II 

112TH CONGRESS 

2D SESSION S. 2252 

To rebuild the American middle class by creating jobs, investing in our 

future, building opportunity for working families, and restoring balance 

to the tax code. 

IN THE SENATE OF THE UNITED STATES 

MARCH 29, 2012 

Mr. HARKIN introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To rebuild the American middle class by creating jobs, investing in our future, building opportunity for working families, and restoring balance to the tax code. 

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 ‘‘Rebuild America Act’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—INVESTING IN AMERICA TO CREATE JOBS AND FUTURE 

GROWTH 


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Subtitle A—Investing in America’s Roads, Bridges, and Infrastructure 

Sec. 101. Modernization, renovation, and repair of educational facilities. 

Sec. 102. National energy renovation and retrofit program. 

Sec. 103. Rebuilding America’s infrastructure. 

Subtitle B—Rebuilding America’s Manufacturing Power 

Sec. 111. National manufacturing strategy. 

Sec. 112. Sectoral technology and innovation centers. 

Sec. 113. Capital for small manufacturers with firm orders. 

Sec. 114. Manufacturing Extension Partnership. 

Sec. 115. Extension of research credit; increase in alternative simplified research credit. 

Sec. 116. Inclusion of certain provisions in trade agreements. 

Sec. 117. Funding for Interagency Trade Enforcement Center. 

Sec. 118. Imposition of countervailing duties for subsidies relating to fundamentally undervalued currencies. 

Subtitle C—Preparing Americans for the Jobs of the Future 

Sec. 121. Short title. 

Sec. 122. Definitions. 

Sec. 123. Program. 

Sec. 124. Eligible entities. 

Sec. 125. Applications. 

Sec. 126. Priority and distribution. 

Sec. 127. Use of funds. 

Sec. 128. Matching requirement. 

Sec. 129. Funding. 

Subtitle D—Supporting Great Teachers 

Sec. 131. Short title. 

Sec. 132. Findings. 

Sec. 133. Purposes. 

Sec. 134. Definitions. 

Sec. 135. Grants authorized. 

Sec. 136. Application. 

Sec. 137. State use of grant funds. 

Sec. 138. Subgrants to local entities. 

Sec. 139. Reporting. 

Sec. 140. Teacher privacy. 

Sec. 141. Rule of construction. 

Sec. 142. Funding. 

Subtitle E—Creating Middle Class Jobs 

PART I—TEACHER STABILIZATION

Sec. 151. Purpose. 

Sec. 152. Definitions. 

Sec. 153. Reservations for the outlying areas and the Secretary of the Interior. 

Sec. 154. State allotments. 

Sec. 155. State application, reservation, and responsibilities. 

Sec. 156. Subgrants. 

Sec. 157. Maintenance of effort. 


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Sec. 158. Reporting. 

Sec. 159. Funding. 

PART II—FIRST RESPONDER STABILIZATION

Sec. 161. Purpose. 

Sec. 162. Career law enforcement officers grant program. 

Sec. 163. First responder grant program. 

PART III—MAINTAINING CRITICAL COMMUNITY SERVICES

Sec. 171. Definitions. 

Sec. 172. Maintaining critical community services. 

Sec. 173. Application. 

Sec. 174. Award basis. 

Sec. 175. Uses of funds. 

Sec. 176. Employee status, compliance with local laws, and contracts. 

Sec. 177. Supplement, not supplant. 

Sec. 178. Funding provided. 

TITLE II—CREATING FINANCIAL STABILITY AND A BETTER 

FUTURE FOR MIDDLE CLASS FAMILIES 

Subtitle A—Alleviating the High Cost of Child Care 

Sec. 201. CCDBG Plus. 

Subtitle B—Helping Americans Enjoy Their Golden Years 

PART I—COMMISSION ON RETIREMENT SECURITY

Sec. 211. Short title. 

Sec. 212. Findings. 

Sec. 213. Commission on Retirement Security. 

Sec. 214. Duties. 

Sec. 215. Commission personnel matters. 

Sec. 216. Termination of Commission. 

PART II—SOCIAL SECURITY

Sec. 221. Determination of taxable wages and self-employment income above 

contribution and benefit base after 2012. 

Sec. 222. Adjustments to bend points in determining primary insurance 

amount. 

Sec. 223. Consumer Price Index for Elderly Consumers. 

Sec. 224. Computation of cost-of-living increases for Social Security benefits. 

Sec. 225. Non-application of increase in Social Security benefits for other Federal or federally assisted programs. 

Subtitle C—Protecting Overtime Pay for Working Americans 

Sec. 231. Salary thresholds, highly compensated employees, and primary duties. 

Subtitle D—Preventing Americans From Having To Choose Between Their 

Health and Their Paycheck 

Sec. 241. Short title. 

Sec. 242. Findings. 

Sec. 243. Purposes. 


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Sec. 244. Definitions. 

Sec. 245. Provision of paid sick time. 

Sec. 246. Posting requirement. 

Sec. 247. Prohibited acts. 

Sec. 248. Enforcement authority. 

Sec. 249. Collection of data on paid sick time and further study. 

Sec. 250. Effect on other laws. 

Sec. 251. Effect on existing employment benefits. 

Sec. 252. Encouragement of more generous leave policies. 

Sec. 253. Regulations. 

Sec. 254. Effective dates. 

Subtitle E—Establishing a Fair Minimum Wage 

Sec. 261. Minimum wage increases. 

Subtitle F—Empowering Hardworking Americans 

Sec. 271. Amendments to the National Labor Relations Act. 

Subtitle G—Increasing Job Opportunities for Americans With Disabilities 

Sec. 281. Modification of work opportunity credit. 

TITLE III—RESTORING BALANCE AND FAIRNESS TO THE TAX 

CODE 

Sec. 300. Amendment of 1986 Code. 

Subtitle A—Instituting the ‘‘Buffett Rule’’ 

Sec. 301. Fair share tax on high-income taxpayers. 

Subtitle B—Adopting a Wall Street Trading and Speculators Tax 

Sec. 311. Transaction tax. 

Subtitle C—Ending Tax Breaks for Companies That Ship Jobs Overseas 

Sec. 321. Allocation of expenses and taxes on basis of repatriation of foreign 

income. 

Sec. 322. Excess income from transfers of intangibles to low-taxed affiliates 

treated as subpart F income. 

Sec. 323. Modifications of foreign tax credit rules applicable to dual capacity 

taxpayers. 

Subtitle D—Making Wall Street Take Responsibility 

Sec. 331. Financial Crisis Responsibility Fee. 

Subtitle E—Closing the Carried Interest Loophole 

Sec. 341. Partnership interests transferred in connection with performance of 

services. 

Sec. 342. Special rules for partners providing investment management services 

to partnerships. 

Subtitle F—Raising the Capital Gains Rate 

Sec. 351. Increased capital gains rate for high-income individuals. 


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Subtitle G—Pension Guaranty Improvement 

Sec. 361. Short title. 

Sec. 362. Findings. 

Sec. 363. Pension Benefit Guaranty Corporation Governance Improvement. 

Sec. 364. Participant and plan sponsor advocate. 

Sec. 365. Increase in multiemployer plan benefit guarantee and annual premium rates. 

Sec. 366. Improving single employer program solvency. 

Subtitle H—Pension and Participant Protection 

Sec. 371. Short title. 

Sec. 372. Findings. 

Sec. 373. Pension funding stabilization. 

Sec. 374. Congressional commitment to encouraging pensions. 

Sec. 375. Participant protection in bankruptcy. 

Subtitle I—Fair Playing Field 

Sec. 381. Short title; findings; purposes. 

Sec. 382. Authority to issue guidance clarifying employment status for purposes 

of employment taxes. 

TITLE IV—REBUILD AMERICA TRUST FUND 

Sec. 401. Establish Rebuild America Trust Fund. 

1 TITLE I—INVESTING IN AMERICA 

2 TO CREATE JOBS AND FU3 TURE GROWTH 

4 Subtitle A—Investing in America’s 

5 Roads, Bridges, and Infrastructure 

6 SEC. 101. MODERNIZATION, RENOVATION, AND REPAIR OF 

7 EDUCATIONAL FACILITIES. 

8 (a) PURPOSE.—The purpose of this section is to pro9 vide assistance for the modernization, renovation, and re10 pair of eligible educational facilities, including early learn11 ing facilities, public elementary school and secondary 

12 school facilities, and community college facilities. 

13 (b) DEFINITIONS.—In this section: 


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1 (1) ESEA DEFINITIONS.—The terms ‘‘elemen2 tary school’’, ‘‘local educational agency’’, ‘‘outlying 

3 area’’, ‘‘secondary school’’, ‘‘Secretary’’, and ‘‘State’’ 

4 have the meanings given the terms in section 9101 

5 of the Elementary and Secondary Education Act of 

6 1965 (20 U.S.C. 7801). 

7 (2) CHPS CRITERIA.—The term ‘‘CHPS Cri8 teria’’ means the green building rating criteria devel9 oped by the Collaborative for High Performance 

10 Schools. 

11 (3) COMMUNITY COLLEGE.—The term ‘‘commu12 nity college’’ means— 

13 (A) a junior or community college, as de14 fined in section 312(f) of the Higher Education 

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

16 (B) a 4-year public institution of higher 

17 education, as defined under section 101 of the 

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

19 1001), that awards a significant number of de20 grees and certificates, as determined by the 

21 Secretary, that are not— 

22 (i) baccalaureate degrees, or the 

23 equivalent of such degrees; or 

24 (ii) masters, professional, or other ad25 vanced degrees. 


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1 (4) ELIGIBLE ENTITY.—The term ‘‘eligible enti2 ty’’ means the following: 

3 (A) In reference to the modernization, ren4 ovation, or repair of an early learning facility, 

5 the term ‘‘eligible entity’’ means— 

6 (i) an eligible child care provider as 

7 defined in paragraph (5)(A) of section 

8 658P of the Child Care and Development 

9 Block Grant Act of 1990 (42 U.S.C. 

10 9858n(5)(A)); or 

11 (ii) a Head Start center under the 

12 Head Start Act (42 U.S.C. 9831 et seq.). 

13 (B) In reference to the modernization, ren14 ovation, or repair of a public elementary school 

15 or secondary school facility, the term ‘‘eligible 

16 entity’’ means a local educational agency. 

17 (C) In reference to the modernization, ren18 ovation, or repair of a community college facil19 ity, the term ‘‘eligible entity’’ means the com20 munity college. 

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

22 means the Energy Star program of the Department 

23 of Energy and the Environmental Protection Agen24 cy. 


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1 (6) GREEN GLOBES.—The term ‘‘Green 

2 Globes’’ means the Green Building Initiative envi3 ronmental design and rating system. 

4 (7) LEED GREEN BUILDING RATING SYS5 TEM.—The term ‘‘LEED Green Building Rating 

6 System’’ means the United States Green Building 

7 Council Leadership in Energy and Environmental 

8 Design green building rating system. 

9 (c) GRANTS TO STATES.— 

10 (1) IN GENERAL.—The Secretary shall allocate 

11 funds to each State, as described in paragraph (3), 

12 to enable the State to award subgrants, on a com13 petitive basis, to eligible entities for the purpose of 

14 modernizing, renovating, and repairing eligible edu15 cational facilities. Grant funds may be used for di16 rect payments, payment of interest on bonds, or pay17 ments for other financing instruments that are 

18 newly issued for the purpose of financing school 

19 modernization, renovation, or repair. 

20 (2) RESERVATIONS.—From the funds made 

21 available under subsection (i) for a fiscal year, the 

22 Secretary shall reserve for the purposes of this sec23 tion— 

24 (A) 0.5 percent for payments to the Sec25 retary of the Interior to provide assistance to 


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1 schools funded by the Bureau of Indian Edu2 cation; 

3 (B) 0.75 percent to provide assistance to 

4 the outlying areas; and 

5 (C) 0.25 percent for grants to institutions 

6 that are eligible to receive a grant under section 

7 316 of the Higher Education Act of 1965 (20 

8 U.S.C. 1059c). 

9 (3) AMOUNT OF FUNDS.—From the funds made 

10 available under subsection (i) for any fiscal year and 

11 remaining after the Secretary makes reservations 

12 under paragraph (2) for the fiscal year, the Sec13 retary shall allot to each State the sum of— 

14 (A) an amount that bears the same rela15 tionship to 35 percent of the remaining amount 

16 as the number of individuals who have not yet 

17 attained age 25 in the State, as determined by 

18 the Secretary on the basis of the most recent 

19 satisfactory data, bears to the number of those 

20 individuals in all such States, as so determined; 

21 and 

22 (B) an amount that bears the same rela23 tionship to 65 percent of the remaining amount 

24 as the number of individuals who have not yet 

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1 comes below the poverty line, in the State, as 

2 determined by the Secretary on the basis of the 

3 most recent satisfactory data, bears to the num4 ber of those individuals in all such States, as so 

5 determined. 

6 (4) REALLOCATION.—If a State does not apply 

7 for its allocation under this section, applies for less 

8 than the full allocation for which it is eligible, or 

9 does not use the allocation in a timely manner, the 

10 Secretary may reallocate all or a portion of the allo11 cation to the other States. 

12 (d) SUBGRANTS.— 

13 (1) IN GENERAL.—From the funds allocated to 

14 a State under subsection (c) for any fiscal year and 

15 remaining after the State makes any reservations 

16 under paragraph (2) for the fiscal year, each State 

17 receiving a grant under this section shall dis18 tribute— 

19 (A) 10 percent to award subgrants to eligi20 ble entities for the modernization, renovation, 

21 and repair of early learning facilities; 

22 (B) 65 percent to award subgrants to eligi23 ble entities for the modernization, renovation, 

24 and repair of public elementary school and sec25 ondary school facilities; and 


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1 (C) 25 percent to award subgrants to eligi2 ble entities for the modernization, renovation, 

3 and repair of community college facilities. 

4 (2) STATE ADMINISTRATION AND OTHER

5 COSTS.—Each State that receives a grant under this 

6 section may reserve not more than 1 percent of the 

7 grant allocation under subsection (c) for the pur8 poses of administering the distribution of subgrants 

9 under this section, including the provision of tech10 nical assistance to eligible entities. 

11 (3) MATCHING REQUIREMENT.— 

12 (A) IN GENERAL.—A State shall require 

13 eligible entities to match funds awarded under 

14 this subsection. 

15 (B) AMOUNT OF MATCHING FUNDS RE16 QUIREMENT.—The amount of a match de17 scribed in subparagraph (A) may be established 

18 by using a sliding scale that takes into account 

19 the relative poverty of the population served by 

20 the eligible entity. 

21 (e) STATE APPLICATIONS.—A State that desires to 

22 receive a grant under this section shall submit an applica23 tion to the Secretary at such time, in such manner, and 

24 containing such information and assurances as the SecVerDate Mar 15 2010 00:42 Apr 04, 2012 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2252.IS S2252

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1 retary may require. Such application shall include the fol2 lowing: 

3 (1) An identification of the State agency or en4 tity that will administer the grant program. 

5 (2) A description of the State’s process for de6 termining how subgrant funds will be distributed 

7 and administered, including— 

8 (A) how the State will determine the cri9 teria for awarding subgrants under subsection 

10 (d); and 

11 (B) how the State will consider— 

12 (i) the needs of each eligible entity, or 

13 each population served by an eligible enti14 ty, for assistance under this section; 

15 (ii) the impact of potential projects on 

16 job creation in the State; 

17 (iii) the fiscal capacity of the eligible 

18 entity applying for assistance; and 

19 (iv) the percentage of individuals 

20 served by the eligible entity who are from 

21 low-income families. 

22 (3) If the State plans to award subgrants to 

23 early learning facilities, a description of how the 

24 State will— 


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1 (A) coordinate, to the extent feasible, with 

2 State early childhood advisory councils estab3 lished under section 642B(b)(1)(A) of the Head 

4 Start Act (42 U.S.C. 9837b(b)(1)(A)); and 

5 (B) encourage eligible entities to coordi6 nate with organizations that have demonstrated 

7 experience in providing technical or financial 

8 assistance for the modernization, renovation, or 

9 repair of child care facilities. 

10 (4) A description of how the State will ensure 

11 that eligible entities receiving subgrants under this 

12 section meet the requirements of this section. 

13 (5) A description of how the State will give pri14 ority to eligible entities that serve the highest per15 centage of low-income individuals. 

16 (6) A description of how the State will give pri17 ority to eligible entities that use green practices that 

18 are certified, verified, or consistent with any applica19 ble provisions of— 

20 (A) the LEED Green Building Rating Sys21 tem; 

22 (B) Energy Star; 

23 (C) the CHPS Criteria; 

24 (D) Green Globes; or 


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1 (E) an equivalent program adopted by the 

2 State or another jurisdiction with authority over 

3 the eligible entity. 

4 (7) A description of the steps that the State 

5 will take to ensure that eligible entities receiving 

6 subgrants will adequately maintain any facilities 

7 that are modernized, renovated, or repaired with 

8 subgrant funds awarded under subsection (d). 

9 (f) USE OF FUNDS.—With respect to funds made 

10 available under this section that are used for the mod11 ernization, renovation, and repair of eligible educational 

12 facilities the following rules shall apply: 

13 (1) PERMISSIBLE USES OF FUNDS.—Facility 

14 modernization, renovation, and repair shall be lim15 ited to 1 or more of the following: 

16 (A) Upgrades, repair, or replacement of 

17 building systems or components to improve the 

18 quality of education and ensure the health and 

19 safety of students and staff. 

20 (B) Modifications necessary to render eligi21 ble educational facilities accessible in order to 

22 comply with the Americans with Disabilities Act 

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

24 504 of the Rehabilitation Act of 1973 (29 

25 U.S.C. 794). 


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1 (C) Improvements to environmental condi2 tions, including asbestos abatement or removal, 

3 and the reduction or elimination of human ex4 posure to lead-based paint, mold, or mildew. 

5 (D) Measures designed to reduce or elimi6 nate human exposure to classroom noise and 

7 environmental noise pollution. 

8 (E) Modifications necessary to reduce the 

9 consumption of electricity, natural gas, oil, 

10 water, coal, or land. 

11 (F) Upgrades or installations of edu12 cational technology infrastructure or training 

13 equipment. 

14 (2) IMPERMISSIBLE USES OF FUNDS.—Funds 

15 received under this section shall not be used for— 

16 (A) payment of maintenance costs; 

17 (B) purchase or upgrade of vehicles; 

18 (C) improvement or construction of stand19 alone facilities whose purpose is not the edu20 cation or care of children or other students, in21 cluding central office administration or oper22 ations or logistical support facilities; 

23 (D) athletic facilities; 

24 (E) purchase of carbon offsets; or 


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1 (F) the facilities of a sectarian institution, 

2 or facilities that are used primarily for sec3 tarian purposes. 

4 (3) SUPPLEMENT, NOT SUPPLANT.—A local 

5 educational agency or State-operated or State-sup6 ported eligible entity shall use Federal funds subject 

7 to this subsection only to supplement the amount of 

8 funds that would, in the absence of such Federal 

9 funds, be made available from non-Federal sources 

10 for school modernization, renovation, and repair. 

11 (g) GENERAL PROVISION.—Each eligible entity that 

12 receives subgrant funds under subsection (d) shall ensure 

13 that, if such eligible entity carries out modernization, ren14 ovation, and repair through a contract, any such contract 

15 process ensures the maximum number of qualified bidders, 

16 including small, minority, and women-owned businesses, 

17 through full and open competition. 

18 (h) REPORT.—The Secretary shall submit to the ap19 propriations committees and the authorizing committees 

20 (as defined in section 103 of the Higher Education Act 

21 of 1965 (20 U.S.C. 1003)) of the House of Representa22 tives and the Senate an annual report regarding the 

23 grants made under this section. 

24 (i) FUNDING.—There shall be made available from 

25 the Rebuild America Trust Fund under section 9512 of 


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1 the Internal Revenue Code of 1986, $2,000,000,000 for 

2 each of fiscal years 2013 through 2022 to carry out this 

3 section. 

4 SEC. 102. NATIONAL ENERGY RENOVATION AND RETROFIT 

5 PROGRAM. 

6 Part D of title III of the Energy Policy and Conserva7 tion Act is amended by inserting after section 364 (42 

8 U.S.C. 6324) the following: 

9 ‘‘SEC. 364A. NATIONAL ENERGY RENOVATION AND RET10 ROFIT PROGRAM. 

11 ‘‘(a) IN GENERAL.—The Secretary shall provide 

12 grants to eligible entities to pay the Federal share of the 

13 cost of carrying out comprehensive energy systems renova14 tion, including— 

15 ‘‘(1) energy systems planning and assessment; 

16 and 

17 ‘‘(2) implementation of energy efficiency and 

18 renewable energy projects. 

19 ‘‘(b) ELIGIBLE ENTITIES.—An entity shall be eligible 

20 to obtain a grant under this section if the entity is a resi21 dential, commercial, industrial, manufacturing, institu22 tional, educational, nonprofit, or other type of entity, orga23 nization, or consortia that is approved by the Secretary. 

24 ‘‘(c) USE.—A grant provided under this section may 

25 be used by an eligible entity— 


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1 ‘‘(1) to conduct entity energy assessments that 

2 cover total energy use across all members and activi3 ties of the entity; 

4 ‘‘(2) to analyze and summarize the major 

5 sources and impacts of the energy use described in 

6 paragraph (1); 

7 ‘‘(3) to identify alternative approaches to modi8 fying energy systems to reduce energy use, reduce 

9 the environmental and climatic impact of the energy 

10 use, and increase the use of clean, domestic energy; 

11 ‘‘(4) to formulate an entity strategy for chang12 ing the overall energy usage of the entity; 

13 ‘‘(5) to implement the strategy described in 

14 paragraph (4) through the purchase and installation 

15 of energy efficiency and renewable energy systems 

16 and other actions, as determined by the entity; and 

17 ‘‘(6) to track and evaluate the effects of the en18 tity energy renovation and retrofit efforts. 

19 ‘‘(d) ADMINISTRATION.—The Secretary, in collabora20 tion with State energy offices, shall establish procedures 

21 for soliciting and evaluating proposals from entities, over22 seeing grants to eligible entities, and otherwise admin23 istering this section, including procedures for— 

24 ‘‘(1) annual solicitation and grant cycles; 


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1 ‘‘(2) education and technical assistance pro2 grams; and 

3 ‘‘(3) reporting and information-sharing activi4 ties. 

5 ‘‘(e) ALLOCATION OF FUNDS.—The Secretary shall— 

6 ‘‘(1) determine the amount of funds that are al7 located for grants for States and political subdivi8 sions of States for a fiscal year under this section; 

9 ‘‘(2) provide a Federal share of not more than 

10 50 percent of the cost of carrying out energy renova11 tion programs under this section; and 

12 ‘‘(3) permit an eligible entity to provide the 

13 non-Federal share of the cost of carrying out energy 

14 renovation and retrofit programs under this section 

15 in the form of in-kind services. 

16 ‘‘(f) FUNDING.—There shall be made available from 

17 the Rebuild America Trust Fund under section 9512 of 

18 the Internal Revenue Code of 1986, $1,500,000,000 for 

19 each of fiscal years 2013 through 2022 to carry out this 

20 section.’’. 

21 SEC. 103. REBUILDING AMERICA’S INFRASTRUCTURE. 

22 (a) IN GENERAL.—For fiscal years 2013 through 

23 2022 and subject to the limitations provided in subsection 

24 (b), the following amounts shall be provided from the ReVerDate Mar 15 2010 00:42 Apr 04, 2012 Jkt 099200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\S2252.IS S2252

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1 build America Trust Fund (referred to in this section as 

2 the ‘‘trust fund’’): 

3 (1) RURAL COMMUNITY FACILITIES PROGRAM

4 ACCOUNT OF THE DEPARTMENT OF AGRI5 CULTURE.—For additional amounts for the cost of 

6 direct loans and grants for rural community facili7 ties programs as provided for under section 306 and 

8 described in section 381E(d)(1) of the Consolidated 

9 Farm and Rural Development Act, $400,000,000 in 

10 each of fiscal years 2013 and 2014 and 

11 $200,000,000 in each of fiscal years 2015 through 

12 fiscal year 2021. 

13 (2) RURAL WATER AND WASTE DISPOSAL PRO14 GRAM ACCOUNT OF THE RURAL UTILITIES SERV15 ICE.—For an additional amount for the cost of di16 rect loans and grants for the rural water, waste 

17 water, and waste disposal programs as provide for 

18 under sections 306 and 310B and described in sec19 tion 381E(d)(2) of the Consolidated Farm and 

20 Rural Development Act, $1,200,000,000 in each of 

21 fiscal years 2013 and 2014 and $600,000,000 in 

22 each of fiscal years 2015 through fiscal year 2021. 

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1 graph, only the community receiving the benefit for 

2 a project shall be considered. 

3 (3) ECONOMIC DEVELOPMENT ADMINISTRATION

4 OF THE DEPARTMENT OF COMMERCE.—For an addi5 tional amount for ‘‘Economic Development Assist6 ance Programs’’, $500,000,000 in each of fiscal 

7 years 2013 and 2014 and $250,000,000 in each of 

8 fiscal years 2015 through fiscal year 2021. Of the 

9 sum provided by the preceding sentence, 10 percent 

10 of those funds provided may be transferred to feder11 ally authorized regional economic development com12 missions. 

13 (4) CORPS OF ENGINEERS CIVIL OF THE DE14 PARTMENT OF THE ARMY OF THE DEPARTMENT OF

15 DEFENSE.— 

16 (A) INVESTIGATIONS.—For an additional 

17 amount for ‘‘Investigations’’, $200,000,000 in 

18 each of fiscal years 2013 and 2014 and 

19 $100,000,000 in each of fiscal years 2015 

20 through fiscal year 2021. 

21 (B) CONSTRUCTION.—For additional 

22 amounts for construction, $1,800,000,000 in 

23 each of fiscal years 2013 and 2014 and 

24 $900,000,000 in each of fiscal years 2015 

25 through fiscal year 2021. 


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1 (C) SHARING.—Notwithstanding any other 

2 provision of law, funds provided in this para3 graph shall not be cost shared with the Inland 

4 Waterways Trust Fund as authorized in Public 

5 Law 99–662. 

6 (5) ENERGY EFFICIENCY AND RENEWABLE EN7 ERGY PROGRAM OF THE DEPARTMENT OF EN8 ERGY.— 

9 (A) EFFICIENCY.—$2,000,000,000 shall 

10 be available for Energy Efficiency and Con11 servation Block Grants for implementation of 

12 programs authorized under subtitle E of title V 

13 of the Energy Independence and Security Act 

14 of 2007 (42 U.S.C. 17151 et seq.) in each of 

15 fiscal years 2013 and 2014 and $1,000,000,000 

16 in each of fiscal years 2015 through fiscal year 

17 2021. Provided further, that 40 percent of 

18 these funds shall be awarded on a competitive 

19 basis. 

20 (B) WEATHERIZATION.— 

21 (i) IN GENERAL.—$2,000,000,000 

22 shall be available for the Weatherization 

23 Assistance Program under part A of title 

24 IV of the Energy Conservation and Pro25 duction Act (42 U.S.C. 6861 et seq.) in 


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1 each of fiscal years 2013 and 2014 and 

2 $1,000,000,000 in each of fiscal years 

3 2015 through fiscal year 2021. 

4 (ii) WEATHERIZATION ASSISTANCE

5 PROGRAM AMENDMENTS.— 

6 (I) INCOME LEVEL.—Section 

7 412(7) of the Energy Conservation 

8 and Production Act (42 U.S.C. 

9 6862(7)) is amended by striking ‘‘150 

10 percent’’ both places it appears and 

11 inserting ‘‘200 percent’’. 

12 (II) ASSISTANCE LEVEL PER

13 DWELLING UNIT.—Section 415(c)(1) 

14 of the Energy Conservation and Pro15 duction Act (42 U.S.C. 6865(c)(1)) is 

16 amended by striking ‘‘$2,500’’ and in17 serting ‘‘$7,000’’. 

18 (C) STATES.—$2,000,000,000 shall be for 

19 the State Energy Program authorized under 

20 part D of title III of the Energy Policy and 

21 Conservation Act (42 U.S.C. 6321) in each of 

22 fiscal years 2013 and 2014 and $1,000,000,000 

23 in each of fiscal years 2015 through fiscal year 

24 2022. 


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1 (6) MITIGATION FOR THE FEDERAL EMER2 GENCY MANAGEMENT AGENCY OF THE DEPARTMENT

3 OF HOMELAND SECURITY.—$1,500,000,000 shall be 

4 available for the Hazard Mitigation Program in each 

5 of fiscal years 2013 and 2014 and $750,000,000 in 

6 each of fiscal years 2015 through fiscal year 2021. 

7 These funds shall be allocated by the Administrator 

8 in proportion to the hazard mitigation grants that 

9 were allocated to the states in the prior 5 years 

10 through Stafford Act allocations. 

11 (7) STATE AND TRIBAL ASSISTANCE GRANTS OF

12 THE ENVIRONMENTAL PROTECTION AGENCY.—For 

13 State and Tribal Assistance Grants, $8,000,000,000 

14 shall be provided in each of fiscal years 2013 and 

15 2014 and $4,000,000,000 in each of fiscal years 

16 2015 through fiscal year 2022 to be allocated as 

17 grants under section 1452 of the Safe Drinking 

18 Water Act. The funds appropriated by this para19 graph shall not be subject to the matching or cost 

20 share requirements of sections 602(b)(2), 602(b)(3) 

21 or 202 of the Federal Water Pollution Control Act 

22 nor the matching requirements of section 1452(e) of 

23 the Safe Drinking Water Act. 

24 (8) SUPPLEMENTAL DISCRETIONARY GRANTS

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1 TEM OF THE DEPARTMENT OF TRANSPORTATION.— 

2 For an additional amount for capital investments in 

3 surface transportation infrastructure, 

4 $1,500,000,000 in each of fiscal years 2013 and 

5 2014 and $750,000,000 in each of fiscal years 2015 

6 through fiscal year 2021 to be awarded by the Sec7 retary of Transportation to State and local govern8 ments or transit agencies on a competitive basis for 

9 projects that will have a significant impact on the 

10 United States, a metropolitan area, or a region: Pro11 vided further, That projects eligible for funding pro12 vided under this heading shall include highway or 

13 bridge projects eligible under title 23, United States 

14 Code, including interstate rehabilitation, improve15 ments to the rural collector road system, the recon16 struction of overpasses and interchanges, bridge re17 placements, seismic retrofit projects for bridges, and 

18 road realignments; public transportation projects eli19 gible under chapter 53 of title 49, United States 

20 Code, including investments in projects participating 

21 in the New Starts or Small Starts programs that 

22 will expedite the completion of those projects and 

23 their entry into revenue service; passenger and 

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1 nect ports to other modes of transportation and im2 prove the efficiency of freight movement. Not more 

3 than 20 percent of the funds made available under 

4 this paragraph may be awarded to projects in a sin5 gle State. 

6 (9) FEDERAL AVIATION ADMINISTRATION.— 

7 $300,000,000 for necessary investments in Federal 

8 Aviation Administration to make improvements to 

9 power systems, air route traffic control centers, air 

10 traffic control towers, terminal radar approach con11 trol facilities, and navigation and landing equipment 

12 in each of fiscal years 2013 and 2014 and 

13 $150,000,000 in each of fiscal years 2015 through 

14 fiscal year 2021. 

15 (10) GRANTS-IN-AID FOR AIRPORTS.— 

16 $600,000,000 for ‘‘Grants-In-Aid for Airports’’ to 

17 make grants for discretionary projects as authorized 

18 by subchapter 1 of chapter 471 and subchapter 1 of 

19 chapter 475 of title 49, United States Code, and for 

20 the procurement, installation and commissioning of 

21 runway incursion prevention devices and systems at 

22 airports in each of fiscal years 2013 and 2014 and 

23 $300,000,000 in each of fiscal years 2015 through 

24 fiscal year 2021. 

25 (11) FEDERAL HIGHWAY ADMINISTRATION.— 


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1 (A) HIGHWAY INFRASTRUCTURE INVEST2 MENT.—$24,000,000,000 in each of fiscal years 

3 2013 and 2014 and $12,000,000,000 in each of 

4 fiscal years 2015 through fiscal year 2021 to be 

5 allocated to the States in proportion to the allo6 cations provided for programs under the admin7 istration of the Federal Highway Administra8 tion under SAFTEA–LU. 

9 (B) CAPITAL ASSISTANCE FOR HIGH

10 SPEED RAIL CORRIDORS AND INTERCITY PAS11 SENGER RAIL SERVICE.—For an additional 

12 amount for section 501 of Public Law 110–432 

13 and discretionary grants to States to pay for 

14 the cost of projects described in paragraphs 

15 (2)(A) and (2)(B) of section 24401 of title 49, 

16 United States Code, subsection (b) of section 

17 24105 of such title, $2,000,000,000 in each of 

18 fiscal years 2013 through fiscal year 2021. Not 

19 less than 80 percent of these funds shall be al20 located to the Federal Railroad Administration 

21 for projects that are expected to achieve 125 

22 miles per hour on not less than 50 percent of 

23 the route. 

24 (12) TRANSIT CAPITAL ASSISTANCE OF THE

25 FEDERAL TRANSIT ADMINISTRATION.—For transit 


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1 capital grants under the allocations provided for 

2 under SAFTEA–LU and its extensions by both for3 mula and competitively, $3,000,000,000 in each of 

4 fiscal years 2013 and 2014 and $1,500,000,000 in 

5 each of fiscal years 2015 through fiscal year 2021. 

6 Not less than one-third of these funds shall be allo7 cated under the discretionary bus program. 

8 (13) COMMUNITY DEVELOPMENT FUND OF THE

9 COMMUNITY PLANNING AND DEVELOPMENT ADMIN10 ISTRATION.—For an additional amount for ‘‘Com11 munity Development Fund’’, $2,000,000,000 in each 

12 of fiscal years 2013 and 2014 and $1,000,000,000 

13 in each of fiscal years 2015 through fiscal year 2021 

14 to carry out the community development block grant 

15 program under title I of the Housing and Commu16 nity Development Act of 1974 (42 U.S.C. 5301 et 

17 seq.): Provided, That the amount appropriated in 

18 this paragraph shall be distributed pursuant to 42 

19 U.S.C. 5306 to grantees that received funding in fis20 cal year 2012. These funds shall be used for capital 

21 projects. 

22 (b) SUPPLEMENT NOT SUPPLANT.— 

23 (1) IN GENERAL.—An entity shall use Federal 

24 funds made available under this section only to sup25 plement the amount of funds that would, in the abVerDate Mar 15 2010 00:42 Apr 04, 2012 Jkt 099200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\S2252.IS S2252

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1 sence of such Federal funds, be made available from 

2 non-Federal sources for the activities involved. 

3 (2) MAINTENANCE OF EFFORT.—An entity 

4 shall ensure that for each fiscal year in which the 

5 entity receives Federal funds under this section, the 

6 entity will maintain existing non-Federal support for 

7 the activities for which such funds are provided at 

8 not less than the level of such support for the fiscal 

9 year preceding the year for which the funds are 

10 being provided. 

11 (c) GENERAL PROVISION.—Each entity that receives 

12 assistance with amounts made available under this section 

13 shall ensure that, if such entity carries out modernization, 

14 renovation, and repair through a contract, any such con15 tract process ensures the maximum number of qualified 

16 bidders, including small, minority, and women-owned busi17 nesses, through full and open competition. 

18 Subtitle B—Rebuilding America’s 

19 Manufacturing Power 

20 SEC. 111. NATIONAL MANUFACTURING STRATEGY. 

21 (a) STRATEGY REQUIRED.— 

22 (1) IN GENERAL.—Not later than 180 days 

23 after the date of the enactment of this Act, the 

24 President shall develop a comprehensive national 

25 manufacturing strategy. 


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1 (2) BIENNIAL REVISIONS.—Not less frequently 

2 than once every 2 years after the date on which the 

3 President completes the strategy required by para4 graph (1), the President shall revise such strategy. 

5 (b) GOALS OF STRATEGY.—The President shall in6 clude in the national manufacturing strategy required by 

7 subsection (a) short- and long-term goals for United 

8 States manufacturing, including goals— 

9 (1) to increase the aggregate number of manu10 facturing jobs in the United States so that such 

11 number is not less than 20 percent of the sum of all 

12 nonfarm jobs in the United States; 

13 (2) to identify emerging technologies to 

14 strengthen the competitiveness of United States 

15 manufacturing in the global marketplace; and 

16 (3) to strengthen the manufacturing sectors of 

17 the United States in which the United States is 

18 most competitive in the global economy. 

19 (c) INFORMATION REQUIRED.—The national manu20 facturing strategy required by subsection (a) shall include 

21 the following: 

22 (1) A survey of all persons with headquarters in 

23 the United States that maintain manufacturing fa24 cilities outside of the United States to identify— 


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1 (A) the categories of products manufac2 tured at such facilities; and 

3 (B) the number of manufacturing jobs lo4 cated at such facilities. 

5 (2) A survey of all Federal agencies that pro6 vide assistance to United States manufacturers, in7 cluding the following: 

8 (A) The Department of Commerce. 

9 (B) The Department of Defense. 

10 (C) The Department of Energy. 

11 (D) The Department of Labor. 

12 (E) The Department of the Treasury. 

13 (F) The Small Business Administration. 

14 (G) The Office of Management and Budg15 et. 

16 (H) The Office of Science and Technology 

17 Policy. 

18 (I) The Office of the United States Trade 

19 Representative. 

20 (J) The National Science Foundation. 

21 (K) Such other Federal agencies as the 

22 President considers appropriate. 

23 (3) A survey of manufacturing goods produced 

24 in the United States and where such goods are pro25 duced. 


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1 (4) The number of people in the United States 

2 employed by manufacturers operating in the United 

3 States. 

4 (5) An evaluation of the global competitiveness 

5 of United States manufacturing, including the fol6 lowing: 

7 (A) A comparison of the manufacturing 

8 policies and strategies of the United States with 

9 the policies and strategies of other counties, in10 cluding the countries that are the top 5 trading 

11 partners of the United States. 

12 (B) A comparison of the productivity of 

13 each sector of the manufacturing industry in 

14 the United States with comparable sectors of 

15 manufacturing industries in other countries. 

16 (d) RECOMMENDATIONS.—The President shall in17 clude in the national manufacturing strategy required by 

18 subsection (a) recommendations for achieving the goals in19 cluded in the strategy pursuant to subsection (b). Such 

20 recommendations may include proposals as follows: 

21 (1) Actions to be taken by the President, Con22 gress, State, local, and territorial governments, the 

23 private sector, universities, industry associations, 

24 and other stakeholders. 


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1 (2) Ways to improve Government policies, co2 ordination among entities developing such policies, 

3 and Government interaction with the manufacturing 

4 sector, including interagency communications re5 garding the effects of proposed or active Government 

6 regulations or other executive actions on the United 

7 States manufacturing sector and its workforce. 

8 (3) How each Federal agency surveyed under 

9 subsection (c)(2) can best support the national man10 ufacturing strategy required by subsection (a). 

11 (4) Adoption of strategies that have been imple12 mented by other countries and proven successful. 

13 (e) SUBMITTAL OF STRATEGY.—Not later than 180 

14 days after the date of the enactment of this Act and each 

15 time the President revises under paragraph (2) of sub16 section (a) the strategy required by paragraph (1) of such 

17 subsection, the President shall submit to Congress such 

18 strategy. 

19 SEC. 112. SECTORAL TECHNOLOGY AND INNOVATION CEN20 TERS. 

21 The National Institute of Standards and Technology 

22 Act (15 U.S.C. 271 et seq.) is amended by inserting after 

23 section 26 (15 U.S.C. 271l) the following: 


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1 ‘‘SEC. 27. SECTORAL TECHNOLOGY AND INNOVATION CEN2 TERS. 

3 ‘‘(a) DEFINITIONS.—In this section: 

4 ‘‘(1) ELIGIBLE ENTITIES.—The term ‘eligible 

5 entities’ means a consortia that— 

6 ‘‘(A) is comprised of representatives from 

7 various organizations, such as State and local 

8 governments, institutions of higher education, 

9 nonprofit organization, and businesses; 

10 ‘‘(B) has an expertise in either a specific 

11 area of technology or a specific aspect of the 

12 manufacturing process; and 

13 ‘‘(C) has a capacity to serve small- or me14 dium-sized manufacturers across the United 

15 States. 

16 ‘‘(2) INDUSTRY CLUSTER.—The term ‘industry 

17 cluster’ means a geographic concentration of inter18 connected companies, specialized suppliers, service 

19 providers, and associated institutions in a particular 

20 industry sector. 

21 ‘‘(3) INSTITUTION OF HIGHER EDUCATION.— 

22 The term ‘institution of higher education’ has the 

23 meaning given the term in section 102 of the Higher 

24 Education Act of 1965 (20 U.S.C. 1002). 

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1 facturer’ means a manufacturer that is a small busi2 ness concern (as such term is defined in section 3 

3 of the Small Business Act (15 U.S.C. 632)). 

4 ‘‘(b) GRANTS AUTHORIZED.— 

5 ‘‘(1) IN GENERAL.—The Secretary may award 

6 grants to eligible entities to establish sectoral tech7 nology and innovation centers— 

8 ‘‘(A) to improve the capacity of small- or 

9 medium-sized manufacturers to innovate; 

10 ‘‘(B) to provide assistance to small- or me11 dium-sized manufacturers with early-stage 

12 product development; 

13 ‘‘(C) to help small- or medium-sized manu14 facturers improve the speed with which they 

15 commercialize new products, processes, and 

16 technologies; 

17 ‘‘(D) to help small- or medium-sized manu18 facturers reduce costs by improving efficiencies 

19 in the manufacturing process, including through 

20 reduced energy use and environmental waste; 

21 ‘‘(E) to link small- or medium-sized manu22 facturers with cutting edge research and tech23 nologies developed by employees of institutions 

24 of higher education or other institutions that 

25 conduct scientific research; and 


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1 ‘‘(F) to facilitate the sharing of informa2 tion and best practices relating to manufac3 turing and product development among the fol4 lowing: 

5 ‘‘(i) Small- or medium-sized manufac6 turers. 

7 ‘‘(ii) Federal and State agencies that 

8 provide assistance to small- or medium9 sized manufacturers. 

10 ‘‘(iii) Nongovernmental organizations 

11 that provide assistance to small- or me12 dium-sized manufacturers. 

13 ‘‘(iv) Institutions of higher education. 

14 ‘‘(2) MINIMUM NUMBER OF SECTORAL TECH15 NOLOGY AND INNOVATION CENTERS.—In awarding 

16 grants under paragraph (1), the Secretary shall en17 sure that not fewer than 25 sectoral technology and 

18 innovation centers are established under this section 

19 before the date that is 2 years after the date of the 

20 enactment of this section. 

21 ‘‘(c) USE OF FUNDS.— 

22 ‘‘(1) IN GENERAL.—Grants awarded pursuant 

23 to subsection (b)(1) shall be used to establish a sec24 toral technology and innovation center that offers a 

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1 graphs (1) through (6) of such subsection, including 

2 services relating to the following: 

3 ‘‘(A) Applied research and development. 

4 ‘‘(B) Proof-of-concept development and 

5 prototyping. 

6 ‘‘(C) Manufacturing process development 

7 and efficiency enhancements. 

8 ‘‘(D) Other technical business matters. 

9 ‘‘(2) FOCUS.—Each technology innovation cen10 ter established with a grant awarded under sub11 section (b)(1) shall be established with a focus on a 

12 specific technology area or specific aspect of the 

13 manufacturing process corresponding with— 

14 ‘‘(A) the expertise of the eligible entity es15 tablishing the center; and 

16 ‘‘(B) the needs of an industry cluster lo17 cated in geographic proximity to the center. 

18 ‘‘(3) CHANGE IN SERVICES PROVIDED.—The 

19 Secretary may allow a recipient of a grant under 

20 subsection (b)(1) to modify the range of services of21 fered by the recipient’s technology innovation center 

22 under paragraph (1) of this subsection. 

23 ‘‘(4) AFFILIATION WITH INSTITUTIONS OF

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1 tion center under paragraph (1) shall be offered in 

2 affiliation with an institution of higher education or 

3 a national laboratory. 

4 ‘‘(d) APPLICATION FOR GRANTS.— 

5 ‘‘(1) IN GENERAL.—An eligible entity seeking a 

6 grant under subsection (b)(1) shall submit to the 

7 Secretary an application therefor in such form and 

8 in such manner as the Secretary considers appro9 priate. 

10 ‘‘(2) PROCESS REQUIRED.—The Secretary shall 

11 establish a standardized application process for pur12 poses of awarding grants under subsection (b)(1). 

13 ‘‘(3) SOLICITATION OF APPLICATIONS.—The 

14 Secretary shall solicit applications for grants under 

15 subsection (b) from eligible entities. 

16 ‘‘(e) SELECTION OF GRANT RECIPIENTS.— 

17 ‘‘(1) COMPETITIVE BASIS.—Grants awarded 

18 under subsection (b)(1) shall be awarded on a com19 petitive basis. 

20 ‘‘(2) PREFERENCES.—In selecting grant recipi21 ents, the Secretary shall give preference to an eligi22 ble entity that— 

23 ‘‘(A) has an expertise in a specific tech24 nology area or manufacturing process that is 

25 needed by an industry cluster; 


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1 ‘‘(B) agrees to establish a technology inno2 vation center in the geographical area of such 

3 industry cluster; 

4 ‘‘(C) represents a broad range of stake5 holders; and 

6 ‘‘(D) can demonstrate that the non-Fed7 eral contributions for the operation of the tech8 nology innovation center will be significant. 

9 ‘‘(3) CONSULTATION.—In selecting grant recipi10 ents, the Secretary shall consult with the Secretary 

11 of Agriculture, the Secretary of Defense, the Sec12 retary of Energy, the Secretary of Labor, the Assist13 ant Secretary for Economic Development, the Na14 tional Science Foundation, the Office of Innovation 

15 and Entrepreneurship, and such other Federal agen16 cies as may be appropriate to determine whether ap17 plicants have sufficient expertise to establish a tech18 nology innovation center as described in paragraphs 

19 (1) and (2) of subsection (c). 

20 ‘‘(f) FEDERAL SHARE.—An eligible entity that re21 ceives a grant under subsection (b)(1) shall provide such 

22 non-Federal contributions for the operation of the sectoral 

23 technology and innovation center established with such 

24 grant as the Secretary considers appropriate. 


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1 ‘‘(g) USER FEES.—An eligible entity that establishes 

2 a technology innovation center with a grant awarded 

3 under subsection (b)(1) may establish user fees to be paid 

4 by recipients of services provided by the center to meet 

5 the operating costs of the center or for purposes of pro6 viding non-Federal contributions as required by subsection 

7 (f). 

8 ‘‘(h) FUNDING.—There shall be made available from 

9 the Rebuild America Trust Fund under section 9512 of 

10 the Internal Revenue Code of 1986, the following amount 

11 to carry out this section: 

12 ‘‘(1) $1,000,000,000 for fiscal year 2013. 

13 ‘‘(2) $2,500,000,000 for fiscal year 2014. 

14 ‘‘(3) $2,500,000,000 for fiscal year 2015. 

15 ‘‘(4) $1,000,000,000 for each of fiscal years 

16 2016 through 2022.’’. 

17 SEC. 113. CAPITAL FOR SMALL MANUFACTURERS WITH 

18 FIRM ORDERS. 

19 (a) IN GENERAL.—Section 7(a) of the Small Busi20 ness Act (15 U.S.C. 636(a)) is amended by adding at the 

21 end the following: 

22 ‘‘(36) CAPITAL FOR SMALL MANUFACTURERS

23 WITH FIRM ORDERS.— 

24 ‘‘(A) DEFINITIONS.—In this paragraph— 


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1 ‘‘(i) the term ‘firm order’ means an 

2 order for goods placed by a person that the 

3 Administrator determines is— 

4 ‘‘(I) required by law or contract 

5 to pay for the goods upon receipt of 

6 the goods; and 

7 ‘‘(II) likely to make the payment 

8 described in subclause (I); and 

9 ‘‘(ii) the term ‘manufacturer’ means a 

10 small business concern the primary busi11 ness of which is classified in sector 31, 32, 

12 or 33 of the North American Industrial 

13 Classification System. 

14 ‘‘(B) IN GENERAL.—The Administrator 

15 may guarantee a loan under this subsection to 

16 a manufacturer, to provide capital for the pro17 duction of goods for a firm order, if the Admin18 istrator determines that the manufacturer will 

19 be able to produce the goods using the capital. 

20 ‘‘(C) AMOUNT.—A loan guaranteed under 

21 this paragraph shall be in an amount that is 

22 not more than $10,000,000. 

23 ‘‘(D) GUARANTEE PERCENTAGE.—The Ad24 ministrator may guarantee not more than 95 


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1 percent of the amount of a loan under this 

2 paragraph.’’. 

3 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

4 Section 1133(b) of the Small Business Jobs Act of 2010 

5 (15 U.S.C. 636 note) is amended— 

6 (1) in paragraph (1), by striking ‘‘and’’ at the 

7 end; 

8 (2) in paragraph (2), by striking the period at 

9 the end and inserting ‘‘; and’’; and 

10 (3) by adding at the end the following: 

11 ‘‘(3) by redesignating paragraph (36), as added 

12 by section 113 of the Rebuild America Act, as para13 graph (35).’’. 

14 SEC. 114. MANUFACTURING EXTENSION PARTNERSHIP. 

15 (a) IN GENERAL.—There shall be made available 

16 from the Rebuild America Trust Fund under section 9512 

17 of the Internal Revenue Code of 1986, $130,000,000 for 

18 each of fiscal years 2013 through 2022 for the Hollings 

19 Manufacturing Extension Partnership of the National In20 stitute of Standards and Technology. 

21 (b) ADJUSTMENTS FOR INFLATION.—For fiscal year 

22 2014 and each fiscal year thereafter, the amount specified 

23 in subsection (a) shall be adjusted to reflect the percent24 age (if any) of the increase or decrease (as the case may 

25 be) in the average of the Consumer Price Index for the 


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1 12-month period ending on the April 30 preceding the be2 ginning of the fiscal year compared to the average of the 

3 Consumer Price Index for the 12-month period ending 

4 April 30, 2012. 

5 SEC. 115. EXTENSION OF RESEARCH CREDIT; INCREASE IN 

6 ALTERNATIVE SIMPLIFIED RESEARCH CRED7 IT. 

8 (a) EXTENSION OF CREDIT.— 

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

10 41(h)(1) of the Internal Revenue Code of 1986 is 

11 amended by striking ‘‘December 31, 2011’’ and in12 serting ‘‘December 31, 2016’’. 

13 (2) CONFORMING AMENDMENT.—Subparagraph 

14 (D) of section 45C(b)(1) of such Code is amended 

15 by striking ‘‘December 31, 2011’’ and inserting 

16 ‘‘December 31, 2016’’. 

17 (3) EFFECTIVE DATE.—The amendments made 

18 by this subsection shall apply to amounts paid or in19 curred after December 31, 2011. 

20 (b) ALTERNATIVE SIMPLIFIED RESEARCH CREDIT

21 INCREASED.— 

22 (1) INCREASED CREDIT.—Subparagraph (A) of 

23 section 41(c)(5) of the Internal Revenue Code of 

24 1986 is amended to read as follows: 

25 ‘‘(A) DETERMINATION OF CREDIT.— 


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1 ‘‘(i) IN GENERAL.—At the election of 

2 the taxpayer, the credit determined under 

3 subsection (a)(1) shall be equal to the ap4 plicable percentage of so much of the 

5 qualified research expenses for the taxable 

6 year as exceeds 50 percent of the average 

7 qualified research expenses for the 3 tax8 able years preceding the taxable year for 

9 which the credit is being determined. 

10 ‘‘(ii) APPLICABLE PERCENTAGE.—For 

11 purposes of clause (i), the applicable per12 centage for any taxable year is equal to— 

13 ‘‘(I) 14 percent, increased by 

14 ‘‘(II) 1 percentage point (not to 

15 exceed 6 percentage points) for each 2 

16 percent increase in the taxpayer’s 

17 qualified manufacturing full-time 

18 equivalent employees during the 5-tax19 able-year period ending immediately 

20 before such taxable year. 

21 ‘‘(iii) LIMITATION.—The increase in 

22 the amount of the credit determined under 

23 subsection (a)(1) by reason of the applica24 tion of clause (ii)(II) shall not exceed the 

25 product of— 


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1 ‘‘(I) $5,000, multiplied by 

2 ‘‘(II) the number of qualified 

3 manufacturing full-time equivalent 

4 employees taken into account for pur5 poses of determining the increase de6 scribed in clause (ii)(II). 

7 ‘‘(iv) QUALIFIED MANUFACTURING

8 FULL-TIME EQUIVALENT EMPLOYEES.— 

9 For purposes of this subparagraph, the 

10 term ‘qualified manufacturing full-time 

11 equivalent employees’ means full-time 

12 equivalent employees (as defined in section 

13 45R(d)(2)) who provide the taxpayer man14 ufacturing services in the United States. 

15 ‘‘(v) EMPLOYEES EXCLUDED FOR

16 CHANGES IN OWNERSHIP OF TRADES OR

17 BUSINESSES.—In determining the number 

18 of qualified manufacturing full-time equiv19 alent employees for any 5-taxable-year pe20 riod referred to in clause (ii)(II), the tax21 payer shall not take into account— 

22 ‘‘(I) any individual who was an 

23 employee, on the date of acquisition, 

24 of any trade or business acquired by 

25 the taxpayer during such period, and 


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1 ‘‘(II) any individual who was an 

2 employee of any trade or business dis3 posed of by the taxpayer during such 

4 period. 

5 ‘‘(vi) MANUFACTURING SERVICES.— 

6 For purposes of this subparagraph, the 

7 term ‘manufacturing services’ means quali8 fied production activities within the mean9 ing of section 199(c) other than the extrac10 tion of fossil fuels or minerals, agricultural 

11 production, activities described in section 

12 199(b)(2)(D), or activities described in 

13 199(c)(4)(B).’’. 

14 (2) CONFORMING AMENDMENT.—Section 

15 41(c)(5)(B)(ii) of such Code is amended by striking 

16 ‘‘6 percent’’ and inserting ‘‘one-half of the applicable 

17 percentage’’. 

18 (3) EFFECTIVE DATE.—The amendments made 

19 by this subsection shall apply to taxable years begin20 ning after December 31, 2016. 

21 (c) TECHNICAL CORRECTIONS.— 

22 (1) IN GENERAL.—Section 409 of the Internal 

23 Revenue Code of 1986 is amended— 

24 (A) by inserting ‘‘, as in effect before the 

25 enactment of the Tax Reform Act of 1984)’’ 


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1 after ‘‘section 41(c)(1)(B)’’ in subsection 

2 (b)(1)(A), 

3 (B) by inserting ‘‘, as in effect before the 

4 enactment of the Tax Reform Act of 1984’’ 

5 after ‘‘relating to the employee stock ownership 

6 credit’’ in subsection (b)(4), 

7 (C) by inserting ‘‘(as in effect before the 

8 enactment of the Tax Reform Act of 1984)’’ 

9 after ‘‘section 41(c)(1)(B)’’ in subsection 

10 (i)(1)(A), 

11 (D) by inserting ‘‘(as in effect before the 

12 enactment of the Tax Reform Act of 1984)’’ 

13 after ‘‘section 41(c)(1)(B)’’ in subsection (m), 

14 (E) by inserting ‘‘(as so in effect)’’ after 

15 ‘‘section 48(n)(1)’’ in subsection (m), 

16 (F) by inserting ‘‘(as in effect before the 

17 enactment of the Tax Reform Act of 1984)’’ 

18 after ‘‘section 48(n)’’ in subsection (q)(1), and 

19 (G) by inserting ‘‘(as in effect before the 

20 enactment of the Tax Reform Act of 1984)’’ 

21 after ‘‘section 41’’ in subsection (q)(3). 

22 (2) EFFECTIVE DATE.—The amendments made 

23 by this subsection shall take effect on the date of the 

24 enactment of this Act. 


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1 SEC. 116. INCLUSION OF CERTAIN PROVISIONS IN TRADE 

2 AGREEMENTS. 

3 (a) DEFINITIONS.—In this section: 

4 (1) CORE LABOR RIGHTS.—The term ‘‘core 

5 labor rights’’ means the core labor rights as stated 

6 in the International Labour Organization conven7 tions dealing with— 

8 (A) freedom of association and the effec9 tive recognition of the right to collective bar10 gaining; 

11 (B) the elimination of all forms of forced 

12 or compulsory labor; 

13 (C) the effective abolition of child labor; 

14 and 

15 (D) the elimination of discrimination with 

16 respect to employment and occupation. 

17 (2) MULTILATERAL ENVIRONMENTAL AGREE18 MENT.—The term ‘‘multilateral environmental 

19 agreement’’ means any international agreement or 

20 provision thereof to which the United States is a 

21 party and that is intended to protect, or has the ef22 fect of protecting, the environment or human health. 

23 (b) LIMITATION ON CONSIDERATION OF BILLS IM24 PLEMENTING TRADE AGREEMENTS.—Notwithstanding 

25 section 151 of the Trade Act of 1974 (19 U.S.C. 2191) 

26 or any other provision of law, any bill implementing a 


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1 trade agreement between the United States and another 

2 country that is introduced in Congress after the date of 

3 the enactment of this Act shall be subject to a point of 

4 order pursuant to subsection (d) unless the trade agree5 ment meets the requirements described in subsection (c). 

6 (c) REQUIREMENTS.—Each trade agreement between 

7 the United States and another country with respect to 

8 which an implementing bill is introduced on or after the 

9 date of the enactment of this Act shall meet the following 

10 requirements: 

11 (1) LABOR STANDARDS.—The labor provisions 

12 of the agreement shall— 

13 (A) be included in the core text of the 

14 agreement; 

15 (B) require each country that is a party to 

16 the agreement— 

17 (i) to adopt and maintain laws and 

18 regulations (including laws applicable to 

19 any designated zone in the country) that 

20 establish core labor rights; and 

21 (ii) to effectively enforce laws relating 

22 to core labor rights and laws relating to 

23 acceptable conditions of work (including 

24 laws relating to minimum wages, hours of 

25 work, and occupational safety and health); 


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1 (C) prohibit a country that is a party to 

2 the agreement from waiving or otherwise dero3 gating from, or offering to waive or otherwise 

4 derogate from, the country’s laws and regula5 tions relating to the core labor rights and ac6 ceptable conditions of work described in sub7 paragraph (B); 

8 (D) provide that failures to meet the labor 

9 requirements of the agreement, regardless of 

10 the effect that failure has on trade, shall be 

11 subject to the dispute resolution and enforce12 ment mechanisms and penalties of the agree13 ment; 

14 (E) provide that enforcement mechanisms 

15 and penalties for failures described in subpara16 graph (D) are included in the core text of the 

17 agreement and are at least as effective as the 

18 mechanisms and penalties that apply to the 

19 commercial provisions of the agreement; and 

20 (F) strengthen the capacity of each coun21 try that is a party to the agreement to promote, 

22 protect, and enforce core labor rights. 

23 (2) ENVIRONMENTAL AND PUBLIC SAFETY

24 STANDARDS.—The environmental provisions of the 

25 agreement shall— 


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1 (A) be included in the text of the agree2 ment; 

3 (B) prohibit each country that is a party 

4 to the agreement from weakening, eliminating, 

5 or failing to enforce domestic environmental or 

6 other public interest standards to promote trade 

7 or attract investment; 

8 (C) require each such country to imple9 ment and enforce fully and effectively the coun10 try’s obligations under multilateral environ11 mental agreements and provide for the enforce12 ment of such obligations under the agreement; 

13 (D) prohibit the trade of products that are 

14 illegally harvested or extracted and the trade of 

15 goods derived from illegally harvested or ex16 tracted natural resources, including timber and 

17 timber products, fish, wildlife, and associated 

18 products, mineral resources, or other environ19 mentally sensitive goods; 

20 (E) provide that the failure to meet the en21 vironmental standards required by the agree22 ment be subject to dispute resolution and en23 forcement mechanisms and penalties that are at 

24 least as effective as the mechanisms and penVerDate Mar 15 2010 00:42 Apr 04, 2012 Jkt 099200 PO 00000 Frm 00051 Fmt 6652 Sfmt 6201 E:\BILLS\S2252.IS S2252

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1 alties that apply to the commercial provisions of 

2 the agreement; and 

3 (F) allow each country that is a party to 

4 the agreement to adopt and implement environ5 mental, health, and safety standards, recog6 nizing the legitimate right of governments to 

7 protect the environment and public health and 

8 safety. 

9 (3) INVESTMENT PROVISIONS.—If the agree10 ment contains provisions relating to investment, 

11 such provisions shall— 

12 (A) ensure that foreign investors operating 

13 in the United States are not afforded greater 

14 procedural or substantive rights under the trade 

15 agreement than those afforded to domestic in16 vestors under the Constitution and laws of the 

17 United States; 

18 (B) include strong and enforceable commit19 ments that an entity owned or controlled by a 

20 foreign government that invests in operations in 

21 the United States— 

22 (i) will make such investments and 

23 will conduct such operations on a commer24 cial basis only; and 


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1 (ii) will not receive benefits, such as 

2 financing, at below market rates, or com3 ponents or materials at below market 

4 prices, from the foreign government for 

5 such operations; and 

6 (C) define the standard of minimum treat7 ment to provide that foreign investors do not 

8 have greater legal rights than United States 

9 citizens possess under the due process clause of 

10 section 1 of the 14th Amendment to the Con11 stitution. 

12 (d) POINT OF ORDER IN SENATE.—The Senate shall 

13 cease consideration of a bill to implement a trade agree14 ment introduced on or after the date of enactment of this 

15 Act if— 

16 (1) a point of order is made by any Senator 

17 against the bill based on the noncompliance of the 

18 trade agreement with the requirements of subsection 

19 (c); and 

20 (2) the point of order is sustained by the Pre21 siding Officer. 

22 (e) WAIVERS AND APPEALS.— 

23 (1) WAIVERS.—Before the Presiding Officer 

24 rules on a point of order described in subsection (d), 

25 any Senator may move to waive the point of order 


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1 and the motion to waive shall not be subject to 

2 amendment. A point of order described in subsection 

3 (d) is waived only by the affirmative vote of 60 

4 Members of the Senate, duly chosen and sworn. 

5 (2) APPEALS.—After the Presiding Officer 

6 rules on a point of order described in subsection (d), 

7 any Senator may appeal the ruling of the Presiding 

8 Officer on the point of order as it applies to some 

9 or all of the provisions on which the Presiding Offi10 cer ruled. A ruling of the Presiding Officer on a 

11 point of order described in subsection (d) is sus12 tained unless 60 Members of the Senate, duly cho13 sen and sworn, vote not to sustain the ruling. 

14 (3) DEBATE.—Debate on the motion to waive 

15 under paragraph (1) or on an appeal of the ruling 

16 of the Presiding Officer under paragraph (2) shall 

17 be limited to 1 hour. The time shall be equally di18 vided between, and controlled by, the majority leader 

19 and the minority leader of the Senate, or their des20 ignees. 

21 SEC. 117. FUNDING FOR INTERAGENCY TRADE ENFORCE22 MENT CENTER. 

23 (a) IN GENERAL.—There shall be made available 

24 from the Rebuild America Trust Fund under section 9512 

25 of the Internal Revenue Code of 1986, the following 


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1 amounts for the Interagency Trade Enforcement Center 

2 established by Executive Order of February 28, 2012, en3 titled ‘‘Establishment of the Interagency Trade Enforce4 ment Center’’: 

5 (1) For fiscal year 2013, $26,000,000. 

6 (2) For fiscal year 2014 and each fiscal year 

7 thereafter, the amount specified in paragraph (1), as 

8 adjusted to reflect the percentage (if any) of the in9 crease or decrease (as the case may be) in the aver10 age of the Consumer Price Index for the 12-month 

11 period ending on the April 30 preceding the begin12 ning of the fiscal year compared to the average of 

13 the Consumer Price Index for the 12-month period 

14 ending April 30, 2012. 

15 (b) CONSUMER PRICE INDEX DEFINED.—In this sec16 tion, the term ‘‘Consumer Price Index’’ means the Con17 sumer Price Index for All Urban Consumers published by 

18 the Bureau of Labor Statistics of the Department of 

19 Labor. 

20 SEC. 118. IMPOSITION OF COUNTERVAILING DUTIES FOR 

21 SUBSIDIES RELATING TO FUNDAMENTALLY 

22 UNDERVALUED CURRENCIES. 

23 (a) BENEFIT CONFERRED.—Section 771(5)(E) of 

24 the Tariff Act of 1930 (19 U.S.C. 1677(5)(E)) is amend25 ed— 


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1 (1) in clause (iii), by striking ‘‘and’’ at the end; 

2 (2) in clause (iv), by striking the period at the 

3 end and inserting ‘‘, and’’; and 

4 (3) by inserting after clause (iv) the following 

5 new clause: 

6 ‘‘(v) in the case in which the currency 

7 of a country in which the subject merchan8 dise is produced is exchanged for foreign 

9 currency obtained from export trans10 actions, and the currency of such country 

11 is a fundamentally undervalued currency, 

12 as defined in paragraph (37), if there is a 

13 difference between the amount of the cur14 rency of such country provided and the 

15 amount of the currency of such country 

16 that would have been provided if the real 

17 effective exchange rate of the currency of 

18 such country were not undervalued, as de19 termined pursuant to paragraph (38).’’. 

20 (b) EXPORT SUBSIDY.—Section 771(5A)(B) of the 

21 Tariff Act of 1930 (19 U.S.C. 1677(5A)(B)) is amended 

22 by adding at the end the following new sentence: ‘‘In the 

23 case of a subsidy relating to a fundamentally undervalued 

24 currency, the fact that the subsidy may also be provided 

25 in circumstances not involving export shall not, for that 


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1 reason alone, mean that the subsidy cannot be considered 

2 contingent upon export performance.’’. 

3 (c) DEFINITION OF FUNDAMENTALLY UNDER4 VALUED CURRENCY.—Section 771 of the Tariff Act of 

5 1930 (19 U.S.C. 1677) is amended by adding at the end 

6 the following new paragraph: 

7 ‘‘(37) FUNDAMENTALLY UNDERVALUED CUR8 RENCY.—The administering authority shall deter9 mine that the currency of a country in which the 

10 subject merchandise is produced is a ‘fundamentally 

11 undervalued currency’ if— 

12 ‘‘(A) the government of the country (in13 cluding any public entity within the territory of 

14 the country) engages in protracted, large-scale 

15 intervention in one or more foreign exchange 

16 markets during part or all of the 18-month pe17 riod that represents the most recent 18 months 

18 for which the information required under para19 graph (38) is reasonably available, but that 

20 does not include any period of time later than 

21 the final month in the period of investigation or 

22 the period of review, as applicable; 

23 ‘‘(B) the real effective exchange rate of the 

24 currency is undervalued by at least 5 percent, 

25 on average and as calculated under paragraph 


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1 (38), relative to the equilibrium real effective 

2 exchange rate for the country’s currency during 

3 the 18-month period; 

4 ‘‘(C) during the 18-month period, the 

5 country has experienced significant and per6 sistent global current account surpluses; and 

7 ‘‘(D) during the 18-month period, the for8 eign asset reserves held by the government of 

9 the country exceed— 

10 ‘‘(i) the amount necessary to repay all 

11 debt obligations of the government falling 

12 due within the coming 12 months; 

13 ‘‘(ii) 20 percent of the country’s 

14 money supply, using standard measures of 

15 M2; and 

16 ‘‘(iii) the value of the country’s im17 ports during the previous 4 months.’’. 

18 (d) DEFINITION OF REAL EFFECTIVE EXCHANGE

19 RATE UNDERVALUATION.—Section 771 of the Tariff Act 

20 of 1930 (19 U.S.C. 1677), as amended by subsection (c) 

21 of this section, is further amended by adding at the end 

22 the following new paragraph: 

23 ‘‘(38) REAL EFFECTIVE EXCHANGE RATE

24 UNDERVALUATION.—The calculation of real effective 


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1 exchange rate undervaluation, for purposes of para2 graph (5)(E)(v) and paragraph (37), shall— 

3 ‘‘(A)(i) rely upon, and where appropriate 

4 be the simple average of, the results yielded 

5 from application of the approaches described in 

6 the guidelines of the International Monetary 

7 Fund’s Consultative Group on Exchange Rate 

8 Issues; or 

9 ‘‘(ii) if the guidelines of the International 

10 Monetary Fund’s Consultative Group on Ex11 change Rate Issues are not available, be based 

12 on generally accepted economic and econometric 

13 techniques and methodologies to measure the 

14 level of undervaluation; 

15 ‘‘(B) rely upon data that are publicly avail16 able, reliable, and compiled and maintained by 

17 the International Monetary Fund or, if the 

18 International Monetary Fund cannot provide 

19 the data, by other international organizations or 

20 by national governments; and 

21 ‘‘(C) use inflation-adjusted, trade-weighted 

22 exchange rates.’’. 

23 (e) APPLICATION TO GOODS FROM CANADA AND

24 MEXICO.—Pursuant to article 1902 of the North Amer25 ican Free Trade Agreement and section 408 of the North 


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1 American Free Trade Agreement Implementation Act of 

2 1993 (19 U.S.C. 3438), the amendments made by this sec3 tion shall apply to goods from Canada and Mexico. 

4 Subtitle C—Preparing Americans 

5 for the Jobs of the Future 

6 SEC. 121. SHORT TITLE. 

7 This subtitle may be cited as the ‘‘Regional Partner8 ships for High-Quality Jobs Act’’. 

9 SEC. 122. DEFINITIONS. 

10 In this subtitle: 

11 (1) CAREER AND TECHNICAL EDUCATION SYS12 TEM.—The term ‘‘career and technical education 

13 system’’ means, with respect to a State, the eligible 

14 agency (as defined in section 3 of the Carl D. Per15 kins Career and Technical Education Act of 2006 

16 (20 U.S.C. 2302)) for the State, and the eligible re17 cipients (as so defined) in the State that receive 

18 funds under section 131 or 132 of such Act (20 

19 U.S.C. 2351, 2352). 

20 (2) CAREER PATHWAY.— 

21 (A) IN GENERAL.—The term ‘‘career path22 way’’ means a set of rigorous, engaging, and 

23 high-quality education, occupational training, 

24 and other services to prepare individuals to 


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1 meet a set of career-related objectives as ref2 erenced in subparagraph (C). 

3 (B) SERVICES.—The services referred to in 

4 subparagraph (A) shall be— 

5 (i) aligned with the skill needs of in6 dustries in the economy of the service area 

7 involved; and 

8 (ii) designed to increase an individ9 ual’s educational and skill attainment, and 

10 improve the individual’s employment out11 comes and ability to meet career-related 

12 objectives, by— 

13 (I) preparing individuals for the 

14 full range of secondary or postsec15 ondary education options, including 

16 apprenticeships registered under the 

17 Act of August 16, 1937 (commonly 

18 known as the ‘‘National Apprentice19 ship Act’’; 50 Stat. 664, chapter 663; 

20 29 U.S.C. 50 et seq.) (referred to in21 dividually in this subtitle as an ‘‘ap22 prenticeship’’); 

23 (II) including counseling and 

24 support services to help individuals 


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1 achieve their education and career 

2 goals; 

3 (III) including, as appropriate for 

4 an individual, education offered con5 currently with and in the same con6 text as workforce preparation activi7 ties and training for a specific occupa8 tion or occupational cluster; and 

9 (IV) organizing education, occu10 pational training, and other services 

11 to meet the particular needs of the in12 dividual in a manner that accelerates 

13 the educational and career advance14 ment of the individual to the extent 

15 practicable. 

16 (C) OBJECTIVES.—The objectives referred 

17 to in subparagraph (A) include— 

18 (i) enabling a worker to attain a sec19 ondary school diploma or its recognized 

20 equivalent, and at least 1 recognized post21 secondary credential; and 

22 (ii) helping a worker enter or advance 

23 within a specific occupation or occupational 

24 cluster. 


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1 (3) COMMUNITY COLLEGE.—The term ‘‘commu2 nity college’’ has the same meaning as the term 

3 ‘‘junior or community college’’, as defined in section 

4 312(f) of the Higher Education Act of 1965 (20 

5 U.S.C. 1058(f)). 

6 (4) EDUCATION TERMS.—The term ‘‘adult edu7 cation’’ has the meaning given the term in section 

8 203 of the Adult Education and Family Literacy Act 

9 (20 U.S.C. 9202). The terms ‘‘State educational 

10 agency’’ and ‘‘local educational agency’’ have the 

11 meanings given the terms in section 9101 of the Ele12 mentary and Secondary Education Act of 1965 (20 

13 U.S.C. 7801). 

14 (5) HIGH-QUALITY EMPLOYMENT.—The term 

15 ‘‘high-quality employment’’ means employment with, 

16 at a minimum, family-sustaining compensation (as 

17 determined by the Secretaries) and opportunities for 

18 advancement (as so determined). 

19 (6) INDIVIDUAL WITH A DISABILITY; INDIVID20 UALS WITH DISABILITIES.— 

21 (A) INDIVIDUAL WITH A DISABILITY.—The 

22 term ‘‘individual with a disability’’ has the 

23 meaning given the term in section 7(20)(A) of 

24 the Rehabilitation Act of 1973 (29 U.S.C. 

25 705(20)(A)). 


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1 (B) INDIVIDUALS WITH DISABILITIES.— 

2 The term ‘‘individuals with disabilities’’ means 

3 more than 1 individual with a disability. 

4 (7) INDUSTRY-RECOGNIZED CREDENTIAL.—The 

5 term ‘‘industry-recognized credential’’ means such a 

6 credential within the meaning of section 3 of the 

7 Carl D. Perkins Career and Technical Education 

8 Act of 2006 (20 U.S.C. 2302). 

9 (8) LABOR ORGANIZATION.—The term ‘‘labor 

10 organization’’ has the meaning given the term in 

11 section 2 of the National Labor Relations Act (29 

12 U.S.C. 152). 

13 (9) OCCUPATIONAL TRAINING.—The term ‘‘oc14 cupational training’’ means training services, as de15 scribed in section 134(d)(4)(D) of the Workforce In16 vestment Act of 1998 (29 U.S.C. 2864(d)(4)(D)). 

17 (10) PRIORITY WORKERS.—The term ‘‘priority 

18 workers’’ means individuals who are— 

19 (A) individuals unemployed for 52 weeks 

20 or more; 

21 (B) youth age 16 through 24 who have 

22 been out of school or out of work, as appro23 priate, for more than 6 months and do not pos24 sess a secondary school diploma or its recog25 nized equivalent; 


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1 (C) individuals with disabilities; 

2 (D) individuals with low literacy levels; or 

3 (E) veterans, as defined in section 101 of 

4 title 38, United States Code. 

5 (11) RECOGNIZED POSTSECONDARY CREDEN6 TIAL.—The term ‘‘recognized postsecondary creden7 tial’’ means a credential consisting of an industry8 recognized credential, a certificate of completion of 

9 an apprenticeship registered under the Act of Au10 gust 16, 1937 (commonly known as the ‘‘National 

11 Apprenticeship Act’’; 50 Stat. 664, chapter 663; 29 

12 U.S.C. 50 et seq.), or an associate or baccalaureate 

13 degree. 

14 (12) SECRETARIES.—The term ‘‘Secretaries’’ 

15 means the Secretary of Education and the Secretary 

16 of Labor, acting in accordance with the agreement 

17 described in section 123(c). 

18 (13) SERVICE AREA.—The term ‘‘service 

19 area’’— 

20 (A) used with respect to a regional part21 nership, means a labor market area; and 

22 (B) used with respect to a State partner23 ship, means 2 or more labor market areas in 

24 the State that are identified by the State part25 nership. 


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1 SEC. 123. PROGRAM. 

2 (a) IN GENERAL.—The Secretary of Labor and the 

3 Secretary of Education shall establish a program to edu4 cate and train workers for high-quality employment. 

5 (b) GRANTS.— 

6 (1) IN GENERAL.—In carrying out the program, 

7 the Secretaries shall award grants, on a competitive 

8 basis, to eligible entities to develop or enhance, and 

9 provide, career pathways and adult learning strate10 gies that integrate education, occupational training, 

11 and supportive services. The career pathways and 

12 learning strategies shall prepare individuals for ex13 isting or emerging employment opportunities in a 

14 service area, which shall include such preparation 

15 through the attainment of a recognized postsec16 ondary credential. 

17 (2) GRANT PERIOD.—A grant awarded to an el18 igible entity under this section shall be awarded for 

19 a period of not more than 5 years. The grant may 

20 be renewed for not more than 1 such additional 

21 grant period, contingent on satisfactory performance 

22 of the eligible entity relating to the expected out23 comes described in section 125(1). 

24 (3) PARTNERSHIPS.—The eligible entities shall 

25 provide the career pathways and learning strategies 


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1 through industry-focused, employer-linked regional 

2 or State partnerships described in section 124. 

3 (c) AGREEMENT.—The Secretary of Labor and the 

4 Secretary of Education shall enter into an interagency 

5 agreement that describes how the Secretaries will jointly 

6 administer the program. 

7 SEC. 124. ELIGIBLE ENTITIES. 

8 (a) IN GENERAL.—To be eligible to receive a grant 

9 under section 123 for a service area, an entity shall consist 

10 of a partnership described in section 123(b)— 

11 (1) that shall include— 

12 (A) employers of various sizes in the serv13 ice area, whose job vacancies represent a sig14 nificant share of current or future job vacan15 cies, and that pledge to train or employ partici16 pants in the project carried out under the 

17 grant; and 

18 (B) community colleges that will provide 

19 education and occupational training, aligned 

20 with current or future job vacancies, through 

21 the project; and 

22 (2) that shall include at least 1 of the following: 

23 (A) A State agency. 


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1 (B) A chief elected official, as defined in 

2 section 101 of the Workforce Investment Act of 

3 1998 (29 U.S.C. 2801). 

4 (C) A nonprofit organization with a dem5 onstrated record of serving priority workers. 

6 (D) Local boards or State boards as such 

7 terms are defined in section 101 of the Work8 force Investment Act of 1998 (29 U.S.C. 2801), 

9 or designated State units, as defined in section 

10 7 of the Rehabilitation Act of 1973 (29 U.S.C. 

11 705) or other vocational rehabilitation offices. 

12 (E) An economic development agency. 

13 (F) A local educational agency. 

14 (G) A labor organization or labor-manage15 ment partnership. 

16 (H) An adult education provider. 

17 (I) An agency, which may be a public li18 brary, that provides occupational training or 

19 supportive services. 

20 (b) STATE OR REGIONAL PARTNERSHIP.—The part21 nership described in subsection (a) may be— 

22 (1) a State partnership, serving 2 or more labor 

23 market areas in the State; or 

24 (2) a regional partnership, serving a labor mar25 ket area. 


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1 SEC. 125. APPLICATIONS. 

2 To be eligible to receive a grant under section 123, 

3 an entity described in section 124 shall submit an applica4 tion to the Secretaries at such time, in such manner, and 

5 containing such information as the Secretaries may deter6 mine to be appropriate, including, at a minimum, a plan 

7 for the project to be carried out under the grant, with 

8 information describing each of the following: 

9 (1) How the partnership will address the objec10 tives of the project, including identifying a fiscal 

11 agent and expected outcomes for the partnership. 

12 (2) How the partnership will develop or enhance 

13 career pathways that result in the attainment of a 

14 recognized postsecondary credential and high-quality 

15 employment in the service area, including— 

16 (A) a description of how the partnership 

17 has used labor market information (including 

18 projections of job openings, job growth, wages, 

19 and skill and certification requirements related 

20 to the credential) to ensure the education and 

21 occupational training provided through the 

22 grant are aligned with employment needs in the 

23 service area; 

24 (B) a description of how the partnership 

25 has incorporated best practices in adult edu26 cation and occupational training, such as use of 


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1 cohort models, compressed course schedules, in2 tegrated adult basic education, and work readi3 ness training and certificates; 

4 (C) information on how the partnership 

5 will identify and prepare workers for employ6 ment opportunities; 

7 (D) an analysis of how the partnership will 

8 engage the entities described in section 

9 124(a)(2), to leverage resources and optimize 

10 outcomes, including by coordinating existing (as 

11 of the date the grant is received) education and 

12 occupational training efforts; and 

13 (E) a description of how the partnership 

14 will conduct data collection, monitoring, report15 ing, and information sharing to continuously 

16 evaluate and improve outcomes for the project. 

17 (3) The commitment of members of the part18 nership, including— 

19 (A) each partner’s financial and pro20 grammatic commitment to the strategies de21 scribed in the application; 

22 (B) each partner’s capacity, such as capac23 ity to provide staff and facilities, to leverage 

24 State and local investments, to coordinate ac25 tivities with related agencies, and to establish 


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1 linkages among employment and labor market 

2 information data systems, to support the strate3 gies described in the application; 

4 (C) each partner’s long-term commitment 

5 to the partnership that, at a minimum, ac6 counts for the cost of supporting the project, 

7 including providing support after grant funds 

8 are no longer available; and 

9 (D) each partner’s commitment to ensure 

10 sound fiscal management and controls, includ11 ing evidence of a related system of supports and 

12 personnel. 

13 (4) How the partnership will make work experi14 ences available to all priority workers, including— 

15 (A) the types of paid internships, on-the16 job training, or other work experiences the part17 nership will make available to all priority work18 ers; and 

19 (B) how the partnership will provide any 

20 developmental education or supportive services 

21 necessary to ensure priority workers receive and 

22 succeed in work experiences. 

23 (5) How the partnership will engage commu24 nity-based organizations with experience providing 

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1 portive services to individuals in the service area, 

2 with particular attention to such organizations that 

3 have experience supporting priority workers. 

4 (6) The Federal and non-Federal sources of 

5 funding that the partnership will secure to comply 

6 with the matching funds requirement set forth in 

7 section 128. 

8 (7) In the case of a State partnership, how the 

9 partnership will carry out goals described in section 

10 127(b)(1)(B). 

11 SEC. 126. PRIORITY AND DISTRIBUTION. 

12 (a) PRIORITY.—The Secretaries shall give priority 

13 consideration to a partnership that— 

14 (1) includes in the partnership involved a labor 

15 organization, labor-management partnership, or 

16 community-based organization that represents the 

17 interests of workers, especially priority workers; or 

18 (2) is a partnership serving at least 1 labor 

19 market area with 1 of the highest levels of unem20 ployment or poverty, as defined by the Secretaries, 

21 in the Nation. 

22 (b) GEOGRAPHIC DIVERSITY.—In administering the 

23 grants awarded under section 123, the Secretaries shall 

24 ensure geographic diversity in the distribution of funds to 

25 regional and State partnerships. 


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1 SEC. 127. USE OF FUNDS. 

2 (a) IN GENERAL.—An eligible entity that receives a 

3 grant under section 123 shall use the grant funds to im4 plement the plan described in the entity’s application, sub5 mitted under section 125. 

6 (b) PARTNERSHIPS.— 

7 (1) PARTNERSHIPS, CAREER PATHWAYS, AND

8 LEARNING STRATEGIES.— 

9 (A) IN GENERAL.—A partnership that re10 ceives a grant under section 123 shall use the 

11 grant funds for investments designed to develop 

12 or enhance, and provide, through an industry13 focused, employer-linked partnership, career 

14 pathways and adult learning strategies that 

15 connect individuals with existing or emerging 

16 employment opportunities. 

17 (B) ADDITIONAL USES.—In addition, a 

18 partnership described in section 124(b)(1) shall 

19 use the grant funds to support the activities de20 scribed in subparagraph (A) by— 

21 (i) supporting programs of tuition as22 sistance, using funding resources, and 

23 through other evidence-based strategies, 

24 except that such support shall not supplant 

25 other Federal funds for such tuition assist26 ance; 


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1 (ii) providing incentives and technical 

2 support to employers who, through partici3 pation in industry-focused, employer-linked 

4 partnerships, or through provision of ca5 reer pathways or adult learning strategies, 

6 retain and promote incumbent workers, 

7 employ new workers, or upgrade jobs for 

8 program participants; and 

9 (iii) for State partnerships, enhancing 

10 linkages among employment and labor 

11 market information data systems in the 

12 State. 

13 (2) SERVICES FOR PRIORITY WORKERS.—The 

14 partnership shall use at least 50 percent of the 

15 grant funds to support the pathways and strategies 

16 and provide supportive services for priority workers. 

17 (3) CONDITIONS OF EDUCATION AND OCCUPA18 TIONAL TRAINING.— 

19 (A) TRAINING LEADING TO JOBS.—All 

20 education and occupational training provided 

21 through the project shall lead to high-quality 

22 employment provided by, at a minimum, the 

23 employers represented in the partnership, and 

24 also including other employers of all sizes in the 

25 service area. 


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1 (B) INTERNSHIPS.—Paid internship posi2 tions provided through the project shall be pri3 marily occupational training positions, and the 

4 internships may not permit interns to spend a 

5 significant amount of time doing work for 

6 which an employee would otherwise be com7 pensated. 

8 (C) ON-THE-JOB TRAINING.—On-the-job 

9 training placements— 

10 (i) provided through the project shall 

11 pay wages comparable to the wages pro12 vided for similar positions in the sector in13 volved for the service area; and 

14 (ii) may be placements in new or va15 cant positions, but a participant in such a 

16 placement shall not displace any currently 

17 employed employee, consistent with section 

18 181(b) of the Workforce Investment Act of 

19 1998 (29 U.S.C. 2931(b)). 

20 SEC. 128. MATCHING REQUIREMENT. 

21 (a) REQUIREMENT.—The Secretaries shall require 

22 that each eligible entity receiving a grant under section 

23 123 contribute, toward the cost of the project for which 

24 the grant was awarded, matching funds in an amount 

25 equal to not less than 50 percent of the amount of the 


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1 grant. The eligible entity may contribute such matching 

2 funds from non-Federal sources or Federal sources (other 

3 than this subtitle), in cash or in-kind, fairly evaluated (in4 cluding plant, equipment, or services). 

5 (b) WAIVER OR REDUCTION.—The Secretary may 

6 waive or reduce the matching requirement described in 

7 subsection (a) for an eligible entity if the eligible entity 

8 demonstrates a need due to significant financial hardship. 

9 SEC. 129. FUNDING. 

10 There shall be made available from the Rebuild 

11 America Trust Fund under section 9512 of the Internal 

12 Revenue Code of 1986, $5,000,000,000 for each of fiscal 

13 years 2013 through 2022 to carry out this subtitle. 

14 Subtitle D—Supporting Great 

15 Teachers 

16 SEC. 131. SHORT TITLE. 

17 This subtitle may be cited as the ‘‘College and Career 

18 Ready Classrooms Act’’. 

19 SEC. 132. FINDINGS. 

20 Congress finds the following: 

21 (1) According to the Department of Labor, al22 most 90 percent of new jobs in occupations with 

23 both high growth and high wages require at least 

24 some postsecondary training. The majority of new 

25 jobs that offer a wage sufficient to support a family 


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1 and provide opportunity for career advancement re2 quire some postsecondary education. Moreover, re3 search shows that the skill level required to enter 

4 college or a work-training program is the same. 

5 (2) Implementing college- and career-ready 

6 State standards is a complex undertaking, requiring 

7 that teachers utilize a wide array of knowledge and 

8 skills. 

9 (3) Peer learning among small groups of teach10 ers is one of the most powerful predictors of im11 proved student academic achievement. Students 

12 achieve more in mathematics and reading when they 

13 attend schools characterized by high levels of teacher 

14 collaboration for school improvement. 

15 (4) Other nations that outperform the United 

16 States on international assessments invest more 

17 heavily in professional development for teachers and 

18 build time for ongoing, sustained collaboration and 

19 professional development into the school day and 

20 year. Teachers in the United States spend about 80 

21 percent of their working time engaged in classroom 

22 instruction compared to teachers in other countries 

23 where 60 percent of their time is spent in classroom 

24 instruction. 


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1 SEC. 133. PURPOSES. 

2 The purposes of this subtitle are to— 

3 (1) support the successful implementation of 

4 college- and career-ready State academic standards; 

5 and 

6 (2) strengthen the capacity of States and local 

7 educational agencies to provide professional develop8 ment that increases the effectiveness of all teachers 

9 in the instruction of college- and career-ready State 

10 standards and the development and use of cur11 riculum and assessments that are aligned with 

12 college- and career-ready State standards. 

13 SEC. 134. DEFINITIONS. 

14 In this subtitle: 

15 (1) ESEA DEFINITIONS.—Unless otherwise 

16 specified, the terms used in this subtitle have the 

17 meanings given the terms in section 9101 of the Ele18 mentary and Secondary Education Act of 1965 (20 

19 U.S.C. 7801). 

20 (2) COLLEGE- AND CAREER-READY PROFES21 SIONAL DEVELOPMENT LEADERSHIP TEAM.—The 

22 term ‘‘college- and career-ready professional develop23 ment leadership team’’ means a group of educators, 

24 teacher association representatives, leaders, and spe25 cialists convened by an eligible entity pursuant to 

26 section 136(b)(1)(C). 


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1 (3) COLLEGE- AND CAREER-READY STAFF NET2 WORK.—The term ‘‘college- and career-ready staff 

3 network’’ means a group of specialists, convened by 

4 a local entity, including school-based teachers and 

5 leaders, teacher association representatives, and spe6 cialists in relevant content areas, in teaching English 

7 learners, and in teaching children with disabilities, 

8 who are serving as mentors, coaches, or facilitators 

9 and who are responsible for— 

10 (A) establishing professional development 

11 goals; 

12 (B) aligning the instructional work for in13 dividual schools; 

14 (C) supporting the implementation of in15 quiry-based models of professional development; 

16 (D) identifying and sharing best practices; 

17 (E) coordinating with the college- and ca18 reer-ready professional development leadership 

19 team; and 

20 (F) building and sustaining professional 

21 development capacity within the local entity. 

22 (4) ELIGIBLE ENTITY.—The term ‘‘eligible enti23 ty’’ means a State educational agency or a consor24 tium of State educational agencies that has adopted 

25 standards in mathematics and English language arts 


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1 that are aligned with college and career readiness, as 

2 demonstrated to the Secretary. 

3 (5) LOCAL ENTITY.—The term ‘‘local entity’’ 

4 means a local educational agency or a consortium of 

5 local educational agencies. 

6 SEC. 135. GRANTS AUTHORIZED. 

7 (a) IN GENERAL.—The Secretary is authorized to 

8 award grants on a competitive basis to eligible entities for 

9 the development, implementation, and monitoring of com10 prehensive, statewide professional development that— 

11 (1) is aligned with local professional develop12 ment efforts; and 

13 (2) increases the effectiveness of all teachers in 

14 the— 

15 (A) instruction of college- and career-ready 

16 State standards; and 

17 (B) development and use of curriculum 

18 and assessments and other instructional sup19 ports that are aligned with college- and career20 ready State standards. 

21 (b) DURATION.—Each grant awarded under sub22 section (a)— 

23 (1) shall be for a minimum of a 3-year period 

24 and a maximum of a 5-year period; and 


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1 (2) may be renewed based on performance, as 

2 determined by the Secretary. 

3 (c) GRANT AMOUNT.—The Secretary shall ensure 

4 that grants are of sufficient size and scope to enable 

5 grantees to carry out grant activities. 

6 (d) GEOGRAPHIC DISTRIBUTION.—The Secretary 

7 shall ensure that grantees represent different geographic 

8 regions of the United States, including urban and rural 

9 areas. 

10 (e) RESERVATION OF FUNDS.—From the amount 

11 made available under section 142 for a fiscal year, the Sec12 retary shall reserve not more than 5 percent for the eval13 uation of activities implemented pursuant to grants 

14 awarded under subsection (a) and the dissemination of in15 formation on effective professional development activities, 

16 curriculum, assessments, and other instructional supports 

17 developed with such grant funds. 

18 SEC. 136. APPLICATION. 

19 (a) IN GENERAL.—An eligible entity that desires to 

20 receive a grant under section 135 shall submit an applica21 tion to the Secretary at such time, in such manner, and 

22 containing such information as the Secretary may reason23 ably require. 

24 (b) CONTENTS.— 


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1 (1) IN GENERAL.—Each application submitted 

2 under subsection (a) shall include a comprehensive 

3 strategy for implementing professional development 

4 aligned to college- and career-ready State standards 

5 and related instructional supports that shall in6 clude— 

7 (A) a description of how the professional 

8 development will increase teacher, principal, 

9 and other school leader knowledge and under10 standing of college- and career-ready State 

11 standards that is differentiated, including by 

12 grade level and subject area, specific to the 

13 teacher; 

14 (B) a description of how the professional 

15 development will increase teacher expertise be16 yond basic content knowledge for subject-area 

17 teachers; 

18 (C) the creation of a college- and career19 ready professional development leadership team 

20 responsible for establishing statewide goals, pro21 viding model frameworks to local college- and 

22 career-ready staff networks, leaders, or special23 ists, for meeting statewide goals, identifying 

24 and sharing best practices around the imple25 mentation of college- and career-ready State 


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1 standards, curriculum alignment, and assess2 ments, and supporting local comprehensive 

3 college- and career-ready professional develop4 ment strategy activities; 

5 (D) dissemination to local college- and ca6 reer-ready staff networks in an easily accessible 

7 format that may include the use of technology, 

8 such as a web-based statewide instructional per9 formance support system, exemplary profes10 sional development activities, opportunities to 

11 participate in professional learning networks, 

12 technical assistance, and other professional de13 velopment resources designed to support the 

14 successful implementation of college- and ca15 reer-ready State standards; 

16 (E) a description of how the professional 

17 development will be developed in collaboration 

18 with nonprofit organizations, which may include 

19 institutions of higher education, with a dem20 onstrated record of expertise, and other edu21 cation stakeholders; and 

22 (F) a description of how the professional 

23 development will be based on an analysis of 

24 data and evidence that indicates the needs of 

25 leaders, teachers, and students. 


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1 (2) DEVELOPMENT OF STRATEGY.—The com2 prehensive strategy described in paragraph (1) shall 

3 be developed in collaboration with the representative 

4 organizations for teachers in the State. 

5 SEC. 137. STATE USE OF GRANT FUNDS. 

6 An eligible entity that receives a grant under section 

7 135 shall carry out the following: 

8 (1) PROFESSIONAL DEVELOPMENT IMPLEMEN9 TATION ACTIVITIES.— 

10 (A) IMPACT ON TEACHING PRACTICE AND

11 STUDENT ACHIEVEMENT.— 

12 (i) IN GENERAL.—The eligible entity 

13 shall reserve not less than 2 percent of the 

14 grant funds— 

15 (I) to conduct an evaluation by a 

16 knowledgeable, skilled, and impartial 

17 evaluator of the impact of the com18 prehensive college- and career-ready 

19 professional development strategy on 

20 teaching practice and student achieve21 ment; and 

22 (II) to inform continuous im23 provement of professional development 

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1 sources towards those activities that 

2 are most beneficial to teachers and 

3 students. 

4 (ii) CONDUCT OF EVALUATION AND

5 INFORMING IMPROVEMENT.—The activities 

6 described in subclauses (I) and (II) of 

7 clause (i) shall be conducted by an entity 

8 other than the State educational agency. 

9 (B) STRATEGY ACTIVITIES.— 

10 (i) IN GENERAL.—Except as provided 

11 in clause (ii), the eligible entity shall re12 serve not more than 13 percent of the 

13 grant funds to carry out the comprehensive 

14 college- and career-ready professional de15 velopment activities described under sec16 tion 136. 

17 (ii) EXCEPTION FOR SMALL OR RURAL

18 STATES.—The Secretary may allow a small 

19 or rural State, upon application by such 

20 State, to reserve more than 13 percent of 

21 the grant funds to carry out the com22 prehensive college- and career-ready pro23 fessional development activities described 

24 under section 136, and activities described 

25 under section 138(c)(4) as the activities 


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1 apply to the State, if the State dem2 onstrates to the Secretary that it would be 

3 more efficient and effective for the State to 

4 carry out such activities rather than local 

5 entities. 

6 (C) IMPLEMENTATION ACTIVITIES.—From 

7 the amount reserved under subparagraph (B), 

8 the eligible entity may implement activities de9 scribed under section 138(c)(4) as the activities 

10 apply to the State educational agency. 

11 (2) SUBGRANTS.—The eligible entity shall re12 serve not less than 85 percent of the grant funds to 

13 award subgrants to local entities under section 138. 

14 SEC. 138. SUBGRANTS TO LOCAL ENTITIES. 

15 (a) AUTHORIZATION.— 

16 (1) IN GENERAL.—An eligible entity that re17 ceives a grant under section 135 shall award sub18 grants, on a competitive basis, to local entities. 

19 (2) APPLICATION.—A local entity that desires 

20 to receive a subgrant under this section shall submit 

21 an application to the eligible entity at such time, in 

22 such manner, and containing such information as 

23 the eligible entity may reasonably require. 

24 (3) CONTENTS OF APPLICATION.— 


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1 (A) LOCAL COMPREHENSIVE COLLEGE2 AND CAREER-READY PROFESSIONAL DEVELOP3 MENT IMPLEMENTATION.—Each application 

4 submitted under paragraph (2) shall include a 

5 comprehensive strategy for implementing pro6 fessional development aligned to college- and 

7 career-ready State standards and related in8 structional supports at the local level (referred 

9 to in this subtitle as the ‘‘local strategy’’) that 

10 will improve teacher practice and increase stu11 dent learning. Such local strategy shall in12 clude— 

13 (i) a description of how the local 

14 strategy was developed in consultation with 

15 the exclusive representative organization 

16 for teachers in the school district or, where 

17 there is no exclusive representative, teach18 ers who shall be selected by teachers in the 

19 school district pursuant to a fair and 

20 democratic election process open to all 

21 teachers in the school district, principals, 

22 and other school leaders, and teacher-edu23 cators; 

24 (ii) the clear learning goals to be 

25 achieved under the local strategy based on 


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1 student, teacher, and leader learning needs 

2 and how they are aligned with the State 

3 goals established in the comprehensive 

4 college- and career-ready professional de5 velopment strategy described under section 

6 136; 

7 (iii) a description of the tools that will 

8 be developed under the local strategy to 

9 enable teachers to easily access college10 and career-ready professional development 

11 materials and related resources, including 

12 model lesson plans and assessments, and 

13 other professional development materials 

14 relevant to teacher practice; 

15 (iv) a description of how the profes16 sional development provided with funds 

17 under this section will— 

18 (I) be delivered in a format that 

19 is job-embedded, ongoing, sustained, 

20 and collaborative; 

21 (II) foster individual and collec22 tive responsibility for improving teach23 er effectiveness and student academic 

24 achievement and provide ongoing op25 portunities for teachers to assess the 


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1 impact of teaching strategies on stu2 dent learning and reflect on practice; 

3 and 

4 (III) support the use of tech5 nology to personalize instruction and 

6 use technology for professional devel7 opment, consistent with subsection 

8 (c)(3); 

9 (v) a description of how the profes10 sional development provided with funds 

11 under this section will strengthen the abil12 ity of teachers to analyze student data, in13 cluding through the use of a statewide lon14 gitudinal data system, if available, to ad15 just teaching strategies in a timely and ef16 fective manner and improve practice; and 

17 (vi) a description of how external 

18 partners, including content area experts, 

19 nonprofit organizations (including institu20 tions of higher education), and teacher 

21 preparation programs, will be included in 

22 the implementation of the local strategy. 

23 (B) ASSURANCE.—Each application sub24 mitted under paragraph (2) shall include an as25 surance that— 


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1 (i) a minimum of 50 hours of relevant 

2 and high-quality professional development 

3 per school year will be provided to each 

4 teacher responsible for implementing, or 

5 assisting in the implementation of, college6 and career-ready State standards, includ7 ing opportunities for ongoing, job-embed8 ded collaboration and participation in peer 

9 observations; and 

10 (ii) participating local educational 

11 agencies and schools, in collaboration with 

12 the exclusive representative organization 

13 for teachers in the school district or, where 

14 there is no exclusive representative, teach15 ers who shall be selected by teachers in the 

16 school district pursuant to a fair and 

17 democratic election process open to all 

18 teachers in the school district, will nego19 tiate or agree to restructure or extend the 

20 length of the school day, week, or year, to 

21 accommodate additional professional devel22 opment hours in a manner that meets the 

23 requirements of this subtitle over the 

24 course of the school-year. 


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1 (b) PRIORITY.—In awarding subgrants under this 

2 section, an eligible entity shall give priority to local enti3 ties— 

4 (1) that serves not fewer than 10,000 children 

5 as described in section 1124(c)(1)(A) of the Elemen6 tary and Secondary Education Act of 1965 (20 

7 U.S.C. 6333(c)(1)(A)); 

8 (2) for which not less than 20 percent of the 

9 children served by the local entity are children as de10 scribed in section 1124(c)(1)(A) of the Elementary 

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

12 6333(c)(1)(A)); 

13 (3) that meets the eligibility requirements for 

14 funding under the Small, Rural School Achievement 

15 Program under section 6211(b) of the Elementary 

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

17 7345(b)); or 

18 (4) that meets the eligibility requirements for 

19 funding under the Rural and Low-Income School 

20 Program under section 6221(b) of the Elementary 

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

22 7351(b)). 

23 (c) LOCAL USE OF FUNDS.—A local entity awarded 

24 a subgrant under this section shall use the subgrant funds 

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1 resentative organizations selected or identified to rep2 resent the teachers, a local strategy, which shall include— 

3 (1) assisting local educational agencies in imple4 menting college- and career-ready standards, specifi5 cally in the areas of increasing content area exper6 tise, curriculum development and alignment, and as7 sessment practices; 

8 (2) creating and supporting a college- and ca9 reer-ready staff network; 

10 (3) providing, to the extent practicable, a hy11 brid model for professional learning that combines 

12 technology-based and in-person professional learning 

13 experiences and support, such as the use of a web14 based local, regional, or statewide instructional per15 formance support system that includes exemplary 

16 professional development activities, opportunities to 

17 participate in professional learning networks, train18 ing programs, technical assistance, and other profes19 sional development resources designed to support the 

20 successful implementation of college- and career21 ready standards; 

22 (4) providing frequent and sustained opportuni23 ties for teachers to develop, implement, and assess— 

24 (A) strategies for aligning the curriculum 

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1 cluding lesson planning and instructional strat2 egies that reflect the rigor of the standards; 

3 (B) instructional strategies, such as inter4 disciplinary or project-based learning ap5 proaches, that enhance students’ ability to 

6 think critically, problem-solve, complete complex 

7 tasks, conduct research and inquiry, commu8 nicate and demonstrate skills, and think inde9 pendently; 

10 (C) instructional strategies and assess11 ments that meet the needs of English learners 

12 and children with disabilities; and 

13 (D) formative students assessments and 

14 other student assessments that measure student 

15 mastery of the relevant college- and career16 ready State standards; 

17 (5) providing in-service activities for school 

18 principals and other school administrators that sup19 port instructional leadership around the implementa20 tion of college- and career-ready standards; 

21 (6) changing the structure and length of the 

22 school day, week, or year, to allow for additional 

23 time for teacher collaboration, planning, and obser24 vation; 


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1 (7) coordinating or sharing information with 

2 pre-service teacher preparation programs to support 

3 the successful implementation of college- and career4 ready State standards; and 

5 (8) developing tools to assist teachers in evalu6 ating student work. 

7 (d) EVALUATION.— 

8 (1) IN GENERAL.—Each local entity that re9 ceives a subgrant under this section shall reserve not 

10 less than 5 percent of the subgrant funds to— 

11 (A) conduct an evaluation of the impact of 

12 the local strategy on teaching practice and stu13 dent growth and learning; and 

14 (B) inform continuous improvement of pro15 fessional development activities. 

16 (2) CONDUCT OF EVALUATION AND INFORMING

17 IMPROVEMENT.—The activities described in subpara18 graphs (A) and (B) of paragraph (1) shall be con19 ducted by an entity other than the local entity. 

20 SEC. 139. REPORTING. 

21 (a) STATE REPORTING.—Each eligible entity that re22 ceives a grant under section 135 shall annually, for each 

23 year of the grant, submit to the Secretary and make avail24 able to the public a report that shall include— 


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1 (1) information on the number of local edu2 cational agencies, schools, and teachers that received 

3 professional development supported with grant funds 

4 under section 135; 

5 (2) the professional development activities fund6 ed under this subtitle; and 

7 (3) a description of the impact of the com8 prehensive college- and career-ready professional de9 velopment strategy, including results from the eval10 uation conducted under section 137(1)(A)(i)(I). 

11 (b) REPORT TO CONGRESS.—The Secretary shall an12 nually submit to Congress and make available to the pub13 lic a summary of the eligible entity reports required under 

14 subsection (a). 

15 (c) LOCAL REPORTING.—Each local entity that re16 ceives a subgrant under section 138 shall annually, for 

17 each year of the subgrant, submit to the eligible entity 

18 and make available to the public a report that shall in19 clude— 

20 (1) information on the number of local edu21 cational agencies, schools, and teachers that received 

22 professional development supported with subgrant 

23 funds under section 138; 

24 (2) the professional development activities fund25 ed under section 138; and 


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1 (3) a description of the impact of the local 

2 strategy, including results from the evaluation con3 ducted under section 138(d). 

4 SEC. 140. TEACHER PRIVACY. 

5 No State or local educational agency shall be required 

6 to publicly report information in compliance with this sub7 title in a case in which the results would reveal personally 

8 identifiable information about an individual teacher. 

9 SEC. 141. RULE OF CONSTRUCTION. 

10 Nothing in this section shall be construed to alter or 

11 otherwise affect the rights, remedies, and procedures af12 forded school or school district employees under Federal, 

13 State, or local laws (including applicable regulations or 

14 court orders) or under the terms of collective bargaining 

15 agreements, memoranda of understanding, or other agree16 ments between such employees and their employers. 

17 SEC. 142. FUNDING. 

18 There shall be made available from the Rebuild 

19 America Trust Fund under section 9512 of the Internal 

20 Revenue Code of 1986, $2,000,000,000 for each of the 

21 fiscal years 2013 through 2017, to carry out this subtitle. 


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1 Subtitle E—Creating Middle Class 

2 Jobs 

3 PART I—TEACHER STABILIZATION 

4 SEC. 151. PURPOSE. 

5 The purpose of this part is to provide funds to States 

6 to prevent teacher layoffs in public schools and support 

7 the creation of additional jobs in public early childhood 

8 education and care programs and public elementary and 

9 secondary education in the 2012–2013, 2013–2014, and 

10 2014–2015 school years. 

11 SEC. 152. DEFINITIONS. 

12 (1) ESEA DEFINITIONS.—Except as otherwise 

13 provided, the terms ‘‘local educational agency’’, 

14 ‘‘outlying area’’, ‘‘Secretary’’, and ‘‘State edu15 cational agency’’ have the meanings given those 

16 terms in section 9101 of the Elementary and Sec17 ondary Education Act of 1965 (20 U.S.C. 7801). 

18 (2) EARLY CHILDHOOD EDUCATOR.—The term 

19 ‘‘early childhood educator’’ means an individual 

20 who— 

21 (A) works directly with children in a State 

22 or local funded early childhood education and 

23 care program in a low-income community; and 

24 (B) in the course of such employment, is 

25 involved directly in the care, development, and 


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1 education of infants, toddlers, or children ages 

2 5 and under. 

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

4 the 50 States, the District of Columbia, and the 

5 Commonwealth of Puerto Rico. 

6 (4) STATE FUNDED EARLY CHILDHOOD PRO7 GRAM.—The term ‘‘State funded early childhood 

8 program’’ means a program that provides edu9 cational services to children from ages birth through 

10 kindergarten entry and receives funding from a 

11 State. 

12 (5) STATE OR LOCAL FUNDED EARLY CHILD13 HOOD PROGRAM.—The term ‘‘State or local funded 

14 early childhood program’’ means a program that 

15 provides educational services to children from ages 

16 birth through kindergarten entry and receives fund17 ing from a State or local government. 

18 SEC. 153. RESERVATIONS FOR THE OUTLYING AREAS AND 

19 THE SECRETARY OF THE INTERIOR. 

20 From the amount appropriated to carry out this part 

21 under section 159 for each fiscal year, the Secretary— 

22 (1) shall reserve 0.5 percent to provide assist23 ance to the outlying areas on the basis of their re24 spective needs, as determined by the Secretary, for 

25 activities consistent with this part and under such 


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1 terms and conditions as the Secretary may deter2 mine; and 

3 (2) shall reserve 0.5 percent to provide assist4 ance to the Secretary of the Interior to carry out ac5 tivities consistent with this part in schools operated 

6 or funded by the Bureau of Indian Education. 

7 SEC. 154. STATE ALLOTMENTS. 

8 (a) IN GENERAL.—From the amounts appropriated 

9 to carry out this part for a fiscal year that remain after 

10 the reservations under section 153, the Secretary shall 

11 allot to each State— 

12 (1) an amount that bears the same relation to 

13 60 percent of such remaining funds as the State’s 

14 population of individuals aged 5 through 17 bears to 

15 the total population of individuals aged 5 through 17 

16 in all States; and 

17 (2) an amount that bears the same relation to 

18 40 percent on such remaining funds as the State’s 

19 population bears to the total population of all States. 

20 (b) AWARDS TO STATES.—In order for a State to re21 ceive an allotment under subsection (a), the Governor of 

22 the State shall submit an approvable application under 

23 section 155(a). 

24 (c) REALLOTMENT.—If a State does not apply for 

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1 ment, the Secretary shall reallot the State’s entire allot2 ment or the remaining portion of its allotment, as the case 

3 may be, to the remaining States in accordance with sub4 section (a). 

5 SEC. 155. STATE APPLICATION, RESERVATION, AND RE6 SPONSIBILITIES. 

7 (a) APPLICATION.—The Governor of a State desiring 

8 to receive a grant under this part shall submit an applica9 tion to the Secretary not later than 30 days after the date 

10 of enactment of this Act, in such manner, and containing 

11 such information as the Secretary may reasonably require 

12 to determine the State’s compliance with applicable provi13 sions of law. 

14 (b) STATE RESERVATIONS, ALLOCATIONS, AND RE15 SPONSIBILITIES.— 

16 (1) RESERVATION.—Each State receiving an al17 lotment under this part may reserve, for each fiscal 

18 year— 

19 (A) not more than 2 percent of the grant 

20 funds for the administrative costs of carrying 

21 out the State’s responsibilities under this part; 

22 and 

23 (B) not more than 10 percent of the grant 

24 funds to award subgrants to State funded early 

25 childhood care and education programs to enVerDate Mar 15 2010 00:42 Apr 04, 2012 Jkt 099200 PO 00000 Frm 00100 Fmt 6652 Sfmt 6201 E:\BILLS\S2252.IS S2252

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1 able the programs to carry out the activities de2 scribed in section 156(b). 

3 (2) ALLOCATIONS TO LOCAL EDUCATIONAL

4 AGENCIES.—From amounts remaining after reserv5 ing funds under paragraph (1), each State receiving 

6 an allotment under this part for a fiscal year shall 

7 use such remaining funds only for awarding sub8 grants to local educational agencies in the State for 

9 the support of high-quality early childhood education 

10 and care programs and elementary and secondary 

11 education by allocating to each local educational 

12 agency— 

13 (A) an amount that bears the same rela14 tion to 35 percent of such remaining funds as 

15 the number of students enrolled in the schools 

16 served by the local educational agency bears to 

17 the number of students enrolled in the schools 

18 served by all local educational agencies in the 

19 State; and 

20 (B) an amount that bears the same rela21 tion to 65 percent of such remaining funds as 

22 the number of individuals age 5 through 17 

23 from families below the poverty line in the geo24 graphic area served by the local educational 

25 agency, as determined by the Secretary on the 


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1 basis of the most recent satisfactory data, bears 

2 to the total number of those individuals in the 

3 geographic area served by all local educational 

4 agencies in the State, as so determined. 

5 (3) TIMING.—Each State receiving an allotment 

6 under this part for a fiscal year shall make the sub7 grants described in paragraphs (1)(B) and (2) avail8 able to the subgrantees not later than 100 days 

9 after receiving the allotment from the Secretary. 

10 (4) PROHIBITIONS.—A State shall not use 

11 funds received under this part to directly or indi12 rectly— 

13 (A) establish, restore, or supplement a 

14 rainy-day fund; 

15 (B) supplant State funds in a manner that 

16 has the effect of establishing, restoring, or 

17 supplementing a rainy-day fund; 

18 (C) reduce or retire debt obligations in19 curred by the State; or 

20 (D) supplant State funds in a manner that 

21 has the effect of reducing or retiring debt obli22 gations incurred by the State. 


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1 SEC. 156. SUBGRANTS. 

2 (a) LOCAL EDUCATIONAL AGENCY RESPONSIBIL3 ITIES.—Each local educational agency that receives a 

4 subgrant under this part shall— 

5 (1) use the subgrant funds only for compensa6 tion and benefits and other expenses, such as sup7 port services, necessary to retain existing employees, 

8 recall or rehire former employees, or hire new em9 ployees to provide high-quality early childhood edu10 cation and care, elementary or secondary education, 

11 or related services; 

12 (2) obligate such funds not later than Sep13 tember 30 of the fiscal year for which the funds are 

14 received; and 

15 (3) not use such funds for general administra16 tive expenses or for other support services or ex17 penditures, as those terms are defined by the Na18 tional Center for Education Statistics in the Com19 mon Core of Data as of the date of enactment of 

20 this Act. 

21 (b) EARLY CHILDHOOD EDUCATION AND CARE PRO22 GRAM RESPONSIBILITIES.—Each State or local funded 

23 early childhood education and care program that receives 

24 a subgrant under this part shall— 

25 (1) use the subgrant funds only for compensa26 tion, benefits, and other expenses, such as support 


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1 services, necessary to retain early childhood edu2 cators, recall or rehire former early childhood edu3 cators, or hire new early childhood educators to pro4 vide high-quality early childhood education and care 

5 services; and 

6 (2) obligate such funds not later than Sep7 tember 30 of the fiscal year for which the funds are 

8 received. 

9 SEC. 157. MAINTENANCE OF EFFORT. 

10 (a) IN GENERAL.—The Secretary shall not award an 

11 allotment to a State under this part unless the State pro12 vides an assurance to the Secretary that, for each fiscal 

13 year of the grant, the State will maintain State support 

14 for early childhood education and care, elementary, and 

15 secondary education programs and services (in the aggre16 gate or on the basis of expenditure per pupil) and for pub17 lic institutions of higher education (not including support 

18 for capital projects or for research and development or tui19 tion and fees paid by students) at not less than the level 

20 of such support for each of the 2 categories for the State 

21 fiscal year preceding the year for which the determination 

22 is being made. 

23 (b) SUPPLEMENT NOT SUPPLANT.—A State edu24 cational agency or local educational agency shall use Fed25 eral funds received under this part only to supplement the 


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1 funds that would, in the absence of such Federal funds, 

2 be made available from non-Federal sources for the edu3 cation of pupils participating in programs assisted under 

4 this part, and not to supplant such funds. 

5 (c) WAIVER.—The Secretary may waive the require6 ments of this section if the Secretary determines that a 

7 waiver would be equitable due to— 

8 (1) exceptional or uncontrollable circumstances, 

9 such as a natural disaster; or 

10 (2) a precipitous decline in the financial re11 sources of the State. 

12 SEC. 158. REPORTING. 

13 Each State that receives an allotment under this part 

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

15 that contains— 

16 (1) a description of how funds received under 

17 this part were expended or obligated; and 

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

19 by the State using funds received under this part. 

20 SEC. 159. FUNDING. 

21 (a) IN GENERAL.—There shall be made available 

22 from the Rebuild America Trust Fund under section 9512 

23 of the Internal Revenue Code of 1986, the following 

24 amounts to carry out this part: 

25 (1) For fiscal year 2013, $30,000,000,000. 


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1 (2) For fiscal year 2014, $20,000,000,000. 

2 (3) For fiscal year 2015, $10,000,000,000. 

3 (b) AVAILABILITY OF FUNDS.—Funds made avail4 able under subsection (a) shall remain available to the Sec5 retary until September 30, 2015. 

6 PART II—FIRST RESPONDER STABILIZATION 

7 SEC. 161. PURPOSE. 

8 The purpose of this part is to provide funds to States 

9 and localities to prevent layoffs of, and support the cre10 ation of additional jobs for, law enforcement officers and 

11 other first responders. 

12 SEC. 162. CAREER LAW ENFORCEMENT OFFICERS GRANT 

13 PROGRAM. 

14 (a) IN GENERAL.—The Attorney General shall make 

15 competitive grants under section 1701 of title I of the Om16 nibus Crime Control and Safe Streets Act of 1968 (42 

17 U.S.C. 3796dd) for the hiring, rehiring, or retention of 

18 career law enforcement officers under part Q of such title. 

19 (b) APPLICABILITY OF GRANT REQUIREMENTS.— 

20 Grants awarded under subsection (a) shall not be subject 

21 to— 

22 (1) subsection (g) or (i) of section 1701 of title 

23 I of the Omnibus Crime Control and Safe Streets 

24 Act of 1968 (42 U.S.C. 3796dd); or 


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1 (2) section 1704 of such Act (42 U.S.C. 

2 3796dd–3). 

3 (c) FUNDING.— 

4 (1) IN GENERAL.—There shall be made avail5 able from the Rebuild America Trust Fund under 

6 section 9512 of the Internal Revenue Code of 1986, 

7 the following amounts to the Community Oriented 

8 Policing Stabilization Fund to enable the Attorney 

9 General to carry out the competitive grant program 

10 under this section: 

11 (A) $4,000,000,000 for fiscal year 2013, 

12 (B) $2,400,000,000 for fiscal year 2014. 

13 (C) $800,000,000 for fiscal year 2015. 

14 (2) LIMITATION.—Of the amounts made avail15 able pursuant to paragraph (1), not to exceed 

16 $8,000,000 shall be for administrative costs of the 

17 Attorney General. 

18 SEC. 163. FIRST RESPONDER GRANT PROGRAM. 

19 (a) IN GENERAL.—There shall be made available 

20 from the Rebuild America Trust Fund under section 9512 

21 of the Internal Revenue Code of 1986, the following 

22 amounts to the Secretary of Homeland Security to award 

23 grants under section 34 of the Federal Fire Prevention 

24 and Control Act of 1974 (15 U.S.C. 2229a): 

25 (1) $1,000,000,000 for fiscal year 2013. 


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1 (2) $600,000,000 for fiscal year 2014. 

2 (3) $200,000,000 for fiscal year 2015. 

3 (b) LIMITATION.—Of the amounts made available 

4 pursuant to subsection (a), not to exceed $2,000,000 shall 

5 be for administrative costs of the Secretary of Homeland 

6 Security. 

7 (c) WAIVERS.—In making grants with amounts made 

8 available under subsection (a), the Secretary may grant 

9 waivers from the requirements in subsections (a)(1)(A), 

10 (a)(1)(B), (a)(1)(E), (c)(1), (c)(2), and (c)(4)(A) of sec11 tion 34 of the Federal Fire Prevention and Control Act 

12 of 1974. 

13 PART III—MAINTAINING CRITICAL COMMUNITY 

14 SERVICES 

15 SEC. 171. DEFINITIONS. 

16 In this part: 

17 (1) BENEFITS.—The term ‘‘benefits’’ has the 

18 meaning given the term ‘‘employment benefits’’ in 

19 section 101 of the Family and Medical Leave Act of 

20 1993 (29 U.S.C. 2611). 

21 (2) EMPLOYEE COMPENSATION.—The term 

22 ‘‘employee compensation’’ includes wages and bene23 fits. 

24 (3) SECRETARY.—The term ‘‘Secretary’’ means 

25 the Secretary of Labor. 


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1 (4) STATE.—The term ‘‘State’’ means any 

2 State of the United States and the Commonwealth 

3 of Puerto Rico. 

4 (5) UNIT OF GENERAL LOCAL GOVERNMENT.— 

5 The term ‘‘unit of general local government’’ 

6 means— 

7 (A) any city, county, town, township, par8 ish, village, or other general purpose political 

9 subdivision of a State; 

10 (B) Guam, the Northern Mariana Islands, 

11 the Virgin Islands, and American Samoa, or a 

12 general purpose political subdivision thereof; 

13 (C) a combination of such political subdivi14 sions that is recognized by the Secretary; or 

15 (D) the District of Columbia. 

16 (6) WAGE.—The term ‘‘wage’’ has the meaning 

17 given such term in section 3 of the Fair Labor 

18 Standards Act of 1938 (29 U.S.C. 203). 

19 SEC. 172. MAINTAINING CRITICAL COMMUNITY SERVICES. 

20 (a) PROGRAM AUTHORIZED.—From the amount 

21 made available for this part under section 178 and not 

22 reserved under subsection (b), the Secretary of Labor, act23 ing through the Employment and Training Administration 

24 and in consultation with the Secretary of Housing and 

25 Urban Development, shall award grants, on a competitive 


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1 basis in accordance with section 174, to units of general 

2 local government to save and create local jobs through the 

3 retention, restoration, or expansion of critical services 

4 needed by local communities. 

5 (b) RESERVATIONS BY THE SECRETARY.—Of the 

6 amount made available for this part under section 178 for 

7 each fiscal year, the Secretary may reserve not more than 

8 1 percent to administer this part. 

9 SEC. 173. APPLICATION. 

10 (a) APPLICATION.—In order to receive funds under 

11 this part for a fiscal year, a unit of general local govern12 ment shall submit to the Secretary, at such time and in 

13 such manner as determined by the Secretary, an applica14 tion that includes the information described in subsection 

15 (b) for such fiscal year. 

16 (b) CONTENTS.—An application submitted under 

17 subsection (a) shall include the following information: 

18 (1) A certification by the unit of general local 

19 government of— 

20 (A) the amount of funds requested by the 

21 unit of general local government; 

22 (B) the number of individuals who will re23 ceive employee compensation with such funds; 

24 and 


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1 (C) whether the positions supported with 

2 funds under this part will assist in retaining, 

3 restoring, or expanding an existing local public 

4 service. 

5 (2) A statement documenting the need for the 

6 critical services to be carried out by the individuals 

7 hired for the positions. 

8 (3) In the case of a unit of general local govern9 ment that desires to use funds received under this 

10 part to continue to provide employee compensation 

11 for existing employees of the unit, a statement docu12 menting the fiscal constraints of the unit that would 

13 result in the termination or reduction of the posi14 tions of such employees. 

15 (4) An assurance by the unit of general local 

16 government that the unit will comply with all provi17 sions of this part and with all applicable Federal, 

18 State, and local labor laws, including laws con19 cerning wages and hours, labor relations, family and 

20 medical leave, occupational safety and health, and 

21 nondiscrimination. 

22 (5) Such additional information as the Sec23 retary determines necessary, including information 

24 regarding the criteria described in section 174(a). 


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1 SEC. 174. AWARD BASIS. 

2 (a) CRITERIA.—Subject to subsection (b), the Sec3 retary shall award grants under this part by taking into 

4 consideration— 

5 (1) the unemployment rate in the local commu6 nity served by the unit of general local government; 

7 (2) the poverty rate in such local community; 

8 (3) the population of such local community; 

9 (4) excess unemployment in such local commu10 nity; and 

11 (5) other factors as the Secretary determines 

12 necessary. 

13 (b) MAXIMUM AMOUNT.— 

14 (1) IN GENERAL.—In no case shall the ratio of 

15 the amount of grant funds awarded under this part 

16 to all units of general local government in the State, 

17 as compared to the total amount of grant funds 

18 available under this part, be greater than the ratio 

19 of the State’s population, as compared to the total 

20 population of all States and all areas described in 

21 paragraph (2). 

22 (2) APPLICATION TO TERRITORIES AND THE

23 DISTRICT OF COLUMBIA.—For the areas of Guam, 

24 the Northern Mariana Islands, the Virgin Islands, 

25 American Samoa, and the District of Columbia, in 

26 no case shall the ratio of the amount of grant funds 


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1 awarded to any such area, as compared to the total 

2 amount of grant funds available under this part, be 

3 greater than the ratio of the population of such area 

4 as compared to the total population of all States and 

5 all such areas. 

6 (c) TIMING.—For each fiscal year, the Secretary shall 

7 award the grants under this part by not later than 30 

8 days after the end of the application period. 

9 SEC. 175. USES OF FUNDS. 

10 (a) IN GENERAL.—A unit of general local govern11 ment that receives a grant under this part— 

12 (1) shall use the funds to provide employee 

13 compensation to retain or hire individuals to con14 tinue, restore, or expand public services; and 

15 (2) may not use more than 5 percent for ad16 ministrative purposes under the grant. 

17 (b) NONDISPLACEMENT.—A unit of general local gov18 ernment may not employ an individual for a position fund19 ed under this part, if— 

20 (1) employing such individual will result in the 

21 layoff or partial displacement (such as a reduction 

22 in hours, wages, or employee benefits) of an existing 

23 employee of the unit of general local government; or 


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1 (2) such individual will perform the same or 

2 substantially similar work that had previously been 

3 performed by an employee of the unit who— 

4 (A) has been laid off or partially displaced 

5 (as such term is described in paragraph (1)); 

6 and 

7 (B) has not been offered, by the unit or or8 ganization, to be restored to the position the 

9 employee had immediately prior to being laid 

10 off or partially displaced. 

11 SEC. 176. EMPLOYEE STATUS, COMPLIANCE WITH LOCAL 

12 LAWS, AND CONTRACTS. 

13 (a) EMPLOYEE STATUS.—An individual hired for a 

14 position funded under this part shall be considered an em15 ployee of the unit of general local government by which 

16 such individual was hired and receive the same employee 

17 compensation, have the same rights and responsibilities 

18 and job classifications, and be subject to the same job 

19 standards, employer policies, and collective bargaining 

20 agreements as if such individual was hired without assist21 ance under this part. 

22 (b) COMPLIANCE WITH LOCAL LAWS AND CON23 TRACTS.—In hiring individuals for positions funded under 

24 this part, or using funds under this part to continue to 

25 provide employee compensation for existing employees, a 


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1 unit of general local government shall comply with all ap2 plicable Federal, State, and local laws, personnel policies 

3 and regulations, and collective bargaining agreements, as 

4 if such individual was hired, or such employee compensa5 tion was provided, without assistance under this part. 

6 SEC. 177. SUPPLEMENT, NOT SUPPLANT. 

7 Funds made available under this part shall be used 

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

9 and local funds that would otherwise be expended to carry 

10 out activities under this part. 

11 SEC. 178. FUNDING PROVIDED. 

12 There shall be made available from the Rebuild 

13 America Trust Fund under section 9512 of the Internal 

14 Revenue Code of 1986, the following amounts to enable 

15 the Secretary of Labor to carry out the purposes of this 

16 part: 

17 (1) $5,000,000,000 for fiscal year 2013. 

18 (2) $5,000,000,000 for fiscal year 2014. 


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1 TITLE II—CREATING FINANCIAL 

2 STABILITY AND A BETTER FU3 TURE FOR MIDDLE CLASS 

4 FAMILIES 

5 Subtitle A—Alleviating the High 

6 Cost of Child Care 

7 SEC. 201. CCDBG PLUS. 

8 (a) DEFINITIONS.—In this section: 

9 (1) ELIGIBLE CHILD.—The term ‘‘eligible 

10 child’’ means a child who has not attained the age 

11 of 13 and whose family income is equal to or less 

12 than the State median income for a family of the 

13 same size. 

14 (2) LOW-INCOME.—The term ‘‘low-income’’, 

15 when used in reference to an individual, means an 

16 individual with a family income that is less than or 

17 equal to 200 percent of the poverty line, as defined 

18 in section 673 of the Community Services Block 

19 Grant Act (42 U.S.C. 9902), applicable to a family 

20 of the size involved. 

21 (3) SECRETARY.—The term ‘‘Secretary’’ means 

22 the Secretary of Health and Human Services. 

23 (4) STATE.—The term ‘‘State’’ means each of 

24 the 50 States, the District of Columbia, and the 

25 Commonwealth of Puerto Rico. 


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1 (b) PROGRAM AUTHORIZED.— 

2 (1) IN GENERAL.—The Secretary of Health and 

3 Human Services is authorized to award grants, in 

4 allotments described in subsection (c)(2), to States 

5 to enable the States to increase the availability of 

6 high-quality early childhood care and education pro7 grams to enable more people of the United States to 

8 enter into and advance within the middle class. 

9 (2) DURATION OF GRANT.—A grant awarded 

10 under this section shall be for a period of not more 

11 than 5 years. 

12 (3) CONTINGENT FUNDING.—After the third 

13 year of the grant period of a grant under this sec14 tion, funding for each additional year of the grant 

15 period shall be contingent on the State’s progress to16 ward meeting the performance indicators and bench17 marks established under subsection (g). 

18 (4) ELIGIBILITY.—In order to receive an allot19 ment under this section, a State shall establish or 

20 certify, to the satisfaction of the Secretary, that the 

21 State’s payments for the grant or contracts to pro22 vide early childhood care and education programs 

23 under subsection (f)(1) are sufficient to ensure that 

24 programs and providers that serve eligible children 


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1 from birth through age 5 can meet the standards es2 tablished under subsection (f)(2). 

3 (c) AMOUNTS RESERVED; ALLOTMENTS.— 

4 (1) RESERVATIONS.—From the amounts appro5 priated to carry out this section, the Secretary shall 

6 reserve— 

7 (A) 2 percent of such amounts to make 

8 grants or enter into contracts with Indian tribes 

9 or tribal organizations (as such terms are de10 fined in section 658P of the Child Care Devel11 opment Block Grant Act of 1990 (42 U.S.C. 

12 9858n)) for programs or activities consistent 

13 with the purposes of this section; and 

14 (B) 0.5 percent of such amounts to award 

15 grants to Guam, American Samoa, the Virgin 

16 Islands of the United States, and the Common17 wealth of the Northern Mariana Islands for 

18 programs or activities consistent with the pur19 poses of this section, to be allotted in accord20 ance with their respective needs. 

21 (2) ALLOTMENTS.—From the amounts appro22 priated to carry out this section and not reserved 

23 under paragraph (1), the Secretary shall make allot24 ments to each eligible State with an approved appli25 cation using the formula established under section 


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1 658O(b) of the Child Care Development Block Grant 

2 Act of 1990 (42 U.S.C. 9858m(b)), except that any 

3 calculation in such formula that refers all States 

4 shall, for purposes of this section, be calculated 

5 based on all eligible States that have submitted an 

6 approved application. 

7 (d) APPLICATION.— 

8 (1) IN GENERAL.—A State desiring a grant 

9 under this section shall submit an application at 

10 such time, in such manner, and containing such in11 formation as the Secretary may require, including 

12 the following: 

13 (A) A description of how, by not later than 

14 3 years after the date of receipt of the grant, 

15 the State will ensure the health and safety of 

16 early childhood care and education programs by 

17 inspecting and monitoring all regulated child 

18 care providers in the State not less than 2 

19 times each year, in accordance with subsection 

20 (e)(2). 

21 (B) A description of the process the State 

22 proposes to use to ensure that investments 

23 made to increase access to programs providing 

24 high-quality early childhood care and education 

25 programs are prioritized first in local economic 


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1 areas with significant concentrations of poverty 

2 and unemployment that do not have such pro3 grams. 

4 (C) A description of the strategies the 

5 State will employ to build on the capacity of 

6 State early childhood care and education pro7 grams, and communities, to promote parents’ 

8 and families’ understanding of the State’s early 

9 childhood care and education system and the 

10 importance of high-quality early learning oppor11 tunities. 

12 (D) A description of the proposed time13 frame to develop and implement the elements of 

14 the grant program described in the application. 

15 (E) An assurance that the grant funds will 

16 only be used to supplement, and not to sup17 plant, Federal, State, and local funds otherwise 

18 available to support existing (as of the date of 

19 the application) early childhood care and edu20 cation programs described in subsection (e)(3). 

21 (F) A certification that the State will pro22 vide assistance for the provision of early child23 hood care and education programs under sub24 section (f), and provides assistance for child 

25 care services under the Child Care and DevelopVerDate Mar 15 2010 00:42 Apr 04, 2012 Jkt 099200 PO 00000 Frm 00120 Fmt 6652 Sfmt 6201 E:\BILLS\S2252.IS S2252

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1 ment Block Grant Act of 1990 (42 U.S.C. 9858 

2 et seq.), for families by using a sliding fee scale 

3 that provides for cost sharing by the families, 

4 in order to prioritize increasing the number and 

5 percentage of low-income and otherwise dis6 advantaged children and families in high-quality 

7 early childhood care and education programs 

8 described in subsection (e)(3). 

9 (G) An assurance that the State will peri10 odically revise the sliding fee scale used to pro11 vide assistance under this section. 

12 (H) A description of how the State will co13 ordinate the program supported under this sec14 tion with the program supported under the 

15 Child Care and Development Block Grant Act 

16 of 1990 (42 U.S.C. 9858 et seq.), Head Start 

17 and Early Head Start programs under the 

18 Head Start Act (42 U.S.C. 9832), the 21st cen19 tury community learning center program under 

20 part B of title IV of the Elementary and Sec21 ondary Education Act of 1965 (20 U.S.C. 7171 

22 et seq.), part C and section 619 of the Individ23 uals with Disabilities Education Act (20 U.S.C. 

24 1431 et seq.), and, as applicable, activities 

25 funded under the Race to The Top-Early 


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1 Learning Challenge program under section 

2 14006 of the American Recovery and Reinvest3 ment Act of 2009 (Public Law 111–5; 123 

4 Stat. 283). 

5 (2) CONSULTATION.—A State shall develop its 

6 application under this subsection in consultation 

7 with the State Advisory Council on Early Education 

8 and Care established pursuant to section 

9 642B(b)(1)(A) of the Head Start Act (42 U.S.C. 

10 9837b(b)(1)(A)). 

11 (e) USE OF FUNDS.—A State that receives a grant 

12 under this section shall use grant funds to carry out the 

13 following: 

14 (1) RESERVATION FOR ENHANCING CHILD CARE

15 QUALITY.—The State shall reserve 10 percent of the 

16 grant funds to support— 

17 (A) activities that enhance the skills, 

18 knowledge, credentials, and compensation of the 

19 child care workforce, including in ways that 

20 support career advancement through career lad21 ders; and 

22 (B) other activities to enhance child care 

23 quality and support child care providers, includ24 ing family child care providers, in meeting the 

25 standards described in subsection (f)(2). 


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1 (2) USE FOR INSPECTION AND MONITORING.— 

2 From the amount of grant funds remaining after the 

3 reservation under paragraph (1), the State shall use 

4 not less than 10 percent of funds to ensure that the 

5 State inspects and monitors all State-regulated child 

6 care providers, to include site visits not less fre7 quently than 2 times each year. At a minimum, 1 

8 such visit shall address health and safety and 1 visit 

9 shall address child care quality, and at least 1 of the 

10 visits shall be unannounced. 

11 (3) USE FOR SUBSIDIES FOR EARLY CHILD12 HOOD CARE AND EDUCATION PROGRAMS.—From the 

13 amount of grant funds remaining after carrying out 

14 paragraphs (1) and (2), the State shall make high15 quality early childhood care and education programs 

16 more affordable to families of eligible children by— 

17 (A) using two-thirds of such remaining 

18 amounts to provide assistance for the provision 

19 of high-quality early childhood care and edu20 cation programs under subsection (f) for eligible 

21 children who are infants and toddlers; and 

22 (B) using the remaining funds to provide 

23 assistance for eligible children who have not at24 tained the age of 13 for the provision of high25 quality early childhood care and education proVerDate Mar 15 2010 00:42 Apr 04, 2012 Jkt 099200 PO 00000 Frm 00123 Fmt 6652 Sfmt 6201 E:\BILLS\S2252.IS S2252

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1 grams (which, for purposes of serving school2 age children under this subparagraph, shall be 

3 deemed to include high-quality after-school pro4 grams) under subsection (f). 

5 (f) MORE AFFORDABLE QUALITY CHILD CARE.— 

6 (1) IN GENERAL.—To provide the assistance 

7 described in subsection (e)(3), a State shall award 

8 grants or contracts to eligible providers that allow 

9 parents of eligible children who are provided assist10 ance under this section to enroll such children with 

11 the eligible providers in high-quality early childhood 

12 care and education programs described in such sub13 section. 

14 (2) ELIGIBLE PROVIDERS.— 

15 (A) IN GENERAL.—In order for a provider 

16 that serves eligible children from birth through 

17 age 5 to be an eligible provider for purposes of 

18 this section, the provider shall be a child care 

19 center, Head Start or Early Head Start pro20 gram, or family child care home or system 

21 that— 

22 (i) offers full-day, full-year care or 

23 before- or after-school care; and 

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1 lished for the top tier of a State’s quality 

2 rating and improvement system, as appro3 priate; or 

4 (II) is accredited by a national early 

5 childhood body with demonstrated valid 

6 and reliable program standards of high 

7 quality. 

8 (B) SPECIAL RULE.—The Secretary may 

9 adjust the requirements of subparagraph (A), 

10 to the extent the Secretary determines nec11 essary to carry out the purposes of this section, 

12 for high-quality early childhood care and edu13 cation programs providing care to eligible chil14 dren during nontraditional hours. 

15 (3) SUPPORT FOR CHILDREN WITH DISABIL16 ITIES.—Not less than 15 percent of the funds de17 scribed in each of subparagraphs (A) and (B) of 

18 subsection (e)(3) shall be used to support high-qual19 ity early childhood care and education programs 

20 through eligible providers for eligible children who 

21 are children with disabilities, as defined in section 

22 602 of the Individuals with Disabilities Education 

23 Act (20 U.S.C. 1401), or infants or toddlers with 

24 disabilities, as defined in section 632 of such Act (20 

25 U.S.C. 1432). 


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1 (4) SUPPORT FOR QUALITY CARE DURING NON2 TRADITIONAL HOURS.—Not less than 10 percent of 

3 the funds described in each of subparagraphs (A) 

4 and (B) of subsection (e)(3) shall be used to support 

5 the provision of high-quality early childhood care 

6 and education programs described in such subsection 

7 to eligible children during nontraditional hours. 

8 (g) ACCOUNTABILITY.— 

9 (1) IN GENERAL.—The Secretary shall define, 

10 by regulation, indicators to be used to measure suc11 cess on the activities carried out under a grant 

12 under this section, the primary indicator of which 

13 shall be increasing the number and percentage of 

14 low-income children in high-quality, State early 

15 childhood care and education programs, as described 

16 in subsection (e)(3). 

17 (2) QUANTIFIABLE BENCHMARKS.—Each State 

18 receiving a grant under this section shall— 

19 (A) develop quantifiable benchmarks for 

20 the State and the activities supported under the 

21 grant based on indicators described in para22 graph (1) that are applicable to the State; and 

23 (B) submit such benchmarks for approval 

24 to the Secretary. 


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1 (3) DISAGGREGATION.—The indicators and 

2 benchmarks shall include, at a minimum, indicators 

3 and benchmarks for all eligible children served by 

4 the program and for the categories of children de5 scribed in paragraphs (2), (3), and (4) of subsection 

6 (i). 

7 (h) MAINTENANCE OF EFFORT.—With respect to 

8 each period for which a State is awarded a grant under 

9 this section, the expenditures by the State on State early 

10 childhood care and education programs described in sub11 section (e)(3), and supports, shall not be less than the 

12 greater of the level of the expenditures for such programs 

13 and supports in the prior fiscal year or in the full fiscal 

14 year preceding the date of enactment of the Rebuilding 

15 America Act. 

16 (i) REPORTS.—Each State that receives a grant 

17 under this section shall submit to the Secretary an annual 

18 report, which the Secretary shall make publicly available, 

19 that includes information on the activities carried out by 

20 the State under this section for the year, including— 

21 (1) the number of eligible children, and fami22 lies, that were assisted under this section; 

23 (2) the number and percentage of low-income 

24 children assisted; 


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1 (3) the number and percentage of English 

2 learners assisted; 

3 (4) the number and percentage of children with 

4 disabilities assisted; and 

5 (5) the number of early childhood care and edu6 cation programs, as described in subsection (e)(3) 

7 and disaggregated by type, that received assistance 

8 under this section. 

9 (j) FUNDING.—There shall be made available from 

10 the Rebuild America Trust Fund under section 9512 of 

11 the Internal Revenue Code of 1986, $5,000,000,000 for 

12 each of fiscal years 2013 through 2022 to carry out this 

13 section. 

14 (k) SUNSET PROVISION.—The authority under this 

15 section shall expire on the date that is 10 years after the 

16 date of enactment of this Act. 

17 Subtitle B—Helping Americans 

18 Enjoy Their Golden Years 

19 PART I—COMMISSION ON RETIREMENT 

20 SECURITY 

21 SEC. 211. SHORT TITLE. 

22 This part may be cited as the ‘‘Retirement Security 

23 Act of 2012’’. 

24 SEC. 212. FINDINGS. 

25 Congress makes the following findings: 


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1 (1) The United States is facing a retirement 

2 crisis. The difference between what people need for 

3 retirement and what they actually have is approxi4 mately $6,600,000,000,000. 

5 (2) Social Security is the bedrock of retirement 

6 security, but Social Security must be supplemented 

7 by a strong and vibrant private retirement system. 

8 (3) The private retirement system is not doing 

9 enough to help families prepare for retirement. Only 

1 10 ⁄2 of the workforce has access to an employer pro11 vided retirement plan, and the number of workers 

12 covered by defined benefit pension plans has fallen 

13 from 50 percent to 20 percent in just 30 years. Con14 sequently, retirement is getting less and less secure 

15 for middle class families. 

16 (4) In order to address the retirement crisis, 

17 the United States needs a retirement system that 

18 embodies the following principles: 

19 (A) The private retirement system must be 

20 universal and automatic. 

21 (B) The private retirement system must 

22 provide people with income certainty. 

23 (C) The private retirement system must be 

24 one of shared responsibility. 


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1 (D) The private retirement system must be 

2 pooled and professionally managed. 

3 SEC. 213. COMMISSION ON RETIREMENT SECURITY. 

4 (a) ESTABLISHMENT.—There is established a com5 mission to be known as the ‘‘Commission on Retirement 

6 Security’’ (referred to in this part as the ‘‘Commission’’). 

7 (b) MEMBERSHIP.— 

8 (1) IN GENERAL.—The Commission shall be 

9 composed of 31 members. Such members shall be 

10 appointed in accordance with the following: 

11 (A) Two members appointed by the Chair12 man of the Committee on Health, Education, 

13 Labor, and Pensions of the Senate. 

14 (B) Two members appointed by the Rank15 ing Member of the Committee on Health, Edu16 cation, Labor, and Pensions of the Senate. 

17 (C) Two members appointed by the Chair18 man of the Committee on Finance of the Sen19 ate. 

20 (D) Two members appointed by the Rank21 ing Member of the Committee on Finance of 

22 the Senate. 

23 (E) Two members appointed by the Chair24 man of the Committee on Education and the 

25 Workforce of the House of Representatives. 


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1 (F) Two members appointed by the Rank2 ing Member of the Committee on Education 

3 and the Workforce of the House of Representa4 tives. 

5 (G) Two members appointed by the Chair6 man of the Committee on Ways and Means of 

7 the House of Representatives. 

8 (H) Two members appointed by the Rank9 ing Member of the Committee on Ways and 

10 Means of the House of Representatives. 

11 (I) Fifteen members appointed by the 

12 President from among officers or employees of 

13 the Executive Branch, private citizens of the 

14 United States, or both. Not more than 8 such 

15 members appointed by the President may be 

16 from 1 political party. 

17 (2) DATE OF APPOINTMENTS.—The appoint18 ment of a member of the Commission shall be made 

19 not later than 30 days after the date of enactment 

20 of this Act. 

21 (c) TERM; VACANCIES.— 

22 (1) TERM.—A member shall be appointed for 

23 the life of the Commission. 

24 (2) VACANCIES.—A vacancy on the Commis25 sion— 


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1 (A) shall not affect the powers of the Com2 mission; and 

3 (B) shall be filled in the same manner as 

4 the original appointment was made. 

5 (d) INITIAL MEETING.—Not later than 15 days after 

6 the date on which all members of the Commission have 

7 been appointed, the Commission shall hold the initial 

8 meeting of the Commission. 

9 (e) MEETINGS.—The Commission shall meet at the 

10 call of the co-chairpersons. Meetings shall be open to the 

11 public unless designated otherwise by the co-chairpersons. 

12 (f) QUORUM.—A majority of the members of the 

13 Commission shall constitute a quorum, but a lesser num14 ber of members may hold hearings. 

15 (g) CO-CHAIRPERSONS.—The Chairman of the Com16 mittee on Health, Education, Labor, and Pensions of the 

17 Senate and the Chairman of the Committee on Education 

18 and the Workforce of the House of Representatives shall 

19 each select 1 member to be co-chairperson of the Commis20 sion. 

21 SEC. 214. DUTIES. 

22 (a) REVIEW AND ANALYSIS.—The Commission 

23 shall— 

24 (1) review relevant analyses of the private re25 tirement system; 


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1 (2) identify problems that threaten retirement 

2 security; and 

3 (3) analyze potential solutions to such prob4 lems. 

5 (b) RECOMMENDATIONS.—The Commission shall de6 velop recommendations on improving the private retire7 ment system in the United States. 

8 (c) REPORT.—Not later than 1 year after the date 

9 of enactment of this Act, the Commission shall submit to 

10 Congress a report that contains— 

11 (1) a detailed statement of the findings and 

12 conclusions of the Commission; and 

13 (2) the recommendations of the Commission for 

14 such legislation (which shall include proposed legisla15 tive language) and administrative actions as the 

16 Commission considers appropriate. 

17 SEC. 215. COMMISSION PERSONNEL MATTERS. 

18 (a) NO COMPENSATION OF MEMBERS.—Members of 

19 the Commission shall serve without compensation. 

20 (b) TRAVEL EXPENSES.—A member of the Commis21 sion who is not an officer or employee of the Federal Gov22 ernment shall be allowed travel expenses, including per 

23 diem in lieu of subsistence, while away from their homes 

24 or regular places of business in the performance of services 

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1 ployed intermittently in the Government service are al2 lowed such expenses under section 5703 of title 5, United 

3 States Code. 

4 (c) STAFF.— 

5 (1) IN GENERAL.—The co-chairpersons of the 

6 Commission may, without regard to the civil service 

7 laws (including regulations), appoint and terminate 

8 an executive director and such other additional per9 sonnel as are necessary to enable the Commission to 

10 perform the duties of the Commission. 

11 (2) CONFIRMATION OF EXECUTIVE DIREC12 TOR.—The employment of an executive director shall 

13 be subject to confirmation by the Commission. 

14 (3) COMPENSATION.— 

15 (A) IN GENERAL.—Except as provided in 

16 subparagraph (B), the co-chairpersons of the 

17 Commission may fix the compensation of the 

18 executive director and other personnel without 

19 regard to the provisions of chapter 51 and sub20 chapter III of chapter 53 of title 5, United 

21 States Code, relating to classification of posi22 tions and General Schedule pay rates. 

23 (B) MAXIMUM RATE OF PAY.—The rate of 

24 pay for the executive director and other per25 sonnel shall not exceed the rate payable for 


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1 level V of the Executive Schedule under section 

2 5316 of title 5, United States Code. 

3 (d) DETAIL OF FEDERAL GOVERNMENT EMPLOY4 EES.— 

5 (1) IN GENERAL.—An employee of the Federal 

6 Government may be detailed to the Commission 

7 without reimbursement. 

8 (2) CIVIL SERVICE STATUS.—The detail of the 

9 employee shall be without interruption or loss of civil 

10 service status or privilege. 

11 (e) PROCUREMENT OF TEMPORARY AND INTERMIT12 TENT SERVICES.—The co-chairpersons of the Commission 

13 may procure temporary and intermittent services in ac14 cordance with section 3109(b) of title 5, United States 

15 Code, at rates for individuals that do not exceed the daily 

16 equivalent of the annual rate of basic pay prescribed for 

17 level V of the Executive Schedule under section 5316 of 

18 that title. 

19 SEC. 216. TERMINATION OF COMMISSION. 

20 The Commission shall terminate 30 days after the 

21 date on which the Commission submits the report of the 

22 Commission under section 214(c). 


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1 PART II—SOCIAL SECURITY 

2 SEC. 221. DETERMINATION OF TAXABLE WAGES AND SELF3 EMPLOYMENT INCOME ABOVE CONTRIBU4 TION AND BENEFIT BASE AFTER 2012. 

5 (a) DETERMINATION OF TAXABLE WAGES ABOVE

6 CONTRIBUTION AND BENEFIT BASE AFTER 2012.— 

7 (1) AMENDMENTS TO THE INTERNAL REVENUE

8 CODE OF 1986.—Section 3121 of the Internal Rev9 enue Code of 1986 is amended— 

10 (A) in subsection (a)(1), by inserting ‘‘the 

11 applicable percentage (determined under sub12 section (c)(1)) of’’ before ‘‘that part of the re13 muneration’’; and 

14 (B) in subsection (c), by striking ‘‘(c) IN15 CLUDED AND EXCLUDED SERVICE.—For pur16 poses of this chapter, if’’ and inserting the fol17 lowing: 

18 ‘‘(c) SPECIAL RULES FOR WAGES AND EMPLOY19 MENT.— 

20 ‘‘(1) APPLICABLE PERCENTAGE OF REMUNERA21 TION IN DETERMINING TAXABLE WAGES.—For pur22 poses of subsection (a)(1), the applicable percentage 

23 for a calendar year shall be equal to— 

24 ‘‘(A) for 2013, 90 percent; 

25 ‘‘(B) for 2014 through 2021, the applica26 ble percentage under this paragraph for the 


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1 previous year, decreased by 10 percentage 

2 points; and 

3 ‘‘(C) for 2022 and each year thereafter, 0 

4 percent. 

5 ‘‘(2) INCLUDED AND EXCLUDED SERVICE.—For 

6 purposes of this chapter, if’’. 

7 (2) AMENDMENTS TO THE SOCIAL SECURITY

8 ACT.—Section 209 of the Social Security Act (42 

9 U.S.C. 409) is amended— 

10 (A) in subsection (a)(1)(I)— 

11 (i) by inserting ‘‘and before 2013’’ 

12 after ‘‘1974’’; and 

13 (ii) by inserting ‘‘and’’ after the semi14 colon; 

15 (B) in subsection (a)(1), by adding at the 

16 end the following new subparagraph: 

17 ‘‘(J) The applicable percentage (deter18 mined under subsection (l)) of that part of re19 muneration which, after remuneration (other 

20 than remuneration referred to in the succeeding 

21 subsections of this section) equal to the con22 tribution and benefit base (determined under 

23 section 230) with respect to employment has 

24 been paid to an individual during any calendar 

25 year after 2012 with respect to which such conVerDate Mar 15 2010 00:42 Apr 04, 2012 Jkt 099200 PO 00000 Frm 00137 Fmt 6652 Sfmt 6201 E:\BILLS\S2252.IS S2252

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1 tribution and benefit base is effective, is paid to 

2 such individual during such calendar year;’’; 

3 and 

4 (C) by adding at the end the following new 

5 subsection: 

6 ‘‘(l) For purposes of subsection (a)(1)(J), the applica7 ble percentage for a calendar year shall be equal to— 

8 ‘‘(1) for 2013, 90 percent; 

9 ‘‘(2) for 2014 through 2021, the applicable per10 centage under this subsection for the previous year, 

11 decreased by 10 percentage points; and 

12 ‘‘(3) for 2022 and each year thereafter, 0 per13 cent.’’. 

14 (3) EFFECTIVE DATE.—The amendments made 

15 by this subsection shall apply with respect to remu16 neration paid in calendar years after 2012. 

17 (b) DETERMINATION OF TAXABLE SELF-EMPLOY18 MENT INCOME ABOVE CONTRIBUTION AND BENEFIT

19 BASE AFTER 2012.— 

20 (1) AMENDMENTS TO THE INTERNAL REVENUE

21 CODE OF 1986.—Section 1402 of the Internal Rev22 enue Code of 1986 is amended— 

23 (A) in subsection (b)(1), by striking ‘‘that 

24 part of the net earnings’’ and all that follows 

25 through ‘‘minus’’ and inserting the following: 


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1 ‘‘an amount equal to the applicable percentage 

2 (as determined under subsection (d)(2)) of that 

3 part of the net earnings from self-employment 

4 which is in excess of the difference (not to be 

5 less than zero) between (i) an amount equal to 

6 the contribution and benefit base (as deter7 mined under section 230 of the Social Security 

8 Act) which is effective for the calendar year in 

9 which such taxable year begins, and’’; and 

10 (B) in subsection (d)— 

11 (i) by striking ‘‘(d) EMPLOYEE AND

12 WAGES.—The term’’ and inserting the fol13 lowing: 

14 ‘‘(d) RULES AND DEFINITIONS.— 

15 ‘‘(1) EMPLOYEE AND WAGES.—The term’’; and 

16 (ii) by adding at the end the fol17 lowing: 

18 ‘‘(2) APPLICABLE PERCENTAGE OF NET EARN19 INGS FROM SELF-EMPLOYMENT IN DETERMINING

20 TAXABLE SELF-EMPLOYMENT INCOME.—For pur21 poses of subsection (b)(1), the applicable percentage 

22 for a taxable year beginning in any calendar year re23 ferred to in such paragraph shall be equal to— 

24 ‘‘(A) for 2013, 90 percent; 


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1 ‘‘(B) for 2014 through 2021, the applica2 ble percentage under this paragraph for the 

3 previous year, decreased by 10 percentage 

4 points; and 

5 ‘‘(C) for 2022 and each year thereafter, 0 

6 percent.’’. 

7 (2) AMENDMENTS TO THE SOCIAL SECURITY

8 ACT.—Section 211 of the Social Security Act (42 

9 U.S.C. 411) is amended— 

10 (A) in subsection (b)— 

11 (i) in paragraph (1)(I)— 

12 (I) by striking ‘‘or’’ after the 

13 semicolon; and 

14 (II) by inserting ‘‘and before 

15 2013’’ after ‘‘1974’’; 

16 (ii) by redesignating paragraph (2) as 

17 paragraph (3); and 

18 (iii) by inserting after paragraph (1) 

19 the following: 

20 ‘‘(2) For any taxable year beginning in any cal21 endar year after 2012, an amount equal to the appli22 cable percentage (as determined under subsection 

23 (l)) of that part of net earnings from self-employ24 ment which is in excess of the difference (not to be 

25 less than zero) between— 


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1 ‘‘(A) an amount equal to the contribution 

2 and benefit base (as determined under section 

3 230) that is effective for such calendar year, 

4 and 

5 ‘‘(B) the amount of the wages paid to such 

6 individual during such taxable year; or’’; and 

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

8 ‘‘(l) For purposes of subsection (b)(2), the applicable 

9 percentage for a taxable year beginning in any calendar 

10 year referred to in such paragraph shall be equal to— 

11 ‘‘(1) for 2013, 90 percent; 

12 ‘‘(2) for 2014 through 2021, the applicable per13 centage under this subsection for the previous year, 

14 decreased by 10 percentage points; and 

15 ‘‘(3) for 2022 and each year thereafter, 0 per16 cent.’’. 

17 (3) EFFECTIVE DATE.—The amendments made 

18 by this subsection shall apply with respect to taxable 

19 years beginning during or after calendar year 2013. 

20 SEC. 222. ADJUSTMENTS TO BEND POINTS IN DETER21 MINING PRIMARY INSURANCE AMOUNT. 

22 (a) IN GENERAL.—Section 215(a)(1) of the Social 

23 Security Act (42 U.S.C. 415(a)(1)) is amended— 

24 (1) in subparagraph (A)— 


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1 (A) in clause (ii), by striking ‘‘and’’ at the 

2 end; 

3 (B) in clause (iii), by striking the comma 

4 at the end and inserting the following: ‘‘but do 

5 not exceed the amount established for purposes 

6 of this clause by subparagraph (B), and’’; and 

7 (C) by adding at the end the following new 

8 clause: 

9 ‘‘(iv) 5 percent of the individual’s average in10 dexed monthly earnings to the extent that such 

11 earnings exceed the amount established for purposes 

12 of clause (iii),’’; and 

13 (2) in subparagraph (B)— 

14 (A) in clause (i), by striking ‘‘clause (i) 

15 and (ii) of subparagraph (A) shall be $180 and 

16 $1,085’’ and inserting ‘‘clauses (i), (ii), and (iii) 

17 of subparagraph (A) shall be $180, $1,085, and 

18 $2,000’’; 

19 (B) by redesignating clause (iii) as clause 

20 (iv); and 

21 (C) by inserting after clause (ii) the fol22 lowing new clause: 

23 ‘‘(iii) For individuals who initially become eligi24 ble for old-age or disability insurance benefits, or 

25 who die (before becoming eligible for such benefits) 


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1 in any calendar year after 2012, the amount deter2 mined under clause (i) of this subparagraph for pur3 poses of subparagraph (A)(i) for such calendar year 

4 shall be increased by— 

5 ‘‘(I) for calendar year 2013, 1.5 percent; 

6 ‘‘(II) for each of calendar years 2014 

7 through 2021, the percent determined under 

8 this clause for the preceding year increased by 

9 1.5 percentage points; and 

10 ‘‘(III) for calendar year 2022 and each 

11 year thereafter, 15 percent.’’. 

12 (b) TECHNICAL AMENDMENT.—Section 215(e)(1) of 

13 such Act (42 U.S.C. 415(e)(1)) is amended— 

14 (1) by striking ‘‘before 1975, and the excess’’ 

15 and inserting ‘‘before 1975, the excess’’; and 

16 (2) by inserting ‘‘and for years after 2012, the 

17 amount of remuneration and net earnings from self18 employment paid to or derived by such individual 

19 during such year after application of sections 

20 209(a)(1)(J) and 211(b)(2),’’ after ‘‘such contribu21 tion and benefit base is effective,’’. 

22 (c) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply with respect to individuals who ini24 tially become eligible (within the meaning of section 

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1 ability insurance benefits under title II of the Social Secu2 rity Act, or who die (before becoming eligible for such ben3 efits), in any calendar year after 2012. 

4 SEC. 223. CONSUMER PRICE INDEX FOR ELDERLY CON5 SUMERS. 

6 (a) IN GENERAL.—The Bureau of Labor Statistics 

7 of the Department of Labor shall prepare and publish an 

8 index for each calendar month to be known as the ‘‘Con9 sumer Price Index for Elderly Consumers’’ that indicates 

10 changes over time in expenditures for consumption which 

11 are typical for individuals in the United States who have 

12 attained early retirement age (as defined under section 

13 216(l)(2) of the Social Security Act (42 U.S.C. 416(l)(2)), 

14 for purposes of an old-age, wife’s, or husband’s insurance 

15 benefit). 

16 (b) EFFECTIVE DATE.—Subsection (a) shall apply 

17 with respect to calendar months ending on or after June 

18 30 of the calendar year in which this Act is enacted. 

19 (c) AUTHORIZATION OF APPROPRIATIONS.—There 

20 are authorized to be appropriated such sums as are nec21 essary to carry out the provisions of this section. 

22 SEC. 224. COMPUTATION OF COST-OF-LIVING INCREASES 

23 FOR SOCIAL SECURITY BENEFITS. 

24 (a) IN GENERAL.—Section 215(i) of the Social Secu25 rity Act (42 U.S.C. 415(i)) is amended— 


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1 (1) in paragraph (1)(G), by inserting before the 

2 period the following: ‘‘, and, with respect to any 

3 monthly insurance benefit payable under this title, 

4 effective for adjustments under this subsection to 

5 the primary insurance amount on which such benefit 

6 is based (or to any such benefit under section 227 

7 or 228), the applicable Consumer Price Index shall 

8 be deemed to be the Consumer Price Index for El9 derly Consumers and such primary insurance 

10 amount shall be deemed adjusted under this sub11 section using such Index’’; and 

12 (2) in paragraph (4), by striking ‘‘and by sec13 tion 9001’’ and inserting ‘‘, by section 9001’’, and 

14 by inserting after ‘‘1986,’’ the following: ‘‘and by 

15 section 224(a) of the Rebuild America Act,’’. 

16 (b) CONFORMING AMENDMENTS IN APPLICABLE

17 FORMER LAW.—Section 215(i)(1)(C) of the Social Secu18 rity Act, as in effect in December 1978 and applied in 

19 certain cases under the provisions of such Act in effect 

20 after December 1978, is amended by inserting before the 

21 period the following: ‘‘, and, with respect to any monthly 

22 insurance benefit payable under this title, effective for ad23 justments under this subsection to the primary insurance 

24 amount on which such benefit is based (or to any such 

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1 sumer Price Index shall be deemed to be the Consumer 

2 Price Index for Elderly Consumers and such primary in3 surance amount shall be deemed adjusted under this sub4 section using such Index’’. 

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

6 this section shall apply to determinations made by the 

7 Commissioner of Social Security under section 215(i)(2) 

8 of the Social Security Act (42 U.S.C. 415(i)(2)), with re9 spect to cost-of-living computation quarters ending on or 

10 after September 30, 2013. 

11 SEC. 225. NON-APPLICATION OF INCREASE IN SOCIAL SE12 CURITY BENEFITS FOR OTHER FEDERAL OR 

13 FEDERALLY ASSISTED PROGRAMS. 

14 Any increase in old-age or disability insurance bene15 fits under title II of the Social Security Act as a result 

16 of the amendments made by this Act shall not be regarded 

17 as income and shall not be regarded as a resource for any 

18 month after December 2012, for purposes of determining 

19 the eligibility of the recipient (or the recipient’s spouse or 

20 family) for benefits or assistance, or the amount or extent 

21 of benefits or assistance, under any Federal program or 

22 under any State or local program financed in whole or in 

23 part with Federal funds. 


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1 Subtitle C—Protecting Overtime 

2 Pay for Working Americans 

3 SEC. 231. SALARY THRESHOLDS, HIGHLY COMPENSATED 

4 EMPLOYEES, AND PRIMARY DUTIES. 

5 (a) SALARY THRESHOLDS FOR EXECUTIVE, ADMIN6 ISTRATIVE, AND PROFESSIONAL EMPLOYEES.—Section 

7 13 of the Fair Labor Standards Act of 1938 (29 U.S.C. 

8 213) is amended— 

9 (1) in subsection (a)(1), by inserting before ‘‘; 

10 or’’ the following: ‘‘, subject to the requirement that 

11 any employee who the Secretary determines is re12 quired to be paid on a salary or fee basis in order 

13 to be exempt under this subsection shall, in order to 

14 be exempt, be compensated at a rate of not less than 

15 the salary rate (or equivalent fee basis) determined 

16 under subsection (k)’’; and 

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

18 ‘‘(k) SALARY RATES.— 

19 ‘‘(1) IN GENERAL.—The salary rate (or equiva20 lent fee basis) determined under this subsection for 

21 purposes of subsection (a)(1) shall be— 

22 ‘‘(A) beginning 1 year after the first day 

23 of the third month that begins after the date of 

24 enactment of the Rebuild America Act, $655 

25 per week; 


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1 ‘‘(B) beginning 2 years after that first day, 

2 $855 per week; 

3 ‘‘(C) beginning 3 years after that first day, 

4 $1,045 per week; and 

5 ‘‘(D) beginning on the date that is 4 years 

6 after that first day, and on that first day in 

7 each succeeding year, an adjusted amount that 

8 is— 

9 ‘‘(i) not less than the amount in effect 

10 under this paragraph on the day before the 

11 date the adjustment is being made; 

12 ‘‘(ii) increased from such amount by 

13 the annual percentage increase in the Con14 sumer Price Index for Urban Wage Earn15 ers and Clerical Workers; and 

16 ‘‘(iii) rounded to the nearest multiple 

17 of $1.00. 

18 ‘‘(2) SPECIAL RULE.—Notwithstanding para19 graph (1), for any employee for whom the minimum 

20 wage would otherwise be determined pursuant to 

21 section 8103(b) of the Fair Minimum Wage Act of 

22 2007 (29 U.S.C. 206 note), the Secretary may de23 termine, through regulations, the salary rate (or 

24 equivalent fee basis).’’. 


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1 (b) DEFINITIONS.—Section 13 of the Fair Labor 

2 Standards Act of 1938 (as amended by subsection (a)) 

3 (29 U.S.C. 213) is further amended by adding at the end 

4 the following: 

5 ‘‘(l) DEFINITIONS.— 

6 ‘‘(1) ANNUAL PERCENTAGE INCREASE; CON7 SUMER PRICE INDEX.—For purposes of this sec8 tion— 

9 ‘‘(A) the term ‘annual percentage in10 crease’, when used in reference to the Con11 sumer Price Index for Urban Wage Earners 

12 and Clerical Workers, means the annual per13 centage increase calculated by the Secretary 

14 under section 6(h)(2), as amended by section 

15 231 of the Rebuild America Act; and 

16 ‘‘(B) the term ‘Consumer Price Index for 

17 Urban Wage Earners and Clerical Workers’ 

18 means the Consumer Price Index for Urban 

19 Wage Earners and Clerical Workers (United 

20 States city average, all items, not seasonally ad21 justed), or its successor publication, as deter22 mined by the Bureau of Labor Statistics. 

23 ‘‘(2) PRIMARY DUTY.—For purposes of para24 graphs (1) and (17) of subsection (a), including the 

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1 erence to the term ‘primary duty’ (or a successor 

2 term) when used with respect to determining if an 

3 employee is employed in a bona fide executive, ad4 ministrative, or professional capacity, or in a posi5 tion described in subsection (a)(17), means the duty 

6 that an employee spends more than 50 percent of 

7 the employee’s work hours per week performing.’’. 

8 (c) HIGHLY COMPENSATED EMPLOYEES.— 

9 (1) IN GENERAL.—If the Secretary of Labor, in 

10 the Secretary’s discretion, determines that an em11 ployee may be exempt for purposes of section 

12 13(a)(1) of the Fair Labor Standards Act of 1938 

13 (29 U.S.C. 213(a)(1)), as a highly compensated em14 ployee (as such term is defined and delimited by the 

15 Secretary), then the level of total annual compensa16 tion necessary for such exemption shall be— 

17 (A) for the calendar year that includes the 

18 effective date of this subsection, $120,000; and 

19 (B) for each succeeding calendar year, an 

20 adjusted amount that is— 

21 (i) not less than the amount in effect 

22 under this paragraph on the day before the 

23 date such adjustment is being made; 

24 (ii) increased from such amount by 

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1 sumer Price Index for Urban Wage Earn2 ers and Clerical Workers; and 

3 (iii) rounded to the nearest multiple of 

4 $1.00. 

5 (2) DEFINITIONS.—For purposes of this sub6 section, the terms ‘‘annual percentage increase’’ and 

7 ‘‘Consumer Price Index for Urban Wage Earners 

8 and Clerical Workers’’ have the meanings given the 

9 terms in section 13(l) of the Fair Labor Standards 

10 Act of 1938 (29 U.S.C. 213(l)), as added by sub11 section (b). 

12 (3) RULE OF CONSTRUCTION.—Nothing in this 

13 subsection or the regulations promulgated by the 

14 Secretary of Labor under this subsection shall over15 ride any provision of a collective bargaining agree16 ment that provides for overtime employment com17 pensation, or rights to such compensation, that ex18 ceed the requirements of the Fair Labor Standards 

19 Act of 1938 (29 U.S.C. 201 et seq.). 

20 (d) PUBLICATION OF NOTICE.—Not later than 60 

21 days before the date any increase in the salary rate (or 

22 equivalent fee basis) required under section 13(k)(1)(D) 

23 of the Fair Labor Standards Act of 1938 (29 U.S.C. 

24 213(a)(k)(1)(D)) takes effect, or any increase in the 

25 amount of compensation required for highly compensated 


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1 employee exemption required under subsection (c) takes 

2 effect, the Secretary of Labor shall publish, in the Federal 

3 Register and on the website of the Department of Labor, 

4 a notice announcing the adjusted salary rate (or equiva5 lent fee basis) requirement or adjusted amount of com6 pensation, respectively. The provisions of section 553 of 

7 title 5, United States Code, shall not apply to any notice 

8 required under this subsection. 

9 (e) EFFECTIVE DATE.—This section, and the amend10 ments made by this section, shall take effect on the date 

11 that is 1 year after the first day of the third month that 

12 begins after the date of enactment of the Rebuild America 

13 Act. 

14 Subtitle D—Preventing Americans 

15 From Having To Choose Be16 tween Their Health and Their 

17 Paycheck 

18 SEC. 241. SHORT TITLE. 

19 This subtitle may be cited as the ‘‘Healthy Families 

20 Act’’. 

21 SEC. 242. FINDINGS. 

22 Congress makes the following findings: 

23 (1) Working Americans need time to meet their 

24 own health care needs and to care for family mem25 bers, including their children, spouse, parents, and 


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1 parents-in-law, and other children and adults for 

2 whom they are caregivers. 

3 (2) Health care needs include preventive health 

4 care, diagnostic procedures, medical treatment, and 

5 recovery in response to short- and long-term ill6 nesses and injuries. 

7 (3) Providing employees time off to meet health 

8 care needs ensures that they will be healthier in the 

9 long run. Preventive care helps avoid illnesses and 

10 injuries and routine medical care helps detect ill11 nesses early and shorten their duration. 

12 (4) When parents are available to care for their 

13 children who become sick, children recover faster, 

14 more serious illnesses are prevented, and children’s 

15 overall mental and physical health improve. In a 

16 2009 study published in the American Journal of 

17 Public Health, 81 percent of parents of a child with 

18 special health care needs reported that taking leave 

19 from work to be with their child had a ‘‘good’’ or 

20 ‘‘very good’’ effect on their child’s physical health. 

21 Similarly, 85 percent of parents of such a child 

22 found that taking such leave had a ‘‘good’’ or ‘‘very 

23 good’’ effect on their child’s emotional health. 

24 (5) When parents cannot afford to miss work 

25 and must send children with contagious illnesses to 


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1 child care centers or schools, infection can spread 

2 rapidly through child care centers and schools. 

3 (6) Providing paid sick time improves public 

4 health by reducing infectious disease. Policies that 

5 make it easier for sick adults and children to be iso6 lated at home reduce the spread of infectious dis7 ease. 

8 (7) Routine medical care reduces medical costs 

9 by detecting and treating illness and injury early, 

10 decreasing the need for emergency care. These sav11 ings benefit public and private payers of health in12 surance, including private businesses. 

13 (8) The provision of individual and family sick 

14 time by large and small businesses, both here in the 

15 United States and elsewhere, demonstrates that pol16 icy solutions are both feasible and affordable in a 

17 competitive economy. A 2009 study by the Center 

18 for Economic and Policy Research found that, of 22 

19 countries with comparable economies, the United 

20 States was 1 of only 3 countries that did not provide 

21 any paid time off for workers with short-term ill22 nesses. 

23 (9) Measures that ensure that employees are in 

24 good health and do not need to worry about unmet 


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1 family health problems help businesses by promoting 

2 productivity and reducing employee turnover. 

3 (10) The American Productivity Audit com4 pleted in 2003 found that lost productivity due to ill5 ness costs $226,000,000,000 annually, and that 71 

6 percent of that cost stems from presenteeism, the 

7 practice of employees coming to work despite illness. 

8 Studies in the Journal of Occupational and Environ9 mental Medicine, the Employee Benefit News, and 

10 the Harvard Business Review show that 

11 presenteeism is a larger productivity drain than ei12 ther absenteeism or short-term disability. 

13 (11) The absence of paid sick time has forced 

14 Americans to make untenable choices between need15 ed income and jobs on the one hand and caring for 

16 their own and their family’s health on the other. 

17 (12) Nearly 40 percent of the private-sector 

18 workforce (about 40,000,000 workers) lack paid sick 

19 time. Another 4,000,000 theoretically have access to 

20 sick time, but have not been on the job long enough 

21 to use it. Millions more lack sick time they can use 

22 to care for a sick child or ill family member. 

23 (13) Workers’ access to paid sick time varies 

24 dramatically by wage level. For private-sector work25 ers in the lowest quartile of earners, 68 percent lack 


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1 paid sick time. For workers in the next 2 quartiles, 

2 34 and 25 percent, respectively, lack paid sick time. 

3 Even for workers in the highest income quartile, 16 

4 percent lack paid sick time. In addition, millions of 

5 workers cannot use paid sick time to care for ill 

6 family members. 

7 (14) Due to the roles of men and women in so8 ciety, the primary responsibility for family caregiving 

9 often falls on women, and such responsibility affects 

10 the working lives of women more than it affects the 

11 working lives of men. 

12 (15) An increasing number of men are also tak13 ing on caregiving obligations, and men who request 

14 paid time for caregiving purposes are often denied 

15 accommodation or penalized because of stereotypes 

16 that caregiving is only ‘‘women’s work’’. 

17 (16) Employers’ reliance on persistent stereo18 types about the ‘‘proper’’ roles of both men and 

19 women in the workplace and in the home continues 

20 a cycle of discrimination and fosters stereotypical 

21 views about women’s commitment to work and their 

22 value as employees. 

23 (17) Employment standards that apply to only 

24 one gender have serious potential for encouraging 


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1 employers to discriminate against employees and ap2 plicants for employment who are of that gender. 

3 (18) It is in the national interest to ensure that 

4 all Americans can care for their own health and the 

5 health of their families while prospering at work. 

6 (19) Nearly 1 in 3 American women report 

7 physical or sexual abuse by a husband or boyfriend 

8 at some point in their lives. Domestic violence also 

9 affects men. Women account for about 85 percent of 

10 the victims of domestic violence and men account for 

11 approximately 15 percent of the victims. Therefore, 

12 women disproportionately need time off to care for 

13 their health or to find solutions, such as obtaining 

14 a restraining order or finding housing, to avoid or 

15 prevent physical or sexual abuse. 

16 (20) One study showed that 85 percent of do17 mestic violence victims at a women’s shelter who 

18 were employed missed work because of abuse. The 

19 mean number of days of paid work lost by a rape 

20 victim is 8.1 days, by a victim of physical assault is 

21 7.2 days, and by a victim of stalking is 10.1 days. 

22 Nationwide, domestic violence victims lose almost 

23 8,000,000 days of paid work per year. 

24 (21) Without paid sick days that can be used 

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1 tims are in grave danger of losing their jobs. One 

2 survey found that 96 percent of employed domestic 

3 violence victims experienced problems at work re4 lated to the violence. The Government Accountability 

5 Office similarly found that 24 to 52 percent of vic6 tims report losing a job due, at least in part, to do7 mestic violence. The loss of employment can be par8 ticularly devastating for victims of domestic violence, 

9 who often need economic security to ensure safety. 

10 (22) The Centers for Disease Control and Pre11 vention has estimated that domestic violence costs 

12 over $700,000,000 annually due to the victims’ lost 

13 productivity in employment. 

14 (23) Efforts to assist abused employees result 

15 in positive outcomes for employers as well as em16 ployees because employers can retain workers who 

17 might otherwise be compelled to leave. 

18 SEC. 243. PURPOSES. 

19 The purposes of this subtitle are— 

20 (1) to ensure that all working Americans can 

21 address their own health needs and the health needs 

22 of their families by requiring employers to permit 

23 employees to earn up to 56 hours of paid sick time 

24 including paid time for family care; 


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1 (2) to diminish public and private health care 

2 costs by enabling workers to seek early and routine 

3 medical care for themselves and their family mem4 bers; 

5 (3) to assist employees who are, or whose fam6 ily members are, victims of domestic violence, sexual 

7 assault, or stalking, by providing the employees with 

8 paid time away from work to allow the victims to re9 ceive treatment and to take the necessary steps to 

10 ensure their protection; 

11 (4) to accomplish the purposes described in 

12 paragraphs (1) through (3) in a manner that is fea13 sible for employers; and 

14 (5) consistent with the provision of the 14th 

15 Amendment to the Constitution relating to equal 

16 protection of the laws, and pursuant to Congress’ 

17 power to enforce that provision under section 5 of 

18 that Amendment— 

19 (A) to accomplish the purposes described 

20 in paragraphs (1) through (3) in a manner that 

21 minimizes the potential for employment dis22 crimination on the basis of sex by ensuring gen23 erally that paid sick time is available for eligible 

24 medical reasons on a gender-neutral basis; and 


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1 (B) to promote the goal of equal employ2 ment opportunity for women and men. 

3 SEC. 244. DEFINITIONS. 

4 In this subtitle: 

5 (1) CHILD.—The term ‘‘child’’ means a biologi6 cal, foster, or adopted child, a stepchild, a legal 

7 ward, or a child of a person standing in loco 

8 parentis, who is— 

9 (A) under 18 years of age; or 

10 (B) 18 years of age or older and incapable 

11 of self-care because of a mental or physical dis12 ability. 

13 (2) DOMESTIC VIOLENCE.—The term ‘‘domestic 

14 violence’’ has the meaning given the term in section 

15 40002(a) of the Violence Against Women Act of 

16 1994 (42 U.S.C. 13925(a)), except that the ref17 erence in such section to the term ‘‘jurisdiction re18 ceiving grant monies’’ shall be deemed to mean the 

19 jurisdiction in which the victim lives or the jurisdic20 tion in which the employer involved is located. 

21 (3) EMPLOYEE.—The term ‘‘employee’’ means 

22 an individual who is— 

23 (A)(i) an employee, as defined in section 

24 3(e) of the Fair Labor Standards Act of 1938 

25 (29 U.S.C. 203(e)), who is not covered under 


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1 subparagraph (E), including such an employee 

2 of the Library of Congress, except that a ref3 erence in such section to an employer shall be 

4 considered to be a reference to an employer de5 scribed in clauses (i)(I) and (ii) of paragraph 

6 (4)(A); or 

7 (ii) an employee of the Government Ac8 countability Office; 

9 (B) a State employee described in section 

10 304(a) of the Government Employee Rights Act 

11 of 1991 (42 U.S.C. 2000e–16c(a)); 

12 (C) a covered employee, as defined in sec13 tion 101 of the Congressional Accountability 

14 Act of 1995 (2 U.S.C. 1301), other than an ap15 plicant for employment; 

16 (D) a covered employee, as defined in sec17 tion 411(c) of title 3, United States Code; or 

18 (E) a Federal officer or employee covered 

19 under subchapter V of chapter 63 of title 5, 

20 United States Code. 

21 (4) EMPLOYER.— 

22 (A) IN GENERAL.—The term ‘‘employer’’ 

23 means a person who is— 


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1 (i)(I) a covered employer, as defined 

2 in subparagraph (B), who is not covered 

3 under subclause (V); 

4 (II) an entity employing a State em5 ployee described in section 304(a) of the 

6 Government Employee Rights Act of 1991; 

7 (III) an employing office, as defined 

8 in section 101 of the Congressional Ac9 countability Act of 1995; 

10 (IV) an employing office, as defined in 

11 section 411(c) of title 3, United States 

12 Code; or 

13 (V) an employing agency covered 

14 under subchapter V of chapter 63 of title 

15 5, United States Code; and 

16 (ii) is engaged in commerce (including 

17 government), or an industry or activity af18 fecting commerce (including government), 

19 as defined in subparagraph (B)(iii). 

20 (B) COVERED EMPLOYER.— 

21 (i) IN GENERAL.—In subparagraph 

22 (A)(i)(I), the term ‘‘covered employer’’— 

23 (I) means any person engaged in 

24 commerce or in any industry or activ25 ity affecting commerce who employs 


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1 15 or more employees for each work2 ing day during each of 20 or more 

3 calendar workweeks in the current or 

4 preceding calendar year; 

5 (II) includes— 

6 (aa) any person who acts, 

7 directly or indirectly, in the inter8 est of an employer to any of the 

9 employees of such employer; and 

10 (bb) any successor in inter11 est of an employer; 

12 (III) includes any ‘‘public agen13 cy’’, as defined in section 3(x) of the 

14 Fair Labor Standards Act of 1938 

15 (29 U.S.C. 203(x)); and 

16 (IV) includes the Government 

17 Accountability Office and the Library 

18 of Congress. 

19 (ii) PUBLIC AGENCY.—For purposes 

20 of clause (i)(III), a public agency shall be 

21 considered to be a person engaged in com22 merce or in an industry or activity affect23 ing commerce. 

24 (iii) DEFINITIONS.—For purposes of 

25 this subparagraph: 


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1 (I) COMMERCE.—The terms 

2 ‘‘commerce’’ and ‘‘industry or activity 

3 affecting commerce’’ mean any activ4 ity, business, or industry in commerce 

5 or in which a labor dispute would 

6 hinder or obstruct commerce or the 

7 free flow of commerce, and include 

8 ‘‘commerce’’ and any ‘‘industry affect9 ing commerce’’, as defined in para10 graphs (1) and (3) of section 501 of 

11 the Labor Management Relations Act, 

12 1947 (29 U.S.C. 142 (1) and (3)). 

13 (II) EMPLOYEE.—The term ‘‘em14 ployee’’ has the same meaning given 

15 such term in section 3(e) of the Fair 

16 Labor Standards Act of 1938 (29 

17 U.S.C. 203(e)). 

18 (III) PERSON.—The term ‘‘per19 son’’ has the same meaning given 

20 such term in section 3(a) of the Fair 

21 Labor Standards Act of 1938 (29 

22 U.S.C. 203(a)). 

23 (C) PREDECESSORS.—Any reference in 

24 this paragraph to an employer shall include a 

25 reference to any predecessor of such employer. 


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1 (5) EMPLOYMENT BENEFITS.—The term ‘‘em2 ployment benefits’’ means all benefits provided or 

3 made available to employees by an employer, includ4 ing group life insurance, health insurance, disability 

5 insurance, sick leave, annual leave, educational bene6 fits, and pensions, regardless of whether such bene7 fits are provided by a practice or written policy of 

8 an employer or through an ‘‘employee benefit plan’’, 

9 as defined in section 3(3) of the Employee Retire10 ment Income Security Act of 1974 (29 U.S.C. 

11 1002(3)). 

12 (6) HEALTH CARE PROVIDER.—The term 

13 ‘‘health care provider’’ means a provider who— 

14 (A)(i) is a doctor of medicine or osteopathy 

15 who is authorized to practice medicine or sur16 gery (as appropriate) by the State in which the 

17 doctor practices; or 

18 (ii) is any other person determined by the 

19 Secretary to be capable of providing health care 

20 services; and 

21 (B) is not employed by an employer for 

22 whom the provider issues certification under 

23 this subtitle. 

24 (7) PAID SICK TIME.—The term ‘‘paid sick 

25 time’’ means an increment of compensated leave that 


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1 can be earned by an employee for use during an ab2 sence from employment for any of the reasons de3 scribed in paragraphs (1) through (4) of section 

4 245(b). 

5 (8) PARENT.—The term ‘‘parent’’ means a bio6 logical, foster, or adoptive parent of an employee, a 

7 stepparent of an employee, or a legal guardian or 

8 other person who stood in loco parentis to an em9 ployee when the employee was a child. 

10 (9) SECRETARY.—The term ‘‘Secretary’’ means 

11 the Secretary of Labor. 

12 (10) SEXUAL ASSAULT.—The term ‘‘sexual as13 sault’’ has the meaning given the term in section 

14 40002(a) of the Violence Against Women Act of 

15 1994 (42 U.S.C. 13925(a)). 

16 (11) SPOUSE.—The term ‘‘spouse’’, with re17 spect to an employee, has the meaning given such 

18 term by the marriage laws of the State in which the 

19 employee resides. 

20 (12) STALKING.—The term ‘‘stalking’’ has the 

21 meaning given the term in section 40002(a) of the 

22 Violence Against Women Act of 1994 (42 U.S.C. 

23 13925(a)). 

24 (13) VICTIM SERVICES ORGANIZATION.—The 

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1 profit, nongovernmental organization that provides 

2 assistance to victims of domestic violence, sexual as3 sault, or stalking or advocates for such victims, in4 cluding a rape crisis center, an organization carrying 

5 out a domestic violence, sexual assault, or stalking 

6 prevention or treatment program, an organization 

7 operating a shelter or providing counseling services, 

8 or a legal services organization or other organization 

9 providing assistance through the legal process. 

10 SEC. 245. PROVISION OF PAID SICK TIME. 

11 (a) ACCRUAL OF PAID SICK TIME.— 

12 (1) IN GENERAL.—An employer shall permit 

13 each employee employed by the employer to earn not 

14 less than 1 hour of paid sick time for every 30 hours 

15 worked, to be used as described in subsection (b). 

16 An employer shall not be required to permit an em17 ployee to earn, under this section, more than 56 

18 hours of paid sick time in a calendar year, unless 

19 the employer chooses to set a higher limit. 

20 (2) EXEMPT EMPLOYEES.— 

21 (A) IN GENERAL.—Except as provided in 

22 paragraph (3), for purposes of this section, an 

23 employee who is exempt from overtime require24 ments under section 13(a)(1) of the Fair Labor 

25 Standards Act of 1938 (29 U.S.C. 213(a)(1)) 


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1 shall be assumed to work 40 hours in each 

2 workweek. 

3 (B) SHORTER NORMAL WORKWEEK.—If 

4 the normal workweek of such an employee is 

5 less than 40 hours, the employee shall earn 

6 paid sick time based upon that normal work7 week. 

8 (3) DATES OF ACCRUAL AND USE.—Employees 

9 shall begin to earn paid sick time under this section 

10 at the commencement of their employment. An em11 ployee shall be entitled to use the earned paid sick 

12 time beginning on the 60th calendar day following 

13 commencement of the employee’s employment. After 

14 that 60th calendar day, the employee may use the 

15 paid sick time as the time is earned. An employer 

16 may, at the discretion of the employer, loan paid 

17 sick time to an employee in advance of the earning 

18 of such time under this section by such employee. 

19 (4) CARRYOVER.— 

20 (A) IN GENERAL.—Except as provided in 

21 subparagraph (B), paid sick time earned under 

22 this section shall carry over from 1 calendar 

23 year to the next. 

24 (B) CONSTRUCTION.—This subtitle shall 

25 not be construed to require an employer to perVerDate Mar 15 2010 00:49 Apr 05, 2012 Jkt 019200 PO 00000 Frm 00168 Fmt 6652 Sfmt 6201 E:\BILLS\S2252.IS S2252

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1 mit an employee to accrue more than 56 hours 

2 of earned paid sick time at a given time. 

3 (5) EMPLOYERS WITH EXISTING POLICIES.— 

4 Any employer with a paid leave policy who makes 

5 available an amount of paid leave that is sufficient 

6 to meet the requirements of this section and that 

7 may be used for the same purposes and under the 

8 same conditions as the purposes and conditions out9 lined in subsection (b) shall not be required to per10 mit an employee to earn additional paid sick time 

11 under this section. 

12 (6) CONSTRUCTION.—Nothing in this section 

13 shall be construed as requiring financial or other re14 imbursement to an employee from an employer upon 

15 the employee’s termination, resignation, retirement, 

16 or other separation from employment for earned 

17 paid sick time that has not been used. 

18 (7) REINSTATEMENT.—If an employee is sepa19 rated from employment with an employer and is re20 hired, within 12 months after that separation, by the 

21 same employer, the employer shall reinstate the em22 ployee’s previously earned paid sick time. The em23 ployee shall be entitled to use the earned paid sick 

24 time and earn additional paid sick time at the re25 commencement of employment with the employer. 


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1 (8) PROHIBITION.—An employer may not re2 quire, as a condition of providing paid sick time 

3 under this subtitle, that the employee involved 

4 search for or find a replacement worker to cover the 

5 hours during which the employee is using paid sick 

6 time. 

7 (b) USES.—Paid sick time earned under this section 

8 may be used by an employee for any of the following: 

9 (1) An absence resulting from a physical or 

10 mental illness, injury, or medical condition of the 

11 employee. 

12 (2) An absence resulting from obtaining profes13 sional medical diagnosis or care, or preventive med14 ical care, for the employee. 

15 (3) An absence for the purpose of caring for a 

16 child, a parent, a spouse, or any other individual re17 lated by blood or affinity whose close association 

18 with the employee is the equivalent of a family rela19 tionship, who— 

20 (A) has any of the conditions or needs for 

21 diagnosis or care described in paragraph (1) or 

22 (2); and 

23 (B) in the case of someone who is not a 

24 child, is otherwise in need of care. 


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1 (4) An absence resulting from domestic vio2 lence, sexual assault, or stalking, if the time is to— 

3 (A) seek medical attention for the em4 ployee or the employee’s child, parent, or 

5 spouse, or an individual related to the employee 

6 as described in paragraph (3), to recover from 

7 physical or psychological injury or disability 

8 caused by domestic violence, sexual assault, or 

9 stalking; 

10 (B) obtain or assist a related person de11 scribed in paragraph (3) in obtaining services 

12 from a victim services organization; 

13 (C) obtain or assist a related person de14 scribed in paragraph (3) in obtaining psycho15 logical or other counseling; 

16 (D) seek relocation; or 

17 (E) take legal action, including preparing 

18 for or participating in any civil or criminal legal 

19 proceeding related to or resulting from domestic 

20 violence, sexual assault, or stalking. 

21 (c) SCHEDULING.—An employee shall make a reason22 able effort to schedule a period of paid sick time under 

23 this subtitle in a manner that does not unduly disrupt the 

24 operations of the employer. 

25 (d) PROCEDURES.— 


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1 (1) IN GENERAL.—Paid sick time shall be pro2 vided upon the oral or written request of an em3 ployee. Such request shall— 

4 (A) include the expected duration of the 

5 period of such time; 

6 (B) in a case in which the need for such 

7 period of time is foreseeable at least 7 days in 

8 advance of such period, be provided at least 7 

9 days in advance of such period; and 

10 (C) otherwise, be provided as soon as prac11 ticable after the employee is aware of the need 

12 for such period. 

13 (2) CERTIFICATION IN GENERAL.— 

14 (A) PROVISION.— 

15 (i) IN GENERAL.—Subject to subpara16 graph (C), an employer may require that a 

17 request for paid sick time under this sec18 tion for a purpose described in paragraph 

19 (1), (2), or (3) of subsection (b) be sup20 ported by a certification issued by the 

21 health care provider of the eligible em22 ployee or of an individual described in sub23 section (b)(3), as appropriate, if the period 

24 of such time covers more than 3 consecu25 tive workdays. 


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1 (ii) TIMELINESS.—The employee shall 

2 provide a copy of such certification to the 

3 employer in a timely manner, not later 

4 than 30 days after the first day of the pe5 riod of time. The employer shall not delay 

6 the commencement of the period of time on 

7 the basis that the employer has not yet re8 ceived the certification. 

9 (B) SUFFICIENT CERTIFICATION.— 

10 (i) IN GENERAL.—A certification pro11 vided under subparagraph (A) shall be suf12 ficient if it states— 

13 (I) the date on which the period 

14 of time will be needed; 

15 (II) the probable duration of the 

16 period of time; 

17 (III) the appropriate medical 

18 facts within the knowledge of the 

19 health care provider regarding the 

20 condition involved, subject to clause 

21 (ii); and 

22 (IV)(aa) for purposes of paid sick 

23 time under subsection (b)(1), a state24 ment that absence from work is medi25 cally necessary; 


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1 (bb) for purposes of such time 

2 under subsection (b)(2), the dates on 

3 which testing for a medical diagnosis 

4 or care is expected to be given and the 

5 duration of such testing or care; and 

6 (cc) for purposes of such time 

7 under subsection (b)(3), in the case of 

8 time to care for someone who is not a 

9 child, a statement that care is needed 

10 for an individual described in such 

11 subsection, and an estimate of the 

12 amount of time that such care is 

13 needed for such individual. 

14 (ii) LIMITATION.—In issuing a certifi15 cation under subparagraph (A), a health 

16 care provider shall make reasonable efforts 

17 to limit the medical facts described in 

18 clause (i)(III) that are disclosed in the cer19 tification to the minimum necessary to es20 tablish a need for the employee to utilize 

21 paid sick time. 

22 (C) REGULATIONS.—Regulations pre23 scribed under section 253 shall specify the man24 ner in which an employee who does not have 


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1 health insurance shall provide a certification for 

2 purposes of this paragraph. 

3 (D) CONFIDENTIALITY AND NONDISCLO4 SURE.— 

5 (i) PROTECTED HEALTH INFORMA6 TION.—Nothing in this subtitle shall be 

7 construed to require a health care provider 

8 to disclose information in violation of sec9 tion 1177 of the Social Security Act (42 

10 U.S.C. 1320d–6) or the regulations pro11 mulgated pursuant to section 264(c) of the 

12 Health Insurance Portability and Account13 ability Act of 1996 (42 U.S.C. 1320d–2 

14 note). 

15 (ii) HEALTH INFORMATION

16 RECORDS.—If an employer possesses 

17 health information about an employee or 

18 an employee’s child, parent, spouse or 

19 other individual described in subsection 

20 (b)(3), such information shall— 

21 (I) be maintained on a separate 

22 form and in a separate file from other 

23 personnel information; 

24 (II) be treated as a confidential 

25 medical record; and 


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1 (III) not be disclosed except to 

2 the affected employee or with the per3 mission of the affected employee. 

4 (3) CERTIFICATION IN THE CASE OF DOMESTIC

5 VIOLENCE, SEXUAL ASSAULT, OR STALKING.— 

6 (A) IN GENERAL.—An employer may re7 quire that a request for paid sick time under 

8 this section for a purpose described in sub9 section (b)(4) be supported by 1 of the fol10 lowing forms of documentation: 

11 (i) A police report indicating that the 

12 employee, or a member of the employee’s 

13 family described in subsection (b)(4), was 

14 a victim of domestic violence, sexual as15 sault, or stalking. 

16 (ii) A court order protecting or sepa17 rating the employee or a member of the 

18 employee’s family described in subsection 

19 (b)(4) from the perpetrator of an act of 

20 domestic violence, sexual assault, or stalk21 ing, or other evidence from the court or 

22 prosecuting attorney that the employee or 

23 a member of the employee’s family de24 scribed in subsection (b)(4) has appeared 

25 in court or is scheduled to appear in court 


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1 in a proceeding related to domestic vio2 lence, sexual assault, or stalking. 

3 (iii) Other documentation signed by 

4 an employee or volunteer working for a vic5 tim services organization, an attorney, a 

6 police officer, a medical professional, a so7 cial worker, an antiviolence counselor, or a 

8 member of the clergy, affirming that the 

9 employee or a member of the employee’s 

10 family described in subsection (b)(4) is a 

11 victim of domestic violence, sexual assault, 

12 or stalking. 

13 (B) REQUIREMENTS.—The requirements 

14 of paragraph (2) shall apply to certifications 

15 under this paragraph, except that— 

16 (i) subclauses (III) and (IV) of sub17 paragraph (B)(i) and subparagraph (B)(ii) 

18 of such paragraph shall not apply; 

19 (ii) the certification shall state the 

20 reason that the leave is required with the 

21 facts to be disclosed limited to the min22 imum necessary to establish a need for the 

23 employee to be absent from work, and the 

24 employee shall not be required to explain 


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1 the details of the domestic violence, sexual 

2 assault, or stalking involved; and 

3 (iii) with respect to confidentiality 

4 under subparagraph (D) of such para5 graph, any information provided to the em6 ployer under this paragraph shall be con7 fidential, except to the extent that any dis8 closure of such information is— 

9 (I) requested or consented to in 

10 writing by the employee; or 

11 (II) otherwise required by appli12 cable Federal or State law. 

13 SEC. 246. POSTING REQUIREMENT. 

14 (a) IN GENERAL.—Each employer shall post and 

15 keep posted a notice, to be prepared or approved in ac16 cordance with procedures specified in regulations pre17 scribed under section 253, setting forth excerpts from, or 

18 summaries of, the pertinent provisions of this subtitle in19 cluding— 

20 (1) information describing paid sick time avail21 able to employees under this subtitle; 

22 (2) information pertaining to the filing of an 

23 action under this subtitle; 


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1 (3) the details of the notice requirement for a 

2 foreseeable period of time under section 

3 245(d)(1)(B); and 

4 (4) information that describes— 

5 (A) the protections that an employee has 

6 in exercising rights under this subtitle; and 

7 (B) how the employee can contact the Sec8 retary (or other appropriate authority as de9 scribed in section 248) if any of the rights are 

10 violated. 

11 (b) LOCATION.—The notice described under sub12 section (a) shall be posted— 

13 (1) in conspicuous places on the premises of the 

14 employer, where notices to employees (including ap15 plicants) are customarily posted; or 

16 (2) in employee handbooks. 

17 (c) VIOLATION; PENALTY.—Any employer who will18 fully violates the posting requirements of this section shall 

19 be subject to a civil fine in an amount not to exceed $100 

20 for each separate offense. 

21 SEC. 247. PROHIBITED ACTS. 

22 (a) INTERFERENCE WITH RIGHTS.— 

23 (1) EXERCISE OF RIGHTS.—It shall be unlawful 

24 for any employer to interfere with, restrain, or deny 


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1 the exercise of, or the attempt to exercise, any right 

2 provided under this subtitle, including— 

3 (A) discharging or discriminating against 

4 (including retaliating against) any individual, 

5 including a job applicant, for exercising, or at6 tempting to exercise, any right provided under 

7 this subtitle; 

8 (B) using the taking of paid sick time 

9 under this subtitle as a negative factor in an 

10 employment action, such as hiring, promotion, 

11 or a disciplinary action; or 

12 (C) counting the paid sick time under a 

13 no-fault attendance policy or any other absence 

14 control policy. 

15 (2) DISCRIMINATION.—It shall be unlawful for 

16 any employer to discharge or in any other manner 

17 discriminate against (including retaliating against) 

18 any individual, including a job applicant, for oppos19 ing any practice made unlawful by this subtitle. 

20 (b) INTERFERENCE WITH PROCEEDINGS OR INQUIR21 IES.—It shall be unlawful for any person to discharge or 

22 in any other manner discriminate against (including retali23 ating against) any individual, including a job applicant, 

24 because such individual— 


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1 (1) has filed an action, or has instituted or 

2 caused to be instituted any proceeding, under or re3 lated to this subtitle; 

4 (2) has given, or is about to give, any informa5 tion in connection with any inquiry or proceeding re6 lating to any right provided under this subtitle; or 

7 (3) has testified, or is about to testify, in any 

8 inquiry or proceeding relating to any right provided 

9 under this subtitle. 

10 (c) CONSTRUCTION.—Nothing in this section shall be 

11 construed to state or imply that the scope of the activities 

12 prohibited by section 105 of the Family and Medical Leave 

13 Act of 1993 (29 U.S.C. 2615) is less than the scope of 

14 the activities prohibited by this section. 

15 SEC. 248. ENFORCEMENT AUTHORITY. 

16 (a) IN GENERAL.— 

17 (1) DEFINITION.—In this subsection: 

18 (A) the term ‘‘employee’’ means an em19 ployee described in subparagraph (A) or (B) of 

20 section 244(3); and 

21 (B) the term ‘‘employer’’ means an em22 ployer described in subclause (I) or (II) of sec23 tion 244(4)(A)(i). 

24 (2) INVESTIGATIVE AUTHORITY.— 


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1 (A) IN GENERAL.—To ensure compliance 

2 with the provisions of this subtitle, or any regu3 lation or order issued under this subtitle, the 

4 Secretary shall have, subject to subparagraph 

5 (C), the investigative authority provided under 

6 section 11(a) of the Fair Labor Standards Act 

7 of 1938 (29 U.S.C. 211(a)), with respect to em8 ployers, employees, and other individuals af9 fected. 

10 (B) OBLIGATION TO KEEP AND PRESERVE

11 RECORDS.—An employer shall make, keep, and 

12 preserve records pertaining to compliance with 

13 this subtitle in accordance with section 11(c) of 

14 the Fair Labor Standards Act of 1938 (29 

15 U.S.C. 211(c)) and in accordance with regula16 tions prescribed by the Secretary. 

17 (C) REQUIRED SUBMISSIONS GENERALLY

18 LIMITED TO AN ANNUAL BASIS.—The Secretary 

19 shall not require, under the authority of this 

20 paragraph, an employer to submit to the Sec21 retary any books or records more than once 

22 during any 12-month period, unless the Sec23 retary has reasonable cause to believe there 

24 may exist a violation of this subtitle or any reg25 ulation or order issued pursuant to this subtitle, 


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1 or is investigating a charge pursuant to para2 graph (4). 

3 (D) SUBPOENA AUTHORITY.—For the pur4 poses of any investigation provided for in this 

5 paragraph, the Secretary shall have the sub6 poena authority provided for under section 9 of 

7 the Fair Labor Standards Act of 1938 (29 

8 U.S.C. 209). 

9 (3) CIVIL ACTION BY EMPLOYEES OR INDIVID10 UALS.— 

11 (A) RIGHT OF ACTION.—An action to re12 cover the damages or equitable relief prescribed 

13 in subparagraph (B) may be maintained 

14 against any employer in any Federal or State 

15 court of competent jurisdiction by one or more 

16 employees or individuals or their representative 

17 for and on behalf of— 

18 (i) the employees or individuals; or 

19 (ii) the employees or individuals and 

20 others similarly situated. 

21 (B) LIABILITY.—Any employer who vio22 lates section 247 (including a violation relating 

23 to rights provided under section 245) shall be 

24 liable to any employee or individual affected— 

25 (i) for damages equal to— 


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1 (I) the amount of— 

2 (aa) any wages, salary, em3 ployment benefits, or other com4 pensation denied or lost by rea5 son of the violation; or 

6 (bb) in a case in which 

7 wages, salary, employment bene8 fits, or other compensation have 

9 not been denied or lost, any ac10 tual monetary losses sustained as 

11 a direct result of the violation up 

12 to a sum equal to 56 hours of 

13 wages or salary for the employee 

14 or individual; 

15 (II) the interest on the amount 

16 described in subclause (I) calculated 

17 at the prevailing rate; and 

18 (III) an additional amount as liq19 uidated damages; and 

20 (ii) for such equitable relief as may be 

21 appropriate, including employment, rein22 statement, and promotion. 

23 (C) FEES AND COSTS.—The court in an 

24 action under this paragraph shall, in addition to 

25 any judgment awarded to the plaintiff, allow a 


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1 reasonable attorney’s fee, reasonable expert wit2 ness fees, and other costs of the action to be 

3 paid by the defendant. 

4 (4) ACTION BY THE SECRETARY.— 

5 (A) ADMINISTRATIVE ACTION.—The Sec6 retary shall receive, investigate, and attempt to 

7 resolve complaints of violations of section 247 

8 (including a violation relating to rights provided 

9 under section 245) in the same manner that the 

10 Secretary receives, investigates, and attempts to 

11 resolve complaints of violations of sections 6 

12 and 7 of the Fair Labor Standards Act of 1938 

13 (29 U.S.C. 206 and 207). 

14 (B) CIVIL ACTION.—The Secretary may 

15 bring an action in any court of competent juris16 diction to recover the damages described in 

17 paragraph (3)(B)(i). 

18 (C) SUMS RECOVERED.—Any sums recov19 ered by the Secretary pursuant to subparagraph 

20 (B) shall be held in a special deposit account 

21 and shall be paid, on order of the Secretary, di22 rectly to each employee or individual affected. 

23 Any such sums not paid to an employee or indi24 vidual affected because of inability to do so 

25 within a period of 3 years shall be deposited 


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1 into the Treasury of the United States as mis2 cellaneous receipts. 

3 (5) LIMITATION.— 

4 (A) IN GENERAL.—Except as provided in 

5 subparagraph (B), an action may be brought 

6 under paragraph (3), (4), or (6) not later than 

7 2 years after the date of the last event consti8 tuting the alleged violation for which the action 

9 is brought. 

10 (B) WILLFUL VIOLATION.—In the case of 

11 an action brought for a willful violation of sec12 tion 247 (including a willful violation relating to 

13 rights provided under section 245), such action 

14 may be brought within 3 years of the date of 

15 the last event constituting the alleged violation 

16 for which such action is brought. 

17 (C) COMMENCEMENT.—In determining 

18 when an action is commenced under paragraph 

19 (3), (4), or (6) for the purposes of this para20 graph, it shall be considered to be commenced 

21 on the date when the complaint is filed. 

22 (6) ACTION FOR INJUNCTION BY SECRETARY.— 

23 The district courts of the United States shall have 

24 jurisdiction, for cause shown, in an action brought 

25 by the Secretary— 


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1 (A) to restrain violations of section 247 

2 (including a violation relating to rights provided 

3 under section 245), including the restraint of 

4 any withholding of payment of wages, salary, 

5 employment benefits, or other compensation, 

6 plus interest, found by the court to be due to 

7 employees or individuals eligible under this sub8 title; or 

9 (B) to award such other equitable relief as 

10 may be appropriate, including employment, re11 instatement, and promotion. 

12 (7) SOLICITOR OF LABOR.—The Solicitor of 

13 Labor may appear for and represent the Secretary 

14 on any litigation brought under paragraph (4) or 

15 (6). 

16 (8) GOVERNMENT ACCOUNTABILITY OFFICE

17 AND LIBRARY OF CONGRESS.—Notwithstanding any 

18 other provision of this subsection, in the case of the 

19 Government Accountability Office and the Library of 

20 Congress, the authority of the Secretary of Labor 

21 under this subsection shall be exercised respectively 

22 by the Comptroller General of the United States and 

23 the Librarian of Congress. 

24 (b) EMPLOYEES COVERED BY CONGRESSIONAL AC25 COUNTABILITY ACT OF 1995.—The powers, remedies, and 


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1 procedures provided in the Congressional Accountability 

2 Act of 1995 (2 U.S.C. 1301 et seq.) to the Board (as de3 fined in section 101 of that Act (2 U.S.C. 1301)), or any 

4 person, alleging a violation of section 202(a)(1) of that 

5 Act (2 U.S.C. 1312(a)(1)) shall be the powers, remedies, 

6 and procedures this subtitle provides to that Board, or any 

7 person, alleging an unlawful employment practice in viola8 tion of this subtitle against an employee described in sec9 tion 244(3)(C). 

10 (c) EMPLOYEES COVERED BY CHAPTER 5 OF TITLE

11 3, UNITED STATES CODE.—The powers, remedies, and 

12 procedures provided in chapter 5 of title 3, United States 

13 Code, to the President, the Merit Systems Protection 

14 Board, or any person, alleging a violation of section 

15 412(a)(1) of that title, shall be the powers, remedies, and 

16 procedures this subtitle provides to the President, that 

17 Board, or any person, respectively, alleging an unlawful 

18 employment practice in violation of this subtitle against 

19 an employee described in section 244(3)(D). 

20 (d) EMPLOYEES COVERED BY CHAPTER 63 OF TITLE

21 5, UNITED STATES CODE.—The powers, remedies, and 

22 procedures provided in title 5, United States Code, to an 

23 employing agency, provided in chapter 12 of that title to 

24 the Merit Systems Protection Board, or provided in that 

25 title to any person, alleging a violation of chapter 63 of 


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1 that title, shall be the powers, remedies, and procedures 

2 this subtitle provides to that agency, that Board, or any 

3 person, respectively, alleging an unlawful employment 

4 practice in violation of this subtitle against an employee 

5 described in section 244(3)(E). 

6 (e) REMEDIES FOR STATE EMPLOYEES.— 

7 (1) WAIVER OF SOVEREIGN IMMUNITY.—A 

8 State’s receipt or use of Federal financial assistance 

9 for any program or activity of a State shall con10 stitute a waiver of sovereign immunity, under the 

11 11th Amendment to the Constitution or otherwise, 

12 to a suit brought by an employee of that program 

13 or activity under this subtitle for equitable, legal, or 

14 other relief authorized under this subtitle. 

15 (2) OFFICIAL CAPACITY.—An official of a State 

16 may be sued in the official capacity of the official by 

17 any employee who has complied with the procedures 

18 under subsection (a)(3), for injunctive relief that is 

19 authorized under this subtitle. In such a suit the 

20 court may award to the prevailing party those costs 

21 authorized by section 722 of the Revised Statutes 

22 (42 U.S.C. 1988). 

23 (3) APPLICABILITY.—With respect to a par24 ticular program or activity, paragraph (1) applies to 

25 conduct occurring on or after the day, after the date 


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1 of enactment of this Act, on which a State first re2 ceives or uses Federal financial assistance for that 

3 program or activity. 

4 (4) DEFINITION OF PROGRAM OR ACTIVITY.—In 

5 this subsection, the term ‘‘program or activity’’ has 

6 the meaning given the term in section 606 of the 

7 Civil Rights Act of 1964 (42 U.S.C. 2000d–4a). 

8 SEC. 249. COLLECTION OF DATA ON PAID SICK TIME AND 

9 FURTHER STUDY. 

10 (a) COMPILATION OF INFORMATION.—Effective 90 

11 days after the date of enactment of this Act, the Commis12 sioner of Labor Statistics shall annually compile informa13 tion on the following: 

14 (1) The number of employees who used paid 

15 sick time. 

16 (2) The number of hours of paid sick time 

17 used. 

18 (3) The number of employees who used paid 

19 sick time for absences necessary due to domestic vio20 lence, sexual assault, or stalking. 

21 (4) The demographic characteristics of employ22 ees who were eligible for and who used paid sick 

23 time. 

24 (b) GAO STUDY.— 


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1 (1) IN GENERAL.—The Comptroller General of 

2 the United States shall annually conduct a study to 

3 determine the following: 

4 (A)(i) The number of days employees used 

5 paid sick time and the reasons for the use. 

6 (ii) The number of employees who used the 

7 paid sick time for periods of time covering more 

8 than 3 consecutive workdays. 

9 (B) The cost and benefits to employers of 

10 implementing the paid sick time policies. 

11 (C) The cost to employees of providing cer12 tification to obtain the paid sick time. 

13 (D) The benefits of the paid sick time to 

14 employees and their family members, including 

15 effects on employees’ ability to care for their 

16 family members or to provide for their own 

17 health needs. 

18 (E) Whether the paid sick time affected 

19 employees’ ability to sustain an adequate in20 come while meeting needs of the employees and 

21 their family members. 

22 (F) Whether employers who administered 

23 paid sick time policies prior to the date of en24 actment of this Act were affected by the provi25 sions of this subtitle. 


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1 (G) Whether other types of leave were af2 fected by this subtitle. 

3 (H) Whether paid sick time affected reten4 tion and turnover and costs of presenteeism. 

5 (I) Whether the paid sick time increased 

6 the use of less costly preventive medical care 

7 and lowered the use of emergency room care. 

8 (J) Whether the paid sick time reduced the 

9 number of children sent to school when the chil10 dren were sick. 

11 (2) AGGREGATING DATA.—The data collected 

12 under subparagraphs (A) and (D) of paragraph (1) 

13 shall be aggregated by gender, race, disability, earn14 ings level, age, marital status, family type, including 

15 parental status, and industry. 

16 (3) REPORTS.— 

17 (A) IN GENERAL.—Not later than 18 

18 months after the date of enactment of this Act, 

19 the Comptroller General of the United States 

20 shall prepare and submit a report to the appro21 priate committees of Congress concerning the 

22 results of the study conducted pursuant to 

23 paragraph (1) and the data aggregated under 

24 paragraph (2). 


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1 (B) FOLLOWUP REPORT.—Not later than 

2 5 years after the date of enactment of this Act, 

3 the Comptroller General of the United States 

4 shall prepare and submit a followup report to 

5 the appropriate committees of Congress con6 cerning the results of the study conducted pur7 suant to paragraph (1) and the data aggregated 

8 under paragraph (2). 

9 SEC. 250. EFFECT ON OTHER LAWS. 

10 (a) FEDERAL AND STATE ANTIDISCRIMINATION

11 LAWS.—Nothing in this subtitle shall be construed to 

12 modify or affect any Federal or State law prohibiting dis13 crimination on the basis of race, religion, color, national 

14 origin, sex, age, or disability. 

15 (b) STATE AND LOCAL LAWS.—Nothing in this sub16 title shall be construed to supersede (including pre17 empting) any provision of any State or local law that pro18 vides greater paid sick time or leave rights (including 

19 greater paid sick time or leave, or greater coverage of 

20 those eligible for paid sick time or leave) than the rights 

21 established under this subtitle. 

22 SEC. 251. EFFECT ON EXISTING EMPLOYMENT BENEFITS. 

23 (a) MORE PROTECTIVE.—Nothing in this subtitle 

24 shall be construed to diminish the obligation of an em25 ployer to comply with any contract, collective bargaining 


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1 agreement, or any employment benefit program or plan 

2 that provides greater paid sick leave or other leave rights 

3 to employees or individuals than the rights established 

4 under this subtitle. 

5 (b) LESS PROTECTIVE.—The rights established for 

6 employees under this subtitle shall not be diminished by 

7 any contract, collective bargaining agreement, or any em8 ployment benefit program or plan. 

9 SEC. 252. ENCOURAGEMENT OF MORE GENEROUS LEAVE 

10 POLICIES. 

11 Nothing in this subtitle shall be construed to discour12 age employers from adopting or retaining leave policies 

13 more generous than policies that comply with the require14 ments of this subtitle. 

15 SEC. 253. REGULATIONS. 

16 (a) IN GENERAL.— 

17 (1) AUTHORITY.—Except as provided in para18 graph (2), not later than 180 days after the date of 

19 enactment of this Act, the Secretary shall prescribe 

20 such regulations as are necessary to carry out this 

21 subtitle with respect to employees described in sub22 paragraph (A) or (B) of section 244(3) and other in23 dividuals affected by employers described in sub24 clause (I) or (II) of section 244(4)(A)(i). 


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1 (2) GOVERNMENT ACCOUNTABILITY OFFICE; LI2 BRARY OF CONGRESS.—The Comptroller General of 

3 the United States and the Librarian of Congress 

4 shall prescribe the regulations with respect to em5 ployees of the Government Accountability Office and 

6 the Library of Congress, respectively, and other indi7 viduals affected by the Comptroller General of the 

8 United States and the Librarian of Congress, re9 spectively. 

10 (b) EMPLOYEES COVERED BY CONGRESSIONAL AC11 COUNTABILITY ACT OF 1995.— 

12 (1) AUTHORITY.—Not later than 120 days 

13 after the date of enactment of this Act, the Board 

14 of Directors of the Office of Compliance shall pre15 scribe (in accordance with section 304 of the Con16 gressional Accountability Act of 1995 (2 U.S.C. 

17 1384)) such regulations as are necessary to carry 

18 out this subtitle with respect to employees described 

19 in section 244(3)(C) and other individuals affected 

20 by employers described in section 244(4)(A)(i)(III). 

21 (2) AGENCY REGULATIONS.—The regulations 

22 prescribed under paragraph (1) shall be the same as 

23 substantive regulations promulgated by the Sec24 retary to carry out this subtitle except insofar as the 

25 Board may determine, for good cause shown and 


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1 stated together with the regulations prescribed 

2 under paragraph (1), that a modification of such 

3 regulations would be more effective for the imple4 mentation of the rights and protections involved 

5 under this section. 

6 (c) EMPLOYEES COVERED BY CHAPTER 5 OF TITLE

7 3, UNITED STATES CODE.— 

8 (1) AUTHORITY.—Not later than 120 days 

9 after the date of enactment of this Act, the Presi10 dent (or the designee of the President) shall pre11 scribe such regulations as are necessary to carry out 

12 this subtitle with respect to employees described in 

13 section 244(3)(D) and other individuals affected by 

14 employers described in section 244(4)(A)(i)(IV). 

15 (2) AGENCY REGULATIONS.—The regulations 

16 prescribed under paragraph (1) shall be the same as 

17 substantive regulations promulgated by the Sec18 retary to carry out this subtitle except insofar as the 

19 President (or designee) may determine, for good 

20 cause shown and stated together with the regula21 tions prescribed under paragraph (1), that a modi22 fication of such regulations would be more effective 

23 for the implementation of the rights and protections 

24 involved under this section. 


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1 (d) EMPLOYEES COVERED BY CHAPTER 63 OF TITLE

2 5, UNITED STATES CODE.— 

3 (1) AUTHORITY.—Not later than 120 days 

4 after the date of enactment of this Act, the Director 

5 of the Office of Personnel Management shall pre6 scribe such regulations as are necessary to carry out 

7 this subtitle with respect to employees described in 

8 section 244(3)(E) and other individuals affected by 

9 employers described in section 244(4)(A)(i)(V). 

10 (2) AGENCY REGULATIONS.—The regulations 

11 prescribed under paragraph (1) shall be the same as 

12 substantive regulations promulgated by the Sec13 retary to carry out this subtitle except insofar as the 

14 Director may determine, for good cause shown and 

15 stated together with the regulations prescribed 

16 under paragraph (1), that a modification of such 

17 regulations would be more effective for the imple18 mentation of the rights and protections involved 

19 under this section. 

20 SEC. 254. EFFECTIVE DATES. 

21 (a) EFFECTIVE DATE.—This subtitle shall take effect 

22 6 months after the date of issuance of regulations under 

23 section 253(a)(1). 

24 (b) COLLECTIVE BARGAINING AGREEMENTS.—In the 

25 case of a collective bargaining agreement in effect on the 


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1 effective date prescribed by subsection (a), this subtitle 

2 shall take effect on the earlier of— 

3 (1) the date of the termination of such agree4 ment; or 

5 (2) the date that occurs 18 months after the 

6 date of issuance of regulations under section 

7 253(a)(1). 

8 Subtitle E—Establishing a Fair 

9 Minimum Wage 

10 SEC. 261. MINIMUM WAGE INCREASES. 

11 (a) MINIMUM WAGE.— 

12 (1) IN GENERAL.—Section 6(a)(1) of the Fair 

13 Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)) 

14 is amended to read as follows: 

15 ‘‘(1) except as otherwise provided in this sec16 tion, not less than— 

17 ‘‘(A) $8.10 an hour, beginning on the first 

18 day of the third month that begins after the 

19 date of enactment of the Rebuild America Act; 

20 ‘‘(B) $8.95 an hour, beginning 1 year after 

21 that first day; 

22 ‘‘(C) $9.80 an hour, beginning 2 years 

23 after that first day; and 

24 ‘‘(D) beginning on the date that is 3 years 

25 after that first day, and annually thereafter, the 


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1 amount determined by the Secretary pursuant 

2 to subsection (h);’’. 

3 (2) DETERMINATION BASED ON INCREASE IN

4 THE CONSUMER PRICE INDEX.—Section 6 of the 

5 Fair Labor Standards Act of 1938 (29 U.S.C. 206) 

6 is amended by adding at the end the following: 

7 ‘‘(h)(1) Each year, by not later than the date that 

8 is 90 days before a new minimum wage determined under 

9 subsection (a)(1)(D) is to take effect, the Secretary shall 

10 determine the minimum wage to be in effect pursuant to 

11 this subsection for the subsequent 1-year period. The wage 

12 determined pursuant to this subsection for a year shall 

13 be— 

14 ‘‘(A) not less than the amount in effect under 

15 subsection (a)(1) on the date of such determination; 

16 ‘‘(B) increased from such amount by the annual 

17 percentage increase in the Consumer Price Index for 

18 Urban Wage Earners and Clerical Workers (United 

19 States city average, all items, not seasonally ad20 justed), or its successor publication, as determined 

21 by the Bureau of Labor Statistics; and 

22 ‘‘(C) rounded to the nearest multiple of $0.05. 

23 ‘‘(2) In calculating the annual percentage increase in 

24 the Consumer Price Index for purposes of paragraph 

25 (1)(B), the Secretary shall compare such Consumer Price 


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1 Index for the most recent month, quarter, or year avail2 able (as selected by the Secretary prior to the first year 

3 for which a minimum wage is in effect pursuant to this 

4 subsection) with the Consumer Price Index for the same 

5 month in the preceding year, the same quarter in the pre6 ceding year, or the preceding year, respectively.’’. 

7 (b) BASE MINIMUM WAGE FOR TIPPED EMPLOY8 EES.—Section 3(m)(1) of the Fair Labor Standards Act 

9 of 1938 (29 U.S.C. 203(m)(1)) is amended to read as fol10 lows: 

11 ‘‘(1) the cash wage paid such employee, which 

12 for purposes of such determination shall be not less 

13 than— 

14 ‘‘(A) for the 1-year period beginning on 

15 the first day of the third month that begins 

16 after the date of enactment of the Rebuild 

17 America Act, $3.00 an hour; 

18 ‘‘(B) for each succeeding 1-year period 

19 until the hourly wage under this paragraph 

20 equals 70 percent of the wage in effect under 

21 section 6(a)(1) for such period, an hourly wage 

22 equal to the amount determined under this 

23 paragraph for the preceding year, increased by 

24 the lesser of— 

25 ‘‘(i) $0.85; or 


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1 ‘‘(ii) the amount necessary for the 

2 wage in effect under this paragraph to 

3 equal 70 percent of the wage in effect 

4 under section 6(a)(1) for such period, 

5 rounded to the nearest multiple of $0.05; 

6 and 

7 ‘‘(C) for each succeeding 1-year period 

8 after the year in which the hourly wage under 

9 this paragraph first equals 70 percent of the 

10 wage in effect under section 6(a)(1) for the 

11 same period, the amount necessary to ensure 

12 that the wage in effect under this paragraph re13 mains equal to 70 percent of the wage in effect 

14 under section 6(a)(1), rounded to the nearest 

15 multiple of $0.05; and’’. 

16 (c) PUBLICATION OF NOTICE.—Section 6 of the Fair 

17 Labor Standards Act of 1938 (as amended by subsection 

18 (a)) (29 U.S.C. 206) is further amended by adding at the 

19 end the following: 

20 ‘‘(i) Not later than 60 days prior to the effective date 

21 of any increase in the minimum wage determined under 

22 subsection (h) or required for tipped employees in accord23 ance with subparagraph (B) or (C) of section 3(m)(1), as 

24 amended by section 261 of the Rebuild America Act, the 

25 Secretary shall publish in the Federal Register and on the 


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1 website of the Department of Labor a notice announcing 

2 the adjusted required wage.’’. 

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

4 subsections (a) and (b) shall take effect on the first day 

5 of the third month that begins after the date of enactment 

6 of this Act. 

7 Subtitle F—Empowering 

8 Hardworking Americans 

9 SEC. 271. AMENDMENTS TO THE NATIONAL LABOR RELA10 TIONS ACT. 

11 (a) COVERAGE.— 

12 (1) SUPERVISORS.—Section 2(11) of the Na13 tional Labor Relations Act (29 U.S.C. 152(11)) is 

14 amended— 

15 (A) by inserting ‘‘and for a majority of the 

16 individual’s worktime’’ after ‘‘interest of the 

17 employer’’; 

18 (B) by striking ‘‘assign,’’; and 

19 (C) by striking ‘‘or responsibly to direct 

20 them’’. 

21 (2) INDEPENDENT CONTRACTORS.—Section 2 

22 of the National Labor Relations Act (29 U.S.C. 

23 152) is amended by adding at the end the following: 

24 ‘‘(15) The term ‘independent contractor’ means 

25 an individual who performs services for an employer 


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1 for remuneration and for whom it is found, to the 

2 satisfaction of the Board, that— 

3 ‘‘(A) the individual has been and will con4 tinue to be free from direction and control of 

5 the employer, both under the individual’s con6 tract of service and in fact; 

7 ‘‘(B) the service is outside the usual course 

8 of business of the employer; and 

9 ‘‘(C) the individual is customarily engaged 

10 in an independently established trade, occupa11 tion, profession, or business, both under the in12 dividual’s contract of service and in fact.’’. 

13 (b) REMEDIES.— 

14 (1) IN GENERAL.—Section 10(l) of the National 

15 Labor Relations Act (29 U.S.C. 160(l)) is amend16 ed— 

17 (A) in the first sentence— 

18 (i) by inserting after ‘‘charged that’’ 

19 the following: ‘‘any person that is an em20 ployer has engaged in an unfair labor prac21 tice within the meaning of section 8(a) 

22 which results in the discharge of an em23 ployee or other serious economic loss, or 

24 that’’; and 


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1 (ii) by striking ‘‘case of like char2 acter’’ and inserting ‘‘other cases described 

3 in this sentence’’; and 

4 (B) in the third sentence, by striking ‘‘as 

5 it deems just and proper, notwithstanding any 

6 other provision of law:’’ and inserting the fol7 lowing: ‘‘to protect the rights guaranteed by 

8 this Act, notwithstanding any other provision of 

9 law. The district court shall grant the relief re10 quested if the court finds that there is reason11 able cause to believe that the alleged violation 

12 of the Act has occurred and, giving deference to 

13 the Board’s expertise in labor policy, there ex14 ists a reasonable probability that the purposes 

15 of the Act will be frustrated unless temporary 

16 relief is granted, or temporary relief is reason17 ably necessary to preserve the effectiveness of 

18 the remedy or forestall further violations:’’. 

19 (2) CIVIL PENALTIES.—Section 12 of the Na20 tional Labor Relations Act (29 U.S.C. 162) is 

21 amended— 

22 (A) by striking ‘‘SEC. 12. Any’’ and insert23 ing the following: 

24 ‘‘SEC. 12. PENALTIES. 

25 ‘‘(a) CRIMINAL PENALTIES.—Any’’; and 


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

2 ‘‘(b) CIVIL PENALTIES.—Any employer who engages 

3 in a violation of section 8 that results in the discharge 

4 of an employee or other serious economic loss, shall, in 

5 addition to any remedy ordered, be subject to a civil pen6 alty not to exceed $20,000 for each violation. In deter7 mining the amount of any penalty under this subsection, 

8 the Board shall consider— 

9 ‘‘(1) the gravity of the unfair labor practice; 

10 ‘‘(2) the impact of the unfair labor practice on 

11 the charging party, on other persons seeking to exer12 cise rights guaranteed by this Act, and on the public 

13 interest; and 

14 ‘‘(3) the size of the employer.’’. 

15 Subtitle G—Increasing Job Oppor16 tunities for Americans With Dis17 abilities 

18 SEC. 281. MODIFICATION OF WORK OPPORTUNITY CREDIT. 

19 (a) QUALIFIED DISABILITY INSURANCE RECIPIENTS

20 TREATED AS MEMBERS OF TARGETED GROUPS.— 

21 (1) IN GENERAL.—Paragraph (1) of section 

22 51(d) of the Internal Revenue Code of 1986 is 

23 amended by striking ‘‘or’’ at the end of subpara24 graph (H), by striking the period at the end of subVerDate Mar 15 2010 00:42 Apr 04, 2012 Jkt 099200 PO 00000 Frm 00205 Fmt 6652 Sfmt 6201 E:\BILLS\S2252.IS S2252

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1 paragraph (I) and inserting ‘‘, or’’, and by adding 

2 at the end the following new subparagraph: 

3 ‘‘(J) a qualified disability insurance recipi4 ent.’’. 

5 (2) QUALIFIED DISABILITY INSURANCE RECIPI6 ENT DEFINED.—Subsection (d) of section 51 of such 

7 Code is amended by adding at the end the following 

8 new paragraph: 

9 ‘‘(15) QUALIFIED DISABILITY INSURANCE RE10 CIPIENT.—The term ‘qualified disability insurance 

11 recipient’ means any individual who is certified by 

12 the local designated agency as receiving disability in13 surance benefits under title II of the Social Security 

14 Act for any month ending within the 60-day period 

15 ending on the hiring date.’’. 

16 (b) MODIFICATION OF VOCATIONAL REHABILITA17 TION REFERRALS.—Section 51(d)(6) of the Internal Rev18 enue Code of 1986 is amended by striking subparagraphs 

19 (A) and (B) and inserting the following: 

20 ‘‘(A) having a physical or mental disability 

21 which, for such individual, constitutes or results 

22 in a substantial impediment to employment, 

23 and 


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1 ‘‘(B)(i) having been referred to the em2 ployer upon completion of (or while receiving) 

3 rehabilitative services pursuant to— 

4 ‘‘(I) an individualized plan for employ5 ment under title I of the Rehabilitation Act 

6 of 1973, or 

7 ‘‘(II) a program of vocational rehabili8 tation carried out under chapter 31 of title 

9 38, United States Code, or 

10 ‘‘(III) an individual work plan devel11 oped and implemented by an employment 

12 network pursuant to subsection (g) of sec13 tion 1148 of the Social Security Act with 

14 respect to which the requirements of such 

15 subsection are met, or 

16 ‘‘(ii) eligible to receive rehabilitative serv17 ices pursuant to a plan described in clause 

18 (i)(I) or a program described in clause (i)(II) 

19 but not receiving such services.’’. 

20 (c) INCREASED CREDIT FOR CERTAIN DISABLED

21 WORKERS.—Section 51 of the Internal Revenue Code of 

22 1986 is amended by adding at the end the following new 

23 subsection: 

24 ‘‘(l) INCREASED CREDIT FOR CERTAIN DISABLED

25 WORKERS.— 


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1 ‘‘(1) IN GENERAL.—In the case of any qualified 

2 disabled worker, subsection (b) shall be applied by 

3 substituting— 

4 ‘‘(A) ‘2-year period’ for ‘1-year period’ in 

5 paragraph (2), and 

6 ‘‘(B) ‘$30,000’ for ‘$6,000’ in paragraph 

7 (3). 

8 ‘‘(2) QUALIFIED DISABLED WORKER.—For pur9 poses of this subsection, the term ‘qualified disabled 

10 worker’ means any individual who is— 

11 ‘‘(A) a qualified SSI recipient who is cer12 tified by the local designated agency as an indi13 vidual who is receiving benefits described in 

14 subsection (d)(9) as the result of being a blind 

15 or disabled individual (as defined in section 

16 1614 of the Social Security Act), 

17 ‘‘(B) a qualified disability insurance recipi18 ent, or 

19 ‘‘(C) a vocational rehabilitation referral.’’. 

20 (d) EXTENSION OF CREDIT.—Subparagraph (B) of 

21 section 51(c)(4) of the Internal Revenue Code of 1986 is 

22 amended to read as follows: 

23 ‘‘(B) after December 31, 2015.’’. 


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1 (e) REPORTING.—Section 51 of the Internal Revenue 

2 Code of 1986, as amended by subsection (c), is amended 

3 by adding at the end the following new subsection: 

4 ‘‘(m) REPORTING.—The Secretary of the Treasury 

5 shall require each taxpayer which is allowed a credit under 

6 this section to report— 

7 ‘‘(1) the number of employees hired by the tax8 payer who are members of a targeted group, 

9 ‘‘(2) the number of employees hired by the tax10 payer who have a disability, 

11 ‘‘(3) the length of retention of employees who 

12 are members of a targeted group, and 

13 ‘‘(4) such other information as the Secretary 

14 may require.’’. 

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

16 this section shall apply to individuals who begin work for 

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

18 TITLE III—RESTORING BALANCE 

19 AND FAIRNESS TO THE TAX 

20 CODE 

21 SEC. 300. AMENDMENT OF 1986 CODE. 

22 Except as otherwise expressly provided, whenever in 

23 this title an amendment or repeal is expressed in terms 

24 of an amendment to, or repeal of, a section or other provi25 sion, the reference shall be considered to be made to a 


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1 section or other provision of the Internal Revenue Code 

2 of 1986. 

3 Subtitle A—Instituting the ‘‘Buffett 

4 Rule’’ 

5 SEC. 301. FAIR SHARE TAX ON HIGH-INCOME TAXPAYERS. 

6 (a) IN GENERAL.—Subchapter A of chapter 1 is 

7 amended by adding at the end the following new part: 

8 ‘‘PART VII—FAIR SHARE TAX ON HIGH-INCOME 

9 TAXPAYERS 

‘‘Sec. 59B. Fair share tax. 

10 ‘‘SEC. 59B. FAIR SHARE TAX. 

11 ‘‘(a) GENERAL RULE.— 

12 ‘‘(1) PHASE-IN OF TAX.—In the case of any 

13 high-income taxpayer, there is hereby imposed for a 

14 taxable year (in addition to any other tax imposed 

15 by this subtitle) a tax equal to the product of— 

16 ‘‘(A) the amount determined under para17 graph (2), and 

18 ‘‘(B) a fraction (not to exceed 1)— 

19 ‘‘(i) the numerator of which is the ex20 cess of— 

21 ‘‘(I) the taxpayer’s adjusted 

22 gross income, over 

23 ‘‘(II) the dollar amount in effect 

24 under subsection (c)(1), and 


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1 ‘‘(ii) the denominator of which is the 

2 dollar amount in effect under subsection 

3 (c)(1). 

4 ‘‘(2) AMOUNT OF TAX.—The amount of tax de5 termined under this paragraph is an amount equal 

6 to the excess (if any) of— 

7 ‘‘(A) the tentative fair share tax for the 

8 taxable year, over 

9 ‘‘(B) the excess of— 

10 ‘‘(i) the sum of— 

11 ‘‘(I) the regular tax liability (as 

12 defined in section 26(b)) for the tax13 able year, 

14 ‘‘(II) the tax imposed by section 

15 55 for the taxable year, plus 

16 ‘‘(III) the payroll tax for the tax17 able year, over 

18 ‘‘(ii) the credits allowable under part 

19 IV of subchapter A (other than sections 

20 27(a), 31, and 34). 

21 ‘‘(b) TENTATIVE FAIR SHARE TAX.—For purposes 

22 of this section— 

23 ‘‘(1) IN GENERAL.—The tentative fair share tax 

24 for the taxable year is 30 percent of the excess of— 


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1 ‘‘(A) the adjusted gross income of the tax2 payer, over 

3 ‘‘(B) the modified charitable contribution 

4 deduction for the taxable year. 

5 ‘‘(2) MODIFIED CHARITABLE CONTRIBUTION

6 DEDUCTION.—For purposes of paragraph (1)— 

7 ‘‘(A) IN GENERAL.—The modified chari8 table contribution deduction for any taxable 

9 year is an amount equal to the amount which 

10 bears the same ratio to the deduction allowable 

11 under section 170 (section 642(c) in the case of 

12 a trust or estate) for such taxable year as— 

13 ‘‘(i) the amount of itemized deduc14 tions allowable under the regular tax (as 

15 defined in section 55) for such taxable 

16 year, determined after the application of 

17 section 68, bears to 

18 ‘‘(ii) such amount, determined before 

19 the application of section 68. 

20 ‘‘(B) TAXPAYER MUST ITEMIZE.—In the 

21 case of any individual who does not elect to 

22 itemize deductions for the taxable year, the 

23 modified charitable contribution deduction shall 

24 be zero. 


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1 ‘‘(c) HIGH-INCOME TAXPAYER.—For purposes of this 

2 section— 

3 ‘‘(1) IN GENERAL.—The term ‘high-income tax4 payer’ means, with respect to any taxable year, any 

5 taxpayer (other than a corporation) with an adjusted 

6 gross income for such taxable year in excess of 

7 $1,000,000 (50 percent of such amount in the case 

8 of a married individual who files a separate return). 

9 ‘‘(2) INFLATION ADJUSTMENT.— 

10 ‘‘(A) IN GENERAL.—In the case of a tax11 able year beginning after 2013, the $1,000,000 

12 amount under paragraph (1) shall be increased 

13 by an amount equal to— 

14 ‘‘(i) such dollar amount, multiplied by 

15 ‘‘(ii) the cost-of-living adjustment de16 termined under section 1(f)(3) for the cal17 endar year in which the taxable year be18 gins, determined by substituting ‘calendar 

19 year 2012’ for ‘calendar year 1992’ in sub20 paragraph (B) thereof. 

21 ‘‘(B) ROUNDING.—If any amount as ad22 justed under subparagraph (A) is not a multiple 

23 of $10,000, such amount shall be rounded to 

24 the next lowest multiple of $10,000. 


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1 ‘‘(d) PAYROLL TAX.—For purposes of this section, 

2 the payroll tax for any taxable year is an amount equal 

3 to the excess of— 

4 ‘‘(1) the taxes imposed on the taxpayer under 

5 sections 1401, 1411, 3101, 3201, and 3211(a) (to 

6 the extent such taxes are attributable to the rate of 

7 tax in effect under section 3101) with respect to 

8 such taxable year or wages or compensation received 

9 during the taxable year, over 

10 ‘‘(2) the deduction allowable under section 

11 164(f) for such taxable year. 

12 ‘‘(e) SPECIAL RULE FOR ESTATES AND TRUSTS.— 

13 For purposes of this section, in the case of an estate or 

14 trust, adjusted gross income shall be computed in the 

15 manner described in section 67(e). 

16 ‘‘(f) NOT TREATED AS TAX IMPOSED BY THIS CHAP17 TER FOR CERTAIN PURPOSES.—The tax imposed under 

18 this section shall not be treated as tax imposed by this 

19 chapter for purposes of determining the amount of any 

20 credit under this chapter (other than the credit allowed 

21 under section 27(a)) or for purposes of section 55.’’. 

22 (b) CONFORMING AMENDMENT.—Section 26(b)(2) is 

23 amended by redesignating subparagraphs (C) through (X) 

24 as subparagraphs (D) through (Y), respectively, and by 


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1 inserting after subparagraph (B) the following new sub2 paragraph: 

3 ‘‘(C) section 59B (relating to fair share 

4 tax),’’. 

5 (c) CLERICAL AMENDMENT.—The table of parts for 

6 subchapter A of chapter 1 is amended by adding at the 

7 end the following new item: 

‘‘PART VII—FAIR SHARE TAX ON HIGH-INCOME TAXPAYERS’’. 

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

9 this section shall apply to taxable years beginning after 

10 December 31, 2012. 

11 Subtitle B—Adopting a Wall Street 

12 Trading and Speculators Tax 

13 SEC. 311. TRANSACTION TAX. 

14 (a) IN GENERAL.—Chapter 36 is amended by insert15 ing after subchapter B the following new subchapter: 

16 ‘‘Subchapter C—Tax on Trading Transactions 

‘‘Sec. 4475. Tax on trading transactions. 

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

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

19 a tax on each covered transaction with respect to any secu20 rity. 

21 ‘‘(b) RATE OF TAX.—The tax imposed under sub22 section (a) with respect to any covered transaction shall 

23 be 0.03 percent of the specified base amount with respect 

24 to such covered transaction. 


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

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

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

4 fair market value of the security (determined as of 

5 the time of the covered transaction), and 

6 ‘‘(2) in the case of any payment described in 

7 subsection (h), the amount of such payment. 

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

9 section, the term ‘covered transaction’ means— 

10 ‘‘(1) except as provided in paragraph (2), any 

11 purchase if— 

12 ‘‘(A) such purchase occurs or is cleared on 

13 a facility located in the United States, or 

14 ‘‘(B) the purchaser or seller is a United 

15 States person, and 

16 ‘‘(2) any transaction with respect to a security 

17 described in subparagraph (D), (E), or (F) of sub18 section (e)(1), if— 

19 ‘‘(A) such security is traded or cleared on 

20 a facility located in the United States, or 

21 ‘‘(B) any party with rights under such se22 curity is a United States person. 

23 ‘‘(e) SECURITY AND OTHER DEFINITIONS.—For pur24 poses of this section— 


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1 ‘‘(1) IN GENERAL.—The term ‘security’ 

2 means— 

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

4 ‘‘(B) any partnership or beneficial owner5 ship interest in a partnership or trust, 

6 ‘‘(C) any note, bond, debenture, or other 

7 evidence of indebtedness, 

8 ‘‘(D) any evidence of an interest in, or a 

9 derivative financial instrument with respect to, 

10 any security or securities described in subpara11 graph (A), (B), or (C), 

12 ‘‘(E) any derivative financial instrument 

13 with respect to any currency or commodity, and 

14 ‘‘(F) any other derivative financial instru15 ment any payment with respect to which is cal16 culated by reference to any specified index. 

17 ‘‘(2) DERIVATIVE FINANCIAL INSTRUMENT.— 

18 The term ‘derivative financial instrument’ includes 

19 any option, forward contract, futures contract, no20 tional principal contract, or any similar financial in21 strument. 

22 ‘‘(3) SPECIFIED INDEX.—The term ‘specified 

23 index’ means any 1 or more of any combination of— 

24 ‘‘(A) a fixed rate, price, or amount, or 

25 ‘‘(B) a variable rate, price, or amount,


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1 which is based on any current objectively deter2 minable information which is not within the control 

3 of any of the parties to the contract or instrument 

4 and is not unique to any of the parties’ cir5 cumstances. 

6 ‘‘(4) TREATMENT OF EXCHANGES.— 

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

8 treated as the sale of the property transferred 

9 and a purchase of the property received by each 

10 party to the exchange. 

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

12 the case of a distribution treated as an ex13 change for stock under section 302 or 331, the 

14 corporation making such distribution shall be 

15 treated as having purchased such stock for pur16 poses of this section. 

17 ‘‘(f) EXCEPTIONS.— 

18 ‘‘(1) EXCEPTION FOR INITIAL ISSUES.—No tax 

19 shall be imposed under subsection (a) on any cov20 ered transaction with respect to the initial issuance 

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

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

23 ‘‘(2) EXCEPTION FOR CERTAIN TRADED SHORT24 TERM INDEBTEDNESS.—A note, bond, debenture, or 

25 other evidence of indebtedness which— 


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•S 2252 IS

1 ‘‘(A) is traded on a trading facility located 

2 in the United States, and 

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

4 than 100 days, 

5 shall not be treated as described in subsection 

6 (e)(1)(C). 

7 ‘‘(3) EXCEPTION FOR SECURITIES LENDING AR8 RANGEMENTS.—No tax shall be imposed under sub9 section (a) on any covered transaction with respect 

10 to which gain or loss is not recognized by reason of 

11 section 1058. 

12 ‘‘(g) BY WHOM PAID.— 

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

14 section shall be paid by— 

15 ‘‘(A) in the case of a transaction which oc16 curs or is cleared on a facility located in the 

17 United States, such facility, and 

18 ‘‘(B) in the case of a purchase not de19 scribed in subparagraph (A) which is executed 

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

21 which is a United States person, such broker. 

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

23 TRANSACTIONS.—In the case of any transaction to 

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

25 by this section shall be paid by— 


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

2 in subsection (d)(1)— 

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

4 a United States person, and 

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

6 a United States person, and 

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

8 in subsection (d)(2)— 

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

10 States person, and 

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

12 United States person. 

13 ‘‘(h) CERTAIN PAYMENTS TREATED AS SEPARATE

14 TRANSACTIONS.—Except as otherwise provided by the 

15 Secretary, any payment with respect to a security de16 scribed in subparagraph (D), (E), or (F) of subsection 

17 (e)(1) shall be treated as a separate transaction for pur18 poses of this section, including— 

19 ‘‘(1) any net initial payment, net final or termi20 nating payment, or net periodical payment with re21 spect to a notional principal contract (or similar fi22 nancial instrument), 

23 ‘‘(2) any payment with respect to any forward 

24 contract (or similar financial instrument), and 


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1 ‘‘(3) any premium paid with respect to any op2 tion (or similar financial instrument). 

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

4 out this section in consultation with the Securities and Ex5 change Commission and the Commodity Futures Trading 

6 Commission. 

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

8 shall— 

9 ‘‘(1) provide guidance regarding such informa10 tion reporting concerning covered transactions as the 

11 Secretary deems appropriate, and 

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

13 or appropriate to prevent avoidance of the purposes 

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

15 States persons in such transactions.’’. 

16 (b) CLERICAL AMENDMENT.—The table of sub17 chapters for chapter 36 is amended by inserting after the 

18 item relating to subchapter B the following new item: 

‘‘Subchapter C. Tax on trading transactions.’’. 

19 (c) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to transactions after December 31, 

21 2012. 


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1 Subtitle C—Ending Tax Breaks for 

2 Companies That Ship Jobs 

3 Overseas 

4 SEC. 321. ALLOCATION OF EXPENSES AND TAXES ON BASIS 

5 OF REPATRIATION OF FOREIGN INCOME. 

6 (a) IN GENERAL.—Part III of subchapter N of chap7 ter 1 is amended by inserting after subpart G the following 

8 new subpart: 

9 ‘‘Subpart H—Special Rules for Allocation of Foreign10 Related Deductions and Foreign Tax Credits 

‘‘Sec. 975. Deductions allocated to deferred foreign income may not offset 

United States source income. 

‘‘Sec. 976. Amount of foreign taxes computed on overall basis. 

‘‘Sec. 977. Application of subpart. 

11 ‘‘SEC. 975. DEDUCTIONS ALLOCATED TO DEFERRED FOR12 EIGN INCOME MAY NOT OFFSET UNITED 

13 STATES SOURCE INCOME. 

14 ‘‘(a) CURRENT YEAR DEDUCTIONS.—For purposes 

15 of this chapter, foreign-related deductions for any taxable 

16 year— 

17 ‘‘(1) shall be taken into account for such tax18 able year only to the extent that such deductions are 

19 allocable to currently-taxed foreign income, and 

20 ‘‘(2) to the extent not so allowed, shall be taken 

21 into account in subsequent taxable years as provided 

22 in subsection (b). 


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1 Foreign-related deductions shall be allocated to currently2 taxed foreign income in the same proportion which cur3 rently-taxed foreign income bears to the sum of currently4 taxed foreign income and deferred foreign income. 

5 ‘‘(b) DEDUCTIONS RELATED TO REPATRIATED DE6 FERRED FOREIGN INCOME.— 

7 ‘‘(1) IN GENERAL.—If there is repatriated for8 eign income for a taxable year, the portion of the 

9 previously deferred deductions allocated to the repa10 triated foreign income shall be taken into account 

11 for the taxable year as a deduction allocated to in12 come from sources outside the United States. Any 

13 such amount shall not be included in foreign-related 

14 deductions for purposes of applying subsection (a) to 

15 such taxable year. 

16 ‘‘(2) PORTION OF PREVIOUSLY DEFERRED DE17 DUCTIONS.—For purposes of paragraph (1), the por18 tion of the previously deferred deductions allocated 

19 to repatriated foreign income is— 

20 ‘‘(A) the amount which bears the same 

21 proportion to such deductions, as 

22 ‘‘(B) the repatriated income bears to the 

23 previously deferred foreign income. 

24 ‘‘(c) DEFINITIONS AND SPECIAL RULE.—For pur25 poses of this section— 


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1 ‘‘(1) FOREIGN-RELATED DEDUCTIONS.—The 

2 term ‘foreign-related deductions’ means the total 

3 amount of deductions and expenses which would be 

4 allocated or apportioned to gross income from 

5 sources without the United States for the taxable 

6 year if both the currently-taxed foreign income and 

7 deferred foreign income were taken into account. 

8 ‘‘(2) CURRENTLY-TAXED FOREIGN INCOME.— 

9 The term ‘currently-taxed foreign income’ means the 

10 amount of gross income from sources without the 

11 United States for the taxable year (determined with12 out regard to repatriated foreign income for such 

13 year). 

14 ‘‘(3) DEFERRED FOREIGN INCOME.—The term 

15 ‘deferred foreign income’ means the excess of— 

16 ‘‘(A) the amount that would be includible 

17 in gross income under subpart F of this part 

18 for the taxable year if— 

19 ‘‘(i) all controlled foreign corporations 

20 were treated as one controlled foreign cor21 poration, and 

22 ‘‘(ii) all earnings and profits of all 

23 controlled foreign corporations were sub24 part F income (as defined in section 952), 

25 over 


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1 ‘‘(B) the sum of— 

2 ‘‘(i) all dividends received during the 

3 taxable year from controlled foreign cor4 porations, plus 

5 ‘‘(ii) amounts includible in gross in6 come under section 951(a). 

7 ‘‘(4) PREVIOUSLY DEFERRED FOREIGN IN8 COME.—The term ‘previously deferred foreign in9 come’ means the aggregate amount of deferred for10 eign income for all prior taxable years to which this 

11 part applies, determined as of the beginning of the 

12 taxable year, reduced by the repatriated foreign in13 come for all such prior taxable years. 

14 ‘‘(5) REPATRIATED FOREIGN INCOME.—The 

15 term ‘repatriated foreign income’ means the amount 

16 included in gross income on account of distributions 

17 out of previously deferred foreign income. 

18 ‘‘(6) PREVIOUSLY DEFERRED DEDUCTIONS.— 

19 The term ‘previously deferred deductions’ means the 

20 aggregate amount of foreign-related deductions not 

21 taken into account under subsection (a) for all prior 

22 taxable years (determined as of the beginning of the 

23 taxable year), reduced by any amounts taken into 

24 account under subsection (b) for such prior taxable 

25 years. 


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1 ‘‘(7) TREATMENT OF CERTAIN FOREIGN

2 TAXES.— 

3 ‘‘(A) PAID BY CONTROLLED FOREIGN COR4 PORATION.—Section 78 shall not apply for pur5 poses of determining currently-taxed foreign in6 come and deferred foreign income. 

7 ‘‘(B) PAID BY TAXPAYER.—For purposes 

8 of determining currently-taxed foreign income, 

9 gross income from sources without the United 

10 States shall be reduced by the aggregate 

11 amount of taxes described in the applicable 

12 paragraph of section 901(b) which are paid by 

13 the taxpayer (without regard to sections 902 

14 and 960) during the taxable year. 

15 ‘‘(8) COORDINATION WITH SECTION 976.—In 

16 determining currently-taxed foreign income and de17 ferred foreign income, the amount of deemed foreign 

18 tax credits shall be determined with regard to sec19 tion 976. 

20 ‘‘SEC. 976. AMOUNT OF FOREIGN TAXES COMPUTED ON 

21 OVERALL BASIS. 

22 ‘‘(a) CURRENT YEAR ALLOWANCE.—For purposes of 

23 this chapter, the amount taken into account as foreign in24 come taxes for any taxable year shall be an amount which 


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•S 2252 IS

1 bears the same ratio to the total foreign income taxes for 

2 that taxable year as— 

3 ‘‘(1) the currently-taxed foreign income for such 

4 taxable year, bears to 

5 ‘‘(2) the sum of the currently-taxed foreign in6 come and deferred foreign income for such year. 

7 The portion of the total foreign income taxes for any tax8 able year not taken into account under the preceding sen9 tence for a taxable year shall only be taken into account 

10 as provided in subsection (b) (and shall not be taken into 

11 account for purposes of applying sections 902 and 960). 

12 ‘‘(b) ALLOWANCE RELATED TO REPATRIATED DE13 FERRED FOREIGN INCOME.— 

14 ‘‘(1) IN GENERAL.—If there is repatriated for15 eign income for any taxable year, the portion of the 

16 previously deferred foreign income taxes paid or ac17 crued during such taxable year shall be taken into 

18 account for the taxable year as foreign taxes paid or 

19 accrued. Any such taxes so taken into account shall 

20 not be included in foreign income taxes for purposes 

21 of applying subsection (a) to such taxable year. 

22 ‘‘(2) PORTION OF PREVIOUSLY DEFERRED FOR23 EIGN INCOME TAXES.—For purposes of paragraph 

24 (1), the portion of the previously deferred foreign inVerDate Mar 15 2010 00:42 Apr 04, 2012 Jkt 099200 PO 00000 Frm 00227 Fmt 6652 Sfmt 6201 E:\BILLS\S2252.IS S2252

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1 come taxes allocated to repatriated deferred foreign 

2 income is— 

3 ‘‘(A) the amount which bears the same 

4 proportion to such taxes, as 

5 ‘‘(B) the repatriated deferred income bears 

6 to the previously deferred foreign income. 

7 ‘‘(c) DEFINITIONS AND SPECIAL RULE.—For pur8 poses of this section— 

9 ‘‘(1) PREVIOUSLY DEFERRED FOREIGN INCOME

10 TAXES.—The term ‘previously deferred foreign in11 come taxes’ means the aggregate amount of total 

12 foreign income taxes not taken into account under 

13 subsection (a) for all prior taxable years (determined 

14 as of the beginning of the taxable year), reduced by 

15 any amounts taken into account under subsection 

16 (b) for such prior taxable years. 

17 ‘‘(2) TOTAL FOREIGN INCOME TAXES.—The 

18 term ‘total foreign income taxes’ means the sum of 

19 foreign income taxes paid or accrued during the tax20 able year (determined without regard to section 

21 904(c)) plus the increase in foreign income taxes 

22 that would be paid or accrued during the taxable 

23 year under sections 902 and 960 if— 


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•S 2252 IS

1 ‘‘(A) all controlled foreign corporations 

2 were treated as one controlled foreign corpora3 tion, and 

4 ‘‘(B) all earnings and profits of all con5 trolled foreign corporations were subpart F in6 come (as defined in section 952). 

7 ‘‘(3) FOREIGN INCOME TAXES.—The term ‘for8 eign income taxes’ means any income, war profits, or 

9 excess profits taxes paid by the taxpayer to any for10 eign country or possession of the United States. 

11 ‘‘(4) CURRENTLY-TAXED FOREIGN INCOME AND

12 DEFERRED FOREIGN INCOME.—The terms ‘cur13 rently-taxed foreign income’ and ‘deferred foreign in14 come’ have the meanings given such terms by sec15 tion 975(c)). 

16 ‘‘SEC. 977. APPLICATION OF SUBPART. 

17 ‘‘This subpart— 

18 ‘‘(1) shall be applied before subpart A, and 

19 ‘‘(2) shall be applied separately with respect to 

20 the categories of income specified in section 

21 904(d)(1).’’. 

22 (b) CLERICAL AMENDMENT.—The table of subparts 

23 for part III of subpart N of chapter 1 is amended by in24 serting after the item relating to subpart G the following 

25 new item: 


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•S 2252 IS

‘‘SUBPART H. SPECIAL RULES FOR ALLOCATION OF FOREIGN-RELATED

DEDUCTIONS AND FOREIGN TAX CREDITS.’’. 

1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2012. 

4 SEC. 322. EXCESS INCOME FROM TRANSFERS OF INTANGI5 BLES TO LOW-TAXED AFFILIATES TREATED 

6 AS SUBPART F INCOME. 

7 (a) IN GENERAL.—Subsection (a) of section 954 is 

8 amended by inserting after paragraph (3) the following 

9 new paragraph: 

10 ‘‘(4) the foreign base company excess intangible 

11 income for the taxable year (determined under sub12 section (f) and reduced as provided in subsection 

13 (b)(5)), and’’. 

14 (b) FOREIGN BASE COMPANY EXCESS INTANGIBLE

15 INCOME.—Section 954 is amended by inserting after sub16 section (e) the following new subsection: 

17 ‘‘(f) FOREIGN BASE COMPANY EXCESS INTANGIBLE

18 INCOME.—For purposes of subsection (a)(4) and this sub19 section: 

20 ‘‘(1) FOREIGN BASE COMPANY EXCESS INTAN21 GIBLE INCOME DEFINED.— 

22 ‘‘(A) IN GENERAL.—The term ‘foreign 

23 base company excess intangible income’ means, 


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•S 2252 IS

1 with respect to any covered intangible, the ex2 cess of— 

3 ‘‘(i) the sum of— 

4 ‘‘(I) gross income from the sale, 

5 lease, license, or other disposition of 

6 property in which such covered intan7 gible is used directly or indirectly, and 

8 ‘‘(II) gross income from the pro9 vision of services related to such cov10 ered intangible or in connection with 

11 property in which such covered intan12 gible is used directly or indirectly, 

13 over 

14 ‘‘(ii) 150 percent of the costs properly 

15 allocated and apportioned to the gross in16 come taken into account under clause (i) 

17 other than expenses for interest and taxes 

18 and any expenses which are not directly al19 locable to such gross income. 

20 ‘‘(B) SAME COUNTRY INCOME NOT TAKEN

21 INTO ACCOUNT.—If— 

22 ‘‘(i) the sale, lease, license, or other 

23 disposition of the property referred to in 

24 subparagraph (A)(i)(I) is for use, con25 sumption, or disposition in the country 


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•S 2252 IS

1 under the laws of which the controlled for2 eign corporation is created or organized, or 

3 ‘‘(ii) the services referred to in sub4 paragraph (A)(i)(II) are performed in such 

5 country, 

6 the gross income from such sale, lease, license, 

7 or other disposition, or provision of services, 

8 shall not be taken into account under subpara9 graph (A)(i). 

10 ‘‘(C) SPECIAL RULE FOR RESEARCH AND

11 DEVELOPMENT EXPENSES.—Research and de12 velopment costs for any taxable year shall be 

13 treated for purposes of subparagraph (A) as 

14 properly allocable to gross income derived from 

15 a covered intangible if such costs are properly 

16 allocable to the line of business in which such 

17 gross income is earned. 

18 ‘‘(2) EXCEPTION BASED ON EFFECTIVE FOR19 EIGN INCOME TAX RATE.— 

20 ‘‘(A) IN GENERAL.—Foreign base company 

21 excess intangible income shall not include the 

22 applicable percentage of any item of income re23 ceived by a controlled foreign corporation if the 

24 taxpayer establishes to the satisfaction of the 

25 Secretary that such income was subject to an 


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•S 2252 IS

1 effective rate of income tax imposed by a for2 eign country in excess of 10 percent. 

3 ‘‘(B) APPLICABLE PERCENTAGE.—For 

4 purposes of subparagraph (A), the term ‘appli5 cable percentage’ means the ratio (expressed as 

6 a percentage), not greater than 100 percent, 

7 of— 

8 ‘‘(i) the number of percentage points 

9 by which the effective rate of income tax 

10 referred to in subparagraph (A) exceeds 10 

11 percentage points, over 

12 ‘‘(ii) 5 percentage points. 

13 ‘‘(C) TREATMENT OF LOSSES IN DETER14 MINING EFFECTIVE RATE OF FOREIGN INCOME

15 TAX.—For purposes of determining the effective 

16 rate of income tax imposed by any foreign 

17 country— 

18 ‘‘(i) such effective rate shall be deter19 mined without regard to any losses carried 

20 to the relevant taxable year, and 

21 ‘‘(ii) to the extent the income with re22 spect to such intangible reduces losses in 

23 the relevant taxable year, such effective 

24 rate shall be treated as being the effective 


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•S 2252 IS

1 rate which would have been imposed on 

2 such income without regard to such losses. 

3 ‘‘(3) COVERED INTANGIBLE.—The term ‘cov4 ered intangible’ means, with respect to any con5 trolled foreign corporation, any intangible property 

6 (as defined in section 936(h)(3)(B))— 

7 ‘‘(A) which is sold, leased, licensed, or oth8 erwise transferred (directly or indirectly) to 

9 such controlled foreign corporation from a 

10 United States related person, or 

11 ‘‘(B) with respect to which such controlled 

12 foreign corporation and one or more related 

13 persons has (directly or indirectly) entered into 

14 any shared risk or development agreement (in15 cluding any cost sharing agreement). 

16 ‘‘(4) RELATED PERSON.—The term ‘related 

17 person’ has the meaning given such term in sub18 section (d)(3).’’. 

19 (c) CONFORMING AMENDMENTS.— 

20 (1) Paragraph (4) of section 954(b) is amended 

21 by inserting ‘‘foreign base company excess intangible 

22 income described in subsection (a)(4) or’’ before 

23 ‘‘foreign base company oil-related income’’ in the 

24 last sentence thereof. 


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•S 2252 IS

1 (2) Paragraph (5) of section 954(b) is amended 

2 by inserting ‘‘the foreign base company excess intan3 gible income,’’ before ‘‘and the foreign base company 

4 oil related income’’. 

5 (3) Subsection (b) of section 954 is amended by 

6 adding at the end the following new paragraph: 

7 ‘‘(7) FOREIGN BASE COMPANY EXCESS INTAN8 GIBLE INCOME NOT TREATED AS ANOTHER KIND OF

9 BASE COMPANY INCOME.—Income of a corporation 

10 which is foreign base company excess intangible in11 come shall not be considered foreign base company 

12 income of such corporation under paragraph (2), 

13 (3), or (5) of subsection (a).’’. 

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

15 this section shall apply to income from transactions con16 nected with or benefitting from covered intangibles in tax17 able years beginning on or after January 1, 2013. 

18 SEC. 323. MODIFICATIONS OF FOREIGN TAX CREDIT RULES 

19 APPLICABLE TO DUAL CAPACITY TAXPAYERS. 

20 (a) IN GENERAL.—Section 901 is amended by redes21 ignating subsection (n) as subsection (o) and by inserting 

22 after subsection (m) the following new subsection: 

23 ‘‘(n) SPECIAL RULES RELATING TO DUAL CAPACITY

24 TAXPAYERS.— 


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•S 2252 IS

1 ‘‘(1) GENERAL RULE.—Notwithstanding any 

2 other provision of this chapter, any amount paid or 

3 accrued by a dual capacity taxpayer or any member 

4 of the worldwide affiliated group of which such dual 

5 capacity taxpayer is also a member to any foreign 

6 country or to any possession of the United States 

7 for any period shall not be considered a tax to the 

8 extent such amount exceeds the amount (determined 

9 in accordance with regulations) which would have 

10 been required to be paid if the taxpayer were not a 

11 dual capacity taxpayer. 

12 ‘‘(2) DUAL CAPACITY TAXPAYER.—For pur13 poses of this subsection, the term ‘dual capacity tax14 payer’ means, with respect to any foreign country or 

15 possession of the United States, a person who— 

16 ‘‘(A) is subject to a levy of such country or 

17 possession, and 

18 ‘‘(B) receives (or will receive) directly or 

19 indirectly a specific economic benefit (as deter20 mined in accordance with regulations) from 

21 such country or possession. 

22 ‘‘(3) REGULATIONS.—The Secretary may issue 

23 such regulations or other guidance as is necessary or 

24 appropriate to carry out the purposes of this sub25 section.’’. 


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•S 2252 IS

1 (b) CONTRARY TREATY OBLIGATIONS UPHELD.— 

2 The amendments made by this section shall not apply to 

3 the extent contrary to any treaty obligation of the United 

4 States. 

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

6 this section shall apply to amounts that, if such amounts 

7 were an amount of tax paid or accrued, would be consid8 ered paid or accrued in taxable years beginning after De9 cember 31, 2012. 

10 Subtitle D—Making Wall Street 

11 Take Responsibility 

12 SEC. 331. FINANCIAL CRISIS RESPONSIBILITY FEE. 

13 (a) AMOUNT TO BE COLLECTED.—In order to cover 

14 the costs to the Federal Government of assistance pro15 vided through the Emergency Economic Stabilization Act 

16 of 2008, including the Troubled Asset Relief Program, the 

17 Secretary of the Treasury, during the 10-year period be18 ginning on the first day of fiscal year 2013 and continuing 

19 through the end of fiscal year 2022, shall assess a Finan20 cial Crisis Responsibility Fee to collect a total of 

21 $65,000,000,000. 

22 (b) ASSESSMENT AND SCHEDULE.—To collect the 

23 Financial Crisis Responsibility Fee, the Secretary of the 

24 Treasury shall establish, by regulation, an assessment 


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•S 2252 IS

1 schedule by fiscal year, including assessment base and 

2 rates, that— 

3 (1) is designed, in the judgment of the Sec4 retary of the Treasury, to result in the collection of 

5 $65,000,000,000; and 

6 (2) shall apply to any financial institution with 

7 $50,000,000,000 or more in total consolidated assets 

8 that received taxpayer assistance under the Emer9 gency Economic Stabilization Act of 2008, including 

10 the Troubled Asset Relief Program. 

11 (c) CONSIDERATION OF ECONOMIC RECOVERY.—To 

12 minimize any adverse impact to, and to promote the full 

13 recovery of, the economy and financial sector, the Sec14 retary of the Treasury shall phase in the assessment rate 

15 required under this part over the 10-year period described 

16 in subsection (a), in a manner determined by the Sec17 retary of the Treasury. 

18 Subtitle E—Closing the Carried 

19 Interest Loophole 

20 SEC. 341. PARTNERSHIP INTERESTS TRANSFERRED IN 

21 CONNECTION WITH PERFORMANCE OF SERV22 ICES. 

23 (a) MODIFICATION TO ELECTION TO INCLUDE PART24 NERSHIP INTEREST IN GROSS INCOME IN YEAR OF

25 TRANSFER.—Subsection (c) of section 83 is amended by 


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1 redesignating paragraph (4) as paragraph (5) and by in2 serting after paragraph (3) the following new paragraph: 

3 ‘‘(4) PARTNERSHIP INTERESTS.—Except as 

4 provided by the Secretary— 

5 ‘‘(A) IN GENERAL.—In the case of any 

6 transfer of an interest in a partnership in con7 nection with the provision of services to (or for 

8 the benefit of) such partnership— 

9 ‘‘(i) the fair market value of such in10 terest shall be treated for purposes of this 

11 section as being equal to the amount of the 

12 distribution which the partner would re13 ceive if the partnership sold (at the time of 

14 the transfer) all of its assets at fair market 

15 value and distributed the proceeds of such 

16 sale (reduced by the liabilities of the part17 nership) to its partners in liquidation of 

18 the partnership, and 

19 ‘‘(ii) the person receiving such interest 

20 shall be treated as having made the elec21 tion under subsection (b)(1) unless such 

22 person makes an election under this para23 graph to have such subsection not apply. 


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1 ‘‘(B) ELECTION.—The election under sub2 paragraph (A)(ii) shall be made under rules 

3 similar to the rules of subsection (b)(2).’’. 

4 (b) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to interests in partnerships trans6 ferred after the date of the enactment of this Act. 

7 SEC. 342. SPECIAL RULES FOR PARTNERS PROVIDING IN8 VESTMENT MANAGEMENT SERVICES TO 

9 PARTNERSHIPS. 

10 (a) IN GENERAL.—Part I of subchapter K of chapter 

11 1 is amended by adding at the end the following new sec12 tion: 

13 ‘‘SEC. 710. SPECIAL RULES FOR PARTNERS PROVIDING IN14 VESTMENT MANAGEMENT SERVICES TO 

15 PARTNERSHIPS. 

16 ‘‘(a) TREATMENT OF DISTRIBUTIVE SHARE OF

17 PARTNERSHIP ITEMS.—For purposes of this title, in the 

18 case of an investment services partnership interest— 

19 ‘‘(1) IN GENERAL.—Notwithstanding section 

20 702(b)— 

21 ‘‘(A) an amount equal to the net capital 

22 gain with respect to such interest for any part23 nership taxable year shall be treated as ordi24 nary income, and 


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1 ‘‘(B) subject to the limitation of paragraph 

2 (2), an amount equal to the net capital loss 

3 with respect to such interest for any partner4 ship taxable year shall be treated as an ordi5 nary loss. 

6 ‘‘(2) RECHARACTERIZATION OF LOSSES LIM7 ITED TO RECHARACTERIZED GAINS.—The amount 

8 treated as ordinary loss under paragraph (1)(B) for 

9 any taxable year shall not exceed the excess (if any) 

10 of— 

11 ‘‘(A) the aggregate amount treated as ordi12 nary income under paragraph (1)(A) with re13 spect to the investment services partnership in14 terest for all preceding partnership taxable 

15 years to which this section applies, over 

16 ‘‘(B) the aggregate amount treated as or17 dinary loss under paragraph (1)(B) with re18 spect to such interest for all preceding partner19 ship taxable years to which this section applies. 

20 ‘‘(3) ALLOCATION TO ITEMS OF GAIN AND

21 LOSS.— 

22 ‘‘(A) NET CAPITAL GAIN.—The amount 

23 treated as ordinary income under paragraph 

24 (1)(A) shall be allocated ratably among the 


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1 items of long-term capital gain taken into ac2 count in determining such net capital gain. 

3 ‘‘(B) NET CAPITAL LOSS.—The amount 

4 treated as ordinary loss under paragraph (1)(B) 

5 shall be allocated ratably among the items of 

6 long-term capital loss and short-term capital 

7 loss taken into account in determining such net 

8 capital loss. 

9 ‘‘(4) TERMS RELATING TO CAPITAL GAINS AND

10 LOSSES.—For purposes of this section— 

11 ‘‘(A) IN GENERAL.—Net capital gain, long12 term capital gain, and long-term capital loss, 

13 with respect to any investment services partner14 ship interest for any taxable year, shall be de15 termined under section 1222, except that such 

16 section shall be applied— 

17 ‘‘(i) without regard to the recharacter18 ization of any item as ordinary income or 

19 ordinary loss under this section, 

20 ‘‘(ii) by only taking into account items 

21 of gain and loss taken into account by the 

22 holder of such interest under section 702 

23 with respect to such interest for such tax24 able year, and 


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1 ‘‘(iii) by treating property which is 

2 taken into account in determining gains 

3 and losses to which section 1231 applies as 

4 capital assets held for more than 1 year. 

5 ‘‘(B) NET CAPITAL LOSS.—The term ‘net 

6 capital loss’ means the excess of the losses from 

7 sales or exchanges of capital assets over the 

8 gains from such sales or exchanges. Rules simi9 lar to the rules of clauses (i) through (iii) of 

10 subparagraph (A) shall apply for purposes of 

11 the preceding sentence. 

12 ‘‘(5) SPECIAL RULES FOR DIVIDENDS.— 

13 ‘‘(A) INDIVIDUALS.—Any dividend allo14 cated to any investment services partnership in15 terest shall not be treated as qualified dividend 

16 income for purposes of section 1(h). 

17 ‘‘(B) CORPORATIONS.—No deduction shall 

18 be allowed under section 243 or 245 with re19 spect to any dividend allocated to any invest20 ment services partnership interest. 

21 ‘‘(6) SPECIAL RULE FOR QUALIFIED SMALL

22 BUSINESS STOCK.—Section 1202 shall not apply to 

23 any gain from the sale or exchange of qualified small 

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1 cated with respect to any investment services part2 nership interest. 

3 ‘‘(b) DISPOSITIONS OF PARTNERSHIP INTERESTS.— 

4 ‘‘(1) GAIN.— 

5 ‘‘(A) IN GENERAL.—Any gain on the dis6 position of an investment services partnership 

7 interest shall be— 

8 ‘‘(i) treated as ordinary income, and 

9 ‘‘(ii) recognized notwithstanding any 

10 other provision of this subtitle. 

11 ‘‘(B) GIFT AND TRANSFERS AT DEATH.— 

12 In the case of a disposition of an investment 

13 services partnership interest by gift or by rea14 son of death of the taxpayer— 

15 ‘‘(i) subparagraph (A) shall not apply, 

16 ‘‘(ii) such interest shall be treated as 

17 an investment services partnership interest 

18 in the hands of the person acquiring such 

19 interest, and 

20 ‘‘(iii) any amount that would have 

21 been treated as ordinary income under this 

22 subsection had the decedent sold such in23 terest immediately before death shall be 

24 treated as an item of income in respect of 

25 a decedent under section 691. 


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1 ‘‘(2) LOSS.—Any loss on the disposition of an 

2 investment services partnership interest shall be 

3 treated as an ordinary loss to the extent of the ex4 cess (if any) of— 

5 ‘‘(A) the aggregate amount treated as ordi6 nary income under subsection (a) with respect 

7 to such interest for all partnership taxable 

8 years to which this section applies, over 

9 ‘‘(B) the aggregate amount treated as or10 dinary loss under subsection (a) with respect to 

11 such interest for all partnership taxable years 

12 to which this section applies. 

13 ‘‘(3) ELECTION WITH RESPECT TO CERTAIN EX14 CHANGES.—Paragraph (1)(A)(ii) shall not apply to 

15 the contribution of an investment services partner16 ship interest to a partnership in exchange for an in17 terest in such partnership if— 

18 ‘‘(A) the taxpayer makes an irrevocable 

19 election to treat the partnership interest re20 ceived in the exchange as an investment serv21 ices partnership interest, and 

22 ‘‘(B) the taxpayer agrees to comply with 

23 such reporting and recordkeeping requirements 

24 as the Secretary may prescribe. 


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1 ‘‘(4) DISTRIBUTIONS OF PARTNERSHIP PROP2 ERTY.— 

3 ‘‘(A) IN GENERAL.—In the case of any dis4 tribution of property by a partnership with re5 spect to any investment services partnership in6 terest held by a partner, the partner receiving 

7 such property shall recognize gain equal to the 

8 excess (if any) of— 

9 ‘‘(i) the fair market value of such 

10 property at the time of such distribution, 

11 over 

12 ‘‘(ii) the adjusted basis of such prop13 erty in the hands of such partner (deter14 mined without regard to subparagraph 

15 (C)). 

16 ‘‘(B) TREATMENT OF GAIN AS ORDINARY

17 INCOME.—Any gain recognized by such partner 

18 under subparagraph (A) shall be treated as or19 dinary income to the same extent and in the 

20 same manner as the increase in such partner’s 

21 distributive share of the taxable income of the 

22 partnership would be treated under subsection 

23 (a) if, immediately prior to the distribution, the 

24 partnership had sold the distributed property at 

25 fair market value and all of the gain from such 


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1 disposition were allocated to such partner. For 

2 purposes of applying subsection (a)(2), any gain 

3 treated as ordinary income under this subpara4 graph shall be treated as an amount treated as 

5 ordinary income under subsection (a)(1)(A). 

6 ‘‘(C) ADJUSTMENT OF BASIS.—In the case 

7 a distribution to which subparagraph (A) ap8 plies, the basis of the distributed property in 

9 the hands of the distributee partner shall be the 

10 fair market value of such property. 

11 ‘‘(D) SPECIAL RULES WITH RESPECT TO

12 MERGERS, DIVISIONS, AND TECHNICAL TERMI13 NATIONS.—In the case of a taxpayer which sat14 isfies requirements similar to the requirements 

15 of subparagraphs (A) and (B) of paragraph (3), 

16 this paragraph and paragraph (1)(A)(ii) shall 

17 not apply to the distribution of a partnership 

18 interest if such distribution is in connection 

19 with a contribution (or deemed contribution) of 

20 any property of the partnership to which sec21 tion 721 applies pursuant to a transaction de22 scribed in paragraph (1)(B) or (2) of section 

23 708(b). 

24 ‘‘(c) INVESTMENT SERVICES PARTNERSHIP INTER25 EST.—For purposes of this section— 


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1 ‘‘(1) IN GENERAL.—The term ‘investment serv2 ices partnership interest’ means any interest in an 

3 investment partnership acquired or held by any per4 son in connection with the conduct of a trade or 

5 business described in paragraph (2) by such person 

6 (or any person related to such person). An interest 

7 in an investment partnership held by any person— 

8 ‘‘(A) shall not be treated as an investment 

9 services partnership interest for any period be10 fore the first date on which it is so held in con11 nection with such a trade or business, 

12 ‘‘(B) shall not cease to be an investment 

13 services partnership interest merely because 

14 such person holds such interest other than in 

15 connection with such a trade or business, and 

16 ‘‘(C) shall be treated as an investment 

17 services partnership interest if acquired from a 

18 related person in whose hands such interest was 

19 an investment services partnership interest. 

20 ‘‘(2) BUSINESSES TO WHICH THIS SECTION AP21 PLIES.—A trade or business is described in this 

22 paragraph if such trade or business primarily in23 volves the performance of any of the following serv24 ices with respect to assets held (directly or indiVerDate Mar 15 2010 00:42 Apr 04, 2012 Jkt 099200 PO 00000 Frm 00248 Fmt 6652 Sfmt 6201 E:\BILLS\S2252.IS S2252

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1 rectly) by the investment partnership referred to in 

2 paragraph (1): 

3 ‘‘(A) Advising as to the advisability of in4 vesting in, purchasing, or selling any specified 

5 asset. 

6 ‘‘(B) Managing, acquiring, or disposing of 

7 any specified asset. 

8 ‘‘(C) Arranging financing with respect to 

9 acquiring specified assets. 

10 ‘‘(D) Any activity in support of any service 

11 described in subparagraphs (A) through (C). 

12 ‘‘(3) INVESTMENT PARTNERSHIP.— 

13 ‘‘(A) IN GENERAL.—The term ‘investment 

14 partnership’ means any partnership if, at the 

15 end of any calendar quarter ending after the 

16 date of enactment of this section— 

17 ‘‘(i) substantially all of the assets of 

18 the partnership are specified assets (deter19 mined without regard to any section 197 

20 intangible within the meaning of section 

21 197(d)), and 

22 ‘‘(ii) more than half of the capital of 

23 the partnership is attributable to qualified 

24 capital interests which (in the hands of the 

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1 erty not held in connection with a trade or 

2 business. 

3 ‘‘(B) SPECIAL RULES FOR DETERMINING

4 IF PROPERTY NOT HELD IN CONNECTION WITH

5 TRADE OR BUSINESS.—Except as otherwise 

6 provided by the Secretary, for purposes of de7 termining whether any interest in a partnership 

8 constitutes property not held in connection with 

9 a trade or business under subparagraph 

10 (A)(ii)— 

11 ‘‘(i) any election under subsection (e) 

12 or (f) of section 475 shall be disregarded, 

13 and 

14 ‘‘(ii) paragraph (5)(B) shall not apply. 

15 ‘‘(C) ANTIABUSE RULES.—The Secretary 

16 may issue regulations or other guidance which 

17 prevent the avoidance of the purposes of sub18 paragraph (A), including regulations or other 

19 guidance which treat convertible and contingent 

20 debt (and other debt having the attributes of 

21 equity) as a capital interest in the partnership. 

22 ‘‘(D) CONTROLLED GROUPS OF ENTI23 TIES.— 

24 ‘‘(i) IN GENERAL.—In the case of a 

25 controlled group of entities, if an interest 


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•S 2252 IS

1 in the partnership received in exchange for 

2 a contribution to the capital of the part3 nership by any member of such controlled 

4 group would (in the hands of such mem5 ber) constitute property held in connection 

6 with a trade or business, then any interest 

7 in such partnership held by any member of 

8 such group shall be treated for purposes of 

9 subparagraph (A) as constituting (in the 

10 hands of such member) property held in 

11 connection with a trade or business. 

12 ‘‘(ii) CONTROLLED GROUP OF ENTI13 TIES.—For purposes of clause (i), the term 

14 ‘controlled group of entities’ means a con15 trolled group of corporations as defined in 

16 section 1563(a)(1), applied without regard 

17 to subsections (a)(4) and (b)(2) of section 

18 1563. A partnership or any other entity 

19 (other than a corporation) shall be treated 

20 as a member of a controlled group of enti21 ties if such entity is controlled (within the 

22 meaning of section 954(d)(3)) by members 

23 of such group (including any entity treated 

24 as a member of such group by reason of 

25 this sentence). 


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1 ‘‘(E) SPECIAL RULE FOR CORPORA2 TIONS.—For purposes of this paragraph, in the 

3 case of a corporation, the determination of 

4 whether property is held in connection with a 

5 trade or business shall be determined as if the 

6 taxpayer were an individual. 

7 ‘‘(4) SPECIFIED ASSET.—The term ‘specified 

8 asset’ means securities (as defined in section 

9 475(c)(2) without regard to the last sentence there10 of), real estate held for rental or investment, inter11 ests in partnerships, commodities (as defined in sec12 tion 475(e)(2)), cash or cash equivalents, or options 

13 or derivative contracts with respect to any of the 

14 foregoing. 

15 ‘‘(5) RELATED PERSONS.— 

16 ‘‘(A) IN GENERAL.—A person shall be 

17 treated as related to another person if the rela18 tionship between such persons is described in 

19 section 267(b) or 707(b). 

20 ‘‘(B) ATTRIBUTION OF PARTNER SERV21 ICES.—Any service described in paragraph (2) 

22 which is provided by a partner of a partnership 

23 shall be treated as also provided by such part24 nership. 


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1 ‘‘(d) EXCEPTION FOR CERTAIN CAPITAL INTER2 ESTS.— 

3 ‘‘(1) IN GENERAL.—In the case of any portion 

4 of an investment services partnership interest which 

5 is a qualified capital interest, all items of gain and 

6 loss (and any dividends) which are allocated to such 

7 qualified capital interest shall not be taken into ac8 count under subsection (a) if— 

9 ‘‘(A) allocations of items are made by the 

10 partnership to such qualified capital interest in 

11 the same manner as such allocations are made 

12 to other qualified capital interests held by part13 ners who do not provide any services described 

14 in subsection (c)(2) and who are not related to 

15 the partner holding the qualified capital inter16 est, and 

17 ‘‘(B) the allocations made to such other in18 terests are significant compared to the alloca19 tions made to such qualified capital interest. 

20 ‘‘(2) AUTHORITY TO PROVIDE EXCEPTIONS TO

21 ALLOCATION REQUIREMENTS.—To the extent pro22 vided by the Secretary in regulations or other guid23 ance— 

24 ‘‘(A) ALLOCATIONS TO PORTION OF QUALI25 FIED CAPITAL INTEREST.—Paragraph (1) may 


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•S 2252 IS

1 be applied separately with respect to a portion 

2 of a qualified capital interest. 

3 ‘‘(B) NO OR INSIGNIFICANT ALLOCATIONS

4 TO NONSERVICE PROVIDERS.—In any case in 

5 which the requirements of paragraph (1)(B) are 

6 not satisfied, items of gain and loss (and any 

7 dividends) shall not be taken into account under 

8 subsection (a) to the extent that such items are 

9 properly allocable under such regulations or 

10 other guidance to qualified capital interests. 

11 ‘‘(C) ALLOCATIONS TO SERVICE PRO12 VIDERS’ QUALIFIED CAPITAL INTERESTS WHICH

13 ARE LESS THAN OTHER ALLOCATIONS.—Alloca14 tions shall not be treated as failing to meet the 

15 requirement of paragraph (1)(A) merely be16 cause the allocations to the qualified capital in17 terest represent a lower return than the alloca18 tions made to the other qualified capital inter19 ests referred to in such paragraph. 

20 ‘‘(3) SPECIAL RULE FOR CHANGES IN SERVICES

21 AND CAPITAL CONTRIBUTIONS.—In the case of an 

22 interest in a partnership which was not an invest23 ment services partnership interest and which, by 

24 reason of a change in the services with respect to as25 sets held (directly or indirectly) by the partnership 


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•S 2252 IS

1 or by reason of a change in the capital contributions 

2 to such partnership, becomes an investment services 

3 partnership interest, the qualified capital interest of 

4 the holder of such partnership interest immediately 

5 after such change shall not, for purposes of this sub6 section, be less than the fair market value of such 

7 interest (determined immediately before such 

8 change). 

9 ‘‘(4) SPECIAL RULE FOR TIERED PARTNER10 SHIPS.—Except as otherwise provided by the Sec11 retary, in the case of tiered partnerships, all items 

12 which are allocated in a manner which meets the re13 quirements of paragraph (1) to qualified capital in14 terests in a lower-tier partnership shall retain such 

15 character to the extent allocated on the basis of 

16 qualified capital interests in any upper-tier partner17 ship. 

18 ‘‘(5) EXCEPTION FOR NO-SELF-CHARGED

19 CARRY AND MANAGEMENT FEE PROVISIONS.—Ex20 cept as otherwise provided by the Secretary, an in21 terest shall not fail to be treated as satisfying the 

22 requirement of paragraph (1)(A) merely because the 

23 allocations made by the partnership to such interest 

24 do not reflect the cost of services described in sub25 section (c)(2) which are provided (directly or indiVerDate Mar 15 2010 00:42 Apr 04, 2012 Jkt 099200 PO 00000 Frm 00255 Fmt 6652 Sfmt 6201 E:\BILLS\S2252.IS S2252

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•S 2252 IS

1 rectly) to the partnership by the holder of such in2 terest (or a related person). 

3 ‘‘(6) SPECIAL RULE FOR DISPOSITIONS.—In the 

4 case of any investment services partnership interest 

5 any portion of which is a qualified capital interest, 

6 subsection (b) shall not apply to so much of any 

7 gain or loss as bears the same proportion to the en8 tire amount of such gain or loss as— 

9 ‘‘(A) the distributive share of gain or loss 

10 that would have been allocated to the qualified 

11 capital interest (consistent with the require12 ments of paragraph (1)) if the partnership had 

13 sold all of its assets at fair market value imme14 diately before the disposition, bears to 

15 ‘‘(B) the distributive share of gain or loss 

16 that would have been so allocated to the invest17 ment services partnership interest of which such 

18 qualified capital interest is a part. 

19 ‘‘(7) QUALIFIED CAPITAL INTEREST.—For pur20 poses of this section— 

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

22 capital interest’ means so much of a partner’s 

23 interest in the capital of the partnership as is 

24 attributable to— 


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1 ‘‘(i) the fair market value of any 

2 money or other property contributed to the 

3 partnership in exchange for such interest 

4 (determined without regard to section 

5 752(a)), 

6 ‘‘(ii) any amounts which have been in7 cluded in gross income under section 83 

8 with respect to the transfer of such inter9 est, and 

10 ‘‘(iii) the excess (if any) of— 

11 ‘‘(I) any items of income and 

12 gain taken into account under section 

13 702 with respect to such interest, over 

14 ‘‘(II) any items of deduction and 

15 loss so taken into account. 

16 ‘‘(B) ADJUSTMENT TO QUALIFIED CAPITAL

17 INTEREST.— 

18 ‘‘(i) DISTRIBUTIONS AND LOSSES.— 

19 The qualified capital interest shall be re20 duced by distributions from the partner21 ship with respect to such interest and by 

22 the excess (if any) of the amount described 

23 in subparagraph (A)(iii)(II) over the 

24 amount described in subparagraph 

25 (A)(iii)(I). 


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1 ‘‘(ii) SPECIAL RULE FOR CONTRIBU2 TIONS OF PROPERTY.—In the case of any 

3 contribution of property described in sub4 paragraph (A)(i) with respect to which the 

5 fair market value of such property is not 

6 equal to the adjusted basis of such prop7 erty immediately before such contribution, 

8 proper adjustments shall be made to the 

9 qualified capital interest to take into ac10 count such difference consistent with such 

11 regulations or other guidance as the Sec12 retary may provide. 

13 ‘‘(C) TECHNICAL TERMINATIONS, ETC., 

14 DISREGARDED.—No increase or decrease in the 

15 qualified capital interest of any partner shall re16 sult from a termination, merger, consolidation, 

17 or division described in section 708, or any 

18 similar transaction. 

19 ‘‘(8) TREATMENT OF CERTAIN LOANS.— 

20 ‘‘(A) PROCEEDS OF PARTNERSHIP LOANS

21 NOT TREATED AS QUALIFIED CAPITAL INTER22 EST OF SERVICE PROVIDING PARTNERS.—For 

23 purposes of this subsection, an investment serv24 ices partnership interest shall not be treated as 

25 a qualified capital interest to the extent that 


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•S 2252 IS

1 such interest is acquired in connection with the 

2 proceeds of any loan or other advance made or 

3 guaranteed, directly or indirectly, by any other 

4 partner or the partnership (or any person re5 lated to any such other partner or the partner6 ship). The preceding sentence shall not apply to 

7 the extent the loan or other advance is repaid 

8 before the date of the enactment of this section 

9 unless such repayment is made with the pro10 ceeds of a loan or other advance described in 

11 the preceding sentence. 

12 ‘‘(B) REDUCTION IN ALLOCATIONS TO

13 QUALIFIED CAPITAL INTERESTS FOR LOANS

14 FROM NONSERVICE-PROVIDING PARTNERS TO

15 THE PARTNERSHIP.—For purposes of this sub16 section, any loan or other advance to the part17 nership made or guaranteed, directly or indi18 rectly, by a partner not providing services de19 scribed in subsection (c)(2) to the partnership 

20 (or any person related to such partner) shall be 

21 taken into account in determining the qualified 

22 capital interests of the partners in the partner23 ship. 

24 ‘‘(e) OTHER INCOME AND GAIN IN CONNECTION

25 WITH INVESTMENT MANAGEMENT SERVICES.— 


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1 ‘‘(1) IN GENERAL.—If— 

2 ‘‘(A) a person performs (directly or indi3 rectly) investment management services for any 

4 investment entity, 

5 ‘‘(B) such person holds (directly or indi6 rectly) a disqualified interest with respect to 

7 such entity, and 

8 ‘‘(C) the value of such interest (or pay9 ments thereunder) is substantially related to 

10 the amount of income or gain (whether or not 

11 realized) from the assets with respect to which 

12 the investment management services are per13 formed, 

14 any income or gain with respect to such interest 

15 shall be treated as ordinary income. Rules similar to 

16 the rules of subsections (a)(5) and (d) shall apply 

17 for purposes of this subsection. 

18 ‘‘(2) DEFINITIONS.—For purposes of this sub19 section— 

20 ‘‘(A) DISQUALIFIED INTEREST.— 

21 ‘‘(i) IN GENERAL.—The term ‘dis22 qualified interest’ means, with respect to 

23 any investment entity— 

24 ‘‘(I) any interest in such entity 

25 other than indebtedness, 


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•S 2252 IS

1 ‘‘(II) convertible or contingent 

2 debt of such entity, 

3 ‘‘(III) any option or other right 

4 to acquire property described in sub5 clause (I) or (II), and 

6 ‘‘(IV) any derivative instrument 

7 entered into (directly or indirectly) 

8 with such entity or any investor in 

9 such entity. 

10 ‘‘(ii) EXCEPTIONS.—Such term shall 

11 not include— 

12 ‘‘(I) a partnership interest, 

13 ‘‘(II) except as provided by the 

14 Secretary, any interest in a taxable 

15 corporation, and 

16 ‘‘(III) except as provided by the 

17 Secretary, stock in an S corporation. 

18 ‘‘(B) TAXABLE CORPORATION.—The term 

19 ‘taxable corporation’ means— 

20 ‘‘(i) a domestic C corporation, or 

21 ‘‘(ii) a foreign corporation substan22 tially all of the income of which is— 

23 ‘‘(I) effectively connected with 

24 the conduct of a trade or business in 

25 the United States, or 


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•S 2252 IS

1 ‘‘(II) subject to a comprehensive 

2 foreign income tax (as defined in sec3 tion 457A(d)(2)). 

4 ‘‘(C) INVESTMENT MANAGEMENT SERV5 ICES.—The term ‘investment management serv6 ices’ means a substantial quantity of any of the 

7 services described in subsection (c)(2). 

8 ‘‘(D) INVESTMENT ENTITY.—The term ‘in9 vestment entity’ means any entity which, if it 

10 were a partnership, would be an investment 

11 partnership. 

12 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 

13 such regulations or other guidance as is necessary or ap14 propriate to carry out the purposes of this section, includ15 ing regulations or other guidance to— 

16 ‘‘(1) provide modifications to the application of 

17 this section (including treating related persons as 

18 not related to one another) to the extent such modi19 fication is consistent with the purposes of this sec20 tion, 

21 ‘‘(2) prevent the avoidance of the purposes of 

22 this section, and 

23 ‘‘(3) coordinate this section with the other pro24 visions of this title. 


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•S 2252 IS

1 ‘‘(g) CROSS REFERENCE.—For 40 percent penalty on 

2 certain underpayments due to the avoidance of this sec3 tion, see section 6662.’’. 

4 (b) APPLICATION OF SECTION 751 TO INDIRECT DIS5 POSITIONS OF INVESTMENT SERVICES PARTNERSHIP IN6 TERESTS.— 

7 (1) IN GENERAL.—Subsection (a) of section 

8 751 is amended by striking ‘‘or’’ at the end of para9 graph (1), by inserting ‘‘or’’ at the end of paragraph 

10 (2), and by inserting after paragraph (2) the fol11 lowing new paragraph: 

12 ‘‘(3) investment services partnership interests 

13 held by the partnership,’’. 

14 (2) CERTAIN DISTRIBUTIONS TREATED AS

15 SALES OR EXCHANGES.—Subparagraph (A) of sec16 tion 751(b)(1) is amended by striking ‘‘or’’ at the 

17 end of clause (i), by inserting ‘‘or’’ at the end of 

18 clause (ii), and by inserting after clause (ii) the fol19 lowing new clause: 

20 ‘‘(iii) investment services partnership 

21 interests held by the partnership,’’. 

22 (3) APPLICATION OF SPECIAL RULES IN THE

23 CASE OF TIERED PARTNERSHIPS.—Subsection (f) of 

24 section 751 is amended— 


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1 (A) by striking ‘‘or’’ at the end of para2 graph (1), by inserting ‘‘or’’ at the end of para3 graph (2), and by inserting after paragraph (2) 

4 the following new paragraph: 

5 ‘‘(3) an investment services partnership interest 

6 held by the partnership,’’, and 

7 (B) by striking ‘‘partner.’’ and inserting 

8 ‘‘partner (other than a partnership in which it 

9 holds an investment services partnership inter10 est).’’. 

11 (4) INVESTMENT SERVICES PARTNERSHIP IN12 TERESTS; QUALIFIED CAPITAL INTERESTS.—Section 

13 751 is amended by adding at the end the following 

14 new subsection: 

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 

25 interest which is a qualified capital interest (deterVerDate Mar 15 2010 00:42 Apr 04, 2012 Jkt 099200 PO 00000 Frm 00264 Fmt 6652 Sfmt 6201 E:\BILLS\S2252.IS S2252

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1 mined under rules similar to the rules of section 

2 710(d)). 

3 ‘‘(3) EXCEPTION FOR PUBLICLY TRADED PART4 NERSHIPS.—In the case of an exchange of an inter5 est in a publicly traded partnership (as defined in 

6 section 7704) to which subsection (a) applies— 

7 ‘‘(A) this section shall be applied without 

8 regard to subsections (a)(3), (b)(1)(A)(iii), and 

9 (f)(3), and 

10 ‘‘(B) such partnership shall be treated as 

11 owning its proportionate share of the property 

12 of any other partnership in which it is a part13 ner. 

14 ‘‘(4) RECOGNITION OF GAINS.—Any gain with 

15 respect to which subsection (a) applies by reason of 

16 paragraph (3) thereof shall be recognized notwith17 standing any other provision of this title. 

18 ‘‘(5) COORDINATION WITH INVENTORY

19 ITEMS.—An investment services partnership interest 

20 held by the partnership shall not be treated as an 

21 inventory item of the partnership. 

22 ‘‘(6) PREVENTION OF DOUBLE COUNTING.— 

23 Under regulations or other guidance prescribed by 

24 the Secretary, subsection (a)(3) shall not apply with 

25 respect to any amount to which section 710 applies. 


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1 ‘‘(7) VALUATION METHODS.—The Secretary 

2 shall prescribe regulations or other guidance which 

3 provide the acceptable methods for valuing invest4 ment services partnership interests for purposes of 

5 this section.’’. 

6 (c) TREATMENT FOR PURPOSES OF SECTION

7 7704.—Subsection (d) of section 7704 is amended by add8 ing at the end the following new paragraph: 

9 ‘‘(6) INCOME FROM CERTAIN CARRIED INTER10 ESTS NOT QUALIFIED.— 

11 ‘‘(A) IN GENERAL.—Specified carried in12 terest income shall not be treated as qualifying 

13 income. 

14 ‘‘(B) SPECIFIED CARRIED INTEREST IN15 COME.—For purposes of this paragraph— 

16 ‘‘(i) IN GENERAL.—The term ‘speci17 fied carried interest income’ means— 

18 ‘‘(I) any item of income or gain 

19 allocated to an investment services 

20 partnership interest (as defined in 

21 section 710(c)) held by the partner22 ship, 

23 ‘‘(II) any gain on the disposition 

24 of an investment services partnership 

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1 ship interest to which (in the hands of 

2 the partnership) section 751 applies, 

3 and 

4 ‘‘(III) any income or gain taken 

5 into account by the partnership under 

6 subsection (b)(4) or (e) of section 

7 710. 

8 ‘‘(ii) EXCEPTION FOR QUALIFIED CAP9 ITAL INTERESTS.—A rule similar to the 

10 rule of section 710(d) shall apply for pur11 poses of clause (i). 

12 ‘‘(C) COORDINATION WITH OTHER PROVI13 SIONS.—Subparagraph (A) shall not apply to 

14 any item described in paragraph (1)(E) (or so 

15 much of paragraph (1)(F) as relates to para16 graph (1)(E)). 

17 ‘‘(D) SPECIAL RULES FOR CERTAIN PART18 NERSHIPS.— 

19 ‘‘(i) CERTAIN PARTNERSHIPS OWNED

20 BY REAL ESTATE INVESTMENT TRUSTS.— 

21 Subparagraph (A) shall not apply in the 

22 case of a partnership which meets each of 

23 the following requirements: 

24 ‘‘(I) Such partnership is treated 

25 as publicly traded under this section 


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1 solely by reason of interests in such 

2 partnership being convertible into in3 terests in a real estate investment 

4 trust which is publicly traded. 

5 ‘‘(II) Fifty percent or more of 

6 the capital and profits interests of 

7 such partnership are owned, directly 

8 or indirectly, at all times during the 

9 taxable year by such real estate in10 vestment trust (determined with the 

11 application of section 267(c)). 

12 ‘‘(III) Such partnership meets 

13 the requirements of paragraphs (2), 

14 (3), and (4) of section 856(c). 

15 ‘‘(ii) CERTAIN PARTNERSHIPS OWN16 ING OTHER PUBLICLY TRADED PARTNER17 SHIPS.—Subparagraph (A) shall not apply 

18 in the case of a partnership which meets 

19 each of the following requirements: 

20 ‘‘(I) Substantially all of the as21 sets of such partnership consist of in22 terests in one or more publicly traded 

23 partnerships (determined without re24 gard to subsection (b)(2)). 


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1 ‘‘(II) Substantially all of the in2 come of such partnership is ordinary 

3 income or section 1231 gain (as de4 fined in section 1231(a)(3)). 

5 ‘‘(E) TRANSITIONAL RULE.—Subpara6 graph (A) shall not apply to any taxable year 

7 of the partnership beginning before the date 

8 which is 10 years after the date of the enact9 ment of this paragraph.’’. 

10 (d) IMPOSITION OF PENALTY ON UNDERPAY11 MENTS.— 

12 (1) IN GENERAL.—Subsection (b) of section 

13 6662 is amended by inserting after paragraph (7) 

14 the following new paragraph: 

15 ‘‘(8) The application of section 710(e) or the 

16 regulations or other guidance prescribed under sec17 tion 710(f) to prevent the avoidance of the purposes 

18 of section 710.’’. 

19 (2) AMOUNT OF PENALTY.— 

20 (A) IN GENERAL.—Section 6662 is amend21 ed by adding at the end the following new sub22 section: 

23 ‘‘(k) INCREASE IN PENALTY IN CASE OF PROPERTY

24 TRANSFERRED FOR INVESTMENT MANAGEMENT SERV25 ICES.—In the case of any portion of an underpayment to 


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1 which this section applies by reason of subsection (b)(8), 

2 subsection (a) shall be applied with respect to such portion 

3 by substituting ‘40 percent’ for ‘20 percent’.’’. 

4 (B) CONFORMING AMENDMENT.—Subpara5 graph (B) of section 6662A(e)(2) is amended 

6 by striking ‘‘or (i)’’ and inserting ‘‘, (i), or (k)’’. 

7 (3) SPECIAL RULES FOR APPLICATION OF REA8 SONABLE CAUSE EXCEPTION.—Subsection (c) of sec9 tion 6664 is amended— 

10 (A) by redesignating paragraphs (3) and 

11 (4) as paragraphs (4) and (5), respectively; 

12 (B) by striking ‘‘paragraph (3)’’ in para13 graph (5)(A), as so redesignated, and inserting 

14 ‘‘paragraph (4)’’; and 

15 (C) by inserting after paragraph (2) the 

16 following new paragraph: 

17 ‘‘(3) SPECIAL RULE FOR UNDERPAYMENTS AT18 TRIBUTABLE TO INVESTMENT MANAGEMENT SERV19 ICES.— 

20 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

21 not apply to any portion of an underpayment to 

22 which section 6662 applies by reason of sub23 section (b)(8) unless— 


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1 ‘‘(i) the relevant facts affecting the 

2 tax treatment of the item are adequately 

3 disclosed, 

4 ‘‘(ii) there is or was substantial au5 thority for such treatment, and 

6 ‘‘(iii) the taxpayer reasonably believed 

7 that such treatment was more likely than 

8 not the proper treatment. 

9 ‘‘(B) RULES RELATING TO REASONABLE

10 BELIEF.—Rules similar to the rules of sub11 section (d)(3) shall apply for purposes of sub12 paragraph (A)(iii).’’. 

13 (e) INCOME AND LOSS FROM INVESTMENT SERVICES

14 PARTNERSHIP INTERESTS TAKEN INTO ACCOUNT IN DE15 TERMINING NET EARNINGS FROM SELF-EMPLOYMENT.— 

16 (1) INTERNAL REVENUE CODE.— 

17 (A) IN GENERAL.—Section 1402(a) is 

18 amended by striking ‘‘and’’ at the end of para19 graph (16), by striking the period at the end of 

20 paragraph (17) and inserting ‘‘; and’’, and by 

21 inserting after paragraph (17) the following 

22 new paragraph: 

23 ‘‘(18) notwithstanding the preceding provisions 

24 of this subsection, in the case of any individual en25 gaged in the trade or business of providing services 


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1 described in section 710(c)(2) with respect to any 

2 entity, investment services partnership income or 

3 loss (as defined in subsection (m)) of such individual 

4 with respect to such entity shall be taken into ac5 count in determining the net earnings from self-em6 ployment of such individual.’’. 

7 (B) INVESTMENT SERVICES PARTNERSHIP

8 INCOME OR LOSS.—Section 1402 is amended by 

9 adding at the end the following new subsection: 

10 ‘‘(m) INVESTMENT SERVICES PARTNERSHIP INCOME

11 OR LOSS.—For purposes of subsection (a)— 

12 ‘‘(1) IN GENERAL.—The term ‘investment serv13 ices partnership income or loss’ means, with respect 

14 to any investment services partnership interest (as 

15 defined in section 710(c)) or disqualified interest (as 

16 defined in section 710(e)), the net of— 

17 ‘‘(A) the amounts treated as ordinary in18 come or ordinary loss under subsections (b) and 

19 (e) of section 710 with respect to such interest, 

20 ‘‘(B) all items of income, gain, loss, and 

21 deduction allocated to such interest, and 

22 ‘‘(C) the amounts treated as realized from 

23 the sale or exchange of property other than a 

24 capital asset under section 751 with respect to 

25 such interest. 


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1 ‘‘(2) EXCEPTION FOR QUALIFIED CAPITAL IN2 TERESTS.—A rule similar to the rule of section 

3 710(d) shall apply for purposes of applying para4 graph (1)(B).’’. 

5 (2) SOCIAL SECURITY ACT.—Section 211(a) of 

6 the Social Security Act is amended by striking 

7 ‘‘and’’ at the end of paragraph (15), by striking the 

8 period at the end of paragraph (16) and inserting ‘‘; 

9 and’’, and by inserting after paragraph (16) the fol10 lowing new paragraph: 

11 ‘‘(17) 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) of the Internal Rev15 enue Code of 1986 with respect to any entity, invest16 ment services partnership income or loss (as defined 

17 in section 1402(m) of such Code) shall be taken into 

18 account in determining the net earnings from self19 employment of such individual.’’. 

20 (f) CONFORMING AMENDMENTS.— 

21 (1) Subsection (d) of section 731 is amended by 

22 inserting ‘‘section 710(b)(4) (relating to distribu23 tions of partnership property),’’ after ‘‘to the extent 

24 otherwise provided by’’. 


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1 (2) Section 741 is amended by inserting ‘‘or 

2 section 710 (relating to special rules for partners 

3 providing investment management services to part4 nerships)’’ before the period at the end. 

5 (3) The table of sections for part I of sub6 chapter K of chapter 1 is amended by adding at the 

7 end the following new item: 

‘‘Sec. 710. Special rules for partners providing investment management services 

to partnerships.’’. 

8 (g) EFFECTIVE DATE.— 

9 (1) IN GENERAL.—Except as otherwise pro10 vided in this subsection, the amendments made by 

11 this section shall apply to taxable years ending after 

12 the date of the enactment of this Act. 

13 (2) PARTNERSHIP TAXABLE YEARS WHICH IN14 CLUDE EFFECTIVE DATE.—In applying section 

15 710(a) of the Internal Revenue Code of 1986 (as 

16 added by this section) in the case of any partnership 

17 taxable year which includes the date of the enact18 ment of this Act, the amount of the net capital gain 

19 referred to in such section shall be treated as being 

20 the lesser of the net capital gain for the entire part21 nership taxable year or the net capital gain deter22 mined by only taking into account items attributable 

23 to the portion of the partnership taxable year which 

24 is after such date. 


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1 (3) DISPOSITIONS OF PARTNERSHIP INTER2 ESTS.— 

3 (A) IN GENERAL.—Section 710(b) of such 

4 Code (as added by this section) shall apply to 

5 dispositions and distributions after the date of 

6 the enactment of this Act. 

7 (B) INDIRECT DISPOSITIONS.—The amend8 ments made by subsection (b) shall apply to 

9 transactions after the date of the enactment of 

10 this Act. 

11 (4) OTHER INCOME AND GAIN IN CONNECTION

12 WITH INVESTMENT MANAGEMENT SERVICES.—Sec13 tion 710(e) of such Code (as added by this section) 

14 shall take effect on the date of the enactment of this 

15 Act. 

16 Subtitle F—Raising the Capital 

17 Gains Rate 

18 SEC. 351. INCREASED CAPITAL GAINS RATE FOR HIGH-IN19 COME INDIVIDUALS. 

20 (a) IN GENERAL.—Paragraph (1) of section 1(h) is 

21 amended— 

22 (1) in subparagraph (C), by striking ‘‘of the ad23 justed net capital gain’’ and all that follows, and in24 serting ‘‘of the lesser of— 


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1 ‘‘(i) so much of the adjusted net cap2 ital gain (or, if less, taxable income) as ex3 ceeds the amount on which a tax is deter4 mined under subparagraph (B), or 

5 ‘‘(ii) the excess (if any) of— 

6 ‘‘(I) $50,000 ($100,000 in the 

7 case of a joint return), over 

8 ‘‘(II) the sum of the amounts on 

9 which a tax is determined under sub10 paragraphs (A) and (B), and’’, and 

11 (2) by striking subparagraphs (D) and (E) and 

12 inserting the following: 

13 ‘‘(D) the lesser of— 

14 ‘‘(i) 28 percent, or 

15 ‘‘(ii) the highest marginal tax rate de16 termined under this section (determined 

17 without regard to this subsection) which 

18 would be imposed on the taxable income of 

19 the taxpayer in excess of the sum of the 

20 amount on which tax is determined under 

21 the preceding subparagraphs of this para22 graph, 

23 multiplied by such amount of taxable income.’’. 

24 (b) MINIMUM TAX.—Paragraph (3) of section 55(b) 

25 is amended— 


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1 (1) in subparagraph (C), by striking ‘‘of the ad2 justed net capital gain’’ and all that follows, and in3 serting ‘‘of the lesser of— 

4 ‘‘(i) so much of the adjusted net cap5 ital gain (or, if less, taxable excess) as ex6 ceeds the amount on which tax is deter7 mined under subparagraph (B), or’’. 

8 ‘‘(ii) the excess described in section 

9 1(h)(1)(C)(ii), plus’’, and 

10 (2) by striking subparagraphs (D) inserting the 

11 following: 

12 ‘‘(D) the lesser of— 

13 ‘‘(i) 28 percent, or 

14 ‘‘(ii) the highest marginal tax rate de15 termined under section 1 (determined with16 out regard to subsection (h)) which would 

17 be imposed on the taxable excess of the 

18 taxpayer in excess of the sum of the 

19 amount on which tax is determined under 

20 the preceding subparagraphs of this para21 graph, 

22 multiplied by such amount of taxable excess.’’. 

23 (c) CONFORMING AMENDMENTS.— 

24 (1) The following provisions are amended by 

25 striking ‘‘15 percent’’ and inserting ‘‘28 percent’’: 


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1 (A) Section 1445(e)(1). 

2 (B) The second sentence of section 

3 7518(g)(6)(A). 

4 (C) Section 53511(f)(2) of title 46, United 

5 States Code. 

6 (2) Section 1445(e)(6) is amended by striking 

7 ‘‘15 percent (20 percent in the case of taxable years 

8 beginning after December 31, 2010)’’ and inserting 

9 ‘‘28 percent’’. 

10 (d) EFFECTIVE DATES.— 

11 (1) IN GENERAL.—Except as provided in para12 graph (2), the amendments made by this section 

13 shall apply to taxable years beginning after Decem14 ber 31, 2012. 

15 (2) WITHHOLDING.—The amendments made by 

16 paragraphs (1)(A) and (2) of subsection (c) shall 

17 apply to amounts paid on or after January 1, 2013. 

18 Subtitle G—Pension Guaranty 

19 Improvement 

20 SEC. 361. SHORT TITLE. 

21 This subtitle may be cited as the ‘‘Pension Guaranty 

22 Improvement Act of 2012’’. 

23 SEC. 362. FINDINGS. 

24 Congress makes the following findings: 


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1 (1) The Pension Benefit Guaranty Corporation 

2 (referred to in this section as the ‘‘Corporation’’) 

3 plays a critical role in helping to protect the retire4 ment security of the 44,000,000 workers and retir5 ees with defined benefit pension plans. 

6 (2) The Corporation has struggled over the 

7 years to address deficiencies and implement long8 term strategies for success. 

9 (3) The Corporation faces long-term fiscal chal10 lenges, which have been exacerbated by the recent fi11 nancial crisis. 

12 (4) It is necessary for Congress to take imme13 diate steps to improve the governance of the Cor14 poration and ensure appropriate oversight by, and 

15 accountability to, key stakeholders, including labor, 

16 plan sponsors, and retirees. 

17 (5) It is further necessary to takes steps to en18 sure that the guaranty provided by the Corporation 

19 is fair to participants and that the Corporation has 

20 sufficient resources to satisfy its obligations. 

21 SEC. 363. PENSION BENEFIT GUARANTY CORPORATION 

22 GOVERNANCE IMPROVEMENT. 

23 (a) BOARD OF DIRECTORS OF THE PENSION BEN24 EFIT GUARANTY CORPORATION.— 


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1 (1) IN GENERAL.—Section 4002(d) of the Em2 ployee Retirement Income Security Act of 1974 (29 

3 U.S.C. 1302(d)) is amended to read as follows: 

4 ‘‘(d)(1) The board of directors of the corporation con5 sists of— 

6 ‘‘(A) the Secretary of the Treasury, the Sec7 retary of Labor, and the Secretary of Commerce; 

8 and 

9 ‘‘(B) 4 other members. 

10 ‘‘(2)(A) The members of the board of directors de11 scribed under paragraph (1)(B)— 

12 ‘‘(i) shall be appointed by the President; and 

13 ‘‘(ii) shall have expertise relevant to business of 

14 the corporation, which may include experience with 

15 insurance programs, defined benefit pension plans, 

16 or institutional asset management. 

17 ‘‘(B) Except as provided in subparagraph (C)(ii), 

18 each member of the board of directors described under 

19 paragraph (1)(B) shall be appointed for a term of 4 years. 

20 ‘‘(C)(i) The initial members of the board of directors 

21 described under paragraph (1)(B) shall be appointed as 

22 soon as practicable after the date of enactment of the Pen23 sion Guaranty Improvement Act of 2012. 


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1 ‘‘(ii) Of the initial members of the board of directors 

2 described under paragraph (1)(B) and appointed under 

3 clause (i)— 

4 ‘‘(I) the term of one such member shall end on 

5 December 31, 2013; 

6 ‘‘(II) the term of one such member shall end on 

7 December 31, 2014; 

8 ‘‘(III) the term of one such member shall end 

9 on December 31, 2015; and 

10 ‘‘(IV) the term of one such member shall end 

11 on December 31, 2016. 

12 ‘‘(D)(i) Not more than 2 members of the board of 

13 directors described under paragraph (1)(B) may be mem14 bers of the same political party. 

15 ‘‘(ii) At least 1 member of the board of directors shall 

16 be an enrolled actuary or other financial expert. 

17 ‘‘(iii) At least 1 member of the board of directors 

18 shall have experience with the issues unique to retired plan 

19 participants. 

20 ‘‘(E)(i) Any vacancy on the board of directors shall 

21 be filled in the manner in which the original appointment 

22 was made. 

23 ‘‘(ii) In the event of vacancy in the office of the Sec24 retary of the Treasury, the Secretary of Labor, or the Sec25 retary of Commerce and pending the appointment of a 


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•S 2252 IS

1 successor, or during the absence or disability of such a 

2 Secretary, the applicable acting Secretary shall be a mem3 ber of the board of directors. 

4 ‘‘(iii) A member of the board of directors appointed 

5 to fill a vacancy occurring before the expiration of the 

6 term for which the predecessor of such member was ap7 pointed shall be appointed for the remainder of such term. 

8 ‘‘(iv) A member of the board of directors described 

9 under paragraph (1)(B) may continue to serve after the 

10 expiration of the term of office for which such member 

11 was appointed until a successor has been appointed. 

12 ‘‘(F) A member of the board of directors described 

13 under paragraph (1)(B) may be removed for good cause 

14 by the President or by unanimous decision of the other 

15 members of the board of directors. 

16 ‘‘(G) A majority of the members of the board of direc17 tors in office shall constitute a quorum for the transaction 

18 of business. The vote of the majority of the members 

19 present and voting at a meeting at which a quorum is 

20 present shall be the act of the board of directors. 

21 ‘‘(3) Each member of the board of directors described 

22 under paragraph (1)(A) shall designate in writing an offi23 cial, not below the level of Assistant Secretary, to serve 

24 as the voting representative of such member on the board. 

25 Such designation shall be effective until revoked or until 


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•S 2252 IS

1 a date or event specified therein. Any such representative 

2 may refer for board action any matter under consideration 

3 by the designating board member. 

4 ‘‘(4) The members of the board of directors described 

5 under— 

6 ‘‘(A) subparagraph (A) of paragraph (1), shall 

7 serve without compensation, but shall be reimbursed 

8 for travel, subsistence, and other necessary expenses 

9 incurred in the performance of their duties as mem10 bers of the board; and 

11 ‘‘(B) subparagraph (B) of paragraph (1) shall, 

12 for each day (including traveltime) during which 

13 they are attending meetings or conferences of the 

14 board or otherwise engaged in the business of the 

15 board, be compensated at a rate fixed by the cor16 poration which is not in excess of the daily equiva17 lent of the annual rate of basic pay for a position 

18 at level IV of the Executive Schedule under section 

19 5315 of title 5, United States Code, and while away 

20 from their homes or regular places of business they 

21 may be allowed travel expenses, including per diem 

22 in lieu of subsistence, as authorized by section 5703 

23 of title 5, United States Code. 

24 ‘‘(5)(A) The Secretary of Labor is the chairman of 

25 the board of directors. 


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1 ‘‘(B) The President shall designate 1 of the members 

2 appointed under paragraph (2) as the vice-chairman of the 

3 board of directors. 

4 ‘‘(6) The Inspector General of the corporation shall 

5 report to the board of directors, and not less than twice 

6 a year, shall attend a meeting of the board of directors 

7 to provide a report on the activities and findings of the 

8 Inspector General, including with respect to monitoring 

9 and review of the operations of the corporation. 

10 ‘‘(7) The General Counsel of the corporation shall— 

11 ‘‘(A) serve as the secretary to the board of di12 rectors, and shall advise such board as needed; and 

13 ‘‘(B) have overall responsibility for all legal 

14 matters affecting the corporation and provide the 

15 corporation with legal advice and opinions on all 

16 matters of law affecting the corporation, except that 

17 the authority of the General Counsel shall not ex18 tend to the Office of Inspector General and the inde19 pendent legal counsel of such Office. 

20 ‘‘(8) Notwithstanding any other provision of this Act, 

21 the Office of Inspector General and the legal counsel of 

22 such Office is independent of the management of the cor23 poration and the General Counsel of the corporation. 

24 ‘‘(9) The board of directors may appoint and fix the 

25 compensation of employees as may be required to enable 


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•S 2252 IS

1 the board of directors to perform its duties. The board 

2 of directors shall determine the qualifications and duties 

3 of such employees and may appoint and fix the compensa4 tion of experts and consultants in accordance with the pro5 visions of section 3109 of title 5, United States Code.’’. 

6 (2) NUMBER OF MEETINGS; PUBLIC AVAIL7 ABILITY.—Section 4002(e) of the Employee Retire8 ment Income Security Act of 1974 (29 U.S.C. 

9 1302(e)) is amended— 

10 (A) by striking ‘‘The board’’ and inserting 

11 ‘‘(1) The board’’; 

12 (B) by striking ‘‘the corporation.’’ and in13 serting ‘‘the corporation, but in no case less 

14 than 4 times a year with not less than 5 mem15 bers present. Not less than 1 meeting of the 

16 board of directors during each year shall be a 

17 joint meeting with the advisory committee 

18 under subsection (h).’’; and 

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

20 ‘‘(2)(A) Except as provided in subparagraph (B), the 

21 chairman of the board of directors shall make available 

22 to the public the minutes from each meeting of the board 

23 of directors. 

24 ‘‘(B) The minutes of a meeting of the board of direc25 tors, or a portion thereof, shall not be subject to disclosure 


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•S 2252 IS

1 under subparagraph (A) if the chairman reasonably deter2 mines that such minutes, or portion thereof, contain con3 fidential information relating to financial activities or per4 sonnel decisions of the corporation. 

5 ‘‘(C) The minutes of a meeting, or portion of thereof, 

6 exempt from disclosure pursuant to subparagraph (B) 

7 shall be exempt from disclosure under section 552(b) of 

8 title 5, United States Code. For purposes of such section 

9 552 of title 5, United States Code, this subparagraph shall 

10 be considered a statute described in subsection (b)(3) of 

11 such section 552.’’. 

12 (3) ADVISORY COMMITTEE.— 

13 (A) ISSUES CONSIDERED BY THE COM14 MITTEE.—Section 4002(h)(1) of the Employee 

15 Retirement Income Security Act of 1974 (29 

16 U.S.C. 1302(h)(1)) is amended— 

17 (i) by striking ‘‘, and (D)’’ and insert18 ing ‘‘, (D)’’; and 

19 (ii) by striking ‘‘time to time.’’ and in20 serting ‘‘time to time, and (E) other issues 

21 as determined appropriate by the advisory 

22 committee.’’. 

23 (B) JOINT MEETING.—Section 4002(h)(3) 

24 of the Employee Retirement Income Security 

25 Act of 1974 (29 U.S.C. 1302(h)(3)) is amended 


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1 by adding at the end the following: ‘‘Not less 

2 than 1 meeting of the advisory committee dur3 ing each year shall be a joint meeting with the 

4 board of directors under subsection (e).’’. 

5 (b) AVOIDING CONFLICTS OF INTEREST.—Section 

6 4002 of the Employee Retirement Income Security Act of 

7 1974 (29 U.S.C. 1302) is amended by adding at the end 

8 the following: 

9 ‘‘(j) CONFLICTS OF INTEREST.— 

10 ‘‘(1) IN GENERAL.—The Director of the cor11 poration and each member of the board of directors 

12 shall not participate in a decision of the corporation 

13 in which the Director or such member has a direct 

14 financial interest. The Director of the corporation 

15 shall not participate in any activities that would 

16 present a potential conflict of interest or appearance 

17 of a conflict of interest without approval of the 

18 board of directors. 

19 ‘‘(2) ESTABLISHMENT OF POLICY.—The board 

20 of directors shall establish a policy that will inform 

21 the identification of potential conflicts of interests of 

22 the members of the board of directors and mitigate 

23 perceived conflicts of interest of such members and 

24 the Director of the corporation.’’. 


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1 (c) RISK MITIGATION.—Section 4002 of the Em2 ployee Retirement Income Security Act of 1974 (29 

3 U.S.C. 1302), as amended by subsection (b), is further 

4 amended by adding at the end the following: 

5 ‘‘(k) RISK MANAGEMENT OFFICER.—The corpora6 tion shall have a risk management officer whose duties 

7 include evaluating and mitigating the risk that the cor8 poration might experience. The individual in such position 

9 shall coordinate the risk management efforts of the cor10 poration, explain risks and controls to senior management 

11 and the board of directors of the corporation, and make 

12 recommendations.’’. 

13 (d) DIRECTOR.—Section 4002(c) of the Employee 

14 Retirement Income Security Act of 1974 (29 U.S.C. 

15 1302(c)) is amended to read as follows: 

16 ‘‘(c) The Director shall be accountable to the board 

17 of directors. The Director shall serve for a term of 5 years 

18 unless removed by the President or the board of directors 

19 before the expiration of such 5-year term.’’. 

20 (e) SENSES OF CONGRESS.— 

21 (1) FORMATION OF COMMITTEES.—It is the 

22 sense of Congress that the board of directors of the 

23 Pension Benefit Guaranty Corporation established 

24 under section 4002 of the Employee Retirement In25 come Security Act of 1974 (29 U.S.C. 1302), as 


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1 amended by this section, should form committees, 

2 including an audit committee and an investment 

3 committee, to enhance the overall effectiveness of the 

4 board of directors. 

5 (2) ADVISORY COMMITTEE.—It is the sense of 

6 Congress that the advisory committee to the Pension 

7 Benefit Guaranty Corporation established under sec8 tion 4002 of the Employee Retirement Income Secu9 rity Act of 1974 (29 U.S.C. 1302), as amended by 

10 this section, should provide to the board of directors 

11 of such corporation policy recommendations regard12 ing changes to the law that would be beneficial to 

13 the corporation or the voluntary private pension sys14 tem. 

15 SEC. 364. PARTICIPANT AND PLAN SPONSOR ADVOCATE. 

16 (a) IN GENERAL.—Title IV of the Employee Retire17 ment Income Security Act of 1974 (29 U.S.C. 1301 et 

18 seq.) is amended by inserting after section 4003 the fol19 lowing: 

20 ‘‘SEC. 4004. PARTICIPANT AND PLAN SPONSOR ADVOCATE. 

21 ‘‘(a) IN GENERAL.—The Secretary of Labor, in con22 sultation with the Director of the corporation and pension 

23 participant and plan sponsor advocacy groups, shall select 

24 a Participant and Plan Sponsor Advocate. Such selected 


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1 individual shall have demonstrated experience in the area 

2 of pensions and pension participant assistance. 

3 ‘‘(b) DUTIES.—The Participant and Plan Sponsor 

4 Advocate shall— 

5 ‘‘(1) act as a liaison between the corporation, 

6 sponsors of defined benefit pension plans insured by 

7 the corporation, and participants in pension plans 

8 trusteed by the corporation; 

9 ‘‘(2) advocate for the full attainment of the 

10 rights of participants in plans trusteed by the cor11 poration; 

12 ‘‘(3) assist pension plan sponsors and partici13 pants in resolving disputes with the corporation; 

14 ‘‘(4) identify areas in which participants and 

15 plan sponsors have persistent problems in dealings 

16 with the corporation; 

17 ‘‘(5) to the extent possible, propose changes in 

18 the administrative practices of the corporation to 

19 mitigate problems; 

20 ‘‘(6) identify potential legislative changes which 

21 may be appropriate to mitigate problems; and 

22 ‘‘(7) refer instances of fraud, waste, and abuse, 

23 and violations of law to the Office of the Inspector 

24 General of the corporation. 


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1 ‘‘(c) REMOVAL.—If the Participant and Plan Sponsor 

2 Advocate is removed from office or is transferred to an3 other position or location within the Department of Labor, 

4 the Secretary shall communicate in writing the reasons for 

5 any such removal or transfer to Congress not less than 

6 30 days before the removal or transfer. Nothing in this 

7 subsection shall prohibit a personnel action otherwise au8 thorized by law, other than transfer or removal. 

9 ‘‘(d) COMPENSATION.—The annual rate of basic pay 

10 for the Participant and Plan Sponsor Advocate shall be 

11 the rate payable for level III of the Executive Schedule 

12 under section 5314 of title 5, United States Code, plus 

13 3 percent. 

14 ‘‘(e) ANNUAL REPORT.— 

15 ‘‘(1) IN GENERAL.—Not later than December 

16 31 of each calendar year, the Participant and Plan 

17 Sponsor Advocate shall report to the Health, Edu18 cation, Labor, and Pensions Committee of the Sen19 ate, the Committee on Finance of the Senate, the 

20 Committee on Education and the Workforce of the 

21 House of Representatives, and the Committee on 

22 Ways and Means of the House of Representatives on 

23 the activities of the Office of the Participant and 

24 Plan Sponsor Advocate during the fiscal year ending 

25 during such calendar year. 


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1 ‘‘(2) CONTENT.—Each report submitted under 

2 paragraph (1) shall— 

3 ‘‘(A) describe the activities, and evaluate 

4 the effectiveness of the Participant and Plan 

5 Sponsor Advocate during the preceding year; 

6 ‘‘(B) identify significant problems the Par7 ticipant and Plan Sponsor Advocate has identi8 fied; 

9 ‘‘(C) include specific legislative and regu10 latory changes to address the problems; and 

11 ‘‘(D) identify any actions taken to correct 

12 problems identified in any previous report. 

13 ‘‘(3) CONCURRENT SUBMISSION.—The Partici14 pant and Plan Sponsor Advocate shall submit a copy 

15 of each report to the Secretary of Labor, the Direc16 tor of the corporation, and any other appropriate of17 ficial at the same time such report is submitted to 

18 the committees of Congress under paragraph (1).’’. 

19 (b) CLERICAL AMENDMENT.—The table of contents 

20 in section 1 of the Employee Retirement Income Security 

21 Act of 1974 is amended by inserting after the item relat22 ing to section 4003 the following new item: 

‘‘4004. Participant and Plan Sponsor Advocate.’’. 

23 SEC. 365. INCREASE IN MULTIEMPLOYER PLAN BENEFIT 

24 GUARANTEE AND ANNUAL PREMIUM RATES. 

25 (a) MONTHLY BENEFIT GUARANTEE.— 


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1 (1) IN GENERAL.—Subparagraph (A) of section 

2 4022A(c)(1) of the Employee Retirement Income Se3 curity Act of 1974 (29 U.S.C. 1322a(c)(1)) is 

4 amended to read as follows: 

5 ‘‘(A) 100 percent of the accrual rate up to $11, 

6 plus the sum of— 

7 ‘‘(i) 75 percent of the lesser of— 

8 ‘‘(I) $33, or 

9 ‘‘(II) the accrual rate, if any, in ex10 cess of $11 and up to $44, and 

11 ‘‘(ii) 50 percent of the lesser of— 

12 ‘‘(I) $40, or 

13 ‘‘(II) the accrual rate, if any, in ex14 cess of $44, and’’. 

15 (2) ADJUSTMENT FOR INFLATION.—Section 

16 4022A(c) of such Act (29 U.S.C. 1322a(c)) is 

17 amended by adding at the end the following new 

18 paragraph: 

19 ‘‘(4) For each plan year beginning in a calendar year 

20 after 2011, there shall be substituted for each dollar 

21 amount specified in subparagraph (A) of paragraph (1) 

22 an amount equal to the greater of— 

23 ‘‘(A) the product derived by multiplying such 

24 dollar amount specified in subparagraph (A) of 

25 paragraph (1) by the ratio of— 


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1 ‘‘(i) the national average wage index (as 

2 defined in section 209(k)(1) of the Social Secu3 rity Act) for the first of the 2 calendar years 

4 preceding the calendar year in which such plan 

5 year begins, to 

6 ‘‘(ii) the national average wage index (as 

7 so defined) for 2009; and 

8 ‘‘(B) such dollar amount in effect under sub9 paragraph (A) of paragraph (1) for plan years be10 ginning in the preceding calendar year. 

11 If the amount determined under this paragraph is not a 

12 multiple of $1, such product shall be rounded to the near13 est multiple of $1.’’. 

14 (3) EFFECTIVE DATE.—The amendment made 

15 by this subsection shall apply to plans terminating 

16 or first receiving financial assistance from the Pen17 sion Benefit Guaranty Corporation (within the 

18 meaning under section 4261 of the Employee Retire19 ment Income Security Act of 1974 (29 U.S.C. 

20 1431)) after the date of the enactment of this Act. 

21 (b) REQUIRED REPORT.—Section 4022A(f) of such 

22 Act (29 U.S.C. 1322a(f)) is amended by adding at the 

23 end the following new paragraph: 

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1 gress under this subsection after the date of enactment 

2 of the Pension Guaranty Improvement Act of 2012 shall 

3 be submitted not later than December 31, 2013.’’. 

4 (c) ANNUAL PREMIUM RATE.— 

5 (1) IN GENERAL.—Subparagraph (A) of section 

6 4006(a)(3) of the Employee Retirement Income Se7 curity Act of 1974 (29 U.S.C. 1306(a)(3)) is amend8 ed— 

9 (A) by inserting ‘‘and before January 1, 

10 2012,’’ after ‘‘December 31, 2005,’’ in clause 

11 (iv), 

12 (B) by striking ‘‘or’’ at the end of clause 

13 (iii), 

14 (C) by striking the period at the end of 

15 clause (iv) and inserting ‘‘, or’’, and 

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

17 clause: 

18 ‘‘(v) in the case of a multiemployer plan, for 

19 plan years beginning after December 31, 2011, 

20 $18.00 for each individual who is a participant in 

21 such plan during the applicable plan year.’’. 

22 (2) INFLATION ADJUSTMENT.—Paragraph (3) 

23 of section 4006(a) of such Act (29 U.S.C. 1306(a)) 

24 is amended by adding at the end the following new 

25 subparagraph: 


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1 ‘‘(I) For each plan year beginning in a calendar year 

2 after 2011, there shall be substituted for the premium rate 

3 specified in clause (v) of subparagraph (A) an amount 

4 equal to the greater of— 

5 ‘‘(i) the product derived by multiplying the pre6 mium rate specified in clause (v) of subparagraph 

7 (A) by the ratio of— 

8 ‘‘(I) the national average wage index (as 

9 defined in section 209(k)(1) of the Social Secu10 rity Act) for the first of the 2 calendar years 

11 preceding the calendar year in which such plan 

12 year begins, to 

13 ‘‘(II) the national average wage index (as 

14 so defined) for 2009; and 

15 ‘‘(ii) the premium rate in effect under clause (v) 

16 of subparagraph (A) for plan years beginning in the 

17 preceding calendar year. 

18 If the amount determined under this subparagraph is not 

19 a multiple of $1, such product shall be rounded to the 

20 nearest multiple of $1.’’. 

21 SEC. 366. IMPROVING SINGLE EMPLOYER PROGRAM SOL22 VENCY. 

23 (a) FLAT-RATE PREMIUM.— 

24 (1) IN GENERAL.—Clause (i) of section 

25 4006(a)(3)(A) of the Employee Retirement Income 


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1 Security Act of 1974 (29 U.S.C. 1306(a)(3)(A)) is 

2 amended to read as follows: 

3 ‘‘(i) in the case of a single-employer plan, an 

4 amount for each individual who is a participant in 

5 such plan during the plan year equal to the sum of 

6 the additional premium (if any) determined under 

7 subparagraph (E) and— 

8 ‘‘(I) for plan years beginning after Decem9 ber 31, 2005 and before January 1, 2012, $30; 

10 ‘‘(II) for plan years beginning after De11 cember 31, 2011, and before January 1, 2013, 

12 $42; 

13 ‘‘(III) for plan years beginning after De14 cember 31, 2012, and before January 1, 2014, 

15 $48; and 

16 ‘‘(IV) for plan years beginning after De17 cember 31, 2013, $54;’’. 

18 (2) ADJUSTMENT FOR INFLATION.—Subpara19 graph (F) of section 4006(a)(3) of such Act (29 

20 U.S.C. 1306(a)(3)) is amended by adding at the end 

21 the following flush sentence: ‘‘For each plan year be22 ginning in a calendar year after 2011, clause (i)(II) 

23 shall be applied by substituting ‘2009’ for ‘2004’.’’. 

24 (b) VARIABLE-RATE PREMIUM ADJUSTMENT FOR IN25 FLATION.—Section 4006(a)(3) of such Act (29 U.S.C. 


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1 1306(a)(3)), as amended by section 365, is further amend2 ed by adding at the end the following new subparagraph: 

3 ‘‘(J) For each plan year beginning in a calendar year 

4 after 2011, there shall be substituted for the premium rate 

5 specified in clause (ii) of subparagraph (E) an amount 

6 equal to the greater of— 

7 ‘‘(i) the product derived by multiplying the pre8 mium rate specified in clause (ii) of subparagraph 

9 (E) by the ratio of— 

10 ‘‘(I) the national average wage index (as 

11 defined in section 209(k)(1) of the Social Secu12 rity Act) for the first of the 2 calendar years 

13 preceding the calendar year in which such plan 

14 year begins, to 

15 ‘‘(II) the national average wage index (as 

16 so defined) for 2009; and 

17 ‘‘(ii) the premium rate in effect under clause 

18 (ii) of subparagraph (E) for plan years beginning in 

19 the preceding calendar year. 

20 If the amount determined under this subparagraph is not 

21 a multiple of $1, such product shall be rounded to the 

22 nearest multiple of $1.’’. 


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1 Subtitle H—Pension and 

2 Participant Protection 

3 SEC. 371. SHORT TITLE. 

4 This subtitle may be cited as the ‘‘Pension and Par5 ticipant Protect Act’’. 

6 SEC. 372. FINDINGS. 

7 Congress makes the following findings: 

8 (1) The ongoing effects of the financial crisis 

9 have put enormous stress on the defined benefit pen10 sion system. 

11 (2) It is in the best interest of plan participants 

12 for Congress to take immediate steps to relieve that 

13 stress by ensuring that pension contributions are 

14 less volatile and more predictable, provided that par15 ticipants are afforded additional protections should 

16 their pensions be terminated in bankruptcy. 

17 (3) It is further in the best interest of partici18 pants for Congress to take future steps to both re19 duce the volatility in pension funding requirements 

20 and better protect plan participants and retirees 

21 from loss. 

22 SEC. 373. PENSION FUNDING STABILIZATION. 

23 (a) AMENDMENTS TO EMPLOYEE RETIREMENT IN24 COME SECURITY ACT OF 1974.— 


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1 (1) IN GENERAL.—Subparagraph (C) of section 

2 303(h)(2) of the Employee Retirement Income Secu3 rity Act of 1974 (29 U.S.C. 1083(h)(2)) is amended 

4 by adding at the end the following new clause: 

5 ‘‘(iv) SEGMENT RATE STABILIZA6 TION.— 

7 ‘‘(I) IN GENERAL.—If a segment 

8 rate described in clause (i), (ii), or 

9 (iii) with respect to any applicable 

10 month (determined without regard to 

11 this clause) is less than the applicable 

12 minimum percentage, or more than 

13 the applicable maximum percentage, 

14 of the average of the segment rates 

15 described in such clause for years in 

16 the 25-year period ending with Sep17 tember 30 of the calendar year pre18 ceding the calendar year in which the 

19 plan year begins, then the segment 

20 rate described in such clause with re21 spect to the applicable month shall be 

22 equal to the applicable minimum per23 centage or the applicable maximum 

24 percentage of such average, whichever 

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1 ury shall determine such average on 

2 an annual basis and may prescribe 

3 equivalent rates for years in any such 

4 25-year period for which the rates de5 scribed in any such clause are not 

6 available. 

7 ‘‘(II) APPLICABLE MINIMUM PER8 CENTAGE; APPLICABLE MAXIMUM

9 PERCENTAGE.—For purposes of sub10 clause (I), the applicable minimum 

11 percentage and the applicable max12 imum percentage for a plan year be13 ginning in a calendar year shall be de14 termined in accordance with the fol15 lowing table: 

‘‘If the calendar year is: 

The 

applicable 

minimum 

percentage 

is: 

The 

applicable 

maximum 

percentage 

is: 

2012 ........................................................................ 90% 110%

2013 ........................................................................ 85% 115%

2014 ........................................................................ 80% 120%

2015 ........................................................................ 75% 125%

After 2015 .............................................................. 70% 130%.’’. 

16 (2) CONFORMING AMENDMENTS.— 

17 (A) Subparagraph (F) of section 303(h)(2) 

18 of such Act (29 U.S.C. 1083(h)(2)) is amended 

19 by inserting ‘‘and the averages determined 


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1 under subparagraph (C)(iv)’’ after ‘‘subpara2 graph (C)’’. 

3 (B) Clauses (ii) and (iii) of section 

4 205(g)(3)(B) of such Act (29 U.S.C. 

5 1055(g)(3)(B)) are each amended by striking 

6 ‘‘section 303(h)(2)(C)’’ and inserting ‘‘section 

7 303(h)(2)(C) (determined by not taking into ac8 count any adjustment under clause (iv) there9 of)’’. 

10 (C) Clause (iv) of section 4006(a)(3)(E) of 

11 such Act (29 U.S.C. 1306(a)(3)(E)) is amended 

12 by striking ‘‘section 303(h)(2)(C)’’ and insert13 ing ‘‘section 303(h)(2)(C) (notwithstanding any 

14 regulations issued by the corporation, deter15 mined by not taking into account any adjust16 ment under clause (iv) thereof)’’. 

17 (b) AMENDMENTS TO INTERNAL REVENUE CODE OF

18 1986.— 

19 (1) IN GENERAL.—Subparagraph (C) of section 

20 430(h)(2) of the Internal Revenue Code of 1986 is 

21 amended by adding at the end the following new 

22 clause: 

23 ‘‘(iv) SEGMENT RATE STABILIZA24 TION.— 


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1 ‘‘(I) IN GENERAL.—If a segment 

2 rate described in clause (i), (ii), or 

3 (iii) with respect to any applicable 

4 month (determined without regard to 

5 this clause) is less than the applicable 

6 minimum percentage, or more than 

7 the applicable maximum percentage, 

8 of the average of the segment rates 

9 described in such clause for years in 

10 the 25-year period ending with Sep11 tember 30 of the calendar year pre12 ceding the calendar year in which the 

13 plan year begins, then the segment 

14 rate described in such clause with re15 spect to the applicable month shall be 

16 equal to the applicable minimum per17 centage or the applicable maximum 

18 percentage of such average, whichever 

19 is closest. The Secretary shall deter20 mine such average on an annual basis 

21 and may prescribe equivalent rates for 

22 years in any such 25-year period for 

23 which the rates described in any such 

24 clause are not available. 


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1 ‘‘(II) APPLICABLE MINIMUM PER2 CENTAGE; APPLICABLE MAXIMUM

3 PERCENTAGE.—For purposes of sub4 clause (I), the applicable minimum 

5 percentage and the applicable max6 imum percentage for a plan year be7 ginning in a calendar year shall be de8 termined in accordance with the fol9 lowing table: 

‘‘If the calendar year is: 

The 

applicable 

minimum 

percentage 

is: 

The 

applicable 

maximum 

percentage 

is: 

2012 ........................................................................ 90% 110%

2013 ........................................................................ 85% 115%

2014 ........................................................................ 80% 120%

2015 ........................................................................ 75% 125%

After 2015 .............................................................. 70% 130%.’’. 

10 (2) CONFORMING AMENDMENTS.— 

11 (A) Paragraph (6) of section 404(o) of 

12 such Code is amended by inserting ‘‘(deter13 mined by not taking into account any adjust14 ment under clause (iv) of subsection (h)(2)(C) 

15 thereof)’’ before the period. 

16 (B) Subparagraph (F) of section 430(h)(2) 

17 of such Code is amended by inserting ‘‘and the 

18 averages determined under subparagraph 

19 (C)(iv)’’ after ‘‘subparagraph (C)’’. 


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1 (C) Subparagraphs (C) and (D) of section 

2 417(e)(3) of such Code are each amended by 

3 striking ‘‘section 430(h)(2)(C)’’ and inserting 

4 ‘‘section 430(h)(2)(C) (determined by not tak5 ing into account any adjustment under clause 

6 (iv) thereof)’’. 

7 (c) EFFECTIVE DATE.— 

8 (1) IN GENERAL.—The amendments made by 

9 this section shall apply with respect to plan years be10 ginning after December 31, 2011. 

11 (2) EXCEPTION.—A plan sponsor may elect not 

12 to have the amendments made by this section apply 

13 to any plan year beginning on or before the date of 

14 the enactment of this Act solely for purposes of de15 termining the adjusted funding target attainment 

16 percentage under sections 436 of the Internal Rev17 enue Code of 1986 and 206(g) of the Employee Re18 tirement Income Security Act of 1974 for such plan 

19 year, provided that the plan sponsor made such de20 termination in good faith and without an intent to 

21 trigger any statutorily required restrictions on bene22 fits. A plan shall not be treated as failing to meet 

23 the requirements of sections 411(d)(6) of such Code 

24 and 204(g) of such Act solely by reason of an elec25 tion under this paragraph. 


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1 SEC. 374. CONGRESSIONAL COMMITMENT TO ENCOUR2 AGING PENSIONS. 

3 Not later than December 31, 2012, the Committee 

4 on Health, Education, Labor, and Pensions of the Senate 

5 and the Committee on Education and the Workforce of 

6 the House of Representatives shall issue a report pro7 viding recommendations to improve and expand the de8 fined benefit pension system. Such report shall include 

9 recommendations concerning— 

10 (1) measures to further stabilize pension con11 tribution rates; 

12 (2) additional or expanded options to improve 

13 pension funding flexibility for plan sponsors suf14 fering a temporary business hardship; 

15 (3) incentives for plans sponsors to establish or 

16 maintain pension plans permitting new entrants and 

17 to encourage plan sponsors to unfreeze their pension 

18 plans; and 

19 (4) modifications to the pension guaranty sys20 tem and bankruptcy law necessary or appropriate to 

21 protect plan participants and retirees from inequi22 table treatment. 

23 SEC. 375. PARTICIPANT PROTECTION IN BANKRUPTCY. 

24 Sections 4022(g) and 4044(e) of the Employee Re25 tirement Income Security Act of 1974 (29 U.S.C. 1322(g) 

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1 tection Act of 2006, are repealed as of October 1, 2011, 

2 and shall not apply with respect to proceedings initiated 

3 under title 11, United States Code, or under any similar 

4 Federal law or law of a State or political subdivision, on 

5 or after such date. 

6 Subtitle I—Fair Playing Field 

7 SEC. 381. SHORT TITLE; FINDINGS; PURPOSES. 

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

9 ‘‘Fair Playing Field Act of 2012’’. 

10 (b) FINDINGS.—Congress makes the following find11 ings: 

12 (1) In 1978, Congress was concerned that lack 

13 of clarity as to the proper classification of some 

14 workers, increased IRS enforcement activity, and 

15 retroactive application by IRS of interpretations that 

16 were arguably new had caused hardships for some 

17 small businesses and other taxpayers and confusion 

18 as to the applicable rules. 

19 (2) To allow time to develop a comprehensive 

20 approach to the problem, Congress enacted section 

21 530 of the Revenue Act of 1978 as an interim meas22 ure protecting taxpayers from liability for misclassi23 fication if the taxpayer has a reasonable basis for 

24 classifying a worker as an independent contractor 

25 and meets certain other conditions. In addition, the 


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1 Act prohibited the Secretary of the Treasury from 

2 publishing regulations or revenue rulings on work3 ers’ employment tax status pending the expected 

4 near-term enactment of clarifying legislation. 

5 (3) During the ensuing 33 years, Congress 

6 made section 530 of the Revenue Act of 1978 per7 manent, however, changes in working relationships 

8 and the continued prohibition on new guidance have 

9 increased the uncertainty as to the proper classifica10 tion of workers. 

11 (4) Many workers are properly classified as 

12 independent contractors. In other instances, workers 

13 who are employees are being treated as independent 

14 contractors. Such misclassification for tax purposes 

15 contributes to inequities in the competitive positions 

16 of businesses and to the Federal and State tax gap, 

17 and may also result in misclassification for other 

18 purposes, such as denial of unemployment benefits, 

19 workplace health and safety protections, and retire20 ment or other benefits or protections available to 

21 employees. 

22 (5) Workers, businesses, and other taxpayers 

23 will benefit from clear guidance regarding employ24 ment tax status. In the interest of fairness and in 

25 view of many service recipients’ reliance on current 


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1 section 530, such guidance should apply only pro2 spectively. 

3 (c) PURPOSES.—The purposes of this subtitle are to 

4 permit the Secretary of the Treasury to provide guidance 

5 allowing workers and businesses to clearly understand the 

6 proper Federal tax classification of workers and to provide 

7 relief allowing an orderly transition to new rules designed 

8 to increase certainty and uniformity of treatment. 

9 SEC. 382. AUTHORITY TO ISSUE GUIDANCE CLARIFYING 

10 EMPLOYMENT STATUS FOR PURPOSES OF 

11 EMPLOYMENT TAXES. 

12 (a) IN GENERAL.—Chapter 25 of the Internal Rev13 enue Code of 1986 is amended by adding at the end the 

14 following new section: 

15 ‘‘SEC. 3511. AUTHORITY TO ISSUE GUIDANCE CLARIFYING 

16 EMPLOYMENT STATUS. 

17 ‘‘(a) IN GENERAL.—The Secretary shall issue such 

18 regulations or other guidance as the Secretary determines 

19 to be necessary or appropriate to clarify the proper em20 ployment status of individuals for purposes of any tax im21 posed by this subtitle. 

22 ‘‘(b) PROHIBITION ON RETROACTIVE ASSESS23 MENTS.— 

24 ‘‘(1) IN GENERAL.—If— 


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1 ‘‘(A) for purposes of any tax imposed by 

2 this subtitle, the taxpayer did not treat an indi3 vidual as an employee for any period before the 

4 reclassification date with respect to such indi5 vidual, and 

6 ‘‘(B) in the case of periods after December 

7 31, 1978, and before such reclassification date, 

8 all Federal tax returns (including information 

9 returns) required to be filed by the taxpayer 

10 with respect to such individual for such period 

11 are filed on a basis consistent with the tax12 payer’s treatment of such individual as not 

13 being an employee, 

14 then, for purposes of applying such taxes for periods 

15 before such reclassification date with respect to the 

16 taxpayer, the individual shall be deemed not to be an 

17 employee unless the taxpayer had no reasonable 

18 basis for not treating such individual as an em19 ployee. 

20 ‘‘(2) STATUTORY STANDARDS PROVIDING ONE

21 METHOD OF SATISFYING THE REQUIREMENTS OF

22 PARAGRAPH (1).—For purposes of paragraph (1), a 

23 taxpayer shall in any case be treated as having a 

24 reasonable basis for not treating an individual as an 

25 employee for a period if the taxpayer’s treatment of 


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1 such individual for such period was in reasonable re2 liance on any of the following: 

3 ‘‘(A) Judicial precedent, published rulings, 

4 technical advice with respect to the taxpayer, or 

5 a letter ruling to the taxpayer. 

6 ‘‘(B) A past Internal Revenue Service 

7 audit of the taxpayer in which there was no as8 sessment attributable to the treatment (for pur9 poses of any tax imposed by this subtitle) of the 

10 individuals holding positions substantially simi11 lar to the position held by such individual. 

12 ‘‘(C) Long-standing recognized practice of 

13 a significant segment of the industry in which 

14 such individual was engaged. 

15 ‘‘(3) CONSISTENCY REQUIRED IN THE CASE OF

16 PRIOR TAX TREATMENT.—Paragraph (1) shall not 

17 apply with respect to the treatment of any individual 

18 (hereafter in this paragraph referred to as the re19 classified individual) for purposes of any tax im20 posed by this subtitle for any period ending after 

21 December 31, 1978, if the taxpayer (or a prede22 cessor) has treated any individual holding a substan23 tially similar position as an employee for purposes of 

24 any tax imposed by this subtitle for any period be25 ginning after December 31, 1977, and ending before 


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1 the reclassification date with respect to such reclas2 sified individual. 

3 ‘‘(c) DEFINITIONS.—For purposes of this section— 

4 ‘‘(1) RECLASSIFICATION DATE.— 

5 ‘‘(A) IN GENERAL.—The term ‘reclassifica6 tion date’ means, with respect to any individual, 

7 the earlier of— 

8 ‘‘(i) the first day of the first calendar 

9 quarter beginning more than 180 days 

10 after the date of an employee classification 

11 determination with respect to such indi12 vidual, or 

13 ‘‘(ii) the effective date of the first ap14 plicable final regulation issued by the Sec15 retary under subsection (a) with respect to 

16 such individual (or, if later, the first day of 

17 the first calendar quarter beginning more 

18 than 180 days after such regulation is 

19 issued). 

20 ‘‘(B) EMPLOYEE CLASSIFICATION DETER21 MINATION.—The term ‘employee classification 

22 determination’ means, with respect to any indi23 vidual, a determination by the Secretary, in 

24 connection with an audit of the taxpayer which 

25 is described in section 7436 and which comVerDate Mar 15 2010 00:42 Apr 04, 2012 Jkt 099200 PO 00000 Frm 00312 Fmt 6652 Sfmt 6201 E:\BILLS\S2252.IS S2252

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1 mences after the date which is 1 year after the 

2 date of the enactment of this section, that a 

3 class of individuals holding positions with such 

4 taxpayer which are substantially similar to the 

5 position held by such individual are employees. 

6 ‘‘(C) FIRST APPLICABLE FINAL REGULA7 TION.—The term ‘first applicable final regula8 tion’ means, with respect to any individual, the 

9 first final regulation (or other guidance of gen10 eral applicability) which sets forth the factors 

11 for determining the employment status of a 

12 class of individuals holding positions substan13 tially similar to the position held by such indi14 vidual. 

15 ‘‘(2) EMPLOYMENT STATUS.—The term ‘em16 ployment status’ means the status of an individual, 

17 under the usual common law rules applicable in de18 termining the employer-employee relationship, as an 

19 employee or as an independent contractor (or other 

20 individual who is not an employee). 

21 ‘‘(d) CONTINUATION OF CERTAIN SPECIAL RULES.— 

22 ‘‘(1) EXCEPTION FOR CERTAIN SKILLED WORK23 ERS.—Subsection (b) shall not apply in the case of 

24 an individual who, pursuant to an arrangement be25 tween the taxpayer and another person, provides 


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1 services for such other person as an engineer, de2 signer, drafter, computer programmer, systems ana3 lyst, or other similarly skilled worker engaged in a 

4 similar line of work. 

5 ‘‘(2) NOTICE OF AVAILABILITY OF SECTION.— 

6 An officer or employee of the Internal Revenue Serv7 ice shall, before or at the commencement of any 

8 audit inquiry relating to the employment status of 

9 one or more individuals who perform services for the 

10 taxpayer, provide the taxpayer with a written notice 

11 of the provisions of this section. 

12 ‘‘(3) RULES RELATING TO STATUTORY STAND13 ARDS.—For purposes of subsection (b)(2)— 

14 ‘‘(A) a taxpayer may not rely on an audit 

15 commenced after December 31, 1996, for pur16 poses of subparagraph (B) thereof unless such 

17 audit included an examination for purposes of 

18 any tax imposed by this subtitle whether the in19 dividual involved (or any individual holding a 

20 position substantially similar to the position 

21 held by the individual involved) should be treat22 ed as an employee of the taxpayer, 

23 ‘‘(B) in no event shall the significant seg24 ment requirement of subparagraph (C) thereof 

25 be construed to require a reasonable showing of 


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1 the practice of more than 25 percent of the in2 dustry (determined by not taking into account 

3 the taxpayer), and 

4 ‘‘(C) in applying the long-standing recog5 nized practice requirement of subparagraph (C) 

6 thereof— 

7 ‘‘(i) such requirement shall not be 

8 construed as requiring the practice to have 

9 continued for more than 10 years, and 

10 ‘‘(ii) a practice shall not fail to be 

11 treated as long-standing merely because 

12 such practice began after 1978. 

13 ‘‘(4) AVAILABILITY OF SAFE HARBORS.—Noth14 ing in this section shall be construed to provide that 

15 subsection (b) only applies where the individual in16 volved is otherwise an employee of the taxpayer. 

17 ‘‘(5) BURDEN OF PROOF.— 

18 ‘‘(A) IN GENERAL.—If— 

19 ‘‘(i) a taxpayer establishes a prima 

20 facie case that it was reasonable not to 

21 treat an individual as an employee for pur22 poses of subsection (b), and 

23 ‘‘(ii) the taxpayer has fully cooperated 

24 with reasonable requests from the Sec25 retary, 


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1 then the burden of proof with respect to such 

2 treatment shall be on the Secretary. 

3 ‘‘(B) EXCEPTION FOR OTHER REASONABLE

4 BASIS.—In the case of any issue involving 

5 whether the taxpayer had a reasonable basis 

6 not to treat an individual as an employee for 

7 purposes of subsection (b), subparagraph (A) 

8 shall only apply for purposes of determining 

9 whether the taxpayer meets the requirements of 

10 subparagraph (A), (B), or (C) of subsection 

11 (b)(2). 

12 ‘‘(6) PRESERVATION OF PRIOR PERIOD SAFE

13 HARBOR.—If— 

14 ‘‘(A) an individual would (but for the 

15 treatment referred to in subparagraph (B)) be 

16 deemed not to be an employee of the taxpayer 

17 under subsection (b) for any prior period, and 

18 ‘‘(B) such individual is treated by the tax19 payer as an employee for purposes of the taxes 

20 imposed by this subtitle for any subsequent pe21 riod, 

22 then, for purposes of applying such taxes for such 

23 prior period with respect to the taxpayer, the indi24 vidual shall be deemed not to be an employee. 


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1 ‘‘(7) SUBSTANTIALLY SIMILAR POSITION.—For 

2 purposes of subsection (b) and this subsection, the 

3 determination as to whether an individual holds a 

4 position substantially similar to a position held by 

5 another individual shall include consideration of the 

6 relationship between the taxpayer and such individ7 uals. 

8 ‘‘(8) TREATMENT OF TEST ROOM SUPERVISORS

9 AND PROCTORS WHO ASSIST IN THE ADMINISTRA10 TION OF COLLEGE ENTRANCE AND PLACEMENT

11 EXAMS.— 

12 ‘‘(A) IN GENERAL.—In the case of an indi13 vidual described in subparagraph (B) who is 

14 providing services as a test proctor or room su15 pervisor by assisting in the administration of 

16 college entrance or placement examinations, 

17 subsection (b) shall be applied to such services 

18 performed after December 31, 2006 (and remu19 neration paid for such services) without regard 

20 to paragraph (3) thereof. 

21 ‘‘(B) APPLICABILITY.—An individual is de22 scribed in this subparagraph if the individual— 

23 ‘‘(i) is providing the services described 

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1 scribed in section 501(c) and exempt from 

2 tax under section 501(a), and 

3 ‘‘(ii) is not otherwise treated as an 

4 employee of such organization for purposes 

5 of this subtitle. 

6 ‘‘(9) TREATMENT OF SECURITIES BROKER

7 DEALERS.—In determining for purposes of this title 

8 whether a registered representative of a securities 

9 broker-dealer is an employee (as defined in section 

10 3121(d)), no weight shall be given to instructions 

11 from the service recipient which are imposed only in 

12 compliance with investor protection standards im13 posed by the Federal Government, any State govern14 ment, or a governing body pursuant to a delegation 

15 by a Federal or State agency. 

16 ‘‘(e) STATEMENTS TO INDEPENDENT CONTRAC17 TORS.— 

18 ‘‘(1) IN GENERAL.—Each person who contracts 

19 for the services of an independent contractor on a 

20 regular and ongoing basis, within the scope of such 

21 person’s trade or business, shall provide a written 

22 statement to such independent contractor notifying 

23 such independent contractor of the Federal tax obli24 gations of an independent contractor, the labor and 

25 employment law protections that do not apply to 


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1 independent contractors, and the right of such inde2 pendent contractor to seek a status determination 

3 from the Internal Revenue Service. 

4 ‘‘(2) INDEPENDENT CONTRACTOR.—For pur5 poses of this subsection, the term ‘independent con6 tractor’ means any individual who is not treated as 

7 an employee by the person receiving the services re8 ferred to in paragraph (1). 

9 ‘‘(3) TIMING OF STATEMENT.—Except as other10 wise provided by the Secretary, the statement re11 quired under paragraph (1) shall be provided within 

12 a reasonable period of entering into the contract re13 ferred to in paragraph (1). 

14 ‘‘(4) DEVELOPMENT OF MODEL STATEMENT.— 

15 The Secretary shall develop model materials for pro16 viding the statement required under paragraph 

17 (1).’’. 

18 (b) REDUCED PENALTY NOT APPLICABLE IN CASES

19 OF NONCOMPLIANCE WITH GUIDANCE WITHOUT REA20 SONABLE BASIS.—Subsection (c) of section 3509 of the 

21 Internal Revenue Code of 1986 is amended— 

22 (1) by striking ‘‘if such liability’’ and inserting 

23 ‘‘if— 

24 ‘‘(1) such liability’’, and 


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1 (2) by striking the period at the end and insert2 ing ‘‘, or 

3 ‘‘(2) such liability relates to an individual who 

4 is treated as an employee under regulations or other 

5 guidance issued by the Secretary under section 

6 3511(a) and the taxpayer lacks a reasonable basis 

7 for treating the individual as other than an em8 ployee. 

9 In the case of a taxpayer which has received a final written 

10 determination from the Internal Revenue Service holding 

11 that the individual referred to in paragraph (2) (or an12 other individual who holds a position with the taxpayer 

13 substantially similar to the position held by such indi14 vidual) is an employee, such taxpayer shall be treated for 

15 purposes of paragraph (2) as lacking a reasonable basis 

16 for treating such individual as other than an employee 

17 with respect to periods beginning on and after the first 

18 day of the first calendar quarter beginning more than 180 

19 days after the date of such written determination unless 

20 the taxpayer establishes by clear and convincing evidence 

21 that the taxpayer has a reasonable basis for such treat22 ment.’’. 

23 (c) CONFORMING AMENDMENTS.— 

24 (1) Paragraph (2) of section 6724(d) of the In25 ternal Revenue Code of 1986 is amended by striking 


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1 ‘‘or’’ at the end of subparagraph (GG), by striking 

2 the period at the end of subparagraph (HH) and in3 serting ‘‘, or’’, and by inserting after subparagraph 

4 (HH) the following new subparagraph: 

5 ‘‘(II) section 3511(e) (relating to state6 ments to independent contractors).’’. 

7 (2) Paragraph (2) of section 7436(a) of such 

8 Code is amended by striking ‘‘subsection (a) of sec9 tion 530 of the Revenue Act of 1978’’ and inserting 

10 ‘‘section 3511(b)’’. 

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

12 Code is amended by adding at the end the following 

13 new item: 

‘‘Sec. 3511. Authority to issue guidance clarifying employment status.’’. 

14 (d) TERMINATION OF SECTION 530 OF THE REV15 ENUE ACT OF 1978.—The Revenue Act of 1978 is amend16 ed by striking section 530. 

17 (e) REPORTS ON WORKER MISCLASSIFICATION.—Be18 ginning with the first fiscal year beginning after the date 

19 the first regulation or other guidance is issued for public 

20 comment under section 3511(a) of the Internal Revenue 

21 Code of 1986 (as added by this section): 

22 (1) A report each fiscal year on worker classi23 fication which shall include the total number of ex24 aminations of employers initiated because of sus25 pected worker classification issues, the total number 


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1 of examinations that included determinations on 

2 worker classification issues, the amount of additional 

3 tax liabilities associated with worker classification 

4 enforcement actions, the number of workers reclassi5 fied as a result of these actions, the number of re6 quests for Determination of Worker Status (Form 

7 SS–8), and technical guidance on how to understand 

8 the data provided in the report. 

9 (2) A report each fiscal year in which new sta10 tistically valid data is compiled and interpreted on 

11 worker classification, prepared on the basis of infor12 mation gathered during an Employment Tax Study 

13 conducted by the National Research Program (NRP) 

14 of the Internal Revenue Service. Such report shall 

15 provide statistical estimates of the number of em16 ployers misclassifying workers, the number of work17 ers misclassified, the industries involved, data inter18 pretations and conclusions, and a description of the 

19 impact of improper worker classification on the em20 ployment tax gap. 

21 (f) EFFECTIVE DATES.— 

22 (1) DELAYED EFFECTIVE DATE OF REGULA23 TIONS AND GUIDANCE.—Except as provided in para24 graph (2), any regulation or other guidance issued 

25 under section 3511(a) of the Internal Revenue Code 


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1 of 1986, as added by this section, shall not apply to 

2 services rendered before the date which is 1 year 

3 after the date of the enactment of this Act. 

4 (2) TREATMENT OF SECURITIES BROKER DEAL5 ERS.—Paragraph (9) of section 3511(d) of the In6 ternal Revenue Code of 1986, as added by this sec7 tion, shall apply to services performed after Decem8 ber 31, 1997. 

9 (3) AUTHORITY TO ISSUE REGULATIONS AND

10 GUIDANCE IMMEDIATELY.—So much of the amend11 ment made by subsection (d) as relates to subsection 

12 (b) of section 530 of the Revenue Act of 1978 shall 

13 take effect on the date of the enactment of this Act. 

14 (4) DELAYED TERMINATION OF REMAINDER OF

15 SECTION 530 OF THE REVENUE ACT OF 1978.—Ex16 cept as provided in paragraph (3), the amendments 

17 made by subsections (c)(1) and (d) shall apply to 

18 services rendered on or after the date which is 1 

19 year after the date of the enactment of this Act. 

20 TITLE IV—REBUILD AMERICA 

21 TRUST FUND 

22 SEC. 401. ESTABLISH REBUILD AMERICA TRUST FUND. 

23 (a) IN GENERAL.—Subchapter A of chapter 98 is 

24 amended by adding at the end the following new section: 


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1 ‘‘SEC. 9512. REBUILD AMERICA TRUST FUND. 

2 ‘‘(a) CREATION OF TRUST FUND.—There is estab3 lished in the Treasury of the United States a trust fund 

4 to be known as the ‘Rebuild America Trust Fund’, con5 sisting of such amounts as may be appropriated or cred6 ited to such fund as provided in this section or section 

7 9602(b). 

8 ‘‘(b) TRANSFERS TO TRUST FUND.—There are here9 by appropriated to the Rebuild America Trust Fund 

10 amounts equivalent to the revenues resulting from the 

11 amendments made by title III of the Rebuild America Act. 

12 ‘‘(c) AUTHORITY TO BORROW.— 

13 ‘‘(1) IN GENERAL.—There are authorized to be 

14 appropriated to the Rebuild America Trust Fund, as 

15 repayable advances, such sums as may be necessary 

16 to carry out the other purposes of the Rebuild Amer17 ica Act as described in subsection (d)(2). 

18 ‘‘(2) LIMITATION ON AGGREGATE ADVANCES.— 

19 The maximum aggregate amount of repayable ad20 vances to the Rebuild America Trust Fund which is 

21 outstanding at any one time shall not exceed an 

22 amount equal to the amount which the Secretary es23 timates will be equal to the sum of the amounts ap24 propriated to the Rebuild America Trust Fund 

25 under subsection (b) during the following 60 

26 months. 


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1 ‘‘(3) REPAYMENT OF ADVANCES.— 

2 ‘‘(A) IN GENERAL.—Advances made to the 

3 Rebuild America Trust Fund shall be repaid, 

4 and interest on such advances shall be paid, to 

5 the general fund of the Treasury when the Sec6 retary determines that moneys are available for 

7 such purposes in the Rebuild America Trust 

8 Fund. 

9 ‘‘(B) FINAL REPAYMENT.—No advance 

10 shall be made to the Rebuild America Trust 

11 Fund after September 30, 2022, and all ad12 vances to such Trust Fund shall be repaid on 

13 or before September 30, 2024. 

14 ‘‘(C) RATE OF INTEREST.—Interest on ad15 vances made to the Rebuild America Trust 

16 Fund shall be at a rate determined by the Sec17 retary of the Treasury (as of the close of the 

18 calendar month preceding the month in which 

19 the advance is made) to be equal to the current 

20 average market yield on outstanding marketable 

21 obligations of the United States with remaining 

22 periods to maturity comparable to the antici23 pated period during which the advance will be 

24 outstanding and shall be compounded annually. 

25 ‘‘(d) EXPENDITURES.— 


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1 ‘‘(1) IN GENERAL.—Amounts in the Rebuild 

2 America Trust Fund shall be available, without fur3 ther appropriation— 

4 ‘‘(A) to transfer to accounts specified by, 

5 and to carry out the provisions of, section 103 

6 of the Rebuild America Act, and 

7 ‘‘(B) as provided for in the Rebuild Amer8 ica Act (and the amendments made by that 

9 Act). 

10 ‘‘(2) ALLOCATION OF FUNDS.—The Secretary 

11 shall allocate funds from the Rebuild America Trust 

12 Fund to the responsible Departments for distribu13 tion to the States and subdivisions within 15 days 

14 of the beginning of each fiscal year as set in section 

15 103 of the Rebuild America Act. Each Secretary of 

16 such a Department shall allocate the funds set by 

17 formula to the States or local receiving entities with18 in 90 days of the beginning of such fiscal year. 

19 ‘‘(3) ADMINISTRATIVE FUNDS.—The portion of 

20 funds allowed for administrative costs for any ac21 count may not exceed the percentage used for ad22 ministering those funds at both the Federal and the 

23 State levels under the underlying regular program 

24 that is in effect for the latest appropriations meas25 ure expiring at the end of a fiscal year. 


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1 ‘‘(4) MAINTENANCE OF EFFORT.— 

2 ‘‘(A) FEDERAL LEVEL.—The funds pro3 vided from the Rebuild America Trust Fund 

4 shall not be provided by the Secretary to an ac5 count if the appropriations for that account are 

6 to be funded at not less than the sum provided 

7 in fiscal year 2012, not including emergency 

8 funds. 

9 ‘‘(B) STATE LEVEL.—A State or local gov10 ernment shall not receive funds for an account 

11 provided by the Rebuild America Trust Fund 

12 unless that State maintains the same level of 

13 funding for that function as the State and local 

14 governments provided in State fiscal year 2011. 

15 The Secretary shall, by rule define the State 

16 programs representing the function for each ac17 count for which funds are provided by the 

18 Trust Fund. 

19 ‘‘(5) USE OF AMERICAN IRON, STEEL, MANU20 FACTURED GOODS, AND EQUIPMENT.— 

21 ‘‘(A) IN GENERAL.—None of the funds 

22 made available by the Rebuild America Trust 

23 Fund may be used for a project for the con24 struction, alteration, maintenance, or repair of 

25 a public building or public work unless all of 


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1 the iron, steel, manufactured goods, and equip2 ment used in the project are produced in the 

3 United States. 

4 ‘‘(B) EXCEPTIONS.—Subparagraph (A) 

5 shall not apply in any case or category of cases 

6 in which the head of the Federal department or 

7 agency involved finds that— 

8 ‘‘(i) applying subparagraph (A) would 

9 be inconsistent with the public interest, 

10 ‘‘(ii) iron, steel, the relevant manufac11 tured goods, or the relevant equipment are 

12 not produced in the United States in suffi13 cient and reasonably available quantities 

14 and of a satisfactory quality, or 

15 ‘‘(iii) inclusion of iron, steel, manufac16 tured goods, and equipment produced in 

17 the United States will increase the cost of 

18 the overall project by more than 25 per19 cent. 

20 ‘‘(C) PUBLICATION OF JUSTIFICATION.—If 

21 the head of a Federal department or agency de22 termines that it is necessary to waive the appli23 cation of subparagraph (A) based on a finding 

24 under subparagraph (B), the head of the de25 partment or agency shall publish in the Federal 


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1 Register a detailed written justification as to 

2 why the provision is being waived. 

3 ‘‘(D) CONSISTENCY WITH INTERNATIONAL

4 AGREEMENTS.—This paragraph shall be applied 

5 in a manner consistent with United States obli6 gations under international agreements. 

7 ‘‘(6) WAGE RATE REQUIREMENTS.—Notwith8 standing any other provision of law and in a manner 

9 consistent with other provisions in this section and 

10 in the Rebuild America Act, all laborers and me11 chanics employed by contractors and subcontractors 

12 on projects funded directly by or assisted in whole 

13 or in part by and through the Federal Government 

14 pursuant to funds made available by the Rebuild 

15 America Act shall be paid wages at rates not less 

16 than those prevailing on projects of a character simi17 lar in the locality as determined by the Secretary of 

18 Labor in accordance with subchapter IV of chapter 

19 31 of title 40, United States Code. With respect to 

20 the labor standards specified in this paragraph, the 

21 Secretary of Labor shall have the authority and 

22 functions set forth in Reorganization Plan Num23 bered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) 

24 and section 3145 of title 40, United States Code.’’. 


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1 (b) CONFORMING AMENDMENT.—The table of sec2 tions for subchapter A of chapter 98 is amended by adding 

3 at the end the following new item: 

‘‘Sec. 9512. Rebuild America Trust Fund.’’. 

Æ 


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