II 

Calendar No. 165 

112TH CONGRESS 

1ST SESSION S. 1549 

To provide tax relief for American workers and businesses, to put workers 

back on the job while rebuilding and modernizing America, and to provide 

pathways back to work for Americans looking for jobs. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 13, 2011 

Mr. REID (by request) introduced the following bill; which was read the first 

time 

SEPTEMBER 14, 2011 

Read the second time and placed on the calendar 

A BILL 

To provide tax relief for American workers and businesses, 

to put workers back on the job while rebuilding and 

modernizing America, and to provide pathways back to 

work for Americans looking for jobs. 

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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘American Jobs Act of 2011’’. 


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1 (b) TABLE OF CONTENTS.—The table of contents for 

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. References. 

Sec. 3. Severability. 

Sec. 4. Buy American—Use of American iron, steel, and manufactured goods. 

Sec. 5. Wage rate and employment protection requirements. 

TITLE I—RELIEF FOR WORKERS AND BUSINESSES 

Subtitle A—Payroll Tax Relief 

Sec. 101. Temporary payroll tax cut for employers, employees and the self-employed. 

Sec. 102. Temporary tax credit for increased payroll. 

Subtitle B—Other Relief for Businesses 

Sec. 111. Extension of temporary 100 percent bonus depreciation for certain 

business assets. 

Sec. 112. Surety bonds. 

Sec. 113. Delay in application of withholding on government contractors. 

TITLE II—PUTTING WORKERS BACK ON THE JOB WHILE 

REBUILDING AND MODERNIZING AMERICA 

Subtitle A—Veterans Hiring Preferences 

Sec. 201. Returning heroes and wounded warriors work opportunity tax credits. 

Subtitle B—Teacher Stabilization 

Sec. 202. Purpose. 

Sec. 203. Grants for the outlying areas and the Secretary of the Interior; availability of funds. 

Sec. 204. State allocation. 

Sec. 205. State application. 

Sec. 206. State reservation and responsibilities. 

Sec. 207. Local educational agencies. 

Sec. 208. Early learning. 

Sec. 209. Maintenance of effort. 

Sec. 210. Reporting. 

Sec. 211. Definitions. 

Sec. 212. Authorization of appropriations. 

Subtitle C—First Responder Stabilization 

Sec. 213. Purpose. 

Sec. 214. Grant program. 

Sec. 215. Appropriations. 

Subtitle D—School Modernization 

PART I—ELEMENTARY AND SECONDARY SCHOOLS

Sec. 221. Purpose. 


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Sec. 222. Authorization of appropriations. 

Sec. 223. Allocation of funds. 

Sec. 224. State use of funds. 

Sec. 225. State and local applications. 

Sec. 226. Use of funds. 

Sec. 227. Private schools. 

Sec. 228. Additional provisions. 

PART II—COMMUNITY COLLEGE MODERNIZATION

Sec. 229. Federal assistance for community college modernization. 

PART III—GENERAL PROVISIONS

Sec. 230. Definitions. 

Sec. 231. Buy American. 

Subtitle E—Immediate Transportation Infrastrucure Investments 

Sec. 241. Immediate transportation infrastructure investments. 

Subtitle F—Building and Upgrading Infrastructure for Long-Term 

Development 

Sec. 242. Short title; table of contents. 

Sec. 243. Findings and purpose. 

Sec. 244. Definitions. 

PART I—AMERICAN INFRASTRUCTURE FINANCING AUTHORITY

Sec. 245. Establishment and general authority of AIFA. 

Sec. 246. Voting members of the board of directors. 

Sec. 247. Chief executive officer of AIFA. 

Sec. 248. Powers and duties of the board of directors. 

Sec. 249. Senior management. 

Sec. 250. Special Inspector General for AIFA. 

Sec. 251. Other personnel. 

Sec. 252. Compliance. 

PART II—TERMS AND LIMITATIONS ON DIRECT LOANS AND LOAN

GUARANTEES

Sec. 253. Eligibility criteria for assistance from AIFA and terms and limitations of loans. 

Sec. 254. Loan terms and repayment. 

Sec. 255. Compliance and enforcement. 

Sec. 256. Audits; reports to the President and Congress. 

PART III—FUNDING OF AIFA 

Sec. 257. Administrative fees. 

Sec. 258. Efficiency of AIFA. 

Sec. 259. Funding. 

PART IV—EXTENSION OF EXEMPTION FROM ALTERNATIVE MINIMUM TAX

TREATMENT FOR CERTAIN TAX-EXEMPT BONDS

Sec. 260. Extension of exemption from alternative minimum tax treatment for 

certain tax-exempt bonds. 


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Subtitle G—Project Rebuild 

Sec. 261. Project Rebuild. 

Subtitle H—National Wireless Initiative 

Sec. 271. Definitions. 

PART I—AUCTIONS OF SPECTRUM AND SPECTRUM MANAGEMENT

Sec. 272. Clarification of authorities to repurpose Federal spectrum for commercial purposes. 

Sec. 273. Incentive auction authority. 

Sec. 274. Requirements when repurposing certain mobile satellite services spectrum for terrestrial broadband use. 

Sec. 275. Permanent extension of auction authority. 

Sec. 276. Authority to auction licenses for domestic satellite services. 

Sec. 277. Directed auction of certain spectrum. 

Sec. 278. Authority to establish spectrum license user fees. 

PART II—PUBLIC SAFETY BROADBAND NETWORK

Sec. 281. Reallocation of D block for public safety. 

Sec. 282. Flexible use of narrowband spectrum. 

Sec. 283. Single public safety wireless network licensee. 

Sec. 284. Establishment of Public Safety Broadband Corporation. 

Sec. 285. Board of directors of the corporation. 

Sec. 286. Officers, employees, and committees of the corporation. 

Sec. 287. Nonprofit and nonpolitical nature of the corporation. 

Sec. 288. Powers, duties, and responsibilities of the corporation. 

Sec. 289. Initial funding for corporation. 

Sec. 290. Permanent self-funding; duty to assess and collect fees for network 

use. 

Sec. 291. Audit and report. 

Sec. 292. Annual report to Congress. 

Sec. 293. Provision of technical assistance. 

Sec. 294. State and local implementation. 

Sec. 295. State and Local Implementation Fund. 

Sec. 296. Public safety wireless communications research and development. 

Sec. 297. Public Safety Trust Fund. 

Sec. 298. FCC report on efficient use of public safety spectrum. 

Sec. 299. Public safety roaming and priority access. 

TITLE III—ASSISTANCE FOR THE UNEMPLOYED AND PATHWAYS 

BACK TO WORK 

Subtitle A—Supporting Unemployed Workers 

Sec. 301. Short title. 

PART I—EXTENSION OF EMERGENCY UNEMPLOYMENT COMPENSATION AND

CERTAIN EXTENDED BENEFITS PROVISIONS, AND ESTABLISHMENT OF

SELF-EMPLOYMENT ASSISTANCE PROGRAM

Sec. 311. Extension of emergency unemployment compensation program. 

Sec. 312. Temporary extension of extended benefit provisions. 

Sec. 313. Reemployment services and reemployment and eligibility assessment 

activities. 


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Sec. 314. Federal-State agreements to administer a self-employment assistance 

program. 

Sec. 315. Conforming amendment on payment of Bridge to Work wages. 

Sec. 316. Additional extended unemployment benefits under the Railroad Unemployment Insurance Act. 

PART II—REEMPLOYMENT NOW PROGRAM

Sec. 321. Establishment of Reemployment NOW program. 

Sec. 322. Distribution of funds. 

Sec. 323. State plan. 

Sec. 324. Bridge to Work program. 

Sec. 325. Wage insurance. 

Sec. 326. Enhanced reemployment strategies. 

Sec. 327. Self-employment programs. 

Sec. 328. Additional innovative programs. 

Sec. 329. Guidance and additional requirements. 

Sec. 330. Report of information and evaluations to Congress and the public. 

Sec. 331. State. 

PART III—SHORT-TIME COMPENSATION PROGRAM

Sec. 341. Treatment of short-time compensation programs. 

Sec. 342. Temporary financing of short-time compensation payments in States 

with programs in law. 

Sec. 343. Temporary financing of short-time compensation agreements. 

Sec. 344. Grants for short-time compensation programs. 

Sec. 345. Assistance and guidance in implementing programs. 

Sec. 346. Reports. 

Subtitle B—Long Term Unemployed Hiring Preferences 

Sec. 351. Long term unemployed workers work opportunity tax credits. 

Subtitle C—Pathways Back to Work 

Sec. 361. Short title. 

Sec. 362. Establishment of Pathways Back to Work Fund. 

Sec. 363. Availability of funds. 

Sec. 364. Subsidized employment for unemployed, low-income adults. 

Sec. 365. Summer employment and year-round employment opportunities for 

low-income youth. 

Sec. 366. Work-based employment strategies of demonstrated effectiveness. 

Sec. 367. General requirements. 

Sec. 368. Definitions. 

Subtitle D—Prohibition of Discrimination in Employment on the Basis of an 

Individual’s Status as Unemployed 

Sec. 371. Short title. 

Sec. 372. Findings and purpose. 

Sec. 373. Definitions. 

Sec. 374. Prohibited acts. 

Sec. 375. Enforcement. 

Sec. 376. Federal and State immunity. 

Sec. 377. Relationship to other laws. 

Sec. 378. Severability. 


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Sec. 379. Effective date. 

TITLE IV—OFFSETS 

Subtitle A—28 Percent Limitation on Certain Deductions and Exclusions 

Sec. 401. 28 percent limitation on certain deductions and exclusions. 

Subtitle B—Tax Carried Interest in Investment Partnerships as Ordinary 

Income 

Sec. 411. Partnership interests transferred in connection with performance of 

services. 

Sec. 412. Special rules for partners providing investment management services 

to partnerships. 

Subtitle C—Close Loophole for Corporate Jet Depreciation 

Sec. 421. General aviation aircraft treated as 7-year property. 

Subtitle D—Repeal Oil Subsidies 

Sec. 431. Repeal of deduction for intangible drilling and development costs in 

the case of oil and gas wells. 

Sec. 432. Repeal of deduction for tertiary injectants. 

Sec. 433. Repeal of percentage depletion for oil and gas wells. 

Sec. 434. Section 199 deduction not allowed with respect to oil, natural gas, 

or primary products thereof. 

Sec. 435. Repeal oil and gas working interest exception to passive activity rules. 

Sec. 436. Uniform seven-year amortization for geological and geophysical expenditures. 

Sec. 437. Repeal enhanced oil recovery credit. 

Sec. 438. Repeal marginal well production credit. 

Subtitle E—Dual Capacity Taxpayers 

Sec. 441. Modifications of foreign tax credit rules applicable to dual capacity 

taxpayers. 

Sec. 442. Separate basket treatment taxes paid on foreign oil and gas income. 

Subtitle F—Increased Target and Trigger for Joint Select Committee on 

Deficit Reduction 

Sec. 451. Increased target and trigger for Joint Select Committee on Deficit 

Reduction. 

1 SEC. 2. REFERENCES. 

2 Except as expressly provided otherwise, any reference 

3 to ‘‘this Act’’ contained in any subtitle of this Act shall 

4 be treated as referring only to the provisions of that sub5 title. 


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1 SEC. 3. SEVERABILITY. 

2 If any provision of this Act, or the application thereof 

3 to any person or circumstance, is held invalid, the remain4 der of the Act and the application of such provision to 

5 other persons or circumstances shall not be affected there6 by. 

7 SEC. 4. BUY AMERICAN—USE OF AMERICAN IRON, STEEL, 

8 AND MANUFACTURED GOODS. 

9 (a) None of the funds appropriated or otherwise made 

10 available by this Act may be used for a project for the 

11 construction, alteration, maintenance, or repair of a public 

12 building or public work unless all of the iron, steel, and 

13 manufactured goods used in the project are produced in 

14 the United States. 

15 (b) Subsection (a) shall not apply in any case or cat16 egory of cases in which the head of the Federal depart17 ment or agency involved finds that— 

18 (1) applying subsection (a) would be incon19 sistent with the public interest; 

20 (2) iron, steel, and the relevant manufactured 

21 goods are not produced in the United States in suffi22 cient and reasonably available quantities and of a 

23 satisfactory quality; or 

24 (3) inclusion of iron, steel, and manufactured 

25 goods produced in the United States will increase 


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1 the cost of the overall project by more than 25 per2 cent. 

3 (c) If the head of a Federal department or agency 

4 determines that it is necessary to waive the application 

5 of subsection (a) based on a finding under subsection (b), 

6 the head of the department or agency shall publish in the 

7 Federal Register a detailed written justification as to why 

8 the provision is being waived. 

9 (d) This section shall be applied in a manner con10 sistent with United States obligations under international 

11 agreements. 

12 SEC. 5. WAGE RATE AND EMPLOYMENT PROTECTION RE13 QUIREMENTS. 

14 (a) Notwithstanding any other provision of law and 

15 in a manner consistent with other provisions in this Act, 

16 all laborers and mechanics employed by contractors and 

17 subcontractors on projects funded directly by or assisted 

18 in whole or in part by and through the Federal Govern19 ment pursuant to this Act shall be paid wages at rates 

20 not less than those prevailing on projects of a character 

21 similar in the locality as determined by the Secretary of 

22 Labor in accordance with subchapter IV of chapter 31 of 

23 title 40, United States Code. 

24 (b) With respect to the labor standards specified in 

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1 ity and functions set forth in Reorganization Plan Num2 bered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and sec3 tion 3145 of title 40, United States Code. 

4 (c) Projects as defined under title 49, United States 

5 Code, funded directly by or assisted in whole or in part 

6 by and through the Federal Government pursuant to this 

7 Act shall be subject to the requirements of section 5333(b) 

8 of title 49, United States Code. 

9 TITLE I—RELIEF FOR WORKERS 

10 AND BUSINESSES 

11 Subtitle A—Payroll Tax Relief 

12 SEC. 101. TEMPORARY PAYROLL TAX CUT FOR EMPLOYERS, 

13 EMPLOYEES AND THE SELF-EMPLOYED. 

14 (a) WAGES.—Notwithstanding any other provision of 

15 law— 

16 (1) with respect to remuneration received dur17 ing the payroll tax holiday period, the rate of tax 

18 under 3101(a) of the Internal Revenue Code of 1986 

19 shall be 3.1 percent (including for purposes of deter20 mining the applicable percentage under sections 

21 3201(a) and 3211(a) of such Code), and 

22 (2) with respect to remuneration paid during 

23 the payroll tax holiday period, the rate of tax under 

24 3111(a) of such Code shall be 3.1 percent (including 

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1 age under sections 3221(a) and 3211(a) of such 

2 Code). 

3 (3) Subsection (a)(2) shall only apply to— 

4 (A) employees performing services in a 

5 trade or business of a qualified employer, or 

6 (B) in the case of a qualified employer ex7 empt from tax under section 501(a), in further8 ance of the activities related to the purpose or 

9 function constituting the basis of the employer’s 

10 exemption under section 501. 

11 (4) Subsection (a)(2) shall apply only to the 

12 first $5 million of remuneration or compensation 

13 paid by a qualified employer subject to section 

14 3111(a) or a corresponding amount of compensation 

15 subject to 3221(a). 

16 (b) SELF-EMPLOYMENT TAXES.— 

17 (1) IN GENERAL.—Notwithstanding any other 

18 provision of law, with respect to any taxable year 

19 which begins in the payroll tax holiday period, the 

20 rate of tax under section 1401(a) of the Internal 

21 Revenue Code of 1986 shall be— 

22 (A) 6.2 percent on the portion of net earn23 ings from self-employment subject to 1401(a) 

24 during the payroll tax period that does not ex25 ceed the amount of the excess of $5 million over 


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1 total remuneration, if any, subject to section 

2 3111(a) paid during the payroll tax holiday pe3 riod to employees of the self-employed person, 

4 and 

5 (B) 9.3 percent for any portion of net 

6 earnings from self-employment not subject to 

7 subsection (b)(1)(A). 

8 (2) COORDINATION WITH DEDUCTIONS FOR EM9 PLOYMENT TAXES.—For purposes of the Internal 

10 Revenue Code of 1986, in the case of any taxable 

11 year which begins in the payroll tax holiday period— 

12 (A) DEDUCTION IN COMPUTING NET EARN13 INGS FROM SELF-EMPLOYMENT.—The deduc14 tion allowed under section 1402(a)(12) of such 

15 Code shall be the sum of (i) 4.55 percent times 

16 the amount of the taxpayer’s net earnings from 

17 self-employment for the taxable year subject to 

18 paragraph (b)(1)(A) of this section, plus (ii) 

19 7.65 percent of the taxpayer’s net earnings 

20 from self-employment in excess of that amount. 

21 (B) INDIVIDUAL DEDUCTION.—The deduc22 tion under section 164(f) of such Code shall be 

23 equal to the sum of (i) one-half of the taxes im24 posed by section 1401 (after the application of 

25 this section) with respect to the taxpayer’s net 


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1 earnings from self-employment for the taxable 

2 year subject to paragraph (b)(1)(A) of this sec3 tion plus (ii) 62.7 percent of the taxes imposed 

4 by section 1401 (after the application of this 

5 section) with respect to the excess. 

6 (c) REGULATORY AUTHORITY.—The Secretary may 

7 prescribe any such regulations or other guidance necessary 

8 or appropriate to carry out this section, including the allo9 cation of the excess of $5 million over total remuneration 

10 subject to section 3111(a) paid during the payroll tax holi11 day period among related taxpayers treated as a single 

12 qualified employer. 

13 (d) DEFINITIONS.— 

14 (1) PAYROLL TAX HOLIDAY PERIOD.—The term 

15 ‘‘payroll tax holiday period’’ means calendar year 

16 2012. 

17 (2) QUALIFIED EMPLOYER.—For purposes of 

18 this paragraph, 

19 (A) IN GENERAL.—The term ‘‘qualified 

20 employer’’ means any employer other than the 

21 United States, any State or possession of the 

22 United States, or any political subdivision 

23 thereof, or any instrumentality of the foregoing. 

24 (B) TREATMENT OF EMPLOYEES OF POST25 SECONDARY EDUCATIONAL INSTITUTIONS.— 


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1 Notwithstanding paragraph (A), the term 

2 ‘‘qualified employer’’ includes any employer 

3 which is a public institution of higher education 

4 (as defined in section 101 of the Higher Edu5 cation Act of 1965). 

6 (3) AGGREGATION RULES.—For purposes of 

7 this subsection rules similar to sections 414(b), 

8 414(c), 414(m) and 414(o) shall apply to determine 

9 when multiple entities shall be treated as a single 

10 employer, and rules with respect to predecessor and 

11 successor employers may be applied, in such manner 

12 as may be prescribed by the Secretary. 

13 (e) TRANSFERS OF FUNDS.— 

14 (1) TRANSFERS TO FEDERAL OLD-AGE AND

15 SURVIVORS INSURANCE TRUST FUND.—There are 

16 hereby appropriated to the Federal Old-Age and 

17 Survivors Trust Fund and the Federal Disability In18 surance Trust Fund established under section 201 

19 of the Social Security Act (42 U.S.C. 401) amounts 

20 equal to the reduction in revenues to the Treasury 

21 by reason of the application of subsections (a) and 

22 (b) to employers other than those described in 

23 (e)(2). Amounts appropriated by the preceding sen24 tence shall be transferred from the general fund at 

25 such times and in such manner as to replicate to the 


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1 extent possible the transfers which would have oc2 curred to such Trust Fund had such amendments 

3 not been enacted. 

4 (2) TRANSFERS TO SOCIAL SECURITY EQUIVA5 LENT BENEFIT ACCOUNT.—There are hereby appro6 priated to the Social Security Equivalent Benefit Ac7 count established under section 15A(a) of the Rail8 road Retirement Act of 1974 (45 U.S.C. 231n–1(a)) 

9 amounts equal to the reduction in revenues to the 

10 Treasury by reason of the application of subsection 

11 (a) to employers subject to the Railroad Retirement 

12 Tax. Amounts appropriated by the preceding sen13 tence shall be transferred from the general fund at 

14 such times and in such manner as to replicate to the 

15 extent possible the transfers which would have oc16 curred to such Account had such amendments not 

17 been enacted. 

18 (f) COORDINATION WITH OTHER FEDERAL LAWS.— 

19 For purposes of applying any provision of Federal law 

20 other than the provisions of the Internal Revenue Code 

21 of 1986, the rate of tax in effect under section 3101(a) 

22 of such Code shall be determined without regard to the 

23 reduction in such rate under this section. 


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1 SEC. 102. TEMPORARY TAX CREDIT FOR INCREASED PAY2 ROLL. 

3 (a) IN GENERAL.—Notwithstanding any other provi4 sion of law, each qualified employer shall be allowed, with 

5 respect to wages for services performed for such qualified 

6 employer, a payroll increase credit determined as follows: 

7 (1) With respect to the period from October 1, 

8 2011 through December 31, 2011, 6.2 percent of 

9 the excess, if any, (but not more than $12.5 million 

10 of the excess) of the wages subject to tax under sec11 tion 3111(a) of the Internal Revenue Code of 1986 

12 for such period over such wages for the cor13 responding period of 2010. 

14 (2) With respect to the period from January 1, 

15 2012 through December 31, 2012, 

16 (A) 6.2 percent of the excess, if any, (but 

17 not more than $50 million of the excess) of the 

18 wages subject to tax under section 3111(a) of 

19 the Internal Revenue Code of 1986 for such pe20 riod over such wages for calendar year 2011, 

21 minus 

22 (B) 3.1 percent of the result (but not less 

23 than zero) of subtracting from $5 million such 

24 wages for calendar year 2011. 

25 (3) In the case of a qualified employer for 

26 which the wages subject to tax under section 


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1 3111(a) of the Internal Revenue Code of 1986 (a) 

2 were zero for the corresponding period of 2010 re3 ferred to in subsection (a)(1), the amount of such 

4 wages shall be deemed to be 80 percent of the 

5 amount of wages taken into account for the period 

6 from October 1, 2011 through December 31, 2011 

7 and (b) were zero for the calendar year 2011 re8 ferred to in subsection (a)(2), then the amount of 

9 such wages shall be deemed to be 80 percent of the 

10 amount of wages taken into account for 2012. 

11 (4) This subsection (a) shall only apply with re12 spect to the wages of employees performing services 

13 in a trade or business of a qualified employer or, in 

14 the case of a qualified employer exempt from tax 

15 under section 501(a) of the Internal Revenue Code 

16 of 1986, in furtherance of the activities related to 

17 the purpose or function constituting the basis of the 

18 employer’s exemption under section 501. 

19 (b) QUALIFIED EMPLOYERS.—For purposes of this 

20 section— 

21 (1) IN GENERAL.—The term ‘‘qualified em22 ployer’’ means any employer other than the United 

23 States, any State or possession of the United States, 

24 or any political subdivision thereof, or any instru25 mentality of the foregoing. 


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1 (2) TREATMENT OF EMPLOYEES OF POST-SEC2 ONDARY EDUCATIONAL INSTITUTIONS.—Notwith3 standing subparagraph (1), the term ‘‘qualified em4 ployer’’ includes any employer which is a public in5 stitution of higher education (as defined in section 

6 101 of the Higher Education Act of 1965). 

7 (c) AGGREGATION RULES.—For purposes of this sub8 section rules similar to sections 414(b), 414(c), 414(m) 

9 and 414(o) of the Internal Revenue Code of 1986 shall 

10 apply to determine when multiple entities shall be treated 

11 as a single employer, and rules with respect to predecessor 

12 and successor employers may be applied, in such manner 

13 as may be prescribed by the Secretary. 

14 (d) APPLICATION OF CREDITS.—The payroll increase 

15 credit shall be treated as a credit allowable under Subtitle 

16 C of the Internal Revenue Code of 1986 under rules pre17 scribed by the Secretary of the Treasury, provided that 

18 the amount so treated for the period described in sub19 section (a)(1) or subsection (a)(2) shall not exceed the 

20 amount of tax imposed on the qualified employer under 

21 section 3111(a) of such Code for the relevant period. Any 

22 income tax deduction by a qualified employer for amounts 

23 paid under section 3111(a) of such Code or similar Rail24 road Retirement Tax provisions shall be reduced by the 

25 amounts so credited. 


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1 (e) TRANSFERS TO FEDERAL OLD-AGE AND SUR2 VIVORS INSURANCE TRUST FUND.—There are hereby ap3 propriated to the Federal Old-Age and Survivors Trust 

4 Fund and the Federal Disability Insurance Trust Fund 

5 established under section 201 of the Social Security Act 

6 (42 U.S.C. 401) amounts equal to the reduction in reve7 nues to the Treasury by reason of the amendments made 

8 by subsection (d). Amounts appropriated by the preceding 

9 sentence shall be transferred from the general fund at 

10 such times and in such manner as to replicate to the ex11 tent possible the transfers which would have occurred to 

12 such Trust Fund had such amendments not been enacted. 

13 (f) APPLICATION TO RAILROAD RETIREMENT

14 TAXES.—For purposes of qualified employers that are em15 ployers under section 3231(a) of the Internal Revenue 

16 Code of 1986, subsections (a)(1) and (a)(2) of this section 

17 shall apply by substituting section 3221 for section 3111, 

18 and substituting the term ‘‘compensation’’ for ‘‘wages’’ as 

19 appropriate. 


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1 Subtitle B—Other Relief for 

2 Businesses 

3 SEC. 111. EXTENSION OF TEMPORARY 100 PERCENT BONUS 

4 DEPRECIATION FOR CERTAIN BUSINESS AS5 SETS. 

6 (a) IN GENERAL.—Paragraph (5) of section 168(k) 

7 of the Internal Revenue Code is amended— 

8 (1) by striking ‘‘January 1, 2012’’ each place 

9 it appears and inserting ‘‘January 1, 2013’’, and 

10 (2) by striking ‘‘January 1, 2013’’ and insert11 ing ‘‘January 1, 2014’’. 

12 (b) CONFORMING AMENDMENT.—The heading for 

13 paragraph (5) of section 168(k) of the Internal Revenue 

14 Code is amended by striking ‘‘PRE–2012 PERIODS’’ and 

15 inserting ‘‘PRE–2013 PERIODS’’. 

16 SEC. 112. SURETY BONDS. 

17 (a) MAXIMUM BOND AMOUNT.—Section 411(a)(1) of 

18 the Small Business Investment Act of 1958 (15 U.S.C. 

19 694b(a)(1)) is amended by striking ‘‘$2,000,000’’ and in20 serting ‘‘$5,000,000’’. 

21 (b) DENIAL OF LIABILITY.—Section 411(e)(2) of the 

22 Small Business Investment Act of 1958 (15 U.S.C. 

23 694b(e)(2)) is amended by striking ‘‘$2,000,000’’ and in24 serting ‘‘$5,000,000’’. 


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1 (c) SUNSET.—The amendments made by subsections 

2 (a) and (b) of this section shall remain in effect until Sep3 tember 30, 2012. 

4 (d) FUNDING.—There is appropriated out of any 

5 money in the Treasury not otherwise appropriated, 

6 $3,000,000, to remain available until expended, for addi7 tional capital for the Surety Bond Guarantees Revolving 

8 Fund, as authorized by the Small Business Investment 

9 Act of 1958, as amended. 

10 SEC. 113. DELAY IN APPLICATION OF WITHHOLDING ON 

11 GOVERNMENT CONTRACTORS. 

12 Subsection (b) of section 511 of the Tax Increase 

13 Prevention and Reconciliation Act of 2005 is amended by 

14 striking ‘‘December 31, 2011’’ and inserting ‘‘December 

15 31, 2013’’. 

16 TITLE II—PUTTING WORKERS 

17 BACK ON THE JOB WHILE RE18 BUILDING AND MODERNIZING 

19 AMERICA 

20 Subtitle A—Veterans Hiring 

21 Preferences 

22 SEC. 201. RETURNING HEROES AND WOUNDED WARRIORS 

23 WORK OPPORTUNITY TAX CREDITS. 

24 (a) IN GENERAL.—Paragraph (3) of section 51(b) of 

25 the Internal Revenue Code is amended by striking 


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1 ‘‘($12,000 per year in the case of any individual who is 

2 a qualified veteran by reason of subsection (d)(3)(A)(ii))’’ 

3 and inserting ‘‘($12,000 per year in the case of any indi4 vidual who is a qualified veteran by reason of subsection 

5 (d)(3)(A)(ii)(I), $14,000 per year in the case of any indi6 vidual who is a qualified veteran by reason of subsection 

7 (d)(3)(A)(iv), and $24,000 per year in the case of any in8 dividual who is a qualified veteran by reason of subsection 

9 (d)(3)(A)(ii)(II))’’. 

10 (b) RETURNING HEROES TAX CREDITS.—Section 

11 51(d)(3)(A) of the Internal Revenue Code is amended by 

12 striking ‘‘or’’ at the end of paragraph (3)(A)(i), and in13 serting the following new paragraphs after paragraph 

14 (ii)— 

15 ‘‘(iii) having aggregate periods of un16 employment during the 1-year period end17 ing on the hiring date which equal or ex18 ceed 4 weeks (but less than 6 months), or 

19 ‘‘(iv) having aggregate periods of un20 employment during the 1-year period end21 ing on the hiring date which equal or ex22 ceed 6 months.’’. 

23 (c) SIMPLIFIED CERTIFICATION.—Section 51(d) of 

24 the Internal Revenue Code is amended by adding a new 

25 paragraph 15 as follows— 


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1 ‘‘(15) CREDIT ALLOWED FOR UNEMPLOYED

2 VETERANS.— 

3 ‘‘(A) IN GENERAL.—Any qualified veteran 

4 under paragraphs (3)(A)(ii)(II), (3)(A)(iii), and 

5 (3)(A)(iv) will be treated as certified by the des6 ignated local agency as having aggregate peri7 ods of unemployment if— 

8 ‘‘(i) in the case of qualified veterans 

9 under paragraphs (3)(A)(ii)(II) and 

10 (3)(A)(iv), the veteran is certified by the 

11 designated local agency as being in receipt 

12 of unemployment compensation under 

13 State or Federal law for not less than 6 

14 months during the 1-year period ending on 

15 the hiring date; or 

16 ‘‘(ii) in the case of a qualified veteran 

17 under paragraph (3)(A)(iii), the veteran is 

18 certified by the designated local agency as 

19 being in receipt of unemployment com20 pensation under State or Federal law for 

21 not less than 4 weeks (but less than 6 

22 months) during the 1-year period ending 

23 on the hiring date. 


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1 ‘‘(B) REGULATORY AUTHORITY.—The Sec2 retary in his discretion may provide alternative 

3 methods for certification.’’. 

4 (d) CREDIT MADE AVAILABLE TO TAX-EXEMPT EM5 PLOYERS IN CERTAIN CIRCUMSTANCES.—Section 52(c) of 

6 the Internal Revenue Code is amended— 

7 (1) by striking the word ‘‘No’’ at the beginning 

8 of the section and replacing it with ‘‘Except as pro9 vided in this subsection, no’’; 

10 (2) the following new paragraphs are inserted 

11 at the end of section 52(c)— 

12 ‘‘(1) IN GENERAL.—In the case of a tax-exempt 

13 employer, there shall be treated as a credit allowable 

14 under subpart C (and not allowable under subpart 

15 D) the lesser of— 

16 ‘‘(A) the amount of the work opportunity 

17 credit determined under this subpart with re18 spect to such employer that is related to the 

19 hiring of qualified veterans described in sections 

20 51(d)(3)(A)(ii)(II), (iii) or (iv); or 

21 ‘‘(B) the amount of the payroll taxes of the 

22 employer during the calendar year in which the 

23 taxable year begins. 

24 ‘‘(2) CREDIT AMOUNT.—In calculating for tax25 exempt employers, the work opportunity credit shall 


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1 be determined by substituting ‘26 percent’ for ‘40 

2 percent’ in section 51(a) and by substituting ‘16.25 

3 percent’ for ‘25 percent’ in section 51(i)(3)(A). 

4 ‘‘(3) TAX-EXEMPT EMPLOYER.—For purposes 

5 of this subpart, the term ‘tax-exempt employer’ 

6 means an employer that is— 

7 ‘‘(i) an organization described in section 

8 501(c) and exempt from taxation under section 

9 501(a), or 

10 ‘‘(ii) a public higher education institution 

11 (as defined in section 101 of the Higher Edu12 cation Act of 1965). 

13 ‘‘(4) PAYROLL TAXES.—For purposes of this 

14 subsection— 

15 ‘‘(A) IN GENERAL.—The term ‘payroll 

16 taxes’ means— 

17 ‘‘(i) amounts required to be withheld 

18 from the employees of the tax-exempt em19 ployer under section 3401(a), 

20 ‘‘(ii) amounts required to be withheld 

21 from such employees under section 

22 3101(a), and 

23 ‘‘(iii) amounts of the taxes imposed on 

24 the tax-exempt employer under section 

25 3111(a).’’. 


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1 (e) TREATMENT OF POSSESSIONS.— 

2 (1) PAYMENTS TO POSSESSIONS.— 

3 (A) MIRROR CODE POSSESSIONS.—The 

4 Secretary of the Treasury shall pay to each pos5 session of the United States with a mirror code 

6 tax system amounts equal to the loss to that 

7 possession by reason of the application of this 

8 section (other than this subsection). Such 

9 amounts shall be determined by the Secretary 

10 of the Treasury based on information provided 

11 by the government of the respective possession 

12 of the United States. 

13 (B) OTHER POSSESSIONS.—The Secretary 

14 of the Treasury shall pay to each possession of 

15 the United States, which does not have a mirror 

16 code tax system, amounts estimated by the Sec17 retary of the Treasury as being equal to the ag18 gregate credits that would have been provided 

19 by the possession by reason of the application 

20 of this section (other than this subsection) if a 

21 mirror code tax system had been in effect in 

22 such possession. The preceding sentence shall 

23 not apply with respect to any possession of the 

24 United States unless such possession has a 

25 plan, which has been approved by the Secretary 


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1 of the Treasury, under which such possession 

2 will promptly distribute such payments. 

3 (2) COORDINATION WITH CREDIT ALLOWED

4 AGAINST UNITED STATES INCOME TAXES.—No in5 crease in the credit determined under section 38(b) 

6 of the Internal Revenue Code of 1986 that is attrib7 utable to the credit provided by this section (other 

8 than this subsection (e)) shall be taken into account 

9 with respect to any person— 

10 (A) to whom a credit is allowed against 

11 taxes imposed by the possession of the United 

12 States by reason of this section for such taxable 

13 year, or 

14 (B) who is eligible for a payment under a 

15 plan described in paragraph (1)(B) with respect 

16 to such taxable year. 

17 (3) DEFINITIONS AND SPECIAL RULES.— 

18 (A) POSSESSION OF THE UNITED

19 STATES.—For purposes of this subsection (e), 

20 the term ‘‘possession of the United States’’ in21 cludes American Samoa, the Commonwealth of 

22 the Northern Mariana Islands, the Common23 wealth of Puerto Rico, Guam, and the United 

24 States Virgin Islands. 


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1 (B) MIRROR CODE TAX SYSTEM.—For pur2 poses of this subsection, the term ‘‘mirror code 

3 tax system’’ means, with respect to any posses4 sion of the United States, the income tax sys5 tem of such possession if the income tax liabil6 ity of the residents of such possession under 

7 such system is determined by reference to the 

8 income tax laws of the United States as if such 

9 possession were the United States. 

10 (C) TREATMENT OF PAYMENTS.—For pur11 poses of section 1324(b)(2) of title 31, United 

12 States Code, rules similar to the rules of section 

13 1001(b)(3)(C) of the American Recovery and 

14 Reinvestment Tax Act of 2009 shall apply. 

15 (f) EFFECTIVE DATE.—The amendment made by 

16 this section shall apply to individuals who begin work for 

17 the employer after the date of the enactment of this Act. 

18 Subtitle B—Teacher Stabilization 

19 SEC. 202. PURPOSE. 

20 The purpose of this subtitle is to provide funds to 

21 States to prevent teacher layoffs and support the creation 

22 of additional jobs in public early childhood, elementary, 

23 and secondary education in the 2011–2012 and 2012– 

24 2013 school years. 


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1 SEC. 203. GRANTS FOR THE OUTLYING AREAS AND THE 

2 SECRETARY OF THE INTERIOR; AVAILABILITY 

3 OF FUNDS. 

4 (a) RESERVATION OF FUNDS.—From the amount ap5 propriated to carry out this subtitle under section 212, 

6 the Secretary— 

7 (1) shall reserve up to one-half of one percent 

8 to provide assistance to the outlying areas on the 

9 basis of their respective needs, as determined by the 

10 Secretary, for activities consistent with this part 

11 under such terms and conditions as the Secretary 

12 may determine; 

13 (2) shall reserve up to one-half of one percent 

14 to provide assistance to the Secretary of the Interior 

15 to carry out activities consistent with this part, in 

16 schools operated or funded by the Bureau of Indian 

17 Education; and 

18 (3) may reserve up to $2,000,000 for adminis19 tration and oversight of this part, including program 

20 evaluation. 

21 (b) AVAILABILITY OF FUNDS.—Funds made avail22 able under section 212 shall remain available to the Sec23 retary until September 30, 2012. 

24 SEC. 204. STATE ALLOCATION. 

25 (a) ALLOCATION.—After reserving funds under sec26 tion 203(a), the Secretary shall allocate to the States— 


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1 (1) 60 percent on the basis of their relative 

2 population of individuals aged 5 through 17; and 

3 (2) 40 percent on the basis of their relative 

4 total population. 

5 (b) AWARDS.—From the funds allocated under sub6 section (a), the Secretary shall make a grant to the Gov7 ernor of each State who submits an approvable application 

8 under section 214. 

9 (c) ALTERNATE DISTRIBUTION OF FUNDS.— 

10 (1) If, within 30 days after the date of enact11 ment of this Act, a Governor has not submitted an 

12 approvable application to the Secretary, the Sec13 retary shall, consistent with paragraph (2), provide 

14 for funds allocated to that State to be distributed to 

15 another entity or other entities in the State for the 

16 support of early childhood, elementary, and sec17 ondary education, under such terms and conditions 

18 as the Secretary may establish. 

19 (2) MAINTENANCE OF EFFORT.— 

20 (A) GOVERNOR ASSURANCE.—The Sec21 retary shall not allocate funds under paragraph 

22 (1) unless the Governor of the State provides 

23 an assurance to the Secretary that the State 

24 will for fiscal years 2012 and 2013 meet the re25 quirements of section 209. 


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1 (B) Notwithstanding subparagraph (A), 

2 the Secretary may allocate up to 50 percent of 

3 the funds that are available to the State under 

4 paragraph (1) to another entity or entities in 

5 the State, provided that the State educational 

6 agency submits data to the Secretary dem7 onstrating that the State will for fiscal year 

8 2012 meet the requirements of section 209(a) 

9 or the Secretary otherwise determines that the 

10 State will meet those requirements, or such 

11 comparable requirements as the Secretary may 

12 establish, for that year. 

13 (3) REQUIREMENTS.—An entity that receives 

14 funds under paragraph (1) shall use those funds in 

15 accordance with the requirements of this subtitle. 

16 (d) REALLOCATION.—If a State does not receive 

17 funding under this subtitle or only receives a portion of 

18 its allocation under subsection (c), the Secretary shall re19 allocate the State’s entire allocation or the remaining por20 tion of its allocation, as the case may be, to the remaining 

21 States in accordance with subsection (a). 

22 SEC. 205. STATE APPLICATION. 

23 The Governor of a State desiring to receive a grant 

24 under this subtitle shall submit an application to the Sec25 retary within 30 days of the date of enactment of this Act, 


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1 in such manner, and containing such information as the 

2 Secretary may reasonably require to determine the State’s 

3 compliance with applicable provisions of law. 

4 SEC. 206. STATE RESERVATION AND RESPONSIBILITIES. 

5 (a) RESERVATION.—Each State receiving a grant 

6 under section 204(b) may reserve— 

7 (1) not more than 10 percent of the grant 

8 funds for awards to State-funded early learning pro9 grams; and 

10 (2) not more than 2 percent of the grant funds 

11 for the administrative costs of carrying out its re12 sponsibilities under this subtitle. 

13 (b) STATE RESPONSIBILITIES.—Each State receiving 

14 a grant under this subtitle shall, after reserving any funds 

15 under subsection (a)— 

16 (1) use the remaining grant funds only for 

17 awards to local educational agencies for the support 

18 of early childhood, elementary, and secondary edu19 cation; and 

20 (2) distribute those funds, through subgrants, 

21 to its local educational agencies by distributing— 

22 (A) 60 percent on the basis of the local 

23 educational agencies’ relative shares of enroll24 ment; and 


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1 (B) 40 percent on the basis of the local 

2 educational agencies’ relative shares of funds 

3 received under part A of title I of the Elemen4 tary and Secondary Education Act of 1965 for 

5 fiscal year 2011; and 

6 (3) make those funds available to local edu7 cational agencies no later than 100 days after receiv8 ing a grant from the Secretary. 

9 (c) PROHIBITIONS.—A State shall not use funds re10 ceived under this subtitle to directly or indirectly— 

11 (1) establish, restore, or supplement a rainy-day 

12 fund; 

13 (2) supplant State funds in a manner that has 

14 the effect of establishing, restoring, or 

15 supplementing a rainy-day fund; 

16 (3) reduce or retire debt obligations incurred by 

17 the State; or 

18 (4) supplant State funds in a manner that has 

19 the effect of reducing or retiring debt obligations in20 curred by the State. 

21 SEC. 207. LOCAL EDUCATIONAL AGENCIES. 

22 Each local educational agency that receives a 

23 subgrant under this subtitle— 

24 (1) shall use the subgrant funds only for com25 pensation and benefits and other expenses, such as 


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1 support services, necessary to retain existing employ2 ees, recall or rehire former employees, or hire new 

3 employees to provide early childhood, elementary, or 

4 secondary educational and related services; 

5 (2) shall obligate those funds no later than Sep6 tember 30, 2013; and 

7 (3) may not use those funds for general admin8 istrative expenses or for other support services or ex9 penditures, as those terms are defined by the Na10 tional Center for Education Statistics in the Com11 mon Core of Data, as of the date of enactment of 

12 this Act. 

13 SEC. 208. EARLY LEARNING. 

14 Each State-funded early learning program that re15 ceives funds under this subtitle shall— 

16 (1) use those funds only for compensation, ben17 efits, and other expenses, such as support services, 

18 necessary to retain early childhood educators, recall 

19 or rehire former early childhood educators, or hire 

20 new early childhood educators to provide early learn21 ing services; and 

22 (2) obligate those funds no later than Sep23 tember 30, 2013. 


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1 SEC. 209. MAINTENANCE OF EFFORT. 

2 (a) The Secretary shall not allocate funds to a State 

3 under this subtitle unless the State provides an assurance 

4 to the Secretary that— 

5 (1) for State fiscal year 2012— 

6 (A) the State will maintain State support 

7 for early childhood, elementary, and secondary 

8 education (in the aggregate or on the basis of 

9 expenditure per pupil) and for public institu10 tions of higher education (not including support 

11 for capital projects or for research and develop12 ment or tuition and fees paid by students) at 

13 not less than the level of such support for each 

14 of the two categories for State fiscal year 2011; 

15 or 

16 (B) the State will maintain State support 

17 for early childhood, elementary, and secondary 

18 education and for public institutions of higher 

19 education (not including support for capital 

20 projects or for research and development or tui21 tion and fees paid by students) at a percentage 

22 of the total revenues available to the State that 

23 is equal to or greater than the percentage pro24 vided for State fiscal year 2011; and 

25 (2) for State fiscal year 2013— 


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1 (A) the State will maintain State support 

2 for early childhood, elementary, and secondary 

3 education (in the aggregate or on the basis of 

4 expenditure per pupil) and for public institu5 tions of higher education (not including support 

6 for capital projects or for research and develop7 ment or tuition and fees paid by students) at 

8 not less than the level of such support for each 

9 of the two categories for State fiscal year 2012; 

10 or 

11 (B) the State will maintain State support 

12 for early childhood, elementary, and secondary 

13 education and for public institutions of higher 

14 education (not including support for capital 

15 projects or for research and development or tui16 tion and fees paid by students) at a percentage 

17 of the total revenues available to the State that 

18 is equal to or greater than the percentage pro19 vided for State fiscal year 2012. 

20 (b) WAIVER.—The Secretary may waive the require21 ments of this section if the Secretary determines that a 

22 waiver would be equitable due to— 

23 (1) exceptional or uncontrollable circumstances, 

24 such as a natural disaster; or 


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1 (2) a precipitous decline in the financial re2 sources of the State. 

3 SEC. 210. REPORTING. 

4 Each State that receives a grant under this subtitle 

5 shall submit, on an annual basis, a report to the Secretary 

6 that contains— 

7 (1) a description of how funds received under 

8 this part were expended or obligated; and 

9 (2) an estimate of the number of jobs supported 

10 by the State using funds received under this subtitle. 

11 SEC. 211. DEFINITIONS. 

12 (a) Except as otherwise provided, the terms ‘‘local 

13 educational agency’’, ‘‘outlying area’’, ‘‘Secretary’’, 

14 ‘‘State’’, and ‘‘State educational agency’’ have the mean15 ings given those terms in section 9101 of the Elementary 

16 and Secondary Education Act of 1965 (20 U.S.C. 7801). 

17 (b) The term ‘‘State’’ does not include an outlying 

18 area. 

19 (c) The term ‘‘early childhood educator’’ means an 

20 individual who— 

21 (1) works directly with children in a State-fund22 ed early learning program in a low-income commu23 nity; 


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1 (2) is involved directly in the care, development, 

2 and education of infants, toddlers, or young children 

3 age five and under; and 

4 (3) has completed a baccalaureate or advanced 

5 degree in early childhood development or early child6 hood education, or in a field related to early child7 hood education. 

8 (d) The term ‘‘State-funded early learning program’’ 

9 means a program that provides educational services to 

10 children from birth to kindergarten entry and receives 

11 funding from the State. 

12 SEC. 212. AUTHORIZATION OF APPROPRIATIONS. 

13 There are authorized to be appropriated, and there 

14 are appropriated, $30,000,000,000 to carry out this sub15 title for fiscal year 2012. 

16 Subtitle C—First Responder 

17 Stabilization 

18 SEC. 213. PURPOSE. 

19 The purpose of this subtitle is to provide funds to 

20 States and localities to prevent layoffs of, and support the 

21 creation of additional jobs for, law enforcement officers 

22 and other first responders. 

23 SEC. 214. GRANT PROGRAM. 

24 The Attorney General shall carry out a competitive 

25 grant program pursuant to section 1701 of title I of the 


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1 Omnibus Crime Control and Safe Streets Act of 1968 (42 

2 U.S.C. 3796dd) for hiring, rehiring, or retention of career 

3 law enforcement officers under part Q of such title. Grants 

4 awarded under this section shall not be subject to sub5 sections (g) or (i) of section 1701 or to section 1704 of 

6 such Act (42 U.S.C. 3796dd–3(c)). 

7 SEC. 215. APPROPRIATIONS. 

8 There are hereby appropriated to the Community 

9 Oriented Policing Stabilization Fund out of any money in 

10 the Treasury not otherwise obligated, $5,000,000,000, to 

11 remain available until September 30, 2012, of which 

12 $4,000,000,000 shall be for the Attorney General to carry 

13 out the competitive grant program under Section 214; and 

14 of which $1,000,000,000 shall be transferred by the Attor15 ney General to a First Responder Stabilization Fund from 

16 which the Secretary of Homeland Security shall make 

17 competitive grants for hiring, rehiring, or retention pursu18 ant to the Federal Fire Prevention and Control Act of 

19 1974 (15 U.S.C. 2201 et seq.), to carry out section 34 

20 of such Act (15 U.S.C. 2229a). In making such grants, 

21 the Secretary may grant waivers from the requirements 

22 in subsections (a)(1)(A), (a)(1)(B), (a)(1)(E), (c)(1), 

23 (c)(2), and (c)(4)(A) of section 34. Of the amounts appro24 priated herein, not to exceed $8,000,000 shall be for ad25 ministrative costs of the Attorney General, and not to exVerDate Mar 15 2010 05:01 Sep 15, 2011 Jkt 099200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\S1549.PCS S1549

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1 ceed $2,000,000 shall be for administrative costs of the 

2 Secretary of Homeland Security. 

3 Subtitle D—School Modernization 

4 PART I—ELEMENTARY AND SECONDARY 

5 SCHOOLS 

6 SEC. 221. PURPOSE. 

7 The purpose of this part is to provide assistance for 

8 the modernization, renovation, and repair of elementary 

9 and secondary school buildings in public school districts 

10 across America in order to support the achievement of im11 proved educational outcomes in those schools. 

12 SEC. 222. AUTHORIZATION OF APPROPRIATIONS. 

13 There are authorized to be appropriated, and there 

14 are appropriated, $25,000,000,000 to carry out this part, 

15 which shall be available for obligation by the Secretary 

16 until September 30, 2012. 

17 SEC. 223. ALLOCATION OF FUNDS. 

18 (a) RESERVATIONS.—Of the amount made available 

19 to carry out this part, the Secretary shall reserve— 

20 (1) one-half of one percent for the Secretary of 

21 the Interior to carry out modernization, renovation, 

22 and repair activities described in section 226 in 

23 schools operated or funded by the Bureau of Indian 

24 Education; 


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1 (2) one-half of one percent to make grants to 

2 the outlying areas for modernization, renovation, 

3 and repair activities described in section 226; and 

4 (3) such funds as the Secretary determines are 

5 needed to conduct a survey, by the National Center 

6 for Education Statistics, of the school construction, 

7 modernization, renovation, and repair needs of the 

8 public schools of the United States. 

9 (b) STATE ALLOCATION.—After reserving funds 

10 under subsection (a), the Secretary shall allocate the re11 maining amount among the States in proportion to their 

12 respective allocations under part A of title I of the Ele13 mentary and Secondary Education Act (ESEA) (20 

14 U.S.C. 6311 et seq.) for fiscal year 2011, except that— 

15 (1) the Secretary shall allocate 40 percent of 

16 such remaining amount to the 100 local educational 

17 agencies with the largest numbers of children aged 

18 5–17 living in poverty, as determined using the most 

19 recent data available from the Department of Com20 merce that are satisfactory to the Secretary, in pro21 portion to those agencies’ respective allocations 

22 under part A of title I of the ESEA for fiscal year 

23 2011; and 

24 (2) the allocation to any State shall be reduced 

25 by the aggregate amount of the allocations under 


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1 paragraph (1) to local educational agencies in that 

2 State. 

3 (c) REMAINING ALLOCATION.— 

4 (1) If a State does not apply for its allocation 

5 (or applies for less than the full allocation for which 

6 it is eligible) or does not use that allocation in a 

7 timely manner, the Secretary may— 

8 (A) reallocate all or a portion of that allo9 cation to the other States in accordance with 

10 subsection (b); or 

11 (B) use all or a portion of that allocation 

12 to make direct allocations to local educational 

13 agencies within the State based on their respec14 tive allocations under part A of title I of the 

15 ESEA for fiscal year 2011 or such other meth16 od as the Secretary may determine. 

17 (2) If a local educational agency does not apply 

18 for its allocation under subsection (b)(1), applies for 

19 less than the full allocation for which it is eligible, 

20 or does not use that allocation in a timely manner, 

21 the Secretary may reallocate all or a portion of its 

22 allocation to the State in which that agency is lo23 cated. 


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1 SEC. 224. STATE USE OF FUNDS. 

2 (a) RESERVATION.—Each State that receives a grant 

3 under this part may reserve not more than one percent 

4 of the State’s allocation under section 223(b) for the pur5 pose of administering the grant, except that no State may 

6 reserve more than $750,000 for this purpose. 

7 (b) FUNDS TO LOCAL EDUCATIONAL AGENCIES.— 

8 (1) FORMULA SUBGRANTS.—From the grant 

9 funds that are not reserved under subsection (a), a 

10 State shall allocate at least 50 percent to local edu11 cational agencies, including charter schools that are 

12 local educational agencies, that did not receive funds 

13 under section 223(b)(1) from the Secretary, in ac14 cordance with their respective allocations under part 

15 A of title I of the ESEA for fiscal year 2011, except 

16 that no such local educational agency shall receive 

17 less than $10,000. 

18 (2) ADDITIONAL SUBGRANTS.—The State shall 

19 use any funds remaining, after reserving funds 

20 under subsection (a) and allocating funds under 

21 paragraph (1), for subgrants to local educational 

22 agencies that did not receive funds under section 

23 223(b)(1), including charter schools that are local 

24 educational agencies, to support modernization, ren25 ovation, and repair projects that the State deter26 mines, using objective criteria, are most needed in 


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1 the State, with priority given to projects in rural 

2 local educational agencies. 

3 (c) REMAINING FUNDS.—If a local educational agen4 cy does not apply for an allocation under subsection 

5 (b)(1), applies for less than its full allocation, or fails to 

6 use that allocation in a timely manner, the State may re7 allocate any unused portion to other local educational 

8 agencies in accordance with subsection (b). 

9 SEC. 225. STATE AND LOCAL APPLICATIONS. 

10 (a) STATE APPLICATION.—A State that desires to re11 ceive a grant under this part shall submit an application 

12 to the Secretary at such time, in such manner, and con13 taining such information and assurances as the Secretary 

14 may require, which shall include— 

15 (1) an identification of the State agency or enti16 ty that will administer the program; and 

17 (2) the State’s process for determining how the 

18 grant funds will be distributed and administered, in19 cluding— 

20 (A) how the State will determine the cri21 teria and priorities in making subgrants under 

22 section 224(b)(2); 

23 (B) any additional criteria the State will 

24 use in determining which projects it will fund 

25 under that section; 


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1 (C) a description of how the State will con2 sider— 

3 (i) the needs of local educational 

4 agencies for assistance under this part; 

5 (ii) the impact of potential projects on 

6 job creation in the State; 

7 (iii) the fiscal capacity of local edu8 cational agencies applying for assistance; 

9 (iv) the percentage of children in 

10 those local educational agencies who are 

11 from low-income families; and 

12 (v) the potential for leveraging assist13 ance provided by this program through 

14 matching or other financing mechanisms; 

15 (D) a description of how the State will en16 sure that the local educational agencies receiv17 ing subgrants meet the requirements of this 

18 part; 

19 (E) a description of how the State will en20 sure that the State and its local educational 

21 agencies meet the deadlines established in sec22 tion 228; 

23 (F) a description of how the State will give 

24 priority to the use of green practices that are 


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1 certified, verified, or consistent with any appli2 cable provisions of— 

3 (i) the LEED Green Building Rating 

4 System; 

5 (ii) Energy Star; 

6 (iii) the CHPS Criteria; 

7 (iv) Green Globes; or 

8 (v) an equivalent program adopted by 

9 the State or another jurisdiction with au10 thority over the local educational agency; 

11 (G) a description of the steps that the 

12 State will take to ensure that local educational 

13 agencies receiving subgrants will adequately 

14 maintain any facilities that are modernized, 

15 renovated, or repaired with subgrant funds 

16 under this part; and 

17 (H) such additional information and assur18 ances as the Secretary may require. 

19 (b) LOCAL APPLICATION.—A local educational agen20 cy that is eligible under section 223(b)(1) that desires to 

21 receive a grant under this part shall submit an application 

22 to the Secretary at such time, in such manner, and con23 taining such information and assurances as the Secretary 

24 may require, which shall include— 


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1 (1) a description of how the local educational 

2 agency will meet the deadlines and requirements of 

3 this part; 

4 (2) a description of the steps that the local edu5 cational agency will take to adequately maintain any 

6 facilities that are modernized, renovated, or repaired 

7 with funds under this part; and 

8 (3) such additional information and assurances 

9 as the Secretary may require. 

10 SEC. 226. USE OF FUNDS. 

11 (a) IN GENERAL.—Funds awarded to local edu12 cational agencies under this part shall be used only for 

13 either or both of the following modernization, renovation, 

14 or repair activities in facilities that are used for elemen15 tary or secondary education or for early learning pro16 grams: 

17 (1) Direct payments for school modernization, 

18 renovation, and repair. 

19 (2) To pay interest on bonds or payments for 

20 other financing instruments that are newly issued 

21 for the purpose of financing school modernization, 

22 renovation, and repair. 

23 (b) SUPPLEMENT, NOT SUPPLANT.—Funds made 

24 available under this part shall be used to supplement, and 

25 not supplant, other Federal, State, and local funds that 


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1 would otherwise be expended to modernize, renovate, or 

2 repair eligible school facilities. 

3 (c) PROHIBITION.—Funds awarded to local edu4 cational agencies under this part may not be used for— 

5 (1) new construction; 

6 (2) payment of routine maintenance costs; or 

7 (3) modernization, renovation, or repair of sta8 diums or other facilities primarily used for athletic 

9 contests or exhibitions or other events for which ad10 mission is charged to the general public. 

11 SEC. 227. PRIVATE SCHOOLS. 

12 (a) IN GENERAL.—Section 9501 of the ESEA (20 

13 U.S.C. 7881) shall apply to this part in the same manner 

14 as it applies to activities under that Act, except that— 

15 (1) section 9501 shall not apply with respect to 

16 the title to any real property modernized, renovated, 

17 or repaired with assistance provided under this sec18 tion; 

19 (2) the term ‘‘services’’, as used in section 9501 

20 with respect to funds under this part, shall be pro21 vided only to private, nonprofit elementary or sec22 ondary schools with a rate of child poverty of at 

23 least 40 percent and may include only— 

24 (A) modifications of school facilities nec25 essary to meet the standards applicable to pubVerDate Mar 15 2010 05:01 Sep 15, 2011 Jkt 099200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6201 E:\BILLS\S1549.PCS S1549

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1 lic schools under the Americans with Disabil2 ities Act of 1990 (42 U.S.C. 12101 et seq.); 

3 (B) modifications of school facilities nec4 essary to meet the standards applicable to pub5 lic schools under section 504 of the Rehabilita6 tion Act of 1973 (29 U.S.C. 794); and 

7 (C) asbestos or polychlorinated biphenyls 

8 abatement or removal from school facilities; and 

9 (3) expenditures for services provided using 

10 funds made available under section 226 shall be con11 sidered equal for purposes of section 9501(a)(4) of 

12 the ESEA if the per-pupil expenditures for services 

13 described in paragraph (2) for students enrolled in 

14 private nonprofit elementary and secondary schools 

15 that have child-poverty rates of at least 40 percent 

16 are consistent with the per-pupil expenditures under 

17 this subpart for children enrolled in the public 

18 schools of the local educational agency receiving 

19 funds under this subpart. 

20 (b) REMAINING FUNDS.—If the expenditure for serv21 ices described in paragraph (2) is less than the amount 

22 calculated under paragraph (3) because of insufficient 

23 need for those services, the remainder shall be available 

24 to the local educational agency for modernization, renova25 tion, and repair of its school facilities. 


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1 (c) APPLICATION.—If any provision of this section, 

2 or the application thereof, to any person or circumstance 

3 is judicially determined to be invalid, the remainder of the 

4 section and the application to other persons or cir5 cumstances shall not be affected thereby. 

6 SEC. 228. ADDITIONAL PROVISIONS. 

7 (a) Funds appropriated under section 222 shall be 

8 available for obligation by local educational agencies re9 ceiving grants from the Secretary under section 223(b)(1), 

10 by States reserving funds under section 224(a), and by 

11 local educational agencies receiving subgrants under sec12 tion 224(b)(1) only during the period that ends 24 months 

13 after the date of enactment of this Act. 

14 (b) Funds appropriated under section 222 shall be 

15 available for obligation by local educational agencies re16 ceiving subgrants under section 224(b)(2) only during the 

17 period that ends 36 months after the date of enactment 

18 of this Act. 

19 (c) Section 439 of the General Education Provisions 

20 Act (20 U.S.C. 1232b) shall apply to funds available 

21 under this part. 

22 (d) For purposes of section 223(b)(1), Hawaii, the 

23 District of Columbia, and the Commonwealth of Puerto 

24 Rico are not local educational agencies. 


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1 PART II—COMMUNITY COLLEGE 

2 MODERNIZATION 

3 SEC. 229. FEDERAL ASSISTANCE FOR COMMUNITY COL4 LEGE MODERNIZATION. 

5 (a) IN GENERAL.— 

6 (1) GRANT PROGRAM.—From the amounts 

7 made available under subsection (h), the Secretary 

8 shall award grants to States to modernize, renovate, 

9 or repair existing facilities at community colleges. 

10 (2) ALLOCATION.— 

11 (A) RESERVATIONS.—Of the amount made 

12 available to carry out this section, the Secretary 

13 shall reserve— 

14 (i) up to 0.25 percent for grants to in15 stitutions that are eligible under section 

16 316 of the Higher Education Act of 1965 

17 (20 U.S.C. 1059c) to provide for mod18 ernization, renovation, and repair activities 

19 described in this section; and 

20 (ii) up to 0.25 percent for grants to 

21 the outlying areas to provide for mod22 ernization, renovation, and repair activities 

23 described in this section. 

24 (B) ALLOCATION.—After reserving funds 

25 under subparagraph (A), the Secretary shall al26 locate to each State that has an application apVerDate Mar 15 2010 05:01 Sep 15, 2011 Jkt 099200 PO 00000 Frm 00050 Fmt 6652 Sfmt 6201 E:\BILLS\S1549.PCS S1549

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1 proved by the Secretary an amount that bears 

2 the same relation to any remaining funds as the 

3 total number of students in such State who are 

4 enrolled in institutions described in section 

5 230(b)(1)(A) plus the number of students who 

6 are estimated to be enrolled in and pursuing a 

7 degree or certificate that is not a bachelor’s, 

8 master’s, professional, or other advanced degree 

9 in institutions described in section 

10 230(b)(1)(B), based on the proportion of de11 grees or certificates awarded by such institu12 tions that are not bachelor’s, master’s, profes13 sional, or other advanced degrees, as reported 

14 to the Integrated Postsecondary Data System 

15 bears to the estimated total number of such 

16 students in all States, except that no State shall 

17 receive less than $2,500,000. 

18 (C) REALLOCATION.—Amounts not allo19 cated under this section to a State because the 

20 State either did not submit an application 

21 under subsection (b), the State submitted an 

22 application that the Secretary determined did 

23 not meet the requirements of such subsection, 

24 or the State cannot demonstrate to the Sec25 retary a sufficient demand for projects to warVerDate Mar 15 2010 05:01 Sep 15, 2011 Jkt 099200 PO 00000 Frm 00051 Fmt 6652 Sfmt 6201 E:\BILLS\S1549.PCS S1549

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1 rant the full allocation of the funds, shall be 

2 proportionately reallocated under this para3 graph to the other States that have a dem4 onstrated need for, and are receiving, alloca5 tions under this section. 

6 (D) STATE ADMINISTRATION.—A State 

7 that receives a grant under this section may use 

8 not more than one percent of that grant to ad9 minister it, except that no State may use more 

10 than $750,000 of its grant for this purpose. 

11 (3) SUPPLEMENT, NOT SUPPLANT.—Funds 

12 made available under this section shall be used to 

13 supplement, and not supplant, other Federal, State, 

14 and local funds that would otherwise be expended to 

15 modernize, renovate, or repair existing community 

16 college facilities. 

17 (b) APPLICATION.—A State that desires to receive a 

18 grant under this section shall submit an application to the 

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

20 such information and assurances as the Secretary may re21 quire. Such application shall include a description of— 

22 (1) how the funds provided under this section 

23 will improve instruction at community colleges in the 

24 State and will improve the ability of those colleges 


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1 to educate and train students to meet the workforce 

2 needs of employers in the State; and 

3 (2) the projected start of each project and the 

4 estimated number of persons to be employed in the 

5 project. 

6 (c) PROHIBITED USES OF FUNDS.— 

7 (1) IN GENERAL.—No funds awarded under 

8 this section may be used for— 

9 (i) payment of routine maintenance costs; 

10 (ii) construction, modernization, renova11 tion, or repair of stadiums or other facilities 

12 primarily used for athletic contests or exhibi13 tions or other events for which admission is 

14 charged to the general public; or 

15 (iii) construction, modernization, renova16 tion, or repair of facilities— 

17 (I) used for sectarian instruction, reli18 gious worship, or a school or department 

19 of divinity; or 

20 (II) in which a substantial portion of 

21 the functions of the facilities are subsumed 

22 in a religious mission. 

23 (2) FOUR-YEAR INSTITUTIONS.—No funds 

24 awarded to a four-year public institution of higher 

25 education under this section may be used for any faVerDate Mar 15 2010 05:01 Sep 15, 2011 Jkt 099200 PO 00000 Frm 00053 Fmt 6652 Sfmt 6201 E:\BILLS\S1549.PCS S1549

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1 cility, service, or program of the institution that is 

2 not available to students who are pursuing a degree 

3 or certificate that is not a bachelor’s, master’s, pro4 fessional, or other advanced degree. 

5 (d) GREEN PROJECTS.—In providing assistance to 

6 community college projects under this section, the State 

7 shall consider the extent to which a community college’s 

8 project involves activities that are certified, verified, or 

9 consistent with the applicable provisions of— 

10 (1) the LEED Green Building Rating System; 

11 (2) Energy Star; 

12 (3) the CHPS Criteria, as applicable; 

13 (4) Green Globes; or 

14 (5) an equivalent program adopted by the State 

15 or the State higher education agency that includes 

16 a verifiable method to demonstrate compliance with 

17 such program. 

18 (e) APPLICATION OF GEPA.—Section 439 of the 

19 General Education Provisions Act such Act (20 U.S.C. 

20 1232b) shall apply to funds available under this subtitle. 

21 (f) REPORTS BY THE STATES.—Each State that re22 ceives a grant under this section shall, not later than Sep23 tember 30, 2012, and annually thereafter for each fiscal 

24 year in which the State expends funds received under this 

25 section, submit to the Secretary a report that includes— 


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1 (1) a description of the projects for which the 

2 grant was, or will be, used; 

3 (2) a description of the amount and nature of 

4 the assistance provided to each community college 

5 under this section; and 

6 (3) the number of jobs created by the projects 

7 funded under this section. 

8 (g) REPORT BY THE SECRETARY.—The Secretary 

9 shall submit to the authorizing committees (as defined in 

10 section 103 of the Higher Education Act of 1965; 20 

11 U.S.C. 1003) an annual report on the grants made under 

12 this section, including the information described in sub13 section (f). 

14 (h) AVAILABILITY OF FUNDS.— 

15 (1) There are authorized to be appropriated, 

16 and there are appropriated, to carry out this section 

17 (in addition to any other amounts appropriated to 

18 carry out this section and out of any money in the 

19 Treasury not otherwise appropriated), 

20 $5,000,000,000 for fiscal year 2012. 

21 (2) Funds appropriated under this subsection 

22 shall be available for obligation by community col23 leges only during the period that ends 36 months 

24 after the date of enactment of this Act. 


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1 PART III—GENERAL PROVISIONS 

2 SEC. 230. DEFINITIONS. 

3 (a) ESEA TERMS.—Except as otherwise provided, in 

4 this subtitle, the terms ‘‘local educational agency’’, ‘‘Sec5 retary’’, and ‘‘State educational agency’’ have the mean6 ings given those terms in section 9101 of the Elementary 

7 and Secondary Education Act of 1965 (20 U.S.C. 7801). 

8 (b) ADDITIONAL DEFINITIONS.—The following defi9 nitions apply to this title: 

10 (1) COMMUNITY COLLEGE.—The term ‘‘commu11 nity college’’ means— 

12 (A) a junior or community college, as that 

13 term is defined in section 312(f) of the Higher 

14 Education Act of 1965 (20 U.S.C. 1058(f)); or 

15 (B) a four-year public institution of higher 

16 education (as defined in section 101 of the 

17 Higher Education Act of 1965 (20 U.S.C. 

18 1001)) that awards a significant number of de19 grees and certificates, as determined by the 

20 Secretary, that are not— 

21 (i) bachelor’s degrees (or an equiva22 lent); or 

23 (ii) master’s, professional, or other 

24 advanced degrees. 

25 (2) CHPS CRITERIA.—The term ‘‘CHPS Cri26 teria’’ means the green building rating program deVerDate Mar 15 2010 05:01 Sep 15, 2011 Jkt 099200 PO 00000 Frm 00056 Fmt 6652 Sfmt 6201 E:\BILLS\S1549.PCS S1549

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1 veloped by the Collaborative for High Performance 

2 Schools. 

3 (3) ENERGY STAR.—The term ‘‘Energy Star’’ 

4 means the Energy Star program of the United 

5 States Department of Energy and the United States 

6 Environmental Protection Agency. 

7 (4) GREEN GLOBES.—The term ‘‘Green 

8 Globes’’ means the Green Building Initiative envi9 ronmental design and rating system referred to as 

10 Green Globes. 

11 (5) LEED GREEN BUILDING RATING SYS12 TEM.—The term ‘‘LEED Green Building Rating 

13 System’’ means the United States Green Building 

14 Council Leadership in Energy and Environmental 

15 Design green building rating standard referred to as 

16 the LEED Green Building Rating System. 

17 (6) MODERNIZATION, RENOVATION, AND RE18 PAIR.—The term ‘‘modernization, renovation and re19 pair’’ means— 

20 (A) comprehensive assessments of facilities 

21 to identify— 

22 (i) facility conditions or deficiencies 

23 that could adversely affect student and 

24 staff health, safety, performance, or proVerDate Mar 15 2010 05:01 Sep 15, 2011 Jkt 099200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 E:\BILLS\S1549.PCS S1549

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1 ductivity or energy, water, or materials ef2 ficiency; and 

3 (ii) needed facility improvements; 

4 (B) repairing, replacing, or installing roofs 

5 (which may be extensive, intensive, or semi-in6 tensive ‘‘green’’ roofs); electrical wiring; water 

7 supply and plumbing systems, sewage systems, 

8 storm water runoff systems, lighting systems 

9 (or components of such systems); or building 

10 envelope, windows, ceilings, flooring, or doors, 

11 including security doors; 

12 (C) repairing, replacing, or installing heat13 ing, ventilation, or air conditioning systems, or 

14 components of those systems (including insula15 tion), including by conducting indoor air quality 

16 assessments; 

17 (D) compliance with fire, health, seismic, 

18 and safety codes, including professional installa19 tion of fire and life safety alarms, and mod20 ernizations, renovations, and repairs that en21 sure that facilities are prepared for such emer22 gencies as acts of terrorism, campus violence, 

23 and natural disasters, such as improving build24 ing infrastructure to accommodate security 

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1 nology to ensure that a school or incident is 

2 able to respond to such emergencies; 

3 (E) making modifications necessary to 

4 make educational facilities accessible in compli5 ance with the Americans with Disabilities Act 

6 of 1990 (42 U.S.C. 12101 et seq.) and section 

7 504 of the Rehabilitation Act of 1973 (29 

8 U.S.C. 794), except that such modifications 

9 shall not be the primary use of a grant or 

10 subgrant; 

11 (F) abatement, removal, or interim con12 trols of asbestos, polychlorinated biphenyls, 

13 mold, mildew, or lead-based hazards, including 

14 lead-based paint hazards; 

15 (G) retrofitting necessary to increase en16 ergy efficiency; 

17 (H) measures, such as selection and sub18 stitution of products and materials, and imple19 mentation of improved maintenance and oper20 ational procedures, such as ‘‘green cleaning’’ 

21 programs, to reduce or eliminate potential stu22 dent or staff exposure to— 

23 (i) volatile organic compounds; 

24 (ii) particles such as dust and pollens; 

25 or 


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1 (iii) combustion gases; 

2 (I) modernization, renovation, or repair 

3 necessary to reduce the consumption of coal, 

4 electricity, land, natural gas, oil, or water; 

5 (J) installation or upgrading of educational 

6 technology infrastructure; 

7 (K) installation or upgrading of renewable 

8 energy generation and heating systems, includ9 ing solar, photovoltaic, wind, biomass (including 

10 wood pellet and woody biomass), waste-to-en11 ergy, solar-thermal, and geothermal systems, 

12 and energy audits; 

13 (L) modernization, renovation, or repair 

14 activities related to energy efficiency and renew15 able energy, and improvements to building in16 frastructures to accommodate bicycle and pe17 destrian access; 

18 (M) ground improvements, storm water 

19 management, landscaping and environmental 

20 clean-up when necessary; 

21 (N) other modernization, renovation, or re22 pair to— 

23 (i) improve teachers’ ability to teach 

24 and students’ ability to learn; 


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1 (ii) ensure the health and safety of 

2 students and staff; or 

3 (iii) improve classroom, laboratory, 

4 and vocational facilities in order to en5 hance the quality of science, technology, 

6 engineering, and mathematics instruction; 

7 and 

8 (O) required environmental remediation re9 lated to facilities modernization, renovation, or 

10 repair activities described in subparagraphs (A) 

11 through (L). 

12 (7) OUTLYING AREA.—The term ‘‘outlying 

13 area’’ means the U.S. Virgin Islands, Guam, Amer14 ican Samoa, the Commonwealth of the Northern 

15 Mariana Islands, and the Republic of Palau. 

16 (8) STATE.—The term ‘‘State’’ means each of 

17 the 50 States of the United States, the Common18 wealth of Puerto Rico, and the District of Columbia. 

19 SEC. 231. BUY AMERICAN. 

20 Section 1605 of division A of the American Recovery 

21 and Reinvestment Act of 2009 (Public Law 111–5) applies 

22 to funds made available under this title. 


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1 Subtitle E—Immediate Transpor2 tation Infrastrucure Invest3 ments 

4 SEC. 241. IMMEDIATE TRANSPORTATION INFRASTRUCTURE 

5 INVESTMENTS. 

6 (a) GRANTS-IN-AID FOR AIRPORTS.— 

7 (1) IN GENERAL.—There is made available to 

8 the Secretary of Transportation $2,000,000,000 to 

9 carry out airport improvement under subchapter I of 

10 chapter 471 and subchapter I of chapter 475 of title 

11 49, United States Code. 

12 (2) FEDERAL SHARE; LIMITATION ON OBLIGA13 TIONS.—The Federal share payable of the costs for 

14 which a grant is made under this subsection, shall 

15 be 100 percent. The amount made available under 

16 this subsection shall not be subject to any limitation 

17 on obligations for the Grants-In-Aid for Airports 

18 program set forth in any Act or in title 49, United 

19 States Code. 

20 (3) DISTRIBUTION OF FUNDS.—Funds provided 

21 to the Secretary under this subsection shall not be 

22 subject to apportionment formulas, special appor23 tionment categories, or minimum percentages under 

24 chapter 471 of such title. 


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1 (4) AVAILABILITY.—The amounts made avail2 able under this subsection shall be available for obli3 gation until the date that is two years after the date 

4 of the enactment of this Act. The Secretary shall ob5 ligate amounts totaling not less than 50 percent of 

6 the funds made available within one year of enact7 ment and obligate remaining amounts not later than 

8 two years after enactment. 

9 (5) ADMINISTRATIVE EXPENSES.—Of the funds 

10 made available under this subsection, 0.3 percent 

11 shall be available to the Secretary for administrative 

12 expenses, shall remain available for obligation until 

13 September 30, 2015, and may be used in conjunc14 tion with funds otherwise provided for the adminis15 tration of the Grants-In-Aid for Airports program. 

16 (b) NEXT GENERATION AIR TRAFFIC CONTROL AD17 VANCEMENTS.— 

18 (1) IN GENERAL.—There is made available to 

19 the Secretary of Transportation $1,000,000,000 for 

20 necessary Federal Aviation Administration capital, 

21 research and operating costs to carry out Next Gen22 eration air traffic control system advancements. 

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1 gation until the date that is two years after the date 

2 of the enactment of this Act. 

3 (c) HIGHWAY INFRASTRUCTURE INVESTMENT.— 

4 (1) IN GENERAL.—There is made available to 

5 the Secretary of Transportation $27,000,000,000 

6 for restoration, repair, construction and other activi7 ties eligible under section 133(b) of title 23, United 

8 States Code, and for passenger and freight rail 

9 transportation and port infrastructure projects eligi10 ble for assistance under section 601(a)(8) of title 23. 

11 (2) FEDERAL SHARE; LIMITATION ON OBLIGA12 TIONS.—The Federal share payable on account of 

13 any project or activity carried out with funds made 

14 available under this subsection shall be, at the op15 tion of the recipient, up to 100 percent of the total 

16 cost thereof. The amount made available under this 

17 subsection shall not be subject to any limitation on 

18 obligations for Federal-aid highways and highway 

19 safety construction programs set forth in any Act or 

20 in title 23, United States Code. 

21 (3) AVAILABILITY.—The amounts made avail22 able under this subsection shall be available for obli23 gation until the date that is two years after the date 

24 of the enactment of this Act. The Secretary shall ob25 ligate amounts totaling not less than 50 percent of 


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1 the funds made available within one year of enact2 ment and obligate remaining amounts not later than 

3 two years after enactment. 

4 (4) DISTRIBUTION OF FUNDS.—Of the funds 

5 provided in this subsection, after making the set6 asides required by paragraphs (9), (10), (11), (12), 

7 and (15), 50 percent of the funds shall be appor8 tioned to States using the formula set forth in sec9 tion 104(b)(3) of title 23, United States Code, and 

10 the remaining funds shall be apportioned to States 

11 in the same ratio as the obligation limitation for fis12 cal year 2010 was distributed among the States in 

13 accordance with the formula specified in section 

14 120(a)(6) of division A of Public Law 111–117. 

15 (5) APPORTIONMENT.—Apportionments under 

16 paragraph (4) shall be made not later than 30 days 

17 after the date of the enactment of this Act. 

18 (6) REDISTRIBUTION.— 

19 (A) The Secretary shall, 180 days fol20 lowing the date of apportionment, withdraw 

21 from each State an amount equal to 50 percent 

22 of the funds apportioned under paragraph (4) 

23 to that State (excluding funds suballocated 

24 within the State) less the amount of funding 

25 obligated (excluding funds suballocated within 


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1 the State), and the Secretary shall redistribute 

2 such amounts to other States that have had no 

3 funds withdrawn under this subparagraph in 

4 the manner described in section 120(c) of divi5 sion A of Public Law 111–117. 

6 (B) One year following the date of appor7 tionment, the Secretary shall withdraw from 

8 each recipient of funds apportioned under para9 graph (4) any unobligated funds, and the Sec10 retary shall redistribute such amounts to States 

11 that have had no funds withdrawn under this 

12 paragraph (excluding funds suballocated within 

13 the State) in the manner described in section 

14 120(c) of division A of Public Law 111–117. 

15 (C) At the request of a State, the Sec16 retary may provide an extension of the one-year 

17 period only to the extent that the Secretary de18 termines that the State has encountered ex19 treme conditions that create an unworkable bid20 ding environment or other extenuating cir21 cumstances. Before granting an extension, the 

22 Secretary notify in writing the Committee on 

23 Transportation and Infrastructure and the 

24 Committee on Environment and Public Works, 


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1 providing a thorough justification for the exten2 sion. 

3 (7) TRANSPORTATION ENHANCEMENTS.—Three 

4 percent of the funds apportioned to a State under 

5 paragraph (4) shall be set aside for the purposes de6 scribed in section 133(d)(2) of title 23, United 

7 States Code (without regard to the comparison to 

8 fiscal year 2005). 

9 (8) SUBALLOCATION.—Thirty percent of the 

10 funds apportioned to a State under this subsection 

11 shall be suballocated within the State in the manner 

12 and for the purposes described in the first sentence 

13 of sections 133(d)(3)(A), 133(d)(3)(B), and 

14 133(d)(3)(D) of title 23, United States Code. Such 

15 suballocation shall be conducted in every State. 

16 Funds suballocated within a State to urbanized 

17 areas and other areas shall not be subject to the re18 distribution of amounts required 180 days following 

19 the date of apportionment of funds provided by 

20 paragraph (6)(A). 

21 (9) PUERTO RICO AND TERRITORIAL HIGHWAY

22 PROGRAMS.—Of the funds provided under this sub23 section, $105,000,000 shall be set aside for the 

24 Puerto Rico highway program authorized under sec25 tion 165 of title 23, United States Code, and 


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1 $45,000,000 shall be for the territorial highway pro2 gram authorized under section 215 of title 23, 

3 United States Code. 

4 (10) FEDERAL LANDS AND INDIAN RESERVA5 TIONS.—Of the funds provided under this sub6 section, $550,000,000 shall be set aside for invest7 ments in transportation at Indian reservations and 

8 Federal lands in accordance with the following: 

9 (A) Of the funds set aside by this para10 graph, $310,000,000 shall be for the Indian 

11 Reservation Roads program, $170,000,000 

12 shall be for the Park Roads and Parkways pro13 gram, $60,000,000 shall be for the Forest 

14 Highway Program, and $10,000,000 shall be 

15 for the Refuge Roads program. 

16 (B) For investments at Indian reservations 

17 and Federal lands, priority shall be given to 

18 capital investments, and to projects and activi19 ties that can be completed within 2 years of en20 actment of this Act. 

21 (C) One year following the enactment of 

22 this Act, to ensure the prompt use of the fund23 ing provided for investments at Indian reserva24 tions and Federal lands, the Secretary shall 

25 have the authority to redistribute unobligated 


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1 funds within the respective program for which 

2 the funds were appropriated. 

3 (D) Up to four percent of the funding pro4 vided for Indian Reservation Roads may be 

5 used by the Secretary of the Interior for pro6 gram management and oversight and project-re7 lated administrative expenses. 

8 (E) Section 134(f)(3)(C)(ii)(II) of title 23, 

9 United States Code, shall not apply to funds set 

10 aside by this paragraph. 

11 (11) JOB TRAINING.—Of the funds provided 

12 under this subsection, $50,000,000 shall be set aside 

13 for the development and administration of transpor14 tation training programs under section 140(b) title 

15 23, United States Code. 

16 (A) Funds set aside under this subsection 

17 shall be competitively awarded and used for the 

18 purpose of providing training, apprenticeship 

19 (including Registered Apprenticeship), skill de20 velopment, and skill improvement programs, as 

21 well as summer transportation institutes and 

22 may be transferred to, or administered in part23 nership with, the Secretary of Labor and shall 

24 demonstrate to the Secretary of Transportation 

25 program outcomes, including— 


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1 (i) impact on areas with transpor2 tation workforce shortages; 

3 (ii) diversity of training participants; 

4 (iii) number of participants obtaining 

5 certifications or credentials required for 

6 specific types of employment; 

7 (iv) employment outcome metrics, 

8 such as job placement and job retention 

9 rates, established in consultation with the 

10 Secretary of Labor and consistent with 

11 metrics used by programs under the Work12 force Investment Act; 

13 (v) to the extent practical, evidence 

14 that the program did not preclude workers 

15 that participate in training or apprentice16 ship activities under the program from 

17 being referred to, or hired on, projects 

18 funded under this chapter; and 

19 (vi) identification of areas of collabo20 ration with the Department of Labor pro21 grams, including co-enrollment. 

22 (B) To be eligible to receive a competitively 

23 awarded grant under this subsection, a State 

24 must certify that at least 0.1 percent of the 

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1 portation Program and Bridge Program will be 

2 obligated in the first fiscal year after enactment 

3 of this Act for job training activities consistent 

4 with section 140(b) of title 23, United States 

5 Code. 

6 (12) DISADVANTAGED BUSINESS ENTER7 PRISES.—Of the funds provided under this sub8 section, $10,000,000 shall be set aside for training 

9 programs and assistance programs under section 

10 140(c) of title 23, United States Code. Funds set 

11 aside under this paragraph should be allocated to 

12 businesses that have proven success in adding staff 

13 while effectively completing projects. 

14 (13) STATE PLANNING AND OVERSIGHT EX15 PENSES.—Of amounts apportioned under paragraph 

16 (4) of this subsection, a State may use up to 0.5 

17 percent for activities related to projects funded 

18 under this subsection, including activities eligible 

19 under sections 134 and 135 of title 23, United 

20 States Code, State administration of subgrants, and 

21 State oversight of subrecipients. 

22 (14) CONDITIONS.— 

23 (A) Funds made available under this sub24 section shall be administered as if apportioned 

25 under chapter 1 of title 23, United States Code, 


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1 except for funds made available for investments 

2 in transportation at Indian reservations and 

3 Federal lands, and for the territorial highway 

4 program, which shall be administered in accord5 ance with chapter 2 of title 23, United States 

6 Code, and except for funds made available for 

7 disadvantaged business enterprises bonding as8 sistance, which shall be administered in accord9 ance with chapter 3 of title 49, United States 

10 Code. 

11 (B) Funds made available under this sub12 section shall not be obligated for the purposes 

13 authorized under section 115(b) of title 23, 

14 United States Code. 

15 (C) Funding provided under this sub16 section shall be in addition to any and all funds 

17 provided for fiscal years 2011 and 2012 in any 

18 other Act for ‘‘Federal-aid Highways’’ and shall 

19 not affect the distribution of funds provided for 

20 ‘‘Federal-aid Highways’’ in any other Act. 

21 (D) Section 1101(b) of Public Law 109–59 

22 shall apply to funds apportioned under this sub23 section. 

24 (15) OVERSIGHT.—The Administrator of the 

25 Federal Highway Administration may set aside up 


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1 to 0.15 percent of the funds provided under this 

2 subsection to fund the oversight by the Adminis3 trator of projects and activities carried out with 

4 funds made available to the Federal Highway Ad5 ministration in this Act, and such funds shall be 

6 available through September 30, 2015. 

7 (d) CAPITAL ASSISTANCE FOR HIGH-SPEED RAIL

8 CORRIDORS AND INTERCITY PASSENGER RAIL SERV9 ICE.— 

10 (1) IN GENERAL.—There is made available to 

11 the Secretary of Transportation $4,000,000,000 for 

12 grants for high-speed rail projects as authorized 

13 under sections 26104 and 26106 of title 49, United 

14 States Code, capital investment grants to support 

15 intercity passenger rail service as authorized under 

16 section 24406 of title 49, United States Code, and 

17 congestion grants as authorized under section 24105 

18 of title 49, United States Code, and to enter into co19 operative agreements for these purposes as author20 ized, except that the Administrator of the Federal 

21 Railroad Administration may retain up to one per22 cent of the funds provided under this heading to 

23 fund the award and oversight by the Administrator 

24 of grants made under this subsection, which retained 


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1 amount shall remain available for obligation until 

2 September 30, 2015. 

3 (2) AVAILABILITY.—The amounts made avail4 able under this subsection shall be available for obli5 gation until the date that is two years after the date 

6 of the enactment of this Act. The Secretary shall ob7 ligate amounts totaling not less than 50 percent of 

8 the funds made available within one year of enact9 ment and obligate remaining amounts not later than 

10 two years after enactment. 

11 (3) FEDERAL SHARE.—The Federal share pay12 able of the costs for which a grant or cooperative 

13 agreements is made under this subsection shall be, 

14 at the option of the recipient, up to 100 percent. 

15 (4) INTERIM GUIDANCE.—The Secretary shall 

16 issue interim guidance to applicants covering appli17 cation procedures and administer the grants pro18 vided under this subsection pursuant to that guid19 ance until final regulations are issued. 

20 (5) INTERCITY PASSENGER RAIL CORRIDORS.— 

21 Not less than 85 percent of the funds provided 

22 under this subsection shall be for cooperative agree23 ments that lead to the development of entire seg24 ments or phases of intercity or high-speed rail cor25 ridors. 


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1 (6) CONDITIONS.— 

2 (A) In addition to the provisions of title 

3 49, United States Code, that apply to each of 

4 the individual programs funded under this sub5 section, subsections 24402(a)(2), 24402(i), and 

6 24403 (a) and (c) of title 49, United States 

7 Code, shall also apply to the provision of funds 

8 provided under this subsection. 

9 (B) A project need not be in a State rail 

10 plan developed under Chapter 227 of title 49, 

11 United States Code, to be eligible for assistance 

12 under this subsection. 

13 (C) Recipients of grants under this para14 graph shall conduct all procurement trans15 actions using such grant funds in a manner 

16 that provides full and open competition, as de17 termined by the Secretary, in compliance with 

18 existing labor agreements. 

19 (e) CAPITAL GRANTS TO THE NATIONAL RAILROAD

20 PASSENGER CORPORATION.— 

21 (1) IN GENERAL.—There is made available 

22 $2,000,000,000 to enable the Secretary of Transpor23 tation to make capital grants to the National Rail24 road Passenger Corporation (Amtrak), as authorized 

25 by section 101(c) of the Passenger Rail Investment 


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1 and Improvement Act of 2008 (Public Law 110– 

2 432). 

3 (2) AVAILABILITY.—The amounts made avail4 able under this subsection shall be available for obli5 gation until the date that is two years after the date 

6 of the enactment of this Act. The Secretary shall ob7 ligate amounts totaling not less than 50 percent of 

8 the funds made available within one year of enact9 ment and obligate remaining amounts not later than 

10 two years after enactment. 

11 (3) PROJECT PRIORITY.—The priority for the 

12 use of funds shall be given to projects for the repair, 

13 rehabilitation, or upgrade of railroad assets or infra14 structure, and for capital projects that expand pas15 senger rail capacity including the rehabilitation of 

16 rolling stock. 

17 (4) CONDITIONS.— 

18 (A) None of the funds under this sub19 section shall be used to subsidize the operating 

20 losses of Amtrak. 

21 (B) The funds provided under this sub22 section shall be awarded not later than 90 days 

23 after the date of enactment of this Act. 

24 (C) The Secretary shall take measures to 

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1 section shall be completed within 2 years of en2 actment of this Act, and shall serve to supple3 ment and not supplant planned expenditures for 

4 such activities from other Federal, State, local 

5 and corporate sources. The Secretary shall cer6 tify to the House and Senate Committees on 

7 Appropriations in writing compliance with the 

8 preceding sentence. 

9 (5) OVERSIGHT.—The Administrator of the 

10 Federal Railroad Administration may set aside 0.5 

11 percent of the funds provided under this subsection 

12 to fund the oversight by the Administrator of 

13 projects and activities carried out with funds made 

14 available in this subsection, and such funds shall be 

15 available through September 30, 2015. 

16 (f) TRANSIT CAPITAL ASSISTANCE.— 

17 (1) IN GENERAL.—There is made available to 

18 the Secretary of Transportation $3,000,000,000 for 

19 grants for transit capital assistance grants as de20 fined by section 5302(a)(1) of title 49, United 

21 States Code. Notwithstanding any provision of chap22 ter 53 of title 49, however, a recipient of funding 

23 under this subsection may use up to 10 percent of 

24 the amount provided for the operating costs of 


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1 equipment and facilities for use in public transpor2 tation or for other eligible activities. 

3 (2) FEDERAL SHARE; LIMTATION ON OBLIGA4 TIONS.—The applicable requirements of chapter 53 

5 of title 49, United States Code, shall apply to fund6 ing provided under this subsection, except that the 

7 Federal share of the costs for which any grant is 

8 made under this subsection shall be, at the option of 

9 the recipient, up to 100 percent. The amount made 

10 available under this subsection shall not be subject 

11 to any limitation on obligations for transit programs 

12 set forth in any Act or chapter 53 of title 49. 

13 (3) AVAILABILITY.—The amounts made avail14 able under this subsection shall be available for obli15 gation until the date that is two years after the date 

16 of the enactment of this Act. The Secretary shall ob17 ligate amounts totaling not less than 50 percent of 

18 the funds made available within one year of enact19 ment and obligate remaining amounts not later than 

20 two years after enactment. 

21 (4) DISTRIBUTION OF FUNDS.—The Secretary 

22 of Transportation shall— 

23 (A) provide 80 percent of the funds appro24 priated under this subsection for grants under 

25 section 5307 of title 49, United States Code, 


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1 and apportion such funds in accordance with 

2 section 5336 of such title; 

3 (B) provide 10 percent of the funds appro4 priated under this subsection in accordance 

5 with section 5340 of such title; and 

6 (C) provide 10 percent of the funds appro7 priated under this subsection for grants under 

8 section 5311 of title 49, United States Code, 

9 and apportion such funds in accordance with 

10 such section. 

11 (5) APPORTIONMENT.—The funds apportioned 

12 under this subsection shall be apportioned not later 

13 than 21 days after the date of the enactment of this 

14 Act. 

15 (6) REDISTRIBUTION.— 

16 (A) The Secretary shall, 180 days fol17 lowing the date of apportionment, withdraw 

18 from each urbanized area or State an amount 

19 equal to 50 percent of the funds apportioned to 

20 such urbanized areas or States less the amount 

21 of funding obligated, and the Secretary shall re22 distribute such amounts to other urbanized 

23 areas or States that have had no funds with24 drawn under this proviso utilizing whatever 

25 method he deems appropriate to ensure that all 


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1 funds redistributed under this proviso shall be 

2 utilized promptly. 

3 (B) One year following the date of appor4 tionment, the Secretary shall withdraw from 

5 each urbanized area or State any unobligated 

6 funds, and the Secretary shall redistribute such 

7 amounts to other urbanized areas or States 

8 that have had no funds withdrawn under this 

9 proviso utilizing whatever method the Secretary 

10 deems appropriate to ensure that all funds re11 distributed under this proviso shall be utilized 

12 promptly. 

13 (C) At the request of an urbanized area or 

14 State, the Secretary of Transportation may pro15 vide an extension of such 1-year period if the 

16 Secretary determines that the urbanized area or 

17 State has encountered an unworkable bidding 

18 environment or other extenuating cir19 cumstances. Before granting an extension, the 

20 Secretary shall notify in writing the Committee 

21 on Transportation and Infrastructure and the 

22 Committee on Banking, Housing and Urban 

23 Affairs, providing a thorough justification for 

24 the extension. 

25 (7) CONDITIONS.— 


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1 (A) Of the funds provided for section 5311 

2 of title 49, United States Code, 2.5 percent 

3 shall be made available for section 5311(c)(1). 

4 (B) Section 1101(b) of Public Law 109–59 

5 shall apply to funds appropriated under this 

6 subsection. 

7 (C) The funds appropriated under this 

8 subsection shall not be comingled with any prior 

9 year funds. 

10 (8) OVERSIGHT.—Notwithstanding any other 

11 provision of law, 0.3 percent of the funds provided 

12 for grants under section 5307 and section 5340, and 

13 0.3 percent of the funds provided for grants under 

14 section 5311, shall be available for administrative 

15 expenses and program management oversight, and 

16 such funds shall be available through September 30, 

17 2015. 

18 (g) STATE OF GOOD REPAIR.— 

19 (1) IN GENERAL.—There is made available to 

20 the Secretary of Transportation $6,000,000,000 for 

21 capital expenditures as authorized by sections 

22 5309(b) (2) and (3) of title 49, United States Code. 

23 (2) FEDERAL SHARE.—The applicable require24 ments of chapter 53 of title 49, United States Code, 

25 shall apply, except that the Federal share of the 


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1 costs for which a grant is made under this sub2 section shall be, at the option of the recipient, up to 

3 100 percent. 

4 (3) AVAILABILITY.—The amounts made avail5 able under this subsection shall be available for obli6 gation until the date that is two years after the date 

7 of the enactment of this Act. The Secretary shall ob8 ligate amounts totaling not less than 50 percent of 

9 the funds made available within one year of enact10 ment and obligate remaining amounts not later than 

11 two years after enactment. 

12 (4) DISTRIBUTION OF FUNDS.— 

13 (A) The Secretary of Transportation shall 

14 apportion not less than 75 percent of the funds 

15 under this subsection for the modernization of 

16 fixed guideway systems, pursuant to the for17 mula set forth in section 5336(b) title 49, 

18 United States Code, other than subsection 

19 (b)(2)(A)(ii). 

20 (B) Of the funds appropriated under this 

21 subsection, not less than 25 percent shall be 

22 available for the restoration or replacement of 

23 existing public transportation assets related to 

24 bus systems, pursuant to the formula set forth 

25 in section 5336 other than subsection (b). 


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1 (5) APPORTIONMENT.—The funds made avail2 able under this subsection shall be apportioned not 

3 later than 30 days after the date of the enactment 

4 of this Act. 

5 (6) REDISTRIBUTION.— 

6 (A) The Secretary shall, 180 days fol7 lowing the date of apportionment, withdraw 

8 from each urbanized area an amount equal to 

9 50 percent of the funds apportioned to such ur10 banized area less the amount of funding obli11 gated, and the Secretary shall redistribute such 

12 amounts to other urbanized areas that have had 

13 no funds withdrawn under this paragraph uti14 lizing whatever method the Secretary deems ap15 propriate to ensure that all funds redistributed 

16 under this paragraph shall be utilized promptly. 

17 (B) One year following the date of appor18 tionment, the Secretary shall withdraw from 

19 each urbanized area any unobligated funds, and 

20 the Secretary shall redistribute such amounts to 

21 other urbanized areas that have had no funds 

22 withdrawn under this paragraph, utilizing what23 ever method the Secretary deems appropriate to 

24 ensure that all funds redistributed under this 

25 paragraph shall be utilized promptly. 


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1 (C) At the request of an urbanized area, 

2 the Secretary may provide an extension of the 

3 1-year period if the Secretary finds that the ur4 banized area has encountered an unworkable 

5 bidding environment or other extenuating cir6 cumstances. Before granting an extension, the 

7 Secretary shall notify the Committee on Trans8 portation and Infrastructure and the Com9 mittee on Banking, Housing, and Urban Af10 fairs, providing a thorough justification for the 

11 extension. 

12 (7) CONDITIONS.— 

13 (A) The provisions of section 1101(b) of 

14 Public Law 109–59 shall apply to funds made 

15 available under this subsection. 

16 (B) The funds appropriated under this 

17 subsection shall not be commingled with any 

18 prior year funds. 

19 (8) OVERSIGHT.—Notwithstanding any other 

20 provision of law, 0.3 percent of the funds under this 

21 subsection shall be available for administrative ex22 penses and program management oversight and shall 

23 remain available for obligation until September 30, 

24 2015. 


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1 (h) TRANSPORTATION INFRASTRUCTURE GRANTS

2 AND FINANCING.— 

3 (1) IN GENERAL.—There is made available to 

4 the Secretary of Transportation $5,000,000,000 for 

5 capital investments in surface transportation infra6 structure. The Secretary shall distribute funds pro7 vided under this subsection as discretionary grants 

8 to be awarded to State and local governments or 

9 transit agencies on a competitive basis for projects 

10 that will have a significant impact on the Nation, a 

11 metropolitan area, or a region. 

12 (2) FEDERAL SHARE; LIMITATION ON OBLIGA13 TIONS.—The Federal share payable of the costs for 

14 which a grant is made under this subsection, shall 

15 be 100 percent. 

16 (3) AVAILABILITY.—The amounts made avail17 able under this subsection shall be available for obli18 gation until the date that is two years after the date 

19 of the enactment of this Act. The Secretary shall ob20 ligate amounts totaling not less than 50 percent of 

21 the funds made available within one year of enact22 ment and obligate remaining amounts not later than 

23 two years after enactment. 

24 (4) PROJECT ELIGIBILITY.—Projects eligible for 

25 funding provided under this subsection include— 


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1 (A) highway or bridge projects eligible 

2 under title 23, United States Code, including 

3 interstate rehabilitation, improvements to the 

4 rural collector road system, the reconstruction 

5 of overpasses and interchanges, bridge replace6 ments, seismic retrofit projects for bridges, and 

7 road realignments; 

8 (B) public transportation projects eligible 

9 under chapter 53 of title 49, United States 

10 Code, including investments in projects partici11 pating in the New Starts or Small Starts pro12 grams that will expedite the completion of those 

13 projects and their entry into revenue service; 

14 (C) passenger and freight rail transpor15 tation projects; and 

16 (D) port infrastructure investments, in17 cluding projects that connect ports to other 

18 modes of transportation and improve the effi19 ciency of freight movement. 

20 (5) TIFIA PROGRAM.—The Secretary may 

21 transfer to the Federal Highway Administration 

22 funds made available under this subsection for the 

23 purpose of paying the subsidy and administrative 

24 costs of projects eligible for federal credit assistance 

25 under chapter 6 of title 23, United States Code, if 


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1 the Secretary finds that such use of the funds would 

2 advance the purposes of this subsection. 

3 (6) PROJECT PRIORITY.—The Secretary shall 

4 give priority to projects that are expected to be com5 pleted within 3 years of the date of the enactment 

6 of this Act. 

7 (7) DEADLINE FOR ISSUANCE OF COMPETITION

8 CRITERIA.—The Secretary shall publish criteria on 

9 which to base the competition for any grants award10 ed under this subsection not later than 90 days after 

11 enactment of this Act. The Secretary shall require 

12 applications for funding provided under this sub13 section to be submitted not later than 180 days after 

14 the publication of the criteria, and announce all 

15 projects selected to be funded from such funds not 

16 later than 1 year after the date of the enactment of 

17 the Act. 

18 (8) APPLICABILITY OF TITLE 40.—Each project 

19 conducted using funds provided under this sub20 section shall comply with the requirements of sub21 chapter IV of chapter 31 of title 40, United States 

22 Code. 

23 (9) ADMINISTRATIVE EXPENSES.—The Sec24 retary may retain up to one-half of one percent of 

25 the funds provided under this subsection, and may 


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1 transfer portions of those funds to the Administra2 tors of the Federal Highway Administration, the 

3 Federal Transit Administration, the Federal Rail4 road Administration and the Maritime Administra5 tion, to fund the award and oversight of grants 

6 made under this subsection. Funds retained shall re7 main available for obligation until September 30, 

8 2015. 

9 (i) LOCAL HIRING.— 

10 (1) IN GENERAL.—In the case of the funding 

11 made available under subsections (a) through (h) of 

12 this section, the Secretary of Transportation may es13 tablish standards under which a contract for con14 struction may be advertised that contains require15 ments for the employment of individuals residing in 

16 or adjacent to any of the areas in which the work 

17 is to be performed to perform construction work re18 quired under the contract, provided that— 

19 (A) all or part of the construction work 

20 performed under the contract occurs in an area 

21 designated by the Secretary as an area of high 

22 unemployment, using data reported by the 

23 United States Department of Labor, Bureau of 

24 Labor Statistics; 


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1 (B) the estimated cost of the project of 

2 which the contract is a part is greater than $10 

3 million, except that the estimated cost of the 

4 project in the case of construction funded under 

5 subsection (c) shall be greater than $50 million; 

6 and 

7 (C) the recipient may not require the hir8 ing of individuals who do not have the nec9 essary skills to perform work in any craft or 

10 trade; provided that the recipient may require 

11 the hiring of such individuals if the recipient es12 tablishes reasonable provisions to train such in13 dividuals to perform any such work under the 

14 contract effectively. 

15 (2) PROJECT STANDARDS.— 

16 (A) IN GENERAL.—Any standards estab17 lished by the Secretary under this section shall 

18 ensure that any requirements specified under 

19 subsection (c)(1)— 

20 (i) do not compromise the quality of 

21 the project; 

22 (ii) are reasonable in scope and appli23 cation; 

24 (iii) do not unreasonably delay the 

25 completion of the project; and 


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1 (iv) do not unreasonably increase the 

2 cost of the project. 

3 (B) AVAILABLE PROGRAMS.—The Sec4 retary shall make available to recipients the 

5 workforce development and training programs 

6 set forth in section 24604(e)(1)(D) of this title 

7 to assist recipients who wish to establish train8 ing programs that satisfy the provisions of sub9 section (c)(1)(C). The Secretary of Labor shall 

10 make available its qualifying workforce and 

11 training development programs to recipients 

12 who wish to establish training programs that 

13 satisfy the provisions of subsection (c)(1)(C). 

14 (3) IMPLEMENTING REGULATIONS.—The Sec15 retary shall promulgate final regulations to imple16 ment the authority of this subsection. 

17 (j) ADMINISTRATIVE PROVISIONS.— 

18 (1) APPLICABILITY OF TITLE 40.—Each project 

19 conducted using funds provided under this subtitle 

20 shall comply with the requirements of subchapter IV 

21 of chapter 31 of title 40, United States Code. 

22 (2) BUY AMERICAN.—Section 1605 of division 

23 A of the American Recovery and Reinvestment Act 

24 of 2009 (Public Law 111–5) applies to each project 

25 conducted using funds provided under this subtitle. 


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1 Subtitle F—Building and Upgrad2 ing Infrastructure for Long3 Term Development 

4 SEC. 242. SHORT TITLE; TABLE OF CONTENTS. 

5 (a) SHORT TITLE.—This subtitle may be cited as the 

6 ‘‘Building and Upgrading Infrastructure for Long-Term 

7 Development Act’’. 

8 SEC. 243. FINDINGS AND PURPOSE. 

9 (a) FINDINGS.—Congress finds that— 

10 (1) infrastructure has always been a vital ele11 ment of the economic strength of the United States 

12 and a key indicator of the international leadership of 

13 the United States; 

14 (2) the Erie Canal, the Hoover Dam, the rail15 roads, and the interstate highway system are all tes16 taments to American ingenuity and have helped pro17 pel and maintain the United States as the world’s 

18 largest economy; 

19 (3) according to the World Economic Forum’s 

20 Global Competitiveness Report, the United States 

21 fell to second place in 2009, and dropped to fourth 

22 place overall in 2010, however, in the ‘‘Quality of 

23 overall infrastructure’’ category of the same report, 

24 the United States ranked twenty-third in the world; 


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1 (4) according to the World Bank’s 2010 Logis2 tic Performance Index, the capacity of countries to 

3 efficiently move goods and connect manufacturers 

4 and consumers with international markets is improv5 ing around the world, and the United States now 

6 ranks seventh in the world in logistics-related infra7 structure behind countries from both Europe and 

8 Asia; 

9 (5) according to a January 2009 report from 

10 the University of Massachusetts/Alliance for Amer11 ican Manufacturing entitled ‘‘Employment, Produc12 tivity and Growth,’’ infrastructure investment is a 

13 ‘‘highly effective engine of job creation’’; 

14 (6) according to the American Society of Civil 

15 Engineers, the current condition of the infrastruc16 ture in the United States earns a grade point aver17 age of D, and an estimated $2,200,000,000,000 in18 vestment is needed over the next 5 years to bring 

19 American infrastructure up to adequate condition; 

20 (7) according to the National Surface Trans21 portation Policy and Revenue Study Commission, 

22 $225,000,000,000 is needed annually from all 

23 sources for the next 50 years to upgrade the United 

24 States surface transportation system to a state of 

25 good repair and create a more advanced system; 


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1 (8) the current infrastructure financing mecha2 nisms of the United States, both on the Federal and 

3 State level, will fail to meet current and foreseeable 

4 demands and will create large funding gaps; 

5 (9) published reports state that there may not 

6 be enough demand for municipal bonds to maintain 

7 the same level of borrowing at the same rates, re8 sulting in significantly decreased infrastructure in9 vestment at the State and local level; 

10 (10) current funding mechanisms are not read11 ily scalable and do not— 

12 (A) serve large in-State or cross jurisdic13 tion infrastructure projects, projects of regional 

14 or national significance, or projects that cross 

15 sector silos; 

16 (B) sufficiently catalyze private sector in17 vestment; or 

18 (C) ensure the optimal return on public re19 sources; 

20 (11) although grant programs of the United 

21 States Government must continue to play a central 

22 role in financing the transportation, environment, 

23 and energy infrastructure needs of the United 

24 States, current and foreseeable demands on existing 

25 Federal, State, and local funding for infrastructure 


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1 expansion clearly exceed the resources to support 

2 these programs by margins wide enough to prompt 

3 serious concerns about the United States ability to 

4 sustain long-term economic development, produc5 tivity, and international competitiveness; 

6 (12) the capital markets, including pension 

7 funds, private equity funds, mutual funds, sovereign 

8 wealth funds, and other investors, have a growing 

9 interest in infrastructure investment and represent 

10 hundreds of billions of dollars of potential invest11 ment; and 

12 (13) the establishment of a United States Gov13 ernment-owned, independent, professionally managed 

14 institution that could provide credit support to quali15 fied infrastructure projects of regional and national 

16 significance, making transparent merit-based invest17 ment decisions based on the commercial viability of 

18 infrastructure projects, would catalyze the participa19 tion of significant private investment capital. 

20 (b) PURPOSE.—The purpose of this Act is to facili21 tate investment in, and long-term financing of, economi22 cally viable infrastructure projects of regional or national 

23 significance in a manner that both complements existing 

24 Federal, State, local, and private funding sources for these 

25 projects and introduces a merit-based system for financing 


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1 such projects, in order to mobilize significant private sec2 tor investment, create jobs, and ensure United States com3 petitiveness through an institution that limits the need for 

4 ongoing Federal funding. 

5 SEC. 244. DEFINITIONS. 

6 For purposes of this Act, the following definitions 

7 shall apply: 

8 (1) AIFA.—The term ‘‘AIFA’’ means the 

9 American Infrastructure Financing Authority estab10 lished under this Act. 

11 (2) BLIND TRUST.—The term ‘‘blind trust’’ 

12 means a trust in which the beneficiary has no knowl13 edge of the specific holdings and no rights over how 

14 those holdings are managed by the fiduciary of the 

15 trust prior to the dissolution of the trust. 

16 (3) BOARD OF DIRECTORS.—The term ‘‘Board 

17 of Directors’’ means Board of Directors of AIFA. 

18 (4) CHAIRPERSON.—The term ‘‘Chairperson’’ 

19 means the Chairperson of the Board of Directors of 

20 AIFA. 

21 (5) CHIEF EXECUTIVE OFFICER.—The term 

22 ‘‘chief executive officer’’ means the chief executive 

23 officer of AIFA, appointed under section 247. 


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1 (6) COST.—The term ‘‘cost’’ has the same 

2 meaning as in section 502 of the Federal Credit Re3 form Act of 1990 (2 U.S.C. 661a). 

4 (7) DIRECT LOAN.—The term ‘‘direct loan’’ has 

5 the same meaning as in section 502 of the Federal 

6 Credit Reform Act of 1990 (2 U.S.C. 661a). 

7 (8) ELIGIBLE ENTITY.—The term ‘‘eligible enti8 ty’’ means an individual, corporation, partnership 

9 (including a public-private partnership), joint ven10 ture, trust, State, or other non-Federal govern11 mental entity, including a political subdivision or any 

12 other instrumentality of a State, or a revolving fund. 

13 (9) INFRASTRUCTURE PROJECT.— 

14 (A) IN GENERAL.—The term ‘‘eligible in15 frastructure project’’ means any non-Federal 

16 transportation, water, or energy infrastructure 

17 project, or an aggregation of such infrastruc18 ture projects, as provided in this Act. 

19 (B) TRANSPORTATION INFRASTRUCTURE

20 PROJECT.—The term ‘‘transportation infra21 structure project’’ means the construction, al22 teration, or repair, including the facilitation of 

23 intermodal transit, of the following subsectors: 

24 (i) Highway or road. 

25 (ii) Bridge. 


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1 (iii) Mass transit. 

2 (iv) Inland waterways. 

3 (v) Commercial ports. 

4 (vi) Airports. 

5 (vii) Air traffic control systems. 

6 (viii) Passenger rail, including high7 speed rail. 

8 (ix) Freight rail systems. 

9 (C) WATER INFRASTRUCTURE PROJECT.— 

10 The term ‘‘water infrastructure project’’ means 

11 the construction, consolidation, alteration, or 

12 repair of the following subsectors: 

13 (i) Waterwaste treatment facility. 

14 (ii) Storm water management system. 

15 (iii) Dam. 

16 (iv) Solid waste disposal facility. 

17 (v) Drinking water treatment facility. 

18 (vi) Levee. 

19 (vii) Open space management system. 

20 (D) ENERGY INFRASTRUCTURE

21 PROJECT.—The term ‘‘energy infrastructure 

22 project’’ means the construction, alteration, or 

23 repair of the following subsectors: 

24 (i) Pollution reduced energy genera25 tion. 


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1 (ii) Transmission and distribution. 

2 (iii) Storage. 

3 (iv) Energy efficiency enhancements 

4 for buildings, including public and com5 mercial buildings. 

6 (E) BOARD AUTHORITY TO MODIFY SUB7 SECTORS.—The Board of Directors may make 

8 modifications, at the discretion of the Board, to 

9 the subsectors described in this paragraph by a 

10 vote of not fewer than 5 of the voting members 

11 of the Board of Directors. 

12 (10) INVESTMENT PROSPECTUS.— 

13 (A) The term ‘‘investment prospectus’’ 

14 means the processes and publications described 

15 below that will guide the priorities and strategic 

16 focus for the Bank’s investments. The invest17 ment prospectus shall follow rulemaking proce18 dures under section 553 of title 5, United 

19 States Code. 

20 (B) The Bank shall publish a detailed de21 scription of its strategy in an Investment Pro22 spectus within one year of the enactment of this 

23 subchapter. The Investment Prospectus shall— 

24 (i) specify what the Bank shall con25 sider significant to the economic competiVerDate Mar 15 2010 05:01 Sep 15, 2011 Jkt 099200 PO 00000 Frm 00098 Fmt 6652 Sfmt 6201 E:\BILLS\S1549.PCS S1549

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1 tiveness of the United States or a region 

2 thereof in a manner consistent with the 

3 primary objective; 

4 (ii) specify the priorities and strategic 

5 focus of the Bank in forwarding its stra6 tegic objectives and carrying out the Bank 

7 strategy; 

8 (iii) specify the priorities and strategic 

9 focus of the Bank in promoting greater ef10 ficiency in the movement of freight; 

11 (iv) specify the priorities and strategic 

12 focus of the Bank in promoting the use of 

13 innovation and best practices in the plan14 ning, design, development and delivery of 

15 projects; 

16 (v) describe in detail the framework 

17 and methodology for calculating applica18 tion qualification scores and associated 

19 ranges as specified in this subchapter, 

20 along with the data to be requested from 

21 applicants and the mechanics of calcula22 tions to be applied to that data to deter23 mine qualification scores and ranges; 

24 (vi) describe how selection criteria will 

25 be applied by the Chief Executive Officer 


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1 in determining the competitiveness of an 

2 application and its qualification score and 

3 range relative to other current applications 

4 and previously funded applications; and 

5 (vii) describe how the qualification 

6 score and range methodology and project 

7 selection framework are consistent with 

8 maximizing the Bank goals in both urban 

9 and rural areas. 

10 (C) The Investment Prospectus and any 

11 subsequent updates thereto shall be approved 

12 by a majority vote of the Board of Directors 

13 prior to publication. 

14 (D) The Bank shall update the Investment 

15 Prospectus on every biennial anniversary of its 

16 original publication. 

17 (11) INVESTMENT-GRADE RATING.—The term 

18 ‘‘investment-grade rating’’ means a rating of BBB 

19 minus, Baa3, or higher assigned to an infrastructure 

20 project by a ratings agency. 

21 (12) LOAN GUARANTEE.—The term ‘‘loan guar22 antee’’ has the same meaning as in section 502 of 

23 the Federal Credit Reform Act of 1990 (2 U.S.C. 

24 661a). 


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1 (13) PUBLIC-PRIVATE PARTNERSHIP.—The 

2 term ‘‘public-private partnership’’ means any eligible 

3 entity— 

4 (A)(i) which is undertaking the develop5 ment of all or part of an infrastructure project 

6 that will have a public benefit, pursuant to re7 quirements established in one or more contracts 

8 between the entity and a State or an instru9 mentality of a State; or 

10 (ii) the activities of which, with respect to 

11 such an infrastructure project, are subject to 

12 regulation by a State or any instrumentality of 

13 a State; 

14 (B) which owns, leases, or operates or will 

15 own, lease, or operate, the project in whole or 

16 in part; and 

17 (C) the participants in which include not 

18 fewer than 1 nongovernmental entity with sig19 nificant investment and some control over the 

20 project or project vehicle. 

21 (14) RURAL INFRASTRUCTURE PROJECT.—The 

22 term ‘‘rural infrastructure project’’ means an infra23 structure project in a rural area, as that term is de24 fined in section 343(a)(13)(A) of the Consolidated 


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1 Farm and Rural Development Act (7 U.S.C. 

2 1991(a)(13)(A)). 

3 (15) SECRETARY.—Unless the context other4 wise requires, the term ‘‘Secretary’’ means the Sec5 retary of the Treasury or the designee thereof. 

6 (16) SENIOR MANAGEMENT.—The term ‘‘senior 

7 management’’ means the chief financial officer, chief 

8 risk officer, chief compliance officer, general counsel, 

9 chief lending officer, and chief operations officer of 

10 AIFA established under section 249, and such other 

11 officers as the Board of Directors may, by majority 

12 vote, add to senior management. 

13 (17) STATE.—The term ‘‘State’’ includes the 

14 District of Columbia, Puerto Rico, Guam, American 

15 Samoa, the Virgin Islands, the Commonwealth of 

16 Northern Mariana Islands, and any other territory 

17 of the United States. 

18 PART I—AMERICAN INFRASTRUCTURE 

19 FINANCING AUTHORITY 

20 SEC. 245. ESTABLISHMENT AND GENERAL AUTHORITY OF 

21 AIFA. 

22 (a) ESTABLISHMENT OF AIFA.—The American In23 frastructure Financing Authority is established as a whol24 ly owned Government corporation. 


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1 (b) GENERAL AUTHORITY OF AIFA.—AIFA shall 

2 provide direct loans and loan guarantees to facilitate infra3 structure projects that are both economically viable and 

4 of regional or national significance, and shall have such 

5 other authority, as provided in this Act. 

6 (c) INCORPORATION.— 

7 (1) IN GENERAL.—The Board of Directors first 

8 appointed shall be deemed the incorporator of AIFA, 

9 and the incorporation shall be held to have been ef10 fected from the date of the first meeting of the 

11 Board of Directors. 

12 (2) CORPORATE OFFICE.—AIFA shall— 

13 (A) maintain an office in Washington, DC; 

14 and 

15 (B) for purposes of venue in civil actions, 

16 be considered to be a resident of Washington, 

17 DC. 

18 (d) RESPONSIBILITY OF THE SECRETARY.—The Sec19 retary shall take such action as may be necessary to assist 

20 in implementing AIFA, and in carrying out the purpose 

21 of this Act. 

22 (e) RULE OF CONSTRUCTION.—Chapter 91 of title 

23 31, United States Code, does not apply to AIFA, unless 

24 otherwise specifically provided in this Act. 


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1 SEC. 246. VOTING MEMBERS OF THE BOARD OF DIREC2 TORS. 

3 (a) VOTING MEMBERSHIP OF THE BOARD OF DIREC4 TORS.— 

5 (1) IN GENERAL.—AIFA shall have a Board of 

6 Directors consisting of 7 voting members appointed 

7 by the President, by and with the advice and consent 

8 of the Senate, not more than 4 of whom shall be 

9 from the same political party. 

10 (2) CHAIRPERSON.—One of the voting members 

11 of the Board of Directors shall be designated by the 

12 President to serve as Chairperson thereof. 

13 (3) CONGRESSIONAL RECOMMENDATIONS.—Not 

14 later than 30 days after the date of enactment of 

15 this Act, the majority leader of the Senate, the mi16 nority leader of the Senate, the Speaker of the 

17 House of Representatives, and the minority leader of 

18 the House of Representatives shall each submit a 

19 recommendation to the President for appointment of 

20 a member of the Board of Directors, after consulta21 tion with the appropriate committees of Congress. 

22 (b) VOTING RIGHTS.—Each voting member of the 

23 Board of Directors shall have an equal vote in all decisions 

24 of the Board of Directors. 

25 (c) QUALIFICATIONS OF VOTING MEMBERS.—Each 

26 voting member of the Board of Directors shall— 


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1 (1) be a citizen of the United States; and 

2 (2) have significant demonstrated expertise in— 

3 (A) the management and administration of 

4 a financial institution relevant to the operation 

5 of AIFA; or a public financial agency or author6 ity; or 

7 (B) the financing, development, or oper8 ation of infrastructure projects; or 

9 (C) analyzing the economic benefits of in10 frastructure investment. 

11 (d) TERMS.— 

12 (1) IN GENERAL.—Except as otherwise pro13 vided in this Act, each voting member of the Board 

14 of Directors shall be appointed for a term of 4 years. 

15 (2) INITIAL STAGGERED TERMS.—Of the voting 

16 members first appointed to the Board of Directors— 

17 (A) the initial Chairperson and 3 of the 

18 other voting members shall each be appointed 

19 for a term of 4 years; and 

20 (B) the remaining 3 voting members shall 

21 each be appointed for a term of 2 years. 

22 (3) DATE OF INITIAL NOMINATIONS.—The ini23 tial nominations for the appointment of all voting 

24 members of the Board of Directors shall be made 


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1 not later than 60 days after the date of enactment 

2 of this Act. 

3 (4) BEGINNING OF TERM.—The term of each of 

4 the initial voting members appointed under this sec5 tion shall commence immediately upon the date of 

6 appointment, except that, for purposes of calculating 

7 the term limits specified in this subsection, the ini8 tial terms shall each be construed as beginning on 

9 January 22 of the year following the date of the ini10 tial appointment. 

11 (5) VACANCIES.—A vacancy in the position of 

12 a voting member of the Board of Directors shall be 

13 filled by the President, and a member appointed to 

14 fill a vacancy on the Board of Directors occurring 

15 before the expiration of the term for which the pred16 ecessor was appointed shall be appointed only for 

17 the remainder of that term. 

18 (e) MEETINGS.— 

19 (1) OPEN TO THE PUBLIC; NOTICE.—Except as 

20 provided in paragraph (3), all meetings of the Board 

21 of Directors shall be— 

22 (A) open to the public; and 

23 (B) preceded by reasonable public notice. 

24 (2) FREQUENCY.—The Board of Directors shall 

25 meet not later than 60 days after the date on which 


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1 all members of the Board of Directors are first ap2 pointed, at least quarterly thereafter, and otherwise 

3 at the call of either the Chairperson or 5 voting 

4 members of the Board of Directors. 

5 (3) EXCEPTION FOR CLOSED MEETINGS.—The 

6 voting members of the Board of Directors may, by 

7 majority vote, close a meeting to the public if, dur8 ing the meeting to be closed, there is likely to be dis9 closed proprietary or sensitive information regarding 

10 an infrastructure project under consideration for as11 sistance under this Act. The Board of Directors 

12 shall prepare minutes of any meeting that is closed 

13 to the public, and shall make such minutes available 

14 as soon as practicable, not later than 1 year after 

15 the date of the closed meeting, with any necessary 

16 redactions to protect any proprietary or sensitive in17 formation. 

18 (4) QUORUM.—For purposes of meetings of the 

19 Board of Directors, 5 voting members of the Board 

20 of Directors shall constitute a quorum. 

21 (f) COMPENSATION OF MEMBERS.—Each voting 

22 member of the Board of Directors shall be compensated 

23 at a rate equal to the daily equivalent of the annual rate 

24 of basic pay prescribed for level III of the Executive 

25 Schedule under section 5314 of title 5, United States 


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1 Code, for each day (including travel time) during which 

2 the member is engaged in the performance of the duties 

3 of the Board of Directors. 

4 (g) CONFLICTS OF INTEREST.—A voting member of 

5 the Board of Directors may not participate in any review 

6 or decision affecting an infrastructure project under con7 sideration for assistance under this Act, if the member has 

8 or is affiliated with an entity who has a financial interest 

9 in such project. 

10 SEC. 247. CHIEF EXECUTIVE OFFICER OF AIFA. 

11 (a) IN GENERAL.—The chief executive officer of 

12 AIFA shall be a nonvoting member of the Board of Direc13 tors, who shall be responsible for all activities of AIFA, 

14 and shall support the Board of Directors as set forth in 

15 this Act and as the Board of Directors deems necessary 

16 or appropriate. 

17 (b) APPOINTMENT AND TENURE OF THE CHIEF EX18 ECUTIVE OFFICER.— 

19 (1) IN GENERAL.—The President shall appoint 

20 the chief executive officer, by and with the advice 

21 and consent of the Senate. 

22 (2) TERM.—The chief executive officer shall be 

23 appointed for a term of 6 years. 

24 (3) VACANCIES.—Any vacancy in the office of 

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1 dent, and the person appointed to fill a vacancy in 

2 that position occurring before the expiration of the 

3 term for which the predecessor was appointed shall 

4 be appointed only for the remainder of that term. 

5 (c) QUALIFICATIONS.—The chief executive officer— 

6 (1) shall have significant expertise in manage7 ment and administration of a financial institution, 

8 or significant expertise in the financing and develop9 ment of infrastructure projects, or significant exper10 tise in analyzing the economic benefits of infrastruc11 ture investment; and 

12 (2) may not— 

13 (A) hold any other public office; 

14 (B) have any financial interest in an infra15 structure project then being considered by the 

16 Board of Directors, unless that interest is 

17 placed in a blind trust; or 

18 (C) have any financial interest in an in19 vestment institution or its affiliates or any 

20 other entity seeking or likely to seek financial 

21 assistance for any infrastructure project from 

22 AIFA, unless any such interest is placed in a 

23 blind trust for the tenure of the service of the 

24 chief executive officer plus 2 additional years. 


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1 (d) RESPONSIBILITIES.—The chief executive officer 

2 shall have such executive functions, powers, and duties as 

3 may be prescribed by this Act, the bylaws of AIFA, or 

4 the Board of Directors, including— 

5 (1) responsibility for the development and im6 plementation of the strategy of AIFA, including— 

7 (A) the development and submission to the 

8 Board of Directors of the investment pro9 spectus, the annual business plans and budget; 

10 (B) the development and submission to the 

11 Board of Directors of a long-term strategic 

12 plan; and 

13 (C) the development, revision, and submis14 sion to the Board of Directors of internal poli15 cies; and 

16 (2) responsibility for the management and over17 sight of the daily activities, decisions, operations, 

18 and personnel of AIFA, including— 

19 (A) the appointment of senior manage20 ment, subject to approval by the voting mem21 bers of the Board of Directors, and the hiring 

22 and termination of all other AIFA personnel; 

23 (B) requesting the detail, on a reimburs24 able basis, of personnel from any Federal agen25 cy having specific expertise not available from 


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1 within AIFA, following which request the head 

2 of the Federal agency may detail, on a reim3 bursable basis, any personnel of such agency 

4 reasonably requested by the chief executive offi5 cer; 

6 (C) assessing and recommending in the 

7 first instance, for ultimate approval or dis8 approval by the Board of Directors, compensa9 tion and adjustments to compensation of senior 

10 management and other personnel of AIFA as 

11 may be necessary for carrying out the functions 

12 of AIFA; 

13 (D) ensuring, in conjunction with the gen14 eral counsel of AIFA, that all activities of 

15 AIFA are carried out in compliance with appli16 cable law; 

17 (E) overseeing the involvement of AIFA in 

18 all projects, including— 

19 (i) developing eligible projects for 

20 AIFA financial assistance; 

21 (ii) determining the terms and condi22 tions of all financial assistance packages; 

23 (iii) monitoring all infrastructure 

24 projects assisted by AIFA, including re25 sponsibility for ensuring that the proceeds 


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1 of any loan made, guaranteed, or partici2 pated in are used only for the purposes for 

3 which the loan or guarantee was made; 

4 (iv) preparing and submitting for ap5 proval by the Board of Directors the docu6 ments required under paragraph (1); and 

7 (v) ensuring the implementation of de8 cisions of the Board of Directors; and 

9 (F) such other activities as may be nec10 essary or appropriate in carrying out this Act. 

11 (e) COMPENSATION.— 

12 (1) IN GENERAL.—Any compensation assess13 ment or recommendation by the chief executive offi14 cer under this section shall be without regard to the 

15 provisions of chapter 51 or subchapter III of chapter 

16 53 of title 5, United States Code. 

17 (2) CONSIDERATIONS.—The compensation as18 sessment or recommendation required under this 

19 subsection shall take into account merit principles, 

20 where applicable, as well as the education, experi21 ence, level of responsibility, geographic differences, 

22 and retention and recruitment needs in determining 

23 compensation of personnel. 


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1 SEC. 248. POWERS AND DUTIES OF THE BOARD OF DIREC2 TORS. 

3 The Board of Directors shall— 

4 (1) as soon as is practicable after the date on 

5 which all members are appointed, approve or dis6 approve senior management appointed by the chief 

7 executive officer; 

8 (2) not later than 180 days after the date on 

9 which all members are appointed— 

10 (A) develop and approve the bylaws of 

11 AIFA, including bylaws for the regulation of 

12 the affairs and conduct of the business of 

13 AIFA, consistent with the purpose, goals, objec14 tives, and policies set forth in this Act; 

15 (B) establish subcommittees, including an 

16 audit committee that is composed solely of 

17 members of the Board of Directors who are 

18 independent of the senior management of 

19 AIFA; 

20 (C) develop and approve, in consultation 

21 with senior management, a conflict-of-interest 

22 policy for the Board of Directors and for senior 

23 management; 

24 (D) approve or disapprove internal policies 

25 that the chief executive officer shall submit to 

26 the Board of Directors, including— 


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1 (i) policies regarding the loan applica2 tion and approval process, including— 

3 (I) disclosure and application 

4 procedures to be followed by entities 

5 in the course of nominating infra6 structure projects for assistance under 

7 this Act; 

8 (II) guidelines for the selection 

9 and approval of projects; 

10 (III) specific criteria for deter11 mining eligibility for project selection, 

12 consistent with title II; and 

13 (IV) standardized terms and con14 ditions, fee schedules, or legal require15 ments of a contract or program, so as 

16 to carry out this Act; and 

17 (ii) operational guidelines; and 

18 (E) approve or disapprove a multi-year or 

19 1-year business plan and budget for AIFA; 

20 (3) ensure that AIFA is at all times operated 

21 in a manner that is consistent with this Act, by— 

22 (A) monitoring and assessing the effective23 ness of AIFA in achieving its strategic goals; 

24 (B) periodically reviewing internal policies; 


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1 (C) reviewing and approving annual busi2 ness plans, annual budgets, and long-term 

3 strategies submitted by the chief executive offi4 cer; 

5 (D) reviewing and approving annual re6 ports submitted by the chief executive officer; 

7 (E) engaging one or more external audi8 tors, as set forth in this Act; and 

9 (F) reviewing and approving all changes to 

10 the organization of senior management; 

11 (4) appoint and fix, by a vote of 5 of the 7 vot12 ing members of the Board of Directors, and without 

13 regard to the provisions of chapter 51 or subchapter 

14 III of chapter 53 of title 5, United States Code, the 

15 compensation and adjustments to compensation of 

16 all AIFA personnel, provided that in appointing and 

17 fixing any compensation or adjustments to com18 pensation under this paragraph, the Board shall— 

19 (A) consult with, and seek to maintain 

20 comparability with, other comparable Federal 

21 personnel; 

22 (B) consult with the Office of Personnel 

23 Management; and 

24 (C) carry out such duties consistent with 

25 merit principles, where applicable, as well as the 


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1 education, experience, level of responsibility, ge2 ographic differences, and retention and recruit3 ment needs in determining compensation of per4 sonnel; 

5 (5) establish such other criteria, requirements, 

6 or procedures as the Board of Directors may con7 sider to be appropriate in carrying out this Act; 

8 (6) serve as the primary liaison for AIFA in 

9 interactions with Congress, the Executive Branch, 

10 and State and local governments, and to represent 

11 the interests of AIFA in such interactions and oth12 ers; 

13 (7) approve by a vote of 5 of the 7 voting mem14 bers of the Board of Directors any changes to the 

15 bylaws or internal policies of AIFA; 

16 (8) have the authority and responsibility— 

17 (A) to oversee entering into and carry out 

18 such contracts, leases, cooperative agreements, 

19 or other transactions as are necessary to carry 

20 out this Act with— 

21 (i) any Federal department or agency; 

22 (ii) any State, territory, or possession 

23 (or any political subdivision thereof, includ24 ing State infrastructure banks) of the 

25 United States; and 


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1 (iii) any individual, public-private 

2 partnership, firm, association, or corpora3 tion; 

4 (B) to approve of the acquisition, lease, 

5 pledge, exchange, and disposal of real and per6 sonal property by AIFA and otherwise approve 

7 the exercise by AIFA of all of the usual inci8 dents of ownership of property, to the extent 

9 that the exercise of such powers is appropriate 

10 to and consistent with the purposes of AIFA; 

11 (C) to determine the character of, and the 

12 necessity for, the obligations and expenditures 

13 of AIFA, and the manner in which the obliga14 tions and expenditures will be incurred, allowed, 

15 and paid, subject to this Act and other Federal 

16 law specifically applicable to wholly owned Fed17 eral corporations; 

18 (D) to execute, in accordance with applica19 ble bylaws and regulations, appropriate instru20 ments; 

21 (E) to approve other forms of credit en22 hancement that AIFA may provide to eligible 

23 projects, as long as the forms of credit enhance24 ments are consistent with the purposes of this 

25 Act and terms set forth in title II; 


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1 (F) to exercise all other lawful powers 

2 which are necessary or appropriate to carry out, 

3 and are consistent with, the purposes of AIFA; 

4 (G) to sue or be sued in the corporate ca5 pacity of AIFA in any court of competent juris6 diction; 

7 (H) to indemnify the members of the 

8 Board of Directors and officers of AIFA for 

9 any liabilities arising out of the actions of the 

10 members and officers in such capacity, in ac11 cordance with, and subject to the limitations 

12 contained in this Act; 

13 (I) to review all financial assistance pack14 ages to all eligible infrastructure projects, as 

15 submitted by the chief executive officer and to 

16 approve, postpone, or deny the same by major17 ity vote; 

18 (J) to review all restructuring proposals 

19 submitted by the chief executive officer, includ20 ing assignation, pledging, or disposal of the in21 terest of AIFA in a project, including payment 

22 or income from any interest owned or held by 

23 AIFA, and to approve, postpone, or deny the 

24 same by majority vote; and 


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1 (K) to enter into binding commitments, as 

2 specified in approved financial assistance pack3 ages; 

4 (9) delegate to the chief executive officer those 

5 duties that the Board of Directors deems appro6 priate, to better carry out the powers and purposes 

7 of the Board of Directors under this section; and 

8 (10) to approve a maximum aggregate amount 

9 of outstanding obligations of AIFA at any given 

10 time, taking into consideration funding, and the size 

11 of AIFA’s addressable market for infrastructure 

12 projects. 

13 SEC. 249. SENIOR MANAGEMENT. 

14 (a) IN GENERAL.—Senior management shall support 

15 the chief executive officer in the discharge of the respon16 sibilities of the chief executive officer. 

17 (b) APPOINTMENT OF SENIOR MANAGEMENT.—The 

18 chief executive officer shall appoint such senior managers 

19 as are necessary to carry out the purpose of AIFA, as 

20 approved by a majority vote of the voting members of the 

21 Board of Directors. 

22 (c) TERM.—Each member of senior management 

23 shall serve at the pleasure of the chief executive officer 

24 and the Board of Directors. 


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1 (d) REMOVAL OF SENIOR MANAGEMENT.—Any mem2 ber of senior management may be removed, either by a 

3 majority of the voting members of the Board of Directors 

4 upon request by the chief executive officer, or otherwise 

5 by vote of not fewer than 5 voting members of the Board 

6 of Directors. 

7 (e) SENIOR MANAGEMENT.— 

8 (1) IN GENERAL.—Each member of senior 

9 management shall report directly to the chief execu10 tive officer, other than the Chief Risk Officer, who 

11 shall report directly to the Board of Directors. 

12 (2) DUTIES AND RESPONSIBILITIES.— 

13 (A) CHIEF FINANCIAL OFFICER.—The 

14 Chief Financial Officer shall be responsible for 

15 all financial functions of AIFA, provided that, 

16 at the discretion of the Board of Directors, spe17 cific functions of the Chief Financial Officer 

18 may be delegated externally. 

19 (B) CHIEF RISK OFFICER.—The Chief 

20 Risk Officer shall be responsible for all func21 tions of AIFA relating to— 

22 (i) the creation of financial, credit, 

23 and operational risk management guide24 lines and policies; 


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1 (ii) credit analysis for infrastructure 

2 projects; 

3 (iii) the creation of conforming stand4 ards for infrastructure finance agreements; 

5 (iv) the monitoring of the financial, 

6 credit, and operational exposure of AIFA; 

7 and 

8 (v) risk management and mitigation 

9 actions, including by reporting such ac10 tions, or recommendations of such actions 

11 to be taken, directly to the Board of Direc12 tors. 

13 (C) CHIEF COMPLIANCE OFFICER.—The 

14 Chief Compliance Officer shall be responsible 

15 for all functions of AIFA relating to internal 

16 audits, accounting safeguards, and the enforce17 ment of such safeguards and other applicable 

18 requirements. 

19 (D) GENERAL COUNSEL.—The General 

20 Counsel shall be responsible for all functions of 

21 AIFA relating to legal matters and, in consulta22 tion with the chief executive officer, shall be re23 sponsible for ensuring that AIFA complies with 

24 all applicable law. 


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1 (E) CHIEF OPERATIONS OFFICER.—The 

2 Chief Operations Officer shall be responsible for 

3 all operational functions of AIFA, including 

4 those relating to the continuing operations and 

5 performance of all infrastructure projects in 

6 which AIFA retains an interest and for all 

7 AIFA functions related to human resources. 

8 (F) CHIEF LENDING OFFICER.—The Chief 

9 Lending Officer shall be responsible for— 

10 (i) all functions of AIFA relating to 

11 the development of project pipeline, finan12 cial structuring of projects, selection of in13 frastructure projects to be reviewed by the 

14 Board of Directors, preparation of infra15 structure projects to be presented to the 

16 Board of Directors, and set aside for rural 

17 infrastructure projects; 

18 (ii) the creation and management of— 

19 (I) a Center for Excellence to 

20 provide technical assistance to public 

21 sector borrowers in the development 

22 and financing of infrastructure 

23 projects; and 

24 (II) an Office of Rural Assistance 

25 to provide technical assistance in the 


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1 development and financing of rural in2 frastructure projects; and 

3 (iii) the establishment of guidelines to 

4 ensure diversification of lending activities 

5 by region, infrastructure project type, and 

6 project size. 

7 (f) CHANGES TO SENIOR MANAGEMENT.—The Board 

8 of Directors, in consultation with the chief executive offi9 cer, may alter the structure of the senior management of 

10 AIFA at any time to better accomplish the goals, objec11 tives, and purposes of AIFA, provided that the functions 

12 of the Chief Financial Officer set forth in subsection (e) 

13 remain separate from the functions of the Chief Risk Offi14 cer set forth in subsection (e). 

15 (g) CONFLICTS OF INTEREST.—No individual ap16 pointed to senior management may— 

17 (1) hold any other public office; 

18 (2) have any financial interest in an infrastruc19 ture project then being considered by the Board of 

20 Directors, unless that interest is placed in a blind 

21 trust; or 

22 (3) have any financial interest in an investment 

23 institution or its affiliates, AIFA or its affiliates, or 

24 other entity then seeking or likely to seek financial 

25 assistance for any infrastructure project from AIFA, 


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1 unless any such interest is placed in a blind trust 

2 during the term of service of that individual in a 

3 senior management position, and for a period of 2 

4 years thereafter. 

5 SEC. 250. SPECIAL INSPECTOR GENERAL FOR AIFA. 

6 (a) IN GENERAL.—During the first 5 operating years 

7 of AIFA, the Office of the Inspector General of the De8 partment of the Treasury shall have responsibility for 

9 AIFA. 

10 (b) OFFICE OF THE SPECIAL INSPECTOR GEN11 ERAL.—Effective 5 years after the date of enactment of 

12 the commencement of the operations of AIFA, there is es13 tablished the Office of the Special Inspector General for 

14 AIFA. 

15 (c) APPOINTMENT OF INSPECTOR GENERAL; RE16 MOVAL.— 

17 (1) HEAD OF OFFICE.—The head of the Office 

18 of the Special Inspector General for AIFA shall be 

19 the Special Inspector General for AIFA (in this Act 

20 referred to as the ‘‘Special Inspector General’’), who 

21 shall be appointed by the President, by and with the 

22 advice and consent of the Senate. 

23 (2) BASIS OF APPOINTMENT.—The appoint24 ment of the Special Inspector General shall be made 

25 on the basis of integrity and demonstrated ability in 


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1 accounting, auditing, financial analysis, law, man2 agement analysis, public administration, or inves3 tigations. 

4 (3) TIMING OF NOMINATION.—The nomination 

5 of an individual as Special Inspector General shall 

6 be made as soon as is practicable after the effective 

7 date under subsection (b). 

8 (4) REMOVAL.—The Special Inspector General 

9 shall be removable from office in accordance with 

10 the provisions of section 3(b) of the Inspector Gen11 eral Act of 1978 (5 U.S.C. App.). 

12 (5) RULE OF CONSTRUCTION.—For purposes of 

13 section 7324 of title 5, United States Code, the Spe14 cial Inspector General shall not be considered an em15 ployee who determines policies to be pursued by the 

16 United States in the nationwide administration of 

17 Federal law. 

18 (6) RATE OF PAY.—The annual rate of basic 

19 pay of the Special Inspector General shall be the an20 nual rate of basic pay for an Inspector General 

21 under section 3(e) of the Inspector General Act of 

22 1978 (5 U.S.C. App.). 

23 (d) DUTIES.— 

24 (1) IN GENERAL.—It shall be the duty of the 

25 Special Inspector General to conduct, supervise, and 


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1 coordinate audits and investigations of the business 

2 activities of AIFA. 

3 (2) OTHER SYSTEMS, PROCEDURES, AND CON4 TROLS.—The Special Inspector General shall estab5 lish, maintain, and oversee such systems, procedures, 

6 and controls as the Special Inspector General con7 siders appropriate to discharge the duty under para8 graph (1). 

9 (3) ADDITIONAL DUTIES.—In addition to the 

10 duties specified in paragraphs (1) and (2), the In11 spector General shall also have the duties and re12 sponsibilities of inspectors general under the Inspec13 tor General Act of 1978. 

14 (e) POWERS AND AUTHORITIES.— 

15 (1) IN GENERAL.—In carrying out the duties 

16 specified in subsection (c), the Special Inspector 

17 General shall have the authorities provided in section 

18 6 of the Inspector General Act of 1978. 

19 (2) ADDITIONAL AUTHORITY.—The Special In20 spector General shall carry out the duties specified 

21 in subsection (c)(1) in accordance with section 

22 4(b)(1) of the Inspector General Act of 1978. 

23 (f) PERSONNEL, FACILITIES, AND OTHER RE24 SOURCES.— 

25 (1) ADDITIONAL OFFICERS.— 


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1 (A) The Special Inspector General may se2 lect, appoint, and employ such officers and em3 ployees as may be necessary for carrying out 

4 the duties of the Special Inspector General, 

5 subject to the provisions of title 5, United 

6 States Code, governing appointments in the 

7 competitive service, and the provisions of chap8 ter 51 and subchapter III of chapter 53 of such 

9 title, relating to classification and General 

10 Schedule pay rates. 

11 (B) The Special Inspector General may ex12 ercise the authorities of subsections (b) through 

13 (i) of section 3161 of title 5, United States 

14 Code (without regard to subsection (a) of that 

15 section). 

16 (2) RETENTION OF SERVICES.—The Special In17 spector General may obtain services as authorized by 

18 section 3109 of title 5, United States Code, at daily 

19 rates not to exceed the equivalent rate prescribed for 

20 grade GS–15 of the General Schedule by section 

21 5332 of such title. 

22 (3) ABILITY TO CONTRACT FOR AUDITS, STUD23 IES, AND OTHER SERVICES.—The Special Inspector 

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1 ices with public agencies and with private persons, 

2 and make such payments as may be necessary to 

3 carry out the duties of the Special Inspector Gen4 eral. 

5 (4) REQUEST FOR INFORMATION.— 

6 (A) IN GENERAL.—Upon request of the 

7 Special Inspector General for information or as8 sistance from any department, agency, or other 

9 entity of the Federal Government, the head of 

10 such entity shall, insofar as is practicable and 

11 not in contravention of any existing law, furnish 

12 such information or assistance to the Special 

13 Inspector General, or an authorized designee. 

14 (B) REFUSAL TO COMPLY.—Whenever in15 formation or assistance requested by the Spe16 cial Inspector General is, in the judgment of the 

17 Special Inspector General, unreasonably refused 

18 or not provided, the Special Inspector General 

19 shall report the circumstances to the Secretary 

20 of the Treasury, without delay. 

21 (g) REPORTS.— 

22 (1) ANNUAL REPORT.—Not later than 1 year 

23 after the confirmation of the Special Inspector Gen24 eral, and every calendar year thereafter, the Special 

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1 port summarizing the activities of the Special In2 spector General during the previous 1-year period 

3 ending on the date of such report. 

4 (2) PUBLIC DISCLOSURES.—Nothing in this 

5 subsection shall be construed to authorize the public 

6 disclosure of information that is— 

7 (A) specifically prohibited from disclosure 

8 by any other provision of law; 

9 (B) specifically required by Executive order 

10 to be protected from disclosure in the interest 

11 of national defense or national security or in 

12 the conduct of foreign affairs; or 

13 (C) a part of an ongoing criminal inves14 tigation. 

15 SEC. 251. OTHER PERSONNEL. 

16 Except as otherwise provided in the bylaws of AIFA, 

17 the chief executive officer, in consultation with the Board 

18 of Directors, shall appoint, remove, and define the duties 

19 of such qualified personnel as are necessary to carry out 

20 the powers, duties, and purpose of AIFA, other than sen21 ior management, who shall be appointed in accordance 

22 with section 249. 

23 SEC. 252. COMPLIANCE. 

24 The provision of assistance by the Board of Directors 

25 pursuant to this Act shall not be construed as superseding 


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1 any provision of State law or regulation otherwise applica2 ble to an infrastructure project. 

3 PART II—TERMS AND LIMITATIONS ON DIRECT 

4 LOANS AND LOAN GUARANTEES 

5 SEC. 253. ELIGIBILITY CRITERIA FOR ASSISTANCE FROM 

6 AIFA AND TERMS AND LIMITATIONS OF 

7 LOANS. 

8 (a) IN GENERAL.—Any project whose use or purpose 

9 is private and for which no public benefit is created shall 

10 not be eligible for financial assistance from AIFA under 

11 this Act. Financial assistance under this Act shall only 

12 be made available if the applicant for such assistance has 

13 demonstrated to the satisfaction of the Board of Directors 

14 that the infrastructure project for which such assistance 

15 is being sought— 

16 (1) is not for the refinancing of an existing in17 frastructure project; and 

18 (2) meets— 

19 (A) any pertinent requirements set forth in 

20 this Act; 

21 (B) any criteria established by the Board 

22 of Directors or chief executive officer in accord23 ance with this Act; and 


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1 (C) the definition of a transportation infra2 structure project, water infrastructure project, 

3 or energy infrastructure project. 

4 (b) CONSIDERATIONS.—The criteria established by 

5 the Board of Directors pursuant to this Act shall provide 

6 adequate consideration of— 

7 (1) the economic, financial, technical, environ8 mental, and public benefits and costs of each infra9 structure project under consideration for financial 

10 assistance under this Act, prioritizing infrastructure 

11 projects that— 

12 (A) contribute to regional or national eco13 nomic growth; 

14 (B) offer value for money to taxpayers; 

15 (C) demonstrate a clear and significant 

16 public benefit; 

17 (D) lead to job creation; and 

18 (E) mitigate environmental concerns; 

19 (2) the means by which development of the in20 frastructure project under consideration is being fi21 nanced, including— 

22 (A) the terms, conditions, and structure of 

23 the proposed financing; 


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1 (B) the credit worthiness and standing of 

2 the project sponsors, providers of equity, and 

3 cofinanciers; 

4 (C) the financial assumptions and projec5 tions on which the infrastructure project is 

6 based; and 

7 (D) whether there is sufficient State or 

8 municipal political support for the successful 

9 completion of the infrastructure project; 

10 (3) the likelihood that the provision of assist11 ance by AIFA will cause such development to pro12 ceed more promptly and with lower costs than would 

13 be the case without such assistance; 

14 (4) the extent to which the provision of assist15 ance by AIFA maximizes the level of private invest16 ment in the infrastructure project or supports a 

17 public-private partnership, while providing a signifi18 cant public benefit; 

19 (5) the extent to which the provision of assist20 ance by AIFA can mobilize the participation of other 

21 financing partners in the infrastructure project; 

22 (6) the technical and operational viability of the 

23 infrastructure project; 

24 (7) the proportion of financial assistance from 

25 AIFA; 


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1 (8) the geographic location of the project in an 

2 effort to have geographic diversity of projects funded 

3 by AIFA; 

4 (9) the size of the project and its impact on the 

5 resources of AIFA; 

6 (10) the infrastructure sector of the project, in 

7 an effort to have projects from more than one sector 

8 funded by AIFA; and 

9 (11) encourages use of innovative procurement, 

10 asset management, or financing to minimize the all11 in-life-cycle cost, and improve the cost-effectiveness 

12 of a project. 

13 (c) APPLICATION.— 

14 (1) IN GENERAL.—Any eligible entity seeking 

15 assistance from AIFA under this Act for an eligible 

16 infrastructure project shall submit an application to 

17 AIFA at such time, in such manner, and containing 

18 such information as the Board of Directors or the 

19 chief executive officer may require. 

20 (2) REVIEW OF APPLICATIONS.—AIFA shall re21 view applications for assistance under this Act on an 

22 ongoing basis. The chief executive officer, working 

23 with the senior management, shall prepare eligible 

24 infrastructure projects for review and approval by 

25 the Board of Directors. 


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1 (3) DEDICATED REVENUE SOURCES.—The Fed2 eral credit instrument shall be repayable, in whole or 

3 in part, from tolls, user fees, or other dedicated rev4 enue sources that also secure the infrastructure 

5 project obligations. 

6 (d) ELIGIBLE INFRASTRUCTURE PROJECT COSTS.— 

7 (1) IN GENERAL.—Except as provided in para8 graph (2), to be eligible for assistance under this 

9 Act, an infrastructure project shall have project 

10 costs that are reasonably anticipated to equal or ex11 ceed $100,000,000. 

12 (2) RURAL INFRASTRUCTURE PROJECTS.—To 

13 be eligible for assistance under this Act a rural in14 frastructure project shall have project costs that are 

15 reasonably anticipated to equal or exceed 

16 $25,000,000. 

17 (e) LOAN ELIGIBILITY AND MAXIMUM AMOUNTS.— 

18 (1) IN GENERAL.—The amount of a direct loan 

19 or loan guarantee under this Act shall not exceed 

20 the lesser of 50 percent of the reasonably anticipated 

21 eligible infrastructure project costs or, if the direct 

22 loan or loan guarantee does not receive an invest23 ment grade rating, the amount of the senior project 

24 obligations. 


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1 (2) MAXIMUM ANNUAL LOAN AND LOAN GUAR2 ANTEE VOLUME.—The aggregate amount of direct 

3 loans and loan guarantees made by AIFA in any 

4 single fiscal year may not exceed— 

5 (A) during the first 2 fiscal years of the 

6 operations of AIFA, $10,000,000,000; 

7 (B) during fiscal years 3 through 9 of the 

8 operations of AIFA, $20,000,000,000; or 

9 (C) during any fiscal year thereafter, 

10 $50,000,000,000. 

11 (f) STATE AND LOCAL PERMITS REQUIRED.—The 

12 provision of assistance by the Board of Directors pursuant 

13 to this Act shall not be deemed to relieve any recipient 

14 of such assistance, or the related infrastructure project, 

15 of any obligation to obtain required State and local per16 mits and approvals. 

17 SEC. 254. LOAN TERMS AND REPAYMENT. 

18 (a) IN GENERAL.—A direct loan or loan guarantee 

19 under this Act with respect to an eligible infrastructure 

20 project shall be on such terms, subject to such conditions, 

21 and contain such covenants, representations, warranties, 

22 and requirements (including requirements for audits) as 

23 the chief executive officer determines appropriate. 

24 (b) TERMS.—A direct loan or loan guarantee under 

25 this Act— 


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1 (1) shall— 

2 (A) be payable, in whole or in part, from 

3 tolls, user fees, or other dedicated revenue 

4 sources that also secure the senior project obli5 gations (such as availability payments and dedi6 cated State or local revenues); and 

7 (B) include a rate covenant, coverage re8 quirement, or similar security feature sup9 porting the project obligations; and 

10 (2) may have a lien on revenues described in 

11 paragraph (1), subject to any lien securing project 

12 obligations. 

13 (c) BASE INTEREST RATE.—The base interest rate 

14 on a direct loan under this Act shall be not less than the 

15 yield on United States Treasury obligations of a similar 

16 maturity to the maturity of the direct loan. 

17 (d) RISK ASSESSMENT.—Before entering into an 

18 agreement for assistance under this Act, the chief execu19 tive officer, in consultation with the Director of the Office 

20 of Management and Budget and considering rating agency 

21 preliminary or final rating opinion letters of the project 

22 under this section, shall estimate an appropriate Federal 

23 credit subsidy amount for each direct loan and loan guar24 antee, taking into account such letter, as well as any com25 parable market rates available for such a loan or loan 


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1 guarantee, should any exist. The final credit subsidy cost 

2 for each loan and loan guarantee shall be determined con3 sistent with the Federal Credit Reform Act, 2 U.S.C. 661a 

4 et seq. 

5 (e) CREDIT FEE.—With respect to each agreement 

6 for assistance under this Act, the chief executive officer 

7 may charge a credit fee to the recipient of such assistance 

8 to pay for, over time, all or a portion of the Federal credit 

9 subsidy determined under subsection (d), with the remain10 der paid by the account established for AIFA; provided, 

11 that the source of fees paid under this section shall not 

12 be a loan or debt obligation guaranteed by the Federal 

13 Government. In the case of a direct loan, such credit fee 

14 shall be in addition to the base interest rate established 

15 under subsection (c). 

16 (f) MATURITY DATE.—The final maturity date of a 

17 direct loan or loan guaranteed by AIFA under this Act 

18 shall be not later than 35 years after the date of substan19 tial completion of the infrastructure project, as determined 

20 by the chief executive officer. 

21 (g) RATING OPINION LETTER.— 

22 (1) IN GENERAL.—The chief executive officer 

23 shall require each applicant for assistance under this 

24 Act to provide a rating opinion letter from at least 

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1 tions of the infrastructure project, which may be the 

2 Federal credit instrument, have the potential to 

3 achieve an investment-grade rating. 

4 (2) RURAL INFRASTRUCTURE PROJECTS.—With 

5 respect to a rural infrastructure project, a rating 

6 agency opinion letter described in paragraph (1) 

7 shall not be required, except that the loan or loan 

8 guarantee shall receive an internal rating score, 

9 using methods similar to the ratings agencies gen10 erated by AIFA, measuring the proposed direct loan 

11 or loan guarantee against comparable direct loans or 

12 loan guarantees of similar credit quality in a similar 

13 sector. 

14 (h) INVESTMENT-GRADE RATING REQUIREMENT.— 

15 (1) LOANS AND LOAN GUARANTEES.—The exe16 cution of a direct loan or loan guarantee under this 

17 Act shall be contingent on the senior obligations of 

18 the infrastructure project receiving an investment19 grade rating. 

20 (2) RATING OF AIFA OVERALL PORTFOLIO.— 

21 The average rating of the overall portfolio of AIFA 

22 shall be not less than investment grade after 5 years 

23 of operation. 

24 (i) TERMS AND REPAYMENT OF DIRECT LOANS.— 


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1 (1) SCHEDULE.—The chief executive officer 

2 shall establish a repayment schedule for each direct 

3 loan under this Act, based on the projected cash 

4 flow from infrastructure project revenues and other 

5 repayment sources. 

6 (2) COMMENCEMENT.—Scheduled loan repay7 ments of principal or interest on a direct loan under 

8 this Act shall commence not later than 5 years after 

9 the date of substantial completion of the infrastruc10 ture project, as determined by the chief executive of11 ficer of AIFA. 

12 (3) DEFERRED PAYMENTS OF DIRECT

13 LOANS.— 

14 (A) AUTHORIZATION.—If, at any time 

15 after the date of substantial completion of an 

16 infrastructure project assisted under this Act, 

17 the infrastructure project is unable to generate 

18 sufficient revenues to pay the scheduled loan re19 payments of principal and interest on the direct 

20 loan under this Act, the chief executive officer 

21 may allow the obligor to add unpaid principal 

22 and interest to the outstanding balance of the 

23 direct loan, if the result would benefit the tax24 payer. 


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1 (B) INTEREST.—Any payment deferred 

2 under subparagraph (A) shall— 

3 (i) continue to accrue interest, in ac4 cordance with the terms of the obligation, 

5 until fully repaid; and 

6 (ii) be scheduled to be amortized over 

7 the remaining term of the loan. 

8 (C) CRITERIA.— 

9 (i) IN GENERAL.—Any payment defer10 ral under subparagraph (A) shall be con11 tingent on the infrastructure project meet12 ing criteria established by the Board of Di13 rectors. 

14 (ii) REPAYMENT STANDARDS.—The 

15 criteria established under clause (i) shall 

16 include standards for reasonable assurance 

17 of repayment. 

18 (4) PREPAYMENT OF DIRECT LOANS.— 

19 (A) USE OF EXCESS REVENUES.—Any ex20 cess revenues that remain after satisfying 

21 scheduled debt service requirements on the in22 frastructure project obligations and direct loan 

23 and all deposit requirements under the terms of 

24 any trust agreement, bond resolution, or similar 

25 agreement securing project obligations under 


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1 this Act may be applied annually to prepay the 

2 direct loan, without penalty. 

3 (B) USE OF PROCEEDS OF REFI4 NANCING.—A direct loan under this Act may be 

5 prepaid at any time, without penalty, from the 

6 proceeds of refinancing from non-Federal fund7 ing sources. 

8 (5) SALE OF DIRECT LOANS.— 

9 (A) IN GENERAL.—As soon as is prac10 ticable after substantial completion of an infra11 structure project assisted under this Act, and 

12 after notifying the obligor, the chief executive 

13 officer may sell to another entity, or reoffer into 

14 the capital markets, a direct loan for the infra15 structure project, if the chief executive officer 

16 determines that the sale or reoffering can be 

17 made on favorable terms for the taxpayer. 

18 (B) CONSENT OF OBLIGOR.—In making a 

19 sale or reoffering under subparagraph (A), the 

20 chief executive officer may not change the origi21 nal terms and conditions of the direct loan, 

22 without the written consent of the obligor. 

23 (j) LOAN GUARANTEES.— 

24 (1) TERMS.—The terms of a loan guaranteed 

25 by AIFA under this Act shall be consistent with the 


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1 terms set forth in this section for a direct loan, ex2 cept that the rate on the guaranteed loan and any 

3 payment, pre-payment, or refinancing features shall 

4 be negotiated between the obligor and the lender, 

5 with the consent of the chief executive officer. 

6 (2) GUARANTEED LENDER.—A guaranteed 

7 lender shall be limited to those lenders meeting the 

8 definition of that term in section 601(a) of title 23, 

9 United States Code. 

10 (k) COMPLIANCE WITH FCRA—IN GENERAL.—Di11 rect loans and loan guarantees authorized by this Act shall 

12 be subject to the provisions of the Federal Credit Reform 

13 Act of 1990 (2 U.S.C. 661 et seq.), as amended. 

14 SEC. 255. COMPLIANCE AND ENFORCEMENT. 

15 (a) CREDIT AGREEMENT.—Notwithstanding any 

16 other provision of law, each eligible entity that receives 

17 assistance under this Act from AIFA shall enter into a 

18 credit agreement that requires such entity to comply with 

19 all applicable policies and procedures of AIFA, in addition 

20 to all other provisions of the loan agreement. 

21 (b) AIFA AUTHORITY ON NONCOMPLIANCE.—In any 

22 case in which a recipient of assistance under this Act is 

23 materially out of compliance with the loan agreement, or 

24 any applicable policy or procedure of AIFA, the Board of 

25 Directors may take action to cancel unutilized loan 


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1 amounts, or to accelerate the repayment terms of any out2 standing obligation. 

3 (c) Nothing in this Act is intended to affect existing 

4 provisions of law applicable to the planning, development, 

5 construction, or operation of projects funded under the 

6 Act. 

7 SEC. 256. AUDITS; REPORTS TO THE PRESIDENT AND CON8 GRESS. 

9 (a) ACCOUNTING.—The books of account of AIFA 

10 shall be maintained in accordance with generally accepted 

11 accounting principles, and shall be subject to an annual 

12 audit by independent public accountants of nationally rec13 ognized standing appointed by the Board of Directors. 

14 (b) REPORTS.— 

15 (1) BOARD OF DIRECTORS.—Not later than 90 

16 days after the last day of each fiscal year, the Board 

17 of Directors shall submit to the President and Con18 gress a complete and detailed report with respect to 

19 the preceding fiscal year, setting forth— 

20 (A) a summary of the operations of AIFA, 

21 for such fiscal year; 

22 (B) a schedule of the obligations of AIFA 

23 and capital securities outstanding at the end of 

24 such fiscal year, with a statement of the 


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1 amounts issued and redeemed or paid during 

2 such fiscal year; 

3 (C) the status of infrastructure projects re4 ceiving funding or other assistance pursuant to 

5 this Act during such fiscal year, including all 

6 nonperforming loans, and including disclosure 

7 of all entities with a development, ownership, or 

8 operational interest in such infrastructure 

9 projects; 

10 (D) a description of the successes and 

11 challenges encountered in lending to rural com12 munities, including the role of the Center for 

13 Excellence and the Office of Rural Assistance 

14 established under this Act; and 

15 (E) an assessment of the risks of the port16 folio of AIFA, prepared by an independent 

17 source. 

18 (2) GAO.—Not later than 5 years after the 

19 date of enactment of this Act, the Comptroller Gen20 eral of the United States shall conduct an evaluation 

21 of, and shall submit to Congress a report on, activi22 ties of AIFA for the fiscal years covered by the re23 port that includes an assessment of the impact and 

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1 structure project accomplished the goals prioritized 

2 by the infrastructure project criteria of AIFA. 

3 (c) BOOKS AND RECORDS.— 

4 (1) IN GENERAL.—AIFA shall maintain ade5 quate books and records to support the financial 

6 transactions of AIFA, with a description of financial 

7 transactions and infrastructure projects receiving 

8 funding, and the amount of funding for each such 

9 project maintained on a publically accessible data10 base. 

11 (2) AUDITS BY THE SECRETARY AND GAO.— 

12 The books and records of AIFA shall at all times be 

13 open to inspection by the Secretary of the Treasury, 

14 the Special Inspector General, and the Comptroller 

15 General of the United States. 

16 PART III—FUNDING OF AIFA 

17 SEC. 257. ADMINISTRATIVE FEES. 

18 (a) IN GENERAL.—In addition to fees that may be 

19 collected under section 254(e), the chief executive officer 

20 shall establish and collect fees from eligible funding recipi21 ents with respect to loans and loan guarantees under this 

22 Act that— 

23 (1) are sufficient to cover all or a portion of the 

24 administrative costs to the Federal Government for 

25 the operations of AIFA, including the costs of expert 


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1 firms, including counsel in the field of municipal and 

2 project finance, and financial advisors to assist with 

3 underwriting, credit analysis, or other independent 

4 reviews, as appropriate; 

5 (2) may be in the form of an application or 

6 transaction fee, or other form established by the 

7 CEO; and 

8 (3) may be based on the risk premium associ9 ated with the loan or loan guarantee, taking into 

10 consideration— 

11 (A) the price of United States Treasury 

12 obligations of a similar maturity; 

13 (B) prevailing market conditions; 

14 (C) the ability of the infrastructure project 

15 to support the loan or loan guarantee; and 

16 (D) the total amount of the loan or loan 

17 guarantee. 

18 (b) AVAILABILITY OF AMOUNTS.—Amounts collected 

19 under subsections (a)(1), (a)(2), and (a)(3) shall be avail20 able without further action; provided further, that the 

21 source of fees paid under this section shall not be a loan 

22 or debt obligation guaranteed by the Federal Government. 

23 SEC. 258. EFFICIENCY OF AIFA. 

24 The chief executive officer shall, to the extent pos25 sible, take actions consistent with this Act to minimize the 


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1 risk and cost to the taxpayer of AIFA activities. Fees and 

2 premiums for loan guarantee or insurance coverage will 

3 be set at levels that minimize administrative and Federal 

4 credit subsidy costs to the Government, as defined in Sec5 tion 502 of the Federal Credit Reform Act of 1990, as 

6 amended, of such coverage, while supporting achievement 

7 of the program’s objectives, consistent with policies as set 

8 forth in the Business Plan. 

9 SEC. 259. FUNDING. 

10 There is hereby appropriated to AIFA to carry out 

11 this Act, for the cost of direct loans and loan guarantees 

12 subject to the limitations under Section 253, and for ad13 ministrative costs, $10,000,000,000, to remain available 

14 until expended; Provided, That such costs, including the 

15 costs of modifying such loans, shall be as defined in sec16 tion 502 of the Federal Credit Reform Act of 1990, as 

17 amended; Provided further, that of this amount, not more 

18 than $25,000,000 for each of fiscal years 2012 through 

19 2013, and not more than $50,000,000 for fiscal year 2014 

20 may be used for administrative costs of AIFA; provided 

21 further, that not more than 5 percent of such amount shall 

22 be used to offset subsidy costs associated with rural 

23 projects. Amounts authorized shall be available without 

24 further action. 


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1 PART IV—EXTENSION OF EXEMPTION FROM AL2 TERNATIVE MINIMUM TAX TREATMENT FOR 

3 CERTAIN TAX-EXEMPT BONDS 

4 SEC. 260. EXTENSION OF EXEMPTION FROM ALTERNATIVE 

5 MINIMUM TAX TREATMENT FOR CERTAIN 

6 TAX-EXEMPT BONDS. 

7 (a) IN GENERAL.—Clause (vi) of section 57(a)(5)(C) 

8 of the Internal Revenue Code of 1986 is amended— 

9 (1) by striking ‘‘January 1, 2011’’ in subclause 

10 (I) and inserting ‘‘January 1, 2013’’; and 

11 (2) by striking ‘‘AND 2010’’ in the heading and 

12 inserting ‘‘, 2010, 2011, AND 2012’’. 

13 (b) ADJUSTED CURRENT EARNINGS.—Clause (iv) of 

14 section 56(g)(4)(B) of the Internal Revenue Code of 1986 

15 is amended— 

16 (1) by striking ‘‘January 1, 2011’’ in subclause 

17 (I) and inserting ‘‘January 1, 2013’’; and 

18 (2) by striking ‘‘AND 2010’’ in the heading and 

19 inserting ‘‘, 2010, 2011, AND 2012’’. 

20 (c) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to obligations issued after Decem22 ber 31, 2010. 

23 Subtitle G—Project Rebuild 

24 SEC. 261. PROJECT REBUILD. 

25 (a) DIRECT APPROPRIATIONS.—There is appro26 priated, out of any money in the Treasury not otherwise 


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1 appropriated, $15,000,000,000, to remain available until 

2 September 30, 2014, for assistance to eligible entities in3 cluding States and units of general local government (as 

4 such terms are defined in section 102 of the Housing and 

5 Community Development Act of 1974 (42 U.S.C. 5302)), 

6 and qualified nonprofit organizations, businesses or con7 sortia of eligible entities for the redevelopment of aban8 doned and foreclosed-upon properties and for the stabiliza9 tion of affected neighborhoods. 

10 (b) ALLOCATION OF APPROPRIATED AMOUNTS.— 

11 (1) IN GENERAL.—Of the amounts appro12 priated, two thirds shall be allocated to States and 

13 units of general local government based on a funding 

14 formula established by the Secretary of Housing and 

15 Urban Development (in this subtitle referred to as 

16 the ‘‘Secretary’’). Of the amounts appropriated, one 

17 third shall be distributed competitively to eligible en18 tities. 

19 (2) FORMULA TO BE DEVISED SWIFTLY.—The 

20 funding formula required under paragraph (1) shall 

21 be established and the Secretary shall announce for22 mula funding allocations, not later than 30 days 

23 after the date of enactment of this section. 

24 (3) FORMULA CRITERIA.—The Secretary may 

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1 mula required under paragraph (1) shall ensure that 

2 any amounts appropriated or otherwise made avail3 able under this section are allocated to States and 

4 units of general local government with the greatest 

5 need, as such need is determined in the discretion of 

6 the Secretary based on— 

7 (A) the number and percentage of home 

8 foreclosures in each State or unit of general 

9 local government; 

10 (B) the number and percentage of homes 

11 in default or delinquency in each State or unit 

12 of general local government; and 

13 (C) other factors such as established pro14 gram designs, grantee capacity and perform15 ance, number and percentage of commercial 

16 foreclosures, overall economic conditions, and 

17 other market needs data, as determined by the 

18 Secretary. 

19 (4) COMPETITION CRITERIA.— 

20 (A) For the funds distributed competi21 tively, eligible entities shall be States, units of 

22 general local government, nonprofit entities, 

23 for-profit entities, and consortia of eligible enti24 ties that demonstrate capacity to use funding 

25 within the period of this program. 


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1 (B) In selecting grantees, the Secretary 

2 shall ensure that grantees are in areas with the 

3 greatest number and percentage of residential 

4 and commercial foreclosures and other market 

5 needs data, as determined by the Secretary. Ad6 ditional award criteria shall include dem7 onstrated grantee capacity to execute projects 

8 involving acquisition and rehabilitation or rede9 velopment of foreclosed residential and commer10 cial property and neighborhood stabilization, le11 verage, knowledge of market conditions and of 

12 effective stabilization activities to address iden13 tified conditions, and any additional factors de14 termined by the Secretary. 

15 (C) The Secretary may establish a min16 imum grant size; and 

17 (D) The Secretary shall publish competi18 tion criteria for any grants awarded under this 

19 heading not later than 60 days after appropria20 tion of funds, and applications shall be due to 

21 the Secretary within 120 days. 

22 (c) USE OF FUNDS.— 

23 (1) OBLIGATION AND EXPENDITURE.—The Sec24 retary shall obligate all funding within 150 days of 

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1 ceives amounts pursuant to this section shall expend 

2 all funds allocated to it within three years of the 

3 date the funds become available to the grantee for 

4 obligation. Furthermore, the Secretary shall by No5 tice establish intermediate expenditure benchmarks 

6 at the one and two year dates from the date the 

7 funds become available to the grantee for obligation. 

8 (2) PRIORITIES.— 

9 (A) JOB CREATION.—Each grantee or eli10 gible entity shall describe how its proposed use 

11 of funds will prioritize job creation, and sec12 ondly, will address goals to stabilize neighbor13 hoods, reverse vacancy, or increase or stabilize 

14 residential and commercial property values. 

15 (B) TARGETING.—Any State or unit of 

16 general local government that receives formula 

17 amounts pursuant to this section shall, in dis18 tributing and targeting such amounts give pri19 ority emphasis and consideration to those met20 ropolitan areas, metropolitan cities, urban 

21 areas, rural areas, low- and moderate-income 

22 areas, and other areas with the greatest need, 

23 including those— 

24 (i) with the greatest percentage of 

25 home foreclosures; 


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1 (ii) identified as likely to face a sig2 nificant rise in the rate of residential or 

3 commercial foreclosures; and 

4 (iii) with higher than national average 

5 unemployment rate. 

6 (C) LEVERAGE.—Each grantee or eligible 

7 entity shall describe how its proposed use of 

8 funds will leverage private funds. 

9 (3) ELIGIBLE USES.—Amounts made available 

10 under this section may be used to— 

11 (A) establish financing mechanisms for the 

12 purchase and redevelopment of abandoned and 

13 foreclosed-upon properties, including such 

14 mechanisms as soft-seconds, loan loss reserves, 

15 and shared-equity loans for low- and moderate16 income homebuyers; 

17 (B) purchase and rehabilitate properties 

18 that have been abandoned or foreclosed upon, 

19 in order to sell, rent, or redevelop such prop20 erties; 

21 (C) establish and operate land banks for 

22 properties that have been abandoned or fore23 closed upon; 

24 (D) demolish blighted structures; 


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1 (E) redevelop abandoned, foreclosed, de2 molished, or vacant properties; and 

3 (F) engage in other activities, as deter4 mined by the Secretary through notice, that are 

5 consistent with the goals of creating jobs, stabi6 lizing neighborhoods, reversing vacancy reduc7 tion, and increasing or stabilizing residential 

8 and commercial property values. 

9 (d) LIMITATIONS.— 

10 (1) ON PURCHASES.—Any purchase of a prop11 erty under this section shall be at a price not to ex12 ceed its current market value, taking into account 

13 its current condition. 

14 (2) REHABILITATION.—Any rehabilitation of an 

15 eligible property under this section shall be to the 

16 extent necessary to comply with applicable laws, and 

17 other requirements relating to safety, quality, mar18 ketability, and habitability, in order to sell, rent, or 

19 redevelop such properties or provide a renewable en20 ergy source or sources for such properties. 

21 (3) SALE OF HOMES.—If an abandoned or fore22 closed-upon home is purchased, redeveloped, or oth23 erwise sold to an individual as a primary residence, 

24 then such sale shall be in an amount equal to or less 

25 than the cost to acquire and redevelop or rehabilitate 


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1 such home or property up to a decent, safe, market2 able, and habitable condition. 

3 (4) ON DEMOLITION OF PUBLIC HOUSING.— 

4 Public housing, as defined at section 3(b)(6) of the 

5 United States Housing Act of 1937, may not be de6 molished with funds under this section. 

7 (5) ON DEMOLITION ACTIVITIES.—No more 

8 than 10 percent of any grant made under this sec9 tion may be used for demolition activities unless the 

10 Secretary determines that such use represents an 

11 appropriate response to local market conditions. 

12 (6) ON USE OF FUNDS FOR NON-RESIDENTIAL

13 PROPERTY.—No more than 30 percent of any grant 

14 made under this section may be used for eligible ac15 tivities under subparagraphs (A), (B), and (E) of 

16 subsection (c)(3) that will not result in residential 

17 use of the property involved unless the Secretary de18 termines that such use represents an appropriate re19 sponse to local market conditions. 

20 (e) RULES OF CONSTRUCTION.— 

21 (1) IN GENERAL.—Except as otherwise pro22 vided by this section, amounts appropriated, reve23 nues generated, or amounts otherwise made avail24 able to eligible entities under this section shall be 

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1 opment block grant funds under title I of the Hous2 ing and Community Development Act of 1974 (42 

3 U.S.C. 5301 et seq.). 

4 (2) NO MATCH.—No matching funds shall be 

5 required in order for an eligible entity to receive any 

6 amounts under this section. 

7 (3) TENANT PROTECTIONS.—An eligible entity 

8 receiving a grant under this section shall comply 

9 with the 14th, 17th, 18th, 19th, 20th, 21st, 22nd 

10 and 23rd provisos of the American Recovery and Re11 investment Act of 2009 (Public Law 111–5, 123 

12 Stat. 218–19), as amended by section 1497(b)(2) of 

13 the Dodd-Frank Wall Street Reform and Consumer 

14 Protection Act (Public Law 111–203, 124 Stat. 

15 2211). 

16 (4) VICINITY HIRING.—An eligible entity receiv17 ing a grant under this section shall comply with sec18 tion 1497(a)(8) of the Dodd-Frank Wall Street Re19 form and Consumer Protection Act (Public Law 

20 111–203, 129 Stat. 2210). 

21 (5) BUY AMERICAN.—Section 1605 of Title 

22 XVI—General Provisions of the American Recovery 

23 and Reinvestment Act of 2009—shall apply to 

24 amounts appropriated, revenues generated, and 


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1 amounts otherwise made available to eligible entities 

2 under this section. 

3 (f) AUTHORITY TO SPECIFY ALTERNATIVE RE4 QUIREMENTS.— 

5 (1) IN GENERAL.—In administering the pro6 gram under this section, the Secretary may specify 

7 alternative requirements to any provision under title 

8 I of the Housing and Community Development Act 

9 of 1974 or under title I of the Cranston-Gonzalez 

10 National Affordable Housing Act of 1990 (except for 

11 those provisions in these laws related to fair hous12 ing, nondiscrimination, labor standards, and the en13 vironment) for the purpose of expediting and facili14 tating the use of funds under this section. 

15 (2) NOTICE.—The Secretary shall provide writ16 ten notice of intent to the public via internet to exer17 cise the authority to specify alternative requirements 

18 under paragraph. 

19 (3) LOW AND MODERATE INCOME REQUIRE20 MENT.— 

21 (A) IN GENERAL.—Notwithstanding the 

22 authority of the Secretary under paragraph 

23 (1)— 

24 (i) all of the formula and competitive 

25 grantee funds appropriated or otherwise 


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1 made available under this section shall be 

2 used with respect to individuals and fami3 lies whose income does not exceed 120 per4 cent of area median income; and 

5 (ii) not less than 25 percent of the 

6 formula and competitive grantee funds ap7 propriated or otherwise made available 

8 under this section shall be used for the 

9 purchase and redevelopment of eligible 

10 properties that will be used to house indi11 viduals or families whose incomes do not 

12 exceed 50 percent of area median income. 

13 (B) RECURRENT REQUIREMENT.—The 

14 Secretary shall, by rule or order, ensure, to the 

15 maximum extent practicable and for the longest 

16 feasible term, that the sale, rental, or redevelop17 ment of abandoned and foreclosed-upon homes 

18 and residential properties under this section re19 main affordable to individuals or families de20 scribed in subparagraph (A). 

21 (g) NATIONWIDE DISTRIBUTION OF RESOURCES.— 

22 Notwithstanding any other provision of this section or the 

23 amendments made by this section, each State shall receive 

24 not less than $20,000,000 of formula funds. 


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1 (h) LIMITATION ON USE OF FUNDS WITH RESPECT

2 TO EMINENT DOMAIN.—No State or unit of general local 

3 government may use any amounts received pursuant to 

4 this section to fund any project that seeks to use the power 

5 of eminent domain, unless eminent domain is employed 

6 only for a public use, which shall not be construed to in7 clude economic development that primarily benefits pri8 vate entities. 

9 (i) LIMITATION ON DISTRIBUTION OF FUNDS.— 

10 (1) IN GENERAL.—None of the funds made 

11 available under this title or title IV shall be distrib12 uted to— 

13 (A) an organization which has been in14 dicted for a violation under Federal law relating 

15 to an election for Federal office; or 

16 (B) an organization which employs applica17 ble individuals. 

18 (2) APPLICABLE INDIVIDUALS DEFINED.—In 

19 this section, the term ‘‘applicable individual’’ means 

20 an individual who— 

21 (A) is— 

22 (i) employed by the organization in a 

23 permanent or temporary capacity; 

24 (ii) contracted or retained by the or25 ganization; or 


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1 (iii) acting on behalf of, or with the 

2 express or apparent authority of, the orga3 nization; and 

4 (B) has been indicted for a violation under 

5 Federal law relating to an election for Federal 

6 office. 

7 (j) RENTAL HOUSING PREFERENCES.—Each State 

8 and local government receiving formula amounts shall es9 tablish procedures to create preferences for the develop10 ment of affordable rental housing. 

11 (k) JOB CREATION.—If a grantee chooses to use 

12 funds to create jobs by establishing and operating a pro13 gram to maintain eligible neighborhood properties, not 

14 more than 10 percent of any grant may be used for that 

15 purpose. 

16 (l) PROGRAM SUPPORT AND CAPACITY BUILDING.— 

17 The Secretary may use up to 0.75 percent of the funds 

18 appropriated for capacity building of and support for eligi19 ble entities and grantees undertaking neighborhood sta20 bilization programs, staffing, training, technical assist21 ance, technology, monitoring, travel, enforcement, re22 search and evaluation activities. 

23 (1) Funds set aside for the purposes of this 

24 subparagraph shall remain available until September 

25 30, 2016; 


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1 (2) Any funds made available under this sub2 paragraph and used by the Secretary for personnel 

3 expenses related to administering funding under this 

4 subparagraph shall be transferred to ‘‘Personnel 

5 Compensation and Benefits, Community Planning 

6 and Development’’; 

7 (3) Any funds made available under this sub8 paragraph and used by the Secretary for training or 

9 other administrative expenses shall be transferred to 

10 ‘‘Administration, Operations, and Management, 

11 Community Planning and Development’’ for non12 personnel expenses; and 

13 (4) Any funds made available under this sub14 paragraph and used by the Secretary for technology 

15 shall be transferred to ‘‘Working Capital Fund’’. 

16 (m) ENFORCEMENT AND PREVENTION OF FRAUD

17 AND ABUSE.—The Secretary shall establish and imple18 ment procedures to prevent fraud and abuse of funds 

19 under this section, and shall impose a requirement that 

20 grantees have an internal auditor to continuously monitor 

21 grantee performance to prevent fraud, waste, and abuse. 

22 Grantees shall provide the Secretary and citizens with 

23 quarterly progress reports. The Secretary shall recapture 

24 funds from formula and competitive grantees that do not 

25 expend 100 percent of allocated funds within 3 years of 


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1 the date that funds become available, and from underper2 forming or mismanaged grantees, and shall re-allocate 

3 those funds by formula to target areas with the greatest 

4 need, as determined by the Secretary through notice. The 

5 Secretary may take an alternative sanctions action only 

6 upon determining that such action is necessary to achieve 

7 program goals in a timely manner. 

8 (n) The Secretary of Housing and Urban Develop9 ment shall to the extent feasible conform policies and pro10 cedures for grants made under this section to the policies 

11 and practices already in place for the grants made under 

12 Section 2301 of the Housing and Economic Recovery Act 

13 of 2008; Division A, Title XII of the American Recovery 

14 and Reinvestment Act of 2009; or Section 1497 of the 

15 Dodd-Frank Wall Street Reform and Consumer Protec16 tion Act. 

17 Subtitle H—National Wireless 

18 Initiative 

19 SEC. 271. DEFINITIONS. 

20 In this subtitle, the following definitions shall apply: 

21 (1) 700 MHZ BAND.—The term ‘‘700 MHz 

22 band’’ means the portion of the electromagnetic 

23 spectrum between the frequencies from 698 mega24 hertz to 806 megahertz. 


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1 (2) 700 MHZ D BLOCK SPECTRUM.—The term 

2 ‘‘700 MHz D block spectrum’’ means the portion of 

3 the electromagnetic spectrum frequencies from 758 

4 megahertz to 763 megahertz and from 788 mega5 hertz to 793 megahertz. 

6 (3) APPROPRIATE COMMITTEES OF CON7 GRESS.—Except as otherwise specifically provided, 

8 the term ‘‘appropriate committees of Congress’’ 

9 means— 

10 (A) the Committee on Commerce, Science, 

11 and Transportation of the Senate; and 

12 (B) the Committee on Energy and Com13 merce of the House of Representatives. 

14 (4) ASSISTANT SECRETARY.—The term ‘‘Assist15 ant Secretary’’ means the Assistant Secretary of 

16 Commerce for Communications and Information. 

17 (5) COMMISSION.—The term ‘‘Commission’’ 

18 means the Federal Communications Commission. 

19 (6) CORPORATION.—The term ‘‘Corporation’’ 

20 means the Public Safety Broadband Corporation es21 tablished in section 284. 

22 (7) EXISTING PUBLIC SAFETY BROADBAND

23 SPECTRUM.—The term ‘‘existing public safety 

24 broadband spectrum’’ means the portion of the elec25 tromagnetic spectrum between the frequencies— 


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1 (A) from 763 megahertz to 768 megahertz; 

2 (B) from 793 megahertz to 798 mega3 hertz; 

4 (C) from 768 megahertz to 769 megahertz; 

5 and 

6 (D) from 798 megahertz to 799 mega7 hertz. 

8 (8) FEDERAL ENTITY.—The term ‘‘Federal en9 tity’’ has the same meaning as in section 113(i) of 

10 the National Telecommunications and Information 

11 Administration Organization Act (47 U.S.C. 923(i)). 

12 (9) NARROWBAND SPECTRUM.—The term 

13 ‘‘narrowband spectrum’’ means the portion of the 

14 electromagnetic spectrum between the frequencies 

15 from 769 megahertz to 775 megahertz and between 

16 the frequencies from 799 megahertz to 805 mega17 hertz. 

18 (10) NIST.—The term ‘‘NIST’’ means the Na19 tional Institute of Standards and Technology. 

20 (11) NTIA.—The term ‘‘NTIA’’ means the Na21 tional Telecommunications and Information Admin22 istration. 

23 (12) PUBLIC SAFETY ENTITY.—The term ‘‘pub24 lic safety entity’’ means an entity that provides pub25 lic safety services. 


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1 (13) PUBLIC SAFETY SERVICES.—The term 

2 ‘‘public safety services’’— 

3 (A) has the meaning given the term in sec4 tion 337(f) of the Communications Act of 1934 

5 (47 U.S.C. 337(f)); and 

6 (B) includes services provided by emer7 gency response providers, as that term is de8 fined in section 2 of the Homeland Security Act 

9 of 2002 (6 U.S.C. 101). 

10 PART I—AUCTIONS OF SPECTRUM AND 

11 SPECTRUM MANAGEMENT 

12 SEC. 272. CLARIFICATION OF AUTHORITIES TO REPURPOSE 

13 FEDERAL SPECTRUM FOR COMMERCIAL PUR14 POSES. 

15 (a) Paragraph (1) of subsection 113(g) of the Na16 tional Telecommunications and Information Administra17 tion Organization Act (47 U.S.C. 923(g)(1)) is amended 

18 by striking paragraph (1) and inserting the following: 

19 ‘‘(1) ELIGIBLE FEDERAL ENTITIES.—Any Fed20 eral entity that operates a Federal Government sta21 tion authorized to use a band of frequencies speci22 fied in paragraph (2) and that incurs relocation 

23 costs because of planning for a potential auction of 

24 spectrum frequencies, a planned auction of spectrum 

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1 quencies from Federal use to exclusive non-Federal 

2 use, or shared Federal and non-Federal use may re3 ceive payment for such costs from the Spectrum Re4 location Fund, in accordance with section 118 of 

5 this Act. For purposes of this paragraph, Federal 

6 power agencies exempted under subsection (c)(4) 

7 that choose to relocate from the frequencies identi8 fied for reallocation pursuant to subsection (a), are 

9 eligible to receive payment under this paragraph.’’. 

10 (b) ELIGIBLE FREQUENCIES.—Section 113(g)(2)(B) 

11 of the National Telecommunications and Information Ad12 ministration Organization Act (47 U.S.C. 923(g)(2)) is 

13 amended by deleting and replacing subsection (B) with the 

14 following: 

15 ‘‘(B) any other band of frequencies reallo16 cated from Federal use to non-Federal or 

17 shared use after January 1, 2003, that is as18 signed by competitive bidding pursuant to sec19 tion 309(j) of the Communications Act of 1934 

20 (47 U.S.C. 309(j)) or is assigned as a result of 

21 later legislation or other administrative direc22 tion.’’. 

23 (c) Paragraph (3) of subsection 113(g) of the Na24 tional Telecommunications and Information Administra25 tion Organization Act (47 U.S.C. 923(g)(3)) is amended 


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1 by striking it in its entirety and replacing it with the fol2 lowing: 

3 ‘‘(3) DEFINITION OF RELOCATION AND SHAR4 ING COSTS.—For purposes of this subsection, the 

5 terms ‘relocation costs’ and ‘sharing costs’ mean the 

6 costs incurred by a Federal entity to plan for a po7 tential or planned auction or sharing of spectrum 

8 frequencies and to achieve comparable capability of 

9 systems, regardless of whether that capability is 

10 achieved by relocating to a new frequency assign11 ment, relocating a Federal Government station to a 

12 different geographic location, modifying Federal gov13 ernment equipment to mitigate interference or use 

14 less spectrum, in terms of bandwidth, geography or 

15 time, and thereby permitting spectrum sharing (in16 cluding sharing among relocated Federal entities 

17 and incumbents to make spectrum available for non18 Federal use) or relocation, or by utilizing an alter19 native technology. Comparable capability of systems 

20 includes the acquisition of state-of-the-art replace21 ment systems intended to meet comparable oper22 ational scope, which may include incidental increases 

23 in functionality. Such costs include— 

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1 cillary equipment, software, facilities, operating 

2 manuals, training costs, or regulations that are 

3 attributable to relocation or sharing; 

4 ‘‘(B) the costs of all engineering, equip5 ment, software, site acquisition and construc6 tion costs, as well as any legitimate and pru7 dent transaction expense, including term-limited 

8 Federal civil servant and contractor staff nec9 essary, which may be renewed, to carry out the 

10 relocation activities of an eligible Federal entity, 

11 and reasonable additional costs incurred by the 

12 Federal entity that are attributable to reloca13 tion or sharing, including increased recurring 

14 costs above recurring costs of the system before 

15 relocation for the remaining estimated life of 

16 the system being relocated; 

17 ‘‘(C) the costs of research, engineering 

18 studies, economic analyses, or other expenses 

19 reasonably incurred in connection with (i) cal20 culating the estimated relocation costs that are 

21 provided to the Commission pursuant to para22 graph (4) of this subsection, or in calculating 

23 the estimated sharing costs; (ii) determining the 

24 technical or operational feasibility of relocation 

25 to one or more potential relocation bands; or 


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1 (iii) planning for or managing a relocation or 

2 sharing project (including spectrum coordina3 tion with auction winners) or potential reloca4 tion or sharing project; 

5 ‘‘(D) the one-time costs of any modifica6 tion of equipment reasonably necessary to ac7 commodate commercial use of shared fre8 quencies or, in the case of frequencies reallo9 cated to exclusive commercial use, prior to the 

10 termination of the Federal entity’s primary allo11 cation or protected status, when the eligible fre12 quencies as defined in paragraph (2) of this 

13 subsection are made available for private sector 

14 uses by competitive bidding and a Federal enti15 ty retains primary allocation or protected status 

16 in those frequencies for a period of time after 

17 the completion of the competitive bidding proc18 ess; 

19 ‘‘(E) the costs associated with the acceler20 ated replacement of systems and equipment if 

21 such acceleration is necessary to ensure the 

22 timely relocation of systems to a new frequency 

23 assignment or the timely accommodation of 

24 sharing of Federal frequencies; and 


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1 ‘‘(F) the costs of the use of commercial 

2 systems and services (including systems not uti3 lizing spectrum) to replace Federal systems dis4 continued or relocated pursuant to this Act, in5 cluding lease, subscription, and equipment costs 

6 over an appropriate period, such as the antici7 pated life of an equivalent Federal system or 

8 other period determined by the Director of the 

9 Office of Management and Budget.’’. 

10 (d) A new subsection (7) is added to Section 113(g) 

11 as follows: 

12 ‘‘(7) SPECTRUM SHARING.—Federal entities are 

13 permitted to allow access to their frequency assign14 ments by non-Federal entities upon approval of the 

15 terms of such access by NTIA, in consultation with 

16 the Office of Management and Budget. Such non17 Federal entities must comply with all applicable 

18 rules of the Commission and NTIA, including any 

19 regulations promulgated pursuant to this section. 

20 Remuneration associated with such access shall be 

21 deposited into the Spectrum Relocation Fund. Fed22 eral entities that incur costs as a result of such ac23 cess are eligible for payment from the Fund for the 

24 purposes specified in subsection (3) of this section. 


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1 The revenue associated with such access must be at 

2 least 110 percent of the estimated Federal costs.’’. 

3 (e) Section 118 of such Act (47 U.S.C. 928) is 

4 amended by: 

5 (1) In subsection (b), adding at the end, ‘‘and 

6 any payments made by non-Federal entities for ac7 cess to Federal spectrum pursuant to 47 U.S.C. 

8 113(g)(7)’’; 

9 (2) replacing subsection (c) with the following: 

10 ‘‘The amounts in the Fund from auctions of eligible 

11 frequencies are authorized to be used to pay relocation 

12 costs, as defined in section (g)(3) of this title, of an eligible 

13 Federal entity incurring such costs with respect to reloca14 tion from any eligible frequency. In addition, the amounts 

15 in the Fund from payments by non-Federal entities for 

16 access to Federal spectrum are authorized to be used to 

17 pay Federal costs associated with such sharing, as defined 

18 in section (g)(3) of this title. The Director of the Office 

19 of Management and Budget (OMB) may transfer at any 

20 time (including prior to any auction or contemplated auc21 tion, or sharing initiative) such sums as may be available 

22 in the Fund to an eligible Federal entity to pay eligible 

23 relocation or sharing costs related to pre-auction estimates 

24 or research as defined in subparagraph (C) of section 

25 923(g)(3) of this title. However, the Director may not 


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1 transfer more than $100,000,000 associated with author2 ized pre-auction activities before an auction is completed 

3 and proceeds are deposited in the Spectrum Relocation 

4 Fund. Within the $100,000,000 that may be transferred 

5 before an auction, the Director of OMB may transfer up 

6 to $10,000,000 in total to eligible federal entities for eligi7 ble relocation or sharing costs related to pre-auction esti8 mates or research as defined in subparagraph (C) of sec9 tion 923(g)(3) of this title for costs incurred prior to the 

10 enactment of this legislation, but after June 28th, 2010. 

11 These amounts transferred pursuant to the previous pro12 viso are in addition to amounts that the Director of OMB 

13 may transfer after the enactment of this legislation.’’; 

14 (3) amending subsection (d)(1) to add, ‘‘and 

15 sharing’’ before ‘‘costs’’; 

16 (4) amending subsection (d)(2)(B) to add, ‘‘and 

17 sharing’’ before ‘‘costs’’, and adding at the end, 

18 ‘‘and sharing’’; 

19 (5) replacing subsection (d)(3) with the fol20 lowing: 

21 ‘‘Any amounts in the Fund that are remaining after 

22 the payment of the relocation and sharing costs that are 

23 payable from the Fund shall revert to and be deposited 

24 in the general fund of the Treasury not later than 15 years 

25 after the date of the deposit of such proceeds to the Fund, 


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1 unless the Director of OMB, in consultation with the As2 sistant Secretary for Communications and Information, 

3 notifies the Committees on Appropriations and Energy 

4 and Commerce of the House of Representatives and the 

5 Committees on Appropriations and Commerce, Science, 

6 and Transportation of the Senate at least 60 days in ad7 vance of the reversion of the funds to the general fund 

8 of the Treasury that such funds are needed to complete 

9 or to implement current or future relocations or sharing 

10 initiatives.’’; 

11 (6) amending subsection (e)(2) by adding ‘‘and 

12 sharing’’ before ‘‘costs’’; by adding ‘‘or sharing’’ be13 fore ‘‘is complete’’; and by adding ‘‘or sharing’’ be14 fore ‘‘in accordance’’; and 

15 (7) adding a new subsection at the end thereof: 

16 ‘‘(f) Notwithstanding subsections (c) through (e) of 

17 this section and after the amount specified in subsection 

18 (b), up to twenty percent of the amounts deposited in the 

19 Spectrum Relocation Fund from the auction of licenses 

20 following the date of enactment of this section for fre21 quencies vacated by Federal entities, or up to twenty per22 cent of the amounts paid by non-Federal entities for shar23 ing of Federal spectrum, after the date of enactment are 

24 hereby appropriated and available at the discretion of the 

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1 sultation with the Assistant Secretary for Communications 

2 and Information, for payment to the eligible Federal enti3 ties, in addition to the relocation and sharing costs defined 

4 in paragraph (3) of subsection 923(g), for the purpose of 

5 encouraging timely access to those frequencies, provided 

6 that: 

7 ‘‘(1) Such payments may be based on the mar8 ket value of the spectrum, timeliness of clearing, and 

9 needs for agencies’ essential missions; 

10 ‘‘(2) Such payments are authorized for: 

11 ‘‘(A) the purposes of achieving enhanced 

12 capabilities of systems that are affected by the 

13 activities specified in subparagraphs (A) 

14 through (F) of paragraph (3) of subsection 

15 923(g) of this title; and 

16 ‘‘(B) other communications, radar and 

17 spectrum-using investments not directly af18 fected by such reallocation or sharing but essen19 tial for the missions of the Federal entity that 

20 is relocating its systems or sharing frequencies; 

21 ‘‘(3) The increase to the Fund due to any one 

22 auction after any payment is not less than 10 per23 cent of the winning bids in the relevant auction, or 

24 is not less than 10 percent of the payments from 


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1 non-Federal entities in the relevant sharing agree2 ment; 

3 ‘‘(4) Payments to eligible entities must be based 

4 on the proceeds generated in the auction that an eli5 gible entity participates in; and 

6 ‘‘(5) Such payments will not be made until 30 

7 days after the Director of OMB has notified the 

8 Committees on Appropriations and Commerce, 

9 Science, and Transportation of the Senate, and the 

10 Committees on Appropriations and Energy and 

11 Commerce of the House of Representatives.’’. 

12 (f) Subparagraph D of section 309 (j)(8) of the Com13 munications Act of 1934 (47 U.S.C. 309(j)(8)(D)) is 

14 amended by adding ‘‘, after the retention of revenue de15 scribed in subparagraph (B),’’ before ‘‘attributable’’ and 

16 ‘‘and frequencies identified by the Federal Communica17 tions Commission to be auctioned in conjunction with eli18 gible frequencies described in 47 U.S.C. 923(g)(2)’’ before 

19 the first ‘‘shall’’ in the subparagraph. 

20 (g) If the head of an executive agency of the Federal 

21 Government determines that public disclosure of any in22 formation contained in notifications and reports required 

23 by sections 923 or 928 of Title 47 of the United States 

24 Code would reveal classified national security information 

25 or other information for which there is a legal basis for 


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1 nondisclosure and such public disclosure would be detri2 mental to national security, homeland security, public 

3 safety, or jeopardize law enforcement investigations the 

4 head of the executive agency shall notify the NTIA of that 

5 determination prior to release of such information. In that 

6 event, such information shall be included in a separate 

7 annex, as needed and to the extent the agency head deter8 mines is consistent with national security or law enforce9 ment purposes. These annexes shall be provided to the ap10 propriate subcommittee in accordance with applicable stip11 ulations, but shall not be disclosed to the public or pro12 vided to any unauthorized person through any other 

13 means. 

14 SEC. 273. INCENTIVE AUCTION AUTHORITY. 

15 (a) Paragraph (8) of section 309(j) of the Commu16 nications Act of 1934 (47 U.S.C. 309(j)) is amended— 

17 (1) in subparagraph (A), by deleting ‘‘and (E)’’ 

18 and inserting ‘‘(E) and (F)’’ after ‘‘subparagraphs 

19 (B), (D),’’; and 

20 (2) by adding at the end the following new sub21 paragraphs: 

22 ‘‘(F) Notwithstanding any other provision 

23 of law, if the Commission determines that it is 

24 consistent with the public interest in utilization 

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1 linquish some or all of its licensed spectrum 

2 usage rights in order to permit the assignment 

3 of new initial licenses through a competitive 

4 bidding process subject to new service rules, or 

5 the designation of spectrum for unlicensed use, 

6 the Commission may pay to such licensee a por7 tion of any auction proceeds that the Commis8 sion determines, in its discretion, are attrib9 utable to the spectrum usage rights voluntarily 

10 relinquished by such licensee. If the Commis11 sion also determines that it is in the public in12 terest to modify the spectrum usage rights of 

13 any incumbent licensee in order to facilitate the 

14 assignment of such new initial licenses subject 

15 to new service rules, or the designation of spec16 trum for unlicensed use, the Commission may 

17 pay to such licensee a portion of the auction 

18 proceeds for the purpose of relocating to any al19 ternative frequency or location that the Com20 mission may designate; Provided, however, that 

21 with respect to frequency bands between 54 

22 megahertz and 72 megahertz, 76 megahertz 

23 and 88 megahertz, 174 megahertz and 216 

24 megahertz, and 470 megahertz and 698 mega25 hertz (‘the specified bands’), any spectrum 


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1 made available for alternative use utilizing pay2 ments authorized under this subsection shall be 

3 assigned via the competitive bidding process 

4 until the winning bidders for licenses covering 

5 at least 84 megahertz from the specified bands 

6 deposit the full amount of their bids in accord7 ance with the Commission’s instructions. In ad8 dition, if more than 84 megahertz of spectrum 

9 from the specified bands is made available for 

10 alternative use utilizing payments under this 

11 subsection, and such spectrum is assigned via 

12 competitive bidding, a portion of the proceeds 

13 may be disbursed to licensees of other fre14 quency bands for the purpose of making addi15 tional spectrum available, provided that a ma16 jority of such additional spectrum is assigned 

17 via competitive bidding. Also, provided that in 

18 exercising the authority provided under this sec19 tion: 

20 ‘‘(i) The Chairman of the Commis21 sion, in consultation with the Director of 

22 OMB, shall notify the Committees on Ap23 propriations and Commerce, Science, and 

24 Transportation of the Senate, and the 

25 Committees on Appropriations and Energy 


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1 and Commerce of the House of Represent2 atives of the methodology for calculating 

3 such payments to licensees at least 3 

4 months in advance of the relevant auction, 

5 and that such methodology consider the 

6 value of spectrum vacated in its current 

7 use and the timeliness of clearing; and 

8 ‘‘(ii) Notwithstanding subparagraph 

9 (A), and except as provided in subpara10 graphs (B), (C), and (D), all proceeds (in11 cluding deposits and up front payments 

12 from successful bidders) from the auction 

13 of spectrum under this section and section 

14 106 of this Act shall be deposited with the 

15 Public Safety Trust Fund established 

16 under section 217 of this Act. 

17 ‘‘(G) ESTABLISHMENT OF INCENTIVE AUC18 TION RELOCATION FUND.— 

19 ‘‘(i) IN GENERAL.—There is estab20 lished in the Treasury of the United States 

21 a fund to be known as the ‘Incentive Auc22 tion Relocation Fund’. 

23 ‘‘(ii) ADMINISTRATION.—The Assist24 ant Secretary shall administer the Incen25 tive Auction Relocation Fund using the 


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1 amounts deposited pursuant to this sec2 tion. 

3 ‘‘(iii) CREDITING OF RECEIPTS.— 

4 There shall be deposited into or credited to 

5 the Incentive Auction Relocation Fund any 

6 amounts specified in section 217 of this 

7 Act. 

8 ‘‘(iv) AVAILABILITY.—Amounts in the 

9 Incentive Auction Relocation Fund shall be 

10 available to the NTIA for use— 

11 ‘‘(I) without fiscal year limita12 tion; 

13 ‘‘(II) for a period not to exceed 

14 18 months following the later of— 

15 ‘‘(aa) the completion of in16 centive auction from which such 

17 amounts were derived; 

18 ‘‘(bb) the date on which the 

19 Commission issues all the new 

20 channel assignments pursuant to 

21 any repacking required under 

22 subparagraph (F)(ii); or 

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1 nels, geographic locations, to col2 locate on the same channel or no3 tification by a station to the As4 sistant Secretary that it is im5 pacted by such a change; and 

6 ‘‘(III) without further appropria7 tion. 

8 ‘‘(v) USE OF FUNDS.—Amounts in the 

9 Incentive Auction Relocation Fund may 

10 only be used by the NTIA, in consultation 

11 with the Commission, to cover— 

12 ‘‘(I) the reasonable costs of tele13 vision broadcast stations that are relo14 cated to a different spectrum channel 

15 or geographic location following an in16 centive auction under subparagraph 

17 (F), or that are impacted by such re18 locations, including to cover the cost 

19 of new equipment, installation, and 

20 construction; and 

21 ‘‘(II) the costs incurred by multi22 channel video programming distribu23 tors for new equipment, installation, 

24 and construction related to the car25 riage of such relocated stations or the 


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1 carriage of stations that voluntarily 

2 elect to share a channel, but retain 

3 their existing rights to carriage pursu4 ant to sections 338, 614, and 615.’’. 

5 SEC. 274. REQUIREMENTS WHEN REPURPOSING CERTAIN 

6 MOBILE SATELLITE SERVICES SPECTRUM 

7 FOR TERRESTRIAL BROADBAND USE. 

8 To the extent that the Commission makes available 

9 terrestrial broadband rights on spectrum primarily li10 censed for mobile satellite services, the Commission shall 

11 recover a significant portion of the value of such right ei12 ther through the authority provided in section 309(j) of 

13 the Communications Act of 1934 (47 U.S.C. 309(j)) or 

14 by section 278 of this subtitle. 

15 SEC. 275. PERMANENT EXTENSION OF AUCTION AUTHOR16 ITY. 

17 Section 309(j)11 of the Communications Act of 1934 

18 (47 U.S.C. 309 (j)(11)) is repealed. 

19 SEC. 276. AUTHORITY TO AUCTION LICENSES FOR DOMES20 TIC SATELLITE SERVICES. 

21 Section 309(j) of the Communications Act of 1934 

22 is amended by adding the following new subsection at the 

23 end thereof: 

24 ‘‘(17) Notwithstanding any other provision of 

25 law, the Commission shall use competitive bidding 


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1 under this subsection to assign any license, construc2 tion permit, reservation, or similar authorization or 

3 modification thereof, that may be used solely or pre4 dominantly for domestic satellite communications 

5 services, including satellite-based television or radio 

6 services. A service is defined to be predominantly for 

7 domestic satellite communications services if the ma8 jority of customers that may be served are located 

9 within the geographic boundaries of the United 

10 States. The Commission may, however, use an alter11 native approach to assignment of such licenses or 

12 similar authorities if it finds that such an alternative 

13 to competitive bidding would serve the public inter14 est, convenience, and necessity. This paragraph shall 

15 be effective on the date of its enactment and shall 

16 apply to all Commission assignments or reservations 

17 of spectrum for domestic satellite services, including, 

18 but not limited to, all assignments or reservations 

19 for satellite-based television or radio services as of 

20 the effective date.’’. 

21 SEC. 277. DIRECTED AUCTION OF CERTAIN SPECTRUM. 

22 (a) IDENTIFICATION OF SPECTRUM.—Not later than 

23 1 year after the date of enactment of this subtitle, the 

24 Assistant Secretary shall identify and make available for 

25 immediate reallocation, at a minimum, 15 megahertz of 


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1 contiguous spectrum at frequencies located between 1675 

2 megahertz and 1710 megahertz, inclusive, minus the geo3 graphic exclusion zones, or any amendment thereof, identi4 fied in NTIA’s October 2010 report entitled ‘‘An Assess5 ment of Near-Term Viability of Accommodating Wireless 

6 Broadband Systems in 1675–1710 MHz, 1755–1780 

7 MHz, 3500–3650 MHz, and 4200–4220 MHz, 4380– 

8 4400 MHz Bands’’, to be made available for reallocation 

9 or sharing with incumbent Government operations. 

10 (b) AUCTION.—Not later than January 31, 2016, the 

11 Commission shall conduct, in such combination as deemed 

12 appropriate by the Commission, the auctions of the fol13 lowing licenses covering at least the frequencies described 

14 in this section, by commencing the bidding for: 

15 (1) The spectrum between the frequencies of 

16 1915 megahertz and 1920 megahertz, inclusive. 

17 (2) The spectrum between the frequencies of 

18 1995 megahertz and 2000 megahertz, inclusive. 

19 (3) The spectrum between the frequencies of 

20 2020 megahertz and 2025 megahertz, inclusive. 

21 (4) The spectrum between the frequencies of 

22 2155 megahertz and 2175 megahertz, inclusive. 

23 (5) The spectrum between the frequencies of 

24 2175 megahertz and 2180 megahertz, inclusive. 


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1 (6) At least 25 megahertz of spectrum between 

2 the frequencies of 1755 megahertz and 1850 mega3 hertz, minus appropriate geographic exclusion zones 

4 if necessary, unless the President of the United 

5 States determines that— 

6 (A) such spectrum should not be reallo7 cated due to the need to protect incumbent 

8 Federal operations; or reallocation must be de9 layed or progressed in phases to ensure protec10 tion or continuity of Federal operations; and 

11 (B) allocation of other spectrum— 

12 (i) better serves the public interest, 

13 convenience, and necessity; and 

14 (ii) can reasonably be expected to 

15 produce receipts comparable to auction of 

16 spectrum frequencies identified in this 

17 paragraph. 

18 (7) The Commission may substitute alternative 

19 spectrum frequencies for the spectrum frequencies 

20 identified in paragraphs (1) through (5) of this sub21 section, if the Commission determines that alter22 native spectrum would better serve the public inter23 est and the Office of Management and Budget cer24 tifies that such alternative spectrum frequencies are 

25 reasonably expected to produce receipts comparable 


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1 to auction of the spectrum frequencies identified in 

2 paragraphs (1) through (5) of this subsection. 

3 (c) AUCTION ORGANIZATION.—The Commission may, 

4 if technically feasible and consistent with the public inter5 est, combine the spectrum identified in paragraphs (4), 

6 (5), and the portion of paragraph (6) between the fre7 quencies of 1755 megahertz and 1850 megahertz, inclu8 sive, of subsection (b) in an auction of licenses for paired 

9 spectrum blocks. 

10 (d) FURTHER REALLOCATION OF CERTAIN OTHER

11 SPECTRUM.— 

12 (1) COVERED SPECTRUM.—For purposes of this 

13 subsection, the term ‘‘covered spectrum’’ means the 

14 portion of the electromagnetic spectrum between the 

15 frequencies of 3550 to 3650 megahertz, inclusive, 

16 minus the geographic exclusion zones, or any amend17 ment thereof, identified in NTIA’s October 2010 re18 port entitled ‘‘An Assessment of Near-Term Viabil19 ity of Accommodating Wireless Broadband Systems 

20 in 1675–1710 MHz, 1755–1780 MHz, 3500–3650 

21 MHz, and 4200–4220 MHz, 4380–4400 MHz 

22 Bands’’. 

23 (2) IN GENERAL.—Consistent with require24 ments of section 309(j) of the Communications Act 

25 of 1934, the Commission shall reallocate covered 


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1 spectrum for assignment by competitive bidding or 

2 allocation to unlicensed use, minus appropriate ex3 clusion zones if necessary, unless the President of 

4 the United States determines that— 

5 (A) such spectrum cannot be reallocated 

6 due to the need to protect incumbent Federal 

7 systems from interference; or 

8 (B) allocation of other spectrum— 

9 (i) better serves the public interest, 

10 convenience, and necessity; and 

11 (ii) can reasonably be expected to 

12 produce receipts comparable to what the 

13 covered spectrum might auction for with14 out the geographic exclusion zones. 

15 (3) ACTIONS REQUIRED IF COVERED SPECTRUM

16 CANNOT BE REALLOCATED.— 

17 (A) IN GENERAL.—If the President makes 

18 a determination under paragraph (2) that the 

19 covered spectrum cannot be reallocated, then 

20 the President shall, within 1 year after the date 

21 of such determination— 

22 (i) identify alternative bands of fre23 quencies totaling more than 20 megahertz 

24 and no more than 100 megahertz of spec25 trum used primarily by Federal agencies 


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1 that satisfy the requirements of clauses (i) 

2 and (ii) of paragraph (2)(B); 

3 (ii) report to the appropriate commit4 tees of Congress and the Commission an 

5 identification of such alternative spectrum 

6 for assignment by competitive bidding; and 

7 (iii) make such alternative spectrum 

8 for assignment immediately available for 

9 reallocation. 

10 (B) AUCTION.—If the President makes a 

11 determination under paragraph (2) that the 

12 covered spectrum cannot be reallocated, the 

13 Commission shall commence the bidding of the 

14 alternative spectrum identified pursuant to sub15 paragraph (A) within 3 years of the date of en16 actment of this subtitle. 

17 (4) ACTIONS REQUIRED IF COVERED SPECTRUM

18 CAN BE REALLOCATED.—If the President does not 

19 make a determination under paragraph (1) that the 

20 covered spectrum cannot be reallocated, the Commis21 sion shall commence the competitive bidding for the 

22 covered spectrum within 3 years of the date of en23 actment of this subtitle. 

24 (e) AMENDMENTS TO DESIGN REQUIREMENTS RE25 LATED TO COMPETITIVE BIDDING.—Section 309(j) of the 


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1 Communications Act of 1934 (47 U.S.C. 309(j)) is 

2 amended— 

3 (1) in paragraph (3)— 

4 (A) in subparagraph (E)(ii), by striking ‘‘; 

5 and’’ and inserting a semicolon; and 

6 (B) in subparagraph (F), by striking the 

7 period at the end and inserting a semicolon; 

8 and 

9 (2) by amending clause (i) of the second sen10 tence of paragraph (8)(C) to read as follows: 

11 ‘‘(i) the deposits— 

12 ‘‘(I) of successful bidders of any 

13 auction conducted pursuant to sub14 paragraph (F) of section 106 of this 

15 act shall be paid to the Public Safety 

16 Trust Fund established under section 

17 217 of such Act; and 

18 ‘‘(II) of successful bidders of any 

19 other auction shall be paid to the 

20 Treasury;’’. 

21 SEC. 278. AUTHORITY TO ESTABLISH SPECTRUM LICENSE 

22 USER FEES. 

23 Section 309 of the Communications Act of 1934 is 

24 amended by adding the following new subsection at the 

25 end thereof: 


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1 ‘‘(m) USE OF SPECTRUM LICENSE USER FEES.— 

2 For initial licenses or construction permits that are not 

3 granted through the use of competitive bidding as set 

4 forth in subsection (j), and for renewals or modifications 

5 of initial licenses or other authorizations, whether granted 

6 through competitive bidding or not, the Commission may, 

7 where warranted, establish, assess, and collect annual user 

8 fees on holders of spectrum licenses or construction per9 mits, including their successors or assignees, in order to 

10 promote efficient and effective use of the electromagnetic 

11 spectrum. 

12 ‘‘(1) REQUIRED COLLECTIONS.—The Commis13 sion shall collect at least the following amounts— 

14 ‘‘(A) $200,000,000 in fiscal year 2012; 

15 ‘‘(B) $300,000,000 in fiscal year 2013; 

16 ‘‘(C) $425,000,000 in fiscal year 2014; 

17 ‘‘(D) $550,000,000 in fiscal year 2015; 

18 ‘‘(E) $550,000,000 in fiscal year 2016; 

19 ‘‘(F) $550,000,000 in fiscal year 2017; 

20 ‘‘(G) $550,000,000 in fiscal year 2018; 

21 ‘‘(H) $550,000,000 in fiscal year 2019; 

22 ‘‘(I) $550,000,000 in fiscal year 2020; and 

23 ‘‘(J) $550,000,000 in fiscal year 2021. 

24 ‘‘(2) DEVELOPMENT OF SPECTRUM FEE REGU25 LATIONS.— 


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1 ‘‘(A) The Commission shall, by regulation, 

2 establish a methodology for assessing annual 

3 spectrum user fees and a schedule for collection 

4 of such fees on classes of spectrum licenses or 

5 construction permits or other instruments of 

6 authorization, consistent with the public inter7 est, convenience and necessity. The Commission 

8 may determine over time different classes of 

9 spectrum licenses or construction permits upon 

10 which such fees may be assessed. In estab11 lishing the fee methodology, the Commission 

12 may consider the following factors: 

13 ‘‘(i) the highest value alternative spec14 trum use forgone; 

15 ‘‘(ii) scope and type of permissible 

16 services and uses; 

17 ‘‘(iii) amount of spectrum and li18 censed coverage area; 

19 ‘‘(iv) shared versus exclusive use; 

20 ‘‘(v) level of demand for spectrum li21 censes or construction permits within a 

22 certain spectrum band or geographic area; 

23 ‘‘(vi) the amount of revenue raised on 

24 comparable licenses awarded through an 

25 auction; and 


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1 ‘‘(vii) such factors that the Commis2 sion determines, in its discretion, are nec3 essary to promote efficient and effective 

4 spectrum use. 

5 ‘‘(B) In addition, the Commission shall, by 

6 regulation, establish a methodology for assess7 ing annual user fees and a schedule for collec8 tion of such fees on entities holding Ancillary 

9 Terrestrial Component authority in conjunction 

10 with Mobile Satellite Service spectrum licenses, 

11 where the Ancillary Terrestrial Component au12 thority was not assigned through use of com13 petitive bidding. The Commission shall not col14 lect less from the holders of such authority than 

15 a reasonable estimate of the value of such au16 thority over its term, regardless of whether ter17 restrial services is actually provided during this 

18 term. In determining a reasonable estimate of 

19 the value of such authority, the Commission 

20 may consider factors listed in subsection (A). 

21 ‘‘(C) Within 60 days of enactment of this 

22 Act, the Commission shall commence a rule23 making to develop the fee methodology and reg24 ulations. The Commission shall take all actions 

25 necessary so that it can collect fees from the 


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1 first class or classes of spectrum license or con2 struction permit holders no later than Sep3 tember 30, 2012. 

4 ‘‘(D) The Commission, from time to time, 

5 may commence further rulemakings (separate 

6 from or in connection with other rulemakings or 

7 proceedings involving spectrum-based services, 

8 licenses, permits and uses) and modify the fee 

9 methodology or revise its rules required by 

10 paragraph (B) to add or modify classes of spec11 trum license or construction permit holders that 

12 must pay fees, and assign or adjust such fee as 

13 a result of the addition, deletion, reclassification 

14 or other change in a spectrum-based service or 

15 use, including changes in the nature of a spec16 trum-based service or use as a consequence of 

17 Commission rulemaking proceedings or changes 

18 in law. Any resulting changes in the classes of 

19 spectrum licenses, construction permits or fees 

20 shall take effect upon the dates established in 

21 the Commission’s rulemaking proceeding in ac22 cordance with applicable law. 

23 ‘‘(E) The Commission shall exempt from 

24 such fees holders of licenses for broadcast tele25 vision and public safety services. The term 


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1 ‘emergency response providers’ includes State, 

2 local, and tribal, emergency public safety, law 

3 enforcement, firefighter, emergency response, 

4 emergency medical (including hospital emer5 gency facilities), and related personnel, agencies 

6 and authorities. 

7 ‘‘(3) PENALTIES FOR LATE PAYMENT.—The 

8 Commission shall prescribe by regulation an addi9 tional charge which shall be assessed as a penalty 

10 for late payment of fees required by this subsection. 

11 ‘‘(4) REVOCATION OF LICENSE OR PERMIT.— 

12 The Commission may revoke any spectrum license or 

13 construction permit for a licensee’s or permitee’s 

14 failure to pay in a timely manner any fee or penalty 

15 to the Commission under this subsection. Such rev16 ocation action may be taken by the Commission 

17 after notice of the Commission’s intent to take such 

18 action is sent to the licensee by registered mail, re19 turn receipt requested, at the licensee’s last known 

20 address. The notice will provide the licensee at least 

21 30 days to either pay the fee or show cause why the 

22 fee does not apply to the licensee or should otherwise 

23 be waived or payment deferred. A hearing is not re24 quired under this subsection unless the licensee’s re25 sponse presents a substantial and material question 


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1 of fact. In any case where a hearing is conducted 

2 pursuant to this section, the hearing shall be based 

3 on written evidence only, and the burden of pro4 ceeding with the introduction of evidence and the 

5 burden of proof shall be on the licensee. Unless the 

6 licensee substantially prevails in the hearing, the 

7 Commission may assess the licensee for the costs of 

8 such hearing. Any Commission order adopted pursu9 ant to this subsection shall determine the amount 

10 due, if any, and provide the licensee with at least 30 

11 days to pay that amount or have its authorization 

12 revoked. No order of revocation under this sub13 section shall become final until the licensee has ex14 hausted its right to judicial review of such order 

15 under section 402(b)(5) of this title. 

16 ‘‘(5) TREATMENT OF REVENUES.—All proceeds 

17 obtained pursuant to the regulations required by this 

18 subsection shall be deposited in the General Fund of 

19 the Treasury.’’. 

20 PART II—PUBLIC SAFETY BROADBAND NETWORK 

21 SEC. 281. REALLOCATION OF D BLOCK FOR PUBLIC SAFE22 TY. 

23 (a) IN GENERAL.—The Commission shall reallocate 

24 the 700 MHz D block spectrum for use by public safety 

25 entities in accordance with the provisions of this subtitle. 


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1 (b) SPECTRUM ALLOCATION.—Section 337(a) of the 

2 Communications Act of 1934 (47 U.S.C. 337(a)) is 

3 amended— 

4 (1) by striking ‘‘24’’ in paragraph (1) and in5 serting ‘‘34’’; and 

6 (2) by striking ‘‘36’’ in paragraph (2) and in7 serting ‘‘26’’. 

8 SEC. 282. FLEXIBLE USE OF NARROWBAND SPECTRUM. 

9 The Commission may allow the narrowband spectrum 

10 to be used in a flexible manner, including usage for public 

11 safety broadband communications, subject to such tech12 nical and interference protection measures as the Commis13 sion may require and subject to interoperability require14 ments of the Commission and the Corporation established 

15 in section 204 of this subtitle. 

16 SEC. 283. SINGLE PUBLIC SAFETY WIRELESS NETWORK LI17 CENSEE. 

18 (a) REALLOCATION AND GRANT OF LICENSE.—Not19 withstanding any other provision of law, and subject to 

20 the provisions of this subtitle, including section 290, the 

21 Commission shall grant a license to the Public Safety 

22 Broadband Corporation established under section 284 for 

23 the use of the 700 MHz D block spectrum and existing 

24 public safety broadband spectrum. 

25 (b) TERM OF LICENSE.— 


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1 (1) INITIAL LICENSE.—The license granted 

2 under subsection (a) shall be for an initial term of 

3 10 years from the date of the initial issuance of the 

4 license. 

5 (2) RENEWAL OF LICENSE.—Prior to expiration 

6 of the term of the initial license granted under sub7 section (a) or the expiration of any subsequent re8 newal of such license, the Corporation shall submit 

9 to the Commission an application for the renewal of 

10 such license. Such renewal application shall dem11 onstrate that, during the preceding license term, the 

12 Corporation has met the duties and obligations set 

13 forth under this subtitle. A renewal license granted 

14 under this paragraph shall be for a term of not to 

15 exceed 15 years. 

16 (c) FACILITATION OF TRANSITION.—The Commis17 sion shall take all actions necessary to facilitate the transi18 tion of the existing public safety broadband spectrum to 

19 the Public Safety Broadband Corporation established 

20 under section 284. 

21 SEC. 284. ESTABLISHMENT OF PUBLIC SAFETY BROADBAND 

22 CORPORATION. 

23 (a) ESTABLISHMENT.—There is authorized to be es24 tablished a private, nonprofit corporation, to be known as 

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1 ther an agency nor establishment of the United States 

2 Government or the District of Columbia Government. 

3 (b) APPLICATION OF PROVISIONS.—The Corporation 

4 shall be subject to the provisions of this subtitle, and, to 

5 the extent consistent with this subtitle, to the District of 

6 Columbia Nonprofit Corporation Act (sec. 29–301.01 et 

7 seq., D.C. Official Code). 

8 (c) RESIDENCE.—The Corporation shall have its 

9 place of business in the District of Columbia and shall be 

10 considered, for purposes of venue in civil actions, to be 

11 a resident of the District of Columbia. 

12 (d) POWERS UNDER DC ACT.—In order to carry out 

13 the duties and activities of the Corporation, the Corpora14 tion shall have the usual powers conferred upon a non15 profit corporation by the District of Columbia Nonprofit 

16 Corporation Act. 

17 (e) INCORPORATION.—The members of the initial 

18 Board of Directors of the Corporation shall serve as 

19 incorporators and shall take whatever steps that are nec20 essary to establish the Corporation under the District of 

21 Columbia Nonprofit Corporation Act. 

22 SEC. 285. BOARD OF DIRECTORS OF THE CORPORATION. 

23 (a) MEMBERSHIP.—The management of the Corpora24 tion shall be vested in a Board of Directors (referred to 


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1 in this Title as the ‘‘Board’’), which shall consist of the 

2 following members: 

3 (1) FEDERAL MEMBERS.—The following indi4 viduals, or their respective designees, shall serve as 

5 Federal members: 

6 (A) The Secretary of Commerce. 

7 (B) The Secretary of Homeland Security. 

8 (C) The Attorney General of the United 

9 States. 

10 (D) The Director of the Office of Manage11 ment and Budget. 

12 (2) NON-FEDERAL MEMBERS.— 

13 (A) IN GENERAL.—The Secretary of Com14 merce, in consultation with the Secretary of 

15 Homeland Security and the Attorney General of 

16 the United States, shall appoint 11 individuals 

17 to serve as non-Federal members of the Board. 

18 (B) STATE, TERRITORIAL, TRIBAL AND

19 LOCAL GOVERNMENT INTERESTS.—In making 

20 appointments under subparagraph (A), the Sec21 retary of Commerce should— 

22 (i) appoint at least 3 individuals with 

23 significant expertise in the collective inter24 ests of State, territorial, tribal and local 

25 governments; and 


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1 (ii) seek to ensure geographic and re2 gional representation of the United States 

3 in such appointments; and 

4 (iii) seek to ensure rural and urban 

5 representation in such appointments. 

6 (C) PUBLIC SAFETY INTERESTS.—In mak7 ing appointments under subparagraph (A), the 

8 Secretary of Commerce should appoint at least 

9 3 individuals who have served or are currently 

10 serving as public safety professionals. 

11 (D) REQUIRED QUALIFICATIONS.— 

12 (i) IN GENERAL.—Each non-Federal 

13 member appointed under subparagraph (A) 

14 should meet at least 1 of the following cri15 teria: 

16 (I) PUBLIC SAFETY EXPERI17 ENCE.—Knowledge and experience in 

18 the use of Federal, State, local, or 

19 tribal public safety or emergency re20 sponse. 

21 (II) TECHNICAL EXPERTISE.— 

22 Technical expertise and fluency re23 garding broadband communications, 

24 including public safety communica25 tions and cybersecurity. 


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1 (III) NETWORK EXPERTISE.— 

2 Expertise in building, deploying, and 

3 operating commercial telecommuni4 cations networks. 

5 (IV) FINANCIAL EXPERTISE.— 

6 Expertise in financing and funding 

7 telecommunications networks. 

8 (ii) EXPERTISE TO BE REP9 RESENTED.—In making appointments 

10 under subparagraph (A), the Secretary of 

11 Commerce should appoint— 

12 (I) at least one individual who 

13 satisfies the requirement under sub14 clause (II) of clause (i); 

15 (II) at least one individual who 

16 satisfies the requirement under sub17 clause (III) of clause (i); and 

18 (III) at least one individual who 

19 satisfies the requirement under sub20 clause (IV) of clause (i). 

21 (E) INDEPENDENCE.— 

22 (i) IN GENERAL.—Each non-Federal 

23 member of the Board shall be independent 

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1 tionship with the Corporation in per2 forming his or her duties. 

3 (ii) INDEPENDENCE DETERMINA4 TION.—In order to be considered inde5 pendent for purposes of this subparagraph, 

6 a member of the Board— 

7 (I) may not, other than in his or 

8 her capacity as a member of the 

9 Board or any committee thereof— 

10 (aa) accept any consulting, 

11 advisory, or other compensatory 

12 fee from the Corporation; or 

13 (bb) be a person associated 

14 with the Corporation or with any 

15 affiliated company thereof; and 

16 (II) shall be disqualified from 

17 any deliberation involving any trans18 action of the Corporation in which the 

19 Board member has a financial interest 

20 in the outcome of the transaction. 

21 (F) NOT OFFICERS OR EMPLOYEES.—The 

22 non-Federal members of the Board shall not, by 

23 reason of such membership, be considered to be 

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1 ernment or of the District of Columbia Govern2 ment. 

3 (G) CITIZENSHIP.—No individual other 

4 than a citizen of the United States may serve 

5 as a non-Federal member of the Board. 

6 (H) CLEARANCE FOR CLASSIFIED INFOR7 MATION.—In order to have the threat and vul8 nerability information necessary to make risk 

9 management decisions regarding the network, 

10 the non-Federal members of the Board shall be 

11 required, prior to appointment, to obtain a 

12 clearance held by the Director of National In13 telligence that permits them to receive informa14 tion classified at the level of Top Secret, Special 

15 Compartmented Information. 

16 (b) TERMS OF APPOINTMENT.— 

17 (1) INITIAL APPOINTMENT DEADLINE.—Mem18 bers of the Board shall be appointed not later than 

19 180 days after the date of the enactment of this 

20 subtitle. 

21 (2) TERMS.— 

22 (A) LENGTH.— 

23 (i) FEDERAL MEMBERS.—Each Fed24 eral member of the Board shall serve as a 

25 member of the Board for the life of the 


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1 Corporation while serving in their ap2 pointed capacity. 

3 (ii) NON-FEDERAL MEMBERS.—The 

4 term of office of each non-Federal member 

5 of the Board shall be 3 years. No non-Fed6 eral member of the Board may serve more 

7 than 2 consecutive full 3-year terms. 

8 (B) EXPIRATION OF TERM.—Any member 

9 whose term has expired may serve until such 

10 member’s successor has taken office, or until 

11 the end of the calendar year in which such 

12 member’s term has expired, whichever is earlier. 

13 (C) APPOINTMENT TO FILL VACANCY.— 

14 Any non-Federal member appointed to fill a va15 cancy occurring prior to the expiration of the 

16 term for which that member’s predecessor was 

17 appointed shall be appointed for the remainder 

18 of the predecessor’s term. 

19 (D) STAGGERED TERMS.—With respect to 

20 the initial non-Federal members of the Board— 

21 (i) 4 members shall serve for a term 

22 of 3 years; 

23 (ii) 4 members shall serve for a term 

24 of 2 years; and 


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1 (iii) 3 members shall serve for a term 

2 of 1 year. 

3 (3) VACANCIES.—A vacancy in the membership 

4 of the Board shall not affect the Board’s powers, 

5 and shall be filled in the same manner as the origi6 nal member was appointed. 

7 (c) CHAIR.— 

8 (1) SELECTION.—The Secretary of Commerce, 

9 in consultation with the Secretary of Homeland Se10 curity and the Attorney General of the United 

11 States, shall select, from among the members of the 

12 Board, an individual to serve for a 2-year term as 

13 Chair of the Board. 

14 (2) CONSECUTIVE TERMS.—An individual may 

15 not serve for more than 2 consecutive terms as 

16 Chair of the Board. 

17 (3) REMOVAL FOR CAUSE.—The Secretary of 

18 Commerce, in consultation with the Secretary of 

19 Homeland Security and the Attorney General of the 

20 United States, may remove the Chair of the Board 

21 and any non-Federal member for good cause. 

22 (d) REMOVAL.—All members of the Board may by 

23 majority vote— 

24 (1) remove any non-Federal member of the 

25 Board from office for conduct determined by the 


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1 Board to be detrimental to the Board or Corpora2 tion; and 

3 (2) request that the Secretary of Commerce ex4 ercise his or her authority to remove the Chair of 

5 the Board for conduct determined by the Board to 

6 be detrimental to the Board or Corporation. 

7 (e) MEETINGS.— 

8 (1) FREQUENCY.—The Board shall meet in ac9 cordance with the bylaws of the Corporation— 

10 (A) at the call of the Chairperson; and 

11 (B) not less frequently than once each 

12 quarter. 

13 (2) TRANSPARENCY.—Meetings of the Board, 

14 including any committee of the Board, shall be open 

15 to the public. The Board may, by majority vote, 

16 close any such meeting only for the time necessary 

17 to preserve the confidentiality of commercial or fi18 nancial information that is privileged or confidential, 

19 to discuss personnel matters, to discuss security 

20 vulnerabilities when making those vulnerabilities 

21 public would increase risk to the network or other22 wise materially threaten network operations, or to 

23 discuss legal matters affecting the Corporation, in24 cluding pending or potential litigation. 


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1 (f) QUORUM.—Eight members of the Board shall 

2 constitute a quorum. 

3 (g) BYLAWS.—A majority of the members of the 

4 Board of Directors may amend the bylaws of the Corpora5 tion. 

6 (h) ATTENDANCE.—Members of the Board of Direc7 tors may attend meetings of the Corporation and vote in 

8 person, via telephone conference, or via video conference. 

9 (i) PROHIBITION ON COMPENSATION.—Members of 

10 the Board of the Corporation shall serve without pay, and 

11 shall not otherwise benefit, directly or indirectly, as a re12 sult of their service to the Corporation, but shall be al13 lowed a per diem allowance for travel expenses, at rates 

14 authorized for an employee of an agency under subchapter 

15 I of chapter 57 of title 5, United States Code, while away 

16 from the home or regular place of business of the member 

17 in the performance of the duties of the Corporation. 

18 SEC. 286. OFFICERS, EMPLOYEES, AND COMMITTEES OF 

19 THE CORPORATION. 

20 (a) OFFICERS AND EMPLOYEES.— 

21 (1) IN GENERAL.—The Corporation shall have 

22 a Chief Executive Officer, and such other officers 

23 and employees as may be named and appointed by 

24 the Board for terms and at rates of compensation 

25 fixed by the Board pursuant to this subsection. The 


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1 Chief Executive Officer may name and appoint such 

2 employees as are necessary. All officers and employ3 ees shall serve at the pleasure of the Board. 

4 (2) LIMITATION.—No individual other than a 

5 citizen of the United States may be an officer of the 

6 Corporation. 

7 (3) NONPOLITICAL NATURE OF APPOINT8 MENT.—No political test or qualification shall be 

9 used in selecting, appointing, promoting, or taking 

10 other personnel actions with respect to officers, 

11 agents, or employees of the Corporation. 

12 (4) COMPENSATION.— 

13 (A) IN GENERAL.—The Board may hire 

14 and fix the compensation of employees hired 

15 under this subsection as may be necessary to 

16 carry out the purposes of the Corporation. 

17 (B) APPROVAL BY COMPENSATION BY FED18 ERAL MEMBERS.—Notwithstanding any other 

19 provision of law, or any bylaw adopted by the 

20 Corporation, all rates of compensation, includ21 ing benefit plans and salary ranges, for officers 

22 and employees of the Board, shall be jointly ap23 proved by the Federal members of the Board. 

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1 tion may receive any salary or other compensa2 tion (except for compensation for services on 

3 boards of directors of other organizations that 

4 do not receive funds from the Corporation, on 

5 committees of such boards, and in similar ac6 tivities for such organizations) from any sources 

7 other than the Corporation for services ren8 dered during the period of the employment of 

9 the officer or employee by the Corporation, un10 less unanimously approved by all voting mem11 bers of the Corporation. 

12 (5) SERVICE ON OTHER BOARDS.—Service by 

13 any officer on boards of directors of other organiza14 tions, on committees of such boards, and in similar 

15 activities for such organizations shall be subject to 

16 annual advance approval by the Board and subject 

17 to the provisions of the Corporation’s Statement of 

18 Ethical Conduct. 

19 (6) RULE OF CONSTRUCTION.—No officer or 

20 employee of the Board or of the Corporation shall be 

21 considered to be an officer or employee of the United 

22 States Government or of the government of the Dis23 trict of Columbia. 

24 (7) CLEARANCE FOR CLASSIFIED INFORMA25 TION.—In order to have the threat and vulnerability 


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1 information necessary to make risk management de2 cisions regarding the network, at a minimum the 

3 Chief Executive Officer and any officers filling the 

4 roles normally titled as Chief Information Officers, 

5 Chief Information Security Officer, and Chief Oper6 ations Officer shall— 

7 (A) be required, within six months of being 

8 hired, to obtain a clearance held by the Director 

9 of National Intelligence that permits them to 

10 receive information classified at the level of Top 

11 Secret, Special Compartmented Information. 

12 (b) ADVISORY COMMITTEES.—The Board— 

13 (1) shall establish a standing public safety advi14 sory committee to assist the Board in carrying out 

15 its duties and responsibilities under this title; and 

16 (2) may establish additional standing or ad hoc 

17 committees, panels, or councils as the Board deter18 mines are necessary. 

19 SEC. 287. NONPROFIT AND NONPOLITICAL NATURE OF THE 

20 CORPORATION. 

21 (a) STOCK.—The Corporation shall have no power to 

22 issue any shares of stock, or to declare or pay any divi23 dends. 

24 (b) PROFIT.—No part of the income or assets of the 

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1 cer, employee, or any other individual associated with the 

2 Corporation, except as salary or reasonable compensation 

3 for services. 

4 (c) POLITICS.—The Corporation may not contribute 

5 to or otherwise support any political party or candidate 

6 for elective public office. 

7 (d) PROHIBITION ON LOBBYING ACTIVITIES.—The 

8 Corporation shall not engage in lobbying activities (as de9 fined in section 3(7) of the Lobbying Disclosure Act of 

10 1995 (5 U.S.C. 1602(7))). 

11 SEC. 288. POWERS, DUTIES, AND RESPONSIBILITIES OF THE 

12 CORPORATION. 

13 (a) GENERAL POWERS.—The Corporation shall have 

14 the authority to do the following: 

15 (1) To adopt and use a corporate seal. 

16 (2) To have succession until dissolved by an Act 

17 of Congress. 

18 (3) To prescribe, through the actions of its 

19 Board, bylaws not inconsistent with Federal law and 

20 the laws of the District of Columbia, regulating the 

21 manner in which the Corporation’s general business 

22 may be conducted and the manner in which the 

23 privileges granted to the Corporation by law may be 

24 exercised. 


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1 (4) To exercise, through the actions of its 

2 Board, all powers specifically granted by the provi3 sions of this title, and such incidental powers as 

4 shall be necessary. 

5 (5) To hold such hearings, sit and act at such 

6 times and places, take such testimony, and receive 

7 such evidence as the Corporation considers necessary 

8 to carry out its responsibilities and duties. 

9 (6) To obtain grants and funds from and make 

10 contracts with individuals, private companies, orga11 nizations, institutions, and Federal, State, regional, 

12 and local agencies, pursuant to guidelines estab13 lished by the Director of the Office of Management 

14 and Budget. 

15 (7) To accept, hold, administer, and utilize 

16 gifts, donations, and bequests of property, both real 

17 and personal, for the purposes of aiding or facili18 tating the work of the Corporation. 

19 (8) To issue notes or bonds, which shall not be 

20 guaranteed or backed in any manner by the Govern21 ment of the United States, to purchasers of such in22 struments in the private capital markets. 

23 (9) To incur indebtedness, which shall be the 

24 sole liability of the Corporation and shall not be 

25 guaranteed or backed by the Government of the 


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1 United States, to carry out the purposes of this 

2 Title. 

3 (10) To spend funds under paragraph (6) in a 

4 manner authorized by the Board, but only for pur5 poses that will advance or enhance public safety 

6 communications consistent with this subtitle. 

7 (11) To establish reserve accounts with funds 

8 that the Corporation may receive from time to time 

9 that exceed the amounts required by the Corporation 

10 to timely pay its debt service and other obligations. 

11 (12) To expend the funds placed in any reserve 

12 accounts established under paragraph (11) (includ13 ing interest earned on any such amounts) in a man14 ner authorized by the Board, but only for purposes 

15 that— 

16 (A) will advance or enhance public safety 

17 communications consistent with this subtitle; or 

18 (B) are otherwise approved by an Act of 

19 Congress. 

20 (13) To build, operate and maintain the public 

21 safety interoperable broadband network. 

22 (14) To take such other actions as the Corpora23 tion (through its Board) may from time to time de24 termine necessary, appropriate, or advisable to ac25 complish the purposes of this subtitle. 


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1 (b) DUTY AND RESPONSIBILITY TO DEPLOY AND

2 OPERATE A NATIONWIDE PUBLIC SAFETY INTEROPER3 ABLE BROADBAND NETWORK.— 

4 (1) IN GENERAL.—The Corporation shall hold 

5 the single public safety wireless license granted 

6 under section 281 and take all actions necessary to 

7 ensure the building, deployment, and operation of a 

8 secure and resilient nationwide public safety inter9 operable broadband network in consultation with 

10 Federal, State, tribal, and local public safety enti11 ties, the Director of NIST, the Commission, and the 

12 public safety advisory committee established in sec13 tion 284(b)(1), including by— 

14 (A) ensuring nationwide standards includ15 ing encryption requirements for use and access 

16 of the network; 

17 (B) issuing open, transparent, and com18 petitive requests for proposals to private sector 

19 entities for the purposes of building, operating, 

20 and maintaining the network; 

21 (C) managing and overseeing the imple22 mentation and execution of contracts or agree23 ments with non-Federal entities to build, oper24 ate, and maintain the network; and 


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1 (D) establishing policies regarding Federal 

2 and public safety support use. 

3 (2) INTEROPERABILITY, SECURITY AND STAND4 ARDS.—In carrying out the duties and responsibil5 ities of this subsection, including issuing requests for 

6 proposals, the Corporation shall— 

7 (A) ensure the safety, security, and resil8 iency of the network, including requirements for 

9 protecting and monitoring the network to pro10 tect against cyber intrusions or cyberattack; 

11 (B) be informed of and manage supply 

12 chain risks to the network, including require13 ments to provide insight into the suppliers and 

14 supply chains for critical network components 

15 and to implement risk management best prac16 tice in network design, contracting, operations 

17 and maintenance; 

18 (C) promote competition in the equipment 

19 market, including devices for public safety com20 munications, by requiring that equipment and 

21 devices for use on the network be— 

22 (i) built to open, non-proprietary, 

23 commercially available standards; 


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1 (ii) capable of being used across the 

2 nationwide public safety broadband net3 work operating in the 700 MHz band; 

4 (iii) be able to be interchangeable with 

5 other vendors’ equipment; and 

6 (iv) backward-compatible with existing 

7 second and third generation commercial 

8 networks to the extent that such capabili9 ties are necessary and technically and eco10 nomically reasonable; and 

11 (D) promote integration of the network 

12 with public safety answering points or their 

13 equivalent. 

14 (3) RURAL COVERAGE.—In carrying out the du15 ties and responsibilities of this subsection, including 

16 issuing requests for proposals, the Corporation, con17 sistent with the license granted under section 281, 

18 shall require deployment phases with substantial 

19 rural coverage milestones as part of each phase of 

20 the construction and deployment of the network. 

21 (4) EXECUTION OF AUTHORITY.—In carrying 

22 out the duties and responsibilities of this subsection, 

23 the Corporation may— 


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1 (A) obtain grants from and make contracts 

2 with individuals, private companies, and Fed3 eral, State, regional, and local agencies; 

4 (B) hire or accept voluntary services of 

5 consultants, experts, advisory boards, and pan6 els to aid the Corporation in carrying out such 

7 duties and responsibilities; 

8 (C) receive payment for use of— 

9 (i) network capacity licensed to the 

10 Corporation; and 

11 (ii) network infrastructure con12 structed, owned, or operated by the Cor13 poration; and 

14 (D) take such other actions as may be nec15 essary to accomplish the purposes set forth in 

16 this subsection. 

17 (c) OTHER SPECIFIC DUTIES AND RESPONSIBIL18 ITIES.— 

19 (1) ESTABLISHMENT OF NETWORK POLICIES.— 

20 In carrying out the requirements under subsection 

21 (b), the Corporation shall take such actions as may 

22 be necessary, including the development of requests 

23 for proposals— 

24 (A) request for proposals should include— 


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1 (i) build timetables, including by tak2 ing into consideration the time needed to 

3 build out to rural areas; 

4 (ii) coverage areas, including coverage 

5 in rural and nonurban areas; 

6 (iii) service levels; 

7 (iv) performance criteria; and 

8 (v) other similar matters for the con9 struction and deployment of such network; 

10 (B) the technical, operational and security 

11 requirements of the network and, as appro12 priate, network suppliers; 

13 (C) practices, procedures, and standards 

14 for the management and operation of such net15 work; 

16 (D) terms of service for the use of such 

17 network, including billing practices; and 

18 (E) ongoing compliance review and moni19 toring of the— 

20 (i) management and operation of such 

21 network; 

22 (ii) practices and procedures of the 

23 entities operating on and the personnel 

24 using such network; and 


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1 (iii) training needs of entities oper2 ating on and personnel using such net3 work. 

4 (2) STATE AND LOCAL PLANNING.— 

5 (A) REQUIRED CONSULTATION.—In devel6 oping requests for proposal and otherwise car7 rying out its responsibilities under this subtitle, 

8 the Corporation shall consult with regional, 

9 State, tribal, and local jurisdictions regarding 

10 the distribution and expenditure of any 

11 amounts required to carry out the policies es12 tablished under paragraph (1), including with 

13 regard to the— 

14 (i) construction of an Evolved Packet 

15 Core or Cores and any Radio Access Net16 work build out; 

17 (ii) placement of towers; 

18 (iii) coverage areas of the network, 

19 whether at the regional, State, tribal, or 

20 local level; 

21 (iv) adequacy of hardening, security, 

22 reliability, and resiliency requirements; 

23 (v) assignment of priority to local 

24 users; 


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1 (vi) assignment of priority and selec2 tion of entities seeking access to or use of 

3 the nationwide public safety interoperable 

4 broadband network established under sub5 section (b); and 

6 (vii) training needs of local users. 

7 (B) METHOD OF CONSULTATION.—The 

8 consultation required under subparagraph (A) 

9 shall occur between the Corporation and the 

10 single officer or governmental body designated 

11 under section 294(d). 

12 (3) LEVERAGING EXISTING INFRASTRUC13 TURE.—In carrying out the requirement under sub14 section (b), the Corporation shall enter into agree15 ments to utilize, to the maximum economically desir16 able, existing— 

17 (A) commercial or other communications 

18 infrastructure; and 

19 (B) Federal, State, tribal, or local infra20 structure. 

21 (4) MAINTENANCE AND UPGRADES.—The Cor22 poration shall ensure through the maintenance, op23 eration, and improvement of the nationwide public 

24 safety interoperable broadband network established 

25 under subsection (b), including by ensuring that the 


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1 Corporation updates and revises any policies estab2 lished under paragraph (1) to take into account new 

3 and evolving technologies and security concerns. 

4 (5) ROAMING AGREEMENTS.—The Corporation 

5 shall negotiate and enter into, as it determines ap6 propriate, roaming agreements with commercial net7 work providers to allow the nationwide public safety 

8 interoperable broadband users to roam onto com9 mercial networks and gain prioritization of public 

10 safety communications over such networks in times 

11 of an emergency. 

12 (6) NETWORK INFRASTRUCTURE AND DEVICE

13 CRITERIA.—The Director of NIST, in consultation 

14 with the Corporation and the Commission, shall en15 sure the development of a list of certified devices 

16 and components meeting appropriate protocols, 

17 encryption requirements, and standards for public 

18 safety entities and commercial vendors to adhere to, 

19 if such entities or vendors seek to have access to, use 

20 of, or compatibility with the nationwide public safety 

21 interoperable broadband network established under 

22 subsection (b). 

23 (7) REPRESENTATION BEFORE STANDARD SET24 TING ENTITIES.—The Corporation, in consultation 

25 with the Director of NIST, the Commission, and the 


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1 public safety advisory committee established under 

2 section 284(b)(1), shall represent the interests of 

3 public safety users of the nationwide public safety 

4 interoperable broadband network established under 

5 subsection (b) before any proceeding, negotiation, or 

6 other matter in which a standards organization, 

7 standards body, standards development organization, 

8 or any other recognized standards-setting entity re9 garding the development of standards relating to 

10 interoperability. 

11 (8) PROHIBITION ON NEGOTIATION WITH FOR12 EIGN GOVERNMENTS.—Except as authorized by the 

13 President, the Corporation shall not have the au14 thority to negotiate or enter into any agreements 

15 with a foreign government on behalf of the United 

16 States. 

17 (d) USE OF MAILS.—The Corporation may use the 

18 United States mails in the same manner and under the 

19 same conditions as the departments and agencies of the 

20 United States. 

21 SEC. 289. INITIAL FUNDING FOR CORPORATION. 

22 (a) NTIA PROVISION OF INITIAL FUNDING TO THE

23 CORPORATION.— 

24 (1) IN GENERAL.—Prior to the commencement 

25 of incentive auctions to be carried out under section 


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1 309(j)(8)(F) of the Communications Act of 1934 or 

2 the auction of spectrum pursuant to section 273 of 

3 this subtitle, the NTIA is hereby appropriated 

4 $50,000,000 for reasonable administrative expenses 

5 and other costs associated with the establishment of 

6 the Corporation, and that may be transferred as 

7 needed to the Corporation for expenses before the 

8 commencement of incentive auction: Provided, That 

9 funding shall expire on September 30, 2014. 

10 (2) CONDITION OF FUNDING.—At the time of 

11 application for, and as a condition to, any such 

12 funding, the Corporation shall file with the NTIA a 

13 statement with respect to the anticipated use of the 

14 proceeds of this funding. 

15 (3) NTIA APPROVAL.—If the NTIA determines 

16 that such funding is necessary for the Corporation 

17 to carry out its duties and responsibilities under this 

18 title and that Corporation has submitted a plan, 

19 then the NTIA shall notify the appropriate commit20 tees of Congress 30 days before each transfer of 

21 funds takes place. 

22 SEC. 290. PERMANENT SELF-FUNDING; DUTY TO ASSESS 

23 AND COLLECT FEES FOR NETWORK USE. 

24 (a) IN GENERAL.—The Corporation shall have the 

25 authority to assess and collect the following fees: 


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1 (1) NETWORK USER FEE.—A user or subscrip2 tion fee from each entity, including any public safety 

3 entity or secondary user, that seeks access to or use 

4 of the nationwide public safety interoperable 

5 broadband network established under this title. 

6 (2) LEASE FEES RELATED TO NETWORK CA7 PACITY.— 

8 (A) IN GENERAL.—A fee from any non9 Federal entity that seeks to enter into a covered 

10 leasing agreement. 

11 (B) COVERED LEASING AGREEMENT.—For 

12 purposes of subparagraph (A), a ‘‘covered leas13 ing agreement’’ means a written agreement be14 tween the Corporation and secondary user to 

15 permit— 

16 (i) access to network capacity on a 

17 secondary basis for non-public safety serv18 ices; and 

19 (ii) the spectrum allocated to such en20 tity to be used for commercial trans21 missions along the dark fiber of the long22 haul network of such entity. 

23 (3) LEASE FEES RELATED TO NETWORK EQUIP24 MENT AND INFRASTRUCTURE.—A fee from any non25 Federal entity that seeks access to or use of any 


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1 equipment or infrastructure, including antennas or 

2 towers, constructed or otherwise owned by the Cor3 poration. 

4 (b) ESTABLISHMENT OF FEE AMOUNTS; PERMA5 NENT SELF-FUNDING.—The total amount of the fees as6 sessed for each fiscal year pursuant to this section shall 

7 be sufficient, and shall not exceed the amount necessary, 

8 to recoup the total expenses of the Corporation in carrying 

9 out its duties and responsibilities described under this title 

10 for the fiscal year involved. 

11 (c) REQUIRED REINVESTMENT OF FUNDS.—The 

12 Corporation shall reinvest amounts received from the as13 sessment of fees under this section in the nationwide pub14 lic safety interoperable broadband network by using such 

15 funds only for constructing, maintaining, managing or im16 proving the network. 

17 SEC. 291. AUDIT AND REPORT. 

18 (a) AUDIT.— 

19 (1) IN GENERAL.—The financial transactions of 

20 the Corporation for any fiscal year during which 

21 Federal funds are available to finance any portion of 

22 its operations shall be audited by the Comptroller 

23 General of the United States in accordance with the 

24 principles and procedures applicable to commercial 

25 corporate transactions and under such rules and 


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1 regulations as may be prescribed by the Comptroller 

2 General. 

3 (2) LOCATION.—Any audit conducted under 

4 paragraph (1) shall be conducted at the place or 

5 places where accounts of the Corporation are nor6 mally kept. 

7 (3) ACCESS TO CORPORATION BOOKS AND DOC8 UMENTS.— 

9 (A) IN GENERAL.—For purposes of an 

10 audit conducted under paragraph (1), the rep11 resentatives of the Comptroller General shall— 

12 (i) have access to all books, accounts, 

13 records, reports, files, and all other papers, 

14 things, or property belonging to or in use 

15 by the Corporation that pertain to the fi16 nancial transactions of the Corporation 

17 and are necessary to facilitate the audit; 

18 and 

19 (ii) be afforded full facilities for 

20 verifying transactions with the balances or 

21 securities held by depositories, fiscal 

22 agents, and custodians. 

23 (B) REQUIREMENT.—All books, accounts, 

24 records, reports, files, papers, and property of 


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1 the Corporation shall remain in the possession 

2 and custody of the Corporation. 

3 (b) REPORT.— 

4 (1) IN GENERAL.—The Comptroller General of 

5 the United States shall submit a report of each 

6 audit conducted under subsection (a) to— 

7 (A) the appropriate committees of Con8 gress; 

9 (B) the President; and 

10 (C) the Corporation. 

11 (2) CONTENTS.—Each report submitted under 

12 paragraph (1) shall contain— 

13 (A) such comments and information as the 

14 Comptroller General determines necessary to in15 form Congress of the financial operations and 

16 condition of the Corporation; 

17 (B) any recommendations of the Comp18 troller General relating to the financial oper19 ations and condition of the Corporation; and 

20 (C) a description of any program, expendi21 ture, or other financial transaction or under22 taking of the Corporation that was observed 

23 during the course of the audit, which, in the 

24 opinion of the Comptroller General, has been 


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1 carried on or made without the authority of 

2 law. 

3 SEC. 292. ANNUAL REPORT TO CONGRESS. 

4 (a) IN GENERAL.—Not later than 1 year after the 

5 date of enactment of this subtitle, and each year there6 after, the Corporation shall submit an annual report cov7 ering the preceding fiscal year to the President and the 

8 appropriate committees of Congress. 

9 (b) REQUIRED CONTENT.—The report required 

10 under subsection (a) shall include— 

11 (1) a comprehensive and detailed report of the 

12 operations, activities, financial condition, and accom13 plishments of the Corporation under this section; 

14 and 

15 (2) such recommendations or proposals for leg16 islative or administrative action as the Corporation 

17 deems appropriate. 

18 (c) AVAILABILITY TO TESTIFY.—The directors, offi19 cers, employees, and agents of the Corporation shall be 

20 available to testify before the appropriate committees of 

21 the Congress with respect to— 

22 (1) the report required under subsection (a); 

23 (2) the report of any audit made by the Comp24 troller General under section 291; or 


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1 (3) any other matter which such committees 

2 may determine appropriate. 

3 SEC. 293. PROVISION OF TECHNICAL ASSISTANCE. 

4 The Commission and the Departments of Homeland 

5 Security, Justice and Commerce may provide technical as6 sistance to the Corporation and may take any action at 

7 the request of the Corporation in effectuating its duties 

8 and responsibilities under this title. 

9 SEC. 294. STATE AND LOCAL IMPLEMENTATION. 

10 (a) ESTABLISHMENT OF STATE AND LOCAL IMPLE11 MENTATION GRANT PROGRAM.—The Assistant Secretary, 

12 in consultation with the Corporation, shall take such ac13 tion as is necessary to establish a grant program to make 

14 grants to States to assist State, regional, tribal, and local 

15 jurisdictions to identify, plan, and implement the most ef16 ficient and effective way for such jurisdictions to utilize 

17 and integrate the infrastructure, equipment, and other ar18 chitecture associated with the nationwide public safety 

19 interoperable broadband network established in this sub20 title to satisfy the wireless communications and data serv21 ices needs of that jurisdiction, including with regards to 

22 coverage, siting, identity management for public safety 

23 users and their devices, and other needs. 

24 (b) MATCHING REQUIREMENTS; FEDERAL SHARE.— 


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1 (1) IN GENERAL.—The Federal share of the 

2 cost of any activity carried out using a grant under 

3 this section may not exceed 80 percent of the eligible 

4 costs of carrying out that activity, as determined by 

5 the Assistant Secretary, in consultation with the 

6 Corporation. 

7 (2) WAIVER.—The Assistant Secretary may 

8 waive, in whole or in part, the requirements of para9 graph (1) for good cause shown if the Assistant Sec10 retary determines that such a waiver is in the public 

11 interest. 

12 (c) PROGRAMMATIC REQUIREMENTS.—Not later than 

13 6 months after the establishment of the bylaws of the Cor14 poration pursuant to section 286 of this subtitle, the As15 sistant Secretary, in consultation with the Corporation, 

16 shall establish requirements relating to the grant program 

17 to be carried out under this section, including the fol18 lowing: 

19 (1) Defining eligible costs for purposes of sub20 section (b)(1). 

21 (2) Determining the scope of eligible activities 

22 for grant funding under this section. 

23 (3) Prioritizing grants for activities that ensure 

24 coverage in rural as well as urban areas. 


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1 (d) CERTIFICATION AND DESIGNATION OF OFFICER

2 OR GOVERNMENTAL BODY.—In carrying out the grant 

3 program established under this section, the Assistant Sec4 retary shall require each State to certify in its application 

5 for grant funds that the State has designated a single offi6 cer or governmental body to serve as the coordinator of 

7 implementation of the grant funds. 

8 SEC. 295. STATE AND LOCAL IMPLEMENTATION FUND. 

9 (a) ESTABLISHMENT.—There is established in the 

10 Treasury of the United States a fund to be known as the 

11 ‘‘State and Local Implementation Fund’’. 

12 (b) PURPOSE.—The Assistant Secretary shall estab13 lish and administer the grant program authorized under 

14 section 294 of this subtitle using funds deposited in the 

15 State and Local Implementation Fund. 

16 (c) CREDITING OF RECEIPTS.—There shall be depos17 ited into or credited to the State and Local Implementa18 tion Fund— 

19 (1) any amounts specified in section 297; and 

20 (2) any amounts borrowed by the Assistant 

21 Secretary under subsection (d). 

22 (d) BORROWING AUTHORITY.— 

23 (1) IN GENERAL.—The Assistant Secretary 

24 may borrow from the General Fund of the Treasury 

25 beginning on October 1, 2011, such sums as may be 


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1 necessary, but not to exceed $100,000,000 to imple2 ment section 294. 

3 (2) REIMBURSEMENT.—The Assistant Sec4 retary shall reimburse the General Fund of the 

5 Treasury, with interest, for any amounts borrowed 

6 under subparagraph (1) as funds are deposited into 

7 the State and Local Implementation Fund. 

8 SEC. 296. PUBLIC SAFETY WIRELESS COMMUNICATIONS RE9 SEARCH AND DEVELOPMENT. 

10 (a) NIST DIRECTED RESEARCH AND DEVELOPMENT

11 PROGRAM.—From amounts made available from the Pub12 lic Safety Trust Fund established under section 297, the 

13 Director of NIST, in consultation with the Commission, 

14 the Secretary of Homeland Security, and the National In15 stitute of Justice of the Department of Justice, as appro16 priate, shall conduct research and assist with the develop17 ment of standards, technologies, and applications to ad18 vance wireless public safety communications. 

19 (b) REQUIRED ACTIVITIES.—In carrying out the re20 quirement under subsection (a), the Director of NIST, in 

21 consultation with the Corporation and the public safety 

22 advisory committee established under section 286(b)(1), 

23 shall— 

24 (1) document public safety wireless communica25 tions technical requirements; 


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1 (2) accelerate the development of the capability 

2 for communications between currently deployed pub3 lic safety narrowband systems and the nationwide 

4 public safety interoperable broadband network to be 

5 established under this title; 

6 (3) establish a research plan, and direct re7 search, that addresses the wireless communications 

8 needs of public safety entities beyond what can be 

9 provided by the current generation of broadband 

10 technology; 

11 (4) accelerate the development of mission crit12 ical voice, including device-to-device ‘‘talkaround’’ 

13 standards for broadband networks, if necessary and 

14 practical, public safety prioritization, authentication 

15 capabilities, as well as a standard application pro16 graming interfaces for the nationwide public safety 

17 interoperable broadband network to be established 

18 under this title, if necessary and practical; 

19 (5) seek to develop technologies, standards, 

20 processes, and architectures that provide a signifi21 cant improvement in network security, resiliency and 

22 trustworthiness; and 

23 (6) convene working groups of relevant govern24 ment and commercial parties to achieve the require25 ments in paragraphs (1) through (5). 


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1 (c) TRANSFER AUTHORITY.—If in the determination 

2 of the Director of NIST another Federal agency is better 

3 suited to carry out and oversee the research and develop4 ment of any activity to be carried out in accordance with 

5 the requirements of this section, the Director may transfer 

6 any amounts provided under this section to such agency, 

7 including to the National Institute of Justice of the De8 partment of Justice and the Department of Homeland Se9 curity. 

10 SEC. 297. PUBLIC SAFETY TRUST FUND. 

11 (a) ESTABLISHMENT OF PUBLIC SAFETY TRUST

12 FUND.— 

13 (1) IN GENERAL.—There is established in the 

14 Treasury of the United States a trust fund to be 

15 known as the ‘‘Public Safety Trust Fund’’. 

16 (2) CREDITING OF RECEIPTS.— 

17 (A) IN GENERAL.—There shall be depos18 ited into or credited to the Public Safety Trust 

19 Fund the proceeds from the auction of spec20 trum carried out pursuant to— 

21 (i) section 273 of this subtitle; and 

22 (ii) section 309(j)(8)(F) of the Com23 munications Act of 1934, as added by sec24 tion 273 of this subtitle. 


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1 (B) AVAILABILITY.—Amounts deposited 

2 into or credited to the Public Safety Trust 

3 Fund in accordance with subparagraph (A) 

4 shall remain available until the end of fiscal 

5 year 2018. Upon the expiration of the period 

6 described in the prior sentence such amounts 

7 shall be deposited in the General Fund of the 

8 Treasury, where such amounts shall be dedi9 cated for the sole purpose of deficit reduction. 

10 (b) USE OF FUND.—Amounts deposited in the Public 

11 Safety Trust Fund shall be used in the following manner: 

12 (1) PAYMENT OF AUCTION INCENTIVE.— 

13 (A) REQUIRED DISBURSALS.—Amounts in 

14 the Public Safety Trust Fund shall be used to 

15 make any required disbursal of payments to li16 censees required pursuant to clause (i) and sub17 clause (IV) of clause (ii) of section 309(j)(8)(F) 

18 of the Communications Act of 1934. 

19 (B) NOTIFICATION TO CONGRESS.— 

20 (i) IN GENERAL.—At least 3 months 

21 in advance of any incentive auction con22 ducted pursuant to subparagraph (F) of 

23 section 309(j)(8) of the Communications 

24 Act of 1934, the Chairman of the Commis25 sion, in consultation with the Director of 


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1 the Office of Management and Budget, 

2 shall notify the appropriate committees of 

3 Congress— 

4 (I) of the methodology for calcu5 lating the disbursal of payments to 

6 certain licensees required pursuant to 

7 clause (i) and subclauses (III) and 

8 (IV) of clause of (ii) of such section; 

9 (II) that such methodology con10 siders the value of the spectrum vol11 untarily relinquished in its current use 

12 and the timeliness with which the li13 censee cleared its use of such spec14 trum; and 

15 (III) of the estimated payments 

16 to be made from the Incentive Auction 

17 Relocation Fund established under 

18 section 309(j)(8)(G) of the Commu19 nications Act of 1934. 

20 (ii) DEFINITION.—In this clause, the 

21 term ‘‘appropriate committees of Con22 gress’’ means— 

23 (I) the Committee on Commerce, 

24 Science, and Transportation of the 

25 Senate; 


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1 (II) the Committee on Appropria2 tions of the Senate; 

3 (III) the Committee on Energy 

4 and Commerce of the House of Rep5 resentatives; and 

6 (IV) the Committee on Appro7 priations of the House of Representa8 tives. 

9 (2) INCENTIVE AUCTION RELOCATION FUND.— 

10 Not more than $1,000,000,000 shall be deposited in 

11 the Incentive Auction Relocation Fund established 

12 under section 309(j)(8)(G) of the Communications 

13 Act of 1934. 

14 (3) STATE AND LOCAL IMPLEMENTATION

15 FUND.—$200,000,000 shall be deposited in the 

16 State and Local Implementation Fund established 

17 under section 294. 

18 (4) PUBLIC SAFETY BROADBAND CORPORA19 TION.—$6,450,000,000 shall be deposited with the 

20 Public Safety Broadband Corporation established 

21 under section 284, of which pursuant to its respon22 sibilities and duties set forth under section 288 to 

23 deploy and operate a nationwide public safety inter24 operable broadband network. Funds deposited with 

25 the Public Safety Broadband Corporation shall be 


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1 available after submission of a five-year budget by 

2 the Corporation and approval by the Secretary of 

3 Commerce, in consultation with the Secretary of 

4 Homeland Security, Director of the Office of Man5 agement and Budget and Attorney General of the 

6 United States. 

7 (5) PUBLIC SAFETY RESEARCH AND DEVELOP8 MENT.—After approval by the Office of Management 

9 and Budget of a spend plan developed by the Direc10 tor of NIST, a Wireless Innovation (WIN) Fund of 

11 up to $300,000,000 shall be made available for use 

12 by the Director of NIST to carry out the research 

13 program established under section 296 and be avail14 able until expended. If less than $300,000,000 is ap15 proved by the Office of Management and Budget, 

16 the remainder shall be transferred to the Public 

17 Safety Broadband Corporation established in section 

18 284 and be available for duties set forth under sec19 tion 288 to deploy and operate a nationwide public 

20 safety interoperable broadband network. 

21 (6) DEFICIT REDUCTION.—Any amounts re22 maining after the deduction of the amounts required 

23 under paragraphs (1) through (5) shall be deposited 

24 in the General Fund of the Treasury, where such 


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1 amounts shall be dedicated for the sole purpose of 

2 deficit reduction. 

3 SEC. 298. FCC REPORT ON EFFICIENT USE OF PUBLIC 

4 SAFETY SPECTRUM. 

5 (a) IN GENERAL.—Not later than 180 days after the 

6 date of the enactment of this subtitle and every 2 years 

7 thereafter, the Commission shall, in consultation with the 

8 Assistant Secretary and the Director of NIST, conduct a 

9 study and submit to the appropriate committees of Con10 gress a report on the spectrum allocated for public safety 

11 use. 

12 (b) CONTENTS.—The report required by subsection 

13 (a) shall include— 

14 (1) an examination of how such spectrum is 

15 being used; 

16 (2) recommendations on how such spectrum 

17 may be used more efficiently; 

18 (3) an assessment of the feasibility of public 

19 safety entities relocating from other bands to the 

20 public safety broadband spectrum; and 

21 (4) an assessment of whether any spectrum 

22 made available by the relocation described in para23 graph (3) could be returned to the Commission for 

24 reassignment through auction, including through use 

25 of incentive auction authority under subparagraph 


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1 (G) of section 309(j)(8) of the Communications Act 

2 of 1934 (47 U.S.C. 309(j)(8)), as added by section 

3 273(a). 

4 SEC. 299. PUBLIC SAFETY ROAMING AND PRIORITY AC5 CESS. 

6 The Commission may adopt rules, if necessary in the 

7 public interest, to improve the ability of public safety users 

8 to roam onto commercial networks and to gain priority 

9 access to commercial networks in an emergency if— 

10 (1) the public safety entity equipment is tech11 nically compatible with the commercial network; 

12 (2) the commercial network is reasonably com13 pensated; and 

14 (3) such access does not preempt or otherwise 

15 terminate or degrade all existing voice conversations 

16 or data sessions. 

17 TITLE III—ASSISTANCE FOR THE 

18 UNEMPLOYED AND PATH19 WAYS BACK TO WORK 

20 Subtitle A—Supporting 

21 Unemployed Workers 

22 SEC. 301. SHORT TITLE. 

23 This subtitle may be cited as the ‘‘Supporting Unem24 ployed Workers Act of 2011’’. 


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1 PART I—EXTENSION OF EMERGENCY UNEMPLOY2 MENT COMPENSATION AND CERTAIN EX3 TENDED BENEFITS PROVISIONS, AND ESTAB4 LISHMENT OF SELF-EMPLOYMENT ASSIST5 ANCE PROGRAM 

6 SEC. 311. EXTENSION OF EMERGENCY UNEMPLOYMENT 

7 COMPENSATION PROGRAM. 

8 (a) IN GENERAL.—Section 4007 of the Supplemental 

9 Appropriations Act, 2008 (Public Law 110–252; 26 

10 U.S.C. 3304 note), is amended— 

11 (1) by striking ‘‘January 3, 2012’’ each place 

12 it appears and inserting ‘‘January 3, 2013’’; 

13 (2) in the heading for subsection (b)(2), by 

14 striking ‘‘January 3, 2012’’ and inserting ‘‘January 

15 3, 2013’’; and 

16 (3) in subsection (b)(3), by striking ‘‘June 9, 

17 2012’’ and inserting ‘‘June 8, 2013’’. 

18 (b) FUNDING.—Section 4004(e)(1) of the Supple19 mental Appropriations Act, 2008 (Public Law 110–252; 

20 26 U.S.C. 3304 note), is amended— 

21 (1) in subparagraph (F), by striking ‘‘and’’ at 

22 the end; and 

23 (2) by inserting after subparagraph (G) the fol24 lowing: 


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1 ‘‘(H) the amendments made by section 101 

2 of the Supporting Unemployed Workers Act of 

3 2011; and’’. 

4 (c) EFFECTIVE DATE.—The amendments made by 

5 this section shall take effect as if included in the enact6 ment of the Unemployment Compensation Extension Act 

7 of 2010 (Public Law 111–205). 

8 SEC. 312. TEMPORARY EXTENSION OF EXTENDED BENEFIT 

9 PROVISIONS. 

10 (a) IN GENERAL.—Section 2005 of the Assistance for 

11 Unemployed Workers and Struggling Families Act, as 

12 contained in Public Law 111–5 (26 U.S.C. 3304 note), 

13 is amended— 

14 (1) by striking ‘‘January 4, 2012’’ each place 

15 it appears and inserting ‘‘January 4, 2013’’; 

16 (2) in the heading for subsection (b)(2), by 

17 striking ‘‘JANUARY 4, 2012’’ and inserting ‘‘JANU18 ARY 4, 2013’’; and 

19 (3) in subsection (c), by striking ‘‘June 11, 

20 2012’’ and inserting ‘‘June 11, 2013’’. 

21 (b) EXTENSION OF MATCHING FOR STATES WITH

22 NO WAITING WEEK.—Section 5 of the Unemployment 

23 Compensation Extension Act of 2008 (Public Law 110– 

24 449; 26 U.S.C. 3304 note) is amended by striking ‘‘June 

25 10, 2012’’ and inserting ‘‘June 9, 2013’’. 


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1 (c) EXTENSION OF MODIFICATION OF INDICATORS

2 UNDER THE EXTENDED BENEFIT PROGRAM.—Section 

3 502 of the Tax Relief, Unemployment Insurance Reau4 thorization, and Job Creation Act of 2010 (Public Law 

5 111–312; 26 U.S.C. 3304 note) is amended— 

6 (1) in subsection (a) by striking ‘‘December 31, 

7 2011’’ and inserting ‘‘December 31, 2012’’; and 

8 (2) in subsection (b)(2) by striking ‘‘December 

9 31, 2011’’ and inserting ‘‘December 31, 2012’’. 

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

11 this section shall take effect as if included in the enact12 ment of the Unemployment Compensation Extension Act 

13 of 2010 (Public Law 111–205). 

14 SEC. 313. REEMPLOYMENT SERVICES AND REEMPLOYMENT 

15 AND ELIGIBILITY ASSESSMENT ACTIVITIES. 

16 (a) IN GENERAL.— 

17 (1) PROVISION OF SERVICES AND ACTIVITIES.— 

18 Section 4001 of the Supplemental Appropriations 

19 Act, 2008, (Public Law 110–252; 26 U.S.C. 3304 

20 note), is amended by inserting the following new 

21 subsection (h): 

22 ‘‘(h) IN GENERAL.— 

23 ‘‘(1) REQUIRED PROVISION OF SERVICES AND

24 ACTIVITIES.—An agreement under this section shall 

25 require that the State provide reemployment services 


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1 and reemployment and eligibility assessment activi2 ties to each individual receiving emergency unem3 ployment compensation who, on or after the date 

4 that is 30 days after the date of enactment of the 

5 Supporting Unemployed Workers Act of 2011, es6 tablishes an account under section 4002(b), com7 mences receiving the amounts described in section 

8 4002(c), commences receiving the amounts described 

9 in section 4002(d), or commences receiving the 

10 amounts described in subsection 4002(e), whichever 

11 occurs first. Such services and activities shall be pro12 vided by the staff of the State agency responsible for 

13 administration of the State unemployment com14 pensation law or the Wagner-Peyser Act from funds 

15 available pursuant to section 4004(c)(2) and may 

16 also be provided from funds available under the 

17 Wagner-Peyser Act. 

18 ‘‘(2) DESCRIPTION OF SERVICES AND ACTIVI19 TIES.—The reemployment services and in-person re20 employment and eligibility assessment activities pro21 vided to individuals receiving emergency unemploy22 ment compensation described in paragraph (1)— 

23 ‘‘(A) shall include— 

24 ‘‘(i) the provision of labor market and 

25 career information; 


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1 ‘‘(ii) an assessment of the skills of the 

2 individual; 

3 ‘‘(iii) orientation to the services avail4 able through the One-Stop centers estab5 lished under title I of the Workforce In6 vestment Act of 1998; 

7 ‘‘(iv) job search counseling and the 

8 development or review of an individual re9 employment plan that includes participa10 tion in job search activities and appro11 priate workshops and may include referrals 

12 to appropriate training services; and 

13 ‘‘(v) review of the eligibility of the in14 dividual for emergency unemployment com15 pensation relating to the job search activi16 ties of the individual; and 

17 ‘‘(B) may include the provision of— 

18 ‘‘(i) comprehensive and specialized as19 sessments; 

20 ‘‘(ii) individual and group career 

21 counseling; and 

22 ‘‘(iii) additional reemployment serv23 ices. 

24 ‘‘(3) PARTICIPATION REQUIREMENT.—As a con25 dition of continuing eligibility for emergency unemVerDate Mar 15 2010 05:01 Sep 15, 2011 Jkt 099200 PO 00000 Frm 00245 Fmt 6652 Sfmt 6201 E:\BILLS\S1549.PCS S1549

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1 ployment compensation for any week, an individual 

2 who has been referred to reemployment services or 

3 reemployment and eligibility assessment activities 

4 under this subsection shall participate, or shall have 

5 completed participation in, such services or activi6 ties, unless the State agency responsible for the ad7 ministration of State unemployment compensation 

8 law determines that there is justifiable cause for fail9 ure to participate or complete such services or activi10 ties, as defined in guidance to be issued by the Sec11 retary of Labor.’’. 

12 (2) ISSUANCE OF GUIDANCE.—Not later than 

13 30 days after the date of enactment of this Act, the 

14 Secretary shall issue guidance on the implementation 

15 of the reemployment services and reemployment and 

16 eligibility assessments activities required to be pro17 vided under the amendments made by paragraph 

18 (1). 

19 (b) FUNDING.— 

20 (1) IN GENERAL.—Section 4004(c) of the Sup21 plemental Appropriations Act, 2008 (Public Law 

22 110–252; 26 U.S.C. 3304 note), is amended— 

23 (A) by striking ‘‘There’’ and inserting ‘‘(1) 

24 ADMINISTRATION.—There’’; and 


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1 (B) by inserting the following new para2 graph: 

3 ‘‘(2) REEMPLOYMENT SERVICES AND REEM4 PLOYMENT AND ELIGIBILITY ASSESSMENT ACTIVI5 TIES.— 

6 ‘‘(A) APPROPRIATION.—There are appro7 priated from the general fund of the Treasury, 

8 without fiscal year limitation, out of the em9 ployment security administration account as es10 tablished by section 901(a) of the Social Secu11 rity Act, such sums as determined by the Sec12 retary of Labor in accordance with subpara13 graph (B) to assist States in providing reem14 ployment services and reemployment and eligi15 bility assessment activities described in section 

16 4001(h)(2). 

17 ‘‘(B) DETERMINATION OF TOTAL

18 AMOUNT.—The amount referred to in subpara19 graph (A) is the amount the Secretary esti20 mates is equal to— 

21 ‘‘(i) the number of individuals who 

22 will receive reemployment services and re23 employment eligibility and assessment ac24 tivities described in section 4001(h)(2) in 


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1 all States through the date specified in sec2 tion 4007(b)(3), multiplied by 

3 ‘‘(ii) $200. 

4 ‘‘(C) DISTRIBUTION AMONG STATES.—Of 

5 the amounts appropriated under subparagraph 

6 (A), the Secretary of Labor shall distribute 

7 amounts to each State, in accordance with sec8 tion 4003(c), that the Secretary estimates is 

9 equal to— 

10 ‘‘(i) the number of individuals who 

11 will receive reemployment services and re12 employment and eligibility assessment ac13 tivities described in section 4001(h)(2) in 

14 such State through the date specified in 

15 section 4007(b)(3), multiplied by 

16 ‘‘(ii) $200.’’. 

17 (2) TRANSFER OF FUNDS.—Section 4004(e) of 

18 the Supplemental Appropriations Act, 2008 (Public 

19 Law 110–252; 26 U.S.C. 3304 note), is amended— 

20 (A) in paragraph (2), by striking the pe21 riod and inserting ‘‘; and’’; and 

22 (B) by inserting the following paragraph 

23 (3): 

24 ‘‘(3) to the Employment Ssecurity Administra25 tion account (as established by section 901(a) of the 


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1 Social Security Act) such sums as the Secretary of 

2 Labor determines to be necessary in accordance with 

3 subsection (c)(2) to assist States in providing reem4 ployment services and reemployment eligibility and 

5 assessment activities described in section 

6 4001(h)(2).’’. 

7 SEC. 314. FEDERAL-STATE AGREEMENTS TO ADMINISTER A 

8 SELF-EMPLOYMENT ASSISTANCE PROGRAM. 

9 Section 4001 of the Supplemental Appropriations 

10 Act, 2008 (Public Law 110–252; 26 U.S.C. 3304 note), 

11 as amended by section 313, is further amended by insert12 ing a new subsection (i) as follows: 

13 ‘‘(i) AUTHORITY TO CONDUCT SELF-EMPLOYMENT

14 ASSISTANCE PROGRAM.— 

15 ‘‘(1) IN GENERAL.— 

16 ‘‘(A) ESTABLISHMENT.—Any agreement 

17 under subsection (a) may provide that the State 

18 agency of the State shall establish a self-em19 ployment assistance program described in para20 graph (2), to provide for the payment of emer21 gency unemployment compensation as self-em22 ployment assistance allowances to individuals 

23 who meet the eligibility criteria specified in sub24 section (b). 


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1 ‘‘(B) PAYMENT OF ALLOWANCES.—The 

2 self-employment assistance allowance described 

3 in subparagraph (A) shall be paid for up to 26 

4 weeks to an eligible individual from such indi5 vidual’s emergency unemployment compensation 

6 account described in section 4002, and the 

7 amount in such account shall be reduced ac8 cordingly. 

9 ‘‘(2) DEFINITION OF ‘SELF-EMPLOYMENT AS10 SISTANCE PROGRAM’.—For the purposes of this title, 

11 the term ‘self-employment assistance program’ 

12 means a program as defined under section 3306(t) 

13 of the Internal Revenue Code of 1986 (26 U.S.C. 

14 3306(t)), except as follows: 

15 ‘‘(A) all references to ‘regular unemploy16 ment compensation under the State law’ shall 

17 be deemed to refer instead to ‘emergency unem18 ployment compensation under title IV of the 

19 Supplemental Appropriations Act, 2008 (Public 

20 Law 110–252; 26 U.S.C. 3304 note)’; 

21 ‘‘(B) paragraph (3)(B) shall not apply; 

22 ‘‘(C) clause (i) of paragraph (3)(C) shall 

23 be deemed to state as follows: 

24 ‘‘ ‘(i) include any entrepreneurial 

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1 ordination with programs of training of2 fered by the Small Business Administra3 tion, which may include business coun4 seling, mentorship for participants, access 

5 to small business development resources, 

6 and technical assistance; and’; 

7 ‘‘(D) the reference to ‘5 percent’ in para8 graph (4) shall be deemed to refer instead to ‘1 

9 percent’; and 

10 ‘‘(E) paragraph (5) shall not apply. 

11 ‘‘(3) AVAILABILITY OF SELF-EMPLOYMENT AS12 SISTANCE ALLOWANCES.—In the case of an indi13 vidual who has received any emergency unemploy14 ment compensation payment under this title, such 

15 individual shall not receive self-employment assist16 ance allowances under this subsection unless the 

17 State agency has a reasonable expectation that such 

18 individual will be entitled to at least 26 times the in19 dividual’s average weekly benefit amount of emer20 gency unemployment compensation. 

21 ‘‘(4) PARTICIPANT OPTION TO TERMINATE PAR22 TICIPATION IN SELF-EMPLOYMENT ASSISTANCE PRO23 GRAM.— 

24 ‘‘(A) TERMINATION.—An individual who is 

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1 sistance program may opt to discontinue par2 ticipation in such program. 

3 ‘‘(B) CONTINUED ELIGIBILITY FOR EMER4 GENCY UNEMPLOYMENT COMPENSATION.—An 

5 individual whose participation in the self-em6 ployment assistance program is terminated as 

7 described in paragraph (1) or who has com8 pleted participation in such program, and who 

9 continues to meet the eligibility requirements 

10 for emergency unemployment compensation 

11 under this title, shall receive emergency unem12 ployment compensation payments with respect 

13 to subsequent weeks of unemployment, to the 

14 extent that amounts remain in the account es15 tablished for such individual under section 

16 4002(b) or to the extent that such individual 

17 commences receiving the amounts described in 

18 subsections (c), (d), or (e) of such section, re19 spectively.’’. 

20 SEC. 315. CONFORMING AMENDMENT ON PAYMENT OF 

21 BRIDGE TO WORK WAGES. 

22 Section 4001 of the Supplemental Appropriations 

23 Act, 2008 (Public Law 110–252; 26 U.S.C. 3304 note), 

24 as amended by section 103, is further amended by insert25 ing a new subsection (j) as follows: 


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1 ‘‘(j) AUTHORIZATION TO PAY WAGES FOR PURPOSES

2 OF A BRIDGE TO WORK PROGRAM.—Any State that estab3 lishes a Bridge to Work program under section 204 of the 

4 Supporting Unemployed Workers Act of 2011 is author5 ized to deduct from an emergency unemployment com6 pensation account established for such individual under 

7 section 4002 such sums as may be necessary to pay wages 

8 for such individual as authorized under section 204(b)(1) 

9 of such Act.’’. 

10 SEC. 316. ADDITIONAL EXTENDED UNEMPLOYMENT BENE11 FITS UNDER THE RAILROAD UNEMPLOY12 MENT INSURANCE ACT. 

13 (a) EXTENSION.—Section 2(c)(2)(D)(iii) of the Rail14 road Unemployment Insurance Act, as added by section 

15 2006 of the American Recovery and Reinvestment Act of 

16 2009 (Public Law 111–5) and as amended by section 9 

17 of the Worker, Homeownership, and Business Assistance 

18 Act of 2009 (Public Law 111–92), is amended— 

19 (1) by striking ‘‘June 30, 2011’’ and inserting 

20 ‘‘June 30, 2012’’; and 

21 (2) by striking ‘‘December 31, 2011’’ and in22 serting ‘‘December 31, 2012’’. 

23 (b) CLARIFICATION ON AUTHORITY TO USE

24 FUNDS.—Funds appropriated under either the first or 

25 second sentence of clause (iv) of section 2(c)(2)(D) of the 


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1 Railroad Unemployment Insurance Act shall be available 

2 to cover the cost of additional extended unemployment 

3 benefits provided under such section 2(c)(2)(D) by reason 

4 of the amendments made by subsection (a) as well as to 

5 cover the cost of such benefits provided under such section 

6 2(c)(2)(D), as in effect on the day before the date of the 

7 enactment of this Act. 

8 PART II—REEMPLOYMENT NOW PROGRAM 

9 SEC. 321. ESTABLISHMENT OF REEMPLOYMENT NOW PRO10 GRAM. 

11 (a) IN GENERAL.—There is hereby established the 

12 Reemployment NOW program to be carried out by the 

13 Secretary of Labor in accordance with this part in order 

14 to facilitate the reemployment of individuals who are re15 ceiving emergency unemployment compensation under title 

16 IV of the Supplemental Appropriations Act, 2008 (Public 

17 Law 110–252; 26 U.S.C. 3304 note) (hereafter in this 

18 part referred to as ‘‘EUC claimants’’). 

19 (b) AUTHORIZATION AND APPROPRIATION.—There 

20 are authorized to be appropriated and appropriated from 

21 the general fund of the Treasury for fiscal year 2012 

22 $4,000,000,000 to carry out the Reemployment NOW pro23 gram under this part. 


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1 SEC. 322. DISTRIBUTION OF FUNDS. 

2 (a) IN GENERAL.—Of the funds appropriated under 

3 section 321(b) to carry out this part, the Secretary of 

4 Labor shall— 

5 (1) reserve up to 1 percent for the costs of Fed6 eral administration and for carrying out rigorous 

7 evaluations of the activities conducted under this 

8 part; and 

9 (2) allot the remainder of the funds not re10 served under paragraph (1) in accordance with the 

11 requirements of subsection (b) and (c) to States that 

12 have approved plans under section 323. 

13 (b) ALLOTMENT FORMULA.— 

14 (1) FORMULA FACTORS.—The Secretary of 

15 Labor shall allot the funds available under sub16 section (a)(2) as follows: 

17 (A) two-thirds of such funds shall be allot18 ted on the basis of the relative number of un19 employed individuals in each State, compared to 

20 the total number of unemployed individuals in 

21 all States; and 

22 (B) one-third of such funds shall be allot23 ted on the basis of the relative number of indi24 viduals in each State who have been unem25 ployed for 27 weeks or more, compared to the 


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1 total number of individuals in all States who 

2 have been unemployed for 27 weeks or more. 

3 (2) CALCULATION.—For purposes of paragraph 

4 (1), the number of unemployed individuals and the 

5 number of individuals unemployed for 27 weeks or 

6 more shall be based on the data for the most recent 

7 12-month period, as determined by the Secretary. 

8 (c) REALLOTMENT.— 

9 (1) FAILURE TO SUBMIT STATE PLAN.—If a 

10 State does not submit a State plan by the time spec11 ified in section 323(b), or a State does not receive 

12 approval of a State plan, the amount the State 

13 would have been eligible to receive pursuant to the 

14 formula under subsection (b) shall be allotted to 

15 States that receive approval of the State plan under 

16 section 323 in accordance with the relative allot17 ments of such States as determined by the Secretary 

18 under subsection (b). 

19 (2) FAILURE TO IMPLEMENT ACTIVITIES ON A

20 TIMELY BASIS.—The Secretary of Labor may, in ac21 cordance with procedures and criteria established by 

22 the Secretary, recapture the portion of the State al23 lotment under this part that remains unobligated if 

24 the Secretary determines such funds are not being 

25 obligated at a rate sufficient to meet the purposes 


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1 of this part. The Secretary shall reallot such recap2 tured funds to other States that are not subject to 

3 recapture in accordance with the relative share of 

4 the allotments of such States as determined by the 

5 Secretary under subsection (b). 

6 (3) RECAPTURE OF FUNDS.—Funds recaptured 

7 under paragraph (2) shall be available for reobliga8 tion not later than December 31, 2012. 

9 SEC. 323. STATE PLAN. 

10 (a) IN GENERAL.—For a State to be eligible to re11 ceive an allotment under section 322, a State shall submit 

12 to the Secretary of Labor a State plan in such form and 

13 containing such information as the Secretary may require, 

14 which at a minimum shall include— 

15 (1) a description of the activities to be carried 

16 out by the State to assist in the reemployment of eli17 gible individuals to be served in accordance with this 

18 part, including which of the activities authorized in 

19 sections 324–328 the State intends to carry out and 

20 an estimate of the amounts the State intends to allo21 cate to the activities, respectively; 

22 (2) a description of the performance outcomes 

23 to be achieved by the State through the activities 

24 carried out under this part, including the employ25 ment outcomes to be achieved by participants and 


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1 the processes the State will use to track perform2 ance, consistent with guidance provided by the Sec3 retary of Labor regarding such outcomes and proc4 esses; 

5 (3) a description of coordination of activities to 

6 be carried out under this part with activities under 

7 title I of the Workforce Investment Act of 1998, the 

8 Wagner-Peyser Act, and other appropriate Federal 

9 programs; 

10 (4) the timelines for implementation of the ac11 tivities described in the plan and the number of 

12 EUC claimants expected to be enrolled in such ac13 tivities by quarter; 

14 (5) assurances that the State will participate in 

15 the evaluation activities carried out by the Secretary 

16 of Labor under this section; 

17 (6) assurances that the State will provide ap18 propriate reemployment services, including coun19 seling, to any EUC claimant who participates in any 

20 of the programs authorized under this part; and 

21 (7) assurances that the State will report such 

22 information as the Secretary may require relating to 

23 fiscal, performance and other matters, including em24 ployment outcomes and effects, which the Secretary 


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1 determines are necessary to effectively monitor the 

2 activities carried out under this part. 

3 (b) PLAN SUBMISSION AND APPROVAL.—A State 

4 plan under this section shall be submitted to the Secretary 

5 of Labor for approval not later than 30 days after the 

6 Secretary issues guidance relating to submission of such 

7 plan. The Secretary shall approve such plans if the Sec8 retary determines that the plans meet the requirements 

9 of this part and are appropriate and adequate to carry 

10 out the purposes of this part. 

11 (c) PLAN MODIFICATIONS.—A State may submit 

12 modifications to a State plan that has been approved 

13 under this part, and the Secretary of Labor may approve 

14 such modifications, if the plan as modified would meet the 

15 requirements of this part and are appropriate and ade16 quate to carry out the purposes of this part. 

17 SEC. 324. BRIDGE TO WORK PROGRAM. 

18 (a) IN GENERAL.—A State may use funds allotted 

19 to the State under this part to establish and administer 

20 a Bridge to Work program described in this section. 

21 (b) DESCRIPTION OF PROGRAM.—In order to in22 crease individuals’ opportunities to move to permanent 

23 employment, a State may establish a Bridge to Work pro24 gram to provide an EUC claimant with short-term work 


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1 experience placements with an eligible employer, during 

2 which time such individual— 

3 (1) shall be paid emergency unemployment 

4 compensation payable under title IV of the Supple5 mental Appropriations Act, 2008 (Public Law 110– 

6 252; 26 U.S.C. 3304 note), as wages for work per7 formed, and as specified in subsection (c); 

8 (2) shall be paid the additional amount de9 scribed in subsection (e) as augmented wages for 

10 work performed; and 

11 (3) may be paid compensation in addition to 

12 the amounts described in paragraphs (1) and (2) by 

13 a State or by a participating employer as wages for 

14 work performed. 

15 (c) PROGRAM ELIGIBILITY AND OTHER REQUIRE16 MENTS.—For purposes of this program— 

17 (1) individuals who, except for the requirements 

18 described in paragraph (3), are eligible to receive 

19 emergency unemployment compensation payments 

20 under title IV of the Supplemental Appropriations 

21 Act, 2008 (Public Law 110–252; 26 U.S.C. 3304 

22 note), and who choose to participate in the program 

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1 untary participation in the program described under 

2 subsection (b); 

3 (2) the wages payable to individuals described 

4 in paragraph (1) shall be paid from the emergency 

5 unemployment compensation account for such indi6 vidual as described in section 4002 of the Supple7 mental Appropriations Act, 2008 (Public Law 110– 

8 252; 26 U.S.C. 3304 note), and the amount in such 

9 individual’s account shall be reduced accordingly; 

10 (3) the wages payable to an individual described 

11 in paragraph (1) shall be payable in the same 

12 amount, at the same interval, on the same terms, 

13 and subject to the same conditions under title IV of 

14 the Supplemental Appropriations Act, 2008 (Public 

15 Law 110–252; 26 U.S.C. 3304 note), except that— 

16 (A) State requirements applied under such 

17 Act relating to availability for work and active 

18 search for work are not applicable to such indi19 viduals who participate for at least 25 hours 

20 per week in the program described in subsection 

21 (b) for the duration of such individual’s partici22 pation in the program; 

23 (B) State requirements applied under such 

24 act relating to disqualifying income regarding 

25 wages earned shall not apply to such individuals 


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1 who participate for at least 25 hours per week 

2 in the program described in subsection (b), and 

3 shall not apply with respect to— 

4 (i) the wages described under sub5 section (b); and 

6 (ii) any wages, in addition to those de7 scribed under subsection (b), whether paid 

8 by a State or a participating employer for 

9 the same work activities; 

10 (C) State prohibitions or limitations ap11 plied under such Act relating to employment 

12 status shall not apply to such individuals who 

13 participate in the program described in sub14 section (b); and 

15 (D) State requirements applied under such 

16 Act relating to an individual’s acceptance of an 

17 offer of employment shall not apply with regard 

18 to an offer of long-term employment from a 

19 participating employer made to such individual 

20 who is participating in the program described in 

21 subsection (b) in a work experience provided by 

22 such employer, where such long-term employ23 ment is expected to commence or commences at 

24 the conclusion of the duration specified in para25 graph (4)(A); 


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1 (4) the program shall be structured so that in2 dividuals described in paragraph (1) may participate 

3 in the program for up to— 

4 (A) 8 weeks, and 

5 (B) 38 hours for each such week; 

6 (5) a State shall ensure that all individuals par7 ticipating in the program are covered by a workers’ 

8 compensation insurance program; and 

9 (6) the program meets such other requirements 

10 as the Secretary of Labor determines to be appro11 priate in guidance issued by the Secretary. 

12 (d) STATE REQUIREMENTS.— 

13 (1) CERTIFICATION OF ELIGIBLE EMPLOYER.— 

14 A State may certify as eligible for participation in 

15 the program under this section any employer that 

16 meets the eligibility criteria as established in guid17 ance by the Secretary of Labor, except that an em18 ployer shall not be certified as eligible for participa19 tion in the program described under subsection 

20 (b)— 

21 (A) if such employer— 

22 (i) is a Federal, State, or local govern23 ment entity; 

24 (ii) would engage an eligible individual 

25 in work activities under any employer’s 


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1 grant, contract, or subcontract with a Fed2 eral, State, or local government entity, ex3 cept with regard to work activities under 

4 any employer’s supply contract or sub5 contract; 

6 (iii) is delinquent with respect to any 

7 taxes or employer contributions described 

8 under sections 3301 and 3303(a)(1) of the 

9 Internal Revenue Code of 1986 or with re10 spect to any related reporting require11 ments; 

12 (iv) is engaged in the business of sup13 plying workers to other employers and 

14 would participate in the program for the 

15 purpose of supplying individuals partici16 pating in the program to other employers; 

17 or 

18 (v) has previously participated in the 

19 program and the State has determined 

20 that such employer has failed to abide by 

21 any of the requirements specified in sub22 sections (h), (i), or (j), or by any other re23 quirements that the Secretary may estab24 lish for employers under subsection (c)(6); 

25 and 


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1 (B) unless such employer provides assur2 ances that it has not displaced existing workers 

3 pursuant to the requirements of subsection (h). 

4 (2) AUTHORIZED ACTIVITIES.—Funds allotted 

5 to a State under this part for the program— 

6 (A) shall be used to— 

7 (i) recruit employers for participation 

8 in the program; 

9 (ii) review and certify employers iden10 tified by eligible individuals seeking to par11 ticipate in the program; 

12 (iii) ensure that reemployment and 

13 counseling services are available for pro14 gram participants, including services de15 scribing the program under subsection (b), 

16 prior to an individual’s participation in 

17 such program; 

18 (iv) establish and implement processes 

19 to monitor the progress and performance 

20 of individual participants for the duration 

21 of the program; 

22 (v) prevent misuse of the program; 

23 and 


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1 (vi) pay augmented wages to eligible 

2 individuals, if necessary, as described in 

3 subsection (e); and 

4 (B) may be used— 

5 (i) to pay workers’ compensation in6 surance premiums to cover all individuals 

7 participating in the program, except that, 

8 if a State opts not to make such payments 

9 directly to a State administered workers’ 

10 compensation program, the State involved 

11 shall describe in the approved State plan 

12 the means by which such State shall en13 sure workers’ compensation or equivalent 

14 coverage for all individuals who participate 

15 in the program; 

16 (ii) to pay compensation to a partici17 pating individual that is in addition to the 

18 amounts described in subsections (c)(1) 

19 and (e) as wages for work performed; 

20 (iii) to provide supportive services, 

21 such as transportation, child care, and de22 pendent care, that would enable individuals 

23 to participate in the program; 

24 (iv) for the administration and over25 sight of the program; and 


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1 (v) to fulfill additional program re2 quirements included in the approved State 

3 plan. 

4 (e) PAYMENT OF AUGMENTED WAGES IF NEC5 ESSARY.—In the event that the wages described in sub6 section (c)(1) are not sufficient to equal or exceed the min7 imum wages that are required to be paid by an employer 

8 under section 6(a)(1) of the Fair Labor Standards Act 

9 of 1938 (29 U.S.C. 206(a)(1)) or the applicable State or 

10 local minimum wage law, whichever is higher, a State shall 

11 pay augmented wages to a program participant in any 

12 amount necessary to cover the difference between— 

13 (1) such minimum wages amount; and 

14 (2) the wages payable under subsection (c)(1). 

15 (f) EFFECT OF WAGES ON ELIGIBILITY FOR OTHER

16 PROGRAMS.—None of the wages paid under this section 

17 shall be considered as income for the purposes of deter18 mining eligibility for and the amount of income transfer 

19 and in-kind aid furnished under any Federal or federally 

20 assisted program based on need. 

21 (g) EFFECT OF WAGES, WORK ACTIVITIES, AND

22 PROGRAM PARTICIPATION ON CONTINUING ELIGIBILITY

23 FOR EMERGENCY UNEMPLOYMENT COMPENSATION.— 

24 Any wages paid under this section and any additional 

25 wages paid by an employer to an individual described in 


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1 subsection (c)(1), and any work activities performed by 

2 such individual as a participant in the program, shall not 

3 be construed so as to render such individual ineligible to 

4 receive emergency unemployment compensation under title 

5 IV of the Supplemental Appropriations Act, 2008 (Public 

6 Law 110–252; 26 U.S.C. 3304 note). 

7 (h) NONDISPLACEMENT OF EMPLOYEES.— 

8 (1) PROHIBITION.—An employer shall not use a 

9 program participant to displace (including a partial 

10 displacement, such as a reduction in the hours of 

11 non-overtime work, wages, or employment benefits) 

12 any current employee (as of the date of the partici13 pation). 

14 (2) OTHER PROHIBITIONS.—An employer shall 

15 not permit a program participant to perform work 

16 activities related to any job for which— 

17 (A) any other individual is on layoff from 

18 the same or any substantially equivalent posi19 tion; 

20 (B) the employer has terminated the em21 ployment of any employee or otherwise reduced 

22 the workforce of the employer with the inten23 tion of filling or partially filling the vacancy so 

24 created with the work activities to be performed 

25 by a program participant; 


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1 (C) there is a strike or lock out at the 

2 worksite that is the participant’s place of em3 ployment; or 

4 (D) the job is created in a manner that 

5 will infringe in any way upon the promotional 

6 opportunities of currently employed individuals 

7 (as of the date of the participation). 

8 (i) PROHIBITION ON IMPAIRMENT OF CONTRACTS.— 

9 An employer shall not, by means of assigning work activi10 ties under this section, impair an existing contract for 

11 services or a collective bargaining agreement, and no such 

12 activity that would be inconsistent with the terms of a col13 lective bargaining agreement shall be undertaken without 

14 the written concurrence of the labor organization that is 

15 signatory to the collective bargaining agreement. 

16 (j) LIMITATION ON EMPLOYER PARTICIPATION.—If, 

17 after 24 weeks of participation in the program, an em18 ployer has not made an offer of suitable long-term employ19 ment to any individual described under subsection (c)(1) 

20 who was placed with such employer and has completed the 

21 program, a State shall bar such employer from further 

22 participation in the program. States may impose addi23 tional conditions on participating employers to ensure that 

24 an appropriate number of participants receive offers of 

25 suitable long term employment. 


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1 (k) FAILURE TO MEET PROGRAM REQUIREMENTS.— 

2 If a State makes a determination based on information 

3 provided to the State, or acquired by the State by means 

4 of its administration and oversight functions, that a par5 ticipating employer under this section has violated a re6 quirement of this section, the State shall bar such em7 ployer from further participation in the program. The 

8 State shall establish a process whereby an individual de9 scribed in subsection (c)(1), or any other affected indi10 vidual or entity, may file a complaint with the State relat11 ing to a violation of any requirement or prohibition under 

12 this section. 

13 (l) PARTICIPANT OPTION TO TERMINATE PARTICIPA14 TION IN BRIDGE TO WORK PROGRAM.— 

15 (1) TERMINATION.—An individual who is par16 ticipating in a program described in subsection (b) 

17 may opt to discontinue participation in such pro18 gram. 

19 (2) CONTINUED ELIGIBILITY FOR EMERGENCY

20 UNEMPLOYMENT COMPENSATION.—An individual 

21 who opts to discontinue participation in such pro22 gram, is terminated from such program by a partici23 pating employer, or who has completed participation 

24 in such program, and who continues to meet the eli25 gibility requirements for emergency unemployment 


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1 compensation under title IV of the Supplemental 

2 Appropriations Act, 2008 (Public Law 110–252; 26 

3 U.S.C. 3304 note), shall receive emergency unem4 ployment compensation payments with respect to 

5 subsequent weeks of unemployment, to the extent 

6 that amounts remain in the account established for 

7 such individual under section 4002(b) of such Act or 

8 to the extent that such individual commences receiv9 ing the amounts described in subsections (c), (d), or 

10 (e) of such section, respectively. 

11 (m) EFFECT OF OTHER LAWS.—Unless otherwise 

12 provided in this section, nothing in this section shall be 

13 construed to alter or affect the rights or obligations under 

14 any Federal, State, or local laws with respect to any indi15 vidual described in subsection (c)(1) and with respect to 

16 any participating employer under this section. 

17 (n) TREATMENT OF PAYMENTS.—All wages or other 

18 payments to an individual under this section shall be treat19 ed as payments of unemployment insurance for purposes 

20 of section 209 of the Social Security Act (42 U.S.C. 409) 

21 and for purposes of subtitle A and sections 3101 and 3111 

22 of the Internal Revenue Code of 1986. 


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1 SEC. 325. WAGE INSURANCE. 

2 (a) IN GENERAL.—A State may use the funds allot3 ted to the State under this part to provide a wage insur4 ance program for EUC claimants. 

5 (b) BENEFITS.—The wage insurance program pro6 vided under this section may use funds allotted to the 

7 State under this part to pay, for a period not to exceed 

8 2 years, to a worker described in subsection (c), up to 50 

9 percent of the difference between— 

10 (1) the wages received by the worker at the 

11 time of separation; and 

12 (2) the wages received by the worker for reem13 ployment. 

14 (c) INDIVIDUAL ELIGIBILITY.—The benefits de15 scribed in subsection (b) may be paid to an individual who 

16 is an EUC claimant at the time such individual obtains 

17 reemployment and who— 

18 (1) is at least 50 years of age; 

19 (2) earns not more than $50,000 per year in 

20 wages from reemployment; 

21 (3) is employed on a full-time basis as defined 

22 by the law of the State; and 

23 (4) is not employed by the employer from which 

24 the individual was last separated. 

25 (d) TOTAL AMOUNT OF PAYMENTS.—A State shall 

26 establish a maximum amount of payments per individual 


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1 for purposes of payments described in subsection (b) dur2 ing the eligibility period described in such subsection. 

3 (e) NON-DISCRIMINATION REGARDING WAGES.—An 

4 employer shall not pay a worker described in subsection 

5 (c) less than such employer pays to a regular worker in 

6 the same or substantially equivalent position. 

7 SEC. 326. ENHANCED REEMPLOYMENT STRATEGIES. 

8 (a) IN GENERAL.—A State may use funds allotted 

9 under this part to provide a program of enhanced reem10 ployment services to EUC claimants. In addition to the 

11 provision of services to such claimants, the program may 

12 include the provision of reemployment services to individ13 uals who are unemployed and have exhausted their rights 

14 to emergency unemployment compensation under title IV 

15 of the Supplemental Appropriations Act, 2008, (Public 

16 Law 110–252; 26 U.S.C. 3304 note). The program shall 

17 provide reemployment services that are more intensive 

18 than the reemployment services provided by the State 

19 prior to the receipt of the allotment under this part. 

20 (b) TYPES OF SERVICES.—The enhanced reemploy21 ment services described in subsection (a) may include serv22 ices such as— 

23 (1) assessments, counseling, and other intensive 

24 services that are provided by staff on a one-to-one 

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1 ment needs of EUC claimants and individuals de2 scribed in subsection (a); 

3 (2) comprehensive assessments designed to 

4 identify alternative career paths; 

5 (3) case management; 

6 (4) reemployment services that are provided 

7 more frequently and more intensively than such re8 employment services have previously been provided 

9 by the State; and 

10 (5) services that are designed to enhance com11 munication skills, interviewing skills, and other skills 

12 that would assist in obtaining reemployment. 

13 SEC. 327. SELF-EMPLOYMENT PROGRAMS. 

14 A State may use funds allotted to the State under 

15 this part, in an amount specified under an approved State 

16 plan, for the administrative costs associated with starting 

17 up the self-employment assistance program described in 

18 section 4001(i) of the Supplemental Appropriations Act, 

19 2008, (Public Law 110–252; 26 U.S.C. 3304 note). 

20 SEC. 328. ADDITIONAL INNOVATIVE PROGRAMS. 

21 (a) IN GENERAL.—A State may use funds allotted 

22 under this part to provide a program for innovative activi23 ties, which use a strategy that is different from the reem24 ployment strategies described in sections 324–327 and 

25 which are designed to facilitate the reemployment of EUC 


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1 claimants. In addition to the provision of activities to such 

2 claimants, the program may include the provision of activi3 ties to individuals who are unemployed and have exhausted 

4 their rights to emergency unemployment compensation 

5 under title IV of the Supplemental Appropriations Act, 

6 2008, (Public Law 110–252; 26 U.S.C. 3304 note). 

7 (b) CONDITIONS.—The innovative activities approved 

8 in accordance with subsection (a)— 

9 (1) shall directly benefit EUC claimants and, if 

10 applicable, individuals described in subsection (a), ei11 ther as a benefit paid to such claimant or individual 

12 or as a service provided to such claimant or indi13 vidual; 

14 (2) shall not result in a reduction in the dura15 tion or amount of, emergency unemployment com16 pensation for which EUC claimants would otherwise 

17 be eligible; 

18 (3) shall not include a reduction in the dura19 tion, amount of or eligibility for regular compensa20 tion or extended benefits; 

21 (4) shall not be used to displace (including a 

22 partial displacement, such as a reduction in the 

23 hours of non-overtime work, wages, or employment 

24 benefits) any currently employed employee (as of the 

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1 pant to perform work activities related to any job for 

2 which— 

3 (A) any other individual is on layoff from 

4 the same or any substantially equivalent job; 

5 (B) the employer has terminated the em6 ployment of any regular employee or otherwise 

7 reduced the workforce of the employer with the 

8 intention of filling or partially filling the va9 cancy so created with the work activities to be 

10 performed by a program participant; 

11 (C) there is a strike or lock out at the 

12 worksite that is the participant’s place of em13 ployment; or 

14 (D) the job is created in a manner that 

15 will infringe in any way upon the promotional 

16 opportunities of currently employed individuals 

17 (as of the date of the participation); 

18 (5) shall not be in violation of any Federal, 

19 State, or local law. 

20 SEC. 329. GUIDANCE AND ADDITIONAL REQUIREMENTS. 

21 The Secretary of Labor may establish through guid22 ance, without regard to the requirements of section 553 

23 of title 5, United States Code, such additional require24 ments, including requirements regarding the allotment, re25 capture, and reallotment of funds, and reporting requireVerDate Mar 15 2010 05:01 Sep 15, 2011 Jkt 099200 PO 00000 Frm 00276 Fmt 6652 Sfmt 6201 E:\BILLS\S1549.PCS S1549

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1 ments, as the Secretary determines to be necessary to en2 sure fiscal integrity, effective monitoring, and appropriate 

3 and prompt implementation of the activities under this 

4 Act. 

5 SEC. 330. REPORT OF INFORMATION AND EVALUATIONS TO 

6 CONGRESS AND THE PUBLIC. 

7 The Secretary of Labor shall provide to the appro8 priate Committees of the Congress and make available to 

9 the public the information reported pursuant to section 

10 329 and the evaluations of activities carried out pursuant 

11 to the funds reserved under section 322(a)(1). 

12 SEC. 331. STATE. 

13 For purposes of this part, the term ‘‘State’’ has the 

14 meaning given that term in section 205 of the Federal15 State Extended Unemployment Compensation Act of 1970 

16 (26 U.S.C. 3304 note). 

17 PART III—SHORT-TIME COMPENSATION 

18 PROGRAM 

19 SEC. 341. TREATMENT OF SHORT-TIME COMPENSATION 

20 PROGRAMS. 

21 (a) DEFINITION.— 

22 (1) IN GENERAL.—Section 3306 of the Internal 

23 Revenue Code of 1986 (26 U.S.C. 3306) is amended 

24 by adding at the end the following new subsection: 


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1 ‘‘(v) SHORT-TIME COMPENSATION PROGRAM.—For 

2 purposes of this chapter, the term ‘short-time compensa3 tion program’ means a program under which— 

4 ‘‘(1) the participation of an employer is vol5 untary; 

6 ‘‘(2) an employer reduces the number of hours 

7 worked by employees in lieu of layoffs; 

8 ‘‘(3) such employees whose workweeks have 

9 been reduced by at least 10 percent, and by not 

10 more than the percentage, if any, that is determined 

11 by the State to be appropriate (but in no case more 

12 than 60 percent), are eligible for unemployment 

13 compensation; 

14 ‘‘(4) the amount of unemployment compensa15 tion payable to any such employee is a pro rata por16 tion of the unemployment compensation which would 

17 otherwise be payable to the employee if such em18 ployee were totally unemployed from the partici19 pating employer; 

20 ‘‘(5) such employees meet the availability for 

21 work and work search test requirements while col22 lecting short-time compensation benefits, by being 

23 available for their workweek as required by their 

24 participation in the short-time compensation pro25 gram; 


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1 ‘‘(6) eligible employees may participate, as ap2 propriate, in training (including employer-sponsored 

3 training or worker training funded under the Work4 force Investment Act of 1998) to enhance job skills 

5 if such program has been approved by the State 

6 agency; 

7 ‘‘(7) the State agency shall require employers to 

8 certify that if the employer provides health benefits 

9 and retirement benefits under a defined benefit plan 

10 (as defined in section 414(j)) or contributions under 

11 a defined contribution plan (as defined in section 

12 414(i)) to any employee whose workweek is reduced 

13 under the program that such benefits will continue 

14 to be provided to employees participating in the 

15 short-time compensation program under the same 

16 terms and conditions as though the workweek of 

17 such employee had not been reduced or to the same 

18 extent as other employees not participating in the 

19 short-time compensation program, subject to other 

20 requirements in this section; 

21 ‘‘(8) the State agency shall require an employer 

22 to submit a written plan describing the manner in 

23 which the requirements of this subsection will be im24 plemented (including a plan for giving advance no25 tice, where feasible, to an employee whose workweek 


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1 is to be reduced) together with an estimate of the 

2 number of layoffs that would have occurred absent 

3 the ability to participate in short-time compensation 

4 and such other information as the Secretary of 

5 Labor determines is appropriate; 

6 ‘‘(9) in the case of employees represented by a 

7 union as the sole and exclusive representative, the 

8 appropriate official of the union has agreed to the 

9 terms of the employer’s written plan and implemen10 tation is consistent with employer obligations under 

11 the applicable Federal laws; and 

12 ‘‘(10) upon request by the State and approval 

13 by the Secretary of Labor, only such other provi14 sions are included in the State law that are deter15 mined to be appropriate for purposes of a short-time 

16 compensation program.’’. 

17 (2) EFFECTIVE DATE.—Subject to paragraph 

18 (3), the amendment made by paragraph (1) shall 

19 take effect on the date of the enactment of this Act. 

20 (3) TRANSITION PERIOD FOR EXISTING PRO21 GRAMS.—In the case of a State that is administering 

22 a short-time compensation program as of the date of 

23 the enactment of this Act and the State law cannot 

24 be administered consistent with the amendment 


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1 made by paragraph (1), such amendment shall take 

2 effect on the earlier of— 

3 (A) the date the State changes its State 

4 law in order to be consistent with such amend5 ment; or 

6 (B) the date that is 2 years and 6 months 

7 after the date of the enactment of this Act. 

8 (b) CONFORMING AMENDMENTS.— 

9 (1) INTERNAL REVENUE CODE OF 1986.— 

10 (A) Subparagraph (E) of section 

11 3304(a)(4) of the Internal Revenue Code of 

12 1986 is amended to read as follows: 

13 ‘‘(E) amounts may be withdrawn for the 

14 payment of short-time compensation under a 

15 short-time compensation program (as defined 

16 under section 3306(v));’’. 

17 (B) Subsection (f) of section 3306 of the 

18 Internal Revenue Code of 1986 is amended— 

19 (i) by striking paragraph (5) (relating 

20 to short-time compensation) and inserting 

21 the following new paragraph: 

22 ‘‘(5) amounts may be withdrawn for the pay23 ment of short-time compensation under a short-time 

24 compensation program (as defined in subsection (v)); 

25 and’’; and 


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1 (ii) by redesignating paragraph (5) 

2 (relating to self-employment assistance 

3 program) as paragraph (6). 

4 (2) SOCIAL SECURITY ACT.—Section 303(a)(5) 

5 of the Social Security Act is amended by striking 

6 ‘‘the payment of short-time compensation under a 

7 plan approved by the Secretary of Labor’’ and in8 serting ‘‘the payment of short-time compensation 

9 under a short-time compensation program (as de10 fined in section 3306(v) of the Internal Revenue 

11 Code of 1986)’’. 

12 (3) UNEMPLOYMENT COMPENSATION AMEND13 MENTS OF 1992.—Subsections (b) through (d) of sec14 tion 401 of the Unemployment Compensation 

15 Amendments of 1992 (26 U.S.C. 3304 note) are re16 pealed. 

17 SEC. 342. TEMPORARY FINANCING OF SHORT-TIME COM18 PENSATION PAYMENTS IN STATES WITH PRO19 GRAMS IN LAW. 

20 (a) PAYMENTS TO STATES.— 

21 (1) IN GENERAL.—Subject to paragraph (3), 

22 there shall be paid to a State an amount equal to 

23 100 percent of the amount of short-time compensa24 tion paid under a short-time compensation program 

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1 enue Code of 1986, as added by section 341(a)) 

2 under the provisions of the State law. 

3 (2) TERMS OF PAYMENTS.—Payments made to 

4 a State under paragraph (1) shall be payable by way 

5 of reimbursement in such amounts as the Secretary 

6 estimates the State will be entitled to receive under 

7 this section for each calendar month, reduced or in8 creased, as the case may be, by any amount by 

9 which the Secretary finds that the Secretary’s esti10 mates for any prior calendar month were greater or 

11 less than the amounts which should have been paid 

12 to the State. Such estimates may be made on the 

13 basis of such statistical, sampling, or other method 

14 as may be agreed upon by the Secretary and the 

15 State agency of the State involved. 

16 (3) LIMITATIONS ON PAYMENTS.— 

17 (A) GENERAL PAYMENT LIMITATIONS.— 

18 No payments shall be made to a State under 

19 this section for short-time compensation paid to 

20 an individual by the State during a benefit year 

21 in excess of 26 times the amount of regular 

22 compensation (including dependents’ allow23 ances) under the State law payable to such in24 dividual for a week of total unemployment. 


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1 (B) EMPLOYER LIMITATIONS.—No pay2 ments shall be made to a State under this sec3 tion for benefits paid to an individual by the 

4 State under a short-time compensation program 

5 if such individual is employed by the partici6 pating employer on a seasonal, temporary, or 

7 intermittent basis. 

8 (b) APPLICABILITY.— 

9 (1) IN GENERAL.—Payments to a State under 

10 subsection (a) shall be available for weeks of unem11 ployment— 

12 (A) beginning on or after the date of the 

13 enactment of this Act; and 

14 (B) ending on or before the date that is 3 

15 years and 6 months after the date of the enact16 ment of this Act. 

17 (2) THREE-YEAR FUNDING LIMITATION FOR

18 COMBINED PAYMENTS UNDER THIS SECTION AND

19 SECTION 343.—States may receive payments under 

20 this section and section 343 with respect to a total 

21 of not more than 156 weeks. 

22 (c) TWO-YEAR TRANSITION PERIOD FOR EXISTING

23 PROGRAMS.—During any period that the transition provi24 sion under section 341(a)(3) is applicable to a State with 

25 respect to a short-time compensation program, such State 


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1 shall be eligible for payments under this section. Subject 

2 to paragraphs (1)(B) and (2) of subsection (b), if at any 

3 point after the date of the enactment of this Act the State 

4 enacts a State law providing for the payment of short5 time compensation under a short-time compensation pro6 gram that meets the definition of such a program under 

7 section 3306(v) of the Internal Revenue Code of 1986, as 

8 added by section 341(a), the State shall be eligible for pay9 ments under this section after the effective date of such 

10 enactment. 

11 (d) FUNDING AND CERTIFICATIONS.— 

12 (1) FUNDING.—There are appropriated, out of 

13 moneys in the Treasury not otherwise appropriated, 

14 such sums as may be necessary for purposes of car15 rying out this section. 

16 (2) CERTIFICATIONS.—The Secretary shall 

17 from time to time certify to the Secretary of the 

18 Treasury for payment to each State the sums pay19 able to such State under this section. 

20 (e) DEFINITIONS.—In this section: 

21 (1) SECRETARY.—The term ‘‘Secretary’’ means 

22 the Secretary of Labor. 

23 (2) STATE; STATE AGENCY; STATE LAW.—The 

24 terms ‘‘State’’, ‘‘State agency’’, and ‘‘State law’’ 

25 have the meanings given those terms in section 205 


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1 of the Federal-State Extended Unemployment Com2 pensation Act of 1970 (26 U.S.C. 3304 note). 

3 SEC. 343. TEMPORARY FINANCING OF SHORT-TIME COM4 PENSATION AGREEMENTS. 

5 (a) FEDERAL-STATE AGREEMENTS.— 

6 (1) IN GENERAL.—Any State which desires to 

7 do so may enter into, and participate in, an agree8 ment under this section with the Secretary provided 

9 that such State’s law does not provide for the pay10 ment of short-time compensation under a short-time 

11 compensation program (as defined in section 

12 3306(v) of the Internal Revenue Code of 1986, as 

13 added by section 341(a)). 

14 (2) ABILITY TO TERMINATE.—Any State which 

15 is a party to an agreement under this section may, 

16 upon providing 30 days’ written notice to the Sec17 retary, terminate such agreement. 

18 (b) PROVISIONS OF FEDERAL-STATE AGREEMENT.— 

19 (1) IN GENERAL.—Any agreement under this 

20 section shall provide that the State agency of the 

21 State will make payments of short-time compensa22 tion under a plan approved by the State. Such plan 

23 shall provide that payments are made in accordance 

24 with the requirements under section 3306(v) of the 


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1 Internal Revenue Code of 1986, as added by section 

2 341(a). 

3 (2) LIMITATIONS ON PLANS.— 

4 (A) GENERAL PAYMENT LIMITATIONS.—A 

5 short-time compensation plan approved by a 

6 State shall not permit the payment of short7 time compensation to an individual by the State 

8 during a benefit year in excess of 26 times the 

9 amount of regular compensation (including de10 pendents’ allowances) under the State law pay11 able to such individual for a week of total un12 employment. 

13 (B) EMPLOYER LIMITATIONS.—A short14 time compensation plan approved by a State 

15 shall not provide payments to an individual if 

16 such individual is employed by the participating 

17 employer on a seasonal, temporary, or intermit18 tent basis. 

19 (3) EMPLOYER PAYMENT OF COSTS.—Any 

20 short-time compensation plan entered into by an em21 ployer must provide that the employer will pay the 

22 State an amount equal to one-half of the amount of 

23 short-time compensation paid under such plan. Such 

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1 culating an employer’s contribution rate under sec2 tion 3303(a)(1) of the Internal Revenue Code of 

3 1986. 

4 (c) PAYMENTS TO STATES.— 

5 (1) IN GENERAL.—There shall be paid to each 

6 State with an agreement under this section an 

7 amount equal to— 

8 (A) one-half of the amount of short-time 

9 compensation paid to individuals by the State 

10 pursuant to such agreement; and 

11 (B) any additional administrative expenses 

12 incurred by the State by reason of such agree13 ment (as determined by the Secretary). 

14 (2) TERMS OF PAYMENTS.—Payments made to 

15 a State under paragraph (1) shall be payable by way 

16 of reimbursement in such amounts as the Secretary 

17 estimates the State will be entitled to receive under 

18 this section for each calendar month, reduced or in19 creased, as the case may be, by any amount by 

20 which the Secretary finds that the Secretary’s esti21 mates for any prior calendar month were greater or 

22 less than the amounts which should have been paid 

23 to the State. Such estimates may be made on the 

24 basis of such statistical, sampling, or other method 


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1 as may be agreed upon by the Secretary and the 

2 State agency of the State involved. 

3 (3) FUNDING.—There are appropriated, out of 

4 moneys in the Treasury not otherwise appropriated, 

5 such sums as may be necessary for purposes of car6 rying out this section. 

7 (4) CERTIFICATIONS.—The Secretary shall 

8 from time to time certify to the Secretary of the 

9 Treasury for payment to each State the sums pay10 able to such State under this section. 

11 (d) APPLICABILITY.— 

12 (1) IN GENERAL.—An agreement entered into 

13 under this section shall apply to weeks of unemploy14 ment— 

15 (A) beginning on or after the date on 

16 which such agreement is entered into; and 

17 (B) ending on or before the date that is 2 

18 years and 13 weeks after the date of the enact19 ment of this Act. 

20 (2) TWO-YEAR FUNDING LIMITATION.—States 

21 may receive payments under this section with re22 spect to a total of not more than 104 weeks. 

23 (e) SPECIAL RULE.—If a State has entered into an 

24 agreement under this section and subsequently enacts a 

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1 pensation under a short-time compensation program that 

2 meets the definition of such a program under section 

3 3306(v) of the Internal Revenue Code of 1986, as added 

4 by section 341(a), the State— 

5 (1) shall not be eligible for payments under this 

6 section for weeks of unemployment beginning after 

7 the effective date of such State law; and 

8 (2) subject to paragraphs (1)(B) and (2) of sec9 tion 342(b), shall be eligible to receive payments 

10 under section 342 after the effective date of such 

11 State law. 

12 (f) DEFINITIONS.—In this section: 

13 (1) SECRETARY.—The term ‘‘Secretary’’ means 

14 the Secretary of Labor. 

15 (2) STATE; STATE AGENCY; STATE LAW.—The 

16 terms ‘‘State’’, ‘‘State agency’’, and ‘‘State law’’ 

17 have the meanings given those terms in section 205 

18 of the Federal-State Extended Unemployment Com19 pensation Act of 1970 (26 U.S.C. 3304 note). 

20 SEC. 344. GRANTS FOR SHORT-TIME COMPENSATION PRO21 GRAMS. 

22 (a) GRANTS.— 

23 (1) FOR IMPLEMENTATION OR IMPROVED AD24 MINISTRATION.—The Secretary shall award grants 

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1 grams (as defined in subsection (i)(2)) for the pur2 pose of implementation or improved administration 

3 of such programs. 

4 (2) FOR PROMOTION AND ENROLLMENT.—The 

5 Secretary shall award grants to States that are eligi6 ble and submit plans for a grant under paragraph 

7 (1) for such States to promote and enroll employers 

8 in short-time compensation programs (as so de9 fined). 

10 (3) ELIGIBILITY.— 

11 (A) IN GENERAL.—The Secretary shall de12 termine eligibility criteria for the grants under 

13 paragraphs (1) and (2). 

14 (B) CLARIFICATION.—A State admin15 istering a short-time compensation program, in16 cluding a program being administered by a 

17 State that is participating in the transition 

18 under the provisions of sections 341(a)(3) and 

19 342(c), that does not meet the definition of a 

20 short-time compensation program under section 

21 3306(v) of the Internal Revenue Code of 1986 

22 (as added by 341(a)), and a State with an 

23 agreement under section 343, shall not be eligi24 ble to receive a grant under this section until 

25 such time as the State law of the State provides 


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1 for payments under a short-time compensation 

2 program that meets such definition and such 

3 law. 

4 (b) AMOUNT OF GRANTS.— 

5 (1) IN GENERAL.—The maximum amount avail6 able for making grants to a State under paragraphs 

7 (1) and (2) shall be equal to the amount obtained 

8 by multiplying $700,000,000 (less the amount used 

9 by the Secretary under subsection (e)) by the same 

10 ratio as would apply under subsection (a)(2)(B) of 

11 section 903 of the Social Security Act (42 U.S.C. 

12 1103) for purposes of determining such State’s 

13 share of any excess amount (as described in sub14 section (a)(1) of such section) that would have been 

15 subject to transfer to State accounts, as of October 

16 1, 2010, under the provisions of subsection (a) of 

17 such section. 

18 (2) AMOUNT AVAILABLE FOR DIFFERENT

19 GRANTS.—Of the maximum incentive payment deter20 mined under paragraph (1) with respect to a 

21 State— 

22 (A) one-third shall be available for a grant 

23 under subsection (a)(1); and 

24 (B) two-thirds shall be available for a 

25 grant under subsection (a)(2). 


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1 (c) GRANT APPLICATION AND DISBURSAL.— 

2 (1) APPLICATION.—Any State seeking a grant 

3 under paragraph (1) or (2) of subsection (a) shall 

4 submit an application to the Secretary at such time, 

5 in such manner, and complete with such information 

6 as the Secretary may require. In no case may the 

7 Secretary award a grant under this section with re8 spect to an application that is submitted after De9 cember 31, 2014. 

10 (2) NOTICE.—The Secretary shall, within 30 

11 days after receiving a complete application, notify 

12 the State agency of the State of the Secretary’s find13 ings with respect to the requirements for a grant 

14 under paragraph (1) or (2) (or both) of subsection 

15 (a). 

16 (3) CERTIFICATION.—If the Secretary finds 

17 that the State law provisions meet the requirements 

18 for a grant under subsection (a), the Secretary shall 

19 thereupon make a certification to that effect to the 

20 Secretary of the Treasury, together with a certifi21 cation as to the amount of the grant payment to be 

22 transferred to the State account in the Unemploy23 ment Trust Fund (as established in section 904(a) 

24 of the Social Security Act (42 U.S.C. 1104(a))) pur25 suant to that finding. The Secretary of the Treasury 


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1 shall make the appropriate transfer to the State ac2 count within 7 days after receiving such certifi3 cation. 

4 (4) REQUIREMENT.—No certification of compli5 ance with the requirements for a grant under para6 graph (1) or (2) of subsection (a) may be made with 

7 respect to any State whose— 

8 (A) State law is not otherwise eligible for 

9 certification under section 303 of the Social Se10 curity Act (42 U.S.C. 503) or approvable under 

11 section 3304 of the Internal Revenue Code of 

12 1986; or 

13 (B) short-time compensation program is 

14 subject to discontinuation or is not scheduled to 

15 take effect within 12 months of the certifi16 cation. 

17 (d) USE OF FUNDS.—The amount of any grant 

18 awarded under this section shall be used for the implemen19 tation of short-time compensation programs and the over20 all administration of such programs and the promotion 

21 and enrollment efforts associated with such programs, 

22 such as through— 

23 (1) the creation or support of rapid response 

24 teams to advise employers about alternatives to lay25 offs; 


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1 (2) the provision of education or assistance to 

2 employers to enable them to assess the feasibility of 

3 participating in short-time compensation programs; 

4 and 

5 (3) the development or enhancement of systems 

6 to automate— 

7 (A) the submission and approval of plans; 

8 and 

9 (B) the filing and approval of new and on10 going short-time compensation claims. 

11 (e) ADMINISTRATION.—The Secretary is authorized 

12 to use 0.25 percent of the funds available under subsection 

13 (g) to provide for outreach and to share best practices with 

14 respect to this section and short-time compensation pro15 grams. 

16 (f) RECOUPMENT.—The Secretary shall establish a 

17 process under which the Secretary shall recoup the 

18 amount of any grant awarded under paragraph (1) or (2) 

19 of subsection (a) if the Secretary determines that, during 

20 the 5-year period beginning on the first date that any such 

21 grant is awarded to the State, the State— 

22 (1) terminated the State’s short-time compensa23 tion program; or 


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1 (2) failed to meet appropriate requirements 

2 with respect to such program (as established by the 

3 Secretary). 

4 (g) FUNDING.—There are appropriated, out of mon5 eys in the Treasury not otherwise appropriated, to the 

6 Secretary, $700,000,000 to carry out this section, to re7 main available without fiscal year limitation. 

8 (h) REPORTING.—The Secretary may establish re9 porting requirements for States receiving a grant under 

10 this section in order to provide oversight of grant funds. 

11 (i) DEFINITIONS.—In this section: 

12 (1) SECRETARY.—The term ‘‘Secretary’’ means 

13 the Secretary of Labor. 

14 (2) SHORT-TIME COMPENSATION PROGRAM.— 

15 The term ‘‘short-time compensation program’’ has 

16 the meaning given such term in section 3306(v) of 

17 the Internal Revenue Code of 1986, as added by sec18 tion 341(a). 

19 (3) STATE; STATE AGENCY; STATE LAW.—The 

20 terms ‘‘State’’, ‘‘State agency’’, and ‘‘State law’’ 

21 have the meanings given those terms in section 205 

22 of the Federal-State Extended Unemployment Com23 pensation Act of 1970 (26 U.S.C. 3304 note). 


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1 SEC. 345. ASSISTANCE AND GUIDANCE IN IMPLEMENTING 

2 PROGRAMS. 

3 (a) IN GENERAL.—In order to assist States in estab4 lishing, qualifying, and implementing short-time com5 pensation programs (as defined in section 3306(v) of the 

6 Internal Revenue Code of 1986, as added by section 

7 341(a)), the Secretary of Labor (in this section referred 

8 to as the ‘‘Secretary’’) shall— 

9 (1) develop model legislative language which 

10 may be used by States in developing and enacting 

11 such programs and periodically review and revise 

12 such model legislative language; 

13 (2) provide technical assistance and guidance in 

14 developing, enacting, and implementing such pro15 grams; 

16 (3) establish reporting requirements for States, 

17 including reporting on— 

18 (A) the number of estimated averted lay19 offs; 

20 (B) the number of participating employers 

21 and workers; and 

22 (C) such other items as the Secretary of 

23 Labor determines are appropriate. 

24 (b) MODEL LANGUAGE AND GUIDANCE.—The model 

25 language and guidance developed under subsection (a) 

26 shall allow sufficient flexibility by States and participating 


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1 employers while ensuring accountability and program in2 tegrity. 

3 (c) CONSULTATION.—In developing the model legisla4 tive language and guidance under subsection (a), and in 

5 order to meet the requirements of subsection (b), the Sec6 retary shall consult with employers, labor organizations, 

7 State workforce agencies, and other program experts. 

8 SEC. 346. REPORTS. 

9 (a) REPORT.— 

10 (1) IN GENERAL.—Not later than 4 years after 

11 the date of the enactment of this Act, the Secretary 

12 of Labor shall submit to Congress and to the Presi13 dent a report or reports on the implementation of 

14 the provisions of this Act. 

15 (2) REQUIREMENTS.—Any report under para16 graph (1) shall at a minimum include the following: 

17 (A) A description of best practices by 

18 States and employers in the administration, 

19 promotion, and use of short-time compensation 

20 programs (as defined in section 3306(v) of the 

21 Internal Revenue Code of 1986, as added by 

22 section 341(a)). 

23 (B) An analysis of the significant chal24 lenges to State enactment and implementation 

25 of short-time compensation programs. 


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1 (C) A survey of employers in States that 

2 have not enacted a short-time compensation 

3 program or entered into an agreement with the 

4 Secretary on a short-time compensation plan to 

5 determine the level of interest among such em6 ployers in participating in short-time compensa7 tion programs. 

8 (b) FUNDING.—There are appropriated, out of any 

9 moneys in the Treasury not otherwise appropriated, to the 

10 Secretary of Labor, $1,500,000 to carry out this section, 

11 to remain available without fiscal year limitation. 

12 Subtitle B—Long Term 

13 Unemployed Hiring Preferences 

14 SEC. 351. LONG TERM UNEMPLOYED WORKERS WORK OP15 PORTUNITY TAX CREDITS. 

16 (a) IN GENERAL.—Paragraph (3) of section 51(b) of 

17 the Internal Revenue Code is amended by inserting 

18 ‘‘$10,000 per year in the case of any individual who is 

19 a qualified long term unemployed individual by reason of 

20 subsection (d)(11), and’’ before ‘‘$12,000 per year’’. 

21 (b) LONG TERM UNEMPLOYED INDIVIDUALS TAX

22 CREDITS.—Paragraph (d) of section 51 of the Internal 

23 Revenue Code is amended by— 

24 (1) inserting ‘‘(J) qualified long term unem25 ployed individual’’ at the end of paragraph (d)(1); 


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1 (2) inserting a new paragraph after paragraph 

2 (10) as follows— 

3 ‘‘(11) QUALIFIED LONG TERM UNEMPLOYED

4 INDIVIDUAL.— 

5 ‘‘(A) IN GENERAL.—The term ‘qualified 

6 long term unemployed individual’ means any in7 dividual who was not a student for at least 6 

8 months during the 1-year period ending on the 

9 hiring date and is certified by the designated 

10 local agency as having aggregate periods of un11 employment during the 1-year period ending on 

12 the hiring date which equal or exceed 6 months. 

13 ‘‘(B) STUDENT.—For purposes of this sub14 section, a student is an individual enrolled at 

15 least half-time in a program that leads to a de16 gree, certificate, or other recognized educational 

17 credential for at least 6 months whether or not 

18 consecutive during the 1-year period ending on 

19 the hiring date.’’; and 

20 (3) renumbering current paragraphs (11) 

21 through (14) as paragraphs (12) through (15). 

22 (c) SIMPLIFIED CERTIFICATION.—Section 51(d) of 

23 the Internal Revenue Code is amended by adding a new 

24 paragraph 16 as follows: 


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1 ‘‘(16) CREDIT ALLOWED FOR QUALIFIED LONG

2 TERM UNEMPLOYED INDIVIDUALS.— 

3 ‘‘(A) IN GENERAL.—Any qualified long 

4 term unemployed individual under paragraph 

5 (11) will be treated as certified by the des6 ignated local agency as having aggregate peri7 ods of unemployment if— 

8 ‘‘(i) the individual is certified by the 

9 designated local agency as being in receipt 

10 of unemployment compensation under 

11 State or Federal law for not less than 6 

12 months during the 1-year period ending on 

13 the hiring date. 

14 ‘‘(B) REGULATORY AUTHORITY.—The Sec15 retary in his discretion may provide alternative 

16 methods for certification.’’. 

17 (d) CREDIT MADE AVAILABLE TO TAX-EXEMPT EM18 PLOYERS IN CERTAIN CIRCUMSTANCES.—Section 52(c) of 

19 the Internal Revenue Code is amended— 

20 (1) by striking the word ‘‘No’’ at the beginning 

21 of the section and replacing it with ‘‘Except as pro22 vided in this subsection, no’’; and 

23 (2) the following new paragraphs are inserted 

24 at the end of section 52(c)— 


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1 ‘‘(1) IN GENERAL.—In the case of a tax-exempt 

2 employer, there shall be treated as a credit allowable 

3 under subpart C (and not allowable under subpart 

4 D) the lesser of— 

5 ‘‘(A) the amount of the work opportunity 

6 credit determined under this subpart with re7 spect to such employer that is related to the 

8 hiring of qualified long term unemployed indi9 viduals described in subsection (d)(11); or 

10 ‘‘(B) the amount of the payroll taxes of the 

11 employer during the calendar year in which the 

12 taxable year begins. 

13 ‘‘(2) CREDIT AMOUNT.—In calculating tax-ex14 empt employers, the work opportunity credit shall be 

15 determined by substituting ‘26 percent’ for ‘40 per16 cent’ in section 51(a) and by substituting ‘16.25 

17 percent’ for ‘25 percent’ in section 51(i)(3)(A). 

18 ‘‘(3) TAX-EXEMPT EMPLOYER.—For purposes 

19 of this subtitle, the term ‘tax-exempt employer’ 

20 means an employer that is— 

21 ‘‘(A) an organization described in section 

22 501(c) and exempt from taxation under section 

23 501(a), or 


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1 ‘‘(B) a public higher education institution 

2 (as defined in section 101 of the Higher Edu3 cation Act of 1965). 

4 ‘‘(4) PAYROLL TAXES.—For purposes of this 

5 subsection— 

6 ‘‘(A) IN GENERAL.—The term ‘payroll 

7 taxes’ means— 

8 ‘‘(i) amounts required to be withheld 

9 from the employees of the tax-exempt em10 ployer under section 3401(a), 

11 ‘‘(ii) amounts required to be withheld 

12 from such employees under section 3101, 

13 and 

14 ‘‘(iii) amounts of the taxes imposed on 

15 the tax-exempt employer under section 

16 3111.’’. 

17 (e) TREATMENT OF POSSESSIONS.— 

18 (1) PAYMENTS TO POSSESSIONS.— 

19 (A) MIRROR CODE POSSESSIONS.—The 

20 Secretary of the Treasury shall pay to each pos21 session of the United States with a mirror code 

22 tax system amounts equal to the loss to that 

23 possession by reason of the application of this 

24 section (other than this subsection). Such 

25 amounts shall be determined by the Secretary 


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1 of the Treasury based on information provided 

2 by the government of the respective possession 

3 of the United States. 

4 (B) OTHER POSSESSIONS.—The Secretary 

5 of the Treasury shall pay to each possession of 

6 the United States, which does not have a mirror 

7 code tax system, amounts estimated by the Sec8 retary of the Treasury as being equal to the ag9 gregate credits that would have been provided 

10 by the possession by reason of the application 

11 of this section (other than this subsection) if a 

12 mirror code tax system had been in effect in 

13 such possession. The preceding sentence shall 

14 not apply with respect to any possession of the 

15 United States unless such possession has a 

16 plan, which has been approved by the Secretary 

17 of the Treasury, under which such possession 

18 will promptly distribute such payments. 

19 (2) COORDINATION WITH CREDIT ALLOWED

20 AGAINST UNITED STATES INCOME TAXES.—No in21 crease in the credit determined under section 38(b) 

22 of the Internal Revenue Code of 1986 that is attrib23 utable to the credit provided by this section (other 

24 than this subsection (e)) shall be taken into account 

25 with respect to any person— 


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1 (A) to whom a credit is allowed against 

2 taxes imposed by the possession of the United 

3 States by reason of this section for such taxable 

4 year, or 

5 (B) who is eligible for a payment under a 

6 plan described in paragraph (1)(B) with respect 

7 to such taxable year. 

8 (3) DEFINITIONS AND SPECIAL RULES.— 

9 (A) POSSESSION OF THE UNITED

10 STATES.—For purposes of this subsection (e), 

11 the term ‘‘possession of the United States’’ in12 cludes American Samoa, the Commonwealth of 

13 the Northern Mariana Islands, the Common14 wealth of Puerto Rico, Guam, and the United 

15 States Virgin Islands. 

16 (B) MIRROR CODE TAX SYSTEM.—For pur17 poses of this subsection, the term ‘‘mirror code 

18 tax system’’ means, with respect to any posses19 sion of the United States, the income tax sys20 tem of such possession if the income tax liabil21 ity of the residents of such possession under 

22 such system is determined by reference to the 

23 income tax laws of the United States as if such 

24 possession were the United States. 


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1 (C) TREATMENT OF PAYMENTS.—For pur2 poses of section 1324(b)(2) of title 31, United 

3 States Code, rules similar to the rules of section 

4 1001(b)(3)(C) of the American Recovery and 

5 Reinvestment Tax Act of 2009 shall apply. 

6 (f) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to individuals who begin work for 

8 the employer after the date of the enactment of this Act. 

9 Subtitle C—Pathways Back to 

10 Work 

11 SEC. 361. SHORT TITLE. 

12 This subtitle may be cited as the ‘‘Pathways Back 

13 to Work Act of 2011’’. 

14 SEC. 362. ESTABLISHMENT OF PATHWAYS BACK TO WORK 

15 FUND. 

16 (a) ESTABLISHMENT.—There is established in the 

17 Treasury of the United States a fund which shall be 

18 known as the Pathways Back to Work Fund (hereafter 

19 in this Act referred to as ‘‘the Fund’’). 

20 (b) DEPOSITS INTO THE FUND.—Out of any 

21 amounts in the Treasury of the United States not other22 wise appropriated, there are appropriated $5,000,000,000 

23 for payment to the Fund to be used by the Secretary of 

24 Labor to carry out this Act. 


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1 SEC. 363. AVAILABILITY OF FUNDS. 

2 (a) IN GENERAL.—Of the amounts available to the 

3 Fund under section 362(b), the Secretary of Labor shall— 

4 (1) allot $2,000,000,000 in accordance with 

5 section 364 to provide subsidized employment to un6 employed, low-income adults; 

7 (2) allot $1,500,000,000 in accordance with 

8 section 365 to provide summer and year-round em9 ployment opportunities to low-income youth; 

10 (3) award $1,500,000,000 in competitive grants 

11 in accordance with section 366 to local entities to 

12 carry out work-based training and other work-re13 lated and educational strategies and activities of 

14 demonstrated effectiveness to unemployed, low-in15 come adults and low-income youth to provide the 

16 skills and assistance needed to obtain employment. 

17 (b) RESERVATION.—The Secretary of Labor may re18 serve not more than 1 percent of amounts available to the 

19 Fund under each of paragraphs (1)–(3) of subsection (a) 

20 for the costs of technical assistance, evaluations and Fed21 eral administration of this Act. 

22 (c) PERIOD OF AVAILABILITY.—The amounts appro23 priated under this Act shall be available for obligation by 

24 the Secretary of Labor until December 31, 2012, and shall 

25 be available for expenditure by grantees and subgrantees 

26 until September 30, 2013. 


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1 SEC. 364. SUBSIDIZED EMPLOYMENT FOR UNEMPLOYED, 

2 LOW-INCOME ADULTS. 

3 (a) IN GENERAL.— 

4 (1) ALLOTMENTS.—From the funds available 

5 under section 363(a)(1), the Secretary of Labor 

6 shall make an allotment under subsection (b) to each 

7 State that has a State plan approved under sub8 section (c) and to each outlying area and Native 

9 American grantee under section 166 of the Work10 force Investment Act of 1998 that meets the re11 quirements of this section, for the purpose of pro12 viding subsidized employment opportunities to unem13 ployed, low-income adults. 

14 (2) GUIDANCE.—Not later than 30 days after 

15 the date of enactment of this Act, the Secretary of 

16 Labor, in coordination with the Secretary of Health 

17 and Human Services, shall issue guidance regarding 

18 the implementation of this section. Such guidance 

19 shall, consistent with this section, include procedures 

20 for the submission and approval of State and local 

21 plans and the allotment and allocation of funds, in22 cluding reallotment and reallocation of such funds, 

23 that promote the expeditious and effective implemen24 tation of the activities authorized under this section. 

25 (b) STATE ALLOTMENTS.— 


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1 (1) RESERVATIONS FOR OUTLYING AREAS AND

2 TRIBES.—Of the funds described in subsection 

3 (a)(1), the Secretary shall reserve— 

4 (A) not more than one-quarter of one per5 cent to provide assistance to outlying areas to 

6 provide subsidized employment to low-income 

7 adults who are unemployed; and 

8 (B) 1.5 percent to provide assistance to 

9 grantees of the Native American programs 

10 under section 166 of the Workforce Investment 

11 Act of 1998 to provide subsidized employment 

12 to low-income adults who are unemployed. 

13 (2) STATES.—After determining the amounts to 

14 be reserved under paragraph (1), the Secretary of 

15 Labor shall allot the remainder of the amounts de16 scribed in subsection (a)(1) among the States as fol17 lows: 

18 (A) one-third shall be allotted on the basis 

19 of the relative number of unemployed individ20 uals in areas of substantial unemployment in 

21 each State, compared to the total number of 

22 unemployed individuals in areas of substantial 

23 unemployment in all States; 

24 (B) one-third shall be allotted on the basis 

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1 dividuals in each State, compared to the total 

2 excess number of unemployed individuals in all 

3 States; and 

4 (C) one-third shall be allotted on the basis 

5 of the relative number of disadvantaged adults 

6 and youth in each State, compared to the total 

7 number of disadvantaged adults and youth in 

8 all States. 

9 (3) DEFINITIONS.—For purposes of the for10 mula described in paragraph (2)— 

11 (A) AREA OF SUBSTANTIAL UNEMPLOY12 MENT.—The term ‘‘area of substantial unem13 ployment’’ means any contiguous area with a 

14 population of at least 10,000 and that has an 

15 average rate of unemployment of at least 6.5 

16 percent for the most recent 12 months, as de17 termined by the Secretary. 

18 (B) DISADVANTAGED ADULTS AND

19 YOUTH.—The term ‘‘disadvantaged adults and 

20 youth’’ means an individual who is age 16 and 

21 older (subject to section 132(b)(1)(B)(v)(I) of 

22 the Workforce Investment Act of 1998) who re23 ceived an income, or is a member of a family 

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1 lation to family size, does not exceed the higher 

2 of— 

3 (i) the poverty line; or 

4 (ii) 70 percent of the lower living 

5 standard income level. 

6 (C) EXCESS NUMBER.—The term ‘‘excess 

7 number’’ means, used with respect to the excess 

8 number of unemployed individuals within a 

9 State, the higher of— 

10 (i) the number that represents the 

11 number of unemployed individuals in ex12 cess of 4.5 percent of the civilian labor 

13 force in the State; or 

14 (ii) the number that represents the 

15 number of unemployed individuals in ex16 cess of 4.5 percent of the civilian labor 

17 force in areas of substantial unemployment 

18 in such State. 

19 (4) REALLOTMENT.—If the Governor of a State 

20 does not submit a State plan by the time specified 

21 in subsection (c), or a State does not receive ap22 proval of a State plan, the amount the State would 

23 have been eligible to receive pursuant to the formula 

24 under paragraph (2) shall be transferred within the 


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1 Fund and added to the amounts available for the 

2 competitive grants under section 363(a)(3). 

3 (c) STATE PLAN.— 

4 (1) IN GENERAL.—For a State to be eligible to 

5 receive an allotment of the funds under subsection 

6 (b), the Governor of the State shall submit to the 

7 Secretary of Labor a State plan in such form and 

8 containing such information as the Secretary may 

9 require. At a minimum, such plan shall include— 

10 (A) a description of the strategies and ac11 tivities to be carried out by the State, in coordi12 nation with employers in the State, to provide 

13 subsidized employment opportunities to unem14 ployed, low-income adults, including strategies 

15 relating to the level and duration of subsidies 

16 consistent with subsection (e)(2); 

17 (B) a description of the requirements the 

18 State will apply relating to the eligibility of un19 employed, low-income adults, consistent with 

20 section 368(6), for subsidized employment op21 portunities, which may include criteria to target 

22 assistance to particular categories of such 

23 adults, such as individuals with disabilities or 

24 individuals who have exhausted all rights to un25 employment compensation; 


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1 (C) a description of how the funds allotted 

2 to provide subsidized employment opportunities 

3 will be administered in the State and local 

4 areas, in accordance with subsection (d); 

5 (D) a description of the performance out6 comes to be achieved by the State through the 

7 activities carried out under this section and the 

8 processes the State will use to track perform9 ance, consistent with guidance provided by the 

10 Secretary of Labor regarding such outcomes 

11 and processes and with section 367(b); 

12 (E) a description of the coordination of ac13 tivities to be carried out with the funds pro14 vided under this section with activities under 

15 title I of the Workforce Investment Act of 

16 1998, the TANF program under part A of title 

17 IV of the Social Security Act, and other appro18 priate Federal and State programs that may as19 sist unemployed, low-income adults in obtaining 

20 and retaining employment; 

21 (F) a description of the timelines for im22 plementation of the activities described in sub23 paragraph (A), and the number of unemployed, 

24 low-income adults expected to be placed in sub25 sidized employment by quarter; 


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1 (G) assurances that the State will report 

2 such information as the Secretary of Labor may 

3 require relating to fiscal, performance and other 

4 matters that the Secretary determines is nec5 essary to effectively monitor the activities car6 ried out under this section; and 

7 (H) assurances that the State will ensure 

8 compliance with the labor standards and protec9 tions described in section 367(a) of this Act. 

10 (2) SUBMISSION AND APPROVAL OF STATE

11 PLAN.— 

12 (A) SUBMISSION WITH OTHER PLANS.— 

13 The State plan described in this subsection may 

14 be submitted in conjunction with the State plan 

15 modification or request for funds required 

16 under section 365, and may be submitted as a 

17 modification to a State plan that has been ap18 proved under section 112 of the Workforce In19 vestment Act of 1998. 

20 (B) SUBMISSION AND APPROVAL.— 

21 (i) SUBMISSION.—The Governor shall 

22 submit a plan to the Secretary of Labor 

23 not later than 75 days after the enactment 

24 of this Act and the Secretary of Labor 

25 shall make a determination regarding the 


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1 approval or disapproval of such plans not 

2 later than 45 days after the submission of 

3 such plan. If the plan is disapproved, the 

4 Secretary of Labor may provide a reason5 able period of time in which a disapproved 

6 plan may be amended and resubmitted for 

7 approval. 

8 (ii) APPROVAL.—The Secretary of 

9 Labor shall approve a State plan that the 

10 Secretary determines is consistent with re11 quirements of this section and reasonably 

12 appropriate and adequate to carry out the 

13 purposes of this section. If the plan is ap14 proved, the Secretary shall allot funds to 

15 States within 30 days after such approval. 

16 (3) MODIFICATIONS TO STATE PLAN.—The 

17 Governor may submit a modification to a State plan 

18 under this subsection consistent with the require19 ments of this section. 

20 (d) ADMINISTRATION WITHIN THE STATE.— 

21 (1) OPTION.—The State may administer the 

22 funds for activities under this section through— 

23 (A) the State and local entities responsible 

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1 gram under title I–B of the Workforce Invest2 ment Act of 1998; 

3 (B) the entities responsible for the admin4 istration of the TANF program under part A of 

5 title IV of the Social Security Act; or 

6 (C) a combination of the entities described 

7 in subparagraphs (A) and (B). 

8 (2) WITHIN-STATE ALLOCATIONS.— 

9 (A) ALLOCATION OF FUNDS.—The Gov10 ernor may reserve up to 5 percent of the allot11 ment under subsection (b)(2) for administration 

12 and technical assistance, and shall allocate the 

13 remainder, in accordance with the option elect14 ed under paragraph (1)— 

15 (i) among local workforce investment 

16 areas within the State in accordance with 

17 the factors identified in subsection (b)(2), 

18 except that for purposes of such allocation 

19 references to a State in such paragraph 

20 shall be deemed to be references to a local 

21 workforce investment area and references 

22 to all States shall be deemed to be ref23 erences to all local areas in the State in24 volved, of which not more than 10 percent 

25 of the funds allocated to a local workforce 


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1 investment area may be used for the costs 

2 of administration of this section; or 

3 (ii) through entities responsible for 

4 the administration of the TANF program 

5 under part A of title IV of the Social Secu6 rity Act in local areas in such manner as 

7 the State may determine appropriate. 

8 (B) LOCAL PLANS.— 

9 (i) IN GENERAL.—In the case where 

10 the responsibility for the administration of 

11 activities is to be carried out by the enti12 ties described under paragraph (1)(A), in 

13 order to receive an allocation under sub14 paragraph (A)(i), a local workforce invest15 ment board, in partnership with the chief 

16 elected official of the local workforce in17 vestment area involved, shall submit to the 

18 Governor a local plan for the use of such 

19 funds under this section not later than 30 

20 days after the submission of the State 

21 plan. Such local plan may be submitted as 

22 a modification to a local plan approved 

23 under section 118 of the Workforce Invest24 ment Act of 1998. 


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1 (ii) CONTENTS.—The local plan de2 scribed in clause (i) shall contain the ele3 ments described in subparagraphs (A)–(H) 

4 of subsection (c)(1), as applied to the local 

5 workforce investment area. 

6 (iii) APPROVAL.—The Governor shall 

7 approve or disapprove the local plan sub8 mitted under clause (i) within 30 days 

9 after submission, or if later, 30 days after 

10 the approval of the State plan. The Gov11 ernor shall approve the plan unless the 

12 Governor determines that the plan is in13 consistent with requirements of this section 

14 or is not reasonably appropriate and ade15 quate to carry out the purposes of this sec16 tion. If the Governor has not made a de17 termination within the period specified 

18 under the first sentence of this clause, the 

19 plan shall be considered approved. If the 

20 plan is disapproved, the Governor may pro21 vide a reasonable period of time in which 

22 a disapproved plan may be amended and 

23 resubmitted for approval. The Governor 

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1 vestment areas with approved plans within 

2 30 days after such approval. 

3 (C) REALLOCATION OF FUNDS TO LOCAL

4 AREAS.—If a local workforce investment board 

5 does not submit a local plan by the time speci6 fied in subparagraph (B) or the Governor does 

7 not approve a local plan, the amount the local 

8 workforce investment area would have been eli9 gible to receive pursuant to the formula under 

10 subparagraph (A)(i) shall be allocated to local 

11 workforce investment areas that receive ap12 proval of the local plan under subparagraph 

13 (B). Such reallocations shall be made in accord14 ance with the relative share of the allocations to 

15 such local workforce investment areas applying 

16 the formula factors described under subpara17 graph (A)(i). 

18 (e) USE OF FUNDS.— 

19 (1) IN GENERAL.—The funds under this section 

20 shall be used to provide subsidized employment for 

21 unemployed, low-income adults. The State and local 

22 entities described in subsection (d)(1) may use a va23 riety of strategies in recruiting employers and identi24 fying appropriate employment opportunities, with a 

25 priority to be provided to employment opportunities 


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1 likely to lead to unsubsidized employment in emerg2 ing or in-demand occupations in the local area. 

3 Funds under this section may be used to provide 

4 support services, such as transportation and child 

5 care, that are necessary to enable the participation 

6 of individuals in subsidized employment opportuni7 ties. 

8 (2) LEVEL OF SUBSIDY AND DURATION.—The 

9 States or local entities described in subsection (d)(1) 

10 may determine the percentage of the wages and 

11 costs of employing a participant for which an em12 ployer may receive a subsidy with the funds provided 

13 under this section, and the duration of such subsidy, 

14 in accordance with guidance issued by the Secretary. 

15 The State or local entities may establish criteria for 

16 determining such percentage or duration using ap17 propriate factors such as the size of the employer 

18 and types of employment. 

19 (f) COORDINATION OF FEDERAL ADMINISTRATION.— 

20 The Secretary of Labor shall administer this section in 

21 coordination with the Secretary of Health and Human 

22 Services to ensure the effective implementation of this sec23 tion. 


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1 SEC. 365. SUMMER EMPLOYMENT AND YEAR-ROUND EM2 PLOYMENT OPPORTUNITIES FOR LOW-IN3 COME YOUTH. 

4 (a) IN GENERAL.—From the funds available under 

5 section 363(a)(2), the Secretary of Labor shall make an 

6 allotment under subsection (c) to each State that has a 

7 State plan modification (or other form of request for funds 

8 specified in guidance under subsection (b)) approved 

9 under subsection (d) and to each outlying area and Native 

10 American grantee under section 166 of the Workforce In11 vestment Act of 1998 that meets the requirements of this 

12 section, for the purpose of providing summer employment 

13 and year-round employment opportunities to low-income 

14 youth. 

15 (b) GUIDANCE AND APPLICATION OF REQUIRE16 MENTS.— 

17 (1) GUIDANCE.—Not later than 20 days after 

18 the date of enactment of this Act, the Secretary of 

19 Labor shall issue guidance regarding the implemen20 tation of this section. Such guidance shall, consistent 

21 with this section, include procedures for the submis22 sion and approval of State plan modifications, or for 

23 forms of requests for funds by the State as may be 

24 identified in such guidance, local plan modifications, 

25 or other forms of requests for funds from local work26 force investment areas as may be identified in such 


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1 guidance, and the allotment and allocation of funds, 

2 including reallotment and reallocation of such funds, 

3 that promote the expeditious and effective implemen4 tation of the activities authorized under this section. 

5 (2) REQUIREMENTS.—Except as otherwise pro6 vided in the guidance described in paragraph (1) 

7 and in this section and other provisions of this Act, 

8 the funds provided for activities under this section 

9 shall be administered in accordance with subtitles B 

10 and E of title I of the Workforce Investment Act of 

11 1998 relating to youth activities. 

12 (c) STATE ALLOTMENTS.— 

13 (1) RESERVATIONS FOR OUTLYING AREAS AND

14 TRIBES.—Of the funds described in subsection (a), 

15 the Secretary shall reserve— 

16 (A) not more than one-quarter of one per17 cent to provide assistance to outlying areas to 

18 provide summer and year-round employment 

19 opportunities to low-income youth; and 

20 (B) 1.5 percent to provide assistance to 

21 grantees of the Native American programs 

22 under section 166 of the Workforce Investment 

23 Act of 1998 to provide summer and year-round 

24 employment opportunities to low-income youth. 


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1 (2) STATES.—After determining the amounts to 

2 be reserved under paragraph (1), the Secretary of 

3 Labor shall allot the remainder of the amounts de4 scribed in subsection (a) among the States in ac5 cordance with the factors described in section 

6 364(b)(2) of this Act. 

7 (3) REALLOTMENT.—If the Governor of a State 

8 does not submit a State plan modification or other 

9 request for funds specified in guidance under sub10 section (b) by the time specified in subsection 

11 (d)(2)(B), or a State does not receive approval of 

12 such State plan modification or request, the amount 

13 the State would have been eligible to receive pursu14 ant to the formula under paragraph (2) shall be 

15 transferred within the Fund and added to the 

16 amounts available for the competitive grants under 

17 section 363(a)(3). 

18 (d) STATE PLAN MODIFICATION.— 

19 (1) IN GENERAL.—For a State to be eligible to 

20 receive an allotment of the funds under subsection 

21 (c), the Governor of the State shall submit to the 

22 Secretary of Labor a modification to a State plan 

23 approved under section 112 of the Workforce Invest24 ment Act of 1998, or other request for funds de25 scribed in guidance in subsection (b), in such form 


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1 and containing such information as the Secretary 

2 may require. At a minimum, such plan modification 

3 or request shall include— 

4 (A) a description of the strategies and ac5 tivities to be carried out to provide summer em6 ployment opportunities and year-round employ7 ment opportunities, including the linkages to 

8 educational activities, consistent with subsection 

9 (f); 

10 (B) a description of the requirements the 

11 States will apply relating to the eligibility of 

12 low-income youth, consistent with section 

13 368(4), for summer employment opportunities 

14 and year-round employment opportunities, 

15 which may include criteria to target assistance 

16 to particular categories of such low-income 

17 youth, such as youth with disabilities, con18 sistent with subsection (f); 

19 (C) a description of the performance out20 comes to be achieved by the State through the 

21 activities carried out under this section and the 

22 processes the State will use to track perform23 ance, consistent with guidance provided by the 

24 Secretary of Labor regarding such outcomes 

25 and processes and with section 367(b); 


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1 (D) a description of the timelines for im2 plementation of the activities described in sub3 paragraph (A), and the number of low-income 

4 youth expected to be placed in summer employ5 ment opportunities, and year-round employment 

6 opportunities, respectively, by quarter; 

7 (E) assurances that the State will report 

8 such information as the Secretary may require 

9 relating to fiscal, performance and other mat10 ters that the Secretary determines is necessary 

11 to effectively monitor the activities carried out 

12 under this section; and 

13 (F) assurances that the State will ensure 

14 compliance with the labor standards protections 

15 described in section 367(a). 

16 (2) SUBMISSION AND APPROVAL OF STATE

17 PLAN MODIFICATION OR REQUEST.— 

18 (A) SUBMISSION.—The Governor shall 

19 submit a modification of the State plan or other 

20 request for funds described in guidance in sub21 section (b) to the Secretary of Labor not later 

22 than 30 days after the issuance of such guid23 ance. The State plan modification or request for 

24 funds required under this subsection may be 


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1 submitted in conjunction with the State plan re2 quired under section 364. 

3 (B) APPROVAL.—The Secretary of Labor 

4 shall approve the plan or request submitted 

5 under subparagraph (A) within 30 days after 

6 submission, unless the Secretary determines 

7 that the plan or request is inconsistent with the 

8 requirements of this section. If the Secretary 

9 has not made a determination within 30 days, 

10 the plan or request shall be considered ap11 proved. If the plan or request is disapproved, 

12 the Secretary may provide a reasonable period 

13 of time in which a disapproved plan or request 

14 may be amended and resubmitted for approval. 

15 If the plan or request is approved, the Sec16 retary shall allot funds to States within 30 days 

17 after such approval. 

18 (3) MODIFICATIONS TO STATE PLAN OR RE19 QUEST.—The Governor may submit further modi20 fications to a State plan or request for funds identi21 fied under subsection (b) to carry out this section in 

22 accordance with the requirements of this section. 

23 (e) WITHIN-STATE ALLOCATION AND ADMINISTRA24 TION.— 


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1 (1) IN GENERAL.—Of the funds allotted to the 

2 State under subsection (c), the Governor— 

3 (A) may reserve up to 5 percent of the al4 lotment for administration and technical assist5 ance; and 

6 (B) shall allocate the remainder of the al7 lotment among local workforce investment areas 

8 within the State in accordance with the factors 

9 identified in section 364(b)(2), except that for 

10 purposes of such allocation references to a 

11 State in such paragraph shall be deemed to be 

12 references to a local workforce investment area 

13 and references to all States shall be deemed to 

14 be references to all local areas in the State in15 volved. Not more than 10 percent of the funds 

16 allocated to a local workforce investment area 

17 may be used for the costs of administration of 

18 this section. 

19 (2) LOCAL PLAN.— 

20 (A) SUBMISSION.—In order to receive an 

21 allocation under paragraph (1)(B), the local 

22 workforce investment board, in partnership with 

23 the chief elected official for the local workforce 

24 investment area involved, shall submit to the 

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1 proved under section 118 of the Workforce In2 vestment Act of 1998, or other form of request 

3 for funds as may be identified in the guidance 

4 issued under subsection (b), not later than 30 

5 days after the submission by the State of the 

6 modification to the State plan or other request 

7 for funds identified in subsection (b), describing 

8 the strategies and activities to be carried out 

9 under this section. 

10 (B) APPROVAL.—The Governor shall ap11 prove the local plan submitted under subpara12 graph (A) within 30 days after submission, un13 less the Governor determines that the plan is 

14 inconsistent with requirements of this section. 

15 If the Governor has not made a determination 

16 within 30 days, the plan shall be considered ap17 proved. If the plan is disapproved, the Governor 

18 may provide a reasonable period of time in 

19 which a disapproved plan may be amended and 

20 resubmitted for approval. The Governor shall 

21 allocate funds to local workforce investment 

22 areas with approved plans within 30 days after 

23 approval. 

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1 fication (or other request for funds identified in 

2 guidance under subsection (b)) by the time specified 

3 in paragraph (2), or does not receive approval of a 

4 local plan, the amount the local workforce invest5 ment area would have been eligible to receive pursu6 ant to the formula under paragraph (1)(B) shall be 

7 allocated to local workforce investment areas that re8 ceive approval of the local plan modification or re9 quest for funds under paragraph (2). Such realloca10 tions shall be made in accordance with the relative 

11 share of the allocations to such local workforce in12 vestment areas applying the formula factors de13 scribed under paragraph (1)(B). 

14 (f) USE OF FUNDS.— 

15 (1) IN GENERAL.—The funds provided under 

16 this section shall be used— 

17 (A) to provide summer employment oppor18 tunities for low-income youth, ages 16 through 

19 24, with direct linkages to academic and occu20 pational learning, and may include the provision 

21 of supportive services, such as transportation or 

22 child care, necessary to enable such youth to 

23 participate; and 

24 (B) to provide year-round employment op25 portunities, which may be combined with other 


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1 activities authorized under section 129 of the 

2 Workforce Investment Act of 1998, to low-in3 come youth, ages 16 through 24, with a priority 

4 to out-of-school youth who are— 

5 (i) high school dropouts; or 

6 (ii) recipients of a secondary school 

7 diploma or its equivalent but who are basic 

8 skills deficient unemployed or under9 employed. 

10 (2) PROGRAM PRIORITIES.—In administering 

11 the funds under this section, the local board and 

12 local chief elected officials shall give a priority to— 

13 (A) identifying employment opportunities 

14 that are— 

15 (i) in emerging or in-demand occupa16 tions in the local workforce investment 

17 area; or 

18 (ii) in the public or nonprofit sector 

19 that meet community needs; and 

20 (B) linking year-round program partici21 pants to training and educational activities that 

22 will provide such participants an industry-recog23 nized certificate or credential. 

24 (3) PERFORMANCE ACCOUNTABILITY.—For ac25 tivities funded under this section, in lieu of the reVerDate Mar 15 2010 05:30 Sep 15, 2011 Jkt 099200 PO 00000 Frm 00330 Fmt 6652 Sfmt 6201 E:\BILLS\S1549.PCS S1549

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1 quirements described in section 136 of the Work2 force Investment Act of 1998, State and local work3 force investment areas shall provide such reports as 

4 the Secretary of Labor may require regarding the 

5 performance outcomes described in section 

6 367(a)(5). 

7 SEC. 366. WORK-BASED EMPLOYMENT STRATEGIES OF 

8 DEMONSTRATED EFFECTIVENESS. 

9 (a) IN GENERAL.—From the funds available under 

10 section 363(a)(3), the Secretary of Labor shall award 

11 grants on a competitive basis to eligible entities to carry 

12 out work-based strategies of demonstrated effectiveness. 

13 (b) USE OF FUNDS.—The grants awarded under this 

14 section shall be used to support strategies and activities 

15 of demonstrated effectiveness that are designed to provide 

16 unemployed, low-income adults or low-income youth with 

17 the skills that will lead to employment as part of or upon 

18 completion of participation in such activities. Such strate19 gies and activities may include— 

20 (1) on-the-job training, registered apprentice21 ship programs, or other programs that combine work 

22 with skills development; 

23 (2) sector-based training programs that have 

24 been designed to meet the specific requirements of 

25 an employer or group of employers in that sector 


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1 and where employers are committed to hiring indi2 viduals upon successful completion of the training; 

3 (3) training that supports an industry sector or 

4 an employer-based or labor-management committee 

5 industry partnership which includes a significant 

6 work-experience component; 

7 (4) acquisition of industry-recognized creden8 tials in a field identified by the State or local work9 force investment area as a growth sector or demand 

10 industry in which there are likely to be significant 

11 job opportunities in the short-term; 

12 (5) connections to immediate work opportuni13 ties, including subsidized employment opportunities, 

14 or summer employment opportunities for youth, that 

15 includes concurrent skills training and other sup16 ports; 

17 (6) career academies that provide students with 

18 the academic preparation and training, including 

19 paid internships and concurrent enrollment in com20 munity colleges or other postsecondary institutions, 

21 needed to pursue a career pathway that leads to 

22 postsecondary credentials and high-demand jobs; 

23 and 

24 (7) adult basic education and integrated basic 

25 education and training models for low-skilled adults, 


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1 hosted at community colleges or at other sites, to 

2 prepare individuals for jobs that are in demand in 

3 a local area. 

4 (c) ELIGIBLE ENTITY.—An eligible entity shall in5 clude a local chief elected official, in collaboration with the 

6 local workforce investment board for the local workforce 

7 investment area involved (which may include a partnership 

8 with such officials and boards in the region and in the 

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

10 Native American grant under section 166 of the Work11 force Investment Act of 1998, and may include, in part12 nership with such officials, boards, and entities, the fol13 lowing: 

14 (1) employers or employer associations; 

15 (2) adult education providers and postsecondary 

16 educational institutions, including community col17 leges; 

18 (3) community-based organizations; 

19 (4) joint labor-management committees; 

20 (5) work-related intermediaries; or 

21 (6) other appropriate organizations. 

22 (d) APPLICATION.—An eligible entity seeking to re23 ceive a grant under this section shall submit to the Sec24 retary of Labor an application at such time, in such manVerDate Mar 15 2010 05:30 Sep 15, 2011 Jkt 099200 PO 00000 Frm 00333 Fmt 6652 Sfmt 6201 E:\BILLS\S1549.PCS S1549

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1 ner, and containing such information as the Secretary may 

2 require. At a minimum, the application shall— 

3 (1) describe the strategies and activities of dem4 onstrated effectiveness that the eligible entities will 

5 carry out to provide unemployed, low-income adults 

6 and low-income youth with the skills that will lead 

7 to employment upon completion of participation in 

8 such activities; 

9 (2) describe the requirements that will apply re10 lating to the eligibility of unemployed, low-income 

11 adults or low-income youth, consistent with para12 graphs (4) and (6) of section 368, for activities car13 ried out under this section, which may include cri14 teria to target assistance to particular categories of 

15 such adults and youth, such as individuals with dis16 abilities or individuals who have exhausted all rights 

17 to unemployment compensation; 

18 (3) describe how the strategies and activities 

19 address the needs of the target populations identi20 fied in paragraph (2) and the needs of employers in 

21 the local area; 

22 (4) describe the expected outcomes to be 

23 achieved by implementing the strategies and activi24 ties; 


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1 (5) provide evidence that the funds provided 

2 may be expended expeditiously and efficiently to im3 plement the strategies and activities; 

4 (6) describe how the strategies and activities 

5 will be coordinated with other Federal, State and 

6 local programs providing employment, education and 

7 supportive activities; 

8 (7) provide evidence of employer commitment to 

9 participate in the activities funded under this sec10 tion, including identification of anticipated occupa11 tional and skill needs; 

12 (8) provide assurances that the grant recipient 

13 will report such information as the Secretary may 

14 require relating to fiscal, performance and other 

15 matters that the Secretary determines is necessary 

16 to effectively monitor the activities carried out under 

17 this section; and 

18 (9) provide assurances that the use of the funds 

19 provided under this section will comply with the 

20 labor standards and protections described in section 

21 367(a). 

22 (e) PRIORITY IN AWARDS.—In awarding grants 

23 under this section, the Secretary of Labor shall give a pri24 ority to applications submitted by eligible entities from 

25 areas of high poverty and high unemployment, as defined 


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1 by the Secretary, such as Public Use Microdata Areas 

2 (PUMAs) as designated by the Census Bureau. 

3 (f) COORDINATION OF FEDERAL ADMINISTRATION.— 

4 The Secretary of Labor shall administer this section in 

5 coordination with the Secretary of Education, Secretary 

6 of Health and Human Services, and other appropriate 

7 agency heads, to ensure the effective implementation of 

8 this section. 

9 SEC. 367. GENERAL REQUIREMENTS. 

10 (a) LABOR STANDARDS AND PROTECTIONS.—Activi11 ties provided with funds under this Act shall be subject 

12 to the requirements and restrictions, including the labor 

13 standards, described in section 181 of the Workforce In14 vestment Act of 1998 and the nondiscrimination provi15 sions of section 188 of such Act, in addition to other appli16 cable federal laws. 

17 (b) REPORTING.—The Secretary may require the re18 porting of information relating to fiscal, performance and 

19 other matters that the Secretary determines is necessary 

20 to effectively monitor the activities carried out with funds 

21 provided under this Act. At a minimum, grantees and sub22 grantees shall provide information relating to— 

23 (1) the number of individuals participating in 

24 activities with funds provided under this Act and the 


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1 number of such individuals who have completed such 

2 participation; 

3 (2) the expenditures of funds provided under 

4 the Act; 

5 (3) the number of jobs created pursuant to the 

6 activities carried out under this Act; 

7 (4) the demographic characteristics of individ8 uals participating in activities under this Act; and 

9 (5) the performance outcomes of individuals 

10 participating in activities under this Act, including— 

11 (A) for adults participating in activities 

12 funded under section 364 of this Act— 

13 (i) entry in unsubsidized employment, 

14 (ii) retention in unsubsidized employ15 ment, and 

16 (iii) earnings in unsubsidized employ17 ment; 

18 (B) for low-income youth participating in 

19 summer employment activities under sections 

20 365 and 366— 

21 (i) work readiness skill attainment 

22 using an employer validated checklist; 

23 (ii) placement in or return to sec24 ondary or postsecondary education or 


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1 training, or entry into unsubsidized em2 ployment; 

3 (C) for low-income youth participating in 

4 year-round employment activities under section 

5 365 or in activities under section 366— 

6 (i) placement in or return to post-sec7 ondary education; 

8 (ii) attainment of high school diploma 

9 or its equivalent; 

10 (iii) attainment of an industry-recog11 nized credential; and 

12 (iv) entry into unsubsidized employ13 ment, retention, and earnings as described 

14 in subparagraph (A); 

15 (D) for unemployed, low-income adults 

16 participating in activities under section 366— 

17 (i) entry into unsubsidized employ18 ment, retention, and earnings as described 

19 in subparagraph (A); and 

20 (ii) the attainment of industry-recog21 nized credentials. 

22 (c) ACTIVITIES REQUIRED TO BE ADDITIONAL.— 

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1 wise be available in the State or local area in the absence 

2 of such funds. 

3 (d) ADDITIONAL REQUIREMENTS.—The Secretary of 

4 Labor may establish such additional requirements as the 

5 Secretary determines may be necessary to ensure fiscal in6 tegrity, effective monitoring, and the appropriate and 

7 prompt implementation of the activities under this Act. 

8 (e) REPORT OF INFORMATION AND EVALUATIONS TO

9 CONGRESS AND THE PUBLIC.—The Secretary of Labor 

10 shall provide to the appropriate Committees of the Con11 gress and make available to the public the information re12 ported pursuant to subsection (b) and the evaluations of 

13 activities carried out pursuant to the funds reserved under 

14 section 363(b). 

15 SEC. 368. DEFINITIONS. 

16 In this Act: 

17 (1) LOCAL CHIEF ELECTED OFFICIAL.—The 

18 term ‘‘local chief elected official’’ means the chief 

19 elected executive officer of a unit of local govern20 ment in a local workforce investment area or in the 

21 case where more than one unit of general govern22 ment, the individuals designated under an agreement 

23 described in section 117(c)(1)(B) of the Workforce 

24 Investment Act of 1998. 


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1 (2) LOCAL WORKFORCE INVESTMENT AREA.— 

2 The term ‘‘local workforce investment area’’ means 

3 such area designated under section 116 of the Work4 force Investment Act of 1998. 

5 (3) LOCAL WORKFORCE INVESTMENT BOARD.— 

6 The term ‘‘local workforce investment board’’ means 

7 such board established under section 117 of the 

8 Workforce Investment Act of 1998. 

9 (4) LOW-INCOME YOUTH.—The term ‘‘low-in10 come youth’’ means an individual who— 

11 (A) is aged 16 through 24; 

12 (B) meets the definition of a low-income 

13 individual provided in section 101(25) of the 

14 Workforce Investment Act of 1998, except that 

15 States, local workforce investment areas under 

16 section 365 and eligible entities under section 

17 366(c), subject to approval in the applicable 

18 State plans, local plans, and applications for 

19 funds, may increase the income level specified 

20 in subparagraph (B)(i) of such section to an 

21 amount not in excess of 200 percent of the pov22 erty line for purposes of determining eligibility 

23 for participation in activities under sections 365 

24 and 366 of this Act; and 


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1 (C) is in one or more of the categories 

2 specified in section 101(13)(C) of the Work3 force Investment Act of 1998. 

4 (5) OUTLYING AREA.—The term ‘‘outlying 

5 area’’ means the United States Virgin Islands, 

6 Guam, American Samoa, the Commonwealth of the 

7 Northern Mariana Islands, and the Republic of 

8 Palau. 

9 (6) UNEMPLOYED, LOW-INCOME ADULT.—The 

10 term ‘‘unemployed, low-income adult’’ means an in11 dividual who— 

12 (A) is age 18 or older; 

13 (B) is without employment and is seeking 

14 assistance under this Act to obtain employment; 

15 and 

16 (C) meets the definition of a ‘‘low-income 

17 individual’’ under section 101(25) of the Work18 force Investment Act of 1998, except that for 

19 that States, local entities described in section 

20 364(d)(1) and eligible entities under section 

21 366(c), subject to approval in the applicable 

22 State plans, local plans, and applications for 

23 funds, may increase the income level specified 

24 in subparagraph (B)(i) of such section to an 

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1 erty line for purposes of determining eligibility 

2 for participation in activities under sections 364 

3 and 366 of this Act. 

4 (7) STATE.—The term ‘‘State’’ means each of 

5 the several States of the United States, the District 

6 of Columbia, and Puerto Rico. 

7 Subtitle D—Prohibition of Dis8 crimination in Employment on 

9 the Basis of an Individual’s Sta10 tus as Unemployed 

11 SEC. 371. SHORT TITLE. 

12 This subtitle may be cited as the ‘‘Fair Employment 

13 Opportunity Act of 2011’’. 

14 SEC. 372. FINDINGS AND PURPOSE. 

15 (a) FINDINGS.—Congress finds that denial of em16 ployment opportunities to individuals because of their sta17 tus as unemployed is discriminatory and burdens com18 merce by— 

19 (1) reducing personal consumption and under20 mining economic stability and growth; 

21 (2) squandering human capital essential to the 

22 Nation’s economic vibrancy and growth; 

23 (3) increasing demands for Federal and State 

24 unemployment insurance benefits, reducing trust 

25 fund assets, and leading to higher payroll taxes for 


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1 employers, cuts in benefits for jobless workers, or 

2 both; 

3 (4) imposing additional burdens on publicly 

4 funded health and welfare programs; and 

5 (5) depressing income, property, and other tax 

6 revenues that the Federal Government, States, and 

7 localities rely on to support operations and institu8 tions essential to commerce. 

9 (b) PURPOSES.—The purposes of this Act are— 

10 (1) to prohibit employers and employment agen11 cies from disqualifying an individual from employ12 ment opportunities because of that individual’s sta13 tus as unemployed; 

14 (2) to prohibit employers and employment agen15 cies from publishing or posting any advertisement or 

16 announcement for an employment opportunity that 

17 indicates that an individual’s status as unemployed 

18 disqualifies that individual for the opportunity; and 

19 (3) to eliminate the burdens imposed on com20 merce due to the exclusion of such individuals from 

21 employment. 

22 SEC. 373. DEFINITIONS. 

23 As used in this Act— 

24 (1) the term ‘‘affected individual’’ means any 

25 person who was subject to an unlawful employment 


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1 practice solely because of that individual’s status as 

2 unemployed; 

3 (2) the term ‘‘Commission’’ means the Equal 

4 Employment Opportunity Commission; 

5 (3) the term ‘‘employee’’ means— 

6 (A) an employee as defined in section 

7 701(f) of the Civil Rights Act of 1964 (42 

8 U.S.C. 2000e(f)); 

9 (B) a State employee to which section 

10 302(a)(1) of the Government Employee Rights 

11 Act of 1991 (42 U.S.C. 2000e–16b(a)(1)) ap12 plies; 

13 (C) a covered employee, as defined in sec14 tion 101 of the Congressional Accountability 

15 Act of 1995 (2 U.S.C. 1301) or section 411(c) 

16 of title 3, United States Code; or 

17 (D) an employee or applicant to which sec18 tion 717(a) of the Civil Rights Act of 1964 (42 

19 U.S.C. 2000e–16(a)) applies; 

20 (4) the term ‘‘employer’’ means— 

21 (A) a person engaged in an industry affect22 ing commerce (as defined in section 701(h) of 

23 the Civil Rights Act of 1964 (42 U.S.C. 

24 2000e(h)) who has 15 or more employees for 

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1 endar weeks in the current or preceding cal2 endar year, and any agent of such a person, but 

3 does not include a bona fide private member4 ship club that is exempt from taxation under 

5 section 501(c) of the Internal Revenue Code of 

6 1986; 

7 (B) an employing authority to which sec8 tion 302(a)(1) of the Government Employee 

9 Rights Act of 1991 applies; 

10 (C) an employing office, as defined in sec11 tion 101 of the Congressional Accountability 

12 Act of 1995 or section 411(c) of title 3, United 

13 States Code; or 

14 (D) an entity to which section 717(a) of 

15 the Civil Rights Act of 1964 (42 U.S.C. 2000e– 

16 16(a)) applies; 

17 (5) the term ‘‘employment agency’’ means any 

18 person regularly undertaking with or without com19 pensation to procure employees for an employer or 

20 to procure for individuals opportunities to work as 

21 employees for an employer and includes an agent of 

22 such a person, and any person who maintains an 

23 Internet website or print medium that publishes ad24 vertisements or announcements of openings in jobs 

25 for employees; 


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1 (6) the term ‘‘person’’ has the meaning given 

2 the term in section 701(a) of the Civil Rights Act 

3 of 1964 (42 U.S.C. 2000e(a)); and 

4 (7) the term ‘‘status as unemployed’’, used with 

5 respect to an individual, means that the individual, 

6 at the time of application for employment or at the 

7 time of action alleged to violate this Act, does not 

8 have a job, is available for work and is searching for 

9 work. 

10 SEC. 374. PROHIBITED ACTS. 

11 (a) EMPLOYERS.—It shall be an unlawful employ12 ment practice for an employer to— 

13 (1) publish in print, on the Internet, or in any 

14 other medium, an advertisement or announcement 

15 for an employee for any job that includes— 

16 (A) any provision stating or indicating that 

17 an individual’s status as unemployed disquali18 fies the individual for any employment oppor19 tunity; or 

20 (B) any provision stating or indicating that 

21 an employer will not consider or hire an indi22 vidual for any employment opportunity based 

23 on that individual’s status as unemployed; 


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1 (2) fail or refuse to consider for employment, or 

2 fail or refuse to hire, an individual as an employee 

3 because of the individual’s status as unemployed; or 

4 (3) direct or request that an employment agen5 cy take an individual’s status as unemployed into ac6 count to disqualify an applicant for consideration, 

7 screening, or referral for employment as an em8 ployee. 

9 (b) EMPLOYMENT AGENCIES.—It shall be an unlaw10 ful employment practice for an employment agency to— 

11 (1) publish, in print or on the Internet or in 

12 any other medium, an advertisement or announce13 ment for any vacancy in a job, as an employee, that 

14 includes— 

15 (A) any provision stating or indicating that 

16 an individual’s status as unemployed disquali17 fies the individual for any employment oppor18 tunity; or 

19 (B) any provision stating or indicating that 

20 the employment agency or an employer will not 

21 consider or hire an individual for any employ22 ment opportunity based on that individual’s sta23 tus as unemployed; 

24 (2) screen, fail or refuse to consider, or fail or 

25 refuse to refer an individual for employment as an 


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1 employee because of the individual’s status as unem2 ployed; or 

3 (3) limit, segregate, or classify any individual in 

4 any manner that would limit or tend to limit the in5 dividual’s access to information about jobs, or con6 sideration, screening, or referral for jobs, as employ7 ees, solely because of an individual’s status as unem8 ployed. 

9 (c) INTERFERENCE WITH RIGHTS, PROCEEDINGS OR

10 INQUIRIES.—It shall be unlawful for any employer or em11 ployment agency to— 

12 (1) interfere with, restrain, or deny the exercise 

13 of or the attempt to exercise, any right provided 

14 under this Act; or 

15 (2) fail or refuse to hire, to discharge, or in any 

16 other manner to discriminate against any individual, 

17 as an employee, because such individual— 

18 (A) opposed any practice made unlawful by 

19 this Act; 

20 (B) has asserted any right, filed any 

21 charge, or has instituted or caused to be insti22 tuted any proceeding, under or related to this 

23 Act; 

24 (C) has given, or is about to give, any in25 formation in connection with any inquiry or 


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1 proceeding relating to any right provided under 

2 this Act; or 

3 (D) has testified, or is about to testify, in 

4 any inquiry or proceeding relating to any right 

5 provided under this Act. 

6 (d) CONSTRUCTION.—Nothing in this Act is intended 

7 to preclude an employer or employment agency from con8 sidering an individual’s employment history, or from ex9 amining the reasons underlying an individual’s status as 

10 unemployed, in assessing an individual’s ability to perform 

11 a job or in otherwise making employment decisions about 

12 that individual. Such consideration or examination may in13 clude an assessment of whether an individual’s employ14 ment in a similar or related job for a period of time rea15 sonably proximate to the consideration of such individual 

16 for employment is job-related or consistent with business 

17 necessity. 

18 SEC. 375. ENFORCEMENT. 

19 (a) ENFORCEMENT POWERS.—With respect to the 

20 administration and enforcement of this Act— 

21 (1) the Commission shall have the same powers 

22 as the Commission has to administer and enforce— 

23 (A) title VII of the Civil Rights Act of 

24 1964 (42 U.S.C. 2000e et seq.); or 


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1 (B) sections 302 and 304 of the Govern2 ment Employee Rights Act of 1991 (42 U.S.C. 

3 2000e–16b and 2000e–16c), 

4 in the case of an affected individual who would be 

5 covered by such title, or by section 302(a)(1) of the 

6 Government Employee Rights Act of 1991 (42 

7 U.S.C. 2000e–16b(a)(1)), respectively; 

8 (2) the Librarian of Congress shall have the 

9 same powers as the Librarian of Congress has to ad10 minister and enforce title VII of the Civil Rights Act 

11 of 1964 (42 U.S.C. 2000e et seq.) in the case of an 

12 affected individual who would be covered by such 

13 title; 

14 (3) the Board (as defined in section 101 of the 

15 Congressional Accountability Act of 1995 (2 U.S.C. 

16 1301)) shall have the same powers as the Board has 

17 to administer and enforce the Congressional Ac18 countability Act of 1995 (2 U.S.C. 1301 et seq.) in 

19 the case of an affected individual who would be cov20 ered by section 201(a)(1) of such Act (2 U.S.C. 

21 1311(a)(1)); 

22 (4) the Attorney General shall have the same 

23 powers as the Attorney General has to administer 

24 and enforce— 


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1 (A) title VII of the Civil Rights Act of 

2 1964 (42 U.S.C. 2000e et seq.); or 

3 (B) sections 302 and 304 of the Govern4 ment Employee Rights Act of 1991 (42 U.S.C. 

5 2000e–16b and 2000e–16c); 

6 in the case of an affected individual who would be 

7 covered by such title, or of section 302(a)(1) of the 

8 Government Employee Rights Act of 1991 (42 

9 U.S.C. 2000e–16b(a)(1)), respectively; 

10 (5) the President, the Commission, and the 

11 Merit Systems Protection Board shall have the same 

12 powers as the President, the Commission, and the 

13 Board, respectively, have to administer and enforce 

14 chapter 5 of title 3, United States Code, in the case 

15 of an affected individual who would be covered by 

16 section 411 of such title; and 

17 (6) a court of the United States shall have the 

18 same jurisdiction and powers as the court has to en19 force— 

20 (A) title VII of the Civil Rights Act of 

21 1964 (42 U.S.C. 2000e et seq.) in the case of 

22 a claim alleged by such individual for a viola23 tion of such title; 

24 (B) sections 302 and 304 of the Govern25 ment Employee Rights Act of 1991 (42 U.S.C. 


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1 2000e–16b and 2000e–16c) in the case of a 

2 claim alleged by such individual for a violation 

3 of section 302(a)(1) of such Act (42 U.S.C. 

4 2000e–16b(a)(1)); 

5 (C) the Congressional Accountability Act 

6 of 1995 (2 U.S.C. 1301 et seq.) in the case of 

7 a claim alleged by such individual for a viola8 tion of section 201(a)(1) of such Act (2 U.S.C. 

9 1311(a)(1)); and 

10 (D) chapter 5 of title 3, United States 

11 Code, in the case of a claim alleged by such in12 dividual for a violation of section 411 of such 

13 title. 

14 (b) PROCEDURES.—The procedures applicable to a 

15 claim alleged by an individual for a violation of this Act 

16 are— 

17 (1) the procedures applicable for a violation of 

18 title VII of the Civil Rights Act of 1964 (42 U.S.C. 

19 2000e et seq.) in the case of a claim alleged by such 

20 individual for a violation of such title; 

21 (2) the procedures applicable for a violation of 

22 section 302(a)(1) of the Government Employee 

23 Rights Act of 1991 (42 U.S.C. 2000e–16b(a)(1)) in 

24 the case of a claim alleged by such individual for a 

25 violation of such section; 


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1 (3) the procedures applicable for a violation of 

2 section 201(a)(1) of the Congressional Account3 ability Act of 1995 (2 U.S.C. 1311(a)(1)) in the 

4 case of a claim alleged by such individual for a viola5 tion of such section; and 

6 (4) the procedures applicable for a violation of 

7 section 411 of title 3, United States Code, in the 

8 case of a claim alleged by such individual for a viola9 tion of such section. 

10 (c) REMEDIES.— 

11 (1) In any claim alleging a violation of Section 

12 374(a)(1) or 374(b)(1) of this Act, an individual, or 

13 any person acting on behalf of the individual as set 

14 forth in Section 375(a) of this Act, may be awarded, 

15 as appropriate— 

16 (A) an order enjoining the respondent from 

17 engaging in the unlawful employment practice; 

18 (B) reimbursement of costs expended as a 

19 result of the unlawful employment practice; 

20 (C) an amount in liquidated damages not 

21 to exceed $1,000 for each day of the violation; 

22 and 

23 (D) reasonable attorney’s fees (including 

24 expert fees) and costs attributable to the pur25 suit of a claim under this Act, except that no 


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1 person identified in Section 103(a) of this Act 

2 shall be eligible to receive attorney’s fees. 

3 (2) In any claim alleging a violation of any 

4 other subsection of this Act, an individual, or any 

5 person acting on behalf of the individual as set forth 

6 in Section 375(a) of this Act, may be awarded, as 

7 appropriate, the remedies available for a violation of 

8 title VII of the Civil Rights Act of 1964 (42 U.S.C. 

9 2000e et seq.), section 302(a)(1) of the Government 

10 Employee Rights Act of 1991 (42 U.S.C. 2000e– 

11 16b(a)(1)), section 201(a)(1) of the Congressional 

12 Accountability Act of 1995 (2 U.S.C. 1311(a)(1)), 

13 and section 411 of title 3, United States Code, ex14 cept that in a case in which wages, salary, employ15 ment benefits, or other compensation have not been 

16 denied or lost to the individual, damages may be 

17 awarded in an amount not to exceed $5,000. 

18 SEC. 376. FEDERAL AND STATE IMMUNITY. 

19 (a) ABROGATION OF STATE IMMUNITY.—A State 

20 shall not be immune under the 11th Amendment to the 

21 Constitution from a suit brought in a Federal court of 

22 competent jurisdiction for a violation of this Act. 

23 (b) WAIVER OF STATE IMMUNITY.— 

24 (1) IN GENERAL.— 


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1 (A) WAIVER.—A State’s receipt or use of 

2 Federal financial assistance for any program or 

3 activity of a State shall constitute a waiver of 

4 sovereign immunity, under the 11th Amend5 ment to the Constitution or otherwise, to a suit 

6 brought by an employee or applicant for em7 ployment of that program or activity under this 

8 Act for a remedy authorized under Section 

9 375(c) of this Act. 

10 (B) DEFINITION.—In this paragraph, the 

11 term ‘‘program or activity’’ has the meaning 

12 given the term in section 606 of the Civil 

13 Rights Act of 1964 (42 U.S.C. 2000d–4a). 

14 (2) EFFECTIVE DATE.—With respect to a par15 ticular program or activity, paragraph (1) applies to 

16 conduct occurring on or after the day, after the date 

17 of enactment of this Act, on which a State first re18 ceives or uses Federal financial assistance for that 

19 program or activity. 

20 (c) REMEDIES AGAINST STATE OFFICIALS.—An offi21 cial of a State may be sued in the official capacity of the 

22 official by any employee or applicant for employment who 

23 has complied with the applicable procedures of this Act, 

24 for relief that is authorized under this Act. 


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1 (d) REMEDIES AGAINST THE UNITED STATES AND

2 THE STATES.—Notwithstanding any other provision of 

3 this Act, in an action or administrative proceeding against 

4 the United States or a State for a violation of this Act, 

5 remedies (including remedies at law and in equity) are 

6 available for the violation to the same extent as such rem7 edies would be available against a non-governmental enti8 ty. 

9 SEC. 377. RELATIONSHIP TO OTHER LAWS. 

10 This Act shall not invalidate or limit the rights, rem11 edies, or procedures available to an individual claiming 

12 discrimination prohibited under any other Federal law or 

13 regulation or any law or regulation of a State or political 

14 subdivision of a State. 

15 SEC. 378. SEVERABILITY. 

16 If any provision of this Act, or the application of the 

17 provision to any person or circumstance, is held to be in18 valid, the remainder of this Act and the application of the 

19 provision to any other person or circumstances shall not 

20 be affected by the invalidity. 

21 SEC. 379. EFFECTIVE DATE. 

22 This Act shall take effect on the date of enactment 

23 of this Act and shall not apply to conduct occurring before 

24 the effective date. 


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1 TITLE IV—OFFSETS 

2 Subtitle A—28 Percent Limitation 

3 on Certain Deductions and Ex4 clusions 

5 SEC. 401. 28 PERCENT LIMITATION ON CERTAIN DEDUC6 TIONS AND EXCLUSIONS. 

7 (a) IN GENERAL.—Part I of subchapter B of chapter 

8 1 of the Internal Revenue Code of 1986 is amended by 

9 adding at the end the following new section: 

10 ‘‘SEC. 69. LIMITATION ON CERTAIN DEDUCTIONS AND EX11 CLUSIONS. 

12 ‘‘(a) IN GENERAL.—In the case of an individual for 

13 any taxable year, if— 

14 ‘‘(1) the taxpayer’s adjusted gross income is 

15 above— 

16 ‘‘(A) $250,000 in the case of a joint return 

17 within the meaning of section 6013, 

18 ‘‘(B) $225,000 in the case of a head of 

19 household return, 

20 ‘‘(C) $125,000 in the case of a married fil21 ing separately return, or 

22 ‘‘(D) $200,000 in all other cases; and 

23 ‘‘(2) the taxpayer’s adjusted taxable income for 

24 such taxable year exceeds the minimum marginal 

25 rate amount, 


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1 then the tax imposed under section 1 with respect to such 

2 taxpayer for such taxable year shall be increased by the 

3 amount determined under subsection (b). If the taxpayer 

4 is subject to tax under section 55, then in lieu of an in5 crease in tax under section 1, the tax imposed under sec6 tion 55 with respect to such taxpayer for such taxable year 

7 shall be increased by the amount determined under sub8 section (c). 

9 ‘‘(b) ADDITIONAL AMOUNT.—The amount deter10 mined under this subsection with respect to any taxpayer 

11 for any taxable year is the excess (if any) of— 

12 ‘‘(1) the tax which would be imposed under sec13 tion 1 with respect to such taxpayer for such taxable 

14 year if ‘adjusted taxable income’ were substituted 

15 for ‘taxable income’ each place it appears therein, 

16 over 

17 ‘‘(2) the sum of— 

18 ‘‘(A) the tax which would be imposed 

19 under such section with respect to such tax20 payer for such taxable year on the greater of— 

21 ‘‘(i) taxable income, or 

22 ‘‘(ii) the minimum marginal rate 

23 amount, plus 


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1 ‘‘(B) 28 percent of the excess (if any) of 

2 the taxpayer’s adjusted taxable income over the 

3 greater of— 

4 ‘‘(i) the taxpayer’s taxable income, or 

5 ‘‘(ii) the minimum marginal rate 

6 amount. 

7 ‘‘(c) ADDITIONAL AMT AMOUNT.— 

8 ‘‘(1) The amount determined under this sub9 section with respect to any taxpayer for any taxable 

10 year is the additional amount computed under sub11 section (b) multiplied by the ratio that— 

12 ‘‘(A) the result of— 

13 ‘‘(i) all itemized deductions (before 

14 the application of section 68), plus 

15 ‘‘(ii) the specified above-the-line de16 ductions and specified exclusions, minus 

17 ‘‘(iii) the amount of deductions dis18 allowed under section 56(b)(1)(A) and (B), 

19 minus 

20 ‘‘(iv) the non-preference disallowed de21 ductions, bears to 

22 ‘‘(B) the sum of— 

23 ‘‘(i) the total of itemized deductions 

24 (after the application of section 68), plus 


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1 ‘‘(ii) the specified above-the-line de2 ductions and specified exclusions. 

3 ‘‘(2) If the top of the AMT exemption phase4 out range for the taxpayer exceeds the minimum 

5 marginal rate amount for the taxpayer and if the 

6 taxpayer’s alternative minimum taxable income does 

7 not exceed the top of the AMT exemption phase-out 

8 range, the taxpayer must increase its additional 

9 AMT amount by 7 percent of the excess of— 

10 ‘‘(A) the lesser of— 

11 ‘‘(i) the top of the AMT exemption 

12 phase-out range, or 

13 ‘‘(ii) the taxpayer’s alternative min14 imum taxable income, computed— 

15 ‘‘(I) without regard to any 

16 itemized deduction or any specified 

17 above-the-line deduction, and 

18 ‘‘(II) by including the amount of 

19 any specified exclusion; over 

20 ‘‘(B) the greater of— 

21 ‘‘(i) the taxpayer’s alternative min22 imum taxable income, or 

23 ‘‘(ii) the minimum marginal rate 

24 amount. 


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1 ‘‘(d) MINIMUM MARGINAL RATE AMOUNT.—For pur2 poses of this section, the term ‘minimum marginal rate 

3 amount’ means, with respect to any taxpayer for any tax4 able year, the highest amount of the taxpayer’s taxable 

5 income which would be subject to a marginal rate of tax 

6 under section 1 that is less than 36 percent with respect 

7 to such taxable year. 

8 ‘‘(e) ADJUSTED TAXABLE INCOME.—For purposes of 

9 this section— 

10 ‘‘(1) IN GENERAL.—The term ‘adjusted taxable 

11 income’ means taxable income computed— 

12 ‘‘(A) without regard to any itemized deduc13 tion or any specified above-the-line deduction, 

14 and 

15 ‘‘(B) by including in gross income any 

16 specified exclusion. 

17 ‘‘(2) SPECIFIED ABOVE-THE-LINE DEDUC18 TION.—The term ‘specified above-the-line deduction’ 

19 means— 

20 ‘‘(A) the deduction provided under section 

21 162(l) (relating to special rules for health insur22 ance costs of self-employed individuals), 

23 ‘‘(B) the deduction provided under section 

24 199 (relating to income attributable to domestic 

25 production activities), and 


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1 ‘‘(C) the deductions provided under the fol2 lowing paragraphs of section 62(a): 

3 ‘‘(i) Paragraph (2) (relating to certain 

4 trade and business deductions of employ5 ees), other than subparagraph (A) thereof. 

6 ‘‘(ii) Paragraph (15) (relating to mov7 ing expenses). 

8 ‘‘(iii) Paragraph (16) (relating to Ar9 cher MSAs). 

10 ‘‘(iv) Paragraph (17) (relating to in11 terest on education loans). 

12 ‘‘(v) Paragraph (18) (relating to high13 er education expenses). 

14 ‘‘(vi) Paragraph (19) (relating to 

15 health savings accounts). 

16 ‘‘(3) SPECIFIED EXCLUSION.—The term ‘speci17 fied exclusion’ means— 

18 ‘‘(A) any interest excluded under section 

19 103, 

20 ‘‘(B) any exclusion with respect to the cost 

21 described in section 6051(a)(14) (without re22 gard to subparagraph (B) thereof), and 

23 ‘‘(C) any foreign earned income excluded 

24 under section 911. 


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1 ‘‘(f) NON-PREFERENCE DISALLOWED DEDUC2 TIONS.—For purposes of this section, the term ‘AMT-al3 lowed deductions’ means all itemized deductions dis4 allowed by section 68 multiplied by the ratio that— 

5 ‘‘(1) a taxpayer’s itemized deductions for the 

6 taxable year that are subject to section 68 (that is, 

7 not including those excluded under section 68(c)) 

8 and that are not limited under section 56(b)(1)(A) 

9 or (B), bears to 

10 ‘‘(2) the taxpayer’s itemized deductions for the 

11 taxable year that are subject to section 68 (that is, 

12 not including those excluded under section 68(c)). 

13 ‘‘(g) REGULATIONS.—The Secretary shall prescribe 

14 such regulations as may be appropriate to carry out this 

15 section, including regulations which provide appropriate 

16 adjustments to the additional AMT amount.’’. 

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

18 this section shall apply to taxable years beginning on or 

19 after January 1, 2013. 


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1 Subtitle B—Tax Carried Interest in 

2 Investment Partnerships as Or3 dinary Income 

4 SEC. 411. PARTNERSHIP INTERESTS TRANSFERRED IN 

5 CONNECTION WITH PERFORMANCE OF SERV6 ICES. 

7 (a) MODIFICATION TO ELECTION TO INCLUDE PART8 NERSHIP INTEREST IN GROSS INCOME IN YEAR OF

9 TRANSFER.—Subsection (c) of section 83 of the Internal 

10 Revenue Code of 1986 is amended by redesignating para11 graph (4) as paragraph (5) and by inserting after para12 graph (3) the following new paragraph: 

13 ‘‘(4) PARTNERSHIP INTERESTS.—Except as 

14 provided by the Secretary— 

15 ‘‘(A) IN GENERAL.—In the case of any 

16 transfer of an interest in a partnership in con17 nection with the provision of services to (or for 

18 the benefit of) such partnership— 

19 ‘‘(i) the fair market value of such in20 terest shall be treated for purposes of this 

21 section as being equal to the amount of the 

22 distribution which the partner would re23 ceive if the partnership sold (at the time of 

24 the transfer) all of its assets at fair market 

25 value and distributed the proceeds of such 


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1 sale (reduced by the liabilities of the part2 nership) to its partners in liquidation of 

3 the partnership, and 

4 ‘‘(ii) the person receiving such interest 

5 shall be treated as having made the elec6 tion under subsection (b)(1) unless such 

7 person makes an election under this para8 graph to have such subsection not apply. 

9 ‘‘(B) ELECTION.—The election under sub10 paragraph (A)(ii) shall be made under rules 

11 similar to the rules of subsection (b)(2).’’. 

12 (b) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to interests in partnerships trans14 ferred after December 31, 2012. 

15 SEC. 412. SPECIAL RULES FOR PARTNERS PROVIDING IN16 VESTMENT MANAGEMENT SERVICES TO 

17 PARTNERSHIPS. 

18 (a) IN GENERAL.—Part I of subchapter K of chapter 

19 1 of the Internal Revenue Code of 1986 is amended by 

20 adding at the end the following new section: 


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1 ‘‘SEC. 710. SPECIAL RULES FOR PARTNERS PROVIDING IN2 VESTMENT MANAGEMENT SERVICES TO 

3 PARTNERSHIPS. 

4 ‘‘(a) TREATMENT OF DISTRIBUTIVE SHARE OF

5 PARTNERSHIP ITEMS.—For purposes of this title, in the 

6 case of an investment services partnership interest— 

7 ‘‘(1) IN GENERAL.—Notwithstanding section 

8 702(b)— 

9 ‘‘(A) an amount equal to the net capital 

10 gain with respect to such interest for any part11 nership taxable year shall be treated as ordi12 nary income, and 

13 ‘‘(B) subject to the limitation of paragraph 

14 (2), an amount equal to the net capital loss 

15 with respect to such interest for any partner16 ship taxable year shall be treated as an ordi17 nary loss. 

18 ‘‘(2) RECHARACTERIZATION OF LOSSES LIM19 ITED TO RECHARACTERIZED GAINS.—The amount 

20 treated as ordinary loss under paragraph (1)(B) for 

21 any taxable year shall not exceed the excess (if any) 

22 of— 

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1 terest for all preceding partnership taxable 

2 years to which this section applies, over 

3 ‘‘(B) the aggregate amount treated as or4 dinary loss under paragraph (1)(B) with re5 spect to such interest for all preceding partner6 ship taxable years to which this section applies. 

7 ‘‘(3) ALLOCATION TO ITEMS OF GAIN AND

8 LOSS.— 

9 ‘‘(A) NET CAPITAL GAIN.—The amount 

10 treated as ordinary income under paragraph 

11 (1)(A) shall be allocated ratably among the 

12 items of long-term capital gain taken into ac13 count in determining such net capital gain. 

14 ‘‘(B) NET CAPITAL LOSS.—The amount 

15 treated as ordinary loss under paragraph (1)(B) 

16 shall be allocated ratably among the items of 

17 long-term capital loss and short-term capital 

18 loss taken into account in determining such net 

19 capital loss. 

20 ‘‘(4) TERMS RELATING TO CAPITAL GAINS AND

21 LOSSES.—For purposes of this section— 

22 ‘‘(A) IN GENERAL.—Net capital gain, long23 term capital gain, and long-term capital loss, 

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1 termined under section 1222, except that such 

2 section shall be applied— 

3 ‘‘(i) without regard to the recharacter4 ization of any item as ordinary income or 

5 ordinary loss under this section, 

6 ‘‘(ii) by only taking into account items 

7 of gain and loss taken into account by the 

8 holder of such interest under section 702 

9 with respect to such interest for such tax10 able year, 

11 ‘‘(iii) by treating property which is 

12 taken into account in determining gains 

13 and losses to which section 1231 applies as 

14 capital assets held for more than 1 year, 

15 and 

16 ‘‘(iv) without regard to section 1202. 

17 ‘‘(B) NET CAPITAL LOSS.—The term ‘net 

18 capital loss’ means the excess of the losses from 

19 sales or exchanges of capital assets over the 

20 gains from such sales or exchanges. Rules simi21 lar to the rules of clauses (i) through (iv) of 

22 subparagraph (A) shall apply for purposes of 

23 the preceding sentence. 

24 ‘‘(5) SPECIAL RULES FOR DIVIDENDS.— 


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1 ‘‘(A) INDIVIDUALS.—Any dividend allo2 cated to any investment services partnership in3 terest shall not be treated as qualified dividend 

4 income for purposes of section 1(h). 

5 ‘‘(B) CORPORATIONS.—No deduction shall 

6 be allowed under section 243 or 245 with re7 spect to any dividend allocated to any invest8 ment services partnership interest. 

9 ‘‘(b) DISPOSITIONS OF PARTNERSHIP INTERESTS.— 

10 ‘‘(1) GAIN.— 

11 ‘‘(A) IN GENERAL.—Any gain on the dis12 position of an investment services partnership 

13 interest shall be— 

14 ‘‘(i) treated as ordinary income, and 

15 ‘‘(ii) recognized notwithstanding any 

16 other provision of this subtitle. 

17 ‘‘(B) EXCEPTIONS—CERTAIN TRANSFERS

18 TO CHARITIES AND RELATED PERSONS.—Sub19 paragraph (A) shall not apply to— 

20 ‘‘(i) a disposition by gift, 

21 ‘‘(ii) a transfer at death, or 

22 ‘‘(iii) other disposition identified by 

23 the Secretary as a disposition with respect 

24 to which it would be inconsistent with the 


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1 purposes of this section to apply subpara2 graph (A), 

3 if such gift, transfer, or other disposition is to 

4 an organization described in section 

5 170(b)(1)(A) (other than any organization de6 scribed in section 509(a)(3) or any fund or ac7 count described in section 4966(d)(2)) or a per8 son with respect to whom the transferred inter9 est is an investment services partnership inter10 est. 

11 ‘‘(2) LOSS.—Any loss on the disposition of an 

12 investment services partnership interest shall be 

13 treated as an ordinary loss to the extent of the ex14 cess (if any) of— 

15 ‘‘(A) the aggregate amount treated as ordi16 nary income under subsection (a) with respect 

17 to such interest for all partnership taxable 

18 years to which this section applies, over 

19 ‘‘(B) the aggregate amount treated as or20 dinary loss under subsection (a) with respect to 

21 such interest for all partnership taxable years 

22 to which this section applies. 

23 ‘‘(3) ELECTION WITH RESPECT TO CERTAIN EX24 CHANGES.—Paragraph (1)(A)(ii) shall not apply to 

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1 ship interest to a partnership in exchange for an in2 terest in such partnership if— 

3 ‘‘(A) the taxpayer makes an irrevocable 

4 election to treat the partnership interest re5 ceived in the exchange as an investment serv6 ices partnership interest, and 

7 ‘‘(B) the taxpayer agrees to comply with 

8 such reporting and recordkeeping requirements 

9 as the Secretary may prescribe. 

10 ‘‘(4) DISTRIBUTIONS OF PARTNERSHIP PROP11 ERTY.— 

12 ‘‘(A) IN GENERAL.—In the case of any dis13 tribution of property by a partnership with re14 spect to any investment services partnership in15 terest held by a partner, the partner receiving 

16 such property shall recognize gain equal to the 

17 excess (if any) of— 

18 ‘‘(i) the fair market value of such 

19 property at the time of such distribution, 

20 over 

21 ‘‘(ii) the adjusted basis of such prop22 erty in the hands of such partner (deter23 mined without regard to subparagraph 

24 (C)). 


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1 ‘‘(B) TREATMENT OF GAIN AS ORDINARY

2 INCOME.—Any gain recognized by such partner 

3 under subparagraph (A) shall be treated as or4 dinary income to the same extent and in the 

5 same manner as the increase in such partner’s 

6 distributive share of the taxable income of the 

7 partnership would be treated under subsection 

8 (a) if, immediately prior to the distribution, the 

9 partnership had sold the distributed property at 

10 fair market value and all of the gain from such 

11 disposition were allocated to such partner. For 

12 purposes of applying paragraphs (2) and (3) of 

13 subsection (a), any gain treated as ordinary in14 come under this subparagraph shall be treated 

15 as an amount treated as ordinary income under 

16 subsection (a)(1)(A). 

17 ‘‘(C) ADJUSTMENT OF BASIS.—In the case 

18 a distribution to which subparagraph (A) ap19 plies, the basis of the distributed property in 

20 the hands of the distributee partner shall be the 

21 fair market value of such property. 

22 ‘‘(D) SPECIAL RULES WITH RESPECT TO

23 MERGERS, DIVISIONS, AND TECHNICAL TERMI24 NATIONS.—In the case of a taxpayer which sat25 isfies requirements similar to the requirements 


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1 of subparagraphs (A) and (B) of paragraph (3), 

2 this paragraph and paragraph (1)(A)(ii) shall 

3 not apply to the distribution of a partnership 

4 interest if such distribution is in connection 

5 with a contribution (or deemed contribution) of 

6 any property of the partnership to which sec7 tion 721 applies pursuant to a transaction de8 scribed in paragraph (1)(B) or (2) of section 

9 708(b). 

10 ‘‘(c) INVESTMENT SERVICES PARTNERSHIP INTER11 EST.—For purposes of this section— 

12 ‘‘(1) IN GENERAL.—The term ‘investment serv13 ices partnership interest’ means any interest in an 

14 investment partnership acquired or held by any per15 son in connection with the conduct of a trade or 

16 business described in paragraph (2) by such person 

17 (or any person related to such person). An interest 

18 in an investment partnership held by any person— 

19 ‘‘(A) shall not be treated as an investment 

20 services partnership interest for any period be21 fore the first date on which it is so held in con22 nection with such a trade or business, 

23 ‘‘(B) shall not cease to be an investment 

24 services partnership interest merely because 


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1 such person holds such interest other than in 

2 connection with such a trade or business, and 

3 ‘‘(C) shall be treated as an investment 

4 services partnership interest if acquired from a 

5 related person in whose hands such interest was 

6 an investment services partnership interest. 

7 ‘‘(2) BUSINESSES TO WHICH THIS SECTION AP8 PLIES.—A trade or business is described in this 

9 paragraph if such trade or business primarily in10 volves the performance of any of the following serv11 ices with respect to assets held (directly or indi12 rectly) by the investment partnership referred to in 

13 paragraph (1): 

14 ‘‘(A) Advising as to the advisability of in15 vesting in, purchasing, or selling any specified 

16 asset. 

17 ‘‘(B) Managing, acquiring, or disposing of 

18 any specified asset. 

19 ‘‘(C) Arranging financing with respect to 

20 acquiring specified assets. 

21 ‘‘(D) Any activity in support of any service 

22 described in subparagraphs (A) through (C). 

23 ‘‘(3) INVESTMENT PARTNERSHIP.— 

24 ‘‘(A) IN GENERAL.—The term ‘investment 

25 partnership’ means any partnership if, at the 


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1 end of any calendar quarter ending after De2 cember 31, 2012— 

3 ‘‘(i) substantially all of the assets of 

4 the partnership are specified assets (deter5 mined without regard to any section 197 

6 intangible within the meaning of section 

7 197(d)), and 

8 ‘‘(ii) more than half of the contributed 

9 capital of the partnership is attributable to 

10 contributions of property by one or more 

11 persons in exchange for interests in the 

12 partnership which (in the hands of such 

13 persons) constitute property held for the 

14 production of income. 

15 ‘‘(B) SPECIAL RULES FOR DETERMINING

16 IF PROPERTY HELD FOR THE PRODUCTION OF

17 INCOME.—Except as otherwise provided by the 

18 Secretary, for purposes of determining whether 

19 any interest in a partnership constitutes prop20 erty held for the production of income under 

21 subparagraph (A)(ii)— 

22 ‘‘(i) any election under subsection (e) 

23 or (f) of section 475 shall be disregarded, 

24 and 

25 ‘‘(ii) paragraph (5)(B) shall not apply. 


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1 ‘‘(C) ANTIABUSE RULES.—The Secretary 

2 may issue regulations or other guidance which 

3 prevent the avoidance of the purposes of sub4 paragraph (A), including regulations or other 

5 guidance which treat convertible and contingent 

6 debt (and other debt having the attributes of 

7 equity) as a capital interest in the partnership. 

8 ‘‘(D) CONTROLLED GROUPS OF ENTI9 TIES.— 

10 ‘‘(i) IN GENERAL.—In the case of a 

11 controlled group of entities, if an interest 

12 in the partnership received in exchange for 

13 a contribution to the capital of the part14 nership by any member of such controlled 

15 group would (in the hands of such mem16 ber) constitute property not held for the 

17 production of income, then any interest in 

18 such partnership held by any member of 

19 such group shall be treated for purposes of 

20 subparagraph (A) as constituting (in the 

21 hands of such member) property not held 

22 for the production of income. 

23 ‘‘(ii) CONTROLLED GROUP OF ENTI24 TIES.—For purposes of clause (i), the term 

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1 trolled group of corporations as defined in 

2 section 1563(a)(1), applied without regard 

3 to subsections (a)(4) and (b)(2) of section 

4 1563. A partnership or any other entity 

5 (other than a corporation) shall be treated 

6 as a member of a controlled group of enti7 ties if such entity is controlled (within the 

8 meaning of section 954(d)(3)) by members 

9 of such group (including any entity treated 

10 as a member of such group by reason of 

11 this sentence). 

12 ‘‘(4) SPECIFIED ASSET.—The term ‘specified 

13 asset’ means securities (as defined in section 

14 475(c)(2) without regard to the last sentence there15 of), real estate held for rental or investment, inter16 ests in partnerships, commodities (as defined in sec17 tion 475(e)(2)), cash or cash equivalents, or options 

18 or derivative contracts with respect to any of the 

19 foregoing. 

20 ‘‘(5) RELATED PERSONS.— 

21 ‘‘(A) IN GENERAL.—A person shall be 

22 treated as related to another person if the rela23 tionship between such persons is described in 

24 section 267(b) or 707(b). 


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1 ‘‘(B) ATTRIBUTION OF PARTNER SERV2 ICES.—Any service described in paragraph (2) 

3 which is provided by a partner of a partnership 

4 shall be treated as also provided by such part5 nership. 

6 ‘‘(d) EXCEPTION FOR CERTAIN CAPITAL INTER7 ESTS.— 

8 ‘‘(1) IN GENERAL.—In the case of any portion 

9 of an investment services partnership interest which 

10 is a qualified capital interest, all items of gain and 

11 loss (and any dividends) which are allocated to such 

12 qualified capital interest shall not be taken into ac13 count under subsection (a) if— 

14 ‘‘(A) allocations of items are made by the 

15 partnership to such qualified capital interest in 

16 the same manner as such allocations are made 

17 to other qualified capital interests held by part18 ners who do not provide any services described 

19 in subsection (c)(2) and who are not related to 

20 the partner holding the qualified capital inter21 est, and 

22 ‘‘(B) the allocations made to such other in23 terests are significant compared to the alloca24 tions made to such qualified capital interest. 


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1 ‘‘(2) AUTHORITY TO PROVIDE EXCEPTIONS TO

2 ALLOCATION REQUIREMENTS.—To the extent pro3 vided by the Secretary in regulations or other guid4 ance— 

5 ‘‘(A) ALLOCATIONS TO PORTION OF QUALI6 FIED CAPITAL INTEREST.—Paragraph (1) may 

7 be applied separately with respect to a portion 

8 of a qualified capital interest. 

9 ‘‘(B) NO OR INSIGNIFICANT ALLOCATIONS

10 TO NONSERVICE PROVIDERS.—In any case in 

11 which the requirements of paragraph (1)(B) are 

12 not satisfied, items of gain and loss (and any 

13 dividends) shall not be taken into account under 

14 subsection (a) to the extent that such items are 

15 properly allocable under such regulations or 

16 other guidance to qualified capital interests. 

17 ‘‘(C) ALLOCATIONS TO SERVICE PRO18 VIDERS’ QUALIFIED CAPITAL INTERESTS WHICH

19 ARE LESS THAN OTHER ALLOCATIONS.—Alloca20 tions shall not be treated as failing to meet the 

21 requirement of paragraph (1)(A) merely be22 cause the allocations to the qualified capital in23 terest represent a lower return than the alloca24 tions made to the other qualified capital inter25 ests referred to in such paragraph. 


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1 ‘‘(3) SPECIAL RULE FOR CHANGES IN SERVICES

2 AND CAPITAL CONTRIBUTIONS.—In the case of an 

3 interest in a partnership which was not an invest4 ment services partnership interest and which, by 

5 reason of a change in the services with respect to as6 sets held (directly or indirectly) by the partnership 

7 or by reason of a change in the capital contributions 

8 to such partnership, becomes an investment services 

9 partnership interest, the qualified capital interest of 

10 the holder of such partnership interest immediately 

11 after such change shall not, for purposes of this sub12 section, be less than the fair market value of such 

13 interest (determined immediately before such 

14 change). 

15 ‘‘(4) SPECIAL RULE FOR TIERED PARTNER16 SHIPS.—Except as otherwise provided by the Sec17 retary, in the case of tiered partnerships, all items 

18 which are allocated in a manner which meets the re19 quirements of paragraph (1) to qualified capital in20 terests in a lower-tier partnership shall retain such 

21 character to the extent allocated on the basis of 

22 qualified capital interests in any upper-tier partner23 ship. 

24 ‘‘(5) EXCEPTION FOR NO-SELF-CHARGED

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1 cept as otherwise provided by the Secretary, an in2 terest shall not fail to be treated as satisfying the 

3 requirement of paragraph (1)(A) merely because the 

4 allocations made by the partnership to such interest 

5 do not reflect the cost of services described in sub6 section (c)(2) which are provided (directly or indi7 rectly) to the partnership by the holder of such in8 terest (or a related person). 

9 ‘‘(6) SPECIAL RULE FOR DISPOSITIONS.—In the 

10 case of any investment services partnership interest 

11 any portion of which is a qualified capital interest, 

12 subsection (b) shall not apply to so much of any 

13 gain or loss as bears the same proportion to the en14 tire amount of such gain or loss as— 

15 ‘‘(A) the distributive share of gain or loss 

16 that would have been allocated to the qualified 

17 capital interest (consistent with the require18 ments of paragraph (1)) if the partnership had 

19 sold all of its assets at fair market value imme20 diately before the disposition, bears to 

21 ‘‘(B) the distributive share of gain or loss 

22 that would have been so allocated to the invest23 ment services partnership interest of which such 

24 qualified capital interest is a part. 


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1 ‘‘(7) QUALIFIED CAPITAL INTEREST.—For pur2 poses of this subsection— 

3 ‘‘(A) IN GENERAL.—The term ‘qualified 

4 capital interest’ means so much of a partner’s 

5 interest in the capital of the partnership as is 

6 attributable to— 

7 ‘‘(i) the fair market value of any 

8 money or other property contributed to the 

9 partnership in exchange for such interest 

10 (determined without regard to section 

11 752(a)), 

12 ‘‘(ii) any amounts which have been in13 cluded in gross income under section 83 

14 with respect to the transfer of such inter15 est, and 

16 ‘‘(iii) the excess (if any) of— 

17 ‘‘(I) any items of income and 

18 gain taken into account under section 

19 702 with respect to such interest, over 

20 ‘‘(II) any items of deduction and 

21 loss so taken into account. 

22 ‘‘(B) ADJUSTMENT TO QUALIFIED CAPITAL

23 INTEREST.— 

24 ‘‘(i) DISTRIBUTIONS AND LOSSES.— 

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1 duced by distributions from the partner2 ship with respect to such interest and by 

3 the excess (if any) of the amount described 

4 in subparagraph (A)(iii)(II) over the 

5 amount described in subparagraph 

6 (A)(iii)(I). 

7 ‘‘(ii) SPECIAL RULE FOR CONTRIBU8 TIONS OF PROPERTY.—In the case of any 

9 contribution of property described in sub10 paragraph (A)(i) with respect to which the 

11 fair market value of such property is not 

12 equal to the adjusted basis of such prop13 erty immediately before such contribution, 

14 proper adjustments shall be made to the 

15 qualified capital interest to take into ac16 count such difference consistent with such 

17 regulations or other guidance as the Sec18 retary may provide. 

19 ‘‘(C) TECHNICAL TERMINATIONS, ETC., 

20 DISREGARDED.—No increase or decrease in the 

21 qualified capital interest of any partner shall re22 sult from a termination, merger, consolidation, 

23 or division described in section 708, or any 

24 similar transaction. 

25 ‘‘(8) TREATMENT OF CERTAIN LOANS.— 


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1 ‘‘(A) PROCEEDS OF PARTNERSHIP LOANS

2 NOT TREATED AS QUALIFIED CAPITAL INTER3 EST OF SERVICE PROVIDING PARTNERS.—For 

4 purposes of this subsection, an investment serv5 ices partnership interest shall not be treated as 

6 a qualified capital interest to the extent that 

7 such interest is acquired in connection with the 

8 proceeds of any loan or other advance made or 

9 guaranteed, directly or indirectly, by any other 

10 partner or the partnership (or any person re11 lated to any such other partner or the partner12 ship). The preceding sentence shall not apply to 

13 the extent the loan or other advance is repaid 

14 before January 1, 2013 unless such repayment 

15 is made with the proceeds of a loan or other ad16 vance described in the preceding sentence. 

17 ‘‘(B) REDUCTION IN ALLOCATIONS TO

18 QUALIFIED CAPITAL INTERESTS FOR LOANS

19 FROM NONSERVICE-PROVIDING PARTNERS TO

20 THE PARTNERSHIP.—For purposes of this sub21 section, any loan or other advance to the part22 nership made or guaranteed, directly or indi23 rectly, by a partner not providing services de24 scribed in subsection (c)(2) to the partnership 

25 (or any person related to such partner) shall be 


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1 taken into account in determining the qualified 

2 capital interests of the partners in the partner3 ship. 

4 ‘‘(e) OTHER INCOME AND GAIN IN CONNECTION

5 WITH INVESTMENT MANAGEMENT SERVICES.— 

6 ‘‘(1) IN GENERAL.—If— 

7 ‘‘(A) a person performs (directly or indi8 rectly) investment management services for any 

9 investment entity, 

10 ‘‘(B) such person holds (directly or indi11 rectly) a disqualified interest with respect to 

12 such entity, and 

13 ‘‘(C) the value of such interest (or pay14 ments thereunder) is substantially related to 

15 the amount of income or gain (whether or not 

16 realized) from the assets with respect to which 

17 the investment management services are per18 formed, 

19 any income or gain with respect to such interest 

20 shall be treated as ordinary income. Rules similar to 

21 the rules of subsections (a)(5) and (d) shall apply 

22 for purposes of this subsection. 

23 ‘‘(2) DEFINITIONS.—For purposes of this sub24 section— 

25 ‘‘(A) DISQUALIFIED INTEREST.— 


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1 ‘‘(i) IN GENERAL.—The term ‘dis2 qualified interest’ means, with respect to 

3 any investment entity— 

4 ‘‘(I) any interest in such entity 

5 other than indebtedness, 

6 ‘‘(II) convertible or contingent 

7 debt of such entity, 

8 ‘‘(III) any option or other right 

9 to acquire property described in sub10 clause (I) or (II), and 

11 ‘‘(IV) any derivative instrument 

12 entered into (directly or indirectly) 

13 with such entity or any investor in 

14 such entity. 

15 ‘‘(ii) EXCEPTIONS.—Such term shall 

16 not include— 

17 ‘‘(I) a partnership interest, 

18 ‘‘(II) except as provided by the 

19 Secretary, any interest in a taxable 

20 corporation, and 

21 ‘‘(III) except as provided by the 

22 Secretary, stock in an S corporation. 

23 ‘‘(B) TAXABLE CORPORATION.—The term 

24 ‘taxable corporation’ means— 

25 ‘‘(i) a domestic C corporation, or 


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1 ‘‘(ii) a foreign corporation substan2 tially all of the income of which is— 

3 ‘‘(I) effectively connected with 

4 the conduct of a trade or business in 

5 the United States, or 

6 ‘‘(II) subject to a comprehensive 

7 foreign income tax (as defined in sec8 tion 457A(d)(2)). 

9 ‘‘(C) INVESTMENT MANAGEMENT SERV10 ICES.—The term ‘investment management serv11 ices’ means a substantial quantity of any of the 

12 services described in subsection (c)(2). 

13 ‘‘(D) INVESTMENT ENTITY.—The term ‘in14 vestment entity’ means any entity which, if it 

15 were a partnership, would be an investment 

16 partnership. 

17 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 

18 such regulations or other guidance as is necessary or ap19 propriate to carry out the purposes of this section, includ20 ing regulations or other guidance to— 

21 ‘‘(1) provide modifications to the application of 

22 this section (including treating related persons as 

23 not related to one another) to the extent such modi24 fication is consistent with the purposes of this sec25 tion, and 


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1 ‘‘(2) coordinate this section with the other pro2 visions of this title. 

3 ‘‘(g) CROSS REFERENCE.—For 40 percent penalty on 

4 certain underpayments due to the avoidance of this sec5 tion, see section 6662.’’. 

6 (b) APPLICATION OF SECTION 751 TO INDIRECT DIS7 POSITIONS OF INVESTMENT SERVICES PARTNERSHIP IN8 TERESTS.— 

9 (1) IN GENERAL.—Subsection (a) of section 

10 751 of the Internal Revenue Code of 1986 is amend11 ed by striking ‘‘or’’ at the end of paragraph (1), by 

12 inserting ‘‘or’’ at the end of paragraph (2), and by 

13 inserting after paragraph (2) the following new 

14 paragraph: 

15 ‘‘(3) investment services partnership interests 

16 held by the partnership,’’. 

17 (2) CERTAIN DISTRIBUTIONS TREATED AS

18 SALES OR EXCHANGES.—Subparagraph (A) of sec19 tion 751(b)(1) of the Internal Revenue Code of 1986 

20 is amended by striking ‘‘or’’ at the end of clause (i), 

21 by inserting ‘‘or’’ at the end of clause (ii), and by 

22 inserting after clause (ii) the following new clause: 

23 ‘‘(iii) investment services partnership 

24 interests held by the partnership,’’. 


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1 (3) APPLICATION OF SPECIAL RULES IN THE

2 CASE OF TIERED PARTNERSHIPS.—Subsection (f) of 

3 section 751 of the Internal Revenue Code of 1986 

4 is amended by striking ‘‘or’’ at the end of paragraph 

5 (1), by inserting ‘‘or’’ at the end of paragraph (2), 

6 and by inserting after paragraph (2) the following 

7 new paragraph: 

8 ‘‘(3) investment services partnership interests 

9 held by the partnership,’’. 

10 (4) INVESTMENT SERVICES PARTNERSHIP IN11 TERESTS; QUALIFIED CAPITAL INTERESTS.—Section 

12 751 of the Internal Revenue Code of 1986 is amend13 ed by adding at the end the following new sub14 section: 

15 ‘‘(g) INVESTMENT SERVICES PARTNERSHIP INTER16 ESTS.—For purposes of this section— 

17 ‘‘(1) IN GENERAL.—The term ‘investment serv18 ices partnership interest’ has the meaning given 

19 such term by section 710(c). 

20 ‘‘(2) ADJUSTMENTS FOR QUALIFIED CAPITAL

21 INTERESTS.—The amount to which subsection (a) 

22 applies by reason of paragraph (3) thereof shall not 

23 include so much of such amount as is attributable 

24 to any portion of the investment services partnership 

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1 mined under rules similar to the rules of section 

2 710(d)). 

3 ‘‘(3) RECOGNITION OF GAINS.—Any gain with 

4 respect to which subsection (a) applies by reason of 

5 paragraph (3) thereof shall be recognized notwith6 standing any other provision of this title. 

7 ‘‘(4) COORDINATION WITH INVENTORY

8 ITEMS.—An investment services partnership interest 

9 held by the partnership shall not be treated as an 

10 inventory item of the partnership. 

11 ‘‘(5) PREVENTION OF DOUBLE COUNTING.— 

12 Under regulations or other guidance prescribed by 

13 the Secretary, subsection (a)(3) shall not apply with 

14 respect to any amount to which section 710 ap15 plies.’’. 

16 (c) TREATMENT FOR PURPOSES OF SECTION

17 7704.—Subsection (d) of section 7704 of the Internal 

18 Revenue Code of 1986 is amended by adding at the end 

19 the following new paragraph: 

20 ‘‘(6) INCOME FROM CERTAIN CARRIED INTER21 ESTS NOT QUALIFIED.— 

22 ‘‘(A) IN GENERAL.—Specified carried in23 terest income shall not be treated as qualifying 

24 income. 


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1 ‘‘(B) SPECIFIED CARRIED INTEREST IN2 COME.—For purposes of this paragraph— 

3 ‘‘(i) IN GENERAL.—The term ‘speci4 fied carried interest income’ means— 

5 ‘‘(I) any item of income or gain 

6 allocated to an investment services 

7 partnership interest (as defined in 

8 section 710(c)) held by the partner9 ship, 

10 ‘‘(II) any gain on the disposition 

11 of an investment services partnership 

12 interest (as so defined) or a partner13 ship interest to which (in the hands of 

14 the partnership) section 751 applies, 

15 and 

16 ‘‘(III) any income or gain taken 

17 into account by the partnership under 

18 subsection (b)(4) or (e) of section 

19 710. 

20 ‘‘(ii) EXCEPTION FOR QUALIFIED CAP21 ITAL INTERESTS.—A rule similar to the 

22 rule of section 710(d) shall apply for pur23 poses of clause (i). 

24 ‘‘(C) COORDINATION WITH OTHER PROVI25 SIONS.—Subparagraph (A) shall not apply to 


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1 any item described in paragraph (1)(E) (or so 

2 much of paragraph (1)(F) as relates to para3 graph (1)(E)). 

4 ‘‘(D) SPECIAL RULES FOR CERTAIN PART5 NERSHIPS.— 

6 ‘‘(i) CERTAIN PARTNERSHIPS OWNED

7 BY REAL ESTATE INVESTMENT TRUSTS.— 

8 Subparagraph (A) shall not apply in the 

9 case of a partnership which meets each of 

10 the following requirements: 

11 ‘‘(I) Such partnership is treated 

12 as publicly traded under this section 

13 solely by reason of interests in such 

14 partnership being convertible into in15 terests in a real estate investment 

16 trust which is publicly traded. 

17 ‘‘(II) 50 percent or more of the 

18 capital and profits interests of such 

19 partnership are owned, directly or in20 directly, at all times during the tax21 able year by such real estate invest22 ment trust (determined with the ap23 plication of section 267(c)). 


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1 ‘‘(III) Such partnership meets 

2 the requirements of paragraphs (2), 

3 (3), and (4) of section 856(c). 

4 ‘‘(ii) CERTAIN PARTNERSHIPS OWN5 ING OTHER PUBLICLY TRADED PARTNER6 SHIPS.—Subparagraph (A) shall not apply 

7 in the case of a partnership which meets 

8 each of the following requirements: 

9 ‘‘(I) Substantially all of the as10 sets of such partnership consist of in11 terests in one or more publicly traded 

12 partnerships (determined without re13 gard to subsection (b)(2)). 

14 ‘‘(II) Substantially all of the in15 come of such partnership is ordinary 

16 income or section 1231 gain (as de17 fined in section 1231(a)(3)). 

18 ‘‘(E) TRANSITIONAL RULE.—Subpara19 graph (A) shall not apply to any taxable year 

20 of the partnership beginning before the date 

21 which is 10 years after January 1, 2013.’’. 

22 (d) IMPOSITION OF PENALTY ON UNDERPAY23 MENTS.— 

24 (1) IN GENERAL.—Subsection (b) of section 

25 6662 of the Internal Revenue Code of 1986 is 


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1 amended by inserting after paragraph (7) the fol2 lowing new paragraph: 

3 ‘‘(8) The application of section 710(e) or the 

4 regulations or other guidance prescribed under sec5 tion 710(h) to prevent the avoidance of the purposes 

6 of section 710.’’. 

7 (2) AMOUNT OF PENALTY.— 

8 (A) IN GENERAL.—Section 6662 of the In9 ternal Revenue Code of 1986 is amended by 

10 adding at the end the following new subsection: 

11 ‘‘(k) INCREASE IN PENALTY IN CASE OF PROPERTY

12 TRANSFERRED FOR INVESTMENT MANAGEMENT SERV13 ICES.—In the case of any portion of an underpayment to 

14 which this section applies by reason of subsection (b)(8), 

15 subsection (a) shall be applied with respect to such portion 

16 by substituting ‘40 percent’ for ‘20 percent’.’’. 

17 (B) CONFORMING AMENDMENT.—Subpara18 graph (B) of section 6662A(e)(2) is amended 

19 by striking ‘‘or (i)’’ and inserting ‘‘, (i), or (k)’’. 

20 (3) SPECIAL RULES FOR APPLICATION OF REA21 SONABLE CAUSE EXCEPTION.—Subsection (c) of sec22 tion 6664 is amended— 

23 (A) by redesignating paragraphs (3) and 

24 (4) as paragraphs (4) and (5), respectively; 


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1 (B) by striking ‘‘paragraph (3)’’ in para2 graph (5)(A), as so redesignated, and inserting 

3 ‘‘paragraph (4)’’; and 

4 (C) by inserting after paragraph (2) the 

5 following new paragraph: 

6 ‘‘(3) SPECIAL RULE FOR UNDERPAYMENTS AT7 TRIBUTABLE TO INVESTMENT MANAGEMENT SERV8 ICES.— 

9 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

10 not apply to any portion of an underpayment to 

11 which section 6662 applies by reason of sub12 section (b)(8) unless— 

13 ‘‘(i) the relevant facts affecting the 

14 tax treatment of the item are adequately 

15 disclosed, 

16 ‘‘(ii) there is or was substantial au17 thority for such treatment, and 

18 ‘‘(iii) the taxpayer reasonably believed 

19 that such treatment was more likely than 

20 not the proper treatment. 

21 ‘‘(B) RULES RELATING TO REASONABLE

22 BELIEF.—Rules similar to the rules of sub23 section (d)(3) shall apply for purposes of sub24 paragraph (A)(iii).’’. 


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1 (e) INCOME AND LOSS FROM INVESTMENT SERVICES

2 PARTNERSHIP INTERESTS TAKEN INTO ACCOUNT IN DE3 TERMINING NET EARNINGS FROM SELF-EMPLOYMENT.— 

4 (1) INTERNAL REVENUE CODE.— 

5 (A) IN GENERAL.—Section 1402(a) of the 

6 Internal Revenue Code of 1986 is amended by 

7 striking ‘‘and’’ at the end of paragraph (16), by 

8 striking the period at the end of paragraph (17) 

9 and inserting ‘‘; and’’, and by inserting after 

10 paragraph (17) the following new paragraph: 

11 ‘‘(18) notwithstanding the preceding provisions 

12 of this subsection, in the case of any individual en13 gaged in the trade or business of providing services 

14 described in section 710(c)(2) with respect to any 

15 entity, investment services partnership income or 

16 loss (as defined in subsection (m)) of such individual 

17 with respect to such entity shall be taken into ac18 count in determining the net earnings from self-em19 ployment of such individual.’’. 

20 (B) INVESTMENT SERVICES PARTNERSHIP

21 INCOME OR LOSS.—Section 1402 of the Inter22 nal Revenue Code is amended by adding at the 

23 end the following new subsection: 

24 ‘‘(m) INVESTMENT SERVICES PARTNERSHIP INCOME

25 OR LOSS.—For purposes of subsection (a)— 


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1 ‘‘(1) IN GENERAL.—The term ‘investment serv2 ices partnership income or loss’ means, with respect 

3 to any investment services partnership interest (as 

4 defined in section 710(c)), the net of— 

5 ‘‘(A) the amounts treated as ordinary in6 come or ordinary loss under subsections (b) and 

7 (e) of section 710 with respect to such interest, 

8 ‘‘(B) all items of income, gain, loss, and 

9 deduction allocated to such interest, and 

10 ‘‘(C) the amounts treated as realized from 

11 the sale or exchange of property other than a 

12 capital asset under section 751 with respect to 

13 such interest. 

14 ‘‘(2) EXCEPTION FOR QUALIFIED CAPITAL IN15 TERESTS.—A rule similar to the rule of section 

16 710(d) shall apply for purposes of applying para17 graph (1)(B)(ii).’’. 

18 (2) SOCIAL SECURITY ACT.—Section 211(a) of 

19 the Social Security Act is amended by striking 

20 ‘‘and’’ at the end of paragraph (15), by striking the 

21 period at the end of paragraph (16) and inserting ‘‘; 

22 and’’, and by inserting after paragraph (16) the fol23 lowing new paragraph: 

24 ‘‘(17) Notwithstanding the preceding provisions 

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1 gaged in the trade or business of providing services 

2 described in section 710(c)(2) of the Internal Rev3 enue Code of 1986 with respect to any entity, invest4 ment services partnership income or loss (as defined 

5 in section 1402(m) of such Code) shall be taken into 

6 account in determining the net earnings from self7 employment of such individual.’’. 

8 (f) CONFORMING AMENDMENTS.— 

9 (1) Subsection (d) of section 731 of the Inter10 nal Revenue Code of 1986 is amended by inserting 

11 ‘‘section 710(b)(4) (relating to distributions of part12 nership property),’’ after ‘‘to the extent otherwise 

13 provided by’’. 

14 (2) Section 741 of the Internal Revenue Code 

15 of 1986 is amended by inserting ‘‘or section 710 (re16 lating to special rules for partners providing invest17 ment management services to partnerships)’’ before 

18 the period at the end. 

19 (3) The table of sections for part I of sub20 chapter K of chapter 1 of the Internal Revenue Code 

21 of 1986 is amended by adding at the end the fol22 lowing new item: 

‘‘Sec. 710. Special rules for partners providing investment management services to partnerships.’’. 

23 (g) EFFECTIVE DATE.— 


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1 (1) IN GENERAL.—Except as otherwise pro2 vided in this subsection, the amendments made by 

3 this section shall apply to taxable years ending after 

4 December 31, 2012. 

5 (2) PARTNERSHIP TAXABLE YEARS WHICH IN6 CLUDE EFFECTIVE DATE.—In applying section 

7 710(a) of the Internal Revenue Code of 1986 (as 

8 added by this section) in the case of any partnership 

9 taxable year which includes January 1, 2013, the 

10 amount of the net income referred to in such section 

11 shall be treated as being the lesser of the net income 

12 for the entire partnership taxable year or the net in13 come determined by only taking into account items 

14 attributable to the portion of the partnership taxable 

15 year which is after such date. 

16 (3) DISPOSITIONS OF PARTNERSHIP INTER17 ESTS.— 

18 (A) IN GENERAL.—Section 710(b) of such 

19 Code (as added by this section) shall apply to 

20 dispositions and distributions after December 

21 31, 2012. 

22 (B) INDIRECT DISPOSITIONS.—The amend23 ments made by subsection (b) shall apply to 

24 transactions after December 31, 2012. 


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1 (4) OTHER INCOME AND GAIN IN CONNECTION

2 WITH INVESTMENT MANAGEMENT SERVICES.—Sec3 tion 710(e) of such Code (as added by this section) 

4 shall take effect on January 1, 2013. 

5 Subtitle C—Close Loophole for 

6 Corporate Jet Depreciation 

7 SECTION 421. GENERAL AVIATION AIRCRAFT TREATED AS 

8 7-YEAR PROPERTY. 

9 (a) IN GENERAL.—Subparagraph (C) of section 

10 168(e)(3) of the Internal Revenue Code of 1986 (relating 

11 to classification of certain property) is amended by strik12 ing ‘‘and’’ at the end of clause (iv), by redesignating clause 

13 (v) as clause (vi), and by inserting after clause (iv) the 

14 following new clause: 

15 ‘‘(v) any general aviation aircraft, 

16 and’’. 

17 (b) CLASS LIFE.—Paragraph (3) of section 168(g) 

18 Internal Revenue Code of 1986 is amended by inserting 

19 after subparagraph (E) the following new subparagraph: 

20 ‘‘(F) GENERAL AVIATION AIRCRAFT.—In 

21 the case of any general aviation aircraft, the re22 covery period used for purposes of paragraph 

23 (2) shall be 12 years.’’. 

24 (c) GENERAL AVIATION AIRCRAFT.—Subsection (i) 

25 of section 168 Internal Revenue Code of 1986 is amended 


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1 by inserting after paragraph (19) the following new para2 graph: 

3 ‘‘(20) GENERAL AVIATION AIRCRAFT.—The 

4 term ‘general aviation aircraft’ means any airplane 

5 or helicopter (including airframes and engines) not 

6 used in commercial or contract carrying of pas7 sengers or freight, but which primarily engages in 

8 the carrying of passengers.’’. 

9 (d) EFFECTIVE DATE.—This section shall be effec10 tive for property placed in service after December 31, 

11 2012. 

12 Subtitle D—Repeal Oil Subsidies 

13 SEC. 431. REPEAL OF DEDUCTION FOR INTANGIBLE DRILL14 ING AND DEVELOPMENT COSTS IN THE CASE 

15 OF OIL AND GAS WELLS. 

16 (a) IN GENERAL.—Section 263(c) of the Internal 

17 Revenue Code of 1986 (relating to intangible drilling and 

18 development costs) is amended by adding at the end the 

19 following new sentence: ‘‘This subsection shall not apply 

20 in the case of oil and gas wells with respect to amounts 

21 paid or incurred after December 31, 2012.’’. 

22 (b) EFFECTIVE DATE.—The amendment made by 

23 this section shall apply to amounts paid or incurred after 

24 December 31, 2012. 


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1 SEC. 432. REPEAL OF DEDUCTION FOR TERTIARY 

2 INJECTANTS. 

3 (a) IN GENERAL.—Part VI of subchapter B of chap4 ter 1 of the Internal Revenue Code of 1986 (relating to 

5 itemized deductions for individuals and corporations) is 

6 amended by striking section 193 (relating to tertiary 

7 injectants). 

8 (b) CLERICAL AMENDMENT.—The table of sections 

9 for part VI of subchapter B of chapter 1 of the Internal 

10 Revenue Code of 1986 is amended by striking the item 

11 relating to section 193. 

12 (c) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to amounts paid or incurred after 

14 December 31, 2012. 

15 SEC. 433. REPEAL OF PERCENTAGE DEPLETION FOR OIL 

16 AND GAS WELLS. 

17 (a) IN GENERAL.—Section 613A of the Internal Rev18 enue Code of 1986 (relating to limitation on percentage 

19 depletion in the case of oil and gas wells) is amended to 

20 read as follows: 

21 ‘‘SEC. 613A. PERCENTAGE DEPLETION NOT ALLOWED IN 

22 CASE OF OIL AND GAS WELLS. 

23 ‘‘The allowance for depletion under section 611 with 

24 respect to any oil and gas well shall be computed without 

25 regard to section 613.’’. 


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

2 this section shall apply to taxable years beginning after 

3 December 31, 2012. 

4 SEC. 434. SECTION 199 DEDUCTION NOT ALLOWED WITH 

5 RESPECT TO OIL, NATURAL GAS, OR PRIMARY 

6 PRODUCTS THEREOF. 

7 (a) IN GENERAL.—Subparagraph (B) of section 

8 199(c)(4) of the Internal Revenue Code of 1986 (relating 

9 to income attributable to domestic production activities) 

10 is amended— 

11 (1) by striking ‘‘or’’ at the end of clause (ii), 

12 (2) by striking the period at the end of clause 

13 (iii) and inserting in lieu thereof ‘‘, or’’, and 

14 (3) by adding at the end thereof the following 

15 new clause: 

16 ‘‘(iv) the production, refining, proc17 essing, transportation, or distribution of 

18 oil, natural gas, or any primary product 

19 (within the meaning of subsection (d)(9)) 

20 thereof.’’. 

21 (b) CONFORMING AMENDMENT.—Paragraph (9) of 

22 section 199(d) is amended to read as follows: 

23 ‘‘(9) PRIMARY PRODUCT.—For purposes of sub24 section (c)(4)(B)(iv), the term ‘primary product’ has 


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1 the same meaning as when used in section 

2 927(a)(2)(C) as in effect before its repeal.’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to taxable years beginning after 

5 December 31, 2012. 

6 SEC. 435. REPEAL OIL AND GAS WORKING INTEREST EX7 CEPTION TO PASSIVE ACTIVITY RULES. 

8 (a) IN GENERAL.—Paragraph (3) of section 469(c) 

9 of the Internal Revenue Code of 1986 (relating to passive 

10 activity defined) is amended by adding at the end thereof 

11 the following new subparagraph: 

12 ‘‘(C) TERMINATION.—Subparagraph (A) 

13 shall not apply for any taxable year beginning 

14 after December 31 2012.’’. 

15 (b) EFFECTIVE DATE.—The amendment made by 

16 this section shall apply to taxable years beginning after 

17 December 31, 2012. 

18 SEC. 436. UNIFORM SEVEN-YEAR AMORTIZATION FOR GEO19 LOGICAL AND GEOPHYSICAL EXPENDITURES. 

20 (a) IN GENERAL.—Paragraph (1) of section 167(h) 

21 of the Internal Revenue Code of 1986 (relating to amorti22 zation of geological and geophysical expenditures) is 

23 amended by striking ‘‘24-month’’ and inserting in lieu 

24 thereof ‘‘7-year’’. 


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1 (b) CONFORMING AMENDMENTS.—Section 167(h) is 

2 amended— 

3 (1) by striking ‘‘24-month’’ in paragraph (4) 

4 and inserting in lieu thereof ‘‘7-year’’, and 

5 (2) by striking paragraph (5). 

6 (c) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to amounts paid or incurred after 

8 December 31, 2012. 

9 SEC. 437. REPEAL ENHANCED OIL RECOVERY CREDIT. 

10 (a) IN GENERAL.—Subpart D of part IV of sub11 chapter A of chapter 1 of the Internal Revenue Code of 

12 1986 (relating to business related credits) is amended by 

13 striking section 43 (relating to enhanced oil recovery cred14 it). 

15 (b) CLERICAL AMENDMENT.—The table of sections 

16 for subpart D of part IV of subchapter A of chapter 1 

17 of the Internal Revenue Code of 1986 is amended by strik18 ing the item relating to section 43. 

19 (c) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to taxable years beginning after 

21 December 31, 2012. 

22 SEC. 438. REPEAL MARGINAL WELL PRODUCTION CREDIT. 

23 (a) IN GENERAL.—Subpart D of part IV of sub24 chapter A of chapter 1 of the Internal Revenue Code of 

25 1986 (relating to business related credits) is amended by 


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1 striking section 45I (relating to credit for producing oil 

2 and gas from marginal wells). 

3 (b) CLERICAL AMENDMENT.—The table of sections 

4 for subpart D of part IV of subchapter A of chapter 1 

5 of the Internal Revenue Code of 1986 is amended by strik6 ing the item relating to section 45I. 

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

8 this section shall apply to taxable years beginning after 

9 December 31, 2012. 

10 Subtitle E—Dual Capacity 

11 Taxpayers 

12 SEC. 441. MODIFICATIONS OF FOREIGN TAX CREDIT RULES 

13 APPLICABLE TO DUAL CAPACITY TAXPAYERS. 

14 (a) IN GENERAL.—Section 901 of the Internal Rev15 enue Code of 1986 (relating to credit for taxes of foreign 

16 countries and of possessions of the United States) is 

17 amended by redesignating subsection (n) as subsection (o) 

18 and by inserting after subsection (m) the following new 

19 subsection: 

20 ‘‘(n) SPECIAL RULES RELATING TO DUAL CAPACITY

21 TAXPAYERS.— 

22 ‘‘(1) GENERAL RULE.—Notwithstanding any 

23 other provision of this chapter, any amount paid or 

24 accrued by a dual capacity taxpayer or any member 

25 of the worldwide affiliated group of which such dual 


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1 capacity taxpayer is also a member to any foreign 

2 country or to any possession of the United States 

3 for any period shall not be considered a tax to the 

4 extent such amount exceeds the amount (determined 

5 in accordance with regulations) which would have 

6 been required to be paid if the taxpayer were not a 

7 dual capacity taxpayer. 

8 ‘‘(2) DUAL CAPACITY TAXPAYER.—For pur9 poses of this subsection, the term ‘dual capacity tax10 payer’ means, with respect to any foreign country or 

11 possession of the United States, a person who— 

12 ‘‘(A) is subject to a levy of such country or 

13 possession, and 

14 ‘‘(B) receives (or will receive) directly or 

15 indirectly a specific economic benefit (as deter16 mined in accordance with regulations) from 

17 such country or possession. 

18 ‘‘(3) REGULATIONS.—The Secretary may issue 

19 such regulations or other guidance as is necessary or 

20 appropriate to carry out the purposes of this sub21 section.’’. 

22 (b) CONTRARY TREATY OBLIGATIONS UPHELD.— 

23 The amendments made by this section shall not apply to 

24 the extent contrary to any treaty obligation of the United 

25 States. 


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408 

•S 1549 PCS

1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to amounts that, if such amounts 

3 were an amount of tax paid or accrued, would be consid4 ered paid or accrued in taxable years beginning after De5 cember 31, 2012. 

6 SEC. 442. SEPARATE BASKET TREATMENT TAXES PAID ON 

7 FOREIGN OIL AND GAS INCOME. 

8 (a) SEPARATE BASKET FOR FOREIGN TAX CRED9 IT.—Paragraph (1) of section 904(d) of the Internal Rev10 enue Code of 1986 is amended by striking ‘‘and’’ at the 

11 end of subparagraph (A), by striking the period at the 

12 end of subparagraph (B) and inserting ‘‘, and’’, and by 

13 adding at the end the following: 

14 ‘‘(C) combined foreign oil and gas income 

15 (as defined in section 907(b)(1)).’’. 

16 (b) COORDINATION.—Section 904(d)(2) of such Code 

17 is amended by redesignating subparagraphs (J) and (K) 

18 as subparagraphs (K) and (L) and by inserting after sub19 paragraph (I) the following: 

20 ‘‘(J) COORDINATION WITH COMBINED FOR21 EIGN OIL AND GAS INCOME.—For purposes of 

22 this section, passive category income and gen23 eral category income shall not include combined 

24 foreign oil and gas income (as defined in section 

25 907(b)(1)).’’. 


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1 (c) CONFORMING AMENDMENTS.— 

2 (1) Section 907(a) is hereby repealed. 

3 (2) Section 907(c)(4) is hereby repealed. 

4 (3) Section 907(f) is hereby repealed. 

5 (d) EFFECTIVE DATES.— 

6 (1) IN GENERAL.—The amendments made by 

7 this section shall apply to taxable years beginning 

8 after December 31, 2012. 

9 (2) TRANSITIONAL RULES.— 

10 (A) CARRYOVERS.—Any unused foreign oil 

11 and gas taxes which under section 907(f) of 

12 such Code (as in effect before the amendment 

13 made by subsection (c)(3)) would have been al14 lowable as a carryover to the taxpayer’s first 

15 taxable year beginning after December 31, 

16 2012 (without regard to the limitation of para17 graph (2) of such section 907(f) for first tax18 able year) shall be allowed as carryovers under 

19 section 904(c) of such Code in the same man20 ner as if such taxes were unused taxes under 

21 such section 904(c) with respect to foreign oil 

22 and gas extraction income. 

23 (B) LOSSES.—The amendment made by 

24 subsection (c)(2) shall not apply to foreign oil 

25 and gas extraction losses arising in taxable 


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•S 1549 PCS

1 years beginning on or before the date of the en2 actment of this Act. 

3 Subtitle F—Increased Target and 

4 Trigger for Joint Select Com5 mittee on Deficit Reduction 

6 SEC. 451. INCREASED TARGET AND TRIGGER FOR JOINT 

7 SELECT COMMITTEE ON DEFICIT REDUC8 TION. 

9 (a) INCREASED TARGET FOR JOINT SELECT COM10 MITTEE.—Section 401(b)(2) of the Budget Control Act of 

11 2011 is amended by striking ‘‘$1,500,000,000,000’’ and 

12 inserting ‘‘$1,950,000,000,000’’. 

13 (b) TRIGGER FOR JOINT SELECT COMMITTEE.—Sec14 tion 302 of the Budget Control Act of 2011 is amended 

15 by redesignating subsection (b) as subsection (c) and by 

16 inserting after subsection (a) the following new subsection: 

17 ‘‘(b) TRIGGER.—If a joint committee bill achieving 

18 an amount greater than ‘$1,650,000,000,000’ in deficit 

19 reduction as provided in section 401(b)(3)(B)(i)(II) of this 

20 Act is enacted by January 15, 2012, then the amendments 

21 to the Internal Revenue Code of 1986 made by subtitles 

22 A through E of title IV of the American Jobs Act of 2011, 

23 shall not be in effect for any taxable year.’’. 


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Calendar No. 165 

112TH CONGRESS 

1ST SESSION S. 1549 

A BILL 

To provide tax relief for American workers and 

ing for jobs. vide pathways back to work for Americans lookrebuilding and modernizing America, and to probusinesses, to put workers back on the job while 

SEPTEMBER 14, 2011 

Read the second time and placed on the calendar 


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