer has filed with the Secretary of Labor an
attestation under section 212(t)(1), or (c) who is
coming temporarily to the United States to perform
services as a registered nurse, who meets the
qualifications described in section 212(m)(1), and with
respect to whom the Secretary of Labor determines and
certifies to the Attorney General that an unexpired
attestation is on file and in effect under section
212(m)(2) for the facility (as defined in section
212(m)(6)) for which the alien will perform the
services; or (ii)(a) having a residence in a foreign
country which he has no intention of abandoning who is
coming temporarily to the United States to perform
agricultural labor or services, as defined by the
Secretary of Labor in regulations and including
agricultural labor defined in section 3121(g) of the
Internal Revenue Code of 1986, agriculture as defined
in section 3(f) of the Fair Labor Standards Act of 1938
(29 U.S.C. 203(f)), and the pressing of apples for
cider on a farm, of a temporary or seasonal nature, or
(b) having a residence in a foreign country which he
has no intention of abandoning who is coming
temporarily to the United States to perform other
temporary service or labor if unemployed persons
capable of performing such service or labor cannot be
found in this country, but this clause shall not apply
to graduates of medical schools coming to the United
States to perform services as members of the medical
profession; or (iii) having a residence in a foreign
country which he has no intention of abandoning who is
coming temporarily to the United States as a trainee,
other than to receive graduate medical education or
training, in a training program that is not designed
primarily to provide productive employment; and the
alien spouse and minor children of any such alien
specified in this paragraph if accompanying him or
following to join him;
(I) upon a basis of reciprocity, an alien who is a
bona fide representative of foreign press, radio, film,
or other foreign information media, who seeks to enter
the United States solely to engage in such vocation,
and the spouse and children of such a representative if
accompanying or following to join him;
(J) an alien having a residence in a foreign country
which he has no intention of abandoning who is a bona
fide student, scholar, trainee, teacher, professor,
research assistant, specialist, or leader in a field of
specialized knowledge or skill, or other person of
similar description, who is coming temporarily to the
United States as a participant in a program designated
by the Director of the United States Information
Agency, for the purpose of teaching, instructing or
lecturing, studying, observing, conducting research,
consulting, demonstrating special skills, or receiving
training and who, if he is coming to the United States
to participate in a program under which he will receive
graduate medical education or training, also meets the
requirements of section 212(j), and the alien spouse
and minor children of any such alien if accompanying
him or following to join him;
(K) subject to subsections (d) and (p) of section
214, an alien who--
(i) is the fiancee or fiance of a citizen of
the United States (other than a citizen
described in section 204(a)(1)(A)(viii)(I)) and
who seeks to enter the United States solely to
conclude a valid marriage with the petitioner
within ninety days after admission;
(ii) has concluded a valid marriage with a
citizen of the United States (other than a
citizen described in section
204(a)(1)(A)(viii)(I)) who is the petitioner,
is the beneficiary of a petition to accord a
status under section 201(b)(2)(A)(i) that was
filed under section 204 by the petitioner, and
seeks to enter the United States to await the
approval of such petition and the availability
to the alien of an immigrant visa; or
(iii) is the minor child of an alien
described in clause (i) or (ii) and is
accompanying, or following to join, the alien;
(L) subject to section 214(c)(2), an alien who,
within 3 years preceding the time of his application
for admission into the United States, has been employed
continuously for one year by a firm or corporation or
other legal entity or an affiliate or subsidiary
thereof and who seeks to enter the United States
temporarily in order to continue to render his services
to the same employer or a subsidiary or affiliate
thereof in a capacity that is managerial, executive, or
involves specialized knowledge, and the alien spouse
and minor children of any such alien if accompanying
him or following to join him;
(M)(i) an alien having a residence in a foreign
country which he has no intention of abandoning who
seeks to enter the United States temporarily and solely
for the purpose of pursuing a full course of study at
an established vocational or other recognized
nonacademic institution (other than in a language
training program) in the United States particularly
designated by him and approved by the Attorney General,
after consultation with the Secretary of Education,
which institution shall have agreed to report to the
Attorney General the termination of attendance of each
nonimmigrant nonacademic student and if any such
institution fails to make reports promptly the approval
shall be withdrawn, (ii) the alien spouse and minor
children of any alien described in clause (i) if
accompanying or following to join such an alien, and
(iii) an alien who is a national of Canada or Mexico,
who maintains actual residence and place of abode in
the country of nationality, who is described in clause
(i) except that the alien's course of study may be full
or part-time, and who commutes to the United States
institution or place of study from Canada or Mexico;
(N)(i) the parent of an alien accorded the status of
special immigrant under paragraph (27)(I)(i) (or under
analogous authority under paragraph (27)(L)), but only
if and while the alien is a child, or (ii) a child of
such parent or of an alien accorded the status of a
special immigrant under clause (ii), (iii), or (iv) of
paragraph (27)(I) (or under analogous authority under
paragraph (27)(L));
(O) an alien who--
(i) has extraordinary ability in the
sciences, arts, education, business, or
athletics which has been demonstrated by
sustained national or international acclaim or,
with regard to motion picture and television
productions a demonstrated record of
extraordinary achievement, and whose
achievements have been recognized in the field
through extensive documentation, and seeks to
enter the United States to continue work in the
area of extraordinary ability; or
(ii)(I) seeks to enter the United States
temporarily and solely for the purpose of
accompanying and assisting in the artistic or
athletic performance by an alien who is
admitted under clause (i) for a specific event
or events,
(II) is an integral part of such actual
performance,
(III)(a) has critical skills and experience
with such alien which are not of a general
nature and which cannot be performed by other
individuals, or (b) in the case of a motion
picture or television production, has skills
and experience with such alien which are not of
a general nature and which are critical either
based on a pre-existing longstanding working
relationship or, with respect to the specific
production, because significant production
(including pre- and post-production work) will
take place both inside and outside the United
States and the continuing participation of the
alien is essential to the successful completion
of the production, and
(IV) has a foreign residence which the alien
has no intention of abandoning; or
(iii) is the alien spouse or child of an
alien described in clause (i) or (ii) and is
accompanying, or following to join, the alien;
(P) an alien having a foreign residence which the
alien has no intention of abandoning who--
(i)(a) is described in section 214(c)(4)(A)
(relating to athletes), or (b) is described in
section 214(c)(4)(B) (relating to entertainment
groups);
(ii)(I) performs as an artist or entertainer,
individually or as part of a group, or is an
integral part of the performance of such a
group, and
(II) seeks to enter the United States
temporarily and solely for the purpose of
performing as such an artist or entertainer or
with such a group under a reciprocal exchange
program which is between an organization or
organizations in the United States and an
organization or organizations in one or more
foreign states and which provides for the
temporary exchange of artists and entertainers;
(iii)(I) performs as an artist or
entertainer, individually or as part of a
group, or is an integral part of the
performance of such a group, and
(II) seeks to enter the United States
temporarily and solely to perform, teach, or
coach as such an artist or entertainer or with
such a group under a commercial or
noncommercial program that is culturally
unique; or
(iv) is the spouse or child of an alien
described in clause (i), (ii), or (iii) and is
accompanying, or following to join, the alien;
(Q)(i) an alien having a residence in a foreign
country which he has no intention of abandoning who is
coming temporarily (for a period not to exceed 15
months) to the United States as a participant in an
international cultural exchange program approved by the
Secretary of Homeland Security for the purpose of
providing practical training, employment, and the
sharing of the history, culture, and traditions of the
country of the alien's nationality and who will be
employed under the same wages and working conditions as
domestic workers; or (ii)(I) an alien citizen of the
United Kingdom or the Republic of Ireland, 21 to 35
years of age, unemployed for not less than 12 months,
and having a residence for not less than 18 months in
Northern Ireland, or the counties of Louth, Monaghan,
Cavan, Leitrim, Sligo, and Donegal within the Republic
of Ireland, which the alien has no intention of
abandoning who is coming temporarily (for a period not
to exceed 24 months) to the United States as a
participant in a cultural and training program approved
by the Secretary of State and the Secretary of Homeland
Security under section 2(a) of the Irish Peace Process
Cultural and Training Program Act of 1998 for the
purpose of providing practical training, employment,
and the experience of coexistence and conflict
resolution in a diverse society, and (II) the alien
spouse and minor children of any such alien if
accompanying the alien or following to join the alien;
(R) an alien, and the spouse and children of the
alien if accompanying or following to join the alien,
who--
(i) for the 2 years immediately preceding the
time of application for admission, has been a
member of a religious denomination having a
bona fide nonprofit, religious organization in
the United States; and
(ii) seeks to enter the United States for a
period not to exceed 5 years to perform the
work described in subclause (I), (II), or (III)
of paragraph (27)(C)(ii);
(S) subject to section 214(k), an alien--
(i) who the Attorney General determines--
(I) is in possession of critical
reliable information concerning a
criminal organization or enterprise;
(II) is willing to supply or has
supplied such information to Federal or
State law enforcement authorities or a
Federal or State court; and
(III) whose presence in the United
States the Attorney General determines
is essential to the success of an
authorized criminal investigation or
the successful prosecution of an
individual involved in the criminal
organization or enterprise; or
(ii) who the Secretary of State and the
Attorney General jointly determine--
(I) is in possession of critical
reliable information concerning a
terrorist organization, enterprise, or
operation;
(II) is willing to supply or has
supplied such information to Federal
law enforcement authorities or a
Federal court;
(III) will be or has been placed in
danger as a result of providing such
information; and
(IV) is eligible to receive a reward
under section 36(a) of the State
Department Basic Authorities Act of
1956,
and, if the Attorney General (or with respect to clause
(ii), the Secretary of State and the Attorney General
jointly) considers it to be appropriate, the spouse,
married and unmarried sons and daughters, and parents
of an alien described in clause (i) or (ii) if
accompanying, or following to join, the alien;
(T)(i) subject to section 214(o), an alien who the
Secretary of Homeland Security, or in the case of
subclause (III)(aa) the Secretary of Homeland Security,
in consultation with the Attorney General, determines--
(I) is or has been a victim of a
severe form of trafficking in persons,
as defined in section 103 of the
Trafficking Victims Protection Act of
2000;
(II) is physically present in the
United States, American Samoa, or the
Commonwealth of the Northern Mariana
Islands, or at a port of entry thereto,
on account of such trafficking,
including physical presence on account
of the alien having been allowed entry
into the United States for
participation in investigative or
judicial processes associated with an
act or a perpetrator of trafficking;
(III)(aa) has complied with any
reasonable request for assistance in
the Federal, State or local
investigation or prosecution of acts of
trafficking or the investigation of
crime where acts of trafficking are at
least one central reason for the
commission of that crime;
(bb) in consultation with the Attorney
General, as appropriate, is unable to cooperate
with a request described in item (aa) due to
physical or psychological trauma; or
(cc) has not attained 18 years of
age; and
(IV) the alien would suffer extreme
hardship involving unusual and severe
harm upon removal; and
(ii) if accompanying, or following to join, the alien
described in clause (i)--
(I) in the case of an alien described in
clause (i) who is under 21 years of age, the
spouse, children, unmarried siblings under 18
years of age on the date on which such alien
applied for status under such clause, and
parents of such alien;
(II) in the case of an alien described in
clause (i) who is 21 years of age or older, the
spouse and children of such alien; or
(III) any parent or unmarried sibling under
18 years of age of an alien described in
subclause (I) or (II) who the Secretary of
Homeland Security, in consultation with the law
enforcement officer investigating a severe form
of trafficking, determines faces a present
danger of retaliation as a result of the
alien's escape from the severe form of
trafficking or cooperation with law
enforcement.
(U)(i) subject to section 214(p), an alien who files
a petition for status under this subparagraph, if the
Secretary of Homeland Security determines that--
(I) the alien has suffered
substantial physical or mental abuse as
a result of having been a victim of
criminal activity described in clause
(iii);
(II) the alien (or in the case of an
alien child under the age of 16, the
parent, guardian, or next friend of the
alien) possesses information concerning
criminal activity described in clause
(iii);
(III) the alien (or in the case of an
alien child under the age of 16, the
parent, guardian, or next friend of the
alien) has been helpful, is being
helpful, or is likely to be helpful to
a Federal, State, or local law
enforcement official, to a Federal,
State, or local prosecutor, to a
Federal or State judge, to the Service,
or to other Federal, State, or local
authorities investigating or
prosecuting criminal activity described
in clause (iii); and
(IV) the criminal activity described
in clause (iii) violated the laws of
the United States or occurred in the
United States (including in Indian
country and military installations) or
the territories and possessions of the
United States;
(ii) if accompanying, or following to join, the alien
described in clause (i)--
(I) in the case of an alien described in
clause (i) who is under 21 years of age, the
spouse, children, unmarried siblings under 18
years of age on the date on which such alien
applied for status under such clause, and
parents of such alien; or
(II) in the case of an alien described in
clause (i) who is 21 years of age or older, the
spouse and children of such alien; and
(iii) the criminal activity referred to in
this clause is that involving one or more of
the following or any similar activity in
violation of Federal, State, or local criminal
law: rape; torture; trafficking; incest;
domestic violence; sexual assault; abusive
sexual contact; prostitution; sexual
exploitation; stalking; female genital
mutilation; being held hostage; peonage;
involuntary servitude; slave trade; kidnapping;
abduction; unlawful criminal restraint; false
imprisonment; blackmail; extortion;
manslaughter; murder; felonious assault;
witness tampering; obstruction of justice;
perjury; fraud in foreign labor contracting (as
defined in section 1351 of title 18, United
States Code); or attempt, conspiracy, or
solicitation to commit any of the above
mentioned crimes; or
(V) subject to section 214(q), an alien who is the
beneficiary (including a child of the principal alien,
if eligible to receive a visa under section 203(d)) of
a petition to accord a status under section
203(a)(2)(A) that was filed with the Attorney General
under section 204 on or before the date of the
enactment of the Legal Immigration Family Equity Act,
if--
(i) such petition has been pending for 3
years or more; or
(ii) such petition has been approved, 3 years
or more have elapsed since such filing date,
and--
(I) an immigrant visa is not
immediately available to the alien
because of a waiting list of applicants
for visas under section 203(a)(2)(A);
or
(II) the alien's application for an
immigrant visa, or the alien's
application for adjustment of status
under section 245, pursuant to the
approval of such petition, remains
pending.
(16) The term ``immigrant visa'' means an immigrant visa
required by this Act and properly issued by a consular officer
at his office outside of the United States to an eligible
immigrant under the provisions of this Act.
(17) The term ``immigration laws'' includes this Act and all
laws, conventions, and treaties of the United States relating
to the immigration, exclusion, deportation, expulsion or
removal of aliens.
(18) The term ``immigration officer'' means any employee or
class of employees of the Service or of the United States
designated by the Attorney General, individually or by
regulation, to perform the functions of an immigration officer
specified by this Act or any section thereof.
(19) The term ``ineligible to citizenship,'' when used in
reference to any individual, means, notwithstanding the
provisions of any treaty relating to military service, an
individual who is, or was at any time, permanently debarred
from becoming a citizen of the United States under section 3(a)
of the Selective Training and Service Act of 1940, as amended
(54 Stat. 885; 55 Stat. 844), or under section 4(a) of the
Selective Service Act of 1948, as amended (62 Stat. 605; 65
Stat. 76), or under any section of this Act, or any other Act,
or under any law amendatory of, supplementary to, or in
substitution for, any of such sections or Acts.
(20) The term ``lawfully admitted for permanent residence''
means the status of having been lawfully accorded the privilege
of residing permanently in the United States as an immigrant in
accordance with the immigration laws, such status not having
changed.
(21) The term ``national'' means a person owing permanent
allegiance to a state.
(22) The term ``national of the United States'' means (A) a
citizen of the United States, or (B) a person who, though not a
citizen of the United States, owes permanent allegiance to the
United States.
(23) The term ``naturalization'' means the conferring of
nationality of a state upon a person after birth, by any means
whatsoever.
(25) The term ``noncombatant service'' shall not include
service in which the individual is not subject to military
discipline, court martial, or does not wear the uniform of any
branch of the armed forces.
(26) The term ``nonimmigrant visa'' means a visa properly
issued to an alien as an eligible nonimmigrant by a competent
officer as provided in this Act.
(27) The term ``special immigrant'' means--
(A) an immigrant, lawfully admitted for permanent
residence, who is returning from a temporary visit
abroad;
(B) an immigrant who was a citizen of the United
States and may, under section 324(a) or 327 of title
III, apply for reacquisition of citizenship;
(C) an immigrant, and the immigrant's spouse and
children if accompanying or following to join the
immigrant, who--
(i) for at least 2 years immediately
preceding the time of application for
admission, has been a member of a religious
denomination having a bona fide nonprofit,
religious organization in the United States;
(ii) seeks to enter the United States--
(I) solely for the purpose of
carrying on the vocation of a minister
of that religious denomination,
(II) before September 30, 2015, in
order to work for the organization at
the request of the organization in a
professional capacity in a religious
vocation or occupation, or
(III) before September 30, 2015, in
order to work for the organization (or
for a bona fide organization which is
affiliated with the religious
denomination and is exempt from
taxation as an organization described
in section 501(c)(3) of the Internal
Revenue Code of 1986) at the request of
the organization in a religious
vocation or occupation; and
(iii) has been carrying on such vocation,
professional work, or other work continuously
for at least the 2-year period described in
clause (i);
(D) an immigrant who--
(i) is an employee, or an honorably retired
former employee, of the United States
Government abroad, or of the American Institute
in Taiwan, and who has performed faithful
service for a total of fifteen years, or more,
and his accompanying spouse and children:
Provided, That the principal officer of a
Foreign Service establishment (or, in the case
of the American Institute in Taiwan, the
Director thereof), in his discretion, shall
have recommended the granting of special
immigrant status to such alien in exceptional
circumstances and the Secretary of State
approves such recommendation and finds that it
is in the national interest to grant such
status; or
(ii) is the surviving spouse or child of an
employee of the United States Government
abroad: Provided, That the employee performed
faithful service for a total of not less than
15 years or was killed in the line of duty;
(E) an immigrant, and his accompanying spouse and
children, who is or has been an employee of the Panama
Canal Company or Canal Zone Government before the date
on which the Panama Canal Treaty of 1977 (as described
in section 3 (a)(1) of the Panama Canal Act of 1979)
enters into force, who was resident in the Canal Zone
on the effective date of the exchange of instruments of
ratification of such Treaty, and who has performed
faithful service as such an employee for one year or
more;
(F) an immigrant, and his accompanying spouse and
children, who is a Panamanian national and (i) who,
before the date on which such Panama Canal Treaty of
1977 enters into force, has been honorably retired from
United States Government employment in the Canal Zone
with a total of 15 years or more of faithful service,
or (ii) who on the date on which such Treaty enters
into force, has been employed by the United States
Government in the Canal Zone with a total of 15 years
or more of faithful service and who subsequently is
honorably retired from such employment or continues to
be employed by the United States Government in an area
of the former Canal Zone or continues to be employed by
the United States Government in an area of the former
Canal Zone;
(G) an immigrant, and his accompanying spouse and
children, who was an employee of the Panama Canal
Company or Canal Zone government on the effective date
of the exchange of instruments of ratification of such
Panama Canal Treaty of 1977, who has performed faithful
service for five years or more as such an employee, and
whose personal safety, or the personal safety of whose
spouse or children, as a direct result of such Treaty,
is reasonably placed in danger because of the special
nature of any of that employment;
(H) an immigrant, and his accompanying spouse and
children, who--
(i) has graduated from a medical school or
has qualified to practice medicine in a foreign
state,
(ii) was fully and permanently licensed to
practice medicine in a State on January 9,
1978, and was practicing medicine in a State on
that date,
(iii) entered the United States as a
nonimmigrant under subsection (a)(15)(H) or
(a)(15)(J) before January 10, 1978, and
(iv) has been continuously present in the
United States in the practice or study of
medicine since the date of such entry;
(I)(i) an immigrant who is the unmarried son or
daughter of an officer or employee, or of a former
officer or employee, of an international organization
described in paragraph (15)(G)(i), and who (I) while
maintaining the status of a nonimmigrant under
paragraph (15)(G)(iv) or paragraph (15)(N), has resided
and been physically present in the United States for
periods totaling at least one-half of the seven years
before the date of application for a visa or for
adjustment of status to a status under this
subparagraph and for a period or periods aggregating at
least seven years between the ages of five and 21
years, and (II) applies for a visa or adjustment of
status under this subparagraph no later than his
twenty-fifth birthday or six months after the date of
the enactment of the Immigration Technical Corrections
Act of 1988, whichever is later;
(ii) an immigrant who is the surviving spouse of a
deceased officer or employee of such an international
organization, and who (I) while maintaining the status
of a nonimmigrant under paragraph (15)(G)(iv) or
paragraph (15)(N), has resided and been physically
present in the United States for periods totaling at
least one-half of the seven years before the date of
application for a visa or for adjustment of status to a
status under this subparagraph and for a period or
periods aggregating at least 15 years before the date
of the death of such officer or employee, and (II)
files a petition for status under this subparagraph no
later than six months after the date of such death or
six months after the date of such death or six months
after the date of the enactment of the Immigration
Technical Corrections Act of 1988, whichever is later;
(iii) an immigrant who is a retired officer or
employee of such an international organization, and who
(I) while maintaining the status of a nonimmigrant
under paragraph (15)(G)(iv), has resided and been
physically present in the United States for periods
totaling at least one-half of the seven years before
the date of application for a visa or for adjustment of
status to a status under this subparagraph and for a
period or periods aggregating at least 15 years before
the date of the officer or employee's retirement from
any such international organization, and (II) files a
petition for status under this subparagraph no later
than six months after the date of such retirement or
six months after the date of enactment of the
Immigration and Nationality Technical Corrections Act
of 1994, whichever is later; or
(iv) an immigrant who is the spouse of a retired
officer or employee accorded the status of special
immigrant under clause (iii), accompanying or following
to join such retired officer or employee as a member of
his immediate family;
(J) an immigrant who is present in the United
States--
(i) who has been declared dependent on a
juvenile court located in the United States or
whom such a court has legally committed to, or
placed under the custody of, an agency or
department of a State, or an individual or
entity appointed by a State or juvenile court
located in the United States, and whose
reunification with 1 or both of the immigrant's
parents is not viable due to abuse, neglect,
abandonment, or a similar basis found under
State law;
(ii) for whom it has been determined in
administrative or judicial proceedings that it
would not be in the alien's best interest to be
returned to the alien's or parent's previous
country of nationality or country of last
habitual residence; and
(iii) in whose case the Secretary of Homeland
Security consents to the grant of special
immigrant juvenile status, except that--
(I) no juvenile court has
jurisdiction to determine the custody
status or placement of an alien in the
custody of the Secretary of Health and
Human Services unless the Secretary of
Health and Human Services specifically
consents to such jurisdiction; and
(II) no natural parent or prior
adoptive parent of any alien provided
special immigrant status under this
subparagraph shall thereafter, by
virtue of such parentage, be accorded
any right, privilege, or status under
this Act;
(K) an immigrant who has served honorably on active
duty in the Armed Forces of the United States after
October 15, 1978, and after original lawful enlistment
outside the United States (under a treaty or agreement
in effect on the date of the enactment of this
subparagraph) for a period or periods aggregating--
(i) 12 years and who, if separated from such
service, was never separated except under
honorable conditions, or
(ii) 6 years, in the case of an immigrant who
is on active duty at the time of seeking
special immigrant status under this
subparagraph and who has reenlisted to incur a
total active duty service obligation of at
least 12 years,
and the spouse or child of any such immigrant if
accompanying or following to join the immigrant, but
only if the executive department under which the
immigrant serves or served recommends the granting of
special immigrant status to the immigrant;
(L) an immigrant who would be described in clause
(i), (ii), (iii), or (iv) of subparagraph (I) if any
reference in such a clause--
(i) to an international organization
described in paragraph (15)(G)(i) were treated
as a reference to the North Atlantic Treaty
Organization (NATO);
(ii) to a nonimmigrant under paragraph
(15)(G)(iv) were treated as a reference to a
nonimmigrant classifiable under NATO-6 (as a
member of a civilian component accompanying a
force entering in accordance with the
provisions of the NATO Status-of-Forces
Agreement, a member of a civilian component
attached to or employed by an Allied
Headquarters under the ``Protocol on the Status
of International Military Headquarters'' set up
pursuant to the North Atlantic Treaty, or as a
dependent); and
(iii) to the Immigration Technical
Corrections Act of 1988 or to the Immigration
and Nationality Technical Corrections Act of
1994 were a reference to the American
Competitiveness and Workforce Improvement Act
of 1998
(M) subject to the numerical limitations of section
203(b)(4), an immigrant who seeks to enter the United
States to work as a broadcaster in the United States
for the International Broadcasting Bureau of the
Broadcasting Board of Governors, or for a grantee of
the Broadcasting Board of Governors, and the
immigrant's accompanying spouse and children.
(28) The term ``organization'' means, but is not limited to,
an organization, corporation, company, partnership,
association, trust, foundation or fund; and includes a group of
persons, whether or not incorporated, permanently or
temporarily associated together with joint action on any
subject or subjects.
(29) The term ``outlying possessions of the United States''
means American Samoa and Swains Island.
(30) The term ``passport'' means any travel document issued
by competent authority showing the bearer's origin, identity,
and nationality if any, which is valid for the admission of the
bearer into a foreign country.
(31) The term ``permanent'' means a relationship of
continuing or lasting nature, as distinguished from temporary,
but a relationship may be permanent even though it is one that
may be dissolved eventually at the instance either of the
United States or of the individual, in accordance with law.
(32) The term ``profession'' shall include but not be limited
to architects, engineers, lawyers, physicians, surgeons, and
teachers in elementary or secondary schools, colleges,
academies, or seminaries.
(33) The term ``residence'' means the place of general abode;
the place of general abode of a person means his principal,
actual dwelling place in fact, without regard to intent.
(34) The term ``Service'' means the Immigration and
Naturalization Service of the Department of Justice.
(35) The term ``spouse'', ``wife'', or ``husband'' does not
include a spouse, wife, or husband by reason of any marriage
ceremony where the contracting parties thereto are not
physically present in the presence of each other, unless the
marriage shall have been consummated.
(36) The term ``State'' includes the District of Columbia,
Puerto Rico, Guam, the Virgin Islands of the United States, and
the Commonwealth of the Northern Mariana Islands.
(37) The term ``totalitarian party'' means an organization
which advocates the establishment in the United States of a
totalitarian dictatorship or totalitarianism. The terms
``totalitarian dictatorship'' and ``totalitarianism'' mean and
refer to systems of government not representative in fact,
characterized by (A) the existence of a single political party,
organized on a dictatorial basis, with so close an identity
between such party and its policies and the governmental
policies of the country in which it exists, that the party and
the government constitute an indistinguishable unit, and (B)
the forcible suppression of opposition to such party.
(38) The term ``United States'', except as otherwise
specifically herein provided, when used in a geographical
sense, means the continental United States, Alaska, Hawaii,
Puerto Rico, Guam, the Virgin Islands of the United States, and
the Commonwealth of the Northern Mariana Islands.
(39) The term ``unmarried'', when used in reference to any
individual as of any time, means an individual who at such time
is not married, whether or not previously married.
(40) The term ``world communism'' means a revolutionary
movement, the purpose of which is to establish eventually a
Communist totalitarian dictatorship in any or all the countries
of the world through the medium of an internationally
coordinated Communist political movement.
(41) The term ``graduates of a medical school'' means aliens
who have graduated from a medical school or who have qualified
to practice medicine in a foreign state, other than such aliens
who are of national or international renown in the field of
medicine.
(42) The term ``refugee'' means (A) any person who is outside
any country of such person's nationality or, in the case of a
person having no nationality, is outside any country in which
such person last habitually resided, and who is unable or
unwilling to return to, and is unable or unwilling to avail
himself or herself of the protection of, that country because
of persecution or a well-founded fear of persecution on account
of race, religion, nationality, membership in a particular
social group, or political opinion, or (B) in such
circumstances as the President after appropriate consultation
(as defined in section 207(e) of this Act) may specify, any
person who is within the country of such person's nationality
or, in the case of a person having no nationality, within the
country in which such person is habitually residing, and who is
persecuted or who has a well-founded fear of persecution on
account of race, religion, nationality, membership in a
particular social group, or political opinion. The term
``refugee'' does not include any person who ordered, incited,
assisted, or otherwise participated in the persecution of any
person on account of race, religion, nationality, membership in
a particular social group, or political opinion. For purposes
of determinations under this Act, a person who has been forced
to abort a pregnancy or to undergo involuntary sterilization,
or who has been persecuted for failure or refusal to undergo
such a procedure or for other resistance to a coercive
population control program, shall be deemed to have been
persecuted on account of political opinion, and a person who
has a well founded fear that he or she will be forced to
undergo such a procedure or subject to persecution for such
failure, refusal, or resistance shall be deemed to have a well
founded fear of persecution on account of political opinion.
(43) The term ``aggravated felony'' means--
(A) murder, rape, or sexual abuse of a minor;
(B) illicit trafficking in a controlled substance (as
defined in section 102 of the Controlled Substances
Act), including a drug trafficking crime (as defined in
section 924(c) of title 18, United States Code);
(C) illicit trafficking in firearms or destructive
devices (as defined in section 921 of title 18, United
States Code) or in explosive materials (as defined in
section 841(c) of that title);
(D) an offense described in section 1956 of title 18,
United States Code (relating to laundering of monetary
instruments) or section 1957 of that title (relating to
engaging in monetary transactions in property derived
from specific unlawful activity) if the amount of the
funds exceeded $10,000;
(E) an offense described in--
(i) section 842 (h) or (i) of title 18,
United States Code, or section 844 (d), (e),
(f), (g), (h), or (i) of that title (relating
to explosive materials offenses);
(ii) section 922(g) (1), (2), (3), (4), or
(5), (j), (n), (o), (p), or (r) or 924 (b) or
(h) of title 18, United States Code (relating
to firearms offenses); or
(iii) section 5861 of the Internal Revenue
Code of 1986 (relating to firearms offenses);
(F) a crime of violence (as defined in section 16 of
title 18, United States Code, but not including a
purely political offense) for which the term of
imprisonment at least one year;
(G) a theft offense (including receipt of stolen
property) or burglary offense for which the term of
imprisonment imposed (regardless of any suspension of
such imprisonment) at least one year;
(H) an offense described in section 875, 876, 877, or
1202 of title 18, United States Code (relating to the
demand for or receipt of ransom);
(I) an offense described in section 2251, 2251A, or
2252 of title 18, United States Code (relating to child
pornography);
(J) an offense described in section 1962 of title 18,
United States Code (relating to racketeer influenced
corrupt organizations), or an offense described in
section 1084 (if it is a second or subsequent offense)
or 1955 of that title (relating to gambling offenses),
for which a sentence of one year imprisonment or more
may be imposed;
(K) an offense that--
(i) relates to the owning, controlling,
managing, or supervising of a prostitution
business;
(ii) is described in section 2421, 2422, or
2423 of title 18, United States Code (relating
to transportation for the purpose of
prostitution) if committed for commercial
advantage; or
(iii) is described in any of sections 1581-
1585 or 1588-1591 of title 18, United States
Code (relating to peonage, slavery, involuntary
servitude, and trafficking in persons);
(L) an offense described in--
(i) section 793 (relating to gathering or
transmitting national defense information), 798
(relating to disclosure of classified
information), 2153 (relating to sabotage) or
2381 or 2382 (relating to treason) of title 18,
United States Code;
(ii) section 601 of the National Security Act
of 1947 (50 U.S.C. 421) (relating to protecting
the identity of undercover intelligence
agents); or
(iii) section 601 of the National Security
Act of 1947 (relating to protecting the
identity of undercover agents);
(M) an offense that--
(i) involves fraud or deceit in which the
loss to the victim or victims exceeds $10,000;
or
(ii) is described in section 7201 of the
Internal Revenue Code of 1986 (relating to tax
evasion) in which the revenue loss to the
Government exceeds $10,000;
(N) an offense described in paragraph (1)(A) or (2)
of section 274(a) (relating to alien smuggling), except
in the case of a first offense for which the alien has
affirmatively shown that the alien committed the
offense for the purpose of assisting, abetting, or
aiding only the alien's spouse, child, or parent (and
no other individual) to violate a provision of this Act
(O) an offense described in section 275(a) or 276
committed by an alien who was previously deported on
the basis of a conviction for an offense described in
another subparagraph of this paragraph;
(P) an offense (i) which either is falsely making,
forging, counterfeiting, mutilating, or altering a
passport or instrument in violation of section 1543 of
title 18, United States Code, or is described in
section 1546(a) of such title (relating to document
fraud) and (ii) for which the term of imprisonment
imposed (regardless of any suspension of such
imprisonment) is at least 12 months, except in the case
of a first offense for which the alien has
affirmatively shown that the alien committed the
offense for the purpose of assisting, abetting, or
aiding only the alien's spouse, child, or parent (and
no other individual) to violate a provision of this
Act;
(Q) an offense relating to a failure to appear by a
defendant for service of sentence if the underlying
offense is punishable by imprisonment for a term of 5
years or more;
(R) an offense relating to commercial bribery,
counterfeiting, forgery, or trafficking in vehicles the
identification numbers of which have been altered for
which the term of imprisonment is at least one year;
(S) an offense relating to obstruction of justice,
perjury or subornation of perjury, or bribery of a
witness, for which the term of imprisonment is at least
one year;
(T) an offense relating to a failure to appear before
a court pursuant to a court order to answer to or
dispose of a charge of a felony for which a sentence of
2 years' imprisonment or more may be imposed; and
(U) an attempt or conspiracy to commit an offense
described in this paragraph.
The term applies to an offense described in this paragraph
whether in violation of Federal or State law and applies to
such an offense in violation of the law of a foreign country
for which the term of imprisonment was completed within the
previous 15 years. Notwithstanding any other provision of law
(including any effective date), the term applies regardless of
whether the conviction was entered before, on, or after the
date of enactment of this paragraph.
(44)(A) The term ``managerial capacity'' means an assignment
within an organization in which the employee primarily--
(i) manages the organization, or a department,
subdivision, function, or component of the
organization;
(ii) supervises and controls the work of other
supervisory, professional, or managerial employees, or
manages an essential function within the organization,
or a department or subdivision of the organization;
(iii) if another employee or other employees are
directly supervised, has the authority to hire and fire
or recommend those as well as other personnel actions
(such as promotion and leave authorization) or, if no
other employee is directly supervised, functions at a
senior level within the organizational hierarchy or
with respect to the function managed; and
(iv) exercises discretion over the day-to-day
operations of the activity or function for which the
employee has authority.
A first-line supervisor is not considered to be acting in a
managerial capacity merely by virtue of the supervisor's
supervisory duties unless the employees supervised are
professional.
(B) The term ``executive capacity'' means an assignment
within an organization in which the employee primarily--
(i) directs the management of the organization or a
major component or function of the organization;
(ii) establishes the goals and policies of the
organization, component, or function;
(iii) exercises wide latitude in discretionary
decision-making; and
(iv) receives only general supervision or direction
from higher level executives, the board of directors,
or stockholders of the organization.
(C) If staffing levels are used as a factor in determining
whether an individual is acting in a managerial or executive
capacity, the Attorney General shall take into account the
reasonable needs of the organization, component, or function in
light of the overall purpose and stage of development of the
organization, component, or function. An individual shall not
be considered to be acting in a managerial or executive
capacity (as previously defined) merely on the basis of the
number of employees that the individual supervises or has
supervised or directs or has directed.
(45) The term ``substantial'' means, for purposes of
paragraph (15)(E) with reference to trade or capital, such an
amount of trade or capital as is established by the Secretary
of State, after consultation with appropriate agencies of
Government.
(46) The term ``extraordinary ability'' means, for purposes
of section 101(a)(15)(O)(i), in the case of the arts,
distinction.
(47)(A) The term ``order of deportation'' means the order of
the special inquiry officer, or other such administrative
officer to whom the Attorney General has delegated the
responsibility for determining whether an alien is deportable,
concluding that the alien is deportable or ordering
deportation.
(B) The order described under subparagraph (A) shall become
final upon the earlier of--
(i) a determination by the Board of Immigration
Appeals affirming such order; or
(ii) the expiration of the period in which the alien
is permitted to seek review of such order by the Board
of Immigration Appeals.
(48)(A) The term ``conviction'' means, with respect to an
alien, a formal judgment of guilt of the alien entered by a
court or, if adjudication of guilt has been withheld, where--
(i) a judge or jury has found the alien guilty or the
alien has entered a plea of guilty or nolo contendere
or has admitted sufficient facts to warrant a finding
of guilt, and
(ii) the judge has ordered some form of punishment,
penalty, or restraint on the alien's liberty to be
imposed.
(B) Any reference to a term of imprisonment or a sentence
with respect to an offense is deemed to include the period of
incarceration or confinement ordered by a court of law
regardless of any suspension of the imposition or execution of
that imprisonment or sentence in whole or in part.
(49) The term ``stowaway'' means any alien who obtains
transportation without the consent of the owner, charterer,
master or person in command of any vessel or aircraft through
concealment aboard such vessel or aircraft. A passenger who
boards with a valid ticket is not to be considered a stowaway.
(50) The term ``intended spouse'' means any alien who meets
the criteria set forth in section
204(a)(1)(A)(iii)(II)(aa)(BB), 204(a)(1)(B)(ii)(II)(aa)(BB), or
240A(b)(2)(A)(i)(III).
(51) The term ``VAWA self-petitioner'' means an
alien, or a child of the alien, who qualifies for
relief under--
(A) clause (iii), (iv), or (vii) of section
204(a)(1)(A);
(B) clause (ii) or (iii) of section
204(a)(1)(B);
(C) section 216(c)(4)(C);
(D) the first section of Public Law 89-732 (8
U.S.C. 1255 note) (commonly known as the Cuban
Adjustment Act) as a child or spouse who has
been battered or subjected to extreme cruelty;
(E) section 902(d)(1)(B) of the Haitian
Refugee Immigration Fairness Act of 1998 (8
U.S.C. 1255 note);
(F) section 202(d)(1) of the Nicaraguan
Adjustment and Central American Relief Act; or
(G) section 309 of the Illegal Immigration
Reform and Immigrant Responsibility Act of 1996
(division C of Public Law 104-208).
(52) The term ``accredited language training program'' means
a language training program that is accredited by an
accrediting agency recognized by the Secretary of Education.
(b) As used in titles I and II--
(1) The term ``child'' means an unmarried person under
twenty-one years of age who is--
(A) a child born in wedlock;
(B) a stepchild, whether or not born out of wedlock,
provided the child had not reached the age of eighteen
years at the time the marriage creating the status of
stepchild occurred;
(C) a child legitimated under the law of the child's
residence or domicile, or under the law of the father's
residence or domicile, whether in or outside the United
States, if such legitimation takes place before the
child reaches the age of eighteen years and the child
is in the legal custody of the legitimating parent or
parents at the time of such legitimation;
(D) a child born out of wedlock, by, through whom, or
on whose behalf a status, privilege, or benefit is
sought by virtue of the relationship of the child to
its natural mother or to its natural father if the
father has or had a bona fide parent-child relationship
with the person;
(E)(i) a child adopted while under the age of sixteen
years if the child has been in the legal custody of,
and has resided with, the adopting parent or parents
for at least two years or if the child has been
battered or subject to extreme cruelty by the adopting
parent or by a family member of the adopting parent
residing in the same household: Provided, That no
natural parent of any such adopted child shall
thereafter, by virtue of such parentage, be accorded
any right, privilege, or status under this Act; or
(ii) subject to the same proviso as in clause (i), a
child who: (I) is a natural sibling of a child
described in clause (i) or subparagraph (F)(i); (II)
was adopted by the adoptive parent or parents of the
sibling described in such clause or subparagraph; and
(III) is otherwise described in clause (i), except that
the child was adopted while under the age of 18 years;
or
(F)(i) a child, under the age of sixteen at the time
a petition is filed in his behalf to accord a
classification as an immediate relative under section
201(b), who is an orphan because of the death or
disappearance of, abandonment or desertion by, or
separation or loss from, both parents, or for whom the
sole or surviving parent is incapable of providing the
proper care and has in writing irrevocably released the
child for emigration and adoption; who has been adopted
abroad by a United States citizen and spouse jointly,
or by an unmarried United States citizen who is at
least 25 years of age, at least 1 of whom personally
saw and observed the child before or during the
adoption proceedings; or who is coming to the United
States for adoption by a United States citizen and
spouse jointly, or by an unmarried United States
citizen at least twenty-five years of age, who have or
has complied with the preadoption requirements, if any,
of the child's proposed residence: Provided, That the
Attorney General is satisfied that proper care will be
furnished the child if admitted to the United States:
Provided further, That no natural parent or prior
adoptive parent of any such child shall thereafter, by
virtue of such parentage, be accorded any right,
privilege, or status under this Act; or
(ii) subject to the same provisos as in clause (i), a
child who: (I) is a natural sibling of a child
described in clause (i) or subparagraph (E)(i); (II)
has been adopted abroad, or is coming to the United
States for adoption, by the adoptive parent (or
prospective adoptive parent) or parents of the sibling
described in such clause or subparagraph; and (III) is
otherwise described in clause (i), except that the
child is under the age of 18 at the time a petition is
filed in his or her behalf to accord a classification
as an immediate relative under section 201(b).
(G)(i) a child, younger than 16 years of age at the
time a petition is filed on the child's behalf to
accord a classification as an immediate relative under
section 201(b), who has been adopted in a foreign state
that is a party to the Convention on Protection of
Children and Co-operation in Respect of Intercountry
Adoption, done at The Hague on May 29, 1993, or who is
emigrating from such a foreign state to be adopted in
the United States by a United States citizen and spouse
jointly or by an unmarried United States citizen who is
at least 25 years of age, Provided, That--
(I) the Secretary of Homeland
Security is satisfied that proper care
will be furnished the child if admitted
to the United States;
(II) the child's natural parents (or
parent, in the case of a child who has
one sole or surviving parent because of
the death or disappearance of,
abandonment or desertion by, the other
parent), or other persons or
institutions that retain legal custody
of the child, have freely given their
written irrevocable consent to the
termination of their legal relationship
with the child, and to the child's
emigration and adoption;
(III) in the case of a child having
two living natural parents, the natural
parents are incapable of providing
proper care for the child;
(IV) the Secretary of Homeland
Security is satisfied that the purpose
of the adoption is to form a bona fide
parent-child relationship, and the
parent-child relationship of the child
and the natural parents has been
terminated (and in carrying out both
obligations under this subclause the
Secretary of Homeland Security may
consider whether there is a petition
pending to confer immigrant status on
one or both of such natural parents);
and
(V) in the case of a child who has
not been adopted--
(aa) the competent authority
of the foreign state has
approved the child's emigration
to the United States for the
purpose of adoption by the
prospective adoptive parent or
parents; and
(bb) the prospective adoptive
parent or parents has or have
complied with any pre-adoption
requirements of the child's
proposed residence; and
(ii) except that no natural parent or prior
adoptive parent of any such child shall
thereafter, by virtue of such parentage, be
accorded any right, privilege, or status under
this chapter; or
(iii) subject to the same provisos as in
clauses (i) and (ii), a child who--
(I) is a natural sibling of a child
described in clause (i), subparagraph
(E)(i), or subparagraph (F)(i);
(II) was adopted abroad, or is coming
to the United States for adoption, by
the adoptive parent (or prospective
adoptive parent) or parents of the
sibling described in clause (i),
subparagraph (E)(i), or subparagraph
(F)(i); and
(III) is otherwise described in
clause (i), except that the child is
younger than 18 years of age at the
time a petition is filed on his or her
behalf for classification as an
immediate relative under section
201(b).
(2) The term ``parent'', ``father'', or ``mother'' means a
parent, father, or mother only where the relationship exists by
reason of any of the circumstances set forth in (1) above,
except that, for purposes of paragraph (1)(F) (other than the
second proviso therein) in the case of a child born out of
wedlock described in paragraph (1)(D) (and not described in
paragraph (1)(C)), the term ``parent'' does not include the
natural father or the child if the father has disappeared or
abandoned or deserted the child or if the father has in writing
irrevocably released the child for emigration and adoption.
(3) The term ``person'' means an individual or an
organization.
(4) The term ``immigration judge'' means an attorney whom the
Attorney General appoints as an administrative judge within the
Executive Office for Immigration Review, qualified to conduct
specified classes of proceedings, including a hearing under
section 240. An immigration judge shall be subject to such
supervision and shall perform such duties as the Attorney
General shall prescribe, but shall not be employed by the
Immigration and Naturalization Service.
(5) The term ``adjacent islands'' includes Saint Pierre,
Miquelon, Cuba, the Dominican Republic, Haiti, Bermuda, the
Bahamas, Barbados, Jamaica, the Windward and Leeward Islands,
Trinidad, Martinique, and other British, French, and
Netherlands territory or possessions in or bordering on the
Caribbean Sea.
(c) As used in title III--
(1) The term ``child'' means an unmarried person under
twenty-one years of age and includes a child legitimated under
the law of the child's residence or domicile, or under the law
of the father's residence or domicile, whether in the United
States or elsewhere, and, except as otherwise provided in
sections 320 and 321 of title III, a child adopted in the
United States, if such legitimation or adoption takes place
before the child reaches the age of 16 years (except to the
extent that the child is described in subparagraph (E)(ii) or
(F)(ii) of subsection (b)(1)), and the child is in the legal
custody of the legitimating or adopting parent or parents at
the time of such legitimation or adoption.
(2) The terms ``parent'', ``father'', and ``mother'' include
in the case of a posthumous child a deceased parent, father,
and mother.
(e) For the purpose of this Act--
(1) The giving, loaning, or promising of support or of money
or any other thing of value to be used for advocating any
doctrine shall constitute the advocating of such doctrine; but
nothing in this paragraph shall be construed as an exclusive
definition of advocating.
(2) The giving, loaning, or promising of support or of money
or any other thing of value for any purpose to any organization
shall be presumed to constitute affiliation therewith; but
nothing in this paragraph shall be construed as an exclusive
definition of affiliation.
(3) Advocating the economic, international, and governmental
doctrines of world communism means advocating the establishment
of a totalitarian Communist dictatorship in any or all of the
countries of the world through the medium of an internationally
coordinated Communist movement.
(f) For the purposes of this Act--
No person shall be regarded as, or found to be, a person of
good moral character who, during the period for which good
moral character is required to be established, is, or was--
(1) a habitual drunkard;
(3) a member of one or more of the classes of
persons, whether inadmissible or not, described in
paragraphs (2)(D), (6)(E), and (10)(A) of section
212(a) of this Act; or subparagraphs (A) and (B) of
section 212(a)(2) and subparagraph (C) thereof of such
section [(except as such paragraph relates to a single
offense of simple possession of 30 grams or less of
marihuana)]; if the offense described therein, for
which such person was convicted or of which he admits
the commission, was committed during such period;
(4) one whose income is derived principally from
illegal gambling activities;
(5) one who has been convicted of two or more
gambling offenses committed during such period;
(6) one who has given false testimony for the purpose
of obtaining any benefits under this Act;
(7) one who during such period has been confined, as
a result of conviction, to a penal institution for an
aggregate period of one hundred and eighty days or
more, regardless of whether the offense, or offenses,
for which he has been confined were committed within or
without such period;
(8) one who at any time has been convicted of an
aggravated felony (as defined in subsection (a)(43));
or
(9) one who at any time has engaged in conduct
described in section 212(a)(3)(E) (relating to
assistance in Nazi persecution, participation in
genocide, or commission of acts of torture or
extrajudicial killings) or 212(a)(2)(G) (relating to
severe violations of religious freedom).
The fact that any person is not within any of the foregoing
classes shall not preclude a finding that for other reasons
such person is or was not of good moral character. In the case
of an alien who makes a false statement or claim of
citizenship, or who registers to vote or votes in a Federal,
State, or local election (including an initiative, recall, or
referendum) in violation of a lawful restriction of such
registration or voting to citizens, if each natural parent of
the alien (or, in the case of an adopted alien, each adoptive
parent of the alien) is or was a citizen (whether by birth or
naturalization), the alien permanently resided in the United
States prior to attaining the age of 16, and the alien
reasonably believed at the time of such statement, claim, or
violation that he or she was a citizen, no finding that the
alien is, or was, not of good moral character may be made based
on it.
(g) For the purposes of this Act any alien ordered deported
or removed (whether before or after the enactment of this Act)
who has left the United States, shall be considered to have
been deported or removed in pursuance of law, irrespective of
the source from which the expenses of his transportation were
defrayed or of the place to which he departed.
(h) For purposes of section 212(a)(2)(E), the term ``serious
criminal offense'' means--
(1) any felony;
(2) any crime of violence, as defined in section 16
of title 18 of the United States Code; or
(3) any crime of reckless driving or of driving while
intoxicated or under the influence of alcohol or of
prohibited substances if such crime involves personal
injury to another.
(i) With respect to each nonimmigrant alien described in
subsection (a)(15)(T)(i)--
(1) the Secretary of Homeland Security, the Attorney
General, and other Government officials, where
appropriate, shall provide the alien with a referral to
a nongovernmental organization that would advise the
alien regarding the alien's options while in the United
States and the resources available to the alien; and
(2) the Secretary of Homeland Security shall, during
the period the alien is in lawful temporary resident
status under that subsection, grant the alien
authorization to engage in employment in the United
States and provide the alien with an ``employment
authorized'' endorsement or other appropriate work
permit.
* * * * * * *
TITLE II--IMMIGRATION
Chapter 1--Selection System
* * * * * * *
special agricultural workers
Sec. 210. (a) Lawful Residence.--
(1) In general.--The Attorney General shall adjust
the status of an alien to that of an alien lawfully
admitted for temporary residence if the Attorney
General determines that the alien meets the following
requirements:
(A) Application Period.--The alien must apply
for such adjustment during the 18-month period
beginning on the first day of the seventh month
that begins after the date of enactment of this
section.
(B) Performance of seasonal agricultural
services and residence in the united states.--
The alien must establish that he has--
(i) resided in the United States, and
(ii) performed seasonal agricultural
services in the United States for at
least 90 man-days,
during the 12-month period ending on May 1,
1986. For purposes of the previous sentence,
performance of seasonal agricultural services
in the United States for more than one employer
on any one day shall be counted as performance
of services for only 1 man-day.
(C) Admissible as immigrant.--The alien must
establish that he is admissible to the United
States as an immigrant, except as otherwise
provided under subsection (c)(2).
(2) Adjustment to permanent residence.--The Attorney
General shall adjust the status of any alien provided
lawful temporary resident status under paragraph (1) to
that of an alien lawfully admitted for permanent
residence on the following date:
(A) Group 1.--Subject to the numerical
limitation established under subparagraph (C),
in the case of an alien who has established, at
the time of application for temporary residence
under paragraph (1), that the alien performed
seasonal agricultural services in the United
States for at least 90 man-days during each of
the 12-months periods ending on May 1, 1984,
1985, and 1986, the adjustment shall occur on
the first day after the end of the one-year
period that begins on the later of (I) the date
the alien was granted such temporary resident
status, or (II) the day after the last day of
the application period described in paragraph
(1)(A).
(B) Group 2.--In the case of aliens to which
subparagraph (A) does not apply, the adjustment
shall occur on the day after the last day of
the two-year period that begins on the later of
(I) the date the alien was granted such
temporary resident status, or (II) the day
after the last day of the application period
described in paragraph (1)(A).
(C) Numerical limitation.--Subparagraph (A)
shall not apply to more than 350,000 aliens. If
more than 350,000 aliens meet the requirements
of such subparagraph, such subparagraph shall
apply to the 350,000 aliens whose applications
for adjustment were first filed under paragraph
(1) and subparagraph (B) shall apply to the
remaining aliens.
(3) Termination of temporary residence.--(A) During
the period of temporary resident status granted an
alien under paragraph (1), the Attorney General may
terminate such status only upon a determination under
this Act that the alien is deportable.
(B) Before any alien becomes eligible for adjustment
of status under paragraph (2), the Attorney General may
deny adjustment to permanent status and provide for
termination of the temporary resident status granted
such alien under paragraph (1) if--
(i) the Attorney General finds by a
preponderance of the evidence that the
adjustment to temporary resident status was the
result of fraud or willful misrepresentation as
set out in section 212(a)(6)(C)(i), or
(ii) the alien commits an act that (I) makes
the alien inadmissible to the United States as
an immigrant, except as provided under
subsection (c)(2), or (II) is convicted of a
felony or 3 or more misdemeanors committed in
the United States.
(4) Authorized travel and employment during temporary
residence.--During the period an alien is in lawful
temporary resident status granted under this
subsection, the alien has the right to travel abroad
(including commutation from a residence abroad) and
shall be granted authorization to engage in employment
in the United States and shall be provided an
``employment authorized'' endorsement or other
appropriate work permit, in the same manner as for
aliens lawfully admitted for permanent residence.
(5) In general.--Except as otherwise provided in this
subsection, an alien who acquires the status of an
alien lawfully admitted for temporary residence under
paragraph (1), such status not having changed, is
considered to be an alien lawfully admitted for
permanent residence (as described in section
101(a)(20)), other than under any provision of the
immigration laws.
(b) Applications for Adjustment of Status.--
(1) To whom may be made.--
(A) Within the united states.--The Attorney
General shall provide that applications for
adjustment of status under subsection (a) may
be filed--
(i) with the Attorney General, or
(ii) with a designated entity
(designated under paragraph (2)), but
only if the applicant consents to the
forwarding of the application to the
Attorney General.
(B) Outside the united states.--The Attorney
General, in cooperation with the Secretary of
State, shall provide a procedure whereby an
alien may apply for adjustment of status under
subsection (a)(1) at an appropriate consular
office outside the United States. If the alien
otherwise qualifies for such adjustment, the
Attorney General shall provide such
documentation of authorization to enter the
United States and to have the alien's status
adjusted upon entry as may be necessary to
carry out the provisions of this section.
(2) Designation of entities to receive
applications.--For purposes of receiving applications
under this section, the Attorney General--
(A) shall designate qualified voluntary
organizations and other qualified State, local,
community, farm labor organizations, and
associations of agricultural employers, and
(B) may designate such other persons as the
Attorney General determines are qualified and
have substantial experience, demonstrated
competence, and traditional long-term
involvement in the preparation and submittal of
applications for adjustment of status under
section 209 or 245, Public Law 89-732, or
Public Law 95-145.
(3) Proof of eligibility.--
(A) In general.--An alien may establish that
he meets the requirement of subsection
(a)(1)(B)(ii) through government employment
records, records supplied by employers or
collective bargaining organizations, and such
other reliable documentation as the alien may
provide. The Attorney General shall establish
special procedures to credit properly work in
cases in which an alien was employed under an
assumed name.
(B) Documentation of work history.--(i) An
alien applying for adjustment of status under
subsection (a)(1) has the burden of proving by
a preponderance of the evidence that the alien
has worked the requisite number of man-days (as
required under subsection (a)(1)(B)(ii)).
(ii) If an employer or farm labor contractor
employing such an alien has kept proper and
adequate records respecting such employment,
the alien's burden of proof under clause (i)
may be met by securing timely production of
those records under regulations to be
promulgated by the Attorney General.
(iii) An alien can meet such burden of proof
if the alien establishes that the alien has in
fact performed the work described in subsection
(a)(1)(B)(ii) by producing sufficient evidence
to show the extent of that employment as a
matter of just and reasonable inference. In
such a case, the burden then shifts to the
Attorney General to disprove the alien's
evidence with a showing which negates the
reasonableness of the inference to be drawn
from the evidence.
(4) Treatment of applications by designated
entities.--Each designated entity must agree to forward
to the Attorney General applications filed with it in
accordance with paragraph (1)(A)(ii) but not to forward
to the Attorney General applications filed with it
unless the applicant has consented to such forwarding.
No such entity may make a determination required by
this section to be made by the Attorney General.
(5) Limitation on access to information.--Files and
records prepared for purposes of this section by
designated entities operating under this section are
confidential and the Attorney General and the Service
shall not have access to such files or records relating
to an alien without the consent of the alien, except as
allowed by a court order issued pursuant to paragraph
(6) of this subsection.
(6) Confidentiality of information.--
(A) In general.--Except as provided in this
paragraph, neither the Attorney General, nor
any other official or employee of the
Department of Justice, or bureau or agency
thereof, may--
(i) use the information furnished by
the applicant pursuant to an
application filed under this section
for any purpose other than to make a
determination on the application,
including a determination under
subsection (a)(3)(B), or for
enforcement of paragraph (7);
(ii) make any publication whereby the
information furnished by any particular
individual can be identified; or
(iii) permit anyone other than the
sworn officers and employees of the
Department or bureau or agency or, with
respect to applications filed with a
designated entity, that designated
entity, to examine individual
applications.
(B) Required disclosures.--The Attorney
General shall provide information furnished
under this section, and any other information
derived from such furnished information, to a
duly recognized law enforcement entity in
connection with a criminal investigation or
prosecution, when such information is requested
in writing by such entity, or to an official
coroner for purposes of affirmatively
identifying a deceased individual (whether or
not such individual is deceased as a result of
a crime).
(C) Construction.--
(i) In general.--Nothing in this
paragraph shall be construed to limit
the use, or release, for immigration
enforcement purposes or law enforcement
purposes of information contained in
files or records of the Service
pertaining to an application filed
under this section, other than
information furnished by an applicant
pursuant to the application, or any
other information derived from the
application, that is not available from
any other source.
(ii) Criminal convictions.--
Information concerning whether the
applicant has at any time been
convicted of a crime may be used or
released for immigration enforcement or
law enforcement purposes.
(D) Crime.--Whoever knowingly uses,
publishes, or permits information to be
examined in violation of this paragraph shall
be fined not more than $10,000.
(7) Penalties for false statements in applications.--
(A) Criminal penalty.--Whoever--
(i) files an application for
adjustment of status under this section
and knowingly and willfully falsifies,
conceals, or covers up a material fact
or makes any false, fictitious, or
fraudulent statements or
representations, or makes or uses any
false writing or document knowing the
same to contain any false, fictitious,
or fraudulent statement or entry, or
(ii) creates or supplies a false
writing or document for use in making
such an application,
shall be fined in accordance with title 18,
United States Code, or imprisoned not more than
five years, or both.
(B) Exclusion.--An alien who is convicted of
a crime under subparagraph (A) shall be
considered to be inadmissible to the United
States on the ground described in section
212(a)(6)(C)(i).
(c) Waiver of Numerical Limitations and Certain Grounds for
Exclusion.--
(1) Numerical limitations do not apply.--The
numerical limitations of sections 201 and 202 shall not
apply to the adjustment of aliens to lawful permanent
resident status under this section.
(2) Waiver of grounds for exclusion.--In the
determination of an alien's admissibility under
subsection (a)(1)(C)--
(A) Grounds of exclusion not applicable.--The
provisions of paragraphs (5) and (7)(A) of
section 212(a) shall not apply.
(B) Waiver of other grounds.--
(i) In general.--Except as provided
in clause (ii), the Attorney General
may waive any other provision of
section 212(a) in the case of
individual aliens for humanitarian
purposes, to assure family unity, or
when it is otherwise in the public
interest.
(ii) Grounds that may not be
waived.--The following provisions of
section 212(a) may not be waived by the
Attorney General under clause (i):
(I) Paragraph (2)(A) and
(2)(B) (relating to criminals).
(II) Paragraph (4) (relating
to aliens likely to become
public charges).
(III) Paragraph (2)(C)
(relating to drug offenses)[,
except for so much of such
paragraph as relates to a
single offense of simple
possession of 30 grams or less
of marihuana].
(IV) Paragraph (3) (relating
to security and related
grounds), other than
subparagraph (E) thereof.
(C) Special Rule for Determination of Public
Charge.--An alien is not ineligible for
adjustment of status under this section due to
being inadmissible under section 212(a)(4) if
the alien demonstrates a history of employment
in the United States evidencing self-support
without reliance on public cash assistance.
(d) Temporary Stay of Exclusion or Deportation and Work
Authorization for Certain Applicants.--
(1) Before application period.--The Attorney General
shall provide that in the case of an alien who is
apprehended before the beginning of the application
period described in subsection (a)(1) and who can
establish a nonfrivolous case of eligibility to have
his status adjusted under subsection (a) (but for the
fact that he may not apply for such adjustment until
the beginning of such period), until the alien has had
the opportunity during the first 30 days of the
application period to complete the filing of an
application for adjustment, the alien--
(A) may not be excluded or deported, and
(B) shall be granted authorization to engage
in employment in the United States and be
provided an ``employment authorized''
endorsement or other appropriate work permit.
(2) During application period.--The Attorney General
shall provide that in the case of an alien who presents
a nonfrivolous application for adjustment of status
under subsection (a) during the application period, and
until a final determination on the application has been
made in accordance with this section, the alien--
(A) may not be excluded or deported, and
(B) shall be granted authorization to engage
in employment in the United States and be
provided an ``employment authorized''
endorsement or other appropriate work permit.
(3) No application fees collected by the Service
pursuant to this subsection may be used by the Service
to offset the costs of the special agricultural worker
legalization program until the Service implements the
program consistent with the statutory mandate as
follows:
(A) During the application period described
in subsection (a)(1)(A) the Service may grant
temporary admission to the United States, work
authorization, and provide an ``employment
authorized'' endorsement or other appropriate
work permit to any alien who presents a
preliminary application for adjustment of
status under subsection (a) at a designated
port of entry on the southern land border. An
alien who does not enter through a port of
entry is subject to deportation and removal as
otherwise provided in this Act.
(B) During the application period described
in subsection (a)(1)(A) any alien who has filed
an application for adjustment of status within
the United States as provided in subsection
(b)(1)(A) pursuant to the provision of 8 CFR
section 210.1(j) is subject to paragraph (2) of
this subsection.
(C) A preliminary application is defined as a
fully completed and signed application with fee
and photographs which contains specific
information concerning the performance of
qualifying employment in the United States and
the documentary evidence which the applicant
intends to submit as proof of such employment.
The applicant must be otherwise admissible to
the United States and must establish to the
satisfaction of the examining officer during an
interview that his or her claim to eligibility
for special agriculture worker status is
credible.
(e) Administrative and Judicial Review.--
(1) Administrative and judicial review.--There shall
be no administrative or judicial review of a
determination respecting an application for adjustment
of status under this section except in accordance with
this subsection.
(2) Administrative review.--
(A) Single level of administrative appellate
review.--The Attorney General shall establish
an appellate authority to provide for a single
level of administrative appellate review of
such a determination.
(B) Standard for review.--Such administrative
appellate review shall be based solely upon the
administrative record established at the time
of the determination on the application and
upon such additional or newly discovered
evidence as may not have been available at the
time of the determination.
(3) Judicial review.--
(A) Limitation to review of exclusion or
deportation.--There shall be judicial review of
such a denial only in the judicial review of an
order of exclusion or deportation under section
106 (as in effect before October 1, 1996).
(B) Standard for judicial review.--Such
judicial review shall be based solely upon the
administrative record established at the time
of the review by the appellate authority and
the findings of fact and determinations
contained in such record shall be conclusive
unless the applicant can establish abuse of
discretion or that the findings are directly
contrary to clear and convincing facts
contained in the record considered as a whole.
(f) Temporary Disqualification of Newly Legalized Aliens From
Receiving Aid to Families With Dependent Children.--During the
five-year period beginning on the date an alien was granted
lawful temporary resident status under subsection (a), and
notwithstanding any other provision of law, the alien is not
eligible for assistance under a State program funded under part
A of title IV of the Social Security Act. Notwithstanding the
previous sentence, in the case of an alien who would be
eligible for aid under a State plan approved under part A of
title IV of the Social Security Act but for the previous
sentence, the provisions of paragraph (3) of section 245A(h)
shall apply in the same manner as they apply with respect to
paragraph (1) of such section and, for this purpose, any
reference in section 245A(h)(3) to paragraph (1) is deemed a
reference to the previous sentence.
(g) Treatment of Special Agricultural Workers.--For all
purposes (subject to subsections (a)(5) and (f)) an alien whose
status is adjusted under this section to that of an alien
lawfully admitted for permanent residence, such status not
having changed, shall be considered to be an alien lawfully
admitted for permanent residence (within the meaning of section
101(a)(20)).
(h) Seasonal Agricultural Services Defined.--In this section,
the term ``seasonal agricultural services'' means the
performance of field work related to planting, cultural
practices, cultivating, growing and harvesting of fruits and
vegetables of every kind and other perishable commodities, as
defined in regulations by the Secretary of Agriculture.
Chapter 2--Qualifications for Admission of Aliens; Travel Control of
Citizens and Aliens
* * * * * * *
general classes of aliens ineligible to receive visas and ineligible
for admission; waivers of inadmissibility
Sec. 212. (a) Classes of Aliens Ineligible for Visas or
Admission.--Except as otherwise provided in this Act, aliens
who are inadmissible under the following paragraphs are
ineligible to receive visas and ineligible to be admitted to
the United States:
(1) Health-related grounds.--
(A) In general.--Any alien--
(i) who is determined (in accordance
with regulations prescribed by the
Secretary of Health and Human Services)
to have a communicable disease of
public health significance;
(ii) except as provided in
subparagraph (C), who seeks admission
as an immigrant, or who seeks
adjustment of status to the status of
an alien lawfully admitted for
permanent residence, and who has failed
to present documentation of having
received vaccination against vaccine-
preventable diseases, which shall
include at least the following
diseases: mumps, measles, rubella,
polio, tetanus and diphtheria toxoids,
pertussis, influenza type B and
hepatitis B, and any other vaccinations
against vaccine-preventable diseases
recommended by the Advisory Committee
for Immunization Practices,
(iii) who is determined (in
accordance with regulations prescribed
by the Secretary of Health and Human
Services in consultation with the
Attorney General)--
(I) to have a physical or
mental disorder and behavior
associated with the disorder
that may pose, or has posed, a
threat to the property, safety,
or welfare of the alien or
others, or
(II) to have had a physical
or mental disorder and a
history of behavior associated
with the disorder, which
behavior has posed a threat to
the property, safety, or
welfare of the alien or others
and which behavior is likely to
recur or to lead to other
harmful behavior, or
(iv) who is determined (in accordance
with regulations prescribed by the
Secretary of Health and Human Services)
to be a drug abuser or addict,
is inadmissibility.
(B) Waiver authorized.--For provision
authorizing waiver of certain clauses of
subparagraph (A), see subsection (g).
(C) Exception from immunization requirement
for adopted children 10 years of age or
younger.--Clause (ii) of subparagraph (A) shall
not apply to a child who--
(i) is 10 years of age or younger,
(ii) is described in subparagraph (F)
or (G) of section 101(b)(1); and
(iii) is seeking an immigrant visa as
an immediate relative under section
201(b),
if, prior to the admission of the child, an
adoptive parent or prospective adoptive parent
of the child, who has sponsored the child for
admission as an immediate relative, has
executed an affidavit stating that the parent
is aware of the provisions of subparagraph
(A)(ii) and will ensure that, within 30 days of
the child's admission, or at the earliest time
that is medically appropriate, the child will
receive the vaccinations identified in such
subparagraph.
(2) Criminal and related grounds.--
(A) Conviction of certain crimes.--
(i) In general.--Except as provided
in clause (ii), any alien convicted of,
or who admits having committed, or who
admits committing acts which constitute
the essential elements of--
(I) a crime involving moral
turpitude (other than a purely
political offense) or an
attempt or conspiracy to commit
such a crime, or
(II) a violation of (or a
conspiracy or attempt to
violate) any law or regulation
of a State, the United States,
or a foreign country relating
to a controlled substance (as
defined in section 102 of the
Controlled Substances Act (21
U.S.C. 802)),
is inadmissible.
(ii) Exception.--Clause (i)(I) shall
not apply to an alien who committed
only one crime if--
(I) the crime was committed
when the alien was under 18
years of age, and the crime was
committed (and the alien
released from any confinement
to a prison or correctional
institution imposed for the
crime) more than 5 years before
the date of application for a
visa or other documentation and
the date of application for
admission to the United States,
or
(II) the maximum penalty
possible for the crime of which
the alien was convicted (or
which the alien admits having
committed or of which the acts
that the alien admits having
committed constituted the
essential elements) did not
exceed imprisonment for one
year and, if the alien was
convicted of such crime, the
alien was not sentenced to a
term of imprisonment in excess
of 6 months (regardless of the
extent to which the sentence
was ultimately executed).
(B) Multiple criminal convictions.--Any alien
convicted of 2 or more offenses (other than
purely political offenses), regardless of
whether the conviction was in a single trial or
whether the offenses arose from a single scheme
of misconduct and regardless of whether the
offenses involved moral turpitude, for which
the aggregate sentences to confinement were 5
years or more is inadmissible.
(C) Controlled substance traffickers.--Any
alien who the consular officer or the Attorney
General knows or has reason to believe--
(i) is or has been an illicit
trafficker in any controlled substance
or in any listed chemical (as defined
in section 102 of the Controlled
Substances Act (21 U.S.C. 802)), or is
or has been a knowing aider, abettor,
assister, conspirator, or colluder with
others in the illicit trafficking in
any such controlled or listed substance
or chemical, or endeavored to do so; or
(ii) is the spouse, son, or daughter
of an alien inadmissible under clause
(i), has, within the previous 5 years,
obtained any financial or other benefit
from the illicit activity of that
alien, and knew or reasonably should
have known that the financial or other
benefit was the product of such illicit
activity,
is inadmissible.
(D) Prostitution and commercialized vice.--
Any alien who--
(i) is coming to the United States
solely, principally, or incidentally to
engage in prostitution, or has engaged
in prostitution within 10 years of the
date of application for a visa,
admission, or adjustment of status,
(ii) directly or indirectly procures
or attempts to procure, or (within 10
years of the date of application for a
visa, entry, or adjustment of status)
procured or attempted to procure or to
import, prostitutes or persons for the
purpose of prostitution, or receives or
(within such 10-year period) received,
in whole or in part, the proceeds of
prostitution, or
(iii) is coming to the United States
to engage in any other unlawful
commercialized vice, whether or not
related to prostitution,
is inadmissible.
(E) Certain aliens involved in serious
criminal activity who have asserted immunity
from prosecution.--Any alien--
(i) who has committed in the United
States at any time a serious criminal
offense (as defined in section 101(h)),
(ii) for whom immunity from criminal
jurisdiction was exercised with respect
to that offense,
(iii) who as a consequence of the
offense and exercise of immunity has
departed from the United States, and
(iv) who has not subsequently
submitted fully to the jurisdiction of
the court in the United States having
jurisdiction with respect to that
offense,
is inadmissible.
(F) Waiver authorized.--For provision
authorizing waiver of certain subparagraphs of
this paragraph, see subsection (h).
(G) Foreign government officials who have
committed particularly severe violations of
religious freedom.--Any alien who, while
serving as a foreign government official, was
responsible for or directly carried out, at any
time, particularly severe violations of
religious freedom, as defined in section 3 of
the International Religious Freedom Act of 1998
(22 U.S.C. 6402), is inadmissible.
(H) Significant traffickers in persons.--
(i) In general.--Any alien who
commits or conspires to commit human
trafficking offenses in the United
States or outside the United States, or
who the consular officer, the Secretary
of Homeland Security, the Secretary of
State, or the Attorney General knows or
has reason to believe is or has been a
knowing aider, abettor, assister,
conspirator, or colluder with such a
trafficker in severe forms of
trafficking in persons, as defined in
the section 103 of such Act, is
inadmissible.
(ii) Beneficiaries of trafficking.--
Except as provided in clause (iii), any
alien who the consular officer or the
Attorney General knows or has reason to
believe is the spouse, son, or daughter
of an alien inadmissible under clause
(i), has, within the previous 5 years,
obtained any financial or other benefit
from the illicit activity of that
alien, and knew or reasonably should
have known that the financial or other
benefit was the product of such illicit
activity, is inadmissible.
(iii) Exception for certain sons and
daughters.--Clause (ii) shall not apply
to a son or daughter who was a child at
the time he or she received the benefit
described in such clause.
(I) Money laundering.--Any alien--
(i) who a consular officer or the
Attorney General knows, or has reason
to believe, has engaged, is engaging,
or seeks to enter the United States to
engage, in an offense which is
described in section 1956 or 1957 of
title 18, United States Code (relating
to laundering of monetary instruments);
or
(ii) who a consular officer or the
Attorney General knows is, or has been,
a knowing aider, abettor, assister,
conspirator, or colluder with others in
an offense which is described in such
section;
is inadmissible.
(3) Security and related grounds.--
(A) In general.--Any alien who a consular
officer or the Attorney General knows, or has
reasonable ground to believe, seeks to enter
the United States to engage solely,
principally, or incidentally in--
(i) any activity (I) to violate any
law of the United States relating to
espionage or sabotage or (II) to
violate or evade any law prohibiting
the export from the United States of
goods, technology, or sensitive
information,
(ii) any other unlawful activity, or
(iii) any activity a purpose of which
is the opposition to, or the control or
overthrow of, the Government of the
United States by force, violence, or
other unlawful means,
is inadmissible.
(B) Terrorist activities.--
(i) In general.--Any alien who--
(I) has engaged in a
terrorist activity;
(II) a consular officer, the
Attorney General, or the
Secretary of Homeland Security
knows, or has reasonable ground
to believe, is engaged in or is
likely to engage after entry in
any terrorist activity (as
defined in clause (iv));
(III) has, under
circumstances indicating an
intention to cause death or
serious bodily harm, incited
terrorist activity;
(IV) is a representative (as
defined in clause (v)) of--
(aa) a terrorist
organization (as
defined in clause
(vi)); or
(bb) a political,
social, or other group
that endorses or
espouses terrorist
activity;
(V) is a member of a
terrorist organization
described in subclause (I) or
(II) of clause (vi);
(VI) is a member of a
terrorist organization
described in clause (vi)(III),
unless the alien can
demonstrate by clear and
convincing evidence that the
alien did not know, and should
not reasonably have known, that
the organization was a
terrorist organization;
(VII) endorses or espouses
terrorist activity or persuades
others to endorse or espouse
terrorist activity or support a
terrorist organization;
(VIII) has received military-
type training (as defined in
section 2339D(c)(1) of title
18, United States Code) from or
on behalf of any organization
that, at the time the training
was received, was a terrorist
organization (as defined in
clause (vi)); or
(IX) is the spouse or child
of an alien who is inadmissible
under this subparagraph, if the
activity causing the alien to
be found inadmissible occurred
within the last 5 years, is
inadmissible.
An alien who is an officer, official,
representative, or spokesman of the
Palestine Liberation Organization is
considered, for purposes of this Act,
to be engaged in a terrorist activity.
(ii) Exception.--Subclause (IX) of
clause (i) does not apply to a spouse
or child--
(I) who did not know or
should not reasonably have
known of the activity causing
the alien to be found
inadmissible under this
section; or
(II) whom the consular
officer or Attorney General has
reasonable grounds to believe
has renounced the activity
causing the alien to be found
inadmissible under this
section.
(iii) Terrorist activity defined.--As
used in this Act, the term ``terrorist
activity'' means any activity which is
unlawful under the laws of the place
where it is committed (or which, if it
had been committed in the United
States, would be unlawful under the
laws of the United States or any State)
and which involves any of the
following:
(I) The highjacking or
sabotage of any conveyance
(including an aircraft, vessel,
or vehicle).
(II) The seizing or
detaining, and threatening to
kill, injure, or continue to
detain, another individual in
order to compel a third person
(including a governmental
organization) to do or abstain
from doing any act as an
explicit or implicit condition
for the release of the
individual seized or detained.
(III) A violent attack upon
an internationally protected
person (as defined in section
1116(b)(4) of title 18, United
States Code) or upon the
liberty of such a person.
(IV) An assassination.
(V) The use of any--
(a) biological agent,
chemical agent, or
nuclear weapon or
device, or
(b) explosive,
firearm, or other
weapon or dangerous
device (other than for
mere personal monetary
gain),
with intent to endanger,
directly or indirectly, the
safety of one or more
individuals or to cause
substantial damage to property.
(VI) A threat, attempt, or
conspiracy to do any of the
foregoing.
(iv) Engage in terrorist activity
defined.--As used in this Act, the term
``engage in terrorist activity'' means,
in an individual capacity or as a
member of an organization--
(I) to commit or to incite to
commit, under circumstances
indicating an intention to
cause death or serious bodily
injury, a terrorist activity;
(II) to prepare or plan a
terrorist activity;
(III) to gather information
on potential targets for
terrorist activity;
(IV) to solicit funds or
other things of value for--
(aa) a terrorist
activity;
(bb) a terrorist
organization described
in clause (vi)(I) or
(vi)(II); or
(cc) a terrorist
organization described
in clause (vi)(III),
unless the solicitor
can demonstrate by
clear and convincing
evidence that he did
not know, and should
not reasonably have
known, that the
organization was a
terrorist organization;
(V) to solicit any
individual--
(aa) to engage in
conduct otherwise
described in this
subsection;
(bb) for membership
in a terrorist
organization described
in clause (vi)(I) or
(vi)(II); or
(cc) for membership
in a terrorist
organization described
in clause (vi)(III)
unless the solicitor
can demonstrate by
clear and convincing
evidence that he did
not know, and should
not reasonably have
known, that the
organization was a
terrorist organization;
or
(VI) to commit an act that
the actor knows, or reasonably
should know, affords material
support, including a safe
house, transportation,
communications, funds, transfer
of funds or other material
financial benefit, false
documentation or
identification, weapons
(including chemical,
biological, or radiological
weapons), explosives, or
training--
(aa) for the
commission of a
terrorist activity;
(bb) to any
individual who the
actor knows, or
reasonably should know,
has committed or plans
to commit a terrorist
activity;
(cc) to a terrorist
organization described
in subclause (I) or
(II) of clause (vi) or
to any member of such
an organization; or
(dd) to a terrorist
organization described
in clause (vi)(III), or
to any member of such
an organization, unless
the actor can
demonstrate by clear
and convincing evidence
that the actor did not
know, and should not
reasonably have known,
that the organization
was a terrorist
organization.
(v) Representative defined.--As used
in this paragraph, the term
``representative'' includes an officer,
official, or spokesman of an
organization, and any person who
directs, counsels, commands, or induces
an organization or its members to
engage in terrorist activity.
(vi) Terrorist organization
defined.--As used in this section, the
term ``terrorist organization'' means
an organization--
(I) designated under section
219;
(II) otherwise designated,
upon publication in the Federal
Register, by the Secretary of
State in consultation with or
upon the request of the
Attorney General or the
Secretary of Homeland Security,
as a terrorist organization,
after finding that the
organization engages in the
activities described in
subclauses (I) through (VI) of
clause (iv); or
(III) that is a group of two
or more individuals, whether
organized or not, which engages
in, or has a subgroup which
engages in, the activities
described in subclauses (I)
through (VI) of clause (iv).
(C) Foreign policy.--
(i) In general.--An alien whose entry
or proposed activities in the United
States the Secretary of State has
reasonable ground to believe would have
potentially serious adverse foreign
policy consequences for the United
States is inadmissible.
(ii) Exception for officials.--An
alien who is an official of a foreign
government or a purported government,
or who is a candidate for election to a
foreign government office during the
period immediately preceding the
election for that office, shall not be
excludable or subject to restrictions
or conditions on entry into the United
States under clause (i) solely because
of the alien's past, current, or
expected beliefs, statements, or
associations, if such beliefs,
statements, or associations would be
lawful within the United States.
(iii) Exception for other aliens.--An
alien, not described in clause (ii),
shall not be excludable or subject to
restrictions or conditions on entry
into the United States under clause (i)
because of the alien's past, current,
or expected beliefs, statements, or
associations, if such beliefs,
statements, or associations would be
lawful within the United States, unless
the Secretary of State personally
determines that the alien's admission
would compromise a compelling United
States foreign policy interest.
(iv) Notification of
determinations.--If a determination is
made under clause (iii) with respect to
an alien, the Secretary of State must
notify on a timely basis the chairmen
of the Committees on the Judiciary and
Foreign Affairs of the House of
Representatives and of the Committees
on the Judiciary and Foreign Relations
of the Senate of the identity of the
alien and the reasons for the
determination.
(D) Immigrant membership in totalitarian
party.--
(i) In general.--Any immigrant who is
or has been a member of or affiliated
with the Communist or any other
totalitarian party (or subdivision or
affiliate thereof), domestic or
foreign, is inadmissible.
(ii) Exception for involuntary
membership.--Clause (i) shall not apply
to an alien because of membership or
affiliation if the alien establishes to
the satisfaction of the consular
officer when applying for a visa (or to
the satisfaction of the Attorney
General when applying for admission)
that the membership or affiliation is
or was involuntary, or is or was solely
when under 16 years of age, by
operation of law, or for purposes of
obtaining employment, food rations, or
other essentials of living and whether
necessary for such purposes.
(iii) Exception for past
membership.--Clause (i) shall not apply
to an alien because of membership or
affiliation if the alien establishes to
the satisfaction of the consular
officer when applying for a visa (or to
the satisfaction of the Attorney
General when applying for admission)
that--
(I) the membership or
affiliation terminated at
least--
(a) 2 years before
the date of such
application, or
(b) 5 years before
the date of such
application, in the
case of an alien whose
membership or
affiliation was with
the party controlling
the government of a
foreign state that is a
totalitarian
dictatorship as of such
date, and
(II) the alien is not a
threat to the security of the
United States.
(iv) Exception for close family
members.--The Attorney General may, in
the Attorney General's discretion,
waive the application of clause (i) in
the case of an immigrant who is the
parent, spouse, son, daughter, brother,
or sister of a citizen of the United
States or a spouse, son, or daughter of
an alien lawfully admitted for
permanent residence for humanitarian
purposes, to assure family unity, or
when it is otherwise in the public
interest if the immigrant is not a
threat to the security of the United
States.
(E) Participants in nazi persecution,
genocide, or the commission of any act of
torture or extrajudicial killing.--
(i) Participation in nazi
persecutions.--Any alien who, during
the period beginning on March 23, 1933,
and ending on May 8, 1945, under the
direction of, or in association with--
(I) the Nazi government of
Germany,
(II) any government in any
area occupied by the military
forces of the Nazi government
of Germany,
(III) any government
established with the assistance
or cooperation of the Nazi
government of Germany, or
(IV) any government which was
an ally of the Nazi government
of Germany,
ordered, incited, assisted, or
otherwise participated in the
persecution of any person because of
race, religion, national origin, or
political opinion is inadmissible.
(ii) Participation in genocide.--Any
alien who ordered, incited, assisted,
or otherwise participated in genocide,
as defined in section 1091(a) of title
18, United States Code, is inadmissible
(iii) Commission of acts of torture
or extrajudicial killings.--Any alien
who, outside the United States, has
committed, ordered, incited, assisted,
or otherwise participated in the
commission of--
(I) any act of torture, as
defined in section 2340 of
title 18, United States Code;
or
(II) under color of law of
any foreign nation, any
extrajudicial killing, as
defined in section 3(a) of the
Torture Victim Protection Act
of 1991 (28 U.S.C. 1350 note),
is inadmissible.
(F) Association with terrorist
organizations.--Any alien who the Secretary of
State, after consultation with the Attorney
General, or the Attorney General, after
consultation with the Secretary of State,
determines has been associated with a terrorist
organization and intends while in the United
States to engage solely, principally, or
incidentally in activities that could endanger
the welfare, safety, or security of the United
States is inadmissible.
(G) Recruitment or use of child soldiers.--
Any alien who has engaged in the recruitment or
use of child soldiers in violation of section
2442 of title 18, United States Code, is
inadmissible.
(4) Public charge.--
(A) In general.--Any alien who, in the
opinion of the consular officer at the time of
application for a visa, or in the opinion of
the Attorney General at the time of application
for admission or adjustment of status, is
likely at any time to become a public charge is
inadmissible.
(B) Factors to be taken into account.--(i) In
determining whether an alien is inadmissible
under this paragraph, the consular officer or
the Attorney General shall at a minimum
consider the alien's--
(I) age;
(II) health;
(III) family status;
(IV) assets, resources, and financial
status; and
(V) education and skills.
(ii) In addition to the factors under clause
(i), the consular officer or the Attorney
General may also consider any affidavit of
support under section 213A for purposes of
exclusion under this paragraph.
(C) Family-sponsored immigrants.--Any alien
who seeks admission or adjustment of status
under a visa number issued under section
201(b)(2) or 203(a) is inadmissible under this
paragraph unless--
(i) the alien has obtained--
(I) status as a spouse or a
child of a United States
citizen pursuant to clause
(ii), (iii), or (iv) of section
204(a)(1)(A), or
(II) classification pursuant
to clause (ii) or (iii) of
section 204(a)(1)(B); or
(III) classification or
status as a VAWA self-
petitioner; or
(ii) the person petitioning for the
alien's admission (and any additional
sponsor required under section 213A(f)
or any alternative sponsor permitted
under paragraph (5)(B) of such section)
has executed an affidavit of support
described in section 213A with respect
to such alien.
(D) Certain employment-based immigrants.--Any
alien who seeks admission or adjustment of
status under a visa number issued under section
203(b) by virtue of a classification petition
filed by a relative of the alien (or by an
entity in which such relative has a significant
ownership interest) is inadmissible under this
paragraph unless such relative has executed an
affidavit of support described in section 213A
with respect to such alien.
(E) Special rule for qualified alien
victims.--Subparagraphs (A), (B), and (C) shall
not apply to an alien who--
(i) is a VAWA self-petitioner;
(ii) is an applicant for, or is
granted, nonimmigrant status under
section 101(a)(15)(U); or
(iii) is a qualified alien described
in section 431(c) of the Personal
Responsibility and Work Opportunity
Reconciliation Act of 1996 (8 U.S.C.
1641(c)).
(5) Labor certification and qualifications for
certain immigrants.--
(A) Labor certification.--
(i) In general.--Any alien who seeks
to enter the United States for the
purpose of performing skilled or
unskilled labor is inadmissible, unless
the Secretary of Labor has determined
and certified to the Secretary of State
and the Attorney General that--
(I) there are not sufficient
workers who are able, willing,
qualified (or equally qualified
in the case of an alien
described in clause (ii)) and
available at the time of
application for a visa and
admission to the United States
and at the place where the
alien is to perform such
skilled or unskilled labor, and
(II) the employment of such
alien will not adversely affect
the wages and working
conditions of workers in the
United States similarly
employed.
(ii) Certain aliens subject to
special rule.--For purposes of clause
(i)(I), an alien described in this
clause is an alien who--
(I) is a member of the
teaching profession, or
(II) has exceptional ability
in the sciences or the arts.
(iii) Professional athletes.--
(I) In general.--A
certification made under clause
(i) with respect to a
professional athlete shall
remain valid with respect to
the athlete after the athlete
changes employer, if the new
employer is a team in the same
sport as the team which
employed the athlete when the
athlete first applied for the
certification.
(II) Definition.--For
purposes of subclause (I), the
term ``professional athlete''
means an individual who is
employed as an athlete by--
(aa) a team that is a
member of an
association of 6 or
more professional
sports teams whose
total combined revenues
exceed $10,000,000 per
year, if the
association governs the
conduct of its members
and regulates the
contests and
exhibitions in which
its member teams
regularly engage; or
(bb) any minor league
team that is affiliated
with such an
association.
(iv) Long delayed adjustment
applicants.--A certification made under
clause (i) with respect to an
individual whose petition is covered by
section 204(j) shall remain valid with
respect to a new job accepted by the
individual after the individual changes
jobs or employers if the new job is in
the same or a similar occupational
classification as the job for which the
certification was issued.
(B) Unqualified physicians.--An alien who is
a graduate of a medical school not accredited
by a body or bodies approved for the purpose by
the Secretary of Education (regardless of
whether such school of medicine is in the
United States) and who is coming to the United
States principally to perform services as a
member of the medical profession is
inadmissible, unless the alien (i) has passed
parts I and II of the National Board of Medical
Examiners Examination (or an equivalent
examination as determined by the Secretary of
Health and Human Services) and (ii) is
competent in oral and written English. For
purposes of the previous sentence, an alien who
is a graduate of a medical school shall be
considered to have passed parts I and II of the
National Board of Medical Examiners if the
alien was fully and permanently licensed to
practice medicine in a State on January 9,
1978, and was practicing medicine in a State on
that date.
(C) Uncertified foreign health-care
workers.--Subject to subsection (r), any alien
who seeks to enter the United States for the
purpose of performing labor as a health-care
worker, other than a physician, is inadmissible
unless the alien presents to the consular
officer, or, in the case of an adjustment of
status, the Attorney General, a certificate
from the Commission on Graduates of Foreign
Nursing Schools, or a certificate from an
equivalent independent credentialing
organization approved by the Attorney General
in consultation with the Secretary of Health
and Human Services, verifying that--
(i) the alien's education, training,
license, and experience--
(I) meet all applicable
statutory and regulatory
requirements for entry into the
United States under the
classification specified in the
application;
(II) are comparable with that
required for an American
health-care worker of the same
type; and
(III) are authentic and, in
the case of a license,
unencumbered;
(ii) the alien has the level of
competence in oral and written English
considered by the Secretary of Health
and Human Services, in consultation
with the Secretary of Education, to be
appropriate for health care work of the
kind in which the alien will be
engaged, as shown by an appropriate
score on one or more nationally
recognized, commercially available,
standardized assessments of the
applicant's ability to speak and write;
and
(iii) if a majority of States
licensing the profession in which the
alien intends to work recognize a test
predicting the success on the
profession's licensing or certification
examination, the alien has passed such
a test or has passed such an
examination.
For purposes of clause (ii), determination of
the standardized tests required and of the
minimum scores that are appropriate are within
the sole discretion of the Secretary of Health
and Human Services and are not subject to
further administrative or judicial review.
(D) Application of grounds.--The grounds for
inadmissibility of aliens under subparagraphs
(A) and (B) shall apply to immigrants seeking
admission or adjustment of status under
paragraph (2) or (3) of section 203(b).
(6) Illegal entrants and immigration violators.--
(A) Aliens present without admission or
parole.--
(i) In general.--An alien present in
the United States without being
admitted or paroled, or who arrives in
the United States at any time or place
other than as designated by the
Attorney General, is inadmissible.
(ii) Exception for certain battered
women and children.--Clause (i) shall
not apply to an alien who demonstrates
that--
(I) the alien is a VAWA self-
petitioner;
(II)(a) the alien has been
battered or subjected to
extreme cruelty by a spouse or
parent, or by a member of the
spouse's or parent's family
residing in the same household
as the alien and the spouse or
parent consented or acquiesced
to such battery or cruelty, or
(b) the alien's child has been
battered or subjected to
extreme cruelty by a spouse or
parent of the alien (without
the active participation of the
alien in the battery or
cruelty) or by a member of the
spouse's or parent's family
residing in the same household
as the alien when the spouse or
parent consented to or
acquiesced in such battery or
cruelty and the alien did not
actively participate in such
battery or cruelty, and
(III) there was a substantial
connection between the battery
or cruelty described in
subclause (I) or (II) and the
alien's unlawful entry into the
United States.
(B) Failure to attend removal proceeding.--
Any alien who without reasonable cause fails or
refuses to attend or remain in attendance at a
proceeding to determine the alien's
inadmissibility or deportability and who seeks
admission to the United States within 5 years
of such alien's subsequent departure or removal
is inadmissible.
(C) Misrepresentation.--
(i) In general.--Any alien who, by
fraud or willfully misrepresenting a
material fact, seeks to procure (or has
sought to procure or has procured) a
visa, other documentation, or admission
into the United States or other benefit
provided under this Act is
inadmissible.
(ii) Falsely claiming citizenship.--
(I) In general.--Any alien
who falsely represents, or has
falsely represented, himself or
herself to be a citizen of the
United States for any purpose
or benefit under this Act
(including section 274A) or any
other Federal or State law is
inadmissible.
(II) Exception.--In the case
of an alien making a
representation described in
subclause (I), if each natural
parent of the alien (or, in the
case of an adopted alien, each
adoptive parent of the alien)
is or was a citizen (whether by
birth or naturalization), the
alien permanently resided in
the United States prior to
attaining the age of 16, and
the alien reasonably believed
at the time of making such
representation that he or she
was a citizen, the alien shall
not be considered to be
inadmissible under any
provision of this subsection
based on such representation.
(iii) Waiver authorized.--For
provision authorizing waiver of clause
(i), see subsection (i).
(D) Stowaways.--Any alien who is a stowaway
is inadmissible.
(E) Smugglers.--
(i) In general.--Any alien who at any
time knowingly has encouraged, induced,
assisted, abetted, or aided any other
alien to enter or to try to enter the
United States in violation of law is
inadmissible.
(ii) Special rule in the case of
family reunification.--Clause (i) shall
not apply in the case of alien who is
an eligible immigrant (as defined in
section 301(b)(1) of the Immigration
Act of 1990), was physically present in
the United States on May 5, 1988, and
is seeking admission as an immediate
relative or under section 203(a)(2)
(including under section 112 of the
Immigration Act of 1990) or benefits
under section 301(a) of the Immigration
Act of 1990 if the alien, before May 5,
1988, has encouraged, induced,
assisted, abetted, or aided only the
alien's spouse, parent, son, or
daughter (and no other individual) to
enter the United States in violation of
law.
(iii) Waiver authorized.--For
provision authorizing waiver of clause
(i), see subsection (d)(11).
(F) Subject of civil penalty.--
(i) In general.--An alien who is the
subject of a final order for violation
of section 274C is inadmissible.
(ii) Waiver authorized.--For
provision authorizing waiver of clause
(i), see subsection (d)(12).
(G) Student visa abusers.--An alien who
obtains the status of a nonimmigrant under
section 101(a)(15)(F)(i) and who violates a
term or condition of such status under section
214(l) is inadmissible until the alien has been
outside the United States for a continuous
period of 5 years after the date of the
violation.
(7) Documentation requirements.--
(A) Immigrants.--
(i) In general.--Except as otherwise
specifically provided in this Act, any
immigrant at the time of application
for admission--
(I) who is not in possession
of a valid unexpired immigrant
visa, reentry permit, border
crossing identification card,
or other valid entry document
required by this Act, and a
valid unexpired passport, or
other suitable travel document,
or document of identity and
nationality if such document is
required under the regulations
issued by the Attorney General
under section 211(a), or
(II) whose visa has been
issued without compliance with
the provisions of section 203,
is inadmissible.
(ii) Waiver authorized.--For
provision authorizing waiver of clause
(i), see subsection (k).
(B) Nonimmigrants.--
(i) In general.--Any nonimmigrant
who--
(I) is not in possession of a
passport valid for a minimum of
six months from the date of the
expiration of the initial
period of the alien's admission
or contemplated initial period
of stay authorizing the alien
to return to the country from
which the alien came or to
proceed to and enter some other
country during such period, or
(II) is not in possession of
a valid nonimmigrant visa or
border crossing identification
card at the time of application
for admission,
is inadmissible.
(ii) General waiver authorized.--For
provision authorizing waiver of clause
(i), see subsection (d)(4).
(iii) Guam and northern mariana
islands visa waiver.--For provision
authorizing waiver of clause (i) in the
case of visitors to Guam or the
Commonwealth of the Northern Mariana
Islands, see subsection (l).
(iv) Visa waiver program.--For
authority to waive the requirement of
clause (i) under a program, see section
217.
(8) Ineligible for citizenship.--
(A) In general.--Any immigrant who is
permanently ineligible to citizenship is
inadmissible.
(B) Draft evaders.--Any person who has
departed from or who has remained outside the
United States to avoid or evade training or
service in the armed forces in time of war or a
period declared by the President to be a
national emergency is inadmissible, except that
this subparagraph shall not apply to an alien
who at the time of such departure was a
nonimmigrant and who is seeking to reenter the
United States as a nonimmigrant.
(9) Aliens previously removed.--
(A) Certain aliens previously removed.--
(i) Arriving aliens.--Any alien who
has been ordered removed under section
235(b)(1) or at the end of proceedings
under section 240 initiated upon the
alien's arrival in the United States
and who again seeks admission within 5
years of the date of such removal (or
within 20 years in the case of a second
or subsequent removal or at any time in
the case of an alien convicted of an
aggravated felony) is inadmissible.
(ii) Other aliens.--Any alien not
described in clause (i) who--
(I) has been ordered removed
under section 240 or any other
provision of law, or
(II) departed the United
States while an order of
removal was outstanding,
and who seeks admission within 10 years
of the date of such alien's departure
or removal (or within 20 years of such
date in the case of a second or
subsequent removal or at any time in
the case of an alien convicted of an
aggravated felony) is inadmissible.
(iii) Exception.--Clauses (i) and
(ii) shall not apply to an alien
seeking admission within a period if,
prior to the date of the alien's
reembarkation at a place outside the
United States or attempt to be admitted
from foreign contiguous territory, the
Attorney General has consented to the
alien's reapplying for admission.
(B) Aliens unlawfully present.--
(i) In general.--Any alien (other
than an alien lawfully admitted for
permanent residence) who--
(I) was unlawfully present in
the United States for a period
of more than 180 days but less
than 1 year, voluntarily
departed the United States
(whether or not pursuant to
section 244(e)) prior to the
commencement of proceedings
under section 235(b)(1) or
section 240, and again seeks
admission within 3 years of the
date of such alien's departure
or removal, or
(II) has been unlawfully
present in the United States
for one year or more, and who
again seeks admission within 10
years of the date of such
alien's departure or removal
from the United States,
is inadmissible.
(ii) Construction of unlawful
presence.--For purposes of this
paragraph, an alien is deemed to be
unlawfully present in the United States
if the alien is present in the United
States after the expiration of the
period of stay authorized by the
Attorney General or is present in the
United States without being admitted or
paroled.
(iii) Exceptions.--
(I) Minors.--No period of
time in which an alien is under
18 years of age shall be taken
into account in determining the
period of unlawful presence in
the United States under clause
(i).
(II) Asylees.--No period of
time in which an alien has a
bona fide application for
asylum pending under section
208 shall be taken into account
in determining the period of
unlawful presence in the United
States under clause (i) unless
the alien during such period
was employed without
authorization in the United
States.
(III) Family unity.--No
period of time in which the
alien is a beneficiary of
family unity protection
pursuant to section 301 of the
Immigration Act of 1990 shall
be taken into account in
determining the period of
unlawful presence in the United
States under clause (i).
(IV) Battered women and
children.--Clause (i) shall not
apply to an alien who would be
described in paragraph
(6)(A)(ii) if ``violation of
the terms of the alien's
nonimmigrant visa'' were
substituted for ``unlawful
entry into the United States''
in subclause (III) of that
paragraph.
(V) Victims of a severe form of trafficking
in persons.--Clause (i) shall not apply to an
alien who demonstrates that the severe form of
trafficking (as that term is defined in section
103 of the Trafficking Victims Protection Act
of 2000 (22 U.S.C. 7102)) was at least one
central reason for the alien's unlawful
presence in the United States.
(iv) Tolling for good cause.--In the
case of an alien who--
(I) has been lawfully
admitted or paroled into the
United States,
(II) has filed a nonfrivolous
application for a change or
extension of status before the
date of expiration of the
period of stay authorized by
the Attorney General, and
(III) has not been employed
without authorization in the
United States before or during
the pendency of such
application,
the calculation of the period of time
specified in clause (i)(I) shall be
tolled during the pendency of such
application, but not to exceed 120
days.
(v) Waiver.--The Attorney General has
sole discretion to waive clause (i) in
the case of an immigrant who is the
spouse or son or daughter of a United
States citizen or of an alien lawfully
admitted for permanent residence, if it
is established to the satisfaction of
the Attorney General that the refusal
of admission to such immigrant alien
would result in extreme hardship to the
citizen or lawfully resident spouse or
parent of such alien. No court shall
have jurisdiction to review a decision
or action by the Attorney General
regarding a waiver under this clause.
(C) Aliens unlawfully present after previous
immigration violations.--
(i) In general.--Any alien who--
(I) has been unlawfully
present in the United States
for an aggregate period of more
than 1 year, or
(II) has been ordered removed
under section 235(b)(1),
section 240, or any other
provision of law,
and who enters or attempts to reenter
the United States without being
admitted is inadmissible.
(ii) Exception.--Clause (i) shall not
apply to an alien seeking admission
more than 10 years after the date of
the alien's last departure from the
United States if, prior to the alien's
reembarkation at a place outside the
United States or attempt to be
readmitted from a foreign contiguous
territory, the Secretary of Homeland
Security has consented to the alien's
reapplying for admission.
(iii) Waiver.--The Secretary of
Homeland Security may waive the
application of clause (i) in the case
of an alien who is a VAWA self-
petitioner if there is a connection
between--
(I) the alien's battering or
subjection to extreme cruelty;
and
(II) the alien's removal,
departure from the United
States, reentry or reentries
into the United States; or
attempted reentry into the
United States.
(10) Miscellaneous.--
(A) Practicing polygamists.--Any immigrant
who is coming to the United States to practice
polygamy is inadmissible.
(B) Guardian required to accompany helpless
alien.--Any alien--
(i) who is accompanying another alien
who is inadmissible and who is
certified to be helpless from sickness,
mental or physical disability, or
infancy pursuant to section 232(c), and
(ii) whose protection or guardianship
is determined to be required by the
alien described in clause (i),
is inadmissible.
(C) International child abduction.--
(i) In general.--Except as provided
in clause (ii), any alien who, after
entry of an order by a court in the
United States granting custody to a
person of a United States citizen child
who detains or retains the child, or
withholds custody of the child, outside
the United States from the person
granted custody by that order, is
inadmissible until the child is
surrendered to the person granted
custody by that order.
(ii) Aliens supporting abductors and
relatives of abductors.--Any alien
who--
(I) is known by the Secretary
of State to have intentionally
assisted an alien in the
conduct described in clause
(i),
(II) is known by the
Secretary of State to be
intentionally providing
material support or safe haven
to an alien described in clause
(i), or
(III) is a spouse (other than
the spouse who is the parent of
the abducted child), child
(other than the abducted
child), parent, sibling, or
agent of an alien described in
clause (i), if such person has
been designated by the
Secretary of State at the
Secretary's sole and
unreviewable discretion, is
inadmissible until the child
described in clause (i) is
surrendered to the person
granted custody by the order
described in that clause, and
such person and child are
permitted to return to the
United States or such person's
place of residence.
(iii) Exceptions.--Clauses (i) and
(ii) shall not apply--
(I) to a government official
of the United States who is
acting within the scope of his
or her official duties;
(II) to a government official
of any foreign government if
the official has been
designated by the Secretary of
State at the Secretary's sole
and unreviewable discretion; or
(III) so long as the child is
located in a foreign state that
is a party to the Convention on
the Civil Aspects of
International Child Abduction,
done at The Hague on October
25, 1980.
(D) Unlawful voters.--
(i) In general.--Any alien who has
voted in violation of any Federal,
State, or local constitutional
provision, statute, ordinance, or
regulation is inadmissible.
(ii) Exception.--In the case of an
alien who voted in a Federal, State, or
local election (including an
initiative, recall, or referendum) in
violation of a lawful restriction of
voting to citizens, if each natural
parent of the alien (or, in the case of
an adopted alien, each adoptive parent
of the alien) is or was a citizen
(whether by birth or naturalization),
the alien permanently resided in the
United States prior to attaining the
age of 16, and the alien reasonably
believed at the time of such violation
that he or she was a citizen, the alien
shall not be considered to be
inadmissible under any provision of
this subsection based on such
violation.
(E) Former citizens who renounced citizenship
to avoid taxation.--Any alien who is a former
citizen of the United States who officially
renounces United States citizenship and who is
determined by the Attorney General to have
renounced United States citizenship for the
purpose of avoiding taxation by the United
States is inadmissible.
(b) Notices of Denials.--
(1) Subject to paragraphs (2) and (3), if an alien's
application for a visa, for admission to the United
States, or for adjustment of status is denied by an
immigration or consular officer because the officer
determines the alien to be inadmissible under
subsection (a), the officer shall provide the alien
with a timely written notice that--
(A) states the determination, and
(B) lists the specific provision or
provisions of law under which the alien is
excludable or ineligible for entry or
adjustment of status.
(2) The Secretary of State may waive the requirements
of paragraph (1) with respect to a particular alien or
any class or classes of inadmissible aliens.
(3) Paragraph (1) does not apply to any alien
inadmissible under paragraph (2) or (3) of subsection
(a).
[(c) Repealed by sec. 304(b) of Public Law 104-208 (110 Stat.
3009-597).]
(d)(1) The Attorney General shall determine whether a ground
for inadmissible exists with respect to a nonimmigrant
described in section 101(a)(15)(S). The Attorney General, in
the Attorney General's discretion, may waive the application of
subsection (a) (other than paragraph (3)(E)) in the case of a
nonimmigrant described in section 101(a)(15)(S), if the
Attorney General considers it to be in the national interest to
do so. Nothing in this section shall be regarded as prohibiting
the Immigration and Naturalization Service from instituting
removal proceedings against an alien admitted as a nonimmigrant
under section 101(a)(15)(S) for conduct committed after the
alien's admission into the United States, or for conduct or a
condition that was not disclosed to the Attorney General prior
to the alien's admission as a nonimmigrant under section
101(a)(15)(S).
(3)(A) Except as provided in this subsection, an alien (i)
who is applying for a nonimmigrant visa and is known or
believed by the consular officer to be ineligible for such visa
under subsection (a) (other than paragraphs (3)(A)(i)(I),
(3)(A)(ii), (3)(A)(iii), (3)(C), and clauses (i) and (ii) of
paragraph (3)(E) of such subsection), may, after approval by
the Attorney General of a recommendation by the Secretary of
State or by the consular officer that the alien be admitted
temporarily despite his inadmissibility, be granted such a visa
and may be admitted into the United States temporarily as a
nonimmigrant in the discretion of the Attorney General, or (ii)
who is inadmissible under subsection (a) (other than paragraphs
(3)(A)(i)(I), (3)(A)(ii), (3)(A)(iii), (3)(C), and clauses (i)
and (ii) of paragraph (3)(E) of such subsection), but who is in
possession of appropriate documents or is granted a waiver
thereof and is seeking admission, may be admitted into the
United States temporarily as a nonimmigrant in the discretion
of the Attorney General. The Attorney General shall prescribe
conditions, including exaction of such bonds as may be
necessary, to control and regulate the admission and return of
inadmissible aliens applying for temporary admission under this
paragraph.
(B)(i) The Secretary of State, after consultation with the
Attorney General and the Secretary of Homeland Security, or the
Secretary of Homeland Security, after consultation with the
Secretary of State and the Attorney General, may determine in
such Secretary's sole unreviewable discretion that subsection
(a)(3)(B) shall not apply with respect to an alien within the
scope of that subsection or that subsection (a)(3)(B)(vi)(III)
shall not apply to a group within the scope of that subsection,
except that no such waiver may be extended to an alien who is
within the scope of subsection (a)(3)(B)(i)(II), no such waiver
may be extended to an alien who is a member or representative
of, has voluntarily and knowingly engaged in or endorsed or
espoused or persuaded others to endorse or espouse or support
terrorist activity on behalf of, or has voluntarily and
knowingly received military-type training from a terrorist
organization that is described in subclause (I) or (II) of
subsection (a)(3)(B)(vi), and no such waiver may be extended to
a group that has engaged terrorist activity against the United
States or another democratic country or that has purposefully
engaged in a pattern or practice of terrorist activity that is
directed at civilians. Such a determination shall neither
prejudice the ability of the United States Government to
commence criminal or civil proceedings involving a beneficiary
of such a determination or any other person, nor create any
substantive or procedural right or benefit for a beneficiary of
such a determination or any other person. Notwithstanding any
other provision of law (statutory or nonstatutory), including
section 2241 of title 28, or any other habeas corpus provision,
and sections 1361 and 1651 of such title, no court shall have
jurisdiction to review such a determination or revocation
except in a proceeding for review of a final order of removal
pursuant to section 1252 of this title, and review shall be
limited to the extent provided in section 1252(a)(2)(D). The
Secretary of State may not exercise the discretion provided in
this clause with respect to an alien at any time during which
the alien is the subject of pending removal proceedings under
section 1229a of this title.
(ii) Not later than 90 days after the end of each fiscal
year, the Secretary of State and the Secretary of Homeland
Security shall each provide to the Committees on the Judiciary
of the House of Representatives and of the Senate, the
Committee on International Relations of the House of
Representatives, the Committee on Foreign Relations of the
Senate, and the Committee on Homeland Security of the House of
Representatives a report on the aliens to whom such Secretary
has applied clause (i). Within one week of applying clause (i)
to a group, the Secretary of State or the Secretary of Homeland
Security shall provide a report to such Committees.
(4) Either or both of the requirements of paragraph (7)(B)(i)
of subsection (a) may be waived by the Attorney General and the
Secretary of State acting jointly (A) on the basis of
unforeseen emergency in individual cases, or (B) on the basis
of reciprocity with respect to nationals of foreign contiguous
territory or of adjacent islands and residents thereof having a
common nationality with such nationals, or (C) in the case of
aliens proceeding in immediate and continuous transit through
the United States under contracts authorized in section 238(c).
(5)(A) The Attorney General may, except as provided in
subparagraph (B) or in section 214(f), in his discretion parole
into the United States temporarily under such conditions as he
may prescribe only on a case-by-case basis for urgent
humanitarian reasons or significant public benefit any alien
applying for admission to the United States, but such parole of
such alien shall not be regarded as an admission of the alien
and when the purposes of such parole shall, in the opinion of
the Attorney General, have been served the alien shall
forthwith return or be returned to the custody from which he
was paroled and thereafter his case shall continue to be dealt
with in the same manner as that of any other applicant for
admission to the United States.
(B) The Attorney General may not parole into the United
States an alien who is a refugee unless the Attorney General
determines that compelling reasons in the public interest with
respect to that particular alien require that the alien be
paroled into the United States rather than be admitted as a
refugee under section 207.
[(6) repealed; see footnote at the beginning of subsection
(d).]
(7) The provisions of subsection (a) (other than paragraph
(7)) shall be applicable to any alien who shall leave Guam, the
Commonwealth of the Northern Mariana Islands, Puerto Rico, or
the Virgin Islands of the United States, and who seeks to enter
the continental United States or any other place under the
jurisdiction of the United States. Any alien described in this
paragraph, who is denied admission to the United States, shall
be immediately removed in the manner provided by section 241(c)
of this Act.
(8) Upon a basis of reciprocity accredited officials of
foreign governments, their immediate families, attendants,
servants, and personal employees may be admitted in immediate
and continuous transit through the United States without regard
to the provisions of this section except paragraphs (3)(A),
(3)(B), (3)(C), and (7)(B) of subsection (a) of this section.
[(9) and (10) repealed; see footnote at the beginning of
subsection (d).]
(11) The Attorney General may, in his discretion for
humanitarian purposes, to assure family unity, or when it is
otherwise in the public interest, waive application of clause
(i) of subsection (a)(6)(E) in the case of any alien lawfully
admitted for permanent residence who temporarily proceeded
abroad voluntarily and not under an order of removal, and who
is otherwise admissible to the United States as a returning
resident under section 211(b) and in the case of an alien
seeking admission or adjustment of status as an immediate
relative or immigrant under section 203(a) (other than
paragraph (4) thereof), if the alien has encouraged, induced,
assisted, abetted, or aided only an individual who at the time
of such action was the alien's spouse, parent, son, or daughter
(and no other individual) to enter the United States in
violation of law.
(12) The Attorney General may, in the discretion of the
Attorney General for humanitarian purposes or to assure family
unity, waive application of clause (i) of subsection
(a)(6)(F)--
(A) in the case of an alien lawfully admitted for
permanent residence who temporarily proceeded abroad
voluntarily and not under an order of deportation or
removal and who is otherwise admissible to the United
States as a returning resident under section 211(b),
and
(B) in the case of an alien seeking admission or
adjustment of status under section 201(b)(2)(A) or
under section 203(a),
if no previous civil money penalty was imposed against the
alien under section 274C and the offense was committed solely
to assist, aid, or support the alien's spouse or child (and not
another individual). No court shall have jurisdiction to review
a decision of the Attorney General to grant or deny a waiver
under this paragraph.
(13)(A) The Secretary of Homeland Security shall determine
whether a ground for inadmissibility exists with respect to a
nonimmigrant described in section 101(a)(15)(T), except that
the ground for inadmissibility described in subsection (a)(4)
shall not apply with respect to such a nonimmigrant.
(B) In addition to any other waiver that may be available
under this section, in the case of a nonimmigrant described in
section 101(a)(15)(T), if the Secretary of Homeland Security
considers it to be in the national interest to do so, the
Secretary of Homeland Security, in the Attorney General's
discretion, may waive the application of--
(i) subsection (a)(1); and
(ii) any other provision of subsection (a) (excluding
paragraphs (3), (4), (10)(C), and (10(E)) if the
activities rendering the alien inadmissible under the
provision were caused by, or were incident to, the
victimization described in section 101(a)(15)(T)(i)(I).
(14) The Secretary of Homeland Security shall determine
whether a ground of inadmissibility exists with respect to a
nonimmigrant described in section 101(a)(15)(U). The Secretary
of Homeland Security, in the Attorney General's discretion, may
waive the application of subsection (a) (other than paragraph
(3)(E)) in the case of a nonimmigrant described in section
101(a)(15)(U), if the Secretary of Homeland Security considers
it to be in the public or national interest to do so.
(e) No person admitted under section 101(a)(15)(J) or
acquiring such status after admission (i) whose participation
in the program for which he came to the United States was
financed in whole or in part, directly or indirectly, by an
agency of the Government of the United States or by the
government of the country of his nationality or his last
residence, (ii) who at the time of admission or acquisition of
status under section 101(a)(15)(J) was a national or resident
of a country which the Director of the United States
Information Agency pursuant to regulations prescribed by him,
had designated as clearly requiring the services of persons
engaged in the field of specialized knowledge or skill in which
the alien was engaged, or (iii) who came to the United States
or acquired such status in order to receive graduate medical
education or training, shall be eligible to apply for an
immigrant visa, or for permanent residence, or for a
nonimmigrant visa under section 101(a)(15)(H) or section
101(a)(15)(L) until it is established that such person has
resided and been physically present in the country of his
nationality or his last residence for an aggregate of a least
two years following departure from the United States: Provided,
That upon the favorable recommendation of the Director,
pursuant to the request of an interested United States
Government agency (or, in the case of an alien described in
clause (iii), pursuant to the request of a State Department of
Public Health, or its equivalent), or of the Commissioner of
Immigration and Naturalization after he has determined that
departure from the United States would impose exceptional
hardship upon the alien's spouse or child (if such spouse or
child is a citizen of the United States or a lawfully resident
alien), or that the alien cannot return to the country of his
nationality or last residence because he would be subject to
persecution on account of race, religion, or political opinion,
the Attorney General may waive the requirement of such two-year
foreign residence abroad in the case of any alien whose
admission to the United States is found by the Attorney General
to be in the public interest except that in the case of a
waiver requested by a State Department of Public Health, or its
equivalent, or in the case of a waiver requested by an
interested United States Government agency on behalf of an
alien described in clause (iii), the waiver shall be subject to
the requirements of section 214(l): And provided further, That,
except in the case of an alien described in clause (iii), the
Attorney General may, upon the favorable recommendation of the
Director, waive such two-year foreign residence requirement in
any case in which the foreign country of the alien's
nationality or last residence has furnished the Director a
statement in writing that it has no objection to such waiver in
the case of such alien.
(f) Whenever the President finds that the entry of any aliens
or of any class of aliens into the United States would be
detrimental to the interests of the United States, he may by
proclamation, and for such period as he shall deem necessary,
suspend the entry of all aliens or any class of aliens as
immigrants or nonimmigrants, or impose on the entry of aliens
any restrictions he may deem to be appropriate. Whenever the
Attorney General finds that a commercial airline has failed to
comply with regulations of the Attorney General relating to
requirements of airlines for the detection of fraudulent
documents used by passengers traveling to the United States
(including the training of personnel in such detection), the
Attorney General may suspend the entry of some or all aliens
transported to the United States by such airline.
(g) The Attorney General may waive the application of--
(1) subsection (a)(1)(A)(i) in the case of any alien
who--
(A) is the spouse or the unmarried son or
daughter, or the minor unmarried lawfully
adopted child, of a United States citizen, or
of an alien lawfully admitted for permanent
residence, or of an alien who has been issued
an immigrant visa,
(B) has a son or daughter who is a United
States citizen, or an alien lawfully admitted
for permanent residence, or an alien who has
been issued an immigrant visa; or
(C) is a VAWA self-petitioner,
in accordance with such terms, conditions, and
controls, if any, including the giving of bond, as the
Attorney General, in the discretion of the Attorney
General after consultation with the Secretary of Health
and Human Services, may by regulation prescribe;
(2) subsection (a)(1)(A)(ii) in the case of any
alien--
(A) who receives vaccination against the
vaccine-preventable disease or diseases for
which the alien has failed to present
documentation of previous vaccination,
(B) for whom a civil surgeon, medical
officer, or panel physician (as those terms are
defined by section 34.2 of title 42 of the Code
of Federal Regulations) certifies, according to
such regulations as the Secretary of Health and
Human Services may prescribe, that such
vaccination would not be medically appropriate,
or
(C) under such circumstances as the Attorney
General provides by regulation, with respect to
whom the requirement of such a vaccination
would be contrary to the alien's religious
beliefs or moral convictions; or
(3) subsection (a)(1)(A)(iii) in the case of any
alien, in accordance with such terms, conditions, and
controls, if any, including the giving of bond, as the
Attorney General, in the discretion of the Attorney
General after consultation with the Secretary of Health
and Human Services, may by regulation prescribe.
(h) The Attorney General may, in his discretion, waive the
application of subparagraphs (A)(i)(I), (B), (D), and (E) of
subsection (a)(2) [and subparagraph (A)(i)(II) of such
subsection insofar as it relates to a single offense of simple
possession of 30 grams or less of marijuana] if--
(1)(A) in the case of any immigrant it is established
to the satisfaction of the Attorney General that--
(i) the alien is inadmissible only under
subparagraph (D)(i) or (D)(ii) of such
subsection or the activities for which the
alien is inadmissible occurred more than 15
years before the date of the alien's
application for a visa, admission, or
adjustment of status,
(ii) the admission to the United States of
such alien would not be contrary to the
national welfare, safety, or security of the
United States, and
(iii) the alien has been rehabilitated; or
(B) in the case of an immigrant who is the spouse,
parent, son, or daughter of a citizen of the United
States or an alien lawfully admitted for permanent
residence if it is established to the satisfaction of
the Attorney General that the alien's denial of
admission would result in extreme hardship to the
United States citizen or lawfully resident spouse,
parent, son, or daughter of such alien; or
(C) the alien is a VAWA self-petitioner; and
(2) the Attorney General, in his discretion, and
pursuant to such terms, conditions and procedures as he
may by regulations prescribe, has consented to the
alien's applying or reapplying for a visa, for
admission to the United States, or adjustment of
status.
No waiver shall be provided under this subsection in the case
of an alien who has been convicted of (or who has admitted
committing acts that constitute) murder or criminal acts
involving torture, or an attempt or conspiracy to commit murder
or a criminal act involving torture. No waiver shall be granted
under this subsection in the case of an alien who has
previously been admitted to the United States as an alien
lawfully admitted for permanent residence if either since the
date of such admission the alien has been convicted of an
aggravated felony or the alien has not lawfully resided
continuously in the United States for a period of not less than
7 years immediately preceding the date of initiation of
proceedings to remove the alien from the United States. No
court shall have jurisdiction to review a decision of the
Attorney General to grant or deny a waiver under this
subsection.
(i)(1) The Attorney General may, in the discretion of the
Attorney General, waive the application of clause (i) of
subsection (a)(6)(C) in the case of an immigrant who is the
spouse, son, or daughter of a United States citizen or of an
alien lawfully admitted for permanent residence if it is
established to the satisfaction of the Attorney General that
the refusal of admission to the United States of such immigrant
alien would result in extreme hardship to the citizen or
lawfully resident spouse or parent of such an alien or, in the
case of a VAWA self-petitioner, the alien demonstrates extreme
hardship to the alien or the alien's United States citizen,
lawful permanent resident, or qualified alien parent or child.
(2) No court shall have jurisdiction to review a decision or
action of the Attorney General regarding a waiver under
paragraph (1).
(j)(1) The additional requirements referred to in section
101(a)(15)(J) for an alien who is coming to the United States
under a program under which he will receive graduate medical
education or training are as follows:
(A) A school of medicine or of one of the other
health professions, which is accredited by a body or
bodies approved for the purpose by the Secretary of
Education, has agreed in writing to provide the
graduate medical education or training under the
program for which the alien is coming to the United
States or to assume responsibility for arranging for
the provision thereof by an appropriate public or
nonprofit private institution or agency, except that,
in the case of such an agreement by a school of
medicine, any one or more of its affiliated hospitals
which are to participate in the provision of the
graduate medical education or training must join in the
agreement.
(B) Before making such agreement, the accredited
school has been satisfied that the alien (i) is a
graduate of a school of medicine which is accredited by
a body or bodies approved for the purpose by the
Secretary of Education (regardless of whether such
school of medicine is in the United States); or (ii)(I)
has passed parts I and II of the National Board of
Medical Examiners Examination (or an equivalent
examination as determined by the Secretary of Health
and Human Services), (II) has competency in oral and
written English, (III) will be able to adapt to the
educational and cultural environment in which he will
be receiving his education or training, and (IV) has
adequate prior education and training to participate
satisfactorily in the program for which he is coming to
the United States. For the purposes of this
subparagraph, an alien who is a graduate of a medical
school shall be considered to have passed parts I and
II of the National Board of Medical Examiners
examination if the alien was fully and permanently
licensed to practice medicine in a State on January 9,
1978, and was practicing medicine in a State on that
date.
(C) The alien has made a commitment to return to the
country of his nationality or last residence upon
completion of the education or training for which he is
coming to the United States, and the government of the
country of his nationality or last residence has
provided a written assurance, satisfactory to the
Secretary of Health and Human Services, that there is a
need in that country for persons with the skills the
alien will acquire in such education or training.
(D) The duration of the alien's participation in the
program of graduate medical education or training for
which the alien is coming to the United States is
limited to the time typically required to complete such
program, as determined by the Director of the United
States Information Agency at the time of the alien's
admission into the United States, based on criteria
which are established in coordination with the
Secretary of Health and Human Services and which take
into consideration the published requirements of the
medical specialty board which administers such
education or training program; except that--
(i) such duration is further limited to seven
years unless the alien has demonstrated to the
satisfaction of the Director that the country
to which the alien will return at the end of
such specialty education or training has an
exceptional need for an individual trained in
such specialty, and
(ii) the alien may, once and not later than
two years after the date the alien is admitted
to the United States as an exchange visitor or
acquires exchange visitor status, change the
alien's designated program of graduate medical
education or training if the Director approves
the change and if a commitment and written
assurance with respect to the alien's new
program have been provided in accordance with
subparagraph (C).
(E) The alien furnishes the Attorney General each
year with an affidavit (in such form as the Attorney
General shall prescribe) that attests that the alien
(i) is in good standing in the program of graduate
medical education or training in which the alien is
participating, and (ii) will return to the country of
his nationality or last residence upon completion of
the education or training for which he came to the
United States.
(2) An alien who is a graduate of a medical school and who is
coming to the United States to perform services as a member of
the medical profession may not be admitted as a nonimmigrant
under section 101(a)(15)(H)(i)(b) unless--
(A) the alien is coming pursuant to an invitation
from a public or nonprofit private educational or
research institution or agency in the United States to
teach or conduct research, or both, at or for such
institution or agency, or
(B)(i) the alien has passed the Federation licensing
examination (administered by the Federation of State
Medical Boards of the United States) or an equivalent
examination as determined by the Secretary of Health
and Human Services, and
(ii)(I) has competency in oral and written English or
(II) is a graduate of a school of medicine which is
accredited by a body or bodies approved for the purpose
by the Secretary of Education (regardless of whether
such school of medicine is in the United States).
(3) The Director of the United States Information Agency
annually shall transmit to the Congress a report on aliens who
have submitted affidavits described in paragraph (1)(E), and
shall include in such report the name and address of each such
alien, the medical education or training program in which such
alien is participating, and the status of such alien in that
program.
(k) Any alien, inadmissible from the United States under
paragraph (5)(A) or (7)(A)(i) of subsection (a), who is in
possession of an immigrant visa may, if otherwise admissible,
be admitted in the discretion of the Attorney General if the
Attorney General is satisfied that inadmissibility was not
known to, and could not have been ascertained by the exercise
of reasonable diligence by, the immigrant before the time of
departure of the vessel or aircraft from the last port outside
the United States and outside foreign contiguous territory or,
in the case of an immigrant coming from foreign contiguous
territory, before the time of the immigrant's application for
admission.
(l) Guam and Northern Mariana Islands Visa Waiver Program.--
(1) In general.--The requirement of subsection
(a)(7)(B)(i) may be waived by the Secretary of Homeland
Security, in the case of an alien applying for
admission as a nonimmigrant visitor for business or
pleasure and solely for entry into and stay in Guam or
the Commonwealth of the Northern Mariana Islands for a
period not to exceed 45 days, if the Secretary of
Homeland Security, after consultation with the
Secretary of the Interior, the Secretary of State, the
Governor of Guam and the Governor of the Commonwealth
of the Northern Mariana Islands, determines that--
(A) an adequate arrival and departure control
system has been developed in Guam and the
Commonwealth of the Northern Mariana Islands;
and
(B) such a waiver does not represent a threat
to the welfare, safety, or security of the
United States or its territories and
commonwealths.
(2) Alien waiver of rights.--An alien may not be
provided a waiver under this subsection unless the
alien has waived any right--
(A) to review or appeal under this Act an
immigration officer's determination as to the
admissibility of the alien at the port of entry
into Guam or the Commonwealth of the Northern
Mariana Islands; or
(B) to contest, other than on the basis of an
application for withholding of removal under
section 241(b)(3) of this Act or under the
Convention Against Torture, or an application
for asylum if permitted under section 208, any
action for removal of the alien.
(3) Regulations.--All necessary regulations to
implement this subsection shall be promulgated by the
Secretary of Homeland Security, in consultation with
the Secretary of the Interior and the Secretary of
State, on or before the 180th day after the date of
enactment of the Consolidated Natural Resources Act of
2008. The promulgation of such regulations shall be
considered a foreign affairs function for purposes of
section 553(a) of title 5, United States Code. At a
minimum, such regulations should include, but not
necessarily be limited to--
(A) a listing of all countries whose
nationals may obtain the waiver also provided
by this subsection, except that such
regulations shall provide for a listing of any
country from which the Commonwealth has
received a significant economic benefit from
the number of visitors for pleasure within the
one-year period preceding the date of enactment
of the Consolidated Natural Resources Act of
2008, unless the Secretary of Homeland Security
determines that such country's inclusion on
such list would represent a threat to the
welfare, safety, or security of the United
States or its territories; and
(B) any bonding requirements for nationals of
some or all of those countries who may present
an increased risk of overstays or other
potential problems, if different from such
requirements otherwise provided by law for
nonimmigrant visitors.
(4) Factors.--In determining whether to grant or
continue providing the waiver under this subsection to
nationals of any country, the Secretary of Homeland
Security, in consultation with the Secretary of the
Interior and the Secretary of State, shall consider all
factors that the Secretary deems relevant, including
electronic travel authorizations, procedures for
reporting lost and stolen passports, repatriation of
aliens, rates of refusal for nonimmigrant visitor
visas, overstays, exit systems, and information
exchange.
(5) Suspension.--The Secretary of Homeland Security
shall monitor the admission of nonimmigrant visitors to
Guam and the Commonwealth of the Northern Mariana
Islands under this subsection. If the Secretary
determines that such admissions have resulted in an
unacceptable number of visitors from a country
remaining unlawfully in Guam or the Commonwealth of the
Northern Mariana Islands, unlawfully obtaining entry to
other parts of the United States, or seeking
withholding of removal or asylum, or that visitors from
a country pose a risk to law enforcement or security
interests of Guam or the Commonwealth of the Northern
Mariana Islands or of the United States (including the
interest in the enforcement of the immigration laws of
the United States), the Secretary shall suspend the
admission of nationals of such country under this
subsection. The Secretary of Homeland Security may in
the Secretary's discretion suspend the Guam and
Northern Mariana Islands visa waiver program at any
time, on a country-by-country basis, for other good
cause.
(6) Addition of countries.--The Governor of Guam and
the Governor of the Commonwealth of the Northern
Mariana Islands may request the Secretary of the
Interior and the Secretary of Homeland Security to add
a particular country to the list of countries whose
nationals may obtain the waiver provided by this
subsection, and the Secretary of Homeland Security may
grant such request after consultation with the
Secretary of the Interior and the Secretary of State,
and may promulgate regulations with respect to the
inclusion of that country and any special requirements
the Secretary of Homeland Security, in the Secretary's
sole discretion, may impose prior to allowing nationals
of that country to obtain the waiver provided by this
subsection.
(m)(1) The qualifications referred to in section
101(a)(15)(H)(i)(c), with respect to an alien who is coming to
the United States to perform nursing services for a facility,
are that the alien--
(A) has obtained a full and unrestricted license to
practice professional nursing in the country where the
alien obtained nursing education or has received
nursing education in the United States;
(B) has passed an appropriate examination (recognized
in regulations promulgated in consultation with the
Secretary of Health and Human Services) or has a full
and unrestricted license under State law to practice
professional nursing in the State of intended
employment; and
(C) is fully qualified and eligible under the laws
(including such temporary or interim licensing
requirements which authorize the nurse to be employed)
governing the place of intended employment to engage in
the practice of professional nursing as a registered
nurse immediately upon admission to the United States
and is authorized under such laws to be employed by the
facility.
(2)(A) The attestation referred to in section
101(a)(15)(H)(i)(c), with respect to a facility for which an
alien will perform services, is an attestation as to the
following:
(i) The facility meets all the requirements of
paragraph (6).
(ii) The employment of the alien will not adversely
affect the wages and working conditions of registered
nurses similarly employed.
(iii) The alien employed by the facility will be paid
the wage rate for registered nurses similarly employed
by the facility.
(iv) The facility has taken and is taking timely and
significant steps designed to recruit and retain
sufficient registered nurses who are United States
citizens or immigrants who are authorized to perform
nursing services, in order to remove as quickly as
reasonably possible the dependence of the facility on
nonimmigrant registered nurses.
(v) There is not a strike or lockout in the course of
a labor dispute, the facility did not lay off and will
not lay off a registered nurse employed by the facility
within the period beginning 90 days before and ending
90 days after the date of filing of any visa petition,
and the employment of such an alien is not intended or
designed to influence an election for a bargaining
representative for registered nurses of the facility.
(vi) At the time of the filing of the petition for
registered nurses under section 101(a)(15)(H)(i)(c),
notice of the filing has been provided by the facility
to the bargaining representative of the registered
nurses at the facility or, where there is no such
bargaining representative, notice of the filing has
been provided to the registered nurses employed at the
facility through posting in conspicuous locations.
(vii) The facility will not, at any time, employ a
number of aliens issued visas or otherwise provided
nonimmigrant status under section 101(a)(15)(H)(i)(c)
that exceeds 33 percent of the total number of
registered nurses employed by the facility.
(viii) The facility will not, with respect to any
alien issued a visa or otherwise provided nonimmigrant
status under section 101(a)(15)(H)(i)(c)--
(I) authorize the alien to perform nursing
services at any worksite other than a worksite
controlled by the facility; or
(II) transfer the place of employment of the
alien from one worksite to another.
Nothing in clause (iv) shall be construed as requiring
a facility to have taken significant steps described in
such clause before the date of the enactment of the
Nursing Relief for Disadvantaged Areas Act of 1999. A
copy of the attestation shall be provided, within 30
days of the date of filing, to registered nurses
employed at the facility on the date of filing.
(B) For purposes of subparagraph (A)(iv), each of the
following shall be considered a significant step reasonably
designed to recruit and retain registered nurses:
(i) Operating a training program for registered
nurses at the facility or financing (or providing
participation in) a training program for registered
nurses elsewhere.
(ii) Providing career development programs and other
methods of facilitating health care workers to become
registered nurses.
(iii) Paying registered nurses wages at a rate higher
than currently being paid to registered nurses
similarly employed in the geographic area.
(iv) Providing reasonable opportunities for
meaningful salary advancement by registered nurses.
The steps described in this subparagraph shall not be
considered to be an exclusive list of the significant steps
that may be taken to meet the conditions of subparagraph
(A)(iv). Nothing in this subparagraph shall require a facility
to take more than one step if the facility can demonstrate that
taking a second step is not reasonable.
(C) Subject to subparagraph (E), an attestation under
subparagraph (A)--
(i) shall expire on the date that is the later of--
(I) the end of the one-year period beginning
on the date of its filing with the Secretary of
Labor; or
(II) the end of the period of admission under
section 101(a)(15)(H)(i)(c) of the last alien
with respect to whose admission it was applied
(in accordance with clause (ii)); and
(ii) shall apply to petitions filed during the one-
year period beginning on the date of its filing with
the Secretary of Labor if the facility states in each
such petition that it continues to comply with the
conditions in the attestation.
(D) A facility may meet the requirements under this paragraph
with respect to more than one registered nurse in a single
petition.
(E)(i) The Secretary of Labor shall compile and make
available for public examination in a timely manner in
Washington, D.C., a list identifying facilities which have
filed petitions for nonimmigrants under section
101(a)(15)(H)(i)(c) and, for each such facility, a copy of the
facility's attestation under subparagraph (A) (and accompanying
documentation) and each such petition filed by the facility.
(ii) The Secretary of Labor shall establish a process,
including reasonable time limits, for the receipt,
investigation, and disposition of complaints respecting a
facility's failure to meet conditions attested to or a
facility's misrepresentation of a material fact in an
attestation. Complaints may be filed by any aggrieved person or
organization (including bargaining representatives,
associations deemed appropriate by the Secretary, and other
aggrieved parties as determined under regulations of the
Secretary). The Secretary shall conduct an investigation under
this clause if there is reasonable cause to believe that a
facility fails to meet conditions attested to. Subject to the
time limits established under this clause, this subparagraph
shall apply regardless of whether an attestation is expired or
unexpired at the time a complaint is filed.
(iii) Under such process, the Secretary shall provide, within
180 days after the date such a complaint is filed, for a
determination as to whether or not a basis exists to make a
finding described in clause (iv). If the Secretary determines
that such a basis exists, the Secretary shall provide for
notice of such determination to the interested parties and an
opportunity for a hearing on the complaint within 60 days of
the date of the determination.
(iv) If the Secretary of Labor finds, after notice and
opportunity for a hearing, that a facility (for which an
attestation is made) has failed to meet a condition attested to
or that there was a misrepresentation of material fact in the
attestation, the Secretary shall notify the Attorney General of
such finding and may, in addition, impose such other
administrative remedies (including civil monetary penalties in
an amount not to exceed $1,000 per nurse per violation, with
the total penalty not to exceed $10,000 per violation) as the
Secretary determines to be appropriate. Upon receipt of such
notice, the Attorney General shall not approve petitions filed
with respect to a facility during a period of at least one year
for nurses to be employed by the facility.
(v) In addition to the sanctions provided for under clause
(iv), if the Secretary of Labor finds, after notice and an
opportunity for a hearing, that a facility has violated the
condition attested to under subparagraph (A)(iii) (relating to
payment of registered nurses at the prevailing wage rate), the
Secretary shall order the facility to provide for payment of
such amounts of back pay as may be required to comply with such
condition.
(F)(i) The Secretary of Labor shall impose on a facility
filing an attestation under subparagraph (A) a filing fee, in
an amount prescribed by the Secretary based on the costs of
carrying out the Secretary's duties under this subsection, but
not exceeding $250.
(ii) Fees collected under this subparagraph shall be
deposited in a fund established for this purpose in the
Treasury of the United States.
(iii) The collected fees in the fund shall be available to
the Secretary of Labor, to the extent and in such amounts as
may be provided in appropriations Acts, to cover the costs
described in clause (i), in addition to any other funds that
are available to the Secretary to cover such costs.
(3) The period of admission of an alien under section
101(a)(15)(H)(i)(c) shall be 3 years.
(4) The total number of nonimmigrant visas issued pursuant to
petitions granted under section 101(a)(15)(H)(i)(c) in each
fiscal year shall not exceed 500. The number of such visas
issued for employment in each State in each fiscal year shall
not exceed the following:
(A) For States with populations of less than
9,000,000, based upon the 1990 decennial census of
population, 25 visas.
(B) For States with populations of 9,000,000 or more,
based upon the 1990 decennial census of population, 50
visas.
(C) If the total number of visas available under this
paragraph for a fiscal year quarter exceeds the number
of qualified nonimmigrants who may be issued such visas
during those quarters, the visas made available under
this paragraph shall be issued without regard to the
numerical limitation under subparagraph (A) or (B) of
this paragraph during the last fiscal year quarter.
(5) A facility that has filed a petition under section
101(a)(15)(H)(i)(c) to employ a nonimmigrant to perform nursing
services for the facility--
(A) shall provide the nonimmigrant a wage rate and
working conditions commensurate with those of nurses
similarly employed by the facility;
(B) shall require the nonimmigrant to work hours
commensurate with those of nurses similarly employed by
the facility; and
(C) shall not interfere with the right of the
nonimmigrant to join or organize a union.
(6) For purposes of this subsection and section
101(a)(15)(H)(i)(c), the term ``facility'' means a subsection
(d) hospital (as defined in section 1886(d)(1)(B) of the Social
Security Act (42 U.S.C. 1395ww(d)(1)(B))) that meets the
following requirements:
(A) As of March 31, 1997, the hospital was located in
a health professional shortage area (as defined in
section 332 of the Public Health Service Act (42 U.S.C.
254e)).
(B) Based on its settled cost report filed under
title XVIII of the Social Security Act for its cost
reporting period beginning during fiscal year 1994--
(i) the hospital has not less than 190
licensed acute care beds;
(ii) the number of the hospital's inpatient
days for such period which were made up of
patients who (for such days) were entitled to
benefits under part A of such title is not less
than 35 percent of the total number of such
hospital's acute care inpatient days for such
period; and
(iii) the number of the hospital's inpatient
days for such period which were made up of
patients who (for such days) were eligible for
medical assistance under a State plan approved
under title XIX of the Social Security Act, is
not less than 28 percent of the total number of
such hospital's acute care inpatient days for
such period.
(7) For purposes of paragraph (2)(A)(v), the term
``lay off'', with respect to a worker--
(A) means to cause the worker's loss of
employment, other than through a discharge for
inadequate performance, violation of workplace
rules, cause, voluntary departure, voluntary
retirement, or the expiration of a grant or
contract; but
(B) does not include any situation in which
the worker is offered, as an alternative to
such loss of employment, a similar employment
opportunity with the same employer at
equivalent or higher compensation and benefits
than the position from which the employee was
discharged, regardless of whether or not the
employee accepts the offer.
Nothing in this paragraph is intended to limit an
employee's or an employer's rights under a collective
bargaining agreement or other employment contract.
(n)(1) No alien may be admitted or provided status as an H-1B
nonimmigrant in an occupational classification unless the
employer has filed with the Secretary of Labor an application
stating the following:
(A) The employer--
(i) is offering and will offer during the
period of authorized employment to aliens
admitted or provided status as an H-1B
nonimmigrant wages that are at least--
(I) the actual wage level paid by the
employer to all other individuals with
similar experience and qualifications
for the specific employment in
question, or
(II) the prevailing wage level for
the occupational classification in the
area of employment,
whichever is greater, based on the best
information available as of the time of filing
the application, and
(ii) will provide working conditions for such
a nonimmigrant that will not adversely affect
the working conditions of workers similarly
employed.
(B) There is not a strike or lockout in the course of
a labor dispute in the occupational classification at
the place of employment.
(C) The employer, at the time of filing the
application--
(i) has provided notice of the filing under
this paragraph to the bargaining representative
(if any) of the employer's employees in the
occupational classification and area for which
aliens are sought, or
(ii) if there is no such bargaining
representative, has provided notice of filing
in the occupational classification through such
methods as physical posting in conspicuous
locations at the place of employment or
electronic notification to employees in the
occupational classification for which H-1B
nonimmigrants are sought.
(D) The application shall contain a specification of
the number of workers sought, the occupational
classification in which the workers will be employed,
and wage rate and conditions under which they will be
employed.
(E)(i) In the case of an application described in
clause (ii), the employer did not displace and will not
displace a United States worker (as defined in
paragraph (4)) employed by the employer within the
period beginning 90 days before and ending 90 days
after the date of filing of any visa petition supported
by the application.
(ii) An application described in this clause is an
application filed on or after the date final
regulations are first promulgated to carry out this
subparagraph, and before by an H-1B-dependent employer
(as defined in paragraph (3)) or by an employer that
has been found, on or after the date of the enactment
of the American Competitiveness and Workforce
Improvement Act of 1998, under paragraph (2)(C) or (5)
to have committed a willful failure or
misrepresentation during the 5-year period preceding
the filing of the application. An application is not
described in this clause if the only H-1B nonimmigrants
sought in the application are exempt H-1B
nonimmigrants.
(F) In the case of an application described in
subparagraph (E)(ii), the employer will not place the
nonimmigrant with another employer (regardless of
whether or not such other employer is an H-1B-dependent
employer) where--
(i) the nonimmigrant performs duties in whole
or in part at one or more worksites owned,
operated, or controlled by such other employer;
and
(ii) there are indicia of an employment
relationship between the nonimmigrant and such
other employer;
unless the employer has inquired of the other employer
as to whether, and has no knowledge that, within the
period beginning 90 days before and ending 90 days
after the date of the placement of the nonimmigrant
with the other employer, the other employer has
displaced or intends to displace a United States worker
employed by the other employer.
(G)(i) In the case of an application described in
subparagraph (E)(ii), subject to clause (ii), the
employer, prior to filing the application--
(I) has taken good faith steps to recruit, in
the United States using procedures that meet
industry-wide standards and offering
compensation that is at least as great as that
required to be offered to H-1B nonimmigrants
under subparagraph (A), United States workers
for the job for which the nonimmigrant or
nonimmigrants is or are sought; and
(II) has offered the job to any United States
worker who applies and is equally or better
qualified for the job for which the
nonimmigrant or nonimmigrants is or are sought.
(ii) The conditions described in clause (i) shall not
apply to an application filed with respect to the
employment of an H-1B nonimmigrant who is described in
subparagraph (A), (B), or (C) of section 203(b)(1).
The employer shall make available for public examination,
within one working day after the date on which an application
under this paragraph is filed, at the employer's principal
place of business or worksite, a copy of each such application
(and such accompanying documents as are necessary). The
Secretary shall compile, on a current basis, a list (by
employer and by occupational classification) of the
applications filed under this subsection. Such list shall
include the wage rate, number of aliens sought, period of
intended employment, and date of need. The Secretary shall make
such list available for public examination in Washington, D.C.
The Secretary of Labor shall review such an application only
for completeness and obvious inaccuracies. Unless the Secretary
finds that the application is incomplete or obviously
inaccurate, the Secretary shall provide the certification
described in section 101(a)(15)(H)(i)(b) within 7 days of the
date of the filing of the application. The application form
shall include a clear statement explaining the liability under
subparagraph (F) of a placing employer if the other employer
described in such subparagraph displaces a United States worker
as described in such subparagraph. Nothing in subparagraph (G)
shall be construed to prohibit an employer from using
legitimate selection criteria relevant to the job that are
normal or customary to the type of job involved, so long as
such criteria are not applied in a discriminatory manner.
(2)(A) Subject to paragraph (5)(A), the Secretary shall
establish a process for the receipt, investigation, and
disposition of complaints respecting a petitioner's failure to
meet a condition specified in an application submitted under
paragraph (1) or a petitioner's misrepresentation of material
facts in such an application. Complaints may be filed by any
aggrieved person or organization (including bargaining
representatives). No investigation or hearing shall be
conducted on a complaint concerning such a failure or
misrepresentation unless the complaint was filed not later than
12 months after the date of the failure or misrepresentation,
respectively. The Secretary shall conduct an investigation
under this paragraph if there is reasonable cause to believe
that such a failure or misrepresentation has occurred.
(B) Under such process, the Secretary shall provide, within
30 days after the date such a complaint is filed, for a
determination as to whether or not a reasonable basis exists to
make a finding described in subparagraph (C). If the Secretary
determines that such a reasonable basis exists, the Secretary
shall provide for notice of such determination to the
interested parties and an opportunity for a hearing on the
complaint, in accordance with section 556 of title 5, United
States Code, within 60 days after the date of the
determination. If such a hearing is requested, the Secretary
shall make a finding concerning the matter by not later than 60
days after the date of the hearing. In the case of similar
complaints respecting the same applicant, the Secretary may
consolidate the hearings under this subparagraph on such
complaints.
(C)(i) If the Secretary finds, after notice and opportunity
for a hearing, a failure to meet a condition of paragraph
(1)(B), (1)(E), or (1)(F), a substantial failure to meet a
condition of paragraph (1)(C), (1)(D), or (1)(G)(i)(I), or a
misrepresentation of material fact in an application--
(I) the Secretary shall notify the Attorney General
of such finding and may, in addition, impose such other
administrative remedies (including civil monetary
penalties in an amount not to exceed $1,000 per
violation) as the Secretary determines to be
appropriate; and
(II) the Attorney General shall not approve petitions
filed with respect to that employer under section 204
or 214(c) during a period of at least 1 year for aliens
to be employed by the employer.
(ii) If the Secretary finds, after notice and opportunity for
a hearing, a willful failure to meet a condition of paragraph
(1), a willful misrepresentation of material fact in an
application, or a violation of clause (iv)--
(I) the Secretary shall notify the Attorney General
of such finding and may, in addition, impose such other
administrative remedies (including civil monetary
penalties in an amount not to exceed $5,000 per
violation) as the Secretary determines to be
appropriate; and
(II) the Attorney General shall not approve petitions
filed with respect to that employer under section 204
or 214(c) during a period of at least 2 years for
aliens to be employed by the employer.
(iii) If the Secretary finds, after notice and opportunity
for a hearing, a willful failure to meet a condition of
paragraph (1) or a willful misrepresentation of material fact
in an application, in the course of which failure or
misrepresentation the employer displaced a United States worker
employed by the employer within the period beginning 90 days
before and ending 90 days after the date of filing of any visa
petition supported by the application--
(I) the Secretary shall notify the Attorney General
of such finding and may, in addition, impose such other
administrative remedies (including civil monetary
penalties in an amount not to exceed $35,000 per
violation) as the Secretary determines to be
appropriate; and
(II) the Attorney General shall not approve petitions
filed with respect to that employer under section 204
or 214(c) during a period of at least 3 years for
aliens to be employed by the employer.
(iv) It is a violation of this clause for an employer who has
filed an application under this subsection to intimidate,
threaten, restrain, coerce, blacklist, discharge, or in any
other manner discriminate against an employee (which term, for
purposes of this clause, includes a former employee and an
applicant for employment) because the employee has disclosed
information to the employer, or to any other person, that the
employee reasonably believes evidences a violation of this
subsection, or any rule or regulation pertaining to this
subsection, or because the employee cooperates or seeks to
cooperate in an investigation or other proceeding concerning
the employer's compliance with the requirements of this
subsection or any rule or regulation pertaining to this
subsection.
(v) The Secretary of Labor and the Attorney General shall
devise a process under which an H-1B nonimmigrant who files a
complaint regarding a violation of clause (iv) and is otherwise
eligible to remain and work in the United States may be allowed
to seek other appropriate employment in the United States for a
period not to exceed the maximum period of stay authorized for
such nonimmigrant classification.
(vi)(I) It is a violation of this clause for an employer who
has filed an application under this subsection to require an H-
1B nonimmigrant to pay a penalty for ceasing employment with
the employer prior to a date agreed to by the nonimmigrant and
the employer. The Secretary shall determine whether a required
payment is a penalty (and not liquidated damages) pursuant to
relevant State law.
(II) It is a violation of this clause for an employer who has
filed an application under this subsection to require an alien
who is the subject of a petition filed under section 214(c)(1),
for which a fee is imposed under section 214(c)(9), to
reimburse, or otherwise compensate, the employer for part or
all of the cost of such fee. It is a violation of this clause
for such an employer otherwise to accept such reimbursement or
compensation from such an alien.
(III) If the Secretary finds, after notice and opportunity
for a hearing, that an employer has committed a violation of
this clause, the Secretary may impose a civil monetary penalty
of $1,000 for each such violation and issue an administrative
order requiring the return to the nonimmigrant of any amount
paid in violation of this clause, or, if the nonimmigrant
cannot be located, requiring payment of any such amount to the
general fund of the Treasury.
(vii)(I) It is a failure to meet a condition of paragraph
(1)(A) for an employer, who has filed an application under this
subsection and who places an H-1B nonimmigrant designated as a
full-time employee on the petition filed under section
214(c)(1) by the employer with respect to the nonimmigrant,
after the nonimmigrant has entered into employment with the
employer, in nonproductive status due to a decision by the
employer (based on factors such as lack of work), or due to the
nonimmigrant's lack of a permit or license, to fail to pay the
nonimmigrant full-time wages in accordance with paragraph
(1)(A) for all such nonproductive time.
(II) It is a failure to meet a condition of paragraph (1)(A)
for an employer, who has filed an application under this
subsection and who places an H-1B nonimmigrant designated as a
part-time employee on the petition filed under section
214(c)(1) by the employer with respect to the nonimmigrant,
after the nonimmigrant has entered into employment with the
employer, in nonproductive status under circumstances described
in subclause (I), to fail to pay such a nonimmigrant for such
hours as are designated on such petition consistent with the
rate of pay identified on such petition.
(III) In the case of an H-1B nonimmigrant who has not yet
entered into employment with an employer who has had approved
an application under this subsection, and a petition under
section 214(c)(1), with respect to the nonimmigrant, the
provisions of subclauses (I) and (II) shall apply to the
employer beginning 30 days after the date the nonimmigrant
first is admitted into the United States pursuant to the
petition, or 60 days after the date the nonimmigrant becomes
eligible to work for the employer (in the case of a
nonimmigrant who is present in the United States on the date of
the approval of the petition).
(IV) This clause does not apply to a failure to pay wages to
an H-1B nonimmigrant for nonproductive time due to non-work-
related factors, such as the voluntary request of the
nonimmigrant for an absence or circumstances rendering the
nonimmigrant unable to work.
(V) This clause shall not be construed as prohibiting an
employer that is a school or other educational institution from
applying to an H-1B nonimmigrant an established salary practice
of the employer, under which the employer pays to H-1B
nonimmigrants and United States workers in the same
occupational classification an annual salary in disbursements
over fewer than 12 months, if--
(aa) the nonimmigrant agrees to the compressed annual
salary payments prior to the commencement of the
employment; and
(bb) the application of the salary practice to the
nonimmigrant does not otherwise cause the nonimmigrant
to violate any condition of the nonimmigrant's
authorization under this Act to remain in the United
States.
(VI) This clause shall not be construed as superseding clause
(viii).
(viii) It is a failure to meet a condition of paragraph
(1)(A) for an employer who has filed an application under this
subsection to fail to offer to an H-1B nonimmigrant, during the
nonimmigrant's period of authorized employment, benefits and
eligibility for benefits (including the opportunity to
participate in health, life, disability, and other insurance
plans; the opportunity to participate in retirement and savings
plans; and cash bonuses and noncash compensation, such as stock
options (whether or not based on performance)) on the same
basis, and in accordance with the same criteria, as the
employer offers to United States workers.
(D) If the Secretary finds, after notice and opportunity for
a hearing, that an employer has not paid wages at the wage
level specified under the application and required under
paragraph (1), the Secretary shall order the employer to
provide for payment of such amounts of back pay as may be
required to comply with the requirements of paragraph (1),
whether or not a penalty under subparagraph (C) has been
imposed.
(E) If an H-1B-dependent employer places a nonexempt H-1B
nonimmigrant with another employer as provided under paragraph
(1)(F) and the other employer has displaced or displaces a
United States worker employed by such other employer during the
period described in such paragraph, such displacement shall be
considered for purposes of this paragraph a failure, by the
placing employer, to meet a condition specified in an
application submitted under paragraph (1); except that the
Attorney General may impose a sanction described in subclause
(II) of subparagraph (C)(i), (C)(ii), or (C)(iii) only if the
Secretary of Labor found that such placing employer--
(i) knew or had reason to know of such displacement
at the time of the placement of the nonimmigrant with
the other employer; or
(ii) has been subject to a sanction under this
subparagraph based upon a previous placement of an H-1B
nonimmigrant with the same other employer.
(F) The Secretary may, on a case-by-case basis, subject an
employer to random investigations for a period of up to 5
years, beginning on the date (on or after the date of the
enactment of the American Competitiveness and Workforce
Improvement Act of 1998) on which the employer is found by the
Secretary to have committed a willful failure to meet a
condition of paragraph (1) (or has been found under paragraph
(5) to have committed a willful failure to meet the condition
of paragraph (1)(G)(i)(II)) or to have made a willful
misrepresentation of material fact in an application. The
preceding sentence shall apply to an employer regardless of
whether or not the employer is an H-1B-dependent employer. The
authority of the Secretary under this subparagraph shall not be
construed to be subject to, or limited by, the requirements of
subparagraph (A).
(G)(i) The Secretary of Labor may initiate an investigation
of any employer that employs nonimmigrants described in section
101(a)(15)(H)(i)(b) if the Secretary of Labor has reasonable
cause to believe that the employer is not in compliance with
this subsection. In the case of an investigation under this
clause, the Secretary of Labor (or the acting Secretary in the
case of the absence of disability of the Secretary of Labor)
shall personally certify that reasonable cause exists and shall
approve commencement of the investigation. The investigation
may be initiated for reasons other than completeness and
obvious inaccuracies by the employer in complying with this
subsection.
(ii) If the Secretary of Labor receives specific credible
information from a source who is likely to have knowledge of an
employer's practices or employment conditions, or an employer's
compliance with the employer's labor condition application
under paragraph (1), and whose identity is known to the
Secretary of Labor, and such information provides reasonable
cause to believe that the employer has committed a willful
failure to meet a condition of paragraph (1)(A), (1)(B),
(1)(C), (1)(E), (1)(F), or (1)(G)(i)(I), has engaged in a
pattern or practice of failures to meet such a condition, or
has committed a substantial failure to meet such a condition
that affects multiple employees, the Secretary of Labor may
conduct an investigation into the alleged failure or failures.
The Secretary of Labor may withhold the identity of the source
from the employer, and the source's identity shall not be
subject to disclosure under section 552 of title 5, United
States Code.
(iii) The Secretary of Labor shall establish a procedure for
any person desiring to provide to the Secretary of Labor
information described in clause (ii) that may be used, in whole
or in part, as the basis for the commencement of an
investigation described in such clause, to provide the
information in writing on a form developed and provided by the
Secretary of Labor and completed by or on behalf of the person.
The person may not be an officer or employee of the Department
of Labor, unless the information satisfies the requirement of
clause (iv)(II) (although an officer or employee of the
Department of Labor may complete the form on behalf of the
person).
(iv) Any investigation initiated or approved by the Secretary
of Labor under clause (ii) shall be based on information that
satisfies the requirements of such clause and that--
(I) originates from a source other than an officer or
employee of the Department of Labor; or
(II) was lawfully obtained by the Secretary of Labor
in the course of lawfully conducting another Department
of Labor investigation under this Act of any other Act.
(v) The receipt by the Secretary of Labor of information
submitted by an employer to the Attorney General or the
Secretary of Labor for purposes of securing the employment of a
nonimmigrant described in section 101(a)(15)(H)(i)(b) shall not
be considered a receipt of information for purposes of clause
(ii).
(vi) No investigation described in clause (ii) (or hearing
described in clause (viii) based on such investigation) may be
conducted with respect to information about a failure to meet a
condition described in clause (ii), unless the Secretary of
Labor receives the information not later than 12 months after
the date of the alleged failure.
(vii) The Secretary of Labor shall provide notice to an
employer with respect to whom there is reasonable cause to
initiate an investigation described in clauses (i) or (ii),
prior to the commencement of an investigation under such
clauses, of the intent to conduct an investigation. The notice
shall be provided in such a manner, and shall contain
sufficient detail, to permit the employer to respond to the
allegations before an investigation is commenced. The Secretary
of Labor is not required to comply with this clause if the
Secretary of Labor determines that to do so would interfere
with an effort by the Secretary of Labor to secure compliance
by the employer with the requirements of this subsection. There
shall be no judicial review of a determination by the Secretary
of Labor under this clause.
(viii) An investigation under clauses (i) or (ii) may be
conducted for a period of up to 60 days. If the Secretary of
Labor determines after such an investigation that a reasonable
basis exists to make a finding that the employer has committed
a willful failure to meet a condition of paragraph (1)(A),
(1)(B), (1)(C), (1)(E), (1)(F), or (1)(G)(i)(I), has engaged in
a pattern or practice of failures to meet such a condition, or
has committed a substantial failure to meet such a condition
that affects multiple employees, the Secretary of Labor shall
provide for notice of such determination to the interested
parties and an opportunity for a hearing in accordance with
section 556 of title 5, United States Code, within 120 days
after the date of the determination. If such a hearing is
requested, the Secretary of Labor shall make a finding
concerning the matter by not later than 120 days after the date
of the hearing.
(H)(i) Except as provided in clauses (ii) and (iii), a person
or entity is considered to have complied with the requirements
of this subsection, notwithstanding a technical or procedural
failure to meet such requirements, if there was a good faith
attempt to comply with the requirements.
(ii) Clause (i) shall not apply if--
(I) the Department of Labor (or another enforcement
agency) has explained to the person or entity the basis
for the failure;
(II) the person or entity has been provided a period
of not less than 10 business days (beginning after the
date of the explanation) within which to correct the
failure; and
(III) the person or entity has not corrected the
failure voluntarily within such period.
(iii) A person or entity that, in the course of an
investigation, is found to have violated the prevailing
wage requirements set forth in paragraph (1)(A), shall
not be assessed fines or other penalties for such
violation if the person or entity can establish that
the manner in which the prevailing wage was calculated
was consistent with recognized industry standards and
practices.
(iv) Clauses (i) and (iii) shall not apply to a
person or entity that has engaged in or is engaging in
a pattern or practice of willful violations of this
subsection.
(I) Nothing in this subsection shall be construed as
superseding or preempting any other enforcement-related
authority under this Act (such as the authorities under section
274B), or any other Act.
(3)(A) For purposes of this subsection, the term ``H-1B-
dependent employer'' means an employer that--
(i)(I) has 25 or fewer full-time equivalent employees
who are employed in the United States; and (II) employs
more than 7 H-1B nonimmigrants;
(ii)(I) has at least 26 but not more than 50 full-
time equivalent employees who are employed in the
United States; and (II) employs more than 12 H-1B
nonimmigrants; or
(iii)(I) has at least 51 full-time equivalent
employees who are employed in the United States; and
(II) employs H-1B nonimmigrants in a number that is
equal to at least 15 percent of the number of such
full-time equivalent employees.
(B) For purposes of this subsection--
(i) the term ``exempt H-1B nonimmigrant'' means an H-
1B nonimmigrant who--
(I) receives wages (including cash bonuses
and similar compensation) at an annual rate
equal to at least $60,000; or
(II) has attained a master's or higher degree
(or its equivalent) in a specialty related to
the intended employment; and
(ii) the term nonexempt H-1B nonimmigrant means an H-
1B nonimmigrant who is not an exempt H-1B nonimmigrant.
(C) For purposes of subparagraph (A)--
(i) in computing the number of full-time equivalent
employees and the number of H-1B nonimmigrants, exempt
H-1B nonimmigrants shall not be taken into account
during the longer of--
(I) the 6-month period beginning on the date
of the enactment of the American
Competitiveness and Workforce Improvement Act
of 1998; or
(II) the period beginning on the date of the
enactment of the American Competitiveness and
Workforce Improvement Act of 1998 and ending on
the date final regulations are issued to carry
out this paragraph; and
(ii) any group treated as a single employer under
subsection (b), (c), (m), or (o) of section 414 of the
Internal Revenue Code of 1986 shall be treated as a
single employer.
(4) For purposes of this subsection:
(A) The term ``area of employment'' means the area
within normal commuting distance of the worksite or
physical location where the work of the H-1B
nonimmigrant is or will be performed. If such worksite
or location is within a Metropolitan Statistical Area,
any place within such area is deemed to be within the
area of employment.
(B) In the case of an application with respect to one
or more H-1B nonimmigrants by an employer, the employer
is considered to ``displace'' a United States worker
from a job if the employer lays off the worker from a
job that is essentially the equivalent of the job for
which the nonimmigrant or nonimmigrants is or are
sought. A job shall not be considered to be essentially
equivalent of another job unless it involves
essentially the same responsibilities, was held by a
United States worker with substantially equivalent
qualifications and experience, and is located in the
same area of employment as the other job.
(C) The term ``H-1B nonimmigrant'' means an alien
admitted or provided status as a nonimmigrant described
in section 101(a)(15)(H)(i)(b).
(D)(i) The term ``lays off'', with respect to a
worker--
(I) means to cause the worker's loss of
employment, other than through a discharge for
inadequate performance, violation of workplace
rules, cause, voluntary departure, voluntary
retirement, or the expiration of a grant or
contract (other than a temporary employment
contract entered into in order to evade a
condition described in subparagraph (E) or (F)
of paragraph (1)); but
(II) does not include any situation in which
the worker is offered, as an alternative to
such loss of employment, a similar employment
opportunity with the same employer (or, in the
case of a placement of a worker with another
employer under paragraph (1)(F), with either
employer described in such paragraph) at
equivalent or higher compensation and benefits
than the position from which the employee was
discharged, regardless of whether or not the
employee accepts the offer.
(ii) Nothing in this subparagraph is intended to
limit an employee's rights under a collective
bargaining agreement or other employment contract.
(E) The term ``United States worker'' means an
employee who--
(i) is a citizen or national of the United
States; or
(ii) is an alien who is lawfully admitted for
permanent residence, is admitted as a refugee
under section 207, is granted asylum under
section 208, or is an immigrant otherwise
authorized, by this Act or by the Attorney
General, to be employed.
(5)(A) This paragraph shall apply instead of subparagraphs
(A) through (E) of paragraph (2) in the case of a violation
described in subparagraph (B), but shall not be construed to
limit or affect the authority of the Secretary or the Attorney
General with respect to any other violation.
(B) The Attorney General shall establish a process for the
receipt, initial review, and disposition in accordance with
this paragraph of complaints respecting an employer's failure
to meet the condition of paragraph (1)(G)(i)(II) or a
petitioner's misrepresentation of material facts with respect
to such condition. Complaints may be filed by an aggrieved
individual who has submitted a resume or otherwise applied in a
reasonable manner for the job that is the subject of the
condition. No proceeding shall be conducted under this
paragraph on a complaint concerning such a failure or
misrepresentation unless the Attorney General determines that
the complaint was filed not later than 12 months after the date
of the failure or misrepresentation, respectively.
(C) If the Attorney General finds that a complaint has been
filed in accordance with subparagraph (B) and there is
reasonable cause to believe that such a failure or
misrepresentation described in such complaint has occurred, the
Attorney General shall initiate binding arbitration proceedings
by requesting the Federal Mediation and Conciliation Service to
appoint an arbitrator from the roster of arbitrators maintained
by such Service. The procedure and rules of such Service shall
be applicable to the selection of such arbitrator and to such
arbitration proceedings. The Attorney General shall pay the fee
and expenses of the arbitrator.
(D)(i) The arbitrator shall make findings respecting whether
a failure or misrepresentation described in subparagraph (B)
occurred. If the arbitrator concludes that failure or
misrepresentation was willful, the arbitrator shall make a
finding to that effect. The arbitrator may not find such a
failure or misrepresentation (or that such a failure or
misrepresentation was willful) unless the complainant
demonstrates such a failure or misrepresentation (or its
willful character) by clear and convincing evidence. The
arbitrator shall transmit the findings in the form of a written
opinion to the parties to the arbitration and the Attorney
General. Such findings shall be final and conclusive, and,
except as provided in this subparagraph, no official or court
of the United States shall have power or jurisdiction to review
any such findings.
(ii) The Attorney General may review and reverse or modify
the findings of an arbitrator only on the same bases as an
award of an arbitrator may be vacated or modified under section
10 or 11 of title 9, United States Code.
(iii) With respect to the findings of an arbitrator, a court
may review only the actions of the Attorney General under
clause (ii) and may set aside such actions only on the grounds
described in subparagraph (A), (B), or (C) of section 706(a)(2)
of title 5, United States Code. Notwithstanding any other
provision of law, such judicial review may only be brought in
an appropriate United States court of appeals.
(E) If the Attorney General receives a finding of an
arbitrator under this paragraph that an employer has failed to
meet the condition of paragraph (1)(G)(i)(II) or has
misrepresented a material fact with respect to such condition,
unless the Attorney General reverses or modifies the finding
under subparagraph (D)(ii)--
(i) the Attorney General may impose administrative
remedies (including civil monetary penalties in an
amount not to exceed $1,000 per violation or $5,000 per
violation in the case of a willful failure or
misrepresentation) as the Attorney General determines
to be appropriate; and
(ii) the Attorney General is authorized to not
approve petitions filed, with respect to that employer
and for aliens to be employed by the employer, under
section 204 or 214(c)--
(I) during a period of not more than 1 year;
or
(II) in the case of a willful failure or
willful misrepresentation, during a period of
not more than 2 years.
(F) The Attorney General shall not delegate, to any other
employee or official of the Department of Justice, any function
of the Attorney General under this paragraph, until 60 days
after the Attorney General has submitted a plan for such
delegation to the Committees on the Judiciary of the United
States House of Representatives and the Senate.
(o) An alien who has been physically present in the United
States shall not be eligible to receive an immigrant visa
within ninety days following departure therefrom unless--
(1) the alien was maintaining a lawful nonimmigrant
status at the time of such departure, or
(2) the alien is the spouse or unmarried child of an
individual who obtained temporary or permanent resident
status under section 210 or 245A of the Immigration and
Nationality Act or section 202 of the Immigration
Reform and Control Act of 1986 at any date, who--
(A) as of May 5, 1988, was the unmarried
child or spouse of the individual who obtained
temporary or permanent resident status under
section 210 or 245A of the Immigration and
Nationality Act or section 202 of the
Immigration Reform and Control Act of 1986;
(B) entered the United States before May 5,
1988, resided in the United States on May 5,
1988, and is not a lawful permanent resident;
and
(C) applied for benefits under section 301(a)
of the Immigration Act of 1990.
(p)(1) In computing the prevailing wage level for an
occupational classification in an area of employment for
purposes of subsections (a)(5)(A), (n)(1)(A)(i)(II), and
(t)(1)(A)(i)(II) in the case of an employee of--
(A) an institution of higher education (as defined in
section 101(a) of the Higher Education Act of 1965), or
a related or affiliated nonprofit entity; or
(B) a nonprofit research organization or a
Governmental research organization,
the prevailing wage level shall only take into account
employees at such institutions and organizations in the area of
employment.
(2) With respect to a professional athlete (as defined in
subsection (a)(5)(A)(iii)(II)) when the job opportunity is
covered by professional sports league rules or regulations, the
wage set forth in those rules or regulations shall be
considered as not adversely affecting the wages of United
States workers similarly employed and be considered the
prevailing wage.
(3) The prevailing wage required to be paid pursuant to
subsections (a)(5)(A), (n)(1)(A)(i)(II), and (t)(1)(A)(i)(II)
shall be 100 percent of the wage determined pursuant to those
sections.
(4) Where the Secretary of Labor uses, or makes available to
employers, a governmental survey to determine the prevailing
wage, such survey shall provide at least 4 levels of wages
commensurate with experience, education, and the level of
supervision. Where an existing government survey has only 2
levels, 2 intermediate levels may be created by dividing by 3,
the difference between the 2 levels offered, adding the
quotient thus obtained to the first level and subtracting that
quotient from the second level.
(q) Any alien admitted under section 101(a)(15)(B) may accept
an honorarium payment and associated incidental expenses for a
usual academic activity or activities (lasting not longer than
9 days at any single institution), as defined by the Attorney
General in consultation with the Secretary of Education, if
such payment is offered by an institution or organization
described in subsection (p)(1) and is made for services
conducted for the benefit of that institution or entity and if
the alien has not accepted such payment or expenses from more
than 5 institutions or organizations in the previous 6-month
period.
(r) Subsection (a)(5)(C) shall not apply to an alien who
seeks to enter the United States for the purpose of performing
labor as a nurse who presents to the consular officer (or in
the case of an adjustment of status, the Attorney General) a
certified statement from the Commission on Graduates of Foreign
Nursing Schools (or an equivalent independent credentialing
organization approved for the certification of nurses under
subsection (a)(5)(C) by the Attorney General in consultation
with the Secretary of Health and Human Services) that--
(1) the alien has a valid and unrestricted license as
a nurse in a State where the alien intends to be
employed and such State verifies that the foreign
licenses of alien nurses are authentic and
unencumbered;
(2) the alien has passed the National Council
Licensure Examination (NCLEX);
(3) the alien is a graduate of a nursing program--
(A) in which the language of instruction was
English;
(B) located in a country--
(i) designated by such commission not
later than 30 days after the date of
the enactment of the Nursing Relief for
Disadvantaged Areas Act of 1999, based
on such commission's assessment that
the quality of nursing education in
that country, and the English language
proficiency of those who complete such
programs in that country, justify the
country's designation; or
(ii) designated on the basis of such
an assessment by unanimous agreement of
such commission and any equivalent
credentialing organizations which have
been approved under subsection
(a)(5)(C) for the certification of
nurses under this subsection; and
(C)(i) which was in operation on or before
the date of the enactment of the Nursing Relief
for Disadvantaged Areas Act of 1999; or
(ii) has been approved by unanimous agreement
of such commission and any equivalent
credentialing organizations which have been
approved under subsection (a)(5)(C) for the
certification of nurses under this subsection.
(s) In determining whether an alien described in subsection
(a)(4)(C)(i) is inadmissible under subsection (a)(4) or
ineligible to receive an immigrant visa or otherwise to adjust
to the status of permanent resident by reason of subsection
(a)(4), the consular officer or the Attorney General shall not
consider any benefits the alien may have received that were
authorized under section 501 of the Illegal Immigration Reform
and Immigrant Responsibility Act of 1996 (8 U.S.C. 1641(c)).
(t)(1) No alien may be admitted or provided status as a
nonimmigrant under section 101(a)(15)(H)(i)(b1) or section
101(a)(15)(E)(iii) in an occupational classification unless the
employer has filed with the Secretary of Labor an attestation
stating the following:
(A) The employer--
(i) is offering and will offer during the
period of authorized employment to aliens
admitted or provided status under section
101(a)(15)(H)(i)(b1) or section
101(a)(15)(E)(iii) wages that are at least--
(I) the actual wage level paid by the
employer to all other individuals with
similar experience and qualifications
for the specific employment in
question; or
(II) the prevailing wage level for
the occupational classification in the
area of employment,
whichever is greater, based on the best
information available as of the time of filing
the attestation; and
(ii) will provide working conditions for such
a nonimmigrant that will not adversely affect
the working conditions of workers similarly
employed.
(B) There is not a strike or lockout in the course of
a labor dispute in the occupational classification at
the place of employment.
(C) The employer, at the time of filing the
attestation--
(i) has provided notice of the filing under
this paragraph to the bargaining representative
(if any) of the employer's employees in the
occupational classification and area for which
aliens are sought; or
(ii) if there is no such bargaining
representative, has provided notice of filing
in the occupational classification through such
methods as physical posting in conspicuous
locations at the place of employment or
electronic notification to employees in the
occupational classification for which
nonimmigrants under section
101(a)(15)(H)(i)(b1) or section
101(a)(15)(E)(iii) are sought.
(D) A specification of the number of workers sought,
the occupational classification in which the workers
will be employed, and wage rate and conditions under
which they will be employed.
(2)(A) The employer shall make available for public
examination, within one working day after the date on which an
attestation under this subsection is filed, at the employer's
principal place of business or worksite, a copy of each such
attestation (and such accompanying documents as are necessary).
(B)(i) The Secretary of Labor shall compile, on a current
basis, a list (by employer and by occupational classification)
of the attestations filed under this subsection. Such list
shall include, with respect to each attestation, the wage rate,
number of aliens sought, period of intended employment, and
date of need.
(ii) The Secretary of Labor shall make such list available
for public examination in Washington, D.C.
(C) The Secretary of Labor shall review an attestation filed
under this subsection only for completeness and obvious
inaccuracies. Unless the Secretary of Labor finds that an
attestation is incomplete or obviously inaccurate, the
Secretary of Labor shall provide the certification described in
section 101(a)(15)(H)(i)(b1) or section 101(a)(15)(E)(iii)
within 7 days of the date of the filing of the attestation.
(3)(A) The Secretary of Labor shall establish a process for
the receipt, investigation, and disposition of complaints
respecting the failure of an employer to meet a condition
specified in an attestation submitted under this subsection or
misrepresentation by the employer of material facts in such an
attestation. Complaints may be filed by any aggrieved person or
organization (including bargaining representatives). No
investigation or hearing shall be conducted on a complaint
concerning such a failure or misrepresentation unless the
complaint was filed not later than 12 months after the date of
the failure or misrepresentation, respectively. The Secretary
of Labor shall conduct an investigation under this paragraph if
there is reasonable cause to believe that such a failure or
misrepresentation has occurred.
(B) Under the process described in subparagraph (A), the
Secretary of Labor shall provide, within 30 days after the date
a complaint is filed, for a determination as to whether or not
a reasonable basis exists to make a finding described in
subparagraph (C). If the Secretary of Labor determines that
such a reasonable basis exists, the Secretary of Labor shall
provide for notice of such determination to the interested
parties and an opportunity for a hearing on the complaint, in
accordance with section 556 of title 5, United States Code,
within 60 days after the date of the determination. If such a
hearing is requested, the Secretary of Labor shall make a
finding concerning the matter by not later than 60 days after
the date of the hearing. In the case of similar complaints
respecting the same applicant, the Secretary of Labor may
consolidate the hearings under this subparagraph on such
complaints.
(C)(i) If the Secretary of Labor finds, after notice and
opportunity for a hearing, a failure to meet a condition of
paragraph (1)(B), a substantial failure to meet a condition of
paragraph (1)(C) or (1)(D), or a misrepresentation of material
fact in an attestation--
(I) the Secretary of Labor shall notify the Secretary
of State and the Secretary of Homeland Security of such
finding and may, in addition, impose such other
administrative remedies (including civil monetary
penalties in an amount not to exceed $1,000 per
violation) as the Secretary of Labor determines to be
appropriate; and
(II) the Secretary of State or the Secretary of
Homeland Security, as appropriate, shall not approve
petitions or applications filed with respect to that
employer under section 204, 214(c),
101(a)(15)(H)(i)(b1), or 101(a)(15)(E)(iii) or section
101(a)(15)(E)(iii) during a period of at least 1 year
for aliens to be employed by the employer.
(ii) If the Secretary of Labor finds, after notice and
opportunity for a hearing, a willful failure to meet a
condition of paragraph (1), a willful misrepresentation of
material fact in an attestation, or a violation of clause
(iv)--
(I) the Secretary of Labor shall notify the Secretary
of State and the Secretary of Homeland Security of such
finding and may, in addition, impose such other
administrative remedies (including civil monetary
penalties in an amount not to exceed $5,000 per
violation as the Secretary of Labor determines to be
appropriate; and
(II) the Secretary of State or the Secretary of
Homeland Security, as appropriate, shall not approve
petitions or applications filed with respect to that
employer under section 204, 214(c),
101(a)(15)(H)(i)(b1), or 101(a)(15)(E)(iii) or section
101(a)(15)(E)(iii) during a period of at least 2 years
for aliens to be employed by the employer.
(iii) If the Secretary of Labor finds, after notice and
opportunity for a hearing, a willful failure to meet a
condition of paragraph (1) or a willful misrepresentation of
material fact in an attestation, in the course of which failure
or misrepresentation the employer displaced a United States
worker employed by the employer within the period beginning 90
days before and ending 90 days after the date of filing of any
visa petition or application supported by the attestation--
(I) the Secretary of Labor shall notify the Secretary
of State and the Secretary of Homeland Security of such
finding and may, in addition, impose such other
administrative remedies (including civil monetary
penalties in an amount not to exceed $35,000 per
violation) as the Secretary of Labor determines to be
appropriate; and
(II) the Secretary of State or the Secretary of
Homeland Security, as appropriate, shall not approve
petitions or applications filed with respect to that
employer under section 204, 214(c),
101(a)(15)(H)(i)(b1), or 101(a)(15)(E)(iii) or section
101(a)(15)(E)(iii) during a period of at least 3 years
for aliens to be employed by the employer.
(iv) It is a violation of this clause for an employer who has
filed an attestation under this subsection to intimidate,
threaten, restrain, coerce, blacklist, discharge, or in any
other manner discriminate against an employee (which term, for
purposes of this clause, includes a former employee and an
applicant for employment) because the employee has disclosed
information to the employer, or to any other person, that the
employee reasonably believes evidences a violation of this
subsection, or any rule or regulation pertaining to this
subsection, or because the employee cooperates or seeks to
cooperate in an investigation or other proceeding concerning
the employer's compliance with the requirements of this
subsection or any rule or regulation pertaining to this
subsection.
(v) The Secretary of Labor and the Secretary of Homeland
Security shall devise a process under which a nonimmigrant
under section 101(a)(15)(H)(i)(b1) or section
101(a)(15)(E)(iii) who files a complaint regarding a violation
of clause (iv) and is otherwise eligible to remain and work in
the United States may be allowed to seek other appropriate
employment in the United States for a period not to exceed the
maximum period of stay authorized for such nonimmigrant
classification.
(vi)(I) It is a violation of this clause for an employer who
has filed an attestation under this subsection to require a
nonimmigrant under section 101(a)(15)(H)(i)(b1) or section
101(a)(15)(E)(iii) to pay a penalty for ceasing employment with
the employer prior to a date agreed to by the nonimmigrant and
the employer. The Secretary of Labor shall determine whether a
required payment is a penalty (and not liquidated damages)
pursuant to relevant State law.
(II) If the Secretary of Labor finds, after notice and
opportunity for a hearing, that an employer has committed a
violation of this clause, the Secretary of Labor may impose a
civil monetary penalty of $1,000 for each such violation and
issue an administrative order requiring the return to the
nonimmigrant of any amount paid in violation of this clause,
or, if the nonimmigrant cannot be located, requiring payment of
any such amount to the general fund of the Treasury.
(vii)(I) It is a failure to meet a condition of paragraph
(1)(A) for an employer who has filed an attestation under this
subsection and who places a nonimmigrant under section
101(a)(15)(H)(i)(b1) or section 101(a)(15)(E)(iii) designated
as a full-time employee in the attestation, after the
nonimmigrant has entered into employment with the employer, in
nonproductive status due to a decision by the employer (based
on factors such as lack of work), or due to the nonimmigrant's
lack of a permit or license, to fail to pay the nonimmigrant
full-time wages in accordance with paragraph (1)(A) for all
such nonproductive time.
(II) It is a failure to meet a condition of paragraph (1)(A)
for an employer who has filed an attestation under this
subsection and who places a nonimmigrant under section
101(a)(15)(H)(i)(b1) or section 101(a)(15)(E)(iii) designated
as a part-time employee in the attestation, after the
nonimmigrant has entered into employment with the employer, in
nonproductive status under circumstances described in subclause
(I), to fail to pay such a nonimmigrant for such hours as are
designated on the attestation consistent with the rate of pay
identified on the attestation.
(III) In the case of a nonimmigrant under section
101(a)(15)(H)(i)(b1) or section 101(a)(15)(E)(iii) who has not
yet entered into employment with an employer who has had
approved an attestation under this subsection with respect to
the nonimmigrant, the provisions of subclauses (I) and (II)
shall apply to the employer beginning 30 days after the date
the nonimmigrant first is admitted into the United States, or
60 days after the date the nonimmigrant becomes eligible to
work for the employer in the case of a nonimmigrant who is
present in the United States on the date of the approval of the
attestation filed with the Secretary of Labor.
(IV) This clause does not apply to a failure to pay wages to
a nonimmigrant under section 101(a)(15)(H)(i)(b1) or section
101(a)(15)(E)(iii) for nonproductive time due to non-work-
related factors, such as the voluntary request of the
nonimmigrant for an absence or circumstances rendering the
nonimmigrant unable to work.
(V) This clause shall not be construed as prohibiting an
employer that is a school or other educational institution from
applying to a nonimmigrant under section 101(a)(15)(H)(i)(b1)
or section 101(a)(15)(E)(iii) an established salary practice of
the employer, under which the employer pays to nonimmigrants
under section 101(a)(15)(H)(i)(b1) or section
101(a)(15)(E)(iii) and United States workers in the same
occupational classification an annual salary in disbursements
over fewer than 12 months, if--
(aa) the nonimmigrant agrees to the compressed annual
salary payments prior to the commencement of the
employment; and
(bb) the application of the salary practice to the
nonimmigrant does not otherwise cause the nonimmigrant
to violate any condition of the nonimmigrant's
authorization under this Act to remain in the United
States.
(VI) This clause shall not be construed as superseding clause
(viii).
(viii) It is a failure to meet a condition of paragraph
(1)(A) for an employer who has filed an attestation under this
subsection to fail to offer to a nonimmigrant under section
101(a)(15)(H)(i)(b1) or section 101(a)(15)(E)(iii), during the
nonimmigrant's period of authorized employment, benefits and
eligibility for benefits (including the opportunity to
participate in health, life, disability, and other insurance
plans; the opportunity to participate in retirement and savings
plans; and cash bonuses and non-cash compensation, such as
stock options (whether or not based on performance)) on the
same basis, and in accordance with the same criteria, as the
employer offers to United States workers.
(D) If the Secretary of Labor finds, after notice and
opportunity for a hearing, that an employer has not paid wages
at the wage level specified in the attestation and required
under paragraph (1), the Secretary of Labor shall order the
employer to provide for payment of such amounts of back pay as
may be required to comply with the requirements of paragraph
(1), whether or not a penalty under subparagraph (C) has been
imposed.
(E) The Secretary of Labor may, on a case-by-case basis,
subject an employer to random investigations for a period of up
to 5 years, beginning on the date on which the employer is
found by the Secretary of Labor to have committed a willful
failure to meet a condition of paragraph (1) or to have made a
willful misrepresentation of material fact in an attestation.
The authority of the Secretary of Labor under this subparagraph
shall not be construed to be subject to, or limited by, the
requirements of subparagraph (A).
(F) Nothing in this subsection shall be construed as
superseding or preempting any other enforcement-related
authority under this Act (such as the authorities under section
274B), or any other Act.
(4) For purposes of this subsection:
(A) The term ``area of employment'' means the area
within normal commuting distance of the worksite or
physical location where the work of the nonimmigrant
under section 101(a)(15)(H)(i)(b1) or section
101(a)(15)(E)(iii) is or will be performed. If such
worksite or location is within a Metropolitan
Statistical Area, any place within such area is deemed
to be within the area of employment.
(B) In the case of an attestation with respect to one
or more nonimmigrants under section
101(a)(15)(H)(i)(b1) or section 101(a)(15)(E)(iii) by
an employer, the employer is considered to ``displace''
a United States worker from a job if the employer lays
off the worker from a job that is essentially the
equivalent of the job for which the nonimmigrant or
nonimmigrants is or are sought. A job shall not be
considered to be essentially equivalent of another job
unless it involves essentially the same
responsibilities, was held by a United States worker
with substantially equivalent qualifications and
experience, and is located in the same area of
employment as the other job.
(C)(i) The term ``lays off'', with respect to a
worker--
(I) means to cause the worker's loss of
employment, other than through a discharge for
inadequate performance, violation of workplace
rules, cause, voluntary departure, voluntary
retirement, or the expiration of a grant or
contract; but
(II) does not include any situation in which
the worker is offered, as an alternative to
such loss of employment, a similar employment
opportunity with the same employer at
equivalent or higher compensation and benefits
than the position from which the employee was
discharged, regardless of whether or not the
employee accepts the offer.
(ii) Nothing in this subparagraph is intended to
limit an employee's rights under a collective
bargaining agreement or other employment contract.
(D) The term ``United States worker'' means an
employee who--
(i) is a citizen or national of the United
States; or
(ii) is an alien who is lawfully admitted for
permanent residence, is admitted as a refugee
under section 207 of this title, is granted
asylum under section 208, or is an immigrant
otherwise authorized, by this Act or by the
Secretary of Homeland Security, to be employed.
(t)(1) Except as provided in paragraph (2), no person
admitted under section 101(a)(15)(Q)(ii)(I), or acquiring such
status after admission, shall be eligible to apply for
nonimmigrant status, an immigrant visa, or permanent residence
under this Act until it is established that such person has
resided and been physically present in the person's country of
nationality or last residence for an aggregate of at least 2
years following departure from the United States.
(2) The Secretary of Homeland Security may waive the
requirement of such 2-year foreign residence abroad if the
Secretary determines that--
(A) departure from the United States would impose
exceptional hardship upon the alien's spouse or child
(if such spouse or child is a citizen of the United
States or an alien lawfully admitted for permanent
residence); or
(B) the admission of the alien is in the public
interest or the national interest of the United States.
* * * * * * *
Chapter 4--Inspection, Apprehension, Examination, Exclusion, and
Removal
* * * * * * *
general classes of deportable aliens
Sec. 237. (a) Classes of Deportable Aliens.--Any alien
(including an alien crewman) in and admitted to the United
States shall, upon the order of the Attorney General, be
removed if the alien is within one or more of the following
classes of deportable aliens:
(1) Inadmissible at time of entry or of adjustment of
status or violates status.--
(A) Inadmissible aliens.--Any alien who at
the time of entry or adjustment of status was
within one or more of the classes of aliens
inadmissible by the law existing at such time
is deportable.
(B) Present in violation of law.--Any alien
who is present in the United States in
violation of this Act or any other law of the
United States, or whose nonimmigrant visa (or
other documentation authorizing admission into
the United States as a nonimmigrant) has been
revoked under section 221(i), is deportable.
(C) Violated nonimmigrant status or condition
of entry.--
(i) Nonimmigrant status violators.--
Any alien who was admitted as a
nonimmigrant and who has failed to
maintain the nonimmigrant status in
which the alien was admitted or to
which it was changed under section 248,
or to comply with the conditions of any
such status, is deportable.
(ii) Violators of conditions of
entry.--Any alien whom the Secretary of
Health and Human Services certifies has
failed to comply with terms,
conditions, and controls that were
imposed under section 212(g) is
deportable.
(D) Termination of conditional permanent
residence.--
(i) In general.--Any alien with
permanent resident status on a
conditional basis under section 216
(relating to conditional permanent
resident status for certain alien
spouses and sons and daughters) or
under section 216A (relating to
conditional permanent resident status
for certain alien entrepreneurs,
spouses, and children) who has had such
status terminated under such respective
section is deportable.
(ii) Exception.--Clause (i) shall not
apply in the cases described in section
216(c)(4) (relating to certain hardship
waivers).
(E) Smuggling.--
(i) In general.--Any alien who (prior
to the date of entry, at the time of
any entry, or within 5 years of the
date of any entry) knowingly has
encouraged, induced, assisted, abetted,
or aided any other alien to enter or to
try to enter the United States in
violation of law is deportable.
(ii) Special rule in the case of
family reunification.--Clause (i) shall
not apply in the case of alien who is
an eligible immigrant (as defined in
section 301(b)(1) of the Immigration
Act of 1990), was physically present in
the United States on May 5, 1988, and
is seeking admission as an immediate
relative or under section 203(a)(2)
(including under section 112 of the
Immigration Act of 1990) or benefits
under section 301(a) of the Immigration
Act of 1990 if the alien, before May 5,
1988, has encouraged, induced,
assisted, abetted, or aided only the
alien's spouse, parent, son, or
daughter (and no other individual) to
enter the United States in violation of
law.
(iii) Waiver authorized.--The
Attorney General may, in his discretion
for humanitarian purposes, to assure
family unity, or when it is otherwise
in the public interest, waive
application of clause (i) in the case
of any alien lawfully admitted for
permanent residence if the alien has
encouraged, induced, assisted, abetted,
or aided only an individual who at the
time of the offense was the alien's
spouse, parent, son, or daughter (and
no other individual) to enter the
United States in violation of law.
(F)
(G) Marriage fraud.--An alien shall be
considered to be deportable as having procured
a visa or other documentation by fraud (within
the meaning of section 212(a)(6)(C)(i)) and to
be in the United States in violation of this
Act (within the meaning of subparagraph (B))
if--
(i) the alien obtains any admission
into the United States with an
immigrant visa or other documentation
procured on the basis of a marriage
entered into less than 2 years prior to
such admission of the alien and which,
within 2 years subsequent to any
admission of the alien in the United
States, shall be judicially annulled or
terminated, unless the alien
establishes to the satisfaction of the
Attorney General that such marriage was
not contracted for the purpose of
evading any provisions of the
immigration laws, or
(ii) it appears to the satisfaction
of the Attorney General that the alien
has failed or refused to fulfill the
alien's marital agreement which in the
opinion of the Attorney General was
made for the purpose of procuring the
alien's admission as an immigrant.
(H) Waiver authorized for certain
misrepresentations.--The provisions of this
paragraph relating to the removal of aliens
within the United States on the ground that
they were inadmissible at the time of admission
as aliens described in section 212(a)(6)(C)(i),
whether willful or innocent, may, in the
discretion of the Attorney General, be waived
for any alien (other than an alien described in
paragraph (4)(D)) who--
(i)(I) is the spouse, parent, son, or
daughter of a citizen of the United
States or of an alien lawfully admitted
to the United States for permanent
residence; and
(II) was in possession of an
immigrant visa or equivalent document
and was otherwise admissible to the
United States at the time of such
admission except for those grounds of
inadmissibility specified under
paragraphs (5)(A) and (7)(A) of section
212(a) which were a direct result of
that fraud or misrepresentation.
(ii) is a VAWA self-petitioner.
A waiver of removal for fraud or
misrepresentation granted under this
subparagraph shall also operate to waive
removal based on the grounds of inadmissibility
directly resulting from such fraud or
misrepresentation.
(2) Criminal offenses.--
(A) General crimes.--
(i) Crimes of moral turpitude.--Any
alien who--
(I) is convicted of a crime
involving moral turpitude
committed within five years (or
10 years in the case of an
alien provided lawful permanent
resident status under section
245(j)) after the date of
admission, and
(II) is convicted of a crime
for which a sentence of one
year or longer may be imposed,
is deportable.
(ii) Multiple criminal convictions.--
Any alien who at any time after
admission is convicted of two or more
crimes involving moral turpitude, not
arising out of a single scheme of
criminal misconduct, regardless of
whether confined therefor and
regardless of whether the convictions
were in a single trial, is deportable.
(iii) Aggravated felony.--Any alien
who is convicted of an aggravated
felony at any time after admission is
deportable.
(iv) High speed flight.--Any alien
who is convicted of a violation of
section 758 of title 18, United States
Code (relating to high speed flight
from an immigration checkpoint), is
deportable.
(v) Failure to register as a sex
offender.--Any alien who is convicted
under section 2250 of title 18, United
States Code, is deportable.
(vi) Waiver authorized.--Clauses (i),
(ii), and (iii) shall not apply in the
case of an alien with respect to a
criminal conviction if the alien
subsequent to the criminal conviction
has been granted a full and
unconditional pardon by the President
of the United States or by the Governor
of any of the several States.
(B) Controlled substances.--
(i) Conviction.--Any alien who at any
time after admission has been convicted
of a violation of (or a conspiracy or
attempt to violate) any law or
regulation of a State, the United
States, or a foreign country relating
to a controlled substance (as defined
in section 102 of the Controlled
Substances Act (21 U.S.C. 802)), [other
than a single offense involving
possession for one's own use of 30
grams or less of marijuana], is
deportable.
(ii) Drug abusers and addicts.--Any
alien who is, or at any time after
admission has been, a drug abuser or
addict is deportable.
(C) Certain firearm offenses.--Any alien who
at any time after admission is convicted under
any law of purchasing, selling, offering for
sale, exchanging, using, owning, possessing, or
carrying, or of attempting or conspiring to
purchase, sell, offer for sale, exchange, use,
own, possess, or carry, any weapon, part, or
accessory which is a firearm or destructive
device (as defined in section 921(a) of title
18, United States Code) in violation of any law
is deportable.
(D) Miscellaneous crimes.--Any alien who at
any time has been convicted (the judgment on
such conviction becoming final) of, or has been
so convicted of a conspiracy or attempt to
violate--
(i) any offense under chapter 37
(relating to espionage), chapter 105
(relating to sabotage), or chapter 115
(relating to treason and sedition) of
title 18, United States Code, for which
a term of imprisonment of five or more
years may be imposed;
(ii) any offense under section 871 or
960 of title 18, United States Code;
(iii) a violation of any provision of
the Military Selective Service Act (50
U.S.C. App. 451 et seq.) or the Trading
With the Enemy Act (50 U.S.C. App. 1 et
seq.); or
(iv) a violation of section 215 or
278 of this Act,
is deportable.
(E) Crimes of domestic violence, stalking, or
violation of protection order, crimes against
children and.--
(i) Domestic violence, stalking, and
child abuse.--Any alien who at any time
after admission is convicted of a crime
of domestic violence, a crime of
stalking, or a crime of child abuse,
child neglect, or child abandonment is
deportable. For purposes of this
clause, the term ``crime of domestic
violence'' means any crime of violence
(as defined in section 16 of title 18,
United States Code) against a person
committed by a current or former spouse
of the person, by an individual with
whom the person shares a child in
common, by an individual who is
cohabiting with or has cohabited with
the person as a spouse, by an
individual similarly situated to a
spouse of the person under the domestic
or family violence laws of the
jurisdiction where the offense occurs,
or by any other individual against a
person who is protected from that
individual's acts under the domestic or
family violence laws of the United
States or any State, Indian tribal
government, or unit of local
government.
(ii) Violators of protection
orders.--Any alien who at any time
after admission is enjoined under a
protection order issued by a court and
whom the court determines has engaged
in conduct that violates the portion of
a protection order that involves
protection against credible threats of
violence, repeated harassment, or
bodily injury to the person or persons
for whom the protection order was
issued is deportable. For purposes of
this clause, the term ``protection
order'' means any injunction issued for
the purpose of preventing violent or
threatening acts of domestic violence,
including temporary or final orders
issued by civil or criminal courts
(other than support or child custody
orders or provisions) whether obtained
by filing an independent action or as a
pendente lite order in another
proceeding.
(F) Trafficking.--Any alien described in
section 212(a)(2)(H) is deportable.
(3) Failure to register and falsification of
documents.--
(A) Change of address.--An alien who has
failed to comply with the provisions of section
265 is deportable, unless the alien establishes
to the satisfaction of the Attorney General
that such failure was reasonably excusable or
was not willful.
(B) Failure to register or falsification of
documents.--Any alien who at any time has been
convicted--
(i) under section 266(c) of this Act
or under section 36(c) of the Alien
Registration Act, 1940,
(ii) of a violation of, or an attempt
or a conspiracy to violate, any
provision of the Foreign Agents
Registration Act of 1938 (22 U.S.C. 611
et seq.), or
(iii) of a violation of, or an
attempt or a conspiracy to violate,
section 1546 of title 18, United States
Code (relating to fraud and misuse of
visas, permits, and other entry
documents),
is deportable.
(C) Document fraud.--
(i) In general.--An alien who is the
subject of a final order for violation
of section 274C is deportable.
(ii) Waiver authorized.--The Attorney
General may waive clause (i) in the
case of an alien lawfully admitted for
permanent residence if no previous
civil money penalty was imposed against
the alien under section 274C and the
offense was incurred solely to assist,
aid, or support the alien's spouse or
child (and no other individual). No
court shall have jurisdiction to review
a decision of the Attorney General to
grant or deny a waiver under this
clause.
(D) Falsely claiming citizenship.--
(i) In general.--Any alien who
falsely represents, or has falsely
represented, himself to be a citizen of
the United States for any purpose or
benefit under this Act (including
section 274A) or any Federal or State
law is deportable.
(ii) Exception.--In the case of an
alien making a representation described
in clause (i), if each natural parent
of the alien (or, in the case of an
adopted alien, each adoptive parent of
the alien) is or was a citizen (whether
by birth or naturalization), the alien
permanently resided in the United
States prior to attaining the age of
16, and the alien reasonably believed
at the time of making such
representation that he or she was a
citizen, the alien shall not be
considered to be deportable under any
provision of this subsection based on
such representation.
(4) Security and related grounds.--
(A) In general.--Any alien who has engaged,
is engaged, or at any time after admission
engages in--
(i) any activity to violate any law
of the United States relating to
espionage or sabotage or to violate or
evade any law prohibiting the export
from the United States of goods,
technology, or sensitive information,
(ii) any other criminal activity
which endangers public safety or
national security, or
(iii) any activity a purpose of which
is the opposition to, or the control or
overthrow of, the Government of the
United States by force, violence, or
other unlawful means,
is deportable.
(B) Terrorist activities.--Any alien who is
described in subparagraph (B) or (F) of section
212(a)(3) is deportable.
(C) Foreign policy.--
(i) In general.--An alien whose
presence or activities in the United
States the Secretary of State has
reasonable ground to believe would have
potentially serious adverse foreign
policy consequences for the United
States is deportable.
(ii) Exceptions.--The exceptions
described in clauses (ii) and (iii) of
section 212(a)(3)(C) shall apply to
deportability under clause (i) in the
same manner as they apply to
inadmissibility under section
212(a)(3)(C)(i).
(D) Participated in nazi persecution,
genocide, or the commission of any act of
torture or extrajudicial killing.--Any alien
described in clause (i), (ii), or (iii) of
section 212(a)(3)(E) is deportable.
(E) Participated in the commission of severe
violations of religious freedom.--Any alien
described in section 212(a)(2)(G) is
deportable.
(F) Recruitment or use of child soldiers.--
Any alien who has engaged in the recruitment or
use of child soldiers in violation of section
2442 of title 18, United States Code, is
deportable.
(5) Public charge.--Any alien who, within five years
after the date of entry, has become a public charge
from causes not affirmatively shown to have arisen
since entry is deportable.
(6) Unlawful voters.--
(A) In general.--Any alien who has voted in
violation of any Federal, State, or local
constitutional provision, statute, ordinance,
or regulation is deportable.
(B) Exception.--In the case of an alien who
voted in a Federal, State, or local election
(including an initiative, recall, or
referendum) in violation of a lawful
restriction of voting to citizens, if each
natural parent of the alien (or, in the case of
an adopted alien, each adoptive parent of the
alien) is or was a citizen (whether by birth or
naturalization), the alien permanently resided
in the United States prior to attaining the age
of 16, and the alien reasonably believed at the
time of such violation that he or she was a
citizen, the alien shall not be considered to
be deportable under any provision of this
subsection based on such violation.
(7) Waiver for victims of domestic violence.--
(A) In general.--The Attorney General is not
limited by the criminal court record and may
waive the application of paragraph (2)(E)(i)
(with respect to crimes of domestic violence
and crimes of stalking) and (ii) in the case of
an alien who has been battered or subjected to
extreme cruelty and who is not and was not the
primary perpetrator of violence in the
relationship--
(i) upon a determination that--
(I) the alien was acting is
self-defense;
(II) the alien was found to
have violated a protection
order intended to protect the
alien; or
(III) the alien committed,
was arrested for, was convicted
of, or pled guilty to
committing a crime--
(aa) that did not
result in serious
bodily injury; and
(bb) where there was
a connection between
the crime and the
alien's having been
battered or subjected
to extreme cruelty.
(B) Credible evidence considered.--In acting
on applications under this paragraph, the
Attorney General shall consider any credible
evidence relevant to the application. The
determination of what evidence is credible and
the weight to be given that evidence shall be
within the sole discretion of the Attorney
General.
(b) An alien, admitted as an nonimmigrant under the
provisions of either section 101(a)(15)(A)(i) or
101(a)(15)(G)(i), and who fails to maintain a status under
either of those provisions, shall not be required to depart
from the United States without the approval of the Secretary of
State, unless such alien is subject to deportation under
paragraph (4) of subsection (a).
(c) Paragraphs (1)(A), (1)(B), (1)(C), (1)(D), and (3)(A) of
subsection (a) (other than so much of paragraph (1) as relates
to a ground of inadmissibility described in paragraph (2) or
(3) of section 212(a)) shall not apply to a special immigrant
described in section 101(a)(27)(J) based upon circumstances
that existed before the date the alien was provided such
special immigrant status.
(d)(1) If the Secretary of Homeland Security determines that
an application for nonimmigrant status under subparagraph (T)
or (U) of section 101(a)(15) filed for an alien in the United
States sets forth a prima facie case for approval, the
Secretary may grant the alien an administrative stay of a final
order of removal under section 241(c)(2) until--
(A) the application for nonimmigrant status under
such subparagraph (T) or (U) is approved; or
(B) there is a final administrative denial of the
application for such nonimmigrant status after the
exhaustion of administrative appeals.
(2) The denial of a request for an administrative stay of
removal under this subsection shall not preclude the alien from
applying for a stay of removal, deferred action, or a
continuance or abeyance of removal proceedings under any other
provision of the immigration laws of the United States.
(3) During any period in which the administrative stay of
removal is in effect, the alien shall not be removed.
(4) Nothing in this subsection may be construed to limit the
authority of the Secretary of Homeland Security or the Attorney
General to grant a stay of removal or deportation in any case
not described in this subsection.
* * * * * * *
temporary protected status
Sec. 244. (a) Granting of Status.--
(1) In general.--In the case of an alien who is a
national of a foreign state designated under subsection
(b) (or in the case of an alien having no nationality,
is a person who last habitually resided in such
designated state) and who meets the requirements of
subsection (c), the Attorney General, in accordance
with this section--
(A) may grant the alien temporary protected
status in the United States and shall not
remove the alien from the United States during
the period in which such status is in effect,
and
(B) shall authorize the alien to engage in
employment in the United States and provide the
alien with an ``employment authorized''
endorsement or other appropriate work permit.
(2) Duration of work authorization.--Work
authorization provided under this section shall be
effective throughout the period the alien is in
temporary protected status under this section.
(3) Notice.--
(A) Upon the granting of temporary protected
status under this section, the Attorney General
shall provide the alien with information
concerning such status under this section.
(B) If, at the time of initiation of a
removal proceeding against an alien, the
foreign state (of which the alien is a
national) is designated under subsection (b),
the Attorney General shall promptly notify the
alien of the temporary protected status that
may be available under this section.
(C) If, at the time of designation of a
foreign state under subsection (b), an alien
(who is a national of such state) is in a
removal proceeding under this title, the
Attorney General shall promptly notify the
alien of the temporary protected status that
may be available under this section.
(D) Notices under this paragraph shall be
provided in a form and language that the alien
can understand.
(4) Temporary treatment for eligible aliens.--
(A) In the case of an alien who can establish
a prima facie case of eligibility for benefits
under paragraph (1), but for the fact that the
period of registration under subsection
(c)(1)(A)(iv) has not begun, until the alien
has had a reasonable opportunity to register
during the first 30 days of such period, the
Attorney General shall provide for the benefits
of paragraph (1).
(B) In the case of an alien who establishes a
prima facie case of eligibility for benefits
under paragraph (1), until a final
determination with respect to the alien's
eligibility for such benefits under paragraph
(1) has been made, the alien shall be provided
such benefits.
(5) Clarification.--Nothing in this section shall be
construed as authorizing the Attorney General to deny
temporary protected status to an alien based on the
alien's immigration status or to require any alien, as
a condition of being granted such status, either to
relinquish nonimmigrant or other status the alien may
have or to execute any waiver of other rights under
this Act. The granting of temporary protected status
under this section shall not be considered to be
inconsistent with the granting of nonimmigrant status
under this Act.
(b) Designations.--
(1) In General.--The Attorney General, after
consultation with appropriate agencies of the
Government, may designate any foreign state (or any
part of such foreign state) under this subsection only
if--
(A) the Attorney General finds that there is
an ongoing armed conflict within the state and,
due to such conflict, requiring the return of
aliens who are nationals of that state to that
state (or to the part of the state) would pose
a serious threat to their personal safety;
(B) the Attorney General finds that--
(i) there has been an earthquake,
flood, drought, epidemic, or other
environmental disaster in the state
resulting in a substantial, but
temporary, disruption of living
conditions in the area affected,
(ii) the foreign state is unable,
temporarily, to handle adequately the
return to the state of aliens who are
nationals of the state, and
(iii) the foreign state officially
has requested designation under this
subparagraph; or
(C) the Attorney General finds that there
exist extraordinary and temporary conditions in
the foreign state that prevent aliens who are
nationals of the state from returning to the
state in safety, unless the Attorney General
finds that permitting the aliens to remain
temporarily in the United States is contrary to
the national interest of the United States.
A designation of a foreign state (or part of such
foreign state) under this paragraph shall not become
effective unless notice of the designation (including a
statement of the findings under this paragraph and the
effective date of the designation) is published in the
Federal Register. In such notice, the Attorney General
shall also state an estimate of the number of nationals
of the foreign state designated who are (or within the
effective period of the designation are likely to
become) eligible for temporary protected status under
this section and their immigration status in the United
States.
(2) Effective period of designation for foreign
states.--The designation of a foreign state (or part of
such foreign state) under paragraph (1) shall--
(A) take effect upon the date of publication
of the designation under such paragraph, or
such later date as the Attorney General may
specify in the notice published under such
paragraph, and
(B) shall remain in effect until the
effective date of the termination of the
designation under paragraph (3)(B).
For purposes of this section, the initial period of
designation of a foreign state (or part thereof) under
paragraph (1) is the period, specified by the Attorney
General, of not less than 6 months and not more than 18
months.
(3) Periodic review, terminations, and extensions of
designations.--
(A) Periodic review.--At least 60 days before
end of the initial period of designation, and
any extended period of designation, of a
foreign state (or part thereof) under this
section the Attorney General, after
consultation with appropriate agencies of the
Government, shall review the conditions in the
foreign state (or part of such foreign state)
for which a designation is in effect under this
subsection and shall determine whether the
conditions for such designation under this
subsection continue to be met. The Attorney
General shall provide on a timely basis for the
publication of notice of each such
determination (including the basis for the
determination, and, in the case of an
affirmative determination, the period of
extension of designation under subparagraph
(C)) in the Federal Register.
(B) Termination of designation.--If the
Attorney General determines under subparagraph
(A) that a foreign state (or part of such
foreign state) no longer continues to meet the
conditions for designation under paragraph (1),
the Attorney General shall terminate the
designation by publishing notice in the Federal
Register of the determination under this
subparagraph (including the basis for the
determination). Such termination is effective
in accordance with subsection (d)(3), but shall
not be effective earlier than 60 days after the
date the notice is published or, if later, the
expiration of the most recent previous
extension under subparagraph (C).
(C) Extension of designation.--If the
Attorney General does not determine under
subparagraph (A) that a foreign state (or part
of such foreign state) no longer meets the
conditions for designation under paragraph (1),
the period of designation of the foreign state
is extended for an additional period of 6
months (or, in the discretion of the Attorney
General, a period of 12 or 18 months).
(4) Information concerning protected status at time
of designations.--At the time of a designation of a
foreign state under this subsection, the Attorney
General shall make available information respecting the
temporary protected status made available to aliens who
are nationals of such designated foreign state.
(5) Review.--
(A) Designations.--There is no judicial
review of any determination of the Attorney
General with respect to the designation, or
termination or extension of a designation, of a
foreign state under this subsection.
(B) Application to individuals.--The Attorney
General shall establish an administrative
procedure for the review of the denial of
benefits to aliens under this subsection. Such
procedure shall not prevent an alien from
asserting protection under this section in
removal proceedings if the alien demonstrates
that the alien is a national of a state
designated under paragraph (1).
(c) Aliens Eligible for Temporary Protected Status.--
(1) In general.--
(A) Nationals of designated foreign states.--
Subject to paragraph (3), an alien, who is a
national of a state designated under subsection
(b)(1) (or in the case of an alien having no
nationality, is a person who last habitually
resided in such designated state), meets the
requirements of this paragraph only if--
(i) the alien has been continuously
physically present in the United States
since the effective date of the most
recent designation of that state;
(ii) the alien has continuously
resided in the United States since such
date as the Attorney General may
designate;
(iii) the alien is admissible as an
immigrant, except as otherwise provided
under paragraph (2)(A), and is not
ineligible for temporary protected
status under paragraph (2)(B); and
(iv) to the extent and in a manner
which the Attorney General establishes,
the alien registers for the temporary
protected status under this section
during a registration period of not
less than 180 days.
(B) Registration fee.--The Attorney General
may require payment of a reasonable fee as a
condition of registering an alien under
subparagraph (A)(iv) (including providing an
alien with an ``employment authorized''
endorsement or other appropriate work permit
under this section). The amount of any such fee
shall not exceed $50. In the case of aliens
registered pursuant to a designation under this
section made after July 17, 1991, the Attorney
General may impose a separate, additional fee
for providing an alien with documentation of
work authorization. Notwithstanding section
3302 of title 31, United States Code, all fees
collected under this subparagraph shall be
credited to the appropriation to be used in
carrying out this section.
(2) Eligibility standards.--
(A) Waiver of certain grounds for
inadmissibility.--In the determination of an
alien's admissibility for purposes of
subparagraph (A)(iii) of paragraph (1)--
(i) the provisions of paragraphs (5)
and (7)(A) of section 212(a) shall not
apply;
(ii) except as provided in clause
(iii), the Attorney General may waive
any other provision of section 212(a)
in the case of individual aliens for
humanitarian purposes, to assure family
unity, or when it is otherwise in the
public interest; but
(iii) the Attorney General may not
waive--
(I) paragraphs (2)(A) and
(2)(B) (relating to criminals)
of such section,
(II) paragraph (2)(C) of such
section (relating to drug
offenses), [except for so much
of such paragraph as relates to
a single offense of simple
possession of 30 grams or less
of marijuana], or
(III) paragraphs (3)(A),
(3)(B), (3)(C), and (3)(E) of
such section (relating to
national security and
participation in the Nazi
persecutions or those who have
engaged in genocide).
(B) Aliens ineligible.--An alien shall not be
eligible for temporary protected status under
this section if the Attorney General finds
that--
(i) the alien has been convicted of
any felony or 2 or more misdemeanors
committed in the United States, or
(ii) the alien is described in
section 208(b)(2)(A).
(3) Withdrawal of temporary protected status.--The
Attorney General shall withdraw temporary protected
status granted to an alien under this section if--
(A) the Attorney General finds that the alien
was not in fact eligible for such status under
this section,
(B) except as provided in paragraph (4) and
permitted in subsection (f)(3), the alien has
not remained continuously physically present in
the United States from the date the alien first
was granted temporary protected status under
this section, or
(C) the alien fails, without good cause, to
register with the Attorney General annually, at
the end of each 12-month period after the
granting of such status, in a form and manner
specified by the Attorney General.
(4) Treatment of brief, casual, and innocent
departures and certain other absences.--
(A) For purposes of paragraphs (1)(A)(i) and
(3)(B), an alien shall not be considered to
have failed to maintain continuous physical
presence in the United States by virtue of
brief, casual, and innocent absences from the
United States, without regard to whether such
absences were authorized by the Attorney
General.
(B) For purposes of paragraph (1)(A)(ii), an
alien shall not be considered to have failed to
maintain continuous residence in the United
States by reason of a brief, casual, and
innocent absence described in subparagraph (A)
or due merely to a brief temporary trip abroad
required by emergency or extenuating
circumstances outside the control of the alien.
(5) Construction.--Nothing in this section shall be
construed as authorizing an alien to apply for
admission to, or to be admitted to, the United States
in order to apply for temporary protected status under
this section.
(6) Confidentiality of information.--The Attorney
General shall establish procedures to protect the
confidentiality of information provided by aliens under
this section.
(d) Documentation.--
(1) Initial issuance.--Upon the granting of temporary
protected status to an alien under this section, the
Attorney General shall provide for the issuance of such
temporary documentation and authorization as may be
necessary to carry out the purposes of this section.
(2) Period of validity.--Subject to paragraph (3),
such documentation shall be valid during the initial
period of designation of the foreign state (or part
thereof) involved and any extension of such period. The
Attorney General may stagger the periods of validity of
the documentation and authorization in order to provide
for an orderly renewal of such documentation and
authorization and for an orderly transition (under
paragraph (3)) upon the termination of a designation of
a foreign state (or any part of such foreign state).
(3) Effective date of terminations.--If the Attorney
General terminates the designation of a foreign state
(or part of such foreign state) under subsection
(b)(3)(B), such termination shall only apply to
documentation and authorization issued or renewed after
the effective date of the publication of notice of the
determination under that subsection (or, at the
Attorney General's option, after such period after the
effective date of the determination as the Attorney
General determines to be appropriate in order to
provide for an orderly transition).
(4) Detention of the alien.--An alien provided
temporary protected status under this section shall not
be detained by the Attorney General on the basis of the
alien's immigration status in the United States.
(e) Relation of Period of Temporary Protected Status to
Cancellation of Removal.--With respect to an alien granted
temporary protected status under this section, the period of
such status shall not be counted as a period of physical
presence in the United States for purposes of section 240A(a),
unless the Attorney General determines that extreme hardship
exists. Such period shall not cause a break in the continuity
of residence of the period before and after such period for
purposes of such section.
(f) Benefits and Status During Period of Temporary Protected
Status.--During a period in which an alien is granted temporary
protected status under this section--
(1) the alien shall not be considered to be
permanently residing in the United States under color
of law;
(2) the alien may be deemed ineligible for public
assistance by a State (as defined in section
101(a)(36)) or any political subdivision thereof which
furnishes such assistance;
(3) the alien may travel abroad with the prior
consent of the Attorney General; and
(4) for purposes of adjustment of status under
section 245 and change of status under section 248, the
alien shall be considered as being in, and maintaining,
lawful status as a nonimmigrant.
(g) Exclusive Remedy.--Except as otherwise specifically
provided, this section shall constitute the exclusive authority
of the Attorney General under law to permit aliens who are or
may become otherwise deportable or have been paroled into the
United States to remain in the United States temporarily
because of their particular nationality or region of foreign
state of nationality.
(h) Limitation on Consideration in the Senate of Legislation
Adjusting Status.--
(1) In general.--Except as provided in paragraph (2),
it shall not be in order in the Senate to consider any
bill, resolution, or amendment that--
(A) provides for adjustment to lawful
temporary or permanent resident alien status
for any alien receiving temporary protected
status under this section, or
(B) has the effect of amending this
subsection or limiting the application of this
subsection.
(2) Supermajority required.--Paragraph (1) may be
waived or suspended in the Senate only by the
affirmative vote of three-fifths of the Members duly
chosen and sworn. An affirmative vote of three-fifths
of the Members of the Senate duly chosen and sworn
shall be required in the Senate to sustain an appeal of
the ruling of the Chair on a point of order raised
under paragraph (1).
(3) Rules.--Paragraphs (1) and (2) are enacted--
(A) as an exercise of the rulemaking power of
the Senate and as such they are deemed a part
of the rules of the Senate, but applicable only
with respect to the matters described in
paragraph (1) and supersede other rules of the
Senate only to the extent that such paragraphs
are inconsistent therewith; and
(B) with full recognition of the
constitutional right of the Senate to change
such rules at any time, in the same manner as
in the case of any other rule of the Senate.
(i) Annual Report and Review.--
(1) Annual report.--Not later than March 1 of each
year (beginning with 1992), the Attorney General, after
consultation with the appropriate agencies of the
Government, shall submit a report to the Committees on
the Judiciary of the House of Representatives and of
the Senate on the operation of this section during the
previous year. Each report shall include--
(A) a listing of the foreign states or parts
thereof designated under this section,
(B) the number of nationals of each such
state who have been granted temporary protected
status under this section and their immigration
status before being granted such status, and
(C) an explanation of the reasons why foreign
states or parts thereof were designated under
subsection (b)(1) and, with respect to foreign
states or parts thereof previously designated,
why the designation was terminated or extended
under subsection (b)(3).
(2) Committee report.--No later than 180 days after
the date of receipt of such a report, the Committee on
the Judiciary of each House of Congress shall report to
its respective House such oversight findings and
legislation as it deems appropriate.
Chapter 5--Adjustment and Change of Status
adjustment of status of nonimmigrant to that of person admitted for
permanent residence
Sec. 245. (a) The status of an alien who was inspected and
admitted or paroled into the United States or the status of any
other alien having an approved petition for classification as a
VAWA self-petitioner may be adjusted by the Attorney General,
in his discretion and under such regulations as he may
prescribe, to that of an alien lawfully admitted for permanent
residence if (1) the alien makes an application for such
adjustment, (2) the alien is eligible to receive an immigrant
visa and is admissible to the United States for permanent
residence, and (3) an immigrant visa is immediately available
to him at the time his application is filed.
(b) Upon the approval of an application for adjustment made
under subsection (a), the Attorney General shall record the
alien's lawful admission for permanent residence as of the date
the order of the Attorney General approving the application for
the adjustment of status is made, and the Secretary of State
shall reduce by one the number of the preference visas
authorized to be issued under sections 202 and 203 within the
class to which the alien is chargeable for the fiscal year then
current.
(c) Other than an alien having an approved petition for
classification as a VAWA self-petitioner, subsection (a) shall
not be applicable to (1) an alien crewman; (2) subject to
subsection (k), an alien (other than an immediate relative as
defined in section 201(b) or a special immigrant described in
section 101(a)(27)(H), (I), (J), or (K)) who hereafter
continues in or accepts unauthorized employment prior to filing
an application for adjustment of status or who is in unlawful
immigration status on the date of filing the application for
adjustment of status or who has failed (other than through no
fault of his own or for technical reasons) to maintain
continuously a lawful status since entry into the United
States; (3) any alien admitted in transit without visa under
section 212(d)(4)(C); (4) an alien (other than an immediate
relative as defined in section 201(b)) who was admitted as a
nonimmigrant visitor without a visa under section 212(l) or
section 217; (5) an alien who was admitted as a nonimmigrant
described in section 101(a)(15)(S), (6) an alien who is
deportable under section 237(a)(4)(B); (7) any alien who seeks
adjustment of status to that of an immigrant under section
203(b) and is not in a lawful nonimmigrant status; or (8) any
alien who was employed while the alien was an unauthorized
alien, as defined in section 274A(h)(3), or who has otherwise
violated the terms of a nonimmigrant visa.
(d) The Attorney General may not adjust, under subsection
(a), the status of an alien lawfully admitted to the United
States for permanent residence on a conditional basis under
section 216. The Attorney General may not adjust, under
subsection (a), the status of a nonimmigrant alien described in
section 101(a)(15)(K) except to that of an alien lawfully
admitted to the United States on a conditional basis under
section 216 as a result of the marriage of the nonimmigrant
(or, in the case of a minor child, the parent) to the citizen
who filed the petition to accord that alien's nonimmigrant
status under section 101(a)(15)(K).
(e)(1) Except as provided in paragraph (3), an alien who is
seeking to receive an immigrant visa on the basis of a marriage
which was entered into during the period described in paragraph
(2) may not have the alien's status adjusted under subsection
(a).
(2) The period described in this paragraph is the period
during which administrative or judicial proceedings are pending
regarding the alien's right to be admitted or remain in the
United States.
(3) Paragraph (1) and section 204(g) shall not apply with
respect to a marriage if the alien establishes by clear and
convincing evidence to the satisfaction of the Attorney General
that the marriage was entered into in good faith and in
accordance with the laws of the place where the marriage took
place and the marriage was not entered into for the purpose of
procuring the alien's admission as an immigrant and no fee or
other consideration was given (other than a fee or other
consideration to an attorney for assistance in preparation of a
lawful petition) for the filing of a petition under section
204(a) or subsection (d) or (p) of section 214 with respect to
the alien spouse or alien son or daughter. In accordance with
regulations, there shall be only one level of administrative
appellate review for each alien under the previous sentence.
(f) The Attorney General may not adjust, under subsection
(a), the status of an alien lawfully admitted to the United
States for permanent residence on a conditional basis under
section 216A.
(g) In applying this section to a special immigrant described
in section 101(a)(27)(K), such an immigrant shall be deemed,
for purposes of subsection (a), to have been paroled into the
United States.
(h) In applying this section to a special immigrant described
in section 101(a)(27)(J)--
(1) such an immigrant shall be deemed, for purposes
of subsection (a), to have been paroled into the United
States; and
(2) in determining the alien's admissibility as an
immigrant--
(A) paragraphs (4), (5)(A), (6)(A), (6)(C),
(6)(D), (7)(A), and (9)(B) of section 212(a)
shall not apply; and
(B) the Attorney General may waive other
paragraphs of section 212(a) (other than
paragraphs (2)(A), (2)(B), (2)(C) [(except for
so much of such paragraph as related to a
single offense of simple possession of 30 grams
or less of marijuana)], (3)(A), (3)(B), (3)(C),
and (3)(E)) in the case of individual aliens
for humanitarian purposes, family unity, or
when it is otherwise in the public interest.
The relationship between an alien and the alien's natural
parents or prior adoptive parents shall not be considered a
factor in making a waiver under paragraph (2)(B). Nothing in
this subsection or section 101(a)(27)(J) shall be construed as
authorizing an alien to apply for admission or be admitted to
the United States in order to obtain special immigrant status
described in such section.
(i)(1) Notwithstanding the provisions of subsections (a) and
(c) of this section, an alien physically present in the United
States--
(A) who--
(i) entered the United States without
inspection; or
(ii) is within one of the classes enumerated
in
subsection (c) of this section;
(B) who is the beneficiary (including a spouse or
child of the principal alien, if eligible to receive a
visa under section 203(d)) of--
(i) a petition for classification under
section 204 that was filed with the Attorney
General on or before April 30, 2001; or
(ii) an application for a labor certification
under section 212(a)(5)(A) that was filed
pursuant to the regulations of the Secretary of
Labor on or before such date; and
(C) who, in the case of a beneficiary of a petition
for classification, or an application for labor
certification, described in subparagraph (B) that was
filed after January 14, 1998, is physically present in
the United States on the date of the enactment of the
LIFE Act Amendments of 2000;
may apply to the Attorney General for the adjustment of his or
her status to that of an alien lawfully admitted for permanent
residence. The Attorney General may accept such application
only if the alien remits with such application a sum equalling
$1,000 as of the date of receipt of the application, but such
sum shall not be required from a child under the age of
seventeen, or an alien who is the spouse or unmarried child of
an individual who obtained temporary or permanent resident
status under section 210 or 245A of the Immigration and
Nationality Act or section 202 of the Immigration Reform and
Control Act of 1986 at any date, who--
(i) as of May 5, 1988, was the unmarried child or
spouse of the individual who obtained temporary or
permanent resident status under section 210 or 245A of
the Immigration and Nationality Act or section 202 of
the Immigration Reform and Control Act of 1986;
(ii) entered the United States before May 5, 1988,
resided in the United States on May 5, 1988, and is not
a lawful permanent resident; and
(iii) applied for benefits under section 301(a) of
the Immigration Act of 1990. The sum specified herein
shall be in addition to the fee normally required for
the processing of an application under this section.
(2) Upon receipt of such an application and the sum hereby
required, the Attorney General may adjust the status of the
alien to that of an alien lawfully admitted for permanent
residence if--
(A) the alien is eligible to receive an immigrant
visa and is admissible to the United States for
permanent residence; and
(B) an immigrant visa is immediately available to the
alien at the time the application is filed.
(3)(A) The portion of each application fee (not to exceed
$200) that the Attorney General determines is required to
process an application under this section and is remitted to
the Attorney General pursuant to paragraphs (1) and (2) of this
subsection shall be disposed of by the Attorney General as
provided in subsections (m), (n), and (o) of section 286.
(B) Any remaining portion of such fees remitted under such
paragraphs shall be deposited by the Attorney General into the
Breached Bond/Detention Fund established under section 286(r),
except that in the case of fees attributable to applications
for a beneficiary with respect to whom a petition for
classification, or an application for labor certification,
described in paragraph (1)(B) was filed after January 14, 1998,
one-half of such remaining portion shall be deposited by the
Attorney General into the Immigration Examinations Fee Account
established under section 286(m).
(j)(1) If, in the opinion of the Attorney General--
(A) a nonimmigrant admitted into the United States
under section 101(a)(15)(S)(i) has supplied information
described in subclause (I) of such section; and
(B) the provision of such information has
substantially contributed to the success of an
authorized criminal investigation or the prosecution of
an individual described in subclause (III) of that
section,
the Attorney General may adjust the status of the alien (and
the spouse, married and unmarried sons and daughters, and
parents of the alien if admitted under that section) to that of
an alien lawfully admitted for permanent residence if the alien
is not described in section 212(a)(3)(E).
(2) If, in the sole discretion of the Attorney General--
(A) a nonimmigrant admitted into the United States
under section 101(a)(15)(S)(ii) has supplied
information described in subclause (I) of such section,
and
(B) the provision of such information has
substantially contributed to--
(i) the prevention or frustration of an act
of terrorism against a United States person or
United States property, or
(ii) the success of an authorized criminal
investigation of, or the prosecution of, an
individual involved in such an act of
terrorism, and
(C) the nonimmigrant has received a reward under
section 36(a) of the State Department Basic Authorities
Act of 1956,
the Attorney General may adjust the status of the alien (and
the spouse, married and unmarried sons and daughters, and
parents of the alien if admitted under such section) to that of
an alien lawfully admitted for permanent residence if the alien
is not described in section 212(a)(3)(E).
(3) Upon the approval of adjustment of status under paragraph
(1) or (2), the Attorney General shall record the alien's
lawful admission for permanent residence as of the date of such
approval and the Secretary of State shall reduce by one the
number of visas authorized to be issued under sections 201(d)
and 203(b)(4) for the fiscal year then current.
(k) An alien who is eligible to receive an immigrant visa
under paragraph (1), (2), or (3) of section 203(b) (or, in the
case of an alien who is an immigrant described in section
101(a)(27)(C), under section 203(b)(4)) may adjust status
pursuant to subsection (a) and notwithstanding subsection
(c)(2), (c)(7), and (c)(8), if--
(1) the alien, on the date of filing an application
for adjustment of status, is present in the United
States pursuant to a lawful admission;
(2) the alien, subsequent to such lawful admission
has not, for an aggregate period exceeding 180 days--
(A) failed to maintain, continuously, a
lawful status;
(B) engaged in unauthorized employment; or
(C) otherwise violated the terms and
conditions of the alien's admission.
(l)(1) If, in the opinion of the Secretary of Homeland
Security, or in the case of subparagraph (C)(i), in the opinion
of the Secretary of Homeland Security, in consultation with the
Attorney General, as appropriate a nonimmigrant admitted into
the United States under section 101(a)(15)(T)(i)--
(A) has been physically present in the United States
for a continuous period of at least 3 years since the
date of admission as a nonimmigrant under section
101(a)(15)(T)(i), or has been physically present in the
United States for a continuous period during the
investigation or prosecution of acts of trafficking and
that, in the opinion of the Attorney General, the
investigation or prosecution is complete, whichever
period of time is less;
(B) subject to paragraph (6), has, throughout such
period, been a person of good moral character; and
(C)(i) has, during such period, complied with any
reasonable request for assistance in the investigation
or prosecution of acts of trafficking;
(ii) the alien would suffer extreme hardship
involving unusual and severe harm upon removal from the
United States; or
(iii) was younger than 18 years of age at the
time of the victimization qualifying the alien
for relief under section 101(a)(15)(T).
the Secretary of Homeland Security, or in the case of
subparagraph (C)(i), the Attorney General, may adjust the
status of the alien (and any person admitted under section
101(a)(15)(T)(ii) as the spouse, parent, sibling, or child of
the alien) to that of an alien lawfully admitted for permanent
residence.
(2) Paragraph (1) shall not apply to an alien admitted under
section 101(a)(15)(T) who is inadmissible to the United States
by reason of a ground that has not been waived under section
212, except that, if the Secretary of Homeland Security
considers it to be in the national interest to do so, the
Secretary of Homeland Security, in the Attorney General's
discretion, may waive the application of--
(A) paragraphs (1) and (4) of section 212(a); and
(B) any other provision of such section (excluding
paragraphs (3), (10)(C), and (10(E)), if the activities
rendering the alien inadmissible under the provision
were caused by, or were incident to, the victimization
described in section 101(a)(15)(T)(i)(I).
(3) An alien shall be considered to have failed to maintain
continuous physical presence in the United States under
paragraph (1)(A) if the alien has departed from the United
States for any period in excess of 90 days or for any periods
in the aggregate exceeding 180 days, unless--
(A) the absence was necessary to assist in the
investigation or prosecution described in paragraph
(1)(A); or
(B) an official involved in the investigation or
prosecution certifies that the absence was otherwise
justified.
(4)(A) The total number of aliens whose status may be
adjusted under paragraph (1) during any fiscal year may not
exceed 5,000.
(B) The numerical limitation of subparagraph (A) shall only
apply to principal aliens and not to the spouses, sons,
daughters, siblings, or parents of such aliens.
(5) Upon the approval of adjustment of status under paragraph
(1), the Secretary of Homeland Security shall record the
alien's lawful admission for permanent residence as of the date
of such approval.
(6) For purposes of paragraph (1)(B), the Secretary of
Homeland Security may waive consideration of a disqualification
from good moral character with respect to an alien if the
disqualification was caused by, or incident to, the trafficking
described in section 101(a)(15)(T)(i)(I).
(7) The Secretary of Homeland Security shall permit aliens to
apply for a waiver of any fees associated with filing an
application for relief through final adjudication of the
adjustment of status for a VAWA self-petitioner and for relief
under sections 101(a)(15)(T), 101(a)(15)(U), 106, 240A(b)(2),
and 244(a)(3) (as in effect on March 31, 1997).
(m)(1) Secretary of Homeland Security may adjust the status
of an alien admitted into the United States (or otherwise
provided nonimmigrant status) under section 101(a)(15)(U) to
that of an alien lawfully admitted for permanent residence if
the alien is not described in section 212(a)(3)(E), unless the
Secretary determines based on affirmative evidence that the
alien unreasonably refused to provide assistance in a criminal
investigation or prosecution, if--
(A) the alien has been physically present in the
United States for a continuous period of at least 3
years since the date of admission as a nonimmigrant
under clause (i) or (ii) of section 101(a)(15)(U); and
(B) in the opinion of the Secretary of Homeland
Security, the alien's continued presence in the United
States is justified on humanitarian grounds, to ensure
family unity, or is otherwise in the public interest.
(2) An alien shall be considered to have failed to maintain
continuous physical presence in the United States under
paragraph (1)(A) if the alien has departed from the United
States for any period in excess of 90 days or for any periods
in the aggregate exceeding 180 days unless the absence is in
order to assist in the investigation or prosecution or unless
an official involved in the investigation or prosecution
certifies that the absence was otherwise justified.
(3) Upon approval of adjustment of status under paragraph (1)
of an alien described in section 101(a)(15)(U)(i) the Secretary
of Homeland Security may adjust the status of or issue an
immigrant visa to a spouse, a child, or, in the case of an
alien child, a parent who did not receive a nonimmigrant visa
under section 101(a)(15)(U)(ii) if the Secretary considers the
grant of such status or visa necessary to avoid extreme
hardship.
(4) Upon the approval of adjustment of status under paragraph
(1) or (3), the Secretary of Homeland Security shall record the
alien's lawful admission for permanent residence as of the date
of such approval.
(5)(A) The Secretary of Homeland Security shall consult with
the Attorney General, as appropriate, in making a determination
under paragraph (1) whether affirmative evidence demonstrates
that the alien unreasonably refused to provide assistance to a
Federal law enforcement official, Federal prosecutor, Federal
judge, or other Federal authority investigating or prosecuting
criminal activity described in section 101(a)(15)(U)(iii).
(B) Nothing in paragraph (1)(B) may be construed to prevent
the Secretary from consulting with the Attorney General in
making a determination whether affirmative evidence
demonstrates that the alien unreasonably refused to provide
assistance to a State or local law enforcement official, State
or local prosecutor, State or local judge, or other State or
local authority investigating or prosecuting criminal activity
described in section 101(a)(15)(U)(iii).
ADJUSTMENT OF STATUS OF CERTAIN ENTRANTS BEFORE JANUARY 1, 1982, TO
THAT OF PERSON ADMITTED FOR LAWFUL RESIDENCE
Sec. 245A. (a) Temporary Resident Status.--The Attorney
General shall adjust the status of an alien to that of an alien
lawfully admitted for temporary residence if the alien meets
the following requirements:
(1) Timely application.--
(A) During application period.--Except as
provided in subparagraph (B), the alien must
apply for such adjustment during the 12-month
period beginning on a date (not later than 180
days after the date of enactment of this
section) designated by the Attorney General.
(B) Application within 30 days of show-cause
order.--An alien who, at any time during the
first 11 months of the 12-month period
described in subparagraph (A), is the subject
of an order to show cause issued under section
242 (as in effect before October 1, 1996), must
make application under this section not later
than the end of the 30-day period beginning
either on the first day of such 12-month period
or on the date of the issuance of such order,
whichever day is later.
(C) Information included in application.--
Each application under this subsection shall
contain such information as the Attorney
General may require, including information on
living relatives of the applicant with respect
to whom a petition for preference or other
status may be filed by the applicant at any
later date under section 204(a).
(2) Continuous unlawful residence since 1982.--
(A) In general.--The alien must establish
that he entered the United States before
January 1, 1982, and that he has resided
continuously in the United States in an
unlawful status since such date and through the
date the application is filed under this
subsection.
(B) Nonimmigrants.--In the case of an alien
who entered the United States as a nonimmigrant
before January 1, 1982, the alien must
establish that the alien's period of authorized
stay as a nonimmigrant expired before such date
through the passage of time or the alien's
unlawful status was known to the Government as
of such date.
(C) Exchange visitors.--If the alien was at
any time a nonimmigrant exchange alien (as
defined in section 101(a)(15)(J)), the alien
must establish that the alien was not subject
to the two-year foreign residence requirement
of section 212(e) or has fulfilled that
requirement or received a waiver thereof.
(3) Continuous physical presence since enactment.--
(A) In general.--The alien must establish
that the alien has been continuously physically
present in the United States since the date of
the enactment of this section.
(B) Treatment of brief, casual, and innocent
absences.--An alien shall not be considered to
have failed to maintained continuous physical
presence in the United States for purposes of
subparagraph (A) by virtue of brief, casual,
and innocent absences from the United States.
(C) Admissions.--Nothing in this section
shall be construed as authorizing an alien to
apply for admission to, or to be admitted to,
the United States in order to apply for
adjustment of status under this subsection.
(4) Admissible as immigrant.--The alien must
establish that he--
(A) is admissible to the United States as an
immigrant, except as otherwise provided under
subsection (d)(2),
(B) has not been convicted of any felony or
of three or more misdemeanors committed in the
United States,
(C) has not assisted in the persecution of
any person or persons on account of race,
religion, nationality, membership in a
particular social group, or political opinion,
and
(D) is registered or registering under the
Military Selective Service Act, if the alien is
required to be so registered under that Act.
For purposes of this subsection, an alien in the status
of a Cuban and Haitian entrant described in paragraph
(1) or (2)(A) of section 501(e) of Public Law 96-422
shall be considered to have entered the United States
and to be in an unlawful status in the United States.
(b) Subsequent Adjustment to Permanent Residence and Nature
of Temporary Resident Status.--
(1) Adjustment to permanent residence.--The Attorney
General shall adjust the status of any alien provided
lawful temporary resident status under subsection (a)
to that of an alien lawfully admitted for permanent
residence if the alien meets the following
requirements:
(A) Timely application after one year's
residence.--The alien must apply for such
adjustment during the 2-year period beginning
with the nineteenth month that begins after the
date the alien was granted such temporary
resident status.
(B) Continuous residence.--
(i) In general.--The alien must
establish that he has continuously
resided in the United States since the
date the alien was granted such
temporary resident status.
(ii) Treatment of certain absences.--
An alien shall not be considered to
have lost the continuous residence
referred to in clause (i) by reason of
an absence from the United States
permitted under paragraph (3)(A).
(C) Admissible as immigrant.--The alien must
establish that he--
(i) is admissible to the United
States as an immigrant, except as
otherwise provided under subsection
(d)(2), and
(ii) has not been convicted of any
felony or three or more misdemeanors
committed in the United States.
(D) Basic citizenship skills.--
(i) In general.--The alien must
demonstrate that he either--
(I) meets the requirements of
section 312(a) (relating to
minimal understanding of
ordinary English and a
knowledge and understanding of
the history and government of
the United States), or
(II) is satisfactorily
pursuing a course of study
(recognized by the Attorney
General) to achieve such an
understanding of English and
such a knowledge and
understanding of the history
and government of the United
States.
(ii) Exception for elderly or
developmentally disabled individuals.--
The Attorney General may, in his
discretion, waive all or part of the
requirements of clause (i) in the case
of an alien who is 65 years of age or
older or who is developmentally
disabled.
(iii) Relation to naturalization
examination.--In accordance with
regulations of the Attorney General, an
alien who has demonstrated under clause
(i)(I) that the alien meets the
requirements of section 312(a) may be
considered to have satisfied the
requirements of that section for
purposes of becoming naturalized as a
citizen of the United States under
title III.
(2) Termination of temporary residence.--The Attorney
General shall provide for termination of temporary
resident status granted an alien under subsection (a)--
(A) if it appears to the Attorney General
that the alien was in fact not eligible for
such status;
(B) if the alien commits an act that (i)
makes the alien inadmissible to the United
States as an immigrant, except as otherwise
provided under subsection (d)(2), or (ii) is
convicted of any felony or three or more
misdemeanors committed in the United States; or
(C) at the end of the 43rd month beginning
after the date the alien is granted such
status, unless the alien has filed an
application for adjustment of such status
pursuant to paragraph (1) and such application
has not been denied.
(3) Authorized travel and employment during temporary
residence.--During the period an alien is in lawful
temporary resident status granted under subsection
(a)--
(A) Authorization of travel abroad.--The
Attorney General shall, in accordance with
regulations, permit the alien to return to the
United States after such brief and casual trips
abroad as reflect an intention on the part of
the alien to adjust to lawful permanent
resident status under paragraph (1) and after
brief temporary trips abroad occasioned by a
family obligation involving an occurrence such
as the illness or death of a close relative or
other family need.
(B) Authorization of employment.--The
Attorney General shall grant the alien
authorization to engage in employment in the
United States and provide to that alien an
``employment authorized'' endorsement or other
appropriate work permit.
(c) Applications for Adjustment of Status.--
(1) To whom may be made.--The Attorney General shall
provide that applications for adjustment of status
under subsection (a) may be filed--
(A) with the Attorney General, or
(B) with a qualified designated entity, but
only if the applicant consents to the
forwarding of the application to the Attorney
General.
As used in this section, the term ``qualified
designated entity'' means an organization or person
designated under paragraph (2).
(2) Designation of qualified entities to receive
applications.--For purposes of assisting in the program
of legalization provided under this section, the
Attorney General--
(A) shall designate qualified voluntary
organizations and other qualified State, local,
and community organizations, and
(B) may designate such other persons as the
Attorney General determines are qualified and
have substantial experience, demonstrated
competence, and traditional long-term
involvement in the preparation and submittal of
applications for adjustment of status under
section 209 or 245, Public Law 89-732, or
Public Law 95-145.
(3) Treatment of applications by designated
entities.--Each qualified designated entity must agree
to forward to the Attorney General applications filed
with it in accordance with paragraph (1)(B) but not to
forward to the Attorney General applications filed with
it unless the applicant has consented to such
forwarding. No such entity may make a determination
required by this section to be made by the Attorney
General.
(4) Limitation on access to information.--Files and
records of qualified designated entities relating to an
alien's seeking assistance or information with respect
to filing an application under this section are
confidential and the Attorney General and the Service
shall not have access to such files or records relating
to an alien without the consent of the alien.
(5) Confidentiality of information.--
(A) In general.--Except as provided in this
paragraph, neither the Attorney General, nor
any other official or employee of the
Department of Justice, or bureau or agency
thereof, may--
(i) use the information furnished by
the applicant pursuant to an
application filed under this section
for any purpose other than to make a
determination on the application, for
enforcement of paragraph (6), or for
the preparation of reports to Congress
under section 404 of the Immigration
Reform and Control Act of 1986;
(ii) make any publication whereby the
information furnished by any particular
applicant can be identified; or
(iii) permit anyone other than the
sworn officers and employees of the
Department or bureau or agency or, with
respect to applications filed with a
designated entity, that designated
entity, to examine individual
applications.
(B) Required disclosures.--The Attorney
General shall provide the information furnished
under this section, and any other information
derived from such furnished information, to a
duly recognized law enforcement entity in
connection with a criminal investigation or
prosecution, when such information is requested
in writing by such entity, or to an official
coroner for purposes of affirmatively
identifying a deceased individual (whether or
not such individual is deceased as a result of
a crime).
(C) Authorized disclosures.--The Attorney
General may provide, in the Attorney General's
discretion, for the furnishing of information
furnished under this section in the same manner
and circumstances as census information may be
disclosed by the Secretary of Commerce under
section 8 of title 13, United States Code.
(D) Construction.--
(i) In general.--Nothing in this
paragraph shall be construed to limit
the use, or release, for immigration
enforcement purposes or law enforcement
purposes of information contained in
files or records of the Service
pertaining to an application filed
under this section, other than
information furnished by an applicant
pursuant to the application, or any
other information derived from the
application, that is not available from
any other source.
(ii) Criminal convictions.--
Information concerning whether the
applicant has at any time been
convicted of a crime may be used or
released for immigration enforcement or
law enforcement purposes.
(E) Crime.--Whoever knowingly uses,
publishes, or permits information to be
examined in violation of this paragraph shall
be fined not more than $10,000.
(6) Penalties for false statements in applications.--
Whoever files an application for adjustment of status
under this section and knowingly and willfully
falsifies, misrepresents, conceals, or covers up a
material fact or makes any false, fictitious, or
fraudulent statements or representations, or makes or
uses any false writing or document knowing the same to
contain any false, fictitious, or fraudulent statement
or entry, shall be fined in accordance with title 18,
United States Code, or imprisoned not more than five
years, or both.
(7) Application fees.--
(A) Fee Schedule.--The Attorney General shall
provide for a schedule of fees to be charged
for the filing of applications for adjustment
under subsection (a) or (b)(1). The Attorney
General shall provide for an additional fee for
filing an application for adjustment under
subsection (b)(1) after the end of the first
year of the 2-year period described in
subsection (b)(1)(A).
(B) Use of fees.--The Attorney General shall
deposit payments received under this paragraph
in a separate account and amounts in such
account shall be available, without fiscal year
limitation, to cover administrative and other
expenses incurred in connection with the review
of applications filed under this section.
(C) Immigration-related unfair employment
practices.--Not to exceed $3,000,000 of the
unobligated balances remaining in the account
established in subparagraph (B) shall be
available in fiscal year 1992 and each fiscal
year thereafter for grants, contracts, and
cooperative agreements to community-based
organizations for outreach programs, to be
administered by the Office of Special Counsel
for Immigration-Related Unfair Employment
Practices: Provided, That such amounts shall be
in addition to any funds appropriated to the
Office of Special Counsel for such purposes:
Provided further, That none of the funds made
available by this section shall be used by the
Office of Special Counsel to establish regional
offices.
(d) Waiver of Numerical Limitations and Certain Grounds for
Exclusion.--
Numerical limitations do not apply.--The numerical
limitations of sections 201 and 202 shall not apply to
the adjustment of aliens to lawful permanent resident
status under this section.
(2) Waiver of grounds for exclusion.--In the
determination of an alien's admissibility under
subsections (a)(4)(A), (b)(1)(C)(i), and (b)(2)(B)--
(A) Grounds of exclusion not applicable.--The
provisions of paragraphs (5) and (7)(A) of
section 212(a) shall not apply.
(B) Waiver of other grounds.--
(i) In general.--Except as provided
in clause (ii), the Attorney General
may waive any other provision of
section 212(a) in the case of
individual aliens for humanitarian
purposes, to assure family unity, or
when it is otherwise in the public
interest.
(ii) Grounds that may not be
waived.--The following provisions of
section 212(a) may not be waived by the
Attorney General under clause (i):
(I) Paragraphs (2)(A) and
(2)(B) (relating to criminals).
(II) Paragraph (2)(C)
(relating to drug offenses)[,
except for so much of such
paragraph as relates to a
single offense of simple
possession of 30 grams or less
of marihuana].
(III) Paragraph (3) (relating
to security and related
grounds).
(IV) Paragraph (4) (relating
to aliens likely to become
public charges) insofar as it
relates to an application for
adjustment to permanent
residence.
Subclause (IV) (prohibiting the waiver
of section 212(a)(4)) shall not apply
to an alien who is or was an aged,
blind, or disabled individual (as
defined in section 1614(a)(1) of the
Social Security Act).
(iii) Special rule for determination
of public charge.--An alien is not
ineligible for adjustment of status
under this section due to being
inadmissible under section 212(a)(4) if
the alien demonstrates a history of
employment in the United States
evidencing self-support without receipt
of public cash assistance.
(C) Medical examination.--The alien shall be
required, at the alien's expense, to undergo
such a medical examination (including a
determination of immunization status) as is
appropriate and conforms to generally accepted
professional standards of medical practice.
(e) Temporary Stay of Deportation and Work Authorization for
Certain Applicants.--
(1) Before application period.--The Attorney General
shall provide that in the case of an alien who is
apprehended before the beginning of the application
period described in subsection (a)(1)(A) and who can
establish a prima facie case of eligibility to have his
status adjusted under subsection (a) (but for the fact
that he may not apply for such adjustment until the
beginning of such period), until the alien has had the
opportunity during the first 30 days of the application
period to complete the filing of an application for
adjustment, the alien--
(A) may not be deported, and
(B) shall be granted authorization to engage
in employment in the United States and be
provided an ``employment authorized''
endorsement or other appropriate work permit.
(2) During application period.--The Attorney General
shall provide that in the case of an alien who presents
a prima facie application for adjustment of status
under subsection (a) during the application period, and
until a final determination on the application has been
made in accordance with this section, the alien--
(A) may not be deported, and
(B) shall be granted authorization to engage
in employment in the United States and be
provided an ``employment authorized''
endorsement or other appropriate work permit.
(f) Administrative and Judicial Review.--
(1) Administrative and judicial review.--There shall
be no administrative or judicial review of a
determination respecting an application for adjustment
of status under this section except in accordance with
this subsection.
(2) No review for late filings.--No denial of
adjustment of status under this section based on a late
filing of an application for such adjustment may be
reviewed by a court of the United States or of any
State or reviewed in any administrative proceeding of
the United States Government.
(3) Administrative review.--
(A) Single level of administrative appellate
review.--The Attorney General shall establish
an appellate authority to provide for a single
level of administrative appellate review of a
determination described in paragraph (1).
(B) Standard for review.--Such administrative
appellate review shall be based solely upon the
administrative record established at the time
of the determination on the application and
upon such additional or newly discovered
evidence as may not have been available at the
time of the determination.
(4) Judicial review.--
(A) Limitation to review of deportation.--
There shall be judicial review of such a denial
only in the judicial review of an order of
deportation under section 106 (as in effect
before October 1, 1996).
(B) Standard for judicial review.--Such
judicial review shall be based solely upon the
administrative record established at the time
of the review by the appellate authority and
the findings of fact and determinations
contained in such record shall be conclusive
unless the applicant can establish abuse of
discretion or that the findings are directly
contrary to clear and convincing facts
contained in the record considered as a whole.
(C) Jurisdiction of courts.--Notwithstanding
any other provision of law, no court shall have
jurisdiction of any cause of action or claim by
or on behalf of any person asserting an
interest under this section unless such person
in fact filed an application under this section
within the period specified by subsection
(a)(1), or attempted to file a complete
application and application fee with an
authorized legalization officer of the Service
but had the application and fee refused by that
officer.
(g) Implementation of Section.--
(1) Regulations.--The Attorney General, after
consultation with the Committees on the Judiciary of
the House of Representatives and of the Senate, shall
prescribe--
(A) regulations establishing a definition of
the term ``resided continuously'', as used in
this section, and the evidence needed to
establish that an alien has resided
continuously in the United States for purposes
of this section, and
(B) such other regulations as may be
necessary to carry out this section.
(2) Considerations.--In prescribing regulations
described in paragraph (1)(A)--
(A) Periods of continuous residence.--The
Attorney General shall specify individual
periods, and aggregate periods, of absence from
the United States which will be considered to
break a period of continuous residence in the
United States and shall take into account
absences due merely to brief and casual trips
abroad.
(B) Absences caused by deportation or
advanced parole.--The Attorney General shall
provide that--
(i) an alien shall not be considered
to have resided continuously in the
United States, if, during any period
for which continuous residence is
required, the alien was outside the
United States as a result of a
departure under an order of
deportation, and
(ii) any period of time during which
an alien is outside the United States
pursuant to the advance parole
procedures of the Service shall not be
considered as part of the period of
time during which an alien is outside
the United States for purposes of this
section.
(C) Waivers of certain absences.--The
Attorney General may provide for a waiver, in
the discretion of the Attorney General, of the
periods specified under subparagraph (A) in the
case of an absence from the United States due
merely to a brief temporary trip abroad
required by emergency or extenuating
circumstances outside the control of the alien.
(D) Use of certain documentation.--The
Attorney General shall require that--
(i) continuous residence and physical
presence in the United States must be
established through documents, together
with independent corroboration of the
information contained in such
documents, and
(ii) the documents provided under
clause (i) be employment-related if
employment-related documents with
respect to the alien are available to
the applicant.
(3) Interim final regulations.--Regulations
prescribed under this section may be prescribed to take
effect on an interim final basis if the Attorney
General determines that this is necessary in order to
implement this section in a timely manner.
(h) Temporary Disqualification of Newly Legalized Aliens from
Receiving Certain Public Welfare Assistance.--
(1) In general.--During the five-year period
beginning on the date an alien was granted lawful
temporary resident status under subsection (a), and
notwithstanding any other provision of law--
(A) except as provided in paragraphs (2) and
(3), the alien is not eligible for--
(i) any program of financial
assistance furnished under Federal law
(whether through grant, loan,
guarantee, or otherwise) on the basis
of financial need, as such programs are
identified by the Attorney General in
consultation with other appropriate
heads of the various departments and
agencies of Government (but in any
event including the State program of
assistance under part A of title IV of
the Social Security Act),
(ii) medical assistance under a State
plan approved under title XIX of the
Social Security Act, and
(iii) assistance under the Food and
Nutrition Act of 2008; and
(B) a State or political subdivision therein
may, to the extent consistent with subparagraph
(A) and paragraphs (2) and (3), provide that
the alien is not eligible for the programs of
financial assistance or for medical assistance
described in subparagraph (A)(ii) furnished
under the law of that State or political
subdivision.
Unless otherwise specifically provided by this section
or other law, an alien in temporary lawful residence
status granted under subsection (a) shall not be
considered (for purposes of any law of a State or
political subdivision providing for a program of
financial assistance) to be permanently residing in the
United States under color of law.
(2) Exceptions.--Paragraph (1) shall not apply--
(A) to a Cuban and Haitian entrant (as
defined in paragraph (1) or (2)(A) of section
501(e) of Public Law 96-422, as in effect on
April 1, 1983), or
(B) in the case of assistance (other than
assistance under a State program funded under
part A of title IV of the Social Security Act)
which is furnished to an alien who is an aged,
blind, or disabled individual (as defined in
section 1614(a)(1) of the Social Security Act).
(3) Restricted medicaid benefits.--
(A) Clarification of entitlement.--Subject to
the restrictions under subparagraph (B), for
the purpose of providing aliens with
eligibility to receive medical assistance--
(i) paragraph (1) shall not apply,
(ii) aliens who would be eligible for
medical assistance but for the
provisions of paragraph (1) shall be
deemed, for purposes of title XIX of
the Social Security Act, to be so
eligible, and
(iii) aliens lawfully admitted for
temporary residence under this section,
such status not having changed, shall
be considered to be permanently
residing in the United States under
color of law.
(B) Restriction of benefits.--
(i) Limitation to emergency services
and services for pregnant women.--
Notwithstanding any provision of title
XIX of the Social Security Act
(including subparagraphs (B) and (C) of
section 1902(a)(10) of such Act),
aliens who, but for subparagraph (A),
would be ineligible for medical
assistance under paragraph (1), are
only eligible for such assistance with
respect to--
(I) emergency services (as
defined for purposes of section
1916(a)(2)(D) of the Social
Security Act), and
(II) services described in
section 1916(a)(2)(B) of such
Act (relating to service for
pregnant women).
(ii) No restriction for exempt aliens
and children.--The restrictions of
clause (i) shall not apply to aliens
who are described in paragraph (2) or
who are under 18 years of age.
(C) Definition of medical assistance.--In
this paragraph, the term ``medical assistance''
refers to medical assistance under a State plan
approved under title XIX of the Social Security
Act.
(4) Treatment of certain programs.--Assistance
furnished under any of the following provisions of law
shall not be construed to be financial assistance
described in paragraph (1)(A)(i):
(A) The Richard B. Russell National School
Lunch Act.
(B) The Child Nutrition Act of 1966.
(C) The The Carl D. Perkins Career and
Technical Education Act of 2006.
(D) Title I of the Elementary and Secondary
Education Act of 1965.
(E) The Headstart-Follow Through Act.
(F) Title I of the Workforce Innovation and
Opportunity Act.
(G) Title IV of the Higher Education Act of
1965.
(H) The Public Health Service Act.
(I) Titles V, XVI, and XX, and parts B, D,
and E of title IV, of the Social Security Act
(and titles I, X, XIV, and XVI of such Act as
in effect without regard to the amendment made
by section 301 of the Social Security
Amendments of 1972).
(5) Adjustment not affecting fascell-stone
benefits.--For the purpose of section 501 of the
Refugee Education Assistance Act of 1980 (Public Law
96-122), assistance shall be continued under such
section with respect to an alien without regard to the
alien's adjustment of status under this section.
(i) Dissemination of Information on Legalization Program.--
Beginning not later than the date designated by the Attorney
General under subsection (a)(1)(A), the Attorney General, in
cooperation with qualified designated entities, shall broadly
disseminate information respecting the benefits which aliens
may receive under this section and the requirements to obtain
such benefits.
* * * * * * *
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Minority Views
H.R. 3617, the Marijuana Opportunity Reinvestment and
Expungement Act of 2021, is flawed legislation that is designed
to decriminalize marijuana at the federal level and remove it
entirely from the Controlled Substances Act (CSA). This bill is
an enormous federal subsidy and stimulus for the marijuana
industry. This extreme and unwise bill would open the
floodgates to marijuana cultivation, distribution, and sale
within the United States--allowing bad actors and transnational
criminal organizations to further exploit America's addiction
crisis.
Marijuana remains the most commonly used illicit drug in
the United States, and the overall landscape of marijuana,
including its legality, research, cultivation, distribution,
importation and use, continues to evolve. Although still
illegal under Federal law, an increasing number of states have
passed legislation regarding the possession, use, and
cultivation of marijuana and its associated products. While
seizure amounts coming across the southwest border have
decreased in recent years, Mexico remains the most significant
foreign source for marijuana available in the United States.\1\
Domestic marijuana production continues to increase, as does
the availability and production of marijuana-related products
including edibles, concentrates, and vapes.\2\
---------------------------------------------------------------------------
\1\U.S. Drug Enforcement Administration (DEA), National Drug Threat
Assessment (NDTA) (Mar. 2021).
\2\Id.
---------------------------------------------------------------------------
MARIJUANA USAGE
Marijuana remains the most illicitly used drug in the
United States and is cultivated in all fifty states.\3\
According to the National Survey on Drug Use and Health, there
are currently 24 million people (8.9 percent of the population)
who use marijuana.\4\ In 2016, the survey also estimated that
``approximately 6.5 percent of adolescents aged 12 to 17, 20.8
percent of young adults aged 18-25, and 7.2 percent of adults
aged 26 or older used marijuana at least once in the past
month.''\5\
---------------------------------------------------------------------------
\3\Id.
\4\National Survey on Drug Use and Health, https://
www.drugabuse.gov/drug-topics/trends-statistics/national-drug-early-
warning-system-ndews/national-survey-drug-use-health (last visited Oct.
12, 2021).
\5\U.S. Drug Enforcement Administration (DEA), National Drug Threat
Assessment (NDTA) (Oct. 2018).
---------------------------------------------------------------------------
STATE MARIJUANA MEASURES
Marijuana has been prohibited at the federal level since
the 1937 Marijuana Tax Act, which was later replaced by the CSA
in 1970.\6\ Since 1996, however, individual states and the
District of Columbia have authorized a variety of measures
relating to the use, possession, and cultivation of marijuana.
Twenty-seven states and the District of Columbia have
decriminalized marijuana, meaning that marijuana use or
possession is not penalized with jail time.\7\ Thirty-six
states, four territories, and the District of Columbia have
legalized ``medical'' marijuana.\8\ Eighteen states, two
territories, and the District of Columbia have laws that permit
the recreational use of marijuana.\9\ Law-enforcement agencies
have reported that a number of marijuana businesses in these
states have financial backing from illicit revenue streams,
including transnational criminal organizations.\10\
---------------------------------------------------------------------------
\6\The Comprehensive Drug Abuse Prevention and Control Act of 1970,
Pub. L. No. 91-513 (1970).
\7\National Conference of State Legislatures, Cannabis Overview,
https://www.ncsl.org/research/civil-and-criminal-justice/marijuana-
overview.aspx (last visited on Oct. 12, 2021).
\8\National Conference of State Legislatures, State Medical
Marijuana Laws, https://www.ncsl.org/research/health/state-medical-
marijuana-laws.aspx (last visited on Oct. 12, 2021).
\9\Supra, note 7.
\10\U.S. Drug Enforcement Administration (DEA), National Drug
Threat Assessment (NDTA) (Mar. 2021).
---------------------------------------------------------------------------
PETITIONS TO RESCHEDULE MARIJUANA UNDER THE CONTROLLED SUBSTANCES ACT
During the Obama-Biden Administration, the Drug Enforcement
Administration (DEA) considered and denied state requests to
reschedule marijuana under the CSA. On November 30, 2011,
Governor Lincoln Chafee of Rhode Island and Governor Christine
Gregoire of Washington submitted petitions to the DEA to
reevaluate marijuana as a Schedule I controlled substance and
to move marijuana to a less-restrictive schedule under the CSA.
In August 2016, the DEA rejected the petitions after conducting
a five-year evaluation process in conjunction with the Food and
Drug Administration (FDA).\11\ The DEA requested a scientific
and medical evaluation and scheduling recommendation from the
Department of Health and Human Services (HHS) and concluded
that marijuana has a high potential for abuse, has no currently
accepted medical use, and lacks an accepted level of safety for
use under medical supervision.\12\ The DEA has rejected similar
petitions in the past.\13\
---------------------------------------------------------------------------
\11\Drug Enforcement Agency, Denial of Petition to Initiate
Proceedings to Reschedule Marijuana, 81 Fed. Reg. 53687 (Aug. 12,
2016).
\12\Id.
\13\Drug Enforcement Agency, Denial of Petition to Initiate
Proceedings to Reschedule Marijuana, 76 Fed. Reg. 40551 (Jun. 30,
2011).
---------------------------------------------------------------------------
FLAWS WITH H.R. 3617
H.R. 3617 not only de-schedules and decriminalizes
marijuana, it also creates a significant federal bureaucracy
that would include new taxes, expansive grant programs, and a
federal licensing regime. This bill requires the Administrator
of the Small Business Administration to provide taxpayer-funded
loans to cannabis businesses. It also creates an Office of
Cannabis Justice in the Department of Justice, which would be
responsible for awarding grants to assist ``individuals
adversely impacted by the war on drugs.'' This bill defines
``individuals adversely impacted by the war on drugs'' so
broadly that it includes not only an individual arrested or
convicted for a federal marijuana offense, but also that
individual's parent, sibling, spouse, or child.
H.R. 3617 disregards established science. This bill seeks
to completely remove marijuana from the CSA despite HHS's
scientific and medical conclusion that marijuana has a high
potential for abuse, has no currently accepted medical use, and
lacks an accepted level of safety for use under medical
supervision.\14\
---------------------------------------------------------------------------
\14\Supra, note 11.
---------------------------------------------------------------------------
H.R. 3617 would incentivize bad actors and transnational
criminal organizations to flood American streets with drugs.
This bill would effectively legalize marijuana at the Federal
level and inevitably lead to an increase in the trafficking of
marijuana by criminal organizations in the underground market,
estimated to be worth $40 billion or more in the United
States.\15\
---------------------------------------------------------------------------
\15\Beau Kilmer, et al., What America's Users Spend on Illegal
Drugs (Feb. 2014), https://obamawhitehouse.archives.gov/sites/default/
files/ondcp/policy-and-research/wausid_results_report.pdf.
---------------------------------------------------------------------------
H.R. 3617 fails to set limitations on the amount of
tetrahydrocannabinol in marijuana or its extracts or
concentrates. While some states have placed limits on the
tetrahydrocannabinol in marijuana concentrate products, none of
the states that have legalized marijuana have placed any such
restrictions.\16\ Studies on the effects of marijuana have
shown that disorientation, impaired judgment, lack of
concentration and slowed fine motor skills can occur in
users.\17\ Studies also show that users who consume marijuana
or its extracts or concentrates containing high levels of
tetrahydrocannabinol will experience higher levels of
impairment.\18\ The bill does not prohibit marijuana products
from containing high levels of tetrahydrocannabinol, which will
result in users with significantly increased impairment.
---------------------------------------------------------------------------
\16\Supra, note 1.
\17\National Institute on Drug Abuse (NIDA), Marijuana Research
Report, (Jul. 2020).
\18\Jennan A. Phillips, et al., Marijuana in the Workplace:
Guidance for Occupational Health Professionals and Employers: Joint
Guidance Statement of the American Association of Occupational Health
Nurses and the American College of Occupational and Environmental
Medicine, 63(4), Sage Journals, 139 (2015).
---------------------------------------------------------------------------
H.R. 3617 does nothing to discourage marijuana usage among
American youth. The bill fails to ban flavored marijuana that
may be appealing to teenagers, and also fails to funnel any tax
revenue towards a public awareness campaign to discourage teen
use of marijuana, modeled on successful anti-tobacco campaigns.
Furthermore, the bill does not place an age restriction on
marijuana use.
H.R. 3617 also does nothing to help the Federal government
and scientific community understand the effects of marijuana
usage. According to the Centers for Disease Control and
Prevention, marijuana directly affects parts of the brain
responsible for memory, learning, attention, and
coordination.\19\ Additionally, both frequent and long-term
marijuana use has been linked to an increased risk of
schizophrenia and psychosis in users.\20\ The bill, however,
fails to require states to track and submit data on mental
health-related conditions related to marijuana use, including
depression, bipolar disorder, psychosis, schizophrenia, opioid
use disorders, and suicide.
---------------------------------------------------------------------------
\19\Meier, M.H., et al., Persistent cannabis users show
neuropsychological decline from childhood to midlife, 109(40),
Proceedings of the National Academy of Sciences of the United States of
America, E2657 (2012).
\20\Di Forti, Marta., et al., Daily use, especially of high-potency
cannabis, drives the earlier onset of psychosis in cannabis users,
40(6), Schizophrenia Bulletin, 1509 (2013); Di Forti, Marta, et. al.,
High-potency cannabis and the risk of psychosis, 195(6), The British
Journal of Psychiatry, 488 (2009).
---------------------------------------------------------------------------
REPUBLICAN AMENDMENTS REJECTED BY THE DEMOCRAT MAJORITY WOULD HAVE
IMPROVED THE LEGISLATION
During the Committee's business meeting to consider H.R.
3617, Republicans offered several amendments to improve the
legislation. Chairman Nadler and the Democrat majority declined
to accept a single amendment offered by Republicans.
Representative Tiffany offered an amendment that would have
prohibited taxpayer dollars from going to organizations whose
leadership had been convicted of a state or federal offense
involving rioting, looting, or destruction of property. Despite
the fact that H.R. 3617 already included conditions on the use
of funds, Chairman Nadler stated that, ``I do not support
conditioning these funds, which would only serve to undermine
these critical restorative portions of the bill.'' Committee
Democrats rejected the amendment.
Representative Fitzgerald offered an amendment that would
have prohibited individuals convicted of possessing a firearm
while selling drugs from receiving benefits from the Community
Reinvestment Grant Program authorized by the bill. H.R. 3617
currently prohibits individuals convicted of distributing drugs
to minors from receiving benefits from the Community
Reinvestment Grant Program, but Committee Democrats unanimously
rejected the notion that drug dealers with firearms should also
be prohibited from receiving these funds. Despite the fact that
the bill contains conditions on who the funds are dispersed to,
Chairman Nadler opposed the amendment, stating, ``I do not
support conditioning these funds or limiting their
application.'' Committee Democrats rejected the amendment.
Representative Fitzgerald offered an amendment that would
have prohibited individuals who fail to pay their taxes from
benefitting from grant programs authorized under the bill. In a
statement opposing the amendment, Chairman Nadler stated,
``There's no reason to make this change because people,
individuals, are expected to report truthfully in any event.''
Committee Democrats rejected the amendment.
Representative Bishop offered an amendment that would have
prohibited the Director of the Cannabis Justice Office from
discriminating on the basis of COVID-19 vaccination status
while making grants under the Community Reinvestment Grant
Program. Chairman Nadler, once again opposed the amendment,
stating, ``I do not support conditioning these funds or
limiting their application.'' Committee Democrats rejected the
amendment.
CONCLUSION
H.R. 3617 would open the floodgates of marijuana
cultivation, distribution, and sales throughout the United
States with little to no controls whatsoever. Bad actors,
domestic criminal enterprises, and transnational criminal
organizations would exploit the numerous loopholes in this
legislation. Moreover, this bill is an enormous federal subsidy
and stimulus for the marijuana industry. Instead of holding
hearings on the growing crisis at our southern border, the
Democratic majority is focused on prioritizing legislation that
would legalize marijuana. This bill is an extreme and unwise
measure. Therefore, I am unable to support this bill and must
respectfully dissent.
Jim Jordan,
Ranking Member.
[all]