In the Senate of the United States, 

August 5, 2010. 

Resolved, That the bill from the House of Representatives (H.R. 1586) entitled ‘‘An Act to modernize the air traffic control system, improve the safety, reliability, and availability of transportation by air in the United States, provide 

for modernization of the air traffic control system, reauthorize the Federal Aviation Administration, and for other purposes.’’, do pass with the following 

SENATE AMENDMENT TO HOUSE AMENDMENT TO 

SENATE AMENDMENT: 

In lieu of the matter proposed to be inserted, insert 

the following: 

1 SHORT TITLE

2 SECTION 1. This Act may be cited as the 

3 ‘‘llllllAct ofllll’’. 
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† HR 1586 EAS2 

1 TITLE I 

2 EDUCATION JOBS FUND 

3 EDUCATION JOBS FUNDS

4 SEC. 101. There are authorized to be appropriated and 

5 there are appropriated out of any money in the Treasury 

6 not otherwise obligated for necessary expenses for an Edu7 cation Jobs Fund, $10,000,000,000: Provided, That the 

8 amount under this heading shall be administered under the 

9 terms and conditions of sections 14001 through 14013 and 

10 title XV of division A of the American Recovery and Rein11 vestment Act of 2009 (Public Law 111–5) except as follows: 

12 (1) ALLOCATION OF FUNDS.— 

13 (A) Funds appropriated under this heading 

14 shall be available only for allocation by the Sec15 retary of Education (in this heading referred to 

16 as the Secretary) in accordance with subsections 

17 (a), (b), (d), (e), and (f) of section 14001 of divi18 sion A of Public Law 111–5 and subparagraph 

19 (B) of this paragraph, except that the amount 

20 reserved under such subsection (b) shall not ex21 ceed $1,000,000 and such subsection (f) shall be 

22 applied by substituting one year for two years. 

23 (B) Prior to allocating funds to States 

24 under section 14001(d) of division A of Public 

25 Law 111–5, the Secretary shall allocate 0.5 per-
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1 cent to the Secretary of the Interior for schools 

2 operated or funded by the Bureau of Indian Af3 fairs on the basis of the schools’ respective needs 

4 for activities consistent with this heading under 

5 such terms and conditions as the Secretary of the 

6 Interior may determine. 

7 (2) RESERVATION.—A State that receives an al8 location of funds appropriated under this heading 

9 may reserve not more than 2 percent for the adminis10 trative costs of carrying out its responsibilities with 

11 respect to those funds. 

12 (3) AWARDS TO LOCAL EDUCATIONAL AGEN13 CIES.— 

14 (A) Except as specified in paragraph (2), 

15 an allocation of funds to a State shall be used 

16 only for awards to local educational agencies for 

17 the support of elementary and secondary edu18 cation in accordance with paragraph (5) for the 

19 2010–2011 school year (or, in the case of re20 allocations made under section 14001(f) of divi21 sion A of Public Law 111–5, for the 2010–2011 

22 or the 2011–2012 school year). 

23 (B) Funds used to support elementary and 

24 secondary education shall be distributed through 

25 a State’s primary elementary and secondary 
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1 funding formulae or based on local educational 

2 agencies’ relative shares of funds under part A of 

3 title I of the Elementary and Secondary Edu4 cation Act of 1965 (20 U.S.C. 6311 et seq.) for 

5 the most recent fiscal year for which data are 

6 available. 

7 (C) Subsections (a) and (b) of section 14002 

8 of division A of Public Law 111–5 shall not 

9 apply to funds appropriated under this heading. 

10 (4) COMPLIANCE WITH EDUCATION REFORM AS11 SURANCES.—For purposes of awarding funds appro12 priated under this heading, any State that has an ap13 proved application for Phase II of the State Fiscal 

14 Stabilization Fund that was submitted in accordance 

15 with the application notice published in the Federal 

16 Register on November 17, 2009 (74 Fed. Reg. 59142) 

17 shall be deemed to be in compliance with subsection 

18 (b) and paragraphs (2) through (5) of subsection (d) 

19 of section 14005 of division A of Public Law 111–5. 

20 (5) REQUIREMENT TO USE FUNDS TO RETAIN OR

21 CREATE EDUCATION JOBS.—Notwithstanding section 

22 14003(a) of division A of Public Law 111–5, funds 

23 awarded to local educational agencies under para24 graph (3)— 
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1 (A) may be used only for compensation and 

2 benefits and other expenses, such as support serv3 ices, necessary to retain existing employees, to 

4 recall or rehire former employees, and to hire 

5 new employees, in order to provide early child6 hood, elementary, or secondary educational and 

7 related services; and 

8 (B) may not be used for general adminis9 trative expenses or for other support services ex10 penditures as those terms were defined by the 

11 National Center for Education Statistics in its 

12 Common Core of Data as of the date of enact13 ment of this Act. 

14 (6) PROHIBITION ON USE OF FUNDS FOR RAINY15 DAY FUNDS OR DEBT RETIREMENT.—A State that re16 ceives an allocation may not use such funds, directly 

17 or indirectly, to— 

18 (A) establish, restore, or supplement a 

19 rainy-day fund; 

20 (B) supplant State funds in a manner that 

21 has the effect of establishing, restoring, or 

22 supplementing a rainy-day fund; 

23 (C) reduce or retire debt obligations in24 curred by the State; or 
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1 (D) supplant State funds in a manner that 

2 has the effect of reducing or retiring debt obliga3 tions incurred by the State. 

4 (7) DEADLINE FOR AWARD.—The Secretary shall 

5 award funds appropriated under this heading not 

6 later than 45 days after the date of the enactment of 

7 this Act to States that have submitted applications 

8 meeting the requirements applicable to funds under 

9 this heading. The Secretary shall not require informa10 tion in applications beyond what is necessary to de11 termine compliance with applicable provisions of law. 

12 (8) ALTERNATE DISTRIBUTION OF FUNDS.—If, 

13 within 30 days after the date of the enactment of this 

14 Act, a Governor has not submitted an approvable ap15 plication, the Secretary shall provide for funds allo16 cated to that State to be distributed to another entity 

17 or other entities in the State (notwithstanding section 

18 14001(e) of division A of Public Law 111–5) for sup19 port of elementary and secondary education, under 

20 such terms and conditions as the Secretary may es21 tablish, provided that all terms and conditions that 

22 apply to funds appropriated under this heading shall 

23 apply to such funds distributed to such entity or enti24 ties. No distribution shall be made to a State under 

25 this paragraph, however, unless the Secretary has de-
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1 termined (on the basis of such information as may be 

2 available) that the requirements of clauses (i), (ii), or 

3 (iii) of paragraph 10(A) are likely to be met, notwith4 standing the lack of an application from the Governor 

5 of that State. 

6 (9) LOCAL EDUCATIONAL AGENCY APPLICA7 TION.—Section 442 of the General Education Provi8 sions Act shall not apply to a local educational agen9 cy that has previously submitted an application to 

10 the State under title XIV of division A of Public Law 

11 111–5. The assurances provided under that applica12 tion shall continue to apply to funds awarded under 

13 this heading. 

14 (10) MAINTENANCE OF EFFORT.— 

15 (A) Except as provided in paragraph (8), 

16 the Secretary shall not allocate funds to a State 

17 under paragraph (1) unless the Governor of the 

18 State provides an assurance to the Secretary 

19 that— 

20 (i) for State fiscal year 2011, the State 

21 will maintain State support for elementary 

22 and secondary education (in the aggregate 

23 or on the basis of expenditures per pupil) 

24 and for public institutions of higher edu25 cation (not including support for capital 
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1 projects or for research and development or 

2 tuition and fees paid by students) at not 

3 less than the level of such support for each 

4 of the two categories, respectively, for State 

5 fiscal year 2009; 

6 (ii) for State fiscal year 2011, the 

7 State will maintain State support for ele8 mentary and secondary education and for 

9 public institutions of higher education (not 

10 including support for capital projects or for 

11 research and development or tuition and 

12 fees paid by students) at a percentage of the 

13 total revenues available to the State that is 

14 equal to or greater than the percentage pro15 vided for each of the two categories, respec16 tively, for State fiscal year 2010; or 

17 (iii) in the case of a State in which 

18 State tax collections for calendar year 2009 

19 were less than State tax collections for cal20 endar year 2006, for State fiscal year 2011 

21 the State will maintain State support for 

22 elementary and secondary education (in the 

23 aggregate) and for public institutions of 

24 higher education (not including support for 

25 capital projects or for research and develop-
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1 ment or tuition and fees paid by stu2 dents)— 

3 (I) at not less than the level of 

4 such support for each of the two cat5 egories, respectively, for State fiscal 

6 year 2006; or 

7 (II) at a percentage of the total 

8 revenues available to the State that is 

9 equal to or greater than the percentage 

10 provided for each of the two categories, 

11 respectively, for State fiscal year 2006. 

12 (B) Section 14005(d)(1) and subsections (a) 

13 through (c) of section 14012 of division A of 

14 Public Law 111–5 shall not apply to funds ap15 propriated under this heading. 

16 (11) ADDITIONAL REQUIREMENTS FOR THE

17 STATE OF TEXAS.—The following requirements shall 

18 apply to the State of Texas: 

19 (A) Notwithstanding paragraph (3)(B), 

20 funds used to support elementary and secondary 

21 education shall be distributed based on local edu22 cational agencies’ relative shares of funds under 

23 part A of title I of the Elementary and Sec24 ondary Education Act of 1965 (20 U.S.C. 6311 

25 et seq.) for the most recent fiscal year which data 
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1 are available. Funds distributed pursuant to this 

2 paragraph shall be used to supplement and not 

3 supplant State formula funding that is distrib4 uted on a similar basis to part A of title I of the 

5 Elementary and Secondary Education Act of 

6 1965 (20 U.S.C. 6311 et seq.). 

7 (B) The Secretary shall not allocate funds 

8 to the State of Texas under paragraph (1) unless 

9 the Governor of the State provides an assurance 

10 to the Secretary that the State will for fiscal 

11 years 2011, 2012, and 2013 maintain State sup12 port for elementary and secondary education at 

13 a percentage of the total revenues available to the 

14 State that is equal to or greater than the per15 centage provided for such purpose for fiscal year 

16 2011 prior to the enactment of this Act. 

17 (C) Notwithstanding paragraph (8), no dis18 tribution shall be made to the State of Texas or 

19 local education agencies therein unless the Gov20 ernor of Texas makes an assurance to the Sec21 retary that the requirements in paragraphs 

22 (11)(A) and (11)(B) will be met, notwith23 standing the lack of an application from the 

24 Governor of Texas. 
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1 TITLE II 

2 STATE FISCAL RELIEF AND OTHER PROVISIONS; 

3 REVENUE OFFSETS 

4 Subtitle A—State Fiscal Relief and Other Provisions 

5 EXTENSION OF ARRA INCREASE IN FMAP

6 SEC. 201. Section 5001 of the American Recovery and 

7 Reinvestment Act of 2009 (Public Law 111–5) is amend8 ed— 

9 (1) in subsection (a)(3), by striking ‘‘first cal10 endar quarter’’ and inserting ‘‘first 3 calendar quar11 ters’’; 

12 (2) in subsection (b)— 

13 (A) in paragraph (1), by striking ‘‘para14 graph (2)’’ and inserting ‘‘paragraphs (2) and 

15 (3)’’; and 

16 (B) by adding at the end the following: 

17 ‘‘(3) PHASE-DOWN OF GENERAL INCREASE.— 

18 ‘‘(A) SECOND QUARTER OF FISCAL YEAR

19 2011.—For each State, for the second quarter of 

20 fiscal year 2011, the FMAP percentage increase 

21 for the State under paragraph (1) or (2) (as ap22 plicable) shall be 3.2 percentage points. 

23 ‘‘(B) THIRD QUARTER OF FISCAL YEAR

24 2011.—For each State, for the third quarter of 

25 fiscal year 2011, the FMAP percentage increase 
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1 for the State under paragraph (1) or (2) (as ap2 plicable) shall be 1.2 percentage points.’’; 

3 (3) in subsection (c)— 

4 (A) in paragraph (2)(B), by striking ‘‘July 

5 1, 2010’’ and inserting ‘‘January 1, 2011’’; 

6 (B) in paragraph (3)(B)(i), by striking 

7 ‘‘July 1, 2010’’ and inserting ‘‘January 1, 2011’’ 

8 each place it appears; and 

9 (C) in paragraph (4)(C)(ii), by striking 

10 ‘‘the 3-consecutive-month period beginning with 

11 January 2010’’ and inserting ‘‘any 3-consecu12 tive-month period that begins after December 

13 2009 and ends before January 2011’’; 

14 (4) in subsection (e), by adding at the end the 

15 following: 

16 ‘‘Notwithstanding paragraph (5), effective for payments 

17 made on or after January 1, 2010, the increases in the 

18 FMAP for a State under this section shall apply to pay19 ments under title XIX of such Act that are attributable to 

20 expenditures for medical assistance provided to nonpreg21 nant childless adults made eligible under a State plan 

22 under such title (including under any waiver under such 

23 title or under section 1115 of such Act (42 U.S.C. 1315)) 

24 who would have been eligible for child health assistance or 

25 other health benefits under eligibility standards in effect as 
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1 of December 31, 2009, of a waiver of the State child health 

2 plan under the title XXI of such Act.’’; 

3 (5) in subsection (g)— 

4 (A) in paragraph (1), by striking ‘‘Sep5 tember 30, 2011’’ and inserting ‘‘March 31, 

6 2012’’; 

7 (B) in paragraph (2), by inserting ‘‘of such 

8 Act’’ after ‘‘1923’’; and 

9 (C) by adding at the end the following: 

10 ‘‘(3) CERTIFICATION BY CHIEF EXECUTIVE OFFI11 CER.—No additional Federal funds shall be paid to a 

12 State as a result of this section with respect to a cal13 endar quarter occurring during the period beginning 

14 on January 1, 2011, and ending on June 30, 2011, 

15 unless, not later than 45 days after the date of enact16 ment of this paragraph, the chief executive officer of 

17 the State certifies that the State will request and use 

18 such additional Federal funds.’’; and 

19 (6) in subsection (h)(3), by striking ‘‘December 

20 31, 2010’’ and inserting ‘‘June 30, 2011’’. 

21 TREATMENT OF CERTAIN DRUGS FOR COMPUTATION OF

22 MEDICAID AMP

23 SEC. 202. Effective as if included in the enactment of 

24 Public Law 111–148, section 1927(k)(1)(B)(i)(IV) of the 

25 Social Security Act (42 U.S.C. 1396r–8(k)(1)(B)(i)(IV)), as 

26 amended by section 2503(a)(2)(B) of Public Law 111–148 
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1 and section 1101(c)(2) of Public Law 111–152, is amended 

2 by adding at the end the following: ‘‘, unless the drug is 

3 an inhalation, infusion, instilled, implanted, or injectable 

4 drug that is not generally dispensed through a retail com5 munity pharmacy; and’’. 

6 SUNSET OF TEMPORARY INCREASE IN BENEFITS UNDER

7 THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM

8 SEC. 203. Section 101(a) of title I of division A of 

9 Public Law 111–5 (123 Stat. 120), as amended by section 

10 4262 of this Act, is amended by striking paragraph (2) and 

11 inserting the following: 

12 ‘‘(2) TERMINATION.—The authority provided by 

13 this subsection shall terminate after March 31, 

14 2014.’’. 

15 Subtitle B—Revenue Offsets 

16 RULES TO PREVENT SPLITTING FOREIGN TAX CREDITS

17 FROM THE INCOME TO WHICH THEY RELATE

18 SEC. 211. (a) IN GENERAL.—Subpart A of part III 

19 of subchapter N of chapter 1 of the Internal Revenue Code 

20 of 1986 is amended by adding at the end the following new 

21 section: 

22 ‘‘SEC. 909. SUSPENSION OF TAXES AND CREDITS UNTIL RE23 LATED INCOME TAKEN INTO ACCOUNT. 

24 ‘‘(a) IN GENERAL.—If there is a foreign tax credit 

25 splitting event with respect to a foreign income tax paid 

26 or accrued by the taxpayer, such tax shall not be taken into 
15 

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1 account for purposes of this title before the taxable year in 

2 which the related income is taken into account under this 

3 chapter by the taxpayer. 

4 ‘‘(b) SPECIAL RULES WITH RESPECT TO SECTION 902 

5 CORPORATIONS.—If there is a foreign tax credit splitting 

6 event with respect to a foreign income tax paid or accrued 

7 by a section 902 corporation, such tax shall not be taken 

8 into account— 

9 ‘‘(1) for purposes of section 902 or 960, or 

10 ‘‘(2) for purposes of determining earnings and 

11 profits under section 964(a), 

12 before the taxable year in which the related income is taken 

13 into account under this chapter by such section 902 cor14 poration or a domestic corporation which meets the owner15 ship requirements of subsection (a) or (b) of section 902 

16 with respect to such section 902 corporation. 

17 ‘‘(c) SPECIAL RULES.—For purposes of this section— 

18 ‘‘(1) APPLICATION TO PARTNERSHIPS, ETC.—In 

19 the case of a partnership, subsections (a) and (b) shall 

20 be applied at the partner level. Except as otherwise 

21 provided by the Secretary, a rule similar to the rule 

22 of the preceding sentence shall apply in the case of 

23 any S corporation or trust. 

24 ‘‘(2) TREATMENT OF FOREIGN TAXES AFTER

25 SUSPENSION.—In the case of any foreign income tax 
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1 not taken into account by reason of subsection (a) or 

2 (b), except as otherwise provided by the Secretary, 

3 such tax shall be so taken into account in the taxable 

4 year referred to in such subsection (other than for 

5 purposes of section 986(a)) as a foreign income tax 

6 paid or accrued in such taxable year. 

7 ‘‘(d) DEFINITIONS.—For purposes of this section— 

8 ‘‘(1) FOREIGN TAX CREDIT SPLITTING EVENT.— 

9 There is a foreign tax credit splitting event with re10 spect to a foreign income tax if the related income is 

11 (or will be) taken into account under this chapter by 

12 a covered person. 

13 ‘‘(2) FOREIGN INCOME TAX.—The term ‘foreign 

14 income tax’ means any income, war profits, or excess 

15 profits tax paid or accrued to any foreign country or 

16 to any possession of the United States. 

17 ‘‘(3) RELATED INCOME.—The term ‘related in18 come’ means, with respect to any portion of any for19 eign income tax, the income (or, as appropriate, earn20 ings and profits) to which such portion of foreign in21 come tax relates. 

22 ‘‘(4) COVERED PERSON.—The term ‘covered per23 son’ means, with respect to any person who pays or 

24 accrues a foreign income tax (hereafter in this para25 graph referred to as the ‘payor’)— 
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1 ‘‘(A) any entity in which the payor holds, 

2 directly or indirectly, at least a 10 percent own3 ership interest (determined by vote or value), 

4 ‘‘(B) any person which holds, directly or in5 directly, at least a 10 percent ownership interest 

6 (determined by vote or value) in the payor, 

7 ‘‘(C) any person which bears a relationship 

8 to the payor described in section 267(b) or 

9 707(b), and 

10 ‘‘(D) any other person specified by the Sec11 retary for purposes of this paragraph. 

12 ‘‘(5) SECTION 902 CORPORATION.—The term ‘sec13 tion 902 corporation’ means any foreign corporation 

14 with respect to which one or more domestic corpora15 tions meets the ownership requirements of subsection 

16 (a) or (b) of section 902. 

17 ‘‘(e) REGULATIONS.—The Secretary may issue such 

18 regulations or other guidance as is necessary or appropriate 

19 to carry out the purposes of this section, including regula20 tions or other guidance which provides— 

21 ‘‘(1) appropriate exceptions from the provisions 

22 of this section, and 

23 ‘‘(2) for the proper application of this section 

24 with respect to hybrid instruments.’’. 
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1 (b) CLERICAL AMENDMENT.—The table of sections for 

2 subpart A of part III of subchapter N of chapter 1 of the 

3 Internal Revenue Code of 1986 is amended by adding at 

4 the end the following new item: 

‘‘Sec. 909. Suspension of taxes and credits until related income taken into account.’’. 

5 (c) EFFECTIVE DATE.—The amendments made by this 

6 section shall apply to— 

7 (1) foreign income taxes (as defined in section 

8 909(d) of the Internal Revenue Code of 1986, as 

9 added by this section) paid or accrued in taxable 

10 years beginning after December 31, 2010; and 

11 (2) foreign income taxes (as so defined) paid or 

12 accrued by a section 902 corporation (as so defined) 

13 in taxable years beginning on or before such date 

14 (and not deemed paid under section 902(a) or 960 of 

15 such Code on or before such date), but only for pur16 poses of applying sections 902 and 960 with respect 

17 to periods after such date. 

18 Section 909(b)(2) of the Internal Revenue Code of 1986, as 

19 added by this section, shall not apply to foreign income 

20 taxes described in paragraph (2). 
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1 DENIAL OF FOREIGN TAX CREDIT WITH RESPECT TO FOR2 EIGN INCOME NOT SUBJECT TO UNITED STATES TAX3 ATION BY REASON OF COVERED ASSET ACQUISITIONS

4 SEC. 212. (a) IN GENERAL.—Section 901 of the Inter5 nal Revenue Code of 1986 is amended by redesignating sub6 section (m) as subsection (n) and by inserting after sub7 section (l) the following new subsection: 

8 ‘‘(m) DENIAL OF FOREIGN TAX CREDIT WITH RE9 SPECT TO FOREIGN INCOME NOT SUBJECT TO UNITED

10 STATES TAXATION BY REASON OF COVERED ASSET ACQUI11 SITIONS.— 

12 ‘‘(1) IN GENERAL.—In the case of a covered asset 

13 acquisition, the disqualified portion of any foreign in14 come tax determined with respect to the income or 

15 gain attributable to the relevant foreign assets— 

16 ‘‘(A) shall not be taken into account in de17 termining the credit allowed under subsection 

18 (a), and 

19 ‘‘(B) in the case of a foreign income tax 

20 paid by a section 902 corporation (as defined in 

21 section 909(d)(5)), shall not be taken into ac22 count for purposes of section 902 or 960. 

23 ‘‘(2) COVERED ASSET ACQUISITION.—For pur24 poses of this section, the term ‘covered asset acquisi25 tion’ means— 
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1 ‘‘(A) a qualified stock purchase (as defined 

2 in section 338(d)(3)) to which section 338(a) ap3 plies, 

4 ‘‘(B) any transaction which— 

5 ‘‘(i) is treated as an acquisition of as6 sets for purposes of this chapter, and 

7 ‘‘(ii) is treated as the acquisition of 

8 stock of a corporation (or is disregarded) for 

9 purposes of the foreign income taxes of the 

10 relevant jurisdiction, 

11 ‘‘(C) any acquisition of an interest in a 

12 partnership which has an election in effect under 

13 section 754, and 

14 ‘‘(D) to the extent provided by the Sec15 retary, any other similar transaction. 

16 ‘‘(3) DISQUALIFIED PORTION.—For purposes of 

17 this section— 

18 ‘‘(A) IN GENERAL.—The term ‘disqualified 

19 portion’ means, with respect to any covered asset 

20 acquisition, for any taxable year, the ratio (ex21 pressed as a percentage) of— 

22 ‘‘(i) the aggregate basis differences (but 

23 not below zero) allocable to such taxable 

24 year under subparagraph (B) with respect 

25 to all relevant foreign assets, divided by 
21 

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1 ‘‘(ii) the income on which the foreign 

2 income tax referred to in paragraph (1) is 

3 determined (or, if the taxpayer fails to sub4 stantiate such income to the satisfaction of 

5 the Secretary, such income shall be deter6 mined by dividing the amount of such for7 eign income tax by the highest marginal tax 

8 rate applicable to such income in the rel9 evant jurisdiction). 

10 ‘‘(B) ALLOCATION OF BASIS DIFFERENCE.— 

11 For purposes of subparagraph (A)(i)— 

12 ‘‘(i) IN GENERAL.—The basis difference 

13 with respect to any relevant foreign asset 

14 shall be allocated to taxable years using the 

15 applicable cost recovery method under this 

16 chapter. 

17 ‘‘(ii) SPECIAL RULE FOR DISPOSITION

18 OF ASSETS.—Except as otherwise provided 

19 by the Secretary, in the case of the disposi20 tion of any relevant foreign asset— 

21 ‘‘(I) the basis difference allocated 

22 to the taxable year which includes the 

23 date of such disposition shall be the ex24 cess of the basis difference with respect 

25 to such asset over the aggregate basis 
22 

† HR 1586 EAS2 

1 difference with respect to such asset 

2 which has been allocated under clause 

3 (i) to all prior taxable years, and 

4 ‘‘(II) no basis difference with re5 spect to such asset shall be allocated 

6 under clause (i) to any taxable year 

7 thereafter. 

8 ‘‘(C) BASIS DIFFERENCE.— 

9 ‘‘(i) IN GENERAL.—The term ‘basis dif10 ference’ means, with respect to any relevant 

11 foreign asset, the excess of— 

12 ‘‘(I) the adjusted basis of such 

13 asset immediately after the covered 

14 asset acquisition, over 

15 ‘‘(II) the adjusted basis of such 

16 asset immediately before the covered 

17 asset acquisition. 

18 ‘‘(ii) BUILT-IN LOSS ASSETS.—In the 

19 case of a relevant foreign asset with respect 

20 to which the amount described in clause 

21 (i)(II) exceeds the amount described in 

22 clause (i)(I), such excess shall be taken into 

23 account under this subsection as a basis dif24 ference of a negative amount. 
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† HR 1586 EAS2 

1 ‘‘(iii) SPECIAL RULE FOR SECTION 338

2 ELECTIONS.—In the case of a covered asset 

3 acquisition described in paragraph (2)(A), 

4 the covered asset acquisition shall be treated 

5 for purposes of this subparagraph as occur6 ring at the close of the acquisition date (as 

7 defined in section 338(h)(2)). 

8 ‘‘(4) RELEVANT FOREIGN ASSETS.—For purposes 

9 of this section, the term ‘relevant foreign asset’ means, 

10 with respect to any covered asset acquisition, any 

11 asset (including any goodwill, going concern value, or 

12 other intangible) with respect to such acquisition if 

13 income, deduction, gain, or loss attributable to such 

14 asset is taken into account in determining the foreign 

15 income tax referred to in paragraph (1). 

16 ‘‘(5) FOREIGN INCOME TAX.—For purposes of 

17 this section, the term ‘foreign income tax’ means any 

18 income, war profits, or excess profits tax paid or ac19 crued to any foreign country or to any possession of 

20 the United States. 

21 ‘‘(6) TAXES ALLOWED AS A DEDUCTION, ETC.— 

22 Sections 275 and 78 shall not apply to any tax which 

23 is not allowable as a credit under subsection (a) by 

24 reason of this subsection. 
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1 ‘‘(7) REGULATIONS.—The Secretary may issue 

2 such regulations or other guidance as is necessary or 

3 appropriate to carry out the purposes of this sub4 section, including to exempt from the application of 

5 this subsection certain covered asset acquisitions, and 

6 relevant foreign assets with respect to which the basis 

7 difference is de minimis.’’. 

8 (b) EFFECTIVE DATE.— 

9 (1) IN GENERAL.—Except as provided in para10 graph (2), the amendments made by this section shall 

11 apply to covered asset acquisitions (as defined in sec12 tion 901(m)(2) of the Internal Revenue Code of 1986, 

13 as added by this section) after December 31, 2010. 

14 (2) TRANSITION RULE.—The amendments made 

15 by this section shall not apply to any covered asset 

16 acquisition (as so defined) with respect to which the 

17 transferor and the transferee are not related if such 

18 acquisition is— 

19 (A) made pursuant to a written agreement 

20 which was binding on January 1, 2011, and at 

21 all times thereafter, 

22 (B) described in a ruling request submitted 

23 to the Internal Revenue Service on or before July 

24 29, 2010, or 
25 

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1 (C) described on or before January 1, 2011, 

2 in a public announcement or in a filing with the 

3 Securities and Exchange Commission. 

4 (3) RELATED PERSONS.—For purposes of this 

5 subsection, a person shall be treated as related to an6 other person if the relationship between such persons 

7 is described in section 267 or 707(b) of the Internal 

8 Revenue Code of 1986. 

9 SEPARATE APPLICATION OF FOREIGN TAX CREDIT

10 LIMITATION, ETC., TO ITEMS RESOURCED UNDER TREATIES

11 SEC. 213. (a) IN GENERAL.—Subsection (d) of section 

12 904 of the Internal Revenue Code of 1986 is amended by 

13 redesignating paragraph (6) as paragraph (7) and by in14 serting after paragraph (5) the following new paragraph: 

15 ‘‘(6) SEPARATE APPLICATION TO ITEMS

16 RESOURCED UNDER TREATIES.— 

17 ‘‘(A) IN GENERAL.—If— 

18 ‘‘(i) without regard to any treaty obli19 gation of the United States, any item of in20 come would be treated as derived from 

21 sources within the United States, 

22 ‘‘(ii) under a treaty obligation of the 

23 United States, such item would be treated 

24 as arising from sources outside the United 

25 States, and 
26 

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1 ‘‘(iii) the taxpayer chooses the benefits 

2 of such treaty obligation, 

3 subsections (a), (b), and (c) of this section and 

4 sections 902, 907, and 960 shall be applied sepa5 rately with respect to each such item. 

6 ‘‘(B) COORDINATION WITH OTHER PROVI7 SIONS.—This paragraph shall not apply to any 

8 item of income to which subsection (h)(10) or 

9 section 865(h) applies. 

10 ‘‘(C) REGULATIONS.—The Secretary may 

11 issue such regulations or other guidance as is 

12 necessary or appropriate to carry out the pur13 poses of this paragraph, including regulations or 

14 other guidance which provides that related items 

15 of income may be aggregated for purposes of this 

16 paragraph.’’. 

17 (b) EFFECTIVE DATE.—The amendments made by this 

18 section shall apply to taxable years beginning after the date 

19 of the enactment of this Act. 

20 LIMITATION ON THE AMOUNT OF FOREIGN TAXES DEEMED

21 PAID WITH RESPECT TO SECTION 956 INCLUSIONS

22 SEC. 214. (a) IN GENERAL.—Section 960 of the Inter23 nal Revenue Code of 1986 is amended by adding at the end 

24 the following new subsection: 

25 ‘‘(c) LIMITATION WITH RESPECT TO SECTION 956 IN26 CLUSIONS.— 
27 

† HR 1586 EAS2 

1 ‘‘(1) IN GENERAL.—If there is included under 

2 section 951(a)(1)(B) in the gross income of a domestic 

3 corporation any amount attributable to the earnings 

4 and profits of a foreign corporation which is a mem5 ber of a qualified group (as defined in section 902(b)) 

6 with respect to the domestic corporation, the amount 

7 of any foreign income taxes deemed to have been paid 

8 during the taxable year by such domestic corporation 

9 under section 902 by reason of subsection (a) with re10 spect to such inclusion in gross income shall not ex11 ceed the amount of the foreign income taxes which 

12 would have been deemed to have been paid during the 

13 taxable year by such domestic corporation if cash in 

14 an amount equal to the amount of such inclusion in 

15 gross income were distributed as a series of distribu16 tions (determined without regard to any foreign taxes 

17 which would be imposed on an actual distribution) 

18 through the chain of ownership which begins with 

19 such foreign corporation and ends with such domestic 

20 corporation. 

21 ‘‘(2) AUTHORITY TO PREVENT ABUSE.—The Sec22 retary shall issue such regulations or other guidance 

23 as is necessary or appropriate to carry out the pur24 poses of this subsection, including regulations or other 

25 guidance which prevent the inappropriate use of the 
28 

† HR 1586 EAS2 

1 foreign corporation’s foreign income taxes not deemed 

2 paid by reason of paragraph (1).’’. 

3 (b) EFFECTIVE DATE.—The amendment made by this 

4 section shall apply to acquisitions of United States property 

5 (as defined in section 956(c) of the Internal Revenue Code 

6 of 1986) after December 31, 2010. 

7 SPECIAL RULE WITH RESPECT TO CERTAIN REDEMPTIONS

8 BY FOREIGN SUBSIDIARIES

9 SEC. 215. (a) IN GENERAL.—Paragraph (5) of section 

10 304(b) of the Internal Revenue Code of 1986 is amended 

11 by redesignating subparagraph (B) as subparagraph (C) 

12 and by inserting after subparagraph (A) the following new 

13 subparagraph: 

14 ‘‘(B) SPECIAL RULE IN CASE OF FOREIGN

15 ACQUIRING CORPORATION.—In the case of any 

16 acquisition to which subsection (a) applies in 

17 which the acquiring corporation is a foreign cor18 poration, no earnings and profits shall be taken 

19 into account under paragraph (2)(A) (and sub20 paragraph (A) shall not apply) if more than 50 

21 percent of the dividends arising from such acqui22 sition (determined without regard to this sub23 paragraph) would neither— 

24 ‘‘(i) be subject to tax under this chap25 ter for the taxable year in which the divi26 dends arise, nor 
29 

† HR 1586 EAS2 

1 ‘‘(ii) be includible in the earnings and 

2 profits of a controlled foreign corporation 

3 (as defined in section 957 and without re4 gard to section 953(c)).’’. 

5 (b) EFFECTIVE DATE.—The amendments made by this 

6 section shall apply to acquisitions after the date of the en7 actment of this Act. 

8 MODIFICATION OF AFFILIATION RULES FOR PURPOSES OF

9 RULES ALLOCATING INTEREST EXPENSE

10 SEC. 216. (a) IN GENERAL.—Subparagraph (A) of sec11 tion 864(e)(5) of the Internal Revenue Code of 1986 is 

12 amended by adding at the end the following: ‘‘Notwith13 standing the preceding sentence, a foreign corporation shall 

14 be treated as a member of the affiliated group if— 

15 ‘‘(i) more than 50 percent of the gross 

16 income of such foreign corporation for the 

17 taxable year is effectively connected with the 

18 conduct of a trade or business within the 

19 United States, and 

20 ‘‘(ii) at least 80 percent of either the 

21 vote or value of all outstanding stock of such 

22 foreign corporation is owned directly or in23 directly by members of the affiliated group 

24 (determined with regard to this sentence).’’. 
30 

† HR 1586 EAS2 

1 (b) EFFECTIVE DATE.—The amendment made by this 

2 section shall apply to taxable years beginning after the date 

3 of the enactment of this Act. 

4 TERMINATION OF SPECIAL RULES FOR INTEREST AND DIVI5 DENDS RECEIVED FROM PERSONS MEETING THE 80- 

6 PERCENT FOREIGN BUSINESS REQUIREMENTS

7 SEC. 217. (a) IN GENERAL.—Paragraph (1) of section 

8 861(a) of the Internal Revenue Code of 1986 is amended 

9 by striking subparagraph (A) and by redesignating sub10 paragraphs (B) and (C) as subparagraphs (A) and (B), re11 spectively. 

12 (b) GRANDFATHER RULE WITH RESPECT TO WITH13 HOLDING ON INTEREST AND DIVIDENDS RECEIVED FROM

14 PERSONS MEETING THE 80-PERCENT FOREIGN BUSINESS

15 REQUIREMENTS.— 

16 (1) IN GENERAL.—Subparagraph (B) of section 

17 871(i)(2) of the Internal Revenue Code of 1986 is 

18 amended to read as follows: 

19 ‘‘(B) The active foreign business percentage 

20 of— 

21 ‘‘(i) any dividend paid by an existing 

22 80/20 company, and 

23 ‘‘(ii) any interest paid by an existing 

24 80/20 company.’’. 

25 (2) DEFINITIONS AND SPECIAL RULES.—Section 

26 871 of such Code is amended by redesignating sub-
31 

† HR 1586 EAS2 

1 sections (l) and (m) as subsections (m) and (n), re2 spectively, and by inserting after subsection (k) the 

3 following new subsection: 

4 ‘‘(l) RULES RELATING TO EXISTING 80/20 COMPA5 NIES.—For purposes of this subsection and subsection 

6 (i)(2)(B)— 

7 ‘‘(1) EXISTING 80/20 COMPANY.— 

8 ‘‘(A) IN GENERAL.—The term ‘existing 80/ 

9 20 company’ means any corporation if— 

10 ‘‘(i) such corporation met the 80-per11 cent foreign business requirements of section 

12 861(c)(1) (as in effect before the date of the 

13 enactment of this subsection) for such cor14 poration’s last taxable year beginning before 

15 January 1, 2011, 

16 ‘‘(ii) such corporation meets the 80- 

17 percent foreign business requirements of 

18 subparagraph (B) with respect to each tax19 able year after the taxable year referred to 

20 in clause (i), and 

21 ‘‘(iii) there has not been an addition of 

22 a substantial line of business with respect to 

23 such corporation after the date of the enact24 ment of this subsection. 

25 ‘‘(B) FOREIGN BUSINESS REQUIREMENTS.— 
32 

† HR 1586 EAS2 

1 ‘‘(i) IN GENERAL.—Except as provided 

2 in clause (iv), a corporation meets the 80- 

3 percent foreign business requirements of this 

4 subparagraph if it is shown to the satisfac5 tion of the Secretary that at least 80 per6 cent of the gross income from all sources of 

7 such corporation for the testing period is 

8 active foreign business income. 

9 ‘‘(ii) ACTIVE FOREIGN BUSINESS IN10 COME.—For purposes of clause (i), the term 

11 ‘active foreign business income’ means gross 

12 income which— 

13 ‘‘(I) is derived from sources out14 side the United States (as determined 

15 under this subchapter), and 

16 ‘‘(II) is attributable to the active 

17 conduct of a trade or business in a for18 eign country or possession of the 

19 United States. 

20 ‘‘(iii) TESTING PERIOD.—For purposes 

21 of this subsection, the term ‘testing period’ 

22 means the 3-year period ending with the 

23 close of the taxable year of the corporation 

24 preceding the payment (or such part of such 

25 period as may be applicable). If the cor-
33 

† HR 1586 EAS2 

1 poration has no gross income for such 3- 

2 year period (or part thereof), the testing pe3 riod shall be the taxable year in which the 

4 payment is made. 

5 ‘‘(iv) TRANSITION RULE.—In the case 

6 of a taxable year for which the testing pe7 riod includes 1 or more taxable years begin8 ning before January 1, 2011— 

9 ‘‘(I) a corporation meets the 80- 

10 percent foreign business requirements 

11 of this subparagraph if and only if the 

12 weighted average of— 

13 ‘‘(aa) the percentage of the 

14 corporation’s gross income from 

15 all sources that is active foreign 

16 business income (as defined in 

17 subparagraph (B) of section 

18 861(c)(1) (as in effect before the 

19 date of the enactment of this sub20 section)) for the portion of the 

21 testing period that includes tax22 able years beginning before Janu23 ary 1, 2011, and 

24 ‘‘(bb) the percentage of the 

25 corporation’s gross income from 
34 

† HR 1586 EAS2 

1 all sources that is active foreign 

2 business income (as defined in 

3 clause (ii) of this subparagraph) 

4 for the portion of the testing pe5 riod, if any, that includes taxable 

6 years beginning on or after Janu7 ary 1, 2011, 

8 is at least 80 percent, and 

9 ‘‘(II) the active foreign business 

10 percentage for such taxable year shall 

11 equal the weighted average percentage 

12 determined under subclause (I). 

13 ‘‘(2) ACTIVE FOREIGN BUSINESS PERCENTAGE.— 

14 Except as provided in paragraph (1)(B)(iv), the term 

15 ‘active foreign business percentage’ means, with re16 spect to any existing 80/20 company, the percentage 

17 which— 

18 ‘‘(A) the active foreign business income of 

19 such company for the testing period, is of 

20 ‘‘(B) the gross income of such company for 

21 the testing period from all sources. 

22 ‘‘(3) AGGREGATION RULES.—For purposes of ap23 plying paragraph (1) (other than subparagraphs 

24 (A)(i) and (B)(iv) thereof) and paragraph (2)— 
35 

† HR 1586 EAS2 

1 ‘‘(A) IN GENERAL.—The corporation re2 ferred to in paragraph (1)(A) and all of such 

3 corporation’s subsidiaries shall be treated as one 

4 corporation. 

5 ‘‘(B) SUBSIDIARIES.—For purposes of sub6 paragraph (A), the term ‘subsidiary’ means any 

7 corporation in which the corporation referred to 

8 in subparagraph (A) owns (directly or indi9 rectly) stock meeting the requirements of section 

10 1504(a)(2) (determined by substituting ‘50 per11 cent’ for ‘80 percent’ each place it appears and 

12 without regard to section 1504(b)(3)). 

13 ‘‘(4) REGULATIONS.—The Secretary may issue 

14 such regulations or other guidance as is necessary or 

15 appropriate to carry out the purposes of this section, 

16 including regulations or other guidance which provide 

17 for the proper application of the aggregation rules de18 scribed in paragraph (3).’’. 

19 (c) CONFORMING AMENDMENTS.— 

20 (1) Section 861 of the Internal Revenue Code of 

21 1986 is amended by striking subsection (c) and by re22 designating subsections (d), (e), and (f) as subsections 

23 (c), (d), and (e), respectively. 

24 (2) Paragraph (9) of section 904(h) of such Code 

25 is amended to read as follows: 
36 

† HR 1586 EAS2 

1 ‘‘(9) TREATMENT OF CERTAIN DOMESTIC COR2 PORATIONS.—In the case of any dividend treated as 

3 not from sources within the United States under sec4 tion 861(a)(2)(A), the corporation paying such divi5 dend shall be treated for purposes of this subsection 

6 as a United States-owned foreign corporation.’’. 

7 (3) Subsection (c) of section 2104 of such Code 

8 is amended in the last sentence by striking ‘‘or to a 

9 debt obligation of a domestic corporation’’ and all 

10 that follows and inserting a period. 

11 (d) EFFECTIVE DATE.— 

12 (1) IN GENERAL.—Except as provided in para13 graph (2), the amendments made by this section shall 

14 apply to taxable years beginning after December 31, 

15 2010. 

16 (2) GRANDFATHER RULE FOR OUTSTANDING

17 DEBT OBLIGATIONS.— 

18 (A) IN GENERAL.—The amendments made 

19 by this section shall not apply to payments of 

20 interest on obligations issued before the date of 

21 the enactment of this Act. 

22 (B) EXCEPTION FOR RELATED PARTY

23 DEBT.—Subparagraph (A) shall not apply to 

24 any interest which is payable to a related person 
37 

† HR 1586 EAS2 

1 (determined under rules similar to the rules of 

2 section 954(d)(3)). 

3 (C) SIGNIFICANT MODIFICATIONS TREATED

4 AS NEW ISSUES.—For purposes of subparagraph 

5 (A), a significant modification of the terms of 

6 any obligation (including any extension of the 

7 term of such obligation) shall be treated as a new 

8 issue. 

9 LIMITATION ON EXTENSION OF STATUTE OF LIMITATIONS

10 FOR FAILURE TO NOTIFY SECRETARY OF CERTAIN

11 FOREIGN TRANSFERS

12 SEC. 218. (a) IN GENERAL.—Paragraph (8) of section 

13 6501(c) of the Internal Revenue Code of 1986 is amended— 

14 (1) by striking ‘‘In the case of any information’’ 

15 and inserting the following: 

16 ‘‘(A) IN GENERAL.—In the case of any in17 formation’’; and 

18 (2) by adding at the end the following: 

19 ‘‘(B) APPLICATION TO FAILURES DUE TO

20 REASONABLE CAUSE.—If the failure to furnish 

21 the information referred to in subparagraph (A) 

22 is due to reasonable cause and not willful ne23 glect, subparagraph (A) shall apply only to the 

24 item or items related to such failure.’’. 
38 

† HR 1586 EAS2 

1 (b) EFFECTIVE DATE.—The amendments made by this 

2 section shall take effect as if included in section 513 of the 

3 Hiring Incentives to Restore Employment Act. 

4 ELIMINATION OF ADVANCE REFUNDABILITY OF EARNED

5 INCOME CREDIT

6 SEC. 219. (a) IN GENERAL.—The following provisions 

7 of the Internal Revenue Code of 1986 are repealed: 

8 (1) Section 3507. 

9 (2) Subsection (g) of section 32. 

10 (3) Paragraph (7) of section 6051(a). 

11 (b) CONFORMING AMENDMENTS.— 

12 (1) Section 6012(a) of the Internal Revenue Code 

13 of 1986 is amended by striking paragraph (8) and by 

14 redesignating paragraph (9) as paragraph (8). 

15 (2) Section 6302 of such Code is amended by 

16 striking subsection (i). 

17 (3) The table of sections for chapter 25 of such 

18 Code is amended by striking the item relating to sec19 tion 3507. 

20 (c) EFFECTIVE DATE.—The repeals and amendments 

21 made by this section shall apply to taxable years beginning 

22 after December 31, 2010. 

23 TITLE III 

24 RESCISSIONS 

25 SEC. 301. There is rescinded from accounts under the 

26 heading ‘‘Department of Agriculture—Rural Development’’, 
39 

† HR 1586 EAS2 

1 $122,000,000, to be derived from the unobligated balances 

2 of funds that were provided for such accounts in prior ap3 propriation Acts (other than Public Law 111–5) and that 

4 were designated by the Congress in such Acts as an emer5 gency requirement pursuant to a concurrent resolution on 

6 the budget or the Balanced Budget and Emergency Deficit 

7 Control Act of 1985. 

8 SEC. 302. Of the funds made available for ‘‘Depart9 ment of Commerce—National Telecommunications and In10 formation Administration—Broadband Technology Oppor11 tunities Program’’ in title II of division A of Public Law 

12 111–5, $302,000,000 are rescinded. 

13 SEC. 303. Of the funds appropriated in Department 

14 of Defense Appropriations Acts, the following funds are re15 scinded from the following accounts in the specified 

16 amounts: 

17 ‘‘Aircraft Procurement, Army, 2008/2010’’, 

18 $21,000,000; 

19 ‘‘Procurement of Weapons and Tracked Combat 

20 Vehicles, Army, 2008/2010’’, $21,000,000; 

21 ‘‘Procurement of Ammunition, Army, 2008/ 

22 2010’’, $17,000,000; 

23 ‘‘Other Procurement, Army, 2008/2010’’, 

24 $75,000,000; 
40 

† HR 1586 EAS2 

1 ‘‘Weapons Procurement, Navy, 2008/2010’’, 

2 $26,000,000; 

3 ‘‘Other Procurement, Navy, 2008/2010’’, 

4 $42,000,000; 

5 ‘‘Procurement, Marine Corps, 2008/2010’’, 

6 $13,000,000; 

7 ‘‘Aircraft Procurement, Air Force, 2008/2010’’, 

8 $102,000,000; 

9 ‘‘Missile Procurement, Air Force, 2008/2010’’, 

10 $28,000,000; 

11 ‘‘Procurement of Ammunition, Air Force, 2008/ 

12 2010’’, $7,000,000; 

13 ‘‘Other Procurement, Air Force, 2008/2010’’, 

14 $130,000,000; 

15 ‘‘Procurement, Defense-Wide, 2008/2010’’, 

16 $33,000,000; 

17 ‘‘Research, Development, Test and Evaluation, 

18 Army, 2009/2010’’, $76,000,000; 

19 ‘‘Research, Development, Test and Evaluation, 

20 Air Force, 2009/2010’’, $164,000,000; 

21 ‘‘Research, Development, Test and Evaluation, 

22 Defense-Wide, 2009/2010’’, $137,000,000; 

23 ‘‘Operation, Test and Evaluation, Defense, 2009/ 

24 2010’’, $1,000,000; 
41 

† HR 1586 EAS2 

1 ‘‘Operation and Maintenance, Army, 2010’’, 

2 $154,000,000; 

3 ‘‘Operation and Maintenance, Navy, 2010’’, 

4 $155,000,000; 

5 ‘‘Operation and Maintenance, Marine Corps, 

6 2010’’, $25,000,000; 

7 ‘‘Operation and Maintenance, Air Force, 2010’’, 

8 $155,000,000; 

9 ‘‘Operation and Maintenance, Defense-Wide, 

10 2010’’, $126,000,000; 

11 ‘‘Operation and Maintenance, Army Reserve, 

12 2010’’, $12,000,000; 

13 ‘‘Operation and Maintenance, Navy Reserve, 

14 2010’’, $6,000,000; 

15 ‘‘Operation and Maintenance, Marine Corps Re16 serve, 2010’’, $1,000,000; 

17 ‘‘Operation and Maintenance, Air Force Reserve, 

18 2010’’, $14,000,000; 

19 ‘‘Operation and Maintenance, Army National 

20 Guard, 2010’’, $28,000,000; and 

21 ‘‘Operation and Maintenance, Air National 

22 Guard, 2010’’, $27,000,000. 

23 SEC. 304. (a) Of the funds appropriated in the Amer24 ican Recovery and Reinvestment Act of 2009 (Public Law 
42 

† HR 1586 EAS2 

1 111–5), the following funds are rescinded from the following 

2 accounts in the specified amounts: 

3 ‘‘Operation and Maintenance, Army, 2009/ 

4 2010’’, $113,500,000; 

5 ‘‘Operation and Maintenance, Navy, 2009/2010’’, 

6 $34,000,000; 

7 ‘‘Operation and Maintenance, Marine Corps, 

8 2009/2010’’, $7,000,000; 

9 ‘‘Operation and Maintenance, Air Force, 2009/ 

10 2010’’, $61,000,000; 

11 ‘‘Operation and Maintenance, Army Reserve, 

12 2009/2010’’, $3,500,000; 

13 ‘‘Operation and Maintenance, Navy Reserve, 

14 2009/2010’’, $8,000,000; 

15 ‘‘Operation and Maintenance, Marine Corps Re16 serve, 2009/2010’’, $1,000,000; 

17 ‘‘Operation and Maintenance, Air Force Reserve, 

18 2009/2010’’, $2,000,000; 

19 ‘‘Operation and Maintenance, Army National 

20 Guard, 2009/2010’’, $1,000,000; 

21 ‘‘Operation and Maintenance, Air National 

22 Guard, 2009/2010’’, $2,500,000; and 

23 ‘‘Defense Health Program, 2009/2010’’, 

24 $27,000,000. 
43 

† HR 1586 EAS2 

1 (b) Of the funds appropriated in the Supplemental Ap2 propriations Act, 2008 (Public Law 110–252), the following 

3 funds are rescinded from the following account in the speci4 fied amount: 

5 ‘‘Procurement, Marine Corps, 2009/2011’’, 

6 $122,000,000. 

7 SEC. 305. (a) Of the funds appropriated for ‘‘Procure8 ment of Weapons and Tracked Combat Vehicles, Army’’ in 

9 title III of division A of public Law 111–118, $116,000,000 

10 are rescinded. 

11 (b) Of the funds appropriated for ‘‘Other Procurement, 

12 Army’’ in title III of division C of Public Law 110–329, 

13 $87,000,000 are rescinded. 

14 SEC. 306. There are rescinded the following amounts 

15 from the specified accounts: 

16 (1) $20,000,000, to be derived from unobligated 

17 balances of funds made available in prior appropria18 tions Acts under the heading ‘‘Department of En19 ergy—Nuclear Energy’’. 

20 SEC. 307. Of the unobligated balances of funds pro21 vided under the heading ‘‘Nuclear Regulatory Commission’’ 

22 in prior appropriations Acts, $18,000,000 is permanently 

23 rescinded. 

24 SEC. 308. Of the funds made available for ‘‘Depart25 ment of Energy—Title 17—Innovative Technology Loan 
44 

† HR 1586 EAS2 

1 Guarantee Program’’ in title III of division A of Public 

2 Law 111–5, $1,500,000,000 are rescinded. 

3 SEC. 309. There are permanently rescinded from ‘‘Gen4 eral Services Administration—Real Property Activities— 

5 Federal Building Fund’’, $75,000,000 from Rental of Space 

6 and $25,000,000 from Building Operations, to be derived 

7 from unobligated balances that were provided in previous 

8 appropriations Acts. 

9 SEC. 310. Of the funds made available for ‘‘Bureau 

10 of Indian Affairs—Indian Guaranteed Loan Program Ac11 count’’ in title VII of division A of Public Law 111–5, 

12 $6,820,000 are rescinded. 

13 SEC. 311. Of the funds made available for ‘‘Environ14 mental Protection Agency—Hazardous Substance Super15 fund’’ in title VII of division A of Public Law 111–5, 

16 $2,600,000 are rescinded. 

17 SEC. 312. Of the funds made available for ‘‘Environ18 mental Protection Agency—Leaking Underground Storage 

19 Tank Trust Fund Program’’ in title VII of division A of 

20 Public Law 111–5, $9,200,000 are rescinded. 

21 SEC. 313. Of the funds made available for transfer in 

22 title VII of division A of Public Law 111–5, ‘‘Environ23 mental Protection Agency—Environmental Programs and 

24 Management’’, $10,000,000 are rescinded. 
45 

† HR 1586 EAS2 

1 SEC. 314. Of the funds made available for ‘‘National 

2 Park Service—Construction’’ in chapter 7 of division B of 

3 Public Law 108–324, $4,800,000 are rescinded. 

4 SEC. 315. Of the funds made available for ‘‘National 

5 Park Service—Construction’’ in chapter 5 of title II of Pub6 lic Law 109–234, $6,400,000 are rescinded. 

7 SEC. 316. Of the funds made available for ‘‘Fish and 

8 Wildlife Service—Construction’’ in chapter 6 of title I of 

9 division B of Public Law 110–329, $3,000,000 are re10 scinded. 

11 SEC. 317. The unobligated balance of funds appro12 priated in the Departments of Labor, Health and Human 

13 Services, and Education, and Related Agencies Appropria14 tions Act, 1995 (Public Law 103–333; 108 Stat. 2574) 

15 under the heading ‘‘Public Health and Social Services 

16 Emergency Fund’’ is rescinded. 

17 SEC. 318. Of the funds appropriated for the Commis18 sioner of Social Security under section 2201(e)(2)(B) in 

19 title II of division B of Public Law 111–5, $47,000,000 are 

20 rescinded. 

21 SEC. 319. Of the funds appropriated in part VI of sub22 title I of title II of division B of Public Law 111–5, 

23 $110,000,000 are rescinded, to be derived only from the 

24 amount provided under section 1899K(b) of such title. 
46 

† HR 1586 EAS2 

1 SEC. 320. Of the funds appropriated for ‘‘Department 

2 of Education—Education for the Disadvantaged’’ in divi3 sion D of Public Law 111–117, $50,000,000 are rescinded, 

4 to be derived only from the amount provided for a com5 prehensive literacy development and education program 

6 under section 1502 of the Elementary and Secondary Edu7 cation Act of 1965. 

8 SEC. 321. Of the funds appropriated for ‘‘Department 

9 of Education—Student Aid Administration’’ in division D 

10 of Public Law 111–117, $82,000,000 are rescinded. 

11 SEC. 322. Of the funds appropriated for ‘‘Department 

12 of Education—Innovation and Improvement’’ in division 

13 D of Public Law 111–117, $10,700,000 are rescinded, to 

14 be derived only from the amount provided to carry out sub15 part 8 of part D of title V of the Elementary and Secondary 

16 Education Act of 1965. 

17 SEC. 323. Of the unobligated balances available under 

18 ‘‘Department of Defense, Military Construction, Army’’ 

19 from prior appropriations Acts, $340,000,000 is rescinded: 

20 Provided, That no funds may be rescinded from amounts 

21 that were designated by the Congress as an emergency re22 quirement or as appropriations for overseas deployments 

23 and other activities pursuant to a concurrent resolution on 

24 the budget or the Balanced Budget and Emergency Deficit 

25 Control Act of 1985. 
47 

† HR 1586 EAS2 

1 SEC. 324. Of the unobligated balances available under 

2 ‘‘Department of Defense, Military Construction, Navy and 

3 Marine Corps’’ from prior appropriations Acts, 

4 $110,000,000 is rescinded: Provided, That no funds may 

5 be rescinded from amounts that were designated by the Con6 gress as an emergency requirement or as appropriations for 

7 overseas deployments and other activities pursuant to a 

8 concurrent resolution on the budget or the Balanced Budget 

9 and Emergency Deficit Control Act of 1985. 

10 SEC. 325. Of the unobligated balances available under 

11 ‘‘Department of Defense, Military Construction, Air Force’’ 

12 from prior appropriations Acts, $50,000,000 is rescinded: 

13 Provided, That no funds may be rescinded from amounts 

14 that were designated by the Congress as an emergency re15 quirement or as appropriations for overseas deployments 

16 and other activities pursuant to a concurrent resolution on 

17 the budget or the Balanced Budget and Emergency Deficit 

18 Control Act of 1985. 

19 SEC. 326. Of the funds made available for the General 

20 Operating Expenses account of the Department of Veterans 

21 Affairs in section 2201(e)(4)(A)(ii) of division B of Public 

22 Law 111–5 (123 Stat. 454; 26 U.S.C. 6428 note), 

23 $6,100,000 are rescinded. 

24 SEC. 327. Of the amount appropriated or otherwise 

25 made available by title X of division A of Public Law 111– 
48 

† HR 1586 EAS2 

1 5, the American Recovery and Reinvestment Act of 2009, 

2 under the heading ‘‘ Departmental Administration, Infor3 mation Technology Systems’’ $5,000,000 is hereby re4 scinded. 

5 SEC. 328. (a) MILLENNIUM CHALLENGE CORPORA6 TION.—Of the unobligated balances available under the 

7 heading ‘‘Millennium Challenge Corporation’’ in title III 

8 of division H of Public Law 111–8 and under such heading 

9 in prior Acts making appropriations for the Department 

10 of State, foreign operations, and related programs, 

11 $50,000,000 are rescinded. 

12 (b) CIVILIAN STABILIZATION INITIATIVE.— 

13 (1) DEPARTMENT OF STATE.—Of the unobligated 

14 balances available under the heading ‘‘Department of 

15 State—Administration of Foreign Affairs—Civilian 

16 Stabilization Initiative’’ in prior Acts making appro17 priations for the Department of State, foreign oper18 ations, and related programs, $40,000,000 are re19 scinded. 

20 (2) UNITED STATES AGENCY FOR INTERNATIONAL

21 DEVELOPMENT.—Of the unobligated balances avail22 able under the heading ‘‘United States Agency for 

23 International Development—Funds Appropriated to 

24 the President—Civilian Stabilization Initiative’’ in 

25 prior Acts making appropriations for the Department 
49 

† HR 1586 EAS2 

1 of State, foreign operations, and related programs, 

2 $30,000,000 are rescinded. 

3 SEC. 329. There are rescinded the following amounts 

4 from the specified accounts: 

5 (1) ‘‘Department of Transportation—Federal 

6 Aviation Administration—Facilities and Equip7 ment’’, $2,182,544, to be derived from unobligated 

8 balances made available under this heading in Public 

9 Law 108–324. 

10 (2) ‘‘Department of Transportation—Federal 

11 Aviation Administration—Facilities and Equip12 ment’’, $5,705,750, to be derived from unobligated 

13 balances made available under this heading in Public 

14 Law 109–148. 

15 SEC. 330. Of the unobligated balances of funds appor16 tioned to each State under chapter 1 of title 23, United 

17 States Code, $2,200,000,000 are permanently rescinded: 

18 Provided, That such rescission shall be distributed among 

19 the States in the same proportion as the funds subject to 

20 such rescission were apportioned to the States for fiscal year 

21 2009: Provided further, That such rescission shall not apply 

22 to the funds distributed in accordance with sections 130(f) 

23 and 104(b)(5) of title 23, United States Code; sections 

24 133(d)(1) and 163 of such title, as in effect on the day before 

25 the date of enactment of Public Law 109–59; and the first 
50 

† HR 1586 EAS2 

1 sentence of section 133(d)(3)(A) of such title: Provided fur2 ther, That notwithstanding section 1132 of Public Law 

3 110–140, in administering the rescission required under 

4 this heading, the Secretary of Transportation shall allow 

5 each State to determine the amount of the required rescis6 sion to be drawn from the programs to which the rescission 

7 applies. 

8 TITLE IV 

9 BUDGETARY PROVISIONS 

10 BUDGETARY PROVISIONS

11 SEC. 401. The budgetary effects of this Act, for the pur12 pose of complying with the Statutory Pay-As-You-Go Act 

13 of 2010, shall be determined by reference to the latest state14 ment titled ‘‘Budgetary Effects of PAYGO Legislation’’ for 

15 this Act, jointly submitted for printing in the Congressional 

16 Record by the Chairmen of the House and Senate Budget 

17 Committees, provided that such statement has been sub18 mitted prior to the vote on passage in the House acting 

19 first on this conference report or amendment between the 

20 Houses. 

Attest: 

Secretary. 

111TH CONGRESS 

2D SESSION H.R. 1586 

HOUSE AMENDMENT TO 

SENATE AMENDMENT TO 

SENATE AMENDMENT