1999 
•AMDT. NO. 2786 
SEC. 9005. LIMITATION ON HEALTH FLEXIBLE SPENDING 
ARRANGEMENTS UNDER CAFETERIA PLANS. 
(a) IN GENERAL.—Section 125 of the Internal Rev-
enue Code of 1986 is amended— 
(1) by redesignating subsections (i) and (j) as 
subsections (j) and (k), respectively, and 
(2) by inserting after subsection (h) the fol-
lowing new subsection: 
‘‘(i) LIMITATION ON HEALTH FLEXIBLE SPENDING 
ARRANGEMENTS.—For purposes of this section, if a ben-
efit is provided under a cafeteria plan through employer 
contributions to a health flexible spending arrangement, 
such benefit shall not be treated as a qualified benefit un-
less the cafeteria plan provides that an employee may not 
elect for any taxable year to have salary reduction con-
tributions in excess of $2,500 made to such arrange-
ment.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2010. 
SEC. 9006. EXPANSION OF INFORMATION REPORTING RE-
QUIREMENTS. 
(a) IN GENERAL.—Section 6041 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsections: 
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•AMDT. NO. 2786 
‘‘(h) APPLICATION
TO CORPORATIONS.—Notwith-
standing any regulation prescribed by the Secretary before 
the date of the enactment of this subsection, for purposes 
of this section the term ‘person’ includes any corporation 
that is not an organization exempt from tax under section 
501(a). 
‘‘(i) REGULATIONS.—The Secretary may prescribe 
such regulations and other guidance as may be appro-
priate or necessary to carry out the purposes of this sec-
tion, including rules to prevent duplicative reporting of 
transactions.’’. 
(b) PAYMENTS FOR PROPERTY AND OTHER GROSS 
PROCEEDS.—Subsection (a) of section 6041 of the Inter-
nal Revenue Code of 1986 is amended— 
(1) by inserting ‘‘amounts in consideration for 
property,’’ after ‘‘wages,’’, 
(2) by inserting ‘‘gross proceeds,’’ after ‘‘emolu-
ments, or other’’, and 
(3) by inserting ‘‘gross proceeds,’’ after ‘‘setting 
forth the amount of such’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to payments made after December 
31, 2011. 
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•AMDT. NO. 2786 
SEC. 9007. ADDITIONAL REQUIREMENTS FOR CHARITABLE 
HOSPITALS. 
(a) REQUIREMENTS
TO
QUALIFY
AS
SECTION 
501(C)(3) CHARITABLE HOSPITAL ORGANIZATION.—Sec-
tion 501 of the Internal Revenue Code of 1986 (relating 
to exemption from tax on corporations, certain trusts, etc.) 
is amended by redesignating subsection (r) as subsection 
(s) and by inserting after subsection (q) the following new 
subsection: 
‘‘(r) ADDITIONAL REQUIREMENTS
FOR CERTAIN 
HOSPITALS.— 
‘‘(1) IN GENERAL.—A hospital organization to 
which this subsection applies shall not be treated as 
described in subsection (c)(3) unless the organiza-
tion— 
‘‘(A) meets the community health needs 
assessment requirements described in para-
graph (3), 
‘‘(B) meets the financial assistance policy 
requirements described in paragraph (4), 
‘‘(C) meets the requirements on charges 
described in paragraph (5), and 
‘‘(D) meets the billing and collection re-
quirement described in paragraph (6). 
‘‘(2) HOSPITAL
ORGANIZATIONS
TO
WHICH 
SUBSECTION APPLIES.— 
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•AMDT. NO. 2786 
‘‘(A) IN GENERAL.—This subsection shall 
apply to— 
‘‘(i) an organization which operates a 
facility which is required by a State to be 
licensed, registered, or similarly recognized 
as a hospital, and 
‘‘(ii) any other organization which the 
Secretary determines has the provision of 
hospital care as its principal function or 
purpose constituting the basis for its ex-
emption under subsection (c)(3) (deter-
mined without regard to this subsection). 
‘‘(B) ORGANIZATIONS WITH MORE THAN 1 
HOSPITAL FACILITY.—If a hospital organization 
operates more than 1 hospital facility— 
‘‘(i) the organization shall meet the 
requirements of this subsection separately 
with respect to each such facility, and 
‘‘(ii) the organization shall not be 
treated as described in subsection (c)(3) 
with respect to any such facility for which 
such requirements are not separately met. 
‘‘(3) COMMUNITY
HEALTH
NEEDS
ASSESS-
MENTS.— 
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•AMDT. NO. 2786 
‘‘(A) IN GENERAL.—An organization meets 
the requirements of this paragraph with respect 
to any taxable year only if the organization— 
‘‘(i) has conducted a community 
health needs assessment which meets the 
requirements of subparagraph (B) in such 
taxable year or in either of the 2 taxable 
years immediately preceding such taxable 
year, and 
‘‘(ii) has adopted an implementation 
strategy to meet the community health 
needs identified through such assessment. 
‘‘(B) COMMUNITY HEALTH NEEDS ASSESS-
MENT.—A community health needs assessment 
meets the requirements of this paragraph if 
such community health needs assessment— 
‘‘(i) takes into account input from 
persons who represent the broad interests 
of the community served by the hospital 
facility, including those with special knowl-
edge of or expertise in public health, and 
‘‘(ii) is made widely available to the 
public. 
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•AMDT. NO. 2786 
‘‘(4) FINANCIAL ASSISTANCE POLICY.—An or-
ganization meets the requirements of this paragraph 
if the organization establishes the following policies: 
‘‘(A) FINANCIAL ASSISTANCE POLICY.—A 
written financial assistance policy which in-
cludes— 
‘‘(i) eligibility criteria for financial as-
sistance, and whether such assistance in-
cludes free or discounted care, 
‘‘(ii) the basis for calculating amounts 
charged to patients, 
‘‘(iii) the method for applying for fi-
nancial assistance, 
‘‘(iv) in the case of an organization 
which does not have a separate billing and 
collections policy, the actions the organiza-
tion may take in the event of non-payment, 
including collections action and reporting 
to credit agencies, and 
‘‘(v) measures to widely publicize the 
policy within the community to be served 
by the organization. 
‘‘(B) POLICY
RELATING
TO
EMERGENCY 
MEDICAL CARE.—A written policy requiring the 
organization to provide, without discrimination, 
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•AMDT. NO. 2786 
‘‘(7) REGULATORY AUTHORITY.—The Secretary 
shall issue such regulations and guidance as may be 
necessary to carry out the provisions of this sub-
section, including guidance relating to what con-
stitutes reasonable efforts to determine the eligibility 
of a patient under a financial assistance policy for 
purposes of paragraph (6).’’. 
(b) EXCISE TAX FOR FAILURES TO MEET HOSPITAL 
EXEMPTION REQUIREMENTS.— 
(1) IN GENERAL.—Subchapter D of chapter 42 
of the Internal Revenue Code of 1986 (relating to 
failure by certain charitable organizations to meet 
certain qualification requirements) is amended by 
adding at the end the following new section: 
‘‘SEC. 4959. TAXES ON FAILURES BY HOSPITAL ORGANIZA-
TIONS. 
‘‘If a hospital organization to which section 501(r) 
applies fails to meet the requirement of section 501(r)(3) 
for any taxable year, there is imposed on the organization 
a tax equal to $50,000.’’. 
(2) CONFORMING AMENDMENT.—The table of 
sections for subchapter D of chapter 42 of such 
Code is amended by adding at the end the following 
new item: 
‘‘Sec. 4959. Taxes on failures by hospital organizations.’’. 
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•AMDT. NO. 2786 
(c) MANDATORY REVIEW OF TAX EXEMPTION FOR 
HOSPITALS.—The Secretary of the Treasury or the Sec-
retary’s delegate shall review at least once every 3 years 
the community benefit activities of each hospital organiza-
tion to which section 501(r) of the Internal Revenue Code 
of 1986 (as added by this section) applies. 
(d) ADDITIONAL REPORTING REQUIREMENTS.— 
(1) COMMUNITY HEALTH NEEDS ASSESSMENTS 
AND
AUDITED
FINANCIAL
STATEMENTS.—Section 
6033(b) of the Internal Revenue Code of 1986 (re-
lating to certain organizations described in section 
501(c)(3)) is amended by striking ‘‘and’’ at the end 
of paragraph (14), by redesignating paragraph (15) 
as paragraph (16), and by inserting after paragraph 
(14) the following new paragraph: 
‘‘(15) in the case of an organization to which 
the requirements of section 501(r) apply for the tax-
able year— 
‘‘(A) a description of how the organization 
is addressing the needs identified in each com-
munity health needs assessment conducted 
under section 501(r)(3) and a description of 
any such needs that are not being addressed to-
gether with the reasons why such needs are not 
being addressed, and 
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•AMDT. NO. 2786 
‘‘(B) the audited financial statements of 
such organization (or, in the case of an organi-
zation the financial statements of which are in-
cluded in a consolidated financial statement 
with other organizations, such consolidated fi-
nancial statement).’’. 
(2) TAXES.—Section 6033(b)(10) of such Code 
is amended by striking ‘‘and’’ at the end of subpara-
graph (B), by inserting ‘‘and’’ at the end of sub-
paragraph (C), and by adding at the end the fol-
lowing new subparagraph: 
‘‘(D) section 4959 (relating to taxes on 
failures by hospital organizations),’’. 
(e) REPORTS.— 
(1) REPORT ON LEVELS OF CHARITY CARE.— 
The Secretary of the Treasury, in consultation with 
the Secretary of Health and Human Services, shall 
submit to the Committees on Ways and Means, 
Education and Labor, and Energy and Commerce of 
the House of Representatives and to the Committees 
on Finance and Health, Education, Labor, and Pen-
sions of the Senate an annual report on the fol-
lowing: 
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•AMDT. NO. 2786 
(A) Information with respect to private 
tax-exempt, taxable, and government-owned 
hospitals regarding— 
(i) levels of charity care provided, 
(ii) bad debt expenses, 
(iii) unreimbursed costs for services 
provided with respect to means-tested gov-
ernment programs, and 
(iv) unreimbursed costs for services 
provided with respect to non-means tested 
government programs. 
(B) Information with respect to private 
tax-exempt hospitals regarding costs incurred 
for community benefit activities. 
(2) REPORT ON TRENDS.— 
(A) STUDY.—The Secretary of the Treas-
ury, in consultation with the Secretary of 
Health and Human Services, shall conduct a 
study on trends in the information required to 
be reported under paragraph (1). 
(B) REPORT.—Not later than 5 years after 
the date of the enactment of this Act, the Sec-
retary of the Treasury, in consultation with the 
Secretary of Health and Human Services, shall 
submit a report on the study conducted under 
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•AMDT. NO. 2786 
subparagraph (A) to the Committees on Ways 
and Means, Education and Labor, and Energy 
and Commerce of the House of Representatives 
and to the Committees on Finance and Health, 
Education, Labor, and Pensions of the Senate. 
(f) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in para-
graphs (2) and (3), the amendments made by this 
section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
(2) 
COMMUNITY
HEALTH
NEEDS
ASSESS-
MENT.—The requirements of section 501(r)(3) of 
the Internal Revenue Code of 1986, as added by 
subsection (a), shall apply to taxable years beginning 
after the date which is 2 years after the date of the 
enactment of this Act. 
(3) EXCISE TAX.—The amendments made by 
subsection (b) shall apply to failures occurring after 
the date of the enactment of this Act. 
SEC. 9008. IMPOSITION OF ANNUAL FEE ON BRANDED PRE-
SCRIPTION 
PHARMACEUTICAL 
MANUFAC-
TURERS AND IMPORTERS. 
(a) IMPOSITION OF FEE.— 
(1) IN GENERAL.—Each covered entity engaged 
in the business of manufacturing or importing 
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•AMDT. NO. 2786 
branded prescription drugs shall pay to the Sec-
retary of the Treasury not later than the annual 
payment date of each calendar year beginning after 
2009 a fee in an amount determined under sub-
section (b). 
(2) ANNUAL PAYMENT DATE.—For purposes of 
this section, the term ‘‘annual payment date’’ means 
with respect to any calendar year the date deter-
mined by the Secretary, but in no event later than 
September 30 of such calendar year. 
(b) DETERMINATION OF FEE AMOUNT.— 
(1) IN GENERAL.—With respect to each covered 
entity, the fee under this section for any calendar 
year shall be equal to an amount that bears the 
same ratio to $2,300,000,000 as— 
(A) the covered entity’s branded prescrip-
tion drug sales taken into account during the 
preceding calendar year, bear to 
(B) the aggregate branded prescription 
drug sales of all covered entities taken into ac-
count during such preceding calendar year. 
(2) SALES TAKEN INTO ACCOUNT.—For pur-
poses of paragraph (1), the branded prescription 
drug sales taken into account during any calendar 
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