Sec. 510. State flexibility and protection of States’ rights. 
Sec. 511. Applicability; effective date. 
Sec. 512. Sense of congress. 
Sec. 513. Cooperative governing of individual health insurance coverage. 
Sec. 514. SECA tax deduction for health insurance costs. 
TITLE VI—WORKFORCE INTEGRITY 
Sec. 601. E-verify program made permanent. 
Sec. 602. Verification under E-verify program made possible over telephone. 
Sec. 603. Grace period to correct paperwork. 
TITLE VII—INTELLECTUAL PROPERTY PROTECTION 
Sec. 701. Limits on patent legislation. 
Sec. 702. Expedited patent filing procedures for small business concerns. 
TITLE VIII—INCENTIVES FOR ENERGY EFFICIENCY 
Subtitle A—Vehicles 
Sec. 801. Consumer incentives to purchase advanced technology vehicles. 
Subtitle B—Extensions 
Sec. 811. Make permanent the tax credit for residential energy-efficient prop-
erty. 
Sec. 812. Make permanent the energy efficiency credit for existing homes. 
Sec. 813. Make permanent the energy efficiency commercial buildings deduc-
tion. 
TITLE IX—GUIDANCE ABOUT NEW RULES 
Sec. 901. Guidance and advice about new rules. 
TITLE X—SMALL BUSINESS PROVISIONS 
Subtitle A—Small Business General Provisions 
Sec. 1001. Administration prohibited from capping executive compensation. 
Sec. 1002. Reduction of regulatory burden. 
Sec. 1003. Litigation burden on small business concerns to be limited to cur-
rent levels. 
Sec. 1004. Expansion of volunteer representation and benchmark reports. 
Sec. 1005. Mentoring and networking. 
Sec. 1006. Name of program changed to SCORE. 
Sec. 1007. Authorization of appropriations. 
Subtitle B—Small Business Goals 
Sec. 1011. Small business goals. 
Sec. 1012. Agency goal negotiation. 
Sec. 1013. Procedures and methods for goal achievement. 
Sec. 1014. Reporting requirements. 
Subtitle C—Contract Bundling 
Sec. 1021. Definitions of bundling of contract requirements. 
Sec. 1022. Justification. 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6211
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
Sec. 1023. Appeals. 
Sec. 1024. Third-party review. 
Subtitle D—Small Business Subcontracting 
Sec. 1031. Good faith compliance with subcontracting plans. 
Sec. 1032. Limitations on subcontracting. 
Sec. 1033. Criminal violations. 
TITLE XI—OFFSETS 
Sec. 1101. Transfer of unobligated stimulus funds. 
TITLE XII—DEBT REDUCTION 
Sec. 1201. Repeal of the Troubled Asset Relief Program. 
TITLE XIII—DEFINITIONS 
Sec. 1301. Definitions. 
SEC. 2. PURPOSE. 
The purpose of this Act is to do the following: 
(1) Protect secret ballots in union elections. 
(2) Lower health costs with lawsuit reforms and 
interstate competition. 
(3) Lower energy costs with credits for efficient 
equipment and hybrids. 
(4) Permit children to continue business with 
low/no death tax. 
(5) Exempt small businesses from capital gains 
tax for 10 years. 
(6) Make immigration laws easy to comply with. 
(7) Create a Patent Office fast lane for small 
business innovation.
(8) SBA to limit Federal paperwork for small 
businesses to 200 hours annually.
(9) Prevent AMT from taxing the middle class. 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
(10) Reduce deficit to encourage jobs and im-
prove credit. 
TITLE I—LOWER TAX 
ENVIRONMENT 
Subtitle A—Alternative Minimum 
Tax Relief 
SEC. 101. EXTENSION OF ALTERNATIVE MINIMUM TAX RE-
LIEF 
FOR 
NONREFUNDABLE 
PERSONAL 
CREDITS. 
(a) IN GENERAL.—Paragraph (2) of section 26(a) of 
the Internal Revenue Code of 1986 (relating to special 
rule for taxable years 2000 through 2009) is amended— 
(1) by striking ‘‘or 2009’’ and inserting ‘‘2009, 
2010, or 2011’’, and 
(2) by striking ‘‘2009’’ in the heading thereof 
and inserting ‘‘2011’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2009. 
SEC. 102. EXTENSION OF INCREASED ALTERNATIVE MIN-
IMUM TAX EXEMPTION AMOUNT. 
(a) IN GENERAL.—Subparagraphs (A) and (B) of 
section 55(d)(1) of the Internal Revenue Code of 1986 (re-
lating to exemption amount) are both amended by striking 
‘‘2009’’ and inserting ‘‘2009, 2010, and 2011’’. 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2009. 
Subtitle B—Capital Gains 
SEC. 111. EXTENSION OF REDUCTION IN TAXES ON DIVI-
DENDS AND CAPITAL GAINS. 
Section 303 of the Jobs and Growth Tax Relief Rec-
onciliation Act of 2003 is amended by striking ‘‘December 
31, 2010’’ and inserting ‘‘December 31, 2011’’. 
SEC. 112. TEMPORARY REDUCTION OF CAPITAL GAINS TAX 
ON QUALIFIED SMALL BUSINESS STOCK. 
(a) TEMPORARY REDUCED RATE FOR QUALIFIED 
SMALL BUSINESS STOCK.—Subparagraph (A)(ii) of sec-
tion 1(h)(4) of the Internal Revenue Code of 1986 is 
amended to read as follows: 
‘‘(ii) in the case of any taxable year 
beginning after December 31, 2020, sec-
tion 1202 gain, over’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to taxable years beginning after 
December 31, 2010. 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
Subtitle C—Tax Benefits for Start- 
Ups 
SEC. 121. INCREASE IN AMOUNT ALLOWED AS DEDUCTION 
FOR START-UP EXPENDITURES. 
(a) IN GENERAL.—Subsection (b) of section 195 of 
the Internal Revenue Code of 1986 is amended by adding 
at the end the following: 
‘‘(3) SPECIAL RULE FOR TAXABLE YEARS BE-
GINNING IN 2009, 2010, OR 2011.—In the case of a 
taxable year beginning in 2009, 2010, or 2011, 
paragraph (1)(A)(ii) shall be applied— 
‘‘(A) 
by 
substituting 
‘$20,000’ 
for 
‘$5,000’; and 
‘‘(B) 
by 
substituting 
‘$75,000’ 
for 
‘$50,000’.’’ 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred in tax-
able years beginning after the date of the enactment of 
this Act. 
Subtitle D—Miscellaneous 
SEC. 131. GAO TO CERTIFY NO BURDEN ON SMALL BUSI-
NESS CONCERNS. 
Clause 3 of Rule XIII of the Rules of the House of 
Representatives is amended by adding at the end the fol-
lowing new paragraph: 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
‘‘(i)(1) Each report of a committee on a public bill 
or a public joint resolution shall contain a statement by 
the Comptroller General that certifies that such bill or res-
olution will not cause an increase in the number of unem-
ployed individuals in the United States. 
‘‘(2) A bill or joint resolution that does not contain 
a statement required under subparagraph (1) may not be 
considered as passed or agreed to unless so determined 
by a vote of not less than three-fifths of the Members vot-
ing, a quorum being present.’’. 
SEC. 132. EXEMPTION FROM TAXES IMPOSED AFTER THE 
DATE OF ENACTMENT OF THIS ACT. 
A small business concern is exempt from any amend-
ment to the Internal Revenue Code of 1986 enacted after 
the date of enactment of this Act that would result in any 
increase in the amount of Federal taxes due from that 
small business concern. 
TITLE II—LIMITATION ON 
REGULATIONS 
SEC. 201. LIMITATION ON REGULATIONS. 
(a) 
IN
GENERAL.—The 
Administrator, 
acting 
through the Chief Counsel of the Office of Advocacy of 
the Small Business Administration, is authorized to pro-
vide such support as may be necessary with regard to any 
Federal regulation to ensure that a small business concern 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
is not required to expend more than a total of 200 man- 
hours annually on applications, filings, petitions, or other 
paperwork submitted to Federal departments or agencies. 
(b) COMMONLY REQUIRED INFORMATION FORM.— 
Support provided under subsection (a) shall include the 
establishment of a form on the public Internet Web site 
of the Administrator, by means of which a small business 
concern may provide to the Administrator information 
that the Administrator determines to be frequently re-
quired as part of any applications, filings, petitions, or 
other paperwork described in subsection (a). The Adminis-
trator shall use information so provided to assist in the 
expedited completion of such applications, filings, peti-
tions, or other paperwork. 
TITLE III—BUSINESS GROWTH 
FOR THE NEXT GENERATION 
SEC. 301. POSTPONEMENT OF TERMINATION OF ESTATE 
TAX AND GENERATION-SKIPPING TRANSFER 
TAXES. 
(a) APPLICATION
OF EGTRRA SUNSET.—Section 
901(a)(2) of title IX of the Economic Growth and Tax 
Relief Reconciliation Act of 2001 is amended by striking 
‘‘December 31, 2010’’ and inserting ‘‘December 31, 
2015’’. 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to the estates of decedents dying, 
gifts made, or generation-skipping transfers, after Decem-
ber 31, 2010. 
TITLE IV—PROTECTING THE 
SECRET BALLOT 
SEC. 401. FINDINGS. 
Congress finds that— 
(1) the right of employees under the National 
Labor Relations Act to choose whether to be rep-
resented by a labor organization by way of secret 
ballot election conducted by the National Labor Re-
lations Board is among the most important protec-
tions afforded under Federal labor law; 
(2) the right of employees to choose by secret 
ballot is the only method that ensures a choice free 
of coercion, intimidation, irregularity, or illegality; 
and 
(3) the recognition of a labor organization by 
using a private agreement, rather than a secret bal-
lot election overseen by the National Labor Relations 
Board, threatens the freedom of employees to choose 
whether to be represented by a labor organization 
and severely limits the ability of the National Labor 
Relations Board to ensure the protection of workers. 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
SEC. 402. NATIONAL LABOR RELATIONS ACT. 
(a) RECOGNITION OF REPRESENTATIVE.— 
(1) IN GENERAL.—Section 8(a)(2) of the Na-
tional Labor Relations Act (29 U.S.C. 158(a)(2)) is 
amended by inserting before the colon the following: 
‘‘or to recognize or bargain collectively with a labor 
organization that has not been selected by a major-
ity of such employees in a secret ballot election con-
ducted by the National Labor Relations Board in ac-
cordance with section 9’’. 
(2) APPLICATION.—The amendment made by 
subsection (a) shall not apply to collective bar-
gaining relationships in which a labor organization 
with majority support was lawfully recognized before 
the date of the enactment of this Act. 
(b) ELECTION REQUIRED.— 
(1) IN GENERAL.—Section 8(b) of the National 
Labor Relations Act (29 U.S.C. 158(b)) is amend-
ed— 
(A) by striking ‘‘and’’ at the end of para-
graph (6); 
(B) by striking the period at the end of 
paragraph (7) and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(8) to cause or attempt to cause an employer 
to recognize or bargain collectively with a represent-
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
ative of a labor organization that has not been se-
lected by a majority of such employees in a secret 
ballot election conducted by the National Labor Re-
lations Board in accordance with section 9.’’. 
(2) APPLICATION.—The amendment made by 
paragraph (1) shall not apply to collective bar-
gaining relationships that were recognized before the 
date of the enactment of this Act. 
(c) SECRET BALLOT ELECTION.—Section 9(a) of the 
National Labor Relations Act (29 U.S.C. 159(a)), is 
amended— 
(1) by inserting ‘‘(1)’’ after ‘‘(a)’’; 
(2) by inserting after ‘‘designated or selected’’ 
the following: ‘‘by a secret ballot election conducted 
by the National Labor Relations Board in accord-
ance with this section’’; and 
(3) by adding at the end the following: 
‘‘(2) The secret ballot election requirement of 
paragraph (1) shall not apply to collective bar-
gaining relationships that were recognized before the 
date of the enactment of the Small Business Bill of 
Rights.’’. 
SEC. 403. REGULATIONS. 
Not later than 6 months after the date of the enact-
ment of this Act, the National Labor Relations Board 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
shall review and revise all regulations promulgated before 
such date to implement the amendments made in this Act 
to the National Labor Relations Act. 
TITLE 
V—HEALTHCARE: 
EX-
PANDING CHOICE AND LOW-
ERING COSTS 
SEC. 501. FINDINGS AND PURPOSE. 
(a) FINDINGS.— 
(1) EFFECT
ON
HEALTH
CARE
ACCESS
AND 
COSTS.—Congress finds that our current civil justice 
system is adversely affecting patient access to health 
care services, better patient care, and cost-efficient 
health care, in that the health care liability system 
is a costly and ineffective mechanism for resolving 
claims of health care liability and compensating in-
jured patients, and is a deterrent to the sharing of 
information among health care professionals which 
impedes efforts to improve patient safety and quality 
of care. 
(2) EFFECT
ON
INTERSTATE
COMMERCE.— 
Congress finds that the health care and insurance 
industries are industries affecting interstate com-
merce and the health care liability litigation systems 
existing throughout the United States are activities 
that affect interstate commerce by contributing to 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
(2) reduce the incidence of ‘‘defensive medi-
cine’’ and lower the cost of health care liability in-
surance, all of which contribute to the escalation of 
health care costs; 
(3) ensure that persons with meritorious health 
care injury claims receive fair and adequate com-
pensation, including reasonable noneconomic dam-
ages; 
(4) improve the fairness and cost-effectiveness 
of our current health care liability system to resolve 
disputes over, and provide compensation for, health 
care liability by reducing uncertainty in the amount 
of compensation provided to injured individuals; and 
(5) provide an increased sharing of information 
in the health care system which will reduce unin-
tended injury and improve patient care. 
SEC. 502. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS. 
The time for the commencement of a health care law-
suit shall be 3 years after the date of manifestation of 
injury or 1 year after the claimant discovers, or through 
the use of reasonable diligence should have discovered, the 
injury, whichever occurs first. In no event shall the time 
for commencement of a health care lawsuit exceed 3 years 
after the date of manifestation of injury unless tolled for 
any of the following— 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
(1) upon proof of fraud; 
(2) intentional concealment; or 
(3) the presence of a foreign body, which has no 
therapeutic or diagnostic purpose or effect, in the 
person of the injured person. 
Actions by a minor shall be commenced within 3 years 
from the date of the alleged manifestation of injury except 
that actions by a minor under the full age of 6 years shall 
be commenced within 3 years of manifestation of injury 
or prior to the minor’s 8th birthday, whichever provides 
a longer period. Such time limitation shall be tolled for 
minors for any period during which a parent or guardian 
and a health care provider or health care organization 
have committed fraud or collusion in the failure to bring 
an action on behalf of the injured minor. 
SEC. 503. COMPENSATING PATIENT INJURY. 
(a) UNLIMITED AMOUNT OF DAMAGES FOR ACTUAL 
ECONOMIC LOSSES IN HEALTH CARE LAWSUITS.—In any 
health care lawsuit, nothing in this title shall limit a claim-
ant’s recovery of the full amount of the available economic 
damages, notwithstanding the limitation in subsection (b). 
(b) ADDITIONAL NONECONOMIC DAMAGES.—In any 
health care lawsuit, the amount of noneconomic damages, 
if available, may be as much as $250,000, regardless of 
the number of parties against whom the action is brought 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
or the number of separate claims or actions brought with 
respect to the same injury. 
(c) NO DISCOUNT OF AWARD FOR NONECONOMIC 
DAMAGES.—For purposes of applying the limitation in 
subsection (b), future noneconomic damages shall not be 
discounted to present value. The jury shall not be in-
formed about the maximum award for noneconomic dam-
ages. An award for noneconomic damages in excess of 
$250,000 shall be reduced either before the entry of judg-
ment, or by amendment of the judgment after entry of 
judgment, and such reduction shall be made before ac-
counting for any other reduction in damages required by 
law. If separate awards are rendered for past and future 
noneconomic damages and the combined awards exceed 
$250,000, the future noneconomic damages shall be re-
duced first. 
(d) FAIR SHARE RULE.—In any health care lawsuit, 
each party shall be liable for that party’s several share 
of any damages only and not for the share of any other 
person. Each party shall be liable only for the amount of 
damages allocated to such party in direct proportion to 
such party’s percentage of responsibility. Whenever a 
judgment of liability is rendered as to any party, a sepa-
rate judgment shall be rendered against each such party 
for the amount allocated to such party. For purposes of 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
this section, the trier of fact shall determine the propor-
tion of responsibility of each party for the claimant’s 
harm. 
SEC. 504. MAXIMIZING PATIENT RECOVERY. 
(a) COURT SUPERVISION OF SHARE OF DAMAGES 
ACTUALLY PAID TO CLAIMANTS.—In any health care law-
suit, the court shall supervise the arrangements for pay-
ment of damages to protect against conflicts of interest 
that may have the effect of reducing the amount of dam-
ages awarded that are actually paid to claimants. In par-
ticular, in any health care lawsuit in which the attorney 
for a party claims a financial stake in the outcome by vir-
tue of a contingent fee, the court shall have the power 
to restrict the payment of a claimant’s damage recovery 
to such attorney, and to redirect such damages to the 
claimant based upon the interests of justice and principles 
of equity. In no event shall the total of all contingent fees 
for representing all claimants in a health care lawsuit ex-
ceed the following limits: 
(1) 40 percent of the first $50,000 recovered by 
all such claimants. 
(2) 331⁄3 percent of the next $50,000 recovered 
by all such claimants. 
(3) 25 percent of the next $500,000 recovered 
by all such claimants. 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
(4) 15 percent of any amount by which the re-
covery by all such claimants is in excess of 
$600,000. 
(b) APPLICABILITY.—The limitations in this section 
shall apply whether the recovery is by judgment, settle-
ment, mediation, arbitration, or any other form of alter-
native dispute resolution. In a health care lawsuit involv-
ing a minor or incompetent person, a court retains the 
authority to authorize or approve a fee that is less than 
the maximum permitted under this section. The require-
ment for court supervision in the first two sentences of 
subsection (a) applies only in civil actions. 
SEC. 505. ADDITIONAL HEALTH BENEFITS. 
In any health care lawsuit involving injury or wrong-
ful death, any party may introduce evidence of collateral 
source benefits. If a party elects to introduce such evi-
dence, any opposing party may introduce evidence of any 
amount paid or contributed or reasonably likely to be paid 
or contributed in the future by or on behalf of the oppos-
ing party to secure the right to such collateral source bene-
fits. No provider of collateral source benefits shall recover 
any amount against the claimant or receive any lien or 
credit against the claimant’s recovery or be equitably or 
legally subrogated to the right of the claimant in a health 
care lawsuit involving injury or wrongful death. This sec-
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
the case may be, by such party, of the kind 
causing the harm complained of by the claim-
ant. 
(E) Any criminal penalties imposed on 
such party, as a result of the conduct com-
plained of by the claimant. 
(F) The amount of any civil fines assessed 
against such party as a result of the conduct 
complained of by the claimant. 
(2) MAXIMUM AWARD.—The amount of punitive 
damages, if awarded, in a health care lawsuit may 
be as much as $250,000 or as much as two times 
the amount of economic damages awarded, which-
ever is greater. The jury shall not be informed of 
this limitation. 
(c) NO PUNITIVE DAMAGES FOR PRODUCTS THAT 
COMPLY WITH FDA STANDARDS.— 
(1) LIABILITY OF CERTAIN MANUFACTURERS, 
DISTRIBUTORS, AND SUPPLIERS.— 
(A) IN
GENERAL.—No punitive damages 
may be awarded against the manufacturer or 
distributor of a medical product, or a supplier 
of any component or raw material of such med-
ical product, based on a claim that such prod-
uct caused the claimant’s harm where— 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
(B) RULE OF CONSTRUCTION.—Subpara-
graph (A) may not be construed as establishing 
the obligation of the Food and Drug Adminis-
tration to demonstrate affirmatively that a 
manufacturer, distributor, or supplier referred 
to in such subparagraph meets any of the con-
ditions described in such subparagraph. 
(2) LIABILITY OF HEALTH CARE PROVIDERS.— 
A health care provider who prescribes, or who dis-
penses pursuant to a prescription, a medical product 
approved, licensed, or cleared by the Food and Drug 
Administration shall not be named as a party to a 
product liability lawsuit involving such product and 
shall not be liable to a claimant in a class action 
lawsuit against the manufacturer, distributor, or 
seller of such product. Nothing in this paragraph 
prevents a court from consolidating cases involving 
health care providers and cases involving products li-
ability claims against the manufacturer, distributor, 
or product seller of such medical product. 
(3) PACKAGING.—In a health care lawsuit for 
harm which is alleged to relate to the adequacy of 
the packaging or labeling of a drug which is required 
to have tamper-resistant packaging under regula-
tions of the Secretary of Health and Human Serv-
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
ices (including labeling regulations related to such 
packaging), the manufacturer or product seller of 
the drug shall not be held liable for punitive dam-
ages unless such packaging or labeling is found by 
the trier of fact by clear and convincing evidence to 
be substantially out of compliance with such regula-
tions. 
(4) EXCEPTION.—Paragraph (1) shall not 
apply with respect to any health care lawsuit in 
which— 
(A) a person, before or after premarket ap-
proval, clearance, or licensure of such medical 
product, knowingly misrepresented to or with-
held from the Food and Drug Administration 
information that is required to be submitted 
under the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 301 et seq.) or section 351 of 
the Public Health Service Act (42 U.S.C. 262) 
that is material and is causally related to the 
harm which the claimant allegedly suffered; or 
(B) a person made an illegal payment to 
an official of the Food and Drug Administra-
tion for the purpose of either securing or main-
taining approval, clearance, or licensure of such 
medical product. 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00025
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
SEC. 507. AUTHORIZATION OF PAYMENT OF FUTURE DAM-
AGES TO CLAIMANTS IN HEALTH CARE LAW-
SUITS. 
(a) IN GENERAL.—In any health care lawsuit, if an 
award of future damages, without reduction to present 
value, equaling or exceeding $50,000 is made against a 
party with sufficient insurance or other assets to fund a 
periodic payment of such a judgment, the court shall, at 
the request of any party, enter a judgment ordering that 
the future damages be paid by periodic payments. In any 
health care lawsuit, the court may be guided by the Uni-
form Periodic Payment of Judgments Act promulgated by 
the National Conference of Commissioners on Uniform 
State Laws. 
(b) APPLICABILITY.—This section applies to all ac-
tions which have not been first set for trial or retrial be-
fore the date of the enactment of this title. 
SEC. 508. DEFINITIONS. 
In this title: 
(1) ALTERNATIVE DISPUTE RESOLUTION SYS-
TEM; ADR.—The term ‘‘alternative dispute resolution 
system’’ or ‘‘ADR’’ means a system that provides 
for the resolution of health care lawsuits in a man-
ner other than through a civil action brought in a 
State or Federal court. 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
(2) CLAIMANT.—The term ‘‘claimant’’ means 
any person who brings a health care lawsuit, includ-
ing a person who asserts or claims a right to legal 
or equitable contribution, indemnity, or subrogation, 
arising out of a health care liability claim or action, 
and any person on whose behalf such a claim is as-
serted or such an action is brought, whether de-
ceased, incompetent, or a minor. 
(3) COLLATERAL
SOURCE
BENEFITS.—The 
term ‘‘collateral source benefits’’ means any amount 
paid or reasonably likely to be paid in the future to, 
or on behalf of, the claimant, or any service, prod-
uct, or other benefit provided or reasonably likely to 
be provided in the future to, or on behalf of, the 
claimant, as a result of the injury or wrongful death, 
pursuant to— 
(A) any State or Federal health, sickness, 
income-disability, accident, or workers’ com-
pensation law; 
(B) any health, sickness, income-disability, 
or accident insurance that provides health bene-
fits or income-disability coverage; 
(C) any contract or agreement of any 
group, organization, partnership, or corporation 
to provide, pay for, or reimburse the cost of 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00027
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
medical, hospital, dental, or income-disability 
benefits; and 
(D) any other publicly or privately funded 
program. 
(4) 
COMPENSATORY
DAMAGES.—The 
term 
‘‘compensatory 
damages’’ 
means 
objectively 
verifiable monetary losses incurred as a result of the 
provision of, use of, or payment for (or failure to 
provide, use, or pay for) health care services or med-
ical products, such as past and future medical ex-
penses, loss of past and future earnings, cost of ob-
taining domestic services, loss of employment, and 
loss of business or employment opportunities, dam-
ages for physical and emotional pain, suffering, in-
convenience, physical impairment, mental anguish, 
disfigurement, loss of enjoyment of life, loss of soci-
ety and companionship, loss of consortium (other 
than loss of domestic service), hedonic damages, in-
jury to reputation, and all other nonpecuniary losses 
of any kind or nature. The term ‘‘compensatory 
damages’’ includes economic damages and non-
economic damages, as such terms are defined in this 
section. 
(5) CONTINGENT FEE.—The term ‘‘contingent 
fee’’ includes all compensation to any person or per-
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00028
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
sons which is payable only if a recovery is effected 
on behalf of one or more claimants. 
(6) ECONOMIC DAMAGES.—The term ‘‘economic 
damages’’ means objectively verifiable monetary 
losses incurred as a result of the provision of, use 
of, or payment for (or failure to provide, use, or pay 
for) health care services or medical products, such as 
past and future medical expenses, loss of past and 
future earnings, cost of obtaining domestic services, 
loss of employment, and loss of business or employ-
ment opportunities. 
(7) 
HEALTH
CARE
LAWSUIT.—The 
term 
‘‘health care lawsuit’’ means any health care liability 
claim concerning the provision of health care goods 
or services or any medical product affecting inter-
state commerce, or any health care liability action 
concerning the provision of health care goods or 
services or any medical product affecting interstate 
commerce, brought in a State or Federal court or 
pursuant to an alternative dispute resolution system, 
against a health care provider, a health care organi-
zation, or the manufacturer, distributor, supplier, 
marketer, promoter, or seller of a medical product, 
regardless of the theory of liability on which the 
claim is based, or the number of claimants, plain-
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00029
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
tiffs, defendants, or other parties, or the number of 
claims or causes of action, in which the claimant al-
leges a health care liability claim. Such term does 
not include a claim or action which is based on 
criminal liability; which seeks civil fines or penalties 
paid to Federal, State, or local government; or which 
is grounded in antitrust. 
(8) HEALTH
CARE
LIABILITY
ACTION.—The 
term ‘‘health care liability action’’ means a civil ac-
tion brought in a State or Federal court or pursuant 
to an alternative dispute resolution system, against 
a health care provider, a health care organization, or 
the manufacturer, distributor, supplier, marketer, 
promoter, or seller of a medical product, regardless 
of the theory of liability on which the claim is based, 
or the number of plaintiffs, defendants, or other par-
ties, or the number of causes of action, in which the 
claimant alleges a health care liability claim. 
(9) HEALTH
CARE
LIABILITY
CLAIM.—The 
term ‘‘health care liability claim’’ means a demand 
by any person, whether or not pursuant to ADR, 
against a health care provider, health care organiza-
tion, or the manufacturer, distributor, supplier, mar-
keter, promoter, or seller of a medical product, in-
cluding, but not limited to, third-party claims, cross- 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00030
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
claims, counter-claims, or contribution claims, which 
are based upon the provision of, use of, or payment 
for (or the failure to provide, use, or pay for) health 
care services or medical products, regardless of the 
theory of liability on which the claim is based, or the 
number of plaintiffs, defendants, or other parties, or 
the number of causes of action. 
(10) HEALTH CARE ORGANIZATION.—The term 
‘‘health care organization’’ means any person or en-
tity which is obligated to provide or pay for health 
benefits under any health plan, including any person 
or entity acting under a contract or arrangement 
with a health care organization to provide or admin-
ister any health benefit. 
(11) HEALTH
CARE
PROVIDER.—The term 
‘‘health care provider’’ means any person or entity 
required by State or Federal laws or regulations to 
be licensed, registered, or certified to provide health 
care services, and being either so licensed, reg-
istered, or certified, or exempted from such require-
ment by other statute or regulation. 
(12) HEALTH CARE GOODS OR SERVICES.—The 
term ‘‘health care goods or services’’ means any 
goods or services provided by a health care organiza-
tion, provider, or by any individual working under 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00031
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
the supervision of a health care provider, that relates 
to the diagnosis, prevention, or treatment of any 
human disease or impairment, or the assessment or 
care of the health of human beings. 
(13) MALICIOUS
INTENT
TO
INJURE.—The 
term ‘‘malicious intent to injure’’ means inten-
tionally causing or attempting to cause physical in-
jury other than providing health care goods or serv-
ices. 
(14) MEDICAL PRODUCT.—The term ‘‘medical 
product’’ means a drug, device, or biological product 
intended for humans, and the terms ‘‘drug’’, ‘‘de-
vice’’, and ‘‘biological product’’ have the meanings 
given such terms in sections 201(g)(1) and 201(h) 
of the Federal Food, Drug and Cosmetic Act (21 
U.S.C. 321(g)(1) and (h)) and section 351(a) of the 
Public Health Service Act (42 U.S.C. 262(a)), re-
spectively, including any component or raw material 
used therein, but excluding health care services. 
(15) 
NONECONOMIC
DAMAGES.—The 
term 
‘‘noneconomic damages’’ means damages for phys-
ical and emotional pain, suffering, inconvenience, 
physical impairment, mental anguish, disfigurement, 
loss of enjoyment of life, loss of society and compan-
ionship, loss of consortium (other than loss of do-
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00032
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
mestic service), hedonic damages, injury to reputa-
tion, and all other nonpecuniary losses of any kind 
or nature. 
(16) PUNITIVE DAMAGES.—The term ‘‘punitive 
damages’’ means damages awarded, for the purpose 
of punishment or deterrence, and not solely for com-
pensatory purposes, against a health care provider, 
health care organization, or a manufacturer, dis-
tributor, or supplier of a medical product. Punitive 
damages are neither economic nor noneconomic 
damages. 
(17) RECOVERY.—The term ‘‘recovery’’ means 
the net sum recovered after deducting any disburse-
ments or costs incurred in connection with prosecu-
tion or settlement of the claim, including all costs 
paid or advanced by any person. Costs of health care 
incurred by the plaintiff and the attorneys’ office 
overhead costs or charges for legal services are not 
deductible disbursements or costs for such purpose. 
(18) STATE.—The term ‘‘State’’ means each of 
the several States, the District of Columbia, the 
Commonwealth of Puerto Rico, the United States 
Virgin Islands, Guam, American Samoa, the Com-
monwealth of the Northern Mariana Islands, the 
Trust Territory of the Pacific Islands, and any other 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00033
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
territory or possession of the United States, or any 
political subdivision thereof. 
SEC. 509. EFFECT ON OTHER LAWS. 
(a) VACCINE INJURY.— 
(1) To the extent that title XXI of the Public 
Health Service Act establishes a Federal rule of law 
applicable to a civil action brought for a vaccine-re-
lated injury or death— 
(A) title V of this Act does not affect the 
application of the rule of law applicable to such 
an action; and 
(B) any rule of law prescribed by title V of 
this Act in conflict with a rule of law of such 
title XXI shall not apply to such action. 
(2) If there is an aspect of a civil action 
brought for a vaccine-related injury or death to 
which a Federal rule of law under title XXI of the 
Public Health Service Act does not apply, then title 
V of this Act or otherwise applicable law (as deter-
mined under this title) will apply to such aspect of 
such action. 
(b) OTHER FEDERAL LAW.—Except as provided in 
this section, nothing in this title shall be deemed to affect 
any defense available to a defendant in a health care law-
suit or action under any other provision of Federal law. 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00034
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
SEC. 
510. 
STATE 
FLEXIBILITY 
AND 
PROTECTION 
OF 
STATES’ RIGHTS. 
(a) HEALTH CARE LAWSUITS.—The provisions gov-
erning health care lawsuits set forth in this title preempt, 
subject to subsections (b) and (c), State law to the extent 
that State law prevents the application of any provisions 
of law established by or under this title. The provisions 
governing health care lawsuits set forth in this title super-
sede chapter 171 of title 28, United States Code, to the 
extent that such chapter— 
(1) provides for a greater amount of damages 
or contingent fees, a longer period in which a health 
care lawsuit may be commenced, or a reduced appli-
cability or scope of periodic payment of future dam-
ages, than provided in title V of this Act; or 
(2) prohibits the introduction of evidence re-
garding collateral source benefits, or mandates or 
permits subrogation or a lien on collateral source 
benefits. 
(b) PROTECTION OF STATES’ RIGHTS AND OTHER 
LAWS.— 
(1) IN GENERAL.—Any issue that is not gov-
erned by any provision of law established by or 
under this title (including State standards of neg-
ligence) shall be governed by otherwise applicable 
State or Federal law. 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00035
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
(2) LAWS
THAT
PROVIDE
GREATER
PROTEC-
TIONS.—This title shall not preempt or supersede 
any State or Federal law that imposes greater proce-
dural or substantive protections for health care pro-
viders and health care organizations from liability, 
loss, or damages than those provided by this title or 
create a cause of action. 
(c) STATE FLEXIBILITY.—No provision of this title 
shall be construed to preempt— 
(1) any State law (whether effective before, on, 
or after the date of the enactment of this title) that 
specifies a particular monetary amount of compen-
satory or punitive damages (or the total amount of 
damages) that may be awarded in a health care law-
suit, regardless of whether such monetary amount is 
greater or lesser than is provided for under this title, 
notwithstanding section 503(a); or 
(2) any defense available to a party in a health 
care lawsuit under any other provision of State or 
Federal law. 
SEC. 511. APPLICABILITY; EFFECTIVE DATE. 
This title shall apply to any health care lawsuit 
brought in a Federal or State court, or subject to an alter-
native dispute resolution system, that is initiated on or 
after the date of the enactment of this title, except that 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00036
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
any health care lawsuit arising from an injury occurring 
prior to the date of the enactment of this title shall be 
governed by the applicable statute of limitations provisions 
in effect at the time the injury occurred. 
SEC. 512. SENSE OF CONGRESS. 
It is the sense of Congress that a health insurer 
should be liable for damages for harm caused when it 
makes a decision as to what care is medically necessary 
and appropriate. 
SEC. 
513. 
COOPERATIVE 
GOVERNING 
OF 
INDIVIDUAL 
HEALTH INSURANCE COVERAGE. 
(a) IN GENERAL.—Title XXVII of the Public Health 
Service Act (42 U.S.C. 300gg et seq.) is amended by add-
ing at the end the following new part: 
‘‘PART D—COOPERATIVE GOVERNING OF 
INDIVIDUAL HEALTH INSURANCE COVERAGE 
‘‘SEC. 2795. DEFINITIONS. 
‘‘In this part: 
‘‘(1) PRIMARY
STATE.—The term ‘primary 
State’ means, with respect to individual health insur-
ance coverage offered by a health insurance issuer, 
the State designated by the issuer as the State 
whose covered laws shall govern the health insurance 
issuer in the sale of such coverage under this part. 
An issuer, with respect to a particular policy, may 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00037
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
only designate one such State as its primary State 
with respect to all such coverage it offers. Such an 
issuer may not change the designated primary State 
with respect to individual health insurance coverage 
once the policy is issued, except that such a change 
may be made upon renewal of the policy. With re-
spect to such designated State, the issuer is deemed 
to be doing business in that State. 
‘‘(2) SECONDARY STATE.—The term ‘secondary 
State’ means, with respect to individual health insur-
ance coverage offered by a health insurance issuer, 
any State that is not the primary State. In the case 
of a health insurance issuer that is selling a policy 
in, or to a resident of, a secondary State, the issuer 
is deemed to be doing business in that secondary 
State. 
‘‘(3) HEALTH INSURANCE ISSUER.—The term 
‘health insurance issuer’ has the meaning given such 
term in section 2791(b)(2), except that such an 
issuer must be licensed in the primary State and be 
qualified to sell individual health insurance coverage 
in that State. 
‘‘(4) INDIVIDUAL
HEALTH
INSURANCE
COV-
ERAGE.—The term ‘individual health insurance cov-
erage’ means health insurance coverage offered in 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00038
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
the individual market, as defined in section 
2791(e)(1). 
‘‘(5) APPLICABLE
STATE
AUTHORITY.—The 
term ‘applicable State authority’ means, with respect 
to a health insurance issuer in a State, the State in-
surance commissioner or official or officials des-
ignated by the State to enforce the requirements of 
this title for the State with respect to the issuer. 
‘‘(6) HAZARDOUS FINANCIAL CONDITION.—The 
term ‘hazardous financial condition’ means that, 
based on its present or reasonably anticipated finan-
cial condition, a health insurance issuer is unlikely 
to be able— 
‘‘(A) to meet obligations to policyholders 
with respect to known claims and reasonably 
anticipated claims; or 
‘‘(B) to pay other obligations in the normal 
course of business. 
‘‘(7) COVERED LAWS.— 
‘‘(A) IN
GENERAL.—The term ‘covered 
laws’ means the laws, rules, regulations, agree-
ments, and orders governing the insurance busi-
ness pertaining to— 
‘‘(i) individual health insurance cov-
erage issued by a health insurance issuer; 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00039
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
‘‘(ii) the offer, sale, rating (including 
medical 
underwriting), 
renewal, 
and 
issuance of individual health insurance cov-
erage to an individual; 
‘‘(iii) the provision to an individual in 
relation to individual health insurance cov-
erage of health care and insurance-related 
services; 
‘‘(iv) the provision to an individual in 
relation to individual health insurance cov-
erage of management, operations, and in-
vestment activities of a health insurance 
issuer; and 
‘‘(v) the provision to an individual in 
relation to individual health insurance cov-
erage of loss control and claims adminis-
tration for a health insurance issuer with 
respect to liability for which the issuer pro-
vides insurance. 
‘‘(B) EXCEPTION.—Such term does not in-
clude any law, rule, regulation, agreement, or 
order governing the use of care or cost manage-
ment techniques, including any requirement re-
lated to provider contracting, network access or 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00040
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
adequacy, health care data collection, or quality 
assurance. 
‘‘(8) STATE.—The term ‘State’ means the 50 
States and includes the District of Columbia, the 
Commonwealth of Puerto Rico, the United States 
Virgin Islands, Guam, American Samoa, and the 
Commonwealth of the Northern Mariana Islands. 
‘‘(9) UNFAIR
CLAIMS
SETTLEMENT
PRAC-
TICES.—The term ‘unfair claims settlement prac-
tices’ means only the following practices: 
‘‘(A) Knowingly misrepresenting to claim-
ants and insured individuals relevant facts or 
policy provisions relating to coverage at issue. 
‘‘(B) Failing to acknowledge with reason-
able promptness pertinent communications with 
respect to claims arising under policies. 
‘‘(C) Failing to adopt and implement rea-
sonable standards for the prompt investigation 
and settlement of claims arising under policies. 
‘‘(D) Failing to effectuate prompt, fair, 
and equitable settlement of claims submitted in 
which liability has become reasonably clear. 
‘‘(E) Refusing to pay claims without con-
ducting a reasonable investigation. 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00041
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
‘‘(F) Failing to affirm or deny coverage of 
claims within a reasonable period of time after 
having completed an investigation related to 
those claims. 
‘‘(G) A pattern or practice of compelling 
insured individuals or their beneficiaries to in-
stitute suits to recover amounts due under its 
policies by offering substantially less than the 
amounts ultimately recovered in suits brought 
by them. 
‘‘(H) A pattern or practice of attempting 
to settle or settling claims for less than the 
amount that a reasonable person would believe 
the insured individual or his or her beneficiary 
was entitled by reference to written or printed 
advertising material accompanying or made 
part of an application. 
‘‘(I) Attempting to settle or settling claims 
on the basis of an application that was materi-
ally altered without notice to, or knowledge or 
consent of, the insured. 
‘‘(J) Failing to provide forms necessary to 
present claims within 15 calendar days of a re-
quest with reasonable explanations regarding 
their use. 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00042
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
‘‘(K) Attempting to cancel a policy in less 
time than that prescribed in the policy or by the 
law of the primary State. 
‘‘(10) FRAUD AND ABUSE.—The term ‘fraud 
and abuse’ means an act or omission committed by 
a person who, knowingly and with intent to defraud, 
commits, or conceals any material information con-
cerning, one or more of the following: 
‘‘(A) Presenting, causing to be presented, 
or preparing with knowledge or belief that it 
will be presented to or by an insurer, a rein-
surer, broker or its agent, false information as 
part of, in support of or concerning a fact ma-
terial to one or more of the following: 
‘‘(i) An application for the issuance or 
renewal of an insurance policy or reinsur-
ance contract. 
‘‘(ii) The rating of an insurance policy 
or reinsurance contract. 
‘‘(iii) A claim for payment or benefit 
pursuant to an insurance policy or reinsur-
ance contract. 
‘‘(iv) Premiums paid on an insurance 
policy or reinsurance contract. 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00043
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
‘‘(v) Payments made in accordance 
with the terms of an insurance policy or 
reinsurance contract. 
‘‘(vi) A document filed with the com-
missioner or the chief insurance regulatory 
official of another jurisdiction. 
‘‘(vii) The financial condition of an in-
surer or reinsurer. 
‘‘(viii) The formation, acquisition, 
merger, reconsolidation, dissolution, or 
withdrawal from one or more lines of in-
surance or reinsurance in all or part of a 
State by an insurer or reinsurer. 
‘‘(ix) The issuance of written evidence 
of insurance. 
‘‘(x) The reinstatement of an insur-
ance policy. 
‘‘(B) Solicitation or acceptance of new or 
renewal insurance risks on behalf of an insurer, 
reinsurer, or other person engaged in the busi-
ness of insurance by a person who knows or 
should know that the insurer or other person 
responsible for the risk is insolvent at the time 
of the transaction. 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00044
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
‘‘(C) Transaction of the business of insur-
ance in violation of laws requiring a license, cer-
tificate of authority, or other legal authority for 
the transaction of the business of insurance. 
‘‘(D) Attempt to commit, aiding or abet-
ting in the commission of, or conspiracy to com-
mit the acts or omissions specified in this para-
graph. 
‘‘SEC. 2796. APPLICATION OF LAW. 
‘‘(a) IN GENERAL.—The covered laws of the primary 
State shall apply to individual health insurance coverage 
offered by a health insurance issuer in the primary State 
and in any secondary State, but only if the coverage and 
issuer comply with the conditions of this section with re-
spect to the offering of coverage in any secondary State. 
‘‘(b) EXEMPTIONS FROM COVERED LAWS IN A SEC-
ONDARY STATE.—Except as provided in this section, a 
health insurance issuer with respect to its offer, sale, rat-
ing (including medical underwriting), renewal, and 
issuance of individual health insurance coverage in any 
secondary State is exempt from any covered laws of the 
secondary State (and any rules, regulations, agreements, 
or orders sought or issued by such State under or related 
to such covered laws) to the extent that such laws would— 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00045
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS
‘‘(1) make unlawful, or regulate, directly or in-
directly, the operation of the health insurance issuer 
operating in the secondary State, except that any 
secondary State may require such an issuer— 
‘‘(A) to pay, on a nondiscriminatory basis, 
applicable premium and other taxes (including 
high-risk-pool assessments) which are levied on 
insurers and surplus lines insurers, brokers, or 
policyholders under the laws of the State; 
‘‘(B) to register with and designate the 
State insurance commissioner as its agent solely 
for the purpose of receiving service of legal doc-
uments or process; 
‘‘(C) to submit to an examination of its fi-
nancial condition by the State insurance com-
missioner in any State in which the issuer is 
doing business to determine the issuer’s finan-
cial condition, if— 
‘‘(i) the State insurance commissioner 
of the primary State has not done an ex-
amination within the period recommended 
by the National Association of Insurance 
Commissioners; and 
‘‘(ii) any such examination is con-
ducted in accordance with the examiners’ 
VerDate Nov 24 2008 
01:35 Apr 23, 2010
Jkt 089200
PO 00000
Frm 00046
Fmt 6652
Sfmt 6201
E:\BILLS\H5109.IH
H5109
jbell on DSKDVH8Z91PROD with BILLS