H. R. 1586 

One Hundred Eleventh Congress 

of the 

United States of America 

AT THE SECOND SESSION 

Begun and held at the City of Washington on Tuesday, 

the fifth day of January, two thousand and ten 

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. 

Be it enacted by the Senate and House of Representatives of 

the United States of America in Congress assembled, 

SHORT TITLE

SECTION 1. This Act may be cited as the ‘‘llllllAct 

ofllll’’. 

TITLE I 

EDUCATION JOBS FUND 

EDUCATION JOBS FUNDS

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

are appropriated out of any money in the Treasury not otherwise 

obligated for necessary expenses for an Education Jobs Fund, 

$10,000,000,000: Provided, That the amount under this heading 

shall be administered under the terms and conditions of sections 

14001 through 14013 and title XV of division A of the American 

Recovery and Reinvestment Act of 2009 (Public Law 111–5) except 

as follows: 

(1) ALLOCATION OF FUNDS.— 

(A) Funds appropriated under this heading shall be 

available only for allocation by the Secretary of Education 

(in this heading referred to as the Secretary) in accordance 

with subsections (a), (b), (d), (e), and (f) of section 14001 

of division A of Public Law 111–5 and subparagraph (B) 

of this paragraph, except that the amount reserved under 

such subsection (b) shall not exceed $1,000,000 and such 

subsection (f) shall be applied by substituting one year 

for two years. 

(B) Prior to allocating funds to States under section 

14001(d) of division A of Public Law 111–5, the Secretary 

shall allocate 0.5 percent to the Secretary of the Interior 

for schools operated or funded by the Bureau of Indian 

Affairs on the basis of the schools’ respective needs for 

activities consistent with this heading under such terms 

and conditions as the Secretary of the Interior may determine. 
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(2) RESERVATION.—A State that receives an allocation of 

funds appropriated under this heading may reserve not more 

than 2 percent for the administrative costs of carrying out 

its responsibilities with respect to those funds. 

(3) AWARDS TO LOCAL EDUCATIONAL AGENCIES.— 

(A) Except as specified in paragraph (2), an allocation 

of funds to a State shall be used only for awards to local 

educational agencies for the support of elementary and 

secondary education in accordance with paragraph (5) for 

the 2010–2011 school year (or, in the case of reallocations 

made under section 14001(f) of division A of Public Law 

111–5, for the 2010–2011 or the 2011–2012 school year). 

(B) Funds used to support elementary and secondary 

education shall be distributed through a State’s primary 

elementary and secondary funding formulae or based on 

local educational agencies’ relative shares of funds under 

part A of title I of the Elementary and Secondary Education 

Act of 1965 (20 U.S.C. 6311 et seq.) for the most recent 

fiscal year for which data are available. 

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

A of Public Law 111–5 shall not apply to funds appropriated 

under this heading. 

(4) COMPLIANCE WITH EDUCATION REFORM ASSURANCES.— 

For purposes of awarding funds appropriated under this 

heading, any State that has an approved application for Phase 

II of the State Fiscal Stabilization Fund that was submitted 

in accordance with the application notice published in the Federal Register on November 17, 2009 (74 Fed. Reg. 59142) shall 

be deemed to be in compliance with subsection (b) and paragraphs (2) through (5) of subsection (d) of section 14005 of 

division A of Public Law 111–5. 

(5) REQUIREMENT TO USE FUNDS TO RETAIN OR CREATE

EDUCATION JOBS.—Notwithstanding section 14003(a) of division 

A of Public Law 111–5, funds awarded to local educational 

agencies under paragraph (3)— 

(A) may be used only for compensation and benefits 

and other expenses, such as support services, necessary 

to retain existing employees, to recall or rehire former 

employees, and to hire new employees, in order to provide 

early childhood, elementary, or secondary educational and 

related services; and 

(B) may not be used for general administrative 

expenses or for other support services expenditures as those 

terms were defined by the National Center for Education 

Statistics in its Common Core of Data as of the date of 

enactment of this Act. 

(6) PROHIBITION ON USE OF FUNDS FOR RAINY-DAY FUNDS

OR DEBT RETIREMENT.—A State that receives an allocation may 

not use such funds, directly or indirectly, to— 

(A) establish, restore, or supplement a rainy-day fund; 

(B) supplant State funds in a manner that has the 

effect of establishing, restoring, or supplementing a rainyday fund; 

(C) reduce or retire debt obligations incurred by the 

State; or 
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(D) supplant State funds in a manner that has the 

effect of reducing or retiring debt obligations incurred by 

the State. 

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

funds appropriated under this heading not later than 45 days 

after the date of the enactment of this Act to States that 

have submitted applications meeting the requirements 

applicable to funds under this heading. The Secretary shall 

not require information in applications beyond what is necessary to determine compliance with applicable provisions of 

law. 

(8) ALTERNATE DISTRIBUTION OF FUNDS.—If, within 30 days 

after the date of the enactment of this Act, a Governor has 

not submitted an approvable application, the Secretary shall 

provide for funds allocated to that State to be distributed to 

another entity or other entities in the State (notwithstanding 

section 14001(e) of division A of Public Law 111–5) for support 

of elementary and secondary education, under such terms and 

conditions as the Secretary may establish, provided that all 

terms and conditions that apply to funds appropriated under 

this heading shall apply to such funds distributed to such 

entity or entities. No distribution shall be made to a State 

under this paragraph, however, unless the Secretary has determined (on the basis of such information as may be available) 

that the requirements of clauses (i), (ii), or (iii) of paragraph 

10(A) are likely to be met, notwithstanding the lack of an 

application from the Governor of that State. 

(9) LOCAL EDUCATIONAL AGENCY APPLICATION.—Section 442 

of the General Education Provisions Act shall not apply to 

a local educational agency that has previously submitted an 

application to the State under title XIV of division A of Public 

Law 111–5. The assurances provided under that application 

shall continue to apply to funds awarded under this heading. 

(10) MAINTENANCE OF EFFORT.— 

(A) Except as provided in paragraph (8), the Secretary 

shall not allocate funds to a State under paragraph (1) 

unless the Governor of the State provides an assurance 

to the Secretary that— 

(i) for State fiscal year 2011, the State will maintain State support for elementary and secondary education (in the aggregate or on the basis of expenditures 

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, respectively, for State 

fiscal year 2009; 

(ii) for State fiscal year 2011, the State will maintain State support for 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 each of the two categories, 

respectively, for State fiscal year 2010; or 
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(iii) in the case of a State in which State tax 

collections for calendar year 2009 were less than State 

tax collections for calendar year 2006, for State fiscal 

year 2011 the State will maintain State support for 

elementary and secondary education (in the aggregate) 

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)— 

(I) at not less than the level of such support 

for each of the two categories, respectively, for 

State fiscal year 2006; or 

(II) at a percentage of the total revenues available to the State that is equal to or greater than 

the percentage provided for each of the two categories, respectively, for State fiscal year 2006. 

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

(c) of section 14012 of division A of Public Law 111–5 

shall not apply to funds appropriated under this heading. 

(11) ADDITIONAL REQUIREMENTS FOR THE STATE OF TEXAS.— 

The following requirements shall apply to the State of Texas: 

(A) Notwithstanding paragraph (3)(B), funds used to 

support elementary and secondary education shall be 

distributed based on local educational agencies’ relative 

shares of funds under part A of title I of the Elementary 

and Secondary Education Act of 1965 (20 U.S.C. 6311 

et seq.) for the most recent fiscal year which data are 

available. Funds distributed pursuant to this paragraph 

shall be used to supplement and not supplant State formula 

funding that is distributed on a similar basis to part A 

of title I of the Elementary and Secondary Education Act 

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

(B) The Secretary shall not allocate funds to the State 

of Texas under paragraph (1) unless the Governor of the 

State provides an assurance to the Secretary that the State 

will for fiscal years 2011, 2012, and 2013 maintain State 

support for elementary and secondary education at a 

percentage of the total revenues available to the State 

that is equal to or greater than the percentage provided 

for such purpose for fiscal year 2011 prior to the enactment 

of this Act. 

(C) Notwithstanding paragraph (8), no distribution 

shall be made to the State of Texas or local education 

agencies therein unless the Governor of Texas makes an 

assurance to the Secretary that the requirements in paragraphs (11)(A) and (11)(B) will be met, notwithstanding 

the lack of an application from the Governor of Texas. 
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TITLE II 

STATE FISCAL RELIEF AND OTHER PROVISIONS; REVENUE 

OFFSETS 

Subtitle A—State Fiscal Relief and Other Provisions 

EXTENSION OF ARRA INCREASE IN FMAP

SEC. 201. Section 5001 of the American Recovery and Reinvestment Act of 2009 (Public Law 111–5) is amended— 

(1) in subsection (a)(3), by striking ‘‘first calendar quarter’’ 

and inserting ‘‘first 3 calendar quarters’’; 

(2) in subsection (b)— 

(A) in paragraph (1), by striking ‘‘paragraph (2)’’ and 

inserting ‘‘paragraphs (2) and (3)’’; and 

(B) by adding at the end the following: 

‘‘(3) PHASE-DOWN OF GENERAL INCREASE.— ‘‘(A) SECOND QUARTER OF FISCAL YEAR 2011.—For each 

State, for the second quarter of fiscal year 2011, the FMAP 

percentage increase for the State under paragraph (1) or 

(2) (as applicable) shall be 3.2 percentage points. 

‘‘(B) THIRD QUARTER OF FISCAL YEAR 2011.—For each 

State, for the third quarter of fiscal year 2011, the FMAP 

percentage increase for the State under paragraph (1) or 

(2) (as applicable) shall be 1.2 percentage points.’’; 

(3) in subsection (c)— 

(A) in paragraph (2)(B), by striking ‘‘July 1, 2010’’ 

and inserting ‘‘January 1, 2011’’; 

(B) in paragraph (3)(B)(i), by striking ‘‘July 1, 2010’’ 

and inserting ‘‘January 1, 2011’’ each place it appears; 

and 

(C) in paragraph (4)(C)(ii), by striking ‘‘the 3-consecutive-month period beginning with January 2010’’ and 

inserting ‘‘any 3-consecutive-month period that begins after 

December 2009 and ends before January 2011’’; 

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

‘‘Notwithstanding paragraph (5), effective for payments made on 

or after January 1, 2010, the increases in the FMAP for a State 

under this section shall apply to payments under title XIX of 

such Act that are attributable to expenditures for medical assistance 

provided to nonpregnant childless adults made eligible under a 

State plan under such title (including under any waiver under 

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

who would have been eligible for child health assistance or other 

health benefits under eligibility standards in effect as of December 

31, 2009, of a waiver of the State child health plan under the 

title XXI of such Act.’’; 

(5) in subsection (g)— 

(A) in paragraph (1), by striking ‘‘September 30, 2011’’ 

and inserting ‘‘March 31, 2012’’; 

(B) in paragraph (2), by inserting ‘‘of such Act’’ after 

‘‘1923’’; and 

(C) by adding at the end the following: 

‘‘(3) CERTIFICATION BY CHIEF EXECUTIVE OFFICER.—No additional Federal funds shall be paid to a State as a result of 

this section with respect to a calendar quarter occurring during 

the period beginning on January 1, 2011, and ending on June 
H. R. 1586—6 

30, 2011, unless, not later than 45 days after the date of 

enactment of this paragraph, the chief executive officer of the 

State certifies that the State will request and use such additional Federal funds.’’; and 

(6) in subsection (h)(3), by striking ‘‘December 31, 2010’’ 

and inserting ‘‘June 30, 2011’’. 

TREATMENT OF CERTAIN DRUGS FOR COMPUTATION OF MEDICAID AMP

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

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

Act (42 U.S.C. 1396r–8(k)(1)(B)(i)(IV)), as amended by section 

2503(a)(2)(B) of Public Law 111–148 and section 1101(c)(2) of Public 

Law 111–152, is amended by adding at the end the following: 

‘‘, unless the drug is an inhalation, infusion, instilled, implanted, 

or injectable drug that is not generally dispensed through a retail 

community pharmacy; and’’. 

SUNSET OF TEMPORARY INCREASE IN BENEFITS UNDER THE

SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM

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

111–5 (123 Stat. 120), as amended by section 4262 of this Act, 

is amended by striking paragraph (2) and inserting the following: 

‘‘(2) TERMINATION.—The authority provided by this subsection shall terminate after March 31, 2014.’’. 

Subtitle B—Revenue Offsets 

RULES TO PREVENT SPLITTING FOREIGN TAX CREDITS FROM THE

INCOME TO WHICH THEY RELATE

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

N of chapter 1 of the Internal Revenue Code of 1986 is amended 

by adding at the end the following new section: 

‘‘SEC. 909. SUSPENSION OF TAXES AND CREDITS UNTIL RELATED 

INCOME TAKEN INTO ACCOUNT. 

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

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

the taxpayer, such tax shall not be taken into account for purposes 

of this title before the taxable year in which the related income 

is taken into account under this chapter by the taxpayer. 

‘‘(b) SPECIAL RULES WITH RESPECT TO SECTION 902 CORPORATIONS.—If there is a foreign tax credit splitting event with respect 

to a foreign income tax paid or accrued by a section 902 corporation, 

such tax shall not be taken into account— 

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

‘‘(2) for purposes of determining earnings and profits under 

section 964(a), 

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

account under this chapter by such section 902 corporation or 

a domestic corporation which meets the ownership requirements 

of subsection (a) or (b) of section 902 with respect to such section 

902 corporation. 

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

‘‘(1) APPLICATION TO PARTNERSHIPS, ETC.—In the case of 

a partnership, subsections (a) and (b) shall be applied at the 

partner level. Except as otherwise provided by the Secretary, 
H. R. 1586—7 

a rule similar to the rule of the preceding sentence shall apply 

in the case of any S corporation or trust. 

‘‘(2) TREATMENT OF FOREIGN TAXES AFTER SUSPENSION.— 

In the case of any foreign income tax not taken into account 

by reason of subsection (a) or (b), except as otherwise provided 

by the Secretary, such tax shall be so taken into account 

in the taxable year referred to in such subsection (other than 

for purposes of section 986(a)) as a foreign income tax paid 

or accrued in such taxable year. 

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

‘‘(1) FOREIGN TAX CREDIT SPLITTING EVENT.—There is a 

foreign tax credit splitting event with respect to a foreign 

income tax if the related income is (or will be) taken into 

account under this chapter by a covered person. 

‘‘(2) FOREIGN INCOME TAX.—The term ‘foreign income tax’ 

means any income, war profits, or excess profits tax paid or 

accrued to any foreign country or to any possession of the 

United States. 

‘‘(3) RELATED INCOME.—The term ‘related income’ means, 

with respect to any portion of any foreign income tax, the 

income (or, as appropriate, earnings and profits) to which such 

portion of foreign income tax relates. 

‘‘(4) COVERED PERSON.—The term ‘covered person’ means, 

with respect to any person who pays or accrues a foreign 

income tax (hereafter in this paragraph referred to as the 

‘payor’)— 

‘‘(A) any entity in which the payor holds, directly or 

indirectly, at least a 10 percent ownership interest (determined by vote or value), 

‘‘(B) any person which holds, directly or indirectly, 

at least a 10 percent ownership interest (determined by 

vote or value) in the payor, 

‘‘(C) any person which bears a relationship to the payor 

described in section 267(b) or 707(b), and 

‘‘(D) any other person specified by the Secretary for 

purposes of this paragraph. 

‘‘(5) SECTION 902 CORPORATION.—The term ‘section 902 corporation’ means any foreign corporation with respect to which 

one or more domestic corporations meets the ownership requirements of subsection (a) or (b) of section 902. 

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

or other guidance as is necessary or appropriate to carry out the 

purposes of this section, including regulations or other guidance 

which provides— 

‘‘(1) appropriate exceptions from the provisions of this section, and 

‘‘(2) for the proper application of this section with respect 

to hybrid instruments.’’. 

(b) CLERICAL AMENDMENT.—The table of sections for subpart 

A of part III of subchapter N of chapter 1 of the Internal Revenue 

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

item: 

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

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

shall apply to— 
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(1) foreign income taxes (as defined in section 909(d) of 

the Internal Revenue Code of 1986, as added by this section) 

paid or accrued in taxable years beginning after December 

31, 2010; and 

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

by a section 902 corporation (as so defined) in taxable years 

beginning on or before such date (and not deemed paid under 

section 902(a) or 960 of such Code on or before such date), 

but only for purposes of applying sections 902 and 960 with 

respect to periods after such date. 

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

by this section, shall not apply to foreign income taxes described 

in paragraph (2). 

DENIAL OF FOREIGN TAX CREDIT WITH RESPECT TO FOREIGN INCOME

NOT SUBJECT TO UNITED STATES TAXATION BY REASON OF COVERED

ASSET ACQUISITIONS

SEC. 212. (a) IN GENERAL.—Section 901 of the Internal Revenue 

Code of 1986 is amended by redesignating subsection (m) as subsection (n) and by inserting after subsection (l) the following new 

subsection: 

‘‘(m) DENIAL OF FOREIGN TAX CREDIT WITH RESPECT TO FOR- EIGN INCOME NOT SUBJECT TO UNITED STATES TAXATION BY REASON

OF COVERED ASSET ACQUISITIONS.— ‘‘(1) IN GENERAL.—In the case of a covered asset acquisition, 

the disqualified portion of any foreign income tax determined 

with respect to the income or gain attributable to the relevant 

foreign assets— 

‘‘(A) shall not be taken into account in determining 

the credit allowed under subsection (a), and 

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

section 902 corporation (as defined in section 909(d)(5)), 

shall not be taken into account for purposes of section 

902 or 960. 

‘‘(2) COVERED ASSET ACQUISITION.—For purposes of this 

section, the term ‘covered asset acquisition’ means— 

‘‘(A) a qualified stock purchase (as defined in section 

338(d)(3)) to which section 338(a) applies, 

‘‘(B) any transaction which— 

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

‘‘(ii) is treated as the acquisition of stock of a 

corporation (or is disregarded) for purposes of the foreign income taxes of the relevant jurisdiction, 

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

which has an election in effect under section 754, and 

‘‘(D) to the extent provided by the Secretary, any other 

similar transaction. 

‘‘(3) DISQUALIFIED PORTION.—For purposes of this section— 

‘‘(A) IN GENERAL.—The term ‘disqualified portion’ 

means, with respect to any covered asset acquisition, for 

any taxable year, the ratio (expressed as a percentage) 

of— 

‘‘(i) the aggregate basis differences (but not below 

zero) allocable to such taxable year under subparagraph (B) with respect to all relevant foreign assets, 

divided by 
H. R. 1586—9 

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

referred to in paragraph (1) is determined (or, if the 

taxpayer fails to substantiate such income to the satisfaction of the Secretary, such income shall be determined by dividing the amount of such foreign income 

tax by the highest marginal tax rate applicable to 

such income in the relevant jurisdiction). 

‘‘(B) ALLOCATION OF BASIS DIFFERENCE.—For purposes 

of subparagraph (A)(i)— 

‘‘(i) IN GENERAL.—The basis difference with respect 

to any relevant foreign asset shall be allocated to taxable years using the applicable cost recovery method 

under this chapter. 

‘‘(ii) SPECIAL RULE FOR DISPOSITION OF ASSETS.— 

Except as otherwise provided by the Secretary, in the 

case of the disposition of any relevant foreign asset— 

‘‘(I) the basis difference allocated to the taxable 

year which includes the date of such disposition 

shall be the excess of the basis difference with 

respect to such asset over the aggregate basis difference with respect to such asset which has been 

allocated under clause (i) to all prior taxable years, 

and 

‘‘(II) no basis difference with respect to such 

asset shall be allocated under clause (i) to any 

taxable year thereafter. 

‘‘(C) BASIS DIFFERENCE.— ‘‘(i) IN GENERAL.—The term ‘basis difference’ 

means, with respect to any relevant foreign asset, the 

excess of— 

‘‘(I) the adjusted basis of such asset immediately after the covered asset acquisition, over 

‘‘(II) the adjusted basis of such asset immediately before the covered asset acquisition. 

‘‘(ii) BUILT-IN LOSS ASSETS.—In the case of a relevant foreign asset with respect to which the amount 

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

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

under this subsection as a basis difference of a negative 

amount. 

‘‘(iii) SPECIAL RULE FOR SECTION 338 ELECTIONS.— 

In the case of a covered asset acquisition described 

in paragraph (2)(A), the covered asset acquisition shall 

be treated for purposes of this subparagraph as occurring at the close of the acquisition date (as defined 

in section 338(h)(2)). 

‘‘(4) RELEVANT FOREIGN ASSETS.—For purposes of this section, the term ‘relevant foreign asset’ means, with respect to 

any covered asset acquisition, any asset (including any goodwill, 

going concern value, or other intangible) with respect to such 

acquisition if income, deduction, gain, or loss attributable to 

such asset is taken into account in determining the foreign 

income tax referred to in paragraph (1). 

‘‘(5) FOREIGN INCOME TAX.—For purposes of this section, 

the term ‘foreign income tax’ means any income, war profits, 

or excess profits tax paid or accrued to any foreign country 

or to any possession of the United States. 
H. R. 1586—10 

‘‘(6) TAXES ALLOWED AS A DEDUCTION, ETC.—Sections 275 

and 78 shall not apply to any tax which is not allowable 

as a credit under subsection (a) by reason of this subsection. 

‘‘(7) REGULATIONS.—The Secretary may issue such regulations or other guidance as is necessary or appropriate to carry 

out the purposes of this subsection, including to exempt from 

the application of this subsection certain covered asset acquisitions, and relevant foreign assets with respect to which the 

basis difference is de minimis.’’. 

(b) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as provided in paragraph (2), the 

amendments made by this section shall apply to covered asset 

acquisitions (as defined in section 901(m)(2) of the Internal 

Revenue Code of 1986, as added by this section) after December 

31, 2010. 

(2) TRANSITION RULE.—The amendments made by this section shall not apply to any covered asset acquisition (as so 

defined) with respect to which the transferor and the transferee 

are not related if such acquisition is— 

(A) made pursuant to a written agreement which was 

binding on January 1, 2011, and at all times thereafter, 

(B) described in a ruling request submitted to the 

Internal Revenue Service on or before July 29, 2010, or 

(C) described on or before January 1, 2011, in a public 

announcement or in a filing with the Securities and 

Exchange Commission. 

(3) RELATED PERSONS.—For purposes of this subsection, 

a person shall be treated as related to another person if the 

relationship between such persons is described in section 267 

or 707(b) of the Internal Revenue Code of 1986. 

SEPARATE APPLICATION OF FOREIGN TAX CREDIT LIMITATION, ETC., TO

ITEMS RESOURCED UNDER TREATIES

SEC. 213. (a) IN GENERAL.—Subsection (d) of section 904 of 

the Internal Revenue Code of 1986 is amended by redesignating 

paragraph (6) as paragraph (7) and by inserting after paragraph 

(5) the following new paragraph: 

‘‘(6) SEPARATE APPLICATION TO ITEMS RESOURCED UNDER

TREATIES.— 

‘‘(A) IN GENERAL.—If— 

‘‘(i) without regard to any treaty obligation of the 

United States, any item of income would be treated 

as derived from sources within the United States, 

‘‘(ii) under a treaty obligation of the United States, 

such item would be treated as arising from sources 

outside the United States, and 

‘‘(iii) the taxpayer chooses the benefits of such 

treaty obligation, 

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

902, 907, and 960 shall be applied separately with respect 

to each such item. 

‘‘(B) COORDINATION WITH OTHER PROVISIONS.—This 

paragraph shall not apply to any item of income to which 

subsection (h)(10) or section 865(h) applies. 

‘‘(C) REGULATIONS.—The Secretary may issue such 

regulations or other guidance as is necessary or appropriate 
H. R. 1586—11 

to carry out the purposes of this paragraph, including regulations or other guidance which provides that related items 

of income may be aggregated for purposes of this paragraph.’’. 

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

shall apply to taxable years beginning after the date of the enactment of this Act. 

LIMITATION ON THE AMOUNT OF FOREIGN TAXES DEEMED PAID WITH

RESPECT TO SECTION 956 INCLUSIONS

SEC. 214. (a) IN GENERAL.—Section 960 of the Internal Revenue 

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

subsection: 

‘‘(c) LIMITATION WITH RESPECT TO SECTION 956 INCLUSIONS.— 

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

951(a)(1)(B) in the gross income of a domestic corporation any 

amount attributable to the earnings and profits of a foreign 

corporation which is a member of a qualified group (as defined 

in section 902(b)) with respect to the domestic corporation, 

the amount of any foreign income taxes deemed to have been 

paid during the taxable year by such domestic corporation 

under section 902 by reason of subsection (a) with respect 

to such inclusion in gross income shall not exceed the amount 

of the foreign income taxes which would have been deemed 

to have been paid during the taxable year by such domestic 

corporation if cash in an amount equal to the amount of such 

inclusion in gross income were distributed as a series of distributions (determined without regard to any foreign taxes 

which would be imposed on an actual distribution) through 

the chain of ownership which begins with such foreign corporation and ends with such domestic corporation. 

‘‘(2) AUTHORITY TO PREVENT ABUSE.—The Secretary shall 

issue such regulations or other guidance as is necessary or 

appropriate to carry out the purposes of this subsection, 

including regulations or other guidance which prevent the 

inappropriate use of the foreign corporation’s foreign income 

taxes not deemed paid by reason of paragraph (1).’’. 

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

shall apply to acquisitions of United States property (as defined 

in section 956(c) of the Internal Revenue Code of 1986) after 

December 31, 2010. 

SPECIAL RULE WITH RESPECT TO CERTAIN REDEMPTIONS BY FOREIGN

SUBSIDIARIES

SEC. 215. (a) IN GENERAL.—Paragraph (5) of section 304(b) 

of the Internal Revenue Code of 1986 is amended by redesignating 

subparagraph (B) as subparagraph (C) and by inserting after 

subparagraph (A) the following new subparagraph: 

‘‘(B) SPECIAL RULE IN CASE OF FOREIGN ACQUIRING CORPORATION.—In the case of any acquisition to which subsection (a) applies in which the acquiring corporation is 

a foreign corporation, no earnings and profits shall be 

taken into account under paragraph (2)(A) (and subparagraph (A) shall not apply) if more than 50 percent of 

the dividends arising from such acquisition (determined 

without regard to this subparagraph) would neither— 
H. R. 1586—12 

‘‘(i) be subject to tax under this chapter for the 

taxable year in which the dividends arise, nor 

‘‘(ii) be includible in the earnings and profits of 

a controlled foreign corporation (as defined in section 

957 and without regard to section 953(c)).’’. 

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

shall apply to acquisitions after the date of the enactment of this 

Act. 

MODIFICATION OF AFFILIATION RULES FOR PURPOSES OF RULES

ALLOCATING INTEREST EXPENSE

SEC. 216. (a) IN GENERAL.—Subparagraph (A) of section 

864(e)(5) of the Internal Revenue Code of 1986 is amended by 

adding at the end the following: ‘‘Notwithstanding the preceding 

sentence, a foreign corporation shall be treated as a member of 

the affiliated group if— 

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

such foreign corporation for the taxable year is effectively connected with the conduct of a trade or business 

within the United States, and 

‘‘(ii) at least 80 percent of either the vote or value 

of all outstanding stock of such foreign corporation 

is owned directly or indirectly by members of the affiliated group (determined with regard to this sentence).’’. 

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

shall apply to taxable years beginning after the date of the enactment of this Act. 

TERMINATION OF SPECIAL RULES FOR INTEREST AND DIVIDENDS RECEIVED FROM PERSONS MEETING THE 80-PERCENT FOREIGN BUSI- NESS REQUIREMENTS

SEC. 217. (a) IN GENERAL.—Paragraph (1) of section 861(a) 

of the Internal Revenue Code of 1986 is amended by striking 

subparagraph (A) and by redesignating subparagraphs (B) and (C) 

as subparagraphs (A) and (B), respectively. 

(b) GRANDFATHER RULE WITH RESPECT TO WITHHOLDING ON

INTEREST AND DIVIDENDS RECEIVED FROM PERSONS MEETING THE

80-PERCENT FOREIGN BUSINESS REQUIREMENTS.— (1) IN GENERAL.—Subparagraph (B) of section 871(i)(2) of 

the Internal Revenue Code of 1986 is amended to read as 

follows: 

‘‘(B) The active foreign business percentage of— 

‘‘(i) any dividend paid by an existing 80/20 company, and 

‘‘(ii) any interest paid by an existing 80/20 company.’’. 

(2) DEFINITIONS AND SPECIAL RULES.—Section 871 of such 

Code is amended by redesignating subsections (l) and (m) as 

subsections (m) and (n), respectively, and by inserting after 

subsection (k) the following new subsection: 

‘‘(l) RULES RELATING TO EXISTING 80/20 COMPANIES.—For purposes of this subsection and subsection (i)(2)(B)— 

‘‘(1) EXISTING 80/20 COMPANY.— 

‘‘(A) IN GENERAL.—The term ‘existing 80/20 company’ 

means any corporation if— 
H. R. 1586—13 

‘‘(i) such corporation met the 80-percent foreign 

business requirements of section 861(c)(1) (as in effect 

before the date of the enactment of this subsection) 

for such corporation’s last taxable year beginning 

before January 1, 2011, 

‘‘(ii) such corporation meets the 80-percent foreign 

business requirements of subparagraph (B) with 

respect to each taxable year after the taxable year 

referred to in clause (i), and 

‘‘(iii) there has not been an addition of a substantial line of business with respect to such corporation 

after the date of the enactment of this subsection. 

‘‘(B) FOREIGN BUSINESS REQUIREMENTS.— 

‘‘(i) IN GENERAL.—Except as provided in clause 

(iv), a corporation meets the 80-percent foreign business requirements of this subparagraph if it is shown 

to the satisfaction of the Secretary that at least 80 

percent of the gross income from all sources of such 

corporation for the testing period is active foreign business income. 

‘‘(ii) ACTIVE FOREIGN BUSINESS INCOME.—For purposes of clause (i), the term ‘active foreign business 

income’ means gross income which— 

‘‘(I) is derived from sources outside the United 

States (as determined under this subchapter), and 

‘‘(II) is attributable to the active conduct of 

a trade or business in a foreign country or possession of the United States. 

‘‘(iii) TESTING PERIOD.—For purposes of this subsection, the term ‘testing period’ means the 3-year 

period ending with the close of the taxable year of 

the corporation preceding the payment (or such part 

of such period as may be applicable). If the corporation 

has no gross income for such 3-year period (or part 

thereof), the testing period shall be the taxable year 

in which the payment is made. 

‘‘(iv) TRANSITION RULE.—In the case of a taxable 

year for which the testing period includes 1 or more 

taxable years beginning before January 1, 2011— 

‘‘(I) a corporation meets the 80-percent foreign 

business requirements of this subparagraph if and 

only if the weighted average of— 

‘‘(aa) the percentage of the corporation’s 

gross income from all sources that is active 

foreign business income (as defined in 

subparagraph (B) of section 861(c)(1) (as in 

effect before the date of the enactment of this 

subsection)) for the portion of the testing 

period that includes taxable years beginning 

before January 1, 2011, and 

‘‘(bb) the percentage of the corporation’s 

gross income from all sources that is active 

foreign business income (as defined in clause 

(ii) of this subparagraph) for the portion of 

the testing period, if any, that includes taxable 

years beginning on or after January 1, 2011, 

is at least 80 percent, and 
H. R. 1586—14 

‘‘(II) the active foreign business percentage for 

such taxable year shall equal the weighted average 

percentage determined under subclause (I). 

‘‘(2) ACTIVE FOREIGN BUSINESS PERCENTAGE.—Except as 

provided in paragraph (1)(B)(iv), the term ‘active foreign business percentage’ means, with respect to any existing 80/20 

company, the percentage which— 

‘‘(A) the active foreign business income of such company 

for the testing period, is of 

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

period from all sources. 

‘‘(3) AGGREGATION RULES.—For purposes of applying paragraph (1) (other than subparagraphs (A)(i) and (B)(iv) thereof) 

and paragraph (2)— 

‘‘(A) IN GENERAL.—The corporation referred to in paragraph (1)(A) and all of such corporation’s subsidiaries shall 

be treated as one corporation. 

‘‘(B) SUBSIDIARIES.—For purposes of subparagraph (A), 

the term ‘subsidiary’ means any corporation in which the 

corporation referred to in subparagraph (A) owns (directly 

or indirectly) stock meeting the requirements of section 

1504(a)(2) (determined by substituting ‘50 percent’ for ‘80 

percent’ each place it appears and without regard to section 

1504(b)(3)). 

‘‘(4) REGULATIONS.—The Secretary may issue such regulations or other guidance as is necessary or appropriate to carry 

out the purposes of this section, including regulations or other 

guidance which provide for the proper application of the 

aggregation rules described in paragraph (3).’’. 

(c) CONFORMING AMENDMENTS.— 

(1) Section 861 of the Internal Revenue Code of 1986 is 

amended by striking subsection (c) and by redesignating subsections (d), (e), and (f) as subsections (c), (d), and (e), respectively. 

(2) Paragraph (9) of section 904(h) of such Code is amended 

to read as follows: 

‘‘(9) TREATMENT OF CERTAIN DOMESTIC CORPORATIONS.— 

In the case of any dividend treated as not from sources within 

the United States under section 861(a)(2)(A), the corporation 

paying such dividend shall be treated for purposes of this 

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

(3) Subsection (c) of section 2104 of such Code is amended 

in the last sentence by striking ‘‘or to a debt obligation of 

a domestic corporation’’ and all that follows and inserting a 

period. 

(d) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as provided in paragraph (2), the 

amendments made by this section shall apply to taxable years 

beginning after December 31, 2010. 

(2) GRANDFATHER RULE FOR OUTSTANDING DEBT OBLIGATIONS.— 

(A) IN GENERAL.—The amendments made by this section shall not apply to payments of interest on obligations 

issued before the date of the enactment of this Act. 

(B) EXCEPTION FOR RELATED PARTY DEBT.—Subparagraph (A) shall not apply to any interest which is payable 
H. R. 1586—15 

to a related person (determined under rules similar to 

the rules of section 954(d)(3)). 

(C) SIGNIFICANT MODIFICATIONS TREATED AS NEW

ISSUES.—For purposes of subparagraph (A), a significant 

modification of the terms of any obligation (including any 

extension of the term of such obligation) shall be treated 

as a new issue. 

LIMITATION ON EXTENSION OF STATUTE OF LIMITATIONS FOR FAILURE

TO NOTIFY SECRETARY OF CERTAIN FOREIGN TRANSFERS

SEC. 218. (a) IN GENERAL.—Paragraph (8) of section 6501(c) 

of the Internal Revenue Code of 1986 is amended— 

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

inserting the following: 

‘‘(A) IN GENERAL.—In the case of any information’’; 

and 

(2) by adding at the end the following: 

‘‘(B) APPLICATION TO FAILURES DUE TO REASONABLE

CAUSE.—If the failure to furnish the information referred 

to in subparagraph (A) is due to reasonable cause and 

not willful neglect, subparagraph (A) shall apply only to 

the item or items related to such failure.’’. 

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

shall take effect as if included in section 513 of the Hiring Incentives 

to Restore Employment Act. 

ELIMINATION OF ADVANCE REFUNDABILITY OF EARNED INCOME

CREDIT

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

Internal Revenue Code of 1986 are repealed: 

(1) Section 3507. 

(2) Subsection (g) of section 32. 

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

(b) CONFORMING AMENDMENTS.— (1) Section 6012(a) of the Internal Revenue Code of 1986 

is amended by striking paragraph (8) and by redesignating 

paragraph (9) as paragraph (8). 

(2) Section 6302 of such Code is amended by striking subsection (i). 

(3) The table of sections for chapter 25 of such Code is 

amended by striking the item relating to section 3507. 

(c) EFFECTIVE DATE.—The repeals and amendments made by 

this section shall apply to taxable years beginning after December 

31, 2010. 

TITLE III 

RESCISSIONS 

SEC. 301. There is rescinded from accounts under the heading ‘‘Department of Agriculture—Rural Development’’, $122,000,000, to 

be derived from the unobligated balances of funds that were provided for such accounts in prior appropriation Acts (other than 

Public Law 111–5) and that were designated by the Congress in 

such Acts as an emergency requirement pursuant to a concurrent 
H. R. 1586—16 

resolution on the budget or the Balanced Budget and Emergency 

Deficit Control Act of 1985. 

SEC. 302. Of the funds made available for ‘‘Department of 

Commerce—National Telecommunications and Information 

Administration—Broadband Technology Opportunities Program’’ in 

title II of division A of Public Law 111–5, $302,000,000 are 

rescinded. 

SEC. 303. Of the funds appropriated in Department of Defense 

Appropriations Acts, the following funds are rescinded from the 

following accounts in the specified amounts: 

‘‘Aircraft Procurement, Army, 2008/2010’’, $21,000,000; 

‘‘Procurement of Weapons and Tracked Combat Vehicles, 

Army, 2008/2010’’, $21,000,000; 

‘‘Procurement of Ammunition, Army, 2008/2010’’, 

$17,000,000; 

‘‘Other Procurement, Army, 2008/2010’’, $75,000,000; 

‘‘Weapons Procurement, Navy, 2008/2010’’, $26,000,000; 

‘‘Other Procurement, Navy, 2008/2010’’, $42,000,000; 

‘‘Procurement, Marine Corps, 2008/2010’’, $13,000,000; 

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

$102,000,000; 

‘‘Missile Procurement, Air Force, 2008/2010’’, $28,000,000; 

‘‘Procurement of Ammunition, Air Force, 2008/2010’’, 

$7,000,000; 

‘‘Other Procurement, Air Force, 2008/2010’’, $130,000,000; 

‘‘Procurement, Defense-Wide, 2008/2010’’, $33,000,000; 

‘‘Research, Development, Test and Evaluation, Army, 2009/ 

2010’’, $76,000,000; 

‘‘Research, Development, Test and Evaluation, Air Force, 

2009/2010’’, $164,000,000; 

‘‘Research, Development, Test and Evaluation, DefenseWide, 2009/2010’’, $137,000,000; 

‘‘Operation, Test and Evaluation, Defense, 2009/2010’’, 

$1,000,000; 

‘‘Operation and Maintenance, Army, 2010’’, $154,000,000; 

‘‘Operation and Maintenance, Navy, 2010’’, $155,000,000; 

‘‘Operation and Maintenance, Marine Corps, 2010’’, 

$25,000,000; 

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

$155,000,000; 

‘‘Operation and Maintenance, Defense-Wide, 2010’’, 

$126,000,000; 

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

$12,000,000; 

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

$6,000,000; 

‘‘Operation and Maintenance, Marine Corps Reserve, 2010’’, 

$1,000,000; 

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

$14,000,000; 

‘‘Operation and Maintenance, Army National Guard, 2010’’, 

$28,000,000; and 

‘‘Operation and Maintenance, Air National Guard, 2010’’, 

$27,000,000. 

SEC. 304. (a) Of the funds appropriated in the American 

Recovery and Reinvestment Act of 2009 (Public Law 111–5), the 
H. R. 1586—17 

following funds are rescinded from the following accounts in the 

specified amounts: 

‘‘Operation and Maintenance, Army, 2009/2010’’, 

$113,500,000; 

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

$34,000,000; 

‘‘Operation and Maintenance, Marine Corps, 2009/2010’’, 

$7,000,000; 

‘‘Operation and Maintenance, Air Force, 2009/2010’’, 

$61,000,000; 

‘‘Operation and Maintenance, Army Reserve, 2009/2010’’, 

$3,500,000; 

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

$8,000,000; 

‘‘Operation and Maintenance, Marine Corps Reserve, 2009/ 

2010’’, $1,000,000; 

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

2010’’, $2,000,000; 

‘‘Operation and Maintenance, Army National Guard, 2009/ 

2010’’, $1,000,000; 

‘‘Operation and Maintenance, Air National Guard, 2009/ 

2010’’, $2,500,000; and 

‘‘Defense Health Program, 2009/2010’’, $27,000,000. 

(b) Of the funds appropriated in the Supplemental Appropriations Act, 2008 (Public Law 110–252), the following funds are 

rescinded from the following account in the specified amount: 

‘‘Procurement, Marine Corps, 2009/2011’’, $122,000,000. 

SEC. 305. (a) Of the funds appropriated for ‘‘Procurement of 

Weapons and Tracked Combat Vehicles, Army’’ in title III of division 

A of public Law 111–118, $116,000,000 are rescinded. 

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

in title III of division C of Public Law 110–329, $87,000,000 are 

rescinded. 

SEC. 306. There are rescinded the following amounts from 

the specified accounts: 

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

of funds made available in prior appropriations Acts under 

the heading ‘‘Department of Energy—Nuclear Energy’’. 

SEC. 307. Of the unobligated balances of funds provided under 

the heading ‘‘Nuclear Regulatory Commission’’ in prior appropriations Acts, $18,000,000 is permanently rescinded. 

SEC. 308. Of the funds made available for ‘‘Department of 

Energy—Title 17—Innovative Technology Loan Guarantee Program’’ in title III of division A of Public Law 111–5, $1,500,000,000 

are rescinded. 

SEC. 309. There are permanently rescinded from ‘‘General Services Administration—Real Property Activities—Federal Building 

Fund’’, $75,000,000 from Rental of Space and $25,000,000 from 

Building Operations, to be derived from unobligated balances that 

were provided in previous appropriations Acts. 

SEC. 310. Of the funds made available for ‘‘Bureau of Indian 

Affairs—Indian Guaranteed Loan Program Account’’ in title VII 

of division A of Public Law 111–5, $6,820,000 are rescinded. 

SEC. 311. Of the funds made available for ‘‘Environmental 

Protection Agency—Hazardous Substance Superfund’’ in title VII 

of division A of Public Law 111–5, $2,600,000 are rescinded. 
H. R. 1586—18 

SEC. 312. Of the funds made available for ‘‘Environmental 

Protection Agency—Leaking Underground Storage Tank Trust Fund 

Program’’ in title VII of division A of Public Law 111–5, $9,200,000 

are rescinded. 

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

VII of division A of Public Law 111–5, ‘‘Environmental Protection 

Agency—Environmental Programs and Management’’, $10,000,000 

are rescinded. 

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

Service—Construction’’ in chapter 7 of division B of Public Law 

108–324, $4,800,000 are rescinded. 

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

Service—Construction’’ in chapter 5 of title II of Public Law 109– 

234, $6,400,000 are rescinded. 

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

Service—Construction’’ in chapter 6 of title I of division B of Public 

Law 110–329, $3,000,000 are rescinded. 

SEC. 317. The unobligated balance of funds appropriated in 

the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 1995 (Public Law 

103–333; 108 Stat. 2574) under the heading ‘‘Public Health and 

Social Services Emergency Fund’’ is rescinded. 

SEC. 318. Of the funds appropriated for the Commissioner 

of Social Security under section 2201(e)(2)(B) in title II of division 

B of Public Law 111–5, $47,000,000 are rescinded. 

SEC. 319. Of the funds appropriated in part VI of subtitle 

I of title II of division B of Public Law 111–5, $110,000,000 are 

rescinded, to be derived only from the amount provided under 

section 1899K(b) of such title. 

SEC. 320. Of the funds appropriated for ‘‘Department of Education—Education for the Disadvantaged’’ in division D of Public 

Law 111–117, $50,000,000 are rescinded, to be derived only from 

the amount provided for a comprehensive literacy development 

and education program under section 1502 of the Elementary and 

Secondary Education Act of 1965. 

SEC. 321. Of the funds appropriated for ‘‘Department of Education—Student Aid Administration’’ in division D of Public Law 

111–117, $82,000,000 are rescinded. 

SEC. 322. Of the funds appropriated for ‘‘Department of Education—Innovation and Improvement’’ in division D of Public Law 

111–117, $10,700,000 are rescinded, to be derived only from the 

amount provided to carry out subpart 8 of part D of title V of 

the Elementary and Secondary Education Act of 1965. 

SEC. 323. Of the unobligated balances available under ‘‘Department of Defense, Military Construction, Army’’ from prior appropriations Acts, $340,000,000 is rescinded: Provided, That no funds may 

be rescinded from amounts that were designated by the Congress 

as an emergency requirement or as appropriations for overseas 

deployments and other activities pursuant to a concurrent resolution 

on the budget or the Balanced Budget and Emergency Deficit Control Act of 1985. 

SEC. 324. Of the unobligated balances available under ‘‘Department of Defense, Military Construction, Navy and Marine Corps’’ 

from prior appropriations Acts, $110,000,000 is rescinded: Provided, 

That no funds may be rescinded from amounts that were designated 

by the Congress as an emergency requirement or as appropriations 
H. R. 1586—19 

for overseas deployments and other activities pursuant to a concurrent resolution on the budget or the Balanced Budget and Emergency Deficit Control Act of 1985. 

SEC. 325. Of the unobligated balances available under ‘‘Department of Defense, Military Construction, Air Force’’ from prior appropriations Acts, $50,000,000 is rescinded: Provided, That no funds 

may be rescinded from amounts that were designated by the Congress as an emergency requirement or as appropriations for overseas 

deployments and other activities pursuant to a concurrent resolution 

on the budget or the Balanced Budget and Emergency Deficit Control Act of 1985. 

SEC. 326. Of the funds made available for the General Operating Expenses account of the Department of Veterans Affairs in 

section 2201(e)(4)(A)(ii) of division B of Public Law 111–5 (123 

Stat. 454; 26 U.S.C. 6428 note), $6,100,000 are rescinded. 

SEC. 327. Of the amount appropriated or otherwise made available by title X of division A of Public Law 111–5, the American 

Recovery and Reinvestment Act of 2009, under the heading ‘‘ 

Departmental Administration, Information Technology Systems’’ 

$5,000,000 is hereby rescinded. 

SEC. 328. (a) MILLENNIUM CHALLENGE CORPORATION.—Of the 

unobligated balances available under the heading ‘‘Millennium 

Challenge Corporation’’ in title III of division H of Public Law 

111–8 and under such heading in prior Acts making appropriations 

for the Department of State, foreign operations, and related programs, $50,000,000 are rescinded. 

(b) CIVILIAN STABILIZATION INITIATIVE.— (1) DEPARTMENT OF STATE.—Of the unobligated balances 

available under the heading ‘‘Department of State—Administration of Foreign Affairs—Civilian Stabilization Initiative’’ in 

prior Acts making appropriations for the Department of State, 

foreign operations, and related programs, $40,000,000 are 

rescinded. 

(2) UNITED STATES AGENCY FOR INTERNATIONAL DEVELOP- MENT.—Of the unobligated balances available under the 

heading ‘‘United States Agency for International Development—Funds Appropriated to the President—Civilian Stabilization Initiative’’ in prior Acts making appropriations for 

the Department of State, foreign operations, and related programs, $30,000,000 are rescinded. 

SEC. 329. There are rescinded the following amounts from 

the specified accounts: 

(1) ‘‘Department of Transportation—Federal Aviation 

Administration—Facilities and Equipment’’, $2,182,544, to be 

derived from unobligated balances made available under this 

heading in Public Law 108–324. 

(2) ‘‘Department of Transportation—Federal Aviation 

Administration—Facilities and Equipment’’, $5,705,750, to be 

derived from unobligated balances made available under this 

heading in Public Law 109–148. 

SEC. 330. Of the unobligated balances of funds apportioned 

to each State under chapter 1 of title 23, United States Code, 

$2,200,000,000 are permanently rescinded: Provided, That such 

rescission shall be distributed among the States in the same proportion as the funds subject to such rescission were apportioned to 

the States for fiscal year 2009: Provided further, That such rescission shall not apply to the funds distributed in accordance with 
H. R. 1586—20 

sections 130(f) and 104(b)(5) of title 23, United States Code; sections 

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

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

of section 133(d)(3)(A) of such title: Provided further, That notwithstanding section 1132 of Public Law 110–140, in administering 

the rescission required under this heading, the Secretary of 

Transportation shall allow each State to determine the amount 

of the required rescission to be drawn from the programs to which 

the rescission applies. 

TITLE IV 

BUDGETARY PROVISIONS 

BUDGETARY PROVISIONS

SEC. 401. The budgetary effects of this Act, for the purpose 

of complying with the Statutory Pay-As-You-Go Act of 2010, shall 

be determined by reference to the latest statement titled ‘‘Budgetary 

Effects of PAYGO Legislation’’ for this Act, jointly submitted for 

printing in the Congressional Record by the Chairmen of the House 

and Senate Budget Committees, provided that such statement has 

been submitted prior to the vote on passage in the House acting 

first on this conference report or amendment between the Houses. 

Speaker of the House of Representatives. 

Vice President of the United States and

President of the Senate.