article: SECTION. 1. SHORT TITLE. This Act may be referred to as the ``Small Business Emancipation Act of 1996''. SEC. 2. DEFINITION. For purposes of this Act the term small-business concern has the meaning given such term in section 3(a)(1) of the Small Business Act (15 U.S.C. 632(a)(1)). TITLE I--LABOR PROVISIONS SEC. 101. SIMPLIFICATION OF EMPLOYEE'S ``REGULAR RATE'' FOR PURPOSES OF CALCULATING OVERTIME COMPENSATION. Notwithstanding 7(e) of the Fair Labor Standards Act of 1938 (29 U.S.C. 207(e)), the ``regular rate'' at which an employee of a small- business concern is employed shall not be deemed to include sums paid in recognition of services performed during a given period if the payments are made to reward an employee or group of employees for meeting or exceeding the productivity, quality, efficiency, or sales goals as specified in a gainsharing, incentive bonus, commission, or performance contingent bonus plan. SEC. 102. COMPENSATORY TIME. Notwithstanding section 7(o) of the Fair Labor Standards Act of 1938 (29 U.S.C. 207(o))-- (1) An employee of a small-business concern may receive, in accordance with this subsection and in lieu of monetary overtime compensation, compensatory time off at a rate not less than 1\1/2\ hours for each hour of employment for which overtime compensation is required by this subsection. (2) An employer may provide compensatory time under paragraph (1) only pursuant to-- (A) applicable provisions of a collective bargaining agreement, memorandum of understanding, or any other agreement between the employer and representative of such employees; or (B) in the case of employees not covered by subparagraph (A), an agreement or understanding arrived at between the employer and employee before the performance of the work. (3) An employee may accrue not more than 240 hours of compensatory time. Not later than January 31 of each calendar year, the employee's employer shall provide monetary compensation for any compensatory time off accrued during the preceding calendar year which was not used prior to December 31 of the preceding year at a rate not less than 1\1/2\ times the regular rate earned by the employee at the time the employee receives such payment. An employer may designate and communicate to the employer's employees a 12-month period other than the calendar year, in which case such compensation shall be provided not later than 31 days after the end of such 12- month period. (4) An employee who has accrued compensatory time off authorized to be provided under paragraph (1) shall, upon termination of employment, be paid for the unused compensatory time at a rate of compensation not less than-- (A) the average regular rate received by such employee during the last 3 years of the employee's employment, or (B) the final regular rate received by such employee, whichever is higher. (5) An employee-- (A) who has accrued compensatory time off authorized to be provided under paragraph (1), and (B) who has requested the use of such compensatory time, shall be permitted by the employee's employer to use such time within a reasonable period after making the request if the use of the compensatory time does not unduly disrupt the operations of the employer. (6) For purposes of this subsection the terms ``compensatory time'' and ``compensatory time off'' mean hours during which an employee is not working, which are not counted as hours worked during the applicable workweek or other work period for purposes of overtime compensation, and for which the employee is compensated at the employee's regular rate. SEC. 103. FLEXIBLE AND COMPRESSED SCHEDULES. (a) Compressed Schedules.--Notwithstanding any other provision of law, a small-business concern employer may establish programs that allow the use of a compressed schedule that consists of-- (1) in the case of a schedule of a full-time employee, a 160-hour basic work requirement, over a 4-week period, that is scheduled for less than 20 workdays; and (2) in the case of a schedule of a part-time employee, a basic work requirement of less than 160 hours, over a 4-week period, that is scheduled for less than 20 workdays. (b) Flexible Schedules.--Notwithstanding any other provision of law, a small-business concern employer may establish programs that allow the use of flexible schedules that include-- (1) designated hours and days during which an employee on such a schedule must be present for work; and (2) designated hours during which an employee on such a schedule may elect the time of the arrival of such employee at and departure of such employee from work, solely for such purpose or, if and to the extent permitted, for the purpose of accumulating credit hours to reduce the length of the workweek or another workday. SEC. 104. SMALL-BUSINESS CONCERN AUDIT EXEMPTION. Notwithstanding any other provision of law, a small-business concern shall not be required to disclose any information obtained through a voluntary internal audit to any regulatory agency. SEC. 105. EXEMPTION FROM THE DAVIS-BACON ACT. The provisions of the Act of March 3, 1931 (40 U.S.C. 276a et seq.) (commonly referred to as the Davis-Bacon Act) shall not apply to any laborers or mechanics employed by small-business concerns. SEC. 106. OCCUPATIONAL SAFETY AND HEALTH STANDARDS. (a) Standard Basis.--Section 6(b) of the Occupational Safety and Health Act (29 U.S.C. 655(b)) is amended by inserting after paragraph (8) the following: ``(9) In establishing standards under this section, the Secretary shall consider and make findings concerning whether there is a reasonable relationship between the costs and benefits of the standard, and the particular effects of the standard on small-business concerns.''. (b) Violations.--Section 17 of the Occupational Safety and Health Act (29 U.S.C. 666) is amended by redesignating subsection (l) as subsection (m) inserting after subsection (k) the following: ``(l) In the case of any small-business concern employer who received a citation for a violation of the requirements of section 5, any standard, rule, or order promulgated pursuant to section 6 or of any regulations prescribed under this Act, the Secretary shall waive up to 100 percent of such penalty to the extent that the employer uses the amount which would have been paid as penalty for correction of the violation. This subsection shall apply where ``(1) the employer has made a good faith effort to comply with applicable regulation, and ``(2) the violation does not constitute a significant threat to an employee's health or safety or is not a criminal violation.''. (c) Employee Participation.--The Occupational Safety and Health Act (29 U.S.C. 651 et seq.) is amended by adding at the end the following: ``employee participation ``Sec. 33. In order to carry out the purposes of this Act to encourage employers and employees in their efforts to reduce the number of occupational safety and health hazards, an employee participation committee or other mechanism-- ``(1) in which employees participate, ``(2) which exists for the purpose, in whole or in part, of dealing with employees concerning the safety or health of working conditions or related matters, and ``(3) which does not have, claim, or seek authority to negotiate or enter into collective bargaining agreements with an employer or to amend existing collective bargaining agreements between and employer and any labor organization, shall not constitute a `labor organization' for purposes of section 8(a)(2) of the National Labor Relations Act or a representative for purposes of sections 1 and 2 of the Railway Labor Act.''. (d) Small Business Assistance and Training.--The Occupational Safety and Health Act, as amended by paragraph (3), is amended by adding after section 33 the following: ``small business assistance and training ``Sec. 34. (a) The Secretary shall establish and implement a program to provide technical assistance and consultative services for employers and employees, either directly or by grant or contract, concerning worksite safety and health and compliance with this Act. Such assistance shall be targeted at small employers and the most hazardous industries. ``(b) This subsection authorizes the consultative services to employers provided under cooperative agreements between the States and the Occupational Safety and Health Administration and described in part 1908 of title 39 of the Code of Federal Regulations. ``(c) Not less than one-fourth of the annual appropriation made to the Secretary to carry out this Act shall be expended for the purposes described in this section.''. (e) Voluntary Protection Program Award.--The Occupational Safety and Health Act, as amended by paragraph (4), is amended by adding after section 34 the following: ``voluntary protection program award ``Sec. 35. (a) The Secretary shall establish an award which shall periodically be made to small-business concerns which have implemented particularly effective approaches to addressing occupational safety and health in the workplace, including those which provide for effective employee involvement in improving safety and health and which are as a consequence deserving of special recognition. ``(b) A company or organization to which an award is made under subsection (a) and which agrees to help other American companies or organizations improve their occupational safety and health may publicize its receipt of such award and use the award in its advertising, but it shall be ineligible to receive another such award in the same category for a period of 5 years. ``(c)(1) Subject to paragraph (2), separate awards shall be made to qualifying organizations and companies in each of the following categories-- ``(A) manufacturing; ``(B) agricultural; ``(C) concerns providing services; ``(D) retail; and ``(E) construction. ``(2) Not more than 1 award may be made within any subcategory in any year (and no award shall be made within any category if there are no qualifying enterprises in that category. ``(d) An organization or company may qualify for an award under subsection (a) only if it-- ``(1) applies to the Secretary in writing, for the award, ``(2) permits a rigorous evaluation of its occupational safety and health operations, and ``(3) meets such requirements and specifications as the Secretary determines to be appropriate to achieve the objectives of this section. In applying paragraph (3) with respect to any organization or company, the Secretary shall rely upon an intensive evaluation of the occupational safety and health operation. The examination should encompass all aspects of the organization's or company's current occupational safety and health practice. The award shall be given only to organizations and companies which have made outstanding improvements in their occupational safety and health practices and which demonstrate effective occupational safety and health practices through the training and involvement of all levels of personnel. ``(e) The Secretary shall ensure that all program participants receive the complete results of their audits as well as detailed explanations of all suggestions for improvements. The Secretary shall also provide information about the awards and the successful quality improvement strategies and programs of the award-winning participants to all participants and other appropriate groups. ``(f) The Secretary is authorized to seek and accept gifts from public and private sources to carry out the program under this section. If additional sums are needed to cover the full cost of the program, the Secretary shall impose fees upon the organizations and companies applying for the award in amounts sufficient to provide such additional sums. ``(g) The Secretary shall prepare and submit to the President and the Congress, within 3 years after the date of the enactment of this section, a report on the progress, findings, and conclusions of activities conducted pursuant to this section along with recommendations for possible modifications thereof.''. SEC. 107. PROHIBITION OF PREFERENTIAL TREATMENT. (a) It shall be an unlawful employment practice for any small business concern employer to grant preferential treatment to any individual or group with respect to selection for, discharge from, compensation for, or the terms, conditions, or privileges of, employment or union membership, on the basis of the race, color, religion, sex, or national origin of such individual or group, for any purpose, except as provided in subsection (b). (b) It shall not be unlawful employment practice for an entity described in subsection (a) to undertake affirmative action designed to recruit individuals of an underrepresented race, color, religion, sex, or national origin, to expand the applicant pool of the individuals seeking employment or union membership with the entity. (c) Nothing in the amendments made by this subsection shall be construed to affect the authority of courts to remedy intentional discrimination under section 706(g) of the Civil Rights Act of 1964 (Public Law 88-352). TITLE II--TAX PROVISIONS SEC. 201. EXCLUSION FROM GROSS ESTATE OF INTERESTS IN CERTAIN SMALL BUSINESSES. (a) In General.--Part III of subchapter A of chapter 11 of the Internal Revenue Code of 1986 (relating to gross estate) is amended by adding at the end the following new section: ``SEC. 2047. EXCLUSION OF QUALIFIED SMALL BUSINESS INTERESTS. ``(a) In General.--If the executor elects the application of this section, the value of the gross estate shall not include the value of the qualified small business interests of the decedent which are otherwise includible in the estate. ``(b) Qualified Small Business Interest.--For purposes of this section-- ``(1) In general.--The term `qualified small business interest' means-- ``(A) an interest as a proprietor in a small- business concern which is a trade or business carried on as a proprietorship, or ``(B) an interest as a partner in a small-business concern which is a partnership, or stock in a small- business concern which is a corporation, carrying on a trade or business, if more than 50 percent of such partnership or corporation (by vote or value) is owned by the decedent. ``(2) Small-business concern.--For purposes of this subsection, the term `small-business concern' has the meaning given such term in section 3(a)(1) of the Small Business Act. ``(3) Indirect ownership.--For purposes of determining ownership under paragraph (1), the rules of section 318 shall apply. ``(4) Limitation to small-business concerns in united states.--The term `qualified small business interest' shall not include any interest in a small-business concern the principal place of business of which is not in the United States or its possessions.'' (b) Clerical Amendment.--The table of sections for part III of subchapter A of chapter 11 of such Code is amended by adding at the end the following new item: ``Sec. 2047. Exclusion of qualified small business interests.'' (c) Effective Date.--The amendments made by this section shall apply to estates of decedents dying after the date of the enactment of this Act. SEC. 202. EXCLUSION OF 401(k) PLANS FROM TOP-HEAVY RULES. (a) In General.--Paragraph (4) of section 416(g) of the Internal Revenue Code of 1986 (relating to special rules for top-heavy plans) is amended by adding at the end the following new subparagraph: ``(H) 401(k) plans.--The term `top heavy plan' shall not include a qualified cash or deferred arrangement, as defined in section 401(k).'' (b) Effective Date.--The amendment made by subsection (a) shall apply to plan years ending after the date of the enactment of this Act. SEC. 203. NO DISQUALIFICATION BY REASON OF GOOD FAITH ADMINISTRATIVE ERROR. (a) In General.--Section 401 of the Internal Revenue Code of 1986 (relating to qualified pension, profit-sharing, and stock bonus plans) is amended by redesignating subsection (o) as subsection (p) and by inserting after subsection (n) the following new subsection: ``(o) No Disqualification By Reason of Good Faith Administrative Error.-- ``(1) In general.--A trust shall not be disqualified for purposes of this part by reason of a good faith administrative error which is-- ``(A) de minimis, or ``(B) inadvertent, if such error is corrected within a reasonable period of time after the employer is notified (by the Secretary or by any other person) of the error. ``(2) Inadvertent.--For purposes of paragraph (1), an error shall be treated as inadvertent if made without knowledge or reason to know of the error.'' (b) Report on Definitions.--Not later than 90 days after the date of the enactment of this Act, the Secretary of the Treasury shall submit to the Congress a report setting forth the proposed interpretation by the Secretary of the terms ``good faith administrative error'' and ``de minimis'' for purposes of subsection (o) of section 401 of the Internal Revenue Code of 1986, as added by this section. (c) Effective Date.--The amendment made by subsection (a) shall apply to plan years ending after the date of the enactment of this Act.
summary: TABLE OF CONTENTS: Title I: Labor Provisions Title II: Tax Provisions Small Business Emancipation Act of 1996 - Title I: Labor Provisions - States that the "regular rate" at which a small business employee (SBE) is employed shall not include sums paid under a performance plan as a reward for meeting or exceeding productivity, quality, efficiency, or sales goals. Authorizes an SBE to receive, in lieu of overtime compensation, compensatory time off at a rate of not less than one and one-half hours off for each hour of employment for which overtime compensation would have been paid. Limits the annual accrual of compensatory time to 240 hours. Provides for the payment of unused compensatory time upon termination. (Sec. 103) Authorizes a small business employer to establish compressed and flexible work schedules. (Sec. 104) States that a small business shall not be required to disclose to any regulatory agency any information obtained through a voluntary internal audit. (Sec. 105) Exempts laborers or mechanics employed by a small business from the provisions of the Davis-Bacon Act. (Sec. 106) Amends the Occupational Safety and Health Act (the Act) to: (1) direct the Secretary of Labor, in establishing occupational safety and health (OSH) standards, to consider the relationship between the costs and benefits of a standard and its effect on small businesses; (2) authorize the Secretary to waive up to 100 percent of an OSH violation penalty to be paid by a small business to the extent that the employer uses the amount to correct the violation; and (3) provide that an employee participation committee formed to attempt to reduce the number of OSH hazards shall not be considered a "labor organization" for purposes of specified labor representation provisions. Directs the Secretary to: (1) establish and implement a program to provide technical assistance and consultative services for small business employers and employees concerning worksite OSH and compliance with the Act; (2) establish an award to be periodically made to small businesses which have implemented effective approaches to addressing OSH in the workplace; and (3) prepare and submit to the President and the Congress a report on the progress, findings, and conclusions of activities conducted under this section, along with recommendations for modifications. (Sec. 107) Prohibits a small business employer from granting preferential treatment to any individual or group on the basis of race, color, religion, sex, or national origin. Title II: Tax Provisions - Amends the Internal Revenue Code to: (1) exclude from the gross estate the value of a qualified small business interest of a decedent; (2) exclude a qualified cash or deferred arrangement from the definition of a "top heavy plan"; and (3) provide that a trust shall not be disqualified from consideration as a qualified pension, profit-sharing, or stock-bonus plan by reason of a good faith administrative error.