text: 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.
target: 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.
feat_title: Small Business Emancipation Act of 1996