U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1 

99–011 2011

112th Congress, 1st Session – – – – – – – – – – – – – House Document 112–53 

THE ‘‘AMERICAN JOBS ACT OF 2011’’ LEGISLATIVE 

PROPOSAL 

MESSAGE 

FROM

THE PRESIDENT OF THE UNITED STATES 

TRANSMITTING

A LEGISLATIVE PROPOSAL ENTITLED THE ‘‘AMERICAN JOBS ACT 

OF 2011’’ 

SEPTEMBER 13, 2011.—Message and accompanying papers referred to the 

Committees on Education and the Workforce, Energy and Commerce, 

Financial Services, House Administration, the Judiciary, Oversight and 

Government Reform, Rules, Science, Space, and Technology, Small Business, Transportation and Infrastructure, and Ways and Means and ordered to be printed 


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To the Congress of the United States: 

Today, I am pleased to submit to the Congress the enclosed legislative proposal, the ‘‘American Jobs Act of 2011,’’ together with a 

section-by-section analysis of the legislation. 

The American people understand that the economic crisis and 

the deep recession were not created overnight and will not be 

solved overnight. The economic security of the middle class has 

been under attack for decades. That is why I believe we need to 

do more than just recover from this economic crisis—we need to rebuild the economy the American way, based on balance, fairness, 

and the same set of rules for everyone from Wall Street to Main 

Street. We can work together to create the jobs of the future by 

helping small business entrepreneurs, by investing in education, 

and by making things the world buys. 

To create jobs, I am submitting the American Jobs Act of 2011— 

nearly all of which is made up of the kinds of proposals supported 

by both Republicans and Democrats, and that the Congress should 

pass right away to get the economy moving now. The purpose of 

the American Jobs Act of 2011 is simple: put more people back to 

work and put more money in the pockets of working Americans. 

And it will do so without adding a dime to the deficit. 

First, the American Jobs Act of 2011 provides a tax cut for small 

businesses, to help them hire and expand now, and an additional 

tax cut to any business that hires or increases wages. In addition, 

the American Jobs Act of 2011 puts more money in the pockets of 

working and middle class Americans by cutting in half the payroll 

tax that comes out of the paycheck of every worker, saving typical 

families an average of $1,500 a year. 

Second, the American Jobs Act of 2011 puts more people back to 

work, including teachers laid off by State budget cuts, first responders and veterans coming back from Iraq and Afghanistan, 

and construction workers repairing crumbling bridges, roads and 

more than 35,000 schools, with projects chosen by need and impact, 

not earmarks and politics. It will repair and refurbish hundreds of 

thousands of foreclosed homes and businesses in communities 

across the country. 

Third, the American Jobs Act of 2011 helps out-of-work Americans by extending unemployment benefits to help them support 

their families while looking for work, and by reforming the system 

with training programs that build real skills, connect to real jobs, 

and help the long-term unemployed. It bans employers from discriminating against the unemployed when hiring, and provides a 

new tax credit to employers hiring workers who have been out of 

a job for over 6 months. And, it expands job opportunities for hundreds of thousands of low income youth and adults through a new 

Pathways Back to Work Fund that supports summer and year 

round jobs for youth; innovative new job training programs to conVerDate Mar 15 2010 06:20 Sep 14, 2011 Jkt 099011 PO 00000 Frm 00003 Fmt 6633 Sfmt 6633 E:\HR\OC\HD053.XXX HD053

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nect low-income workers to jobs quickly; and successful programs 

to encourage employers to bring on disadvantaged workers. 

Lastly, this legislation is fully paid for. The legislation includes 

specific offsets to close corporate tax loopholes and asks the 

wealthiest Americans to pay their fair share that more than cover 

the cost of the jobs measures. The legislation also increases the deficit reduction target for the Joint Committee by the amount of the 

cost of the jobs package and specifies that, if the Committee 

reaches that higher target, then their measures would replace and 

turn off the specific offsets in this legislation. 

I urge the prompt and favorable consideration of this proposal. 

BARACK OBAMA. 

THE WHITE HOUSE, September 12, 2011. 


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SECTION-BY-SECTION ANALYSIS AND EXPLANATION OF THE

‘‘AMERICAN JOBS ACT OF 2011’’ 

Section 1—Short Title; Table of Contents. This section provides 

that the bill may be cited as the ‘‘American Jobs Act of 2011’’ and 

includes a table of contents for the bill. 

Section 2—References. This section specifies that generally any 

reference to ‘‘this Act’’ contained in any subtitle of the bill refers 

only to the provisions of that subtitle. 

Section 3—Severability. This section specifies that, if any provision of the bill is held invalid, the remainder of the bill is not affected. 

Section 4—Buy American—Use of American Iron, Steel, and 

Manufactured Goods. This section provides for the use of American 

iron, steel and manufactured goods, except in certain instances. 

Section 5—Wage Rate Requirements. This section provides for 

specific wage rate requirements. All laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal 

government pursuant to the American Jobs Act of 2011 would have 

to be paid not less than the wages prevailing in the locality for 

similar projects as determined by the Secretary of Labor in accordance with the Davis-Bacon Act. 

TITLE I—TAX RELIEF FOR WORKERS AND BUSINESSES 

SUBTITLE A—PAYROLL TAX RELIEF

Section 101—Temporary Payroll Tax Cut for Employers, Employees, and the Self-Employed. This section extends and expands the 

existing temporary reduction in payroll taxes. For calendar year 

2012, it: (a) further reduces the Old Age, Survivors and Disability 

Insurance (social security) portion of the payroll tax that was paid 

by employees during 2011 from 4.2 percent (reflecting the existing 

2 percent temporary reduction from the permanent rate) to 3.1 percent; and (b) adds a new reduction in the portion of this tax that 

is paid by employers from 6.2 percent to 3.1 percent. The employer 

reduction applies to up to $5 million of wages that are paid by the 

employer. With limited exceptions, the reduction in amounts paid 

by employers is available to all employers, whether private businesses or tax-exempt organizations. The employer reduction is not 

available, however, to Federal, State and local government employers (other than State colleges and universities) or with respect to 

household workers. This section contains equivalent reductions for 

individuals subject to self-employment taxes. Transfers from general revenues are provided to protect the social security trust fund. 

Section 102—Temporary Tax Credit for Increased Payroll. For 

the last quarter of 2011 and for calendar year 2012, the proposal 

provides a payroll tax credit that fully offsets the employer social 

security tax that otherwise would apply to increases in wages from 

the corresponding period of the prior year. For example, if an employer paid wages subject to social security tax of $5 million in 

2011 and $6 million in 2012, the credit to which the employer 

would be entitled would eliminate the employer’s portion of social 

security taxes on the $1 million of increased wages. The credit 


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would be available on up to $50 million of an employer’s increased 

wages. Generally, the credit is available to all employers, whether 

private businesses or tax-exempt organizations, but would not be 

available to Federal, State and local government employers (other 

than State colleges and universities) or with respect to household 

workers. Transfers from general revenues are provided to protect 

the social security trust fund. 

SUBTITLE B—OTHER RELIEF FOR BUSINESSES

Section 111—Extension of Temporary 100 Percent Bonus Depreciation for Certain Business Assets. Under current law, businesses 

generally are allowed to immediately deduct 100 percent of the cost 

of qualified property placed in service in 2011 and 50 percent of the 

cost of such property placed in service in 2012. To encourage additional capital investment, this section extends the ability of businesses to deduct 100 percent of the cost of qualified property 

through the end of 2012. 

Section 112—Surety Bonds. Subsection (a) temporarily increases 

the size of contract surety bond that the Small Business Administration (SBA) can guarantee from $2,000,000 to $5,000,000. This 

will make it easier for small businesses to take advantage of contracting opportunities generated by the American Jobs Act’s proposed infrastructure investments. Subsection (b) amends the section of the Small Business Investment Act that limits liability for 

surety bond guarantees in situations when the guarantee was obtained by fraud or material misrepresentation, the surety has 

breached a material item of the guarantee agreement, or the surety 

has violated SBA’s surety bond regulations, in order to make that 

section consistent with the higher surety bond guarantee limit. 

Subsection (c) provides that the increased surety loan size will sunset at the end of fiscal year 2012. Subsection (d) provides 

$3,000,000 in mandatory funding to the Surety Bond Guarantees 

Revolving Fund to cover the estimated cost of this section. 

Section 113—Delay in Application of Withholding on Government 

Contractors. This section would delay the effective date of the requirement that governmental entities withhold at a 3 percent rate 

from payments to persons providing certain property or services. 

Under this section, this withholding requirement would apply to 

payments made after December 31, 2013. 

TITLE II—PUTTING WORKERS BACK ON THE JOB WHILE 

REBUILDING AND MODERNIZING AMERICA 

SUBTITLE A—VETERANS HIRING PREFERENCES

Section 201—Returning Heroes and Wounded Warriors Work Opportunity Tax Credits. Under current law, employers that hire veterans who have been unemployed for at least 6 months and have 

a service-connected disability are eligible for a maximum tax credit 

of $4,800. This section increases the amount of that credit to 

$9,600. This section also creates two new hiring credits for veterans. The first is a credit of $2,400 for employers that hire veterans who have been unemployed for at least 4 weeks. The second 

is credit of $5,600 for veterans who have been unemployed for at 

least 6 months. Under this section, these credits are also available 


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to tax-exempt entities and public universities. Finally, this section 

authorizes the Secretary of the treasury to provide alternative 

methods for certifying a veteran’s unemployed status. 

SUBTITLE B—TEACHER STABILIZATION

Section 202—Purpose. This section establishes the purpose of 

this subtitle as the prevention of teacher layoffs and creation of additional jobs in public early childhood, elementary, and secondary 

education. 

Section 203—Grants for the Outlying Areas and the Secretary of 

the Interior; Availability of Funds. This section reserves, from the 

amount provided in section 212, up to one-half of one percent for 

outlying areas and up to one-half of one percent for Bureau of Indian Education (BIE) schools, and allow the Secretary to reserve up 

to $2,000,000 for administration and oversight. Under subsection 

(b), funds provided in section 212 would be made available to the 

Secretary until September 30, 2012. 

Section 204—State Allocation. This section allocates the remaining funds to the States based on population, through a grant to the 

Governor of each State who submits an approvable application. 

Under subsection (c), if a Governor does not submit an approvable 

application, the Secretary of Education would distribute those 

funds to other entities in the State, provided the Governor assures 

maintenance of effort for fiscal years 2012 and 2013. Under subsection (d), the Secretary would reallocate funds to the remaining 

States if a State does not receive funding or receives only 50 percent of its allocation. 

Section 205—State Application. This section allows Governors 30 

days from the enactment of the Act to submit an application for a 

grant. 

Section 206—State Reservation and Responsibilities. This section 

authorizes States to reserve 10 percent of their grants for Statefunded preschool programs and to reserve 2 percent for administrative costs. Subsection (b) would require States to support early, elementary, and secondary education by distributing the remaining 

grant funds to local educational agencies (LEAs) no later than 100 

days after receiving a grant. Subsection (c) prohibits a State from 

using the funds to support a rainy-day fund or reduce debt obligations. 

Section 207—Local Educational Agencies. This section limits the 

use of funds by local educational agencies to those necessary to retain existing employees, rehire former employees, or hire new employees to provide early, elementary, or secondary educational and 

related services and excludes the use of funds for general administrative expenses. It also requires the funds to be obligated by September 30, 2013. 

Section 208—Early Learning. This section limits the use of funds 

by State-funded preschool programs to those necessary to retain 

early childhood educators, recall or rehire former early childhood 

educators, or hire new early childhood educators to provide early 

learning services, and requires the funds to be obligated by September 30, 2013. 

Section 209—Maintenance of Effort. This section of the bill requires a State to provide an assurance to the Secretary that, for 


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fiscal years 2012 and 2013, the State will maintain State support 

for early childhood, elementary, and secondary education and public institutions of higher education at the same level of support as 

the previous fiscal year or higher. Subsection (b) allows the Secretary to waive this maintenance of effort requirement in the event 

of exceptional or uncontrollable circumstances, or a precipitous decline in the financial resources of the State. 

Section 210—Reporting. This section requires each State that receives a grant under this part to submit, on an annual basis, a report to the Secretary that contains a description of how funds received were expended or obligated, and an estimate of the number 

of jobs supported by the State using funds received under this subtitle. 

Section 211—Definitions. This section defines the terms used in 

Subtitle B. 

Section 212—Authorization of Appropriations. This section authorizes and appropriates $30,000,000,000 to carry out this subtitle 

for fiscal year 2012. 

SUBTITLE C—FIRST RESPONDER STABILIZATION

Section 213—Purpose. This section indicates that the purpose of 

this subtitle is to provide funding to States and localities to prevent 

layoffs and support the creation of additional jobs for law enforcement officers and other first responders. 

Section 214—Grant Program. This section provides authority for 

the Attorney General to carry out a competitive grant program as 

authorized by section 1701 of title I of the Omnibus Crime Control 

and Safe Streets Act of 1968 (42 U.S.C. 3796dd) to support hiring, 

rehiring, and retention of career law enforcement officers. This section further waives the requirements of subsections (g) and (i) of 

section 1701 and section 1704 of such Act (42 U.S.C. 3796dd–3(c)), 

which limit the Federal contribution for grants to 75 percent, terminate the authority to hire and rehire law enforcement officers 

after September 13, 2000, and limit annual salaries and benefits 

paid for by the grants to $75,000. 

Section 215—Appropriations. This section makes available 

$5,000,000,000 to carry out the program identified in section 214 

for fiscal year 2012, permitting funds to remain available through 

September 30, 2012. This section further authorizes the transfer of 

$1,000,000,000 of this funding to the Department of Homeland Security to provide for competitive grants to support the hiring of 

first responder personnel, as authorized by 15 U.S.C. 2201 et seq., 

and to carry out section 34 of that Act (15 U.S.C. 2229a). This section also permits the Secretary to waive the requirements of subsections (a)(1)(A), (a)(1)(B), (a)(1)(E), (c)(1), (c)(2), and (c)(4)(A) of 

section 34, which, among other requirements, would limit the use 

of the funds as well as the duration of availability and funding 

amounts of grants. This section further permits that up to 

$8,000,000 of the amounts made available to the Department of 

Justice to be used for program administration, and up to 

$2,000,000 of amounts made available to the Department of Homeland Security may be used for program administration. 


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SUBTITLE D—SCHOOL MODERNIZATION

Part I—Elementary and Secondary Schools 

Section 221—Purpose. This section states that the purpose of 

Subtitle D is to provide assistance for the modernization, renovation, and repair of elementary and secondary school buildings in 

public school districts across America, in order to support the 

achievement of improved educational outcomes in those schools. 

Section 222—Authorization of Appropriations. This section authorizes and appropriates $25,000,000,000, which would be available for obligation until September 30, 2012, to carry out this part. 

Section 223—Allocation of Funds. This section reserves one-half 

of one percent of the appropriated funds for BIE schools and outlying areas. It also permits funds to be reserved for a National 

Center for Education Statistics (NCES) survey on public school 

modernization, renovation, and repair needs. This section also allocates funds to the 100 LEAs with the largest numbers of children 

living in poverty, and provides for the remainder of funds to be allocated to States in proportion to their respective allocations under 

Part A of Title I of the Elementary and Secondary Education Act 

(ESEA) for fiscal year 2011. 

Section 224—State Use of Funds. This section allows a State to 

reserve no more than 1 percent (with a maximum of $750,000) for 

grant administration. It would also require States to allocate at 

least 50 percent of their funds to LEAs (other than those 100 LEAs 

described in section 1203(b)) based on their respective allocations 

under Part A of Title I of the ESEA for FY2011, with a minimum 

grant of $10,000. This section also authorizes States to use any remaining funds for grants to LEAs as needed, with priority to rural 

LEAs. 

Section 225—State and Local Applications. This section describes 

State and local application requirements. 

Section 226—Use of Funds. This section provides for the use of 

funds under this part. 

Section 227—Private Schools. This section allows certain private, 

nonprofit elementary or secondary schools to be eligible to receive 

program services for limited purposes, including meeting requirements of the Americans with Disabilities Act and the Rehabilitation Act. 

Section 228—Additional Provisions. This section makes funds appropriated under this Part available to LEAs for obligation for 24 

months, and allows LEAs to obligate funds for 36 months from the 

date of enactment. It also states that section 439 of the General 

Education Provisions Act (GEPA) applies to this Part and clarifies 

that Hawaii, the District of Columbia, and the Commonwealth of 

Puerto Rico are not LEAs for the purpose of receiving direct grants 

from the Secretary under subsection 223(b)(1). 

Part II—Community College Modernization 

Section 229—Federal Assistance for Community College Modernization. This section authorizes the Secretary of Education to 

award grants to States to modernize, renovate, or repair existing 

facilities at community colleges. This section also reserves up to 

0.25 percent for grants to Tribally Controlled Universities and outVerDate Mar 15 2010 06:20 Sep 14, 2011 Jkt 099011 PO 00000 Frm 00009 Fmt 6602 Sfmt 6602 E:\HR\OC\HD053.XXX HD053

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lying areas and provides for the Secretary’s allocation to each 

State. It also: (1) allows the Secretary to reallocate any remaining 

funds proportionately; (2) allows a State to reserve 1 percent (up 

to $750,000) for grant administration; (3) requires that funds be 

used to supplement, and not supplant, other Federal, State, and 

local funds that would otherwise be expended to modernize, renovate, or repair existing community college facilities; (4) lists the 

application requirements for States; (5) prohibits the use of funds 

under this Part for the payment of routine maintenance costs, or 

for construction, modernization, renovation, or repair of stadiums 

or facilities used for religious instruction or worship; (6) requires 

States to consider ‘‘green projects’’ in their funding of subgrants; (7) 

establishes that section 439 GEPA applies to this part; (8) requires 

States to report on their use of funds and job creation; (9) requires 

the Secretary of Education to report on grants made; and (10) authorizes and appropriates $5,000,000,000 for fiscal year 2012, available for obligation only during the period that ends 36 months after 

the date of enactment of this Act. 

Part III—General Provisions 

Section 230—Definitions. This section defines several applicable 

terms used in this subtitle. 

Section 231—Buy American. This section establishes that Section 

1605 of Division A of the American Recovery and Reinvestment Act 

of 2009 (P.L. 111–5) applies to funds made available under this 

subtitle. 

SUBTITLE E—IMMEDIATE TRANSPORTATION INFRASTRUCTURE

INVESTMENTS

Section 241—Immediate Transportation Infrastructure Investments. Subsection (a) of this section makes available $2 billion for 

airport development grants. Grants made available under the section would have a 100 percent Federal share. Additionally, this 

subsection permits 0.3 percent of the available funds to be used for 

administrative expenses. 

Subsection (b) makes $1 billion available to conduct research and 

development and demonstrations and to acquire, establish, and improve FAA air navigation facilities, systems, and procedures to advance NextGen. 

Subsection (c) provides $27 billion for highway restoration, repair, and construction projects, as well as passenger and freight 

rail transportation projects, distributed via traditional formulas 

that were also utilized in the Recovery Act. A portion of the funds 

within each State would be sub-allocated by population areas. To 

speed project delivery, the Federal share of project costs would be 

100 percent. In addition, set asides are specifically provided for: (1) 

Puerto Rico and territorial highways; (2) Indian reservation roads; 

(3) park roads and parkways; (4) forest highways; (5) refuge roads; 

and (6) management and oversight, including funding for State Departments of Transportation planning activities. Competitive funding is also provided for transportation training programs, particularly focused on workforce skill gaps, and disadvantaged business 

enterprise training assistance. 


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Subsection (d) makes available $4 billion for projects to improve 

the Nation’s existing intercity passenger rail network and develop 

new high speed rail corridors. Grants made available under the 

section would have a 100 percent Federal share. The Secretary 

would be required to issue interim guidance to applicants detailing 

the application process and eligibility criteria, and not less than 85 

percent of the funds awarded shall be for projects supporting the 

development of intercity or high speed passenger rail corridors. 

Subsection (e) makes available $2 billion to Amtrak for the repair, rehabilitation, and upgrade of Amtrak’s assets and infrastructure, including rolling stock. 

Subsection (f) makes available $3 billion for transit capital 

projects, particularly for the purchase of new buses and for the repair and rehabilitation of existing rail and bus systems, including 

rolling stock. To speed project delivery, the Federal share of project 

costs would be 100 percent. Of the funds provided, 80 percent 

would be apportioned to urbanized areas with a population of at 

least 50,000, 10 percent shall be apportioned to ‘‘Growing States 

and High Density States’’ as provided in Section 5340 of title 49, 

and 10 percent shall be apportioned to non-urbanized areas with 

populations below 50,000. In addition, within the amount made 

available for apportionment to non-urbanized areas, 2.5 percent 

would be made available for tribal transit programs as provided in 

Section 5311(c)(1) of title 49. Funds apportioned to urbanized areas 

with a population of at least 50,000, but not more than 200,000 are 

eligible for both capital and operating assistance. Funds apportioned to non-urbanized areas are also eligible for operating assistance. 

Subsection (g) makes available $6 billion for capital projects to 

modernize existing fixed guideway systems and to replace and rehabilitate buses and bus facilities. To speed project delivery, the 

Federal share of project costs would be 100 percent. To target fixed 

guideway modernization funding to the transit systems with the 

highest need for state of good repair upgrades, 75 percent of the 

funds provided will be apportioned based on fixed guideway revenue vehicle miles and passenger miles, as provided in Section 

5336(b) of Title 49. The remaining 25 percent shall be available for 

bus and bus facilities and shall be apportioned based on formula 

in Section 5336 other than subsection (b). 

Subsection (h) provides $5 billion to award grants on a competitive basis for projects across all surface transportation modes that 

will have a significant impact on the Nation, a metropolitan area 

or a region. Provisions require the Secretary to publish criteria on 

which to base competition for the grants within 90 days of enactment, with priority for distribution of funds given to projects expected to be completed within three years of the date of enactment 

of the Act. This subsection also provides the Secretary the flexibility to provide other forms of federal credit assistance for capital 

investments in surface transportation infrastructure. 

Subsection (i) authorizes the Secretary to establish standards 

under which a contract for construction funded under subsections 

(a) through (h) of this section may be advertised that contains 

‘‘local hiring’’ requirements in some limited circumstances. 


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SUBTITLE F—BUILDING AND UPGRADING INFRASTRUCTURE FOR LONGTERM DEVELOPMENT

Section 242—Short Title; Table of Contents. The Act is entitled 

the Building and Upgrading Infrastructure for Long-Term Development (BUILD) Act. 

Section 243—Findings and Purpose. This section sets forth findings concerning, among other things, the importance of infrastructure and investing in infrastructure, the status of U.S. infrastructure as compared to other nations, and the issues surrounding our 

current funding mechanisms. It also sets forth the purpose of the 

Act, which is to create an institution that will mobilize significant 

private investment in economically viable infrastructure projects of 

regional or national significance in order to create jobs, reduce our 

infrastructure deficit, and support U.S. competitiveness. 

Section 244—Definitions. In this section-by-section, the definitions of significant terms are discussed in the sections below in 

which they appear. 

Part I—American Infrastructure Financing Authority 

Section 245—Establishment and General Authority of AIFA. This 

section establishes the American Infrastructure Financing Authority (AIFA) as a wholly-owned government corporation that will provide direct loans and loan guarantees to facilitate investment in 

economically-viable infrastructure projects of regional or national 

significance. As set forth in the—Definitions section of the Act, the 

term—infrastructure project includes projects from the transportation, water, and energy sectors. These sectors, in turn, include 

highways, roads, bridges, mass transit, inland waterways, commercial ports, airports, air traffic control systems, passenger rail, 

freight rail, water-waste treatment facilities, storm-water management systems, dams, solid-waste disposal facilities, levees, openspace management systems, pollution-reduced energy generation, 

transmission and distribution of energy, storage of energy, and energy-efficiency enhancements for buildings. The Board of Directors 

may make changes at its discretion to the subsectors by a vote of 

at least five of the voting members of the Board. This section further provides that AIFA shall be incorporated on the date of the 

first meeting of the Board of Directors, shall maintain and be considered a resident of Washington, D.C., and shall be exempt from 

the requirements set forth in chapter 91 of title 31 related to government corporations. Finally, this section requires the Secretary 

of the Treasury to take such action as may be necessary to assist 

AIFA in carrying out the purposes of this Act. 

Section 246—Voting Members of the Board of Directors. AIFA’s 

Board of Directors will consist of seven voting members, each of 

whom will have an equal vote and all of whom will be appointed 

by the President with the advice and consent of the Senate. The 

President will also designate the Chairperson of the Board. Congressional Leadership (the Majority and Minority Leaders of the 

Senate, and the Speaker and Minority Leader of the House) will 

submit recommendations to the President after consulting with the 

appropriate Congressional committees. No more than four of the 

voting members can be from the same political party. Further, to 


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be eligible to serve on the Board, the person must be a U.S. citizen 

and have significant expertise either in the management and administration of a relevant financial institution or in the financing, 

development, or operation of infrastructure projects. Voting members will serve a term of four years, except that the initial terms 

will be staggered for a subset of the Board. Voting members will 

be compensated at the daily equivalent of the annual rate of basic 

pay prescribed for level III of the Executive Schedule under section 

5314 of Title 5 for each day during which the member is engaged 

in the performance of Board duties. A board member will not participate in decisions regarding any AIFA project in which the member has a financial interest. 

Section 247—Chief Executive Officer of AIFA. This section provides that the President will appoint, with the advice and consent 

of the Senate, a Chief Executive Officer of AIFA for a term of six 

years. The CEO will be a nonvoting member of the Board of Directors. To be eligible to serve as CEO, the person must be a U.S. citizen and have significant expertise in the management or administration of a financial institution or the financing and development 

of infrastructure projects. Additionally, to be eligible, the candidate 

must not hold any other public office or have any interest in an infrastructure project that is being considered by the Board (unless 

that interest is placed in a blind trust). The CEO will be responsible for all activities of AIFA, including responsibility for the development of AIFA’s internal policies and responsibility for managing and overseeing AIFA’s daily activities and personnel. More 

specifically, the CEO will be responsible for appointing senior management (subject to Board approval), hiring and terminating all 

other AIFA personnel, overseeing AIFA’s involvement in the funded projects, and assessing and recommending in the first instance 

(subject to ultimate approval or disapproval by the Board) the compensation of all AIFA personnel. Although the Board is responsible 

for ultimately approving or disapproving loans and loan guarantees 

for applying projects, the CEO is responsible, in consultation with 

his or her staff, for developing eligible projects for AIFA support, 

for preparing the financial assistance packages for Board approval, 

and for monitoring any projects that receive funding. The CEO’s 

compensation recommendations will be without regard to chapter 

51 or subchapter III of chapter 53 of title 5. 

Section 248—Powers and Duties of the Board of Directors. This 

section lays out the powers and duties of the Board. It provides 

that the Board will be responsible for the ultimate review and approval of the eligible project applications and financial packages 

that are submitted by the CEO and senior management. The Board 

will also be responsible for, among other things, approving or disapproving any senior management appointed by the CEO, approving CEO-submitted documents concerning application and lending 

procedures, approving the compensation of AIFA personnel, approving business plans, strategies, and budgets, developing bylaws 

and conflict of interest policies, establishing subcommittees of the 

Board (including an audit committee), and ensuring that AIFA is 

operated in compliance with the Act. In setting and approving the 

compensation for the CEO and other AIFA personnel, the Board 

will consult with the Office of Personnel Management and seek to 


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maintain comparability with other comparable federal personnel. 

The Board will also have the general authority to execute and oversee AIFA’s contractual agreements, to determine appropriate expenses and obligations of AIFA, to approve other forms of credit enhancement that AIFA may provide to eligible projects consistent 

with the Act, to sue and be sued in AIFA’s corporate capacity, and 

to exercise all other lawful powers that are necessary to carry out 

AIFA’s purposes. 

Section 249—Senior Management. Senior management will be 

appointed by the CEO, subject to approval by the Board of Directors, and will serve at the pleasure of the CEO and the Board. 

Members of senior management include the Chief Financial Officer, Chief Risk Officer, Chief Compliance Officer, General Counsel, 

Chief Operations Officer, and Chief Lending Officer—each of whom 

will report directly to the CEO except for the Chief Risk Officer, 

who will report directly to the Board. The primary function of senior management will be to provide professional support to the CEO 

in the discharge of his or her duties. The section provides that: (1) 

the Chief Financial Officer will be responsible for all financial functions of AIFA except those functions that the Board delegates externally; (2) the Chief Risk Officer will be responsible for the creation of financial, credit, and operational risk management guidelines, the establishment of guidelines to ensure diversification of 

lending activities, the monitoring of the financial, credit, and operational exposure of AIFA, and the development of risk-management 

actions; (3) the Chief Compliance Officer will be responsible for 

AIFA functions relating to audits and accounting safeguards; that 

the General Counsel will be responsible for legal matters; (4) the 

Chief Operations Officer will be responsible for all AIFA operational functions, including those related to operations generally 

and human resources; and (5) the Chief Lending Officer will be responsible for all functions relating to the development of project 

pipelines, the financial structuring of projects, the selection of infrastructure projects to be reviewed by the Board, and related functions. The Chief Lending Officer will also be responsible for creating and managing both a Center for Excellence to provide technical assistance to public-sector borrowers and an Office of Rural 

Assistance to provide technical assistance for rural infrastructure 

projects. Finally, this section prevents members of senior management from holding any other public office and from having a financial interest in projects being considered (unless that interest is 

placed in a blind trust). 

Section 250—Special Inspector General for AIFA. This section 

provides that an Inspector General will oversee AIFA’s operations. 

For the first five years of AIFA’s existence, oversight responsibility 

will fall to the Inspector General of the Department of the Treasury. Beginning five years after enactment of the Act, an Office of 

the Special Inspector General for AIFA will be created. The Special 

IG for AIFA will be appointed by the President, with the advice 

and consent of the Senate. The primary duties of this office will be 

to conduct, supervise, and coordinate audits and investigations of 

AIFA’s business activities. The Inspector General Act of 1978 will 

apply to the Special IG of AIFA, and the Special IG may appoint 

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tities, departments, and agencies are obliged to comply with requests for information from the Special IG of AIFA. Not later than 

one year after the confirmation of the Special IG of AIFA, and 

every calendar year thereafter, the Special IG will submit to the 

President a report of his or her activities during the previous year. 

Section 251—Other Personnel. Except as otherwise provided in 

the bylaws of AIFA, the CEO (in consultation with the Board) shall 

appoint, remove, and define the duties of such qualified personnel 

as are necessary to carry out the duties and purposes of AIFA. 

Members of senior management are excluded from this section, as 

they are addressed in section 295. 

Section 252—Compliance. This section provides that the provision of financial assistance to projects under this Act shall not be 

construed as superseding any provision of State law or any regulation that is otherwise applicable to an infrastructure project. 

Part II—Terms and Limitations on Direct Loans and Loan Guarantees 

Section 253—Eligibility Criteria for Assistance from AIFA and 

Terms and Limitations of Loans. Financial assistance under this 

Act shall not be provided for any project whose purpose is private 

and for which no public benefit is created. Nor will financial assistance be provided for the refinancing of an existing project. Applicants are required to demonstrate to the satisfaction of the Board 

of Directors that the non-Federal project meets any pertinent requirements of this Act, any criteria established by the Board of Directors or CEO of AIFA, and the definition of a transportation and 

transportation-related infrastructure project, water infrastructure 

project, or energy infrastructure project as defined by this Act. The 

criteria established by the Board of Directors shall provide adequate consideration of the economic, financial, technical, environmental, and public costs of each infrastructure project under consideration for financial assistance under this Act. The criteria established by the Board of Directors shall also provide adequate consideration of: (1) the means by which an infrastructure project is 

being financed; (2) the likelihood that assistance from AIFA will accelerate the development of the project and lower the overall costs; 

(3) the extent to which assistance from AIFA maximizes private investment or supports a public-private partnership; (4) the extent to 

which the support mobilizes other financing; (5) the technical and 

operational viability of the infrastructure project; (6) the proportions of financial assistance from AIFA; (7) the geographic location 

of the project (in an effort to have geographic diversity); (8) the size 

of the project and its impact on the resources of AIFA; and (9) the 

infrastructure sector of the project (in an effort to have projects 

from more than one sector financed by AIFA). Entities seeking assistance from AIFA for an eligible infrastructure project shall submit an application to AIFA. The CEO, working with the senior 

management of AIFA, will prepare eligible infrastructure projects 

for review and approval by the Board of Directors. Applications are 

reviewed on an ongoing basis. An eligible project has a cost that 

is reasonably anticipated to equal or exceed $100 million, with the 

exception of rural projects. An eligible rural project has a cost that 

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lected for financing, the amount of any direct loan or loan guarantee shall not exceed the lesser of 50 percent of the reasonably anticipated eligible infrastructure project costs or—if the direct loan 

or loan guarantee does not receive an investment grade rating—the 

amount of the senior project obligations. The maximum amount of 

new direct loans and loan guarantees in AIFA’s first two fiscal 

years is limited to $10 billion each year. This increases to $20 billion per year after the second year of operations and through the 

ninth year, and increases to $50 billion per year after the ninth 

year of operations. 

Section 254—Loan Terms and Repayment. A direct loan or loan 

guarantee under this Act shall be on such terms and subject to 

such conditions as the CEO of AIFA determines appropriate, but 

there are certain threshold terms that will apply. First, a direct 

loan or loan guarantee under this Act shall be payable (in whole 

or part) from tolls, user fees, or other dedicated revenue sources 

that secure the senior payment obligations and shall include a rate 

covenant, coverage requirement, or similar security feature supporting the project obligations. Second, the base interest rate on a 

direct loan shall not be less than the yield on United States Treasury obligations of a similar maturity to the maturity of the direct 

loan. Third, the CEO of AIFA (in consultation with the Director of 

the Office of Management and Budget) shall estimate an appropriate federal credit subsidy amount for each direct loan and loan 

guarantee before entering an agreement for assistance. The final 

credit subsidy cost will be determined consistent with the Federal 

Credit Reform Act. The CEO of AIFA may charge a credit fee to 

the borrower to pay for all or a portion of the Federal credit subsidy. Fourth, the final maturity date of a direct loan or loan guarantee by AIFA shall be no later than 35 years after the date of substantial completion of the project (as determined by the CEO of 

AIFA). The CEO of AIFA will also require each applicant to provide an opinion letter from at least one rating agency. An opinion 

letter is not required for rural projects, as these projects will receive an internal rating score. The execution of loan and loan guarantees under this Act will be contingent on the senior obligations 

of the infrastructure project receiving an investment grade rating. 

The CEO of AIFA will establish a repayment schedule for each direct loan, with the repayment commencing no later than five years 

after the date of substantial completion. After the first five years 

of AIFA operations, the average rating of AIFA’s overall portfolio 

must be investment grade. The terms for loan guarantees are consistent with the terms set forth in this section for direct loans, except that a rate on the guaranteed loan and any payment, pre-payment, or refinancing features will be negotiated between the obligor 

and the lenders with the consent of the CEO of AIFA. Direct loans 

and loan guarantees under this Act are subject to the Federal 

Credit Reform Act. 

Section 255—Compliance and Enforcement. Entities that receive 

assistance from AIFA are required to enter into a credit agreement 

promising compliance with all policies and procedures of AIFA. The 

Board of Directors may take action to cancel utilized loan amounts 

or to accelerate the repayment terms of any outstanding obligations 


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if a recipient of assistance is materially out of compliance with the 

loan agreement or any applicable procedure of AIFA. 

Section 256—Audits; reports to the President and Congress. The 

books of AIFA shall be maintained with generally accepted accounting principles and shall be subject to an annual audit by public accountants appointed by the Board of Directors. Ninety days 

after the last day of each fiscal year, the Board of Directors will 

be required to submit to the President and Congress an annual report that provides a detailed assessment of the preceding fiscal 

year. The Government Accountability Office (GAO) is required to 

conduct an evaluation and to submit a report to Congress on the 

activities of AIFA no later than five years after the date of enactment. AIFA is required to maintain appropriate records to support 

AIFA’s financial transactions. The AIFA records are at all times 

open to inspection by the Secretary of the Treasury, the Special Inspector General, and the Comptroller General of the United States. 

Part III—Funding of AIFA 

Section 257—Administrative Fees. The CEO of AIFA shall establish fees that are sufficient to cover all or a portion of the administrative costs of AIFA. 

Section 258—Efficiency of AIFA. The CEO of AIFA shall make efforts to minimize the risk and cost to the taxpayer of AIFA activities while supporting the program’s objectives, in establishing fees 

and risk premiums on loans and loan guarantees. 

Section 259—Funding. This section authorizes and appropriates 

$10 billion, which is to remain available until expended. Portions 

of these funds are set aside in the early years for administrative 

costs. No more than five percent will be used to offset subsidy costs 

associated with rural infrastructure projects. 

Part IV—Extension of Exemption from Alternative Minimum Tax 

Treatment for Certain Tax-Exempt Bonds 

Section 260—Extension of Exemption from Alternative Minimum 

Tax Treatment for Certain Tax-Exempt Bonds. This section excludes from the alternative minimum tax (AMT) interest on tax-exempt private activity bonds for bonds issued in 2011 or 2012. 

SUBTITLE G—PROJECT REBUILD

This subtitle authorizes $15 billion in investments to put construction workers on the job rehabilitating and refurbishing hundreds of thousands of vacant and foreclosed homes and businesses. 

Building on proven approaches to stabilizing neighborhoods with 

high concentrations of foreclosures, Project Rebuild will bring in expertise and capital from the private sector, focus on commercial 

and residential property improvements, and expand innovative 

property solutions like land banks. The goals of this subtitle are to 

create jobs, as well as stabilize neighborhoods, reverse vacancy reduction, and increase or stabilize residential and commercial property values. 

Section 261—Project Rebuild. Subsection (a) includes $15 billion 

in direct appropriations and enumerates the eligible entities, including units of general local government, states, nonprofits, forprofits, and consortia. This section makes for-profits eligible to be 


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a potential direct grant recipients and not only as partners with a 

local government or non-profit entity. This addition is consistent 

with the added emphasis on job creation, innovation, and capacity 

to carry out real property acquisition. To offset potential new risks 

inherent in direct grants to for-profit entities, HUD will implement 

the enforcement policies and procedures as described at the end of 

the subtitle. 

Subsection (b)(1) describes the allocation of funds, with twothirds allocated by formula to States and local governments and 

one-third allocated competitively to all types of eligible entity. This 

split allows the program both to use the speed of a formula and to 

use the more policy-driven competitive process to bring new players 

with capacity into the program, spurring leverage and innovation. 

The formula mandated by subsections (b)(2) and (b)(3) will be developed and allocations made within 30 days of enactment. Entities 

eligible to receive formula allocations are States and units of general local government. The formula criteria subsection includes factors such as home foreclosures, mortgage defaults and delinquencies, and other criteria determined by the Secretary. As the 

nature of the causes of neighborhood de-stabilizing foreclosures has 

shifted over time, the formula factors are designed to capture 

greatest need areas and high capacity grantees. These factors will 

allow HUD to prepare a formula that will target effectively. Subsection (b)(4) describes the eligible entities for the competitively 

distributed funds and the competition factors. For-profit entities 

are included as possible direct grantees and factors have been 

added to identify applicant capacity to acquire foreclosed residential and commercial property and to demonstrate their knowledge 

of market conditions and appropriate responses. Capacity to undertake acquisition and stabilization activities is the most critical factor, so eligible entities will include consortia. The subsection requires publication of the competition NOFA within 60 days of enactment and submission of applications within 120 days. 

Under subsection (c), all funding must be obligated by HUD 

within 150 days, and eligible entities will have ambitious expenditure goals: 100 percent of funds expended within 3 years of receipt 

by the grantee, and the Secretary shall, by notice, establish expenditure benchmarks at the one- and two-year milestones. This 

ensures the program leverages experience and begins generating 

benefits sooner for targeted high need neighborhoods. Subsection 

(c) also requires each grantee to address how the use of funds will 

prioritize job creation. Other goals that must be addressed include 

neighborhood stabilization, vacancy rates, and stabilization of property values. This subsection also governs grantee targeting of resources. It requires grantees to target funds to needy geographical 

areas based on foreclosure-related factors. In addition, commercial 

foreclosures and higher than average unemployment will be considered in targeting. Grantees will be required to describe how their 

proposed use of funds will leverage private funds. 

Eligible uses of these funds include financing mechanisms, property acquisition/rehabilitation, land banks, demolition, and redevelopment. In addition, other eligible activities are property acquisition, direct homeownership assistance, homebuyer rehabilitation, 

property maintenance and disposition, and public improvements of 


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public facilities. Eligible property types include foreclosed, abandoned, blighted, demolished, and vacant residential and commercial 

property. Commercial properties may be used for job generating activities, providing another employment and neighborhood stabilization tool. Another eligible use will allow the Secretary to support 

innovative uses of funds that support program goals, especially job 

creation through special economic development or modernization of 

public facilities. 

Subsection (d)(1) requires that grantees not purchase properties 

at a price in excess of current market value. Subsection (d)(2) requires quality rehabilitation that brings properties to applicable 

codes and permits use of renewable energy sources. Subsection 

(d)(3) requires the sale of homes at an amount less than or equal 

to the acquisition or rehabilitation cost to ensure housing affordability. Subsection (d)(4) prohibits using the funds to demolish public housing. This is an important safeguard to ensure that funds 

are not used to decrease affordable housing. Subsection (d)(5) limits 

the use of funds for demolition of other types of housing unless the 

Secretary determines that more demolition is an appropriate response to market conditions. This helps focus grantees on appropriate responses to market conditions and ensures that the vast 

majority of funds are used in ways that increase job opportunities 

and affordable housing. Subsection (d)(6) limits the use of funds 

under certain eligible uses for commercial purposes to 30 percent 

of each grant. The majority of properties in foreclosure nationally 

are residential, not commercial. This limitation will help maintain 

an appropriate focus on each property type. The limitation will not 

apply to properties in land banks. Land banks are frequently used 

in areas of very high unemployment where a focus on commercial 

uses is appropriate. Further, the Secretary will be able to provide 

exceptions to this limitation where appropriate to address local 

market conditions. 

Subsection (e)(1) establishes the program within the frameworks 

of the Housing and Community Development Act of 1974 and title 

I of the Cranston-Gonzalez National Affordable Housing Act of 

1990, which ensure strong financial management accountability, 

citizen participation, environmental review delegations, and other 

time-tested established requirements. Subsection (e)(2) states that 

no match will be required. Subsection (e)(3) references the tenant 

protections requirements in prior enacted language to be applicable 

in this Act. The provisions require grantees to extend certain protections to legal tenants of foreclosed property acquired with funds. 

Subsection (e)(4) includes vicinity hiring requirements to emphasize local hiring preferences. Subsection (e)(5) applies the Buy 

American provisions that was in the American Recovery and Reinvestment Act of 2009 to this program. 

Subsection (f)(1) permits the Secretary to specify waivers and alternative requirements for provisions that underlie the Housing 

and Community Development Act of 1974 and the National Affordable Housing Act, to expedite and facilitate use of funds. However, 

the Secretary may not specify alternative requirements to fair 

housing, nondiscrimination, labor standards or environmental provisions under these laws. Subsection (f)(2) provides for the Secretary to provide written notice of intent to exercise the authority 


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to specify alternative requirements. This is consistent with the policy goal of increasing transparency. Subsection (f)(3) provides that 

the beneficiaries of the program are individuals and families whose 

income are 120 percent or less of the area median with 25 percent 

of the funds set aside for uses that provide housing for persons 

whose incomes are 50 percent or less of area median. This allows 

Project Rebuild to address the employment and housing needs of 

families with a wider range of incomes, but still ensuring assistance to lower income families. The Recurrent Requirement under 

subsection (f)(3)(B) directs the Secretary to take action to ensure 

long term affordability of residential property treated with Project 

Rebuild funds. Through notice, HUD will prescribe different affordability periods for different investment amounts, with greater investment resulting in longer affordability periods. Resale or recapture provisions are used for homeowner properties. 

Subsection (g) assures nationwide distribution of formula funds by providing a minimum of $20 million for each state. 

Subsection (h) limits the use of eminent domain so that it may 

not be used for purposes of economic development that primarily 

benefits private entities. 

Subsection (i) Limitation on distribution of funds does not allow 

grants to an organization that is itself or has employees that have 

been indicted for a violation under Federal law relating to election 

for Federal office. 

Subsection (j) requires every formula grantee to establish procedures related to the development of affordable rental housing. 

Many Project Rebuild grantees will be working in markets in which 

more rental housing is needed and this provision requires grantees 

to consider how to address these needs. 

Subsection (k) provides a 10 percent cap on the amount of funds 

in any grant that may be used to support a job-creating property 

maintenance program. This allows grantees to create short-term 

jobs on an interim basis while taking other actions to stabilize the 

neighborhood for the longer term. 

Subsection (l) allows 0.75 percent of the funds to be directed by 

HUD for grantee capacity building assistance and HUD expenses 

including, enforcement and program evaluation. With these funds, 

HUD will carry out its role in launching, overseeing, and closing 

out these grants. HUD’s use of the grantee capacity building funds 

will support continued improvements and operations of the online 

reporting system used to track financial and activity progress. 

Subsection (m) requires the Secretary to establish and implement 

procedures to prevent fraud, waste, and abuse of funds. Further, 

grantees will be required to have an internal auditor and to provide performance reports to HUD on a quarterly basis. This subsection also specifies that the sanction for failure to meet expenditure requirements, as determined by the Secretary, shall be recapture of funds and reallocation. The Secretary will only be able to 

take an alternative sanction if the action is necessary to achieve 

program goals in a timely manner. 

SUBTITLE H—NATIONAL WIRELESS INITIATIVE

Section 271—Definitions. This section defines several applicable 

terms used in this subtitle. 


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Part I—Auctions of Spectrum and Spectrum Management 

Section 272—Clarification of Authorities to Repurpose Federal 

Spectrum for Commercial Purposes. Subsections (a) and (b) permit 

Federal agencies to be fully reimbursed through the Spectrum Relocation Fund (SRF) for relocation costs (including planning costs 

that occur before an auction), to better enable agencies to evaluate 

the cost and scheduling implications of relocation activities, and 

thereby facilitate both an improved auction and relocation process 

while ensuring the continuity of agency missions. Also, subsection 

(b) allows for support of costs incurred by Federal agencies to allow 

shared and unlicensed use of spectrum assigned to agencies. 

Subsection (c) permits Federal agencies to be reimbursed for 

costs incurred in accommodating additional non-Federal access to 

their frequencies, as well as for studies related to sharing bands 

among Federal users. Reimbursable costs to enable sharing are 

consistent with system modifications made in the context of relocation. 

In addition, subsection (c) clarifies that the agencies are permitted to acquire state of the art replacement systems under the 

current-law standard of comparable capability of systems. Section 

101(c) also permits agencies to hire term-limited civil servant and 

contractor support staff to implement relocation projects, and provides further authority for expenditures related to planning in advance of an auction. Subsection (c) furthermore clarifies that the 

SRF can be used to reimburse agencies for the cost of using commercial services, if these services are the most cost effective way 

of vacating Federal frequencies while maintaining agency missions. 

Subsection (d) allows Federal agencies to enter into sharing arrangements with non-Federal entities, upon approval of NTIA and 

the Office of Management and Budget (OMB). Subsection (e) provides authority to the Director of OMB to transfer amounts from 

the SRF for the costs of activities (including planning) directly attributable to relocation of Federal systems. This section also extends the period of funds availability in the SRF from 8 to 15 

years, and provides additional flexibility beyond that period upon 

notification of the Congress. Furthermore, subsection (e) provides 

that up to 20 percent of the revenue from the auction of licenses 

associated with frequencies vacated by Federal agencies, or made 

available through sharing, may be used to enhance agency communications, radar and other spectrum using capabilities; this funding 

availability for enhancements would be in addition to the relocation 

costs covered under the current authorities, which provide for 

maintaining comparable capability for agencies. Use of funds for 

enhancements, like current authorities for relocation cost reimbursement, would be subject to notification of the appropriate Congressional committees. Subsection (f) clarifies that proceeds from 

non-federal spectrum auctioned and paired with spectrum from federal inventories is available to support relocation activities after retention of revenues by the Federal Communications Commission to 

support its auctions program. Subsection (g) provides for a classified annex, if required, for any reports and notifications arising 

from the requirements of Sections 923 and 928 of Title 47, including the provisions of the bill. 


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Section 273—Incentive Auction Authority. Subsection (a) authorizes the FCC to hold incentive auctions, where non-government 

holders of spectrum will be reimbursed for its value from a portion 

of auction proceeds in return for voluntarily relinquishing their 

spectrum rights. The method of determining the portion paid to licensees would be subject to review prior to implementation. This 

section would require the FCC to assign at least the first 84 megahertz from certain specified bands through a competitive bidding 

process. 

Section 274—Requirements When Repurposing Mobile Satellite 

Services Spectrum for Terrestrial Broadband Use. This section 

would require the FCC to recover a significant portion of the value 

of new terrestrial broadband deployment rights in certain spectrum 

frequencies that were originally set aside for satellite services either through competitive bidding procedures or spectrum fee authority. 

Section 275—Permanent Extension of Auction Authority. This section would make permanent FCC’s authority to auction spectrum, 

which expires on September 30, 2012, under current law. 

Section 276—Authority to Auction Licenses for Domestic Satellite 

Services. This section would clarify FCC’s authority to auction certain spectrum that is solely or predominantly used for domestic 

satellite communications. 

Section 277—Directed Auction of Certain Spectrum. This section 

requires certain spectrum assigned to Federal agencies or in FCC 

inventories to be identified by NTIA and auctioned by the Commission. The section provides procedures for the President to not auction certain Federal spectrum if the President determines that it 

is not in the public interest to do so and provided that alternative 

spectrum is identified. 

Section 278—Authority to Establish Spectrum License User Fees. 

This section creates a new subsection (m) under section 309 of the 

Communications Act of 1934, which provides the FCC with authority to establish, assess, and collect fees for initial spectrum licenses 

and construction permits that were not assigned by auction (competitive bidding) under section 309(j) and for modifications or renewals of initial licenses and other authorizations, whether granted 

through competitive bidding or not, based upon public interest 

principles (for example, if a modification increases the value of a 

license). Fee authority will assist the FCC in managing the spectrum efficiently in cases in which auctions are prohibited or may 

not be an appropriate assignment tool but in which it is important 

to ensure that license holders pay the opportunity costs of their 

spectrum use, such as mobile satellite spectrum that is also licensed for ancillary terrestrial services. 

Paragraph (1) of new subsection (m) requires the FCC to collect 

certain amounts in fees in each fiscal year from 2012 through 2021. 

Paragraph (2) governs the FCC’s development of regulations to implement its fee authority. Subparagraph (A) requires the FCC to 

conduct a rulemaking to establish a fee methodology and a fee collection schedule. The FCC is directed to develop a fee methodology 

consistent with the public interest, convenience, and necessity requirement, which is found throughout the Communications Act. 

The FCC is expected to undertake a multi-stage rulemaking during 


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which fees for different classes of spectrum licenses or construction 

permits may be developed and phased-in over time, consistent with 

sound spectrum management principles. It is expected that fees 

would encourage efficient allocation and use of the radio spectrum, 

as the opportunity cost of spectrum resources would be reflected to 

commercial license holders that did not receive authorizations 

through competitive bidding. The proposal specifies that the FCC 

may take the following factors into account when developing a fee 

methodology: (1) the highest value use of the spectrum that is forgone by the license or class of licenses or construction permits (i.e., 

the opportunity cost of spectrum use); (2) the scope and type of permissible services and uses; (3) the amount of spectrum and licensed 

coverage area; (4) shared versus exclusive use; (5) the level of demand for spectrum licenses or construction permits within a certain spectrum band or geographic area; (6) the amount of revenue 

raised on comparable licenses awarded through auction; and (7) 

such other factors that the FCC determines, in its discretion, are 

necessary to promote efficient and effective spectrum use. These 

factors may assist the FCC in determining which classes of spectrum licenses and construction permits should be subject to user 

fees and in developing a methodology that addresses the relative 

value of the spectrum to different classes of users. The FCC may 

consider other factors that may be raised during the rulemaking 

process. The FCC may also determine that certain classes of licenses or permits should be exempt from fees. 

Subparagraph (B) requires the FCC to conduct a rulemaking to 

establish a fee methodology and a fee collection schedule for entities holding Ancillary Terrestrial Component (ATC) authority on 

Mobile Satellite Service spectrum licenses. The FCC is directed to 

develop a fee methodology to collect an amount not less than a reasonable estimate of the value of the licenses over their term regardless of whether the spectrum is used for the ATC service. The FCC 

may take the same factors under subparagraph (A) into account 

when developing a fee methodology for the spectrum used for ATC 

service. 

Subparagraph (C) directs the FCC to commence a rulemaking regarding fees as a spectrum management tool within 60 days of enactment of the Act. The FCC is also directed to take all actions necessary so that fees for first class or classes of spectrum licenses or 

construction permits can be collected by September 30, 2012. 

Subparagraph (D) provides clarification that the FCC may modify the fee methodology or revise the rules implementing fees either 

through separate rulemakings, or as part of rulemakings or proceedings involving spectrum-based services, licenses, permits, and 

uses. Such modifications or revisions may add or modify classes of 

spectrum license or construction permit holders that must pay fees, 

and reflect appropriate increases or decreases in fees as a result of 

the addition, deletion, reclassification, or other change in a spectrum-based service or use, including changes in the nature of a 

spectrum-based service or use as a consequence of FCC rulemaking 

proceedings or changes in law. Such modifications or revisions can 

take effect upon the date established in the FCC’s rulemaking or 

in the law. 


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Subparagraph (E) provides an exemption from spectrum licensing fees for holders of licenses for broadcast television and public 

safety radio services. The meaning of ‘‘emergency response providers’’ is derived from the definition of the term found in section 

2(6) of the Homeland Security Act of 2002. Federal agencies are not 

FCC licensees and would not be subject to FCC fees. 

Paragraph (3) directs the FCC to assess penalties for late payment of fees. Paragraph (4) provides the FCC with the authority 

to revoke a license or permit if the license or construction permit 

holder has failed to pay to the FCC the fee or penalty authorized 

under this subsection. Paragraph (5) requires that all proceeds collected by the FCC under this section of the legislation be deposited 

in the Treasury’s General Fund. 

Part II—Public Safety Broadband Network 

Section 281—Reallocation of D Block for Public Safety. This section would reallocate spectrum known as the D block for use by 

first responders and other public safety uses. Under current law, 

the spectrum would be auctioned. 

Section 282—Flexible Use of Narrowband Spectrum. This section 

would allow the FCC to authorize broadband technologies to operate in spectrum currently designated for legacy narrowband and 

other land mobile radio technologies used for public safety operations. 

Section 283—Single Public Safety Wireless Licensee. This section 

would grant the Public Safety Broadband Corporation, which is established under section 284, the license for the D block of spectrum 

in addition to certain spectrum held for public safety use by 

broadband technologies. 

Section 284—Establishment of Public Safety Broadband Corporation. This section establishes the Public Safety Broadband Corporation to promote the construction and development of a nationwide 

public safety network. The section designates that the Corporation 

is not an agency or establishment of the U.S. or District of Columbia governments. 

Section 285—Board of Directors of the Corporation. This section 

establishes that the Corporation shall have a board of directors 

comprised of Federal and non-Federal members. The section also 

provides procedures for the election of non-Federal members, qualifications, terms of apportionment, and other matters. 

Section 286—Officers, Employees, and Committees of the Corporation. This section describes the officers and employees of the corporation and compensation among other issues. 

Section 287—Nonprofit and Nonpolitical Nature of the Corporation. This section prohibits the Corporation from profiting on its assets, issuing stock, or supporting political parties or candidates for 

elective office. 

Section 288—Powers, Duties, and Responsibilities of the Corporation. This section describes the Corporation’s authorities and responsibilities in deploying a nationwide public safety broadband 

network. 

Section 289—Initial Funding for the Corporation. This section 

provides up to $50 million to the National Telecommunications and 

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penses before proceeds from spectrum auctions authorized in this 

bill are realized. 

Section 290—Permanent Self-Funding; Duty to Assess and Collect 

Fees for Network Use. This section allows the Corporation to charge 

fees for the use of the public safety broadband network’s capacity, 

whether public safety users or commercial users on a secondary 

basis. It also requires that fees cover the operations of the network 

after the initial expenditure of Federal funds and that proceeds 

from fees be reinvested in the network. 

Section 291—Audit and Report. This section requires that the 

Comptroller General have access to the Corporation’s financial 

records in years where federal funds are available to finance operations. The section also requires the Comptroller General to submit 

reports to appropriate committees of Congress, the President, and 

the Corporation after an audit is conducted. 

Section 292—Annual Report to Congress. This section requires 

the Corporation to submit an annual report to Congress and the 

President on its activities. 

Section 293—Provision of Technical Assistance. This section allows the Commission and the Departments of Commerce, Justice 

and Homeland Security to provide technical assistance to the Corporation in carrying out its duties. 

Section 294—State and Local Implementation. This section authorizes a grant program to be administered by NTIA for states 

and localities to plan for the nationwide public safety broadband 

network. 

Section 295—State and Local Implementation Fund. This section 

creates a State and Local Implementation Fund for the grant program authorized in section 294. The fund is authorized to spend up 

to $100 million, and up to this amount could be borrowed from future spectrum proceeds to operate the program before proceeds 

from an auction are realized. 

Section 296—Public Safety Wireless Communications Research 

and Development. This section authorizes the program at the National Institute of Standards and Technology to develop technical 

requirements and standards for the public safety broadband network. 

Section 297—Public Safety Trust Fund. This section establishes 

the Public Safety Trust Fund, where proceeds from certain spectrum auctions are authorized to be deposited. This section provides 

$7 billion to build and operate the nationwide public safety 

broadband network as well as conduct research to develop standards for the network. Specifically, $200 million is provided to the 

state and local grant program to plan for and implement the network, $6.5 billion is provided for network construction (including 

up to $50 million of initial funding provided by NTIA) and up to 

$300 million is provided for the public safety communications research and development activities authorized in section 296. Funds 

are available until fiscal year 2016. In addition, after funds have 

been provided to licensees that participate in incentive auctions, 

the Commission may deposit $1 billion in the incentive auction relocation fund for the purpose of compensating licensees for costs incurred in repacking spectrum to make contiguous blocks available. 


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Section 298—FCC Report on Efficient Use of Public Safety Spectrum. This section requires the Commission to report on use of 

spectrum assigned to public safety entities. This includes an examination of spectrum use, whether efficiency can be increased, and 

the feasibility of repurposing spectrum. 

Section 299—Public Safety Roaming and Priority Access. This 

section provides the Commission with authority to adopt rules that 

allow public safety entities to roam and have priority access on 

commercial networks in emergencies if certain conditions are met. 

TITLE III—ASSISTANCE FOR THE UNEMPLOYED AND 

PATHWAYS BACK TO WORK 

SUBTITLE A—SUPPORTING UNEMPLOYED WORKERS

Section 301—Short Title. This section provides that this subtitle 

may be cited as the ‘‘Supporting Unemployed Workers Act of 2011’’. 

Part I—Extension of Emergency Unemployment Compensation and 

Certain Extended Benefits Provisions, and Establishment of 

Self-Employment Assistance Program 

This part provides for the extension of emergency unemployment 

compensation and certain extended benefits and establishes the 

self-employment assistance program. 

Section 311—Extension of Emergency Unemployment Compensation Program. This section generally provides for the extension of 

emergency unemployment compensation benefits. Subsection (a) 

would extend the emergency unemployment compensation (EUC) 

program for individuals to enter the program (upon exhaustion of 

regular unemployment compensation (UC) payments) by one year 

to January 3, 2013. It also would extend the transition period so 

individuals would be permitted to continue to receive amounts remaining in their EUC accounts until June 8, 2013. Subsection (b) 

would continue general revenue funding of EUC benefits and related administrative costs. Subsection (c) would provide that the 

amendments made by this section take effect as if included in the 

enactment of the Unemployment Compensation Extension Act of 

2010. 

Section 312—Temporary Extension of Extended Benefit Provisions. This section generally provides for the extension of certain 

extended benefits. Subsection (a) would extend 100 percent Federal 

funding of most extended benefits (EB) by one year to January 4, 

2013. It also would extend the transition period by one year so 100 

percent federal funding of EB would continue until June 11, 2013 

for individuals who started receiving EB before January 4, 2013. 

Subsection (b) would extend 100 percent Federal funding of the 

first week of EB by one year to June 9, 2013. Subsection (c) would 

extend by one year the temporary modification to EB indicators, 

which makes it easier for EB to remain payable in states, to December 31, 2012. Subsection (d) would provide that the amendments made by this section take effect as if included in the enactment of the Unemployment Compensation Extension Act of 2010. 

Section 313—Reemployment Services and Reemployment and Eligibility Assessment Activities. This section generally provides for 

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ment services and reemployment and eligibility assessments to certain emergency unemployment compensation recipients. Subsection 

(a) would require, as a condition of the Federal-State agreement 

permitting States to pay EUC, that States provide reemployment 

services and reemployment and eligibility assessment activities to 

each individual receiving EUC who, beginning 30 days after enactment of the Act, first establishes an EUC account or who begins 

to receive the amounts available under tiers 2, 3, or 4 of the EUC 

program. 

These services and activities would be provided from funds appropriated for this purpose. Staff of State agencies administering 

UI or the Wagner-Peyser Act would provide these services and activities, which would include: the provision of labor market and career information; an assessment of the individual’s skills; orientation to services available in One-Stop centers; job search counseling 

and development or review of individual’s reemployment plan (including participation in job search activities, workshops, or appropriate training); and review of the individual’s eligibility for EUC 

relating to the individual’s job search efforts. States also would be 

authorized to use the funds to provide: comprehensive and specialized assessments; career counseling; and additional reemployment 

services. EUC claimants would be required to participate in the 

services or activities to which they are referred, as a condition of 

continuing EUC eligibility, unless the State agency determines 

there is justifiable cause for the failure to participate. Finally, the 

Secretary of Labor would be required to issue guidance on implementation of the required services and assessments no later than 

30 days after enactment of the Act. 

Subsection (b) provides that the funds for such services and assessments would be appropriated from the general fund of the 

Treasury out of the employment security administration account. 

The total amount of funding appropriated would equal the number 

of individuals the Secretary estimates would receive such services 

and assessment activities multiplied by $200. Each State would 

then receive a distribution equal to the number of individuals who 

would receive the services and assessment activities multiplied by 

$200. 

Section 314—Federal-State Agreements to Administer a Self-Employment Assistance Program. This section would amend the EUC 

law to permit States to enter into an agreement with the Secretary 

of Labor to establish self-employment assistance (SEA) programs, 

which would permit the payment of EUC as self-employment allowances to eligible individuals. For an individual who chooses to participate in the program, the SEA allowances would be paid for up 

to 26 weeks from amounts remaining in such individual’s EUC account, and the amounts in such account would be reduced accordingly. For purposes of this title, the term ‘‘self employment assistance program’’ would mean a program as defined in section 3306(t) 

of the Internal Revenue Code of 1986, except as follows: participation would not be limited to individuals who were identified pursuant to a State worker profiling system as likely to exhaust regular 

unemployment compensation; entrepreneurial training would not 

be mandatory and would be available in coordination with programs of the Small Business Administration; and participation 


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would be capped at 1 percent of the number of individuals receiving EUC. SEA allowances only would be available to individuals 

that the State agency reasonably expects would have at least 26 

times their average weekly benefit amount in potential EUC entitlement remaining. Further, an individual who chooses to terminate his or her participation in the SEA program, or who has completed participation in the program, and who continues to meet the 

EUC eligibility requirements, would be permitted to receive 

amounts remaining in their EUC accounts with respect to subsequent weeks of unemployment. 

Section 315—Conforming Amendment on Payment of Bridge To 

Work Wages. This section would authorize States that establish a 

bridge to work program under Part II of this Act to deduct 

amounts from an individual’s EUC account to pay the individual’s 

wages during participation in the program. 

Section 316—Additional Extended Unemployment Benefits Under 

the Railroad Unemployment Insurance Act. This section 106 would 

amend the Railroad Unemployment Insurance Act to extend 

through December 31, 2012, the temporary increase in extended 

unemployment benefits for employees with 10 or more years of 

service and for those with less than 10 years of service. This section would make pre-existing appropriated funds under such Act 

available to cover the cost of such extended unemployment benefits 

as well as the costs of current benefits. 

Part II—Reemployment NOW program 

This part establishes the Reemployment NOW program. 

Section 321—Establishment of Reemployment NOW Program. 

This section would authorize and appropriate $4 billion for fiscal 

year 2012 for the Secretary of Labor to establish and carry out a 

Reemployment NOW program, which would facilitate the reemployment of individuals receiving emergency unemployment compensation. 

Section 322—Distribution of Funds. This section provides for the 

distribution of funds to carry out the Reemployment NOW program. Subsection (a) provides that the Secretary of Labor may reserve up to 1 percent of the funds appropriated for the program to 

pay the costs of Federal administration and for rigorous evaluations of the activities that are carried out by the States under the 

program. The remaining 99 percent or more of the funds would be 

allotted among the States that receive approval of State plans. 

Subsection (b) provides the formula for allotting funds among the 

States. Two-thirds of the funds would be allotted on the basis of 

the relative number of unemployed individuals in each State and 

one-third would be allotted on the basis of the relative number of 

individuals who have been unemployed for 27 weeks or more in 

each State. Subsection (c) provides for the reallotment of funds. If 

a State does not submit a plan by the required date, or fails to receive approval of its plan, the State’s allotment is reallotted to 

States with approved plans, using the allotment formula. The Secretary of Labor also is authorized, in accordance with guidance 

issued by the Secretary, to recapture and reobligate funds if the 

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poses of the program. Funds recaptured by the Secretary would be 

available for reobligation until December 31, 2012. 

Section 323—State Plan. This section provides the requirements 

for the State plan. Subsection (a) provides that for a State to be 

eligible to receive an allotment under the program, the State must 

submit a State plan in the form and containing the information the 

Secretary may require. At a minimum, the plan is to include: (1) 

a description of the activities to be carried out and an estimate of 

how the State intends to allocate funds among the authorized activities; (2) the performance outcomes to be achieved; (3) the coordination of activities with the activities under other Federal programs; (4) timelines for implementation; assurances that the State 

will participate in evaluation activities; (5) assurances that reemployment services will be provided for EUC claimants who participate in program activities; and (6) assurances that the State will 

report on any information required by the Secretary relating to fiscal, performance and other matters. Subsection (b) requires that a 

State submit plans not later than 30 days after the Secretary 

issues guidance. The Secretary is to approve the plans that meet 

the requirements of the program and are appropriate and adequate 

to carry out the program’s purposes. Subsection (c) authorizes 

modifications to the State plan. 

Section 324—Bridge to Work Program. This section provides for 

the establishment of a bridge to work program. Subsection (a) 

would authorize a State to use Reemployment NOW funds to provide a bridge to work program. 

Subsection (b) would provide that, under the bridge to work program, eligible individuals would have the option to engage in shortterm work experiences with an eligible employer. During participation in the bridge to work program, an individual receiving EUC 

would: continue to receive EUC as wages for work performed for 

the participating employer; receive any augmented wages, if applicable, under subsection (e); and could be paid compensation by a 

participating employer or by a State that is in addition to EUC and 

augmented wages paid. 

Subsection (c) establishes program and eligibility requirements. 

Under this provision, an individual would be paid EUC from his or 

her EUC account as wages during the bridge to work program. 

Bridge to work wages are to be paid in the same amount as EUC; 

however, some EUC requirements would not apply, specifically, requirements with respect to work search and disqualifying income 

would not apply, as long as a participating individual works at 

least 25 hours. 

Subsection (c) further provides that State limitations or prohibitions on the work status of an EUC claimant shall not render the 

individual ineligible to participate in, or receive wages from, the 

bridge to work program. A participating individual would be permitted to accept an offer of long-term employment from a participating employer that commences after the conclusion of the bridge 

to work program, and this acceptance would not render such individual ineligible to participate in, or receive wages from, the program. 

Subsection (c) would also require a State to structure the program so that bridge to work placements could last for up to 8 


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weeks and could provide an individual who voluntarily participates 

in the program with up to 38 hours of work experience per week 

with an eligible employer. Additionally, this subsection would require that the State ensure that all bridge to work participants are 

covered by a workers’ compensation insurance program, and that 

the State meets other requirements as may be established by the 

Secretary of Labor. 

Subsection (d) would establish eligibility requirements for employers wishing to participate in the program. Specifically, subsection (d) would provide that an employer is not eligible for the 

bridge to work program if the employer is: a Federal, State, or local 

government entity; would provide work relating to government contracts and grants (other than supply contracts); is delinquent on 

any Federal unemployment insurance tax or State contribution obligations, or related reporting requirements; is engaged in the business of supplying workers to other employers and would participate 

in the program to supply participating individuals to other employers; or has previously failed to meet program requirements. In addition, the employer must provide assurances that it has not displaced existing workers. 

Subsection (d) would also require that States use allotted funds 

to: recruit employers for participation in the program; review and 

certify employers identified by eligible individuals seeking to participate in the program; ensure that reemployment and counseling 

services are made available to program participants; establish and 

implement processes to monitor the progress and performance of 

individual participants for the duration of the program; prevent 

misuse of the program; and pay augmented wages under subsection 

(e) to eligible individuals, if necessary. 

Finally, subsection (d) would permit States to use allotted funds 

to pay workers’ compensation insurance premiums to cover all individuals participating in the program through a State administered 

workers’ compensation program, except that a State could choose 

another method of providing this coverage, which the State would 

have to describe in the approved State plan. The State also could 

use allotted funds: to pay compensation to participating individuals 

that is in addition to EUC and augmented wages paid; to provide 

supportive services, such as transportation, child care, and dependent care, which would enable individuals to participate in the program; to administer and oversee the program; and to fulfill additional program requirements included in the approved State plan. 

Subsection (e) would require that, to the degree EUC payments 

are insufficient to meet minimum wage thresholds under the Fair 

Labor Standards Act of 1938, or any applicable State or local laws 

(whichever is higher), the State would be required to augment a 

bridge to work participant’s wages by the amount necessary to 

meet the applicable minimum wage. 

Subsection (f) would specify that neither the emergency unemployment compensation paid as wages, nor the augmented wages 

received by a program participant, could be treated as income for 

Federal needs-based programs. 

Subsection (g) would prohibit any wages or participation relating 

to the bridge to work program from being considered as factors that 


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render an individual ineligible for emergency unemployment compensation. 

Subsection (h) would prohibit a participating employer from: displacing current employees with a program participant. In addition, 

an employer could not permit a program participant to perform 

work activities relating to any job for which any other individual 

is on layoff, a current worker was terminated, there is a strike or 

lockout at the workplace, or for which the job would infringe on a 

current worker’s promotional opportunities. 

Subsection (i) would provide that work activities under the program also could not impair a contract for services or a collective 

bargaining agreement without the concurrence of the relevant 

labor organization. 

Subsection (j) would place certain limits on employer participation. Specifically, if, after 24 weeks an employer has not provided 

an offer of suitable employment to any individual who has participated in the program with the employer, the State would be required to bar the employer from further participation. In addition, 

States would be permitted to impose additional conditions on participating employers to ensure that an appropriate number of participants receive offers of suitable long term employment. 

Subsection (k) would permit a State to bar an employer from further participation if the State receives information or, through its 

oversight and administration of the program, determines that the 

employer has violated a requirement or a prohibition relating to 

the program. Subsection (k) also would require a participating 

State to establish a process whereby a participating individual may 

file a complaint with the State relating to any violation of a requirement or prohibition under this section. 

Subsection (l) would provide that an eligible individual’s participation in the program is voluntary, and may be terminated by the 

individual or the participating employer. If a bridge to work participant opts to discontinue participation in the program, or is terminated by the employer, the individual would potentially remain eligible for continued receipt of emergency unemployment compensation under the terms of the applicable law, as long as amounts remain available in such individual’s emergency unemployment compensation account. 

Subsection (m) provides that nothing in this section is to be construed to alter or affect the rights or obligations under any Federal, 

State, or local laws that apply to individual participants and to employer participants under the program. 

Subsection (n) provides that all wages and other payments to 

participating individuals under this section would be treated as 

payments of unemployment insurance for purposes of section 209 

of the Social Security Act, subtitle A of the Internal Revenue Code 

of 1986, and sections 3101 and 3111 of such Code. 

Section 325—Wage Insurance. This section generally provides for 

a wage insurance program. Subsection (a) would permit a State to 

use Reemployment NOW funds to establish a wage insurance program in the State for EUC claimants. Subsection (b) provides that 

the State may make payments to EUC claimants who obtain reemployment that pays less than the employment from which the 

claimant was separated. The amount of the payments could be up 


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to 50 percent of the difference between the reemployment wages 

and the wages at separation, and such payments could last for a 

period of up to 2 years. Subsection (c) provides that in order to be 

eligible for wage insurance payments, the EUC claimant must be 

at least 50 years of age, earn not more than $50,000 in wages from 

reemployment, be reemployed on a full-time basis, and not be reemployed by the same employer from which the claimant was laid 

off. Subsection (d) provides that the State is to establish a maximum amount that an eligible individual may receive under the 

program. Subsection (e) requires that the employer who provides 

the reemployment is to pay the eligible individual the same wages 

as regular workers in the same or substantially equivalent position. 

Section 326—Enhanced Reemployment Strategies. This section 

would permit a State to use allotted Reemployment NOW funds to 

provide EUC claimants with enhanced reemployment services. A 

State also could opt to provide individuals who have exhausted 

their right to EUC, and who remain unemployed, with such services. Subsection (a) would require that the services offered under 

any such program must be more intensive than the reemployment 

services previously provided by the State. 

Subsection (b) provides that services that qualify as enhanced reemployment services include: assessments, counseling, and other 

intensive services that are provided by staff on a one-to-one basis 

and may be customized to meet the reemployment needs of the 

EUC claimant and individuals who have exhausted their right to 

EUC and who remain unemployed; comprehensive assessments designed to identify alternative career paths; case management; reemployment services that are provided more frequently and more 

intensively than those previously offered by the State; and services 

that are designed to enhance communication skills, interviewing 

skills, and other skills that would assist in obtaining reemployment. 

Section 327—Self-Employment Programs. This section would authorize a State to use allotted Reemployment NOW funds for administrative costs related to the start-up of a self-employment assistance program. The amount of any funds a State intends to use 

for such costs must be specified in the State’s approved State plan. 

Section 328—Additional Innovative Programs. Subsection (a) 

would permit the Secretary of Labor to authorize a State to use allotted Reemployment NOW funds for other innovative activities designed to facilitate the reemployment of EUC claimants. The State 

also could opt to provide such activities to individuals who have exhausted their right to EUC and who remain unemployed. 

Subsection (b) would require that innovative activities directly 

benefit EUC claimants. In addition, subsection (b) provides that approved innovative activities shall not: (1) result in a reduction in 

the duration or amount of emergency unemployment compensation 

for which EUC claimants would otherwise be eligible; (2) include 

a reduction in the duration, amount of or eligibility for regular 

compensation or extended benefits; (3) be used to displace any currently employed employee; (4) allow a program participant to perform work activities related to any job that meets certain enumerated criteria; or (5) violate of any State, local or Federal law. 


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Section 329—Guidance and Additional Requirements. This section would grant the Secretary of Labor the authority to issue guidance establishing such additional requirements as the Secretary 

determines to be necessary to ensure fiscal integrity, effective monitoring, and appropriate and prompt implementation of the activities under the Act. The guidance may include reporting requirements on employment outcomes. 

Section 330—Report of Information and Evaluations to Congress 

and the Public. This section would require the Secretary of Labor 

to provide the appropriate Congressional Committees with information reported pursuant to section 209 and the evaluations of activities carried out pursuant to the funds reserved under section 

202(a)(1). This section would also require that the Secretary of 

Labor make the information and evaluations available to the public. 

Section 331—State. This section defines the term State for purposes of this part. 

Part III—Short-Time Compensation Program 

This subtitle provides clarification for short-time compensation 

programs. 

Section 341—Treatment of Short-Time Compensation Programs. 

This section would generally make clear that the requirements relating to short-time compensation (STC or ‘‘worksharing’’) programs under the Internal Revenue Code and the Social Security 

Act. Under STC programs, employers reduce the workweek of their 

employees in lieu of temporary layoffs and the affected employees 

receive a pro-rated share of their weekly benefit amount for the period not worked. 

Section 342—Temporary Financing of Short-Time Compensation 

Payments in States With Programs in Law. This section provides 

States with temporary Federal financing of 100 percent of STC 

benefits paid to individual workers for up to 26 weeks. Payments 

are available to the State for no more than 156 weeks (3 years) 

under either Section 302 or 303. 

Section 343—Temporary Financing of Short-Time Compensation 

Agreements. This section provides that any State without an STC 

program may enter into an agreement with the Secretary of Labor 

and receive one-half of the STC paid by the State. States may receive payments for a total of not more than 104 weeks (2 years). 

Under a special rule, if a State enacts a law providing for payment 

of STC, the State shall be eligible to receive payments for 100 percent of the costs after the effective date of the State law. 

Section 344—Grants for Short-Time Compensation Programs. 

This section requires the Secretary to award grants to States that 

enact STC programs. One-third of each State’s grant shall be available for the purposes of implementation and improved administration, and two-thirds shall be available for promotion of the programs and enrollment of employers. The maximum amount of all 

grants is $700 million. 

Section 345—Assistance and Guidance in Implementing Programs. This section requires the Secretary to develop for State’s 

use model legislative language for STC, provide technical assistance to the States, and establish reporting requirements, including 


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the number of averted layoffs, the number of participating employers and workers, and other items the Secretary determines are appropriate. The section also would require the Secretary to consult 

with employers, labor organizations, state workforce agencies and 

other experts in developing model STC legislative language. 

Section 346—Reports. This section requires the Secretary to submit to Congress and to the President reports on the implementation of the Act, including a description of best practices, analysis 

of significant challenges, and surveys of employers in states without STC programs to determine level of interest. The section also 

provides $1.5 million for this purpose. 

SUBTITLE B—LONG-TERM UNEMPLOYED HIRING PREFERENCES

Section 351—Long Term Unemployed Workers Work Opportunity 

Tax Credits. This section makes employers eligible for a maximum tax credit of $4,000 if they hire individuals who have been unemployed for at least 6 months. This credit is also made available to 

tax-exempt entities and public universities. Finally, this section authorizes the Secretary of the Treasury to provide alternative methods for certifying an individual’s unemployed status. 

SUBTITLE C—PATHWAYS BACK TO WORK

The ‘‘Pathways Back to Work Act of 2011’’ would establish a $5 

billion fund to support subsidized employment opportunities, summer and year-round youth employment, and work-based training 

and education programs for unemployed, low-income adults and 

low-income youth. 

Section 361—Short Title. This section provides that this subtitle 

may be cited as the ‘‘Pathways Back to Work Act of 2011’’. 

Section 362—Establishment of Pathways Back to Work Fund. 

This section would establish the Pathways Back to Work Fund (the 

Fund) and appropriates $5 billion to the Fund for the Secretary of 

Labor to carry out the Act. 

Section 363—Availability of Funds. This section would direct the 

Secretary of Labor (the Secretary) to use the $5 billion in the Fund 

as follows: $2 billion would be available for subsidized employment 

for unemployed, low-income adults; $1.5 billion would be available 

to provide summer and year-round employment opportunities to 

low-income youth; and $1.5 billion would be available for competitive grants to local entities to carry out work-based training for unemployed, low-income adults and low-income youth. The Secretary 

is authorized to reserve up to 1 percent of funding for technical assistance, evaluations, and Federal administration. The funds would 

be available for obligation by the Secretary of Labor through December 31, 2012, and for available for expenditure by grantees and 

subgrantees through September 30, 2013. 

Section 364—Subsidized Employment for Unemployed, Low-Income Adults. This section describes how the $2 billion of funding 

for subsidized employment for unemployed, low-income adults 

would be allotted and administered. Under subsection (a), the Secretary would be required, not later than 30 days after the enactment of the Act, to issue guidance relating to the implementation 

of this section. The guidance would be issued in coordination with 

the Secretary of Health and Human Services, and consistent with 


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the specified requirements in the Act, address procedures to promote the expeditious and effective implementation of the activities. 

Subsection (b) describes the allotment of funds. The Secretary 

would reserve 0.25 percent for outlying areas and 1.5 percent for 

Native American programs, and then allot the remainder by formula to States that submit plans which are approved by the Secretary. Two-thirds of the formula would be based on measures of 

a State’s relative share of unemployed individuals and one-third 

would be based on the relative share of disadvantaged individuals. 

States that do not submit a plan, or do not have a plan approved, 

would have their share of funding reallotted to the portion of the 

Fund used for competitive grants to local areas for work-based 

training. 

Subsection (c) contains the requirements for the State plan. The 

State plan is to include a description of: the strategies and activities to be carried out, in coordination with employers, to provide 

subsidized employment opportunities; the requirements relating to 

the eligibility of unemployed, low-income adults, including the targeting of assistance to categories within that group, such as individuals with disabilities and individuals who have exhausted all 

rights to unemployment compensation; the administration of activities at the State and local levels; performance outcomes to be 

achieved; coordination with activities funded under WIA, TANF, 

and other programs; timelines for implementation and the number 

of participants expected to be placed in subsidized employment; assurances regarding the reporting of information to the Secretary; 

and assurances regarding compliance with labor standards and 

protections. 

The State plan may be submitted in conjunction with the request 

for funds to serve low-income youth under section 365 or as a modification to the WIA plan. The plan must be submitted within 75 

days after enactment, and a determination regarding approval or 

disapproval made by the Secretary of Labor within 45 days after 

submission. The Secretary is to approve plans that the Secretary 

determines are consistent with the requirements of the section and 

reasonably appropriate and adequate to carry out the purposes of 

this section. 

Under subsection (d), States would have the option to administer 

the subsidized employment program through local entities responsible for the Workforce Investment Act (WIA) adult program, entities responsible for Temporary Assistance for Needy Families 

(TANF), or both in coordination. The States would allocate funding 

to local WIA entities that submit plans which are approved by the 

Governor by formula (using the same factors as the State formula), 

or to TANF agencies by any method a State determines is appropriate. 

The local plans from the WIA entities are to be submitted within 

30 days of the submission of the State plan and may be submitted 

as a modification of the local WIA plan. The plan would contain the 

elements required in the State plan. The Governor is to approve or 

disapprove the plan within 30 days, and if approved, allocate funds 

to the local areas within 30 days after approval. 

The State would reallocate funding from local WIA entities that 

do not submit or have an approved plan to other local areas. States 


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would reserve up to 5 percent of funds for administration and technical assistance, and local WIA areas would be permitted to use up 

to 10 percent of their funding for administrative costs. 

Under subsection (e), funds would be used to provide subsidized 

employment to unemployed, low-income adults, with a priority for 

opportunities likely to lead to unsubsidized employment. The funds 

could also be used to provide support services that enable participation in subsidized employment. The States or local entities administering the program may, in accordance with guidance issued 

by the Secretary, determine the percentage of the wages and costs 

of employing a participant for which an employer will receive a 

subsidy, and the duration of the subsidy. 

Section 365—Summer Employment and Year-Round Employment 

Opportunities for Low-Income Youth. This section describes how the 

$1.5 billion from the Fund for summer jobs and year-round employment opportunities for low-income youth is to be allotted and administered. Subsection (a) authorizes the allotments. Subsection (b) 

requires the Secretary of Labor to issue guidance regarding the implementation of this section not later than 20 days after the date 

the Act is enacted. That subsection also provides that except as 

otherwise provided in guidance or in this section, the activities are 

to be administered in accordance with the youth formula program 

under title I of WIA. Subsection (c) provides for State allotments. 

After a reservation of not more than 0.25 percent for outlying areas 

and 1.5 percent for Indian and Native American grantees, the Secretary of Labor would allot funds among States in accordance with 

the same formula (based on relative unemployment and the number of disadvantaged individuals) that is used under section 364. 

Subsection (d) provides that for a State to be eligible to receive 

funds under this section, the State must submit a State plan modification to its WIA plan or other request in a form specified by the 

Secretary in guidance. The plan modification or request is to include: the strategies and activities to provide summer employment 

opportunities and year-round employment opportunities for low-income youth, including linkages to educational activities; the requirements relating to eligibility and targeting of assistance among 

low-income youth; performance outcomes; timelines for implementation and the number of youth expected to be placed in employment opportunities; assurances regarding reporting to the Secretary; and assurances regarding compliance with labor standards. 

The State plan modification or request is to be submitted within 

30 days of the issuance of guidance by the Secretary. The Secretary 

is then to approve the State plan modification or request unless it 

is inconsistent with the requirements of this section. The funds are 

to be allotted within 30 days after the Secretary approves the plan. 

Subsection (e) relates to within-State allocation and administration of funds. The State may reserve up to 5 percent of the funds 

for administration and technical assistance and is to allocate the 

remainder to local workforce investment areas in accordance with 

the same formula factors used to allot funds among States. To be 

eligible for an allocation, the local workforce investment boards 

must submit to the Governor a local plan modification (or other 

form of request specified in guidance issued by the Secretary), describing the strategies and activities to be carried out under this 


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section. The Governor is to approve the plan modification or request within 30 days of submission if it is not inconsistent with the 

requirements of this section, and allocate the funds within 30 days 

of approval. If a local area does not submit a plan or its plan is 

not approved, the Governor may recapture and reallocate the funds 

to the other local areas in the State according to their relative 

shares under the formula. 

Subsection (f) relates to the use of funds. The local areas are to 

provide summer employment opportunities with direct linkages to 

academic and occupational learning to low-income youth ages 16– 

24. In addition, the local area is to provide year-round employment 

opportunities, which may be combined with other activities, to lowincome youth with a priority to out-of-school youth who are high 

school dropouts or basic skills deficient and unemployed or underemployed. In identifying employment opportunities, priority is to be 

given to emerging or in-demand occupations or in the public or 

nonprofit sector that meet community needs. The local areas must 

also give priority to linking year-round program participants to 

training and educational activities that will provide an industryrecognized certificate or credential. 

Section 366—Work-Based Employment Strategies of Demonstrated Effectiveness. This section describes how the $1.5 billion 

from the Fund for competitive grants to local areas to provide 

work-based training would be administered. Subsection (a) authorizes the Secretary of Labor to competitively award grants to eligible 

entities to support strategies and activities of demonstrated effectiveness. 

Under subsection (b), these strategies and activities are to be designed to provide unemployed, low-income adults or low-income 

youth with skills that will lead to employment upon completion of 

the activities. These activities may include: on-the-job training, registered apprenticeship programs, or other programs that combine 

work with skills development; sector-based training programs that 

are designed to meet specific needs of employers or include a significant work experience component; acquisition of industry-recognized credentials in a growth sector or demand industry; connections to immediate work opportunities that includes concurrent 

skills training and other supports; career academies that include 

paid internships and concurrent enrollment in community colleges; 

and integrated basic education and training for low-skilled adults. 

Subsection (c) describes the eligible entities that may apply for 

the competitive grants. These entities would include a local chief 

elected official, in collaboration with the local workforce investment 

board (or a partnership of such officials and boards from a region 

or State), or an entity eligible to apply for an Indian and Native 

American grant under section 166 of the WIA. These officials, 

boards and entities would be able to partner with a variety of other 

organizations, including employers and employer associations, community colleges and other postsecondary and adult education institutions; community-based organizations; joint labor-management 

committees; and work-related intermediaries. 

Subsection (d) relates to the application for funds. At a minimum, the application is to include the strategies and activities 

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income youth with the skills needed for employment; target populations within those categories, such as individuals with disabilities 

and individuals who have exhausted all rights to unemployment 

compensation; how the activities will address the needs of the target populations and employers in the local area; expected outcomes; 

evidence that the funds may be expended expeditiously; coordination with other programs; evidence of employer commitment to participate, including identification of anticipated occupational and 

skill needs; and assurances regarding reporting and labor standards and protections. 

Subsection (e) provides that in awarding grants, the Secretary 

would give priority to grant applicants from areas of high poverty 

and high unemployment, including Public Use Microdata Areas 

(PUMAs). 

Subsection (f) provides that the Secretary of Labor would administer this section in coordination with the Secretary of Education, 

Secretary of Health and Human Services, and other appropriate 

agency heads. 

Section 367—General Requirements. This section contains general requirements applicable to all of the activities carried out 

under the Fund. Under subsection (a), the labor standards and protections and nondiscrimination requirements specified under WIA 

would apply to activities carried out under this Act, in addition to 

other Federal laws. 

Under subsection (b), the Secretary of Labor is to require funding 

recipients to report fiscal, performance, and other information, and 

would require several minimum reporting elements, including: the 

number and demographic characteristics of participants; the 

amount of fund expenditures; the number of jobs created; and specified participant outcomes. 

Under subsection (c), funds provided under this Act may only be 

used for activities that are in addition to activities that would otherwise be available in the State or local area in the absence of such 

funds. 

Under subsection (d), the Secretary of Labor may establish additional requirements to ensure the appropriate and prompt implementation of this Act. 

Under subsection (e), the Secretary of Labor is to report performance information and evaluation results to Congress and the 

public. 

Section 368—Definitions. This section would establish definitions 

for the following terms which are used in the Act: local chief elected official; local workforce investment area; local workforce investment board; low-income youth; outlying area; unemployed, low-income adult; and State. 

SUBTITLE D—PROHIBITION OF DISCRIMINATION IN EMPLOYMENT ON

THE BASIS OF AN INDIVIDUAL’S STATUS AS UNEMPLOYED

Section 371—Short Title. This section provides that this subtitle 

may be cited as the ‘‘Fair Employment Opportunity Act of 2011.’’ 

Section 372—Findings and Purpose. This section sets forth 

Congress’s findings and the purposes of the Act. Subsection (a) 

states that Congress has found that the denial of employment opportunities to individuals because they are currently unemployed is 


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discriminatory and burdens commerce in ways explained in subsections of this Section. Subsections (a)(1)–(5) describe the burdens 

on commerce imposed by denial of employment opportunities to individuals who are currently unemployed. Those burdens include: 

(1) reducing personal consumption and undermining economic stability; (2) squandering essential human capital; (3) increasing demands for unemployment insurance, reducing trust fund assets, 

and raising payroll taxes for employers and/or cutting benefits for 

jobless workers; (4) imposing additional burdens on publicly funded 

health and welfare programs; and (5) depressing income and other 

tax revenues that governments rely on to support operations and 

institutions essential to commerce. 

Subsection (b) sets out the purposes of the Act. Subsection (b)(1) 

states that the Act is intended to prohibit employers and employment agencies from disqualifying an individual from employment 

opportunities because of that individual’s status as unemployed. 

Subsection (b)(2) states that the Act is intended to prohibit employers and employment agencies from publishing or posting any advertisement or announcement for an employment opportunity that indicates that an individual’s status as unemployed disqualifies the 

individual for the opportunity. Subsection (b)(3) states that the Act 

is intended to eliminate the burdens on commerce caused by the 

exclusion of such individuals from employment. 

Section 373—Definitions. Subsection (1) defines ‘‘affected individual’’ to mean any person who was subject to an unlawful employment practice because of his or her status as unemployed. 

Subsection (2) states that ‘‘Commission’’ means the Equal Employment Opportunity Commission. 

Subsection (3) defines ‘‘employee’’ to include employees covered 

under Section 701(f) of the Civil Rights Act of 1964; State employees covered by Section 302(a)(1) of the Government Employee 

Rights Act of 1991; covered employees as defined in Section 101 of 

the Congressional Accountability Act of 1995; or employees or applicants covered by Section 717(a) of the Civil Rights Act of 1964. 

Subsection (4) defines ‘‘employer’’ to mean a person engaged in 

an industry affecting commerce who has 15 or more employees for 

each working day in each of 20 or more calendar weeks in the current or preceding calendar year and any agent of such a person. 

This subsection excludes from the definition of ‘‘employer’’ a bona 

fide private membership club that is exempt from taxation under 

Section 501(c) of the Internal Revenue Code of 1986. The subsection further defines ‘‘employer’’ to mean an employing authority 

to which Section 302(a)(1) of the Government Employee Rights Act 

of 1991 applies; an employing office as defined in Section 101 of the 

Congressional Accountability Act of 1995 or section 411(c) of title 

3, United States Code; or an entity to which Section 717(a) of the 

Civil Rights Act of 1964 applies. 

Subsection (5) defines ‘‘employment agency’’ to mean any person 

that regularly undertakes, with or without compensation, to procure employees for an employer or to procure for individuals opportunities to work as employees of an employer and includes an 

agent of such a person. Subsection (5) further defines ‘‘employment 

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dium that publishes advertisements or announcements of openings 

in jobs for employees. 

Subsection (6) states that the term ‘‘person’’ has the meaning 

given that term in Section 701(a) of the Civil Rights Act of 1964. 

Subsection (7) defines ‘‘status as unemployed’’ to mean, with respect to an individual, that the individual at the time of application 

for employment or at the time of action alleged to violate this Act 

does not have a job, is available for work, and is searching for 

work. 

Section 374—Prohibited Acts. This section sets forth the actions 

that the Act prohibits employers and employment agencies from 

taking. Subsection (a) describes unlawful employment practices by 

an employer. Subsection (a)(1) states that it shall be an unlawful 

employment practice for an employer to publish, in print, on the 

Internet, or in any medium, an advertisement or announcement for 

a job that includes any provision stating or indicating that an individual’s status as unemployed disqualifies the individual for any 

employment opportunity. The subsection also bars any provision 

stating or indicating that an employer will not consider or hire an 

individual based on that individual’s status as unemployed. 

Subsection (a)(2) states that it shall be an unlawful employment 

practice for an employer to fail or refuse to consider for employment, or fail or refuse to hire an individual as an employee because 

of the individual’s status as unemployed. 

Subsection (a)(3) states that it shall be an unlawful employment 

practice for an employer to direct or request that an employment 

agency take an individual’s status as unemployed into account to 

disqualify an applicant for consideration, screening, or referral for 

employment as an employee. 

Subsection (b) describes unlawful employment practices by an 

employment agency. Subsection (b)(1) states that it shall be an unlawful employment practice for an employment agency to publish, 

in print, on the Internet, or in any medium, an advertisement or 

announcement for a job that includes any provision stating or indicating that an individual’s status as unemployed disqualifies the 

individual for any employment opportunity. The subsection also 

bars any provision stating or indicating that an employer or an employment agency will not consider or hire an individual based on 

that individual’s status as unemployed. 

Subsection (b)(2) bars employment agencies from screening, failing or refusing to consider or refer an individual for employment 

as an employee because of the individual’s status as unemployed. 

Subsection (b)(3) prohibits an employment agency from limiting, 

segregating or classifying individuals in any manner that would 

limit or tend to limit their access to information about jobs or consideration, screening or referral for jobs as employees, because of 

their status as unemployed. 

Subsection (c) bars interference with rights, proceedings and inquiries under the Act and makes it unlawful for any employer or 

employment agency to: interfere with, restrain, or deny the exercise 

of or the attempt to exercise, any right provided under the Act. The 

subsection further bars any employer or employment agency from 

failing or refusing to hire, discharging, or otherwise discriminating 

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posed practices made unlawful by the Act; asserted any right, filed 

any charge, or instituted any proceeding under or related to the 

Act; gave (or is about to give) any information, or testified (or is 

about to testify) in connection with any inquiry or proceeding related to any right provided under the Act. 

Subsection (d) sets forth a rule of construction that nothing in 

the Act is intended to preclude an employer or employment agency 

from considering an individual’s employment history or examining 

the reasons underlying an individual’s status as unemployed in assessing the individual’s ability to perform the job or otherwise making employment decisions about the individual. The subsection further states that such consideration or examination may include an 

assessment of whether an individual’s employment in a similar or 

related job for a period of time reasonably proximate to the consideration of such individual for employment is job-related and consistent with business necessity. 

Section 375—Enforcement. Subsection (a) sets out the powers 

provided to different entities to administer and enforce the Act. 

Subsection (a) states that the Equal Employment Opportunity 

Commission; the Librarian of Congress; the Board as defined in 

Section 101 of the Congressional Accountability Act; the Attorney 

General; the President, the Commission and the Merit Systems 

Protection Board; and the courts of the United States shall have 

the same powers under the Act as each entity does under other 

non-discrimination statutes each enforces when addressing the case 

of an affected individual who would be covered by such statutes. 

Subsection (b) describes the procedures applicable to a claim alleged by an individual for a violation of the Act. Those procedures 

are the procedures that apply for a violation of Title VII of the 

Civil Rights Act of 1964 in the case of a claim alleged by the individual for a violation of that title; those that are applicable for a 

violation of Section 302(a)(1) of the Government Employee Rights 

Act of 1991 in the case of a claim alleged by the individual for a 

violation of such section; the procedures applicable for a violation 

of Section 201(a)(1) or the Congressional Accountability Act of 1995 

in the case of a claim alleged by the individual for a violation of 

such section; and the procedures applicable for a violation of Section 411 of Title 3, United States Code, in the case of a claim alleged by the individual for a violation of such section. 

Subsection (c)(1) identifies the remedies available for a violation 

of section 374(a)(1) or 374(b)(1) of the Act: (a) an order enjoining 

the respondent from engaging in the unlawful employment practice; (b) reimbursement of costs expended as a result of the unlawful employment practice; (c) liquidated damages not to exceed 

$1,000 for each day of the violation; and (d) reasonable attorney’s 

fees (including expert fees) and costs attributable to pursuit of a 

claim under the Act, except that no person identified in Section 

375(a) of the Act is eligible to receive attorney’s fees. 

Subsection (c)(2) identifies the remedies available for a violation 

of any other subsection of the Act as available under other existing 

law, except that in a case in which wages, salary, employment benefits, or other compensation have not been denied or lost to the individual, damages may be awarded in an amount not to exceed 

$5,000. Those remedies are the remedies available for a violation 


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of Title VII of the Civil Rights Act of 1964 in the case of a claim 

alleged by the individual for a violation of that title; those that are 

applicable for a violation of Section 302(a)(1) of the Government 

Employee Rights Act of 1991 in the case of a claim alleged by the 

individual for a violation of such section; those that are applicable 

for a violation of Section 201(a)(1) or the Congressional Accountability Act of 1995 in the case of a claim alleged by the individual 

for a violation of such section; and those that are applicable for a 

violation of Section 411 of Title 3, United States Code, in the case 

of a claim alleged by the individual for a violation of such section. 

Section 376—Federal and State Immunity. Subsection (a) states 

that a State shall not be immune under the 11th Amendment to 

the Constitution to suits brought in federal court challenging a violation of the Act. 

Subsection (b) states that a State’s receipt or use of Federal financial assistance for any program or activity shall constitute a 

waiver of sovereign immunity to a suit brought by an employee or 

applicant for employment of that program or activity for a remedy 

authorized under the Act. Subsection (b) defines ‘‘program or activity’’ to have the meaning given the term in Section 606 of the Civil 

Rights Act of 1964 and provides that the waiver of sovereign immunity with respect to a program or activity applies to conduct occurring on or after the day, after the date of enactment of the Act, on 

which a State first receives or uses Federal financial assistance for 

the program or activity. 

Subsection (c) states that an official of a State may be sued in 

his official capacity by any employee or applicant for employment 

who has complied with the applicable procedures of the Act for a 

remedy authorized under the Act. 

Subsection (d) states that in an action or administrative proceeding against the United States or a State for a violation of the 

Act, remedies are available to the same extent as such remedies 

would be available against a non-governmental entity. 

Section 377—Relationship to Other Laws. This section states that 

the Act does not invalidate or limit the rights, remedies or procedures available to an individual claiming discrimination prohibited 

under any other Federal law or regulation or any law or regulation 

of a State or political subdivision of a State. 

Section 378—Severability. This section states that if any provision of the Act, or application of the provision to any person or circumstance, is held to be invalid, the remainder of the Act and the 

application of the provision to other persons or circumstances shall 

not be affected. 

Section 379—Effective Date. This section states that the Act shall 

take effect on the date of enactment and shall not apply to conduct 

occurring before the effective date. 

TITLE IV—OFFSETS 

The following subtitles raise revenue to support the hiring incentives and important tax relief provided by the American Jobs Act 

to American taxpayers. 


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SUBTITLE A—28 PERCENT LIMITATION ON CERTAIN DEDUCTIONS AND

EXCLUSIONS

Section 401—28 Percent Limitation on Certain Deductions and 

Exclusions. This section would limit the value of all itemized deductions and certain other tax expenditures for high-income taxpayers by limiting the tax value of otherwise allowable deductions 

and exclusions to 28 percent. No taxpayer with adjusted gross income under $250,000 for married couples filing jointly (or $200,000 

for single taxpayers) would be subject to this limitation. The limitation would affect itemized deductions and certain other tax expenditures that would otherwise reduce taxable income in the 36 or 39.6 

percent tax brackets. A similar limitation also would apply under 

the alternative minimum tax. This section would be effective for 

taxable years beginning on or after January 1, 2013. 

SUBTITLE B—TAX CARRIED INTEREST IN INVESTMENT PARTNERSHIPS

AS ORDINARY INCOME

Section 411—Partnership Interests Transferred in Connection 

With Performance of Services. Current law allows service partners 

to receive capital gains treatment on labor income without limit, 

which creates an unfair and inefficient tax preference. This section 

would tax as ordinary income, and make subject to self-employment tax, a service partner’s share of the income of an investment 

partnership attributable to a carried interest because such income 

is derived from the performance of services. 

Section 412—Special Rules for Partners Providing Investment 

Management Services to Partnerships. To the extent that a service 

partner contributes ‘‘invested capital’’ and the partnership reasonably allocates its income and loss between such invested capital 

and the remaining interest, income attributable to the invested 

capital would not be recharacterized. This subtitle would be effective for taxable years beginning after December 31, 2012. 

SUBTITLE C—CLOSE LOOPHOLE FOR CORPORATE JET DEPRECIATION

Section 421—General Aviation Aircraft Treated as 7-Year Property. The cost of capital assets used in businesses generally cannot 

be deducted immediately, but instead may be depreciated over a 

period of years. Current law contains a loophole that allows corporate jets to be depreciated faster than jets used by airlines to 

carry passengers. This section closes this loophole, requiring corporate jets to be depreciated over the same number of years as 

other aircraft. This section would be effective for taxable years beginning after December 31, 2012. 

SUBTITLE D—REPEAL OIL SUBSIDIES

Section 431—Repeal of Deduction for Intangible Drilling and Development Costs in the Case of Oil and Gas Wells. This section 

would not allow expensing of IDCs or 60-month amortization of 

capitalized IDCs. Instead, IDCs would be capitalized as depreciable 

or depletable property, depending on the nature of the cost incurred, in accordance with generally applicable rules. This section 

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zation of capitalized IDCs effective for costs paid or incurred after 

December 31, 2012. 

Section 432—Repeal of Deduction for Tertiary Injectants. This 

section would repeal the deduction available under existing law for 

the cost of qualified tertiary injectant expenses. Qualified tertiary 

injectant expenses are amounts paid or incurred for any tertiary 

injectants (other than recoverable hydrocarbon injectants) that are 

used as a part of a tertiary recovery method to increase the recovery of crude oil. This section would repeal the deduction for qualified tertiary injectant expenses effective for amounts paid or incurred after December 31, 2012. 

Section 433—Repeal of Percentage Depletion for Oil and Gas 

Wells. This section would repeal the percentage depletion method 

available under existing law for recovery of the capital costs of oil 

and gas wells. Under the percentage depletion method, the amount 

of the deduction is a statutory percentage of the gross income from 

the property. Instead of the percentage depletion method, taxpayers would be permitted to claim cost depletion on their adjusted 

basis, if any, in oil and gas wells. Under the cost depletion method, 

the basis recovery for a taxable year is proportional to the exhaustion of the property during the year. This method does not permit 

cost recovery deductions that exceed basis or that are allowable on 

an accelerated basis. This section would be effective for taxable 

years beginning after December 31, 2012. 

Section 434—Section 199 Deduction Not Allowed With Respect to 

Oil, Natural Gas, or Primary Products Thereof. This section would 

deny the deduction available under existing law with respect to income attributable to domestic production activities (the manufacturing deduction) for oil and gas production. For taxable years beginning after 2009, the manufacturing deduction is generally equal 

to 9 percent of the lesser of qualified production activities income 

for the taxable year or taxable income for the taxable year, limited 

to 50 percent of the W–2 wages of the taxpayer for the taxable 

year. The deduction for income from oil and gas production activities is computed at a 6 percent rate. Qualified production activities 

income is generally calculated as a taxpayer’s domestic production 

gross receipts minus the cost of goods sold and other expenses, 

losses, or deductions attributable to such receipts. The manufacturing deduction generally is available to all taxpayers that generate qualified production activities income, which under current 

law includes income from the sale, exchange or disposition of oil, 

natural gas or primary products thereof produced in the United 

States. The proposal would retain the overall manufacturing deduction, but exclude from the definition of domestic production gross 

receipts all gross receipts derived from the sale, exchange or other 

disposition of oil, natural gas or a primary product thereof. This 

section would be effective for taxable years beginning after December 31, 2012. 

Section 435—Repeal Oil and Gas Working Interest Exception to 

Passive Activity Rules. This section would repeal the exception 

under existing law for oil and gas working interests from the passive loss rules that limit deductions and credits from passive trade 

or business activities. Deductions attributable to passive activities, 

to the extent they exceed income from passive activities, generally 


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may not be deducted against other income, such as wages, portfolio 

income, or business income that is not derived from a passive activity. A similar rule applies to credits. Suspended deductions and 

credits are carried forward and treated as deductions and credits 

from passive activities in the next year. The suspended losses and 

credits from a passive activity are allowed in full when the taxpayer completely disposes of the activity. Passive activities are defined to include trade or business activities in which the taxpayer 

does not materially participate. Under existing law, an exception is 

provided, however, for any working interest in an oil or gas property that the taxpayer holds directly or through an entity that does 

not limit the liability of the taxpayer with respect to the interest. 

This section would repeal this exception for taxable years beginning after December 31, 2012. 

Section 436—Uniform Seven-Year Amortization for Geological 

and Geophysical Expenditures. Geological and geophysical expenditures are costs incurred for the purpose of obtaining and accumulating data that will serve as the basis for the acquisition and retention of mineral properties. Under existing law, the amortization 

period for geological and geophysical expenditures incurred in connection with oil and gas exploration in the United States is two 

years for independent producers and seven years for integrated oil 

and gas producers. The proposal would increase the amortization 

period from two years to seven years for geological and geophysical 

expenditures incurred by independent producers in connection with 

all oil and gas exploration in the United States. Seven-year amortization would apply even if the property is abandoned and any remaining basis of the abandoned property would be recovered over 

the remainder of the seven-year period. This section would be effective for amounts paid or incurred after December 31, 2012. 

Section 437—Repeal Enhanced Oil Recovery (EOR) Credit. This 

section would repeal the 15-percent credit available under existing 

law for eligible costs attributable to EOR projects. Eligible costs 

currently include the cost of constructing a gas treatment plant to 

prepare Alaska natural gas for pipeline transportation and any of 

the following costs with respect to a qualified EOR project: (1) the 

cost of depreciable or amortizable tangible property that is an integral part of the project; (2) intangible drilling and development 

costs (IDCs) that the taxpayer can elect to deduct; and (3) deductible tertiary injectant costs. Additional limitations apply, and the 

allowable credit is phased out under existing law over a $6 range 

for a taxable year if the annual average unregulated wellhead price 

per barrel of domestic crude oil during the calendar year preceding 

the calendar year in which the taxable year begins (the reference 

price) exceeds an inflation adjusted threshold. The repeal of the 

EOR credit would be effective for taxable years beginning after December 31, 2012. 

Section 438—Repeal Marginal Well Production Credit. This section would repeal the credit available under existing law for crude 

oil and natural gas produced from marginal wells. Under existing 

law, the credit rate is $3.00 per barrel of oil and 50 cents per 1,000 

cubic feet of natural gas for taxable years beginning in 2005 and 

is adjusted for inflation in taxable years beginning after 2005. The 

credit can be carried back up to five years. The credit is available 


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for production from wells that produce oil and gas qualifying as 

marginal production for purposes of the percentage depletion rules 

or that have average daily production of not more than 25 barrelof-oil equivalents and produce at least 95 percent water. The credit 

per well is limited to 1,095 barrels of oil or barrel-of-oil equivalents 

per year. The credit rate for crude oil is phased out for a taxable 

year if the annual average unregulated wellhead price per barrel 

of domestic crude oil during the calendar year preceding the calendar year in which the taxable year begins (the reference price) 

exceeds the applicable threshold. The repeal of the marginal well 

credit would be effective for taxable years beginning after December 31, 2012. 

SUBTITLE E—DUAL CAPACITY TAXPAYERS

Section 441—Modifications of Foreign Tax Credit Rules Applicable to Dual Capacity Taxpayers. The purpose of the foreign tax 

credit is to mitigate double taxation of income by the United States 

and a foreign country. When a payment is made to a foreign country in exchange for a specific economic benefit, there is no double 

taxation. Current law recognizes the distinction between a payment of creditable taxes and a payment in exchange for a specific 

economic benefit but fails to achieve the appropriate split between 

the two when a single payment is made in a case where, for example, a foreign country imposes a levy only on oil and gas income, 

or imposes a higher levy on oil and gas income as compared to 

other income. This section would allow a dual capacity taxpayer to 

treat as a creditable tax the portion of a foreign levy that does not 

exceed the foreign levy that the taxpayer would pay if it were not 

a dual-capacity taxpayer. 

Section 442—Separate Basket Treatment Taxes Paid on Foreign 

Oil and Gas Income. This section would convert the special foreign 

tax credit limitation rules of section 907 into a separate category 

within section 904 for foreign oil and gas income. This section 

would yield to United States treaty obligations to the extent that 

they explicitly allow a credit for taxes paid or accrued on certain 

oil or gas income. This subtitle would be effective for taxable years 

beginning after December 31, 2012. 

SUBTITLE F—INCREASED TARGET AND TRIGGER FOR JOINT SELECT

COMMITTEE ON DEFICIT REDUCTION

Section 451—Increased Target and Trigger for Joint Select Committee on Deficit Reduction. Subtitles A through E of Title IV of 

this bill enact offsets to pay for the jobs creation provisions of the 

bill. If the Joint Select Committee on Deficit Reduction achieves additional savings in the amount of the cost of these jobs creation 

provisions, the offsets do not take effect. 

Subsection (a) of Section 451 amends the Budget Control Act of 2011 to increase the $1.5 trillion deficit reduction target of the 

Joint Committee by the cost of the jobs creation provisions (Titles 

I–III). This increased amount would be revised based on the final 

score of the jobs provisions. 

Subsection (b) of Section 451 amends the Budget Control Act to 

specify that if the Joint Committee exceeds the $1.2 trillion in deficit reduction necessary to avoid sequestration by the cost of the 


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jobs creation provisions, then the offsets in Title IV of this bill will 

not take effect. As in subsection (a) of this section, this increased 

amount would be revised based on the final score of the jobs provisions (Titles I–III). Subsection (b) does not affect the existing requirement in the Budget Control Act for sequestration if the Joint 

Committee does not hit its minimum deficit reduction target of $1.2 

trillion. 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘American 

Jobs Act of 2011’’. 

(b) TABLE OF CONTENTS.—The table of contents for this Act is 

as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. References. 

Sec. 3. Severability. 

Sec. 4. Buy American—Use of American iron, steel, and manufactured goods. 

Sec. 5. Wage rate and employment protection requirements. 

TITLE I—RELIEF FOR WORKERS AND BUSINESSES 

Subtitle A—Payroll Tax Relief 

Sec. 101. Temporary payroll tax cut for employers, employees and the self-employed. 

Sec. 102. Temporary tax credit for increased payroll. 

Subtitle B—Other Relief for Businesses 

Sec. 111. Extension of temporary 100 percent bonus depreciation for certain business assets. 

Sec. 112. Surety bonds. 

Sec. 113. Delay in application of withholding on government contractors. 

TITLE II—PUTTING WORKERS BACK ON THE JOB WHILE REBUILDING AND 

MODERNIZING AMERICA 

Subtitle A—Veterans Hiring Preferences 

Sec. 201. Returning heroes and wounded warriors work opportunity tax credits. 

Subtitle B—Teacher Stabilization 

Sec. 202. Purpose. 

Sec. 203. Grants for the outlying areas and the Secretary of the Interior; availability of funds. 

Sec. 204. State allocation. 

Sec. 205. State application. 

Sec. 206. State reservation and responsibilities. 

Sec. 207. Local educational agencies. 

Sec. 208. Early learning. 

Sec. 209. Maintenance of effort. 

Sec. 210. Reporting. 

Sec. 211. Definitions. 

Sec. 212. Authorization of appropriations. 

Subtitle C—First Responder Stabilization 

Sec. 213. Purpose. 

Sec. 214. Grant program. 

Sec. 215. Appropriations. 

Subtitle D—School Modernization 

PART I—ELEMENTARY AND SECONDARY SCHOOLS

Sec. 221. Purpose. 

Sec. 222. Authorization of appropriations. 

Sec. 223. Allocation of funds. 

Sec. 224. State use of funds. 


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Sec. 225. State and local applications. 

Sec. 226. Use of funds. 

Sec. 227. Private schools. 

Sec. 228. Additional provisions. 

PART II—COMMUNITY COLLEGE MODERNIZATION

Sec. 229. Federal assistance for community college modernization. 

PART III—GENERAL PROVISIONS

Sec. 230. Definitions. 

Sec. 231. Buy American. 

Subtitle E—Immediate Transportation Infrastrucure Investments 

Sec. 241. Immediate transportation infrastructure investments. 

Subtitle F—Building and Upgrading Infrastructure for Long-Term Development 

Sec. 242. Short title; table of contents. 

Sec. 243. Findings and purpose. 

Sec. 244. Definitions. 

PART I—AMERICAN INFRASTRUCTURE FINANCING AUTHORITY

Sec. 245. Establishment and general authority of AIFA. 

Sec. 246. Voting members of the board of directors. 

Sec. 247. Chief executive officer of AIFA. 

Sec. 248. Powers and duties of the board of directors. 

Sec. 249. Senior management. 

Sec. 250. Special Inspector General for AIFA. 

Sec. 251. Other personnel. 

Sec. 252. Compliance. 

PART II—TERMS AND LIMITATIONS ON DIRECT LOANS AND LOAN GUARANTEES

Sec. 253. Eligibility criteria for assistance from AIFA and terms and limitations of 

loans. 

Sec. 254. Loan terms and repayment. 

Sec. 255. Compliance and enforcement. 

Sec. 256. Audits; reports to the President and Congress. 

PART III—FUNDING OF AIFA 

Sec. 257. Administrative fees. 

Sec. 258. Efficiency of AIFA. 

Sec. 259. Funding. 

PART IV—EXTENSION OF EXEMPTION FROM ALTERNATIVE MINIMUM TAX TREATMENT

FOR CERTAIN TAX-EXEMPT BONDS

Sec. 260. Extension of exemption from alternative minimum tax treatment for certain tax-exempt bonds. 

Subtitle G—Project Rebuild 

Sec. 261. Project rebuild. 

Subtitle H—National Wireless Initiative 

Sec. 271. Definitions. 

PART I—AUCTIONS OF SPECTRUM AND SPECTRUM MANAGEMENT

Sec. 272. Clarification of authorities to repurpose Federal spectrum for commercial 

purposes. 

Sec. 273. Incentive auction authority. 

Sec. 274. Requirements when repurposing certain mobile satellite services spectrum for terrestrial broadband use. 

Sec. 275. Permanent extension of auction authority. 

Sec. 276. Authority to auction licenses for domestic satellite services. 

Sec. 277. Directed auction of certain spectrum. 

Sec. 278. Authority to establish spectrum license user fees. 

PART II—PUBLIC SAFETY BROADBAND NETWORK

Sec. 281. Reallocation of D block for public safety. 


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Sec. 282. Flexible use of narrowband spectrum. 

Sec. 283. Single public safety wireless network licensee. 

Sec. 284. Establishment of Public Safety Broadband Corporation. 

Sec. 285. Board of directors of the corporation. 

Sec. 286. Officers, employees, and committees of the corporation. 

Sec. 287. Nonprofit and nonpolitical nature of the corporation. 

Sec. 288. Powers, duties, and responsibilities of the corporation. 

Sec. 289. Initial funding for corporation. 

Sec. 290. Permanent self-funding; duty to assess and collect fees for network use. 

Sec. 291. Audit and report. 

Sec. 292. Annual report to Congress. 

Sec. 293. Provision of technical assistance. 

Sec. 294. State and local implementation. 

Sec. 295. State and local implementation fund. 

Sec. 296. Public safety wireless communications research and development. 

Sec. 297. Public Safety Trust Fund. 

Sec. 298. FCC report on efficient use of public safety spectrum. 

Sec. 299. Public safety roaming and priority access. 

TITLE III—ASSISTANCE FOR THE UNEMPLOYED AND PATHWAYS BACK TO 

WORK 

Subtitle A—Supporting Unemployed Workers 

Sec. 301. Short title. 

PART I—EXTENSION OF EMERGENCY UNEMPLOYMENT COMPENSATION AND CERTAIN

EXTENDED BENEFITS PROVISIONS, AND ESTABLISHMENT OF SELF-EMPLOYMENT ASSISTANCE PROGRAM

Sec. 311. Extension of emergency unemployment compensation program. 

Sec. 312. Temporary extension of extended benefit provisions. 

Sec. 313. Reemployment services and reemployment and eligibility assessment activities. 

Sec. 314. Federal-State agreements to administer a self-employment assistance program. 

Sec. 315. Conforming amendment on payment of bridge to work wages. 

Sec. 316. Additional extended unemployment benefits under the Railroad Unemployment Insurance Act. 

PART II—REEMPLOYMENT NOW PROGRAM

Sec. 321. Establishment of reemployment NOW program. 

Sec. 322. Distribution of funds. 

Sec. 323. State plan. 

Sec. 324. Bridge to work program. 

Sec. 325. Wage insurance. 

Sec. 326. Enhanced reemployment strategies. 

Sec. 327. Self-employment programs. 

Sec. 328. Additional innovative programs. 

Sec. 329. Guidance and additional requirements. 

Sec. 330. Report of information and evaluations to Congress and the public. 

Sec. 331. State. 

PART III—SHORT-TIME COMPENSATION PROGRAM

Sec. 341. Treatment of short-time compensation programs. 

Sec. 342. Temporary financing of short-time compensation payments in states with 

programs in law. 

Sec. 343. Temporary financing of short-time compensation agreements. 

Sec. 344. Grants for short-time compensation programs. 

Sec. 345. Assistance and guidance in implementing programs. 

Sec. 346. Reports. 

Subtitle B—Long Term Unemployed Hiring Preferences 

Sec. 351. Long term unemployeed workers work opportunity tax credits. 

Subtitle C—Pathways Back to Work 

Sec. 361. Short title. 

Sec. 362. Establishment of Pathways Back to Work Fund. 

Sec. 363. Availability of funds. 


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Sec. 364. Subsidized employment for unemployed, low-income adults. 

Sec. 365. Summer employment and year-round employment opportunities for lowincome youth. 

Sec. 366. Work-based employment strategies of demonstrated effectiveness. 

Sec. 367. General requirements. 

Sec. 368. Definitions. 

Subtitle D—Prohibition of Discrimination in Employment on the Basis of an 

Individual’s Status as Unemployed 

Sec. 371. Short title. 

Sec. 372. Findings and purpose. 

Sec. 373. Definitions. 

Sec. 374. Prohibited acts. 

Sec. 375. Enforcement. 

Sec. 376. Federal and State immunity. 

Sec. 377. Relationship to other laws. 

Sec. 378. Severability. 

Sec. 379. Effective date. 

TITLE IV—OFFSETS 

Subtitle A—28 Percent Limitation on Certain Deductions and Exclusions 

Sec. 401. 28 percent limitation on certain deductions and exclusions. 

Subtitle B—Tax Carried Interest in Investment Partnerships as Ordinary Income 

Sec. 411. Partnership interests transferred in connection with performance of services. 

Sec. 412. Special rules for partners providing investment management services to 

partnerships. 

Subtitle C—Close Loophole for Corporate Jet Depreciation 

Sec. 421. General aviation aircraft treated as 7-year property. 

Subtitle D—Repeal Oil Subsidies 

Sec. 431. Repeal of deduction for intangible drilling and development costs in the 

case of oil and gas wells. 

Sec. 432. Repeal of deduction for tertiary injectants. 

Sec. 433. Repeal of percentage depletion for oil and gas wells. 

Sec. 434. Section 199 deduction not allowed with respect to oil, natural gas, or primary products thereof. 

Sec. 435. Repeal oil and gas working interest exception to passive activity rules. 

Sec. 436. Uniform seven-year amortization for geological and geophysical expenditures. 

Sec. 437. Repeal enhanced oil recovery credit. 

Sec. 438. Repeal marginal well production credit. 

Subtitle E—Dual Capacity Taxpayers 

Sec. 441. Modifications of foreign tax credit rules applicable to dual capacity taxpayers. 

Sec. 442. Separate basket treatment taxes paid on foreign oil and gas income. 

Subtitle F—Increased Target and Trigger for Joint Select Committee on Deficit 

Reduction 

Sec. 451. Increased target and trigger for joint select committee on deficit reduction. 

SEC. 2. REFERENCES. 

Except as expressly provided otherwise, any reference to ‘‘this 

Act’’ contained in any subtitle of this Act shall be treated as referring only to the provisions of that subtitle. 

SEC. 3. SEVERABILITY. 

If any provision of this Act, or the application thereof to any 

person or circumstance, is held invalid, the remainder of the Act 

and the application of such provision to other persons or circumstances shall not be affected thereby. 


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SEC. 4. BUY AMERICAN—USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS. 

(a) None of the funds appropriated or otherwise made available 

by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work 

unless all of the iron, steel, and manufactured goods used in the 

project are produced in the United States. 

(b) Subsection (a) shall not apply in any case or category of 

cases in which the head of the Federal department or agency involved finds that— 

(1) applying subsection (a) would be inconsistent with the 

public interest; 

(2) iron, steel, and the relevant manufactured goods are 

not produced in the United States in sufficient and reasonably 

available quantities and of a satisfactory quality; or 

(3) inclusion of iron, steel, and manufactured goods produced in the United States will increase the cost of the overall 

project by more than 25 percent. 

(c) If the head of a Federal department or agency determines 

that it is necessary to waive the application of subsection (a) based 

on a finding under subsection (b), the head of the department or 

agency shall publish in the Federal Register a detailed written justification as to why the provision is being waived. 

(d) This section shall be applied in a manner consistent with 

United States obligations under international agreements. 

SEC. 5. WAGE RATE AND EMPLOYMENT PROTECTION REQUIREMENTS. 

(a) Notwithstanding any other provision of law and in a manner consistent with other provisions in this Act, all laborers and 

mechanics employed by contractors and subcontractors on projects 

funded directly by or assisted in whole or in part by and through 

the Federal Government pursuant to this Act shall be paid wages 

at rates not less than those prevailing on projects of a character 

similar in the locality as determined by the Secretary of Labor in 

accordance with subchapter IV of chapter 31 of title 40, United 

States Code. 

(b) With respect to the labor standards specified in this section, 

the Secretary of Labor shall have the authority and functions set 

forth in Reorganization Plan Numbered 14 of 1950 (64 Stat. 1267; 

5 U.S.C. App.) and section 3145 of title 40, United States Code. 

(c) Projects as defined under title 49, United States Code, funded directly by or assisted in whole or in part by and through the 

Federal Government pursuant to this Act shall be subject to the requirements of section 5333(b) of title 49, United States Code. 

TITLE I—RELIEF FOR WORKERS AND BUSINESSES 

Subtitle A—Payroll Tax Relief 

SEC. 101. TEMPORARY PAYROLL TAX CUT FOR EMPLOYERS, EMPLOYEES AND THE SELF-EMPLOYED. 

(a) WAGES.—Notwithstanding any other provision of law— 

(1) with respect to remuneration received during the payroll tax holiday period, the rate of tax under 3101(a) of the Internal Revenue Code of 1986 shall be 3.1 percent (including for 


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purposes of determining the applicable percentage under sections 3201(a) and 3211(a) of such Code), and 

(2) with respect to remuneration paid during the payroll 

tax holiday period, the rate of tax under 3111(a) of such Code 

shall be 3.1 percent (including for purposes of determining the 

applicable percentage under sections 3221(a) and 3211(a) of 

such Code). 

(3) Subsection (a)(2) shall only apply to— 

(A) employees performing services in a trade or business of a qualified employer, or 

(B) in the case of a qualified employer exempt from 

tax under section 501(a), in furtherance of the activities related to the purpose or function constituting the basis of 

the employer’s exemption under section 501. 

(4) Subsection (a)(2) shall apply only to the first $5 million 

of remuneration or compensation paid by a qualified employer 

subject to section 3111(a) or a corresponding amount of compensation subject to 3221(a). 

(b) SELF-EMPLOYMENT TAXES.— (1) IN GENERAL.—Notwithstanding any other provision of 

law, with respect to any taxable year which begins in the payroll tax holiday period, the rate of tax under section 1401(a) of 

the Internal Revenue Code of 1986 shall be— 

(A) 6.2 percent on the portion of net earnings from 

self-employment subject to 1401(a) during the payroll tax 

period that does not exceed the amount of the excess of $5 

million over total remuneration, if any, subject to section 

3111(a) paid during the payroll tax holiday period to employees of the self-employed person, and 

(B) 9.3 percent for any portion of net earnings from 

self-employment not subject to subsection (b)(1)(A). 

(2) COORDINATION WITH DEDUCTIONS FOR EMPLOYMENT

TAXES.—For purposes of the Internal Revenue Code of 1986, in 

the case of any taxable year which begins in the payroll tax 

holiday period— 

(A) DEDUCTION IN COMPUTING NET EARNINGS FROM

SELF-EMPLOYMENT.—The deduction allowed under section 

1402(a)(12) of such Code shall be the sum of (i) 4.55 percent times the amount of the taxpayer’s net earnings from 

self-employment for the taxable year subject to paragraph 

(b)(1)(A) of this section, plus (ii) 7.65 percent of the taxpayers net earnings from self-employment in excess of that 

amount. 

(B) INDIVIDUAL DEDUCTION.—The deduction under section 164(f) of such Code shall be equal to the sum of ((i) 

one-half of the taxes imposed by section 1401 (after the application of this section) with respect to the taxpayer’s net 

earnings from self-employment for the taxable year subject 

to paragraph (b)(1)(A) of this section plus (ii) 62.7 percent 

of the taxes imposed by section 1401 (after the application 

of this section) with respect to the excess. 

(c) REGULATORY AUTHORITY.—The Secretary may prescribe any 

such regulations or other guidance necessary or appropriate to 

carry out this section, including the allocation of the excess of $5 


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million over total remuneration subject to section 3111(a) paid during the payroll tax holiday period among related taxpayers treated 

as a single qualified employer. 

(d) DEFINITIONS.— 

(1) PAYROLL TAX HOLIDAY PERIOD.—The term ‘‘payroll tax 

holiday period’’ means calendar year 2012. 

(2) QUALIFIED EMPLOYER.—For purposes of this paragraph, 

(A) IN GENERAL.—The term ‘‘qualified employer’’ 

means any employer other than the United States, any 

State or possession of the United States, or any political 

subdivision thereof, or any instrumentality of the foregoing. 

(B) TREATMENT OF EMPLOYEES OF POST-SECONDARY

EDUCATIONAL INSTITUTIONS.—Notwithstanding paragraph 

(A), the term ‘‘qualified employer’’ includes any employer 

which is a public institution of higher education (as defined in section 101 of the Higher Education Act of 1965). 

(3) AGGREGATION RULES.—For purposes of this subsection 

rules similar to sections 414(b), 414(c), 414(m) and 414(o) shall 

apply to determine when multiple entities shall be treated as 

a single employer, and rules with respect to predecessor and 

successor employers may be applied, in such manner as may 

be prescribed by the Secretary. 

(e) TRANSFERS OF FUNDS.— 

(1) TRANSFERS TO FEDERAL OLD-AGE AND SURVIVORS INSURANCE TRUST FUND.—There are hereby appropriated to the Federal Old-Age and Survivors Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of 

the Social Security Act (42 U.S.C. 401) amounts equal to the 

reduction in revenues to the Treasury by reason of the application of subsections (a) and (b) to employers other than those 

described in (e)(2). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times 

and in such manner as to replicate to the extent possible the 

transfers which would have occurred to such Trust Fund had 

such amendments not been enacted. 

(2) TRANSFERS TO SOCIAL SECURITY EQUIVALENT BENEFIT

ACCOUNT.—There are hereby appropriated to the Social Security Equivalent Benefit Account established under section 

15A(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 

231n–1(a)) amounts equal to the reduction in revenues to the 

Treasury by reason of the application of subsection (a) to employers subject to the Railroad Retirement Tax. Amounts appropriated by the preceding sentence shall be transferred from 

the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Account had such amendments not been enacted. 

(f) COORDINATION WITH OTHER FEDERAL LAWS.—For purposes 

of applying any provision of Federal law other than the provisions 

of the Internal Revenue Code of 1986, the rate of tax in effect 

under section 3101(a) of such Code shall be determined without regard to the reduction in such rate under this section. 


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SEC. 102. TEMPORARY TAX CREDIT FOR INCREASED PAYROLL. 

(a) IN GENERAL.—Notwithstanding any other provision of law, 

each qualified employer shall be allowed, with respect to wages for 

services performed for such qualified employer, a payroll increase 

credit determined as follows: 

(1) With respect to the period from October 1, 2011 

through December 31, 2011, 6.2 percent of the excess, if any, 

(but not more than $12.5 million of the excess) of the wages 

subject to tax under section 3111(a) of the Internal Revenue 

Code of 1986 for such period over such wages for the corresponding period of 2010. 

(2) With respect to the period from January 1, 2012 

through December 31, 2012, 

(A) 6.2 percent of the excess, if any, (but not more than $50 million of the excess) of the wages subject to tax 

under section 3111(a) of the Internal Revenue Code of 

1986 for such period over such wages for calendar year 

2011, minus 

(B) 3.1 percent of the result (but not less than zero) of 

subtracting from $5 million such wages for calendar year 

2011. 

(3) In the case of a qualified employer for which the wages 

subject to tax under section 3111(a) of the Internal Revenue 

Code of 1986 (a) were zero for the corresponding period of 2010 

referred to in subsection (a)(1), the amount of such wages shall 

be deemed to be 80 percent of the amount of wages taken into 

account for the period from October 1, 2011 through December 

31, 2011 and (b) were zero for the calendar year 2011 referred 

to in subsection (a)(2), then the amount of such wages shall be 

deemed to be 80 percent of the amount of wages taken into account for 2012. 

(4) This subsection (a) shall only apply with respect to the 

wages of employees performing services in a trade or business 

of a qualified employer or, in the case of a qualified employer 

exempt from tax under section 501(a) of the Internal Revenue 

Code of 1986, in furtherance of the activities related to the 

purpose or function constituting the basis of the employer’s exemption under section 501. 

(b) QUALIFIED EMPLOYERS.—For purposes of this section— 

(1) IN GENERAL.—The term ‘‘qualified employer’’ means 

any employer other than the United States, any State or possession of the United States, or any political subdivision thereof, or any instrumentality of the foregoing. 

(2) TREATMENT OF EMPLOYEES OF POST-SECONDARY EDU- CATIONAL INSTITUTIONS.—Notwithstanding subparagraph (1), 

the term ‘‘qualified employer’’ includes any employer which is 

a public institution of higher education (as defined in section 

101 of the Higher Education Act of 1965). 

(c) AGGREGATION RULES.—For purposes of this subsection rules 

similar to sections 414(b), 414(c), 414(m) and 414(o) of the Internal 

Revenue Code of 1986 shall apply to determine when multiple entities shall be treated as a single employer, and rules with respect 

to predecessor and successor employers may be applied, in such 

manner as may be prescribed by the Secretary. 


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(d) APPLICATION OF CREDITS.—The payroll increase credit shall 

be treated as a credit allowable under Subtitle C of the Internal 

Revenue Code of 1986 under rules prescribed by the Secretary of 

the Treasury, provided that the amount so treated for the period 

described in section (a)(1) or section (a)(2) shall not exceed the 

amount of tax imposed on the qualified employer under section 

3111(a) of such Code for the relevant period. Any income tax deduction by a qualified employer for amounts paid under section 

3111(a) of such Code or similar Railroad Retirement Tax provisions 

shall be reduced by the amounts so credited. 

(e) TRANSFERS TO FEDERAL OLD-AGE AND SURVIVORS INSURANCE TRUST FUND.—There are hereby appropriated to the Federal 

Old-Age and Survivors Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) amounts equal to the reduction in revenues to the Treasury by reason of the amendments made by subsection (d). Amounts appropriated by the preceding sentence shall 

be transferred from the general fund at such times and in such 

manner as to replicate to the extent possible the transfers which 

would have occurred to such Trust Fund had such amendments not 

been enacted. 

(f) APPLICATION TO RAILROAD RETIREMENT TAXES.—For purposes of qualified employers that are employers under section 

3231(a) of the Internal Revenue Code of 1986, subsections (a)(1) 

and (a)(2) of this section shall apply by substituting section 3221 

for section 3111, and substituting the term ‘‘compensation’’ for 

‘‘wages’’ as appropriate. 

Subtitle B—Other Relief for Businesses 

SEC. 111. EXTENSION OF TEMPORARY 100 PERCENT BONUS DEPRECIATION FOR CERTAIN BUSINESS ASSETS. 

(a) IN GENERAL.—Paragraph (5) of section 168(k) of the Internal Revenue Code is amended— 

(1) by striking ‘‘January 1, 2012’’ each place it appears and 

inserting ‘‘January 1, 2013’’, and 

(2) by striking ‘‘January 1, 2013’’ and inserting ‘‘January 

1, 2014’’. 

(b) CONFORMING AMENDMENT.—The heading for paragraph (5) 

of section 168(k) of the Internal Revenue Code is amended by striking ‘‘PRE–2012 PERIODS’’ and inserting ‘‘PRE–2013 PERIODS’’. 

SEC. 112. SURETY BONDS. 

(a) MAXIMUM BOND AMOUNT.—Section 411(a)(1) of the Small 

Business Investment Act of 1958 (15 U.S.C. 694b(a)(1)) is amended 

by striking ‘‘$2,000,000’’ and inserting ‘‘$5,000,000’’. 

(b) DENIAL OF LIABILITY.—Section 411(e)(2) of the Small Business Investment Act of 1958 (15 U.S.C. 694b(e)(2)) is amended by 

striking ‘‘$2,000,000’’ and inserting ‘‘$5,000,000’’. 

(c) SUNSET.—The amendments made by subsections (a) and (b) 

of this section shall remain in effect until September 30, 2012. 

(d) FUNDING.—There is appropriated out of any money in the 

Treasury not otherwise appropriated, $3,000,000, to remain available until expended, for additional capital for the Surety Bond 


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Guarantees Revolving Fund, as authorized by the Small Business 

Investment Act of 1958, as amended. 

SEC. 113. DELAY IN APPLICATION OF WITHHOLDING ON GOVERNMENT 

CONTRACTORS. 

Subsection (b) of section 511 of the Tax Increase Prevention 

and Reconciliation Act of 2005 is amended by striking ‘‘December 

31, 2011’’ and inserting ‘‘December 31, 2013’’. 

TITLE II—PUTTING WORKERS BACK ON THE JOB WHILE 

REBUILDING AND MODERNIZING AMERICA 

Subtitle A—Veterans Hiring Preferences 

SEC. 201. RETURNING HEROES AND WOUNDED WARRIORS WORK OPPORTUNITY TAX CREDITS. 

(a) IN GENERAL.—Paragraph (3) of section 51(b) of the Internal Revenue Code is amended by striking ‘‘($12,000 per year in the 

case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii))’’ and inserting ‘‘($12,000 per year in the case of 

any individual who is a qualified veteran by reason of subsection 

(d)(3)(A)(ii)(I), $14,000 per year in the case of any individual who 

is a qualified veteran by reason of subsection (d)(3)(A)(iv), and 

$24,000 per year in the case of any individual who is a qualified 

veteran by reason of subsection (d)(3)(A)(ii)(II))’’. 

(b) RETURNING HEROES TAX CREDITS.—Section 51(d)(3)(A) of 

the Internal Revenue Code is amended by striking ‘‘or’’ at the end 

of paragraph (3)(A)(i), and inserting the following new paragraphs 

after paragraph (ii)— 

‘‘(iii) having aggregate periods of unemployment 

during the 1-year period ending on the hiring date 

which equal or exceed 4 weeks (but less than 6 

months), or 

‘‘(iv) having aggregate periods of unemployment 

during the 1-year period ending on the hiring date 

which equal or exceed 6 months.’’. 

(c) SIMPLIFIED CERTIFICATION.—Section 51(d) of the Internal 

revenue Code is amended by adding a new paragraph 15 as follows— 

‘‘(15) CREDIT ALLOWED FOR UNEMPLOYED VETERANS.— 

‘‘(A) IN GENERAL.—Any qualified veteran under paragraphs (3)(A)(ii)(II), (3)(A)(iii), and (3)(A)(iv) will be treated 

as certified by the designated local agency as having aggregate periods of unemployment if— 

‘‘(i) In the case of qualified veterans under paragraphs (3)(A)(ii)(II) and (3)(A)(iv), the veteran is certified by the designated local agency as being in receipt of unemployment compensation under State or 

Federal law for not less than 6 months during the 1- 

year period ending on the hiring date; or 

‘‘(ii) In the case of a qualified veteran under paragraph (3)(A)(iii), the veteran is certified by the designated local agency as being in receipt of unemployment compensation under State or Federal law for not 

less than 4 weeks (but less than 6 months) during the 

1-year period ending on the hiring date. 


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‘‘(B) REGULATORY AUTHORITY.—The Secretary in his 

discretion may provide alternative methods for certification.’’. 

(d) CREDIT MADE AVAILABLE TO TAX-EXEMPT EMPLOYERS IN

CERTAIN CIRCUMSTANCES.—Section 52(c) of the Internal Revenue 

Code is amended— 

(1) by striking the word ‘‘No’’ at the beginning of the section and replacing it with ‘‘Except as provided in this subsection, no’’; 

(2) the following new paragraphs are inserted at the end 

of section 52(c)— 

‘‘(1) IN GENERAL.—In the case of a tax-exempt employer, 

there shall be treated as a credit allowable under subpart C 

(and not allowable under subpart D) the lesser of— 

‘‘(A) The amount of the work opportunity credit determined under this subpart with respect to such employer 

that is related to the hiring of qualified veterans described 

in sections 51(d)(3)(A)(ii)(II), (iii) or (iv); or 

‘‘(B) The amount of the payroll taxes of the employer 

during the calendar year in which the taxable year begins. 

‘‘(2) CREDIT AMOUNT.—In calculating for tax-exempt employers, the work opportunity credit shall be determined by 

substituting ‘26 percent’ for ‘40 percent’ in section 51(a) and by 

substituting ‘16.25 percent’ for ‘25 percent’ in section 

51(i)(3)(A). 

‘‘(3) TAX-EXEMPT EMPLOYER.—For purposes of this subpart, 

the term ‘tax-exempt employer’ means an employer that is— 

‘‘(i) an organization described in section 501(c) and exempt from taxation under section 501(a), or 

‘‘(ii) a public higher education institution (as defined 

in section 101 of the Higher Education Act of 1965). 

‘‘(4) PAYROLL TAXES.—For purposes of this subsection— 

‘‘(A) IN GENERAL.—The term ‘payroll taxes’ means— 

‘‘(i) amounts required to be withheld from the employees of the tax-exempt employer under section 

3401(a), 

‘‘(ii) amounts required to be withheld from such 

employees under section 3101(a), and 

‘‘(iii) amounts of the taxes imposed on the tax-exempt employer under section 3111(a).’’. 

(e) TREATMENT OF POSSESSIONS.— 

(1) PAYMENTS TO POSSESSIONS.— 

(A) MIRROR CODE POSSESSIONS.—The Secretary of the 

Treasury shall pay to each possession of the United States 

with a mirror code tax system amounts equal to the loss 

to that possession by reason of the application of this section (other than this subsection). Such amounts shall be 

determined by the Secretary of the Treasury based on information provided by the government of the respective 

possession of the United States. 

(B) OTHER POSSESSIONS.—The Secretary of the Treasury shall pay to each possession of the United States, 

which does not have a mirror code tax system, amounts estimated by the Secretary of the Treasury as being equal to 


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the aggregate credits that would have been provided by 

the possession by reason of the application of this section 

(other than this subsection) if a mirror code tax system 

had been in effect in such possession. The preceding sentence shall not apply with respect to any possession of the 

United States unless such possession has a plan, which 

has been approved by the Secretary of the Treasury, under 

which such possession will promptly distribute such payments. 

(2) COORDINATION WITH CREDIT ALLOWED AGAINST UNITED

STATES INCOME TAXES.—No increase in the credit determined 

under section 38(b) of the Internal Revenue Code of 1986 that 

is attributable to the credit provided by this section (other than 

this subsection (e)) shall be taken into account with respect to 

any person— 

(A) to whom a credit is allowed against taxes imposed 

by the possession of the United States by reason of this 

section for such taxable year, or 

(B) who is eligible for a payment under a plan described in paragraph (1)(B) with respect to such taxable 

year. 

(3) DEFINITIONS AND SPECIAL RULES.— 

(A) POSSESSION OF THE UNITED STATES.—For purposes 

of this subsection (e), the term ‘‘possession of the United 

States’’ includes American Samoa, the Commonwealth of 

the Northern Mariana Islands, the Commonwealth of 

Puerto Rico, Guam, and the United States Virgin Islands. 

(B) MIRROR CODE TAX SYSTEM.—For purposes of this 

subsection, the term ‘‘mirror code tax system’’ means, with 

respect to any possession of the United States, the income 

tax system of such possession if the income tax liability of 

the residents of such possession under such system is determined by reference to the income tax laws of the United 

States as if such possession were the United States. 

(C) TREATMENT OF PAYMENTS.—For purposes of section 

1324(b)(2) of title 31, United States Code, rules similar to 

the rules of section 1001(b)(3)(C) of the American Recovery 

and Reinvestment Tax Act of 2009 shall apply. 

(f) EFFECTIVE DATE.—The amendment made by this section 

shall apply to individuals who begin work for the employer after 

the date of the enactment of this Act. 

Subtitle B—Teacher Stabilization 

SEC. 202. PURPOSE. 

The purpose of this subtitle is to provide funds to States to 

prevent teacher layoffs and support the creation of additional jobs 

in public early childhood, elementary, and secondary education in 

the 2011–2012 and 2012–2013 school years. 

SEC. 203. GRANTS FOR THE OUTLYING AREAS AND THE SECRETARY 

OF THE INTERIOR; AVAILABILITY OF FUNDS. 

(a) RESERVATION OF FUNDS.—From the amount appropriated to 

carry out this subtitle under section 212, the Secretary— 


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(1) shall reserve up to one-half of one percent to provide 

assistance to the outlying areas on the basis of their respective 

needs, as determined by the Secretary, for activities consistent 

with this part under such terms and conditions as the Secretary may determine; 

(2) shall reserve up to one-half of one percent to provide 

assistance to the Secretary of the Interior to carry out activities consistent with this part, in schools operated or funded by 

the Bureau of Indian Education; and (3) may reserve up to $2,000,000 for administration and 

oversight of this part, including program evaluation. 

(b) AVAILABILITY OF FUNDS.—Funds made available under section 212 shall remain available to the Secretary until September 

30, 2012. 

SEC. 204. STATE ALLOCATION. 

(a) ALLOCATION.—After reserving funds under section 203(a), 

the Secretary shall allocate to the States— 

(1) 60 percent on the basis of their relative population of 

individuals aged 5 through 17; and 

(2) 40 percent on the basis of their relative total population. 

(b) AWARDS.—From the funds allocated under subsection (a), 

the Secretary shall make a grant to the Governor of each State who 

submits an approvable application under section 214. 

(c) ALTERNATE DISTRIBUTION OF FUNDS.— (1) If, within 30 days after the date of enactment of this 

Act, a Governor has not submitted an approvable application 

to the Secretary, the Secretary shall, consistent with paragraph (2), provide for funds allocated to that State to be distributed to another entity or other entities in the State for the 

support of early childhood, elementary, and secondary education, under such terms and conditions as the Secretary may 

establish. 

(2) MAINTENANCE OF EFFORT.— (A) GOVERNOR ASSURANCE.—The Secretary shall not 

allocate funds under paragraph (1) unless the Governor of 

the State provides an assurance to the Secretary that the 

State will for fiscal years 2012 and 2013 meet the requirements of section 209. 

(B) Notwithstanding subparagraph (A), the Secretary 

may allocate up to 50 percent of the funds that are available to the State under paragraph (1) to another entity or 

entities in the State, provided that the State educational 

agency submits data to the Secretary demonstrating that 

the State will for fiscal year 2012 meet the requirements 

of section 209(a) or the Secretary otherwise determines 

that the State will meet those requirements, or such comparable requirements as the Secretary may establish, for 

that year. 

(3) REQUIREMENTS.—An entity that receives funds under 

paragraph (1) shall use those funds in accordance with the requirements of this subtitle. 

(d) REALLOCATION.—If a State does not receive funding under 

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section (c), the Secretary shall reallocate the State’s entire allocation or the remaining portion of its allocation, as the case may be, 

to the remaining States in accordance with subsection (a). 

SEC. 205. STATE APPLICATION. 

The Governor of a State desiring to receive a grant under this 

subtitle shall submit an application to the Secretary within 30 days 

of the date of enactment of this Act, in such manner, and containing such information as the Secretary may reasonably require 

to determine the State’s compliance with applicable provisions of 

law. 

SEC. 206. STATE RESERVATION AND RESPONSIBILITIES. 

(a) RESERVATION.—Each State receiving a grant under section 

204(b) may reserve— 

(1) not more than 10 percent of the grant funds for awards 

to State-funded early learning programs; and 

(2) not more than 2 percent of the grant funds for the administrative costs of carrying out its responsibilities under this 

subtitle. 

(b) STATE RESPONSIBILITIES.—Each State receiving a grant 

under this subtitle shall, after reserving any funds under subsection (a)— 

(1) use the remaining grant funds only for awards to local 

educational agencies for the support of early childhood, elementary, and secondary education; and 

(2) distribute those funds, through subgrants, to its local 

educational agencies by distributing— 

(A) 60 percent on the basis of the local educational 

agencies’ relative shares of enrollment; and 

(B) 40 percent on the basis of the local educational 

agencies’ relative shares of funds received under part A of 

title I of the Elementary and Secondary Education Act of 

1965 for fiscal year 2011; and 

(3) make those funds available to local educational agencies no later than 100 days after receiving a grant from the 

Secretary. 

(c) PROHIBITIONS.—A State shall not use funds received under 

this subtitle to directly or indirectly— 

(1) establish, restore, or supplement a rainy-day fund; 

(2) supplant State funds in a manner that has the effect 

of establishing, restoring, or supplementing a rainy-day fund; 

(3) reduce or retire debt obligations incurred by the State; 

or 

(4) supplant State funds in a manner that has the effect 

of reducing or retiring debt obligations incurred by the State. 

SEC. 207. LOCAL EDUCATIONAL AGENCIES. 

Each local educational agency that receives a subgrant under 

this subtitle— 

(1) shall use the subgrant funds only for compensation and 

benefits and other expenses, such as support services, necessary to retain existing employees, recall or rehire former employees, or hire new employees to provide early childhood, elementary, or secondary educational and related services; 


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(2) shall obligate those funds no later than September 30, 

2013; and 

(3) may not use those funds for general administrative expenses or for other support services or expenditures, as those 

terms are defined by the National Center for Education Statistics in the Common Core of Data, as of the date of enactment 

of this Act. 

SEC. 208. EARLY LEARNING. 

Each State-funded early learning program that receives funds 

under this subtitle shall— 

(1) use those funds only for compensation, benefits, and 

other expenses, such as support services, necessary to retain 

early childhood educators, recall or rehire former early childhood educators, or hire new early childhood educators to provide early learning services; and 

(2) obligate those funds no later than September 30, 2013. 

SEC. 209. MAINTENANCE OF EFFORT. 

(a) The Secretary shall not allocate funds to a State under this 

subtitle unless the State provides an assurance to the Secretary 

that— 

(1) for State fiscal year 2012— 

(A) the State will maintain State support for early 

childhood, elementary, and secondary education (in the aggregate or on the basis of expenditure per pupil) and for 

public institutions of higher education (not including support for capital projects or for research and development or 

tuition and fees paid by students) at not less than the level 

of such support for each of the two categories for State fiscal year 2011; or 

(B) the State will maintain State support for early 

childhood, elementary, and secondary education and for 

public institutions of higher education (not including support for capital projects or for research and development or 

tuition and fees paid by students) at a percentage of the 

total revenues available to the State that is equal to or 

greater than the percentage provided for State fiscal year 

2011; and 

(2) for State fiscal year 2013— 

(A) the State will maintain State support for early 

childhood, elementary, and secondary education (in the aggregate or on the basis of expenditure per pupil) and for 

public institutions of higher education (not including support for capital projects or for research and development or 

tuition and fees paid by students) at not less than the level 

of such support for each of the two categories for State fiscal year 2012; or 

(B) the State will maintain State support for early 

childhood, elementary, and secondary education and for 

public institutions of higher education (not including support for capital projects or for research and development or 

tuition and fees paid by students) at a percentage of the 

total revenues available to the State that is equal to or 


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greater than the percentage provided for State fiscal year 

2012. 

(b) WAIVER.—The Secretary may waive the requirements of 

this section if the Secretary determines that a waiver would be equitable due to— 

(1) exceptional or uncontrollable circumstances, such as a 

natural disaster; or 

(2) a precipitous decline in the financial resources of the 

State. 

SEC. 210. REPORTING. 

Each State that receives a grant under this subtitle shall submit, on an annual basis, a report to the Secretary that contains— 

(1) a description of how funds received under this part 

were expended or obligated; and 

(2) an estimate of the number of jobs supported by the 

State using funds received under this subtitle. 

SEC. 211. DEFINITIONS. 

(a) Except as otherwise provided, the terms ‘‘local educational 

agency’’, ‘‘outlying area’’, ‘‘Secretary’’, ‘‘State’’, and ‘‘State educational agency’’ have the meanings given those terms in section 

9101 of the Elementary and Secondary Education Act of 1965 (20 

U.S.C. 7801). 

(b) The term ‘‘State’’ does not include an outlying area. 

(c) The term ‘‘early childhood educator’’ means an individual 

who— 

(1) works directly with children in a State-funded early 

learning program in a low-income community; 

(2) is involved directly in the care, development, and education of infants, toddlers, or young children age five and 

under; and 

(3) has completed a baccalaureate or advanced degree in 

early childhood development or early childhood education, or in 

a field related to early childhood education. 

(d) The term ‘‘State-funded early learning program’’ means a 

program that provides educational services to children from birth 

to kindergarten entry and receives funding from the State. 

SEC. 212. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated, and there are appropriated, $30,000,000,000 to carry out this subtitle for fiscal year 

2012. 

Subtitle C—First Responder Stabilization 

SEC. 213. PURPOSE. 

The purpose of this subtitle is to provide funds to States and 

localities to prevent layoffs of, and support the creation of additional jobs for, law enforcement officers and other first responders. 

SEC. 214. GRANT PROGRAM. 

The Attorney General shall carry out a competitive grant program pursuant to section 1701 of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796dd) for hiring, rehiring, or retention of career law enforcement officers under part 

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ject to subsections (g) or (i) of section 1701 or to section 1704 of 

such Act (42 U.S.C. 3796dd–3(c)). 

SEC. 215. APPROPRIATIONS. 

There are hereby appropriated to the Community Oriented Policing Stabilization Fund out of any money in the Treasury not otherwise obligated, $5,000,000,000, to remain available until September 30, 2012, of which $4,000,000,000 shall be for the Attorney 

General to carry out the competitive grant program under Section 

214; and of which $1,000,000,000 shall be transferred by the Attorney General to a First Responder Stabilization Fund from which 

the Secretary of Homeland Security shall make competitive grants 

for hiring, rehiring, or retention pursuant to the Federal Fire Prevention and Control Act of 1974 (15 U.S.C. 2201 et seq.), to carry 

out section 34 of such Act (15 U.S.C. 2229a). In making such 

grants, the Secretary may grant waivers from the requirements in 

subsections (a)(1)(A), (a)(1)(B), (a)(1)(E), (c)(1), (c)(2), and (c)(4)(A) of 

section 34. Of the amounts appropriated herein, not to exceed 

$8,000,000 shall be for administrative costs of the Attorney General, and not to exceed $2,000,000 shall be for administrative costs 

of the Secretary of Homeland Security. 

Subtitle D—School Modernization 

PART I—ELEMENTARY AND SECONDARY 

SCHOOLS 

SEC. 221. PURPOSE. 

The purpose of this part is to provide assistance for the modernization, renovation, and repair of elementary and secondary 

school buildings in public school districts across America in order 

to support the achievement of improved educational outcomes in 

those schools. 

SEC. 222. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated, and there are appropriated, $25,000,000,000 to carry out this part, which shall be 

available for obligation by the Secretary until September 30, 2012. 

SEC. 223. ALLOCATION OF FUNDS. 

(a) RESERVATIONS.—Of the amount made available to carry out 

this part, the Secretary shall reserve— 

(1) one-half of one percent for the Secretary of the Interior 

to carry out modernization, renovation, and repair activities 

described in section 226 in schools operated or funded by the 

Bureau of Indian Education; 

(2) one-half of one percent to make grants to the outlying 

areas for modernization, renovation, and repair activities described in section 226; and 

(3) such funds as the Secretary determines are needed to 

conduct a survey, by the National Center for Education Statistics, of the school construction, modernization, renovation, and 

repair needs of the public schools of the United States. 

(b) STATE ALLOCATION.—After reserving funds under subsection (a), the Secretary shall allocate the remaining amount 


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among the States in proportion to their respective allocations under 

part A of title I of the Elementary and Secondary Education Act 

(ESEA) (20 U.S.C. 6311 et seq.) for fiscal year 2011, except that— 

(1) the Secretary shall allocate 40 percent of such remaining amount to the 100 local educational agencies with the largest numbers of children aged 5–17 living in poverty, as determined using the most recent data available from the Department of Commerce that are satisfactory to the Secretary, in 

proportion to those agencies’ respective allocations under part 

A of title I of the ESEA for fiscal year 2011; and 

(2) the allocation to any State shall be reduced by the aggregate amount of the allocations under paragraph (1) to local 

educational agencies in that State. 

(c) REMAINING ALLOCATION.— 

(1) If a State does not apply for its allocation (or applies 

for less than the full allocation for which it is eligible) or does 

not use that allocation in a timely manner, the Secretary 

may— 

(A) reallocate all or a portion of that allocation to the 

other States in accordance with subsection (b); or 

(B) use all or a portion of that allocation to make direct allocations to local educational agencies within the 

State based on their respective allocations under part A of 

title I of the ESEA for fiscal year 2011 or such other method as the Secretary may determine. 

(2) If a local educational agency does not apply for its allocation under subsection (b)(1), applies for less than the full allocation for which it is eligible, or does not use that allocation 

in a timely manner, the Secretary may reallocate all or a portion of its allocation to the State in which that agency is located. 

SEC. 224. STATE USE OF FUNDS. 

(a) RESERVATION.—Each State that receives a grant under this 

part may reserve not more than one percent of the State’s allocation under section 223(b) for the purpose of administering the 

grant, except that no State may reserve more than $750,000 for 

this purpose. 

(b) FUNDS TO LOCAL EDUCATIONAL AGENCIES.— 

(1) FORMULA SUBGRANTS.—From the grant funds that are 

not reserved under subsection (a), a State shall allocate at 

least 50 percent to local educational agencies, including charter 

schools that are local educational agencies, that did not receive 

funds under section 223(b)(1) from the Secretary, in accordance 

with their respective allocations under part A of title I of the 

ESEA for fiscal year 2011, except that no such local educational agency shall receive less than $10,000. 

(2) ADDITIONAL SUBGRANTS.—The State shall use any 

funds remaining, after reserving funds under subsection (a) 

and allocating funds under paragraph (1), for subgrants to 

local educational agencies that did not receive funds under section 223(b)(1), including charter schools that are local educational agencies, to support modernization, renovation, and 

repair projects that the State determines, using objective criVerDate Mar 15 2010 06:20 Sep 14, 2011 Jkt 099011 PO 00000 Frm 00064 Fmt 6602 Sfmt 6601 E:\HR\OC\HD053.XXX HD053

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teria, are most needed in the State, with priority given to 

projects in rural local educational agencies. 

(c) REMAINING FUNDS.—If a local educational agency does not 

apply for an allocation under subsection (b)(1), applies for less than 

its full allocation, or fails to use that allocation in a timely manner, 

the State may reallocate any unused portion to other local educational agencies in accordance with subsection (b). 

SEC. 225. STATE AND LOCAL APPLICATIONS. 

(a) STATE APPLICATION.—A State that desires to receive a 

grant under this part shall submit an application to the Secretary 

at such time, in such manner, and containing such information and 

assurances as the Secretary may require, which shall include— 

(1) an identification of the State agency or entity that will 

administer the program; 

(2) the State’s process for determining how the grant funds 

will be distributed and administered, including— 

(A) how the State will determine the criteria and priorities in making subgrants under section 224(b)(2); 

(B) any additional criteria the State will use in determining which projects it will fund under that section; 

(C) a description of how the State will consider— 

(i) the needs of local educational agencies for assistance under this part; 

(ii) the impact of potential projects on job creation 

in the State; 

(iii) the fiscal capacity of local educational agencies applying for assistance; 

(iv) the percentage of children in those local educational agencies who are from low-income families; 

and 

(v) the potential for leveraging assistance provided 

by this program through matching or other financing 

mechanisms; 

(D) a description of how the State will ensure that the 

local educational agencies receiving subgrants meet the requirements of this part; 

(E) a description of how the State will ensure that the 

State and its local educational agencies meet the deadlines 

established in section 228; 

(F) a description of how the State will give priority to 

the use of green practices that are certified, verified, or 

consistent with any applicable provisions of— 

(i) the LEED Green Building Rating System; 

(ii) Energy Star; 

(iii) the CHPS Criteria; 

(iv) Green Globes; or 

(v) an equivalent program adopted by the State or 

another jurisdiction with authority over the local educational agency; 

(G) a description of the steps that the State will take 

to ensure that local educational agencies receiving subgrants will adequately maintain any facilities that are 

modernized, renovated, or repaired with subgrant funds 

under this part; and 


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(H) such additional information and assurances as the 

Secretary may require. 

(b) LOCAL APPLICATION.—A local educational agency that is eligible under section 223(b)(1) that desires to receive a grant under 

this part shall submit an application to the Secretary at such time, 

in such manner, and containing such information and assurances 

as the Secretary may require, which shall include— 

(1) a description of how the local educational agency will 

meet the deadlines and requirements of this part; 

(2) a description of the steps that the local educational 

agency will take to adequately maintain any facilities that are 

modernized, renovated, or repaired with funds under this part; 

and 

(3) such additional information and assurances as the Secretary may require. 

SEC. 226. USE OF FUNDS. 

(a) IN GENERAL.—Funds awarded to local educational agencies 

under this part shall be used only for either or both of the following 

modernization, renovation, or repair activities in facilities that are 

used for elementary or secondary education or for early learning 

programs: 

(1) Direct payments for school modernization, renovation, 

and repair. 

(2) To pay interest on bonds or payments for other financing instruments that are newly issued for the purpose of financing school modernization, renovation, and repair. 

(b) SUPPLEMENT, NOT SUPPLANT.—Funds made available under 

this part shall be used to supplement, and not supplant, other Federal, State, and local funds that would otherwise be expended to 

modernize, renovate, or repair eligible school facilities. 

(c) PROHIBITION.—Funds awarded to local educational agencies 

under this part may not be used for— 

(1) new construction; 

(2) payment of routine maintenance costs; or 

(3) modernization, renovation, or repair of stadiums or 

other facilities primarily used for athletic contests or exhibitions or other events for which admission is charged to the 

general public. 

SEC. 227. PRIVATE SCHOOLS. 

(a) IN GENERAL.—Section 9501 of the ESEA (20 U.S.C. 7881) 

shall apply to this part in the same manner as it applies to activities under that Act, except that— 

(1) section 9501 shall not apply with respect to the title to 

any real property modernized, renovated, or repaired with assistance provided under this section; 

(2) the term ‘‘services’’, as used in section 9501 with respect to funds under this part, shall be provided only to private, nonprofit elementary or secondary schools with a rate of 

child poverty of at least 40 percent and may include only— 

(A) modifications of school facilities necessary to meet 

the standards applicable to public schools under the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et 

seq.); 


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(B) modifications of school facilities necessary to meet 

the standards applicable to public schools under section 

504 of the Rehabilitation Act of 1973 (29 U.S.C. 794); and 

(C) asbestos or polychlorinated biphenyls abatement or 

removal from school facilities; and 

(3) expenditures for services provided using funds made 

available under section 226 shall be considered equal for purposes of section 9501(a)(4) of the ESEA if the per-pupil expenditures for services described in paragraph (2) for students enrolled in private nonprofit elementary and secondary schools 

that have child-poverty rates of at least 40 percent are consistent with the per-pupil expenditures under this subpart for 

children enrolled in the public schools of the local educational 

agency receiving funds under this subpart. 

(b) REMAINING FUNDS.—If the expenditure for services described in paragraph (2) is less than the amount calculated under 

paragraph (3) because of insufficient need for those services, the remainder shall be available to the local educational agency for modernization, renovation, and repair of its school facilities. 

(c) APPLICATION.—If any provision of this section, or the application thereof, to any person or circumstance is judicially determined to be invalid, the remainder of the section and the application to other persons or circumstances shall not be affected thereby. 

SEC. 228. ADDITIONAL PROVISIONS. 

(a) Funds appropriated under section 222 shall be available for 

obligation by local educational agencies receiving grants from the 

Secretary under section 223(b)(1), by States reserving funds under 

section 224(a), and by local educational agencies receiving subgrants under section 224(b)(1) only during the period that ends 24 

months after the date of enactment of this Act. 

(b) Funds appropriated under section 222 shall be available for 

obligation by local educational agencies receiving subgrants under 

section 224(b)(2) only during the period that ends 36 months after 

the date of enactment of this Act. 

(c) Section 439 of the General Education Provisions Act (20 

U.S.C. 1232b) shall apply to funds available under this part. 

(d) For purposes of section 223(b)(1), Hawaii, the District of Columbia, and the Commonwealth of Puerto Rico are not local educational agencies. 

PART II—COMMUNITY COLLEGE 

MODERNIZATION 

SEC. 229. FEDERAL ASSISTANCE FOR COMMUNITY COLLEGE MODERNIZATION. 

(a) IN GENERAL.— 

(1) GRANT PROGRAM.—From the amounts made available 

under subsection (h), the Secretary shall award grants to 

States to modernize, renovate, or repair existing facilities at 

community colleges. 

(2) ALLOCATION.— (A) RESERVATIONS.—Of the amount made available to 

carry out this section, the Secretary shall reserve— 


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(i) up to 0.25 percent for grants to institutions 

that are eligible under section 316 of the Higher Education Act of 1965 (20 U.S.C. 1059c) to provide for 

modernization, renovation, and repair activities described in this section; and 

(ii) up to 0.25 percent for grants to the outlying 

areas to provide for modernization, renovation, and repair activities described in this section. 

(B) ALLOCATION.—After reserving funds under subparagraph (A), the Secretary shall allocate to each State 

that has an application approved by the Secretary an 

amount that bears the same relation to any remaining 

funds as the total number of students in such State who 

are enrolled in institutions described in section 

230(b)(1)(A) plus the number of students who are estimated to be enrolled in and pursuing a degree or certificate that is not a bachelor’s, master’s, professional, or 

other advanced degree in institutions described in section 

230(b)(1)(B), based on the proportion of degrees or certificates awarded by such institutions that are not bachelor’s, 

master’s, professional, or other advanced degrees, as reported to the Integrated Postsecondary Data System bears 

to the estimated total number of such students in all 

States, except that no State shall receive less than 

$2,500,000. 

(C) REALLOCATION.—Amounts not allocated under this 

section to a State because the State either did not submit 

an application under subsection (b), the State submitted 

an application that the Secretary determined did not meet 

the requirements of such subsection, or the State cannot 

demonstrate to the Secretary a sufficient demand for 

projects to warrant the full allocation of the funds, shall be 

proportionately reallocated under this paragraph to the 

other States that have a demonstrated need for, and are 

receiving, allocations under this section. 

(D) STATE ADMINISTRATION.—A State that receives a 

grant under this section may use not more than one percent of that grant to administer it, except that no State 

may use more than $750,000 of its grant for this purpose. 

(3) SUPPLEMENT, NOT SUPPLANT.—Funds made available 

under this section shall be used to supplement, and not supplant, other Federal, State, and local funds that would otherwise be expended to modernize, renovate, or repair existing 

community college facilities. 

(b) APPLICATION.—A State that desires to receive a grant under 

this section shall submit an application to the Secretary at such 

time, in such manner, and containing such information and assurances as the Secretary may require. Such application shall include 

a description of— 

(1) how the funds provided under this section will improve 

instruction at community colleges in the State and will improve the ability of those colleges to educate and train students 

to meet the workforce needs of employers in the State; and 


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(2) the projected start of each project and the estimated 

number of persons to be employed in the project. 

(c) PROHIBITED USES OF FUNDS.— (1) IN GENERAL.—No funds awarded under this section 

may be used for— 

(i) payment of routine maintenance costs; 

(ii) construction, modernization, renovation, or repair 

of stadiums or other facilities primarily used for athletic 

contests or exhibitions or other events for which admission 

is charged to the general public; or 

(iii) construction, modernization, renovation, or repair 

of facilities— 

(I) used for sectarian instruction, religious worship, or a school or department of divinity; or 

(II) in which a substantial portion of the functions 

of the facilities are subsumed in a religious mission. 

(2) FOUR-YEAR INSTITUTIONS.—No funds awarded to a fouryear public institution of higher education under this section 

may be used for any facility, service, or program of the institution that is not available to students who are pursuing a degree or certificate that is not a bachelor’s, master’s, professional, or other advanced degree. 

(d) GREEN PROJECTS.—In providing assistance to community 

college projects under this section, the State shall consider the extent to which a community college’s project involves activities that 

are certified, verified, or consistent with the applicable provisions 

of— 

(1) the LEED Green Building Rating System; 

(2) Energy Star; 

(3) the CHPS Criteria, as applicable; 

(4) Green Globes; or 

(5) an equivalent program adopted by the State or the 

State higher education agency that includes a verifiable method to demonstrate compliance with such program. 

(e) APPLICATION OF GEPA.—Section 439 of the General Education Provisions Act such Act (20 U.S.C. 1232b) shall apply to 

funds available under this subtitle. 

(f) REPORTS BY THE STATES.—Each State that receives a grant 

under this section shall, not later than September 30, 2012, and 

annually thereafter for each fiscal year in which the State expends 

funds received under this section, submit to the Secretary a report 

that includes— 

(1) a description of the projects for which the grant was, 

or will be, used; 

(2) a description of the amount and nature of the assistance provided to each community college under this section; 

and 

(3) the number of jobs created by the projects funded 

under this section. 

(g) REPORT BY THE SECRETARY.—The Secretary shall submit to 

the authorizing committees (as defined in section 103 of the Higher 

Education Act of 1965; 20 U.S.C. 1003) an annual report on the 

grants made under this section, including the information described in subsection (f). 


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(h) AVAILABILITY OF FUNDS.— (1) There are authorized to be appropriated, and there are 

appropriated, to carry out this section (in addition to any other 

amounts appropriated to carry out this section and out of any 

money in the Treasury not otherwise appropriated), 

$5,000,000,000 for fiscal year 2012. 

(2) Funds appropriated under this subsection shall be 

available for obligation by community colleges only during the 

period that ends 36 months after the date of enactment of this 

Act. 

PART III—GENERAL PROVISIONS 

SEC. 230. DEFINITIONS. 

(a) ESEA TERMS.—Except as otherwise provided, in this subtitle, the terms ‘‘local educational agency’’, ‘‘Secretary’’, and ‘‘State 

educational agency’’ have the meanings given those terms in section 9101 of the Elementary and Secondary Education Act of 1965 

(20 U.S.C. 7801). 

(b) ADDITIONAL DEFINITIONS.—The following definitions apply 

to this title: 

(1) COMMUNITY COLLEGE.—The term ‘‘community college’’ 

means— 

(A) a junior or community college, as that term is defined in section 312(f) of the Higher Education Act of 1965 

(20 U.S.C. 1058(f)); or 

(B) a four-year public institution of higher education 

(as defined in section 101 of the Higher Education Act of 

1965 (20 U.S.C. 1001)) that awards a significant number 

of degrees and certificates, as determined by the Secretary, 

that are not— 

(i) bachelor’s degrees (or an equivalent); or 

(ii) master’s, professional, or other advanced degrees. 

(2) CHPS CRITERIA.—The term ‘‘CHPS Criteria’’ means the 

green building rating program developed by the Collaborative 

for High Performance Schools. 

(3) ENERGY STAR.—The term ‘‘Energy Star’’ means the Energy Star program of the United States Department of Energy 

and the United States Environmental Protection Agency. 

(4) GREEN GLOBES.—The term ‘‘Green Globes’’ means the 

Green Building Initiative environmental design and rating system referred to as Green Globes. 

(5) LEED GREEN BUILDING RATING SYSTEM.—The term 

‘‘LEED Green Building Rating System’’ means the United 

States Green Building Council Leadership in Energy and Environmental Design green building rating standard referred to as 

the LEED Green Building Rating System. 

(6) MODERNIZATION, RENOVATION, AND REPAIR.—The term 

‘‘modernization, renovation and repair’’ means— 

(A) comprehensive assessments of facilities to identify— 

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formance, or productivity or energy, water, or materials efficiency; and 

(ii) needed facility improvements; 

(B) repairing, replacing, or installing roofs (which may 

be extensive, intensive, or semi-intensive ‘‘green’’ roofs); 

electrical wiring; water supply and plumbing systems, sewage systems, storm water runoff systems, lighting systems 

(or components of such systems); or building envelope, windows, ceilings, flooring, or doors, including security doors; 

(C) repairing, replacing, or installing heating, ventilation, or air conditioning systems, or components of those 

systems (including insulation), including by conducting indoor air quality assessments; 

(D) compliance with fire, health, seismic, and safety 

codes, including professional installation of fire and life 

safety alarms, and modernizations, renovations, and repairs that ensure that facilities are prepared for such 

emergencies as acts of terrorism, campus violence, and 

natural disasters, such as improving building infrastructure to accommodate security measures and installing or 

upgrading technology to ensure that a school or incident is 

able to respond to such emergencies; 

(E) making modifications necessary to make educational facilities accessible in compliance with the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) 

and section 504 of the Rehabilitation Act of 1973 (29 

U.S.C. 794), except that such modifications shall not be the 

primary use of a grant or subgrant; 

(F) abatement, removal, or interim controls of asbestos, polychlorinated biphenyls, mold, mildew, or lead-based 

hazards, including lead-based paint hazards; 

(G) retrofitting necessary to increase energy efficiency; 

(H) measures, such as selection and substitution of 

products and materials, and implementation of improved 

maintenance and operational procedures, such as ‘‘green 

cleaning’’ programs, to reduce or eliminate potential student or staff exposure to— 

(i) volatile organic compounds; 

(ii) particles such as dust and pollens; or 

(iii) combustion gases; 

(I) modernization, renovation, or repair necessary to 

reduce the consumption of coal, electricity, land, natural 

gas, oil, or water; 

(J) installation or upgrading of educational technology 

infrastructure; 

(K) installation or upgrading of renewable energy generation and heating systems, including solar, photovoltaic, 

wind, biomass (including wood pellet and woody biomass), 

waste-to-energy, solar-thermal, and geothermal systems, 

and energy audits; 

(L) modernization, renovation, or repair activities related to energy efficiency and renewable energy, and improvements to building infrastructures to accommodate bicycle and pedestrian access; 


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(M) Ground improvements, storm water management, 

landscaping and environmental clean-up when necessary; 

(N) other modernization, renovation, or repair to— 

(i) improve teachers’ ability to teach and students’ 

ability to learn; 

(ii) ensure the health and safety of students and 

staff; or 

(iii) improve classroom, laboratory, and vocational 

facilities in order to enhance the quality of science, 

technology, engineering, and mathematics instruction; 

and 

(O) required environmental remediation related to facilities modernization, renovation, or repair activities described in subparagraphs (A) through (L). 

(7) OUTLYING AREA.—The term ‘‘outlying area’’ means the 

U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and the Republic of 

Palau. 

(8) STATE.—The term ‘‘State’’ means each of the 50 States 

of the United States, the Commonwealth of Puerto Rico, and 

the District of Columbia. 

SEC. 231. BUY AMERICAN. 

Section 1605 of division A of the American Recovery and Reinvestment Act of 2009 (Public Law 111–5) applies to funds made 

available under this title. 

Subtitle E—Immediate Transportation Infrastrucure 

Investments 

SEC. 241. IMMEDIATE TRANSPORTATION INFRASTRUCTURE INVESTMENTS. 

(a) GRANTS-IN-AID FOR AIRPORTS.— 

(1) IN GENERAL.—There is made available to the Secretary 

of Transportation $2,000,000,000 to carry out airport improvement under subchapter I of chapter 471 and subchapter I of 

chapter 475 of title 49, United States Code. 

(2) FEDERAL SHARE; LIMITATION ON OBLIGATIONS.—The 

Federal share payable of the costs for which a grant is made 

under this subsection, shall be 100 percent. The amount made 

available under this subsection shall not be subject to any limitation on obligations for the Grants-In-Aid for Airports program set forth in any Act or in title 49, United States Code. 

(3) DISTRIBUTION OF FUNDS.—Funds provided to the Secretary under this subsection shall not be subject to apportionment formulas, special apportionment categories, or minimum 

percentages under chapter 471 of such title. 

(4) AVAILABILITY.—The amounts made available under this 

subsection shall be available for obligation until the date that 

is two years after the date of the enactment of this Act. The 

Secretary shall obligate amounts totaling not less than 50 percent of the funds made available within one year of enactment 

and obligate remaining amounts not later than two years after 

enactment. 


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(5) ADMINISTRATIVE EXPENSES.—Of the funds made available under this subsection, 0.3 percent shall be available to the 

Secretary for administrative expenses, shall remain available 

for obligation until September 30, 2015, and may be used in 

conjunction with funds otherwise provided for the administration of the Grants-In-Aid for Airports program. 

(b) NEXT GENERATION AIR TRAFFIC CONTROL ADVANCE- MENTS.— 

(1) IN GENERAL.—There is made available to the Secretary of Transportation $1,000,000,000 for necessary Federal Aviation Administration capital, research and operating costs to 

carry out Next Generation air traffic control system advancements. 

(2) AVAILABILITY.—The amounts made available under this 

subsection shall be available for obligation until the date that 

is two years after the date of the enactment of this Act. 

(c) HIGHWAY INFRASTRUCTURE INVESTMENT.— (1) IN GENERAL.—There is made available to the Secretary of Transportation $27,000,000,000 for restoration, repair, construction and other activities eligible under section 133(b) of 

title 23, United States Code, and for passenger and freight rail 

transportation and port infrastructure projects eligible for assistance under section 601(a)(8) of title 23. 

(2) FEDERAL SHARE; LIMITATION ON OBLIGATIONS.—The 

Federal share payable on account of any project or activity carried out with funds made available under this subsection shall 

be, at the option of the recipient, up to 100 percent of the total 

cost thereof. The amount made available under this subsection 

shall not be subject to any limitation on obligations for Federal-aid highways and highway safety construction programs 

set forth in any Act or in title 23, United States Code. 

(3) AVAILABILITY.—The amounts made available under this 

subsection shall be available for obligation until the date that 

is two years after the date of the enactment of this Act. The 

Secretary shall obligate amounts totaling not less than 50 percent of the funds made available within one year of enactment 

and obligate remaining amounts not later than two years after 

enactment. 

(4) DISTRIBUTION OF FUNDS.—Of the funds provided in this 

subsection, after making the set-asides required by paragraphs 

(9), (10), (11), (12), and (15), 50 percent of the funds shall be 

apportioned to States using the formula set forth in section 

104(b)(3) of title 23, United States Code, and the remaining 

funds shall be apportioned to States in the same ratio as the 

obligation limitation for fiscal year 2010 was distributed 

among the States in accordance with the formula specified in 

section 120(a)(6) of division A of Public Law 111–117. 

(5) APPORTIONMENT.—Apportionments under paragraph (4) 

shall be made not later than 30 days after the date of the enactment of this Act. 

(6) REDISTRIBUTION.— 

(A) The Secretary shall, 180 days following the date of 

apportionment, withdraw from each State an amount 

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graph (4) to that State (excluding funds suballocated within the State) less the amount of funding obligated (excluding funds suballocated within the State), and the Secretary 

shall redistribute such amounts to other States that have 

had no funds withdrawn under this subparagraph in the 

manner described in section 120(c) of division A of Public 

Law 111–117. 

(B) One year following the date of apportionment, the 

Secretary shall withdraw from each recipient of funds apportioned under paragraph (4) any unobligated funds, and 

the Secretary shall redistribute such amounts to States 

that have had no funds withdrawn under this paragraph 

(excluding funds suballocated within the State) in the 

manner described in section 120(c) of division A of Public 

Law 111–117. 

(C) At the request of a State, the Secretary may provide an extension of the one-year period only to the extent 

that the Secretary determines that the State has encountered extreme conditions that create an unworkable bidding environment or other extenuating circumstances. Before granting an extension, the Secretary notify in writing 

the Committee on Transportation and Infrastructure and 

the Committee on Environment and Public Works, providing a thorough justification for the extension. 

(7) TRANSPORTATION ENHANCEMENTS.—Three percent of 

the funds apportioned to a State under paragraph (4) shall be 

set aside for the purposes described in section 133(d)(2) of title 

23, United States Code (without regard to the comparison to 

fiscal year 2005). 

(8) SUBALLOCATION.—Thirty percent of the funds apportioned to a State under this subsection shall be suballocated 

within the State in the manner and for the purposes described 

in the first sentence of sections 133(d)(3)(A), 133(d)(3)(B), and 

133(d)(3)(D) of title 23, United States Code. Such suballocation 

shall be conducted in every State. Funds suballocated within 

a State to urbanized areas and other areas shall not be subject 

to the redistribution of amounts required 180 days following 

the date of apportionment of funds provided by paragraph 

(6)(A). 

(9) PUERTO RICO AND TERRITORIAL HIGHWAY PROGRAMS.— 

Of the funds provided under this subsection, $105,000,000 

shall be set aside for the Puerto Rico highway program authorized under section 165 of title 23, United States Code, and 

$45,000,000 shall be for the territorial highway program authorized under section 215 of title 23, United States Code. 

(10) FEDERAL LANDS AND INDIAN RESERVATIONS.—Of the 

funds provided under this subsection, $550,000,000 shall be set 

aside for investments in transportation at Indian reservations 

and Federal lands in accordance with the following: 

(A) Of the funds set aside by this paragraph, 

$310,000,000 shall be for the Indian Reservation Roads 

program, $170,000,000 shall be for the Park Roads and 

Parkways program, $60,000,000 shall be for the Forest 


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Highway Program, and $10,000,000 shall be for the Refuge 

Roads program. 

(B) For investments at Indian reservations and Federal lands, priority shall be given to capital investments, 

and to projects and activities that can be completed within 

2 years of enactment of this Act. 

(C) One year following the enactment of this Act, to 

ensure the prompt use of the funding provided for investments at Indian reservations and Federal lands, the Secretary shall have the authority to redistribute unobligated 

funds within the respective program for which the funds 

were appropriated. 

(D) Up to four percent of the funding provided for Indian Reservation Roads may be used by the Secretary of 

the Interior for program management and oversight and 

project-related administrative expenses. 

(E) Section 134(f)(3)(C)(ii)(II) of title 23, United States 

Code, shall not apply to funds set aside by this paragraph. 

(11) JOB TRAINING.—Of the funds provided under this sub- section, $50,000,000 shall be set aside for the development and 

administration of transportation training programs under section 140(b) title 23, United States Code. 

(A) Funds set aside under this subsection shall be 

competitively awarded and used for the purpose of providing training, apprenticeship (including Registered Apprenticeship), skill development, and skill improvement 

programs, as well as summer transportation institutes and 

may be transferred to, or administered in partnership 

with, the Secretary of Labor and shall demonstrate to the 

Secretary of Transportation program outcomes, including— 

(i) impact on areas with transportation workforce 

shortages; 

(ii) diversity of training participants; 

(iii) number of participants obtaining certifications 

or credentials required for specific types of employment; 

(iv) employment outcome metrics, such as job 

placement and job retention rates, established in consultation with the Secretary of Labor and consistent 

with metrics used by programs under the Workforce 

Investment Act; 

(v) to the extent practical, evidence that the program did not preclude workers that participate in 

training or apprenticeship activities under the program from being referred to, or hired on, projects 

funded under this chapter; and 

(vi) identification of areas of collaboration with the 

Department of Labor programs, including co-enrollment. 

(B) To be eligible to receive a competitively awarded 

grant under this subsection, a State must certify that at 

least 0.1 percent of the amounts apportioned under the 

Surface Transportation Program and Bridge Program will 

be obligated in the first fiscal year after enactment of this 


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act for job training activities consistent with section 140(b) 

of title 23, United States Code. 

(12) DISADVANTAGED BUSINESS ENTERPRISES.—Of the funds 

provided under this subsection, $10,000,000 shall be set aside 

for training programs and assistance programs under section 

140(c) of title 23, United States Code. Funds set aside under 

this paragraph should be allocated to businesses that have 

proven success in adding staff while effectively completing 

projects. 

(13) STATE PLANNING AND OVERSIGHT EXPENSES.—Of 

amounts apportioned under paragraph (4) of this subsection, a 

State may use up to 0.5 percent for activities related to 

projects funded under this subsection, including activities eligible under sections 134 and 135 of title 23, United States Code, 

State administration of subgrants, and State oversight of subrecipients. 

(14) CONDITIONS.— (A) Funds made available under this subsection shall 

be administered as if apportioned under chapter 1 of title 

23, United States Code, except for funds made available 

for investments in transportation at Indian reservations 

and Federal lands, and for the territorial highway program, which shall be administered in accordance with 

chapter 2 of title 23, United States Code, and except for 

funds made available for disadvantaged business enterprises bonding assistance, which shall be administered in 

accordance with chapter 3 of title 49, United States Code. 

(B) Funds made available under this subsection shall 

not be obligated for the purposes authorized under section 

115(b) of title 23, United States Code. 

(C) Funding provided under this subsection shall be in 

addition to any and all funds provided for fiscal years 2011 

and 2012 in any other Act for ‘‘Federal-aid Highways’’ and 

shall not affect the distribution of funds provided for ‘‘Federal-aid Highways’’ in any other Act. 

(D) Section 1101(b) of Public Law 109–59 shall apply 

to funds apportioned under this subsection. 

(15) OVERSIGHT.—The Administrator of the Federal Highway Administration may set aside up to 0.15 percent of the 

funds provided under this subsection to fund the oversight by 

the Administrator of projects and activities carried out with 

funds made available to the Federal Highway Administration 

in this Act, and such funds shall be available through September 30, 2015. 

(d) CAPITAL ASSISTANCE FOR HIGH SPEED RAIL CORRIDORS AND

INTERCITY PASSENGER RAIL SERVICE.— 

(1) IN GENERAL.—There is made available to the Secretary 

of Transportation $4,000,000,000 for grants for high-speed rail 

projects as authorized under sections 26104 and 26106 of title 

49, United States Code, capital investment grants to support 

intercity passenger rail service as authorized under section 

24406 of title 49, United States Code, and congestion grants as 

authorized under section 24105 of title 49, United States Code, 

and to enter into cooperative agreements for these purposes as 


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authorized, except that the Administrator of the Federal Railroad Administration may retain up to one percent of the funds 

provided under this heading to fund the award and oversight 

by the Administrator of grants made under this subsection, 

which retained amount shall remain available for obligation 

until September 30, 2015. 

(2) AVAILABILITY.—The amounts made available under this 

subsection shall be available for obligation until the date that 

is two years after the date of the enactment of this Act. The 

Secretary shall obligate amounts totaling not less than 50 percent of the funds made available within one year of enactment 

and obligate remaining amounts not later than two years after 

enactment. 

(3) FEDERAL SHARE.—The Federal share payable of the 

costs for which a grant or cooperative agreements is made 

under this subsection shall be, at the option of the recipient, 

up to 100 percent. 

(4) INTERIM GUIDANCE.—The Secretary shall issue interim 

guidance to applicants covering application procedures and administer the grants provided under this subsection pursuant to 

that guidance until final regulations are issued. 

(5) INTERCITY PASSENGER RAIL CORRIDORS.—Not less than 

85 percent of the funds provided under this subsection shall be 

for cooperative agreements that lead to the development of entire segments or phases of intercity or high-speed rail corridors. 

(6) CONDITIONS.— 

(A) In addition to the provisions of title 49, United 

States Code, that apply to each of the individual programs 

funded under this subsection, subsections 24402(a)(2), 

24402(i), and 24403(a) and (c) of title 49, United States 

Code, shall also apply to the provision of funds provided 

under this subsection. 

(B) A project need not be in a State rail plan developed under Chapter 227 of title 49, United States Code, to 

be eligible for assistance under this subsection. 

(C) Recipients of grants under this paragraph shall 

conduct all procurement transactions using such grant 

funds in a manner that provides full and open competition, 

as determined by the Secretary, in compliance with existing labor agreements. 

(e) CAPITAL GRANTS TO THE NATIONAL RAILROAD PASSENGER

CORPORATION.— 

(1) IN GENERAL.—There is made available $2,000,000,000 

to enable the Secretary of Transportation to make capital 

grants to the National Railroad Passenger Corporation (Amtrak), as authorized by section 101(c) of the Passenger Rail Investment and Improvement Act of 2008 (Public Law 110–432). 

(2) AVAILABILITY.—The amounts made available under this 

subsection shall be available for obligation until the date that 

is two years after the date of the enactment of this Act. The 

Secretary shall obligate amounts totaling not less than 50 percent of the funds made available within one year of enactment 


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and obligate remaining amounts not later than two years after 

enactment. 

(3) PROJECT PRIORITY.—The priority for the use of funds 

shall be given to projects for the repair, rehabilitation, or upgrade of railroad assets or infrastructure, and for capital 

projects that expand passenger rail capacity including the rehabilitation of rolling stock. 

(4) CONDITIONS.— (A) None of the funds under this subsection shall be 

used to subsidize the operating losses of Amtrak. 

(B) The funds provided under this subsection shall be 

awarded not later than 90 days after the date of enactment of this Act. 

(C) The Secretary shall take measures to ensure that 

projects funded under this subsection shall be completed 

within 2 years of enactment of this Act, and shall serve to 

supplement and not supplant planned expenditures for 

such activities from other Federal, State, local and corporate sources. The Secretary shall certify to the House 

and Senate Committees on Appropriations in writing compliance with the preceding sentence. 

(5) OVERSIGHT.—The Administrator of the Federal Railroad Administration may set aside 0.5 percent of the funds 

provided under this subsection to fund the oversight by the Administrator of projects and activities carried out with funds 

made available in this subsection, and such funds shall be 

available through September 30, 2015. 

(f) TRANSIT CAPITAL ASSISTANCE.— (1) IN GENERAL.—There is made available to the Secretary of Transportation $3,000,000,000 for grants for transit capital 

assistance grants as defined by section 5302(a)(1) of title 49, 

United States Code. Notwithstanding any provision of chapter 

53 of title 49, however, a recipient of funding under this subsection may use up to 10 percent of the amount provided for 

the operating costs of equipment and facilities for use in public 

transportation or for other eligible activities. 

(2) FEDERAL SHARE; LIMTATION ON OBLIGATIONS.—The applicable requirements of chapter 53 of title 49, United States 

Code, shall apply to funding provided under this subsection, 

except that the Federal share of the costs for which any grant 

is made under this subsection shall be, at the option of the recipient, up to 100 percent. The amount made available under 

this subsection shall not be subject to any limitation on obligations for transit programs set forth in any Act or chapter 53 

of title 49. 

(3) AVAILABILITY.—The amounts made available under this 

subsection shall be available for obligation until the date that 

is two years after the date of the enactment of this Act. The 

Secretary shall obligate amounts totaling not less than 50 percent of the funds made available within one year of enactment 

and obligate remaining amounts not later than two years after 

enactment. 

(4) DISTRIBUTION OF FUNDS.—The Secretary of Transportation shall— 


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(A) provide 80 percent of the funds appropriated under 

this subsection for grants under section 5307 of title 49, 

United States Code, and apportion such funds in accordance with section 5336 of such title; 

(B) provide 10 percent of the funds appropriated under 

this subsection in accordance with section 5340 of such 

title; and 

(C) provide 10 percent of the funds appropriated under 

this subsection for grants under section 5311 of title 49, 

United States Code, and apportion such funds in accordance with such section. 

(5) APPORTIONMENT.—The funds apportioned under this 

subsection shall be apportioned not later than 21 days after 

the date of the enactment of this Act. 

(6) REDISTRIBUTION.— (A) The Secretary shall, 180 days following the date of 

apportionment, withdraw from each urbanized area or 

State an amount equal to 50 percent of the funds apportioned to such urbanized areas or States less the amount 

of funding obligated, and the Secretary shall redistribute 

such amounts to other urbanized areas or States that have 

had no funds withdrawn under this proviso utilizing whatever method he deems appropriate to ensure that all funds 

redistributed under this proviso shall be utilized promptly. 

(B) One year following the date of apportionment, the 

Secretary shall withdraw from each urbanized area or 

State any unobligated funds, and the Secretary shall redistribute such amounts to other urbanized areas or States 

that have had no funds withdrawn under this proviso utilizing whatever method the Secretary deems appropriate 

to ensure that all funds redistributed under this proviso 

shall be utilized promptly. 

(C) At the request of an urbanized area or State, the 

Secretary of Transportation may provide an extension of 

such 1-year period if the Secretary determines that the urbanized area or State has encountered an unworkable bidding environment or other extenuating circumstances. Before granting an extension, the Secretary shall notify in 

writing the Committee on Transportation and Infrastructure and the Committee on Banking, Housing and Urban 

Affairs, providing a thorough justification for the extension. 

(7) CONDITIONS.— 

(A) Of the funds provided for section 5311 of title 49, 

United States Code, 2.5 percent shall be made available 

for section 5311(c)(1). 

(B) Section 1101(b) of Public Law 109–59 shall apply 

to funds appropriated under this subsection. 

(C) The funds appropriated under this subsection shall 

not be comingled with any prior year funds. 

(8) OVERSIGHT.—Notwithstanding any other provision of 

law, 0.3 percent of the funds provided for grants under section 

5307 and section 5340, and 0.3 percent of the funds provided 

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trative expenses and program management oversight, and such 

funds shall be available through September 30, 2015. 

(g) STATE OF GOOD REPAIR.— (1) IN GENERAL.—There is made available to the Secretary of Transportation $6,000,000,000 for capital expenditures as 

authorized by sections 5309(b)(2) and (3) of title 49, United 

States Code. 

(2) FEDERAL SHARE.—The applicable requirements of chapter 53 of Title 49, United States Code, shall apply, except that 

the Federal share of the costs for which a grant is made under 

this subsection shall be, at the option of the recipient, up to 

100 percent. 

(3) AVAILABILITY.—The amounts made available under this 

subsection shall be available for obligation until the date that 

is two years after the date of the enactment of this Act. The 

Secretary shall obligate amounts totaling not less than 50 percent of the funds made available within one year of enactment 

and obligate remaining amounts not later than two years after 

enactment. 

(4) DISTRIBUTION OF FUNDS.— (A) The Secretary of Transportation shall apportion 

not less than 75 percent of the funds under this subsection 

for the modernization of fixed guideway systems, pursuant 

to the formula set forth in section 5336(b) title 49, United 

States Code, other than subsection (b)(2)(A)(ii). 

(B) Of the funds appropriated under this subsection, 

not less than 25 percent shall be available for the restoration or replacement of existing public transportation assets 

related to bus systems, pursuant to the formula set forth 

in section 5336 other than subsection (b). 

(5) APPORTIONMENT.—The funds made available under this 

subsection shall be apportioned not later than 30 days after 

the date of the enactment of this Act. 

(6) REDISTRIBUTION.— 

(A) The Secretary shall, 180 days following the date of 

apportionment, withdraw from each urbanized area an 

amount equal to 50 percent of the funds apportioned to 

such urbanized area less the amount of funding obligated, 

and the Secretary shall redistribute such amounts to other 

urbanized areas that have had no funds withdrawn under 

this paragraph utilizing whatever method the Secretary 

deems appropriate to ensure that all funds redistributed 

under this paragraph shall be utilized promptly: 

(B) One year following the date of apportionment, the 

Secretary shall withdraw from each urbanized area any 

unobligated funds, and the Secretary shall redistribute 

such amounts to other urbanized areas that have had no 

funds withdrawn under this paragraph, utilizing whatever 

method the Secretary deems appropriate to ensure that all 

funds redistributed under this paragraph shall be utilized 

promptly: 

(C) At the request of an urbanized area, the Secretary 

may provide an extension of the 1-year period if the Secretary finds that the urbanized area has encountered an 


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unworkable bidding environment or other extenuating circumstances. Before granting an extension, the Secretary 

shall notify the Committee on Transportation and Infrastructure and the Committee on Banking, Housing, and 

Urban Affairs, providing a thorough justification for the 

extension. 

(7) CONDITIONS.— 

(A) The provisions of section 1101(b) of Public Law 

109–59 shall apply to funds made available under this 

subsection. 

(B) The funds appropriated under this subsection shall 

not be commingled with any prior year funds. 

(8) OVERSIGHT.—Notwithstanding any other provision of 

law, 0.3 percent of the funds under this subsection shall be 

available for administrative expenses and program management oversight and shall remain available for obligation until 

September 30, 2015. 

(h) TRANSPORTATION INFRASTRUCTURE GRANTS AND FINANCING.— 

(1) IN GENERAL.—There is made available to the Secretary 

of Transportation $5,000,000,000 for capital investments in 

surface transportation infrastructure. The Secretary shall distribute funds provided under this subsection as discretionary 

grants to be awarded to State and local governments or transit 

agencies on a competitive basis for projects that will have a 

significant impact on the Nation, a metropolitan area, or a region. 

(2) FEDERAL SHARE; LIMTATION ON OBLIGATIONS.—The Federal share payable of the costs for which a grant is made under 

this subsection, shall be 100 percent. 

(3) AVAILABILITY.—The amounts made available under this 

subsection shall be available for obligation until the date that 

is two years after the date of the enactment of this Act. The 

Secretary shall obligate amounts totaling not less than 50 percent of the funds made available within one year of enactment 

and obligate remaining amounts not later than two years after 

enactment. 

(4) PROJECT ELIGIBILITY.—Projects eligible for funding provided under this subsection include— 

(A) highway or bridge projects eligible under title 23, 

United States Code, including interstate rehabilitation, improvements to the rural collector road system, the reconstruction of overpasses and interchanges, bridge replacements, seismic retrofit projects for bridges, and road realignments; 

(B) public transportation projects eligible under chapter 53 of title 49, United States Code, including investments in projects participating in the New Starts or Small 

Starts programs that will expedite the completion of those 

projects and their entry into revenue service; 

(C) passenger and freight rail transportation projects; 

and 


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(D) port infrastructure investments, including projects 

that connect ports to other modes of transportation and 

improve the efficiency of freight movement. 

(5) TIFIA PROGRAM.—The Secretary may transfer to the 

Federal Highway Administration funds made available under 

this subsection for the purpose of paying the subsidy and administrative costs of projects eligible for federal credit assistance under chapter 6 of title 23, United States Code, if the Secretary finds that such use of the funds would advance the purposes of this subsection. 

(6) PROJECT PRIORITY.—The Secretary shall give priority to 

projects that are expected to be completed within 3 years of the 

date of the enactment of this Act. 

(7) DEADLINE FOR ISSUANCE OF COMPETITION CRITERIA.— 

The Secretary shall publish criteria on which to base the competition for any grants awarded under this subsection not later 

than 90 days after enactment of this Act. The Secretary shall 

require applications for funding provided under this subsection 

to be submitted not later than 180 days after the publication 

of the criteria, and announce all projects selected to be funded 

from such funds not later than 1 year after the date of the enactment of the Act. 

(8) APPLICABILITY OF TITLE 40.—Each project conducted 

using funds provided under this subsection shall comply with 

the requirements of subchapter IV of chapter 31 of title 40, 

United States Code. 

(9) ADMINISTRATIVE EXPENSES.—The Secretary may retain 

up to one half of one percent of the funds provided under this 

subsection, and may transfer portions of those funds to the Administrators of the Federal Highway Administration, the Federal Transit Administration, the Federal Railroad Administration and the Maritime Administration, to fund the award and 

oversight of grants made under this subsection. Funds retained 

shall remain available for obligation until September 30, 2015. 

(i) LOCAL HIRING.— 

(1) IN GENERAL.—In the case of the funding made available 

under subsections (a) through (h) of this section, the Secretary 

of Transportation may establish standards under which a contract for construction may be advertised that contains requirements for the employment of individuals residing in or adjacent to any of the areas in which the work is to be performed 

to perform construction work required under the contract, provided that— 

(A) all or part of the construction work performed 

under the contract occurs in an area designated by the 

Secretary as an area of high unemployment, using data reported by the United States Department of Labor, Bureau 

of Labor Statistics; 

(B) the estimated cost of the project of which the contract is a part is greater than $10 million, except that the 

estimated cost of the project in the case of construction 

funded under subsection (c) shall be greater than $50 million; and 


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(C) the recipient may not require the hiring of individuals who do not have the necessary skills to perform work 

in any craft or trade; provided that the recipient may require the hiring of such individuals if the recipient establishes reasonable provisions to train such individuals to 

perform any such work under the contract effectively. 

(2) PROJECT STANDARDS.— 

(A) IN GENERAL.—Any standards established by the 

Secretary under this section shall ensure that any requirements specified under subsection (c)(1)— 

(i) do not compromise the quality of the project; 

(ii) are reasonable in scope and application; 

(iii) do not unreasonably delay the completion of 

the project; and 

(iv) do not unreasonably increase the cost of the 

project. 

(B) AVAILABLE PROGRAMS.—The Secretary shall make 

available to recipients the workforce development and 

training programs set forth in section 24604(e)(1)(D) of 

this title to assist recipients who wish to establish training 

programs that satisfy the provisions of section (c)(1)(C). 

The Secretary of Labor shall make available its qualifying 

workforce and training development programs to recipients 

who wish to establish training programs that satisfy the 

provisions of section (c)(1)(C). 

(3) IMPLEMENTING REGULATIONS.—The Secretary shall promulgate final regulations to implement the authority of this 

subsection. 

(j) ADMINISTRATIVE PROVISIONS.— 

(1) APPLICABILITY OF TITLE 40.—Each project conducted 

using funds provided under this subtitle shall comply with the 

requirements of subchapter IV of chapter 31 of title 40, United 

States Code. 

(2) BUY AMERICAN.—Section 1605 of division A of the 

American Recovery and Reinvestment Act of 2009 (Public Law 

111–5) applies to each project conducted using funds provided 

under this subtitle. 

Subtitle F—Building and Upgrading Infrastructure for 

Long-Term Development 

SEC. 242. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This subtitle may be cited as the ‘‘Building 

and Upgrading Infrastructure for Long-Term Development Act’’. 

SEC. 243. FINDINGS AND PURPOSE. 

(a) FINDINGS.—Congress finds that— 

(1) infrastructure has always been a vital element of the 

economic strength of the United States and a key indicator of 

the international leadership of the United States; 

(2) the Erie Canal, the Hoover Dam, the railroads, and the 

interstate highway system are all testaments to American ingenuity and have helped propel and maintain the United 

States as the world’s largest economy; 


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(3) according to the World Economic Forum’s Global Competitiveness Report, the United States fell to second place in 

2009, and dropped to fourth place overall in 2010, however, in 

the ‘‘Quality of overall infrastructure’’ category of the same report, the United States ranked twenty-third in the world; 

(4) according to the World Bank’s 2010 Logistic Performance Index, the capacity of countries to efficiently move goods 

and connect manufacturers and consumers with international 

markets is improving around the world, and the United States 

now ranks seventh in the world in logistics-related infrastructure behind countries from both Europe and Asia; 

(5) according to a January 2009 report from the University 

of Massachusetts/Alliance for American Manufacturing entitled 

‘‘Employment, Productivity and Growth,’’ infrastructure investment is a ‘‘highly effective engine of job creation’’; 

(6) according to the American Society of Civil Engineers, 

the current condition of the infrastructure in the United States 

earns a grade point average of D, and an estimated 

$2,200,000,000,000 investment is needed over the next 5 years 

to bring American infrastructure up to adequate condition; 

(7) according to the National Surface Transportation Policy and Revenue Study Commission, $225,000,000,000 is needed 

annually from all sources for the next 50 years to upgrade the 

United States surface transportation system to a state of good 

repair and create a more advanced system; 

(8) the current infrastructure financing mechanisms of the 

United States, both on the Federal and State level, will fail to 

meet current and foreseeable demands and will create large 

funding gaps; 

(9) published reports state that there may not be enough 

demand for municipal bonds to maintain the same level of borrowing at the same rates, resulting in significantly decreased 

infrastructure investment at the State and local level; 

(10) current funding mechanisms are not readily scalable 

and do not— 

(A) serve large in-State or cross jurisdiction infrastructure projects, projects of regional or national significance, 

or projects that cross sector silos; 

(B) sufficiently catalyze private sector investment; or 

(C) ensure the optimal return on public resources; 

(11) although grant programs of the United States Government must continue to play a central role in financing the 

transportation, environment, and energy infrastructure needs 

of the United States, current and foreseeable demands on existing Federal, State, and local funding for infrastructure expansion clearly exceed the resources to support these programs 

by margins wide enough to prompt serious concerns about the 

United States ability to sustain long-term economic development, productivity, and international competitiveness; 

(12) the capital markets, including pension funds, private 

equity funds, mutual funds, sovereign wealth funds, and other 

investors, have a growing interest in infrastructure investment 

and represent hundreds of billions of dollars of potential investment; and 


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(13) the establishment of a United States Governmentowned, independent, professionally managed institution that 

could provide credit support to qualified infrastructure projects 

of regional and national significance, making transparent 

merit-based investment decisions based on the commercial viability of infrastructure projects, would catalyze the participation of significant private investment capital. 

(b) PURPOSE.—The purpose of this Act is to facilitate investment in, and long-term financing of, economically viable infrastructure projects of regional or national significance in a manner that 

both complements existing Federal, State, local, and private funding sources for these projects and introduces a merit-based system 

for financing such projects, in order to mobilize significant private 

sector investment, create jobs, and ensure United States competitiveness through an institution that limits the need for ongoing 

Federal funding. 

SEC. 244. DEFINITIONS. 

For purposes of this Act, the following definitions shall apply: 

(1) AIFA.—The term ‘‘AIFA’’ means the American Infrastructure Financing Authority established under this Act. 

(2) BLIND TRUST.—The term ‘‘blind trust’’ means a trust in 

which the beneficiary has no knowledge of the specific holdings 

and no rights over how those holdings are managed by the fiduciary of the trust prior to the dissolution of the trust. 

(3) BOARD OF DIRECTORS.—The term ‘‘Board of Directors’’ 

means Board of Directors of AIFA. 

(4) CHAIRPERSON.—The term ‘‘Chairperson’’ means the 

Chairperson of the Board of Directors of AIFA. 

(5) CHIEF EXECUTIVE OFFICER.—The term ‘‘chief executive 

officer’’ means the chief executive officer of AIFA, appointed 

under section 247. 

(6) COST.—The term ‘‘cost’’ has the same meaning as in 

section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 

661a). 

(7) DIRECT LOAN.—The term ‘‘direct loan’’ has the same 

meaning as in section 502 of the Federal Credit Reform Act of 

1990 (2 U.S.C. 661a). 

(8) ELIGIBLE ENTITY.—The term ‘‘eligible entity’’ means an 

individual, corporation, partnership (including a public-private 

partnership), joint venture, trust, State, or other non-Federal 

governmental entity, including a political subdivision or any 

other instrumentality of a State, or a revolving fund. 

(9) INFRASTRUCTURE PROJECT.— 

(A) IN GENERAL.—The term ‘‘eligible infrastructure 

project’’ means any non-Federal transportation, water, or 

energy infrastructure project, or an aggregation of such infrastructure projects, as provided in this Act. 

(B) TRANSPORTATION INFRASTRUCTURE PROJECT.—The 

term ‘‘transportation infrastructure project’’ means the 

construction, alteration, or repair, including the facilitation 

of intermodal transit, of the following subsectors: 

(i) Highway or road. 

(ii) Bridge. 

(iii) Mass transit. 


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(iv) Inland waterways. 

(v) Commercial ports. 

(vi) Airports. 

(vii) Air traffic control systems. 

(viii) Passenger rail, including high-speed rail. 

(ix) Freight rail systems. 

(C) WATER INFRASTRUCTURE PROJECT.—The term 

‘‘water infrastructure project’’ means the construction, consolidation, alteration, or repair of the following subsectors: 

(i) Waterwaste treatment facility. 

(ii) Storm water management system. 

(iii) Dam. 

(iv) Solid waste disposal facility. 

(v) Drinking water treatment facility. 

(vi) Levee. 

(vii) Open space management system. 

(D) ENERGY INFRASTRUCTURE PROJECT.—The term ‘‘energy infrastructure project’’ means the construction, alteration, or repair of the following subsectors: 

(i) Pollution reduced energy generation. 

(ii) Transmission and distribution. 

(iii) Storage. 

(iv) Energy efficiency enhancements for buildings, 

including public and commercial buildings. 

(E) BOARD AUTHORITY TO MODIFY SUBSECTORS.—The 

Board of Directors may make modifications, at the discretion of the Board, to the subsectors described in this paragraph by a vote of not fewer than 5 of the voting members 

of the Board of Directors. 

(10) INVESTMENT PROSPECTUS.— 

(A) The term ‘‘investment prospectus’’ means the processes and publications described below that will guide the 

priorities and strategic focus for the Bank’s investments. 

The investment prospectus shall follow rulemaking procedures under section 553 of title 5, United States Code. 

(B) The Bank shall publish a detailed description of its 

strategy in an Investment Prospectus within one year of 

the enactment of this subchapter. The Investment Prospectus shall— 

(i) specify what the Bank shall consider significant 

to the economic competitiveness of the United States 

or a region thereof in a manner consistent with the 

primary objective; 

(ii) specify the priorities and strategic focus of the 

Bank in forwarding its strategic objectives and carrying out the Bank strategy; 

(iii) specify the priorities and strategic focus of the 

Bank in promoting greater efficiency in the movement 

of freight; 

(iv) specify the priorities and strategic focus of the 

Bank in promoting the use of innovation and best 

practices in the planning, design, development and delivery of projects; 


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(v) describe in detail the framework and methodology for calculating application qualification scores 

and associated ranges as specified in this subchapter, 

along with the data to be requested from applicants 

and the mechanics of calculations to be applied to that 

data to determine qualification scores and ranges; 

(vi) describe how selection criteria will be applied 

by the Chief Executive Officer in determining the competitiveness of an application and its qualification 

score and range relative to other current applications 

and previously funded applications; and 

(vii) describe how the qualification score and 

range methodology and project selection framework 

are consistent with maximizing the Bank goals in both 

urban and rural areas. 

(C) The Investment Prospectus and any subsequent 

updates thereto shall be approved by a majority vote of the 

Board of Directors prior to publication. 

(D) The Bank shall update the Investment Prospectus 

on every biennial anniversary of its original publication. 

(11) INVESTMENT-GRADE RATING.—The term ‘‘investmentgrade rating’’ means a rating of BBB minus, Baa3, or higher 

assigned to an infrastructure project by a ratings agency. 

(12) LOAN GUARANTEE.—The term ‘‘loan guarantee’’ has 

the same meaning as in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a). 

(13) PUBLIC-PRIVATE PARTNERSHIP.—The term ‘‘public-private partnership’’ means any eligible entity— 

(A)(i) which is undertaking the development of all or 

part of an infrastructure project that will have a public 

benefit, pursuant to requirements established in one or 

more contracts between the entity and a State or an instrumentality of a State; or 

(ii) the activities of which, with respect to such an infrastructure project, are subject to regulation by a State or 

any instrumentality of a State; 

(B) which owns, leases, or operates or will own, lease, 

or operate, the project in whole or in part; and 

(C) the participants in which include not fewer than 1 

nongovernmental entity with significant investment and 

some control over the project or project vehicle. 

(14) RURAL INFRASTRUCTURE PROJECT.—The term ‘‘rural 

infrastructure project’’ means an infrastructure project in a 

rural area, as that term is defined in section 343(a)(13)(A) of 

the Consolidated Farm and Rural Development Act (7 U.S.C. 

1991(a)(13)(A)). 

(15) SECRETARY.—Unless the context otherwise requires, 

the term ‘‘Secretary’’ means the Secretary of the Treasury or 

the designee thereof. 

(16) SENIOR MANAGEMENT.—The term ‘‘senior management’’ means the chief financial officer, chief risk officer, chief 

compliance officer, general counsel, chief lending officer, and 

chief operations officer of AIFA established under section 249, 


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and such other officers as the Board of Directors may, by majority vote, add to senior management. 

(17) STATE.—The term ‘‘State’’ includes the District of Columbia, Puerto Rico, Guam, American Samoa, the Virgin Islands, the Commonwealth of Northern Mariana Islands, and 

any other territory of the United States. 

PART I—AMERICAN INFRASTRUCTURE 

FINANCING AUTHORITY 

SEC. 245. ESTABLISHMENT AND GENERAL AUTHORITY OF AIFA. 

(a) ESTABLISHMENT OF AIFA.—The American Infrastructure 

Financing Authority is established as a wholly owned Government 

corporation. 

(b) GENERAL AUTHORITY OF AIFA.—AIFA shall provide direct 

loans and loan guarantees to facilitate infrastructure projects that 

are both economically viable and of regional or national significance, and shall have such other authority, as provided in this Act. 

(c) INCORPORATION.— 

(1) IN GENERAL.—The Board of Directors first appointed 

shall be deemed the incorporator of AIFA, and the incorporation shall be held to have been effected from the date of the 

first meeting of the Board of Directors. 

(2) CORPORATE OFFICE.—AIFA shall— 

(A) maintain an office in Washington, DC; and 

(B) for purposes of venue in civil actions, be considered 

to be a resident of Washington, DC. 

(d) RESPONSIBILITY OF THE SECRETARY.—The Secretary shall 

take such action as may be necessary to assist in implementing 

AIFA, and in carrying out the purpose of this Act. 

(e) RULE OF CONSTRUCTION.—Chapter 91 of title 31, United 

States Code, does not apply to AIFA, unless otherwise specifically 

provided in this Act. 

SEC. 246. VOTING MEMBERS OF THE BOARD OF DIRECTORS. 

(a) VOTING MEMBERSHIP OF THE BOARD OF DIRECTORS.— 

(1) IN GENERAL.—AIFA shall have a Board of Directors 

consisting of 7 voting members appointed by the President, by 

and with the advice and consent of the Senate, not more than 

4 of whom shall be from the same political party. 

(2) CHAIRPERSON.—One of the voting members of the 

Board of Directors shall be designated by the President to 

serve as Chairperson thereof. 

(3) CONGRESSIONAL RECOMMENDATIONS.—Not later than 30 

days after the date of enactment of this Act, the majority leader of the Senate, the minority leader of the Senate, the Speaker of the House of Representatives, and the minority leader of 

the House of Representatives shall each submit a recommendation to the President for appointment of a member of the Board 

of Directors, after consultation with the appropriate committees of Congress. 

(b) VOTING RIGHTS.—Each voting member of the Board of Directors shall have an equal vote in all decisions of the Board of Directors. 


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(c) QUALIFICATIONS OF VOTING MEMBERS.—Each voting member of the Board of Directors shall— 

(1) be a citizen of the United States; and 

(2) have significant demonstrated expertise in— 

(A) the management and administration of a financial 

institution relevant to the operation of AIFA; or a public 

financial agency or authority; or 

(B) the financing, development, or operation of infrastructure projects; or 

(C) analyzing the economic benefits of infrastructure 

investment. 

(d) TERMS.— (1) IN GENERAL.—Except as otherwise provided in this Act, 

each voting member of the Board of Directors shall be appointed for a term of 4 years. 

(2) INITIAL STAGGERED TERMS.—Of the voting members 

first appointed to the Board of Directors— 

(A) the initial Chairperson and 3 of the other voting 

members shall each be appointed for a term of 4 years; 

and 

(B) the remaining 3 voting members shall each be appointed for a term of 2 years. 

(3) DATE OF INITIAL NOMINATIONS.—The initial nominations for the appointment of all voting members of the Board 

of Directors shall be made not later than 60 days after the date 

of enactment of this Act. 

(4) BEGINNING OF TERM.—The term of each of the initial 

voting members appointed under this section shall commence 

immediately upon the date of appointment, except that, for 

purposes of calculating the term limits specified in this subsection, the initial terms shall each be construed as beginning 

on January 22 of the year following the date of the initial appointment. 

(5) VACANCIES.—A vacancy in the position of a voting 

member of the Board of Directors shall be filled by the President, and a member appointed to fill a vacancy on the Board 

of Directors occurring before the expiration of the term for 

which the predecessor was appointed shall be appointed only 

for the remainder of that term. 

(e) MEETINGS.— 

(1) OPEN TO THE PUBLIC; NOTICE.—Except as provided in 

paragraph (3), all meetings of the Board of Directors shall be— 

(A) open to the public; and 

(B) preceded by reasonable public notice. 

(2) FREQUENCY.—The Board of Directors shall meet not 

later than 60 days after the date on which all members of the 

Board of Directors are first appointed, at least quarterly thereafter, and otherwise at the call of either the Chairperson or 5 

voting members of the Board of Directors. 

(3) EXCEPTION FOR CLOSED MEETINGS.—The voting members of the Board of Directors may, by majority vote, close a 

meeting to the public if, during the meeting to be closed, there 

is likely to be disclosed proprietary or sensitive information regarding an infrastructure project under consideration for asVerDate Mar 15 2010 06:20 Sep 14, 2011 Jkt 099011 PO 00000 Frm 00089 Fmt 6602 Sfmt 6601 E:\HR\OC\HD053.XXX HD053

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sistance under this Act. The Board of Directors shall prepare 

minutes of any meeting that is closed to the public, and shall 

make such minutes available as soon as practicable, not later 

than 1 year after the date of the closed meeting, with any necessary redactions to protect any proprietary or sensitive information. 

(4) QUORUM.—For purposes of meetings of the Board of Directors, 5 voting members of the Board of Directors shall constitute a quorum. 

(f) COMPENSATION OF MEMBERS.—Each voting member of the 

Board of Directors shall be compensated at a rate equal to the daily 

equivalent of the annual rate of basic pay prescribed for level III 

of the Executive Schedule under section 5314 of title 5, United 

States Code, for each day (including travel time) during which the 

member is engaged in the performance of the duties of the Board 

of Directors. 

(g) CONFLICTS OF INTEREST.—A voting member of the Board of 

Directors may not participate in any review or decision affecting an 

infrastructure project under consideration for assistance under this 

Act, if the member has or is affiliated with an entity who has a financial interest in such project. 

SEC. 247. CHIEF EXECUTIVE OFFICER OF AIFA. 

(a) IN GENERAL.—The chief executive officer of AIFA shall be 

a nonvoting member of the Board of Directors, who shall be responsible for all activities of AIFA, and shall support the Board of Directors as set forth in this Act and as the Board of Directors deems 

necessary or appropriate. 

(b) APPOINTMENT AND TENURE OF THE CHIEF EXECUTIVE OFFI- CER.— (1) IN GENERAL.—The President shall appoint the chief executive officer, by and with the advice and consent of the Senate. 

(2) TERM.—The chief executive officer shall be appointed 

for a term of 6 years. 

(3) VACANCIES.—Any vacancy in the office of the chief executive officer shall be filled by the President, and the person 

appointed to fill a vacancy in that position occurring before the 

expiration of the term for which the predecessor was appointed 

shall be appointed only for the remainder of that term. 

(c) QUALIFICATIONS.—The chief executive officer— 

(1) shall have significant expertise in management and administration of a financial institution, or significant expertise 

in the financing and development of infrastructure projects, or 

significant expertise in analyzing the economic benefits of infrastructure investment; and 

(2) may not— 

(A) hold any other public office; 

(B) have any financial interest in an infrastructure 

project then being considered by the Board of Directors, 

unless that interest is placed in a blind trust; or 

(C) have any financial interest in an investment institution or its affiliates or any other entity seeking or likely 

to seek financial assistance for any infrastructure project 

from AIFA, unless any such interest is placed in a blind 


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trust for the tenure of the service of the chief executive officer plus 2 additional years. 

(d) RESPONSIBILITIES.—The chief executive officer shall have 

such executive functions, powers, and duties as may be prescribed 

by this Act, the bylaws of AIFA, or the Board of Directors, including— 

(1) responsibility for the development and implementation 

of the strategy of AIFA, including— 

(A) the development and submission to the Board of 

Directors of the investment prospectus, the annual business plans and budget; 

(B) the development and submission to the Board of 

Directors of a long-term strategic plan; and 

(C) the development, revision, and submission to the 

Board of Directors of internal policies; and 

(2) responsibility for the management and oversight of the 

daily activities, decisions, operations, and personnel of AIFA, 

including— 

(A) the appointment of senior management, subject to 

approval by the voting members of the Board of Directors, 

and the hiring and termination of all other AIFA personnel; 

(B) requesting the detail, on a reimbursable basis, of 

personnel from any Federal agency having specific expertise not available from within AIFA, following which request the head of the Federal agency may detail, on a reimbursable basis, any personnel of such agency reasonably 

requested by the chief executive officer; 

(C) assessing and recommending in the first instance, 

for ultimate approval or disapproval by the Board of Directors, compensation and adjustments to compensation of 

senior management and other personnel of AIFA as may 

be necessary for carrying out the functions of AIFA; 

(D) ensuring, in conjunction with the general counsel 

of AIFA, that all activities of AIFA are carried out in compliance with applicable law; 

(E) overseeing the involvement of AIFA in all projects, 

including— 

(i) developing eligible projects for AIFA financial 

assistance; 

(ii) determining the terms and conditions of all financial assistance packages; 

(iii) monitoring all infrastructure projects assisted 

by AIFA, including responsibility for ensuring that the 

proceeds of any loan made, guaranteed, or participated 

in are used only for the purposes for which the loan 

or guarantee was made; 

(iv) preparing and submitting for approval by the 

Board of Directors the documents required under 

paragraph (1); and 

(v) ensuring the implementation of decisions of 

the Board of Directors; and 

(F) such other activities as may be necessary or appropriate in carrying out this Act. 


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(e) COMPENSATION.— 

(1) IN GENERAL.—Any compensation assessment or recommendation by the chief executive officer under this section 

shall be without regard to the provisions of chapter 51 or subchapter III of chapter 53 of title 5, United States Code. 

(2) CONSIDERATIONS.—The compensation assessment or 

recommendation required under this subsection shall take into 

account merit principles, where applicable, as well as the education, experience, level of responsibility, geographic differences, and retention and recruitment needs in determining 

compensation of personnel. 

SEC. 248. POWERS AND DUTIES OF THE BOARD OF DIRECTORS. 

The Board of Directors shall— 

(1) as soon as is practicable after the date on which all 

members are appointed, approve or disapprove senior management appointed by the chief executive officer; 

(2) not later than 180 days after the date on which all 

members are appointed— 

(A) develop and approve the bylaws of AIFA, including 

bylaws for the regulation of the affairs and conduct of the 

business of AIFA, consistent with the purpose, goals, objectives, and policies set forth in this Act; 

(B) establish subcommittees, including an audit committee that is composed solely of members of the Board of 

Directors who are independent of the senior management 

of AIFA; 

(C) develop and approve, in consultation with senior 

management, a conflict-of-interest policy for the Board of 

Directors and for senior management; 

(D) approve or disapprove internal policies that the 

chief executive officer shall submit to the Board of Directors, including— 

(i) policies regarding the loan application and approval process, including— 

(I) disclosure and application procedures to be 

followed by entities in the course of nominating 

infrastructure projects for assistance under this 

Act; 

(II) guidelines for the selection and approval 

of projects; 

(III) specific criteria for determining eligibility 

for project selection, consistent with title II; and 

(IV) standardized terms and conditions, fee 

schedules, or legal requirements of a contract or 

program, so as to carry out this Act; and 

(ii) operational guidelines; and 

(E) approve or disapprove a multi-year or 1-year business plan and budget for AIFA; 

(3) ensure that AIFA is at all times operated in a manner 

that is consistent with this Act, by— 

(A) monitoring and assessing the effectiveness of AIFA 

in achieving its strategic goals; 

(B) periodically reviewing internal policies; 


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(C) reviewing and approving annual business plans, 

annual budgets, and long-term strategies submitted by the 

chief executive officer; 

(D) reviewing and approving annual reports submitted 

by the chief executive officer; 

(E) engaging one or more external auditors, as set 

forth in this Act; and 

(F) reviewing and approving all changes to the organization of senior management; 

(4) appoint and fix, by a vote of 5 of the 7 voting members 

of the Board of Directors, and without regard to the provisions 

of chapter 51 or subchapter III of chapter 53 of title 5, United 

Sates Code, the compensation and adjustments to compensation of all AIFA personnel, provided that in appointing and fixing any compensation or adjustments to compensation under 

this paragraph, the Board shall— 

(A) consult with, and seek to maintain comparability 

with, other comparable Federal personnel; 

(B) consult with the Office of Personnel Management; 

and 

(C) carry out such duties consistent with merit principles, where applicable, as well as the education, experience, level of responsibility, geographic differences, and retention and recruitment needs in determining compensation of personnel; 

(5) establish such other criteria, requirements, or procedures as the Board of Directors may consider to be appropriate 

in carrying out this Act; 

(6) serve as the primary liaison for AIFA in interactions 

with Congress, the Executive Branch, and State and local governments, and to represent the interests of AIFA in such interactions and others; 

(7) approve by a vote of 5 of the 7 voting members of the 

Board of Directors any changes to the bylaws or internal policies of AIFA; 

(8) have the authority and responsibility— 

(A) to oversee entering into and carry out such contracts, leases, cooperative agreements, or other transactions as are necessary to carry out this Act with— 

(i) any Federal department or agency; 

(ii) any State, territory, or possession (or any political subdivision thereof, including State infrastructure banks) of the United States; and 

(iii) any individual, public-private partnership, 

firm, association, or corporation; 

(B) to approve of the acquisition, lease, pledge, exchange, and disposal of real and personal property by 

AIFA and otherwise approve the exercise by AIFA of all of 

the usual incidents of ownership of property, to the extent 

that the exercise of such powers is appropriate to and consistent with the purposes of AIFA; 

(C) to determine the character of, and the necessity 

for, the obligations and expenditures of AIFA, and the 

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incurred, allowed, and paid, subject to this Act and other 

Federal law specifically applicable to wholly owned Federal 

corporations; 

(D) to execute, in accordance with applicable bylaws 

and regulations, appropriate instruments; 

(E) to approve other forms of credit enhancement that 

AIFA may provide to eligible projects, as long as the forms 

of credit enhancements are consistent with the purposes of 

this Act and terms set forth in title II; 

(F) to exercise all other lawful powers which are necessary or appropriate to carry out, and are consistent with, 

the purposes of AIFA; 

(G) to sue or be sued in the corporate capacity of AIFA 

in any court of competent jurisdiction; 

(H) to indemnify the members of the Board of Directors and officers of AIFA for any liabilities arising out of 

the actions of the members and officers in such capacity, 

in accordance with, and subject to the limitations contained in this Act; 

(I) to review all financial assistance packages to all eligible infrastructure projects, as submitted by the chief executive officer and to approve, postpone, or deny the same 

by majority vote; 

(J) to review all restructuring proposals submitted by 

the chief executive officer, including assignation, pledging, 

or disposal of the interest of AIFA in a project, including 

payment or income from any interest owned or held by 

AIFA, and to approve, postpone, or deny the same by majority vote; and 

(K) to enter into binding commitments, as specified in 

approved financial assistance packages; 

(9) delegate to the chief executive officer those duties that 

the Board of Directors deems appropriate, to better carry out 

the powers and purposes of the Board of Directors under this 

section; and 

(10) to approve a maximum aggregate amount of outstanding obligations of AIFA at any given time, taking into 

consideration funding, and the size of AIFA’s addressable market for infrastructure projects. 

SEC. 249. SENIOR MANAGEMENT. 

(a) IN GENERAL.—Senior management shall support the chief 

executive officer in the discharge of the responsibilities of the chief 

executive officer. 

(b) APPOINTMENT OF SENIOR MANAGEMENT.—The chief executive officer shall appoint such senior managers as are necessary to 

carry out the purpose of AIFA, as approved by a majority vote of 

the voting members of the Board of Directors. 

(c) TERM.—Each member of senior management shall serve at 

the pleasure of the chief executive officer and the Board of Directors. 

(d) REMOVAL OF SENIOR MANAGEMENT.—Any member of senior 

management may be removed, either by a majority of the voting 

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tive officer, or otherwise by vote of not fewer than 5 voting members of the Board of Directors. 

(e) SENIOR MANAGEMENT.— (1) IN GENERAL.—Each member of senior management 

shall report directly to the chief executive officer, other than 

the Chief Risk Officer, who shall report directly to the Board 

of Directors. 

(2) DUTIES AND RESPONSIBILITIES.— (A) CHIEF FINANCIAL OFFICER.—The Chief Financial 

Officer shall be responsible for all financial functions of 

AIFA, provided that, at the discretion of the Board of Directors, specific functions of the Chief Financial Officer 

may be delegated externally. 

(B) CHIEF RISK OFFICER.—The Chief Risk Officer shall 

be responsible for all functions of AIFA relating to— 

(i) the creation of financial, credit, and operational 

risk management guidelines and policies; 

(ii) credit analysis for infrastructure projects; 

(iii) the creation of conforming standards for infrastructure finance agreements; 

(iv) the monitoring of the financial, credit, and 

operational exposure of AIFA; and 

(v) risk management and mitigation actions, including by reporting such actions, or recommendations 

of such actions to be taken, directly to the Board of Directors. 

(C) CHIEF COMPLIANCE OFFICER.—The Chief Compliance Officer shall be responsible for all functions of AIFA 

relating to internal audits, accounting safeguards, and the 

enforcement of such safeguards and other applicable requirements. 

(D) GENERAL COUNSEL.—The General Counsel shall be 

responsible for all functions of AIFA relating to legal matters and, in consultation with the chief executive officer, 

shall be responsible for ensuring that AIFA complies with 

all applicable law. 

(E) CHIEF OPERATIONS OFFICER.—The Chief Operations Officer shall be responsible for all operational functions of AIFA, including those relating to the continuing 

operations and performance of all infrastructure projects 

in which AIFA retains an interest and for all AIFA functions related to human resources. 

(F) CHIEF LENDING OFFICER.—The Chief Lending Officer shall be responsible for— 

(i) all functions of AIFA relating to the development of project pipeline, financial structuring of 

projects, selection of infrastructure projects to be reviewed by the Board of Directors, preparation of infrastructure projects to be presented to the Board of Directors, and set aside for rural infrastructure projects; 

and 

(ii) the creation and management of— 

(I) a Center for Excellence to provide technical 

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opment and financing of infrastructure projects; 

and 

(II) an Office of Rural Assistance to provide 

technical assistance in the development and financing of rural infrastructure projects; and 

(iii) the establishment of guidelines to ensure diversification of lending activities by region, infrastructure project type, and project size. 

(f) CHANGES TO SENIOR MANAGEMENT.—The Board of Directors, in consultation with the chief executive officer, may alter the 

structure of the senior management of AIFA at any time to better 

accomplish the goals, objectives, and purposes of AIFA, provided 

that the functions of the Chief Financial Officer set forth in subsection (e) remain separate from the functions of the Chief Risk Officer set forth in subsection (e). 

(g) CONFLICTS OF INTEREST.—No individual appointed to senior 

management may— 

(1) hold any other public office; 

(2) have any financial interest in an infrastructure project 

then being considered by the Board of Directors, unless that interest is placed in a blind trust; or 

(3) have any financial interest in an investment institution 

or its affiliates, AIFA or its affiliates, or other entity then seeking or likely to seek financial assistance for any infrastructure 

project from AIFA, unless any such interest is placed in a blind 

trust during the term of service of that individual in a senior 

management position, and for a period of 2 years thereafter. 

SEC. 250. SPECIAL INSPECTOR GENERAL FOR AIFA. 

(a) IN GENERAL.—During the first 5 operating years of AIFA, 

the Office of the Inspector General of the Department of the Treasury shall have responsibility for AIFA. 

(b) OFFICE OF THE SPECIAL INSPECTOR GENERAL.—Effective 5 

years after the date of enactment of the commencement of the operations of AIFA, there is established the Office of the Special Inspector General for AIFA. 

(c) APPOINTMENT OF INSPECTOR GENERAL; REMOVAL.— (1) HEAD OF OFFICE.—The head of the Office of the Special 

Inspector General for AIFA shall be the Special Inspector General for AIFA (in this Act referred to as the ‘‘Special Inspector 

General’’), who shall be appointed by the President, by and 

with the advice and consent of the Senate. 

(2) BASIS OF APPOINTMENT.—The appointment of the Special Inspector General shall be made on the basis of integrity 

and demonstrated ability in accounting, auditing, financial 

analysis, law, management analysis, public administration, or 

investigations. 

(3) TIMING OF NOMINATION.—The nomination of an individual as Special Inspector General shall be made as soon as 

is practicable after the effective date under subsection (b). 

(4) REMOVAL.—The Special Inspector General shall be removable from office in accordance with the provisions of section 

3(b) of the Inspector General Act of 1978 (5 U.S.C. App.). 

(5) RULE OF CONSTRUCTION.—For purposes of section 7324 

of title 5, United States Code, the Special Inspector General 


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shall not be considered an employee who determines policies to 

be pursued by the United States in the nationwide administration of Federal law. 

(6) RATE OF PAY.—The annual rate of basic pay of the Special Inspector General shall be the annual rate of basic pay for 

an Inspector General under section 3(e) of the Inspector General Act of 1978 (5 U.S.C. App.). 

(d) DUTIES.— (1) IN GENERAL.—It shall be the duty of the Special Inspector General to conduct, supervise, and coordinate audits and 

investigations of the business activities of AIFA. 

(2) OTHER SYSTEMS, PROCEDURES, AND CONTROLS.—The 

Special Inspector General shall establish, maintain, and oversee such systems, procedures, and controls as the Special Inspector General considers appropriate to discharge the duty 

under paragraph (1). 

(3) ADDITIONAL DUTIES.—In addition to the duties specified 

in paragraphs (1) and (2), the Inspector General shall also 

have the duties and responsibilities of inspectors general under 

the Inspector General Act of 1978. 

(e) POWERS AND AUTHORITIES.— (1) IN GENERAL.—In carrying out the duties specified in 

subsection (c), the Special Inspector General shall have the authorities provided in section 6 of the Inspector General Act of 

1978. 

(2) ADDITIONAL AUTHORITY.—The Special Inspector General shall carry out the duties specified in subsection (c)(1) in 

accordance with section 4(b)(1) of the Inspector General Act of 

1978. 

(f) PERSONNEL, FACILITIES, AND OTHER RESOURCES.— (1) ADDITIONAL OFFICERS.— (A) The Special Inspector General may select, appoint, 

and employ such officers and employees as may be necessary for carrying out the duties of the Special Inspector 

General, subject to the provisions of title 5, United States 

Code, governing appointments in the competitive service, 

and the provisions of chapter 51 and subchapter III of 

chapter 53 of such title, relating to classification and General Schedule pay rates. 

(B) The Special Inspector General may exercise the 

authorities of subsections (b) through (i) of section 3161 of 

title 5, United States Code (without regard to subsection 

(a) of that section). 

(2) RETENTION OF SERVICES.—The Special Inspector General may obtain services as authorized by section 3109 of title 

5, United States Code, at daily rates not to exceed the equivalent rate prescribed for grade GS–15 of the General Schedule 

by section 5332 of such title. 

(3) ABILITY TO CONTRACT FOR AUDITS, STUDIES, AND OTHER

SERVICES.—The Special Inspector General may enter into contracts and other arrangements for audits, studies, analyses, 

and other services with public agencies and with private persons, and make such payments as may be necessary to carry 

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(4) REQUEST FOR INFORMATION.— (A) IN GENERAL.—Upon request of the Special Inspector General for information or assistance from any department, agency, or other entity of the Federal Government, 

the head of such entity shall, insofar as is practicable and 

not in contravention of any existing law, furnish such information or assistance to the Special Inspector General, 

or an authorized designee. 

(B) REFUSAL TO COMPLY.—Whenever information or 

assistance requested by the Special Inspector General is, 

in the judgment of the Special Inspector General, unreasonably refused or not provided, the Special Inspector General shall report the circumstances to the Secretary of the 

Treasury, without delay. 

(g) REPORTS.— 

(1) ANNUAL REPORT.—Not later than 1 year after the confirmation of the Special Inspector General, and every calendar 

year thereafter, the Special Inspector General shall submit to 

the President a report summarizing the activities of the Special Inspector General during the previous 1-year period ending on the date of such report. 

(2) PUBLIC DISCLOSURES.—Nothing in this subsection shall 

be construed to authorize the public disclosure of information 

that is— 

(A) specifically prohibited from disclosure by any other 

provision of law; 

(B) specifically required by Executive order to be protected from disclosure in the interest of national defense or 

national security or in the conduct of foreign affairs; or 

(C) a part of an ongoing criminal investigation. 

SEC. 251. OTHER PERSONNEL. 

Except as otherwise provided in the bylaws of AIFA, the chief 

executive officer, in consultation with the Board of Directors, shall 

appoint, remove, and define the duties of such qualified personnel 

as are necessary to carry out the powers, duties, and purpose of 

AIFA, other than senior management, who shall be appointed in 

accordance with section 249. 

SEC. 252. COMPLIANCE. 

The provision of assistance by the Board of Directors pursuant 

to this Act shall not be construed as superseding any provision of 

State law or regulation otherwise applicable to an infrastructure 

project. 

PART II—TERMS AND LIMITATIONS ON 

DIRECT LOANS AND LOAN GUARANTEES 

SEC. 253. ELIGIBILITY CRITERIA FOR ASSISTANCE FROM AIFA AND 

TERMS AND LIMITATIONS OF LOANS. 

(a) IN GENERAL.—Any project whose use or purpose is private 

and for which no public benefit is created shall not be eligible for 

financial assistance from AIFA under this Act. Financial assistance 

under this Act shall only be made available if the applicant for 

such assistance has demonstrated to the satisfaction of the Board 


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of Directors that the infrastructure project for which such assistance is being sought— 

(1) is not for the refinancing of an existing infrastructure 

project; and 

(2) meets— 

(A) any pertinent requirements set forth in this Act; 

(B) any criteria established by the Board of Directors 

or chief executive officer in accordance with this Act; and 

(C) the definition of a transportation infrastructure 

project, water infrastructure project, or energy infrastructure project. 

(b) CONSIDERATIONS.—The criteria established by the Board of 

Directors pursuant to this Act shall provide adequate consideration 

of— 

(1) the economic, financial, technical, environmental, and 

public benefits and costs of each infrastructure project under 

consideration for financial assistance under this Act, 

prioritizing infrastructure projects that— 

(A) contribute to regional or national economic growth; 

(B) offer value for money to taxpayers; 

(C) demonstrate a clear and significant public benefit; 

(D) lead to job creation; and 

(E) mitigate environmental concerns; 

(2) the means by which development of the infrastructure 

project under consideration is being financed, including— 

(A) the terms, conditions, and structure of the proposed financing; 

(B) the credit worthiness and standing of the project 

sponsors, providers of equity, and cofinanciers; 

(C) the financial assumptions and projections on which 

the infrastructure project is based; and 

(D) whether there is sufficient State or municipal political support for the successful completion of the infrastructure project; 

(3) the likelihood that the provision of assistance by AIFA 

will cause such development to proceed more promptly and 

with lower costs than would be the case without such assistance; 

(4) the extent to which the provision of assistance by AIFA 

maximizes the level of private investment in the infrastructure 

project or supports a public-private partnership, while providing a significant public benefit; 

(5) the extent to which the provision of assistance by AIFA 

can mobilize the participation of other financing partners in 

the infrastructure project; 

(6) the technical and operational viability of the infrastructure project; 

(7) the proportion of financial assistance from AIFA; 

(8) the geographic location of the project in an effort to 

have geographic diversity of projects funded by AIFA; 

(9) the size of the project and its impact on the resources 

of AIFA; 

(10) the infrastructure sector of the project, in an effort to 

have projects from more than one sector funded by AIFA; and 


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(11) Encourages use of innovative procurement, asset management, or financing to minimize the all-in-life-cycle cost, and 

improve the cost-effectiveness of a project. 

(c) APPLICATION.— (1) IN GENERAL.—Any eligible entity seeking assistance 

from AIFA under this Act for an eligible infrastructure project 

shall submit an application to AIFA at such time, in such manner, and containing such information as the Board of Directors 

or the chief executive officer may require. 

(2) REVIEW OF APPLICATIONS.—AIFA shall review applications for assistance under this Act on an ongoing basis. The 

chief executive officer, working with the senior management, 

shall prepare eligible infrastructure projects for review and approval by the Board of Directors. 

(3) DEDICATED REVENUE SOURCES.—The Federal credit instrument shall be repayable, in whole or in part, from tolls, 

user fees, or other dedicated revenue sources that also secure 

the infrastructure project obligations. 

(d) ELIGIBLE INFRASTRUCTURE PROJECT COSTS.— (1) IN GENERAL.—Except as provided in paragraph (2), to 

be eligible for assistance under this Act, an infrastructure 

project shall have project costs that are reasonably anticipated 

to equal or exceed $100,000,000. 

(2) RURAL INFRASTRUCTURE PROJECTS.—To be eligible for 

assistance under this Act a rural infrastructure project shall 

have project costs that are reasonably anticipated to equal or 

exceed $25,000,000. 

(e) LOAN ELIGIBILITY AND MAXIMUM AMOUNTS.— (1) IN GENERAL.—The amount of a direct loan or loan guarantee under this Act shall not exceed the lesser of 50 percent 

of the reasonably anticipated eligible infrastructure project 

costs or, if the direct loan or loan guarantee does not receive 

an investment grade rating, the amount of the senior project 

obligations. 

(2) MAXIMUM ANNUAL LOAN AND LOAN GUARANTEE VOL- UME.—The aggregate amount of direct loans and loan guarantees made by AIFA in any single fiscal year may not exceed— 

(A) during the first 2 fiscal years of the operations of AIFA, $10,000,000,000; 

(B) during fiscal years 3 through 9 of the operations of AIFA, $20,000,000,000; or 

(C) during any fiscal year thereafter, $50,000,000,000. 

(f) STATE AND LOCAL PERMITS REQUIRED.—The provision of assistance by the Board of Directors pursuant to this Act shall not 

be deemed to relieve any recipient of such assistance, or the related 

infrastructure project, of any obligation to obtain required State 

and local permits and approvals. 

SEC. 254. LOAN TERMS AND REPAYMENT. 

(a) IN GENERAL.—A direct loan or loan guarantee under this 

Act with respect to an eligible infrastructure project shall be on 

such terms, subject to such conditions, and contain such covenants, 

representations, warranties, and requirements (including requirements for audits) as the chief executive officer determines appropriate. 


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(b) TERMS.—A direct loan or loan guarantee under this Act— 

(1) shall— 

(A) be payable, in whole or in part, from tolls, user 

fees, or other dedicated revenue sources that also secure 

the senior project obligations (such as availability payments and dedicated State or local revenues); and 

(B) include a rate covenant, coverage requirement, or 

similar security feature supporting the project obligations; 

and 

(2) may have a lien on revenues described in paragraph 

(1), subject to any lien securing project obligations. 

(c) BASE INTEREST RATE.—The base interest rate on a direct 

loan under this Act shall be not less than the yield on United 

States Treasury obligations of a similar maturity to the maturity 

of the direct loan. 

(d) RISK ASSESSMENT.—Before entering into an agreement for 

assistance under this Act, the chief executive officer, in consultation with the Director of the Office of Management and Budget and 

considering rating agency preliminary or final rating opinion letters of the project under this section, shall estimate an appropriate 

Federal credit subsidy amount for each direct loan and loan guarantee, taking into account such letter, as well as any comparable 

market rates available for such a loan or loan guarantee, should 

any exist. The final credit subsidy cost for each loan and loan guarantee shall be determined consistent with the Federal Credit Reform Act, 2 U.S.C. 661a et seq. 

(e) CREDIT FEE.—With respect to each agreement for assistance under this Act, the chief executive officer may charge a credit 

fee to the recipient of such assistance to pay for, over time, all or 

a portion of the Federal credit subsidy determined under subsection (d), with the remainder paid by the account established for 

AIFA; provided, that the source of fees paid under this section shall 

not be a loan or debt obligation guaranteed by the Federal Government. In the case of a direct loan, such credit fee shall be in addition to the base interest rate established under subsection (c). 

(f) MATURITY DATE.—The final maturity date of a direct loan 

or loan guaranteed by AIFA under this Act shall be not later than 

35 years after the date of substantial completion of the infrastructure project, as determined by the chief executive officer. 

(g) RATING OPINION LETTER.— 

(1) IN GENERAL.—The chief executive officer shall require 

each applicant for assistance under this Act to provide a rating 

opinion letter from at least 1 ratings agency, indicating that 

the senior obligations of the infrastructure project, which may 

be the Federal credit instrument, have the potential to achieve 

an investment-grade rating. 

(2) RURAL INFRASTRUCTURE PROJECTS.—With respect to a 

rural infrastructure project, a rating agency opinion letter described in paragraph (1) shall not be required, except that the 

loan or loan guarantee shall receive an internal rating score, 

using methods similar to the ratings agencies generated by 

AIFA, measuring the proposed direct loan or loan guarantee 

against comparable direct loans or loan guarantees of similar 

credit quality in a similar sector. 


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(h) INVESTMENT-GRADE RATING REQUIREMENT.— 

(1) LOANS AND LOAN GUARANTEES.—The execution of a direct loan or loan guarantee under this Act shall be contingent 

on the senior obligations of the infrastructure project receiving 

an investment-grade rating. 

(2) RATING OF AIFA OVERALL PORTFOLIO.—The average rating of the overall portfolio of AIFA shall be not less than investment grade after 5 years of operation. 

(i) TERMS AND REPAYMENT OF DIRECT LOANS.— 

(1) SCHEDULE.—The chief executive officer shall establish 

a repayment schedule for each direct loan under this Act, 

based on the projected cash flow from infrastructure project 

revenues and other repayment sources. 

(2) COMMENCEMENT.—Scheduled loan repayments of principal or interest on a direct loan under this Act shall commence not later than 5 years after the date of substantial completion of the infrastructure project, as determined by the chief 

executive officer of AIFA. 

(3) DEFERRED PAYMENTS OF DIRECT LOANS.— 

(A) AUTHORIZATION.—If, at any time after the date of 

substantial completion of an infrastructure project assisted 

under this Act, the infrastructure project is unable to generate sufficient revenues to pay the scheduled loan repayments of principal and interest on the direct loan under 

this Act, the chief executive officer may allow the obligor 

to add unpaid principal and interest to the outstanding 

balance of the direct loan, if the result would benefit the 

taxpayer. 

(B) INTEREST.—Any payment deferred under subparagraph (A) shall— 

(i) continue to accrue interest, in accordance with 

the terms of the obligation, until fully repaid; and 

(ii) be scheduled to be amortized over the remaining term of the loan. 

(C) CRITERIA.— 

(i) IN GENERAL.—Any payment deferral under subparagraph (A) shall be contingent on the infrastructure project meeting criteria established by the Board 

of Directors. 

(ii) REPAYMENT STANDARDS.—The criteria established under clause (i) shall include standards for reasonable assurance of repayment. 

(4) PREPAYMENT OF DIRECT LOANS.— 

(A) USE OF EXCESS REVENUES.—Any excess revenues 

that remain after satisfying scheduled debt service requirements on the infrastructure project obligations and 

direct loan and all deposit requirements under the terms 

of any trust agreement, bond resolution, or similar agreement securing project obligations under this Act may be 

applied annually to prepay the direct loan, without penalty. 

(B) USE OF PROCEEDS OF REFINANCING.—A direct loan 

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alty, from the proceeds of refinancing from non-Federal 

funding sources. 

(5) SALE OF DIRECT LOANS.— 

(A) IN GENERAL.—As soon as is practicable after substantial completion of an infrastructure project assisted 

under this Act, and after notifying the obligor, the chief executive officer may sell to another entity, or reoffer into 

the capital markets, a direct loan for the infrastructure 

project, if the chief executive officer determines that the 

sale or reoffering can be made on favorable terms for the 

taxpayer. 

(B) CONSENT OF OBLIGOR.—In making a sale or reoffering under subparagraph (A), the chief executive officer 

may not change the original terms and conditions of the 

direct loan, without the written consent of the obligor. 

(j) LOAN GUARANTEES.— 

(1) TERMS.—The terms of a loan guaranteed by AIFA 

under this Act shall be consistent with the terms set forth in 

this section for a direct loan, except that the rate on the guaranteed loan and any payment, pre-payment, or refinancing features shall be negotiated between the obligor and the lender, 

with the consent of the chief executive officer. 

(2) GUARANTEED LENDER.—A guaranteed lender shall be 

limited to those lenders meeting the definition of that term in 

section 601(a) of title 23, United States Code. 

(k) COMPLIANCE WITH FCRA—IN GENERAL.—Direct loans and 

loan guarantees authorized by this Act shall be subject to the provisions of the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et 

seq.), as amended. 

SEC. 255. COMPLIANCE AND ENFORCEMENT. 

(a) CREDIT AGREEMENT.—Notwithstanding any other provision 

of law, each eligible entity that receives assistance under this Act 

from AIFA shall enter into a credit agreement that requires such 

entity to comply with all applicable policies and procedures of 

AIFA, in addition to all other provisions of the loan agreement. 

(b) AIFA AUTHORITY ON NONCOMPLIANCE.—In any case in 

which a recipient of assistance under this Act is materially out of 

compliance with the loan agreement, or any applicable policy or 

procedure of AIFA, the Board of Directors may take action to cancel unutilized loan amounts, or to accelerate the repayment terms 

of any outstanding obligation. 

(c) Nothing in this Act is intended to affect existing provisions 

of law applicable to the planning, development, construction, or operation of projects funded under the Act. 

SEC. 256. AUDITS; REPORTS TO THE PRESIDENT AND CONGRESS. 

(a) ACCOUNTING.—The books of account of AIFA shall be maintained in accordance with generally accepted accounting principles, 

and shall be subject to an annual audit by independent public accountants of nationally recognized standing appointed by the Board 

of Directors. 

(b) REPORTS.— 

(1) BOARD OF DIRECTORS.—Not later than 90 days after the 

last day of each fiscal year, the Board of Directors shall submit 


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to the President and Congress a complete and detailed report 

with respect to the preceding fiscal year, setting forth— 

(A) a summary of the operations of AIFA, for such fiscal year; 

(B) a schedule of the obligations of AIFA and capital 

securities outstanding at the end of such fiscal year, with 

a statement of the amounts issued and redeemed or paid 

during such fiscal year; 

(C) the status of infrastructure projects receiving funding or other assistance pursuant to this Act during such 

fiscal year, including all nonperforming loans, and including disclosure of all entities with a development, ownership, or operational interest in such infrastructure 

projects; 

(D) a description of the successes and challenges encountered in lending to rural communities, including the 

role of the Center for Excellence and the Office of Rural 

Assistance established under this Act; and 

(E) an assessment of the risks of the portfolio of AIFA, 

prepared by an independent source. 

(2) GAO.—Not later than 5 years after the date of enactment of this Act, the Comptroller General of the United States 

shall conduct an evaluation of, and shall submit to Congress a 

report on, activities of AIFA for the fiscal years covered by the 

report that includes an assessment of the impact and benefits 

of each funded infrastructure project, including a review of how 

effectively each such infrastructure project accomplished the 

goals prioritized by the infrastructure project criteria of AIFA. 

(c) BOOKS AND RECORDS.— (1) IN GENERAL.—AIFA shall maintain adequate books and 

records to support the financial transactions of AIFA, with a 

description of financial transactions and infrastructure projects 

receiving funding, and the amount of funding for each such 

project maintained on a publically accessible database. 

(2) AUDITS BY THE SECRETARY AND GAO.—The books and 

records of AIFA shall at all times be open to inspection by the 

Secretary of the Treasury, the Special Inspector General, and 

the Comptroller General of the United States. 

PART III—FUNDING OF AIFA 

SEC. 257. ADMINISTRATIVE FEES. 

(a) IN GENERAL.—In addition to fees that may be collected 

under section 254(e), the chief executive officer shall establish and 

collect fees from eligible funding recipients with respect to loans 

and loan guarantees under this Act that— 

(1) are sufficient to cover all or a portion of the administrative costs to the Federal Government for the operations of 

AIFA, including the costs of expert firms, including counsel in 

the field of municipal and project finance, and financial advisors to assist with underwriting, credit analysis, or other independent reviews, as appropriate; 

(2) may be in the form of an application or transaction fee, 

or other form established by the CEO; and 


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(3) may be based on the risk premium associated with the 

loan or loan guarantee, taking into consideration— 

(A) the price of United States Treasury obligations of 

a similar maturity; 

(B) prevailing market conditions; 

(C) the ability of the infrastructure project to support 

the loan or loan guarantee; and 

(D) the total amount of the loan or loan guarantee. 

(b) AVAILABILITY OF AMOUNTS.—Amounts collected under subsections (a)(1), (a)(2), and (a)(3) shall be available without further 

action; provided further, that the source of fees paid under this section shall not be a loan or debt obligation guaranteed by the Federal Government. 

SEC. 258. EFFICIENCY OF AIFA. 

The chief executive officer shall, to the extent possible, take actions consistent with this Act to minimize the risk and cost to the 

taxpayer of AIFA activities. Fees and premiums for loan guarantee 

or insurance coverage will be set at levels that minimize administrative and Federal credit subsidy costs to the Government, as defined in Section 502 of the Federal Credit Reform Act of 1990, as 

amended, of such coverage, while supporting achievement of the 

program’s objectives, consistent with policies as set forth in the 

Business Plan. 

SEC. 259. FUNDING. 

There is hereby appropriated to AIFA to carry out this Act, for 

the cost of direct loans and loan guarantees subject to the limitations under Section 253, and for administrative costs, 

$10,000,000,000, to remain available until expended; Provided, 

That such costs, including the costs of modifying such loans, shall 

be as defined in section 502 of the Federal Credit Reform Act of 

1990, as amended; Provided further, that of this amount, not more 

than $25,000,000 for each of fiscal years 2012 through 2013, and 

not more than $50,000,000 for fiscal year 2014 may be used for administrative costs of AIFA; provided further, that not more than 5 

percent of such amount shall be used to offset subsidy costs associated with rural projects. Amounts authorized shall be available 

without further action. 

PART IV—EXTENSION OF EXEMPTION FROM 

ALTERNATIVE MINIMUM TAX TREATMENT 

FOR CERTAIN TAX-EXEMPT BONDS 

SEC. 260. EXTENSION OF EXEMPTION FROM ALTERNATIVE MINIMUM 

TAX TREATMENT FOR CERTAIN TAX-EXEMPT BONDS. 

(a) IN GENERAL.—Clause (vi) of section 57(a)(5)(C) of the Internal Revenue Code of 1986 is amended— 

(1) by striking ‘‘January 1, 2011’’ in subclause (I) and inserting ‘‘January 1, 2013’’; and 

(2) by striking ‘‘AND 2010’’ in the heading and inserting 

‘‘, 2010, 2011, AND 2012’’. 

(b) ADJUSTED CURRENT EARNINGS.—Clause (iv) of section 

56(g)(4)(B) of the Internal Revenue Code of 1986 is amended— 


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(1) by striking ‘‘January 1, 2011’’ in subclause (I) and inserting ‘‘January 1, 2013’’; and 

(2) by striking ‘‘AND 2010’’ in the heading and inserting 

‘‘, 2010, 2011, AND 2012’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to obligations issued after December 31, 2010. 

Subtitle G—Project Rebuild 

SEC. 261. PROJECT REBUILD. 

(a) DIRECT APPROPRIATIONS.—There is appropriated, out of any 

money in the Treasury not otherwise appropriated, 

$15,000,000,000, to remain available until September 30, 2014, for 

assistance to eligible entities including States and units of general 

local government (as such terms are defined in section 102 of the 

Housing and Community Development Act of 1974 (42 U.S.C. 

5302)), and qualified nonprofit organizations, businesses or consortia of eligible entities for the redevelopment of abandoned and 

foreclosed-upon properties and for the stabilization of affected 

neighborhoods. 

(b) ALLOCATION OF APPROPRIATED AMOUNTS.— 

(1) IN GENERAL.—Of the amounts appropriated, two thirds 

shall be allocated to States and units of general local government based on a funding formula established by the Secretary 

of Housing and Urban Development (in this subtitle referred to 

as the ‘‘Secretary’’). Of the amounts appropriated, one third 

shall be distributed competitively to eligible entities. 

(2) FORMULA TO BE DEVISED SWIFTLY.—The funding formula required under paragraph (1) shall be established and 

the Secretary shall announce formula funding allocations, not 

later than 30 days after the date of enactment of this section. 

(3) FORMULA CRITERIA.—The Secretary may establish a 

minimum grant size, and the funding formula required under 

paragraph (1) shall ensure that any amounts appropriated or 

otherwise made available under this section are allocated to 

States and units of general local government with the greatest 

need, as such need is determined in the discretion of the Secretary based on— 

(A) the number and percentage of home foreclosures in 

each State or unit of general local government; 

(B) the number and percentage of homes in default or 

delinquency in each State or unit of general local government; and 

(C) other factors such as established program designs, 

grantee capacity and performance, number and percentage 

of commercial foreclosures, overall economic conditions, 

and other market needs data, as determined by the Secretary. 

(4) COMPETITION CRITERIA.— 

(A) For the funds distributed competitively, eligible 

entities shall be States, units of general local government, 

nonprofit entities, for-profit entities, and consortia of eligible entities that demonstrate capacity to use funding within the period of this program. 


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(B) In selecting grantees, the Secretary shall ensure 

that grantees are in areas with the greatest number and 

percentage of residential and commercial foreclosures and 

other market needs data, as determined by the Secretary. 

Additional award criteria shall include demonstrated 

grantee capacity to execute projects involving acquisition 

and rehabilitation or redevelopment of foreclosed residential and commercial property and neighborhood stabilization, leverage, knowledge of market conditions and of effective stabilization activities to address identified conditions, 

and any additional factors determined by the Secretary. 

(C) The Secretary may establish a minimum grant 

size; and 

(D) The Secretary shall publish competition criteria for 

any grants awarded under this heading not later than 60 

days after appropriation of funds, and applications shall be 

due to the Secretary within 120 days. 

(c) USE OF FUNDS.— (1) OBLIGATION AND EXPENDITURE.—The Secretary shall 

obligate all funding within 150 days of enactment of this Act. 

Any eligible entity that receives amounts pursuant to this section shall expend all funds allocated to it within three years of 

the date the funds become available to the grantee for obligation. Furthermore, the Secretary shall by Notice establish intermediate expenditure benchmarks at the one and two year 

dates from the date the funds become available to the grantee 

for obligation. 

(2) PRIORITIES.— (A) JOB CREATION.—Each grantee or eligible entity 

shall describe how its proposed use of funds will prioritize 

job creation, and secondly, will address goals to stabilize 

neighborhoods, reverse vacancy, or increase or stabilize 

residential and commercial property values. 

(B) TARGETING.—Any State or unit of general local 

government that receives formula amounts pursuant to 

this section shall, in distributing and targeting such 

amounts give priority emphasis and consideration to those 

metropolitan areas, metropolitan cities, urban areas, rural 

areas, low- and moderate-income areas, and other areas 

with the greatest need, including those— 

(i) with the greatest percentage of home foreclosures; 

(ii) identified as likely to face a significant rise in 

the rate of residential or commercial foreclosures; and 

(iii) with higher than national average unemployment rate. 

(C) LEVERAGE.—Each grantee or eligible entity shall 

describe how its proposed use of funds will leverage private funds. 

(3) ELIGIBLE USES.—Amounts made available under this 

section may be used to— 

(A) establish financing mechanisms for the purchase 

and redevelopment of abandoned and foreclosed-upon properties, including such mechanisms as soft-seconds, loan 


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loss reserves, and shared-equity loans for low- and moderate-income homebuyers; 

(B) purchase and rehabilitate properties that have 

been abandoned or foreclosed upon, in order to sell, rent, 

or redevelop such properties; 

(C) establish and operate land banks for properties 

that have been abandoned or foreclosed upon; 

(D) demolish blighted structures; 

(E) redevelop abandoned, foreclosed, demolished, or 

vacant properties; and 

(F) engage in other activities, as determined by the 

Secretary through notice, that are consistent with the 

goals of creating jobs, stabilizing neighborhoods, reversing 

vacancy reduction, and increasing or stabilizing residential 

and commercial property values. 

(d) LIMITATIONS.— 

(1) ON PURCHASES.—Any purchase of a property under this 

section shall be at a price not to exceed its current market 

value, taking into account its current condition. 

(2) REHABILITATION.—Any rehabilitation of an eligible 

property under this section shall be to the extent necessary to 

comply with applicable laws, and other requirements relating 

to safety, quality, marketability, and habitability, in order to 

sell, rent, or redevelop such properties or provide a renewable 

energy source or sources for such properties. 

(3) SALE OF HOMES.—If an abandoned or foreclosed-upon 

home is purchased, redeveloped, or otherwise sold to an individual as a primary residence, then such sale shall be in an 

amount equal to or less than the cost to acquire and redevelop 

or rehabilitate such home or property up to a decent, safe, 

marketable, and habitable condition. 

(4) ON DEMOLITION OF PUBLIC HOUSING.—Public housing, 

as defined at section 3(b)(6) of the United States Housing Act 

of 1937, may not be demolished with funds under this section. 

(5) ON DEMOLITION ACTIVITIES.—No more than 10 percent 

of any grant made under this section may be used for demolition activities unless the Secretary determines that such use 

represents an appropriate response to local market conditions. 

(6) ON USE OF FUNDS FOR NON-RESIDENTIAL PROPERTY.—No 

more than 30 percent of any grant made under this section 

may be used for eligible activities under subparagraphs (A), 

(B), and (E) of subsection (c)(3) that will not result in residential use of the property involved unless the Secretary determines that such use represents an appropriate response to 

local market conditions. 

(e) RULES OF CONSTRUCTION.— 

(1) IN GENERAL.—Except as otherwise provided by this section, amounts appropriated, revenues generated, or amounts 

otherwise made available to eligible entities under this section 

shall be treated as though such funds were community development block grant funds under title I of the Housing and 

Community Development Act of 1974 (42 U.S.C. 5301 et seq.). 


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(2) NO MATCH.—No matching funds shall be required in 

order for an eligible entity to receive any amounts under this 

section. 

(3) TENANT PROTECTIONS.—An eligible entity receiving a 

grant under this section shall comply with the 14th, 17th, 

18th, 19th, 20th, 21st, 22nd and 23rd provisos of the American 

Recovery and Reinvestment Act of 2009 (Pub. L. 111–5, 123 

Stat. 218–19), as amended by section 1497(b)(2) of the DoddFrank Wall Street Reform and Consumer Protection Act (Pub. 

L. 111–203, 124 Stat. 2211). 

(4) VICINITY HIRING.—An eligible entity receiving a grant 

under this section shall comply with section 1497(a)(8) of the 

Dodd-Frank Wall Street Reform and Consumer Protection Act 

(Pub. L. 111–203, 129 Stat. 2210). 

(5) BUY AMERICAN.—Section 1605 of Title XVI—General 

Provisions of the American Recovery and Reinvestment Act of 

2009—shall apply to amounts appropriated, revenues generated, and amounts otherwise made available to eligible entities under this section. 

(f) AUTHORITY TO SPECIFY ALTERNATIVE REQUIREMENTS.— 

(1) IN GENERAL.—In administering the program under this 

section, the Secretary may specify alternative requirements to 

any provision under title I of the Housing and Community Development Act of 1974 or under title I of the Cranston-Gonzalez National Affordable Housing Act of 1990 (except for those 

provisions in these laws related to fair housing, nondiscrimination, labor standards, and the environment) for the purpose of 

expediting and facilitating the use of funds under this section. 

(2) NOTICE.—The Secretary shall provide written notice of 

intent to the public via internet to exercise the authority to 

specify alternative requirements under paragraph. 

(3) LOW AND MODERATE INCOME REQUIREMENT.— 

(A) IN GENERAL.—Notwithstanding the authority of 

the Secretary under paragraph (1)— 

(i) all of the formula and competitive grantee 

funds appropriated or otherwise made available under 

this section shall be used with respect to individuals 

and families whose income does not exceed 120 percent of area median income; and 

(ii) not less than 25 percent of the formula and 

competitive grantee funds appropriated or otherwise 

made available under this section shall be used for the 

purchase and redevelopment of eligible properties that 

will be used to house individuals or families whose incomes do not exceed 50 percent of area median income. 

(B) RECURRENT REQUIREMENT.—The Secretary shall, 

by rule or order, ensure, to the maximum extent practicable and for the longest feasible term, that the sale, 

rental, or redevelopment of abandoned and foreclosed-upon 

homes and residential properties under this section remain 

affordable to individuals or families described in subparagraph (A). 


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(g) NATIONWIDE DISTRIBUTION OF RESOURCES.—Notwithstanding any other provision of this section or the amendments 

made by this section, each State shall receive not less than 

$20,000,000 of formula funds. 

(h) LIMITATION ON USE OF FUNDS WITH RESPECT TO EMINENT

DOMAIN.—No State or unit of general local government may use 

any amounts received pursuant to this section to fund any project 

that seeks to use the power of eminent domain, unless eminent domain is employed only for a public use, which shall not be construed to include economic development that primarily benefits private entities. 

(i) LIMITATION ON DISTRIBUTION OF FUNDS.— (1) IN GENERAL.—None of the funds made available under 

this title or title IV shall be distributed to— 

(A) an organization which has been indicted for a violation under Federal law relating to an election for Federal 

office; or 

(B) an organization which employs applicable individuals. 

(2) APPLICABLE INDIVIDUALS DEFINED.—In this section, the 

term ‘‘applicable individual’’ means an individual who— 

(A) is— 

(i) employed by the organization in a permanent 

or temporary capacity; 

(ii) contracted or retained by the organization; or 

(iii) acting on behalf of, or with the express or apparent authority of, the organization; and 

(B) has been indicted for a violation under Federal law 

relating to an election for Federal office. 

(j) RENTAL HOUSING PREFERENCES.—Each State and local government receiving formula amounts shall establish procedures to 

create preferences for the development of affordable rental housing. 

(k) JOB CREATION.—If a grantee chooses to use funds to create 

jobs by establishing and operating a program to maintain eligible 

neighborhood properties, not more than 10 percent of any grant 

may be used for that purpose. 

(l) PROGRAM SUPPORT AND CAPACITY BUILDING.—The Secretary 

may use up to 0.75 percent of the funds appropriated for capacity 

building of and support for eligible entities and grantees undertaking neighborhood stabilization programs, staffing, training, 

technical assistance, technology, monitoring, travel, enforcement, 

research and evaluation activities. 

(1) Funds set aside for the purposes of this subparagraph 

shall remain available until September 30, 2016; 

(2) Any funds made available under this subparagraph and 

used by the Secretary for personnel expenses related to administering funding under this subparagraph shall be transferred 

to ‘‘Personnel Compensation and Benefits, Community Planning and Development’’; 

(3) Any funds made available under this subparagraph and 

used by the Secretary for training or other administrative expenses shall be transferred to ‘‘Administration, Operations, 

and Management, Community Planning and Development’’ for 

non-personnel expenses; and 


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(4) Any funds made available under this subparagraph and 

used by the Secretary for technology shall be transferred to 

‘‘Working Capital Fund’’. 

(m) ENFORCEMENT AND PREVENTION OF FRAUD AND ABUSE.— 

The Secretary shall establish and implement procedures to prevent 

fraud and abuse of funds under this section, and shall impose a requirement that grantees have an internal auditor to continuously 

monitor grantee performance to prevent fraud, waste, and abuse. 

Grantees shall provide the Secretary and citizens with quarterly 

progress reports. The Secretary shall recapture funds from formula 

and competitive grantees that do not expend 100 percent of allocated funds within 3 years of the date that funds become available, 

and from underperforming or mismanaged grantees, and shall reallocate those funds by formula to target areas with the greatest 

need, as determined by the Secretary through notice. The Secretary 

may take an alternative sanctions action only upon determining 

that such action is necessary to achieve program goals in a timely 

manner. 

(n) The Secretary of Housing and Urban Development shall to 

the extent feasible conform policies and procedures for grants made 

under this section to the policies and practices already in place for 

the grants made under Section 2301 of the Housing and Economic 

Recovery Act of 2008; Division A, Title XII of the American Recovery and Reinvestment Act of 2009; or Section 1497 of the DoddFrank Wall Street Reform and Consumer Protection Act. 

Subtitle H—National Wireless Initiative 

SEC. 271. DEFINITIONS. 

In this subtitle, the following definitions shall apply: 

(1) 700 MHZ BAND.—The term ‘‘700 MHz band’’ means the 

portion of the electromagnetic spectrum between the frequencies from 698 megahertz to 806 megahertz. 

(2) 700 MHZ D BLOCK SPECTRUM.—The term ‘‘700 MHz D 

block spectrum’’ means the portion of the electromagnetic spectrum frequencies from 758 megahertz to 763 megahertz and 

from 788 megahertz to 793 megahertz. 

(3) APPROPRIATE COMMITTEES OF CONGRESS.—Except as 

otherwise specifically provided, the term ‘‘appropriate committees of Congress’’ means— 

(A) the Committee on Commerce, Science, and Transportation of the Senate; and 

(B) the Committee on Energy and Commerce of the 

House of Representatives. 

(4) ASSISTANT SECRETARY.—The term ‘‘Assistant Secretary’’ 

means the Assistant Secretary of Commerce for Communications and Information. 

(5) COMMISSION.—The term ‘‘Commission’’ means the Federal Communications Commission. 

(6) CORPORATION.—The term ‘‘Corporation’’ means the 

Public Safety Broadband Corporation established in section 

284. 

(7) EXISTING PUBLIC SAFETY BROADBAND SPECTRUM.—The 

term ‘‘existing public safety broadband spectrum’’ means the 


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portion of the electromagnetic spectrum between the frequencies— 

(A) from 763 megahertz to 768 megahertz; 

(B) from 793 megahertz to 798 megahertz; 

(C) from 768 megahertz to 769 megahertz; and 

(D) from 798 megahertz to 799 megahertz. 

(8) FEDERAL ENTITY.—The term ‘‘Federal entity’’ has the 

same meaning as in section 113(i) of the National Telecommunications and Information Administration Organization 

Act (47 U.S.C. 923(i)). 

(9) NARROWBAND SPECTRUM.—The term ‘‘narrowband spectrum’’ means the portion of the electromagnetic spectrum between the frequencies from 769 megahertz to 775 megahertz 

and between the frequencies from 799 megahertz to 805 megahertz. 

(10) NIST.—The term ‘‘NIST’’ means the National Institute of Standards and Technology. 

(11) NTIA.—The term ‘‘NTIA’’ means the National Telecommunications and Information Administration. 

(12) PUBLIC SAFETY ENTITY.—The term ‘‘public safety entity’’ means an entity that provides public safety services. 

(13) PUBLIC SAFETY SERVICES.—The term ‘‘public safety 

services’’— 

(A) has the meaning given the term in section 337(f) 

of the Communications Act of 1934 (47 U.S.C. 337(f)); and 

(B) includes services provided by emergency response 

providers, as that term is defined in section 2 of the Homeland Security Act of 2002 (6 U.S.C. 101). 

PART I—AUCTIONS OF SPECTRUM AND 

SPECTRUM MANAGEMENT 

SEC. 272. CLARIFICATION OF AUTHORITIES TO REPURPOSE FEDERAL 

SPECTRUM FOR COMMERCIAL PURPOSES. 

(a) Paragraph (1) of subsection 113(g) of the National Telecommunications and Information Administration Organization Act 

(47 U.S.C. 923(g)(1)) is amended by striking paragraph (1) and inserting the following: 

‘‘(1) ELIGIBLE FEDERAL ENTITIES.—Any Federal entity that 

operates a Federal Government station authorized to use a 

band of frequencies specified in paragraph (2) and that incurs 

relocation costs because of planning for a potential auction of 

spectrum frequencies, a planned auction of spectrum frequencies or the reallocation of spectrum frequencies from Federal use to exclusive non-Federal use, or shared Federal and 

non-Federal use may receive payment for such costs from the 

Spectrum Relocation Fund, in accordance with section 118 of 

this Act. For purposes of this paragraph, Federal power agencies exempted under subsection (c)(4) that choose to relocate 

from the frequencies identified for reallocation pursuant to 

subsection (a), are eligible to receive payment under this paragraph.’’. 

(b) ELIGIBLE FREQUENCIES.—Section 113(g)(2)(B) of the National Telecommunications and Information Administration OrgaVerDate Mar 15 2010 06:20 Sep 14, 2011 Jkt 099011 PO 00000 Frm 00112 Fmt 6602 Sfmt 6601 E:\HR\OC\HD053.XXX HD053

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nization Act (47 U.S.C. 923(g)(2)) is amended by deleting and replacing subsection (B) with the following: 

‘‘(B) any other band of frequencies reallocated from 

Federal use to non-Federal or shared use after January 1, 

2003, that is assigned by competitive bidding pursuant to 

section 309(j) of the Communications Act of 1934 (47 U.S.C 

309(j)) or is assigned as a result of later legislation or 

other administrative direction.’’. 

(c) Paragraph (3) of subsection 113(g) of the National Telecommunications and Information Administration Organization Act 

(47 U.S.C. 923(g)(3)) is amended by striking it in its entirety and 

replacing it with the following: 

‘‘(3) DEFINITION OF RELOCATION AND SHARING COSTS.—For 

purposes of this subsection, the terms ‘relocation costs’ and 

‘sharing costs’ mean the costs incurred by a Federal entity to 

plan for a potential or planned auction or sharing of spectrum 

frequencies and to achieve comparable capability of systems, 

regardless of whether that capability is achieved by relocating 

to a new frequency assignment, relocating a Federal Government station to a different geographic location, modifying Federal government equipment to mitigate interference or use less 

spectrum, in terms of bandwidth, geography or time, and 

thereby permitting spectrum sharing (including sharing among 

relocated Federal entities and incumbents to make spectrum 

available for non-Federal use) or relocation, or by utilizing an 

alternative technology. Comparable capability of systems includes the acquisition of state-of-the art replacement systems 

intended to meet comparable operational scope, which may include incidental increases in functionality. Such costs include— 

‘‘(A) the costs of any modification or replacement of 

equipment, spares, associated ancillary equipment, software, facilities, operating manuals, training costs, or regulations that are attributable to relocation or sharing; 

‘‘(B) the costs of all engineering, equipment, software, 

site acquisition and construction costs, as well as any legitimate and prudent transaction expense, including termlimited Federal civil servant and contractor staff necessary, which may be renewed, to carry out the relocation 

activities of an eligible Federal entity, and reasonable additional costs incurred by the Federal entity that are attributable to relocation or sharing, including increased recurring costs above recurring costs of the system before relocation for the remaining estimated life of the system 

being relocated; 

‘‘(C) the costs of research, engineering studies, economic analyses, or other expenses reasonably incurred in 

connection with (i) calculating the estimated relocation 

costs that are provided to the Commission pursuant to 

paragraph (4) of this subsection, or in calculating the estimated sharing costs; (ii) determining the technical or operational feasibility of relocation to one or more potential relocation bands; or (iii) planning for or managing a relocation or sharing project (including spectrum coordination 


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with auction winners) or potential relocation or sharing 

project; 

‘‘(D) the one-time costs of any modification of equipment reasonably necessary to accommodate commercial 

use of shared frequencies or, in the case of frequencies reallocated to exclusive commercial use, prior to the termination of the Federal entity’s primary allocation or protected status, when the eligible frequencies as defined in 

paragraph (2) of this subsection are made available for private sector uses by competitive bidding and a Federal entity retains primary allocation or protected status in those 

frequencies for a period of time after the completion of the 

competitive bidding process; 

‘‘(E) the costs associated with the accelerated replacement of systems and equipment if such acceleration is necessary to ensure the timely relocation of systems to a new 

frequency assignment or the timely accommodation of 

sharing of Federal frequencies; and 

‘‘(F) the costs of the use of commercial systems and 

services (including systems not utilizing spectrum) to replace Federal systems discontinued or relocated pursuant 

to this Act, including lease, subscription, and equipment 

costs over an appropriate period, such as the anticipated 

life of an equivalent Federal system or other period determined by the Director of the Office of Management and 

Budget.’’. 

(d) A new subsection (7) is added to Section 113(g) as follows: 

‘‘(7) SPECTRUM SHARING.—Federal entities are permitted to 

allow access to their frequency assignments by non-Federal entities upon approval of the terms of such access by NTIA, in 

consultation with the Office of Management and Budget. Such 

non-Federal entities must comply with all applicable rules of 

the Commission and NTIA, including any regulations promulgated pursuant to this section. Remuneration associated with 

such access shall be deposited into the Spectrum Relocation 

Fund. Federal entities that incur costs as a result of such access are eligible for payment from the Fund for the purposes 

specified in subsection (3) of this section. The revenue associated with such access must be at least 110 percent of the estimated Federal costs.’’. 

(e) Section 118 of such Act (47 U.S.C. 928) is amended by: 

(1) In subsection (b), adding at the end, ‘‘and any payments made by non-Federal entities for access to Federal spectrum pursuant to 47 U.S.C. 113(g)(7)’’; 

(2) replacing subsection (c) with the following: 

‘‘The amounts in the Fund from auctions of eligible frequencies 

are authorized to be used to pay relocation costs, as defined in section (g)(3) of this title, of an eligible Federal entity incurring such 

costs with respect to relocation from any eligible frequency. In addition, the amounts in the Fund from payments by non-Federal entities for access to Federal spectrum are authorized to be used to 

pay Federal costs associated with such sharing, as defined in section (g)(3) of this title. The Director of the Office of Management 

and Budget (OMB) may transfer at any time (including prior to 


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any auction or contemplated auction, or sharing initiative) such 

sums as may be available in the Fund to an eligible federal entity 

to pay eligible relocation or sharing costs related to pre-auction estimates or research as defined in subparagraph (C) of section 

923(g)(3) of this title. However, the Director may not transfer more 

than $100,000,000 associated with authorized pre-auction activities 

before an auction is completed and proceeds are deposited in the 

Spectrum Relocation Fund. Within the $100,000,000 that may be 

transferred before an auction, the Director of OMB may transfer up 

to $10,000,000 in total to eligible federal entities for eligible relocation or sharing costs related to pre-auction estimates or research 

as defined in subparagraph (C) of section 923(g)(3) of this title for 

costs incurred prior to the enactment of this legislation, but after 

June 28th, 2010. These amounts transferred pursuant to the previous proviso are in addition to amounts that the Director of OMB 

may transfer after the enactment of this legislation.’’; 

(3) amending subsection (d)(1) to add, ‘‘and sharing’’ before 

‘‘costs’’; 

(4) amending subsection (d)(2)(B) to add, ‘‘and sharing’’ before ‘‘costs’’, and adding at the end, ‘‘and sharing’’; 

(5) replacing subsection (d)(3) with the following: 

‘‘Any amounts in the Fund that are remaining after the payment of the relocation and sharing costs that are payable from the 

Fund shall revert to and be deposited in the general fund of the 

Treasury not later than 15 years after the date of the deposit of 

such proceeds to the Fund, unless the Director of OMB, in consultation with the Assistant Secretary for Communications and Information, notifies the Committees on Appropriations and Energy 

and Commerce of the House of Representative and the Committees 

on Appropriations and Commerce, Science, and Transportation of 

the Senate at least 60 days in advance of the reversion of the funds 

to the general fund of the Treasury that such funds are needed to 

complete or to implement current or future relocations or sharing 

initiatives.’’; 

(6) amending subsection (e)(2) by adding ‘‘and sharing’’ before ‘‘costs’’; by adding ‘‘or sharing’’ before ‘‘is complete’’; and by 

adding ‘‘or sharing’’ before ‘‘in accordance’’; and 

(7) adding a new subsection at the end thereof: 

‘‘(f) Notwithstanding subsections (c) through (e) of this section 

and after the amount specified in subsection (b), up to twenty percent of the amounts deposited in the Spectrum Relocation Fund 

from the auction of licenses following the date of enactment of this 

section for frequencies vacated by Federal entities, or up to twenty 

percent of the amounts paid by non-Federal entities for sharing of 

Federal spectrum, after the date of enactment are hereby appropriated and available at the discretion of the Director of the Office 

of Management and Budget, in consultation with the Assistant Secretary for Communications and Information, for payment to the eligible Federal entities, in addition to the relocation and sharing 

costs defined in paragraph (3) of subsection 923(g), for the purpose 

of encouraging timely access to those frequencies, provided that: 

‘‘(1) Such payments may be based on the market value of 

the spectrum, timeliness of clearing, and needs for agencies’ essential missions; 


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‘‘(2) Such payments are authorized for: 

‘‘(A) the purposes of achieving enhanced capabilities of 

systems that are affected by the activities specified in subparagraphs (A) through (F) of paragraph (3) of subsection 

923(g) of this title; and 

‘‘(B) other communications, radar and spectrum-using 

investments not directly affected by such reallocation or 

sharing but essential for the missions of the Federal entity 

that is relocating its systems or sharing frequencies; 

‘‘(3) The increase to the Fund due to any one auction after 

any payment is not less than 10 percent of the winning bids 

in the relevant auction, or is not less than 10 percent of the 

payments from non-Federal entities in the relevant sharing 

agreement; 

‘‘(4) Payments to eligible entities must be based on the proceeds generated in the auction that an eligible entity participates in; and 

‘‘(5) Such payments will not be made until 30 days after 

the Director of OMB has notified the Committees on Appropriations and Commerce, Science, and Transportation of the 

Senate, and the Committees on Appropriations and Energy 

and Commerce of the House of Representatives.’’. 

(f) Subparagraph D of section 309 (j)(8) of the Communications 

Act of 1934 (47 U.S.C. 309(j)(8)(D)) is amended by adding ‘‘, after 

the retention of revenue described in subparagraph (B),’’ before ‘‘attributable’’ and ‘‘and frequencies identified by the Federal Communications Commission to be auctioned in conjunction with eligible 

frequencies described in 47 U.S.C. 923(g)(2)’’ before the first ‘‘shall’’ 

in the subparagraph. 

(g) If the head of an executive agency of the Federal Government determines that public disclosure of any information contained in notifications and reports required by sections 923 or 928 

of Title 47 of the United States Code would reveal classified national security information or other information for which there is 

a legal basis for nondisclosure and such public disclosure would be 

detrimental to national security, homeland security, public safety, 

or jeopardize law enforcement investigations the head of the executive agency shall notify the NTIA of that determination prior to release of such information. In that event, such information shall be 

included in a separate annex, as needed and to the extent the 

agency head determines is consistent with national security or law 

enforcement purposes. These annexes shall be provided to the appropriate subcommittee in accordance with applicable stipulations, 

but shall not be disclosed to the public or provided to any unauthorized person through any other means. 

SEC. 273. INCENTIVE AUCTION AUTHORITY. 

(a) Paragraph (8) of section 309(j) of the Communications Act 

of 1934 (47 U.S.C. 309(j)) is amended— 

(1) in subparagraph (A), by deleting ‘‘and (E)’’ and inserting ‘‘(E) and (F)’’ after ‘‘subparagraphs (B), (D),’’; and 

(2) by adding at the end the following new subparagraphs: 

‘‘(F) Notwithstanding any other provision of law, if the 

Commission determines that it is consistent with the public interest in utilization of the spectrum for a licensee to 


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voluntarily relinquish some or all of its licensed spectrum 

usage rights in order to permit the assignment of new initial licenses through a competitive bidding process subject 

to new service rules, or the designation of spectrum for unlicensed use, the Commission may pay to such licensee a 

portion of any auction proceeds that the Commission determines, in its discretion, are attributable to the spectrum 

usage rights voluntarily relinquished by such licensee. If 

the Commission also determines that it is in the public interest to modify the spectrum usage rights of any incumbent licensee in order to facilitate the assignment of such 

new initial licenses subject to new service rules, or the designation of spectrum for unlicensed use, the Commission 

may pay to such licensee a portion of the auction proceeds 

for the purpose of relocating to any alternative frequency 

or location that the Commission may designate; Provided, 

however, that with respect to frequency bands between 54 

megahertz and 72 megahertz, 76 megahertz and 88 megahertz, 174 megahertz and 216 megahertz, and 470 megahertz and 698 megahertz (‘the specified bands’), any spectrum made available for alternative use utilizing payments 

authorized under this subsection shall be assigned via the 

competitive bidding process until the winning bidders for 

licenses covering at least 84 megahertz from the specified 

bands deposit the full amount of their bids in accordance 

with the Commission’s instructions. In addition, if more 

than 84 megahertz of spectrum from the specified bands is 

made available for alternative use utilizing payments 

under this subsection, and such spectrum is assigned via 

competitive bidding, a portion of the proceeds may be disbursed to licensees of other frequency bands for the purpose of making additional spectrum available, provided 

that a majority of such additional spectrum is assigned via 

competitive bidding. Also, provided that in exercising the 

authority provided under this section: 

‘‘(i) The Chairman of the Commission, in consultation with the Director of OMB, shall notify the Committees on Appropriations and Commerce, Science, 

and Transportation of the Senate, and the Committees 

on Appropriations and Energy and Commerce of the 

House of Representatives of the methodology for calculating such payments to licensees at least 3 months in 

advance of the relevant auction, and that such methodology consider the value of spectrum vacated in its 

current use and the timeliness of clearing; and 

‘‘(ii) Notwithstanding subparagraph (A), and except as provided in subparagraphs (B), (C), and (D), all 

proceeds (including deposits and up front payments 

from successful bidders) from the auction of spectrum 

under this section and section 106 of this Act shall be 

deposited with the Public Safety Trust Fund established under section 217 of this Act. 

‘‘(G) ESTABLISHMENT OF INCENTIVE AUCTION RELOCA- TION FUND.— 


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‘‘(i) IN GENERAL.—There is established in the 

Treasury of the United States a fund to be known as 

the ‘Incentive Auction Relocation Fund’. 

‘‘(ii) ADMINISTRATION.—The Assistant Secretary 

shall administer the Incentive Auction Relocation 

Fund using the amounts deposited pursuant to this 

section. 

‘‘(iii) CREDITING OF RECEIPTS.—There shall be deposited into or credited to the Incentive Auction Relocation Fund any amounts specified in section 217 of 

this Act. 

‘‘(iv) AVAILABILITY.—Amounts in the Incentive 

Auction Relocation Fund shall be available to the 

NTIA for use— 

‘‘(I) without fiscal year limitation; 

‘‘(II) for a period not to exceed 18 months following the later of— 

‘‘(aa) the completion of incentive auction 

from which such amounts were derived; 

‘‘(bb) the date on which the Commission 

issues all the new channel assignments pursuant to any repacking required under subparagraph (F)(ii); or 

‘‘(cc) the issuance of a construction permit 

by the Commission for a station to change 

channels, geographic locations, to collocate on 

the same channel or notification by a station 

to the Assistant Secretary that it is impacted 

by such a change; and 

‘‘(III) without further appropriation. 

‘‘(v) USE OF FUNDS.—Amounts in the Incentive 

Auction Relocation Fund may only be used by the 

NTIA, in consultation with the Commission, to cover— 

‘‘(I) the reasonable costs of television broadcast stations that are relocated to a different spectrum channel or geographic location following an 

incentive auction under subparagraph (F), or that 

are impacted by such relocations, including to 

cover the cost of new equipment, installation, and 

construction; and 

‘‘(II) the costs incurred by multichannel video 

programming distributors for new equipment, installation, and construction related to the carriage 

of such relocated stations or the carriage of stations that voluntarily elect to share a channel, but 

retain their existing rights to carriage pursuant to 

sections 338, 614, and 615.’’. 

SEC. 274. REQUIREMENTS WHEN REPURPOSING CERTAIN MOBILE 

SATELLITE SERVICES SPECTRUM FOR TERRESTRIAL 

BROADBAND USE. 

To the extent that the Commission makes available terrestrial 

broadband rights on spectrum primarily licensed for mobile satellite services, the Commission shall recover a significant portion 

of the value of such right either through the authority provided in 


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section 309(j) of the Communications Act of 1934 (47 U.S.C. 309(j)) 

or by section 278 of this subtitle. 

SEC. 275. PERMANENT EXTENSION OF AUCTION AUTHORITY. 

Section 309(j)(11) of the Communications Act of 1934 (47 

U.S.C. 309(j)(11)) is repealed. 

SEC. 276. AUTHORITY TO AUCTION LICENSES FOR DOMESTIC SATELLITE SERVICES. 

Section 309(j) of the Communications Act of 1934 is amended 

by adding the following new subsection at the end thereof: 

‘‘(17) Notwithstanding any other provision of law, the Commission shall use competitive bidding under this subsection to 

assign any license, construction permit, reservation, or similar 

authorization or modification thereof, that may be used solely 

or predominantly for domestic satellite communications services, including satellite-based television or radio services. A 

service is defined to be predominantly for domestic satellite 

communications services if the majority of customers that may 

be served are located within the geographic boundaries of the 

United States. The Commission may, however, use an alternative approach to assignment of such licenses or similar authorities if it finds that such an alternative to competitive bidding would serve the public interest, convenience, and necessity. This paragraph shall be effective on the date of its enactment and shall apply to all Commission assignments or reservations of spectrum for domestic satellite services, including, 

but not limited to, all assignments or reservations for satellitebased television or radio services as of the effective date.’’. 

SEC. 277. DIRECTED AUCTION OF CERTAIN SPECTRUM. 

(a) IDENTIFICATION OF SPECTRUM.—Not later than 1 year after 

the date of enactment of this subtitle, the Assistant Secretary shall 

identify and make available for immediate reallocation, at a minimum, 15 megahertz of contiguous spectrum at frequencies located 

between 1675 megahertz and 1710 megahertz, inclusive, minus the 

geographic exclusion zones, or any amendment thereof, identified 

in NTIA’s October 2010 report entitled ‘‘An Assessment of NearTerm Viability of Accommodating Wireless Broadband Systems in 

1675–1710 MHz, 1755–1780 MHz, 3500–3650 MHz, and 4200–4220 

MHz, 4380–4400 MHz Bands’’, to be made available for reallocation 

or sharing with incumbent Government operations. 

(b) AUCTION.—Not later than January 31, 2016, the Commission shall conduct, in such combination as deemed appropriate by 

the Commission, the auctions of the following licenses covering at 

least the frequencies described in this section, by commencing the 

bidding for: 

(1) The spectrum between the frequencies of 1915 megahertz and 1920 megahertz, inclusive. 

(2) The spectrum between the frequencies of 1995 megahertz and 2000 megahertz, inclusive. 

(3) The spectrum between the frequencies of 2020 megahertz and 2025 megahertz, inclusive. 

(4) The spectrum between the frequencies of 2155 megahertz and 2175 megahertz, inclusive. 


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(5) The spectrum between the frequencies of 2175 megahertz and 2180 megahertz, inclusive. 

(6) At least 25 megahertz of spectrum between the frequencies of 1755 megahertz and 1850 megahertz, minus appropriate geographic exclusion zones if necessary, unless the 

President of the United States determines that— 

(A) such spectrum should not be reallocated due to the 

need to protect incumbent Federal operations; or reallocation must be delayed or progressed in phases to ensure 

protection or continuity of Federal operations; and 

(B) allocation of other spectrum— 

(i) better serves the public interest, convenience, 

and necessity; and 

(ii) can reasonably be expected to produce receipts 

comparable to auction of spectrum frequencies identified in this paragraph. 

(7) The Commission may substitute alternative spectrum 

frequencies for the spectrum frequencies identified in paragraphs (1) through (5) of this subsection, if the Commission determines that alternative spectrum would better serve the public interest and the Office of Management and Budget certifies 

that such alternative spectrum frequencies are reasonably expected to produce receipts comparable to auction of the spectrum frequencies identified in paragraphs (1) through (5) of 

this subsection. 

(c) AUCTION ORGANIZATION.—The Commission may, if technically feasible and consistent with the public interest, combine the 

spectrum identified in paragraphs (4), (5), and the portion of paragraph (6) between the frequencies of 1755 megahertz and 1850 

megahertz, inclusive, of subsection (b) in an auction of licenses for 

paired spectrum blocks. 

(d) FURTHER REALLOCATION OF CERTAIN OTHER SPECTRUM.— 

(1) COVERED SPECTRUM.—For purposes of this subsection, 

the term ‘‘covered spectrum’’ means the portion of the electromagnetic spectrum between the frequencies of 3550 to 3650 

megahertz, inclusive, minus the geographic exclusion zones, or 

any amendment thereof, identified in NTIA’s October 2010 report entitled ‘‘An Assessment of Near-Term Viability of Accommodating Wireless Broadband Systems in 1675–1710 MHz, 

1755–1780 MHz, 3500–3650 MHz, and 4200–4220 MHz, 4380– 

4400 MHz Bands’’. 

(2) IN GENERAL.—Consistent with requirements of section 

309(j) of the Communications Act of 1934, the Commission 

shall reallocate covered spectrum for assignment by competitive bidding or allocation to unlicensed use, minus appropriate 

exclusion zones if necessary, unless the President of the United 

States determines that— 

(A) such spectrum cannot be reallocated due to the 

need to protect incumbent Federal systems from interference; or 

(B) allocation of other spectrum— 

(i) better serves the public interest, convenience, 

and necessity; and 


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(ii) can reasonably be expected to produce receipts 

comparable to what the covered spectrum might auction for without the geographic exclusion zones. 

(3) ACTIONS REQUIRED IF COVERED SPECTRUM CANNOT BE

REALLOCATED.— 

(A) IN GENERAL.—If the President makes a determination under paragraph (2) that the covered spectrum cannot 

be reallocated, then the President shall, within 1 year 

after the date of such determination— 

(i) identify alternative bands of frequencies totaling more than 20 megahertz and no more than 100 

megahertz of spectrum used primarily by Federal 

agencies that satisfy the requirements of clauses (i) 

and (ii) of paragraph (2)(B); 

(ii) report to the appropriate committees of Congress and the Commission an identification of such alternative spectrum for assignment by competitive bidding; and 

(iii) make such alternative spectrum for assignment immediately available for reallocation. 

(B) AUCTION.—If the President makes a determination 

under paragraph (2) that the covered spectrum cannot be 

reallocated, the Commission shall commence the bidding of 

the alternative spectrum identified pursuant to subparagraph (A) within 3 years of the date of enactment of this 

subtitle. 

(4) ACTIONS REQUIRED IF COVERED SPECTRUM CAN BE REALLOCATED.—If the President does not make a determination 

under paragraph (1) that the covered spectrum cannot be reallocated, the Commission shall commence the competitive bidding for the covered spectrum within 3 years of the date of enactment of this subtitle. 

(e) AMENDMENTS TO DESIGN REQUIREMENTS RELATED TO COMPETITIVE BIDDING.—Section 309(j) of the Communications Act of 

1934 (47 U.S.C. 309(j)) is amended— 

(1) in paragraph (3)— 

(A) in subparagraph (E)(ii), by striking ‘‘; and’’ and inserting a semicolon; 

(B) in subparagraph (F), by striking the period at the 

end and inserting a semicolon; and 

(2) by amending clause (i) of the second sentence of paragraph (8)(C) to read as follows: 

‘‘(i) the deposits— 

‘‘(I) of successful bidders of any auction conducted pursuant to subparagraph (F) of section 

106 of this act shall be paid to the Public Safety 

Trust Fund established under section 217 of such 

Act; and 

‘‘(II) of successful bidders of any other auction 

shall be paid to the Treasury;’’. 

SEC. 278. AUTHORITY TO ESTABLISH SPECTRUM LICENSE USER FEES. 

Section 309 of the Communications Act of 1934 is amended by 

adding the following new subsection at the end thereof: 


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‘‘(m) USE OF SPECTRUM LICENSE USER FEES.—For initial licenses or construction permits that are not granted through the 

use of competitive bidding as set forth in subsection (j), and for renewals or modifications of initial licenses or other authorizations, 

whether granted through competitive bidding or not, the Commission may, where warranted, establish, assess, and collect annual 

user fees on holders of spectrum licenses or construction permits, 

including their successors or assignees, in order to promote efficient 

and effective use of the electromagnetic spectrum. 

‘‘(1) REQUIRED COLLECTIONS.—The Commission shall collect at least the following amounts— ‘‘(A) $200,000,000 in fiscal year 2012; 

‘‘(B) $300,000,000 in fiscal year 2013; 

‘‘(C) $425,000,000 in fiscal year 2014; 

‘‘(D) $550,000,000 in fiscal year 2015; 

‘‘(E) $550,000,000 in fiscal year 2016; 

‘‘(F) $550,000,000 in fiscal year 2017; 

‘‘(G) $550,000,000 in fiscal year 2018; 

‘‘(H) $550,000,000 in fiscal year 2019; 

‘‘(I) $550,000,000 in fiscal year 2020; and 

‘‘(J) $550,000,000 in fiscal year 2021. 

‘‘(2) DEVELOPMENT OF SPECTRUM FEE REGULATIONS.— ‘‘(A) The Commission shall, by regulation, establish a 

methodology for assessing annual spectrum user fees and 

a schedule for collection of such fees on classes of spectrum 

licenses or construction permits or other instruments of 

authorization, consistent with the public interest, convenience and necessity. The Commission may determine over 

time different classes of spectrum licenses or construction 

permits upon which such fees may be assessed. In establishing the fee methodology, the Commission may consider 

the following factors: 

‘‘(i) the highest value alternative spectrum use forgone; 

‘‘(ii) scope and type of permissible services and 

uses; 

‘‘(iii) amount of spectrum and licensed coverage 

area; 

‘‘(iv) shared versus exclusive use; 

‘‘(v) level of demand for spectrum licenses or construction permits within a certain spectrum band or 

geographic area; 

‘‘(vi) the amount of revenue raised on comparable 

licenses awarded through an auction; and 

‘‘(vii) such factors that the Commission determines, in its discretion, are necessary to promote efficient and effective spectrum use. 

‘‘(B) In addition, the Commission shall, by regulation, 

establish a methodology for assessing annual user fees and 

a schedule for collection of such fees on entities holding 

Ancillary Terrestrial Component authority in conjunction 

with Mobile Satellite Service spectrum licenses, where the 

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sion shall not collect less from the holders of such authority than a reasonable estimate of the value of such authority over its term, regardless of whether terrestrial services 

is actually provided during this term. In determining a 

reasonable estimate of the value of such authority, the 

Commission may consider factors listed in subsection (A). 

‘‘(C) Within 60 days of enactment of this Act, the Commission shall commence a rulemaking to develop the fee 

methodology and regulations. The Commission shall take 

all actions necessary so that it can collect fees from the 

first class or classes of spectrum license or construction 

permit holders no later than September 30, 2012. 

‘‘(D) The Commission, from time to time, may commence further rulemakings (separate from or in connection 

with other rulemakings or proceedings involving spectrumbased services, licenses, permits and uses) and modify the 

fee methodology or revise its rules required by paragraph 

(B) to add or modify classes of spectrum license or construction permit holders that must pay fees, and assign or 

adjust such fee as a result of the addition, deletion, reclassification or other change in a spectrum-based service or 

use, including changes in the nature of a spectrum-based 

service or use as a consequence of Commission rulemaking 

proceedings or changes in law. Any resulting changes in 

the classes of spectrum licenses, construction permits or 

fees shall take effect upon the dates established in the 

Commission’s rulemaking proceeding in accordance with 

applicable law. 

‘‘(E) The Commission shall exempt from such fees 

holders of licenses for broadcast television and public safety services. The term ‘emergency response providers’ includes State, local, and tribal, emergency public safety, law 

enforcement, firefighter, emergency response, emergency 

medical (including hospital emergency facilities), and related personnel, agencies and authorities. 

‘‘(3) PENALTIES FOR LATE PAYMENT.—The Commission shall 

prescribe by regulation an additional charge which shall be assessed as a penalty for late payment of fees required by this 

subsection. 

‘‘(4) REVOCATION OF LICENSE OR PERMIT.—The Commission 

may revoke any spectrum license or construction permit for a 

licensee’s or permitee’s failure to pay in a timely manner any 

fee or penalty to the Commission under this subsection. Such 

revocation action may be taken by the Commission after notice 

of the Commission’s intent to take such action is sent to the 

licensee by registered mail, return receipt requested, at the licensee’s last known address. The notice will provide the licensee at least 30 days to either pay the fee or show cause why 

the fee does not apply to the licensee or should otherwise be 

waived or payment deferred. A hearing is not required under 

this subsection unless the licensee’s response presents a substantial and material question of fact. In any case where a 

hearing is conducted pursuant to this section, the hearing shall 

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ceeding with the introduction of evidence and the burden of 

proof shall be on the licensee. Unless the licensee substantially 

prevails in the hearing, the Commission may assess the licensee for the costs of such hearing. Any Commission order 

adopted pursuant to this subsection shall determine the 

amount due, if any, and provide the licensee with at least 30 

days to pay that amount or have its authorization revoked. No 

order of revocation under this subsection shall become final 

until the licensee has exhausted its right to judicial review of 

such order under section 402(b)(5) of this title. 

‘‘(5) TREATMENT OF REVENUES.—All proceeds obtained pursuant to the regulations required by this subsection shall be 

deposited in the General Fund of the Treasury.’’. 

PART II—PUBLIC SAFETY BROADBAND 

NETWORK 

SEC. 281. REALLOCATION OF D BLOCK FOR PUBLIC SAFETY. 

(a) IN GENERAL.—The Commission shall reallocate the 700 

MHz D block spectrum for use by public safety entities in accordance with the provisions of this subtitle. 

(b) SPECTRUM ALLOCATION.—Section 337(a) of the Communications Act of 1934 (47 U.S.C. 337(a)) is amended— 

(1) by striking ‘‘24’’ in paragraph (1) and inserting ‘‘34’’; 

and 

(2) by striking ‘‘36’’ in paragraph (2) and inserting ‘‘26’’. 

SEC. 282. FLEXIBLE USE OF NARROWBAND SPECTRUM. 

The Commission may allow the narrowband spectrum to be 

used in a flexible manner, including usage for public safety 

broadband communications, subject to such technical and interference protection measures as the Commission may require and 

subject to interoperability requirements of the Commission and the 

Corporation established in section 204 of this subtitle. 

SEC. 283. SINGLE PUBLIC SAFETY WIRELESS NETWORK LICENSEE. 

(a) REALLOCATION AND GRANT OF LICENSE.—Notwithstanding 

any other provision of law, and subject to the provisions of this 

subtitle, including section 290, the Commission shall grant a license to the Public Safety Broadband Corporation established 

under section 284 for the use of the 700 MHz D block spectrum and 

existing public safety broadband spectrum. 

(b) TERM OF LICENSE.— 

(1) INITIAL LICENSE.—The license granted under subsection 

(a) shall be for an initial term of 10 years from the date of the 

initial issuance of the license. 

(2) RENEWAL OF LICENSE.—Prior to expiration of the term 

of the initial license granted under subsection (a) or the expiration of any subsequent renewal of such license, the Corporation 

shall submit to the Commission an application for the renewal 

of such license. Such renewal application shall demonstrate 

that, during the preceding license term, the Corporation has 

met the duties and obligations set forth under this subtitle. A 

renewal license granted under this paragraph shall be for a 

term of not to exceed 15 years. 


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(c) FACILITATION OF TRANSITION.—The Commission shall take 

all actions necessary to facilitate the transition of the existing public safety broadband spectrum to the Public Safety Broadband Corporation established under section 284. 

SEC. 284. ESTABLISHMENT OF PUBLIC SAFETY BROADBAND CORPORATION. 

(a) ESTABLISHMENT.—There is authorized to be established a 

private, nonprofit corporation, to be known as the ‘‘Public Safety 

Broadband Corporation’’, which is neither an agency nor establishment of the United States Government or the District of Columbia 

Government. 

(b) APPLICATION OF PROVISIONS.—The Corporation shall be 

subject to the provisions of this subtitle, and, to the extent consistent with this subtitle, to the District of Columbia Nonprofit 

Corporation Act (sec. 29–301.01 et seq., D.C. Official Code). 

(c) RESIDENCE.—The Corporation shall have its place of business in the District of Columbia and shall be considered, for purposes of venue in civil actions, to be a resident of the District of 

Columbia. 

(d) POWERS UNDER DC ACT.—In order to carry out the duties 

and activities of the Corporation, the Corporation shall have the 

usual powers conferred upon a nonprofit corporation by the District 

of Columbia Nonprofit Corporation Act. 

(e) INCORPORATION.—The members of the initial Board of Directors of the Corporation shall serve as incorporators and shall 

take whatever steps that are necessary to establish the Corporation 

under the District of Columbia Nonprofit Corporation Act. 

SEC. 285. BOARD OF DIRECTORS OF THE CORPORATION. 

(a) MEMBERSHIP.—The management of the Corporation shall 

be vested in a Board of Directors (referred to in this Title as the 

‘‘Board’’), which shall consist of the following members: 

(1) FEDERAL MEMBERS.—The following individuals, or their 

respective designees, shall serve as Federal members: 

(A) The Secretary of Commerce. 

(B) The Secretary of Homeland Security. 

(C) The Attorney General of the United States. 

(D) The Director of the Office of Management and 

Budget. 

(2) NON-FEDERAL MEMBERS.— 

(A) IN GENERAL.—The Secretary of Commerce, in consultation with the Secretary of Homeland Security and the 

Attorney General of the United States, shall appoint 11 individuals to serve as non-Federal members of the Board. 

(B) STATE, TERRITORIAL, TRIBAL AND LOCAL GOVERNMENT INTERESTS.—In making appointments under subparagraph (A), the Secretary of Commerce should— 

(i) appoint at least 3 individuals with significant 

expertise in the collective interests of State, Territorial, Tribal and Local governments; and 

(ii) seek to ensure geographic and regional representation of the United States in such appointments; 

(iii) seek to ensure rural and urban representation 

in such appointments. 


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(C) PUBLIC SAFETY INTERESTS.—In making appointments under subparagraph (A), the Secretary of Commerce 

should appoint at least 3 individuals who have served or 

are currently serving as public safety professionals. 

(D) REQUIRED QUALIFICATIONS.— (i) IN GENERAL.—Each non-Federal member appointed under subparagraph (A) should meet at least 

1 of the following criteria: 

(I) PUBLIC SAFETY EXPERIENCE.—Knowledge 

and experience in the use of Federal, State, local, 

or tribal public safety or emergency response. 

(II) TECHNICAL EXPERTISE.—Technical expertise and fluency regarding broadband communications, including public safety communications and 

cybersecurity. 

(III) NETWORK EXPERTISE.—Expertise in 

building, deploying, and operating commercial 

telecommunications networks. 

(IV) FINANCIAL EXPERTISE.—Expertise in financing and funding telecommunications networks. 

(ii) EXPERTISE TO BE REPRESENTED.—In making 

appointments under subparagraph (A), the Secretary 

of Commerce should appoint— 

(I) at least one individual who satisfies the requirement under subclause (II) of clause (i); 

(II) at least one individual who satisfies the 

requirement under subclause (III) of clause (i); 

and 

(III) at least one individual who satisfies the 

requirement under subclause (IV) of clause (i). 

(E) INDEPENDENCE.— 

(i) IN GENERAL.—Each non-Federal member of the 

Board shall be independent and neutral and maintain 

a fiduciary relationship with the Corporation in performing his or her duties. 

(ii) INDEPENDENCE DETERMINATION.—In order to 

be considered independent for purposes of this subparagraph, a member of the Board— 

(I) may not, other than in his or her capacity 

as a member of the Board or any committee thereof— 

(aa) accept any consulting, advisory, or 

other compensatory fee from the Corporation; 

or 

(bb) be a person associated with the Corporation or with any affiliated company thereof; and 

(II) shall be disqualified from any deliberation 

involving any transaction of the Corporation in 

which the Board member has a financial interest 

in the outcome of the transaction. 

(F) NOT OFFICERS OR EMPLOYEES.—The non-Federal 

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bership, be considered to be officers or employees of the 

United States Government or of the District of Columbia 

Government. 

(G) CITIZENSHIP.—No individual other than a citizen of 

the United States may serve as a non-Federal member of 

the Board. 

(H) CLEARANCE FOR CLASSIFIED INFORMATION.—In 

order to have the threat and vulnerability information necessary to make risk management decisions regarding the 

network, the non-Federal members of the Board shall be 

required, prior to appointment, to obtain a clearance held 

by the Director of National Intelligence that permits them 

to receive information classified at the level of Top Secret, 

Special Compartmented Information. 

(b) TERMS OF APPOINTMENT.— (1) INITIAL APPOINTMENT DEADLINE.—Members of the 

Board shall be appointed not later than 180 days after the date 

of the enactment of this subtitle. 

(2) TERMS.— (A) LENGTH.— (i) FEDERAL MEMBERS.—Each Federal member of 

the Board shall serve as a member of the Board for 

the life of the Corporation while serving in their appointed capacity. 

(ii) NON-FEDERAL MEMBERS.—The term of office of 

each non-Federal member of the Board shall be 3 

years. No non-Federal member of the Board may serve 

more than 2 consecutive full 3-year terms. 

(B) EXPIRATION OF TERM.—Any member whose term 

has expired may serve until such member’s successor has 

taken office, or until the end of the calendar year in which 

such member’s term has expired, whichever is earlier. 

(C) APPOINTMENT TO FILL VACANCY.—Any non-Federal 

member appointed to fill a vacancy occurring prior to the 

expiration of the term for which that member’s predecessor 

was appointed shall be appointed for the remainder of the 

predecessor’s term. 

(D) STAGGERED TERMS.—With respect to the initial 

non-Federal members of the Board— 

(i) 4 members shall serve for a term of 3 years; 

(ii) 4 members shall serve for a term of 2 years; 

and 

(iii) 3 members shall serve for a term of 1 year. 

(3) VACANCIES.—A vacancy in the membership of the 

Board shall not affect the Board’s powers, and shall be filled 

in the same manner as the original member was appointed. 

(c) CHAIR.— 

(1) SELECTION.—The Secretary of Commerce, in consultation with the Secretary of Homeland Security and the Attorney 

General of the United States, shall select, from among the 

members of the Board, an individual to serve for a 2-year term 

as Chair of the Board. 

(2) CONSECUTIVE TERMS.—An individual may not serve for 

more than 2 consecutive terms as Chair of the Board. 


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(3) REMOVAL FOR CAUSE.—The Secretary of Commerce, in 

consultation with the Secretary of Homeland Security and the 

Attorney General of the United States, may remove the Chair 

of the Board and any non-Federal member for good cause. 

(d) REMOVAL.—All members of the Board may by majority 

vote— 

(1) remove any non-Federal member of the Board from office for conduct determined by the Board to be detrimental to 

the Board or Corporation; and 

(2) request that the Secretary of Commerce exercise his or 

her authority to remove the Chair of the Board for conduct determined by the Board to be detrimental to the Board or Corporation. 

(e) MEETINGS.— 

(1) FREQUENCY.—The Board shall meet in accordance with 

the bylaws of the Corporation— 

(A) at the call of the Chairperson; and 

(B) not less frequently than once each quarter. 

(2) TRANSPARENCY.—Meetings of the Board, including any 

committee of the Board, shall be open to the public. The Board 

may, by majority vote, close any such meeting only for the time 

necessary to preserve the confidentiality of commercial or financial information that is privileged or confidential, to discuss 

personnel matters, to discuss security vulnerabilities when 

making those vulnerabilities public would increase risk to the 

network or otherwise materially threaten network operations, 

or to discuss legal matters affecting the Corporation, including 

pending or potential litigation. 

(f) QUORUM.—Eight members of the Board shall constitute a 

quorum. 

(g) BYLAWS.—A majority of the members of the Board of Directors may amend the bylaws of the Corporation. 

(h) ATTENDANCE.—Members of the Board of Directors may attend meetings of the Corporation and vote in person, via telephone 

conference, or via video conference. 

(i) PROHIBITION ON COMPENSATION.—Members of the Board of 

the Corporation shall serve without pay, and shall not otherwise 

benefit, directly or indirectly, as a result of their service to the Corporation, but shall be allowed a per diem allowance for travel expenses, at rates authorized for an employee of an agency under 

subchapter I of chapter 57 of title 5, United States Code, while 

away from the home or regular place of business of the member in 

the performance of the duties of the Corporation. 

SEC. 286. OFFICERS, EMPLOYEES, AND COMMITTEES OF THE CORPORATION. 

(a) OFFICERS AND EMPLOYEES.— 

(1) IN GENERAL.—The Corporation shall have a Chief Executive Officer, and such other officers and employees as may be 

named and appointed by the Board for terms and at rates of 

compensation fixed by the Board pursuant to this subsection. 

The Chief Executive Officer may name and appoint such employees as are necessary. All officers and employees shall serve 

at the pleasure of the Board. 


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(2) LIMITATION.—No individual other than a citizen of the 

United States may be an officer of the Corporation. 

(3) NONPOLITICAL NATURE OF APPOINTMENT.—No political 

test or qualification shall be used in selecting, appointing, promoting, or taking other personnel actions with respect to officers, agents, or employees of the Corporation. 

(4) COMPENSATION.— 

(A) IN GENERAL.—The Board may hire and fix the 

compensation of employees hired under this subsection as 

may be necessary to carry out the purposes of the Corporation. 

(B) APPROVAL BY COMPENSATION BY FEDERAL MEMBERS.—Notwithstanding any other provision of law, or any 

bylaw adopted by the Corporation, all rates of compensation, including benefit plans and salary ranges, for officers 

and employees of the Board, shall be jointly approved by 

the Federal members of the Board. 

(C) LIMITATION ON OTHER COMPENSATION.—No officer 

or employee of the Corporation may receive any salary or 

other compensation (except for compensation for services 

on boards of directors of other organizations that do not receive funds from the Corporation, on committees of such 

boards, and in similar activities for such organizations) 

from any sources other than the Corporation for services 

rendered during the period of the employment of the officer or employee by the Corporation, unless unanimously 

approved by all voting members of the Corporation. 

(5) SERVICE ON OTHER BOARDS.—Service by any officer on 

boards of directors of other organizations, on committees of 

such boards, and in similar activities for such organizations 

shall be subject to annual advance approval by the Board and 

subject to the provisions of the Corporation’s Statement of Ethical Conduct. 

(6) RULE OF CONSTRUCTION.—No officer or employee of the 

Board or of the Corporation shall be considered to be an officer 

or employee of the United States Government or of the government of the District of Columbia. 

(7) CLEARANCE FOR CLASSIFIED INFORMATION.—In order to 

have the threat and vulnerability information necessary to 

make risk management decisions regarding the network, at a 

minimum the Chief Executive Officer and any officers filling 

the roles normally titled as Chief Information Officers, Chief 

Information Security Officer, and Chief Operations Officer 

shall— 

(A) be required, within six months of being hired, to 

obtain a clearance held by the Director of National Intelligence that permits them to receive information classified 

at the level of Top Secret, Special Compartmented Information. 

(b) ADVISORY COMMITTEES.—The Board— 

(1) shall establish a standing public safety advisory committee to assist the Board in carrying out its duties and responsibilities under this Title; and 


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(2) may establish additional standing or ad hoc committees, panels, or councils as the Board determines are necessary. 

SEC. 287. NONPROFIT AND NONPOLITICAL NATURE OF THE CORPORATION. 

(a) STOCK.—The Corporation shall have no power to issue any 

shares of stock, or to declare or pay any dividends. 

(b) PROFIT.—No part of the income or assets of the Corporation 

shall inure to the benefit of any director, officer, employee, or any 

other individual associated with the Corporation, except as salary 

or reasonable compensation for services. 

(c) POLITICS.—The Corporation may not contribute to or otherwise support any political party or candidate for elective public office. 

(d) PROHIBITION ON LOBBYING ACTIVITIES.—The Corporation 

shall not engage in lobbying activities (as defined in section 3(7) of 

the Lobbying Disclosure Act of 1995 (5 U.S.C. 1602(7))). 

SEC. 288. POWERS, DUTIES, AND RESPONSIBILITIES OF THE CORPORATION. 

(a) GENERAL POWERS.—The Corporation shall have the authority to do the following: 

(1) To adopt and use a corporate seal. 

(2) To have succession until dissolved by an Act of Congress. 

(3) To prescribe, through the actions of its Board, bylaws 

not inconsistent with Federal law and the laws of the District 

of Columbia, regulating the manner in which the Corporation’s 

general business may be conducted and the manner in which 

the privileges granted to the Corporation by law may be exercised. 

(4) To exercise, through the actions of its Board, all powers 

specifically granted by the provisions of this Title, and such incidental powers as shall be necessary. 

(5) To hold such hearings, sit and act at such times and 

places, take such testimony, and receive such evidence as the 

Corporation considers necessary to carry out its responsibilities 

and duties. 

(6) To obtain grants and funds from and make contracts 

with individuals, private companies, organizations, institutions, and Federal, State, regional, and local agencies, pursuant to guidelines established by the Director of the Office of 

Management and Budget. 

(7) To accept, hold, administer, and utilize gifts, donations, 

and bequests of property, both real and personal, for the purposes of aiding or facilitating the work of the Corporation. 

(8) To issue notes or bonds, which shall not be guaranteed 

or backed in any manner by the Government of the United 

States, to purchasers of such instruments in the private capital 

markets. 

(9) To incur indebtedness, which shall be the sole liability 

of the Corporation and shall not be guaranteed or backed by 

the Government of the United States, to carry out the purposes 

of this Title. 


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(10) To spend funds under paragraph (6) in a manner authorized by the Board, but only for purposes that will advance 

or enhance public safety communications consistent with this 

subtitle. 

(11) To establish reserve accounts with funds that the Corporation may receive from time to time that exceed the 

amounts required by the Corporation to timely pay its debt 

service and other obligations. 

(12) To expend the funds placed in any reserve accounts 

established under paragraph (11) (including interest earned on 

any such amounts) in a manner authorized by the Board, but 

only for purposes that— 

(A) will advance or enhance public safety communications consistent with this subtitle; or 

(B) are otherwise approved by an Act of Congress. 

(13) To build, operate and maintain the public safety interoperable broadband network. 

(14) To take such other actions as the Corporation 

(through its Board) may from time to time determine necessary, appropriate, or advisable to accomplish the purposes of 

this subtitle. 

(b) DUTY AND RESPONSIBILITY TO DEPLOY AND OPERATE A NA- TIONWIDE PUBLIC SAFETY INTEROPERABLE BROADBAND NETWORK.— (1) IN GENERAL.—The Corporation shall hold the single 

public safety wireless license granted under section 281 and 

take all actions necessary to ensure the building, deployment, 

and operation of a secure and resilient nationwide public safety 

interoperable broadband network in consultation with Federal, 

State, tribal, and local public safety entities, the Director of 

NIST, the Commission, and the public safety advisory committee established in section 284(b)(1), including by,— 

(A) ensuring nationwide standards including 

encryption requirements for use and access of the network; 

(B) issuing open, transparent, and competitive requests for proposals to private sector entities for the purposes of building, operating, and maintaining the network; 

(C) managing and overseeing the implementation and 

execution of contracts or agreements with non-Federal entities to build, operate, and maintain the network; and 

(D) establishing policies regarding Federal and public 

safety support use. 

(2) INTEROPERABILITY, SECURITY AND STANDARDS.—In carrying out the duties and responsibilities of this subsection, including issuing requests for proposals, the Corporation shall— 

(A) ensure the safety, security, and resiliency of the 

network, including requirements for protecting and monitoring the network to protect against cyber intrusions or 

cyberattack; 

(B) be informed of and manage supply chain risks to 

the network, including requirements to provide insight 

into the suppliers and supply chains for critical network 

components and to implement risk management best practice in network design, contracting, operations and maintenance; 


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(C) promote competition in the equipment market, including devices for public safety communications, by requiring that equipment and devices for use on the network 

be— 

(i) built to open, non-proprietary, commercially 

available standards; 

(ii) capable of being used across the nationwide 

public safety broadband network operating in the 700 

MHz band; 

(iii) be able to be interchangeable with other vendors’ equipment; and 

(iv) backward-compatible with existing second and 

third generation commercial networks to the extent 

that such capabilities are necessary and technically 

and economically reasonable; and 

(D) promote integration of the network with public 

safety answering points or their equivalent. 

(3) RURAL COVERAGE.—In carrying out the duties and responsibilities of this subsection, including issuing requests for 

proposals, the Corporation, consistent with the license granted 

under section 281, shall require deployment phases with substantial rural coverage milestones as part of each phase of the 

construction and deployment of the network. 

(4) EXECUTION OF AUTHORITY.—In carrying out the duties 

and responsibilities of this subsection, the Corporation may— 

(A) obtain grants from and make contracts with individuals, private companies, and Federal, State, regional, 

and local agencies; 

(B) hire or accept voluntary services of consultants, experts, advisory boards, and panels to aid the Corporation 

in carrying out such duties and responsibilities; 

(C) receive payment for use of— 

(i) network capacity licensed to the Corporation; 

and 

(ii) network infrastructure constructed, owned, or 

operated by the Corporation; and 

(D) take such other actions as may be necessary to accomplish the purposes set forth in this subsection. 

(c) OTHER SPECIFIC DUTIES AND RESPONSIBILITIES.— 

(1) ESTABLISHMENT OF NETWORK POLICIES.—In carrying 

out the requirements under subsection (b), the Corporation 

shall take such actions as may be necessary, including the development of requests for proposals— 

(A) request for proposals should include— 

(i) build timetables, including by taking into consideration the time needed to build out to rural areas; 

(ii) coverage areas, including coverage in rural 

and nonurban areas; 

(iii) service levels; 

(iv) performance criteria; and 

(v) other similar matters for the construction and 

deployment of such network; 


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(B) the technical, operational and security requirements of the network and, as appropriate, network suppliers; 

(C) practices, procedures, and standards for the management and operation of such network; 

(D) terms of service for the use of such network, including billing practices; and 

(E) ongoing compliance review and monitoring of the— 

(i) management and operation of such network; 

(ii) practices and procedures of the entities operating on and the personnel using such network; and 

(iii) training needs of entities operating on and 

personnel using such network. 

(2) STATE AND LOCAL PLANNING.— (A) REQUIRED CONSULTATION.—In developing requests 

for proposal and otherwise carrying out its responsibilities 

under this subtitle, the Corporation shall consult with regional, State, tribal, and local jurisdictions regarding the 

distribution and expenditure of any amounts required to 

carry out the policies established under paragraph (1), including with regard to the— 

(i) construction of an Evolved Packet Core or 

Cores and any Radio Access Network build out; 

(ii) placement of towers; 

(iii) coverage areas of the network, whether at the 

regional, State, tribal, or local level; 

(iv) adequacy of hardening, security, reliability, 

and resiliency requirements; 

(v) assignment of priority to local users; 

(vi) assignment of priority and selection of entities 

seeking access to or use of the nationwide public safety interoperable broadband network established under 

subsection (b); and 

(vii) training needs of local users. 

(B) METHOD OF CONSULTATION.—The consultation required under subparagraph (A) shall occur between the 

Corporation and the single officer or governmental body 

designated under section 294(d). 

(3) LEVERAGING EXISTING INFRASTRUCTURE.—In carrying 

out the requirement under subsection (b), the Corporation 

shall enter into agreements to utilize, to the maximum economically desirable, existing— 

(A) commercial or other communications infrastructure; and 

(B) Federal, State, tribal, or local infrastructure. 

(4) MAINTENANCE AND UPGRADES.—The Corporation shall 

ensure through the maintenance, operation, and improvement 

of the nationwide public safety interoperable broadband network established under subsection (b), including by ensuring 

that the Corporation updates and revises any policies established under paragraph (1) to take into account new and evolving technologies and security concerns. 

(5) ROAMING AGREEMENTS.—The Corporation shall negotiate and enter into, as it determines appropriate, roaming 


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agreements with commercial network providers to allow the 

nationwide public safety interoperable broadband users to 

roam onto commercial networks and gain prioritization of public safety communications over such networks in times of an 

emergency. 

(6) NETWORK INFRASTRUCTURE AND DEVICE CRITERIA.—The 

Director of NIST, in consultation with the Corporation and the 

Commission, shall ensure the development of a list of certified 

devices and components meeting appropriate protocols, 

encryption requirements, and standards for public safety entities and commercial vendors to adhere to, if such entities or 

vendors seek to have access to, use of, or compatibility with the 

nationwide public safety interoperable broadband network established under subsection (b). 

(7) REPRESENTATION BEFORE STANDARD SETTING ENTI- TIES.—The Corporation, in consultation with the Director of 

NIST, the Commission, and the public safety advisory committee established under section 284(b)(1), shall represent the 

interests of public safety users of the nationwide public safety 

interoperable broadband network established under subsection 

(b) before any proceeding, negotiation, or other matter in which 

a standards organization, standards body, standards development organization, or any other recognized standards-setting 

entity regarding the development of standards relating to 

interoperability. 

(8) PROHIBITION ON NEGOTIATION WITH FOREIGN GOVERN- MENTS.—Except as authorized by the President, the Corporation shall not have the authority to negotiate or enter into any 

agreements with a foreign government on behalf of the United 

States. 

(d) USE OF MAILS.—The Corporation may use the United 

States mails in the same manner and under the same conditions 

as the departments and agencies of the United States. 

SEC. 289. INITIAL FUNDING FOR CORPORATION. 

(a) NTIA PROVISION OF INITIAL FUNDING TO THE CORPORA- TION.— (1) IN GENERAL.—Prior to the commencement of incentive 

auctions to be carried out under section 309(j)(8)(F) of the 

Communications Act of 1934 or the auction of spectrum pursuant to section 273 of this subtitle, the NTIA is hereby appropriated $50,000,000 for reasonable administrative expenses 

and other costs associated with the establishment of the Corporation, and that may be transferred as needed to the Corporation for expenses before the commencement of incentive 

auction: Provided, That funding shall expire on September 30, 

2014. 

(2) CONDITION OF FUNDING.—At the time of application for, 

and as a condition to, any such funding, the Corporation shall 

file with the NTIA a statement with respect to the anticipated 

use of the proceeds of this funding. 

(3) NTIA APPROVAL.—If the NTIA determines that such 

funding is necessary for the Corporation to carry out its duties 

and responsibilities under this Title and that Corporation has 

submitted a plan, then the NTIA shall notify the appropriate 


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committees of Congress 30 days before each transfer of funds 

takes place. 

SEC. 290. PERMANENT SELF-FUNDING; DUTY TO ASSESS AND COLLECT 

FEES FOR NETWORK USE. 

(a) IN GENERAL.—The Corporation shall have the authority to 

assess and collect the following fees: 

(1) NETWORK USER FEE.—A user or subscription fee from 

each entity, including any public safety entity or secondary 

user, that seeks access to or use of the nationwide public safety 

interoperable broadband network established under this Title. 

(2) LEASE FEES RELATED TO NETWORK CAPACITY.— 

(A) IN GENERAL.—A fee from any non-Federal entity 

that seeks to enter into a covered leasing agreement. 

(B) COVERED LEASING AGREEMENT.—For purposes of 

subparagraph (A), a ‘‘covered leasing agreement’’ means a 

written agreement between the Corporation and secondary 

user to permit— 

(i) access to network capacity on a secondary basis 

for non-public safety services; and 

(ii) the spectrum allocated to such entity to be 

used for commercial transmissions along the dark 

fiber of the long-haul network of such entity. 

(3) LEASE FEES RELATED TO NETWORK EQUIPMENT AND INFRASTRUCTURE.—A fee from any non-Federal entity that seeks 

access to or use of any equipment or infrastructure, including 

antennas or towers, constructed or otherwise owned by the 

Corporation. 

(b) ESTABLISHMENT OF FEE AMOUNTS; PERMANENT SELF-FUNDING.—The total amount of the fees assessed for each fiscal year 

pursuant to this section shall be sufficient, and shall not exceed the 

amount necessary, to recoup the total expenses of the Corporation 

in carrying out its duties and responsibilities described under this 

Title for the fiscal year involved. 

(c) REQUIRED REINVESTMENT OF FUNDS.—The Corporation 

shall reinvest amounts received from the assessment of fees under 

this section in the nationwide public safety interoperable 

broadband network by using such funds only for constructing, 

maintaining, managing or improving the network. 

SEC. 291. AUDIT AND REPORT. 

(a) AUDIT.— 

(1) IN GENERAL.—The financial transactions of the Corporation for any fiscal year during which Federal funds are 

available to finance any portion of its operations shall be audited by the Comptroller General of the United States in accordance with the principles and procedures applicable to commercial corporate transactions and under such rules and regulations as may be prescribed by the Comptroller General. 

(2) LOCATION.—Any audit conducted under paragraph (1) 

shall be conducted at the place or places where accounts of the 

Corporation are normally kept. 

(3) ACCESS TO CORPORATION BOOKS AND DOCUMENTS.— 


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(A) IN GENERAL.—For purposes of an audit conducted 

under paragraph (1), the representatives of the Comptroller General shall— 

(i) have access to all books, accounts, records, reports, files, and all other papers, things, or property 

belonging to or in use by the Corporation that pertain 

to the financial transactions of the Corporation and 

are necessary to facilitate the audit; and 

(ii) be afforded full facilities for verifying transactions with the balances or securities held by depositories, fiscal agents, and custodians. 

(B) REQUIREMENT.—All books, accounts, records, reports, files, papers, and property of the Corporation shall 

remain in the possession and custody of the Corporation. 

(b) REPORT.— (1) IN GENERAL.—The Comptroller General of the United 

States shall submit a report of each audit conducted under 

subsection (a) to— 

(A) the appropriate committees of Congress; 

(B) the President; and 

(C) the Corporation. 

(2) CONTENTS.—Each report submitted under paragraph 

(1) shall contain— 

(A) such comments and information as the Comptroller General determines necessary to inform Congress of 

the financial operations and condition of the Corporation; 

(B) any recommendations of the Comptroller General 

relating to the financial operations and condition of the 

Corporation; and 

(C) a description of any program, expenditure, or other 

financial transaction or undertaking of the Corporation 

that was observed during the course of the audit, which, 

in the opinion of the Comptroller General, has been carried 

on or made without the authority of law. 

SEC. 292. ANNUAL REPORT TO CONGRESS. 

(a) IN GENERAL.—Not later than 1 year after the date of enactment of this subtitle, and each year thereafter, the Corporation 

shall submit an annual report covering the preceding fiscal year to 

the President and the appropriate committees of Congress. 

(b) REQUIRED CONTENT.—The report required under subsection 

(a) shall include— 

(1) a comprehensive and detailed report of the operations, 

activities, financial condition, and accomplishments of the Corporation under this section; and 

(2) such recommendations or proposals for legislative or 

administrative action as the Corporation deems appropriate. 

(c) AVAILABILITY TO TESTIFY.—The directors, officers, employees, and agents of the Corporation shall be available to testify before the appropriate committees of the Congress with respect to— 

(1) the report required under subsection (a); 

(2) the report of any audit made by the Comptroller General under section 291; or 

(3) any other matter which such committees may determine appropriate. 


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SEC. 293. PROVISION OF TECHNICAL ASSISTANCE. 

The Commission and the Departments of Homeland Security, 

Justice and Commerce may provide technical assistance to the Corporation and may take any action at the request of the Corporation 

in effectuating its duties and responsibilities under this Title. 

SEC. 294. STATE AND LOCAL IMPLEMENTATION. 

(a) ESTABLISHMENT OF STATE AND LOCAL IMPLEMENTATION

GRANT PROGRAM.—The Assistant Secretary, in consultation with 

the Corporation, shall take such action as is necessary to establish 

a grant program to make grants to States to assist State, regional, 

tribal, and local jurisdictions to identify, plan, and implement the 

most efficient and effective way for such jurisdictions to utilize and 

integrate the infrastructure, equipment, and other architecture associated with the nationwide public safety interoperable broadband 

network established in this subtitle to satisfy the wireless communications and data services needs of that jurisdiction, including 

with regards to coverage, siting, identity management for public 

safety users and their devices, and other needs. 

(b) MATCHING REQUIREMENTS; FEDERAL SHARE.— 

(1) IN GENERAL.—The Federal share of the cost of any activity carried out using a grant under this section may not exceed 80 percent of the eligible costs of carrying out that activity, as determined by the Assistant Secretary, in consultation 

with the Corporation. 

(2) WAIVER.—The Assistant Secretary may waive, in whole 

or in part, the requirements of paragraph (1) for good cause 

shown if the Assistant Secretary determines that such a waiver is in the public interest. 

(c) PROGRAMMATIC REQUIREMENTS.—Not later than 6 months 

after the establishment of the bylaws of the Corporation pursuant 

to section 286 of this subtitle, the Assistant Secretary, in consultation with the Corporation, shall establish requirements relating to 

the grant program to be carried out under this section, including 

the following: 

(1) Defining eligible costs for purposes of subsection (b)(1). 

(2) Determining the scope of eligible activities for grant 

funding under this section. 

(3) Prioritizing grants for activities that ensure coverage in 

rural as well as urban areas. 

(d) CERTIFICATION AND DESIGNATION OF OFFICER OR GOVERN- MENTAL BODY.—In carrying out the grant program established 

under this section, the Assistant Secretary shall require each State 

to certify in its application for grant funds that the State has designated a single officer or governmental body to serve as the coordinator of implementation of the grant funds. 

SEC. 295. STATE AND LOCAL IMPLEMENTATION FUND. 

(a) ESTABLISHMENT.—There is established in the Treasury of 

the United States a fund to be known as the ‘‘State and Local Implementation Fund’’. 

(b) PURPOSE.—The Assistant Secretary shall establish and administer the grant program authorized under section 294 of this 

subtitle using funds deposited in the State and Local Implementation Fund. 


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(c) CREDITING OF RECEIPTS.—There shall be deposited into or 

credited to the State and Local Implementation Fund— 

(1) any amounts specified in section 297; and 

(2) any amounts borrowed by the Assistant Secretary 

under subsection (d). 

(d) BORROWING AUTHORITY.— (1) IN GENERAL.—The Assistant Secretary may borrow 

from the General Fund of the Treasury beginning on October 

1, 2011, such sums as may be necessary, but not to exceed 

$100,000,000 to implement section 294. 

(2) REIMBURSEMENT.—The Assistant Secretary shall reimburse the General Fund of the Treasury, with interest, for any 

amounts borrowed under subparagraph (1) as funds are deposited into the State and Local Implementation Fund. 

SEC. 296. PUBLIC SAFETY WIRELESS COMMUNICATIONS RESEARCH 

AND DEVELOPMENT. 

(a) NIST DIRECTED RESEARCH AND DEVELOPMENT PROGRAM.— From amounts made available from the Public Safety Trust Fund 

established under section 297, the Director of NIST, in consultation 

with the Commission, the Secretary of Homeland Security, and the 

National Institute of Justice of the Department of Justice, as appropriate, shall conduct research and assist with the development 

of standards, technologies, and applications to advance wireless 

public safety communications. 

(b) REQUIRED ACTIVITIES.—In carrying out the requirement 

under subsection (a), the Director of NIST, in consultation with the 

Corporation and the public safety advisory committee established 

under section 286(b)(1), shall— 

(1) document public safety wireless communications technical requirements; 

(2) accelerate the development of the capability for communications between currently deployed public safety narrowband 

systems and the nationwide public safety interoperable 

broadband network to be established under this title; 

(3) establish a research plan, and direct research, that addresses the wireless communications needs of public safety entities beyond what can be provided by the current generation 

of broadband technology; 

(4) accelerate the development of mission critical voice, including device-to-device ‘‘talkaround’’ standards for broadband 

networks, if necessary and practical, public safety 

prioritization, authentication capabilities, as well as a standard 

application programing interfaces for the nationwide public 

safety interoperable broadband network to be established 

under this title, if necessary and practical; 

(5) seek to develop technologies, standards, processes, and 

architectures that provide a significant improvement in network security, resiliency and trustworthiness; and 

(6) convene working groups of relevant government and 

commercial parties to achieve the requirements in paragraphs 

(1) through (5). 

(c) TRANSFER AUTHORITY.—If in the determination of the Director of NIST another Federal agency is better suited to carry out 

and oversee the research and development of any activity to be carVerDate Mar 15 2010 06:20 Sep 14, 2011 Jkt 099011 PO 00000 Frm 00138 Fmt 6602 Sfmt 6601 E:\HR\OC\HD053.XXX HD053

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ried out in accordance with the requirements of this section, the 

Director may transfer any amounts provided under this section to 

such agency, including to the National Institute of Justice of the 

Department of Justice and the Department of Homeland Security. 

SEC. 297. PUBLIC SAFETY TRUST FUND. 

(a) ESTABLISHMENT OF PUBLIC SAFETY TRUST FUND.— 

(1) IN GENERAL.—There is established in the Treasury of 

the United States a trust fund to be known as the ‘‘Public Safety Trust Fund’’. 

(2) CREDITING OF RECEIPTS.— 

(A) IN GENERAL.—There shall be deposited into or 

credited to the Public Safety Trust Fund the proceeds from 

the auction of spectrum carried out pursuant to— 

(i) section 273 of this subtitle; and 

(ii) section 309(j)(8)(F) of the Communications Act 

of 1934, as added by section 273 of this subtitle. 

(B) AVAILABILITY.—Amounts deposited into or credited 

to the Public Safety Trust Fund in accordance with subparagraph (A) shall remain available until the end of fiscal 

year 2018. Upon the expiration of the period described in 

the prior sentence such amounts shall be deposited in the 

General Fund of the Treasury, where such amounts shall 

be dedicated for the sole purpose of deficit reduction. 

(b) USE OF FUND.—Amounts deposited in the Public Safety 

Trust Fund shall be used in the following manner: 

(1) PAYMENT OF AUCTION INCENTIVE.— 

(A) REQUIRED DISBURSALS.—Amounts in the Public 

Safety Trust Fund shall be used to make any required disbursal of payments to licensees required pursuant to 

clause (i) and subclause (IV) of clause (ii) of section 

309(j)(8)(F) of the Communications Act of 1934. 

(B) NOTIFICATION TO CONGRESS.— 

(i) IN GENERAL.—At least 3 months in advance of 

any incentive auction conducted pursuant to subparagraph (F) of section 309(j)(8) of the Communications 

Act of 1934, the Chairman of the Commission, in consultation with the Director of the Office of Management and Budget, shall notify the appropriate committees of Congress— 

(I) of the methodology for calculating the disbursal of payments to certain licensees required 

pursuant to clause (i) and subclauses (III) and (IV) 

of clause of (ii) of such section; 

(II) that such methodology considers the value 

of the spectrum voluntarily relinquished in its 

current use and the timeliness with which the licensee cleared its use of such spectrum; and 

(III) of the estimated payments to be made 

from the Incentive Auction Relocation fund established under section 309(j)(8)(G) of the Communications Act of 1934. 

(ii) DEFINITION.—In this clause, the term ‘‘appropriate committees of Congress’’ means— 


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(I) the Committee on Commerce, Science, and 

Transportation of the Senate; 

(II) the Committee on Appropriations of the 

Senate; 

(III) the Committee on Energy and Commerce 

of the House of Representatives; and 

(IV) the Committee on Appropriations of the 

House of Representatives. 

(2) INCENTIVE AUCTION RELOCATION FUND.—Not more than 

$1,000,000,000 shall be deposited in the Incentive Auction Relocation Fund established under section 309(j)(8)(G) of the 

Communications Act of 1934. 

(3) STATE AND LOCAL IMPLEMENTATION FUND.— $200,000,000 shall be deposited in the State and Local Implementation Fund established under section 294. 

(4) PUBLIC SAFETY BROADBAND CORPORATION.— $6,450,000,000 shall deposited with the Public Safety 

Broadband Corporation established under section 284, of which 

pursuant to its responsibilities and duties set forth under section 288 to deploy and operate a nationwide public safety interoperable broadband network. Funds deposited with the Public 

Safety Broadband Corporation shall be available after submission of a five-year budget by the Corporation and approval by 

the Secretary of Commerce, in consultation with the Secretary 

of Homeland Security, Director of the Office of Management 

and Budget and Attorney General of the United States. 

(5) PUBLIC SAFETY RESEARCH AND DEVELOPMENT.—After 

approval by the Office of Management and Budget of a spend 

plan developed by the Director of NIST, a Wireless Innovation 

(WIN) Fund of up to $300,000,000 shall be made available for 

use by the Director of NIST to carry out the research program 

established under section 296 and be available until expended. 

If less than $300,000,000 is approved by the Office of Management and Budget, the remainder shall be transferred to the 

Public Safety Broadband Corporation established in section 

284 and be available for duties set forth under section 288 to 

deploy and operate a nationwide public safety interoperable 

broadband network. 

(6) DEFICIT REDUCTION.—Any amounts remaining after the 

deduction of the amounts required under paragraphs (1) 

through (5) shall be deposited in the General Fund of the 

Treasury, where such amounts shall be dedicated for the sole 

purpose of deficit reduction. 

SEC. 298. FCC REPORT ON EFFICIENT USE OF PUBLIC SAFETY SPECTRUM. 

(a) IN GENERAL.—Not later than 180 days after the date of the 

enactment of this subtitle and every 2 years thereafter, the Commission shall, in consultation with the Assistant Secretary and the 

Director of NIST, conduct a study and submit to the appropriate 

committees of Congress a report on the spectrum allocated for public safety use. 

(b) CONTENTS.—The report required by subsection (a) shall include— 

(1) an examination of how such spectrum is being used; 


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(2) recommendations on how such spectrum may be used 

more efficiently; 

(3) an assessment of the feasibility of public safety entities 

relocating from other bands to the public safety broadband 

spectrum; and 

(4) an assessment of whether any spectrum made available 

by the relocation described in paragraph (3) could be returned 

to the Commission for reassignment through auction, including 

through use of incentive auction authority under subparagraph 

(G) of section 309(j)(8) of the Communications Act of 1934 (47 

U.S.C. 309(j)(8)), as added by section 273(a). 

SEC. 299. PUBLIC SAFETY ROAMING AND PRIORITY ACCESS. 

The Commission may adopt rules, if necessary in the public interest, to improve the ability of public safety users to roam onto 

commercial networks and to gain priority access to commercial networks in an emergency if— 

(1) the public safety entity equipment is technically compatible with the commercial network; 

(2) the commercial network is reasonably compensated; 

and 

(3) such access does not preempt or otherwise terminate or 

degrade all existing voice conversations or data sessions. 

TITLE III—ASSISTANCE FOR THE UNEMPLOYED AND 

PATHWAYS BACK TO WORK 

Subtitle A—Supporting Unemployed Workers 

SEC. 301. SHORT TITLE. 

This subtitle may be cited as the ‘‘Supporting Unemployed 

Workers Act of 2011’’. 

PART I—EXTENSION OF EMERGENCY UNEMPLOYMENT COMPENSATION AND CERTAIN 

EXTENDED BENEFITS PROVISIONS, AND ESTABLISHMENT OF SELF-EMPLOYMENT ASSISTANCE PROGRAM 

SEC. 311. EXTENSION OF EMERGENCY UNEMPLOYMENT COMPENSATION PROGRAM. 

(a) IN GENERAL.—Section 4007 of the Supplemental Appropriations Act, 2008 (Public Law 110–252; 26 U.S.C. 3304 note), is 

amended— 

(1) by striking ‘‘January 3, 2012’’ each place it appears and 

inserting ‘‘January 3, 2013’’; 

(2) in the heading for subsection (b)(2), by striking ‘‘January 3, 2012’’ and inserting ‘‘January 3, 2013’’; and 

(3) in subsection (b)(3), by striking ‘‘June 9, 2012’’ and inserting ‘‘June 8, 2013’’. 

(b) FUNDING.—Section 4004(e)(1) of the Supplemental Appropriations Act, 2008 (Public Law 110–252; 26 U.S.C. 3304 note), is 

amended— 

(1) in subparagraph (F), by striking ‘‘and’’ at the end; and 


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(2) by inserting after subparagraph (G) the following: 

‘‘(H) the amendments made by section 101 of the Supporting Unemployed Workers Act of 2011; and.’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall take effect as if included in the enactment of the Unemployment Compensation Extension Act of 2010 (Public Law 111–205). 

SEC. 312. TEMPORARY EXTENSION OF EXTENDED BENEFIT PROVISIONS. 

(a) IN GENERAL.—Section 2005 of the Assistance for Unemployed Workers and Struggling Families Act, as contained in Public 

Law 111–5 (26 U.S.C. 3304 note), is amended— 

(1) by striking ‘‘January 4, 2012’’ each place it appears and 

inserting ‘‘January 4, 2013’’; 

(2) in the heading for subsection (b)(2), by striking ‘‘January 4, 2012’’ and inserting ‘‘January 4, 2013’’; and 

(3) in subsection (c), by striking ‘‘June 11, 2012’’ and inserting ‘‘June 11, 2013’’. 

(b) EXTENSION OF MATCHING FOR STATES WITH NO WAITING

WEEK.—Section 5 of the Unemployment Compensation Extension 

Act of 2008 (Public Law 110–449; 26 U.S.C. 3304 note) is amended 

by striking ‘‘June 10, 2012’’ and inserting ‘‘June 9, 2013’’. 

(c) EXTENSION OF MODIFICATION OF INDICATORS UNDER THE

EXTENDED BENEFIT PROGRAM.—Section 502 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 

2010 (Public Law 111–312; 26 U.S.C. 3304 note) is amended— 

(1) in subsection (a) by striking ‘‘December 31, 2011’’ and 

inserting ‘‘December 31, 2012’’; and 

(2) in subsection (b)(2) by striking ‘‘December 31, 2011’’ 

and inserting ‘‘December 31, 2012’’. 

(d) EFFECTIVE DATE.—The amendments made by this section 

shall take effect as if included in the enactment of the Unemployment Compensation Extension Act of 2010 (Public Law 111–205). 

SEC. 313. REEMPLOYMENT SERVICES AND REEMPLOYMENT AND ELIGIBILITY ASSESSMENT ACTIVITIES. 

(a) IN GENERAL.— (1) PROVISION OF SERVICES AND ACTIVITIES.—Section 4001 

of the Supplemental Appropriations Act, 2008, (Public Law 

110–252; 26 U.S.C. 3304 note), is amended by inserting the following new subsection (h): 

‘‘(h) IN GENERAL.— ‘‘(1) REQUIRED PROVISION OF SERVICES AND ACTIVITIES.—An 

agreement under this section shall require that the State provide reemployment services and reemployment and eligibility 

assessment activities to each individual receiving emergency 

unemployment compensation who, on or after the date that is 

30 days after the date of enactment of the Supporting Unemployed Workers Act of 2011, establishes an account under section 4002(b), commences receiving the amounts described in 

section 4002(c), commences receiving the amounts described in 

section 4002(d), or commences receiving the amounts described 

in subsection 4002(e), whichever occurs first. Such services and 

activities shall be provided by the staff of the State agency responsible for administration of the State unemployment compensation law or the Wagner-Peyser Act from funds available 


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pursuant to section 4004(c)(2) and may also be provided from 

funds available under the Wagner-Peyser Act. 

‘‘(2) DESCRIPTION OF SERVICES AND ACTIVITIES.—The reemployment services and in-person reemployment and eligibility 

assessment activities provided to individuals receiving emergency unemployment compensation described in paragraph 

(1)— 

‘‘(A) shall include— 

‘‘(i) the provision of labor market and career information; 

‘‘(ii) an assessment of the skills of the individual; 

‘‘(iii) orientation to the services available through 

the One-Stop centers established under title I of the 

Workforce Investment Act of 1998; 

‘‘(iv) job search counseling and the development or 

review of an individual reemployment plan that includes participation in job search activities and appropriate workshops and may include referrals to appropriate training services; and 

‘‘(v) review of the eligibility of the individual for 

emergency unemployment compensation relating to 

the job search activities of the individual; and 

‘‘(B) may include the provision of— 

‘‘(i) comprehensive and specialized assessments; 

‘‘(ii) individual and group career counseling; and 

‘‘(iii) additional reemployment services. 

‘‘(3) PARTICIPATION REQUIREMENT.—As a condition of continuing eligibility for emergency unemployment compensation 

for any week, an individual who has been referred to reemployment services or reemployment and eligibility assessment activities under this subsection shall participate, or shall have 

completed participation in, such services or activities, unless 

the State agency responsible for the administration of State 

unemployment compensation law determines that there is justifiable cause for failure to participate or complete such services or activities, as defined in guidance to be issued by the 

Secretary of Labor.’’. 

(2) ISSUANCE OF GUIDANCE.—Not later than 30 days after 

the date of enactment of this Act, the Secretary shall issue 

guidance on the implementation of the reemployment services 

and reemployment and eligibility assessments activities required to be provided under the amendments made by paragraph (1). 

(b) FUNDING.— 

(1) IN GENERAL.—Section 4004(c) of the Supplemental Appropriations Act, 2008 (Public Law 110–252; 26 U.S.C. 3304 

note), is amended— 

(A) by striking ‘‘There’’ and inserting ‘‘(1) ADMINISTRATION.—There’’; and 

(B) by inserting the following new paragraph: 

‘‘(2) REEMPLOYMENT SERVICES AND REEMPLOYMENT AND

ELIGIBILITY ASSESSMENT ACTIVITIES.— ‘‘(A) APPROPRIATION.—There are appropriated from the 

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tion, out of the employment security administration account as established by section 901(a) of the Social Security Act, such sums as determined by the Secretary of 

Labor in accordance with subparagraph (B) to assist States 

in providing reemployment services and reemployment and 

eligibility assessment activities described in section 

4001(h)(2). 

‘‘(B) DETERMINATION OF TOTAL AMOUNT.—The amount 

referred to in subparagraph (A) is the amount the Secretary estimates is equal to— 

‘‘(i) the number of individuals who will receive reemployment services and reemployment eligibility and 

assessment activities described in section 4001(h)(2) in 

all States through the date specified in section 

4007(b)(3), multiplied by 

‘‘(ii) $200. 

‘‘(C) DISTRIBUTION AMONG STATES.—Of the amounts 

appropriated under subparagraph (A), the Secretary of 

Labor shall distribute amounts to each State, in accordance with section 4003(c), that the Secretary estimates is 

equal to— 

‘‘(i) the number of individuals who will receive reemployment services and reemployment and eligibility 

assessment activities described in section 4001(h)(2) in 

such State through the date specified in section 

4007(b)(3), multiplied by 

‘‘(ii) $200.’’. 

(2) TRANSFER OF FUNDS.—Section 4004(e) of the Supplemental Appropriations Act, 2008 (Public Law 110–252; 26 

U.S.C. 3304 note), is amended— 

(A) in paragraph (2), by striking the period and inserting ‘‘; and’’; and 

(B) by inserting the following paragraph (3): 

‘‘(3) to the employment security administration account (as 

established by section 901(a) of the Social Security Act) such 

sums as the Secretary of Labor determines to be necessary in 

accordance with subsection (c)(2) to assist States in providing 

reemployment services and reemployment eligibility and assessment activities described in section 4001(h)(2).’’. 

SEC. 314. FEDERAL-STATE AGREEMENTS TO ADMINISTER A SELF-EMPLOYMENT ASSISTANCE PROGRAM. 

Section 4001 of the Supplemental Appropriations Act, 2008 

(Public Law 110–252; 26 U.S.C. 3304 note), as amended by section 

313, is further amended by inserting a new subsection (i) as follows: 

‘‘(i) AUTHORITY TO CONDUCT SELF-EMPLOYMENT ASSISTANCE

PROGRAM.— 

‘‘(1) IN GENERAL.— 

‘‘(A) ESTABLISHMENT.—Any agreement under subsection (a) may provide that the State agency of the State 

shall establish a self-employment assistance program described in paragraph (2), to provide for the payment of 

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ment assistance allowances to individuals who meet the 

eligibility criteria specified in subsection (b). 

‘‘(B) PAYMENT OF ALLOWANCES.—The self-employment 

assistance allowance described in subparagraph (A) shall 

be paid for up to 26 weeks to an eligible individual from 

such individual’s emergency unemployment compensation 

account described in section 4002, and the amount in such 

account shall be reduced accordingly. 

‘‘(2) DEFINITION OF ‘SELF-EMPLOYMENT ASSISTANCE PRO- GRAM’.—For the purposes of this title, the term ‘self-employment assistance program’ means a program as defined under 

section 3306(t) of the Internal Revenue Code of 1986 (26 U.S.C. 

3306(t)), except as follows: 

‘‘(A) all references to ‘regular unemployment compensation under the State law’ shall be deemed to refer instead to ‘emergency unemployment compensation under 

title IV of the Supplemental Appropriations Act, 2008 

(Public Law 110–252; 26 U.S.C. 3304 note)’; 

‘‘(B) paragraph (3)(B) shall not apply; 

‘‘(C) clause (i) of paragraph (3)(C) shall be deemed to 

state as follows: 

‘‘ ‘(i) include any entrepreneurial training that the 

State may provide in coordination with programs of 

training offered by the Small Business Administration, 

which may include business counseling, mentorship 

for participants, access to small business development 

resources, and technical assistance; and;’; 

‘‘(D) the reference to ‘5 percent’ in paragraph (4) shall 

be deemed to refer instead to ‘1 percent’; and 

‘‘(E) paragraph (5) shall not apply. 

‘‘(3) AVAILABILITY OF SELF-EMPLOYMENT ASSISTANCE ALLOWANCES.—In the case of an individual who has received any 

emergency unemployment compensation payment under this 

title, such individual shall not receive self-employment assistance allowances under this subsection unless the State agency 

has a reasonable expectation that such individual will be entitled to at least 26 times the individual’s average weekly benefit 

amount of emergency unemployment compensation. 

‘‘(4) PARTICIPANT OPTION TO TERMINATE PARTICIPATION IN

SELF-EMPLOYMENT ASSISTANCE PROGRAM.— 

‘‘(A) TERMINATION.—An individual who is participating 

in a State’s self -employment assistance program may opt 

to discontinue participation in such program. 

‘‘(B) CONTINUED ELIGIBILITY FOR EMERGENCY UNEMPLOYMENT COMPENSATION.—An individual whose participation in the self-employment assistance program is terminated as described in paragraph (1) or who has completed 

participation in such program, and who continues to meet 

the eligibility requirements for emergency unemployment 

compensation under this title, shall receive emergency unemployment compensation payments with respect to subsequent weeks of unemployment, to the extent that amounts 

remain in the account established for such individual 

under section 4002(b) or to the extent that such individual 


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commences receiving the amounts described in subsections 

(c), (d), or (e) of such section, respectively.’’. 

SEC. 315. CONFORMING AMENDMENT ON PAYMENT OF BRIDGE TO 

WORK WAGES. 

Section 4001 of the Supplemental Appropriations Act, 2008 

(Public Law 110–252; 26 U.S.C. 3304 note), as amended by section 

103, is further amended by inserting a new subsection (j) as follows: 

‘‘(j) AUTHORIZATION TO PAY WAGES FOR PURPOSES OF A BRIDGE

TO WORK PROGRAM.—Any State that establishes a Bridge to Work 

program under section 204 of the Supporting Unemployed Workers 

Act of 2011 is authorized to deduct from an emergency unemployment compensation account established for such individual under 

section 4002 such sums as may be necessary to pay wages for such 

individual as authorized under section 204(b)(1) of such Act.’’. 

SEC. 316. ADDITIONAL EXTENDED UNEMPLOYMENT BENEFITS UNDER 

THE RAILROAD UNEMPLOYMENT INSURANCE ACT. 

(a) EXTENSION.—Section 2(c)(2)(D)(iii) of the Railroad Unemployment Insurance Act, as added by section 2006 of the American 

Recovery and Reinvestment Act of 2009 (Public Law 111–5) and as 

amended by section 9 of the Worker, Homeownership, and Business 

Assistance Act of 2009 (Public Law 111–92), is amended— 

(1) by striking ‘‘June 30, 2011’’ and inserting ‘‘June 30, 

2012’’; and 

(2) by striking ‘‘December 31, 2011’’ and inserting ‘‘December 31, 2012’’. 

(b) CLARIFICATION ON AUTHORITY TO USE FUNDS.—Funds appropriated under either the first or second sentence of clause (iv) 

of section 2(c)(2)(D) of the Railroad Unemployment Insurance Act 

shall be available to cover the cost of additional extended unemployment benefits provided under such section 2(c)(2)(D) by reason 

of the amendments made by subsection (a) as well as to cover the 

cost of such benefits provided under such section 2(c)(2)(D), as in 

effect on the day before the date of the enactment of this Act. 

PART II—REEMPLOYMENT NOW PROGRAM 

SEC. 321. ESTABLISHMENT OF REEMPLOYMENT NOW PROGRAM. 

(a) IN GENERAL.—There is hereby established the Reemployment NOW program to be carried out by the Secretary of Labor in 

accordance with this part in order to facilitate the reemployment 

of individuals who are receiving emergency unemployment compensation under title IV of the Supplemental Appropriations Act, 

2008 (Public Law 110–252; 26 U.S.C. 3304 note) (hereafter in this 

part referred to as ‘‘EUC claimants’’). 

(b) AUTHORIZATION AND APPROPRIATION.—There are authorized 

to be appropriated and appropriated from the general fund of the 

Treasury for fiscal year 2012 $4,000,000,000 to carry out the Reemployment NOW program under this part. 

SEC. 322. DISTRIBUTION OF FUNDS. 

(a) IN GENERAL.—Of the funds appropriated under section 

321(b) to carry out this part, the Secretary of Labor shall— 


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(1) reserve up to 1 percent for the costs of Federal administration and for carrying out rigorous evaluations of the activities conducted under this part; and 

(2) allot the remainder of the funds not reserved under 

paragraph (1) in accordance with the requirements of subsection (b) and (c) to States that have approved plans under 

section 323. 

(b) ALLOTMENT FORMULA.— (1) FORMULA FACTORS.—The Secretary of Labor shall allot 

the funds available under subsection (a)(2) as follows: 

(A) two-thirds of such funds shall be allotted on the 

basis of the relative number of unemployed individuals in 

each State, compared to the total number of unemployed 

individuals in all States; 

(B) one-third of such funds shall be allotted on the 

basis of the relative number of individuals in each State 

who have been unemployed for 27 weeks or more, compared to the total number of individuals in all States who 

have been unemployed for 27 weeks or more. 

(2) CALCULATION.—For purposes of paragraph (1), the 

number of unemployed individuals and the number of individuals unemployed for 27 weeks or more shall be based on the 

data for the most recent 12-month period, as determined by 

the Secretary. 

(c) REALLOTMENT.— (1) FAILURE TO SUBMIT STATE PLAN.—If a State does not 

submit a State plan by the time specified in section 323(b), or 

a State does not receive approval of a State plan, the amount 

the State would have been eligible to receive pursuant to the 

formula under subsection (b) shall be allotted to States that receive approval of the State plan under section 323 in accordance with the relative allotments of such States as determined 

by the Secretary under subsection (b). 

(2) FAILURE TO IMPLEMENT ACTIVITIES ON A TIMELY

BASIS.—The Secretary of Labor may, in accordance with procedures and criteria established by the Secretary, recapture the 

portion of the State allotment under this part that remains unobligated if the Secretary determines such funds are not being 

obligated at a rate sufficient to meet the purposes of this part. 

The Secretary shall reallot such recaptured funds to other 

States that are not subject to recapture in accordance with the 

relative share of the allotments of such States as determined 

by the Secretary under subsection (b). 

(3) RECAPTURE OF FUNDS.—Funds recaptured under paragraph (2) shall be available for reobligation not later than December 31, 2012. 

SEC. 323. STATE PLAN. 

(a) IN GENERAL.—For a State to be eligible to receive an allotment under section 322, a State shall submit to the Secretary of 

Labor a State plan in such form and containing such information 

as the Secretary may require, which at a minimum shall include: 

(1) a description of the activities to be carried out by the 

State to assist in the reemployment of eligible individuals to be 

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tivities authorized in sections 324–328 the State intends to 

carry out and an estimate of the amounts the State intends to 

allocate to the activities, respectively; 

(2) a description of the performance outcomes to be 

achieved by the State through the activities carried out under 

this part, including the employment outcomes to be achieved 

by participants and the processes the State will use to track 

performance, consistent with guidance provided by the Secretary of Labor regarding such outcomes and processes; 

(3) a description of coordination of activities to be carried 

out under this part with activities under title I of the Workforce Investment Act of 1998, the Wagner-Peyser Act, and 

other appropriate Federal programs; 

(4) the timelines for implementation of the activities described in the plan and the number of EUC claimants expected 

to be enrolled in such activities by quarter; 

(5) assurances that the State will participate in the evaluation activities carried out by the Secretary of Labor under 

this section; 

(6) assurances that the State will provide appropriate reemployment services, including counseling, to any EUC claimant who participates in any of the programs authorized under 

this part; and 

(7) assurances that the State will report such information 

as the Secretary may require relating to fiscal, performance 

and other matters, including employment outcomes and effects, 

which the Secretary determines are necessary to effectively 

monitor the activities carried out under this part. 

(b) PLAN SUBMISSION AND APPROVAL.—A State plan under this 

section shall be submitted to the Secretary of Labor for approval 

not later than 30 days after the Secretary issues guidance relating 

to submission of such plan. The Secretary shall approve such plans 

if the Secretary determines that the plans meet the requirements 

of this part and are appropriate and adequate to carry out the purposes of this part. 

(c) PLAN MODIFICATIONS.—A State may submit modifications to 

a State plan that has been approved under this part, and the Secretary of Labor may approve such modifications, if the plan as 

modified would meet the requirements of this part and are appropriate and adequate to carry out the purposes of this part. 

SEC. 324. BRIDGE TO WORK PROGRAM. 

(a) IN GENERAL.—A State may use funds allotted to the State 

under this part to establish and administer a Bridge to Work program described in this section. 

(b) DESCRIPTION OF PROGRAM.—In order to increase individuals’ opportunities to move to permanent employment, a State may 

establish a Bridge to Work program to provide an EUC claimant 

with short-term work experience placements with an eligible employer, during which time such individual— 

(1) shall be paid emergency unemployment compensation 

payable under title IV of the Supplemental Appropriations Act, 

2008 (Public Law 110–252; 26 U.S.C. 3304 note), as wages for 

work performed, and as specified in subsection (c); 


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(2) shall be paid the additional amount described in subsection (e) as augmented wages for work performed; and 

(3) may be paid compensation in addition to the amounts 

described in paragraphs (1) and (2) by a State or by a participating employer as wages for work performed. 

(c) PROGRAM ELIGIBILITY AND OTHER REQUIREMENTS.—For purposes of this program— 

(1) individuals who, except for the requirements described 

in paragraph (3), are eligible to receive emergency unemployment compensation payments under title IV of the Supplemental Appropriations Act, 2008 (Public Law 110–252; 26 

U.S.C. 3304 note), and who choose to participate in the program described in subsection (b), shall receive such payments 

as wages for work performed during their voluntary participation in the program described under subsection (b); 

(2) the wages payable to individuals described in paragraph (1) shall be paid from the emergency unemployment 

compensation account for such individual as described in section 4002 of the Supplemental Appropriations Act, 2008 (Public 

Law 110–252; 26 U.S.C. 3304 note), and the amount in such 

individual’s account shall be reduced accordingly; 

(3) The wages payable to an individual described in paragraph (1) shall be payable in the same amount, at the same 

interval, on the same terms, and subject to the same conditions 

under title IV of the Supplemental Appropriations Act, 2008 

(Public Law 110–252; 26 U.S.C. 3304 note), except that— 

(A) State requirements applied under such Act relating to availability for work and active search for work are 

not applicable to such individuals who participate for at 

least 25 hours per week in the program described in subsection (b) for the duration of such individual’s participation in the program; 

(B) State requirements applied under such act relating 

to disqualifying income regarding wages earned shall not 

apply to such individuals who participate for at least 25 

hours per week in the program described in subsection (b), 

and shall not apply with respect to— 

(i) the wages described under subsection (b); and 

(ii) any wages, in addition to those described 

under subsection (b), whether paid by a State or a participating employer for the same work activities; 

(C) State prohibitions or limitations applied under 

such Act relating to employment status shall not apply to 

such individuals who participate in the program described 

in subsection (b); and 

(D) State requirements applied under such Act relating to an individual’s acceptance of an offer of employment 

shall not apply with regard to an offer of long-term employment from a participating employer made to such individual who is participating in the program described in 

subsection (b) in a work experience provided by such employer, where such long-term employment is expected to 

commence or commences at the conclusion of the duration 

specified in paragraph (4)(A); 


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(4) the program shall be structured so that individuals described in paragraph (1) may participate in the program for up 

to— 

(A) 8 weeks, and 

(B) 38 hours for each such week; 

(5) a State shall ensure that all individuals participating 

in the program are covered by a workers’ compensation insurance program; and 

(6) the program meets such other requirements as the Secretary of Labor determines to be appropriate in guidance 

issued by the Secretary. 

(d) STATE REQUIREMENTS.— 

(1) CERTIFICATION OF ELIGIBLE EMPLOYER.—A State may 

certify as eligible for participation in the program under this 

section any employer that meets the eligibility criteria as established in guidance by the Secretary of Labor, except that an 

employer shall not be certified as eligible for participation in 

the program described under subsection (b)— 

(A) if such employer— 

(i) is a Federal, State, or local government entity; 

(ii) would engage an eligible individual in work activities under any employer’s grant, contract, or subcontract with a Federal, State, or local government entity, except with regard to work activities under any 

employer’s supply contract or subcontract; 

(iii) is delinquent with respect to any taxes or employer contributions described under sections 3301 and 

3303(a)(1) of the Internal Revenue Code of 1986 or 

with respect to any related reporting requirements; 

(iv) is engaged in the business of supplying workers to other employers and would participate in the 

program for the purpose of supplying individuals participating in the program to other employers; or 

(v) has previously participated in the program and 

the State has determined that such employer has 

failed to abide by any of the requirements specified in 

subsections (h), (i), or (j), or by any other requirements 

that the Secretary may establish for employers under 

subsection (c)(6); and 

(B) unless such employer provides assurances that it 

has not displaced existing workers pursuant to the requirements of subsection (h). 

(2) AUTHORIZED ACTIVITIES.—Funds allotted to a State 

under this part for the program— 

(A) shall be used to— 

(i) recruit employers for participation in the program; 

(ii) review and certify employers identified by eligible individuals seeking to participate in the program; 

(iii) ensure that reemployment and counseling 

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(b), prior to an individual’s participation in such program; 

(iv) establish and implement processes to monitor 

the progress and performance of individual participants for the duration of the program; 

(v) prevent misuse of the program; and 

(vi) pay augmented wages to eligible individuals, 

if necessary, as described in subsection (e); and 

(B) may be used— 

(i) to pay workers’ compensation insurance premiums to cover all individuals participating in the program, except that, if a State opts not to make such 

payments directly to a State administered workers’ 

compensation program, the State involved shall describe in the approved State plan the means by which 

such State shall ensure workers’ compensation or 

equivalent coverage for all individuals who participate 

in the program; 

(ii) to pay compensation to a participating individual that is in addition to the amounts described in 

subsections (c)(1) and (e) as wages for work performed; 

(iii) to provide supportive services, such as transportation, child care, and dependent care, that would 

enable individuals to participate in the program; 

(iv) for the administration and oversight of the 

program; and 

(v) to fulfill additional program requirements included in the approved State plan. 

(e) PAYMENT OF AUGMENTED WAGES IF NECESSARY.—In the 

event that the wages described in subsection (c)(1) are not sufficient to equal or exceed the minimum wages that are required to 

be paid by an employer under section 6(a)(1) of the Fair Labor 

Standards Act of 1938 (29 U.S.C. 206(a)(1)) or the applicable State 

or local minimum wage law, whichever is higher, a State shall pay 

augmented wages to a program participant in any amount necessary to cover the difference between— 

(1) such minimum wages amount; and 

(2) the wages payable under subsection (c)(1). 

(f) EFFECT OF WAGES ON ELIGIBILITY FOR OTHER PROGRAMS.— None of the wages paid under this section shall be considered as 

income for the purposes of determining eligibility for and the 

amount of income transfer and in-kind aid furnished under any 

Federal or Federally assisted program based on need. 

(g) EFFECT OF WAGES, WORK ACTIVITIES, AND PROGRAM PARTICIPATION ON CONTINUING ELIGIBILITY FOR EMERGENCY UNEMPLOYMENT COMPENSATION.—Any wages paid under this section and 

any additional wages paid by an employer to an individual described in subsection (c)(1), and any work activities performed by 

such individual as a participant in the program, shall not be construed so as to render such individual ineligible to receive emergency unemployment compensation under title IV of the Supplemental Appropriations Act, 2008 (Public Law 110–252; 26 U.S.C. 

3304 note). 

(h) NONDISPLACEMENT OF EMPLOYEES.— 


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(1) PROHIBITION.—An employer shall not use a program 

participant to displace (including a partial displacement, such 

as a reduction in the hours of non-overtime work, wages, or 

employment benefits) any current employee (as of the date of 

the participation). 

(2) OTHER PROHIBITIONS.—An employer shall not permit a 

program participant to perform work activities related to any 

job for which— 

(A) any other individual is on layoff from the same or 

any substantially equivalent position; 

(B) the employer has terminated the employment of 

any employee or otherwise reduced the workforce of the 

employer with the intention of filling or partially filling 

the vacancy so created with the work activities to be performed by a program participant; 

(C) there is a strike or lock out at the worksite that 

is the participant’s place of employment; or 

(D) the job is created in a manner that will infringe 

in any way upon the promotional opportunities of currently employed individuals (as of the date of the participation). 

(i) PROHIBITION ON IMPAIRMENT OF CONTRACTS.— An employer shall not, by means of assigning work activities under this section, impair an existing contract 

for services or a collective bargaining agreement, and 

no such activity that would be inconsistent with the 

terms of a collective bargaining agreement shall be 

undertaken without the written concurrence of the 

labor organization that is signatory to the collective 

bargaining agreement. 

(j) LIMITATION ON EMPLOYER PARTICIPATION.—If, after 24 

weeks of participation in the program, an employer has not made 

an offer of suitable long-term employment to any individual described under subsection (c)(1) who was placed with such employer 

and has completed the program, a State shall bar such employer 

from further participation in the program. States may impose additional conditions on participating employers to ensure that an appropriate number of participants receive offers of suitable long 

term employment. 

(k) FAILURE TO MEET PROGRAM REQUIREMENTS.—If a State 

makes a determination based on information provided to the State, 

or acquired by the State by means of its administration and oversight functions, that a participating employer under this section 

has violated a requirement of this section, the State shall bar such 

employer from further participation in the program. The State 

shall establish a process whereby an individual described in subsection (c)(1), or any other affected individual or entity, may file a 

complaint with the State relating to a violation of any requirement 

or prohibition under this section. 

(l) PARTICIPANT OPTION TO TERMINATE PARTICIPATION IN

BRIDGE TO WORK PROGRAM.— 

(1) TERMINATION.—An individual who is participating in a 

program described in subsection (b) may opt to discontinue 

participation in such program. 


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(2) CONTINUED ELIGIBILITY FOR EMERGENCY UNEMPLOYMENT COMPENSATION.—An individual who opts to discontinue 

participation in such program, is terminated from such program by a participating employer, or who has completed participation in such program, and who continues to meet the eligibility requirements for emergency unemployment compensation under title IV of the Supplemental Appropriations Act, 

2008 (Public Law 110–252; 26 U.S.C. 3304 note), shall receive 

emergency unemployment compensation payments with respect to subsequent weeks of unemployment, to the extent that 

amounts remain in the account established for such individual 

under section 4002(b) of such Act or to the extent that such individual commences receiving the amounts described in subsections (c), (d), or (e) of such section, respectively. 

(m) EFFECT OF OTHER LAWS.—Unless otherwise provided in 

this section, nothing in this section shall be construed to alter or 

affect the rights or obligations under any Federal, State, or local 

laws with respect to any individual described in subsection (c)(1) 

and with respect to any participating employer under this section. 

(n) TREATMENT OF PAYMENTS.—All wages or other payments to 

an individual under this section shall be treated as payments of 

unemployment insurance for purposes of section 209 of the Social 

Security Act (42 U.S.C. 409) and for purposes of subtitle A and sections 3101 and 3111 of the Internal Revenue Code of 1986. 

SEC. 325. WAGE INSURANCE. 

(a) IN GENERAL.—A State may use the funds allotted to the 

State under this part to provide a wage insurance program for 

EUC claimants. 

(b) BENEFITS.—The wage insurance program provided under 

this section may use funds allotted to the State under this part to 

pay, for a period not to exceed 2 years, to a worker described in 

subsection (c), up to 50 percent of the difference between— 

(1) the wages received by the worker at the time of separation; and 

(2) the wages received by the worker for reemployment. 

(c) INDIVIDUAL ELIGIBILITY.—The benefits described in subsection (b) may be paid to an individual who is an EUC claimant 

at the time such individual obtains reemployment and who— 

(1) is at least 50 years of age; 

(2) earns not more than $50,000 per year in wages from 

reemployment; 

(3) is employed on a full-time basis as defined by the law 

of the State; and 

(4) is not employed by the employer from which the individual was last separated. 

(d) TOTAL AMOUNT OF PAYMENTS.—A State shall establish a 

maximum amount of payments per individual for purposes of payments described in subsection (b) during the eligibility period described in such subsection. 

(e) NON-DISCRIMINATION REGARDING WAGES.—An employer 

shall not pay a worker described in subsection (c) less than such 

employer pays to a regular worker in the same or substantially 

equivalent position. 


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SEC. 326. ENHANCED REEMPLOYMENT STRATEGIES. 

(a) IN GENERAL.—A State may use funds allotted under this 

part to provide a program of enhanced reemployment services to 

EUC claimants. In addition to the provision of services to such 

claimants, the program may include the provision of reemployment 

services to individuals who are unemployed and have exhausted 

their rights to emergency unemployment compensation under title 

IV of the Supplemental Appropriations Act, 2008, (Public Law 110– 

252; 26 U.S.C. 3304 note). The program shall provide reemployment services that are more intensive than the reemployment services provided by the State prior to the receipt of the allotment 

under this part. 

(b) TYPES OF SERVICES.—The enhanced reemployment services 

described in subsection (a) may include services such as— 

(1) assessments, counseling, and other intensive services 

that are provided by staff on a one-to-one basis and may be 

customized to meet the reemployment needs of EUC claimants 

and individuals described in subsection (a); 

(2) comprehensive assessments designed to identify alternative career paths; 

(3) case management; 

(4) reemployment services that are provided more frequently and more intensively than such reemployment services 

have previously been provided by the State; and 

(5) services that are designed to enhance communication 

skills, interviewing skills, and other skills that would assist in 

obtaining reemployment. 

SEC. 327. SELF-EMPLOYMENT PROGRAMS. 

A State may use funds allotted to the State under this part, 

in an amount specified under an approved State plan, for the administrative costs associated with starting up the self-employment 

assistance program described in section 4001(i) of the Supplemental Appropriations Act, 2008, (Public Law 110–252; 26 U.S.C. 

3304 note). 

SEC. 328. ADDITIONAL INNOVATIVE PROGRAMS. 

(a) IN GENERAL.—A State may use funds allotted under this 

part to provide a program for innovative activities, which use a 

strategy that is different from the reemployment strategies described in sections 324–327 and which are designed to facilitate the 

reemployment of EUC claimants. In addition to the provision of activities to such claimants, the program may include the provision 

of activities to individuals who are unemployed and have exhausted 

their rights to emergency unemployment compensation under title 

IV of the Supplemental Appropriations Act, 2008, (Public Law 110– 

252; 26 U.S.C. 3304 note). 

(b) CONDITIONS.—The innovative activities approved in accordance with subsection (a)— 

(1) shall directly benefit EUC claimants and, if applicable, 

individuals described in subsection (a), either as a benefit paid 

to such claimant or individual or as a service provided to such 

claimant or individual; 


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(2) shall not result in a reduction in the duration or 

amount of, emergency unemployment compensation for which 

EUC claimants would otherwise be eligible; 

(3) shall not include a reduction in the duration, amount 

of or eligibility for regular compensation or extended benefits; 

(4) shall not be used to displace (including a partial displacement, such as a reduction in the hours of non-overtime 

work, wages, or employment benefits) any currently employed 

employee (as of the date of the participation) or allow a program participant to perform work activities related to any job 

for which— 

(A) any other individual is on layoff from the same or 

any substantially equivalent job; 

(B) the employer has terminated the employment of 

any regular employee or otherwise reduced the workforce 

of the employer with the intention of filling or partially 

filling the vacancy so created with the work activities to be 

performed by a program participant; 

(C) there is a strike or lock out at the worksite that 

is the participant’s place of employment; or 

(D) the job is created in a manner that will infringe 

in any way upon the promotional opportunities of currently employed individuals (as of the date of the participation); 

(5) shall not be in violation of any Federal, State, or local 

law. 

SEC. 329. GUIDANCE AND ADDITIONAL REQUIREMENTS. 

The Secretary of Labor may establish through guidance, without regard to the requirements of section 553 of title 5, United 

States Code, such additional requirements, including requirements 

regarding the allotment, recapture, and reallotment of funds, and 

reporting requirements, as the Secretary determines to be necessary to ensure fiscal integrity, effective monitoring, and appropriate and prompt implementation of the activities under this Act. 

SEC. 330. REPORT OF INFORMATION AND EVALUATIONS TO CONGRESS AND THE PUBLIC. 

The Secretary of Labor shall provide to the appropriate Committees of the Congress and make available to the public the information reported pursuant to section 329 and the evaluations of activities carried out pursuant to the funds reserved under section 

322(a)(1). 

SEC. 331. STATE. 

For purposes of this part, the term ‘‘State’’ has the meaning 

given that term in section 205 of the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note). 

PART III—SHORT-TIME COMPENSATION 

PROGRAM 

SEC. 341. TREATMENT OF SHORT-TIME COMPENSATION PROGRAMS. 

(a) DEFINITION.— 


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(1) IN GENERAL.—Section 3306 of the Internal Revenue 

Code of 1986 (26 U.S.C. 3306) is amended by adding at the end 

the following new subsection: 

‘‘(v) SHORT-TIME COMPENSATION PROGRAM.—For purposes of 

this chapter, the term ‘short-time compensation program’ means a 

program under which— 

‘‘(1) the participation of an employer is voluntary; 

‘‘(2) an employer reduces the number of hours worked by 

employees in lieu of layoffs; 

‘‘(3) such employees whose workweeks have been reduced 

by at least 10 percent, and by not more than the percentage, 

if any, that is determined by the State to be appropriate (but 

in no case more than 60 percent), are eligible for unemployment compensation; 

‘‘(4) the amount of unemployment compensation payable to 

any such employee is a pro rata portion of the unemployment 

compensation which would otherwise be payable to the employee if such employee were totally unemployed from the participating employer; 

‘‘(5) such employees meet the availability for work and 

work search test requirements while collecting short-time compensation benefits, by being available for their workweek as required by their participation in the short-time compensation 

program; 

‘‘(6) eligible employees may participate, as appropriate, in 

training (including employer-sponsored training or worker 

training funded under the Workforce Investment Act of 1998) 

to enhance job skills if such program has been approved by the 

State agency; 

‘‘(7) the State agency shall require employers to certify 

that if the employer provides health benefits and retirement 

benefits under a defined benefit plan (as defined in section 

414(j)) or contributions under a defined contribution plan (as 

defined in section 414(i)) to any employee whose workweek is 

reduced under the program that such benefits will continue to 

be provided to employees participating in the short-time compensation program under the same terms and conditions as 

though the workweek of such employee had not been reduced 

or to the same extent as other employees not participating in 

the short-time compensation program, subject to other requirements in this section; 

‘‘(8) the State agency shall require an employer to submit 

a written plan describing the manner in which the requirements of this subsection will be implemented (including a plan 

for giving advance notice, where feasible, to an employee whose 

workweek is to be reduced) together with an estimate of the 

number of layoffs that would have occurred absent the ability 

to participate in short-time compensation and such other information as the Secretary of Labor determines is appropriate; 

‘‘(9) in the case of employees represented by a union as the 

sole and exclusive representative, the appropriate official of the 

union has agreed to the terms of the employer’s written plan 

and implementation is consistent with employer obligations 

under the applicable Federal laws; and 


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‘‘(10) upon request by the State and approval by the Secretary of Labor, only such other provisions are included in the 

State law that are determined to be appropriate for purposes 

of a short-time compensation program.’’. 

(2) EFFECTIVE DATE.—Subject to paragraph (3), the amendment made by paragraph (1) shall take effect on the date of the 

enactment of this Act. 

(3) TRANSITION PERIOD FOR EXISTING PROGRAMS.—In the 

case of a State that is administering a short-time compensation 

program as of the date of the enactment of this Act and the 

State law cannot be administered consistent with the amendment made by paragraph (1), such amendment shall take effect 

on the earlier of— 

(A) the date the State changes its State law in order 

to be consistent with such amendment; or 

(B) the date that is 2 years and 6 months after the 

date of the enactment of this Act. 

(b) CONFORMING AMENDMENTS.— 

(1) INTERNAL REVENUE CODE OF 1986.— 

(A) Subparagraph (E) of section 3304(a)(4) of the Internal Revenue Code of 1986 is amended to read as follows: 

‘‘(E) amounts may be withdrawn for the payment of 

short-time compensation under a short-time compensation 

program (as defined under section 3306(v));’’. 

(B) Subsection (f) of section 3306 of the Internal Revenue Code of 1986 is amended— 

(i) by striking paragraph (5) (relating to shorttime compensation) and inserting the following new 

paragraph: 

‘‘(5) amounts may be withdrawn for the payment of shorttime compensation under a short-time compensation program 

(as defined in subsection (v)); and’’; and 

(ii) by redesignating paragraph (5) (relating to 

self-employment assistance program) as paragraph (6). 

(2) SOCIAL SECURITY ACT.—Section 303(a)(5) of the Social 

Security Act is amended by striking ‘‘the payment of short-time 

compensation under a plan approved by the Secretary of 

Labor’’ and inserting ‘‘the payment of short-time compensation 

under a short-time compensation program (as defined in section 3306(v) of the Internal Revenue Code of 1986)’’. 

(3) UNEMPLOYMENT COMPENSATION AMENDMENTS OF 1992.— 

Subsections (b) through (d) of section 401 of the Unemployment 

Compensation Amendments of 1992 (26 U.S.C. 3304 note) are 

repealed. 

SEC. 342. TEMPORARY FINANCING OF SHORT-TIME COMPENSATION 

PAYMENTS IN STATES WITH PROGRAMS IN LAW. 

(a) PAYMENTS TO STATES.— 

(1) IN GENERAL.—Subject to paragraph (3), there shall be 

paid to a State an amount equal to 100 percent of the amount 

of short-time compensation paid under a short-time compensation program (as defined in section 3306(v) of the Internal Revenue Code of 1986, as added by section 341(a)) under the provisions of the State law. 


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(2) TERMS OF PAYMENTS.—Payments made to a State 

under paragraph (1) shall be payable by way of reimbursement 

in such amounts as the Secretary estimates the State will be 

entitled to receive under this section for each calendar month, 

reduced or increased, as the case may be, by any amount by 

which the Secretary finds that the Secretary’s estimates for 

any prior calendar month were greater or less than the 

amounts which should have been paid to the State. Such estimates may be made on the basis of such statistical, sampling, 

or other method as may be agreed upon by the Secretary and 

the State agency of the State involved. 

(3) LIMITATIONS ON PAYMENTS.— 

(A) GENERAL PAYMENT LIMITATIONS.—No payments 

shall be made to a State under this section for short-time 

compensation paid to an individual by the State during a 

benefit year in excess of 26 times the amount of regular 

compensation (including dependents’ allowances) under the 

State law payable to such individual for a week of total 

unemployment. 

(B) EMPLOYER LIMITATIONS.—No payments shall be 

made to a State under this section for benefits paid to an 

individual by the State under a short-time compensation 

program if such individual is employed by the participating employer on a seasonal, temporary, or intermittent 

basis. 

(b) APPLICABILITY.— 

(1) IN GENERAL.—Payments to a State under subsection (a) 

shall be available for weeks of unemployment— 

(A) beginning on or after the date of the enactment of 

this Act; and 

(B) ending on or before the date that is 3 years and 

6 months after the date of the enactment of this Act. 

(2) THREE-YEAR FUNDING LIMITATION FOR COMBINED PAYMENTS UNDER THIS SECTION AND SECTION 343.—States may receive payments under this section and section 343 with respect 

to a total of not more than 156 weeks. 

(c) TWO-YEAR TRANSITION PERIOD FOR EXISTING PROGRAMS.— 

During any period that the transition provision under section 

341(a)(3) is applicable to a State with respect to a short-time compensation program, such State shall be eligible for payments under 

this section. Subject to paragraphs (1)(B) and (2) of subsection (b), 

if at any point after the date of the enactment of this Act the State 

enacts a State law providing for the payment of short-time compensation under a short-time compensation program that meets the 

definition of such a program under section 3306(v) of the Internal 

Revenue Code of 1986, as added by section 341(a), the State shall 

be eligible for payments under this section after the effective date 

of such enactment. 

(d) FUNDING AND CERTIFICATIONS.— 

(1) FUNDING.—There are appropriated, out of moneys in 

the Treasury not otherwise appropriated, such sums as may be 

necessary for purposes of carrying out this section. 


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(2) CERTIFICATIONS.—The Secretary shall from time to 

time certify to the Secretary of the Treasury for payment to 

each State the sums payable to such State under this section. 

(e) DEFINITIONS.—In this section: 

(1) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Labor. 

(2) STATE; STATE AGENCY; STATE LAW.—The terms ‘‘State’’, 

‘‘State agency’’, and ‘‘State law’’ have the meanings given those 

terms in section 205 of the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note). 

SEC. 343. TEMPORARY FINANCING OF SHORT-TIME COMPENSATION 

AGREEMENTS. 

(a) FEDERAL-STATE AGREEMENTS.— (1) IN GENERAL.—Any State which desires to do so may 

enter into, and participate in, an agreement under this section 

with the Secretary provided that such State’s law does not provide for the payment of short-time compensation under a shorttime compensation program (as defined in section 3306(v) of 

the Internal Revenue Code of 1986, as added by section 

341(a)). 

(2) ABILITY TO TERMINATE.—Any State which is a party to 

an agreement under this section may, upon providing 30 days’ 

written notice to the Secretary, terminate such agreement. 

(b) PROVISIONS OF FEDERAL-STATE AGREEMENT.— (1) IN GENERAL.—Any agreement under this section shall 

provide that the State agency of the State will make payments 

of short-time compensation under a plan approved by the 

State. Such plan shall provide that payments are made in accordance with the requirements under section 3306(v) of the 

Internal Revenue Code of 1986, as added by section 341(a). 

(2) LIMITATIONS ON PLANS.— (A) GENERAL PAYMENT LIMITATIONS.—A short-time 

compensation plan approved by a State shall not permit 

the payment of short-time compensation to an individual 

by the State during a benefit year in excess of 26 times the 

amount of regular compensation (including dependents’ allowances) under the State law payable to such individual 

for a week of total unemployment. 

(B) EMPLOYER LIMITATIONS.—A short-time compensation plan approved by a State shall not provide payments 

to an individual if such individual is employed by the participating employer on a seasonal, temporary, or intermittent basis. 

(3) EMPLOYER PAYMENT OF COSTS.—Any short-time compensation plan entered into by an employer must provide that 

the employer will pay the State an amount equal to one-half 

of the amount of short-time compensation paid under such 

plan. Such amount shall be deposited in the State’s unemployment fund and shall not be used for purposes of calculating an 

employer’s contribution rate under section 3303(a)(1) of the Internal Revenue Code of 1986. 

(c) PAYMENTS TO STATES.— 

(1) IN GENERAL.—There shall be paid to each State with an 

agreement under this section an amount equal to— 


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(A) one-half of the amount of short-time compensation 

paid to individuals by the State pursuant to such agreement; and 

(B) any additional administrative expenses incurred 

by the State by reason of such agreement (as determined 

by the Secretary). 

(2) TERMS OF PAYMENTS.—Payments made to a State 

under paragraph (1) shall be payable by way of reimbursement 

in such amounts as the Secretary estimates the State will be 

entitled to receive under this section for each calendar month, 

reduced or increased, as the case may be, by any amount by 

which the Secretary finds that the Secretary’s estimates for 

any prior calendar month were greater or less than the 

amounts which should have been paid to the State. Such estimates may be made on the basis of such statistical, sampling, 

or other method as may be agreed upon by the Secretary and 

the State agency of the State involved. 

(3) FUNDING.—There are appropriated, out of moneys in 

the Treasury not otherwise appropriated, such sums as may be 

necessary for purposes of carrying out this section. 

(4) CERTIFICATIONS.—The Secretary shall from time to 

time certify to the Secretary of the Treasury for payment to 

each State the sums payable to such State under this section. 

(d) APPLICABILITY.— (1) IN GENERAL.—An agreement entered into under this 

section shall apply to weeks of unemployment— 

(A) beginning on or after the date on which such 

agreement is entered into; and 

(B) ending on or before the date that is 2 years and 

13 weeks after the date of the enactment of this Act. 

(2) TWO-YEAR FUNDING LIMITATION.—States may receive 

payments under this section with respect to a total of not more 

than 104 weeks. 

(e) SPECIAL RULE.—If a State has entered into an agreement 

under this section and subsequently enacts a State law providing 

for the payment of short-time compensation under a short-time 

compensation program that meets the definition of such a program 

under section 3306(v) of the Internal Revenue Code of 1986, as 

added by section 341(a), the State— 

(1) shall not be eligible for payments under this section for 

weeks of unemployment beginning after the effective date of 

such State law; and 

(2) subject to paragraphs (1)(B) and (2) of section 342(b), 

shall be eligible to receive payments under section 342 after 

the effective date of such State law. 

(f) DEFINITIONS.—In this section: 

(1) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Labor. 

(2) STATE; STATE AGENCY; STATE LAW.—The terms ‘‘State’’, 

‘‘State agency’’, and ‘‘State law’’ have the meanings given those 

terms in section 205 of the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note). 

SEC. 344. GRANTS FOR SHORT-TIME COMPENSATION PROGRAMS. 

(a) GRANTS.— 


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(1) FOR IMPLEMENTATION OR IMPROVED ADMINISTRATION.— 

The Secretary shall award grants to States that enact shorttime compensation programs (as defined in subsection (i)(2)) 

for the purpose of implementation or improved administration 

of such programs. 

(2) FOR PROMOTION AND ENROLLMENT.—The Secretary 

shall award grants to States that are eligible and submit plans 

for a grant under paragraph (1) for such States to promote and 

enroll employers in short-time compensation programs (as so 

defined). 

(3) ELIGIBILITY.— 

(A) IN GENERAL.—The Secretary shall determine eligibility criteria for the grants under paragraph (1) and (2). 

(B) CLARIFICATION.—A State administering a shorttime compensation program, including a program being administered by a State that is participating in the transition under the provisions of sections 341(a)(3) and 342(c), 

that does not meet the definition of a short-time compensation program under section 3306(v) of the Internal Revenue Code of 1986 (as added by 341(a)), and a State with 

an agreement under section 343, shall not be eligible to receive a grant under this section until such time as the 

State law of the State provides for payments under a 

short-time compensation program that meets such definition and such law. 

(b) AMOUNT OF GRANTS.— 

(1) IN GENERAL.—The maximum amount available for 

making grants to a State under paragraphs (1) and (2) shall 

be equal to the amount obtained by multiplying $700,000,000 

(less the amount used by the Secretary under subsection (e)) 

by the same ratio as would apply under subsection (a)(2)(B) of 

section 903 of the Social Security Act (42 U.S.C. 1103) for purposes of determining such State’s share of any excess amount 

(as described in subsection (a)(1) of such section) that would 

have been subject to transfer to State accounts, as of October 

1, 2010, under the provisions of subsection (a) of such section. 

(2) AMOUNT AVAILABLE FOR DIFFERENT GRANTS.—Of the 

maximum incentive payment determined under paragraph (1) 

with respect to a State— 

(A) one-third shall be available for a grant under subsection (a)(1); and 

(B) two-thirds shall be available for a grant under subsection (a)(2). 

(c) GRANT APPLICATION AND DISBURSAL.— 

(1) APPLICATION.—Any State seeking a grant under paragraph (1) or (2) of subsection (a) shall submit an application to 

the Secretary at such time, in such manner, and complete with 

such information as the Secretary may require. In no case may 

the Secretary award a grant under this section with respect to 

an application that is submitted after December 31, 2014. 

(2) NOTICE.—The Secretary shall, within 30 days after receiving a complete application, notify the State agency of the 

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ments for a grant under paragraph (1) or (2) (or both) of subsection (a). 

(3) CERTIFICATION.—If the Secretary finds that the State 

law provisions meet the requirements for a grant under subsection (a), the Secretary shall thereupon make a certification 

to that effect to the Secretary of the Treasury, together with 

a certification as to the amount of the grant payment to be 

transferred to the State account in the Unemployment Trust 

Fund (as established in section 904(a) of the Social Security 

Act (42 U.S.C. 1104(a))) pursuant to that finding. The Secretary of the Treasury shall make the appropriate transfer to 

the State account within 7 days after receiving such certification. 

(4) REQUIREMENT.—No certification of compliance with the 

requirements for a grant under paragraph (1) or (2) of subsection (a) may be made with respect to any State whose— 

(A) State law is not otherwise eligible for certification 

under section 303 of the Social Security Act (42 U.S.C. 

503) or approvable under section 3304 of the Internal Revenue Code of 1986; or 

(B) short-time compensation program is subject to discontinuation or is not scheduled to take effect within 12 

months of the certification. 

(d) USE OF FUNDS.—The amount of any grant awarded under 

this section shall be used for the implementation of short-time compensation programs and the overall administration of such programs and the promotion and enrollment efforts associated with 

such programs, such as through— 

(1) the creation or support of rapid response teams to advise employers about alternatives to layoffs; 

(2) the provision of education or assistance to employers to 

enable them to assess the feasibility of participating in shorttime compensation programs; and 

(3) the development or enhancement of systems to automate— 

(A) the submission and approval of plans; and 

(B) the filing and approval of new and ongoing shorttime compensation claims. 

(e) ADMINISTRATION.—The Secretary is authorized to use 0.25 

percent of the funds available under subsection (g) to provide for 

outreach and to share best practices with respect to this section 

and short-time compensation programs. 

(f) RECOUPMENT.—The Secretary shall establish a process 

under which the Secretary shall recoup the amount of any grant 

awarded under paragraph (1) or (2) of subsection (a) if the Secretary determines that, during the 5-year period beginning on the 

first date that any such grant is awarded to the State, the State— 

(1) terminated the State’s short-time compensation program; or 

(2) failed to meet appropriate requirements with respect to 

such program (as established by the Secretary). 

(g) FUNDING.—There are appropriated, out of moneys in the 

Treasury not otherwise appropriated, to the Secretary, 


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$700,000,000 to carry out this section, to remain available without 

fiscal year limitation. 

(h) REPORTING.—The Secretary may establish reporting requirements for States receiving a grant under this section in order 

to provide oversight of grant funds. 

(i) DEFINITIONS.—In this section: 

(1) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Labor. 

(2) SHORT-TIME COMPENSATION PROGRAM.—The term 

‘‘short-time compensation program’’ has the meaning given 

such term in section 3306(v) of the Internal Revenue Code of 

1986, as added by section 341(a). 

(3) STATE; STATE AGENCY; STATE LAW.—The terms ‘‘State’’, 

‘‘State agency’’, and ‘‘State law’’ have the meanings given those 

terms in section 205 of the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note). 

SEC. 345. ASSISTANCE AND GUIDANCE IN IMPLEMENTING PROGRAMS. 

(a) IN GENERAL.—In order to assist States in establishing, 

qualifying, and implementing short-time compensation programs 

(as defined in section 3306(v) of the Internal Revenue Code of 1986, 

as added by section 341(a)), the Secretary of Labor (in this section 

referred to as the ‘‘Secretary’’) shall— 

(1) develop model legislative language which may be used 

by States in developing and enacting such programs and periodically review and revise such model legislative language; 

(2) provide technical assistance and guidance in developing, enacting, and implementing such programs; 

(3) establish reporting requirements for States, including 

reporting on— 

(A) the number of estimated averted layoffs; 

(B) the number of participating employers and workers; and 

(C) such other items as the Secretary of Labor determines are appropriate. 

(b) MODEL LANGUAGE AND GUIDANCE.—The model language 

and guidance developed under subsection (a) shall allow sufficient 

flexibility by States and participating employers while ensuring accountability and program integrity. 

(c) CONSULTATION.—In developing the model legislative language and guidance under subsection (a), and in order to meet the 

requirements of subsection (b), the Secretary shall consult with employers, labor organizations, State workforce agencies, and other 

program experts. 

SEC. 346. REPORTS. 

(a) REPORT.— 

(1) IN GENERAL.—Not later than 4 years after the date of 

the enactment of this Act, the Secretary of Labor shall submit 

to Congress and to the President a report or reports on the implementation of the provisions of this Act. 

(2) REQUIREMENTS.—Any report under paragraph (1) shall 

at a minimum include the following: 

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time compensation programs (as defined in section 3306(v) 

of the Internal Revenue Code of 1986, as added by section 

341(a)). 

(B) An analysis of the significant challenges to State 

enactment and implementation of short-time compensation 

programs. 

(C) A survey of employers in States that have not enacted a short-time compensation program or entered into 

an agreement with the Secretary on a short-time compensation plan to determine the level of interest among 

such employers in participating in short-time compensation programs. 

(b) FUNDING.—There are appropriated, out of any moneys in 

the Treasury not otherwise appropriated, to the Secretary of Labor, 

$1,500,000 to carry out this section, to remain available without 

fiscal year limitation. 

Subtitle B—Long Term Unemployed Hiring Preferences 

SEC. 351. LONG TERM UNEMPLOYEED WORKERS WORK OPPORTUNITY 

TAX CREDITS. 

(a) IN GENERAL.—Paragraph (3) of section 51(b) of the Internal 

Revenue Code is amended by inserting ‘‘$10,000 per year in the 

case of any individual who is a qualified long term unemployed individual by reason of subsection (d)(11), and’’ before ‘‘$12,000 per 

year’’. 

(b) LONG TERM UNEMPLOYEED INDIVIDUALS TAX CREDITS.— 

Paragraph (d) of section 51 of the Internal Revenue Code is amended by— 

(1) inserting ‘‘(J) qualified long term unemployed individual’’ at the end of paragraph (d)(1); 

(2) inserting a new paragraph after paragraph (10) as follows— 

‘‘(11) Qualified long term unemployed individual. 

‘‘(A) IN GENERAL.—The term ‘qualified long term unemployed individual’ means any individual who was not a 

student for at least 6 months during the 1-year period ending on the hiring date and is certified by the designated 

local agency as having aggregate periods of unemployment 

during the 1-year period ending on the hiring date which 

equal or exceed 6 months. 

‘‘(B) STUDENT.—For purposes of this subsection, a student is an individual enrolled at least half-time in a program that leads to a degree, certificate, or other recognized 

educational credential for at least 6 months whether or not 

consecutive during the 1-year period ending on the hiring 

date.’’; and 

(3) renumbering current paragraphs (11) through (14) as 

paragraphs (12) through (15). 

(c) SIMPLIFIED CERTIFICATION.—Section 51(d) of the Internal 

Revenue Code is amended by adding a new paragraph 16 as follows: 

‘‘(16) Credit allowed for qualified long term unemployed individuals. 


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‘‘(A) IN GENERAL.—Any qualified long term unemployed individual under paragraph (11) will be treated as 

certified by the designated local agency as having aggregate periods of unemployment if— 

‘‘(i) the individual is certified by the designated 

local agency as being in receipt of unemployment compensation under State or Federal law for not less than 

6 months during the 1-year period ending on the hiring date. 

‘‘(B) REGULATORY AUTHORITY.—The Secretary in his 

discretion may provide alternative methods for certification.’’. 

(d) CREDIT MADE AVAILABLE TO TAX-EXEMPT EMPLOYERS IN

CERTAIN CIRCUMSTANCES.—Section 52(c) of the Internal Revenue 

Code is amended— 

(1) by striking the word ‘‘No’’ at the beginning of the section and replacing it with ‘‘Except as provided in this subsection, no’’; and 

(2) the following new paragraphs are inserted at the end 

of section 52(c)— 

‘‘(1) IN GENERAL.—In the case of a tax-exempt employer, 

there shall be treated as a credit allowable under subpart C 

(and not allowable under subpart D) the lesser of— 

‘‘(A) the amount of the work opportunity credit determined under this subpart with respect to such employer 

that is related to the hiring of qualified long term unemployed individuals described in subsection (d)(11); or 

‘‘(B) the amount of the payroll taxes of the employer 

during the calendar year in which the taxable year begins. 

‘‘(2) CREDIT AMOUNT.—In calculating tax-exempt employers, the work opportunity credit shall be determined by substituting ‘26 percent’ for ‘40 percent’ in section 51(a) and by 

substituting ‘16.25 percent’ for ‘25 percent’ in section 

51(i)(3)(A). 

‘‘(3) TAX-EXEMPT EMPLOYER.—For purposes of this subtitle, 

the term ‘tax-exempt employer’ means an employer that is— 

‘‘(A) an organization described in section 501(c) and 

exempt from taxation under section 501(a), or 

‘‘(B) a public higher education institution (as defined 

in section 101 of the Higher Education Act of 1965). 

‘‘(4) PAYROLL TAXES.—For purposes of this subsection— 

‘‘(A) IN GENERAL.—The term ‘payroll taxes’ means— 

‘‘(i) amounts required to be withheld from the employees of the tax-exempt employer under section 

3401(a), 

‘‘(ii) amounts required to be withheld from such 

employees under section 3101, and 

‘‘(iii) amounts of the taxes imposed on the tax-exempt employer under section 3111.’’. 

(e) TREATMENT OF POSSESSIONS.— (1) PAYMENTS TO POSSESSIONS.— 

(A) MIRROR CODE POSSESSIONS.—The Secretary of the 

Treasury shall pay to each possession of the United States 

with a mirror code tax system amounts equal to the loss 


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to that possession by reason of the application of this section (other than this subsection). Such amounts shall be 

determined by the Secretary of the Treasury based on information provided by the government of the respective 

possession of the United States. 

(B) OTHER POSSESSIONS.—The Secretary of the Treasury shall pay to each possession of the United States, 

which does not have a mirror code tax system, amounts estimated by the Secretary of the Treasury as being equal to 

the aggregate credits that would have been provided by 

the possession by reason of the application of this section 

(other than this subsection) if a mirror code tax system 

had been in effect in such possession. The preceding sentence shall not apply with respect to any possession of the 

United States unless such possession has a plan, which 

has been approved by the Secretary of the Treasury, under 

which such possession will promptly distribute such payments. 

(2) COORDINATION WITH CREDIT ALLOWED AGAINST UNITED

STATES INCOME TAXES.—No increase in the credit determined 

under section 38(b) of the Internal Revenue Code of 1986 that 

is attributable to the credit provided by this section (other than 

this subsection (e)) shall be taken into account with respect to 

any person— 

(A) to whom a credit is allowed against taxes imposed 

by the possession of the United States by reason of this 

section for such taxable year, or 

(B) who is eligible for a payment under a plan described in paragraph (1)(B) with respect to such taxable 

year. 

(3) DEFINITIONS AND SPECIAL RULES.— 

(A) POSSESSION OF THE UNITED STATES.—For purposes 

of this subsection (e), the term ‘‘possession of the United 

States’’ includes American Samoa, the Commonwealth of 

the Northern Mariana Islands, the Commonwealth of 

Puerto Rico, Guam, and the United States Virgin Islands. 

(B) MIRROR CODE TAX SYSTEM.—For purposes of this 

subsection, the term ‘‘mirror code tax system’’ means, with 

respect to any possession of the United States, the income 

tax system of such possession if the income tax liability of 

the residents of such possession under such system is determined by reference to the income tax laws of the United 

States as if such possession were the United States. 

(C) TREATMENT OF PAYMENTS.—For purposes of section 

1324(b)(2) of title 31, United States Code, rules similar to 

the rules of section 1001(b)(3)(C) of the American Recovery 

and Reinvestment Tax Act of 2009 shall apply. 

(f) EFFECTIVE DATE.—The amendments made by this section 

shall apply to individuals who begin work for the employer after 

the date of the enactment of this Act. 


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Subtitle C—Pathways Back to Work 

SEC. 361. SHORT TITLE. 

This subtitle may be cited as the ‘‘Pathways Back to Work Act 

of 2011’’. 

SEC. 362. ESTABLISHMENT OF PATHWAYS BACK TO WORK FUND. 

(a) ESTABLISHMENT.—There is established in the Treasury of 

the United States a fund which shall be known as the Pathways 

Back to Work Fund (hereafter in this Act referred to as ‘‘the 

Fund’’). 

(b) DEPOSITS INTO THE FUND.—Out of any amounts in the 

Treasury of the United States not otherwise appropriated, there 

are appropriated $5,000,000,000 for payment to the Fund to be 

used by the Secretary of Labor to carry out this Act. 

SEC. 363. AVAILABILITY OF FUNDS. 

(a) IN GENERAL.—Of the amounts available to the Fund under 

section 362(b), the Secretary of Labor shall— 

(1) allot $2,000,000,000 in accordance with section 364 to 

provide subsidized employment to unemployed, low-income 

adults; 

(2) allot $1,500,000,000 in accordance with section 365 to 

provide summer and year-round employment opportunities to 

low-income youth; 

(3) award $1,500,000,000 in competitive grants in accordance with section 366 to local entities to carry out work-based 

training and other work-related and educational strategies and 

activities of demonstrated effectiveness to unemployed, low-income adults and low-income youth to provide the skills and assistance needed to obtain employment. 

(b) RESERVATION.—The Secretary of Labor may reserve not 

more than 1 percent of amounts available to the Fund under each 

of paragraphs (1)–(3) of subsection (a) for the costs of technical assistance, evaluations and Federal administration of this Act. 

(c) PERIOD OF AVAILABILITY.—The amounts appropriated under 

this Act shall be available for obligation by the Secretary of Labor 

until December 31, 2012, and shall be available for expenditure by 

grantees and subgrantees until September 30, 2013. 

SEC. 364. SUBSIDIZED EMPLOYMENT FOR UNEMPLOYED, LOW-INCOME 

ADULTS. 

(a) IN GENERAL.— 

(1) ALLOTMENTS.—From the funds available under section 

363(a)(1), the Secretary of Labor shall make an allotment 

under subsection (b) to each State that has a State plan approved under subsection (c) and to each outlying area and Native American grantee under section 166 of the Workforce Investment Act of 1998 that meets the requirements of this section, for the purpose of providing subsidized employment opportunities to unemployed, low-income adults. 

(2) GUIDANCE.—Not later than 30 days after the date of 

enactment of this Act, the Secretary of Labor, in coordination 

with the Secretary of Health and Human Services, shall issue 

guidance regarding the implementation of this section. Such 

guidance shall, consistent with this section, include procedures 


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for the submission and approval of State and local plans and 

the allotment and allocation of funds, including reallotment 

and reallocation of such funds, that promote the expeditious 

and effective implementation of the activities authorized under 

this section. 

(b) STATE ALLOTMENTS.— (1) RESERVATIONS FOR OUTLYING AREAS AND TRIBES.—Of 

the funds described subsection (a)(1), the Secretary shall reserve— 

(A) not more than one-quarter of one percent to provide assistance to outlying areas to provide subsidized employment to low-income adults who are unemployed; and 

(B) 1.5 percent to provide assistance to grantees of the 

Native American programs under section 166 of the Workforce Investment Act of 1998 to provide subsidized employment to low-income adults who are unemployed. 

(2) STATES.—After determining the amounts to be reserved 

under paragraph (1), the Secretary of Labor shall allot the remainder of the amounts described in subsection (a)(1) among 

the States as follows: 

(A) one-third shall be allotted on the basis of the relative number of unemployed individuals in areas of substantial unemployment in each State, compared to the 

total number of unemployed individuals in areas of substantial unemployment in all States; 

(B) one-third shall be allotted on the basis of the relative excess number of unemployed individuals in each 

State, compared to the total excess number of unemployed 

individuals in all States; and 

(C) one-third shall be allotted on the basis of the relative number of disadvantaged adults and youth in each 

State, compared to the total number of disadvantaged 

adults and youth in all States. 

(3) DEFINITIONS.—For purposes of the formula described in 

paragraph (2)— 

(A) AREA OF SUBSTANTIAL UNEMPLOYMENT.—The term 

‘‘area of substantial unemployment’’ means any contiguous 

area with a population of at least 10,000 and that has an 

average rate of unemployment of at least 6.5 percent for 

the most recent 12 months, as determined by the Secretary. 

(B) DISADVANTAGED ADULTS AND YOUTH.—The term 

‘‘disadvantaged adults and youth’’ means an individual 

who is age 16 and older (subject to section 

132(b)(1)(B)(v)(I) of the Workforce Investment Act of 1998) 

who received an income, or is a member of a family that 

received a total family income, that, in relation to family 

size, does not exceed the higher of— 

(i) the poverty line; or 

(ii) 70 percent of the lower living standard income 

level. 

(C) EXCESS NUMBER.—The term ‘‘excess number’’ 

means, used with respect to the excess number of unemployed individuals within a State, the higher of— 


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(i) the number that represents the number of unemployed individuals in excess of 4.5 percent of the civilian labor force in the State; or 

(ii) the number that represents the number of unemployed individuals in excess of 4.5 percent of the civilian labor force in areas of substantial unemployment in such State. 

(4) REALLOTMENT.—If the Governor of a State does not 

submit a State plan by the time specified in subsection (c), or 

a State does not receive approval of a State plan, the amount 

the State would have been eligible to receive pursuant to the 

formula under paragraph (2) shall be transferred within the 

Fund and added to the amounts available for the competitive 

grants under section 363(a)(3). 

(c) STATE PLAN.— (1) IN GENERAL.—For a State to be eligible to receive an 

allotment of the funds under subsection (b), the Governor of 

the State shall submit to the Secretary of Labor a State plan 

in such form and containing such information as the Secretary 

may require. At a minimum, such plan shall include— 

(A) a description of the strategies and activities to be 

carried out by the State, in coordination with employers in 

the State, to provide subsidized employment opportunities 

to unemployed, low-income adults, including strategies relating to the level and duration of subsidies consistent 

with subsection (e)(2); 

(B) a description of the requirements the State will 

apply relating to the eligibility of unemployed, low-income 

adults, consistent with section 368(6), for subsidized employment opportunities, which may include criteria to target assistance to particular categories of such adults, such 

as individuals with disabilities or individuals who have exhausted all rights to unemployment compensation; 

(C) a description of how the funds allotted to provide 

subsidized employment opportunities will be administered 

in the State and local areas, in accordance with subsection 

(d); 

(D) a description of the performance outcomes to be 

achieved by the State through the activities carried out 

under this section and the processes the State will use to 

track performance, consistent with guidance provided by 

the Secretary of Labor regarding such outcomes and processes and with section 367(b); 

(E) a description of the coordination of activities to be 

carried out with the funds provided under this section with 

activities under title I of the Workforce Investment Act of 

1998, the TANF program under part A of title IV of the 

Social Security Act, and other appropriate Federal and 

State programs that may assist unemployed, low-income 

adults in obtaining and retaining employment; 

(F) a description of the timelines for implementation of 

the activities described in subparagraph (A), and the number of unemployed, low-income adults expected to be 

placed in subsidized employment by quarter; 


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(G) assurances that the State will report such information as the Secretary of Labor may require relating to fiscal, performance and other matters that the Secretary determines is necessary to effectively monitor the activities 

carried out under this section; and 

(H) assurances that the State will ensure compliance 

with the labor standards and protections described in section 367(a) of this Act. 

(2) SUBMISSION AND APPROVAL OF STATE PLAN.— (A) SUBMISSION WITH OTHER PLANS.—The State plan 

described in this subsection may be submitted in conjunction with the State plan modification or request for funds 

required under section 365, and may be submitted as a 

modification to a State plan that has been approved under 

section 112 of the Workforce Investment Act of 1998. 

(B) SUBMISSION AND APPROVAL.— (i) SUBMISSION.—The Governor shall submit a 

plan to the Secretary of Labor not later than 75 days 

after the enactment of this Act and the Secretary of 

Labor shall make a determination regarding the approval or disapproval of such plans not later than 45 

days after the submission of such plan. If the plan is 

disapproved, the Secretary of Labor may provide a 

reasonable period of time in which a disapproved plan 

may be amended and resubmitted for approval. 

(ii) APPROVAL.—The Secretary of Labor shall approve a State plan that the Secretary determines is 

consistent with requirements of this section and reasonably appropriate and adequate to carry out the 

purposes of this section. If the plan is approved, the 

Secretary shall allot funds to States within 30 days 

after such approval. 

(3) MODIFICATIONS TO STATE PLAN.—The Governor may 

submit a modification to a State plan under this subsection 

consistent with the requirements of this section. 

(d) ADMINISTRATION WITHIN THE STATE.— (1) OPTION.—The State may administer the funds for activities under this section through— 

(A) the State and local entities responsible for the administration of the adult formula program under title I–B 

of the Workforce Investment Act of 1998; 

(B) the entities responsible for the administration of 

the TANF program under part A of title IV of the Social 

Security Act; or 

(C) a combination of the entities described in subparagraphs (A) and (B). 

(2) WITHIN-STATE ALLOCATIONS.— 

(A) ALLOCATION OF FUNDS.—The Governor may reserve up to 5 percent of the allotment under subsection 

(b)(2) for administration and technical assistance, and 

shall allocate the remainder, in accordance with the option 

elected under paragraph (1)— 

(i) among local workforce investment areas within 

the State in accordance with the factors identified in 


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subsection (b)(2), except that for purposes of such allocation references to a State in such paragraph shall be 

deemed to be references to a local workforce investment area and references to all States shall be deemed 

to be references to all local areas in the State involved, 

of which not more than 10 percent of the funds allocated to a local workforce investment area may be 

used for the costs of administration of this section; or 

(ii) through entities responsible for the administration of the TANF program under part A of title IV 

of the Social Security Act in local areas in such manner as the State may determine appropriate. 

(B) LOCAL PLANS.— (i) IN GENERAL.—In the case where the responsibility for the administration of activities is to be carried out by the entities described under paragraph 

(1)(A), in order to receive an allocation under subparagraph (A)(i), a local workforce investment board, in 

partnership with the chief elected official of the local 

workforce investment area involved, shall submit to 

the Governor a local plan for the use of such funds 

under this section not later than 30 days after the 

submission of the State plan. Such local plan may be 

submitted as a modification to a local plan approved 

under section 118 of the Workforce Investment Act of 

1998. 

(ii) CONTENTS.—The local plan described in clause 

(i) shall contain the elements described in subparagraphs (A)–(H) of subsection (c)(1), as applied to the 

local workforce investment area. 

(iii) APPROVAL.—The Governor shall approve or 

disapprove the local plan submitted under clause (i) 

within 30 days after submission, or if later, 30 days 

after the approval of the State plan. The Governor 

shall approve the plan unless the Governor determines 

that the plan is inconsistent with requirements of this 

section or is not reasonably appropriate and adequate 

to carry out the purposes of this section. If the Governor has not made a determination within the period 

specified under the first sentence of this clause, the 

plan shall be considered approved. If the plan is disapproved, the Governor may provide a reasonable period of time in which a disapproved plan may be 

amended and resubmitted for approval. The Governor 

shall allocate funds to local workforce investment 

areas with approved plans within 30 days after such 

approval. 

(C) REALLOCATION OF FUNDS TO LOCAL AREAS.—If a 

local workforce investment board does not submit a local 

plan by the time specified in subparagraph (B) or the Governor does not approve a local plan, the amount the local 

workforce investment area would have been eligible to receive pursuant to the formula under subparagraph (A)(i) 

shall be allocated to local workforce investment areas that 


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receive approval of the local plan under subparagraph (B). 

Such reallocations shall be made in accordance with the 

relative share of the allocations to such local workforce investment areas applying the formula factors described 

under subparagraph (A)(i). 

(e) USE OF FUNDS.— (1) IN GENERAL.—The funds under this section shall be 

used to provide subsidized employment for unemployed, low-income adults. The State and local entities described in subsection (d)(1) may use a variety of strategies in recruiting employers and identifying appropriate employment opportunities, 

with a priority to be provided to employment opportunities 

likely to lead to unsubsidized employment in emerging or indemand occupations in the local area. Funds under this section 

may be used to provide support services, such as transportation and child care, that are necessary to enable the participation of individuals in subsidized employment opportunities. 

(2) LEVEL OF SUBSIDY AND DURATION.—The States or local 

entities described in subsection (d)(1) may determine the percentage of the wages and costs of employing a participant for 

which an employer may receive a subsidy with the funds provided under this section, and the duration of such subsidy, in 

accordance with guidance issued by the Secretary. The State or 

local entities may establish criteria for determining such percentage or duration using appropriate factors such as the size 

of the employer and types of employment. 

(f) COORDINATION OF FEDERAL ADMINISTRATION.—The Secretary of Labor shall administer this section in coordination with 

the Secretary of Health and Human Services to ensure the effective 

implementation of this section. 

SEC. 365. SUMMER EMPLOYMENT AND YEAR-ROUND EMPLOYMENT 

OPPORTUNITIES FOR LOW-INCOME YOUTH. 

(a) IN GENERAL.—From the funds available under section 

363(a)(2), the Secretary of Labor shall make an allotment under 

subsection (c) to each State that has a State plan modification (or 

other form of request for funds specified in guidance under subsection (b)) approved under subsection (d) and to each outlying area 

and Native American grantee under section 166 of the Workforce 

Investment Act of 1998 that meets the requirements of this section, 

for the purpose of providing summer employment and year-round 

employment opportunities to low-income youth. 

(b) GUIDANCE AND APPLICATION OF REQUIREMENTS.— 

(1) GUIDANCE.—Not later than 20 days after the date of 

enactment of this Act, the Secretary of Labor shall issue guidance regarding the implementation of this section. Such guidance shall, consistent with this section, include procedures for 

the submission and approval of State plan modifications, or for 

forms of requests for funds by the State as may be identified 

in such guidance, local plan modifications, or other forms of requests for funds from local workforce investment areas as may 

be identified in such guidance, and the allotment and allocation of funds, including reallotment and reallocation of such 

funds, that promote the expeditious and effective implementation of the activities authorized under this section. 


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(2) REQUIREMENTS.—Except as otherwise provided in the 

guidance described in paragraph (1) and in this section and 

other provisions of this Act, the funds provided for activities 

under this section shall be administered in accordance with 

subtitles B and E of title I of the Workforce Investment Act of 

1998 relating to youth activities. 

(c) STATE ALLOTMENTS.— 

(1) RESERVATIONS FOR OUTLYING AREAS AND TRIBES.—Of 

the funds described subsection (a), the Secretary shall reserve— 

(A) not more than one-quarter of one percent to provide assistance to outlying areas to provide summer and 

year-round employment opportunities to low-income youth; 

and 

(B) 1.5 percent to provide assistance to grantees of the 

Native American programs under section 166 of the Workforce Investment Act of 1998 to provide summer and yearround employment opportunities to low-income youth. 

(2) STATES.—After determining the amounts to be reserved 

under paragraph (1), the Secretary of Labor shall allot the remainder of the amounts described in subsection (a) among the 

States in accordance with the factors described in section 

364(b)(2) of this Act. 

(3) REALLOTMENT.—If the Governor of a State does not 

submit a State plan modification or other request for funds 

specified in guidance under subsection (b) by the time specified 

in subsection (d)(2)(B), or a State does not receive approval of 

such State plan modification or request, the amount the State 

would have been eligible to receive pursuant to the formula 

under paragraph (2) shall be transferred within the Fund and 

added to the amounts available for the competitive grants 

under section 363(a)(3). 

(d) STATE PLAN MODIFICATION.— 

(1) IN GENERAL.—For a State to be eligible to receive an 

allotment of the funds under subsection (c), the Governor of 

the State shall submit to the Secretary of Labor a modification 

to a State plan approved under section 112 of the Workforce 

Investment Act of 1998, or other request for funds described in 

guidance in subsection (b), in such form and containing such 

information as the Secretary may require. At a minimum, such 

plan modification or request shall include— 

(A) a description of the strategies and activities to be 

carried out to provide summer employment opportunities 

and year-round employment opportunities, including the 

linkages to educational activities, consistent with subsection (f); 

(B) a description of the requirements the States will 

apply relating to the eligibility of low-income youth, consistent with section 368(4), for summer employment opportunities and year-round employment opportunities, which 

may include criteria to target assistance to particular categories of such low-income youth, such as youth with disabilities, consistent with subsection (f); 


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(C) a description of the performance outcomes to be 

achieved by the State through the activities carried out 

under this section and the processes the State will use to 

track performance, consistent with guidance provided by 

the Secretary of Labor regarding such outcomes and processes and with section 367(b); 

(D) a description of the timelines for implementation 

of the activities described in subparagraph (A), and the 

number of low-income youth expected to be placed in summer employment opportunities, and year-round employment opportunities, respectively, by quarter; 

(E) assurances that the State will report such information as the Secretary may require relating to fiscal, performance and other matters that the Secretary determines 

is necessary to effectively monitor the activities carried out 

under this section; and 

(F) assurances that the State will ensure compliance 

with the labor standards protections described in section 

367(a). 

(2) SUBMISSION AND APPROVAL OF STATE PLAN MODIFICA- TION OR REQUEST.— (A) SUBMISSION.—The Governor shall submit a modification of the State plan or other request for funds described in guidance in subsection (b) to the Secretary of 

Labor not later than 30 days after the issuance of such 

guidance. The State plan modification or request for funds 

required under this subsection may be submitted in conjunction with the State plan required under section 364. 

(B) APPROVAL.—The Secretary of Labor shall approve 

the plan or request submitted under subparagraph (A) 

within 30 days after submission, unless the Secretary determines that the plan or request is inconsistent with the 

requirements of this section. If the Secretary has not made 

a determination within 30 days, the plan or request shall 

be considered approved. If the plan or request is disapproved, the Secretary may provide a reasonable period 

of time in which a disapproved plan or request may be 

amended and resubmitted for approval. If the plan or request is approved, the Secretary shall allot funds to States 

within 30 days after such approval. 

(3) MODIFICATIONS TO STATE PLAN OR REQUEST.—The Governor may submit further modifications to a State plan or request for funds identified under subsection (b) to carry out this 

section in accordance with the requirements of this section. 

(e) WITHIN-STATE ALLOCATION AND ADMINISTRATION.— 

(1) IN GENERAL.—Of the funds allotted to the State under 

subsection (c), the Governor— 

(A) may reserve up to 5 percent of the allotment for 

administration and technical assistance; and 

(B) shall allocate the remainder of the allotment 

among local workforce investment areas within the State 

in accordance with the factors identified in section 

364(b)(2), except that for purposes of such allocation references to a State in such paragraph shall be deemed to 


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be references to a local workforce investment area and references to all States shall be deemed to be references to 

all local areas in the State involved. Not more than 10 percent of the funds allocated to a local workforce investment 

area may be used for the costs of administration of this 

section. 

(2) LOCAL PLAN.— (A) SUBMISSION.—In order to receive an allocation 

under paragraph (1)(B), the local workforce investment 

board, in partnership with the chief elected official for the 

local workforce investment area involved, shall submit to 

the Governor a modification to a local plan approved under 

section 118 of the Workforce Investment Act of 1998, or 

other form of request for funds as may be identified in the 

guidance issued under subsection (b), not later than 30 

days after the submission by the State of the modification 

to the State plan or other request for funds identified in 

subsection (b), describing the strategies and activities to be 

carried out under this section. 

(B) APPROVAL.—The Governor shall approve the local 

plan submitted under subparagraph (A) within 30 days 

after submission, unless the Governor determines that the 

plan is inconsistent with requirements of this section. If 

the Governor has not made a determination within 30 

days, the plan shall be considered approved. If the plan is 

disapproved, the Governor may provide a reasonable period of time in which a disapproved plan may be amended 

and resubmitted for approval. The Governor shall allocate 

funds to local workforce investment areas with approved 

plans within 30 days after approval. 

(3) REALLOCATION.—If a local workforce investment board 

does not submit a local plan modification (or other request for 

funds identified in guidance under subsection (b)) by the time 

specified in paragraph (2), or does not receive approval of a 

local plan, the amount the local workforce investment area 

would have been eligible to receive pursuant to the formula 

under paragraph (1)(B) shall be allocated to local workforce investment areas that receive approval of the local plan modification or request for funds under paragraph (2). Such reallocations shall be made in accordance with the relative share of the 

allocations to such local workforce investment areas applying 

the formula factors described under paragraph (1)(B). 

(f) USE OF FUNDS.— 

(1) IN GENERAL.—The funds provided under this section 

shall be used— 

(A) to provide summer employment opportunities for 

low-income youth, ages 16 through 24, with direct linkages 

to academic and occupational learning, and may include 

the provision of supportive services, such as transportation 

or child care, necessary to enable such youth to participate; and 

(B) to provide year round employment opportunities, 

which may be combined with other activities authorized 

under section 129 of the workforce investment act of 1998, 


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to low-income youth, ages 16 through 24, with a priority 

to out-of school youth who are— 

(i) high school dropouts; or 

(ii) recipients of a secondary school diploma or its 

equivalent but who are basic skills deficient unemployed or underemployed. 

(2) PROGRAM PRIORITIES.—In administering the funds 

under this section, the local board and local chief elected officials shall give a priority to— 

(A) identifying employment opportunities that are— 

(i) in emerging or in-demand occupations in the 

local workforce investment area; or 

(ii) in the public or nonprofit sector that meet 

community needs; and 

(B) linking year-round program participants to training and educational activities that will provide such participants an industry-recognized certificate or credential. 

(3) PERFORMANCE ACCOUNTABILITY.—For activities funded 

under this section, in lieu of the requirements described in section 136 of the Workforce Investment Act of 1998, State and 

local workforce investment areas shall provide such reports as 

the Secretary of Labor may require regarding the performance 

outcomes described in section 367(a)(5). 

SEC. 366. WORK-BASED EMPLOYMENT STRATEGIES OF DEMONSTRATED EFFECTIVENESS. 

(a) IN GENERAL.—From the funds available under section 

363(a)(3), the Secretary of Labor shall award grants on a competitive basis to eligible entities to carry out work-based strategies of 

demonstrated effectiveness. 

(b) USE OF FUNDS.—The grants awarded under this section 

shall be used to support strategies and activities of demonstrated 

effectiveness that are designed to provide unemployed, low-income 

adults or low-income youth with the skills that will lead to employment as part of or upon completion of participation in such activities. Such strategies and activities may include— 

(1) on-the-job training, registered apprenticeship programs, 

or other programs that combine work with skills development; 

(2) sector-based training programs that have been designed to meet the specific requirements of an employer or 

group of employers in that sector and where employers are 

committed to hiring individuals upon successful completion of 

the training; 

(3) training that supports an industry sector or an employer-based or labor-management committee industry partnership which includes a significant work-experience component; 

(4) acquisition of industry-recognized credentials in a field 

identified by the State or local workforce investment area as 

a growth sector or demand industry in which there are likely 

to be significant job opportunities in the short-term; 

(5) connections to immediate work opportunities, including 

subsidized employment opportunities, or summer employment 

opportunities for youth, that includes concurrent skills training 

and other supports; 


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(6) career academies that provide students with the academic preparation and training, including paid internships and 

concurrent enrollment in community colleges or other postsecondary institutions, needed to pursue a career pathway that 

leads to postsecondary credentials and high-demand jobs; and 

(7) adult basic education and integrated basic education 

and training models for low-skilled adults, hosted at community colleges or at other sites, to prepare individuals for jobs 

that are in demand in a local area. 

(c) ELIGIBLE ENTITY.—An eligible entity shall include a local 

chief elected official, in collaboration with the local workforce investment board for the local workforce investment area involved 

(which may include a partnership with of such officials and boards 

in the region and in the State), or an entity eligible to apply for 

an Indian and Native American grant under section 166 of the 

Workforce Investment Act of 1998, and may include, in partnership 

with such officials, boards, and entities, the following: 

(1) employers or employer associations; 

(2) adult education providers and postsecondary educational institutions, including community colleges; 

(3) community-based organizations; 

(4) joint labor-management committees; 

(5) work-related intermediaries; or 

(6) other appropriate organizations. 

(d) APPLICATION.—An eligible entity seeking to receive a grant 

under this section shall submit to the Secretary of Labor an application at such time, in such manner, and containing such information as the Secretary may require. At a minimum, the application 

shall— 

(1) describe the strategies and activities of demonstrated 

effectiveness that the eligible entities will carry out to provide 

unemployed, low-income adults and low-income youth with the 

skills that will lead to employment upon completion of participation in such activities; 

(2) describe the requirements that will apply relating to 

the eligibility of unemployed, low-income adults or low-income 

youth, consistent with paragraphs (4) and (6) of section 368, for 

activities carried out under this section, which may include criteria to target assistance to particular categories of such adults 

and youth, such as individuals with disabilities or individuals 

who have exhausted all rights to unemployment compensation; 

(3) describe how the strategies and activities address the 

needs of the target populations identified in paragraph (2) and 

the needs of employers in the local area; 

(4) describe the expected outcomes to be achieved by implementing the strategies and activities; 

(5) provide evidence that the funds provided may be expended expeditiously and efficiently to implement the strategies and activities; 

(6) describe how the strategies and activities will be coordinated with other Federal, State and local programs providing 

employment, education and supportive activities; 


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(7) provide evidence of employer commitment to participate in the activities funded under this section, including identification of anticipated occupational and skill needs; 

(8) provide assurances that the grant recipient will report 

such information as the Secretary may require relating to fiscal, performance and other matters that the Secretary determines is necessary to effectively monitor the activities carried 

out under this section; and 

(9) provide assurances that the use of the funds provided 

under this section will comply with the labor standards and 

protections described section 367(a). 

(e) PRIORITY IN AWARDS.—In awarding grants under this section, the Secretary of Labor shall give a priority to applications 

submitted by eligible entities from areas of high poverty and high 

unemployment, as defined by the Secretary, such as Public Use 

Microdata Areas (PUMAs) as designated by the Census Bureau. 

(f) COORDINATION OF FEDERAL ADMINISTRATION.—The Secretary of Labor shall administer this section in coordination with 

the Secretary of Education, Secretary of Health and Human Services, and other appropriate agency heads, to ensure the effective 

implementation of this section. 

SEC. 367. GENERAL REQUIREMENTS. 

(a) LABOR STANDARDS AND PROTECTIONS.—Activities provided 

with funds under this Act shall be subject to the requirements and 

restrictions, including the labor standards, described in section 181 

of the Workforce Investment Act of 1998 and the nondiscrimination 

provisions of section 188 of such Act, in addition to other applicable 

federal laws. 

(b) REPORTING.—The Secretary may require the reporting of information relating to fiscal, performance and other matters that 

the Secretary determines is necessary to effectively monitor the activities carried out with funds provided under this Act. At a minimum, grantees and subgrantees shall provide information relating 

to— 

(1) the number individuals participating in activities with 

funds provided under this Act and the number of such individuals who have completed such participation; 

(2) the expenditures of funds provided under the Act; 

(3) the number of jobs created pursuant to the activities 

carried out under this Act; 

(4) the demographic characteristics of individuals participating in activities under this Act; and 

(5) the performance outcomes of individuals participating 

in activities under this act, including— 

(A) for adults participating in activities funded under 

section 364 of this act— 

(i) entry in unsubsidized employment, 

(ii) retention in unsubsidized employment, and 

(iii) earnings in unsubsidized employment; 

(B) for low-income youth participating in summer employment activities under sections 365 and 366— 

(i) work readiness skill attainment using an employer validated checklist; or 


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(ii) placement in or return to secondary or postsecondary education or training, or entry into unsubsidized employment; 

(C) for low-income youth participating in year-round 

employment activities under section 365 or in activities 

under section 366— 

(i) placement in or return to post-secondary education; 

(ii) attainment of high school diploma or its equivalent; 

(iii) attainment of an industry-recognized credential; and 

(iv) entry into unsubsidized employment, retention, and earnings as described in subparagraph (A); 

(D) for unemployed, low-income adults participating in 

activities under section 366— 

(i) entry into unsubsidized employment, retention, 

and earnings as described in subparagraph (A); and 

(ii) the attainment of industry-recognized credentials. 

(c) ACTIVITIES REQUIRED TO BE ADDITIONAL.—Funds provided 

under this Act shall only be used for activities that are in addition 

to activities that would otherwise be available in the State or local 

area in the absence of such funds. 

(d) ADDITIONAL REQUIREMENTS.—The Secretary of Labor may 

establish such additional requirements as the Secretary determines 

may be necessary to ensure fiscal integrity, effective monitoring, 

and the appropriate and prompt implementation of the activities 

under this Act. 

(e) REPORT OF INFORMATION AND EVALUATIONS TO CONGRESS

AND THE PUBLIC.—The Secretary of Labor shall provide to the appropriate Committees of the Congress and make available to the 

public the information reported pursuant to subsection (b) and the 

evaluations of activities carried out pursuant to the funds reserved 

under section 363(b). 

SEC. 368. DEFINITIONS. 

In this Act: 

(1) LOCAL CHIEF ELECTED OFFICIAL.—The term ‘‘local chief 

elected official’’ means the chief elected executive officer of a 

unit of local government in a local workforce investment area 

or in the case where more than one unit of general government, the individuals designated under an agreement described in section 117(c)(1)(B) of the Workforce Investment Act 

of 1998. 

(2) LOCAL WORKFORCE INVESTMENT AREA.—The term ‘‘local 

workforce investment area’’ means such area designated under 

section 116 of the Workforce Investment Act of 1998. 

(3) LOCAL WORKFORCE INVESTMENT BOARD.—The term 

‘‘local workforce investment board’’ means such board established under section 117 of the Workforce Investment Act of 

1998. 

(4) LOW-INCOME YOUTH.—The term ‘‘low-income youth’’ 

means an individual who— 

(A) is aged 16 through 24; 


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(B) meets the definition of a low-income individual 

provided in section 101(25) of the Workforce Investment 

Act of 1998, except that States, local workforce investment 

areas under section 365 and eligible entities under section 

366(c), subject to approval in the applicable State plans, 

local plans, and applications for funds, may increase the 

income level specified in subparagraph (B)(i) of such section to an amount not in excess of 200 percent of the poverty line for purposes of determining eligibility for participation in activities under sections 365 and 366 of this Act; 

and 

(C) is in one or more of the categories specified in section 101(13)(C) of the Workforce Investment Act of 1998. 

(5) OUTLYING AREA.—The term ‘‘outlying area’’ means the 

United States Virgin Islands, Guam, American Samoa, the 

Commonwealth of the Northern Mariana Islands, and the Republic of Palau. 

(6) UNEMPLOYED, LOW-INCOME ADULT.—The term ‘‘unemployed, low-income adult’’ means an individual who— 

(A) is age 18 or older; 

(B) is without employment and is seeking assistance 

under this Act to obtain employment; and 

(C) meets the definition of a ‘‘low-income individual’’ 

under section 101(25) of the Workforce Investment Act of 

1998, except that for that States, local entities described in 

section 364(d)(1) and eligible entities under section 366(c), 

subject to approval in the applicable State plans, local 

plans, and applications for funds, may increase the income 

level specified in subparagraph (B)(i) of such section to an 

amount not in excess of 200 percent of the poverty line for 

purposes of determining eligibility for participation in activities under sections 364 and 366 of this Act. 

(7) STATE.—The term ‘‘State’’ means each of the several 

States of the United States, the District of Columbia, and 

Puerto Rico. 

Subtitle D—Prohibition of Discrimination in Employment 

on the Basis of an Individual’s Status as Unemployed 

SEC. 371. SHORT TITLE. 

This subtitle may be cited as the ‘‘Fair Employment Opportunity Act of 2011’’. 

SEC. 372. FINDINGS AND PURPOSE. 

(a) FINDINGS.—Congress finds that denial of employment opportunities to individuals because of their status as unemployed is 

discriminatory and burdens commerce by— 

(1) reducing personal consumption and undermining economic stability and growth; 

(2) squandering human capital essential to the Nation’s 

economic vibrancy and growth; 

(3) increasing demands for Federal and State unemployment insurance benefits, reducing trust fund assets, and leading to higher payroll taxes for employers, cuts in benefits for 

jobless workers, or both; 


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(4) imposing additional burdens on publicly funded health 

and welfare programs; and 

(5) depressing income, property, and other tax revenues 

that the Federal Government, States, and localities rely on to 

support operations and institutions essential to commerce. 

(b) PURPOSES.—The purposes of this Act are— 

(1) to prohibit employers and employment agencies from 

disqualifying an individual from employment opportunities because of that individual’s status as unemployed; 

(2) to prohibit employers and employment agencies from 

publishing or posting any advertisement or announcement for 

an employment opportunity that indicates that an individual’s 

status as unemployed disqualifies that individual for the opportunity; and 

(3) to eliminate the burdens imposed on commerce due to 

the exclusion of such individuals from employment. 

SEC. 373. DEFINITIONS. 

As used in this Act— 

(1) the term ‘‘affected individual’’ means any person who 

was subject to an unlawful employment practice solely because 

of that individual’s status as unemployed; 

(2) the term ‘‘Commission’’ means the Equal Employment 

Opportunity Commission; 

(3) the term ‘‘employee’’ means— 

(A) an employee as defined in section 701(f) of the 

Civil Rights Act of 1964 (42 U.S.C. 2000e(f)); 

(B) a State employee to which section 302(a)(1) of the 

Government Employee Rights Act of 1991 (42 U.S.C. 

2000e–16b(a)(1)) applies; 

(C) a covered employee, as defined in section 101 of 

the Congressional Accountability Act of 1995 (2 U.S.C. 

1301) or section 411(c) of title 3, United States Code; or 

(D) an employee or applicant to which section 717(a) 

of the Civil Rights Act of 1964 (42 U.S.C. 2000e–16(a)) applies; 

(4) the term ‘‘employer’’ means— 

(A) a person engaged in an industry affecting commerce (as defined in section 701(h) of the Civil Rights Act 

of 1964 (42 U.S.C. 2000e(h)) who has 15 or more employees for each working day in each of 20 or more calendar 

weeks in the current or preceding calendar year, and any 

agent of such a person, but does not include a bona fide 

private membership club that is exempt from taxation 

under section 501(c) of the Internal Revenue Code of 1986; 

(B) an employing authority to which section 302(a)(1) 

of the Government Employee Rights Act of 1991 applies; 

(C) an employing office, as defined in section 101 of 

the Congressional Accountability Act of 1995 or section 

411(c) of title 3, United States Code; or 

(D) an entity to which section 717(a) of the Civil 

Rights Act of 1964 (42 U.S.C. 2000e–16(a)) applies; 

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ties to work as employees for an employer and includes an 

agent of such a person, and any person who maintains an 

Internet website or print medium that publishes advertisements or announcements of openings in jobs for employees; 

(6) the term ‘‘person’’ has the meaning given the term in 

section 701(a) of the Civil Rights Act of 1964 (42 U.S.C. 

2000e(a)); and 

(7) the term ‘‘status as unemployed’’, used with respect to 

an individual, means that the individual, at the time of application for employment or at the time of action alleged to violate this Act, does not have a job, is available for work and is 

searching for work. 

SEC. 374. PROHIBITED ACTS. 

(a) EMPLOYERS.—It shall be an unlawful employment practice 

for an employer to— 

(1) publish in print, on the Internet, or in any other medium, an advertisement or announcement for an employee for 

any job that includes— 

(A) any provision stating or indicating that an individual’s status as unemployed disqualifies the individual for 

any employment opportunity; or 

(B) any provision stating or indicating that an employer will not consider or hire an individual for any employment opportunity based on that individual’s status as 

unemployed; 

(2) fail or refuse to consider for employment, or fail or 

refuse to hire, an individual as an employee because of the individual’s status as unemployed; or 

(3) direct or request that an employment agency take an 

individual’s status as unemployed into account to disqualify an 

applicant for consideration, screening, or referral for employment as an employee. 

(b) EMPLOYMENT AGENCIES.—It shall be an unlawful employment practice for an employment agency to— 

(1) publish, in print or on the Internet or in any other medium, an advertisement or announcement for any vacancy in 

a job, as an employee, that includes— 

(A) any provision stating or indicating that an individual’s status as unemployed disqualifies the individual for 

any employment opportunity; or 

(B) any provision stating or indicating that the employment agency or an employer will not consider or hire 

an individual for any employment opportunity based on 

that individual’s status as unemployed; 

(2) screen, fail or refuse to consider, or fail or refuse to 

refer an individual for employment as an employee because of 

the individual’s status as unemployed; or 

(3) limit, segregate, or classify any individual in any manner that would limit or tend to limit the individual’s access to 

information about jobs, or consideration, screening, or referral 

for jobs, as employees, solely because of an individual’s status 

as unemployed. 

(c) INTERFERENCE WITH RIGHTS, PROCEEDINGS OR INQUIRIES.— 

It shall be unlawful for any employer or employment agency to— 


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(1) interfere with, restrain, or deny the exercise of or the 

attempt to exercise, any right provided under this Act; or 

(2) fail or refuse to hire, to discharge, or in any other manner to discriminate against any individual, as an employee, because such individual— 

(A) opposed any practice made unlawful by this Act; 

(B) has asserted any right, filed any charge, or has instituted or caused to be instituted any proceeding, under 

or related to this Act; 

(C) has given, or is about to give, any information in 

connection with any inquiry or proceeding relating to any 

right provided under this Act; or 

(D) has testified, or is about to testify, in any inquiry 

or proceeding relating to any right provided under this 

Act. 

(d) CONSTRUCTION.—Nothing in this Act is intended to preclude an employer or employment agency from considering an individual’s employment history, or from examining the reasons underlying an individual’s status as unemployed, in assessing an individual’s ability to perform a job or in otherwise making employment 

decisions about that individual. Such consideration or examination 

may include an assessment of whether an individual’s employment 

in a similar or related job for a period of time reasonably proximate 

to the consideration of such individual for employment is job-related or consistent with business necessity. 

SEC. 375. ENFORCEMENT. 

(a) ENFORCEMENT POWERS.—With respect to the administration and enforcement of this Act— 

(1) the Commission shall have the same powers as the 

Commission has to administer and enforce— 

(A) title VII of the Civil Rights Act of 1964 (42 U.S.C. 

2000e et seq.); or 

(B) sections 302 and 304 of the Government Employee 

Rights Act of 1991 (42 U.S.C. 2000e–16b and 2000e–16c), 

in the case of an affected individual who would be covered by 

such title, or by section 302(a)(1) of the Government Employee 

Rights Act of 1991 (42 U.S.C. 2000e–16b(a)(1)), respectively; 

(2) the Librarian of Congress shall have the same powers 

as the Librarian of Congress has to administer and enforce 

title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et 

seq.) in the case of an affected individual who would be covered 

by such title; 

(3) the Board (as defined in section 101 of the Congressional Accountability Act of 1995 (2 U.S.C. 1301)) shall have 

the same powers as the Board has to administer and enforce 

the Congressional Accountability Act of 1995 (2 U.S.C. 1301 et 

seq.) in the case of an affected individual who would be covered 

by section 201(a)(1) of such Act (2 U.S.C. 1311(a)(1)); 

(4) the Attorney General shall have the same powers as 

the Attorney General has to administer and enforce— 

(A) title VII of the Civil Rights Act of 1964 (42 U.S.C. 

2000e et seq.); or 

(B) sections 302 and 304 of the Government Employee 

Rights Act of 1991 (42 U.S.C. 2000e–16b and 2000e–16c); 


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in the case of an affected individual who would be covered by 

such title, or of section 302(a)(1) of the Government Employee 

Rights Act of 1991 (42 U.S.C. 2000e–16b(a)(1)), respectively; 

(5) the President, the Commission, and the Merit Systems 

Protection Board shall have the same powers as the President, 

the Commission, and the Board, respectively, have to administer and enforce chapter 5 of title 3, United States Code, in 

the case of an affected individual who would be covered by section 411 of such title; and 

(6) a court of the United States shall have the same jurisdiction and powers as the court has to enforce— 

(A) title VII of the Civil Rights Act of 1964 (42 U.S.C. 

2000e et seq.) in the case of a claim alleged by such individual for a violation of such title; 

(B) sections 302 and 304 of the Government Employee 

Rights Act of 1991 (42 U.S.C. 2000e–16b and 2000e–16c) 

in the case of a claim alleged by such individual for a violation of section 302(a)(1) of such Act (42 U.S.C. 2000e– 

16b(a)(1)); 

(C) the Congressional Accountability Act of 1995 (2 

U.S.C. 1301 et seq.) in the case of a claim alleged by such 

individual for a violation of section 201(a)(1) of such Act (2 

U.S.C. 1311(a)(1)); and 

(D) chapter 5 of title 3, United States Code, in the 

case of a claim alleged by such individual for a violation 

of section 411 of such title. 

(b) PROCEDURES.—The procedures applicable to a claim alleged 

by an individual for a violation of this Act are— 

(1) the procedures applicable for a violation of title VII of 

the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.) in the 

case of a claim alleged by such individual for a violation of 

such title; 

(2) the procedures applicable for a violation of section 

302(a)(1) of the Government Employee Rights Act of 1991 (42 

U.S.C. 2000e–16b(a)(1)) in the case of a claim alleged by such 

individual for a violation of such section; 

(3) the procedures applicable for a violation of section 

201(a)(1) of the Congressional Accountability Act of 1995 (2 

U.S.C. 1311(a)(1)) in the case of a claim alleged by such individual for a violation of such section; and 

(4) the procedures applicable for a violation of section 411 

of title 3, United States Code, in the case of a claim alleged by 

such individual for a violation of such section. 

(c) REMEDIES.— 

(1) In any claim alleging a violation of Section 374(a)(1) or 

374(b)(1) of this Act, an individual, or any person acting on behalf of the individual as set forth in Section 375(a) of this Act, 

may be awarded, as appropriate— 

(A) an order enjoining the respondent from engaging 

in the unlawful employment practice; 

(B) reimbursement of costs expended as a result of the 

unlawful employment practice; 

(C) an amount in liquidated damages not to exceed $1,000 for each day of the violation; and 


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(D) reasonable attorney’s fees (including expert fees) 

and costs attributable to the pursuit of a claim under this 

Act, except that no person identified in Section 103(a) of 

this Act shall be eligible to receive attorney’s fees. 

(2) In any claim alleging a violation of any other subsection of this Act, an individual, or any person acting on behalf of the individual as set forth in Section 375(a) of this Act, 

may be awarded, as appropriate, the remedies available for a 

violation of title VII of the Civil Rights Act of 1964 (42 U.S.C. 

2000e et seq.), section 302(a)(1) of the Government Employee 

Rights Act of 1991 (42 U.S.C. 2000e–16b(a)(1)), section 

201(a)(1) of the Congressional Accountability Act of 1995 (2 

U.S.C. 1311(a)(1)), and section 411 of title 3, United States 

Code, except that in a case in which wages, salary, employment benefits, or other compensation have not been denied or 

lost to the individual, damages may be awarded in an amount 

not to exceed $5,000. 

SEC. 376. FEDERAL AND STATE IMMUNITY. 

(a) ABROGATION OF STATE IMMUNITY.—A State shall not be immune under the 11th Amendment to the Constitution from a suit 

brought in a Federal court of competent jurisdiction for a violation 

of this Act. 

(b) WAIVER OF STATE IMMUNITY.— 

(1) IN GENERAL.— 

(A) WAIVER.—A State’s receipt or use of Federal financial assistance for any program or activity of a State shall 

constitute a waiver of sovereign immunity, under the 11th 

Amendment to the Constitution or otherwise, to a suit 

brought by an employee or applicant for employment of 

that program or activity under this Act for a remedy authorized under Section 375(c) of this Act. 

(B) DEFINITION.—In this paragraph, the term ‘‘program or activity’’ has the meaning given the term in section 606 of the Civil Rights Act of 1964 (42 U.S.C. 2000d– 

4a). 

(2) EFFECTIVE DATE.—With respect to a particular program 

or activity, paragraph (1) applies to conduct occurring on or 

after the day, after the date of enactment of this Act, on which 

a State first receives or uses Federal financial assistance for 

that program or activity. 

(c) REMEDIES AGAINST STATE OFFICIALS.—An official of a State 

may be sued in the official capacity of the official by any employee 

or applicant for employment who has complied with the applicable 

procedures of this Act, for relief that is authorized under this Act. 

(d) REMEDIES AGAINST THE UNITED STATES AND THE STATES.— Notwithstanding any other provision of this Act, in an action or administrative proceeding against the United States or a State for a 

violation of this Act, remedies (including remedies at law and in equity) are available for the violation to the same extent as such remedies would be available against a non-governmental entity. 

SEC. 377. RELATIONSHIP TO OTHER LAWS. 

This Act shall not invalidate or limit the rights, remedies, or 

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hibited under any other Federal law or regulation or any law or 

regulation of a State or political subdivision of a State. 

SEC. 378. SEVERABILITY. 

If any provision of this Act, or the application of the provision 

to any person or circumstance, is held to be invalid, the remainder 

of this Act and the application of the provision to any other person 

or circumstances shall not be affected by the invalidity. 

SEC. 379. EFFECTIVE DATE. 

This Act shall take effect on the date of enactment of this Act 

and shall not apply to conduct occurring before the effective date. 

TITLE IV—OFFSETS 

Subtitle A—28 Percent Limitation on Certain Deductions 

and Exclusions 

SEC. 401. 28 PERCENT LIMITATION ON CERTAIN DEDUCTIONS AND EXCLUSIONS. 

(a) IN GENERAL.—Part I 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. 69. LIMITATION ON CERTAIN DEDUCTIONS AND EXCLUSIONS. 

‘‘(a) IN GENERAL.—In the case of an individual for any taxable 

year, if— 

‘‘(1) the taxpayer’s adjusted gross income is above— ‘‘(A) $250,000 in the case of a joint return within the 

meaning of section 6013, ‘‘(B) $225,000 in the case of a head of household return, 

‘‘(C) $125,000 in the case of a married filing separately 

return, or 

‘‘(D) $200,000 in all other cases; and 

‘‘(2) the taxpayer’s adjusted taxable income for such taxable year exceeds the minimum marginal rate amount, 

then the tax imposed under section 1 with respect to such taxpayer 

for such taxable year shall be increased by the amount determined 

under subsection (b). If the taxpayer is subject to tax under section 

55, then in lieu of an increase in tax under section 1, the tax imposed under section 55 with respect to such taxpayer for such taxable year shall be increased by the amount determined under subsection (c). 

‘‘(b) ADDITIONAL AMOUNT.—The amount determined under this 

subsection with respect to any taxpayer for any taxable year is the 

excess (if any) of— 

‘‘(1) the tax which would be imposed under section 1 with 

respect to such taxpayer for such taxable year if ‘adjusted taxable income’ were substituted for ‘taxable income’ each place it 

appears therein, over 

‘‘(2) the sum of— 

‘‘(A) the tax which would be imposed under such section with respect to such taxpayer for such taxable year on 

the greater of— 

‘‘(i) taxable income, or 

‘‘(ii) the minimum marginal rate amount, plus 


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‘‘(B) 28 percent of the excess (if any) of the taxpayer’s 

adjusted taxable income over the greater of— 

‘‘(i) the taxpayer’s taxable income, or 

‘‘(ii) the minimum marginal rate amount. 

‘‘(c) ADDITIONAL AMT AMOUNT.— ‘‘(1) The amount determined under this subsection with respect to any taxpayer for any taxable year is the additional 

amount computed under subsection (b) multiplied by the ratio 

that— 

‘‘(A) the result of— 

‘‘(i) all itemized deductions (before the application 

of section 68), plus 

‘‘(ii) the specified above-the-line deductions and 

specified exclusions, minus 

‘‘(iii) the amount of deductions disallowed under 

section 56(b)(1)(A) and (B), minus 

‘‘(iv) the non-preference disallowed deductions, 

bears to 

‘‘(B) the sum of— 

‘‘(i) the total of itemized deductions (after the application of section 68), plus 

‘‘(ii) the specified above-the-line deductions and 

specified exclusions. 

‘‘(2) If the top of the AMT exemption phase-out range for 

the taxpayer exceeds the minimum marginal rate amount for 

the taxpayer and if the taxpayer’s alternative minimum taxable income does not exceed the top of the AMT exemption 

phase-out range, the taxpayer must increase its additional 

AMT amount by 7 percent of the excess of— 

‘‘(A) the lesser of— 

‘‘(i) the top of the AMT exemption phase-out 

range, or 

‘‘(ii) the taxpayer’s alternative minimum taxable 

income, computed— 

‘‘(I) without regard to any itemized deduction 

or any specified above-the-line deduction, and 

‘‘(II) by including the amount of any specified 

exclusion; over 

‘‘(B) the greater of— 

‘‘(i) the taxpayer’s alternative minimum taxable 

income, or 

‘‘(ii) the minimum marginal rate amount. 

‘‘(d) MINIMUM MARGINAL RATE AMOUNT.—For purposes of this 

section, the term ‘minimum marginal rate amount’ means, with respect to any taxpayer for any taxable year, the highest amount of 

the taxpayer’s taxable income which would be subject to a marginal 

rate of tax under section 1 that is less than 36 percent with respect 

to such taxable year. 

‘‘(e) ADJUSTED TAXABLE INCOME.—For purposes of this section— 

‘‘(1) IN GENERAL.—The term ‘adjusted taxable income’ 

means taxable income computed— 

‘‘(A) without regard to any itemized deduction or any 

specified above-the-line deduction, and 


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‘‘(B) by including in gross income any specified exclusion. 

‘‘(2) SPECIFIED ABOVE-THE-LINE DEDUCTION.—The term 

‘specified above-the-line deduction’ means— 

‘‘(A) the deduction provided under section 162(l) (relating to special rules for health insurance costs of self-employed individuals), 

‘‘(B) the deduction provided under section 199 (relating 

to income attributable to domestic production activities), 

and 

‘‘(C) the deductions provided under the following paragraphs of section 62(a): 

‘‘(i) Paragraph (2) (relating to certain trade and 

business deductions of employees), other than subparagraph (A) thereof. 

‘‘(ii) Paragraph (15) (relating to moving expenses). 

‘‘(iii) Paragraph (16) (relating to Archer MSAs). 

‘‘(iv) Paragraph (17) (relating to interest on education loans). 

‘‘(v) Paragraph (18) (relating to higher education 

expenses). 

‘‘(vi) Paragraph (19) (relating to health savings accounts). 

‘‘(3) SPECIFIED EXCLUSION.—The term ‘specified exclusion’ 

means— 

‘‘(A) any interest excluded under section 103, 

‘‘(B) any exclusion with respect to the cost described in 

section 6051(a)(14) (without regard to subparagraph (B) 

thereof), and 

‘‘(C) any foreign earned income excluded under section 

911. 

‘‘(f) NON-PREFERENCE DISALLOWED DEDUCTIONS.—For purposes 

of this section, the term ‘AMT-allowed deductions’ means all 

itemized deductions disallowed by section 68 multiplied by the 

ratio that— 

‘‘(1) a taxpayer’s itemized deductions for the taxable year 

that are subject to section 68 (that is, not including those excluded under section 68(c)) and that are not limited under section 56(b)(1)(A) or (B), bears to 

‘‘(2) the taxpayer’s itemized deductions for the taxable year 

that are subject to section 68 (that is, not including those excluded under section 68(c)). 

‘‘(g) REGULATIONS.—The Secretary shall prescribe such regulations as may be appropriate to carry out this section, including regulations which provide appropriate adjustments to the additional 

AMT amount.’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years beginning on or after January 1, 2013. 


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Subtitle B—Tax Carried Interest in Investment Partnerships 

as Ordinary Income 

SEC. 411. PARTNERSHIP INTERESTS TRANSFERRED IN CONNECTION 

WITH PERFORMANCE OF SERVICES. 

(a) MODIFICATION TO ELECTION TO INCLUDE PARTNERSHIP INTEREST IN GROSS INCOME IN YEAR OF TRANSFER.—Subsection (c) of 

section 83 of the Internal Revenue Code of 1986 is amended by redesignating paragraph (4) as paragraph (5) and by inserting after 

paragraph (3) the following new paragraph: 

‘‘(4) PARTNERSHIP INTERESTS.—Except as provided by the 

Secretary— 

‘‘(A) IN GENERAL.—In the case of any transfer of an interest in a partnership in connection with the provision of 

services to (or for the benefit of) such partnership— 

‘‘(i) the fair market value of such interest shall be 

treated for purposes of this section as being equal to 

the amount of the distribution which the partner 

would receive if the partnership sold (at the time of 

the transfer) all of its assets at fair market value and 

distributed the proceeds of such sale (reduced by the 

liabilities of the partnership) to its partners in liquidation of the partnership, and 

‘‘(ii) the person receiving such interest shall be 

treated as having made the election under subsection 

(b)(1) unless such person makes an election under this 

paragraph to have such subsection not apply. 

‘‘(B) ELECTION.—The election under subparagraph 

(A)(ii) shall be made under rules similar to the rules of 

subsection (b)(2).’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall apply to interests in partnerships transferred after December 

31, 2012. 

SEC. 412. SPECIAL RULES FOR PARTNERS PROVIDING INVESTMENT 

MANAGEMENT SERVICES TO PARTNERSHIPS. 

(a) IN GENERAL.—Part I of subchapter K of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the 

following new section: 

‘‘SEC. 710. SPECIAL RULES FOR PARTNERS PROVIDING INVESTMENT 

MANAGEMENT SERVICES TO PARTNERSHIPS. 

‘‘(a) TREATMENT OF DISTRIBUTIVE SHARE OF PARTNERSHIP

ITEMS.—For purposes of this title, in the case of an investment 

services partnership interest— 

‘‘(1) IN GENERAL.—Notwithstanding section 702(b)— 

‘‘(A) an amount equal to the net capital gain with respect to such interest for any partnership taxable year 

shall be treated as ordinary income, and 

‘‘(B) subject to the limitation of paragraph (2), an 

amount equal to the net capital loss with respect to such 

interest for any partnership taxable year shall be treated 

as an ordinary loss. 

‘‘(2) RECHARACTERIZATION OF LOSSES LIMITED TO RECHARACTERIZED GAINS.—The amount treated as ordinary loss 


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under paragraph (1)(B) for any taxable year shall not exceed 

the excess (if any) of— 

‘‘(A) the aggregate amount treated as ordinary income 

under paragraph (1)(A) with respect to the investment 

services partnership interest for all preceding partnership 

taxable years to which this section applies, over 

‘‘(B) the aggregate amount treated as ordinary loss 

under paragraph (1)(B) with respect to such interest for all 

preceding partnership taxable years to which this section 

applies. 

‘‘(3) ALLOCATION TO ITEMS OF GAIN AND LOSS.— ‘‘(A) NET CAPITAL GAIN.—The amount treated as ordinary income under paragraph (1)(A) shall be allocated ratably among the items of long-term capital gain taken into 

account in determining such net capital gain. 

‘‘(B) NET CAPITAL LOSS.—The amount treated as ordinary loss under paragraph (1)(B) shall be allocated ratably 

among the items of long-term capital loss and short-term 

capital loss taken into account in determining such net 

capital loss. 

‘‘(4) TERMS RELATING TO CAPITAL GAINS AND LOSSES.—For 

purposes of this section— 

‘‘(A) IN GENERAL.—Net capital gain, long-term capital 

gain, and long-term capital loss, with respect to any investment services partnership interest for any taxable 

year, shall be determined under section 1222, except that 

such section shall be applied— 

‘‘(i) without regard to the recharacterization of any 

item as ordinary income or ordinary loss under this 

section, 

‘‘(ii) by only taking into account items of gain and 

loss taken into account by the holder of such interest 

under section 702 with respect to such interest for 

such taxable year, 

‘‘(iii) by treating property which is taken into account in determining gains and losses to which section 

1231 applies as capital assets held for more than 1 

year, and 

‘‘(iv) without regard to section 1202. 

‘‘(B) NET CAPITAL LOSS.—The term ‘net capital loss’ 

means the excess of the losses from sales or exchanges of 

capital assets over the gains from such sales or exchanges. 

Rules similar to the rules of clauses (i) through (iv) of subparagraph (A) shall apply for purposes of the preceding 

sentence. 

‘‘(5) SPECIAL RULES FOR DIVIDENDS.— 

‘‘(A) INDIVIDUALS.—Any dividend allocated to any investment services partnership interest shall not be treated 

as qualified dividend income for purposes of section 1(h). 

‘‘(B) CORPORATIONS.—No deduction shall be allowed 

under section 243 or 245 with respect to any dividend allocated to any investment services partnership interest. 

‘‘(b) DISPOSITIONS OF PARTNERSHIP INTERESTS.— 

‘‘(1) GAIN.— 


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‘‘(A) IN GENERAL.—Any gain on the disposition of an 

investment services partnership interest shall be— 

‘‘(i) treated as ordinary income, and 

‘‘(ii) recognized notwithstanding any other provision of this subtitle. 

‘‘(B) EXCEPTIONS—CERTAIN TRANSFERS TO CHARITIES

AND RELATED PERSONS.—Subparagraph (A) shall not apply 

to— 

‘‘(i) a disposition by gift, 

‘‘(ii) a transfer at death, or 

‘‘(iii) other disposition identified by the Secretary 

as a disposition with respect to which it would be inconsistent with the purposes of this section to apply 

subparagraph (A), 

if such gift, transfer, or other disposition is to an organization described in section 170(b)(1)(A) (other than any organization described in section 509(a)(3) or any fund or account described in section 4966(d)(2)) or a person with respect to whom the transferred interest is an investment 

services partnership interest. 

‘‘(2) LOSS.—Any loss on the disposition of an investment 

services partnership interest shall be treated as an ordinary 

loss to the extent of the excess (if any) of— 

‘‘(A) the aggregate amount treated as ordinary income 

under subsection (a) with respect to such interest for all 

partnership taxable years to which this section applies, 

over 

‘‘(B) the aggregate amount treated as ordinary loss 

under subsection (a) with respect to such interest for all 

partnership taxable years to which this section applies. 

‘‘(3) ELECTION WITH RESPECT TO CERTAIN EXCHANGES.— Paragraph (1)(A)(ii) shall not apply to the contribution of an investment services partnership interest to a partnership in exchange for an interest in such partnership if— 

‘‘(A) the taxpayer makes an irrevocable election to 

treat the partnership interest received in the exchange as 

an investment services partnership interest, and 

‘‘(B) the taxpayer agrees to comply with such reporting 

and recordkeeping requirements as the Secretary may prescribe. 

‘‘(4) DISTRIBUTIONS OF PARTNERSHIP PROPERTY.— 

‘‘(A) IN GENERAL.—In the case of any distribution of 

property by a partnership with respect to any investment 

services partnership interest held by a partner, the partner receiving such property shall recognize gain equal to 

the excess (if any) of— 

‘‘(i) the fair market value of such property at the 

time of such distribution, over 

‘‘(ii) the adjusted basis of such property in the 

hands of such partner (determined without regard to 

subparagraph (C)). 

‘‘(B) TREATMENT OF GAIN AS ORDINARY INCOME.—Any 

gain recognized by such partner under subparagraph (A) 

shall be treated as ordinary income to the same extent and 


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in the same manner as the increase in such partner’s distributive share of the taxable income of the partnership 

would be treated under subsection (a) if, immediately prior 

to the distribution, the partnership had sold the distributed property at fair market value and all of the gain from 

such disposition were allocated to such partner. For purposes of applying paragraphs (2) and (3) of subsection (a), 

any gain treated as ordinary income under this subparagraph shall be treated as an amount treated as ordinary 

income under subsection (a)(1)(A). 

‘‘(C) ADJUSTMENT OF BASIS.—In the case a distribution 

to which subparagraph (A) applies, the basis of the distributed property in the hands of the distributee partner shall 

be the fair market value of such property. 

‘‘(D) SPECIAL RULES WITH RESPECT TO MERGERS, DIVISIONS, AND TECHNICAL TERMINATIONS.—In the case of a 

taxpayer which satisfies requirements similar to the requirements of subparagraphs (A) and (B) of paragraph (3), 

this paragraph and paragraph (1)(A)(ii) shall not apply to 

the distribution of a partnership interest if such distribution is in connection with a contribution (or deemed contribution) of any property of the partnership to which section 721 applies pursuant to a transaction described in 

paragraph (1)(B) or (2) of section 708(b). 

‘‘(c) INVESTMENT SERVICES PARTNERSHIP INTEREST.—For purposes of this section— 

‘‘(1) IN GENERAL.—The term ‘investment services partnership interest’ means any interest in an investment partnership 

acquired or held by any person in connection with the conduct 

of a trade or business described in paragraph (2) by such person (or any person related to such person). An interest in an 

investment partnership held by any person— 

‘‘(A) shall not be treated as an investment services 

partnership interest for any period before the first date on 

which it is so held in connection with such a trade or business, 

‘‘(B) shall not cease to be an investment services partnership interest merely because such person holds such interest other than in connection with such a trade or business, and 

‘‘(C) shall be treated as an investment services partnership interest if acquired from a related person in whose 

hands such interest was an investment services partnership interest. 

‘‘(2) BUSINESSES TO WHICH THIS SECTION APPLIES.—A trade 

or business is described in this paragraph if such trade or business primarily involves the performance of any of the following 

services with respect to assets held (directly or indirectly) by 

the investment partnership referred to in paragraph (1): 

‘‘(A) Advising as to the advisability of investing in, 

purchasing, or selling any specified asset. 

‘‘(B) Managing, acquiring, or disposing of any specified 

asset. 


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‘‘(C) Arranging financing with respect to acquiring 

specified assets. 

‘‘(D) Any activity in support of any service described in 

subparagraphs (A) through (C). 

‘‘(3) INVESTMENT PARTNERSHIP.— 

‘‘(A) IN GENERAL.—The term ‘investment partnership’ 

means any partnership if, at the end of any calendar quarter ending after December 31, 2012— 

‘‘(i) substantially all of the assets of the partnership are specified assets (determined without regard to 

any section 197 intangible within the meaning of section 197(d)), and 

‘‘(ii) more than half of the contributed capital of 

the partnership is attributable to contributions of 

property by one or more persons in exchange for interests in the partnership which (in the hands of such 

persons) constitute property held for the production of 

income. 

‘‘(B) SPECIAL RULES FOR DETERMINING IF PROPERTY

HELD FOR THE PRODUCTION OF INCOME.—Except as otherwise provided by the Secretary, for purposes of determining whether any interest in a partnership constitutes 

property held for the production of income under subparagraph (A)(ii)— 

‘‘(i) any election under subsection (e) or (f) of section 475 shall be disregarded, and 

‘‘(ii) paragraph (5)(B) shall not apply. 

‘‘(C) ANTIABUSE RULES.—The Secretary may issue regulations or other guidance which prevent the avoidance of 

the purposes of subparagraph (A), including regulations or 

other guidance which treat convertible and contingent debt 

(and other debt having the attributes of equity) as a capital interest in the partnership. 

‘‘(D) CONTROLLED GROUPS OF ENTITIES.— 

‘‘(i) IN GENERAL.—In the case of a controlled group 

of entities, if an interest in the partnership received in 

exchange for a contribution to the capital of the partnership by any member of such controlled group would 

(in the hands of such member) constitute property not 

held for the production of income, then any interest in 

such partnership held by any member of such group 

shall be treated for purposes of subparagraph (A) as 

constituting (in the hands of such member) property 

not held for the production of income. 

‘‘(ii) CONTROLLED GROUP OF ENTITIES.—For purposes of clause (i), the term ‘controlled group of entities’ means a controlled group of corporations as defined in section 1563(a)(1), applied without regard to 

subsections (a)(4) and (b)(2) of section 1563. A partnership or any other entity (other than a corporation) 

shall be treated as a member of a controlled group of 

entities if such entity is controlled (within the meaning of section 954(d)(3)) by members of such group (inVerDate Mar 15 2010 06:20 Sep 14, 2011 Jkt 099011 PO 00000 Frm 00193 Fmt 6602 Sfmt 6601 E:\HR\OC\HD053.XXX HD053

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cluding any entity treated as a member of such group 

by reason of this sentence). 

‘‘(4) SPECIFIED ASSET.—The term ‘specified asset’ means securities (as defined in section 475(c)(2) without regard to the 

last sentence thereof), real estate held for rental or investment, 

interests in partnerships, commodities (as defined in section 

475(e)(2)), cash or cash equivalents, or options or derivative 

contracts with respect to any of the foregoing. 

‘‘(5) RELATED PERSONS.— ‘‘(A) IN GENERAL.—A person shall be treated as related 

to another person if the relationship between such persons 

is described in section 267(b) or 707(b). 

‘‘(B) ATTRIBUTION OF PARTNER SERVICES.—Any service 

described in paragraph (2) which is provided by a partner 

of a partnership shall be treated as also provided by such 

partnership. 

‘‘(d) EXCEPTION FOR CERTAIN CAPITAL INTERESTS.— ‘‘(1) IN GENERAL.—In the case of any portion of an investment services partnership interest which is a qualified capital 

interest, all items of gain and loss (and any dividends) which 

are allocated to such qualified capital interest shall not be 

taken into account under subsection (a) if— 

‘‘(A) allocations of items are made by the partnership 

to such qualified capital interest in the same manner as 

such allocations are made to other qualified capital interests held by partners who do not provide any services described in subsection (c)(2) and who are not related to the 

partner holding the qualified capital interest, and 

‘‘(B) the allocations made to such other interests are 

significant compared to the allocations made to such qualified capital interest. 

‘‘(2) AUTHORITY TO PROVIDE EXCEPTIONS TO ALLOCATION RE- QUIREMENTS.—To the extent provided by the Secretary in regulations or other guidance— 

‘‘(A) ALLOCATIONS TO PORTION OF QUALIFIED CAPITAL

INTEREST.—Paragraph (1) may be applied separately with 

respect to a portion of a qualified capital interest. 

‘‘(B) NO OR INSIGNIFICANT ALLOCATIONS TO NON- SERVICE PROVIDERS.—In any case in which the requirements of paragraph (1)(B) are not satisfied, items of gain 

and loss (and any dividends) shall not be taken into account under subsection (a) to the extent that such items 

are properly allocable under such regulations or other 

guidance to qualified capital interests. 

‘‘(C) ALLOCATIONS TO SERVICE PROVIDERS’ QUALIFIED

CAPITAL INTERESTS WHICH ARE LESS THAN OTHER ALLOCATIONS.—Allocations shall not be treated as failing to meet 

the requirement of paragraph (1)(A) merely because the allocations to the qualified capital interest represent a lower 

return than the allocations made to the other qualified 

capital interests referred to in such paragraph. 

‘‘(3) SPECIAL RULE FOR CHANGES IN SERVICES AND CAPITAL

CONTRIBUTIONS.—In the case of an interest in a partnership 

which was not an investment services partnership interest and 


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which, by reason of a change in the services with respect to assets held (directly or indirectly) by the partnership or by reason of a change in the capital contributions to such partnership, becomes an investment services partnership interest, the 

qualified capital interest of the holder of such partnership interest immediately after such change shall not, for purposes of 

this subsection, be less than the fair market value of such interest (determined immediately before such change). 

‘‘(4) SPECIAL RULE FOR TIERED PARTNERSHIPS.—Except as 

otherwise provided by the Secretary, in the case of tiered partnerships, all items which are allocated in a manner which 

meets the requirements of paragraph (1) to qualified capital interests in a lower-tier partnership shall retain such character 

to the extent allocated on the basis of qualified capital interests in any upper-tier partnership. 

‘‘(5) EXCEPTION FOR NO-SELF-CHARGED CARRY AND MANAGEMENT FEE PROVISIONS.—Except as otherwise provided by the 

Secretary, an interest shall not fail to be treated as satisfying 

the requirement of paragraph (1)(A) merely because the allocations made by the partnership to such interest do not reflect 

the cost of services described in subsection (c)(2) which are provided (directly or indirectly) to the partnership by the holder 

of such interest (or a related person). 

‘‘(6) SPECIAL RULE FOR DISPOSITIONS.—In the case of any 

investment services partnership interest any portion of which 

is a qualified capital interest, subsection (b) shall not apply to 

so much of any gain or loss as bears the same proportion to 

the entire amount of such gain or loss as— 

‘‘(A) the distributive share of gain or loss that would 

have been allocated to the qualified capital interest (consistent with the requirements of paragraph (1)) if the partnership had sold all of its assets at fair market value immediately before the disposition, bears to 

‘‘(B) the distributive share of gain or loss that would 

have been so allocated to the investment services partnership interest of which such qualified capital interest is a 

part. 

‘‘(7) QUALIFIED CAPITAL INTEREST.—For purposes of this 

subsection— 

‘‘(A) IN GENERAL.—The term ‘qualified capital interest’ 

means so much of a partner’s interest in the capital of the 

partnership as is attributable to— 

‘‘(i) the fair market value of any money or other 

property contributed to the partnership in exchange 

for such interest (determined without regard to section 

752(a)), 

‘‘(ii) any amounts which have been included in 

gross income under section 83 with respect to the 

transfer of such interest, and 

‘‘(iii) the excess (if any) of— 

‘‘(I) any items of income and gain taken into 

account under section 702 with respect to such interest, over 


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‘‘(II) any items of deduction and loss so taken 

into account. 

‘‘(B) ADJUSTMENT TO QUALIFIED CAPITAL INTEREST.— 

‘‘(i) DISTRIBUTIONS AND LOSSES.—The qualified 

capital interest shall be reduced by distributions from 

the partnership with respect to such interest and by 

the excess (if any) of the amount described in subparagraph (A)(iii)(II) over the amount described in subparagraph (A)(iii)(I). 

‘‘(ii) SPECIAL RULE FOR CONTRIBUTIONS OF PROPERTY.—In the case of any contribution of property described in subparagraph (A)(i) with respect to which 

the fair market value of such property is not equal to 

the adjusted basis of such property immediately before 

such contribution, proper adjustments shall be made 

to the qualified capital interest to take into account 

such difference consistent with such regulations or 

other guidance as the Secretary may provide. 

‘‘(C) TECHNICAL TERMINATIONS, ETC., DISREGARDED.— 

No increase or decrease in the qualified capital interest of 

any partner shall result from a termination, merger, consolidation, or division described in section 708, or any similar transaction. 

‘‘(8) TREATMENT OF CERTAIN LOANS.— 

‘‘(A) PROCEEDS OF PARTNERSHIP LOANS NOT TREATED

AS QUALIFIED CAPITAL INTEREST OF SERVICE PROVIDING

PARTNERS.—For purposes of this subsection, an investment 

services partnership interest shall not be treated as a 

qualified capital interest to the extent that such interest is 

acquired in connection with the proceeds of any loan or 

other advance made or guaranteed, directly or indirectly, 

by any other partner or the partnership (or any person related to any such other partner or the partnership). The 

preceding sentence shall not apply to the extent the loan 

or other advance is repaid before January 1, 2013 unless 

such repayment is made with the proceeds of a loan or 

other advance described in the preceding sentence. 

‘‘(B) REDUCTION IN ALLOCATIONS TO QUALIFIED CAPITAL

INTERESTS FOR LOANS FROM NONSERVICE-PROVIDING PARTNERS TO THE PARTNERSHIP.—For purposes of this subsection, any loan or other advance to the partnership made 

or guaranteed, directly or indirectly, by a partner not providing services described in subsection (c)(2) to the partnership (or any person related to such partner) shall be 

taken into account in determining the qualified capital interests of the partners in the partnership. 

‘‘(e) OTHER INCOME AND GAIN IN CONNECTION WITH INVESTMENT MANAGEMENT SERVICES.— 

‘‘(1) IN GENERAL.—If— 

‘‘(A) a person performs (directly or indirectly) investment management services for any investment entity, 

‘‘(B) such person holds (directly or indirectly) a disqualified interest with respect to such entity, and 


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‘‘(C) the value of such interest (or payments thereunder) is substantially related to the amount of income or 

gain (whether or not realized) from the assets with respect 

to which the investment management services are performed, 

any income or gain with respect to such interest shall be treated as ordinary income. Rules similar to the rules of subsections 

(a)(5) and (d) shall apply for purposes of this subsection. 

‘‘(2) DEFINITIONS.—For purposes of this subsection— 

‘‘(A) DISQUALIFIED INTEREST.— 

‘‘(i) IN GENERAL.—The term ‘disqualified interest’ 

means, with respect to any investment entity— 

‘‘(I) any interest in such entity other than indebtedness, 

‘‘(II) convertible or contingent debt of such entity, 

‘‘(III) any option or other right to acquire 

property described in subclause (I) or (II), and 

‘‘(IV) any derivative instrument entered into 

(directly or indirectly) with such entity or any investor in such entity. 

‘‘(ii) EXCEPTIONS.—Such term shall not include— 

‘‘(I) a partnership interest, 

‘‘(II) except as provided by the Secretary, any 

interest in a taxable corporation, and 

‘‘(III) except as provided by the Secretary, 

stock in an S corporation. 

‘‘(B) TAXABLE CORPORATION.—The term ‘taxable corporation’ means— 

‘‘(i) a domestic C corporation, or 

‘‘(ii) a foreign corporation substantially all of the 

income of which is— 

‘‘(I) effectively connected with the conduct of a 

trade or business in the United States, or 

‘‘(II) subject to a comprehensive foreign income tax (as defined in section 457A(d)(2)). 

‘‘(C) INVESTMENT MANAGEMENT SERVICES.—The term 

‘investment management services’ means a substantial 

quantity of any of the services described in subsection 

(c)(2). 

‘‘(D) INVESTMENT ENTITY.—The term ‘investment entity’ means any entity which, if it were a partnership, would 

be an investment partnership. 

‘‘(f) REGULATIONS.—The Secretary shall prescribe such regulations or other guidance as is necessary or appropriate to carry out 

the purposes of this section, including regulations or other guidance to— 

‘‘(1) provide modifications to the application of this section 

(including treating related persons as not related to one another) to the extent such modification is consistent with the 

purposes of this section, and 

‘‘(2) coordinate this section with the other provisions of this 

title. 


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‘‘(g) CROSS REFERENCE.—For 40 percent penalty on certain underpayments due to the avoidance of this section, see section 

6662.’’. 

(b) APPLICATION OF SECTION 751 TO INDIRECT DISPOSITIONS OF

INVESTMENT SERVICES PARTNERSHIP INTERESTS.— 

(1) IN GENERAL.—Subsection (a) of section 751 of the Internal Revenue Code of 1986 is amended by striking ‘‘or’’ at the 

end of paragraph (1), by inserting ‘‘or’’ at the end of paragraph 

(2), and by inserting after paragraph (2) the following new 

paragraph: 

‘‘(3) investment services partnership interests held by the 

partnership,’’. 

(2) CERTAIN DISTRIBUTIONS TREATED AS SALES OR EXCHANGES.—Subparagraph (A) of section 751(b)(1) of the Internal Revenue Code of 1986 is amended by striking ‘‘or’’ at the 

end of clause (i), by inserting ‘‘or’’ at the end of clause (ii), and 

by inserting after clause (ii) the following new clause: 

‘‘(iii) investment services partnership interests 

held by the partnership,’’. 

(3) APPLICATION OF SPECIAL RULES IN THE CASE OF TIERED

PARTNERSHIPS.—Subsection (f) of section 751 of the Internal 

Revenue Code of 1986 is amended by striking ‘‘or’’ at the end 

of paragraph (1), by inserting ‘‘or’’ at the end of paragraph (2), 

and by inserting after paragraph (2) the following new paragraph: 

‘‘(3) investment services partnership interests held by the 

partnership,’’. 

(4) INVESTMENT SERVICES PARTNERSHIP INTERESTS; QUALIFIED CAPITAL INTERESTS.—Section 751 of the Internal Revenue 

Code of 1986 is amended by adding at the end the following 

new subsection: 

‘‘(g) INVESTMENT SERVICES PARTNERSHIP INTERESTS.—For purposes of this section— 

‘‘(1) IN GENERAL.—The term ‘investment services partnership interest’ has the meaning given such term by section 

710(c). 

‘‘(2) ADJUSTMENTS FOR QUALIFIED CAPITAL INTERESTS.—The 

amount to which subsection (a) applies by reason of paragraph 

(3) thereof shall not include so much of such amount as is attributable to any portion of the investment services partnership interest which is a qualified capital interest (determined 

under rules similar to the rules of section 710(d)). 

‘‘(3) RECOGNITION OF GAINS.—Any gain with respect to 

which subsection (a) applies by reason of paragraph (3) thereof 

shall be recognized notwithstanding any other provision of this 

title. 

‘‘(4) COORDINATION WITH INVENTORY ITEMS.—An investment services partnership interest held by the partnership 

shall not be treated as an inventory item of the partnership. 

‘‘(5) PREVENTION OF DOUBLE COUNTING.—Under regulations or other guidance prescribed by the Secretary, subsection 

(a)(3) shall not apply with respect to any amount to which section 710 applies.’’. 


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(c) TREATMENT FOR PURPOSES OF SECTION 7704.—Subsection 

(d) of section 7704 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: 

‘‘(6) INCOME FROM CERTAIN CARRIED INTERESTS NOT QUALI- FIED.— ‘‘(A) IN GENERAL.—Specified carried interest income 

shall not be treated as qualifying income. 

‘‘(B) SPECIFIED CARRIED INTEREST INCOME.—For purposes of this paragraph— 

‘‘(i) IN GENERAL.—The term ‘specified carried interest income’ means— 

‘‘(I) any item of income or gain allocated to an 

investment services partnership interest (as defined in section 710(c)) held by the partnership, 

‘‘(II) any gain on the disposition of an investment services partnership interest (as so defined) 

or a partnership interest to which (in the hands of 

the partnership) section 751 applies, and 

‘‘(III) any income or gain taken into account 

by the partnership under subsection (b)(4) or (e) of 

section 710. 

‘‘(ii) EXCEPTION FOR QUALIFIED CAPITAL INTER- ESTS.—A rule similar to the rule of section 710(d) shall 

apply for purposes of clause (i). 

‘‘(C) COORDINATION WITH OTHER PROVISIONS.—Subparagraph (A) shall not apply to any item described in 

paragraph (1)(E) (or so much of paragraph (1)(F) as relates 

to paragraph (1)(E)). 

‘‘(D) SPECIAL RULES FOR CERTAIN PARTNERSHIPS.— ‘‘(i) CERTAIN PARTNERSHIPS OWNED BY REAL ES- TATE INVESTMENT TRUSTS.—Subparagraph (A) shall 

not apply in the case of a partnership which meets 

each of the following requirements: 

‘‘(I) Such partnership is treated as publicly 

traded under this section solely by reason of interests in such partnership being convertible into interests in a real estate investment trust which is 

publicly traded. 

‘‘(II) 50 percent or more of the capital and 

profits interests of such partnership are owned, 

directly or indirectly, at all times during the taxable year by such real estate investment trust (determined with the application of section 267(c)). 

‘‘(III) Such partnership meets the requirements of paragraphs (2), (3), and (4) of section 

856(c). 

‘‘(ii) CERTAIN PARTNERSHIPS OWNING OTHER PUB- LICLY TRADED PARTNERSHIPS.—Subparagraph (A) shall 

not apply in the case of a partnership which meets 

each of the following requirements: 

‘‘(I) Substantially all of the assets of such 

partnership consist of interests in one or more 

publicly traded partnerships (determined without 

regard to subsection (b)(2)). 


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‘‘(II) Substantially all of the income of such 

partnership is ordinary income or section 1231 

gain (as defined in section 1231(a)(3)). 

‘‘(E) TRANSITIONAL RULE.—Subparagraph (A) shall not 

apply to any taxable year of the partnership beginning before the date which is 10 years after January 1, 2013.’’. 

(d) IMPOSITION OF PENALTY ON UNDERPAYMENTS.— (1) IN GENERAL.—Subsection (b) of section 6662 of the Internal Revenue Code of 1986 is amended by inserting after 

paragraph (7) the following new paragraph: 

‘‘(8) The application of section 710(e) or the regulations or 

other guidance prescribed under section 710(h) to prevent the 

avoidance of the purposes of section 710.’’. 

(2) AMOUNT OF PENALTY.— (A) IN GENERAL.—Section 6662 of the Internal Revenue Code of 1986 is amended by adding at the end the 

following new subsection: 

‘‘(k) INCREASE IN PENALTY IN CASE OF PROPERTY TRANSFERRED

FOR INVESTMENT MANAGEMENT SERVICES.—In the case of any portion of an underpayment to which this section applies by reason of 

subsection (b)(8), subsection (a) shall be applied with respect to 

such portion by substituting ‘40 percent’ for ‘20 percent’.’’. 

(B) CONFORMING AMENDMENT.—Subparagraph (B) of 

section 6662A(e)(2) is amended by striking ‘‘or (i)’’ and inserting ‘‘, (i), or (k)’’. 

(3) SPECIAL RULES FOR APPLICATION OF REASONABLE CAUSE

EXCEPTION.—Subsection (c) of section 6664 is amended— 

(A) by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively; 

(B) by striking ‘‘paragraph (3)’’ in paragraph (5)(A), as 

so redesignated, and inserting ‘‘paragraph (4)’’; and 

(C) by inserting after paragraph (2) the following new 

paragraph: 

‘‘(3) SPECIAL RULE FOR UNDERPAYMENTS ATTRIBUTABLE TO

INVESTMENT MANAGEMENT SERVICES.— ‘‘(A) IN GENERAL.—Paragraph (1) shall not apply to 

any portion of an underpayment to which section 6662 applies by reason of subsection (b)(8) unless— 

‘‘(i) the relevant facts affecting the tax treatment 

of the item are adequately disclosed, 

‘‘(ii) there is or was substantial authority for such 

treatment, and 

‘‘(iii) the taxpayer reasonably believed that such 

treatment was more likely than not the proper treatment. 

‘‘(B) RULES RELATING TO REASONABLE BELIEF.—Rules 

similar to the rules of subsection (d)(3) shall apply for purposes of subparagraph (A)(iii).’’. 

(e) INCOME AND LOSS FROM INVESTMENT SERVICES PARTNER- SHIP INTERESTS TAKEN INTO ACCOUNT IN DETERMINING NET EARN- INGS FROM SELF-EMPLOYMENT.— 

(1) INTERNAL REVENUE CODE.— (A) IN GENERAL.—Section 1402(a) of the Internal Revenue Code of 1986 is amended by striking ‘‘and’’ at the end 


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of paragraph (16), by striking the period at the end of 

paragraph (17) and inserting ‘‘; and’’, and by inserting 

after paragraph (17) the following new paragraph: 

‘‘(18) notwithstanding the preceding provisions of this subsection, in the case of any individual engaged in the trade or 

business of providing services described in section 710(c)(2) 

with respect to any entity, investment services partnership income or loss (as defined in subsection (m)) of such individual 

with respect to such entity shall be taken into account in determining the net earnings from self-employment of such individual.’’. 

(B) INVESTMENT SERVICES PARTNERSHIP INCOME OR

LOSS.—Section 1402 of the Internal Revenue Code is 

amended by adding at the end the following new subsection: 

‘‘(m) INVESTMENT SERVICES PARTNERSHIP INCOME OR LOSS.— For purposes of subsection (a)— 

‘‘(1) IN GENERAL.—The term ‘investment services partnership income or loss’ means, with respect to any investment 

services partnership interest (as defined in section 710(c)), the 

net of— 

‘‘(A) the amounts treated as ordinary income or ordinary loss under subsections (b) and (e) of section 710 with 

respect to such interest, 

‘‘(B) all items of income, gain, loss, and deduction allocated to such interest, and 

‘‘(C) the amounts treated as realized from the sale or 

exchange of property other than a capital asset under section 751 with respect to such interest. 

‘‘(2) EXCEPTION FOR QUALIFIED CAPITAL INTERESTS.—A rule 

similar to the rule of section 710(d) shall apply for purposes of 

applying paragraph (1)(B)(ii).’’. 

(2) SOCIAL SECURITY ACT.—Section 211(a) of the Social Security Act is amended by striking ‘‘and’’ at the end of paragraph (15), by striking the period at the end of paragraph (16) 

and inserting ‘‘; and’’, and by inserting after paragraph (16) the 

following new paragraph: 

‘‘(17) Notwithstanding the preceding provisions of this subsection, in the case of any individual engaged in the trade or 

business of providing services described in section 710(c)(2) of 

the Internal Revenue Code of 1986 with respect to any entity, 

investment services partnership income or loss (as defined in 

section 1402(m) of such Code) shall be taken into account in 

determining the net earnings from self-employment of such individual.’’. 

(f) CONFORMING AMENDMENTS.— 

(1) Subsection (d) of section 731 of the Internal Revenue 

Code of 1986 is amended by inserting ‘‘section 710(b)(4) (relating to distributions of partnership property),’’ after ‘‘to the extent otherwise provided by’’. 

(2) Section 741 of the Internal Revenue Code of 1986 is 

amended by inserting ‘‘or section 710 (relating to special rules 

for partners providing investment management services to 

partnerships)’’ before the period at the end. 


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(3) The table of sections for part I of subchapter K of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: 

‘‘Sec. 710. Special rules for partners providing investment management services to 

partnerships.’’. 

(g) EFFECTIVE DATE.— (1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall apply to 

taxable years ending after December 31, 2012. 

(2) PARTNERSHIP TAXABLE YEARS WHICH INCLUDE EFFEC- TIVE DATE.—In applying section 710(a) of the Internal Revenue 

Code of 1986 (as added by this section) in the case of any partnership taxable year which includes January 1, 2013, the 

amount of the net income referred to in such section shall be 

treated as being the lesser of the net income for the entire 

partnership taxable year or the net income determined by only 

taking into account items attributable to the portion of the 

partnership taxable year which is after such date. 

(3) DISPOSITIONS OF PARTNERSHIP INTERESTS.— 

(A) IN GENERAL.—Section 710(b) of such Code (as 

added by this section) shall apply to dispositions and distributions after December 31, 2012. 

(B) INDIRECT DISPOSITIONS.—The amendments made 

by subsection (b) shall apply to transactions after December 31, 2012. 

(4) OTHER INCOME AND GAIN IN CONNECTION WITH INVESTMENT MANAGEMENT SERVICES.—Section 710(e) of such Code (as 

added by this section) shall take effect on January 1, 2013. 

Subtitle C—Close Loophole for Corporate Jet Depreciation 

SECTION 421. GENERAL AVIATION AIRCRAFT TREATED AS 7-YEAR 

PROPERTY. 

(a) IN GENERAL.—Subparagraph (C) of section 168(e)(3) of the 

Internal Revenue Code of 1986 (relating to classification of certain 

property) is amended by striking ‘‘and’’ at the end of clause (iv), by 

redesignating clause (v) as clause (vi), and by inserting after clause 

(iv) the following new clause: 

‘‘(v) any general aviation aircraft, and’’. 

(b) CLASS LIFE.—Paragraph (3) of section 168(g) Internal Revenue Code of 1986 is amended by inserting after subparagraph (E) 

the following new subparagraph: 

‘‘(F) GENERAL AVIATION AIRCRAFT.—In the case of any 

general aviation aircraft, the recovery period used for purposes of paragraph (2) shall be 12 years.’’. 

(c) GENERAL AVIATION AIRCRAFT.—Subsection (i) of section 168 

Internal Revenue Code of 1986 is amended by inserting after paragraph (19) the following new paragraph: 

‘‘(20) GENERAL AVIATION AIRCRAFT.—The term ‘general 

aviation aircraft’ means any airplane or helicopter (including 

airframes and engines) not used in commercial or contract carrying of passengers or freight, but which primarily engages in 

the carrying of passengers.’’. 

(d) EFFECTIVE DATE.—This section shall be effective for property placed in service after December 31, 2012. 


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Subtitle D—Repeal Oil Subsidies 

SEC. 431. REPEAL OF DEDUCTION FOR INTANGIBLE DRILLING AND 

DEVELOPMENT COSTS IN THE CASE OF OIL AND GAS 

WELLS. 

(a) IN GENERAL.—Section 263(c) of the Internal Revenue Code 

of 1986 (relating to intangible drilling and development costs) is 

amended by adding at the end the following new sentence: ‘‘This 

subsection shall not apply in the case of oil and gas wells with respect to amounts paid or incurred after December 31, 2012.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to amounts paid or incurred after December 31, 2012. 

SEC. 432. REPEAL OF DEDUCTION FOR TERTIARY INJECTANTS. 

(a) IN GENERAL.—Part VI of subchapter B of chapter 1 of the 

Internal Revenue Code of 1986 (relating to itemized deductions for 

individuals and corporations) is amended by striking section 193 

(relating to tertiary injectants). 

(b) CLERICAL AMENDMENT.—The table of sections for part VI of 

subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 

amended by striking the item relating to section 193. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to amounts paid or incurred after December 31, 2012. 

SEC. 433. REPEAL OF PERCENTAGE DEPLETION FOR OIL AND GAS 

WELLS. 

(a) IN GENERAL.—Section 613A of the Internal Revenue Code 

of 1986 (relating to limitation on percentage depletion in the case 

of oil and gas wells) is amended to read as follows: 

‘‘SEC. 613A. PERCENTAGE DEPLETION NOT ALLOWED IN CASE OF OIL 

AND GAS WELLS. 

‘‘The allowance for depletion under section 611 with respect to 

any oil and gas well shall be computed without regard to section 

613.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to taxable years beginning after December 31, 2012. 

SEC. 434. SECTION 199 DEDUCTION NOT ALLOWED WITH RESPECT TO 

OIL, NATURAL GAS, OR PRIMARY PRODUCTS THEREOF. 

(a) IN GENERAL.—Subparagraph (B) of section 199(c)(4) of the 

Internal Revenue Code of 1986 (relating to income attributable to 

domestic production activities) is amended— 

(1) by striking ‘‘or’’ at the end of clause (ii), 

(2) by striking the period at the end of clause (iii) and inserting in lieu thereof ‘‘, or’’, and 

(3) by adding at the end thereof the following new clause: 

‘‘(iv) the production, refining, processing, transportation, or distribution of oil, natural gas, or any primary product (within the meaning of subsection (d)(9)) 

thereof.’’. 

(b) CONFORMING AMENDMENT.—Paragraph (9) of section 199(d) 

is amended to read as follows: 

‘‘(9) PRIMARY PRODUCT.—For purposes of subsection 

(c)(4)(B)(iv), the term ‘primary product’ has the same meaning 

as when used in section 927(a)(2)(C) as in effect before its repeal.’’. 


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(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years beginning after December 31, 2012. 

SEC. 435. REPEAL OIL AND GAS WORKING INTEREST EXCEPTION TO 

PASSIVE ACTIVITY RULES. 

(a) IN GENERAL.—Paragraph (3) of section 469(c) of the Internal Revenue Code of 1986 (relating to passive activity defined) is 

amended by adding at the end thereof the following new subparagraph— 

‘‘(C) TERMINATION.—Subparagraph (A) shall not apply 

for any taxable year beginning after December 31 2012.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to taxable years beginning after December 31, 2012. 

SEC. 436. UNIFORM SEVEN-YEAR AMORTIZATION FOR GEOLOGICAL 

AND GEOPHYSICAL EXPENDITURES. 

(a) IN GENERAL.—Paragraph (1) of section 167(h) of the Internal Revenue Code of 1986 (relating to amortization of geological 

and geophysical expenditures) is amended by striking ‘‘24-month’’ 

and inserting in lieu thereof ‘‘7-year’’. 

(b) CONFORMING AMENDMENTS.—Section 167(h) is amended— 

(1) by striking ‘‘24-month’’ in paragraph (4) and inserting 

in lieu thereof ‘‘7-year’’, and 

(2) by striking paragraph (5). 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to amounts paid or incurred after December 31, 2012. 

SEC. 437. REPEAL ENHANCED OIL RECOVERY CREDIT. 

(a) IN GENERAL.—Subpart D of part IV of subchapter A of 

chapter 1 of the Internal Revenue Code of 1986 (relating to business related credits) is amended by striking section 43 (relating to 

enhanced oil recovery credit). 

(b) CLERICAL AMENDMENT.—The table of sections for subpart D 

of part IV of subchapter A of chapter 1 of the Internal Revenue 

Code of 1986 is amended by striking the item relating to section 

43. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years beginning after December 31, 2012. 

SEC. 438. REPEAL MARGINAL WELL PRODUCTION CREDIT. 

(a) IN GENERAL.—Subpart D of part IV of subchapter A of 

chapter 1of the Internal Revenue Code of 1986 (relating to business 

related credits) is amended by striking section 45I (relating to credit for producing oil and gas from marginal wells). 

(b) CLERICAL AMENDMENT.—The table of sections for subpart D 

of part IV of subchapter A of chapter 1 of the Internal Revenue 

Code of 1986 is amended by striking the item relating to section 

45I. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years beginning after December 31, 2012. 

Subtitle E—Dual Capacity Taxpayers 

SEC. 441. MODIFICATIONS OF FOREIGN TAX CREDIT RULES APPLICABLE TO DUAL CAPACITY TAXPAYERS. 

(a) IN GENERAL.—Section 901 of the Internal Revenue Code of 

1986 (relating to credit for taxes of foreign countries and of possessions of the United States) is amended by redesignating subsection 


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(n) as subsection (o) and by inserting after subsection (m) the following new subsection: 

‘‘(n) SPECIAL RULES RELATING TO DUAL CAPACITY TAX- PAYERS.— 

‘‘(1) GENERAL RULE.—Notwithstanding any other provision 

of this chapter, any amount paid or accrued by a dual capacity 

taxpayer or any member of the worldwide affiliated group of 

which such dual capacity taxpayer is also a member to any foreign country or to any possession of the United States for any 

period shall not be considered a tax to the extent such amount 

exceeds the amount (determined in accordance with regulations) which would have been required to be paid if the taxpayer were not a dual capacity taxpayer. 

‘‘(2) DUAL CAPACITY TAXPAYER.—For purposes of this subsection, the term ‘dual capacity taxpayer’ means, with respect 

to any foreign country or possession of the United States, a 

person who— 

‘‘(A) is subject to a levy of such country or possession, 

and 

‘‘(B) receives (or will receive) directly or indirectly a 

specific economic benefit (as determined in accordance 

with regulations) from such country or possession. 

‘‘(3) REGULATIONS.—The Secretary may issue such regulations or other guidance as is necessary or appropriate to carry 

out the purposes of this subsection.’’. 

(b) CONTRARY TREATY OBLIGATIONS UPHELD.—The amendments made by this section shall not apply to the extent contrary 

to any treaty obligation of the United States. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to amounts that, if such amounts were an amount of 

tax paid or accrued, would be considered paid or accrued in taxable 

years beginning after December 31, 2012. 

SEC. 442. SEPARATE BASKET TREATMENT TAXES PAID ON FOREIGN 

OIL AND GAS INCOME. 

(a) SEPARATE BASKET FOR FOREIGN TAX CREDIT.—Paragraph 

(1) of section 904(d) of the Internal Revenue Code of 1986 is 

amended by striking ‘‘and’’ at the end of subparagraph (A), by 

striking the period at the end of subparagraph (B) and inserting ‘‘, 

and’’, and by adding at the end the following: 

‘‘(C) combined foreign oil and gas income (as defined 

in section 907(b)(1)).’’. 

(b) COORDINATION.—Section 904(d)(2)of such Code is amended 

by redesignating subparagraphs (J) and (K) as subparagraphs (K) 

and (L) and by inserting after subparagraph (I) the following: 

‘‘(J) COORDINATION WITH COMBINED FOREIGN OIL AND

GAS INCOME.—For purposes of this section, passive category income and general category income shall not include combined foreign oil and gas income (as defined in 

section 907(b)(1)).’’. 

(c) CONFORMING AMENDMENTS.— 

(1) Section 907(a) is hereby repealed. 

(2) Section 907(c)(4) is hereby repealed. 

(3) Section 907(f) is hereby repealed. 

(d) EFFECTIVE DATES.— 


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(1) IN GENERAL.—The amendments made by this section 

shall apply to taxable years beginning after December 31, 

2012. 

(2) TRANSITIONAL RULES.— (A) CARRYOVERS.—Any unused foreign oil and gas 

taxes which under section 907(f) of such Code (as in effect 

before the amendment made by subsection (c)(3)) would 

have been allowable as a carryover to the taxpayer’s first 

taxable year beginning after December 31, 2012 (without 

regard to the limitation of paragraph (2) of such section 

907(f) for first taxable year) shall be allowed as carryovers 

under section 904(c) of such Code in the same manner as 

if such taxes were unused taxes under such section 904(c) 

with respect to foreign oil and gas extraction income. 

(B) LOSSES.—The amendment made by subsection 

(c)(2) shall not apply to foreign oil and gas extraction 

losses arising in taxable years beginning on or before the 

date of the enactment of this Act. 

Subtitle F—Increased Target and Trigger for Joint Select 

Committee on Deficit Reduction 

SEC. 451. INCREASED TARGET AND TRIGGER FOR JOINT SELECT COMMITTEE ON DEFICIT REDUCTION. 

(a) INCREASED TARGET FOR JOINT SELECT COMMITTEE.—Section 

401(b)(2) of the Budget Control Act of 2011 is amended by striking 

‘‘$1,500,000,000,000’’ and inserting ‘‘$1,950,000,000,000’’. 

(b) TRIGGER FOR JOINT SELECT COMMITTEE.—Section 302 of the 

Budget Control Act of 2011 is amended by redesignating subsection 

(b) as subsection (c) and by inserting after subsection (a) the following new subsection: 

‘‘(b) TRIGGER.—If a joint committee bill achieving an amount 

greater than ‘$1,650,000,000,000’ in deficit reduction as provided in 

section 401(b)(3)(B)(i)(II) of this Act is enacted by January 15, 

2012, then the amendments to the Internal Revenue Code of 1986 

made by subtitles A through E of title IV of the American Jobs Act 

of 2011, shall not be in effect for any taxable year.’’. 

Æ 


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