I 

118TH CONGRESS 

2D SESSION H. R. 8602 

To require the Secretary of Labor to establish a program to provide grants 

for job guarantee programs. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 3, 2024 

Mrs. WATSON COLEMAN (for herself, Ms. OMAR, Ms. NORTON, Ms. TLAIB, 

Mr. BOWMAN, and Mrs. RAMIREZ) introduced the following bill; which 

was referred to the Committee on Ways and Means, and in addition to 

the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such 

provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To require the Secretary of Labor to establish a program 

to provide grants for job guarantee programs. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Workforce Promotion 

5 and Access Act’’ or the ‘‘WPA Act’’. 

6 SEC. 2. JOB GUARANTEE GRANT PROGRAM. 

7 (a) DEFINITIONS.—In this section: 


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1 (1) ELIGIBLE ENTITY.—The term ‘‘eligible enti2 ty’’ means— 

3 (A) a State; 

4 (B) a political subdivision of a State; 

5 (C) a Tribal entity; 

6 (D) an outlying area; or 

7 (E) a consortium of the entities described 

8 in subparagraph (B) or (C). 

9 (2) JOB GUARANTEE PROGRAM.—The term 

10 ‘‘job guarantee program’’ means a program that 

11 meets the requirements of subsection (c). 

12 (3) RURAL AREA.—The term ‘‘rural area’’ 

13 means an area that is located outside of an urban 

14 area. 

15 (4) TRIBAL ENTITY.—The term ‘‘Tribal entity’’ 

16 means an Indian tribe or tribal organization as such 

17 terms are defined in section 4 of the Indian Self-De18 termination Act (25 U.S.C. 5304). 

19 (5) URBAN AREA.—The term ‘‘urban area’’ the 

20 has the meaning given the term by the Bureau of 

21 the Census in regulations. 

22 (6) SECRETARY.—The term ‘‘Secretary’’ means 

23 the Secretary of Labor. 

24 (7) WIOA DEFINITIONS.—The terms ‘‘adult 

25 education and literacy activities’’, ‘‘career planning’’, 


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1 ‘‘individual with a barrier to employment’’, ‘‘in-de2 mand industry sector or occupation’’, ‘‘local board’’, 

3 ‘‘outlying area’’, ‘‘recognized postsecondary creden4 tial’’, ‘‘State’’, ‘‘State board’’, ‘‘supportive services’’, 

5 and ‘‘workplace learning advisor’’ have the meanings 

6 given such terms in section 3 of the Workforce Inno7 vation and Opportunity Act (29 U.S.C. 3102). 

8 (b) ESTABLISHMENT.— 

9 (1) IN GENERAL.—The Secretary shall establish 

10 a program to provide competitive grants to eligible 

11 entities to establish programs to ensure that any eli12 gible individual within the area served by any such 

13 eligible entity who applies for a job through such a 

14 program established by such eligible entity will be 

15 provided with employment in accordance with this 

16 section. 

17 (2) NATIONAL JOB PRIORITIES.—Prior to solic18 iting the initial grants under this section, the Sec19 retary shall make publicly available on the website of 

20 the Department of Labor a list of national job prior21 ities emphasizing strategic job creation in in-demand 

22 industry sectors and occupations that address com23 munity needs, promote economic resilience, and sup24 port sustainable development. The Secretary may 


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1 take State board and local board suggestions into 

2 consideration when developing such list. 

3 (3) GRANT PERIOD; ADDITIONAL GRANTS.— 

4 (A) GRANT PERIOD.—A grant awarded 

5 under this section shall be for a period of 3 

6 years. In the case of an additional grant award7 ed to an eligible entity, the 3-year grant period 

8 for such additional grant shall begin on the day 

9 after the last day of the grant period of the pre10 ceding grant awarded to such eligible entity 

11 under this section. 

12 (B) ADDITIONAL GRANTS.— 

13 (i) IN GENERAL.—An eligible entity 

14 that receives a grant under this section 

15 may reapply under this section for one or 

16 more additional grants if such eligible enti17 ty, as of the date of the application for 

18 such additional grant— 

19 (I) meets the requirements of 

20 subsection (f)(1); 

21 (II) has not become ineligible for 

22 funds under this section pursuant to 

23 subsection (k)(2)(B); and 

24 (III) meets any performance re25 quirements, as determined by the SecVerDate Sep 11 2014 18:51 Jul 19, 2024 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8602.IH H8602

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1 retary, with respect to the program 

2 carried out under the preceding grant. 

3 (ii) GRANT RENEWAL APPLICATION.— 

4 Such an eligible entity may submit an ap5 plication under subsection (e) for an addi6 tional grant prior to the last day of the 

7 grant period of the preceding grant award8 ed to the eligible entity under this section. 

9 (iii) EXPEDITED REVIEW PER10 MITTED.—The Secretary may provide an 

11 expedited review process for an eligible en12 tity’s application for an additional grant, 

13 which may include a performance review of 

14 the program carried out under the pre15 ceding grant awarded to the eligible entity 

16 under this section. 

17 (c) JOB GUARANTEE PROGRAMS.— 

18 (1) IN GENERAL.—Subject to paragraph (2), a 

19 job guarantee program meets the requirements of 

20 this subsection if each job provided under such pro21 gram— 

22 (A) is available to any individual who— 

23 (i) is 18 years of age or older; and 

24 (ii) has principal residence in the eli25 gible entity as of the date that such indiVerDate Sep 11 2014 18:51 Jul 19, 2024 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H8602.IH H8602

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1 vidual applies for a job under such pro2 gram; 

3 (B) is, with respect to each individual who 

4 receives a job under the program, included as 

5 part of an established bargaining unit and cov6 ered by any applicable collective bargaining 

7 agreement in effect if similarly situated employ8 ees are part of such unit and represented by an 

9 exclusive bargaining representative; and 

10 (C) provides each such individual the fol11 lowing: 

12 (i) A choice between coverage under— 

13 (I) a health insurance program 

14 that is comparable to that offered to 

15 Federal employees under the Federal 

16 Employee Health Benefits Program; 

17 or 

18 (II) the health insurance pro19 gram under an applicable collective 

20 bargaining agreement as provided for 

21 under subparagraph (B). 

22 (ii) The following leave— 

23 (I) family and medical leave con24 sistent with the provisions of the 

25 Family and Medical Leave Act of 


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1 1993 and applicable State law, except 

2 that such leave shall be paid leave; 

3 and 

4 (II) paid sick leave as provided 

5 by the Emergency Paid Sick Leave 

6 Act under division E of the Families 

7 First Coronavirus Response Act (29 

8 U.S.C. 2601 note). 

9 (iii) The paid training and career de10 velopment opportunities developed pursu11 ant to subsection (j). 

12 (iv) A wage that is not less than the 

13 highest of the following rates: 

14 (I) $17 per hour. 

15 (II) The hourly wage required to 

16 be paid to employees in the area to be 

17 served under the program. 

18 (III) The prevailing wage in the 

19 area involved for a similar job as re20 quired by chapter 67 of title 41, 

21 United States Code, and other related 

22 laws. 

23 (IV) The applicable wage under 

24 an applicable collective bargaining 


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1 agreement as provided for under sub2 paragraph (B). 

3 (2) SUSPENSIONS.— 

4 (A) IN GENERAL.—An eligible individual 

5 who receives job under a job guarantee program 

6 under this section may be released or suspended 

7 from such job if such individual— 

8 (i) fails to perform the stipulated du9 ties; or 

10 (ii) is generally disruptive to the work11 place involved. 

12 (B) REVIEW PROCEDURES.—The Secretary 

13 shall establish procedures to provide for an op14 portunity for a review of any such release or 

15 suspension. 

16 (d) OTHER USES OF FUNDS.—A grant awarded 

17 under this section may be used to provide workers in a 

18 job guarantee program with— 

19 (1) supportive services, which may include food, 

20 transportation, child care, dependent care, housing, 

21 clothing and personal protection equipment, and 

22 needs-related payments, that are necessary to enable 

23 an individual to participate in activities authorized 

24 under this section; 


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1 (2) access to a workplace learning advisor to 

2 support the education, skill development, job train3 ing, career planning, and credentials required to 

4 progress toward career goals of such employees in 

5 order to meet employer requirements related to job 

6 openings and career advancements that support eco7 nomic self-sufficiency; 

8 (3) adult education and literacy activities, in9 cluding those provided by public libraries; 

10 (4) activities that assist justice-involved individ11 uals, formerly incarcerated individuals, and individ12 uals with criminal records in reentering the work13 force; and 

14 (5) financial literacy activities including those 

15 described in section 129(b)(2)(D) of the Workforce 

16 Innovation and Opportunity Act (29 U.S.C. 

17 3164(b)(2)(D)). 

18 (e) APPLICATIONS.—An eligible entity seeking a 

19 grant under this section shall submit an application to the 

20 Secretary at such time, in such manner, and containing 

21 such information as the Secretary may require. Such ap22 plication shall include— 

23 (1) a description of the geographic area and 

24 population that the entity intends to serve under the 

25 job guarantee program established under the grant, 


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1 including the area unemployment rate, underemploy2 ment rate, unemployment rate for individuals with 

3 disabilities, poverty rate, housing vacancy rate, crime 

4 rate, household income distribution, home-ownership 

5 rate, labor force participation rate, and educational 

6 attainment distribution; 

7 (2) to the extent practicable, a description of 

8 the jobs that will be offered under the job guarantee 

9 program, including— 

10 (A) a description of supports provided to 

11 individuals with disabilities and accommoda12 tions required under the Americans with Dis13 abilities Act of 1990 (42 U.S.C. 12101 et seq.); 

14 and 

15 (B) a description of supports and proce16 dures to ensure job access and opportunities for 

17 individuals with criminal records, including in18 formation on physical and programmatic acces19 sibility, in accordance with section 188 of the 

20 Workforce Innovation and Opportunity Act (29 

21 U.S.C. 3248), if applicable, and the Americans 

22 with Disabilities Act of 1990, for individuals 

23 with disabilities; 

24 (3) the need in the area for jobs to be per25 formed, including for jobs designated as a high-skill, 


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1 high-wage, or in-demand industry sector or occupa2 tion by the Secretary, State board, or local board; 

3 (4) a description of State, local, or philan4 thropic funding, including through coordination and 

5 in-kind or nonfinancial support, if any, that will be 

6 provided to assist in carrying out the job guarantee 

7 program; 

8 (5) an assurance that the eligible entity will es9 tablish— 

10 (A) a public internet website, in conjunc11 tion with the Secretary, to post all available 

12 jobs under the job guarantee program; and 

13 (B) a process for individuals to apply for 

14 such jobs; 

15 (6) a comprehensive plan to describe how the 

16 funding under the program will leverage existing or 

17 anticipated local, State, and Federal funding; 

18 (7) an assurance that necessary administrative 

19 data systems and information technology infrastruc20 ture are available, or will be available, to provide for 

21 full participation in the evaluation under subsection 

22 (m); 

23 (8) a description of how the eligible entity will 

24 comply with the requirements described in sub25 section (c)(1)(D); 


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1 (9) an assurance that the entity will enter into 

2 an allocation agreement with the Secretary under 

3 subsection (k)(2)(A); and 

4 (10) an assurance that any job in the energy 

5 and infrastructure sector provided under the pro6 gram will not exacerbate the impacts of climate 

7 change. 

8 (f) SELECTION.—In awarding grants to eligible enti9 ties under this section, the Secretary shall— 

10 (1) select eligible entities that— 

11 (A) as of the date of submission of the ap12 plication under subsection (e), has an unem13 ployment rate that (as determined by the Bu14 reau of Labor Statistics based on the most re15 cent data available as of such date or, in the 

16 case of an eligible entity that is a Tribal entity 

17 with respect to which no Federal data are avail18 able, based on employment entity submitted by 

19 the Tribal entity) is at least the lower of— 

20 (i) 5 percent; or 

21 (ii) 80 percent of the national unem22 ployment rate; 

23 (B) in the case of eligible entities seeking 

24 an additional grant pursuant to subsection 

25 (b)(3), have not been determined to be ineligible 


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1 for funds under this section pursuant to sub2 section (k)(2)(B); and 

3 (2) consider diversity in geographic location, 

4 urban-rural composition, and political entity, includ5 ing the representation of Tribal entities. 

6 (g) AMOUNT OF GRANT.— 

7 (1) ESTABLISHMENT OF FUND.—There is es8 tablished in the Treasury of the United States a sep9 arate account to be known as the ‘‘Job Guarantee 

10 Program Trust Fund’’ (referred to in this section as 

11 the ‘‘Fund’’). 

12 (2) TRANSFERS TO FUND.—There is hereby ap13 propriated to the Fund amounts equivalent to— 

14 (A) taxes received in the Treasury under 

15 subchapter C of chapter 36 of the Internal Rev16 enue Code of 1986; and 

17 (B) interest earned on investment of 

18 amounts in the Fund under rules similar to the 

19 rules of section 9602(b) of such Code. 

20 (3) USE OF AMOUNTS.—The Secretary shall use 

21 amounts in the Fund to make payments to grantees 

22 under grants under this section in accordance with 

23 paragraph (4). 

24 (4) PAYMENTS.— 


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1 (A) IN GENERAL.—The Secretary shall de2 termine the annual amount of a grant under 

3 this section based on a formula to be developed 

4 by the Secretary. 

5 (B) PAYMENTS.—The Secretary shall 

6 make payments to grantees under this section 

7 based on a standardized payment schedule and 

8 in a manner determined appropriate by the Sec9 retary. The Secretary shall not make subse10 quent payments to a grantee after the initial 

11 payment until the grantee certifies to the Sec12 retary that the grantee has expended, trans13 ferred, or obligated not less than 80 percent of 

14 the most recent payment made under this sub15 section. 

16 (h) LIMITATIONS.—An eligible entity may not use 

17 amounts received under a grant under this section to— 

18 (1) employ individuals who will replace, or lead 

19 to the displacement of, existing employees, positions, 

20 or individuals who would otherwise perform similar 

21 employment; 

22 (2) disrupt existing contracts or collective bar23 gaining agreements; and 

24 (3) perform functions otherwise prohibited by 

25 applicable Federal, State, or local laws. 


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1 (i) FEDERAL PROVISION OF JOBS IN PROGRAM

2 SITES.— 

3 (1) GUIDANCE.—Not later than 30 days after 

4 the date on which the Secretary awards the first 

5 grant under this section, the Secretary shall— 

6 (A) provide guidance to the heads of ap7 propriate Federal agencies to notify such agen8 cies of job guarantee programs established 

9 under the grants awarded to eligible entities 

10 under this section, and that such agencies may 

11 work with such eligible entities to carry out 

12 such programs on behalf of such eligible entities 

13 and receive reimbursement for carrying out 

14 such a program; 

15 (B) request that, not later than 30 days 

16 after the date on which the guidance is received 

17 under subparagraph (A), the heads of such 

18 agencies notify the Secretary of the number and 

19 types of jobs that each such agency would make 

20 available through each of the programs; and 

21 (C) ensure that each such agency makes 

22 best efforts to provide jobs through the pro23 grams established under such grants. 

24 (2) APPLICATION OF PROVISIONS.—The re25 quirements of subsection (c) relating to wages and 


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1 benefits provided to participants in jobs provided 

2 under job guarantee programs, and the limitations 

3 in subsection (h), shall apply to Federal agencies 

4 and jobs provided under this subsection. 

5 (3) LISTING OF JOBS ON WEBSITE.—The Sec6 retary shall establish procedures to ensure that jobs 

7 identified under paragraph (1)(B) are listed on the 

8 appropriate public internet website as provided for 

9 under subsection (e)(5)(A). 

10 (j) TRAINING AND DEVELOPMENT.— 

11 (1) IN GENERAL.—Not later than 30 days after 

12 the date of enactment of this Act, the Secretary 

13 shall develop procedures to support a minimum of 1 

14 week, and up to 8 weeks, of paid training and career 

15 development opportunities to eligible individuals se16 lected to participate in a program under this section 

17 in order to enable such individuals to perform duties 

18 required by such program. 

19 (2) SPECIFIC POPULATIONS.—With respect to 

20 individuals with barriers to employment (as defined 

21 in section 3(24) of the Workforce Innovation and 

22 Opportunity Act (29 U.S.C. 3102(24)), the training 

23 period may include specific job-related training and 

24 counseling and other general skills training to pre25 pare such individuals to reenter the workforce. 


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1 (k) AUDITS; ALLOCATION AGREEMENTS.— 

2 (1) AUDITS.—The Secretary, acting through 

3 the Inspector General of the Department of Labor, 

4 shall carry out annual audits of the use of grant 

5 funds provided to eligible entities under this section. 

6 (2) ALLOCATION AGREEMENTS AND MISUSE OF

7 FUNDS.— 

8 (A) ALLOCATION AGREEMENTS.—An eligi9 ble entity shall enter into an allocation agree10 ment with the Secretary that shall provide that 

11 the Secretary shall recoup any amounts paid to 

12 the entity under a grant under this section if 

13 the results of an audit under paragraph (1) in14 clude a finding that there was an intentional or 

15 reckless misuse of such funds by such entity. 

16 (B) LOSS OF ELIGIBILITY.—An eligible en17 tity that is determined to have falsified or oth18 erwise misstated data in any report submitted 

19 to the Secretary with the intent to deceive or 

20 mislead the Secretary shall be ineligible to re21 ceive additional funds under this section. 

22 (l) REPORTS.— 

23 (1) SUBMISSION OF REPORTS.—Not later than 

24 90 days after the end of each fiscal year for which 

25 an eligible entity obligates or expends any amounts 


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1 made available under a grant under this section, the 

2 eligible entity shall submit to the Secretary a report 

3 that— 

4 (A) specifies the amount of grant funds 

5 obligated or expended for the preceding fiscal 

6 year; 

7 (B) specifies any purposes for which the 

8 funds were obligated or expended; and 

9 (C) includes any other information that the 

10 Secretary may require to more effectively ad11 minister the grant program under this section, 

12 including the indicators of performance under 

13 section 116(b)(2)(A)(i) of the Workforce Inno14 vation and Opportunity Act (29 U.S.C. 

15 3141(b)(2)(A)(i)), with the performance data 

16 disaggregated by race, ethnicity, sex, age, and 

17 membership in a population specified in section 

18 3(24) of such Act (29 U.S.C. 3102(24)). 

19 (2) PUBLICATION OF REPORTS.—Not later than 

20 180 days after the end of each fiscal year for which 

21 an eligible entity obligates or expends any amounts 

22 made available under a grant under this section, the 

23 Secretary shall publish such reports from paragraph 

24 (1) in a searchable online database. 


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1 (m) EVALUATION.—The Chief Evaluation Officer at 

2 the Department of Labor shall provide for the conduct of 

3 an evaluation of each program carried out by an eligible 

4 entity under this section, using a rigorous design and eval5 uation methods to assess the implementation of the pro6 gram and its impact on, with respect to the area served 

7 by such program— 

8 (1) overall employment, public-sector employ9 ment, and private-sector employment; 

10 (2) private-sector employment, wages, and bene11 fits; 

12 (3) poverty rate; 

13 (4) public assistance spending and other Fed14 eral spending in the area served by the program; 

15 (5) child health and educational outcomes; 

16 (6) health and well-being of those with mental, 

17 emotional, and behavioral health needs; 

18 (7) incarceration rates; 

19 (8) the environment, including air quality and 

20 water quality; 

21 (9) the indicators of performance as described 

22 in subsection (l)(1)(C); and 

23 (10) other economic development and individual 

24 outcome indicators, as determined by the Secretary. 


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1 (n) EXPANSION OF WORK OPPORTUNITY CREDIT TO

2 INCLUDE PARTICIPANTS IN JOB GUARANTEE PRO3 GRAMS.— 

4 (1) IN GENERAL.—Subsection (d) of section 51 

5 of the Internal Revenue Code of 1986 is amended— 

6 (A) in paragraph (1)— 

7 (i) in subparagraph (I), by striking 

8 ‘‘or’’ at the end, 

9 (ii) in subparagraph (J), by striking 

10 the period at the end and inserting ‘‘, or’’, 

11 and 

12 (iii) by adding at the end the fol13 lowing new subparagraph: 

14 ‘‘(K) a qualified participant in a job guar15 antee program.’’, and 

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

17 paragraph: 

18 ‘‘(16) QUALIFIED PARTICIPANT IN A JOB GUAR19 ANTEE PROGRAM.—The term ‘qualified participant 

20 in a job guarantee program’ means any individual 

21 who is certified by the designated local agency as 

22 having participated in a job guarantee program 

23 under section 2 of the Workforce Promotion and Ac24 cess Act for not less than 3 months during the 6- 

25 month period ending on the hiring date.’’. 


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1 (2) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply to individuals who 

3 begin work for the employer after December 31, 

4 2024. 

5 (o) APPROPRIATIONS.—From funds in the Treasury 

6 not otherwise appropriated, there are appropriated to the 

7 Secretary such sums as may be necessary to carry out this 

8 section. 

9 SEC. 3. TRANSACTION TAX. 

10 (a) IN GENERAL.—Chapter 36 of the Internal Rev11 enue Code of 1986 is amended by inserting after sub12 chapter B the following new subchapter: 

13 ‘‘Subchapter C—Tax on Trading Transactions 

‘‘Sec. 4475. Tax on trading transactions. 

‘‘Sec. 4476. Derivative defined. 

14 ‘‘SEC. 4475. TAX ON TRADING TRANSACTIONS. 

15 ‘‘(a) IMPOSITION OF TAX.—There is hereby imposed 

16 a tax on each covered transaction with respect to any secu17 rity. 

18 ‘‘(b) RATE OF TAX.—The tax imposed under sub19 section (a) with respect to any covered transaction shall 

20 be 0.1 percent of the specified base amount with respect 

21 to such covered transaction. 

22 ‘‘(c) SPECIFIED BASE AMOUNT.—For purposes of 

23 this section, the term ‘specified base amount’ means— 


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1 ‘‘(1) except as provided in paragraph (2), the 

2 fair market value of a security (determined as of the 

3 time of the covered transaction), and 

4 ‘‘(2) in the case of any payment with respect to 

5 a derivative, the amount of such payment. 

6 ‘‘(d) COVERED TRANSACTION.—For purposes of this 

7 section— 

8 ‘‘(1) IN GENERAL.—The term ‘covered trans9 action’ means— 

10 ‘‘(A) except as provided in subparagraph 

11 (B), any purchase if— 

12 ‘‘(i) such purchase occurs on, or is 

13 subject to the rules of, a qualified board or 

14 exchange located in the United States, or 

15 ‘‘(ii) the purchaser or seller is a 

16 United States person, and 

17 ‘‘(B) any transaction with respect to a de18 rivative if— 

19 ‘‘(i) such derivative is traded on, or is 

20 subject to the rules of, a qualified board or 

21 exchange located in the United States, or 

22 ‘‘(ii) any party with rights under such 

23 derivative is a United States person. 

24 ‘‘(2) EXCEPTION FOR INITIAL ISSUES.—No tax 

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1 ered transaction with respect to the initial issuance 

2 of any security described in subparagraph (A), (B), 

3 or (C) of subsection (e)(1). 

4 ‘‘(e) DEFINITIONS AND SPECIAL RULES.—For pur5 poses of this section— 

6 ‘‘(1) SECURITY.—For purposes of this section, 

7 the term ‘security’ means— 

8 ‘‘(A) any share of stock in a corporation, 

9 ‘‘(B) any partnership or beneficial owner10 ship interest in a partnership or trust, 

11 ‘‘(C) except as provided in paragraph (2), 

12 any note, bond, debenture, or other evidence of 

13 indebtedness, and 

14 ‘‘(D) any derivative (as defined in section 

15 4476). 

16 ‘‘(2) EXCEPTION FOR CERTAIN TRADED SHORT17 TERM INDEBTEDNESS.—A note, bond, debenture, or 

18 other evidence of indebtedness which— 

19 ‘‘(A) is traded on, or is subject to the rules 

20 of, a qualified board or exchange located in the 

21 United States, and 

22 ‘‘(B) has a fixed maturity of not more 

23 than 100 days, 

24 shall not be treated as described in paragraph 

25 (1)(C). 


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1 ‘‘(3) QUALIFIED BOARD OR EXCHANGE.—The 

2 term ‘qualified board or exchange’ has the meaning 

3 given such term by section 1256(g)(7). 

4 ‘‘(f) BY WHOM PAID.— 

5 ‘‘(1) IN GENERAL.—The tax imposed by this 

6 section shall be paid by— 

7 ‘‘(A) in the case of a transaction which oc8 curs on, or is subject to the rules of, a qualified 

9 board or exchange located in the United States, 

10 such qualified board or exchange, and 

11 ‘‘(B) in the case of a purchase not de12 scribed in subparagraph (A) which is executed 

13 by a broker (as defined in section 6045(c)(1)) 

14 which is a United States person, such broker. 

15 ‘‘(2) SPECIAL RULES FOR DIRECT, ETC., 

16 TRANSACTIONS.—In the case of any transaction to 

17 which paragraph (1) does not apply, the tax imposed 

18 by this section shall be paid by— 

19 ‘‘(A) in the case of a transaction described 

20 in subsection (d)(1)(A)— 

21 ‘‘(i) the purchaser if the purchaser is 

22 a United States person, and 

23 ‘‘(ii) the seller if the purchaser is not 

24 a United States person, and 


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1 ‘‘(B) in the case of a transaction described 

2 in subsection (d)(1)(B)— 

3 ‘‘(i) the payor if the payor is a United 

4 States person, and 

5 ‘‘(ii) the payee if the payor is not a 

6 United States person. 

7 ‘‘(g) TREATMENT OF EXCHANGES AND PAYMENTS

8 WITH RESPECT TO DERIVATIVES.—For purposes of this 

9 section— 

10 ‘‘(1) TREATMENT OF EXCHANGES.— 

11 ‘‘(A) IN GENERAL.—An exchange shall be 

12 treated as the sale of the property transferred 

13 and a purchase of the property received by each 

14 party to the exchange. 

15 ‘‘(B) CERTAIN DEEMED EXCHANGES.—In 

16 the case of a distribution treated as an ex17 change for stock under section 302 or 331, the 

18 corporation making such distribution shall be 

19 treated as having purchased such stock for pur20 poses of this section. 

21 ‘‘(2) PAYMENTS WITH RESPECT TO DERIVA22 TIVES TREATED AS SEPARATE TRANSACTIONS.—Ex23 cept as otherwise provided by the Secretary, any 

24 payment with respect to any derivative shall be 


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1 treated as a separate transaction for purposes of 

2 this section. 

3 ‘‘(h) APPLICATION TO TRANSACTIONS BY CON4 TROLLED FOREIGN CORPORATIONS.— 

5 ‘‘(1) IN GENERAL.—For purposes of this sec6 tion, a controlled foreign corporation shall be treated 

7 as a United States person. 

8 ‘‘(2) SPECIAL RULES FOR PAYMENT OF TAX ON

9 DIRECT, ETC., TRANSACTIONS.—In the case of any 

10 transaction which is a covered transaction solely by 

11 reason of paragraph (1) and which is not described 

12 in subsection (f)(1)— 

13 ‘‘(A) PAYMENT BY UNITED STATES SHARE14 HOLDERS.—Any tax which would (but for this 

15 paragraph) be payable under subsection (f)(2) 

16 by the controlled foreign corporation shall, in 

17 lieu thereof, be paid by the United States 

18 shareholders of such controlled foreign corpora19 tion as provided in subparagraph (B). 

20 ‘‘(B) PRO RATA SHARES.—Each such 

21 United States shareholder shall pay the same 

22 proportion of such tax as— 

23 ‘‘(i) the stock which such United 

24 States shareholder owns (within the meanVerDate Sep 11 2014 18:51 Jul 19, 2024 Jkt 049200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\H8602.IH H8602

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1 ing of section 958(a)) in such controlled 

2 foreign corporation, bears to 

3 ‘‘(ii) the stock so owned by all United 

4 States shareholders in such controlled for5 eign corporation. 

6 ‘‘(C) DEFINITIONS.—For purposes of this 

7 subsection, the terms ‘United States share8 holder’ and ‘controlled foreign corporation’ have 

9 the meanings given such terms in sections 

10 951(b) and 957(a), respectively. 

11 ‘‘(i) ADMINISTRATION.—The Secretary shall carry 

12 out this section in consultation with the Securities and Ex13 change Commission and the Commodity Futures Trading 

14 Commission. 

15 ‘‘(j) GUIDANCE; REGULATIONS.—The Secretary 

16 shall— 

17 ‘‘(1) provide guidance regarding such informa18 tion reporting concerning covered transactions as the 

19 Secretary deems appropriate, and 

20 ‘‘(2) prescribe such regulations as are necessary 

21 or appropriate to prevent avoidance of the purposes 

22 of this section, including the use of non-United 

23 States persons in such transactions. 


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1 ‘‘SEC. 4476. DERIVATIVE DEFINED. 

2 ‘‘(a) IN GENERAL.—For purposes of this subchapter, 

3 except as otherwise provided in this section, the term ‘de4 rivative’ means any contract (including any option, for5 ward contract, futures contract, short position, swap, or 

6 similar contract) the value of which, or any payment or 

7 other transfer with respect to which, is (directly or indi8 rectly) determined by reference to one or more of the fol9 lowing: 

10 ‘‘(1) Any share of stock in a corporation. 

11 ‘‘(2) Any partnership or beneficial ownership 

12 interest in a partnership or trust. 

13 ‘‘(3) Any evidence of indebtedness. 

14 ‘‘(4) Except as provided in subsection (b)(1), 

15 any real property. 

16 ‘‘(5) Any commodity which is actively traded 

17 (within the meaning of section 1092(d)(1)). 

18 ‘‘(6) Any currency. 

19 ‘‘(7) Any rate, price, amount, index, formula, or 

20 algorithm. 

21 ‘‘(8) Any other item as the Secretary may pre22 scribe. 

23 Except as provided in regulations prescribed by the Sec24 retary to prevent the avoidance of the purposes of this 

25 subchapter, such term shall not include any item described 

26 in paragraphs (1) through (8). 


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1 ‘‘(b) EXCEPTIONS.— 

2 ‘‘(1) CERTAIN REAL PROPERTY.— 

3 ‘‘(A) IN GENERAL.—For purposes of this 

4 subchapter, the term ‘derivative’ shall not in5 clude any contract with respect to interests in 

6 real property (as defined in section 

7 856(c)(5)(C)) if such contract requires physical 

8 delivery of such real property. 

9 ‘‘(B) OPTIONS TO SETTLE IN CASH.— 

10 ‘‘(i) IN GENERAL.—For purposes of 

11 subparagraph (A), a contract which pro12 vides for an option of cash settlement shall 

13 not be treated as requiring physical deliv14 ery of real property unless the option is— 

15 ‘‘(I) not exercisable uncondition16 ally, and 

17 ‘‘(II) exercisable only in unusual 

18 and exceptional circumstances. 

19 ‘‘(ii) OPTION OF CASH SETTLE20 MENT.—For purposes of clause (i), a con21 tract provides an option of cash settlement 

22 if the contract settles in (or could be set23 tled in) cash or property other than the 

24 underlying real property. 


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1 ‘‘(2) SECURITIES LENDING, SALE-REPURCHASE, 

2 AND SIMILAR FINANCING TRANSACTIONS.—To the 

3 extent provided by the Secretary, for purposes of 

4 this subchapter, the term ‘derivative’ shall not in5 clude the right to the return of the same or substan6 tially identical securities transferred in a securities 

7 lending transaction, sale-repurchase transaction, or 

8 similar financing transaction. 

9 ‘‘(3) OPTIONS RECEIVED IN CONNECTION WITH

10 THE PERFORMANCE OF SERVICES.—For purposes of 

11 this subchapter, the term ‘derivative’ shall not in12 clude any option described in section 83(e)(3) re13 ceived in connection with the performance of serv14 ices. 

15 ‘‘(4) INSURANCE CONTRACTS, ANNUITIES, AND

16 ENDOWMENTS.—For purposes of this subchapter, 

17 the term ‘derivative’ shall not include any insurance, 

18 annuity, or endowment contract issued by an insur19 ance company to which subchapter L applies (or 

20 issued by any foreign corporation to which such sub21 chapter would apply if such foreign corporation were 

22 a domestic corporation). 

23 ‘‘(5) DERIVATIVES WITH RESPECT TO STOCK

24 OF MEMBERS OF SAME WORLDWIDE AFFILIATED

25 GROUP.—For purposes of this subchapter, the term 


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1 ‘derivative’ shall not include any derivative (deter2 mined without regard to this paragraph) with re3 spect to stock issued by any member of the same 

4 worldwide affiliated group (as defined in section 

5 864(f)) in which the taxpayer is a member. 

6 ‘‘(6) COMMODITIES USED IN NORMAL COURSE

7 OF TRADE OR BUSINESS.—For purposes of this sub8 chapter, the term ‘derivative’ shall not include any 

9 contract with respect to any commodity if— 

10 ‘‘(A) such contract requires physical deliv11 ery with the option of cash settlement only in 

12 unusual and exceptional circumstances, and 

13 ‘‘(B) such commodity is used (and is used 

14 in quantities with respect to which such deriva15 tive relates) in the normal course of the tax16 payer’s trade or business (or, in the case of an 

17 individual, for personal consumption). 

18 ‘‘(c) CONTRACTS WITH EMBEDDED DERIVATIVE

19 COMPONENTS.— 

20 ‘‘(1) IN GENERAL.—If a contract has derivative 

21 and nonderivative components, then each derivative 

22 component shall be treated as a derivative for pur23 poses of this subchapter. If the derivative component 

24 cannot be separately valued, then the entire contract 


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1 shall be treated as a derivative for purposes of this 

2 subchapter. 

3 ‘‘(2) EXCEPTION FOR CERTAIN EMBEDDED DE4 RIVATIVE COMPONENTS OF DEBT INSTRUMENTS.—A 

5 debt instrument shall not be treated as having a de6 rivative component merely because— 

7 ‘‘(A) such debt instrument is denominated 

8 in a nonfunctional currency (as defined in sec9 tion 988(c)(1)(C)(ii)), or 

10 ‘‘(B) payments with respect to such debt 

11 instrument are determined by reference to the 

12 value of a nonfunctional currency (as so de13 fined). 

14 ‘‘(d) TREATMENT OF AMERICAN DEPOSITORY RE15 CEIPTS AND SIMILAR INSTRUMENTS.—Except as other16 wise provided by the Secretary, for purposes of this sub17 chapter, American depository receipts (and similar instru18 ments) with respect to shares of stock in foreign corpora19 tions shall be treated as shares of stock in such foreign 

20 corporations.’’. 

21 (b) INFORMATION REPORTING WITH RESPECT TO

22 CONTROLLED FOREIGN CORPORATIONS.—Section 

23 6038(a)(1)(B) of such Code is amended by inserting ‘‘and 

24 transactions which are covered transactions for purposes 

25 of section 4475 by reason of the application of section 


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1 4475(h)(1) to such corporation’’ before the semicolon at 

2 the end. 

3 (c) CONFORMING AMENDMENT.—The table of sub4 chapters for chapter 36 of such Code is amended by in5 serting after the item relating to subchapter B the fol6 lowing new item: 

‘‘SUBCHAPTER C. TAX ON TRADING TRANSACTIONS’’. 

7 (d) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to transactions after December 31, 

9 2024. 

Æ 


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