Teacher: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Teacher: Now, understand the problem? If you are still confused, see the following example:
SECTION 1. LIABILITY OF BUSINESS ENTITIES PROVIDING USE OF FACILITIES
TO NONPROFIT ORGANIZATIONS.

(a) Definitions.--In this section:
(1) Business entity.--The term ''business entity'' means a
firm, corporation, association, partnership, consortium, joint
venture, or other form of enterprise.
(2) Facility.--The term ''facility'' means any real
property, including any building, improvement, or appurtenance.
(3) Gross negligence.--The term ''gross negligence'' means
voluntary and conscious conduct by a person with knowledge (at
the time of the conduct) that the conduct is likely to be
harmful to the health or well-being of another person.
(4) Intentional misconduct.--The term ''intentional
misconduct'' means conduct by a person with knowledge (at the
time of the conduct) that the conduct is harmful to the health
or well-being of another person.
(5) Nonprofit organization.--The term ''nonprofit
organization'' means--
(A) any organization described in section 501(c)(3)
of the Internal Revenue Code of 1986 and exempt from
tax under section 501(a) of such Code; or
(B) any not-for-profit organization organized and
conducted for public benefit and operated primarily for
charitable, civic, educational, religious, welfare, or
health purposes.
(6) State.--The term ''State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, American Samoa, the Northern
Mariana Islands, any other territory or possession of the
United States, or any political subdivision of any such State,
territory, or possession.
(b) Limitation on Liability.--
(1) In general.--Subject to subsection (c), a business
entity shall not be subject to civil liability relating to any
injury or death occurring at a facility of the business entity
in connection with a use of such facility by a nonprofit
organization if--
(A) the use occurs outside of the scope of business
of the business entity;
(B) such injury or death occurs during a period
that such facility is used by the nonprofit
organization; and
(C) the business entity authorized the use of such
facility by the nonprofit organization.
(2) Application.--This subsection shall apply--
(A) with respect to civil liability under Federal
and State law; and
(B) regardless of whether a nonprofit organization
pays for the use of a facility.
(c) Exception for Liability.--Subsection (b) shall not apply to an
injury or death that results from an act or omission of a business
entity that constitutes gross negligence or intentional misconduct,
including any misconduct that--
(1) constitutes a crime of violence (as that term is
defined in section 16 of title 18, United States Code) or act
of international terrorism (as that term is defined in section
2331 of title 18) for which the defendant has been convicted in
any court;
(2) constitutes a hate crime (as that term is used in the
Hate Crime Statistics Act (28 U.S.C. 534 note));
(3) involves a sexual offense, as defined by applicable
State law, for which the defendant has been convicted in any
court; or
(4) involves misconduct for which the defendant has been
found to have violated a Federal or State civil rights law.
(d) Superseding Provision.--
(1) In general.--Subject to paragraph (2) and subsection
(e), this Act preempts the laws of any State to the extent that
such laws are inconsistent with this Act, except that this Act
shall not preempt any State law that provides additional
protection from liability for a business entity for an injury
or death with respect to which conditions under subparagraphs
(A) through (C) of subsection (b)(1) apply.
(2) Limitation.--Nothing in this Act shall be construed to
supersede any Federal or State health or safety law.
(e) Election of State Regarding Nonapplicability.--This Act shall
not apply to any civil action in a State court against a business
entity in which all parties are citizens of the State if such State
enacts a statute--
(1) citing the authority of this subsection;
(2) declaring the election of such State that this Act
shall not apply to such civil action in the State; and
(3) containing no other provision.
Solution: Shields a business entity from civil liability relating to any injury or death occurring at a facility of that entity in connection with a use of such facility by a nonprofit organization if: (1) the use occurs outside the scope of business of the business entity; (2) such injury or death occurs during a period that such facility is used by such organization; and (3) the business entity authorized the use of such facility by the organization.
Makes this Act inapplicable to an injury or death that results from an act or omission of a business entity that constitutes gross negligence or intentional misconduct, including misconduct that: (1) constitutes a hate crime or a crime of violence or act of international terrorism for which the defendant has been convicted in any court; or (2) involves a sexual offense for which the defendant has been convicted in any court or misconduct for which the defendant has been found to have violated a Federal or State civil rights law.
Preempts State laws to the extent that such laws are inconsistent with this Act, except State law that provides additional protection from liability. Specifies that this Act shall not be construed to supersede any Federal or State health or safety law.
Makes this Act inapplicable to any civil action in a State court against a business entity in which all parties are citizens of the State if such State, citing this Act's authority and containing no other provision, enacts a statute declaring the State's election that this Act shall not apply to such action in the State.
Reason: This Bill focuses on shielding business entities from civil liability relating to an injury or death depending on the conditions of injury, hence the generated summary is correct.

Now, solve this instance: SECTION 1. SHORT TITLE.

This Act may be cited as the ''Small Business Tax Cut Act''.

SEC. 2. DEDUCTION FOR DOMESTIC BUSINESS INCOME OF QUALIFIED SMALL
BUSINESSES.

(a) In General.--Part VI of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new section:

''SEC. 200. DOMESTIC BUSINESS INCOME OF QUALIFIED SMALL BUSINESSES.

''(a) Allowance of Deduction.--In the case of a qualified small
business, there shall be allowed as a deduction an amount equal to 20
percent of the lesser of--
''(1) the qualified domestic business income of the
taxpayer for the taxable year, or
''(2) taxable income (determined without regard to this
section) for the taxable year.
''(b) Deduction Limited Based on Wages Paid.--
''(1) In general.--The amount of the deduction allowable
under subsection (a) for any taxable year shall not exceed 50
percent of the greater of--
''(A) the W-2 wages of the taxpayer paid to non-
owners, or
''(B) the sum of--
''(i) the W-2 wages of the taxpayer paid to
individuals who are non-owner family members of
direct owners, plus
''(ii) any W-2 wages of the taxpayer paid
to 10-percent-or-less direct owners.
''(2) Definitions related to ownership.--For purposes of
this section--
''(A) Non-owner.--The term 'non-owner' means, with
respect to any qualified small business, any person who
does not own (and is not considered as owning within
the meaning of subsection (c) or (e)(3) of section 267,
as the case may be) any stock of such business (or, if
such business is other than a corporation, any capital
or profits interest of such business).
''(B) Non-owner family members.--An individual is a
non-owner family member of a direct owner if--
''(i) such individual is family (within the
meaning of section 267(c)(4)) of a direct
owner, and
''(ii) such individual would be a non-owner
if subsections (c) and (e)(3) of section 267
were applied without regard to section
267(c)(2).
''(C) Direct owner.--The term 'direct owner' means,
with respect to any qualified small business, any
person who owns (or is considered as owning under the
applicable non-family attribution rules) any stock of
such business (or, if such business is other than a
corporation, any capital or profits interest of such
business).
''(D) 10-percent-or-less direct owners.--The term
'10-percent-or-less direct owner' means, with respect
to any qualified small business, any direct owner of
such business who owns (or is considered as owning
under the applicable non-family attribution rules)--
''(i) in the case of a qualified small
business which is a corporation, not more than
10 percent of the outstanding stock of the
corporation or stock possessing more than 10
percent of the total combined voting power of
all stock of the corporation, or
''(ii) in the case of a qualified small
business which is not a corporation, not more
than 10 percent of the capital or profits
interest of such business.
''(E) Applicable non-family attribution rules.--The
term 'applicable non-family attribution rules' means
the attribution rules of subsection (c) or (e)(3) of
section 267, as the case may be, but in each case
applied without regard to section 267(c)(2).
''(3) W-2 wages.--For purposes of this section--
''(A) In general.--The term 'W-2 wages' means, with
respect to any person for any taxable year of such
person, the sum of the amounts described in paragraphs
(3) and (8) of section 6051(a) paid by such person with
respect to employment of employees by such person
during the calendar year ending during such taxable
year.
''(B) Limitation to wages attributable to qualified
domestic business income.--Such term shall not include
any amount which is not properly allocable to domestic
business gross receipts for purposes of subsection
(c)(1).
''(C) Other requirements.--Except in the case of
amounts treated as W-2 wages under paragraph (4)--
''(i) such term shall not include any
amount which is not allowed as a deduction
under section 162 for the taxable year, and
''(ii) such term shall not include any
amount which is not properly included in a
return filed with the Social Security
Administration on or before the 60th day after
the due date (including extensions) for such
return.
''(4) Certain partnership distributions treated as w-2
wages.--
''(A) In general.--In the case of a qualified small
business which is a partnership and elects the
application of this paragraph for the taxable year--
''(i) the qualified domestic business
taxable income of such partnership for such
taxable year (determined after the application
of clause (ii)) which is allocable under rules
similar to the rules of section
199(d)(1)(A)(ii) to each qualified service-
providing partner shall be treated for purposes
of this section as W-2 wages paid during such
taxable year to such partner as an employee,
and
''(ii) the domestic business gross receipts
of such partnership for such taxable year shall
be reduced by the amount so treated.
''(B) Qualified service-providing partner.--For
purposes of this paragraph, the term 'qualified
service-providing partner' means, with respect to any
qualified domestic business taxable income, any partner
who is a 10-percent-or-less direct owner and who
materially participates in the trade or business to
which such income relates.
''(5) Acquisitions and dispositions.--The Secretary shall
provide for the application of this subsection in cases where
the taxpayer acquires, or disposes of, the major portion of a
trade or business or the major portion of a separate unit of a
trade or business during the taxable year.
''(c) Qualified Domestic Business Income.--For purposes of this
section--
''(1) In general.--The term 'qualified domestic business
income' for any taxable year means an amount equal to the
excess (if any) of--
''(A) the taxpayer's domestic business gross
receipts for such taxable year, over
''(B) the sum of--
''(i) the cost of goods sold that are
allocable to such receipts, and
''(ii) other expenses, losses, or
deductions (other than the deduction allowed
under this section), which are properly
allocable to such receipts.
''(2) Domestic business gross receipts.--
''(A) In general.--The term 'domestic business
gross receipts' means the gross receipts of the
taxpayer which are effectively connected with the
conduct of a trade or business within the United States
within the meaning of section 864(c) but determined--
''(i) without regard to paragraphs (3),
(4), and (5) thereof, and
''(ii) by substituting 'qualified small
business (within the meaning of section 200)'
for 'nonresident alien individual or a foreign
corporation' each place it appears therein.
''(B) Exceptions.--For purposes of paragraph (1),
domestic business gross receipts shall not include any
of the following:
''(i) Gross receipts derived from the sale
or exchange of--
''(I) a capital asset, or
''(II) property used in the trade
or business (as defined in section
1231(b)).
''(ii) Royalties, rents, dividends,
interest, or annuities.
''(iii) Any amount which constitutes wages
(as defined in section 3401).
''(3) Application of certain rules.--Rules similar to the
rules of paragraphs (2) and (3) of section 199(c) shall apply
for purposes of this section (applied with respect to qualified
domestic business income in lieu of qualified production
activities income and with respect to domestic business gross
receipts in lieu of domestic production gross receipts).
''(d) Qualified Small Business.--For purposes of this section--
''(1) In general.--The term 'qualified small business'
means any employer engaged in a trade or business if such
employer had fewer than 500 full-time equivalent employees for
either calendar year 2010 or 2011.
''(2) Full-time equivalent employees.--The term 'full-time
equivalent employees' has the meaning given such term by
subsection (d)(2) of section 45R applied--
''(A) without regard to subsection (d)(5) of such
section,
''(B) with regard to subsection (e)(1) of such
section, and
''(C) by substituting 'calendar year' for 'taxable
year' each place it appears therein.
''(3) Employers not in existence prior to 2012.--In the
case of an employer which was not in existence on January 1,
2012, the determination under paragraph (1) shall be made with
respect to calendar year 2012.
''(4) Application to calendar years in which employer in
existence for portion of calendar year.--In the case of any
calendar year during which the employer comes into existence,
the number of full-time equivalent employees determined under
paragraph (2) with respect to such calendar year shall be
increased by multiplying the number so determined (without
regard to this paragraph) by the quotient obtained by
dividing--
''(A) the number of days in such calendar year, by
''(B) the number of days during such calendar year
which such employer is in existence.
''(5) Special rules.--
''(A) Aggregation rule.--For purposes of paragraph
(1), any person treated as a single employer under
subsection (a) or (b) of section 52 (applied without
regard to section 1563(b)) or subsection (m) or (o) of
section 414 shall be treated as a single employer for
purposes of this subsection.
''(B) Predecessors.--Any reference in this
subsection to an employer shall include a reference to
any predecessor of such employer.
''(e) Special Rules.--
''(1) Elective application of deduction.--Except as
otherwise provided by the Secretary, the taxpayer may elect not
to take any item of income into account as domestic business
gross receipts for purposes of this section.
''(2) Coordination with section 199.--If a deduction is
allowed under this section with respect to any taxpayer for any
taxable year--
''(A) any gross receipts of the taxpayer which are
taken into account under this section for such taxable
year shall not be taken into account under section 199
for such taxable year, and
''(B) the W-2 wages of the taxpayer which are taken
into account under this section shall not be taken into
account under section 199 for such taxable year.
''(3) Application of certain rules.--Rules similar to the
rules of paragraphs (1), (2), (3), (4), (6), and (7) of section
199(d) shall apply for purposes of this section (applied with
respect to qualified domestic business income in lieu of
qualified production activities income).
''(f) Regulations.--The Secretary shall prescribe such regulations
as are necessary to carry out the purposes of this section, including
regulations which prevent a taxpayer which reorganizes from being
treated as a qualified small business if such taxpayer would not have
been treated as a qualified small business prior to such
reorganization.
''(g) Application.--Subsection (a) shall apply only with respect to
the first taxable year of the taxpayer beginning after December 31,
2011.''.
(b) Conforming Amendments.--
(1) Section 56(d)(1)(A) of such Code is amended by striking
''deduction under section 199'' both places it appears and
inserting ''deductions under sections 199 and 200''.
(2) Section 56(g)(4)(C) of such Code is amended by adding
at the end the following new clause:
''(vii) Deduction for domestic business
income of qualified small businesses.--Clause
(i) shall not apply to any amount allowable as
a deduction under section 200.''.
(3) The following provisions of such Code are each amended
by inserting ''200,'' after ''199,''.
(A) Section 86(b)(2)(A).
(B) Section 135(c)(4)(A).
(C) Section 137(b)(3)(A).
(D) Section 219(g)(3)(A)(ii).
(E) Section 221(b)(2)(C)(i).
(F) Section 222(b)(2)(C)(i).
(G) Section 246(b)(1).
(H) Section 469(i)(3)(F)(iii).
(4) Section 163(j)(6)(A)(i) of such Code is amended by
striking ''and'' at the end of subclause (III) and by inserting
after subclause (IV) the following new subclause:
''(V) any deduction allowable under
section 200, and''.
(5) Section 170(b)(2)(C) of such Code is amended by
striking ''and'' at the end of clause (iv), by striking the
period at the end of clause (v) and inserting '', and'', and by
inserting after clause (v) the following new clause:
''(vi) section 200.''.
(6) Section 172(d) of such Code is amended by adding at the
end the following new paragraph:
''(8) Domestic business income of qualified small
businesses.--The deduction under section 200 shall not be
allowed.''.
(7) Section 613(a) of such Code is amended by striking
''deduction under section 199'' and inserting ''deductions
under sections 199 and 200''.
(8) Section 613A(d)(1) of such Code is amended by
redesignating subparagraphs (C), (D), and (E) as subparagraphs
(D), (E), and (F), respectively, and by inserting after
subparagraph (B) the following new subparagraph:
''(C) any deduction allowable under section 200,''.
(9) Section 1402(a) of such Code is amended by striking
''and'' at the end of paragraph (16), by redesignating
paragraph (17) as paragraph (18), and by inserting after
paragraph (16) the following new paragraph:
''(17) the deduction provided by section 200 shall not be
allowed; and''.
(c) Clerical Amendment.--The table of sections for part VI of
subchapter B of chapter 1 of such Code is amended by adding at the end
the following new item:

''Sec. 200. Domestic business income of qualified small businesses.''.

Passed the House of Representatives April 19, 2012.

Attest:

KAREN L. HAAS,

Clerk.
Student:
Small Business Tax Cut Act - Amends the Internal Revenue Code to allow a qualified small business a tax deduction equal to 20% of the lesser of qualified domestic business income or taxable income. Defines: (1) "qualified small business" as any employer engaged in a trade or business if such employer had fewer than 500 full-time employees in either 2010 or 2011; and (2) "qualified domestic business income" as an amount equal to the excess (if any) of the taxpayer's domestic business gross receipts (i.e., gross receipts effectively connected with a trade or business within the United States) for a taxable year over the sum of the cost of goods sold allocable to such receipts and other expenses, losses, or deductions properly allocable to such receipts.

Limits the amount of such deduction to 50% of the greater of: (1) the taxpayer's W-2 wages (payroll) paid to non-owners of the taxpayer's business; or (2) the sum of the W-2 wages paid to individuals who are non-owner family members of direct owners (i.e., stockholders of the business), plus any W-2 wages paid to direct owners who have an ownership interest in the business of 10% or less.

Directs the Secretary of the Treasury to prescribe regulations to carry out this Act, including regulations to prevent a taxpayer that reorganizes from being treated as a qualified small business if such taxpayer would not have been treated as a qualified small business prior to such reorganization.