S.Amdt. 321

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

At the appropriate place, insert the following:

SEC. ____. HEALTHCARE FRAUD REMOVAL.

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

[[Page S4318]]

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

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

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

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

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

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