II 

115TH CONGRESS 

1ST SESSION S. 554 

To provide for reconciliation pursuant to section 2002 of the concurrent 

resolution on the budget for fiscal year 2017. 

IN THE SENATE OF THE UNITED STATES 

MARCH 7, 2017 

Mr. PAUL (for himself and Mr. LEE) introduced the following bill; which was 

read twice and referred to the Committee on Finance 

A BILL 

To provide for reconciliation pursuant to section 2002 of 

the concurrent resolution on the budget for fiscal year 2017. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 TITLE I—HEALTH, EDUCATION, 

4 LABOR, AND PENSIONS 

5 SEC. 101. THE PREVENTION AND PUBLIC HEALTH FUND. 

6 (a) IN GENERAL.—Subsection (b) of section 4002 of 

7 the Patient Protection and Affordable Care Act (42 

8 U.S.C. 300u–11) is amended by striking paragraphs (3) 

9 through (8). 


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1 (b) RESCISSION OF UNOBLIGATED FUNDS.—Of the 

2 funds made available by such section 4002, the unobli3 gated balance is rescinded. 

4 SEC. 102. COMMUNITY HEALTH CENTER PROGRAM. 

5 Effective as if included in the enactment of the Medi6 care Access and CHIP Reauthorization Act of 2015 (Pub7 lic Law 114–10, 129; Stat. 87), paragraph (1) of section 

8 221(a) of such Act is amended by inserting ‘‘, an addi9 tional $235,000,000 for fiscal year 2017, and 

10 $235,000,000 for fiscal year 2018’’ after ‘‘through 2017’’. 

11 SEC. 103. REINSURANCE, RISK CORRIDOR, AND RISK AD12 JUSTMENT PROGRAMS. 

13 (a) TRANSITIONAL REINSURANCE PROGRAM FOR IN14 DIVIDUAL MARKET.—Section 1341 of the Patient Protec15 tion and Affordable Care Act (42 U.S.C. 18061) is amend16 ed by adding at the end the following: 

17 ‘‘(e) NO FORCE AND EFFECT.—Effective January 1, 

18 2018, the Secretary shall not make payments under this 

19 section.’’. 

20 SEC. 104. SUPPORT FOR STATE RESPONSE TO SUBSTANCE 

21 ABUSE PUBLIC HEALTH CRISIS AND URGENT 

22 MENTAL HEALTH NEEDS. 

23 (a) IN GENERAL.—There are authorized to be appro24 priated, and are appropriated, out of monies in the Treas25 ury not otherwise obligated, $750,000,000 for each of fisVerDate Sep 11 2014 03:53 Mar 10, 2017 Jkt 069200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S554.IS S554

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1 cal years 2018 and 2019, to the Secretary of Health and 

2 Human Services (referred to in this section as the ‘‘Sec3 retary’’) to award grants to States to address the sub4 stance abuse public health crisis or to respond to urgent 

5 mental health needs within the State. In awarding grants 

6 under this section, the Secretary may give preference to 

7 States with an incidence or prevalence of substance use 

8 disorders that is substantial relative to other States or to 

9 States that identify mental health needs within their com10 munities that are urgent relative to such needs of other 

11 States. Funds appropriated under this subsection shall re12 main available until expended. 

13 (b) USE OF FUNDS.—Grants awarded to a State 

14 under subsection (a) shall be used for one or more of the 

15 following public health-related activities: 

16 (1) Improving State prescription drug moni17 toring programs. 

18 (2) Implementing prevention activities, and 

19 evaluating such activities to identify effective strate20 gies to prevent substance abuse. 

21 (3) Training for health care practitioners, such 

22 as best practices for prescribing opioids, pain man23 agement, recognizing potential cases of substance 

24 abuse, referral of patients to treatment programs, 

25 and overdose prevention. 


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1 (4) Supporting access to health care services 

2 provided by federally certified opioid treatment pro3 grams or other appropriate health care providers to 

4 treat substance use disorders or mental health 

5 needs. 

6 (5) Other public health-related activities, as the 

7 State determines appropriate, related to addressing 

8 the substance abuse public health crisis or respond9 ing to urgent mental health needs within the State. 

10 TITLE II—FINANCE 

11 SEC. 201. RECAPTURE EXCESS ADVANCE PAYMENTS OF 

12 PREMIUM TAX CREDITS. 

13 Subparagraph (B) of section 36B(f)(2) of the Inter14 nal Revenue Code of 1986 is amended by adding at the 

15 end the following new clause: 

16 ‘‘(iii) NONAPPLICABILITY OF LIMITA17 TION.—This subparagraph shall not apply 

18 to taxable years ending after December 31, 

19 2017, and before January 1, 2020.’’. 

20 SEC. 202. PREMIUM TAX CREDIT AND COST-SHARING SUB21 SIDIES. 

22 (a) REPEAL OF PREMIUM TAX CREDIT.—Subpart C 

23 of part IV of subchapter A of chapter 1 of the Internal 

24 Revenue Code of 1986 is amended by striking section 

25 36B. 


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1 (b) REPEAL OF COST-SHARING SUBSIDY.—Section 

2 1402 of the Patient Protection and Affordable Care Act 

3 is repealed. 

4 (c) REPEAL OF ELIGIBILITY DETERMINATIONS.— 

5 The following sections of the Patient Protection and Af6 fordable Care Act are repealed: 

7 (1) Section 1411 (other than subsection (i), the 

8 last sentence of subsection (e)(4)(A)(ii), and such 

9 provisions of such section solely to the extent related 

10 to the application of the last sentence of subsection 

11 (e)(4)(A)(ii)). 

12 (2) Section 1412. 

13 (d) PROTECTING AMERICANS BY REPEAL OF DIS14 CLOSURE AUTHORITY TO CARRY OUT ELIGIBILITY RE15 QUIREMENTS FOR CERTAIN PROGRAMS.— 

16 (1) IN GENERAL.—Paragraph (21) of section 

17 6103(l) of the Internal Revenue Code of 1986 is 

18 amended by adding at the end the following new 

19 subparagraph: 

20 ‘‘(D) TERMINATION.—No disclosure may 

21 be made under this paragraph after December 

22 31, 2019.’’. 

23 (e) EFFECTIVE DATES.— 


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1 (1) PREMIUM TAX CREDIT.—The amendment 

2 made by subsection (a) shall apply to taxable years 

3 beginning after December 31, 2019. 

4 (2) COST SHARING-SUBSIDIES AND ELIGIBILITY

5 DETERMINATIONS.—The repeals in subsection (b) 

6 and (c) shall take effect on December 31, 2019. 

7 (3) PROTECTING AMERICANS BY RESCINDING

8 DISCLOSURE AUTHORITY.—The amendments made 

9 by subsection (d) shall take effect on December 31, 

10 2019. 

11 SEC. 203. SMALL BUSINESS TAX CREDIT. 

12 (a) IN GENERAL.—Section 45R of the Internal Rev13 enue Code of 1986 is amended by adding at the end the 

14 following new subsection: 

15 ‘‘(j) SHALL NOT APPLY.—This section shall not 

16 apply with respect to amounts paid or incurred in taxable 

17 years beginning after December 31, 2019.’’. 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 this section shall apply to amounts paid or incurred in tax20 able years beginning after December 31, 2019. 

21 SEC. 204. INDIVIDUAL MANDATE. 

22 (a) IN GENERAL.—Section 5000A(c) of the Internal 

23 Revenue Code of 1986 is amended— 

24 (1) in paragraph (2)(B)— 


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1 (A) by striking ‘‘after 2015’’ in clause (iii) 

2 and inserting ‘‘in 2016’’, and 

3 (B) by adding at the end the following new 

4 clause: 

5 ‘‘(iv) Zero percent for taxable years 

6 beginning after 2016.’’, and 

7 (2) in paragraph (3)— 

8 (A) by striking ‘‘$695’’ in subparagraph 

9 (A) and inserting ‘‘$0’’, 

10 (B) by striking ‘‘and $325 for 2014’’ in 

11 subparagraph (B) and inserting ‘‘, $325, for 

12 2014, and $695 for 2016’’, and 

13 (C) by striking subparagraph (D). 

14 (b) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to months beginning after Decem16 ber 31, 2016. 

17 SEC. 205. EMPLOYER MANDATE. 

18 (a) IN GENERAL.— 

19 (1) Paragraph (1) of section 4980H(c) of the 

20 Internal Revenue Code of 1986 is amended by in21 serting ‘‘($0 in the case of months beginning after 

22 December 31, 2016)’’ after ‘‘$2,000’’. 

23 (2) Paragraph (1) of section 4980H(b) of the 

24 Internal Revenue Code of 1986 is amended by inVerDate Sep 11 2014 03:53 Mar 10, 2017 Jkt 069200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S554.IS S554

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1 serting ‘‘($0 in the case of months beginning after 

2 December 31, 2016)’’ after ‘‘$3,000’’. 

3 (b) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to months beginning after Decem5 ber 31, 2016. 

6 SEC. 206. FEDERAL PAYMENTS TO STATES. 

7 (a) IN GENERAL.—Notwithstanding section 504(a), 

8 1902(a)(23), 1903(a), 2002, 2005(a)(4), 2102(a)(7), or 

9 2105(a)(1) of the Social Security Act (42 U.S.C. 704(a), 

10 1396a(a)(23), 1396b(a), 1397a, 1397d(a)(4), 

11 1397bb(a)(7), 1397ee(a)(1)), or the terms of any Med12 icaid waiver in effect on the date of enactment of this Act 

13 that is approved under section 1115 or 1915 of the Social 

14 Security Act (42 U.S.C. 1315, 1396n), for the 1-year pe15 riod beginning on the date of enactment of this Act, no 

16 Federal funds provided from a program referred to in this 

17 subsection that is considered direct spending for any year 

18 may be made available to a State for payments to a pro19 hibited entity, whether made directly to the prohibited en20 tity or through a managed care organization under con21 tract with the State. 

22 (b) DEFINITIONS.—In this section: 

23 (1) PROHIBITED ENTITY.—The term ‘‘prohib24 ited entity’’ means an entity, including its affiliates, 

25 subsidiaries, successors, and clinics— 


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1 (A) that, as of the date of enactment of 

2 this Act— 

3 (i) is an organization described in sec4 tion 501(c)(3) of the Internal Revenue 

5 Code of 1986 and exempt from tax under 

6 section 501(a) of such Code; 

7 (ii) is an essential community provider 

8 described in section 156.235 of title 45, 

9 Code of Federal Regulations (as in effect 

10 on the date of enactment of this Act), that 

11 is primarily engaged in family planning 

12 services, reproductive health, and related 

13 medical care; and 

14 (iii) provides for abortions, other than 

15 an abortion— 

16 (I) if the pregnancy is the result 

17 of an act of rape or incest; or 

18 (II) in the case where a woman 

19 suffers from a physical disorder, phys20 ical injury, or physical illness that 

21 would, as certified by a physician, 

22 place the woman in danger of death 

23 unless an abortion is performed, in24 cluding a life-endangering physical 


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1 condition caused by or arising from 

2 the pregnancy itself; and 

3 (B) for which the total amount of Federal 

4 and State expenditures under the Medicaid pro5 gram under title XIX of the Social Security Act 

6 in fiscal year 2014 made directly to the entity 

7 and to any affiliates, subsidiaries, successors, or 

8 clinics of the entity, or made to the entity and 

9 to any affiliates, subsidiaries, successors, or 

10 clinics of the entity as part of a nationwide 

11 health care provider network, exceeded 

12 $350,000,000. 

13 (2) DIRECT SPENDING.—The term ‘‘direct 

14 spending’’ has the meaning given that term under 

15 section 250(c) of the Balanced Budget and Emer16 gency Deficit Control Act of 1985 (2 U.S.C. 900(c)). 

17 SEC. 207. MEDICAID. 

18 The Social Security Act (42 U.S.C. 301 et seq.) is 

19 amended— 

20 (1) in section 1902— 

21 (A) in subsection (a)(10)(A), in each of 

22 clauses (i)(VIII) and (ii)(XX), by inserting 

23 ‘‘and ending December 31, 2019,’’ after ‘‘Janu24 ary 1, 2014,’’; 


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1 (B) in subsection (a)(47)(B), by inserting 

2 ‘‘and provided that any such election shall cease 

3 to be effective on January 1, 2018, and no such 

4 election shall be made after that date’’ before 

5 the semicolon at the end; and 

6 (C) in subsection (l)(2)(C), by inserting 

7 ‘‘and ending December 31, 2019,’’ after ‘‘Janu8 ary 1, 2014,’’; 

9 (2) in section 1905— 

10 (A) in the first sentence of subsection (b), 

11 by inserting ‘‘(50 percent on or after January 

12 1, 2020)’’ after ‘‘55 percent’’; 

13 (B) in subsection (y)(1), by striking the 

14 semicolon at the end of subparagraph (D) and 

15 all that follows through ‘‘thereafter’’; and 

16 (C) in subsection (z)(2)— 

17 (i) in subparagraph (A), by striking 

18 ‘‘each year thereafter’’ and inserting 

19 ‘‘through 2019’’; and 

20 (ii) in subparagraph (B)(ii)(VI), by 

21 striking ‘‘and each subsequent year’’; 

22 (3) in section 1915(k)(2), by striking ‘‘during 

23 the period described in paragraph (1)’’ and inserting 

24 ‘‘on or after the date referred to in paragraph (1) 

25 and before January 1, 2020’’; 


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1 (4) in section 1920(e), by adding at the end the 

2 following: ‘‘This subsection shall not apply after De3 cember 31, 2019.’’; 

4 (5) in section 1937(b)(5), by adding at the end 

5 the following: ‘‘This paragraph shall not apply after 

6 December 31, 2019.’’; and 

7 (6) in section 1943(a), by inserting ‘‘and before 

8 January 1, 2020,’’ after ‘‘January 1, 2014,’’. 

9 SEC. 208. REPEAL OF DSH ALLOTMENT REDUCTIONS. 

10 Section 1923(f) of the Social Security Act (42 U.S.C. 

11 1396r–4(f)) is amended by striking paragraphs (7) and 

12 (8). 

13 SEC. 209. REPEAL OF THE TAX ON EMPLOYEE HEALTH IN14 SURANCE PREMIUMS AND HEALTH PLAN 

15 BENEFITS. 

16 (a) IN GENERAL.—Chapter 43 of the Internal Rev17 enue Code of 1986 is amended by striking section 4980I. 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 subsection (a) shall apply to taxable years beginning after 

20 December 31, 2019. 

21 SEC. 210. REPEAL OF TAX ON OVER-THE-COUNTER MEDICA22 TIONS. 

23 (a) HSAS.—Subparagraph (A) of section 223(d)(2) 

24 of the Internal Revenue Code of 1986 is amended by strik25 ing ‘‘Such term’’ and all that follows through the period. 


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1 (b) ARCHER MSAS.—Subparagraph (A) of section 

2 220(d)(2) of the Internal Revenue Code of 1986 is amend3 ed by striking ‘‘Such term’’ and all that follows through 

4 the period. 

5 (c) HEALTH FLEXIBLE SPENDING ARRANGEMENTS

6 AND HEALTH REIMBURSEMENT ARRANGEMENTS.—Sec7 tion 106 of the Internal Revenue Code of 1986 is amended 

8 by striking subsection (f). 

9 (d) EFFECTIVE DATES.— 

10 (1) DISTRIBUTIONS FROM SAVINGS AC11 COUNTS.—The amendments made by subsections (a) 

12 and (b) shall apply to amounts paid with respect to 

13 taxable years beginning after December 31, 2017. 

14 (2) REIMBURSEMENTS.—The amendment made 

15 by subsection (c) shall apply to expenses incurred 

16 with respect to taxable years beginning after Decem17 ber 31, 2017. 

18 SEC. 211. REPEAL OF TAX ON HEALTH SAVINGS ACCOUNTS. 

19 (a) HSAS.—Section 223(f)(4)(A) of the Internal 

20 Revenue Code of 1986 is amended by striking ‘‘20 per21 cent’’ and inserting ‘‘10 percent’’. 

22 (b) ARCHER MSAS.—Section 220(f)(4)(A) of the In23 ternal Revenue Code of 1986 is amended by striking ‘‘20 

24 percent’’ and inserting ‘‘15 percent’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to distributions made after Decem3 ber 31, 2017. 

4 SEC. 212. REPEAL OF LIMITATIONS ON CONTRIBUTIONS TO 

5 FLEXIBLE SPENDING ACCOUNTS. 

6 (a) IN GENERAL.—Section 125 of the Internal Rev7 enue Code of 1986 is amended by striking subsection (i). 

8 (b) EFFECTIVE DATE.—The amendment made by 

9 this section shall apply to taxable years beginning after 

10 December 31, 2017. 

11 SEC. 213. REPEAL OF TAX ON PRESCRIPTION MEDICA12 TIONS. 

13 Subsection (j) of section 9008 of the Patient Protec14 tion and Affordable Care Act is amended to read as fol15 lows: 

16 ‘‘(j) REPEAL.—This section shall apply to calendar 

17 years beginning after December 31, 2010, and ending be18 fore January 1, 2018.’’. 

19 SEC. 214. REPEAL OF MEDICAL DEVICE EXCISE TAX. 

20 (a) IN GENERAL.—Chapter 32 of the Internal Rev21 enue Code of 1986 is amended by striking subchapter E. 

22 (b) EFFECTIVE DATE.—The amendment made by 

23 this section shall apply to sales in calendar quarters begin24 ning after December 31, 2017. 


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1 SEC. 215. REPEAL OF HEALTH INSURANCE TAX. 

2 Subsection (j) of section 9010 of the Patient Protec3 tion and Affordable Care Act is amended to read as fol4 lows: 

5 ‘‘(j) REPEAL.—This section shall apply to calendar 

6 years beginning after December 31, 2013, and ending be7 fore January 1, 2017.’’. 

8 SEC. 216. REPEAL OF ELIMINATION OF DEDUCTION FOR 

9 EXPENSES ALLOCABLE TO MEDICARE PART D 

10 SUBSIDY. 

11 (a) IN GENERAL.—Section 139A of the Internal Rev12 enue Code of 1986 is amended by adding at the end the 

13 following new sentence: ‘‘This section shall not be taken 

14 into account for purposes of determining whether any de15 duction is allowable with respect to any cost taken into 

16 account in determining such payment.’’. 

17 (b) EFFECTIVE DATE.—The amendment made by 

18 this section shall apply to taxable years beginning after 

19 December 31, 2017. 

20 SEC. 217. REPEAL OF CHRONIC CARE TAX. 

21 (a) IN GENERAL.—Subsection (a) of section 213 of 

22 the Internal Revenue Code of 1986 is amended by striking 

23 ‘‘10 percent’’ and inserting ‘‘7.5 percent’’. 

24 (b) EFFECTIVE DATE.—The amendment made by 

25 this section shall apply to taxable years beginning after 

26 December 31, 2017. 


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1 SEC. 218. REPEAL OF MEDICARE TAX INCREASE. 

2 (a) IN GENERAL.—Subsection (b) of section 3101 of 

3 the Internal Revenue Code of 1986 is amended to read 

4 as follows: 

5 ‘‘(b) HOSPITAL INSURANCE.—In addition to the tax 

6 imposed by the preceding subsection, there is hereby im7 posed on the income of every individual a tax equal to 1.45 

8 percent of the wages (as defined in section 3121(a)) re9 ceived by such individual with respect to employment (as 

10 defined in section 3121(b).’’. 

11 (b) SECA.—Subsection (b) of section 1401 of the In12 ternal Revenue Code of 1986 is amended to read as fol13 lows: 

14 ‘‘(b) HOSPITAL INSURANCE.—In addition to the tax 

15 imposed by the preceding subsection, there shall be im16 posed for each taxable year, on the self-employment in17 come of every individual, a tax equal to 2.9 percent of the 

18 amount of the self-employment income for such taxable 

19 year.’’. 

20 (c) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply with respect to remuneration re22 ceived after, and taxable years beginning after, December 

23 31, 2017. 

24 SEC. 219. REPEAL OF TANNING TAX. 

25 (a) IN GENERAL.—The Internal Revenue Code of 

26 1986 is amended by striking chapter 49. 


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1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section shall apply to services performed on or after 

3 December 31, 2017. 

4 SEC. 220. REPEAL OF NET INVESTMENT TAX. 

5 (a) IN GENERAL.—Subtitle A of the Internal Rev6 enue Code of 1986 is amended by striking chapter 2A. 

7 (b) EFFECTIVE DATE.—The amendment made by 

8 this section shall apply to taxable years beginning after 

9 December 31, 2017. 

10 SEC. 221. REMUNERATION. 

11 Paragraph (6) of section 162(m) of the Internal Rev12 enue Code of 1986 is amended by adding at the end the 

13 following new subparagraph: 

14 ‘‘(I) TERMINATION.—This paragraph shall 

15 not apply to taxable years beginning after De16 cember 31, 2017.’’. 

17 SEC. 222. ECONOMIC SUBSTANCE DOCTRINE. 

18 (a) IN GENERAL.—Subsection (o) of section 7701 of 

19 the Internal Revenue Code of 1986 is repealed. 

20 (b) PENALTY FOR UNDERPAYMENTS.—Paragraph 

21 (6) of section 6662(b) of the Internal Revenue Code of 

22 1986 is repealed. 

23 (c) INCREASED PENALTY FOR NONDISCLOSED

24 TRANSACTIONS.—Subsection (i) of section 6662 of the In25 ternal Revenue Code of 1986 is repealed. 


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1 (d) REASONABLE CAUSE EXCEPTION FOR UNDER2 PAYMENTS.—Paragraph (2) of section 6664(c) of the In3 ternal Revenue Code of 1986 is repealed. 

4 (e) REASONABLE CAUSE EXCEPTION FOR NONDIS5 CLOSED TRANSACTIONS.—Paragraph (2) of section 

6 6664(d) of the Internal Revenue Code of 1986 is repealed. 

7 (f) ERRONEOUS CLAIM FOR REFUND OR CREDIT.— 

8 Subsection (c) of section 6676 of the Internal Revenue 

9 Code of 1986 is repealed. 

10 (g) EFFECTIVE DATE.—The repeals made by this 

11 section shall apply to transactions entered into, and to un12 derpayments, understatements, or refunds and credits at13 tributable to transactions entered into, after December 31, 

14 2017. 

15 SEC. 223. BUDGETARY SAVINGS FOR EXTENDING MEDI16 CARE SOLVENCY. 

17 As a result of policies contained in this Act, the Sec18 retary of the Treasury shall transfer to the Federal Hos19 pital Insurance Trust Fund under section 1817 of the So20 cial Security Act (42 U.S.C. 1395i) $379,300,000,000 

21 (which represents the full amount of on-budget savings 

22 during the period of fiscal years 2018 through 2027) for 

23 extending Medicare solvency, to remain available until ex24 pended. 

Æ 


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