I 

112TH CONGRESS 

1ST SESSION H. R. 12 

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

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

pathways back to work for Americans looking for jobs. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 21, 2011 

Mr. LARSON of Connecticut (by request): introduced the following bill; which 

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

the Committees on Small Business, Transportation and Infrastructure, 

Education and the Workforce, Energy and Commerce, Financial Services, 

House Administration, the Judiciary, Oversight and Government Reform, 

Rules, and Science, Space, and Technology, for a period to be subsequently determined by the Speaker, in each case for consideration of such 

provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To provide tax relief for American workers and businesses, 

to put workers back on the job while rebuilding and 

modernizing America, and to provide pathways back to 

work for Americans looking for jobs. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘American Jobs Act of 2011’’. 


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

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. References. 

Sec. 3. Severability. 

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

Sec. 5. Wage rate and employment protection requirements. 

TITLE I—RELIEF FOR WORKERS AND BUSINESSES 

Subtitle A—Payroll Tax Relief 

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

Sec. 102. Temporary tax credit for increased payroll. 

Subtitle B—Other Relief for Businesses 

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

business assets. 

Sec. 112. Surety bonds. 

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

TITLE II—PUTTING WORKERS BACK ON THE JOB WHILE 

REBUILDING AND MODERNIZING AMERICA 

Subtitle A—Veterans Hiring Preferences 

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

Subtitle B—Teacher Stabilization 

Sec. 202. Purpose. 

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

Sec. 204. State allocation. 

Sec. 205. State application. 

Sec. 206. State reservation and responsibilities. 

Sec. 207. Local educational agencies. 

Sec. 208. Early learning. 

Sec. 209. Maintenance of effort. 

Sec. 210. Reporting. 

Sec. 211. Definitions. 

Sec. 212. Authorization of appropriations. 

Subtitle C—First Responder Stabilization 

Sec. 213. Purpose. 

Sec. 214. Grant program. 

Sec. 215. Appropriations. 

Subtitle D—School Modernization 

PART I—ELEMENTARY AND SECONDARY SCHOOLS

Sec. 221. Purpose. 


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Sec. 222. Authorization of appropriations. 

Sec. 223. Allocation of funds. 

Sec. 224. State use of funds. 

Sec. 225. State and local applications. 

Sec. 226. Use of funds. 

Sec. 227. Private schools. 

Sec. 228. Additional provisions. 

PART II—COMMUNITY COLLEGE MODERNIZATION

Sec. 229. Federal assistance for community college modernization. 

PART III—GENERAL PROVISIONS

Sec. 230. Definitions. 

Sec. 231. Buy American. 

Subtitle E—Immediate Transportation Infrastructure Investments 

Sec. 241. Immediate transportation infrastructure investments. 

Subtitle F—Building and Upgrading Infrastructure for Long-Term 

Development 

Sec. 242. Short title. 

Sec. 243. Findings and purpose. 

Sec. 244. Definitions. 

PART I—AMERICAN INFRASTRUCTURE FINANCING AUTHORITY

Sec. 245. Establishment and general authority of AIFA. 

Sec. 246. Voting members of the Board of Directors. 

Sec. 247. Chief executive officer of AIFA. 

Sec. 248. Powers and duties of the Board of Directors. 

Sec. 249. Senior management. 

Sec. 250. Special Inspector General for AIFA. 

Sec. 251. Other personnel. 

Sec. 252. Compliance. 

PART II—TERMS AND LIMITATIONS ON DIRECT LOANS AND LOAN

GUARANTEES

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

Sec. 254. Loan terms and repayment. 

Sec. 255. Compliance and enforcement. 

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

PART III—FUNDING OF AIFA 

Sec. 257. Administrative fees. 

Sec. 258. Efficiency of AIFA. 

Sec. 259. Funding. 

PART IV—EXTENSION OF EXEMPTION FROM ALTERNATIVE MINIMUM TAX

TREATMENT FOR CERTAIN TAX-EXEMPT BONDS

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

certain tax-exempt bonds. 


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Subtitle G—Project Rebuild 

Sec. 261. Project rebuild. 

Subtitle H—National Wireless Initiative 

Sec. 271. Definitions. 

PART I—AUCTIONS OF SPECTRUM AND SPECTRUM MANAGEMENT

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

Sec. 273. Incentive auction authority. 

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

Sec. 275. Permanent extension of auction authority. 

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

Sec. 277. Directed auction of certain spectrum. 

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

PART II—PUBLIC SAFETY BROADBAND NETWORK

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

Sec. 282. Flexible use of narrowband spectrum. 

Sec. 283. Single public safety wireless network licensee. 

Sec. 284. Establishment of public safety broadband corporation. 

Sec. 285. Board of directors of the corporation. 

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

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

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

Sec. 289. Initial funding for corporation. 

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

use. 

Sec. 291. Audit and report. 

Sec. 292. Annual report to Congress. 

Sec. 293. Provision of technical assistance. 

Sec. 294. State and local implementation. 

Sec. 295. State and local implementation fund. 

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

Sec. 297. Public safety trust fund. 

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

Sec. 299. Public safety roaming and priority access. 

TITLE III—ASSISTANCE FOR THE UNEMPLOYED AND PATHWAYS 

BACK TO WORK 

Subtitle A—Supporting Unemployed Workers 

Sec. 301. Short title. 

PART I—EXTENSION OF EMERGENCY UNEMPLOYMENT COMPENSATION AND

CERTAIN EXTENDED BENEFITS PROVISIONS, AND ESTABLISHMENT OF

SELF-EMPLOYMENT ASSISTANCE PROGRAM

Sec. 311. Extension of emergency unemployment compensation program. 

Sec. 312. Temporary extension of extended benefit provisions. 

Sec. 313. Reemployment services and reemployment and eligibility assessment 

activities. 


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

program. 

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

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

PART II—REEMPLOYMENT NOW PROGRAM

Sec. 321. Establishment of reemployment NOW program. 

Sec. 322. Distribution of funds. 

Sec. 323. State plan. 

Sec. 324. Bridge to Work program. 

Sec. 325. Wage insurance. 

Sec. 326. Enhanced reemployment strategies. 

Sec. 327. Self-employment programs. 

Sec. 328. Additional innovative programs. 

Sec. 329. Guidance and additional requirements. 

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

Sec. 331. State. 

PART III—SHORT-TIME COMPENSATION PROGRAM

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

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

with programs in law. 

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

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

Sec. 345. Assistance and guidance in implementing programs. 

Sec. 346. Reports. 

Subtitle B—Long Term Unemployed Hiring Preferences 

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

Subtitle C—Pathways Back to Work 

Sec. 361. Short title. 

Sec. 362. Establishment of pathways back to work fund. 

Sec. 363. Availability of funds. 

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

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

low-income youth. 

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

Sec. 367. General requirements. 

Sec. 368. Definitions. 

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

Individual’s Status as Unemployed 

Sec. 371. Short title. 

Sec. 372. Findings and purpose. 

Sec. 373. Definitions. 

Sec. 374. Prohibited acts. 

Sec. 375. Enforcement. 

Sec. 376. Federal and State immunity. 

Sec. 377. Relationship to other laws. 

Sec. 378. Severability. 


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Sec. 379. Effective date. 

TITLE IV—OFFSETS 

Subtitle A—28 Percent Limitation on Certain Deductions and Exclusions 

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

Subtitle B—Tax Carried Interest in Investment Partnerships as Ordinary 

Income 

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

services. 

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

to partnerships. 

Subtitle C—Close Loophole for Corporate Jet Depreciation 

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

Subtitle D—Repeal Oil Subsidies 

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

the case of oil and gas wells. 

Sec. 432. Repeal of deduction for tertiary injectants. 

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

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

or primary products thereof. 

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

Sec. 436. Repeal enhanced oil recovery credit. 

Sec. 437. Uniform seven-year amortization for geological and geophysical expenditures. 

Sec. 438. Repeal marginal well production credit. 

Subtitle E—Dual Capacity Taxpayers 

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

taxpayers. 

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

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

Deficit Reduction 

Sec. 451. Increased target and trigger for joint select committee on deficit reduction. 

1 SEC. 2. REFERENCES. 

2 Except as expressly provided otherwise, any reference 

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

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


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1 SEC. 3. SEVERABILITY. 

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

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

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

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

8 AND MANUFACTURED GOODS. 

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

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

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

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

13 manufactured goods used in the project are produced in 

14 the United States. 

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

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

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

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

23 satisfactory quality; or 

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

25 goods produced in the United States will increase 


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

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

4 determines that it is necessary to waive the application 

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

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

7 Federal Register a detailed written justification as to why 

8 the provision is being waived. 

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

11 agreements. 

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

14 (a) Notwithstanding any other provision of law and 

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

16 all laborers and mechanics employed by contractors and 

17 subcontractors on projects funded directly by or assisted 

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

20 not less than those prevailing on projects of a character 

21 similar in the locality as determined by the Secretary of 

22 Labor in accordance with subchapter IV of chapter 31 of 

23 title 40, United States Code. 

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

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

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

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

6 by and through the Federal Government pursuant to this 

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

8 of title 49, United States Code. 

9 TITLE I—RELIEF FOR WORKERS 

10 AND BUSINESSES 

11 Subtitle A—Payroll Tax Relief 

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

13 EMPLOYEES, AND THE SELF-EMPLOYED. 

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

15 law— 

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

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

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

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

22 (2) with respect to remuneration paid during 

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

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

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

2 Code). 

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

4 (A) employees performing services in a 

5 trade or business of a qualified employer, or 

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

9 function constituting the basis of the employer’s 

10 exemption under section 501. 

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

12 first $5 million of remuneration or compensation 

13 paid by a qualified employer subject to section 

14 3111(a) or a corresponding amount of compensation 

15 subject to section 3221(a). 

16 (b) SELF-EMPLOYMENT TAXES.— 

17 (1) IN GENERAL.—Notwithstanding any other 

18 provision of law, with respect to any taxable year 

19 which begins in the payroll tax holiday period, the 

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

21 Revenue Code of 1986 shall be— 

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

24 1401(a) during the payroll tax period that does 

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1 lion over total remuneration, if any, subject to 

2 section 3111(a) paid during the payroll tax holi3 day period to employees of the self-employed 

4 person, and 

5 (B) 9.3 percent for any portion of net 

6 earnings from self-employment not subject to 

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

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

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

11 year which begins in the payroll tax holiday period— 

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

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

16 the amount of the taxpayer’s net earnings from 

17 self-employment for the taxable year subject to 

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

19 7.65 percent of the taxpayer’s net earnings 

20 from self-employment in excess of that amount. 

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

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

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


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1 earnings from self-employment for the taxable 

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

4 by section 1401 (after the application of this 

5 section) with respect to the excess. 

6 (c) REGULATORY AUTHORITY.—The Secretary may 

7 prescribe any such regulations or other guidance necessary 

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

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

12 qualified employer. 

13 (d) DEFINITIONS.— 

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

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

16 2012. 

17 (2) QUALIFIED EMPLOYER.—For purposes of 

18 this paragraph: 

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

20 employer’’ means any employer other than the 

21 United States, any State or possession of the 

22 United States, or any political subdivision 

23 thereof, or any instrumentality of the foregoing. 

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


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1 Notwithstanding subparagraph (A), the term 

2 ‘‘qualified employer’’ includes any employer 

3 which is a public institution of higher education 

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

6 (3) AGGREGATION RULES.—For purposes of 

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

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

9 when multiple entities shall be treated as a single 

10 employer, and rules with respect to predecessor and 

11 successor employers may be applied, in such manner 

12 as may be prescribed by the Secretary. 

13 (e) TRANSFERS OF FUNDS.— 

14 (1) TRANSFERS TO FEDERAL OLD-AGE AND

15 SURVIVORS INSURANCE TRUST FUND.—There are 

16 hereby appropriated to the Federal Old-Age and 

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

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

20 equal to the reduction in revenues to the Treasury 

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

22 (b) to employers other than those described in sub23 section (e)(2). Amounts appropriated by the pre24 ceding sentence shall be transferred from the general 

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1 licate to the extent possible the transfers which 

2 would have occurred to such Trust Fund had such 

3 amendments not been enacted. 

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

9 amounts equal to the reduction in revenues to the 

10 Treasury by reason of the application of subsection 

11 (a) to employers subject to the Railroad Retirement 

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

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

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

17 been enacted. 

18 (f) COORDINATION WITH OTHER FEDERAL LAWS.— 

19 For purposes of applying any provision of Federal law 

20 other than the provisions of the Internal Revenue Code 

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

22 of such Code shall be determined without regard to the 

23 reduction in such rate under this section. 


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

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

5 respect to wages for services performed for such qualified 

6 employer, a payroll increase credit determined as follows: 

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

8 2011 through December 31, 2011, 6.2 percent of 

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

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

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

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

15 2012 through December 31, 2012, 

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

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

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

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

21 minus 

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

23 than zero) of subtracting from $5 million such 

24 wages for calendar year 2011. 

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

26 which the wages subject to tax under section 


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

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

4 wages shall be deemed to be 80 percent of the 

5 amount of wages taken into account for the period 

6 from October 1, 2011 through December 31, 2011 

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

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

10 amount of wages taken into account for 2012. 

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

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

14 the case of a qualified employer exempt from tax 

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

16 of 1986, in furtherance of the activities related to 

17 the purpose or function constituting the basis of the 

18 employer’s exemption under section 501. 

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

20 section— 

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

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

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


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

6 101 of the Higher Education Act of 1965). 

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

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

10 apply to determine when multiple entities shall be treated 

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

12 and successor employers may be applied, in such manner 

13 as may be prescribed by the Secretary. 

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

15 credit shall be treated as a credit allowable under Subtitle 

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

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

20 amount of tax imposed on the qualified employer under 

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

22 income tax deduction by a qualified employer for amounts 

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

25 amounts so credited. 


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

4 Fund and the Federal Disability Insurance Trust Fund 

5 established under section 201 of the Social Security Act 

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

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

9 sentence shall be transferred from the general fund at 

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

12 such Trust Fund had such amendments not been enacted. 

13 (f) APPLICATION TO RAILROAD RETIREMENT

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

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

17 shall apply by substituting section 3221 for section 3111, 

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

19 appropriate. 


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1 Subtitle B—Other Relief for 

2 Businesses 

3 SEC. 111. EXTENSION OF TEMPORARY 100 PERCENT BONUS 

4 DEPRECIATION FOR CERTAIN BUSINESS AS5 SETS. 

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

7 of the Internal Revenue Code is amended— 

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

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

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

12 (b) CONFORMING AMENDMENT.—The heading for 

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

14 Code is amended by striking ‘‘PRE-2012 PERIODS’’ and in15 serting ‘‘PRE-2013 PERIODS’’. 

16 SEC. 112. SURETY BONDS. 

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

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

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

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

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

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


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

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

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

5 money in the Treasury not otherwise appropriated, 

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

8 Fund, as authorized by the Small Business Investment 

9 Act of 1958, as amended. 

10 SEC. 113. DELAY IN APPLICATION OF WITHHOLDING ON 

11 GOVERNMENT CONTRACTORS. 

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

13 Prevention and Reconciliation Act of 2005 is amended by 

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

15 31, 2013’’. 

16 TITLE II—PUTTING WORKERS 

17 BACK ON THE JOB WHILE RE18 BUILDING AND MODERNIZING 

19 AMERICA 

20 Subtitle A—Veterans Hiring 

21 Preferences 

22 SEC. 201. RETURNING HEROES AND WOUNDED WARRIORS 

23 WORK OPPORTUNITY TAX CREDITS. 

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

25 the Internal Revenue Code is amended by striking 


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

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

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

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

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

9 (d)(3)(A)(ii)(II))’’. 

10 (b) RETURNING HEROES TAX CREDITS.—Section 

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

12 striking ‘‘or’’ at the end of clause (3)(A)(i), and inserting 

13 the following new clauses after clause (ii)— 

14 ‘‘(iii) having aggregate periods of un15 employment during the 1-year period end16 ing on the hiring date which equal or ex17 ceed 4 weeks (but less than 6 months), or 

18 ‘‘(iv) having aggregate periods of un19 employment during the 1-year period end20 ing on the hiring date which equal or ex21 ceed 6 months.’’. 

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

23 the Internal revenue Code is amended by adding a new 

24 paragraph (15) as follows— 


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1 ‘‘(15) CREDIT ALLOWED FOR UNEMPLOYED

2 VETERANS.— 

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

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

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

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

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

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

11 designated local agency as being in receipt 

12 of unemployment compensation under 

13 State or Federal law for not less than 6 

14 months during the 1-year period ending on 

15 the hiring date; or 

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

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

18 certified by the designated local agency as 

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

21 not less than 4 weeks (but less than 6 

22 months) during the 1-year period ending 

23 on the hiring date. 


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

3 methods for certification.’’. 

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

6 the Internal Revenue Code is amended— 

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

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

10 (2) by inserting at the end of section 52(c) the 

11 following new paragraphs— 

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

13 employer, there shall be treated as a credit allowable 

14 under subpart C (and not allowable under subpart 

15 D) the lesser of— 

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

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

19 hiring of qualified veterans described in sections 

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

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

22 employer during the calendar year in which the 

23 taxable year begins. 

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


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

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

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

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

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

6 means an employer that is— 

7 ‘‘(A) an organization described in section 

8 501(c) and exempt from taxation under section 

9 501(a), or 

10 ‘‘(B) a public higher education institution 

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

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

14 subsection— 

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

16 taxes’ means— 

17 ‘‘(i) amounts required to be withheld 

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

20 ‘‘(ii) amounts required to be withheld 

21 from such employees under section 

22 3101(a), and 

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

24 the tax-exempt employer under section 

25 3111(a).’’. 


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1 (e) TREATMENT OF POSSESSIONS.— 

2 (1) PAYMENTS TO POSSESSIONS.— 

3 (A) MIRROR CODE POSSESSIONS.—The 

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

6 tax system amounts equal to the loss to that 

7 possession by reason of the application of this 

8 section (other than this subsection). Such 

9 amounts shall be determined by the Secretary 

10 of the Treasury based on information provided 

11 by the government of the respective possession 

12 of the United States. 

13 (B) OTHER POSSESSIONS.—The Secretary 

14 of the Treasury shall pay to each possession of 

15 the United States, which does not have a mirror 

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

19 by the possession by reason of the application 

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

21 mirror code tax system had been in effect in 

22 such possession. The preceding sentence shall 

23 not apply with respect to any possession of the 

24 United States unless such possession has a 

25 plan, which has been approved by the Secretary 


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1 of the Treasury, under which such possession 

2 will promptly distribute such payments. 

3 (2) COORDINATION WITH CREDIT ALLOWED

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

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

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

9 with respect to any person— 

10 (A) to whom a credit is allowed against 

11 taxes imposed by the possession of the United 

12 States by reason of this section for such taxable 

13 year, or 

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

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

16 to such taxable year. 

17 (3) DEFINITIONS AND SPECIAL RULES.— 

18 (A) POSSESSION OF THE UNITED

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

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

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

24 States Virgin Islands. 


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

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

7 such system is determined by reference to the 

8 income tax laws of the United States as if such 

9 possession were the United States. 

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

12 States Code, rules similar to the rules of section 

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

14 Reinvestment Tax Act of 2009 shall apply. 

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

16 this section shall apply to individuals who begin work for 

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

18 Subtitle B—Teacher Stabilization 

19 SEC. 202. PURPOSE. 

20 The purpose of this subtitle is to provide funds to 

21 States to prevent teacher layoffs and support the creation 

22 of additional jobs in public early childhood, elementary, 

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

24 2013 school years. 


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

2 SECRETARY OF THE INTERIOR; AVAILABILITY 

3 OF FUNDS. 

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

6 the Secretary— 

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

8 to provide assistance to the outlying areas on the 

9 basis of their respective needs, as determined by the 

10 Secretary, for activities consistent with this subtitle 

11 under such terms and conditions as the Secretary 

12 may determine; 

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

14 to provide assistance to the Secretary of the Interior 

15 to carry out activities consistent with this subtitle, in 

16 schools operated or funded by the Bureau of Indian 

17 Education; and 

18 (3) may reserve up to $2,000,000 for adminis19 tration and oversight of this subtitle, including pro20 gram evaluation. 

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

24 SEC. 204. STATE ALLOCATION. 

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


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1 funds appropriated under section 212 to States, of 

2 which— 

3 (1) 60 percent shall be allocated to States on 

4 the basis of their relative population of individuals 

5 aged 5 through 17; and 

6 (2) 40 percent shall be allocated to States on 

7 the basis of their relative total population. 

8 (b) AWARDS.—The Secretary shall award a State’s 

9 allocation under subsection (a) to the Governor of the 

10 State only if the Secretary has approved the State’s appli11 cation under section 205. 

12 (c) ALTERNATE DISTRIBUTION OF FUNDS.— 

13 (1) IN GENERAL.—If, within 30 days after the 

14 date of enactment of this Act, a Governor has not 

15 submitted an approvable application to the Sec16 retary, the Secretary shall, consistent with para17 graph (2), provide for funds allocated to that State 

18 to be distributed to another entity or other entities 

19 in the State for the support of early childhood, ele20 mentary, and secondary education, under such terms 

21 and conditions as the Secretary may establish. 

22 (2) MAINTENANCE OF EFFORT.— 

23 (A) GOVERNOR ASSURANCE.—The Sec24 retary shall not allocate funds under paragraph 

25 (1) unless the Governor of the State provides 


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1 an assurance to the Secretary that the State 

2 will for fiscal years 2012 and 2013 meet the re3 quirements of section 209. 

4 (B) ALLOCATIONS TO OTHER ENTITIES.— 

5 Notwithstanding subparagraph (A), the Sec6 retary may allocate up to 50 percent of the 

7 funds that are available to the State under 

8 paragraph (1) to another entity or entities in 

9 the State, provided that the State educational 

10 agency submits data to the Secretary dem11 onstrating that the State will for fiscal year 

12 2012 meet the requirements of section 209(a) 

13 or the Secretary otherwise determines that the 

14 State will meet those requirements, or such 

15 comparable requirements as the Secretary may 

16 establish, for that year. 

17 (3) REQUIREMENTS.—An entity that receives 

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

19 accordance with the requirements of this subtitle. 

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

21 funding under this subtitle or only receives a portion of 

22 its allocation under subsection (c), the Secretary shall re23 allocate the State’s entire allocation or the remaining por24 tion of its allocation, as the case may be, to the remaining 

25 States in accordance with subsection (a). 


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1 SEC. 205. STATE APPLICATION. 

2 The Governor of a State desiring to receive a grant 

3 under this subtitle shall submit an application to the Sec4 retary within 30 days of the date of enactment of this Act, 

5 in such manner, and containing such information as the 

6 Secretary may reasonably require to determine the State’s 

7 compliance with applicable provisions of law. 

8 SEC. 206. STATE RESERVATION AND RESPONSIBILITIES. 

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

10 under section 204(b) may reserve— 

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

12 funds for awards to State-funded early learning pro13 grams; and 

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

15 for the administrative costs of carrying out its re16 sponsibilities under this subtitle. 

17 (b) STATE RESPONSIBILITIES.—Each State receiving 

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

19 under subsection (a)— 

20 (1) use the remaining grant funds only for 

21 awards to local educational agencies for the support 

22 of early childhood, elementary, and secondary edu23 cation; and 

24 (2) distribute those funds, through subgrants, 

25 to its local educational agencies by distributing— 


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

2 educational agencies’ relative shares of enroll3 ment; and 

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

5 educational agencies’ relative shares of funds 

6 received under part A of title I of the Elemen7 tary and Secondary Education Act of 1965 for 

8 fiscal year 2011; and 

9 (3) make those funds available to local edu10 cational agencies no later than 100 days after receiv11 ing a grant from the Secretary. 

12 (c) PROHIBITIONS.—A State shall not use funds re13 ceived under this subtitle to directly or indirectly— 

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

15 fund; 

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

17 the effect of establishing, restoring, or 

18 supplementing a rainy-day fund; 

19 (3) reduce or retire debt obligations incurred by 

20 the State; or 

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

22 the effect of reducing or retiring debt obligations in23 curred by the State. 


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1 SEC. 207. LOCAL EDUCATIONAL AGENCIES. 

2 Each local educational agency that receives a 

3 subgrant under this subtitle— 

4 (1) shall use the subgrant funds only for com5 pensation and benefits and other expenses, such as 

6 support services, necessary to retain existing employ7 ees, recall or rehire former employees, or hire new 

8 employees to provide early childhood, elementary, or 

9 secondary educational and related services; 

10 (2) shall obligate those funds not later than 

11 September 30, 2013; and 

12 (3) may not use those funds for general admin13 istrative expenses or for other support services or ex14 penditures, as those terms are defined by the Na15 tional Center for Education Statistics in the Com16 mon Core of Data, as of the date of enactment of 

17 this Act. 

18 SEC. 208. EARLY LEARNING. 

19 Each State-funded early learning program that re20 ceives funds under this subtitle shall— 

21 (1) use those funds only for compensation, ben22 efits, and other expenses, such as support services, 

23 necessary to retain early childhood educators, recall 

24 or rehire former early childhood educators, or hire 

25 new early childhood educators to provide early learn26 ing services; and 


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1 (2) obligate those funds not later than Sep2 tember 30, 2013. 

3 SEC. 209. MAINTENANCE OF EFFORT. 

4 (a) REQUIREMENT.—The Secretary shall not allocate 

5 funds to a State under this subtitle unless the State pro6 vides an assurance to the Secretary that— 

7 (1) for State fiscal year 2012— 

8 (A) the State will maintain State support 

9 for early childhood, elementary, and secondary 

10 education (in the aggregate or on the basis of 

11 expenditure per pupil) and for public institu12 tions of higher education (not including support 

13 for capital projects or for research and develop14 ment or tuition and fees paid by students) at 

15 not less than the level of such support for each 

16 of the two categories for State fiscal year 2011; 

17 or 

18 (B) the State will maintain State support 

19 for early childhood, elementary, and secondary 

20 education and for public institutions of higher 

21 education (not including support for capital 

22 projects or for research and development or tui23 tion and fees paid by students) at a percentage 

24 of the total revenues available to the State that 


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1 is equal to or greater than the percentage pro2 vided for State fiscal year 2011; and 

3 (2) for State fiscal year 2013— 

4 (A) the State will maintain State support 

5 for early childhood, elementary, and secondary 

6 education (in the aggregate or on the basis of 

7 expenditure per pupil) and for public institu8 tions of higher education (not including support 

9 for capital projects or for research and develop10 ment or tuition and fees paid by students) at 

11 not less than the level of such support for each 

12 of the two categories for State fiscal year 2012; 

13 or 

14 (B) the State will maintain State support 

15 for early childhood, elementary, and secondary 

16 education and for public institutions of higher 

17 education (not including support for capital 

18 projects or for research and development or tui19 tion and fees paid by students) at a percentage 

20 of the total revenues available to the State that 

21 is equal to or greater than the percentage pro22 vided for State fiscal year 2012. 

23 (b) WAIVER.—The Secretary may waive the require24 ments of this section if the Secretary determines that a 

25 waiver would be equitable due to— 


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1 (1) exceptional or uncontrollable circumstances, 

2 such as a natural disaster; or 

3 (2) a precipitous decline in the financial re4 sources of the State. 

5 SEC. 210. REPORTING. 

6 Each State that receives a grant under this subtitle 

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

8 that contains— 

9 (1) a description of how funds received under 

10 this part were expended or obligated; and 

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

12 by the State using funds received under this subtitle. 

13 SEC. 211. DEFINITIONS. 

14 In this subtitle: 

15 (1) ESEA DEFINITIONS.—Except as otherwise 

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

17 ‘‘outlying area’’, ‘‘Secretary’’, ‘‘State’’, and ‘‘State 

18 educational agency’’ have the meanings given those 

19 terms in section 9101 of the Elementary and Sec20 ondary Education Act of 1965 (20 U.S.C. 7801). 

21 (2) STATE.—The term ‘‘State’’ does not include 

22 an outlying area. 

23 (3) EARLY CHILD EDUCATOR.—The term 

24 ‘‘early childhood educator’’ means an individual 

25 who— 


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1 (A) works directly with children in a State2 funded early learning program in a low-income 

3 community; 

4 (B) is involved directly in the care, devel5 opment, and education of infants, toddlers, or 

6 young children age five and under; and 

7 (C) has completed a baccalaureate or ad8 vanced degree in early childhood development or 

9 early childhood education, or in a field related 

10 to early childhood education. 

11 (4) STATE-FUNDED EARLY LEARNING PRO12 GRAM.—The term ‘‘State-funded early learning pro13 gram’’ means a program that provides educational 

14 services to children from birth to kindergarten entry 

15 and receives funding from a State. 

16 SEC. 212. AUTHORIZATION OF APPROPRIATIONS. 

17 There are authorized to be appropriated, and there 

18 are appropriated, $30,000,000,000 to carry out this sub19 title for fiscal year 2012. 

20 Subtitle C—First Responder 

21 Stabilization 

22 SEC. 213. PURPOSE. 

23 The purpose of this subtitle is to provide funds to 

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


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1 creation of additional jobs for, law enforcement officers 

2 and other first responders. 

3 SEC. 214. GRANT PROGRAM. 

4 The Attorney General shall carry out a competitive 

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

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

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

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

9 awarded under this section shall not be subject to sub10 sections (g) or (i) of section 1701 or to section 1704 of 

11 such Act (42 U.S.C. 3796dd–3(c)). 

12 SEC. 215. APPROPRIATIONS. 

13 There are hereby appropriated to the Community 

14 Oriented Policing Stabilization Fund out of any money in 

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

16 remain available until September 30, 2012, of which 

17 $4,000,000,000 shall be for the Attorney General to carry 

18 out the competitive grant program under section 214; and 

19 of which $1,000,000,000 shall be transferred by the Attor20 ney General to a First Responder Stabilization Fund from 

21 which the Secretary of Homeland Security shall make 

22 competitive grants for hiring, rehiring, or retention pursu23 ant to the Federal Fire Prevention and Control Act of 

24 1974 (15 U.S.C. 2201 et seq.), to carry out section 34 

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


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1 the Secretary may grant waivers from the requirements 

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

3 (c)(2), and (c)(4)(A) of such section 34. Of the amounts 

4 appropriated herein, not to exceed $8,000,000 shall be for 

5 administrative costs of the Attorney General, and not to 

6 exceed $2,000,000 shall be for administrative costs of the 

7 Secretary of Homeland Security. 

8 Subtitle D—School Modernization 

9 PART I—ELEMENTARY AND SECONDARY 

10 SCHOOLS 

11 SEC. 221. PURPOSE. 

12 The purpose of this part is to provide assistance for 

13 the modernization, renovation, and repair of elementary 

14 and secondary school buildings in public school districts 

15 across America in order to support the achievement of im16 proved educational outcomes in those schools. 

17 SEC. 222. AUTHORIZATION OF APPROPRIATIONS. 

18 There are authorized to be appropriated, and there 

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

20 which shall be available for obligation by the Secretary 

21 until September 30, 2012. 

22 SEC. 223. ALLOCATION OF FUNDS. 

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

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


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

2 the Interior to carry out modernization, renovation, 

3 and repair activities described in section 226 in 

4 schools operated or funded by the Bureau of Indian 

5 Education; 

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

7 the outlying areas for modernization, renovation, 

8 and repair activities described in section 226; and 

9 (3) such funds as the Secretary determines are 

10 needed to conduct a survey, by the National Center 

11 for Education Statistics, of the school construction, 

12 modernization, renovation, and repair needs of the 

13 public schools of the United States. 

14 (b) STATE ALLOCATION.—After reserving funds 

15 under subsection (a), the Secretary shall allocate the re16 maining amount among the States in proportion to their 

17 respective allocations under part A of title I of the Ele18 mentary and Secondary Education Act of 1965 (in this 

19 part referred to as the ‘‘ESEA’’) (20 U.S.C. 6311 et seq.) 

20 for fiscal year 2011, except that— 

21 (1) the Secretary shall allocate 40 percent of 

22 such remaining amount to the 100 local educational 

23 agencies with the largest numbers of children aged 

24 5–17 living in poverty, as determined using the most 

25 recent data available from the Department of ComVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 merce that are satisfactory to the Secretary, in pro2 portion to those agencies’ respective allocations 

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

4 2011; and 

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

6 by the aggregate amount of the allocations under 

7 paragraph (1) to local educational agencies in that 

8 State. 

9 (c) REMAINING ALLOCATION.— 

10 (1) STATES.—If a State does not apply for its 

11 allocation under subsection (b) (or applies for less 

12 than the full allocation for which it is eligible) or 

13 does not use that allocation in a timely manner, the 

14 Secretary may— 

15 (A) reallocate all or a portion of that allo16 cation to the other States in accordance with 

17 subsection (b); or 

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

19 to make direct allocations to local educational 

20 agencies within the State based on their respec21 tive allocations under part A of title I of the 

22 ESEA for fiscal year 2011 or such other meth23 od as the Secretary may determine. 

24 (2) LOCAL EDUCATIONAL AGENCIES.—If a local 

25 educational agency does not apply for its allocation 


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1 under subsection (b)(1), applies for less than the full 

2 allocation for which it is eligible, or does not use 

3 that allocation in a timely manner, the Secretary 

4 may reallocate all or a portion of its allocation to the 

5 State in which that agency is located. 

6 SEC. 224. STATE USE OF FUNDS. 

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

8 under this part may reserve not more than one percent 

9 of the State’s allocation under section 223(b) for the pur10 pose of administering the grant, except that no State may 

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

12 (b) FUNDS TO LOCAL EDUCATIONAL AGENCIES.— 

13 (1) FORMULA SUBGRANTS.—From the grant 

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

15 State shall allocate at least 50 percent to local edu16 cational agencies, including charter schools that are 

17 local educational agencies, that did not receive funds 

18 under section 223(b)(1) from the Secretary, in ac19 cordance with their respective allocations under part 

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

21 that no such local educational agency shall receive 

22 less than $10,000. 

23 (2) ADDITIONAL SUBGRANTS.—The State shall 

24 use any funds remaining, after reserving funds 

25 under subsection (a) and allocating funds under 


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1 paragraph (1), for subgrants to local educational 

2 agencies that did not receive funds under section 

3 223(b)(1), including charter schools that are local 

4 educational agencies, to support modernization, ren5 ovation, and repair projects that the State deter6 mines, using objective criteria, are most needed in 

7 the State, with priority given to projects in rural 

8 local educational agencies. 

9 (c) REMAINING FUNDS.—If a local educational agen10 cy does not apply for an allocation under subsection 

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

12 use that allocation in a timely manner, the State may re13 allocate any unused portion to other local educational 

14 agencies in accordance with subsection (b). 

15 SEC. 225. STATE AND LOCAL APPLICATIONS. 

16 (a) STATE APPLICATION.—A State that desires to re17 ceive a grant under this part shall submit an application 

18 to the Secretary at such time, in such manner, and con19 taining such information and assurances as the Secretary 

20 may require, which shall include— 

21 (1) an identification of the State agency or enti22 ty that will administer the program under this part; 

23 and 


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

2 grant funds will be distributed and administered, in3 cluding— 

4 (A) how the State will determine the cri5 teria and priorities in making subgrants under 

6 section 224(b)(2); 

7 (B) any additional criteria the State will 

8 use in determining which projects it will fund 

9 under that section; 

10 (C) a description of how the State will con11 sider— 

12 (i) the needs of local educational 

13 agencies for assistance under this part; 

14 (ii) the impact of potential projects on 

15 job creation in the State; 

16 (iii) the fiscal capacity of local edu17 cational agencies applying for assistance; 

18 (iv) the percentage of children in 

19 those local educational agencies who are 

20 from low-income families; and 

21 (v) the potential for leveraging assist22 ance provided by the program under this 

23 part through matching or other financing 

24 mechanisms; 


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1 (D) a description of how the State will en2 sure that the local educational agencies receiv3 ing subgrants meet the requirements of this 

4 part; 

5 (E) a description of how the State will en6 sure that the State and its local educational 

7 agencies meet the deadlines established in sec8 tion 228; 

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

10 priority to the use of green practices that are 

11 certified, verified, or consistent with any appli12 cable provisions of— 

13 (i) the LEED Green Building Rating 

14 System; 

15 (ii) Energy Star; 

16 (iii) the CHPS Criteria; 

17 (iv) Green Globes; or 

18 (v) an equivalent program adopted by 

19 the State or another jurisdiction with au20 thority over the local educational agency; 

21 (G) a description of the steps that the 

22 State will take to ensure that local educational 

23 agencies receiving subgrants under this part 

24 will adequately maintain any facilities that are 


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1 modernized, renovated, or repaired with such 

2 subgrant funds; and 

3 (H) such additional information and assur4 ances as the Secretary may require. 

5 (b) LOCAL APPLICATION.—A local educational agen6 cy that is eligible under section 223(b)(1) that desires to 

7 receive a grant under this part shall submit an application 

8 to the Secretary at such time, in such manner, and con9 taining such information and assurances as the Secretary 

10 may require, which shall include— 

11 (1) a description of how the local educational 

12 agency will meet the deadlines and requirements of 

13 this part; 

14 (2) a description of the steps that the local edu15 cational agency will take to adequately maintain any 

16 facilities that are modernized, renovated, or repaired 

17 with funds under this part; and 

18 (3) such additional information and assurances 

19 as the Secretary may require. 

20 SEC. 226. USE OF FUNDS. 

21 (a) IN GENERAL.—Funds awarded to local edu22 cational agencies under this part shall be used only for 

23 either or both of the following modernization, renovation, 

24 or repair activities in facilities that are used for elemenVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00046 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 tary or secondary education or for early learning pro2 grams: 

3 (1) Direct payments for school modernization, 

4 renovation, or repair. 

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

6 other financing instruments that are newly issued 

7 for the purpose of financing school modernization, 

8 renovation, or repair. 

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

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

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

12 would otherwise be expended to modernize, renovate, or 

13 repair eligible school facilities. 

14 (c) PROHIBITION.—Funds awarded to local edu15 cational agencies under this part may not be used for— 

16 (1) new construction; 

17 (2) payment of routine maintenance costs; or 

18 (3) modernization, renovation, or repair of sta19 diums or other facilities primarily used for athletic 

20 contests or exhibitions or other events for which ad21 mission is charged to the general public. 

22 SEC. 227. PRIVATE SCHOOLS. 

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

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

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


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1 (1) such section 9501 shall not apply with re2 spect to the title to any real property modernized, 

3 renovated, or repaired with assistance provided 

4 under this part; 

5 (2) educational services or other benefits funded 

6 under this part for private schools shall be provided 

7 only to private, nonprofit elementary or secondary 

8 schools with a rate of child poverty of at least 40 

9 percent and may include only— 

10 (A) modifications of school facilities nec11 essary to meet the standards applicable to pub12 lic schools under the Americans with Disabil13 ities Act of 1990 (42 U.S.C. 12101 et seq.); 

14 (B) modifications of school facilities nec15 essary to meet the standards applicable to pub16 lic schools under section 504 of the Rehabilita17 tion Act of 1973 (29 U.S.C. 794); and 

18 (C) asbestos or polychlorinated biphenyls 

19 abatement or removal from school facilities; and 

20 (3) expenditures for services provided using 

21 funds made available under section 226 shall be con22 sidered equal for purposes of section 9501(a)(4) of 

23 the ESEA if the per-pupil expenditures for services 

24 described in paragraph (2) for students enrolled in 

25 private, nonprofit elementary and secondary schools 


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

2 are consistent with the per-pupil expenditures under 

3 this part for children enrolled in the public schools 

4 of the local educational agency receiving funds under 

5 this part. 

6 (b) REMAINING FUNDS.—If the expenditure for serv7 ices described in subsection (a)(2) is less than the amount 

8 calculated under subsection (a)(3) because of insufficient 

9 need for those services, the remainder shall be available 

10 to the local educational agency for modernization, renova11 tion, or repair of its school facilities. 

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

13 or the application thereof, to any person or circumstance 

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

15 section and the application to other persons or cir16 cumstances shall not be affected thereby. 

17 SEC. 228. ADDITIONAL PROVISIONS. 

18 (a) 24-MONTH PERIOD OF AVAILABILITY.—Funds 

19 appropriated under section 222 shall be available for obli20 gation by local educational agencies receiving grants from 

21 the Secretary under section 223(b)(1), by States reserving 

22 funds under section 224(a), and by local educational agen23 cies receiving subgrants under section 224(b)(1) only dur24 ing the period that ends 24 months after the date of enact25 ment of this Act. 


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1 (b) 36-MONTH PERIOD OF AVAILABILITY.—Funds 

2 appropriated under section 222 shall be available for obli3 gation by local educational agencies receiving subgrants 

4 under section 224(b)(2) only during the period that ends 

5 36 months after the date of enactment of this Act. 

6 (c) APPLICABILITY OF GEPA.—Section 439 of the 

7 General Education Provisions Act (20 U.S.C. 1232b) shall 

8 apply to funds available under this part. 

9 (d) LIMITATION.—For purposes of section 223(b)(1), 

10 Hawaii, the District of Columbia, and the Commonwealth 

11 of Puerto Rico are not local educational agencies. 

12 PART II—COMMUNITY COLLEGE 

13 MODERNIZATION 

14 SEC. 229. FEDERAL ASSISTANCE FOR COMMUNITY COL15 LEGE MODERNIZATION. 

16 (a) IN GENERAL.— 

17 (1) GRANT PROGRAM.—From the amounts 

18 made available under subsection (h), the Secretary 

19 shall award grants to States to modernize, renovate, 

20 or repair existing facilities at community colleges. 

21 (2) ALLOCATION.— 

22 (A) RESERVATIONS.—Of the amount made 

23 available to carry out this section, the Secretary 

24 shall reserve— 


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1 (i) up to 0.25 percent for grants to in2 stitutions that are eligible under section 

3 316 of the Higher Education Act of 1965 

4 (20 U.S.C. 1059c) to provide for mod5 ernization, renovation, and repair activities 

6 described in this section; and 

7 (ii) up to 0.25 percent for grants to 

8 the outlying areas to provide for mod9 ernization, renovation, and repair activities 

10 described in this section. 

11 (B) ALLOCATION.—After reserving funds 

12 under subparagraph (A), the Secretary shall al13 locate to each State that has an application ap14 proved by the Secretary an amount that bears 

15 the same relation to any remaining funds as the 

16 total number of students in such State who are 

17 enrolled in institutions described in section 

18 230(b)(1)(A) plus the number of students who 

19 are estimated to be enrolled in and pursuing a 

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

21 master’s, professional, or other advanced degree 

22 in institutions described in section 

23 230(b)(1)(B), based on the proportion of de24 grees or certificates awarded by such institu25 tions that are not bachelor’s, master’s, profesVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00051 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 sional, or other advanced degrees, as reported 

2 to the Integrated Postsecondary Data System 

3 bears to the estimated total number of such 

4 students in all States, except that no State shall 

5 receive less than $2,500,000. 

6 (C) REALLOCATION.—Amounts not allo7 cated under this section to a State because the 

8 State either did not submit an application 

9 under subsection (b), the State submitted an 

10 application that the Secretary determined did 

11 not meet the requirements of such subsection, 

12 or the State cannot demonstrate to the Sec13 retary a sufficient demand for projects to war14 rant the full allocation of the funds, shall be 

15 proportionately reallocated under this para16 graph to the other States that have a dem17 onstrated need for, and are receiving, alloca18 tions under this section. 

19 (D) STATE ADMINISTRATION.—A State 

20 that receives a grant under this section may use 

21 not more than one percent of that grant to ad22 minister it, except that no State may use more 

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

24 (3) SUPPLEMENT, NOT SUPPLANT.—Funds 

25 made available under this section shall be used to 


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

2 and local funds that would otherwise be expended to 

3 modernize, renovate, or repair existing community 

4 college facilities. 

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

6 grant under this section shall submit an application to the 

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

8 such information and assurances as the Secretary may re9 quire. Such application shall include a description of— 

10 (1) how the funds provided under this section 

11 will improve instruction at community colleges in the 

12 State and will improve the ability of those colleges 

13 to educate and train students to meet the workforce 

14 needs of employers in the State; 

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

16 estimated number of persons to be employed in the 

17 project; and 

18 (3) the cost of each project and the total 

19 amount of funds requested for each project and for 

20 all projects. 

21 (c) PROHIBITED USES OF FUNDS.— 

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

23 this section may be used for— 

24 (A) payment of routine maintenance costs; 


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1 (B) construction, modernization, renova2 tion, or repair of stadiums or other facilities 

3 primarily used for athletic contests or exhibi4 tions or other events for which admission is 

5 charged to the general public; or 

6 (C) construction, modernization, renova7 tion, or repair of facilities— 

8 (i) used for sectarian instruction, reli9 gious worship, or a school or department 

10 of divinity; or 

11 (ii) in which a substantial portion of 

12 the functions of the facilities are subsumed 

13 in a religious mission. 

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

15 awarded to a four-year public institution of higher 

16 education under this section may be used for any fa17 cility, service, or program of the institution that is 

18 not available to students who are pursuing a degree 

19 or certificate that is not a bachelor’s, master’s, pro20 fessional, or other advanced degree. 

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

22 community college projects under this section, the State 

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

24 project involves activities that are certified, verified, or 

25 consistent with the applicable provisions of— 


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1 (1) the LEED Green Building Rating System; 

2 (2) Energy Star; 

3 (3) the CHPS Criteria, as applicable; 

4 (4) Green Globes; or 

5 (5) an equivalent program adopted by the State 

6 or the State higher education agency that includes 

7 a verifiable method to demonstrate compliance with 

8 such program. 

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

10 General Education Provisions Act (20 U.S.C. 1232b) shall 

11 apply to funds available under this section. 

12 (f) REPORTS BY THE STATES.—Each State that re13 ceives a grant under this section shall, not later than Sep14 tember 30, 2012, and annually thereafter for each fiscal 

15 year in which the State expends funds received under this 

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

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

18 grant was, or will be, used; 

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

20 the assistance provided to each community college 

21 under this section; and 

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

23 funded under this section. 

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

25 shall submit to the authorizing committees (as defined in 


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

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

3 this section, including the information described in sub4 section (f). 

5 (h) AVAILABILITY OF FUNDS.— 

6 (1) There are authorized to be appropriated, 

7 and there are appropriated, to carry out this section 

8 (in addition to any other amounts appropriated to 

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

10 Treasury not otherwise appropriated), 

11 $5,000,000,000 for fiscal year 2012. 

12 (2) Funds appropriated under this subsection 

13 shall be available for obligation by community col14 leges only during the period that ends 36 months 

15 after the date of enactment of this Act. 

16 PART III—GENERAL PROVISIONS 

17 SEC. 230. DEFINITIONS. 

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

19 this subtitle, the terms ‘‘local educational agency’’, ‘‘Sec20 retary’’, and ‘‘State educational agency’’ have the mean21 ings given those terms in section 9101 of the Elementary 

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

23 (b) ADDITIONAL DEFINITIONS.—The following defi24 nitions apply to this title: 


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1 (1) COMMUNITY COLLEGE.—The term ‘‘commu2 nity college’’ means— 

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

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

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

6 (B) an institution of higher education (as 

7 defined in section 101 of the Higher Education 

8 Act of 1965 (20 U.S.C. 1001)) that awards a 

9 significant number of degrees and certificates, 

10 as determined by the Secretary, that are not— 

11 (i) bachelor’s degrees (or an equiva12 lent); or 

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

14 advanced degrees. 

15 (2) CHPS CRITERIA.—The term ‘‘CHPS Cri16 teria’’ means the green building rating program de17 veloped by the Collaborative for High Performance 

18 Schools. 

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

20 means the Energy Star program of the United 

21 States Department of Energy and the United States 

22 Environmental Protection Agency. 

23 (4) GREEN GLOBES.—The term ‘‘Green 

24 Globes’’ means the Green Building Initiative enviVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 ronmental design and rating system referred to as 

2 Green Globes. 

3 (5) LEED GREEN BUILDING RATING SYSTEM.— 

4 The term ‘‘LEED Green Building Rating System’’ 

5 means the United States Green Building Council 

6 Leadership in Energy and Environmental Design 

7 green building rating standard referred to as the 

8 LEED Green Building Rating System. 

9 (6) MODERNIZATION, RENOVATION, AND RE10 PAIR.—The term ‘‘modernization, renovation, and 

11 repair’’ means— 

12 (A) comprehensive assessments of facili13 ties, including indoor air-quality assessments, to 

14 identify— 

15 (i) facility conditions or deficiencies 

16 that could adversely affect student and 

17 staff health, safety, performance, or pro18 ductivity or energy, water, or materials ef19 ficiency; and 

20 (ii) needed facility improvements; 

21 (B) repairing, replacing, or installing roofs 

22 (which may be extensive, intensive, or semi-in23 tensive ‘‘green’’ roofs); electrical wiring; water 

24 supply and plumbing systems, sewage systems, 

25 storm water runoff systems, lighting systems 


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1 (or components of such systems); or building 

2 envelope, windows, ceilings, flooring, or doors, 

3 including security doors; 

4 (C) repairing, replacing, or installing heat5 ing, ventilation, or air conditioning systems, or 

6 components of those systems (including insula7 tion) to improve energy efficiency; 

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

9 and safety codes, including professional installa10 tion of fire and life safety alarms, and mod11 ernizations, renovations, and repairs that en12 sure that facilities are prepared for such emer13 gencies as acts of terrorism, campus violence, 

14 and natural disasters, such as improving build15 ing infrastructure to accommodate security 

16 measures and installing or upgrading tech17 nology to ensure that a school or incident is 

18 able to respond to such emergencies; 

19 (E) making modifications necessary to 

20 make educational facilities accessible in compli21 ance with the Americans with Disabilities Act 

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

23 504 of the Rehabilitation Act of 1973 (29 

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


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1 shall not be the primary use of a grant or 

2 subgrant; 

3 (F) abatement, removal, or interim con4 trols of asbestos, polychlorinated biphenyls, 

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

6 lead-based paint hazards; 

7 (G) retrofitting necessary to increase en8 ergy efficiency; 

9 (H) measures, such as selection and sub10 stitution of products and materials, and imple11 mentation of improved maintenance and oper12 ational procedures, such as ‘‘green cleaning’’ 

13 programs, to reduce or eliminate potential stu14 dent or staff exposure to— 

15 (i) volatile organic compounds; 

16 (ii) particles such as dust and pollens; 

17 or 

18 (iii) combustion gases; 

19 (I) modernization, renovation, or repair 

20 necessary to reduce the consumption of coal, 

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

22 (J) installation or upgrading of educational 

23 technology infrastructure; 

24 (K) installation or upgrading of renewable 

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1 ing solar, photovoltaic, wind, biomass (including 

2 wood pellet and woody biomass), waste-to-en3 ergy, solar-thermal, and geothermal systems, 

4 and energy audits; 

5 (L) modernization, renovation, or repair 

6 activities related to energy efficiency and renew7 able energy, and improvements to building in8 frastructures to accommodate bicycle and pe9 destrian access; 

10 (M) ground improvements, storm water 

11 management, landscaping, and environmental 

12 clean-up when necessary; 

13 (N) other modernization, renovation, or re14 pair to— 

15 (i) improve teachers’ ability to teach 

16 and students’ ability to learn; 

17 (ii) ensure the health and safety of 

18 students and staff; or 

19 (iii) improve classroom, laboratory, 

20 and vocational facilities in order to en21 hance the quality of science, technology, 

22 engineering, and mathematics instruction; 

23 and 

24 (O) required environmental remediation re25 lated to facilities modernization, renovation, or 


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1 repair activities described in subparagraphs (A) 

2 through (N). 

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

4 area’’ means the U.S. Virgin Islands, Guam, Amer5 ican Samoa, the Commonwealth of the Northern 

6 Mariana Islands, and the Republic of Palau. 

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

8 the 50 States of the United States, the Common9 wealth of Puerto Rico, and the District of Columbia. 

10 SEC. 231. BUY AMERICAN. 

11 Section 1605 of division A of the American Recovery 

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

13 to funds made available under this title. 

14 Subtitle E—Immediate Transpor15 tation Infrastructure Invest16 ments 

17 SEC. 241. IMMEDIATE TRANSPORTATION INFRASTRUCTURE 

18 INVESTMENTS. 

19 (a) GRANTS-IN-AID FOR AIRPORTS.— 

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

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

22 carry out airport improvement under subchapter I of 

23 chapter 471 and subchapter I of chapter 475 of title 

24 49, United States Code. 


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1 (2) FEDERAL SHARE; LIMITATION ON OBLIGA2 TIONS.—The Federal share payable of the costs for 

3 which a grant is made under this subsection, shall 

4 be 100 percent. The amount made available under 

5 this subsection shall not be subject to any limitation 

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

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

8 States Code. 

9 (3) DISTRIBUTION OF FUNDS.—Funds provided 

10 to the Secretary under this subsection shall not be 

11 subject to apportionment formulas, special appor12 tionment categories, or minimum percentages under 

13 chapter 471 of such title. 

14 (4) AVAILABILITY.—The amounts made avail15 able under this subsection shall be available for obli16 gation until the date that is two years after the date 

17 of the enactment of this Act. The Secretary shall ob18 ligate amounts totaling not less than 50 percent of 

19 the funds made available within one year of enact20 ment and obligate remaining amounts not later than 

21 two years after enactment. 

22 (5) ADMINISTRATIVE EXPENSES.—Of the funds 

23 made available under this subsection, 0.3 percent 

24 shall be available to the Secretary for administrative 

25 expenses, shall remain available for obligation until 


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1 September 30, 2015, and may be used in conjunc2 tion with funds otherwise provided for the adminis3 tration of the Grants-In-Aid for Airports program. 

4 (b) NEXT GENERATION AIR TRAFFIC CONTROL AD5 VANCEMENTS.— 

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

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

8 necessary Federal Aviation Administration capital, 

9 research, and operating costs to carry out Next Gen10 eration air traffic control system advancements. 

11 (2) AVAILABILITY.—The amounts made avail12 able under this subsection shall be available for obli13 gation until the date that is two years after the date 

14 of the enactment of this Act. 

15 (c) HIGHWAY INFRASTRUCTURE INVESTMENT.— 

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

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

18 for restoration, repair, construction and other activi19 ties eligible under section 133(b) of title 23, United 

20 States Code, and for passenger and freight rail 

21 transportation and port infrastructure projects eligi22 ble for assistance under section 601(a)(8) of title 23. 

23 (2) FEDERAL SHARE; LIMITATION ON OBLIGA24 TIONS.—The Federal share payable on account of 

25 any project or activity carried out with funds made 


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1 available under this subsection shall be, at the op2 tion of the recipient, up to 100 percent of the total 

3 cost thereof. The amount made available under this 

4 subsection shall not be subject to any limitation on 

5 obligations for Federal-aid highways and highway 

6 safety construction programs set forth in any Act or 

7 in title 23, United States Code. 

8 (3) AVAILABILITY.—The amounts made avail9 able under this subsection shall be available for obli10 gation until the date that is two years after the date 

11 of the enactment of this Act. The Secretary shall ob12 ligate amounts totaling not less than 50 percent of 

13 the funds made available within one year of enact14 ment and obligate remaining amounts not later than 

15 two years after enactment. 

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

17 provided in this subsection, after making the set18 asides required by paragraphs (9), (10), (11), (12), 

19 and (15), 50 percent of the funds shall be appor20 tioned to States using the formula set forth in sec21 tion 104(b)(3) of title 23, United States Code, and 

22 the remaining funds shall be apportioned to States 

23 in the same ratio as the obligation limitation for fis24 cal year 2010 was distributed among the States in 


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1 accordance with the formula specified in section 

2 120(a)(6) of division A of Public Law 111–117. 

3 (5) APPORTIONMENT.—Apportionments under 

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

5 after the date of the enactment of this Act. 

6 (6) REDISTRIBUTION.— 

7 (A) The Secretary shall, 180 days fol8 lowing the date of apportionment, withdraw 

9 from each State an amount equal to 50 percent 

10 of the funds apportioned under paragraph (4) 

11 to that State (excluding funds suballocated 

12 within the State) less the amount of funding 

13 obligated (excluding funds suballocated within 

14 the State), and the Secretary shall redistribute 

15 such amounts to other States that have had no 

16 funds withdrawn under this subparagraph in 

17 the manner described in section 120(c) of divi18 sion A of Public Law 111–117. 

19 (B) One year following the date of appor20 tionment, the Secretary shall withdraw from 

21 each recipient of funds apportioned under para22 graph (4) any unobligated funds, and the Sec23 retary shall redistribute such amounts to States 

24 that have had no funds withdrawn under this 

25 paragraph (excluding funds suballocated within 


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1 the State) in the manner described in section 

2 120(c) of division A of Public Law 111–117. 

3 (C) At the request of a State, the Sec4 retary may provide an extension of the one-year 

5 period only to the extent that the Secretary de6 termines that the State has encountered ex7 treme conditions that create an unworkable bid8 ding environment or other extenuating cir9 cumstances. Before granting an extension, the 

10 Secretary notify in writing the Committee on 

11 Transportation and Infrastructure and the 

12 Committee on Environment and Public Works, 

13 providing a thorough justification for the exten14 sion. 

15 (7) TRANSPORTATION ENHANCEMENTS.—Three 

16 percent of the funds apportioned to a State under 

17 paragraph (4) shall be set aside for the purposes de18 scribed in section 133(d)(2) of title 23, United 

19 States Code (without regard to the comparison to 

20 fiscal year 2005). 

21 (8) SUBALLOCATION.—Thirty percent of the 

22 funds apportioned to a State under this subsection 

23 shall be suballocated within the State in the manner 

24 and for the purposes described in the first sentence 

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


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1 133(d)(3)(D) of title 23, United States Code. Such 

2 suballocation shall be conducted in every State. 

3 Funds suballocated within a State to urbanized 

4 areas and other areas shall not be subject to the re5 distribution of amounts required 180 days following 

6 the date of apportionment of funds provided by 

7 paragraph (6)(A). 

8 (9) PUERTO RICO AND TERRITORIAL HIGHWAY

9 PROGRAMS.—Of the funds provided under this sub10 section, $105,000,000 shall be set aside for the 

11 Puerto Rico highway program authorized under sec12 tion 165 of title 23, United States Code, and 

13 $45,000,000 shall be for the territorial highway pro14 gram authorized under section 215 of title 23, 

15 United States Code. 

16 (10) FEDERAL LANDS AND INDIAN RESERVA17 TIONS.—Of the funds provided under this sub18 section, $550,000,000 shall be set aside for invest19 ments in transportation at Indian reservations and 

20 Federal lands in accordance with the following:. 

21 (A) Of the funds set aside by this para22 graph, $310,000,000 shall be for the Indian 

23 Reservation Roads program, $170,000,000 

24 shall be for the Park Roads and Parkways pro25 gram, $60,000,000 shall be for the Forest 


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

2 for the Refuge Roads program. 

3 (B) For investments at Indian reservations 

4 and Federal lands, priority shall be given to 

5 capital investments, and to projects and activi6 ties that can be completed within 2 years of en7 actment of this Act. 

8 (C) One year following the enactment of 

9 this Act, to ensure the prompt use of the fund10 ing provided for investments at Indian reserva11 tions and Federal lands, the Secretary shall 

12 have the authority to redistribute unobligated 

13 funds within the respective program for which 

14 the funds were appropriated. 

15 (D) Up to four percent of the funding pro16 vided for Indian Reservation Roads may be 

17 used by the Secretary of the Interior for pro18 gram management and oversight and project-re19 lated administrative expenses. 

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

21 United States Code, shall not apply to funds set 

22 aside by this paragraph. 

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

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

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1 tation training programs under section 140(b) title 

2 23, United States Code. 

3 (A) Funds set aside under this subsection 

4 shall be competitively awarded and used for the 

5 purpose of providing training, apprenticeship 

6 (including Registered Apprenticeship), skill de7 velopment, and skill improvement programs, as 

8 well as summer transportation institutes and 

9 may be transferred to, or administered in part10 nership with, the Secretary of Labor and shall 

11 demonstrate to the Secretary of Transportation 

12 program outcomes, including— 

13 (i) impact on areas with transpor14 tation workforce shortages; 

15 (ii) diversity of training participants; 

16 (iii) number of participants obtaining 

17 certifications or credentials required for 

18 specific types of employment; 

19 (iv) employment outcome metrics, 

20 such as job placement and job retention 

21 rates, established in consultation with the 

22 Secretary of Labor and consistent with 

23 metrics used by programs under the Work24 force Investment Act; 


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1 (v) to the extent practical, evidence 

2 that the program did not preclude workers 

3 that participate in training or apprentice4 ship activities under the program from 

5 being referred to, or hired on, projects 

6 funded under this chapter; and 

7 (vi) identification of areas of collabo8 ration with the Department of Labor pro9 grams, including co-enrollment. 

10 (B) To be eligible to receive a competitively 

11 awarded grant under this subsection, a State 

12 must certify that at least 0.1 percent of the 

13 amounts apportioned under the Surface Trans14 portation Program and Bridge Program will be 

15 obligated in the first fiscal year after enactment 

16 of this act for job training activities consistent 

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

18 Code. 

19 (12) DISADVANTAGED BUSINESS ENTER20 PRISES.—Of the funds provided under this sub21 section, $10,000,000 shall be set aside for training 

22 programs and assistance programs under section 

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

24 aside under this paragraph should be allocated to 


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1 businesses that have proven success in adding staff 

2 while effectively completing projects. 

3 (13) STATE PLANNING AND OVERSIGHT EX4 PENSES.—Of amounts apportioned under paragraph 

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

6 percent for activities related to projects funded 

7 under this subsection, including activities eligible 

8 under sections 134 and 135 of title 23, United 

9 States Code, State administration of subgrants, and 

10 State oversight of subrecipients. 

11 (14) CONDITIONS.— 

12 (A) Funds made available under this sub13 section shall be administered as if apportioned 

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

15 except for funds made available for investments 

16 in transportation at Indian reservations and 

17 Federal lands, and for the territorial highway 

18 program, which shall be administered in accord19 ance with chapter 2 of title 23, United States 

20 Code, and except for funds made available for 

21 disadvantaged business enterprises bonding as22 sistance, which shall be administered in accord23 ance with chapter 3 of title 49, United States 

24 Code. 


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1 (B) Funds made available under this sub2 section shall not be obligated for the purposes 

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

4 United States Code. 

5 (C) Funding provided under this sub6 section shall be in addition to any and all funds 

7 provided for fiscal years 2011 and 2012 in any 

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

9 not affect the distribution of funds provided for 

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

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

12 shall apply to funds apportioned under this sub13 section. 

14 (15) OVERSIGHT.—The Administrator of the 

15 Federal Highway Administration may set aside up 

16 to 0.15 percent of the funds provided under this 

17 subsection to fund the oversight by the Adminis18 trator of projects and activities carried out with 

19 funds made available to the Federal Highway Ad20 ministration in this Act, and such funds shall be 

21 available through September 30, 2015. 

22 (d) CAPITAL ASSISTANCE FOR HIGH SPEED RAIL

23 CORRIDORS AND INTERCITY PASSENGER RAIL SERV24 ICE.— 


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

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

3 grants for high-speed rail projects as authorized 

4 under sections 26104 and 26106 of title 49, United 

5 States Code, capital investment grants to support 

6 intercity passenger rail service as authorized under 

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

8 congestion grants as authorized under section 24105 

9 of title 49, United States Code, and to enter into co10 operative agreements for these purposes as author11 ized, except that the Administrator of the Federal 

12 Railroad Administration may retain up to one per13 cent of the funds provided under this heading to 

14 fund the award and oversight by the Administrator 

15 of grants made under this subsection, which retained 

16 amount shall remain available for obligation until 

17 September 30, 2015. 

18 (2) AVAILABILITY.—The amounts made avail19 able under this subsection shall be available for obli20 gation until the date that is two years after the date 

21 of the enactment of this Act. The Secretary shall ob22 ligate amounts totaling not less than 50 percent of 

23 the funds made available within one year of enact24 ment and obligate remaining amounts not later than 

25 two years after enactment. 


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1 (3) FEDERAL SHARE.—The Federal share pay2 able of the costs for which a grant or cooperative 

3 agreements is made under this subsection shall be, 

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

5 (4) INTERIM GUIDANCE.—The Secretary shall 

6 issue interim guidance to applicants covering appli7 cation procedures and administer the grants pro8 vided under this subsection pursuant to that guid9 ance until final regulations are issued. 

10 (5) INTERCITY PASSENGER RAIL CORRIDORS.— 

11 Not less than 85 percent of the funds provided 

12 under this subsection shall be for cooperative agree13 ments that lead to the development of entire seg14 ments or phases of intercity or high-speed rail cor15 ridors. 

16 (6) CONDITIONS.— 

17 (A) In addition to the provisions of title 

18 49, United States Code, that apply to each of 

19 the individual programs funded under this sub20 section, subsections 24402(a)(2), 24402(i), and 

21 24403(a) and (c) of title 49, United States 

22 Code, shall also apply to the provision of funds 

23 provided under this subsection. 

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

25 plan developed under Chapter 227 of title 49, 


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1 United States Code, to be eligible for assistance 

2 under this subsection. 

3 (C) Recipients of grants under this para4 graph shall conduct all procurement trans5 actions using such grant funds in a manner 

6 that provides full and open competition, as de7 termined by the Secretary, in compliance with 

8 existing labor agreements. 

9 (e) CAPITAL GRANTS TO THE NATIONAL RAILROAD

10 PASSENGER CORPORATION.— 

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

12 $2,000,000,000 to enable the Secretary of Transpor13 tation to make capital grants to the National Rail14 road Passenger Corporation (Amtrak), as authorized 

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

16 and Improvement Act of 2008 (Public Law 110– 

17 432). 

18 (2) AVAILABILITY.—The amounts made avail19 able under this subsection shall be available for obli20 gation until the date that is two years after the date 

21 of the enactment of this Act. The Secretary shall ob22 ligate amounts totaling not less than 50 percent of 

23 the funds made available within one year of enact24 ment and obligate remaining amounts not later than 

25 two years after enactment. 


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

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

3 rehabilitation, or upgrade of railroad assets or infra4 structure, and for capital projects that expand pas5 senger rail capacity including the rehabilitation of 

6 rolling stock. 

7 (4) CONDITIONS.— 

8 (A) None of the funds under this sub9 section shall be used to subsidize the operating 

10 losses of Amtrak. 

11 (B) The funds provided under this sub12 section shall be awarded not later than 90 days 

13 after the date of enactment of this Act. 

14 (C) The Secretary shall take measures to 

15 ensure that projects funded under this sub16 section shall be completed within 2 years of en17 actment of this Act, and shall serve to supple18 ment and not supplant planned expenditures for 

19 such activities from other Federal, State, local 

20 and corporate sources. The Secretary shall cer21 tify to the House and Senate Committees on 

22 Appropriations in writing compliance with the 

23 preceding sentence. 

24 (5) OVERSIGHT.—The Administrator of the 

25 Federal Railroad Administration may set aside 0.5 


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1 percent of the funds provided under this subsection 

2 to fund the oversight by the Administrator of 

3 projects and activities carried out with funds made 

4 available in this subsection, and such funds shall be 

5 available through September 30, 2015. 

6 (f) TRANSIT CAPITAL ASSISTANCE.— 

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

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

9 grants for transit capital assistance grants as de10 fined by section 5302(a)(1) of title 49, United 

11 States Code. Notwithstanding any provision of chap12 ter 53 of title 49, however, a recipient of funding 

13 under this subsection may use up to 10 percent of 

14 the amount provided for the operating costs of 

15 equipment and facilities for use in public transpor16 tation or for other eligible activities. 

17 (2) FEDERAL SHARE; LIMITATION ON OBLIGA18 TIONS.—The applicable requirements of chapter 53 

19 of title 49, United States Code, shall apply to fund20 ing provided under this subsection, except that the 

21 Federal share of the costs for which any grant is 

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

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

24 available under this subsection shall not be subject 


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1 to any limitation on obligations for transit programs 

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

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

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

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

10 two years after enactment. 

11 (4) DISTRIBUTION OF FUNDS.—The Secretary 

12 of Transportation shall— 

13 (A) provide 80 percent of the funds appro14 priated under this subsection for grants under 

15 section 5307 of title 49, United States Code, 

16 and apportion such funds in accordance with 

17 section 5336 of such title; 

18 (B) provide 10 percent of the funds appro19 priated under this subsection in accordance 

20 with section 5340 of such title; and 

21 (C) provide 10 percent of the funds appro22 priated under this subsection for grants under 

23 section 5311 of title 49, United States Code, 

24 and apportion such funds in accordance with 

25 such section. 


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1 (5) APPORTIONMENT.—The funds apportioned 

2 under this subsection shall be apportioned not later 

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

4 Act. 

5 (6) REDISTRIBUTION.— 

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

8 from each urbanized area or State an amount 

9 equal to 50 percent of the funds apportioned to 

10 such urbanized areas or States less the amount 

11 of funding obligated, and the Secretary shall re12 distribute such amounts to other urbanized 

13 areas or States that have had no funds with14 drawn under this proviso utilizing whatever 

15 method he deems appropriate to ensure that all 

16 funds redistributed under this proviso shall be 

17 utilized promptly. 

18 (B) One year following the date of appor19 tionment, the Secretary shall withdraw from 

20 each urbanized area or State any unobligated 

21 funds, and the Secretary shall redistribute such 

22 amounts to other urbanized areas or States 

23 that have had no funds withdrawn under this 

24 proviso utilizing whatever method the Secretary 

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1 distributed under this proviso shall be utilized 

2 promptly. 

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

4 State, the Secretary of Transportation may pro5 vide an extension of such 1-year period if the 

6 Secretary determines that the urbanized area or 

7 State has encountered an unworkable bidding 

8 environment or other extenuating cir9 cumstances. Before granting an extension, the 

10 Secretary shall notify in writing the Committee 

11 on Transportation and Infrastructure and the 

12 Committee on Banking, Housing and Urban 

13 Affairs, providing a thorough justification for 

14 the extension. 

15 (7) CONDITIONS.— 

16 (A) Of the funds provided for section 5311 

17 of title 49, United States Code, 2.5 percent 

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

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

20 shall apply to funds appropriated under this 

21 subsection. 

22 (C) The funds appropriated under this 

23 subsection shall not be comingled with any prior 

24 year funds. 


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1 (8) OVERSIGHT.—Notwithstanding any other 

2 provision of law, 0.3 percent of the funds provided 

3 for grants under section 5307 and section 5340, and 

4 0.3 percent of the funds provided for grants under 

5 section 5311, shall be available for administrative 

6 expenses and program management oversight, and 

7 such funds shall be available through September 30, 

8 2015. 

9 (g) STATE OF GOOD REPAIR.— 

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

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

12 capital expenditures as authorized by sections 

13 5309(b)(2) and (3) of title 49, United States Code. 

14 (2) FEDERAL SHARE.—The applicable require15 ments of chapter 53 of title 49, United States Code, 

16 shall apply, except that the Federal share of the 

17 costs for which a grant is made under this sub18 section shall be, at the option of the recipient, up to 

19 100 percent. 

20 (3) AVAILABILITY.—The amounts made avail21 able under this subsection shall be available for obli22 gation until the date that is two years after the date 

23 of the enactment of this Act. The Secretary shall ob24 ligate amounts totaling not less than 50 percent of 

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1 ment and obligate remaining amounts not later than 

2 two years after enactment. 

3 (4) DISTRIBUTION OF FUNDS.— 

4 (A) The Secretary of Transportation shall 

5 apportion not less than 75 percent of the funds 

6 under this subsection for the modernization of 

7 fixed guideway systems, pursuant to the for8 mula set forth in section 5336(b) title 49, 

9 United States Code, other than subsection 

10 (b)(2)(A)(ii). 

11 (B) Of the funds appropriated under this 

12 subsection, not less than 25 percent shall be 

13 available for the restoration or replacement of 

14 existing public transportation assets related to 

15 bus systems, pursuant to the formula set forth 

16 in section 5336 other than subsection (b). 

17 (5) APPORTIONMENT.—The funds made avail18 able under this subsection shall be apportioned not 

19 later than 30 days after the date of the enactment 

20 of this Act. 

21 (6) REDISTRIBUTION.— 

22 (A) The Secretary shall, 180 days fol23 lowing the date of apportionment, withdraw 

24 from each urbanized area an amount equal to 

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1 banized area less the amount of funding obli2 gated, and the Secretary shall redistribute such 

3 amounts to other urbanized areas that have had 

4 no funds withdrawn under this paragraph uti5 lizing whatever method the Secretary deems ap6 propriate to ensure that all funds redistributed 

7 under this paragraph shall be utilized promptly. 

8 (B) One year following the date of appor9 tionment, the Secretary shall withdraw from 

10 each urbanized area any unobligated funds, and 

11 the Secretary shall redistribute such amounts to 

12 other urbanized areas that have had no funds 

13 withdrawn under this paragraph, utilizing what14 ever method the Secretary deems appropriate to 

15 ensure that all funds redistributed under this 

16 paragraph shall be utilized promptly. 

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

18 the Secretary may provide an extension of the 

19 1-year period if the Secretary finds that the ur20 banized area has encountered an unworkable 

21 bidding environment or other extenuating cir22 cumstances. Before granting an extension, the 

23 Secretary shall notify the Committee on Trans24 portation and Infrastructure and the Com25 mittee on Banking, Housing, and Urban AfVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00084 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 fairs, providing a thorough justification for the 

2 extension. 

3 (7) CONDITIONS.— 

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

5 Public Law 109–59 shall apply to funds made 

6 available under this subsection. 

7 (B) The funds appropriated under this 

8 subsection shall not be commingled with any 

9 prior year funds. 

10 (8) OVERSIGHT.—Notwithstanding any other 

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

12 subsection shall be available for administrative ex13 penses and program management oversight and shall 

14 remain available for obligation until September 30, 

15 2015. 

16 (h) TRANSPORTATION INFRASTRUCTURE GRANTS

17 AND FINANCING.— 

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

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

20 capital investments in surface transportation infra21 structure. The Secretary shall distribute funds pro22 vided under this subsection as discretionary grants 

23 to be awarded to State and local governments or 

24 transit agencies on a competitive basis for projects 


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

2 metropolitan area, or a region. 

3 (2) FEDERAL SHARE; LIMITATION ON OBLIGA4 TIONS.—The Federal share payable of the costs for 

5 which a grant is made under this subsection, shall 

6 be 100 percent. 

7 (3) AVAILABILITY.—The amounts made avail8 able under this subsection shall be available for obli9 gation until the date that is two years after the date 

10 of the enactment of this Act. The Secretary shall ob11 ligate amounts totaling not less than 50 percent of 

12 the funds made available within one year of enact13 ment and obligate remaining amounts not later than 

14 two years after enactment. 

15 (4) PROJECT ELIGIBILITY.—Projects eligible for 

16 funding provided under this subsection include— 

17 (A) highway or bridge projects eligible 

18 under title 23, United States Code, including 

19 interstate rehabilitation, improvements to the 

20 rural collector road system, the reconstruction 

21 of overpasses and interchanges, bridge replace22 ments, seismic retrofit projects for bridges, and 

23 road realignments; 

24 (B) public transportation projects eligible 

25 under chapter 53 of title 49, United States 


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1 Code, including investments in projects partici2 pating in the New Starts or Small Starts pro3 grams that will expedite the completion of those 

4 projects and their entry into revenue service; 

5 (C) passenger and freight rail transpor6 tation projects; and 

7 (D) port infrastructure investments, in8 cluding projects that connect ports to other 

9 modes of transportation and improve the effi10 ciency of freight movement. 

11 (5) TIFIA PROGRAM.—The Secretary may 

12 transfer to the Federal Highway Administration 

13 funds made available under this subsection for the 

14 purpose of paying the subsidy and administrative 

15 costs of projects eligible for Federal credit assistance 

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

17 the Secretary finds that such use of the funds would 

18 advance the purposes of this subsection. 

19 (6) PROJECT PRIORITY.—The Secretary shall 

20 give priority to projects that are expected to be com21 pleted within 3 years of the date of the enactment 

22 of this Act. 

23 (7) DEADLINE FOR ISSUANCE OF COMPETITION

24 CRITERIA.—The Secretary shall publish criteria on 

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1 ed under this subsection not later than 90 days after 

2 enactment of this Act. The Secretary shall require 

3 applications for funding provided under this sub4 section to be submitted not later than 180 days after 

5 the publication of the criteria, and announce all 

6 projects selected to be funded from such funds not 

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

8 the Act. 

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

10 conducted using funds provided under this sub11 section shall comply with the requirements of sub12 chapter IV of chapter 31 of title 40, United States 

13 Code. 

14 (9) ADMINISTRATIVE EXPENSES.—The Sec15 retary may retain up to one half of one percent of 

16 the funds provided under this subsection, and may 

17 transfer portions of those funds to the Administra18 tors of the Federal Highway Administration, the 

19 Federal Transit Administration, the Federal Rail20 road Administration and the Maritime Administra21 tion, to fund the award and oversight of grants 

22 made under this subsection. Funds retained shall re23 main available for obligation until September 30, 

24 2015. 

25 (i) LOCAL HIRING.— 


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

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

3 this section, the Secretary of Transportation may es4 tablish standards under which a contract for con5 struction may be advertised that contains require6 ments for the employment of individuals residing in 

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

8 is to be performed to perform construction work re9 quired under the contract, provided that— 

10 (A) all or part of the construction work 

11 performed under the contract occurs in an area 

12 designated by the Secretary as an area of high 

13 unemployment, using data reported by the 

14 United States Department of Labor, Bureau of 

15 Labor Statistics; 

16 (B) the estimated cost of the project of 

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

18 million, except that the estimated cost of the 

19 project in the case of construction funded under 

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

21 and 

22 (C) the recipient may not require the hir23 ing of individuals who do not have the nec24 essary skills to perform work in any craft or 

25 trade; provided that the recipient may require 


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1 the hiring of such individuals if the recipient es2 tablishes reasonable provisions to train such in3 dividuals to perform any such work under the 

4 contract effectively. 

5 (2) PROJECT STANDARDS.— 

6 (A) IN GENERAL.—Any standards estab7 lished by the Secretary under this section shall 

8 ensure that any requirements specified under 

9 subsection (c)(1)— 

10 (i) do not compromise the quality of 

11 the project; 

12 (ii) are reasonable in scope and appli13 cation; 

14 (iii) do not unreasonably delay the 

15 completion of the project; and 

16 (iv) do not unreasonably increase the 

17 cost of the project; 

18 (B) AVAILABLE PROGRAMS.—The Sec19 retary shall make available to recipients the 

20 workforce development and training programs 

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

22 to assist recipients who wish to establish train23 ing programs that satisfy the provisions of sec24 tion (c)(1)(C). The Secretary of Labor shall 

25 make available its qualifying workforce and 


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1 training development programs to recipients 

2 who wish to establish training programs that 

3 satisfy the provisions of section (c)(1)(C). 

4 (3) IMPLEMENTING REGULATIONS.—The Sec5 retary shall promulgate final regulations to imple6 ment the authority of this subsection. 

7 (j) ADMINISTRATIVE PROVISIONS.— 

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

9 conducted using funds provided under this subtitle 

10 shall comply with the requirements of subchapter IV 

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

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

13 A of the American Recovery and Reinvestment Act 

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

15 conducted using funds provided under this subtitle. 

16 Subtitle F—Building and Upgrad17 ing Infrastructure for Long18 Term Development 

19 SEC. 242. SHORT TITLE. 

20 This subtitle may be cited as the ‘‘Building and Up21 grading Infrastructure for Long-Term Development Act’’. 

22 SEC. 243. FINDINGS AND PURPOSE. 

23 (a) FINDINGS.—Congress finds that— 

24 (1) infrastructure has always been a vital ele25 ment of the economic strength of the United States 


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1 and a key indicator of the international leadership of 

2 the United States; 

3 (2) the Erie Canal, the Hoover Dam, the rail4 roads, and the interstate highway system are all tes5 taments to American ingenuity and have helped pro6 pel and maintain the United States as the world’s 

7 largest economy; 

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

9 Global Competitiveness Report, the United States 

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

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

12 overall infrastructure’’ category of the same report, 

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

14 (4) according to the World Bank’s 2010 Logis15 tic Performance Index, the capacity of countries to 

16 efficiently move goods and connect manufacturers 

17 and consumers with international markets is improv18 ing around the world, and the United States now 

19 ranks seventh in the world in logistics-related infra20 structure behind countries from both Europe and 

21 Asia; 

22 (5) according to a January 2009 report from 

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1 tivity and Growth,’’ infrastructure investment is a 

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

3 (6) according to the American Society of Civil 

4 Engineers, the current condition of the infrastruc5 ture in the United States earns a grade point aver6 age of D, and an estimated $2,200,000,000,000 in7 vestment is needed over the next 5 years to bring 

8 American infrastructure up to adequate condition; 

9 (7) according to the National Surface Trans10 portation Policy and Revenue Study Commission, 

11 $225,000,000,000 is needed annually from all 

12 sources for the next 50 years to upgrade the United 

13 States surface transportation system to a state of 

14 good repair and create a more advanced system; 

15 (8) the current infrastructure financing mecha16 nisms of the United States, both on the Federal and 

17 State level, will fail to meet current and foreseeable 

18 demands and will create large funding gaps; 

19 (9) published reports state that there may not 

20 be enough demand for municipal bonds to maintain 

21 the same level of borrowing at the same rates, re22 sulting in significantly decreased infrastructure in23 vestment at the State and local level; 

24 (10) current funding mechanisms are not read25 ily scalable and do not— 


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1 (A) serve large in-State or cross jurisdic2 tion infrastructure projects, projects of regional 

3 or national significance, or projects that cross 

4 sector silos; 

5 (B) sufficiently catalyze private sector in6 vestment; or 

7 (C) ensure the optimal return on public re8 sources; 

9 (11) although grant programs of the United 

10 States Government must continue to play a central 

11 role in financing the transportation, environment, 

12 and energy infrastructure needs of the United 

13 States, current and foreseeable demands on existing 

14 Federal, State, and local funding for infrastructure 

15 expansion clearly exceed the resources to support 

16 these programs by margins wide enough to prompt 

17 serious concerns about the United States ability to 

18 sustain long-term economic development, produc19 tivity, and international competitiveness; 

20 (12) the capital markets, including pension 

21 funds, private equity funds, mutual funds, sovereign 

22 wealth funds, and other investors, have a growing 

23 interest in infrastructure investment and represent 

24 hundreds of billions of dollars of potential invest25 ment; and 


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1 (13) the establishment of a United States Gov2 ernment-owned, independent, professionally managed 

3 institution that could provide credit support to quali4 fied infrastructure projects of regional and national 

5 significance, making transparent merit-based invest6 ment decisions based on the commercial viability of 

7 infrastructure projects, would catalyze the participa8 tion of significant private investment capital. 

9 (b) PURPOSE.—The purpose of this Act is to facili10 tate investment in, and long-term financing of, economi11 cally viable infrastructure projects of regional or national 

12 significance in a manner that both complements existing 

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

14 projects and introduces a merit-based system for financing 

15 such projects, in order to mobilize significant private sec16 tor investment, create jobs, and ensure United States com17 petitiveness through an institution that limits the need for 

18 ongoing Federal funding. 

19 SEC. 244. DEFINITIONS. 

20 For purposes of this Act, the following definitions 

21 shall apply: 

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

23 American Infrastructure Financing Authority estab24 lished under this Act. 


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

2 means a trust in which the beneficiary has no knowl3 edge of the specific holdings and no rights over how 

4 those holdings are managed by the fiduciary of the 

5 trust prior to the dissolution of the trust. 

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

7 of Directors’’ means Board of Directors of AIFA. 

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

9 means the Chairperson of the Board of Directors of 

10 AIFA. 

11 (5) CHIEF EXECUTIVE OFFICER.—The term 

12 ‘‘chief executive officer’’ means the chief executive 

13 officer of AIFA, appointed under section 247. 

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

15 meaning as in section 502 of the Federal Credit Re16 form Act of 1990 (2 U.S.C. 661a). 

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

18 the same meaning as in section 502 of the Federal 

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

20 (8) ELIGIBLE ENTITY.—The term ‘‘eligible enti21 ty’’ means an individual, corporation, partnership 

22 (including a public-private partnership), joint ven23 ture, trust, State, or other non-Federal govern24 mental entity, including a political subdivision or any 

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


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1 (9) INFRASTRUCTURE PROJECT.— 

2 (A) IN GENERAL.—The term ‘‘eligible in3 frastructure project’’ means any non-Federal 

4 transportation, water, or energy infrastructure 

5 project, or an aggregation of such infrastruc6 ture projects, as provided in this Act. 

7 (B) TRANSPORTATION INFRASTRUCTURE

8 PROJECT.—The term ‘‘transportation infra9 structure project’’ means the construction, al10 teration, or repair, including the facilitation of 

11 intermodal transit, of the following subsectors: 

12 (i) Highway or road. 

13 (ii) Bridge. 

14 (iii) Mass transit. 

15 (iv) Inland waterways. 

16 (v) Commercial ports. 

17 (vi) Airports. 

18 (vii) Air traffic control systems. 

19 (viii) Passenger rail, including high20 speed rail. 

21 (ix) Freight rail systems. 

22 (C) WATER INFRASTRUCTURE PROJECT.— 

23 The term ‘‘water infrastructure project’’ means 

24 the construction, consolidation, alteration, or 

25 repair of the following subsectors: 


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1 (i) Waterwaste treatment facility. 

2 (ii) Storm water management system. 

3 (iii) Dam. 

4 (iv) Solid waste disposal facility. 

5 (v) Drinking water treatment facility. 

6 (vi) Levee. 

7 (vii) Open space management system. 

8 (D) ENERGY INFRASTRUCTURE

9 PROJECT.—The term ‘‘energy infrastructure 

10 project’’ means the construction, alteration, or 

11 repair of the following subsectors: 

12 (i) Pollution reduced energy genera13 tion. 

14 (ii) Transmission and distribution. 

15 (iii) Storage. 

16 (iv) Energy efficiency enhancements 

17 for buildings, including public and com18 mercial buildings. 

19 (E) BOARD AUTHORITY TO MODIFY SUB20 SECTORS.—The Board of Directors may make 

21 modifications, at the discretion of the Board, to 

22 the subsectors described in this paragraph by a 

23 vote of not fewer than 5 of the voting members 

24 of the Board of Directors. 

25 (10) INVESTMENT PROSPECTUS.— 


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

2 means the processes and publications described 

3 below that will guide the priorities and strategic 

4 focus for the Bank’s investments. The invest5 ment prospectus shall follow rulemaking proce6 dures under section 553 of title 5, United 

7 States Code. 

8 (B) The Bank shall publish a detailed de9 scription of its strategy in an Investment Pro10 spectus within one year of the enactment of this 

11 subchapter. The Investment Prospectus shall— 

12 (i) specify what the Bank shall con13 sider significant to the economic competi14 tiveness of the United States or a region 

15 thereof in a manner consistent with the 

16 primary objective; 

17 (ii) specify the priorities and strategic 

18 focus of the Bank in forwarding its stra19 tegic objectives and carrying out the Bank 

20 strategy; 

21 (iii) specify the priorities and strategic 

22 focus of the Bank in promoting greater ef23 ficiency in the movement of freight; 

24 (iv) specify the priorities and strategic 

25 focus of the Bank in promoting the use of 


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1 innovation and best practices in the plan2 ning, design, development and delivery of 

3 projects; 

4 (v) describe in detail the framework 

5 and methodology for calculating applica6 tion qualification scores and associated 

7 ranges as specified in this subchapter, 

8 along with the data to be requested from 

9 applicants and the mechanics of calcula10 tions to be applied to that data to deter11 mine qualification scores and ranges; 

12 (vi) describe how selection criteria will 

13 be applied by the Chief Executive Officer 

14 in determining the competitiveness of an 

15 application and its qualification score and 

16 range relative to other current applications 

17 and previously funded applications; and 

18 (vii) describe how the qualification 

19 score and range methodology and project 

20 selection framework are consistent with 

21 maximizing the Bank goals in both urban 

22 and rural areas. 

23 (C) The Investment Prospectus and any 

24 subsequent updates thereto shall be approved 


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1 by a majority vote of the Board of Directors 

2 prior to publication. 

3 (D) The Bank shall update the Investment 

4 Prospectus on every biennial anniversary of its 

5 original publication. 

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

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

8 minus, Baa3, or higher assigned to an infrastructure 

9 project by a ratings agency. 

10 (12) LOAN GUARANTEE.—The term ‘‘loan guar11 antee’’ has the same meaning as in section 502 of 

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

13 661a). 

14 (13) PUBLIC-PRIVATE PARTNERSHIP.—The 

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

16 entity— 

17 (A)(i) which is undertaking the develop18 ment of all or part of an infrastructure project 

19 that will have a public benefit, pursuant to re20 quirements established in one or more contracts 

21 between the entity and a State or an instru22 mentality of a State; or 

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

24 such an infrastructure project, are subject to 


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1 regulation by a State or any instrumentality of 

2 a State; 

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

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

5 in part; and 

6 (C) the participants in which include not 

7 fewer than 1 nongovernmental entity with sig8 nificant investment and some control over the 

9 project or project vehicle. 

10 (14) RURAL INFRASTRUCTURE PROJECT.—The 

11 term ‘‘rural infrastructure project’’ means an infra12 structure project in a rural area, as that term is de13 fined in section 343(a)(13)(A) of the Consolidated 

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

15 1991(a)(13)(A)). 

16 (15) SECRETARY.—Unless the context other17 wise requires, the term ‘‘Secretary’’ means the Sec18 retary of the Treasury or the designee thereof. 

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

20 management’’ means the chief financial officer, chief 

21 risk officer, chief compliance officer, general counsel, 

22 chief lending officer, and chief operations officer of 

23 AIFA established under section 249, and such other 

24 officers as the Board of Directors may, by majority 

25 vote, add to senior management. 


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

2 District of Columbia, Puerto Rico, Guam, American 

3 Samoa, the Virgin Islands, the Commonwealth of 

4 Northern Mariana Islands, and any other territory 

5 of the United States. 

6 PART I—AMERICAN INFRASTRUCTURE 

7 FINANCING AUTHORITY 

8 SEC. 245. ESTABLISHMENT AND GENERAL AUTHORITY OF 

9 AIFA. 

10 (a) ESTABLISHMENT OF AIFA.—The American In11 frastructure Financing Authority is established as a whol12 ly owned Government corporation. 

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

14 provide direct loans and loan guarantees to facilitate infra15 structure projects that are both economically viable and 

16 of regional or national significance, and shall have such 

17 other authority, as provided in this Act. 

18 (c) INCORPORATION.— 

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

20 appointed shall be deemed the incorporator of AIFA, 

21 and the incorporation shall be held to have been ef22 fected from the date of the first meeting of the 

23 Board of Directors. 

24 (2) CORPORATE OFFICE.—AIFA shall— 


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

2 and 

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

4 be considered to be a resident of Washington, 

5 DC. 

6 (d) RESPONSIBILITY OF THE SECRETARY.—The Sec7 retary shall take such action as may be necessary to assist 

8 in implementing AIFA, and in carrying out the purpose 

9 of this Act. 

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

11 31, United States Code, does not apply to AIFA, unless 

12 otherwise specifically provided in this Act. 

13 SEC. 246. VOTING MEMBERS OF THE BOARD OF DIREC14 TORS. 

15 (a) VOTING MEMBERSHIP OF THE BOARD OF DIREC16 TORS.— 

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

18 Directors consisting of 7 voting members appointed 

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

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

21 from the same political party. 

22 (2) CHAIRPERSON.—One of the voting members 

23 of the Board of Directors shall be designated by the 

24 President to serve as Chairperson thereof. 


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1 (3) CONGRESSIONAL RECOMMENDATIONS.—Not 

2 later than 30 days after the date of enactment of 

3 this Act, the majority leader of the Senate, the mi4 nority leader of the Senate, the Speaker of the 

5 House of Representatives, and the minority leader of 

6 the House of Representatives shall each submit a 

7 recommendation to the President for appointment of 

8 a member of the Board of Directors, after consulta9 tion with the appropriate committees of Congress. 

10 (b) VOTING RIGHTS.—Each voting member of the 

11 Board of Directors shall have an equal vote in all decisions 

12 of the Board of Directors. 

13 (c) QUALIFICATIONS OF VOTING MEMBERS.—Each 

14 voting member of the Board of Directors shall— 

15 (1) be a citizen of the United States; and 

16 (2) have significant demonstrated expertise in— 

17 (A) the management and administration of 

18 a financial institution relevant to the operation 

19 of AIFA; or a public financial agency or author20 ity; 

21 (B) the financing, development, or oper22 ation of infrastructure projects; or 

23 (C) analyzing the economic benefits of in24 frastructure investment. 

25 (d) TERMS.— 


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1 (1) IN GENERAL.—Except as otherwise pro2 vided in this Act, each voting member of the Board 

3 of Directors shall be appointed for a term of 4 years. 

4 (2) INITIAL STAGGERED TERMS.—Of the voting 

5 members first appointed to the Board of Directors— 

6 (A) the initial Chairperson and 3 of the 

7 other voting members shall each be appointed 

8 for a term of 4 years; and 

9 (B) the remaining 3 voting members shall 

10 each be appointed for a term of 2 years. 

11 (3) DATE OF INITIAL NOMINATIONS.—The ini12 tial nominations for the appointment of all voting 

13 members of the Board of Directors shall be made 

14 not later than 60 days after the date of enactment 

15 of this Act. 

16 (4) BEGINNING OF TERM.—The term of each of 

17 the initial voting members appointed under this sec18 tion shall commence immediately upon the date of 

19 appointment, except that, for purposes of calculating 

20 the term limits specified in this subsection, the ini21 tial terms shall each be construed as beginning on 

22 January 22 of the year following the date of the ini23 tial appointment. 

24 (5) VACANCIES.—A vacancy in the position of 

25 a voting member of the Board of Directors shall be 


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1 filled by the President, and a member appointed to 

2 fill a vacancy on the Board of Directors occurring 

3 before the expiration of the term for which the pred4 ecessor was appointed shall be appointed only for 

5 the remainder of that term. 

6 (e) MEETINGS.— 

7 (1) OPEN TO THE PUBLIC; NOTICE.—Except as 

8 provided in paragraph (3), all meetings of the Board 

9 of Directors shall be— 

10 (A) open to the public; and 

11 (B) preceded by reasonable public notice. 

12 (2) FREQUENCY.—The Board of Directors shall 

13 meet not later than 60 days after the date on which 

14 all members of the Board of Directors are first ap15 pointed, at least quarterly thereafter, and otherwise 

16 at the call of either the Chairperson or 5 voting 

17 members of the Board of Directors. 

18 (3) EXCEPTION FOR CLOSED MEETINGS.—The 

19 voting members of the Board of Directors may, by 

20 majority vote, close a meeting to the public if, dur21 ing the meeting to be closed, there is likely to be dis22 closed proprietary or sensitive information regarding 

23 an infrastructure project under consideration for as24 sistance under this Act. The Board of Directors 

25 shall prepare minutes of any meeting that is closed 


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1 to the public, and shall make such minutes available 

2 as soon as practicable, not later than 1 year after 

3 the date of the closed meeting, with any necessary 

4 redactions to protect any proprietary or sensitive in5 formation. 

6 (4) QUORUM.—For purposes of meetings of the 

7 Board of Directors, 5 voting members of the Board 

8 of Directors shall constitute a quorum. 

9 (f) COMPENSATION OF MEMBERS.—Each voting 

10 member of the Board of Directors shall be compensated 

11 at a rate equal to the daily equivalent of the annual rate 

12 of basic pay prescribed for level III of the Executive 

13 Schedule under section 5314 of title 5, United States 

14 Code, for each day (including travel time) during which 

15 the member is engaged in the performance of the duties 

16 of the Board of Directors. 

17 (g) CONFLICTS OF INTEREST.—A voting member of 

18 the Board of Directors may not participate in any review 

19 or decision affecting an infrastructure project under con20 sideration for assistance under this Act, if the member has 

21 or is affiliated with an entity who has a financial interest 

22 in such project. 

23 SEC. 247. CHIEF EXECUTIVE OFFICER OF AIFA. 

24 (a) IN GENERAL.—The chief executive officer of 

25 AIFA shall be a nonvoting member of the Board of DirecVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00108 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 tors, who shall be responsible for all activities of AIFA, 

2 and shall support the Board of Directors as set forth in 

3 this Act and as the Board of Directors deems necessary 

4 or appropriate. 

5 (b) APPOINTMENT AND TENURE OF THE CHIEF EX6 ECUTIVE OFFICER.— 

7 (1) IN GENERAL.—The President shall appoint 

8 the chief executive officer, by and with the advice 

9 and consent of the Senate. 

10 (2) TERM.—The chief executive officer shall be 

11 appointed for a term of 6 years. 

12 (3) VACANCIES.—Any vacancy in the office of 

13 the chief executive officer shall be filled by the Presi14 dent, and the person appointed to fill a vacancy in 

15 that position occurring before the expiration of the 

16 term for which the predecessor was appointed shall 

17 be appointed only for the remainder of that term. 

18 (c) QUALIFICATIONS.—The chief executive officer— 

19 (1) shall have significant expertise in manage20 ment and administration of a financial institution, 

21 or significant expertise in the financing and develop22 ment of infrastructure projects, or significant exper23 tise in analyzing the economic benefits of infrastruc24 ture investment; and 

25 (2) may not— 


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1 (A) hold any other public office; 

2 (B) have any financial interest in an infra3 structure project then being considered by the 

4 Board of Directors, unless that interest is 

5 placed in a blind trust; or 

6 (C) have any financial interest in an in7 vestment institution or its affiliates or any 

8 other entity seeking or likely to seek financial 

9 assistance for any infrastructure project from 

10 AIFA, unless any such interest is placed in a 

11 blind trust for the tenure of the service of the 

12 chief executive officer plus 2 additional years. 

13 (d) RESPONSIBILITIES.—The chief executive officer 

14 shall have such executive functions, powers, and duties as 

15 may be prescribed by this Act, the bylaws of AIFA, or 

16 the Board of Directors, including— 

17 (1) responsibility for the development and im18 plementation of the strategy of AIFA, including— 

19 (A) the development and submission to the 

20 Board of Directors of the investment pro21 spectus, the annual business plans and budget; 

22 (B) the development and submission to the 

23 Board of Directors of a long-term strategic 

24 plan; and 


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1 (C) the development, revision, and submis2 sion to the Board of Directors of internal poli3 cies; and 

4 (2) responsibility for the management and over5 sight of the daily activities, decisions, operations, 

6 and personnel of AIFA, including— 

7 (A) the appointment of senior manage8 ment, subject to approval by the voting mem9 bers of the Board of Directors, and the hiring 

10 and termination of all other AIFA personnel; 

11 (B) requesting the detail, on a reimburs12 able basis, of personnel from any Federal agen13 cy having specific expertise not available from 

14 within AIFA, following which request the head 

15 of the Federal agency may detail, on a reim16 bursable basis, any personnel of such agency 

17 reasonably requested by the chief executive offi18 cer; 

19 (C) assessing and recommending in the 

20 first instance, for ultimate approval or dis21 approval by the Board of Directors, compensa22 tion and adjustments to compensation of senior 

23 management and other personnel of AIFA as 

24 may be necessary for carrying out the functions 

25 of AIFA; 


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1 (D) ensuring, in conjunction with the gen2 eral counsel of AIFA, that all activities of 

3 AIFA are carried out in compliance with appli4 cable law; 

5 (E) overseeing the involvement of AIFA in 

6 all projects, including— 

7 (i) developing eligible projects for 

8 AIFA financial assistance; 

9 (ii) determining the terms and condi10 tions of all financial assistance packages; 

11 (iii) monitoring all infrastructure 

12 projects assisted by AIFA, including re13 sponsibility for ensuring that the proceeds 

14 of any loan made, guaranteed, or partici15 pated in are used only for the purposes for 

16 which the loan or guarantee was made; 

17 (iv) preparing and submitting for ap18 proval by the Board of Directors the docu19 ments required under paragraph (1); and 

20 (v) ensuring the implementation of de21 cisions of the Board of Directors; and 

22 (F) such other activities as may be nec23 essary or appropriate in carrying out this Act. 

24 (e) COMPENSATION.— 


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1 (1) IN GENERAL.—Any compensation assess2 ment or recommendation by the chief executive offi3 cer under this section shall be without regard to the 

4 provisions of chapter 51 or subchapter III of chapter 

5 53 of title 5, United States Code. 

6 (2) CONSIDERATIONS.—The compensation as7 sessment or recommendation required under this 

8 subsection shall take into account merit principles, 

9 where applicable, as well as the education, experi10 ence, level of responsibility, geographic differences, 

11 and retention and recruitment needs in determining 

12 compensation of personnel. 

13 SEC. 248. POWERS AND DUTIES OF THE BOARD OF DIREC14 TORS. 

15 The Board of Directors shall— 

16 (1) as soon as is practicable after the date on 

17 which all members are appointed, approve or dis18 approve senior management appointed by the chief 

19 executive officer; 

20 (2) not later than 180 days after the date on 

21 which all members are appointed— 

22 (A) develop and approve the bylaws of 

23 AIFA, including bylaws for the regulation of 

24 the affairs and conduct of the business of 


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1 AIFA, consistent with the purpose, goals, objec2 tives, and policies set forth in this Act; 

3 (B) establish subcommittees, including an 

4 audit committee that is composed solely of 

5 members of the Board of Directors who are 

6 independent of the senior management of 

7 AIFA; 

8 (C) develop and approve, in consultation 

9 with senior management, a conflict-of-interest 

10 policy for the Board of Directors and for senior 

11 management; 

12 (D) approve or disapprove internal policies 

13 that the chief executive officer shall submit to 

14 the Board of Directors, including— 

15 (i) policies regarding the loan applica16 tion and approval process, including— 

17 (I) disclosure and application 

18 procedures to be followed by entities 

19 in the course of nominating infra20 structure projects for assistance under 

21 this Act; 

22 (II) guidelines for the selection 

23 and approval of projects; 


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1 (III) specific criteria for deter2 mining eligibility for project selection, 

3 consistent with title II; and 

4 (IV) standardized terms and con5 ditions, fee schedules, or legal require6 ments of a contract or program, so as 

7 to carry out this Act; and 

8 (ii) operational guidelines; and 

9 (E) approve or disapprove a multi-year or 

10 1-year business plan and budget for AIFA; 

11 (3) ensure that AIFA is at all times operated 

12 in a manner that is consistent with this Act, by— 

13 (A) monitoring and assessing the effective14 ness of AIFA in achieving its strategic goals; 

15 (B) periodically reviewing internal policies; 

16 (C) reviewing and approving annual busi17 ness plans, annual budgets, and long-term 

18 strategies submitted by the chief executive offi19 cer; 

20 (D) reviewing and approving annual re21 ports submitted by the chief executive officer; 

22 (E) engaging one or more external audi23 tors, as set forth in this Act; and 

24 (F) reviewing and approving all changes to 

25 the organization of senior management; 


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1 (4) appoint and fix, by a vote of 5 of the 7 vot2 ing members of the Board of Directors, and without 

3 regard to the provisions of chapter 51 or subchapter 

4 III of chapter 53 of title 5, United States Code, the 

5 compensation and adjustments to compensation of 

6 all AIFA personnel, provided that in appointing and 

7 fixing any compensation or adjustments to com8 pensation under this paragraph, the Board shall— 

9 (A) consult with, and seek to maintain 

10 comparability with, other comparable Federal 

11 personnel; 

12 (B) consult with the Office of Personnel 

13 Management; and 

14 (C) carry out such duties consistent with 

15 merit principles, where applicable, as well as the 

16 education, experience, level of responsibility, ge17 ographic differences, and retention and recruit18 ment needs in determining compensation of per19 sonnel; 

20 (5) establish such other criteria, requirements, 

21 or procedures as the Board of Directors may con22 sider to be appropriate in carrying out this Act; 

23 (6) serve as the primary liaison for AIFA in 

24 interactions with Congress, the Executive Branch, 

25 and State and local governments, and to represent 


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1 the interests of AIFA in such interactions and oth2 ers; 

3 (7) approve by a vote of 5 of the 7 voting mem4 bers of the Board of Directors any changes to the 

5 bylaws or internal policies of AIFA; 

6 (8) have the authority and responsibility— 

7 (A) to oversee entering into and carry out 

8 such contracts, leases, cooperative agreements, 

9 or other transactions as are necessary to carry 

10 out this Act with— 

11 (i) any Federal department or agency; 

12 (ii) any State, territory, or possession 

13 (or any political subdivision thereof, includ14 ing State infrastructure banks) of the 

15 United States; and 

16 (iii) any individual, public-private 

17 partnership, firm, association, or corpora18 tion; 

19 (B) to approve of the acquisition, lease, 

20 pledge, exchange, and disposal of real and per21 sonal property by AIFA and otherwise approve 

22 the exercise by AIFA of all of the usual inci23 dents of ownership of property, to the extent 

24 that the exercise of such powers is appropriate 

25 to and consistent with the purposes of AIFA; 


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1 (C) to determine the character of, and the 

2 necessity for, the obligations and expenditures 

3 of AIFA, and the manner in which the obliga4 tions and expenditures will be incurred, allowed, 

5 and paid, subject to this Act and other Federal 

6 law specifically applicable to wholly owned Fed7 eral corporations; 

8 (D) to execute, in accordance with applica9 ble bylaws and regulations, appropriate instru10 ments; 

11 (E) to approve other forms of credit en12 hancement that AIFA may provide to eligible 

13 projects, as long as the forms of credit enhance14 ments are consistent with the purposes of this 

15 Act and terms set forth in title II; 

16 (F) to exercise all other lawful powers 

17 which are necessary or appropriate to carry out, 

18 and are consistent with, the purposes of AIFA; 

19 (G) to sue or be sued in the corporate ca20 pacity of AIFA in any court of competent juris21 diction; 

22 (H) to indemnify the members of the 

23 Board of Directors and officers of AIFA for 

24 any liabilities arising out of the actions of the 

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1 cordance with, and subject to the limitations 

2 contained in this Act; 

3 (I) to review all financial assistance pack4 ages to all eligible infrastructure projects, as 

5 submitted by the chief executive officer and to 

6 approve, postpone, or deny the same by major7 ity vote; 

8 (J) to review all restructuring proposals 

9 submitted by the chief executive officer, includ10 ing assignation, pledging, or disposal of the in11 terest of AIFA in a project, including payment 

12 or income from any interest owned or held by 

13 AIFA, and to approve, postpone, or deny the 

14 same by majority vote; and 

15 (K) to enter into binding commitments, as 

16 specified in approved financial assistance pack17 ages; 

18 (9) delegate to the chief executive officer those 

19 duties that the Board of Directors deems appro20 priate, to better carry out the powers and purposes 

21 of the Board of Directors under this section; and 

22 (10) to approve a maximum aggregate amount 

23 of outstanding obligations of AIFA at any given 

24 time, taking into consideration funding, and the size 


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1 of AIFA’s addressable market for infrastructure 

2 projects. 

3 SEC. 249. SENIOR MANAGEMENT. 

4 (a) IN GENERAL.—Senior management shall support 

5 the chief executive officer in the discharge of the respon6 sibilities of the chief executive officer. 

7 (b) APPOINTMENT OF SENIOR MANAGEMENT.—The 

8 chief executive officer shall appoint such senior managers 

9 as are necessary to carry out the purpose of AIFA, as 

10 approved by a majority vote of the voting members of the 

11 Board of Directors. 

12 (c) TERM.—Each member of senior management 

13 shall serve at the pleasure of the chief executive officer 

14 and the Board of Directors. 

15 (d) REMOVAL OF SENIOR MANAGEMENT.—Any mem16 ber of senior management may be removed, either by a 

17 majority of the voting members of the Board of Directors 

18 upon request by the chief executive officer, or otherwise 

19 by vote of not fewer than 5 voting members of the Board 

20 of Directors. 

21 (e) SENIOR MANAGEMENT.— 

22 (1) IN GENERAL.—Each member of senior 

23 management shall report directly to the chief execu24 tive officer, other than the Chief Risk Officer, who 

25 shall report directly to the Board of Directors. 


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1 (2) DUTIES AND RESPONSIBILITIES.— 

2 (A) CHIEF FINANCIAL OFFICER.—The 

3 Chief Financial Officer shall be responsible for 

4 all financial functions of AIFA, provided that, 

5 at the discretion of the Board of Directors, spe6 cific functions of the Chief Financial Officer 

7 may be delegated externally. 

8 (B) CHIEF RISK OFFICER.—The Chief 

9 Risk Officer shall be responsible for all func10 tions of AIFA relating to— 

11 (i) the creation of financial, credit, 

12 and operational risk management guide13 lines and policies; 

14 (ii) credit analysis for infrastructure 

15 projects; 

16 (iii) the creation of conforming stand17 ards for infrastructure finance agreements; 

18 (iv) the monitoring of the financial, 

19 credit, and operational exposure of AIFA; 

20 and 

21 (v) risk management and mitigation 

22 actions, including by reporting such ac23 tions, or recommendations of such actions 

24 to be taken, directly to the Board of Direc25 tors. 


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1 (C) CHIEF COMPLIANCE OFFICER.—The 

2 Chief Compliance Officer shall be responsible 

3 for all functions of AIFA relating to internal 

4 audits, accounting safeguards, and the enforce5 ment of such safeguards and other applicable 

6 requirements. 

7 (D) GENERAL COUNSEL.—The General 

8 Counsel shall be responsible for all functions of 

9 AIFA relating to legal matters and, in consulta10 tion with the chief executive officer, shall be re11 sponsible for ensuring that AIFA complies with 

12 all applicable law. 

13 (E) CHIEF OPERATIONS OFFICER.—The 

14 Chief Operations Officer shall be responsible for 

15 all operational functions of AIFA, including 

16 those relating to the continuing operations and 

17 performance of all infrastructure projects in 

18 which AIFA retains an interest and for all 

19 AIFA functions related to human resources. 

20 (F) CHIEF LENDING OFFICER.—The Chief 

21 Lending Officer shall be responsible for— 

22 (i) all functions of AIFA relating to 

23 the development of project pipeline, finan24 cial structuring of projects, selection of in25 frastructure projects to be reviewed by the 


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1 Board of Directors, preparation of infra2 structure projects to be presented to the 

3 Board of Directors, and set aside for rural 

4 infrastructure projects; and 

5 (ii) the creation and management of— 

6 (I) a Center for Excellence to 

7 provide technical assistance to public 

8 sector borrowers in the development 

9 and financing of infrastructure 

10 projects; and 

11 (II) an Office of Rural Assistance 

12 to provide technical assistance in the 

13 development and financing of rural in14 frastructure projects. 

15 (iii) the establishment of guidelines to 

16 ensure diversification of lending activities 

17 by region, infrastructure project type, and 

18 project size. 

19 (f) CHANGES TO SENIOR MANAGEMENT.—The Board 

20 of Directors, in consultation with the chief executive offi21 cer, may alter the structure of the senior management of 

22 AIFA at any time to better accomplish the goals, objec23 tives, and purposes of AIFA, provided that the functions 

24 of the Chief Financial Officer set forth in subsection (e) 


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1 remain separate from the functions of the Chief Risk Offi2 cer set forth in subsection (e). 

3 (g) CONFLICTS OF INTEREST.—No individual ap4 pointed to senior management may— 

5 (1) hold any other public office; 

6 (2) have any financial interest in an infrastruc7 ture project then being considered by the Board of 

8 Directors, unless that interest is placed in a blind 

9 trust; or 

10 (3) have any financial interest in an investment 

11 institution or its affiliates, AIFA or its affiliates, or 

12 other entity then seeking or likely to seek financial 

13 assistance for any infrastructure project from AIFA, 

14 unless any such interest is placed in a blind trust 

15 during the term of service of that individual in a 

16 senior management position, and for a period of 2 

17 years thereafter. 

18 SEC. 250. SPECIAL INSPECTOR GENERAL FOR AIFA. 

19 (a) IN GENERAL.—During the first 5 operating years 

20 of AIFA, the Office of the Inspector General of the De21 partment of the Treasury shall have responsibility for 

22 AIFA. 

23 (b) OFFICE OF THE SPECIAL INSPECTOR GEN24 ERAL.—Effective 5 years after the date of enactment of 

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1 tablished the Office of the Special Inspector General for 

2 AIFA. 

3 (c) APPOINTMENT OF INSPECTOR GENERAL; RE4 MOVAL.— 

5 (1) HEAD OF OFFICE.—The head of the Office 

6 of the Special Inspector General for AIFA shall be 

7 the Special Inspector General for AIFA (in this Act 

8 referred to as the ‘‘Special Inspector General’’), who 

9 shall be appointed by the President, by and with the 

10 advice and consent of the Senate. 

11 (2) BASIS OF APPOINTMENT.—The appoint12 ment of the Special Inspector General shall be made 

13 on the basis of integrity and demonstrated ability in 

14 accounting, auditing, financial analysis, law, man15 agement analysis, public administration, or inves16 tigations. 

17 (3) TIMING OF NOMINATION.—The nomination 

18 of an individual as Special Inspector General shall 

19 be made as soon as is practicable after the effective 

20 date under subsection (b). 

21 (4) REMOVAL.—The Special Inspector General 

22 shall be removable from office in accordance with 

23 the provisions of section 3(b) of the Inspector Gen24 eral Act of 1978 (5 U.S.C. App.). 


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1 (5) RULE OF CONSTRUCTION.—For purposes of 

2 section 7324 of title 5, United States Code, the Spe3 cial Inspector General shall not be considered an em4 ployee who determines policies to be pursued by the 

5 United States in the nationwide administration of 

6 Federal law. 

7 (6) RATE OF PAY.—The annual rate of basic 

8 pay of the Special Inspector General shall be the an9 nual rate of basic pay for an Inspector General 

10 under section 3(e) of the Inspector General Act of 

11 1978 (5 U.S.C. App.). 

12 (d) DUTIES.— 

13 (1) IN GENERAL.—It shall be the duty of the 

14 Special Inspector General to conduct, supervise, and 

15 coordinate audits and investigations of the business 

16 activities of AIFA. 

17 (2) OTHER SYSTEMS, PROCEDURES, AND CON18 TROLS.—The Special Inspector General shall estab19 lish, maintain, and oversee such systems, procedures, 

20 and controls as the Special Inspector General con21 siders appropriate to discharge the duty under para22 graph (1). 

23 (3) ADDITIONAL DUTIES.—In addition to the 

24 duties specified in paragraphs (1) and (2), the In25 spector General shall also have the duties and reVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00126 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 sponsibilities of inspectors general under the Inspec2 tor General Act of 1978. 

3 (e) POWERS AND AUTHORITIES.— 

4 (1) IN GENERAL.—In carrying out the duties 

5 specified in subsection (c), the Special Inspector 

6 General shall have the authorities provided in section 

7 6 of the Inspector General Act of 1978. 

8 (2) ADDITIONAL AUTHORITY.—The Special In9 spector General shall carry out the duties specified 

10 in subsection (c)(1) in accordance with section 

11 4(b)(1) of the Inspector General Act of 1978. 

12 (f) PERSONNEL, FACILITIES, AND OTHER RE13 SOURCES.— 

14 (1) ADDITIONAL OFFICERS.— 

15 (A) The Special Inspector General may se16 lect, appoint, and employ such officers and em17 ployees as may be necessary for carrying out 

18 the duties of the Special Inspector General, 

19 subject to the provisions of title 5, United 

20 States Code, governing appointments in the 

21 competitive service, and the provisions of chap22 ter 51 and subchapter III of chapter 53 of such 

23 title, relating to classification and General 

24 Schedule pay rates. 


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1 (B) The Special Inspector General may ex2 ercise the authorities of subsections (b) through 

3 (i) of section 3161 of title 5, United States 

4 Code (without regard to subsection (a) of that 

5 section). 

6 (2) RETENTION OF SERVICES.—The Special In7 spector General may obtain services as authorized by 

8 section 3109 of title 5, United States Code, at daily 

9 rates not to exceed the equivalent rate prescribed for 

10 grade GS–15 of the General Schedule by section 

11 5332 of such title. 

12 (3) ABILITY TO CONTRACT FOR AUDITS, STUD13 IES, AND OTHER SERVICES.—The Special Inspector 

14 General may enter into contracts and other arrange15 ments for audits, studies, analyses, and other serv16 ices with public agencies and with private persons, 

17 and make such payments as may be necessary to 

18 carry out the duties of the Special Inspector Gen19 eral. 

20 (4) REQUEST FOR INFORMATION.— 

21 (A) IN GENERAL.—Upon request of the 

22 Special Inspector General for information or as23 sistance from any department, agency, or other 

24 entity of the Federal Government, the head of 

25 such entity shall, insofar as is practicable and 


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1 not in contravention of any existing law, furnish 

2 such information or assistance to the Special 

3 Inspector General, or an authorized designee. 

4 (B) REFUSAL TO COMPLY.—Whenever in5 formation or assistance requested by the Spe6 cial Inspector General is, in the judgment of the 

7 Special Inspector General, unreasonably refused 

8 or not provided, the Special Inspector General 

9 shall report the circumstances to the Secretary 

10 of the Treasury, without delay. 

11 (g) REPORTS.— 

12 (1) ANNUAL REPORT.—Not later than 1 year 

13 after the confirmation of the Special Inspector Gen14 eral, and every calendar year thereafter, the Special 

15 Inspector General shall submit to the President a re16 port summarizing the activities of the Special In17 spector General during the previous 1-year period 

18 ending on the date of such report. 

19 (2) PUBLIC DISCLOSURES.—Nothing in this 

20 subsection shall be construed to authorize the public 

21 disclosure of information that is— 

22 (A) specifically prohibited from disclosure 

23 by any other provision of law; 

24 (B) specifically required by Executive order 

25 to be protected from disclosure in the interest 


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1 of national defense or national security or in 

2 the conduct of foreign affairs; or 

3 (C) a part of an ongoing criminal inves4 tigation. 

5 SEC. 251. OTHER PERSONNEL. 

6 Except as otherwise provided in the bylaws of AIFA, 

7 the chief executive officer, in consultation with the Board 

8 of Directors, shall appoint, remove, and define the duties 

9 of such qualified personnel as are necessary to carry out 

10 the powers, duties, and purpose of AIFA, other than sen11 ior management, who shall be appointed in accordance 

12 with section 249. 

13 SEC. 252. COMPLIANCE. 

14 The provision of assistance by the Board of Directors 

15 pursuant to this Act shall not be construed as superseding 

16 any provision of State law or regulation otherwise applica17 ble to an infrastructure project. 

18 PART II—TERMS AND LIMITATIONS ON DIRECT 

19 LOANS AND LOAN GUARANTEES 

20 SEC. 253. ELIGIBILITY CRITERIA FOR ASSISTANCE FROM 

21 AIFA AND TERMS AND LIMITATIONS OF 

22 LOANS. 

23 (a) IN GENERAL.—Any project whose use or purpose 

24 is private and for which no public benefit is created shall 

25 not be eligible for financial assistance from AIFA under 


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1 this Act. Financial assistance under this Act shall only 

2 be made available if the applicant for such assistance has 

3 demonstrated to the satisfaction of the Board of Directors 

4 that the infrastructure project for which such assistance 

5 is being sought— 

6 (1) is not for the refinancing of an existing in7 frastructure project; and 

8 (2) meets— 

9 (A) any pertinent requirements set forth in 

10 this Act; 

11 (B) any criteria established by the Board 

12 of Directors or chief executive officer in accord13 ance with this Act; and 

14 (C) the definition of a transportation infra15 structure project, water infrastructure project, 

16 or energy infrastructure project. 

17 (b) CONSIDERATIONS.—The criteria established by 

18 the Board of Directors pursuant to this Act shall provide 

19 adequate consideration of— 

20 (1) the economic, financial, technical, environ21 mental, and public benefits and costs of each infra22 structure project under consideration for financial 

23 assistance under this Act, prioritizing infrastructure 

24 projects that— 


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1 (A) contribute to regional or national eco2 nomic growth; 

3 (B) offer value for money to taxpayers; 

4 (C) demonstrate a clear and significant 

5 public benefit; 

6 (D) lead to job creation; and 

7 (E) mitigate environmental concerns; 

8 (2) the means by which development of the in9 frastructure project under consideration is being fi10 nanced, including— 

11 (A) the terms, conditions, and structure of 

12 the proposed financing; 

13 (B) the credit worthiness and standing of 

14 the project sponsors, providers of equity, and 

15 cofinanciers; 

16 (C) the financial assumptions and projec17 tions on which the infrastructure project is 

18 based; and 

19 (D) whether there is sufficient State or 

20 municipal political support for the successful 

21 completion of the infrastructure project; 

22 (3) the likelihood that the provision of assist23 ance by AIFA will cause such development to pro24 ceed more promptly and with lower costs than would 

25 be the case without such assistance; 


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1 (4) the extent to which the provision of assist2 ance by AIFA maximizes the level of private invest3 ment in the infrastructure project or supports a 

4 public-private partnership, while providing a signifi5 cant public benefit; 

6 (5) the extent to which the provision of assist7 ance by AIFA can mobilize the participation of other 

8 financing partners in the infrastructure project; 

9 (6) the technical and operational viability of the 

10 infrastructure project; 

11 (7) the proportion of financial assistance from 

12 AIFA; 

13 (8) the geographic location of the project in an 

14 effort to have geographic diversity of projects funded 

15 by AIFA; 

16 (9) the size of the project and its impact on the 

17 resources of AIFA; 

18 (10) the infrastructure sector of the project, in 

19 an effort to have projects from more than one sector 

20 funded by AIFA; and 

21 (11) Encourages use of innovative procurement, 

22 asset management, or financing to minimize the all23 in-life-cycle cost, and improve the cost-effectiveness 

24 of a project. 

25 (c) APPLICATION.— 


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1 (1) IN GENERAL.—Any eligible entity seeking 

2 assistance from AIFA under this Act for an eligible 

3 infrastructure project shall submit an application to 

4 AIFA at such time, in such manner, and containing 

5 such information as the Board of Directors or the 

6 chief executive officer may require. 

7 (2) REVIEW OF APPLICATIONS.—AIFA shall re8 view applications for assistance under this Act on an 

9 ongoing basis. The chief executive officer, working 

10 with the senior management, shall prepare eligible 

11 infrastructure projects for review and approval by 

12 the Board of Directors. 

13 (3) DEDICATED REVENUE SOURCES.—The Fed14 eral credit instrument shall be repayable, in whole or 

15 in part, from tolls, user fees, or other dedicated rev16 enue sources that also secure the infrastructure 

17 project obligations. 

18 (d) ELIGIBLE INFRASTRUCTURE PROJECT COSTS.— 

19 (1) IN GENERAL.—Except as provided in para20 graph (2), to be eligible for assistance under this 

21 Act, an infrastructure project shall have project 

22 costs that are reasonably anticipated to equal or ex23 ceed $100,000,000. 

24 (2) RURAL INFRASTRUCTURE PROJECTS.—To 

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1 frastructure project shall have project costs that are 

2 reasonably anticipated to equal or exceed 

3 $25,000,000. 

4 (e) LOAN ELIGIBILITY AND MAXIMUM AMOUNTS.— 

5 (1) IN GENERAL.—The amount of a direct loan 

6 or loan guarantee under this Act shall not exceed 

7 the lesser of 50 percent of the reasonably anticipated 

8 eligible infrastructure project costs or, if the direct 

9 loan or loan guarantee does not receive an invest10 ment grade rating, the amount of the senior project 

11 obligations. 

12 (2) MAXIMUM ANNUAL LOAN AND LOAN GUAR13 ANTEE VOLUME.—The aggregate amount of direct 

14 loans and loan guarantees made by AIFA in any 

15 single fiscal year may not exceed— 

16 (A) during the first 2 fiscal years of the 

17 operations of AIFA, $10,000,000,000; 

18 (B) during fiscal years 3 through 9 of the 

19 operations of AIFA, $20,000,000,000; or 

20 (C) during any fiscal year thereafter, 

21 $50,000,000,000. 

22 (f) STATE AND LOCAL PERMITS REQUIRED.—The 

23 provision of assistance by the Board of Directors pursuant 

24 to this Act shall not be deemed to relieve any recipient 

25 of such assistance, or the related infrastructure project, 


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1 of any obligation to obtain required State and local per2 mits and approvals. 

3 SEC. 254. LOAN TERMS AND REPAYMENT. 

4 (a) IN GENERAL.—A direct loan or loan guarantee 

5 under this Act with respect to an eligible infrastructure 

6 project shall be on such terms, subject to such conditions, 

7 and contain such covenants, representations, warranties, 

8 and requirements (including requirements for audits) as 

9 the chief executive officer determines appropriate. 

10 (b) TERMS.—A direct loan or loan guarantee under 

11 this Act— 

12 (1) shall— 

13 (A) be payable, in whole or in part, from 

14 tolls, user fees, or other dedicated revenue 

15 sources that also secure the senior project obli16 gations (such as availability payments and dedi17 cated State or local revenues); and 

18 (B) include a rate covenant, coverage re19 quirement, or similar security feature sup20 porting the project obligations; and 

21 (2) may have a lien on revenues described in 

22 paragraph (1), subject to any lien securing project 

23 obligations. 

24 (c) BASE INTEREST RATE.—The base interest rate 

25 on a direct loan under this Act shall be not less than the 


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1 yield on United States Treasury obligations of a similar 

2 maturity to the maturity of the direct loan. 

3 (d) RISK ASSESSMENT.—Before entering into an 

4 agreement for assistance under this Act, the chief execu5 tive officer, in consultation with the Director of the Office 

6 of Management and Budget and considering rating agency 

7 preliminary or final rating opinion letters of the project 

8 under this section, shall estimate an appropriate Federal 

9 credit subsidy amount for each direct loan and loan guar10 antee, taking into account such letter, as well as any com11 parable market rates available for such a loan or loan 

12 guarantee, should any exist. The final credit subsidy cost 

13 for each loan and loan guarantee shall be determined con14 sistent with the Federal Credit Reform Act, 2 U.S.C. 

15 661a, et seq. 

16 (e) CREDIT FEE.—With respect to each agreement 

17 for assistance under this Act, the chief executive officer 

18 may charge a credit fee to the recipient of such assistance 

19 to pay for, over time, all or a portion of the Federal credit 

20 subsidy determined under subsection (d), with the remain21 der paid by the account established for AIFA; provided, 

22 that the source of fees paid under this section shall not 

23 be a loan or debt obligation guaranteed by the Federal 

24 Government. In the case of a direct loan, such credit fee 


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1 shall be in addition to the base interest rate established 

2 under subsection (c). 

3 (f) MATURITY DATE.—The final maturity date of a 

4 direct loan or loan guaranteed by AIFA under this Act 

5 shall be not later than 35 years after the date of substan6 tial completion of the infrastructure project, as determined 

7 by the chief executive officer. 

8 (g) RATING OPINION LETTER.— 

9 (1) IN GENERAL.—The chief executive officer 

10 shall require each applicant for assistance under this 

11 Act to provide a rating opinion letter from at least 

12 1 ratings agency, indicating that the senior obliga13 tions of the infrastructure project, which may be the 

14 Federal credit instrument, have the potential to 

15 achieve an investment-grade rating. 

16 (2) RURAL INFRASTRUCTURE PROJECTS.—With 

17 respect to a rural infrastructure project, a rating 

18 agency opinion letter described in paragraph (1) 

19 shall not be required, except that the loan or loan 

20 guarantee shall receive an internal rating score, 

21 using methods similar to the ratings agencies gen22 erated by AIFA, measuring the proposed direct loan 

23 or loan guarantee against comparable direct loans or 

24 loan guarantees of similar credit quality in a similar 

25 sector. 


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1 (h) INVESTMENT-GRADE RATING REQUIREMENT.— 

2 (1) LOANS AND LOAN GUARANTEES.—The exe3 cution of a direct loan or loan guarantee under this 

4 Act shall be contingent on the senior obligations of 

5 the infrastructure project receiving an investment6 grade rating. 

7 (2) RATING OF AIFA OVERALL PORTFOLIO.— 

8 The average rating of the overall portfolio of AIFA 

9 shall be not less than investment grade after 5 years 

10 of operation. 

11 (i) TERMS AND REPAYMENT OF DIRECT LOANS.— 

12 (1) SCHEDULE.—The chief executive officer 

13 shall establish a repayment schedule for each direct 

14 loan under this Act, based on the projected cash 

15 flow from infrastructure project revenues and other 

16 repayment sources. 

17 (2) COMMENCEMENT.—Scheduled loan repay18 ments of principal or interest on a direct loan under 

19 this Act shall commence not later than 5 years after 

20 the date of substantial completion of the infrastruc21 ture project, as determined by the chief executive of22 ficer of AIFA. 

23 (3) DEFERRED PAYMENTS OF DIRECT

24 LOANS.— 


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1 (A) AUTHORIZATION.—If, at any time 

2 after the date of substantial completion of an 

3 infrastructure project assisted under this Act, 

4 the infrastructure project is unable to generate 

5 sufficient revenues to pay the scheduled loan re6 payments of principal and interest on the direct 

7 loan under this Act, the chief executive officer 

8 may allow the obligor to add unpaid principal 

9 and interest to the outstanding balance of the 

10 direct loan, if the result would benefit the tax11 payer. 

12 (B) INTEREST.—Any payment deferred 

13 under subparagraph (A) shall— 

14 (i) continue to accrue interest, in ac15 cordance with the terms of the obligation, 

16 until fully repaid; and 

17 (ii) be scheduled to be amortized over 

18 the remaining term of the loan. 

19 (C) CRITERIA.— 

20 (i) IN GENERAL.—Any payment defer21 ral under subparagraph (A) shall be con22 tingent on the infrastructure project meet23 ing criteria established by the Board of Di24 rectors. 


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1 (ii) REPAYMENT STANDARDS.—The 

2 criteria established under clause (i) shall 

3 include standards for reasonable assurance 

4 of repayment. 

5 (4) PREPAYMENT OF DIRECT LOANS.— 

6 (A) USE OF EXCESS REVENUES.—Any ex7 cess revenues that remain after satisfying 

8 scheduled debt service requirements on the in9 frastructure project obligations and direct loan 

10 and all deposit requirements under the terms of 

11 any trust agreement, bond resolution, or similar 

12 agreement securing project obligations under 

13 this Act may be applied annually to prepay the 

14 direct loan, without penalty. 

15 (B) USE OF PROCEEDS OF REFI16 NANCING.—A direct loan under this Act may be 

17 prepaid at any time, without penalty, from the 

18 proceeds of refinancing from non-Federal fund19 ing sources. 

20 (5) SALE OF DIRECT LOANS.— 

21 (A) IN GENERAL.—As soon as is prac22 ticable after substantial completion of an infra23 structure project assisted under this Act, and 

24 after notifying the obligor, the chief executive 

25 officer may sell to another entity, or reoffer into 


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1 the capital markets, a direct loan for the infra2 structure project, if the chief executive officer 

3 determines that the sale or reoffering can be 

4 made on favorable terms for the taxpayer. 

5 (B) CONSENT OF OBLIGOR.—In making a 

6 sale or reoffering under subparagraph (A), the 

7 chief executive officer may not change the origi8 nal terms and conditions of the direct loan, 

9 without the written consent of the obligor. 

10 (j) LOAN GUARANTEES.— 

11 (1) TERMS.—The terms of a loan guaranteed 

12 by AIFA under this Act shall be consistent with the 

13 terms set forth in this section for a direct loan, ex14 cept that the rate on the guaranteed loan and any 

15 payment, pre-payment, or refinancing features shall 

16 be negotiated between the obligor and the lender, 

17 with the consent of the chief executive officer. 

18 (2) GUARANTEED LENDER.—A guaranteed 

19 lender shall be limited to those lenders meeting the 

20 definition of that term in section 601(a) of title 23, 

21 United States Code. 

22 (k) COMPLIANCE WITH FCRA; IN GENERAL.—Di23 rect loans and loan guarantees authorized by this Act shall 

24 be subject to the provisions of the Federal Credit Reform 

25 Act of 1990 (2 U.S.C. 661 et seq.), as amended. 


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1 SEC. 255. COMPLIANCE AND ENFORCEMENT. 

2 (a) CREDIT AGREEMENT.—Notwithstanding any 

3 other provision of law, each eligible entity that receives 

4 assistance under this Act from AIFA shall enter into a 

5 credit agreement that requires such entity to comply with 

6 all applicable policies and procedures of AIFA, in addition 

7 to all other provisions of the loan agreement. 

8 (b) AIFA AUTHORITY ON NONCOMPLIANCE.—In any 

9 case in which a recipient of assistance under this Act is 

10 materially out of compliance with the loan agreement, or 

11 any applicable policy or procedure of AIFA, the Board of 

12 Directors may take action to cancel unutilized loan 

13 amounts, or to accelerate the repayment terms of any out14 standing obligation. 

15 (c) Nothing in this Act is intended to affect existing 

16 provisions of law applicable to the planning, development, 

17 construction, or operation of projects funded under the 

18 Act. 

19 SEC. 256. AUDITS; REPORTS TO THE PRESIDENT AND CON20 GRESS. 

21 (a) ACCOUNTING.—The books of account of AIFA 

22 shall be maintained in accordance with generally accepted 

23 accounting principles, and shall be subject to an annual 

24 audit by independent public accountants of nationally rec25 ognized standing appointed by the Board of Directors. 

26 (b) REPORTS.— 


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1 (1) BOARD OF DIRECTORS.—Not later than 90 

2 days after the last day of each fiscal year, the Board 

3 of Directors shall submit to the President and Con4 gress a complete and detailed report with respect to 

5 the preceding fiscal year, setting forth— 

6 (A) a summary of the operations of AIFA, 

7 for such fiscal year; 

8 (B) a schedule of the obligations of AIFA 

9 and capital securities outstanding at the end of 

10 such fiscal year, with a statement of the 

11 amounts issued and redeemed or paid during 

12 such fiscal year; 

13 (C) the status of infrastructure projects re14 ceiving funding or other assistance pursuant to 

15 this Act during such fiscal year, including all 

16 nonperforming loans, and including disclosure 

17 of all entities with a development, ownership, or 

18 operational interest in such infrastructure 

19 projects; 

20 (D) a description of the successes and 

21 challenges encountered in lending to rural com22 munities, including the role of the Center for 

23 Excellence and the Office of Rural Assistance 

24 established under this Act; and 


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1 (E) an assessment of the risks of the port2 folio of AIFA, prepared by an independent 

3 source. 

4 (2) GAO.—Not later than 5 years after the 

5 date of enactment of this Act, the Comptroller Gen6 eral of the United States shall conduct an evaluation 

7 of, and shall submit to Congress a report on, activi8 ties of AIFA for the fiscal years covered by the re9 port that includes an assessment of the impact and 

10 benefits of each funded infrastructure project, in11 cluding a review of how effectively each such infra12 structure project accomplished the goals prioritized 

13 by the infrastructure project criteria of AIFA. 

14 (c) BOOKS AND RECORDS.— 

15 (1) IN GENERAL.—AIFA shall maintain ade16 quate books and records to support the financial 

17 transactions of AIFA, with a description of financial 

18 transactions and infrastructure projects receiving 

19 funding, and the amount of funding for each such 

20 project maintained on a publically accessible data21 base. 

22 (2) AUDITS BY THE SECRETARY AND GAO.— 

23 The books and records of AIFA shall at all times be 

24 open to inspection by the Secretary of the Treasury, 


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1 the Special Inspector General, and the Comptroller 

2 General of the United States. 

3 PART III—FUNDING OF AIFA 

4 SEC. 257. ADMINISTRATIVE FEES. 

5 (a) IN GENERAL.—In addition to fees that may be 

6 collected under section 254(e), the chief executive officer 

7 shall establish and collect fees from eligible funding recipi8 ents with respect to loans and loan guarantees under this 

9 Act that— 

10 (1) are sufficient to cover all or a portion of the 

11 administrative costs to the Federal Government for 

12 the operations of AIFA, including the costs of expert 

13 firms, including counsel in the field of municipal and 

14 project finance, and financial advisors to assist with 

15 underwriting, credit analysis, or other independent 

16 reviews, as appropriate; 

17 (2) may be in the form of an application or 

18 transaction fee, or other form established by the 

19 CEO; and 

20 (3) may be based on the risk premium associ21 ated with the loan or loan guarantee, taking into 

22 consideration— 

23 (A) the price of United States Treasury 

24 obligations of a similar maturity; 

25 (B) prevailing market conditions; 


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1 (C) the ability of the infrastructure project 

2 to support the loan or loan guarantee; and 

3 (D) the total amount of the loan or loan 

4 guarantee; 

5 (b) AVAILABILITY OF AMOUNTS.—Amounts collected 

6 under subsections (a)(1), (a)(2)(a)(3) shall be available 

7 without further action; provided further, that the source 

8 of fees paid under this section shall not be a loan or debt 

9 obligation guaranteed by the Federal Government. 

10 SEC. 258. EFFICIENCY OF AIFA. 

11 The chief executive officer shall, to the extent pos12 sible, take actions consistent with this Act to minimize the 

13 risk and cost to the taxpayer of AIFA activities. Fees and 

14 premiums for loan guarantee or insurance coverage will 

15 be set at levels that minimize administrative and Federal 

16 credit subsidy costs to the Government, as defined in Sec17 tion 502 of the Federal Credit Reform Act of 1990, as 

18 amended, of such coverage, while supporting achievement 

19 of the program’s objectives, consistent with policies as set 

20 forth in the Business Plan. 

21 SEC. 259. FUNDING. 

22 There is hereby appropriated to AIFA to carry out 

23 this Act, for the cost of direct loans and loan guarantees 

24 subject to the limitations under section 253, and for ad25 ministrative costs, $10,000,000,000, to remain available 


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1 until expended; provided, that such costs, including the 

2 costs of modifying such loans, shall be as defined in sec3 tion 502 of the Federal Credit Reform Act of 1990, as 

4 amended; provided further, that of this amount, not more 

5 than $25,000,000 for each of fiscal years 2012 through 

6 2013, and not more than $50,000,000 for fiscal year 2014 

7 may be used for administrative costs of AIFA; provided 

8 further, that not more than 5 percent of such amount shall 

9 be used to offset subsidy costs associated with rural 

10 projects. Amounts authorized shall be available without 

11 further action. 

12 PART IV—EXTENSION OF EXEMPTION FROM AL13 TERNATIVE MINIMUM TAX TREATMENT FOR 

14 CERTAIN TAX-EXEMPT BONDS 

15 SEC. 260. EXTENSION OF EXEMPTION FROM ALTERNATIVE 

16 MINIMUM TAX TREATMENT FOR CERTAIN 

17 TAX-EXEMPT BONDS. 

18 (a) IN GENERAL.—Clause (vi) of section 57(a)(5)(C) 

19 of the Internal Revenue Code of 1986 is amended— 

20 (1) by striking ‘‘January 1, 2011’’ in subclause 

21 (I) and inserting ‘‘January 1, 2013’’; and 

22 (2) by striking ‘‘AND 2010’’ in the heading and 

23 inserting ‘‘, 2010, 2011, AND 2012’’. 


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1 (b) ADJUSTED CURRENT EARNINGS.—Clause (iv) of 

2 section 56(g)(4)(B) of the Internal Revenue Code of 1986 

3 is amended— 

4 (1) by striking ‘‘January 1, 2011’’ in subclause 

5 (I) and inserting ‘‘January 1, 2013’’; and 

6 (2) by striking ‘‘AND 2010’’ in the heading and 

7 inserting ‘‘, 2010, 2011, AND 2012’’. 

8 (c) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to obligations issued after Decem10 ber 31, 2010. 

11 Subtitle G—Project Rebuild 

12 SEC. 261. PROJECT REBUILD. 

13 (a) DIRECT APPROPRIATIONS.—There is appro14 priated, out of any money in the Treasury not otherwise 

15 appropriated, $15,000,000,000, to remain available until 

16 September 30, 2014, for assistance to eligible entities in17 cluding States and units of general local government (as 

18 such terms are defined in section 102 of the Housing and 

19 Community Development Act of 1974 (42 U.S.C. 5302)), 

20 and qualified nonprofit organizations, businesses or con21 sortia of eligible entities for the redevelopment of aban22 doned and foreclosed-upon properties and for the stabiliza23 tion of affected neighborhoods. 

24 (b) ALLOCATION OF APPROPRIATED AMOUNTS.— 


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1 (1) IN GENERAL.—Of the amounts appro2 priated, two thirds shall be allocated to States and 

3 units of general local government based on a funding 

4 formula established by the Secretary of Housing and 

5 Urban Development (in this subtitle referred to as 

6 the ‘‘Secretary’’). Of the amounts appropriated, one 

7 third shall be distributed competitively to eligible en8 tities. 

9 (2) FORMULA TO BE DEVISED SWIFTLY.—The 

10 funding formula required under paragraph (1) shall 

11 be established and the Secretary shall announce for12 mula funding allocations, not later than 30 days 

13 after the date of enactment of this section. 

14 (3) FORMULA CRITERIA.—The Secretary may 

15 establish a minimum grant size, and the funding for16 mula required under paragraph (1) shall ensure that 

17 any amounts appropriated or otherwise made avail18 able under this section are allocated to States and 

19 units of general local government with the greatest 

20 need, as such need is determined in the discretion of 

21 the Secretary based on— 

22 (A) the number and percentage of home 

23 foreclosures in each State or unit of general 

24 local government; 


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1 (B) the number and percentage of homes 

2 in default or delinquency in each State or unit 

3 of general local government; and 

4 (C) other factors such as established pro5 gram designs, grantee capacity and perform6 ance, number and percentage of commercial 

7 foreclosures, overall economic conditions, and 

8 other market needs data, as determined by the 

9 Secretary. 

10 (4) COMPETITION CRITERIA.— 

11 (A) For the funds distributed competi12 tively, eligible entities shall be States, units of 

13 general local government, nonprofit entities, 

14 for-profit entities, and consortia of eligible enti15 ties that demonstrate capacity to use funding 

16 within the period of this program. 

17 (B) In selecting grantees, the Secretary 

18 shall ensure that grantees are in areas with the 

19 greatest number and percentage of residential 

20 and commercial foreclosures and other market 

21 needs data, as determined by the Secretary. Ad22 ditional award criteria shall include dem23 onstrated grantee capacity to execute projects 

24 involving acquisition and rehabilitation or rede25 velopment of foreclosed residential and commerVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00151 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 cial property and neighborhood stabilization, le2 verage, knowledge of market conditions and of 

3 effective stabilization activities to address iden4 tified conditions, and any additional factors de5 termined by the Secretary. 

6 (C) The Secretary may establish a min7 imum grant size. 

8 (D) The Secretary shall publish competi9 tion criteria for any grants awarded under this 

10 heading not later than 60 days after appropria11 tion of funds, and applications shall be due to 

12 the Secretary within 120 days. 

13 (c) USE OF FUNDS.— 

14 (1) OBLIGATION AND EXPENDITURE.—The Sec15 retary shall obligate all funding within 150 days of 

16 enactment of this Act. Any eligible entity that re17 ceives amounts pursuant to this section shall expend 

18 all funds allocated to it within three years of the 

19 date the funds become available to the grantee for 

20 obligation. Furthermore, the Secretary shall by No21 tice establish intermediate expenditure benchmarks 

22 at the one and two year dates from the date the 

23 funds become available to the grantee for obligation. 

24 (2) PRIORITIES.— 


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1 (A) JOB CREATION.—Each grantee or eli2 gible entity shall describe how its proposed use 

3 of funds will prioritize job creation, and sec4 ondly, will address goals to stabilize neighbor5 hoods, reverse vacancy, or increase or stabilize 

6 residential and commercial property values. 

7 (B) TARGETING.—Any State or unit of 

8 general local government that receives formula 

9 amounts pursuant to this section shall, in dis10 tributing and targeting such amounts give pri11 ority emphasis and consideration to those met12 ropolitan areas, metropolitan cities, urban 

13 areas, rural areas, low- and moderate-income 

14 areas, and other areas with the greatest need, 

15 including those— 

16 (i) with the greatest percentage of 

17 home foreclosures; 

18 (ii) identified as likely to face a sig19 nificant rise in the rate of residential or 

20 commercial foreclosures; and 

21 (iii) with higher than national average 

22 unemployment rate. 

23 (C) LEVERAGE.—Each grantee or eligible 

24 entity shall describe how its proposed use of 

25 funds will leverage private funds. 


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1 (3) ELIGIBLE USES.—Amounts made available 

2 under this section may be used to— 

3 (A) establish financing mechanisms for the 

4 purchase and redevelopment of abandoned and 

5 foreclosed-upon properties, including such 

6 mechanisms as soft-seconds, loan loss reserves, 

7 and shared-equity loans for low- and moderate8 income homebuyers; 

9 (B) purchase and rehabilitate properties 

10 that have been abandoned or foreclosed upon, 

11 in order to sell, rent, or redevelop such prop12 erties; 

13 (C) establish and operate land banks for 

14 properties that have been abandoned or fore15 closed upon; 

16 (D) demolish blighted structures; 

17 (E) redevelop abandoned, foreclosed, de18 molished, or vacant properties; and 

19 (F) engage in other activities, as deter20 mined by the Secretary through notice, that are 

21 consistent with the goals of creating jobs, stabi22 lizing neighborhoods, reversing vacancy reduc23 tion, and increasing or stabilizing residential 

24 and commercial property values. 

25 (d) LIMITATIONS.— 


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1 (1) ON PURCHASES.—Any purchase of a prop2 erty under this section shall be at a price not to ex3 ceed its current market value, taking into account 

4 its current condition. 

5 (2) REHABILITATION.—Any rehabilitation of an 

6 eligible property under this section shall be to the 

7 extent necessary to comply with applicable laws, and 

8 other requirements relating to safety, quality, mar9 ketability, and habitability, in order to sell, rent, or 

10 redevelop such properties or provide a renewable en11 ergy source or sources for such properties. 

12 (3) SALE OF HOMES.—If an abandoned or fore13 closed-upon home is purchased, redeveloped, or oth14 erwise sold to an individual as a primary residence, 

15 then such sale shall be in an amount equal to or less 

16 than the cost to acquire and redevelop or rehabilitate 

17 such home or property up to a decent, safe, market18 able, and habitable condition. 

19 (4) ON DEMOLITION OF PUBLIC HOUSING.— 

20 Public housing, as defined at section 3(b)(6) of the 

21 United States Housing Act of 1937, may not be de22 molished with funds under this section. 

23 (5) ON DEMOLITION ACTIVITIES.—No more 

24 than 10 percent of any grant made under this sec25 tion may be used for demolition activities unless the 


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1 Secretary determines that such use represents an 

2 appropriate response to local market conditions. 

3 (6) ON USE OF FUNDS FOR NON-RESIDENTIAL

4 PROPERTY.—No more than 30 percent of any grant 

5 made under this section may be used for eligible ac6 tivities under subparagraphs (A), (B), and (E) of 

7 subsection (c)(3) that will not result in residential 

8 use of the property involved unless the Secretary de9 termines that such use represents an appropriate re10 sponse to local market conditions. 

11 (e) RULES OF CONSTRUCTION.— 

12 (1) IN GENERAL.—Except as otherwise pro13 vided by this section, amounts appropriated, reve14 nues generated, or amounts otherwise made avail15 able to eligible entities under this section shall be 

16 treated as though such funds were community devel17 opment block grant funds under title I of the Hous18 ing and Community Development Act of 1974 (42 

19 U.S.C. 5301 et seq.). 

20 (2) NO MATCH.—No matching funds shall be 

21 required in order for an eligible entity to receive any 

22 amounts under this section. 

23 (3) TENANT PROTECTIONS.—An eligible entity 

24 receiving a grant under this section shall comply 

25 with the 14th, 17th, 18th, 19th, 20th, 21st, 22nd, 


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1 and 23rd provisos of the American Recovery and Re2 investment Act of 2009 (Public Law 111–5, 123 

3 Stat. 218–19), as amended by section 1497(b)(2) of 

4 the Dodd-Frank Wall Street Reform and Consumer 

5 Protection Act (Public Law 111–203, 124 Stat. 

6 2211). 

7 (4) VICINITY HIRING.—An eligible entity receiv8 ing a grant under this section shall comply with sec9 tion 1497(a)(8) of the Dodd-Frank Wall Street Re10 form and Consumer Protection Act (Public Law 

11 111–203, 129 Stat. 2210). 

12 (5) BUY AMERICAN.—Section 1605 of title 

13 XVI. 

14 (f) AUTHORITY TO SPECIFY ALTERNATIVE REQUIRE15 MENTS.— 

16 (1) IN GENERAL.—In administering the pro17 gram under this section, the Secretary may specify 

18 alternative requirements to any provision under title 

19 I of the Housing and Community Development Act 

20 of 1974 or under title I of the Cranston-Gonzalez 

21 National Affordable Housing Act of 1990 (except for 

22 those provisions in these laws related to fair hous23 ing, nondiscrimination, labor standards, and the en24 vironment) for the purpose of expediting and facili25 tating the use of funds under this section. 


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1 (2) NOTICE.—The Secretary shall provide writ2 ten notice of intent to the public via internet to exer3 cise the authority to specify alternative requirements 

4 under paragraph. 

5 (3) LOW AND MODERATE INCOME REQUIRE6 MENT.— 

7 (A) IN GENERAL.—Notwithstanding the 

8 authority of the Secretary under paragraph 

9 (1)— 

10 (i) all of the formula and competitive 

11 grantee funds appropriated or otherwise 

12 made available under this section shall be 

13 used with respect to individuals and fami14 lies whose income does not exceed 120 per15 cent of area median income; and 

16 (ii) not less than 25 percent of the 

17 formula and competitive grantee funds ap18 propriated or otherwise made available 

19 under this section shall be used for the 

20 purchase and redevelopment of eligible 

21 properties that will be used to house indi22 viduals or families whose incomes do not 

23 exceed 50 percent of area median income. 

24 (B) RECURRENT REQUIREMENT.—The 

25 Secretary shall, by rule or order, ensure, to the 


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1 maximum extent practicable and for the longest 

2 feasible term, that the sale, rental, or redevelop3 ment of abandoned and foreclosed-upon homes 

4 and residential properties under this section re5 main affordable to individuals or families de6 scribed in subparagraph (A). 

7 (g) NATIONWIDE DISTRIBUTION OF RESOURCES.— 

8 Notwithstanding any other provision of this section or the 

9 amendments made by this section, each State shall receive 

10 not less than $20,000,000 of formula funds. 

11 (h) LIMITATION ON USE OF FUNDS WITH RESPECT

12 TO EMINENT DOMAIN.—No State or unit of general local 

13 government may use any amounts received pursuant to 

14 this section to fund any project that seeks to use the power 

15 of eminent domain, unless eminent domain is employed 

16 only for a public use, which shall not be construed to in17 clude economic development that primarily benefits pri18 vate entities. 

19 (i) LIMITATION ON DISTRIBUTION OF FUNDS.— 

20 (1) IN GENERAL.—None of the funds made 

21 available under this title or title IV shall be distrib22 uted to— 

23 (A) an organization which has been in24 dicted for a violation under Federal law relating 

25 to an election for Federal office; or 


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1 (B) an organization which employs applica2 ble individuals. 

3 (2) APPLICABLE INDIVIDUALS DEFINED.—In 

4 this section, the term ‘‘applicable individual’’ means 

5 an individual who— 

6 (A) is— 

7 (i) employed by the organization in a 

8 permanent or temporary capacity; 

9 (ii) contracted or retained by the or10 ganization; or 

11 (iii) acting on behalf of, or with the 

12 express or apparent authority of, the orga13 nization; and 

14 (B) has been indicted for a violation under 

15 Federal law relating to an election for Federal 

16 office. 

17 (j) RENTAL HOUSING PREFERENCES.—Each State 

18 and local government receiving formula amounts shall es19 tablish procedures to create preferences for the develop20 ment of affordable rental housing. 

21 (k) JOB CREATION.—If a grantee chooses to use 

22 funds to create jobs by establishing and operating a pro23 gram to maintain eligible neighborhood properties, not 

24 more than 10 percent of any grant may be used for that 

25 purpose. 


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1 (l) PROGRAM SUPPORT AND CAPACITY BUILDING.— 

2 The Secretary may use up to 0.75 percent of the funds 

3 appropriated for capacity building of and support for eligi4 ble entities and grantees undertaking neighborhood sta5 bilization programs, staffing, training, technical assist6 ance, technology, monitoring, travel, enforcement, re7 search, and evaluation activities. 

8 (1) Funds set aside for the purposes of this 

9 subparagraph shall remain available until September 

10 30, 2016. 

11 (2) Any funds made available under this sub12 paragraph and used by the Secretary for personnel 

13 expenses related to administering funding under this 

14 subparagraph shall be transferred to ‘‘Personnel 

15 Compensation and Benefits, Community Planning 

16 and Development’’. 

17 (3) Any funds made available under this sub18 paragraph and used by the Secretary for training or 

19 other administrative expenses shall be transferred to 

20 ‘‘Administration, Operations, and Management, 

21 Community Planning and Development’’ for non22 personnel expenses. 

23 (4) Any funds made available under this sub24 paragraph and used by the Secretary for technology 

25 shall be transferred to ‘‘Working Capital Fund’’. 


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1 (m) ENFORCEMENT AND PREVENTION OF FRAUD

2 AND ABUSE.—The Secretary shall establish and imple3 ment procedures to prevent fraud and abuse of funds 

4 under this section, and shall impose a requirement that 

5 grantees have an internal auditor to continuously monitor 

6 grantee performance to prevent fraud, waste, and abuse. 

7 Grantees shall provide the Secretary and citizens with 

8 quarterly progress reports. The Secretary shall recapture 

9 funds from formula and competitive grantees that do not 

10 expend 100 percent of allocated funds within 3 years of 

11 the date that funds become available, and from underper12 forming or mismanaged grantees, and shall re-allocate 

13 those funds by formula to target areas with the greatest 

14 need, as determined by the Secretary through notice. The 

15 Secretary may take an alternative sanctions action only 

16 upon determining that such action is necessary to achieve 

17 program goals in a timely manner. 

18 (n) The Secretary of Housing and Urban Develop19 ment shall to the extent feasible conform policies and pro20 cedures for grants made under this section to the policies 

21 and practices already in place for the grants made under 

22 section 2301 of the Housing and Economic Recovery Act 

23 of 2008; division A, title XII of the American Recovery 

24 and Reinvestment Act of 2009; or section 1497 of the 


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1 Dodd-Frank Wall Street Reform and Consumer Protec2 tion Act. 

3 Subtitle H—National Wireless 

4 Initiative 

5 SEC. 271. DEFINITIONS. 

6 In this subtitle, the following definitions shall apply: 

7 (1) 700 MHZ BAND.—The term ‘‘700 MHz 

8 band’’ means the portion of the electromagnetic 

9 spectrum between the frequencies from 698 mega10 hertz to 806 megahertz. 

11 (2) 700 MHZ D BLOCK SPECTRUM.—The term 

12 ‘‘700 MHz D block spectrum’’ means the portion of 

13 the electromagnetic spectrum frequencies from 758 

14 megahertz to 763 megahertz and from 788 mega15 hertz to 793 megahertz. 

16 (3) APPROPRIATE COMMITTEES OF CON17 GRESS.—Except as otherwise specifically provided, 

18 the term ‘‘appropriate committees of Congress’’ 

19 means— 

20 (A) the Committee on Commerce, Science, 

21 and Transportation of the Senate; and 

22 (B) the Committee on Energy and Com23 merce of the House of Representatives. 


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1 (4) ASSISTANT SECRETARY.—The term ‘‘Assist2 ant Secretary’’ means the Assistant Secretary of 

3 Commerce for Communications and Information. 

4 (5) COMMISSION.—The term ‘‘Commission’’ 

5 means the Federal Communications Commission. 

6 (6) CORPORATION.—The term ‘‘Corporation’’ 

7 means the Public Safety Broadband Corporation es8 tablished in section 284. 

9 (7) EXISTING PUBLIC SAFETY BROADBAND

10 SPECTRUM.—The term ‘‘existing public safety 

11 broadband spectrum’’ means the portion of the elec12 tromagnetic spectrum between the frequencies— 

13 (A) from 763 megahertz to 768 megahertz; 

14 (B) from 793 megahertz to 798 mega15 hertz; 

16 (C) from 768 megahertz to 769 megahertz; 

17 and 

18 (D) from 798 megahertz to 799 mega19 hertz. 

20 (8) FEDERAL ENTITY.—The term ‘‘Federal en21 tity’’ has the same meaning as in section 113(i) of 

22 the National Telecommunications and Information 

23 Administration Organization Act (47 U.S.C. 923(i)). 

24 (9) NARROWBAND SPECTRUM.—The term 

25 ‘‘narrowband spectrum’’ means the portion of the 


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1 electromagnetic spectrum between the frequencies 

2 from 769 megahertz to 775 megahertz and between 

3 the frequencies from 799 megahertz to 805 mega4 hertz. 

5 (10) NIST.—The term ‘‘NIST’’ means the Na6 tional Institute of Standards and Technology. 

7 (11) NTIA.—The term ‘‘NTIA’’ means the Na8 tional Telecommunications and Information Admin9 istration. 

10 (12) PUBLIC SAFETY ENTITY.—The term ‘‘pub11 lic safety entity’’ means an entity that provides pub12 lic safety services. 

13 (13) PUBLIC SAFETY SERVICES.—The term 

14 ‘‘public safety service’’— 

15 (A) has the meaning given the term in sec16 tion 337(f) of the Communications Act of 1934 

17 (47 U.S.C. 337(f)); and 

18 (B) includes services provided by emer19 gency response providers, as that term is de20 fined in section 2 of the Homeland Security Act 

21 of 2002 (6 U.S.C. 101). 


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1 PART I—AUCTIONS OF SPECTRUM AND 

2 SPECTRUM MANAGEMENT 

3 SEC. 272. CLARIFICATION OF AUTHORITIES TO REPURPOSE 

4 FEDERAL SPECTRUM FOR COMMERCIAL PUR5 POSES. 

6 (a) Paragraph (1) of section 113(g) of the National 

7 Telecommunications and Information Administration Or8 ganization Act (47 U.S.C. 923(g)) is amended to read as 

9 follows: 

10 ‘‘(1) ELIGIBLE FEDERAL ENTITIES.—Any Fed11 eral entity that operates a Federal Government sta12 tion authorized to use a band of frequencies speci13 fied in paragraph (2) and that incurs relocation 

14 costs because of planning for a potential auction of 

15 spectrum frequencies, a planned auction of spectrum 

16 frequencies or the reallocation of spectrum fre17 quencies from Federal use to exclusive non-Federal 

18 use, or shared Federal and non-Federal use may re19 ceive payment for such costs from the Spectrum Re20 location Fund, in accordance with section 118 of 

21 this Act. For purposes of this paragraph, Federal 

22 power agencies exempted under subsection (c)(4) 

23 that choose to relocate from the frequencies identi24 fied for reallocation pursuant to subsection (a), are 

25 eligible to receive payment under this paragraph.’’. 


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1 (b) ELIGIBLE FREQUENCIES.—Section 113(g)(2)(B) 

2 of the National Telecommunications and Information Ad3 ministration Organization Act (47 U.S.C. 923(g)(2)(B)) 

4 is amended to read as follows: 

5 ‘‘(B) any other band of frequencies reallo6 cated from Federal use to non-Federal or 

7 shared use after January 1, 2003, that is as8 signed by competitive bidding pursuant to sec9 tion 309(j) of the Communications Act of 1934 

10 (47 U.S.C 309(j)) or is assigned as a result of 

11 later legislation or other administrative direc12 tion.’’. 

13 (c) Paragraph (3) of section 113(g) of the National 

14 Telecommunications and Information Administration Or15 ganization Act (47 U.S.C. 923(g)) is amended to read as 

16 follows: 

17 ‘‘(3) DEFINITION OF RELOCATION AND SHAR18 ING COSTS.—For purposes of this subsection, the 

19 terms ‘relocation costs’ and ‘sharing costs’ mean the 

20 costs incurred by a Federal entity to plan for a po21 tential or planned auction or sharing of spectrum 

22 frequencies and to achieve comparable capability of 

23 systems, regardless of whether that capability is 

24 achieved by relocating to a new frequency assign25 ment, relocating a Federal Government station to a 


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1 different geographic location, modifying Federal gov2 ernment equipment to mitigate interference or use 

3 less spectrum, in terms of bandwidth, geography or 

4 time, and thereby permitting spectrum sharing (in5 cluding sharing among relocated Federal entities 

6 and incumbents to make spectrum available for non7 Federal use) or relocation, or by utilizing an alter8 native technology. Comparable capability of systems 

9 includes the acquisition of state-of-the art replace10 ment systems intended to meet comparable oper11 ational scope, which may include incidental increases 

12 in functionality. Such costs include— 

13 ‘‘(A) the costs of any modification or re14 placement of equipment, spares, associated an15 cillary equipment, software, facilities, operating 

16 manuals, training costs, or regulations that are 

17 attributable to relocation or sharing; 

18 ‘‘(B) the costs of all engineering, equip19 ment, software, site acquisition and construc20 tion costs, as well as any legitimate and pru21 dent transaction expense, including term-limited 

22 Federal civil servant and contractor staff nec23 essary, which may be renewed, to carry out the 

24 relocation activities of an eligible Federal entity, 

25 and reasonable additional costs incurred by the 


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1 Federal entity that are attributable to reloca2 tion or sharing, including increased recurring 

3 costs above recurring costs of the system before 

4 relocation for the remaining estimated life of 

5 the system being relocated; 

6 ‘‘(C) the costs of research, engineering 

7 studies, economic analyses, or other expenses 

8 reasonably incurred in connection with (i) cal9 culating the estimated relocation costs that are 

10 provided to the Commission pursuant to para11 graph (4) of this subsection, or in calculating 

12 the estimated sharing costs; (ii) determining the 

13 technical or operational feasibility of relocation 

14 to one or more potential relocation bands; or 

15 (iii) planning for or managing a relocation or 

16 sharing project (including spectrum coordina17 tion with auction winners) or potential reloca18 tion or sharing project; 

19 ‘‘(D) the one-time costs of any modifica20 tion of equipment reasonably necessary to ac21 commodate commercial use of shared fre22 quencies or, in the case of frequencies reallo23 cated to exclusive commercial use, prior to the 

24 termination of the Federal entity’s primary allo25 cation or protected status, when the eligible freVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00169 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 quencies as defined in paragraph (2) of this 

2 subsection are made available for private sector 

3 uses by competitive bidding and a Federal enti4 ty retains primary allocation or protected status 

5 in those frequencies for a period of time after 

6 the completion of the competitive bidding proc7 ess; 

8 ‘‘(E) the costs associated with the acceler9 ated replacement of systems and equipment if 

10 such acceleration is necessary to ensure the 

11 timely relocation of systems to a new frequency 

12 assignment or the timely accommodation of 

13 sharing of Federal frequencies; and 

14 ‘‘(F) the costs of the use of commercial 

15 systems and services (including systems not uti16 lizing spectrum) to replace Federal systems dis17 continued or relocated pursuant to this Act, in18 cluding lease, subscription, and equipment costs 

19 over an appropriate period, such as the antici20 pated life of an equivalent Federal system or 

21 other period determined by the Director of the 

22 Office of Management and Budget.’’. 

23 (d) Section 113(g) of the National Telecommuni24 cations and Information Administration Organization Act 


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1 (47 U.S.C. 923(g)) is amended by adding at the end the 

2 following: 

3 ‘‘(7) SPECTRUM SHARING.—Federal entities are 

4 permitted to allow access to their frequency assign5 ments by non-Federal entities upon approval of the 

6 terms of such access by NTIA, in consultation with 

7 the Office of Management and Budget. Such non8 Federal entities must comply with all applicable 

9 rules of the Commission and NTIA, including any 

10 regulations promulgated pursuant to this section. 

11 Remuneration associated with such access shall be 

12 deposited into the Spectrum Relocation Fund. Fed13 eral entities that incur costs as a result of such ac14 cess are eligible for payment from the Fund for the 

15 purposes specified in paragraph (3) of this section. 

16 The revenue associated with such access must be at 

17 least 110 percent of the estimated Federal costs.’’. 

18 (e) Section 118 of such Act (47 U.S.C. 928) is 

19 amended— 

20 (1) in subsection (b), by inserting before the pe21 riod at the end the following: ‘‘and any payments 

22 made by non-Federal entities for access to Federal 

23 spectrum pursuant to section 113(g)(7)’’; 

24 (2) by amending subsection (c) to read as fol25 lows: 


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1 ‘‘(c) The amounts in the Fund from auctions of eligi2 ble frequencies are authorized to be used to pay relocation 

3 costs, as defined in section 113(g)(3), of an eligible Fed4 eral entity incurring such costs with respect to relocation 

5 from any eligible frequency. In addition, the amounts in 

6 the Fund from payments by non-Federal entities for ac7 cess to Federal spectrum are authorized to be used to pay 

8 Federal costs associated with such sharing, as defined in 

9 section 113(g)(3). The Director of the Office of Manage10 ment and Budget (OMB) may transfer at any time (in11 cluding prior to any auction or contemplated auction, or 

12 sharing initiative) such sums as may be available in the 

13 Fund to an eligible Federal entity to pay eligible relocation 

14 or sharing costs related to pre-auction estimates or re15 search as defined in subparagraph (C) of section 

16 113(g)(3). However, the Director may not transfer more 

17 than $100,000,000 during the period beginning on the 

18 date of enactment of the American Jobs Act of 2011 and 

19 ending on September 30, 2021, for authorized pre-auction 

20 activities before an auction is completed and proceeds are 

21 deposited in the Spectrum Relocation Fund. Within the 

22 $100,000,000 that may be transferred before an auction, 

23 the Director of OMB may transfer up to $10,000,000 in 

24 total to eligible Federal entities for eligible relocation or 

25 sharing costs related to pre-auction estimates or research 


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1 as defined in subparagraph (C) of section 113(g)(3) for 

2 costs incurred prior to the enactment of the American 

3 Jobs Act of 2011, but after June 28, 2010. These 

4 amounts transferred pursuant to the previous proviso are 

5 in addition to amounts that the Director of OMB may 

6 transfer after the enactment of such Act.’’; 

7 (3) in subsection (d)— 

8 (A) in paragraph (1), by inserting ‘‘and 

9 sharing’’ before ‘‘costs’’; 

10 (B) in paragraph (2)(B)— 

11 (i) by inserting ‘‘and sharing’’ before 

12 ‘‘costs’’; and 

13 (ii) by adding ‘‘and sharing’’ before 

14 the period at the end; and 

15 (C) by amending paragraph (3) to read as 

16 follows: 

17 ‘‘(3) Any amounts in the Fund that are remain18 ing after the payment of the relocation and sharing 

19 costs that are payable from the Fund shall revert to 

20 and be deposited in the general fund of the Treasury 

21 not later than 15 years after the date of the deposit 

22 of such proceeds to the Fund, unless the Director of 

23 OMB, in consultation with the Assistant Secretary 

24 for Communications and Information, notifies the 

25 Committees on Appropriations and Energy and 


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1 Commerce of the House of Representative and the 

2 Committees on Appropriations and Commerce, 

3 Science, and Transportation of the Senate at least 

4 60 days in advance of the reversion of the funds to 

5 the general fund of the Treasury that such funds are 

6 needed to complete or to implement current or fu7 ture relocations or sharing initiatives.’’; 

8 (4) in subsection (e)(2)— 

9 (A) by inserting ‘‘and sharing’’ before 

10 ‘‘costs’’; 

11 (B) by inserting ‘‘or sharing’’ before ‘‘is 

12 complete’’; and 

13 (C) by inserting ‘‘or sharing’’ before ‘‘in 

14 accordance’’; and 

15 (5) by adding at the end the following new sub16 section: 

17 ‘‘(f) Notwithstanding subsections (c) through (e) of 

18 this section and after the amount specified in subsection 

19 (b), up to twenty percent of the amounts deposited in the 

20 Spectrum Relocation Fund from the auction of licenses 

21 following the date of enactment of the American Jobs Act 

22 of 2011 for frequencies vacated by Federal entities, or up 

23 to twenty percent of the amounts paid by non-Federal en24 tities for sharing of Federal spectrum after the date of 

25 enactment, are hereby appropriated and available at the 


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1 discretion of the Director of the Office of Management and 

2 Budget, in consultation with the Assistant Secretary for 

3 Communications and Information, for payment to the eli4 gible Federal entities, in addition to the relocation and 

5 sharing costs defined in paragraph (3) of section 113(g), 

6 for the purpose of encouraging timely access to those fre7 quencies, provided that: 

8 ‘‘(1) Such payments may be based on the mar9 ket value of the spectrum, timeliness of clearing, and 

10 needs for agencies’ essential missions. 

11 ‘‘(2) Such payments are authorized for— 

12 ‘‘(A) the purposes of achieving enhanced 

13 capabilities of systems that are affected by the 

14 activities specified in subparagraphs (A) 

15 through (F) of paragraph (3) of section 113(g); 

16 and 

17 ‘‘(B) other communications, radar and 

18 spectrum-using investments not directly af19 fected by such reallocation or sharing but essen20 tial for the missions of the Federal entity that 

21 is relocating its systems or sharing frequencies. 

22 ‘‘(3) The increase to the Fund due to any one 

23 auction after any payment is not less than 10 per24 cent of the winning bids in the relevant auction, or 

25 is not less than 10 percent of the payments from 


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1 non-Federal entities in the relevant sharing agree2 ment. 

3 ‘‘(4) Payments to eligible entities must be based 

4 on the proceeds generated in the auction that an eli5 gible entity participates in. 

6 ‘‘(5) Such payments will not be made until 30 

7 days after the Director of OMB has notified the 

8 Committees on Appropriations and Commerce, 

9 Science, and Transportation of the Senate, and the 

10 Committees on Appropriations and Energy and 

11 Commerce of the House of Representatives.’’. 

12 (f) Subparagraph (D) of section 309(j)(8) of the 

13 Communications Act of 1934 (47 U.S.C. 309(j)(8)) is 

14 amended— 

15 (1) by inserting ‘‘, after the retention of rev16 enue described in subparagraph (B),’’ before ‘‘attrib17 utable’’; and 

18 (2) by inserting ‘‘and frequencies identified by 

19 the Federal Communications Commission to be auc20 tioned in conjunction with eligible frequencies de21 scribed in such section’’ before the first ‘‘shall’’ in 

22 the subparagraph. 

23 (g) If the head of an executive agency of the Federal 

24 Government determines that public disclosure of any in25 formation contained in notifications and reports required 


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1 by section 113 or 118 of the National Telecommunications 

2 and Information Administration Organization Act (47 

3 U.S.C. 923; 928) would reveal classified national security 

4 information or other information for which there is a legal 

5 basis for nondisclosure and such public disclosure would 

6 be detrimental to national security, homeland security, 

7 public safety, or jeopardize law enforcement investigations 

8 the head of the executive agency shall notify the NTIA 

9 of that determination prior to release of such information. 

10 In that event, such information shall be included in a sepa11 rate annex, as needed and to the extent the agency head 

12 determines is consistent with national security or law en13 forcement purposes. These annexes shall be provided to 

14 the appropriate subcommittee in accordance with applica15 ble stipulations, but shall not be disclosed to the public 

16 or provided to any unauthorized person through any other 

17 means. 

18 SEC. 273. INCENTIVE AUCTION AUTHORITY. 

19 Paragraph (8) of section 309(j) of the Communica20 tions Act of 1934 (47 U.S.C. 309(j)) is amended— 

21 (1) in subparagraph (A), by striking ‘‘and (E)’’ 

22 and inserting ‘‘(E), and (F)’’; and 

23 (2) by adding at the end the following new sub24 paragraphs: 


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1 ‘‘(F) Notwithstanding any other provision 

2 of law, if the Commission determines that it is 

3 consistent with the public interest in utilization 

4 of the spectrum for a licensee to voluntarily re5 linquish some or all of its licensed spectrum 

6 usage rights in order to permit the assignment 

7 of new initial licenses through a competitive 

8 bidding process subject to new service rules, or 

9 the designation of spectrum for unlicensed use, 

10 the Commission may pay to such licensee a por11 tion of any auction proceeds that the Commis12 sion determines, in its discretion, are attrib13 utable to the spectrum usage rights voluntarily 

14 relinquished by such licensee. If the Commis15 sion also determines that it is in the public in16 terest to modify the spectrum usage rights of 

17 any incumbent licensee in order to facilitate the 

18 assignment of such new initial licenses subject 

19 to new service rules, or the designation of spec20 trum for unlicensed use, the Commission may 

21 pay to such licensee a portion of the auction 

22 proceeds for the purpose of relocating to any al23 ternative frequency or location that the Com24 mission may designate; Provided, however, that 

25 with respect to frequency bands between 54 


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1 megahertz and 72 megahertz, 76 megahertz 

2 and 88 megahertz, 174 megahertz and 216 

3 megahertz, and 470 megahertz and 698 mega4 hertz (‘the specified bands’), any spectrum 

5 made available for alternative use utilizing pay6 ments authorized under this subsection shall be 

7 assigned via the competitive bidding process 

8 until the winning bidders for licenses covering 

9 at least 84 megahertz from the specified bands 

10 deposit the full amount of their bids in accord11 ance with the Commission’s instructions. In ad12 dition, if more than 84 megahertz of spectrum 

13 from the specified bands is made available for 

14 alternative use utilizing payments under this 

15 subsection, and such spectrum is assigned via 

16 competitive bidding, a portion of the proceeds 

17 may be disbursed to licensees of other fre18 quency bands for the purpose of making addi19 tional spectrum available, provided that a ma20 jority of such additional spectrum is assigned 

21 via competitive bidding. Also, provided that in 

22 exercising the authority provided under this sec23 tion: 

24 ‘‘(i) The Chairman of the Commis25 sion, in consultation with the Director of 


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1 OMB, shall notify the Committees on Ap2 propriations and Commerce, Science, and 

3 Transportation of the Senate, and the 

4 Committees on Appropriations and Energy 

5 and Commerce of the House of Represent6 atives of the methodology for calculating 

7 such payments to licensees at least 3 

8 months in advance of the relevant auction, 

9 and that such methodology consider the 

10 value of spectrum vacated in its current 

11 use and the timeliness of clearing. 

12 ‘‘(ii) Notwithstanding subparagraph 

13 (A), and except as provided in subpara14 graphs (B), (C), and (D), all proceeds (in15 cluding deposits and up front payments 

16 from successful bidders) from the auction 

17 of spectrum under this subparagraph and 

18 section 277 of the American Jobs Act of 

19 2011 shall be deposited with the Public 

20 Safety Trust Fund established under sec21 tion 297 of such Act. 

22 ‘‘(G) ESTABLISHMENT OF INCENTIVE AUC23 TION RELOCATION FUND.— 

24 ‘‘(i) IN GENERAL.—There is estab25 lished in the Treasury of the United States 


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1 a fund to be known as the ‘Incentive Auc2 tion Relocation Fund’. 

3 ‘‘(ii) ADMINISTRATION.—The Assist4 ant Secretary shall administer the Incen5 tive Auction Relocation Fund using the 

6 amounts deposited pursuant to this sec7 tion. 

8 ‘‘(iii) CREDITING OF RECEIPTS.— 

9 There shall be deposited into or credited to 

10 the Incentive Auction Relocation Fund any 

11 amounts specified in section 297 of the 

12 American Jobs Act of 2011. 

13 ‘‘(iv) AVAILABILITY.—Amounts in the 

14 Incentive Auction Relocation Fund shall be 

15 available to the NTIA for use— 

16 ‘‘(I) without fiscal year limita17 tion; 

18 ‘‘(II) for a period not to exceed 

19 18 months following the later of— 

20 ‘‘(aa) the completion of in21 centive auction from which such 

22 amounts were derived; 

23 ‘‘(bb) the date on which the 

24 Commission issues all the new 

25 channel assignments pursuant to 


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1 any repacking required under 

2 subparagraph (F); or 

3 ‘‘(cc) the issuance of a con4 struction permit by the Commis5 sion for a station to change chan6 nels, geographic locations, to col7 locate on the same channel or no8 tification by a station to the As9 sistant Secretary that it is im10 pacted by such a change; and 

11 ‘‘(III) without further appropria12 tion. 

13 ‘‘(v) USE OF FUNDS.—Amounts in the 

14 Incentive Auction Relocation Fund may 

15 only be used by the NTIA, in consultation 

16 with the Commission, to cover— 

17 ‘‘(I) the reasonable costs of tele18 vision broadcast stations that are relo19 cated to a different spectrum channel 

20 or geographic location following an in21 centive auction under subparagraph 

22 (F), or that are impacted by such re23 locations, including to cover the cost 

24 of new equipment, installation, and 

25 construction; and 


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1 ‘‘(II) the costs incurred by multi2 channel video programming distribu3 tors for new equipment, installation, 

4 and construction related to the car5 riage of such relocated stations or the 

6 carriage of stations that voluntarily 

7 elect to share a channel, but retain 

8 their existing rights to carriage pursu9 ant to sections 338, 614, and 615.’’. 

10 SEC. 274. REQUIREMENTS WHEN REPURPOSING CERTAIN 

11 MOBILE SATELLITE SERVICES SPECTRUM 

12 FOR TERRESTRIAL BROADBAND USE. 

13 To the extent that the Commission makes available 

14 terrestrial broadband rights on spectrum primarily li15 censed for mobile satellite services, the Commission shall 

16 recover a significant portion of the value of such right ei17 ther through the authority provided in section 309(j) of 

18 the Communications Act of 1934 (47 U.S.C. 309(j)) or 

19 by section 309(m) of such Act, as added by section 278. 

20 SEC. 275. PERMANENT EXTENSION OF AUCTION AUTHOR21 ITY. 

22 Section 309(j)(11) of the Communications Act of 

23 1934 (47 U.S.C. 309(j)(11)) is repealed. 


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1 SEC. 276. AUTHORITY TO AUCTION LICENSES FOR DOMES2 TIC SATELLITE SERVICES. 

3 Section 309(j) of the Communications Act of 1934 

4 is amended by adding at the end the following: 

5 ‘‘(17) Notwithstanding any other provision of 

6 law, the Commission shall use competitive bidding 

7 under this subsection to assign any license, construc8 tion permit, reservation, or similar authorization or 

9 modification thereof, that may be used solely or pre10 dominantly for domestic satellite communications 

11 services, including satellite-based television or radio 

12 services. A service is defined to be predominantly for 

13 domestic satellite communications services if the ma14 jority of customers that may be served are located 

15 within the geographic boundaries of the United 

16 States. The Commission may, however, use an alter17 native approach to assignment of such licenses or 

18 similar authorities if it finds that such an alternative 

19 to competitive bidding would serve the public inter20 est, convenience, and necessity. This paragraph shall 

21 be effective on the date of its enactment and shall 

22 apply to all Commission assignments or reservations 

23 of spectrum for domestic satellite services, including, 

24 but not limited to, all assignments or reservations 

25 for satellite-based television or radio services as of 

26 the effective date.’’. 


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1 SEC. 277. DIRECTED AUCTION OF CERTAIN SPECTRUM. 

2 (a) IDENTIFICATION OF SPECTRUM.—Not later than 

3 1 year after the date of enactment of this subtitle, the 

4 Assistant Secretary shall identify and make available for 

5 immediate reallocation, at a minimum, 15 megahertz of 

6 contiguous spectrum at frequencies located between 1675 

7 megahertz and 1710 megahertz, inclusive, minus the geo8 graphic exclusion zones, or any amendment thereof, identi9 fied in NTIA’s October 2010 report entitled ‘‘An Assess10 ment of Near-Term Viability of Accommodating Wireless 

11 Broadband Systems in 1675–1710 MHz, 1755–1780 

12 MHz, 3500–3650 MHz, and 4200–4220 MHz, 4380– 

13 4400 MHz Bands,’’ to be made available for reallocation 

14 or sharing with incumbent Government operations. 

15 (b) AUCTION.—Not later than January 31, 2016, the 

16 Commission shall conduct, in such combination as deemed 

17 appropriate by the Commission, the auctions of the fol18 lowing licenses covering at least the frequencies described 

19 in this section, by commencing the bidding for— 

20 (1) the spectrum between the frequencies of 

21 1915 megahertz and 1920 megahertz, inclusive; 

22 (2) the spectrum between the frequencies of 

23 1995 megahertz and 2000 megahertz, inclusive; 

24 (3) the spectrum between the frequencies of 

25 2020 megahertz and 2025 megahertz, inclusive; 


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1 (4) the spectrum between the frequencies of 

2 2155 megahertz and 2175 megahertz, inclusive; 

3 (5) the spectrum between the frequencies of 

4 2175 megahertz and 2180 megahertz, inclusive; and 

5 (6) at least 25 megahertz of spectrum between 

6 the frequencies of 1755 megahertz and 1850 mega7 hertz, minus appropriate geographic exclusion zones 

8 if necessary, unless the President of the United 

9 States determines that— 

10 (A) such spectrum should not be reallo11 cated due to the need to protect incumbent 

12 Federal operations or reallocation must be de13 layed or progressed in phases to ensure protec14 tion or continuity of Federal operations; and 

15 (B) allocation of other spectrum— 

16 (i) better serves the public interest, 

17 convenience, and necessity; and 

18 (ii) can reasonably be expected to 

19 produce receipts comparable to auction of 

20 spectrum frequencies identified in this 

21 paragraph. 

22 The Commission may substitute alternative spectrum fre23 quencies for the spectrum frequencies identified in para24 graphs (1) through (5) of this subsection, if the Commis25 sion determines that alternative spectrum would better 


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1 serve the public interest and the Office of Management 

2 and Budget certifies that such alternative spectrum fre3 quencies are reasonably expected to produce receipts com4 parable to auction of the spectrum frequencies identified 

5 in paragraphs (1) through (5) of this subsection. 

6 (c) AUCTION ORGANIZATION.—The Commission may, 

7 if technically feasible and consistent with the public inter8 est, combine the spectrum identified in paragraphs (4), 

9 (5), and the portion of paragraph (6) between the fre10 quencies of 1755 megahertz and 1850 megahertz, inclu11 sive, of subsection (b) in an auction of licenses for paired 

12 spectrum blocks. 

13 (d) FURTHER REALLOCATION OF CERTAIN OTHER

14 SPECTRUM.— 

15 (1) COVERED SPECTRUM.—For purposes of this 

16 subsection, the term ‘‘covered spectrum’’ means the 

17 portion of the electromagnetic spectrum between the 

18 frequencies of 3550 to 3650 megahertz, inclusive, 

19 minus the geographic exclusion zones, or any amend20 ment thereof, identified in NTIA’s October 2010 re21 port entitled ‘‘An Assessment of Near-Term Viabil22 ity of Accommodating Wireless Broadband Systems 

23 in 1675–1710 MHz, 1755–1780 MHz, 3500–3650 

24 MHz, and 4200–4220 MHz, 4380–4400 MHz 

25 Bands’’. 


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1 (2) IN GENERAL.—Consistent with require2 ments of section 309(j) of the Communications Act 

3 of 1934, the Commission shall reallocate covered 

4 spectrum for assignment by competitive bidding or 

5 allocation to unlicensed use, minus appropriate ex6 clusion zones if necessary, unless the President of 

7 the United States determines that— 

8 (A) such spectrum cannot be reallocated 

9 due to the need to protect incumbent Federal 

10 systems from interference; or 

11 (B) allocation of other spectrum— 

12 (i) better serves the public interest, 

13 convenience, and necessity; and 

14 (ii) can reasonably be expected to 

15 produce receipts comparable to what the 

16 covered spectrum might auction for with17 out the geographic exclusion zones. 

18 (3) ACTIONS REQUIRED IF COVERED SPECTRUM

19 CANNOT BE REALLOCATED.— 

20 (A) IN GENERAL.—If the President makes 

21 a determination under paragraph (2) that the 

22 covered spectrum cannot be reallocated, then 

23 the President shall, within 1 year after the date 

24 of such determination— 


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1 (i) identify alternative bands of fre2 quencies totaling more than 20 megahertz 

3 and no more than 100 megahertz of spec4 trum used primarily by Federal agencies 

5 that satisfy the requirements of clauses (i) 

6 and (ii) of paragraph (2)(B); 

7 (ii) report to the appropriate commit8 tees of Congress and the Commission an 

9 identification of such alternative spectrum 

10 for assignment by competitive bidding; and 

11 (iii) make such alternative spectrum 

12 for assignment immediately available for 

13 reallocation. 

14 (B) AUCTION.—If the President makes a 

15 determination under paragraph (2) that the 

16 covered spectrum cannot be reallocated, the 

17 Commission shall commence the bidding of the 

18 alternative spectrum identified pursuant to sub19 paragraph (A) within 3 years of the date of en20 actment of this subtitle. 

21 (4) ACTIONS REQUIRED IF COVERED SPECTRUM

22 CAN BE REALLOCATED.—If the President does not 

23 make a determination under paragraph (2) that the 

24 covered spectrum cannot be reallocated, the Commis25 sion shall commence the competitive bidding for the 


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1 covered spectrum within 3 years of the date of en2 actment of this subtitle. 

3 (e) AMENDMENTS TO DESIGN REQUIREMENTS RE4 LATED TO COMPETITIVE BIDDING.—Section 309(j) of the 

5 Communications Act of 1934 (47 U.S.C. 309(j)) is 

6 amended— 

7 (1) in paragraph (3)— 

8 (A) in subparagraph (E)(ii), by striking ‘‘; 

9 and’’ and inserting a semicolon; 

10 (B) in subparagraph (F), by striking the 

11 period at the end and inserting ‘‘; and’’; and 

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

13 ‘‘(G) ensuring that there is an adequate 

14 opportunity for applicants to obtain licenses 

15 covering both large and small geographic areas, 

16 as such areas are determined by the Commis17 sion.’’; and 

18 (2) in paragraph (8)(C), by amending clause (i) 

19 to read as follows: 

20 ‘‘(i) the deposits— 

21 ‘‘(I) of successful bidders of any 

22 auction conducted pursuant to sub23 paragraph (F) or section 277 of the 

24 American Jobs Act of 2011 shall be 

25 paid to the Public Safety Trust Fund 


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1 established under section 297 of such 

2 Act; and 

3 ‘‘(II) of successful bidders of any 

4 other auction shall be paid to the 

5 Treasury;’’. 

6 SEC. 278. AUTHORITY TO ESTABLISH SPECTRUM LICENSE 

7 USER FEES. 

8 Section 309 of the Communications Act of 1934 (47 

9 U.S.C. 309) is amended by adding at the end the following 

10 new subsection: 

11 ‘‘(m) USE OF SPECTRUM LICENSE USER FEES.— 

12 ‘‘(1) IN GENERAL.—For initial licenses or con13 struction permits that are not granted through the 

14 use of competitive bidding as set forth in subsection 

15 (j), and for renewals or modifications of initial li16 censes or other authorizations, whether granted 

17 through competitive bidding or not, the Commission 

18 may, where warranted, establish, assess, and collect 

19 annual user fees on holders of spectrum licenses or 

20 construction permits, including their successors or 

21 assignees, in order to promote efficient and effective 

22 use of the electromagnetic spectrum. 

23 ‘‘(2) REQUIRED COLLECTIONS.—The Commis24 sion shall collect at least the following amounts: 

25 ‘‘(A) $200,000,000 in fiscal year 2012. 


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1 ‘‘(B) $300,000,000 in fiscal year 2013. 

2 ‘‘(C) $425,000,000 in fiscal year 2014. 

3 ‘‘(D) $550,000,000 in fiscal year 2015. 

4 ‘‘(E) $550,000,000 in fiscal year 2016. 

5 ‘‘(F) $550,000,000 in fiscal year 2017. 

6 ‘‘(G) $550,000,000 in fiscal year 2018. 

7 ‘‘(H) $550,000,000 in fiscal year 2019. 

8 ‘‘(I) $550,000,000 in fiscal year 2020. 

9 ‘‘(J) $550,000,000 in fiscal year 2021. 

10 ‘‘(3) DEVELOPMENT OF SPECTRUM FEE REGU11 LATIONS.— 

12 ‘‘(A) The Commission shall, by regulation, 

13 establish a methodology for assessing annual 

14 spectrum user fees and a schedule for collection 

15 of such fees on classes of spectrum licenses or 

16 construction permits or other instruments of 

17 authorization, consistent with the public inter18 est, convenience and necessity. The Commission 

19 may determine over time different classes of 

20 spectrum licenses or construction permits upon 

21 which such fees may be assessed. In estab22 lishing the fee methodology, the Commission 

23 may consider the following factors: 

24 ‘‘(i) The highest value alternative 

25 spectrum use forgone. 


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1 ‘‘(ii) Scope and type of permissible 

2 services and uses. 

3 ‘‘(iii) Amount of spectrum and li4 censed coverage area. 

5 ‘‘(iv) Shared versus exclusive use. 

6 ‘‘(v) Level of demand for spectrum li7 censes or construction permits within a 

8 certain spectrum band or geographic area. 

9 ‘‘(vi) The amount of revenue raised on 

10 comparable licenses awarded through an 

11 auction. 

12 ‘‘(vii) Such factors that the Commis13 sion determines, in its discretion, are nec14 essary to promote efficient and effective 

15 spectrum use. 

16 ‘‘(B) In addition, the Commission shall, by 

17 regulation, establish a methodology for assess18 ing annual user fees and a schedule for collec19 tion of such fees on entities holding Ancillary 

20 Terrestrial Component authority in conjunction 

21 with Mobile Satellite Service spectrum licenses, 

22 where the Ancillary Terrestrial Component au23 thority was not assigned through use of com24 petitive bidding. The Commission shall not col25 lect less from the holders of such authority than 


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1 a reasonable estimate of the value of such au2 thority over its term, regardless of whether ter3 restrial service is actually provided during this 

4 term. In determining a reasonable estimate of 

5 the value of such authority, the Commission 

6 may consider factors listed in subparagraph 

7 (A). 

8 ‘‘(C) Within 60 days of enactment of the 

9 American Jobs Act of 2011, the Commission 

10 shall commence a rulemaking to develop the fee 

11 methodology and regulations. The Commission 

12 shall take all actions necessary so that it can 

13 collect fees from the first class or classes of 

14 spectrum license or construction permit holders 

15 no later than September 30, 2012. 

16 ‘‘(D) The Commission, from time to time, 

17 may commence further rulemakings (separate 

18 from or in connection with other rulemakings or 

19 proceedings involving spectrum-based services, 

20 licenses, permits and uses) and modify the fee 

21 methodology or revise its rules required by sub22 paragraph (B) to add or modify classes of spec23 trum license or construction permit holders that 

24 must pay fees, and assign or adjust such fee as 

25 a result of the addition, deletion, reclassification 


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1 or other change in a spectrum-based service or 

2 use, including changes in the nature of a spec3 trum-based service or use as a consequence of 

4 Commission rulemaking proceedings or changes 

5 in law. Any resulting changes in the classes of 

6 spectrum licenses, construction permits or fees 

7 shall take effect upon the dates established in 

8 the Commission’s rulemaking proceeding in ac9 cordance with applicable law. 

10 ‘‘(E) The Commission shall exempt from 

11 such fees holders of licenses for broadcast tele12 vision and public safety services. The term 

13 ‘‘emergency response providers’’ includes State, 

14 local, and tribal, emergency public safety, law 

15 enforcement, firefighter, emergency response, 

16 emergency medical (including hospital emer17 gency facilities), and related personnel, agencies 

18 and authorities. 

19 ‘‘(4) PENALTIES FOR LATE PAYMENT.—The 

20 Commission shall prescribe by regulation an addi21 tional charge which shall be assessed as a penalty 

22 for late payment of fees required by this subsection. 

23 ‘‘(5) REVOCATION OF LICENSE OR PERMIT.— 

24 The Commission may revoke any spectrum license or 

25 construction permit for a licensee’s or permitee’s 


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1 failure to pay in a timely manner any fee or penalty 

2 to the Commission under this subsection. Such rev3 ocation action may be taken by the Commission 

4 after notice of the Commission’s intent to take such 

5 action is sent to the licensee by registered mail, re6 turn receipt requested, at the licensee’s last known 

7 address. The notice will provide the licensee at least 

8 30 days to either pay the fee or show cause why the 

9 fee does not apply to the licensee or should otherwise 

10 be waived or payment deferred. A hearing is not re11 quired under this subsection unless the licensee’s re12 sponse presents a substantial and material question 

13 of fact. In any case where a hearing is conducted 

14 pursuant to this subsection, the hearing shall be 

15 based on written evidence only, and the burden of 

16 proceeding with the introduction of evidence and the 

17 burden of proof shall be on the licensee. Unless the 

18 licensee substantially prevails in the hearing, the 

19 Commission may assess the licensee for the costs of 

20 such hearing. Any Commission order adopted pursu21 ant to this subsection shall determine the amount 

22 due, if any, and provide the licensee with at least 30 

23 days to pay that amount or have its authorization 

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1 hausted its right to judicial review of such order 

2 under section 402(b)(5). 

3 ‘‘(6) TREATMENT OF REVENUES.—All proceeds 

4 obtained pursuant to the regulations required by this 

5 subsection shall be deposited in the General Fund of 

6 the Treasury.’’. 

7 PART II—PUBLIC SAFETY BROADBAND NETWORK 

8 SEC. 281. REALLOCATION OF D BLOCK FOR PUBLIC SAFE9 TY. 

10 (a) IN GENERAL.—The Commission shall reallocate 

11 the 700 MHz D block spectrum for use by public safety 

12 entities in accordance with the provisions of this subtitle. 

13 (b) SPECTRUM ALLOCATION.—Section 337(a) of the 

14 Communications Act of 1934 (47 U.S.C. 337(a)) is 

15 amended— 

16 (1) by striking ‘‘24’’ in paragraph (1) and in17 serting ‘‘34’’; and 

18 (2) by striking ‘‘36’’ in paragraph (2) and in19 serting ‘‘26’’. 

20 SEC. 282. FLEXIBLE USE OF NARROWBAND SPECTRUM. 

21 The Commission may allow the narrowband spectrum 

22 to be used in a flexible manner, including usage for public 

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1 ments of the Commission and the Corporation established 

2 in section 204 of this subtitle. 

3 SEC. 283. SINGLE PUBLIC SAFETY WIRELESS NETWORK LI4 CENSEE. 

5 (a) REALLOCATION AND GRANT OF LICENSE.—Not6 withstanding any other provision of law, but subject to the 

7 provisions of this subtitle, including section 290, the Com8 mission shall grant a license to the Public Safety 

9 Broadband Corporation established under section 284 for 

10 the use of the 700 MHz D block spectrum and existing 

11 public safety broadband spectrum. 

12 (b) TERM OF LICENSE.— 

13 (1) INITIAL LICENSE.—The license granted 

14 under subsection (a) shall be for an initial term of 

15 10 years from the date of the initial issuance of the 

16 license. 

17 (2) RENEWAL OF LICENSE.—Prior to expiration 

18 of the term of the initial license granted under sub19 section (a) or the expiration of any subsequent re20 newal of such license, the Corporation shall submit 

21 to the Commission an application for the renewal of 

22 such license. Such renewal application shall dem23 onstrate that, during the preceding license term, the 

24 Corporation has met the duties and obligations set 

25 forth under this subtitle. A renewal license granted 


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1 under this paragraph shall be for a term of not to 

2 exceed 15 years. 

3 (c) FACILITATION OF TRANSITION.—The Commis4 sion shall take all actions necessary to facilitate the transi5 tion of the existing public safety broadband spectrum to 

6 the Public Safety Broadband Corporation established 

7 under section 284. 

8 SEC. 284. ESTABLISHMENT OF PUBLIC SAFETY BROADBAND 

9 CORPORATION. 

10 (a) ESTABLISHMENT.—There is authorized to be es11 tablished a private, nonprofit corporation, to be known as 

12 the ‘‘Public Safety Broadband Corporation’’, which is nei13 ther an agency nor establishment of the United States 

14 Government or the District of Columbia Government. 

15 (b) APPLICATION OF PROVISIONS.—The Corporation 

16 shall be subject to the provisions of this subtitle, and, to 

17 the extent consistent with this subtitle, to the District of 

18 Columbia Nonprofit Corporation Act (section 29–301.01 

19 et seq., D.C. Official Code). 

20 (c) RESIDENCE.—The Corporation shall have its 

21 place of business in the District of Columbia and shall be 

22 considered, for purposes of venue in civil actions, to be 

23 a resident of the District of Columbia. 

24 (d) POWERS UNDER D.C. ACT.—In order to carry 

25 out the duties and activities of the Corporation, the CorVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00199 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 poration shall have the usual powers conferred upon a 

2 nonprofit corporation by the District of Columbia Non3 profit Corporation Act. 

4 (e) INCORPORATION.—The members of the initial 

5 Board of Directors of the Corporation shall serve as 

6 incorporators and shall take whatever steps that are nec7 essary to establish the Corporation under the District of 

8 Columbia Nonprofit Corporation Act. 

9 SEC. 285. BOARD OF DIRECTORS OF THE CORPORATION. 

10 (a) MEMBERSHIP.—The management of the Corpora11 tion shall be vested in a Board of Directors (referred to 

12 in this subtitle as the ‘‘Board’’), which shall consist of the 

13 following members: 

14 (1) FEDERAL MEMBERS.—The following indi15 viduals, or their respective designees, shall serve as 

16 Federal members: 

17 (A) The Secretary of Commerce. 

18 (B) The Secretary of Homeland Security. 

19 (C) The Attorney General of the United 

20 States. 

21 (D) The Director of the Office of Manage22 ment and Budget. 

23 (2) NON-FEDERAL MEMBERS.— 

24 (A) IN GENERAL.—The Secretary of Com25 merce, in consultation with the Secretary of 


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1 Homeland Security and the Attorney General of 

2 the United States, shall appoint 11 individuals 

3 to serve as non-Federal members of the Board. 

4 (B) STATE, TERRITORIAL, TRIBAL AND

5 LOCAL GOVERNMENT INTERESTS.—In making 

6 appointments under subparagraph (A), the Sec7 retary of Commerce should— 

8 (i) appoint at least 3 individuals with 

9 significant expertise in the collective inter10 ests of State, territorial, tribal, and local 

11 governments; 

12 (ii) seek to ensure geographic and re13 gional representation of the United States 

14 in such appointments; and 

15 (iii) seek to ensure rural and urban 

16 representation in such appointments. 

17 (C) PUBLIC SAFETY INTERESTS.—In mak18 ing appointments under subparagraph (A), the 

19 Secretary of Commerce should appoint at least 

20 3 individuals who have served or are currently 

21 serving as public safety professionals. 

22 (D) REQUIRED QUALIFICATIONS.— 

23 (i) IN GENERAL.—Each non-Federal 

24 member appointed under subparagraph (A) 


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1 should meet at least one of the following 

2 criteria: 

3 (I) PUBLIC SAFETY EXPERI4 ENCE.—Knowledge and experience in 

5 the use of Federal, State, local, or 

6 tribal public safety or emergency re7 sponse. 

8 (II) TECHNICAL EXPERTISE.— 

9 Technical expertise and fluency re10 garding broadband communications, 

11 including public safety communica12 tions and cybersecurity. 

13 (III) NETWORK EXPERTISE.— 

14 Expertise in building, deploying, and 

15 operating commercial telecommuni16 cations networks. 

17 (IV) FINANCIAL EXPERTISE.— 

18 Expertise in financing and funding 

19 telecommunications networks. 

20 (ii) EXPERTISE TO BE REP21 RESENTED.—In making appointments 

22 under subparagraph (A), the Secretary of 

23 Commerce should appoint— 


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1 (I) at least one individual who 

2 satisfies the requirement under sub3 clause (II) of clause (i); 

4 (II) at least one individual who 

5 satisfies the requirement under sub6 clause (III) of clause (i); and 

7 (III) at least one individual who 

8 satisfies the requirement under sub9 clause (IV) of clause (i). 

10 (E) INDEPENDENCE.— 

11 (i) IN GENERAL.—Each non-Federal 

12 member of the Board shall be independent 

13 and neutral and maintain a fiduciary rela14 tionship with the Corporation in per15 forming his or her duties. 

16 (ii) INDEPENDENCE DETERMINA17 TION.—In order to be considered inde18 pendent for purposes of this subparagraph, 

19 a member of the Board— 

20 (I) may not, other than in his or 

21 her capacity as a member of the 

22 Board or any committee thereof— 

23 (aa) accept any consulting, 

24 advisory, or other compensatory 

25 fee from the Corporation; or 


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1 (bb) be a person associated 

2 with the Corporation or with any 

3 affiliated company thereof; and 

4 (II) shall be disqualified from 

5 any deliberation involving any trans6 action of the Corporation in which the 

7 Board member has a financial interest 

8 in the outcome of the transaction. 

9 (F) NOT OFFICERS OR EMPLOYEES.—The 

10 non-Federal members of the Board shall not, by 

11 reason of such membership, be considered to be 

12 officers or employees of the United States Gov13 ernment or of the District of Columbia Govern14 ment. 

15 (G) CITIZENSHIP.—No individual other 

16 than a citizen of the United States may serve 

17 as a non-Federal member of the Board. 

18 (H) CLEARANCE FOR CLASSIFIED INFOR19 MATION.—In order to have the threat and vul20 nerability information necessary to make risk 

21 management decisions regarding the network, 

22 the non-Federal members of the Board shall be 

23 required, prior to appointment, to obtain a 

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1 tion classified at the level of Top Secret, Special 

2 Compartmented Information. 

3 (b) TERMS OF APPOINTMENT.— 

4 (1) INITIAL APPOINTMENT DEADLINE.—Mem5 bers of the Board shall be appointed not later than 

6 180 days after the date of the enactment of this 

7 subtitle. 

8 (2) TERMS.— 

9 (A) LENGTH.— 

10 (i) FEDERAL MEMBERS.—Each Fed11 eral member of the Board shall serve as a 

12 member of the Board for the life of the 

13 Corporation while serving in their ap14 pointed capacity. 

15 (ii) NON-FEDERAL MEMBERS.—The 

16 term of office of each non-Federal member 

17 of the Board shall be 3 years. No non-Fed18 eral member of the Board may serve more 

19 than 2 consecutive full 3-year terms. 

20 (B) EXPIRATION OF TERM.—Any member 

21 whose term has expired may serve until such 

22 member’s successor has taken office, or until 

23 the end of the calendar year in which such 

24 member’s term has expired, whichever is earlier. 


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1 (C) APPOINTMENT TO FILL VACANCY.— 

2 Any non-Federal member appointed to fill a va3 cancy occurring prior to the expiration of the 

4 term for which that member’s predecessor was 

5 appointed shall be appointed for the remainder 

6 of the predecessor’s term. 

7 (D) STAGGERED TERMS.—With respect to 

8 the initial non-Federal members of the Board— 

9 (i) 4 members shall serve for a term 

10 of 3 years; 

11 (ii) 4 members shall serve for a term 

12 of 2 years; and 

13 (iii) 3 members shall serve for a term 

14 of 1 year. 

15 (3) VACANCIES.—A vacancy in the membership 

16 of the Board shall not affect the Board’s powers and 

17 shall be filled in the same manner as the original 

18 member was appointed. 

19 (c) CHAIR.— 

20 (1) SELECTION.—The Secretary of Commerce, 

21 in consultation with the Secretary of Homeland Se22 curity and the Attorney General of the United 

23 States, shall select, from among the members of the 

24 Board, an individual to serve for a 2-year term as 

25 Chair of the Board. 


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1 (2) CONSECUTIVE TERMS.—An individual may 

2 not serve for more than 2 consecutive terms as 

3 Chair of the Board. 

4 (3) REMOVAL FOR CAUSE.—The Secretary of 

5 Commerce, in consultation with the Secretary of 

6 Homeland Security and the Attorney General of the 

7 United States, may remove the Chair of the Board 

8 and any non-Federal member for good cause. 

9 (d) REMOVAL.—All members of the Board may by 

10 majority vote— 

11 (1) remove any non-Federal member of the 

12 Board from office for conduct determined by the 

13 Board to be detrimental to the Board or Corpora14 tion; and 

15 (2) request that the Secretary of Commerce ex16 ercise his or her authority to remove the Chair of 

17 the Board for conduct determined by the Board to 

18 be detrimental to the Board or Corporation. 

19 (e) MEETINGS.— 

20 (1) FREQUENCY.—The Board shall meet in ac21 cordance with the bylaws of the Corporation— 

22 (A) at the call of the Chair; and 

23 (B) not less frequently than once each 

24 quarter. 


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1 (2) TRANSPARENCY.—Meetings of the Board, 

2 including any committee of the Board, shall be open 

3 to the public. The Board may, by majority vote, 

4 close any such meeting only for the time necessary 

5 to preserve the confidentiality of commercial or fi6 nancial information that is privileged or confidential, 

7 to discuss personnel matters, to discuss security 

8 vulnerabilities when making those vulnerabilities 

9 public would increase risk to the network or other10 wise materially threaten network operations, or to 

11 discuss legal matters affecting the Corporation, in12 cluding pending or potential litigation. 

13 (f) QUORUM.—Eight members of the Board shall 

14 constitute a quorum. 

15 (g) BYLAWS.—A majority of the members of the 

16 Board of Directors may amend the bylaws of the Corpora17 tion. 

18 (h) ATTENDANCE.—Members of the Board of Direc19 tors may attend meetings of the Corporation and vote in 

20 person, via telephone conference, or via video conference. 

21 (i) PROHIBITION ON COMPENSATION.—Members of 

22 the Board of the Corporation shall serve without pay and 

23 shall not otherwise benefit, directly or indirectly, as a re24 sult of their service to the Corporation, but shall be al25 lowed a per diem allowance for travel expenses, at rates 


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1 authorized for an employee of an agency under subchapter 

2 I of chapter 57 of title 5, United States Code, while away 

3 from the home or regular place of business of the member 

4 in the performance of the duties of the Corporation. 

5 SEC. 286. OFFICERS, EMPLOYEES, AND COMMITTEES OF 

6 THE CORPORATION. 

7 (a) OFFICERS AND EMPLOYEES.— 

8 (1) IN GENERAL.—The Corporation shall have 

9 a Chief Executive Officer and such other officers 

10 and employees as may be named and appointed by 

11 the Board for terms and at rates of compensation 

12 fixed by the Board pursuant to this subsection. The 

13 Chief Executive Officer may name and appoint such 

14 employees as are necessary. All officers and employ15 ees shall serve at the pleasure of the Board. 

16 (2) LIMITATION.—No individual other than a 

17 citizen of the United States may be an officer of the 

18 Corporation. 

19 (3) NONPOLITICAL NATURE OF APPOINT20 MENT.—No political test or qualification shall be 

21 used in selecting, appointing, promoting, or taking 

22 other personnel actions with respect to officers, 

23 agents, or employees of the Corporation. 

24 (4) COMPENSATION.— 


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1 (A) IN GENERAL.—The Board may hire 

2 and fix the compensation of employees hired 

3 under this subsection as may be necessary to 

4 carry out the purposes of the Corporation. 

5 (B) APPROVAL OF COMPENSATION BY

6 FEDERAL MEMBERS.—Notwithstanding any 

7 other provision of law, or any bylaw adopted by 

8 the Corporation, all rates of compensation, in9 cluding benefit plans and salary ranges, for of10 ficers and employees of the Corporation, shall 

11 be jointly approved by the Federal members of 

12 the Board. 

13 (C) LIMITATION ON OTHER COMPENSA14 TION.—No officer or employee of the Corpora15 tion may receive any salary or other compensa16 tion (except for compensation for services on 

17 boards of directors of other organizations that 

18 do not receive funds from the Corporation, on 

19 committees of such boards, and in similar ac20 tivities for such organizations) from any sources 

21 other than the Corporation for services ren22 dered during the period of the employment of 

23 the officer or employee by the Corporation, un24 less unanimously approved by all voting mem25 bers of the Board. 


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1 (5) SERVICE ON OTHER BOARDS.—Service by 

2 any officer on boards of directors of other organiza3 tions, on committees of such boards, and in similar 

4 activities for such organizations shall be subject to 

5 annual advance approval by the Board and subject 

6 to the provisions of the Corporation’s Statement of 

7 Ethical Conduct. 

8 (6) RULE OF CONSTRUCTION.—No officer or 

9 employee of the Corporation shall be considered to 

10 be an officer or employee of the United States Gov11 ernment or of the government of the District of Co12 lumbia. 

13 (7) CLEARANCE FOR CLASSIFIED INFORMA14 TION.—In order to have the threat and vulnerability 

15 information necessary to make risk management de16 cisions regarding the network, at a minimum the 

17 Chief Executive Officer and any officers filling the 

18 roles normally titled as Chief Information Officer, 

19 Chief Information Security Officer, and Chief Oper20 ations Officer shall be required, within 6 months of 

21 being hired, to obtain a clearance held by the Direc22 tor of National Intelligence that permits them to re23 ceive information classified at the level of Top Se24 cret, Special Compartmented Information. 

25 (b) ADVISORY COMMITTEES.—The Board— 


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1 (1) shall establish a standing public safety advi2 sory committee to assist the Board in carrying out 

3 its duties and responsibilities under this title; and 

4 (2) may establish additional standing or ad hoc 

5 committees, panels, or councils as the Board deter6 mines are necessary. 

7 SEC. 287. NONPROFIT AND NONPOLITICAL NATURE OF THE 

8 CORPORATION. 

9 (a) STOCK.—The Corporation shall have no power to 

10 issue any shares of stock or to declare or pay any divi11 dends. 

12 (b) PROFIT.—No part of the income or assets of the 

13 Corporation shall inure to the benefit of any director, offi14 cer, employee, or any other individual associated with the 

15 Corporation, except as salary or reasonable compensation 

16 for services. 

17 (c) POLITICS.—The Corporation may not contribute 

18 to or otherwise support any political party or candidate 

19 for elective public office. 

20 (d) PROHIBITION ON LOBBYING ACTIVITIES.—The 

21 Corporation shall not engage in lobbying activities (as de22 fined in section 3(7) of the Lobbying Disclosure Act of 

23 1995 (5 U.S.C. 1602(7))). 


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1 SEC. 288. POWERS, DUTIES, AND RESPONSIBILITIES OF THE 

2 CORPORATION. 

3 (a) GENERAL POWERS.—The Corporation shall have 

4 the authority to do the following: 

5 (1) To adopt and use a corporate seal. 

6 (2) To have succession until dissolved by an Act 

7 of Congress. 

8 (3) To prescribe, through the actions of its 

9 Board, bylaws not inconsistent with Federal law and 

10 the laws of the District of Columbia, regulating the 

11 manner in which the Corporation’s general business 

12 may be conducted and the manner in which the 

13 privileges granted to the Corporation by law may be 

14 exercised. 

15 (4) To exercise, through the actions of its 

16 Board, all powers specifically granted by the provi17 sions of this subtitle and such incidental powers as 

18 shall be necessary. 

19 (5) To hold such hearings, sit and act at such 

20 times and places, take such testimony, and receive 

21 such evidence as the Corporation considers necessary 

22 to carry out its responsibilities and duties. 

23 (6) To obtain grants and funds from and make 

24 contracts with individuals, private companies, orga25 nizations, institutions, and Federal, State, regional, 

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1 lished by the Director of the Office of Management 

2 and Budget. 

3 (7) To accept, hold, administer, and utilize 

4 gifts, donations, and bequests of property, both real 

5 and personal, for the purposes of aiding or facili6 tating the work of the Corporation. 

7 (8) To issue notes or bonds, which shall not be 

8 guaranteed or backed in any manner by the Govern9 ment of the United States, to purchasers of such in10 struments in the private capital markets. 

11 (9) To incur indebtedness, which shall be the 

12 sole liability of the Corporation and shall not be 

13 guaranteed or backed by the Government of the 

14 United States, to carry out the purposes of this sub15 title. 

16 (10) To spend funds under paragraph (6) in a 

17 manner authorized by the Board, but only for pur18 poses that will advance or enhance public safety 

19 communications consistent with this subtitle. 

20 (11) To establish reserve accounts with funds 

21 that the Corporation may receive from time to time 

22 that exceed the amounts required by the Corporation 

23 to timely pay its debt service and other obligations. 

24 (12) To expend the funds placed in any reserve 

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1 ing interest earned on any such amounts) in a man2 ner authorized by the Board, but only for purposes 

3 that— 

4 (A) will advance or enhance public safety 

5 communications consistent with this subtitle; or 

6 (B) are otherwise approved by an Act of 

7 Congress. 

8 (13) To build, operate, and maintain the public 

9 safety interoperable broadband network. 

10 (14) To take such other actions as the Corpora11 tion (through its Board) may from time to time de12 termine necessary, appropriate, or advisable to ac13 complish the purposes of this subtitle. 

14 (b) DUTY AND RESPONSIBILITY TO DEPLOY AND

15 OPERATE A NATIONWIDE PUBLIC SAFETY INTEROPER16 ABLE BROADBAND NETWORK.— 

17 (1) IN GENERAL.—The Corporation shall hold 

18 the single public safety wireless license granted 

19 under section 283 and take all actions necessary to 

20 ensure the building, deployment, and operation of a 

21 secure and resilient nationwide public safety inter22 operable broadband network in consultation with 

23 Federal, State, tribal, and local public safety enti24 ties, the Director of NIST, the Commission, and the 


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1 public safety advisory committee established in sec2 tion 286(b)(1), including by— 

3 (A) ensuring nationwide standards includ4 ing encryption requirements for use and access 

5 of the network; 

6 (B) issuing open, transparent, and com7 petitive requests for proposals to private sector 

8 entities for the purposes of building, operating, 

9 and maintaining the network; 

10 (C) managing and overseeing the imple11 mentation and execution of contracts or agree12 ments with non-Federal entities to build, oper13 ate, and maintain the network; and 

14 (D) establishing policies regarding Federal 

15 and public safety support use. 

16 (2) INTEROPERABILITY, SECURITY, AND STAND17 ARDS.—In carrying out the duties and responsibil18 ities of this subsection, including issuing requests for 

19 proposals, the Corporation shall— 

20 (A) ensure the safety, security, and resil21 iency of the network, including requirements for 

22 protecting and monitoring the network to pro23 tect against cyber intrusions or cyberattack; 

24 (B) be informed of and manage supply 

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1 ments to provide insight into the suppliers and 

2 supply chains for critical network components 

3 and to implement risk management best prac4 tice in network design, contracting, operations, 

5 and maintenance; 

6 (C) promote competition in the equipment 

7 market, including devices for public safety com8 munications, by requiring that equipment and 

9 devices for use on the network be— 

10 (i) built to open, non-proprietary, 

11 commercially available standards; 

12 (ii) capable of being used across the 

13 nationwide public safety broadband net14 work operating in the 700 MHz band; 

15 (iii) able to be interchangeable with 

16 other vendors’ equipment; and 

17 (iv) backward-compatible with existing 

18 second and third generation commercial 

19 networks to the extent that such capabili20 ties are necessary and technically and eco21 nomically reasonable; and 

22 (D) promote integration of the network 

23 with public safety answering points or their 

24 equivalent. 


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1 (3) RURAL COVERAGE.—In carrying out the du2 ties and responsibilities of this subsection, including 

3 issuing requests for proposals, the Corporation, con4 sistent with the license granted under section 283, 

5 shall require deployment phases with substantial 

6 rural coverage milestones as part of each phase of 

7 the construction and deployment of the network. 

8 (4) EXECUTION OF AUTHORITY.—In carrying 

9 out the duties and responsibilities of this subsection, 

10 the Corporation may— 

11 (A) obtain grants from and make contracts 

12 with individuals, private companies, and Fed13 eral, State, regional, and local agencies; 

14 (B) hire or accept voluntary services of 

15 consultants, experts, advisory boards, and pan16 els to aid the Corporation in carrying out such 

17 duties and responsibilities; 

18 (C) receive payment for use of— 

19 (i) network capacity licensed to the 

20 Corporation; and 

21 (ii) network infrastructure con22 structed, owned, or operated by the Cor23 poration; and 


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1 (D) take such other actions as may be nec2 essary to accomplish the purposes set forth in 

3 this subsection. 

4 (c) OTHER SPECIFIC DUTIES AND RESPONSIBIL5 ITIES.— 

6 (1) ESTABLISHMENT OF NETWORK POLICIES.— 

7 In carrying out the requirements under subsection 

8 (b), the Corporation shall take such actions as may 

9 be necessary, including the development of requests 

10 for proposals. Request for proposals should in11 clude— 

12 (A)(i) build timetables, including by taking 

13 into consideration the time needed to build out 

14 to rural areas; 

15 (ii) coverage areas, including coverage in 

16 rural and nonurban areas; 

17 (iii) service levels; 

18 (iv) performance criteria; and 

19 (v) other similar matters for the construc20 tion and deployment of such network; 

21 (B) the technical, operational, and security 

22 requirements of the network and, as appro23 priate, network suppliers; 


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1 (C) practices, procedures, and standards 

2 for the management and operation of such net3 work; 

4 (D) terms of service for the use of such 

5 network, including billing practices; and 

6 (E) ongoing compliance review and moni7 toring of the— 

8 (i) management and operation of such 

9 network; 

10 (ii) practices and procedures of the 

11 entities operating on and the personnel 

12 using such network; and 

13 (iii) training needs of entities oper14 ating on and personnel using such net15 work. 

16 (2) STATE AND LOCAL PLANNING.— 

17 (A) REQUIRED CONSULTATION.—In devel18 oping requests for proposal and otherwise car19 rying out its responsibilities under this subtitle, 

20 the Corporation shall consult with regional, 

21 State, tribal, and local jurisdictions regarding 

22 the distribution and expenditure of any 

23 amounts required to carry out the policies es24 tablished under paragraph (1), including with 

25 regard to the— 


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1 (i) construction of an Evolved Packet 

2 Core or Cores and any Radio Access Net3 work build out; 

4 (ii) placement of towers; 

5 (iii) coverage areas of the network, 

6 whether at the regional, State, tribal, or 

7 local level; 

8 (iv) adequacy of hardening, security, 

9 reliability, and resiliency requirements; 

10 (v) assignment of priority to local 

11 users; 

12 (vi) assignment of priority and selec13 tion of entities seeking access to or use of 

14 the nationwide public safety interoperable 

15 broadband network established under sub16 section (b); and 

17 (vii) training needs of local users. 

18 (B) METHOD OF CONSULTATION.—The 

19 consultation required under subparagraph (A) 

20 shall occur between the Corporation and the 

21 single officer or governmental body designated 

22 under section 294(d). 

23 (3) LEVERAGING EXISTING INFRASTRUC24 TURE.—In carrying out the requirement under sub25 section (b), the Corporation shall enter into agreeVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00221 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 ments to utilize, to the maximum economically desir2 able, existing— 

3 (A) commercial or other communications 

4 infrastructure; and 

5 (B) Federal, State, tribal, or local infra6 structure. 

7 (4) MAINTENANCE AND UPGRADES.—The Cor8 poration shall ensure through the maintenance, op9 eration, and improvement of the nationwide public 

10 safety interoperable broadband network established 

11 under subsection (b), including by ensuring that the 

12 Corporation updates and revises any policies estab13 lished under paragraph (1), to take into account new 

14 and evolving technologies and security concerns. 

15 (5) ROAMING AGREEMENTS.—The Corporation 

16 shall negotiate and enter into, as it determines ap17 propriate, roaming agreements with commercial net18 work providers to allow the nationwide public safety 

19 interoperable broadband users to roam onto com20 mercial networks and gain prioritization of public 

21 safety communications over such networks in times 

22 of an emergency. 

23 (6) NETWORK INFRASTRUCTURE AND DEVICE

24 CRITERIA.—The Director of NIST, in consultation 

25 with the Corporation and the Commission, shall enVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00222 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 sure the development of a list of certified devices 

2 and components meeting appropriate protocols, 

3 encryption requirements, and standards for public 

4 safety entities and commercial vendors to adhere to, 

5 if such entities or vendors seek to have access to, use 

6 of, or compatibility with the nationwide public safety 

7 interoperable broadband network established under 

8 subsection (b). 

9 (7) REPRESENTATION BEFORE STANDARD SET10 TING ENTITIES.—The Corporation, in consultation 

11 with the Director of NIST, the Commission, and the 

12 public safety advisory committee established under 

13 section 286(b)(1), shall represent the interests of 

14 public safety users of the nationwide public safety 

15 interoperable broadband network established under 

16 subsection (b) before any proceeding, negotiation, or 

17 other matter in which a standards organization, 

18 standards body, standards development organization, 

19 or any other recognized standards-setting entity acts 

20 regarding the development of standards relating to 

21 interoperability. 

22 (8) PROHIBITION ON NEGOTIATION WITH FOR23 EIGN GOVERNMENTS.—Except as authorized by the 

24 President, the Corporation shall not have the au25 thority to negotiate or enter into any agreements 


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1 with a foreign government on behalf of the United 

2 States. 

3 (d) USE OF MAILS.—The Corporation may use the 

4 United States mails in the same manner and under the 

5 same conditions as the departments and agencies of the 

6 United States. 

7 SEC. 289. INITIAL FUNDING FOR CORPORATION. 

8 (a) NTIA PROVISION OF INITIAL FUNDING TO THE

9 CORPORATION.— 

10 (1) IN GENERAL.—Prior to the commencement 

11 of incentive auctions to be carried out under section 

12 309(j)(8)(F) of the Communications Act of 1934 or 

13 the auction of spectrum pursuant to section 277 of 

14 this subtitle, the NTIA is hereby appropriated 

15 $50,000,000 for reasonable administrative expenses 

16 and other costs associated with the establishment of 

17 the Corporation, and that may be transferred as 

18 needed to the Corporation for expenses before the 

19 commencement of an incentive auction: Provided, 

20 That funding shall expire on September 30, 2014. 

21 (2) CONDITION OF FUNDING.—At the time of 

22 application for, and as a condition to, any such 

23 funding, the Corporation shall file with the NTIA a 

24 statement with respect to the anticipated use of the 

25 proceeds of this funding. 


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1 (3) NTIA APPROVAL.—If the NTIA determines 

2 that such funding is necessary for the Corporation 

3 to carry out its duties and responsibilities under this 

4 subtitle and that the Corporation has submitted a 

5 plan, then the NTIA shall notify the appropriate 

6 committees of Congress 30 days before each transfer 

7 of funds takes place. 

8 SEC. 290. PERMANENT SELF-FUNDING; DUTY TO ASSESS 

9 AND COLLECT FEES FOR NETWORK USE. 

10 (a) IN GENERAL.—The Corporation shall have the 

11 authority to assess and collect the following fees: 

12 (1) NETWORK USER FEE.—A user or subscrip13 tion fee from each entity, including any public safety 

14 entity or secondary user, that seeks access to or use 

15 of the nationwide public safety interoperable 

16 broadband network established under this subtitle. 

17 (2) LEASE FEES RELATED TO NETWORK CA18 PACITY.— 

19 (A) IN GENERAL.—A fee from any non20 Federal entity that seeks to enter into a covered 

21 leasing agreement. 

22 (B) COVERED LEASING AGREEMENT.—For 

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1 tween the Corporation and secondary user to 

2 permit— 

3 (i) access to network capacity on a 

4 secondary basis for non-public safety serv5 ices; and 

6 (ii) the spectrum allocated to such en7 tity to be used for commercial trans8 missions along the dark fiber of the long9 haul network of such entity. 

10 (3) LEASE FEES RELATED TO NETWORK EQUIP11 MENT AND INFRASTRUCTURE.—A fee from any non12 Federal entity that seeks access to or use of any 

13 equipment or infrastructure, including antennas or 

14 towers, constructed or otherwise owned by the Cor15 poration. 

16 (b) ESTABLISHMENT OF FEE AMOUNTS; PERMA17 NENT SELF-FUNDING.—The total amount of the fees as18 sessed for each fiscal year pursuant to this section shall 

19 be sufficient, and shall not exceed the amount necessary, 

20 to recoup the total expenses of the Corporation in carrying 

21 out its duties and responsibilities described under this title 

22 for the fiscal year involved. 

23 (c) REQUIRED REINVESTMENT OF FUNDS.—The 

24 Corporation shall reinvest amounts received from the as25 sessment of fees under this section in the nationwide pubVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00226 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 lic safety interoperable broadband network by using such 

2 funds only for constructing, maintaining, managing, or 

3 improving the network. 

4 SEC. 291. AUDIT AND REPORT. 

5 (a) AUDIT.— 

6 (1) IN GENERAL.—The financial transactions of 

7 the Corporation for any fiscal year during which 

8 Federal funds are available to finance any portion of 

9 its operations shall be audited by the Comptroller 

10 General of the United States in accordance with the 

11 principles and procedures applicable to commercial 

12 corporate transactions and under such rules and 

13 regulations as may be prescribed by the Comptroller 

14 General. 

15 (2) LOCATION.—Any audit conducted under 

16 paragraph (1) shall be conducted at the place or 

17 places where accounts of the Corporation are nor18 mally kept. 

19 (3) ACCESS TO CORPORATION BOOKS AND DOC20 UMENTS.— 

21 (A) IN GENERAL.—For purposes of an 

22 audit conducted under paragraph (1), the rep23 resentatives of the Comptroller General shall— 

24 (i) have access to all books, accounts, 

25 records, reports, files, and all other papers, 


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1 things, or property belonging to or in use 

2 by the Corporation that pertain to the fi3 nancial transactions of the Corporation 

4 and are necessary to facilitate the audit; 

5 and 

6 (ii) be afforded full facilities for 

7 verifying transactions with the balances or 

8 securities held by depositories, fiscal 

9 agents, and custodians. 

10 (B) REQUIREMENT.—All books, accounts, 

11 records, reports, files, papers, and property of 

12 the Corporation shall remain in the possession 

13 and custody of the Corporation. 

14 (b) REPORT.— 

15 (1) IN GENERAL.—The Comptroller General of 

16 the United States shall submit a report of each 

17 audit conducted under subsection (a) to— 

18 (A) the appropriate committees of Con19 gress; 

20 (B) the President; and 

21 (C) the Corporation. 

22 (2) CONTENTS.—Each report submitted under 

23 paragraph (1) shall contain— 

24 (A) such comments and information as the 

25 Comptroller General determines necessary to inVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00228 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 form Congress of the financial operations and 

2 condition of the Corporation; 

3 (B) any recommendations of the Comp4 troller General relating to the financial oper5 ations and condition of the Corporation; and 

6 (C) a description of any program, expendi7 ture, or other financial transaction or under8 taking of the Corporation that was observed 

9 during the course of the audit, which, in the 

10 opinion of the Comptroller General, has been 

11 carried on or made without the authority of 

12 law. 

13 SEC. 292. ANNUAL REPORT TO CONGRESS. 

14 (a) IN GENERAL.—Not later than 1 year after the 

15 date of enactment of this subtitle, and each year there16 after, the Corporation shall submit an annual report cov17 ering the preceding fiscal year to the President and the 

18 appropriate committees of Congress. 

19 (b) REQUIRED CONTENT.—The report required 

20 under subsection (a) shall include— 

21 (1) a comprehensive and detailed report of the 

22 operations, activities, financial condition, and accom23 plishments of the Corporation under this section; 

24 and 


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1 (2) such recommendations or proposals for leg2 islative or administrative action as the Corporation 

3 deems appropriate. 

4 (c) AVAILABILITY TO TESTIFY.—The directors, offi5 cers, employees, and agents of the Corporation shall be 

6 available to testify before the appropriate committees of 

7 the Congress with respect to— 

8 (1) the report required under subsection (a); 

9 (2) the report of any audit made by the Comp10 troller General under section 291; or 

11 (3) any other matter which such committees 

12 may determine appropriate. 

13 SEC. 293. PROVISION OF TECHNICAL ASSISTANCE. 

14 The Commission and the Departments of Homeland 

15 Security, Justice, and Commerce may provide technical 

16 assistance to the Corporation and may take any action at 

17 the request of the Corporation in effectuating its duties 

18 and responsibilities under this subtitle. 

19 SEC. 294. STATE AND LOCAL IMPLEMENTATION. 

20 (a) ESTABLISHMENT OF STATE AND LOCAL IMPLE21 MENTATION GRANT PROGRAM.—The Assistant Secretary, 

22 in consultation with the Corporation, shall take such ac23 tion as is necessary to establish a grant program to make 

24 grants to States to assist State, regional, tribal, and local 

25 jurisdictions to identify, plan, and implement the most efVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00230 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 ficient and effective way for such jurisdictions to utilize 

2 and integrate the infrastructure, equipment, and other ar3 chitecture associated with the nationwide public safety 

4 interoperable broadband network established in this sub5 title to satisfy the wireless communications and data serv6 ices needs of that jurisdiction, including with regards to 

7 coverage, siting, identity management for public safety 

8 users and their devices, and other needs. 

9 (b) MATCHING REQUIREMENTS; FEDERAL SHARE.— 

10 (1) IN GENERAL.—The Federal share of the 

11 cost of any activity carried out using a grant under 

12 this section may not exceed 80 percent of the eligible 

13 costs of carrying out that activity, as determined by 

14 the Assistant Secretary, in consultation with the 

15 Corporation. 

16 (2) WAIVER.—The Assistant Secretary may 

17 waive, in whole or in part, the requirements of para18 graph (1) for good cause shown if the Assistant Sec19 retary determines that such a waiver is in the public 

20 interest. 

21 (c) PROGRAMMATIC REQUIREMENTS.—Not later than 

22 6 months after the establishment of the bylaws of the Cor23 poration pursuant to section 288 of this subtitle, the As24 sistant Secretary, in consultation with the Corporation, 

25 shall establish requirements relating to the grant program 


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1 to be carried out under this section, including the fol2 lowing: 

3 (1) Defining eligible costs for purposes of sub4 section (b)(1). 

5 (2) Determining the scope of eligible activities 

6 for grant funding under this section. 

7 (3) Prioritizing grants for activities that ensure 

8 coverage in rural as well as urban areas. 

9 (d) CERTIFICATION AND DESIGNATION OF OFFICER

10 OR GOVERNMENTAL BODY.—In carrying out the grant 

11 program established under this section, the Assistant Sec12 retary shall require each State to certify in its application 

13 for grant funds that the State has designated a single offi14 cer or governmental body to serve as the coordinator of 

15 implementation of the grant funds. 

16 SEC. 295. STATE AND LOCAL IMPLEMENTATION FUND. 

17 (a) ESTABLISHMENT.—There is established in the 

18 Treasury of the United States a fund to be known as the 

19 ‘‘State and Local Implementation Fund’’. 

20 (b) PURPOSE.—The Assistant Secretary shall estab21 lish and administer the grant program authorized under 

22 section 294 of this subtitle using funds deposited in the 

23 State and Local Implementation Fund. 


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1 (c) CREDITING OF RECEIPTS.—There shall be depos2 ited into or credited to the State and Local Implementa3 tion Fund— 

4 (1) any amounts specified in section 297; and 

5 (2) any amounts borrowed by the Assistant 

6 Secretary under subsection (d). 

7 (d) BORROWING AUTHORITY.— 

8 (1) IN GENERAL.—The Assistant Secretary 

9 may borrow from the General Fund of the Treasury 

10 beginning on October 1, 2011, such sums as may be 

11 necessary, but not to exceed $100,000,000 to imple12 ment section 294. 

13 (2) REIMBURSEMENT.—The Assistant Sec14 retary shall reimburse the General Fund of the 

15 Treasury, with interest, for any amounts borrowed 

16 under paragraph (1) as funds are deposited into the 

17 State and Local Implementation Fund. 

18 SEC. 296. PUBLIC SAFETY WIRELESS COMMUNICATIONS RE19 SEARCH AND DEVELOPMENT. 

20 (a) NIST DIRECTED RESEARCH AND DEVELOPMENT

21 PROGRAM.—From amounts made available from the Pub22 lic Safety Trust Fund established under section 297, the 

23 Director of NIST, in consultation with the Commission, 

24 the Secretary of Homeland Security, and the National In25 stitute of Justice of the Department of Justice, as approVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00233 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 priate, shall conduct research and assist with the develop2 ment of standards, technologies, and applications to ad3 vance wireless public safety communications. 

4 (b) REQUIRED ACTIVITIES.—In carrying out the re5 quirement under subsection (a), the Director of NIST, in 

6 consultation with the Corporation and the public safety 

7 advisory committee established under section 286(b)(1), 

8 shall— 

9 (1) document public safety wireless communica10 tions technical requirements; 

11 (2) accelerate the development of the capability 

12 for communications between currently deployed pub13 lic safety narrowband systems and the nationwide 

14 public safety interoperable broadband network to be 

15 established under this subtitle; 

16 (3) establish a research plan, and direct re17 search, that addresses the wireless communications 

18 needs of public safety entities beyond what can be 

19 provided by the current generation of broadband 

20 technology; 

21 (4) accelerate the development of mission crit22 ical voice, including device-to-device ‘‘talkaround’’ 

23 standards for broadband networks, if necessary and 

24 practical, public safety prioritization, authentication 

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1 graming interfaces for the nationwide public safety 

2 interoperable broadband network to be established 

3 under this title, if necessary and practical; 

4 (5) seek to develop technologies, standards, 

5 processes, and architectures that provide a signifi6 cant improvement in network security, resiliency, 

7 and trustworthiness; and 

8 (6) convene working groups of relevant govern9 ment and commercial parties to achieve the require10 ments in paragraphs (1) through (5). 

11 (c) TRANSFER AUTHORITY.—If, in the determination 

12 of the Director of NIST, another Federal agency is better 

13 suited to carry out and oversee the research and develop14 ment of any activity to be carried out in accordance with 

15 the requirements of this section, the Director may transfer 

16 any amounts provided under this section to such agency, 

17 including to the National Institute of Justice of the De18 partment of Justice and the Department of Homeland Se19 curity. 

20 SEC. 297. PUBLIC SAFETY TRUST FUND. 

21 (a) ESTABLISHMENT OF PUBLIC SAFETY TRUST

22 FUND.— 

23 (1) IN GENERAL.—There is established in the 

24 Treasury of the United States a trust fund to be 

25 known as the ‘‘Public Safety Trust Fund’’. 


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1 (2) CREDITING OF RECEIPTS.— 

2 (A) IN GENERAL.—There shall be depos3 ited into or credited to the Public Safety Trust 

4 Fund the proceeds from the auction of spec5 trum carried out pursuant to— 

6 (i) section 277 of this subtitle; and 

7 (ii) section 309(j)(8)(F) of the Com8 munications Act of 1934, as added by sec9 tion 273 of this subtitle. 

10 (B) AVAILABILITY.—Amounts deposited 

11 into or credited to the Public Safety Trust 

12 Fund in accordance with subparagraph (A) 

13 shall remain available until the end of fiscal 

14 year 2021. Upon the expiration of the period 

15 described in the prior sentence, such amounts 

16 shall be deposited in the General Fund of the 

17 Treasury, where such amounts shall be dedi18 cated for the sole purpose of deficit reduction. 

19 (b) USE OF FUND.—Amounts deposited in the Public 

20 Safety Trust Fund shall be used in the following manner: 

21 (1) PAYMENT OF AUCTION INCENTIVE.— 

22 (A) REQUIRED DISBURSALS.—Amounts in 

23 the Public Safety Trust Fund shall be used to 

24 make any required disbursal of payments to li25 censees required pursuant to section 


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1 309(j)(8)(F) of the Communications Act of 

2 1934. 

3 (B) NOTIFICATION TO CONGRESS.— 

4 (i) IN GENERAL.—At least 3 months 

5 in advance of any incentive auction con6 ducted pursuant to section 309(j)(8)(F) of 

7 the Communications Act of 1934, the 

8 Chairman of the Commission, in consulta9 tion with the Director of the Office of 

10 Management and Budget, shall notify the 

11 appropriate committees of Congress— 

12 (I) of the methodology for calcu13 lating the disbursal of payments to 

14 certain licensees required pursuant to 

15 clause (i) and subclauses (III) and 

16 (IV) of clause (ii) of such section; 

17 (II) that such methodology con18 siders the value of the spectrum vol19 untarily relinquished in its current use 

20 and the timeliness with which the li21 censee cleared its use of such spec22 trum; and 

23 (III) of the estimated payments 

24 to be made from the Incentive Auction 

25 Relocation Fund established under 


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1 section 309(j)(8)(G) of the Commu2 nications Act of 1934. 

3 (ii) DEFINITION.—In this clause, the 

4 term ‘‘appropriate committees of Con5 gress’’ means— 

6 (I) the Committee on Commerce, 

7 Science, and Transportation of the 

8 Senate; 

9 (II) the Committee on Appropria10 tions of the Senate; 

11 (III) the Committee on Energy 

12 and Commerce of the House of Rep13 resentatives; and 

14 (IV) the Committee on Appro15 priations of the House of Representa16 tives. 

17 (2) INCENTIVE AUCTION RELOCATION FUND.— 

18 Not more than $1,000,000,000 shall be deposited in 

19 the Incentive Auction Relocation Fund established 

20 under section 309(j)(8)(G) of the Communications 

21 Act of 1934. 

22 (3) STATE AND LOCAL IMPLEMENTATION

23 FUND.—$200,000,000 shall be deposited in the 

24 State and Local Implementation Fund established 

25 under section 295. 


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1 (4) PUBLIC SAFETY BROADBAND CORPORA2 TION.—$6,450,000,000 shall be deposited with the 

3 Public Safety Broadband Corporation established 

4 under section 284, of which pursuant to its respon5 sibilities and duties set forth under section 288 to 

6 deploy and operate a nationwide public safety inter7 operable broadband network. Funds deposited with 

8 the Public Safety Broadband Corporation shall be 

9 available after submission of a five-year budget by 

10 the Corporation and approval by the Secretary of 

11 Commerce, in consultation with the Secretary of 

12 Homeland Security, the Director of the Office of 

13 Management and Budget, and the Attorney General 

14 of the United States. 

15 (5) PUBLIC SAFETY RESEARCH AND DEVELOP16 MENT.—After approval by the Office of Management 

17 and Budget of a spending plan developed by the Di18 rector of NIST, a Wireless Innovation (WIN) Fund 

19 of up to $300,000,000 shall be made available for 

20 use by the Director of NIST to carry out the re21 search program established under section 296 and 

22 be available until expended. If less than 

23 $300,000,000 is approved by the Office of Manage24 ment and Budget, the remainder shall be transferred 

25 to the Public Safety Broadband Corporation estabVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00239 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 lished in section 284 and be available for duties set 

2 forth under section 288 to deploy and operate a na3 tionwide public safety interoperable broadband net4 work. 

5 (6) DEFICIT REDUCTION.—Any amounts re6 maining after the deduction of the amounts required 

7 under paragraphs (1) through (5) shall be deposited 

8 in the General Fund of the Treasury, where such 

9 amounts shall be dedicated for the sole purpose of 

10 deficit reduction. 

11 SEC. 298. FCC REPORT ON EFFICIENT USE OF PUBLIC 

12 SAFETY SPECTRUM. 

13 (a) IN GENERAL.—Not later than 180 days after the 

14 date of the enactment of this subtitle and every 2 years 

15 thereafter, the Commission shall, in consultation with the 

16 Assistant Secretary and the Director of NIST, conduct a 

17 study and submit to the appropriate committees of Con18 gress a report on the spectrum allocated for public safety 

19 use. 

20 (b) CONTENTS.—The report required by subsection 

21 (a) shall include— 

22 (1) an examination of how such spectrum is 

23 being used; 

24 (2) recommendations on how such spectrum 

25 may be used more efficiently; 


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1 (3) an assessment of the feasibility of public 

2 safety entities relocating from other bands to the 

3 public safety broadband spectrum; and 

4 (4) an assessment of whether any spectrum 

5 made available by the relocation described in para6 graph (3) could be returned to the Commission for 

7 reassignment through auction, including through use 

8 of incentive auction authority under subparagraph 

9 (G) of section 309(j)(8) of the Communications Act 

10 of 1934 (47 U.S.C. 309(j)(8)), as added by section 

11 273 of this subtitle. 

12 SEC. 299. PUBLIC SAFETY ROAMING AND PRIORITY AC13 CESS. 

14 The Commission may adopt rules, if necessary in the 

15 public interest, to improve the ability of public safety users 

16 to roam onto commercial networks and to gain priority 

17 access to commercial networks in an emergency if— 

18 (1) the public safety entity equipment is tech19 nically compatible with the commercial network; 

20 (2) the commercial network is reasonably com21 pensated; and 

22 (3) such access does not preempt or otherwise 

23 terminate or degrade all existing voice conversations 

24 or data sessions. 


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1 TITLE III—ASSISTANCE FOR THE 

2 UNEMPLOYED AND PATH3 WAYS BACK TO WORK 

4 Subtitle A—Supporting 

5 Unemployed Workers 

6 SEC. 301. SHORT TITLE. 

7 This subtitle may be cited as the ‘‘Supporting Unem8 ployed Workers Act of 2011’’. 

9 PART I—EXTENSION OF EMERGENCY UNEMPLOY10 MENT COMPENSATION AND CERTAIN EX11 TENDED BENEFITS PROVISIONS, AND ESTAB12 LISHMENT OF SELF-EMPLOYMENT ASSIST13 ANCE PROGRAM 

14 SEC. 311. EXTENSION OF EMERGENCY UNEMPLOYMENT 

15 COMPENSATION PROGRAM. 

16 (a) IN GENERAL.—Section 4007 of the Supplemental 

17 Appropriations Act, 2008 (Public Law 110–252; 26 

18 U.S.C. 3304 note) is amended— 

19 (1) by striking ‘‘January 3, 2012’’ each place 

20 it appears and inserting ‘‘January 3, 2013’’; 

21 (2) in the heading for subsection (b)(2), by 

22 striking ‘‘JANUARY 3, 2012’’ and inserting ‘‘JANUARY

23 3, 2013’’; and 

24 (3) in subsection (b)(3), by striking ‘‘June 9, 

25 2012’’ and inserting ‘‘June 8, 2013’’. 


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1 (b) FUNDING.—Section 4004(e)(1) of the Supple2 mental Appropriations Act, 2008 (Public Law 110–252; 

3 26 U.S.C. 3304 note) is amended— 

4 (1) in subparagraph (F), by striking ‘‘and’’ at 

5 the end; and 

6 (2) by inserting after subparagraph (G) the fol7 lowing: 

8 ‘‘(H) the amendments made by section 

9 311(a) of the Supporting Unemployed Workers 

10 Act of 2011; and’’. 

11 (c) EFFECTIVE DATE.—The amendments made by 

12 this section shall take effect as if included in the enact13 ment of the Tax Relief, Unemployment Insurance Reau14 thorization, and Job Creation Act of 2010 (Public Law 

15 111–312; 26 U.S.C. 3304 note). 

16 SEC. 312. TEMPORARY EXTENSION OF EXTENDED BENEFIT 

17 PROVISIONS. 

18 (a) IN GENERAL.—Section 2005 of the Assistance for 

19 Unemployed Workers and Struggling Families Act, as 

20 contained in Public Law 111–5 (26 U.S.C. 3304 note), 

21 is amended— 

22 (1) by striking ‘‘January 4, 2012’’ each place 

23 it appears and inserting ‘‘January 4, 2013’’; and 

24 (2) in subsection (c), by striking ‘‘June 11, 

25 2012’’ and inserting ‘‘June 11, 2013’’. 


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1 (b) EXTENSION OF MATCHING FOR STATES WITH

2 NO WAITING WEEK.—Section 5 of the Unemployment 

3 Compensation Extension Act of 2008 (Public Law 110– 

4 449; 26 U.S.C. 3304 note) is amended by striking ‘‘June 

5 10, 2012’’ and inserting ‘‘June 9, 2013’’. 

6 (c) EXTENSION OF MODIFICATION OF INDICATORS

7 UNDER THE EXTENDED BENEFIT PROGRAM.—Section 

8 203 of the Federal-State Extended Unemployment Com9 pensation Act of 1970 (26 U.S.C. 3304 note) is amend10 ed— 

11 (1) in subsection (d), by striking ‘‘December 

12 31, 2011’’ and inserting ‘‘December 31, 2012’’; and 

13 (2) in subsection (f)(2), by striking ‘‘December 

14 31, 2011’’ and inserting ‘‘December 31, 2012’’. 

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

16 this section shall take effect as if included in the enact17 ment of the Tax Relief, Unemployment Insurance Reau18 thorization, and Job Creation Act of 2010 (Public Law 

19 111–312; 26 U.S.C. 3304 note). 

20 SEC. 313. REEMPLOYMENT SERVICES AND REEMPLOYMENT 

21 AND ELIGIBILITY ASSESSMENT ACTIVITIES. 

22 (a) IN GENERAL.— 

23 (1) PROVISION OF SERVICES AND ACTIVITIES.— 

24 Section 4001 of the Supplemental Appropriations 

25 Act, 2008 (Public Law 110–252; 26 U.S.C. 3304 


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1 note) is amended by inserting the following new sub2 section (h): 

3 ‘‘(h) IN GENERAL.— 

4 ‘‘(1) REQUIRED PROVISION OF SERVICES AND

5 ACTIVITIES.—An agreement under this section shall 

6 require that the State provide reemployment services 

7 and reemployment and eligibility assessment activi8 ties to each individual receiving emergency unem9 ployment compensation who, on or after the date 

10 that is 30 days after the date of enactment of the 

11 Supporting Unemployed Workers Act of 2011, es12 tablishes an account under section 4002(b), com13 mences receiving the amounts described in section 

14 4002(c), commences receiving the amounts described 

15 in section 4002(d), or commences receiving the 

16 amounts described in subsection 4002(e), whichever 

17 occurs first. Such services and activities shall be pro18 vided by the staff of the State agency responsible for 

19 administration of the State unemployment com20 pensation law or the Wagner-Peyser Act from funds 

21 available pursuant to section 4004(c)(2) and may 

22 also be provided from funds available under the 

23 Wagner-Peyser Act. 

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1 employment and eligibility assessment activities pro2 vided to individuals receiving emergency unemploy3 ment compensation described in paragraph (1)— 

4 ‘‘(A) shall include— 

5 ‘‘(i) the provision of labor market and 

6 career information; 

7 ‘‘(ii) an assessment of the skills of the 

8 individual; 

9 ‘‘(iii) orientation to the services avail10 able through the One-Stop centers estab11 lished under title I of the Workforce In12 vestment Act of 1998; 

13 ‘‘(iv) job search counseling and the 

14 development or review of an individual re15 employment plan that includes participa16 tion in job search activities and appro17 priate workshops and may include referrals 

18 to appropriate training services; and 

19 ‘‘(v) review of the eligibility of the in20 dividual for emergency unemployment com21 pensation relating to the job search activi22 ties of the individual; and 

23 ‘‘(B) may include the provision of— 

24 ‘‘(i) comprehensive and specialized as25 sessments; 


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1 ‘‘(ii) individual and group career 

2 counseling; and 

3 ‘‘(iii) additional reemployment serv4 ices. 

5 ‘‘(3) PARTICIPATION REQUIREMENT.—As a con6 dition of continuing eligibility for emergency unem7 ployment compensation for any week, an individual 

8 who has been referred to reemployment services or 

9 reemployment and eligibility assessment activities 

10 under this subsection shall participate, or shall have 

11 completed participation in, such services or activi12 ties, unless the State agency responsible for the ad13 ministration of State unemployment compensation 

14 law determines that there is justifiable cause for fail15 ure to participate or complete such services or activi16 ties, as defined in guidance to be issued by the Sec17 retary of Labor.’’. 

18 (2) ISSUANCE OF GUIDANCE.—Not later than 

19 30 days after the date of enactment of this Act, the 

20 Secretary shall issue guidance on the implementation 

21 of the reemployment services and reemployment and 

22 eligibility assessments activities required to be pro23 vided under the amendment made by paragraph (1). 

24 (b) FUNDING.— 


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1 (1) IN GENERAL.—Section 4004(c) of the Sup2 plemental Appropriations Act, 2008 (Public Law 

3 110–252; 26 U.S.C. 3304 note), is amended— 

4 (A) by striking ‘‘There’’ and inserting ‘‘(1) 

5 ADMINISTRATION.—There’’; and 

6 (B) by inserting the following new para7 graph: 

8 ‘‘(2) REEMPLOYMENT SERVICES AND REEM9 PLOYMENT AND ELIGIBILITY ASSESSMENT ACTIVI10 TIES.— 

11 ‘‘(A) APPROPRIATION.—There are appro12 priated from the general fund of the Treasury, 

13 without fiscal year limitation, out of the em14 ployment security administration account as es15 tablished by section 901(a) of the Social Secu16 rity Act, such sums as determined by the Sec17 retary of Labor in accordance with subpara18 graph (B) to assist States in providing reem19 ployment services and reemployment and eligi20 bility assessment activities described in section 

21 4001(h)(2). 

22 ‘‘(B) DETERMINATION OF TOTAL

23 AMOUNT.—The amount referred to in subpara24 graph (A) is the amount the Secretary esti25 mates is equal to— 


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1 ‘‘(i) the number of individuals who 

2 will receive reemployment services and re3 employment eligibility and assessment ac4 tivities described in section 4001(h)(2) in 

5 all States through the date specified in sec6 tion 4007(b)(3), multiplied by 

7 ‘‘(ii) $200. 

8 ‘‘(C) DISTRIBUTION AMONG STATES.—Of 

9 the amounts appropriated under subparagraph 

10 (A), the Secretary of Labor shall distribute 

11 amounts to each State, in accordance with sec12 tion 4003(c), that the Secretary estimates is 

13 equal to— 

14 ‘‘(i) the number of individuals who 

15 will receive reemployment services and re16 employment and eligibility assessment ac17 tivities described in section 4001(h)(2) in 

18 such State through the date specified in 

19 section 4007(b)(3), multiplied by 

20 ‘‘(ii) $200.’’. 

21 (2) TRANSFER OF FUNDS.—Section 4004(e) of 

22 the Supplemental Appropriations Act, 2008 (Public 

23 Law 110–252; 26 U.S.C. 3304 note) is amended— 

24 (A) in paragraph (2), by striking the pe25 riod and inserting ‘‘; and’’; and 


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1 (B) by inserting the following paragraph 

2 (3): 

3 ‘‘(3) to the employment security administration 

4 account (as established by section 901(a) of the So5 cial Security Act) such sums as the Secretary of 

6 Labor determines to be necessary in accordance with 

7 subsection (c)(2) to assist States in providing reem8 ployment services and reemployment eligibility and 

9 assessment activities described in section 

10 4001(h)(2).’’. 

11 SEC. 314. FEDERAL-STATE AGREEMENTS TO ADMINISTER A 

12 SELF-EMPLOYMENT ASSISTANCE PROGRAM. 

13 Section 4001 of the Supplemental Appropriations 

14 Act, 2008 (Public Law 110–252; 26 U.S.C. 3304 note), 

15 as amended by section 313, is further amended by insert16 ing a new subsection (i) as follows: 

17 ‘‘(i) AUTHORITY TO CONDUCT SELF-EMPLOYMENT

18 ASSISTANCE PROGRAM.— 

19 ‘‘(1) IN GENERAL.— 

20 ‘‘(A) ESTABLISHMENT.—Any agreement 

21 under subsection (a) may provide that the State 

22 agency of the State shall establish a self-em23 ployment assistance program described in para24 graph (2), to provide for the payment of emer25 gency unemployment compensation as self-emVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00250 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 ployment assistance allowances to individuals 

2 who meet the eligibility criteria specified in sub3 section (b). 

4 ‘‘(B) PAYMENT OF ALLOWANCES.—The 

5 self-employment assistance allowance described 

6 in subparagraph (A) shall be paid for up to 26 

7 weeks to an eligible individual from such indi8 vidual’s emergency unemployment compensation 

9 account described in section 4002, and the 

10 amount in such account shall be reduced ac11 cordingly. 

12 ‘‘(2) DEFINITION OF ‘SELF-EMPLOYMENT AS13 SISTANCE PROGRAM’.—For the purposes of this title, 

14 the term ‘self-employment assistance program’ 

15 means a program as defined under section 3306(t) 

16 of the Internal Revenue Code of 1986 (26 U.S.C. 

17 3306(t)), except as follows: 

18 ‘‘(A) all references to ‘regular unemploy19 ment compensation under the State law’ shall 

20 be deemed to refer instead to ‘emergency unem21 ployment compensation under title IV of the 

22 Supplemental Appropriations Act, 2008 (Public 

23 Law 110–252; 26 U.S.C. 3304 note)’; 

24 ‘‘(B) paragraph (3)(B) shall not apply; 


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1 ‘‘(C) clause (i) of paragraph (3)(C) shall 

2 be deemed to state as follows: 

3 ‘‘ ‘(i) include any entrepreneurial 

4 training that the State may provide in co5 ordination with programs of training of6 fered by the Small Business Administra7 tion, which may include business coun8 seling, mentorship for participants, access 

9 to small business development resources, 

10 and technical assistance; and’; 

11 ‘‘(D) the reference to ‘5 percent’ in para12 graph (4) shall be deemed to refer instead to ‘1 

13 percent’; and 

14 ‘‘(E) paragraph (5) shall not apply. 

15 ‘‘(3) AVAILABILITY OF SELF-EMPLOYMENT AS16 SISTANCE ALLOWANCES.—In the case of an indi17 vidual who has received any emergency unemploy18 ment compensation payment under this title, such 

19 individual shall not receive self-employment assist20 ance allowances under this subsection unless the 

21 State agency has a reasonable expectation that such 

22 individual will be entitled to at least 26 times the in23 dividual’s average weekly benefit amount of emer24 gency unemployment compensation. 


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1 ‘‘(4) PARTICIPANT OPTION TO TERMINATE PAR2 TICIPATION IN SELF-EMPLOYMENT ASSISTANCE PRO3 GRAM.— 

4 ‘‘(A) TERMINATION.—An individual who is 

5 participating in a State’s self-employment as6 sistance program may opt to discontinue par7 ticipation in such program. 

8 ‘‘(B) CONTINUED ELIGIBILITY FOR EMER9 GENCY UNEMPLOYMENT COMPENSATION.—An 

10 individual whose participation in the self-em11 ployment assistance program is terminated as 

12 described in paragraph (1) or who has com13 pleted participation in such program, and who 

14 continues to meet the eligibility requirements 

15 for emergency unemployment compensation 

16 under this title, shall receive emergency unem17 ployment compensation payments with respect 

18 to subsequent weeks of unemployment, to the 

19 extent that amounts remain in the account es20 tablished for such individual under section 

21 4002(b) or to the extent that such individual 

22 commences receiving the amounts described in 

23 subsections (c), (d), or (e) of such section, re24 spectively.’’. 


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1 SEC. 315. CONFORMING AMENDMENT ON PAYMENT OF 

2 BRIDGE TO WORK WAGES. 

3 Section 4001 of the Supplemental Appropriations 

4 Act, 2008 (Public Law 110–252; 26 U.S.C. 3304 note), 

5 as amended by section 314, is further amended by insert6 ing a new subsection (j) as follows: 

7 ‘‘(j) AUTHORIZATION TO PAY WAGES FOR PURPOSES

8 OF A BRIDGE TO WORK PROGRAM.—Any State that estab9 lishes a Bridge to Work program under section 324 of the 

10 Supporting Unemployed Workers Act of 2011 is author11 ized to deduct from an emergency unemployment com12 pensation account established for such individual under 

13 section 4002 such sums as may be necessary to pay wages 

14 for such individual as authorized under section 324(b)(1) 

15 of such Act.’’. 

16 SEC. 316. ADDITIONAL EXTENDED UNEMPLOYMENT BENE17 FITS UNDER THE RAILROAD UNEMPLOY18 MENT INSURANCE ACT. 

19 (a) EXTENSION.—Section 2(c)(2)(D)(iii) of the Rail20 road Unemployment Insurance Act, as added by section 

21 2006 of the American Recovery and Reinvestment Act of 

22 2009 (Public Law 111–5) and as amended by section 9 

23 of the Worker, Homeownership, and Business Assistance 

24 Act of 2009 (Public Law 111–92), is amended— 

25 (1) by striking ‘‘June 30, 2011’’ and inserting 

26 ‘‘June 30, 2012’’; and 


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1 (2) by striking ‘‘December 31, 2011’’ and in2 serting ‘‘December 31, 2012’’. 

3 (b) CLARIFICATION ON AUTHORITY TO USE

4 FUNDS.—Funds appropriated under either the first or 

5 second sentence of clause (iv) of section 2(c)(2)(D) of the 

6 Railroad Unemployment Insurance Act shall be available 

7 to cover the cost of additional extended unemployment 

8 benefits provided under such section 2(c)(2)(D) by reason 

9 of the amendments made by subsection (a) as well as to 

10 cover the cost of such benefits provided under such section 

11 2(c)(2)(D), as in effect on the day before the date of the 

12 enactment of this Act. 

13 PART II—REEMPLOYMENT NOW PROGRAM 

14 SEC. 321. ESTABLISHMENT OF REEMPLOYMENT NOW PRO15 GRAM. 

16 (a) IN GENERAL.—There is hereby established the 

17 Reemployment NOW program to be carried out by the 

18 Secretary of Labor in accordance with this part in order 

19 to facilitate the reemployment of individuals who are re20 ceiving emergency unemployment compensation under title 

21 IV of the Supplemental Appropriations Act, 2008 (Public 

22 Law 110–252; 26 U.S.C. 3304 note) (hereafter in this 

23 part referred to as ‘‘EUC claimants’’). 

24 (b) AUTHORIZATION AND APPROPRIATION.—There 

25 are authorized to be appropriated and appropriated from 


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1 the general fund of the Treasury for fiscal year 2012 

2 $4,000,000,000 to carry out the Reemployment NOW pro3 gram under this part. 

4 SEC. 322. DISTRIBUTION OF FUNDS. 

5 (a) IN GENERAL.—Of the funds appropriated under 

6 section 321(b) to carry out this part, the Secretary of 

7 Labor shall— 

8 (1) reserve up to 1 percent for the costs of Fed9 eral administration and for carrying out rigorous 

10 evaluations of the activities conducted under this 

11 part; and 

12 (2) allot the remainder of the funds not re13 served under paragraph (1) in accordance with the 

14 requirements of subsection (b) and (c) to States that 

15 have approved plans under section 323. 

16 (b) ALLOTMENT FORMULA.— 

17 (1) FORMULA FACTORS.—The Secretary of 

18 Labor shall allot the funds available under sub19 section (a)(2) as follows: 

20 (A) two-thirds of such funds shall be allot21 ted on the basis of the relative number of un22 employed individuals in each State, compared to 

23 the total number of unemployed individuals in 

24 all States; 


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1 (B) one-third of such funds shall be allot2 ted on the basis of the relative number of indi3 viduals in each State who have been unem4 ployed for 27 weeks or more, compared to the 

5 total number of individuals in all States who 

6 have been unemployed for 27 weeks or more. 

7 (2) CALCULATION.—For purposes of paragraph 

8 (1), the number of unemployed individuals and the 

9 number of individuals unemployed for 27 weeks or 

10 more shall be based on the data for the most recent 

11 12-month period, as determined by the Secretary. 

12 (c) REALLOTMENT.— 

13 (1) FAILURE TO SUBMIT STATE PLAN.—If a 

14 State does not submit a State plan by the time spec15 ified in section 323(b), or a State does not receive 

16 approval of a State plan, the amount the State 

17 would have been eligible to receive pursuant to the 

18 formula under subsection (b) shall be allotted to 

19 States that receive approval of the State plan under 

20 section 323 in accordance with the relative allot21 ments of such States as determined by the Secretary 

22 under subsection (b). 

23 (2) FAILURE TO IMPLEMENT ACTIVITIES ON A

24 TIMELY BASIS.—The Secretary of Labor may, in ac25 cordance with procedures and criteria established by 


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1 the Secretary, recapture the portion of the State al2 lotment under this part that remains unobligated if 

3 the Secretary determines such funds are not being 

4 obligated at a rate sufficient to meet the purposes 

5 of this part. The Secretary shall reallot such recap6 tured funds to other States that are not subject to 

7 recapture in accordance with the relative share of 

8 the allotments of such States as determined by the 

9 Secretary under subsection (b). 

10 (3) RECAPTURE OF FUNDS.—Funds recaptured 

11 under paragraph (2) shall be available for reobliga12 tion not later than December 31, 2012. 

13 SEC. 323. STATE PLAN. 

14 (a) IN GENERAL.—For a State to be eligible to re15 ceive an allotment under section 322, a State shall submit 

16 to the Secretary of Labor a State plan in such form and 

17 containing such information as the Secretary may require, 

18 which at a minimum shall include: 

19 (1) a description of the activities to be carried 

20 out by the State to assist in the reemployment of eli21 gible individuals to be served in accordance with this 

22 part, including which of the activities authorized in 

23 sections 324–328 the State intends to carry out and 

24 an estimate of the amounts the State intends to allo25 cate to the activities, respectively; 


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1 (2) a description of the performance outcomes 

2 to be achieved by the State through the activities 

3 carried out under this part, including the employ4 ment outcomes to be achieved by participants and 

5 the processes the State will use to track perform6 ance, consistent with guidance provided by the Sec7 retary of Labor regarding such outcomes and proc8 esses; 

9 (3) a description of coordination of activities to 

10 be carried out under this part with activities under 

11 title I of the Workforce Investment Act of 1998, the 

12 Wagner-Peyser Act, and other appropriate Federal 

13 programs; 

14 (4) the timelines for implementation of the ac15 tivities described in the plan and the number of 

16 EUC claimants expected to be enrolled in such ac17 tivities by quarter; 

18 (5) assurances that the State will participate in 

19 the evaluation activities carried out by the Secretary 

20 of Labor under this section; 

21 (6) assurances that the State will provide ap22 propriate reemployment services, including coun23 seling, to any EUC claimant who participates in any 

24 of the programs authorized under this part; and 


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1 (7) assurances that the State will report such 

2 information as the Secretary may require relating to 

3 fiscal, performance and other matters, including em4 ployment outcomes and effects, which the Secretary 

5 determines are necessary to effectively monitor the 

6 activities carried out under this part. 

7 (b) PLAN SUBMISSION AND APPROVAL.—A State 

8 plan under this section shall be submitted to the Secretary 

9 of Labor for approval not later than 30 days after the 

10 Secretary issues guidance relating to submission of such 

11 plan. The Secretary shall approve such plans if the Sec12 retary determines that the plans meet the requirements 

13 of this part and are appropriate and adequate to carry 

14 out the purposes of this part. 

15 (c) PLAN MODIFICATIONS.—A State may submit 

16 modifications to a State plan that has been approved 

17 under this part, and the Secretary of Labor may approve 

18 such modifications, if the plan as modified would meet the 

19 requirements of this part and are appropriate and ade20 quate to carry out the purposes of this part. 

21 SEC. 324. BRIDGE TO WORK PROGRAM. 

22 (a) IN GENERAL.—A State may use funds allotted 

23 to the State under this part to establish and administer 

24 a Bridge to Work program described in this section. 


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1 (b) DESCRIPTION OF PROGRAM.—In order to in2 crease individuals’ opportunities to move to permanent 

3 employment, a State may establish a Bridge to Work pro4 gram to provide an EUC claimant with short-term work 

5 experience placements with an eligible employer, during 

6 which time such individual— 

7 (1) shall be paid emergency unemployment 

8 compensation payable under title IV of the Supple9 mental Appropriations Act, 2008 (Public Law 110– 

10 252; 26 U.S.C. 3304 note), as wages for work per11 formed, and as specified in subsection (c); 

12 (2) shall be paid the additional amount de13 scribed in subsection (e) as augmented wages for 

14 work performed; and 

15 (3) may be paid compensation in addition to 

16 the amounts described in paragraphs (1) and (2) by 

17 a State or by a participating employer as wages for 

18 work performed. 

19 (c) PROGRAM ELIGIBILITY AND OTHER REQUIRE20 MENTS.—For purposes of this program— 

21 (1) individuals who, except for the requirements 

22 described in paragraph (3), are eligible to receive 

23 emergency unemployment compensation payments 

24 under title IV of the Supplemental Appropriations 

25 Act, 2008 (Public Law 110–252; 26 U.S.C. 3304 


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1 note), and who choose to participate in the program 

2 described in subsection (b), shall receive such pay3 ments as wages for work performed during their vol4 untary participation in the program described under 

5 subsection (b); 

6 (2) the wages payable to individuals described 

7 in paragraph (1) shall be paid from the emergency 

8 unemployment compensation account for such indi9 vidual as described in section 4002 of the Supple10 mental Appropriations Act, 2008 (Public Law 110– 

11 252; 26 U.S.C. 3304 note), and the amount in such 

12 individual’s account shall be reduced accordingly; 

13 (3) the wages payable to an individual described 

14 in paragraph (1) shall be payable in the same 

15 amount, at the same interval, on the same terms, 

16 and subject to the same conditions under title IV of 

17 the Supplemental Appropriations Act, 2008 (Public 

18 Law 110–252; 26 U.S.C. 3304 note), except that— 

19 (A) State requirements applied under such 

20 Act relating to availability for work and active 

21 search for work are not applicable to such indi22 viduals who participate for at least 25 hours 

23 per week in the program described in subsection 

24 (b) for the duration of such individual’s partici25 pation in the program; 


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1 (B) State requirements applied under such 

2 Act relating to disqualifying income regarding 

3 wages earned shall not apply to such individuals 

4 who participate for at least 25 hours per week 

5 in the program described in subsection (b), and 

6 shall not apply with respect to— 

7 (i) the wages described under sub8 section (b); and 

9 (ii) any wages, in addition to those de10 scribed under subsection (b), whether paid 

11 by a State or a participating employer for 

12 the same work activities; 

13 (C) State prohibitions or limitations ap14 plied under such Act relating to employment 

15 status shall not apply to such individuals who 

16 participate in the program described in sub17 section (b); and 

18 (D) State requirements applied under such 

19 Act relating to an individual’s acceptance of an 

20 offer of employment shall not apply with regard 

21 to an offer of long-term employment from a 

22 participating employer made to such individual 

23 who is participating in the program described in 

24 subsection (b) in a work experience provided by 

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1 ment is expected to commence or commences at 

2 the conclusion of the duration specified in para3 graph (4)(A); 

4 (4) the program shall be structured so that in5 dividuals described in paragraph (1) may participate 

6 in the program for up to— 

7 (A) 8 weeks, and 

8 (B) 38 hours for each such week; 

9 (5) a State shall ensure that all individuals par10 ticipating in the program are covered by a workers’ 

11 compensation insurance program; and 

12 (6) the program meets such other requirements 

13 as the Secretary of Labor determines to be appro14 priate in guidance issued by the Secretary. 

15 (d) STATE REQUIREMENTS.— 

16 (1) CERTIFICATION OF ELIGIBLE EMPLOYER.— 

17 A State may certify as eligible for participation in 

18 the program under this section any employer that 

19 meets the eligibility criteria as established in guid20 ance by the Secretary of Labor, except that an em21 ployer shall not be certified as eligible for participa22 tion in the program described under subsection 

23 (b)— 

24 (A) if such employer— 


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1 (i) is a Federal, State, or local govern2 ment entity; 

3 (ii) would engage an eligible individual 

4 in work activities under any employer’s 

5 grant, contract, or subcontract with a Fed6 eral, State, or local government entity, ex7 cept with regard to work activities under 

8 any employer’s supply contract or sub9 contract; 

10 (iii) is delinquent with respect to any 

11 taxes or employer contributions described 

12 under sections 3301 and 3302(a)(1) of the 

13 Internal Revenue Code of 1986 or with re14 spect to any related reporting require15 ments; 

16 (iv) is engaged in the business of sup17 plying workers to other employers and 

18 would participate in the program for the 

19 purpose of supplying individuals partici20 pating in the program to other employers; 

21 or 

22 (v) has previously participated in the 

23 program and the State has determined 

24 that such employer has failed to abide by 

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1 sections (h), (i), or (j), or by any other re2 quirements that the Secretary may estab3 lish for employers under subsection (c)(6); 

4 and 

5 (B) unless such employer provides assur6 ances that it has not displaced existing workers 

7 pursuant to the requirements of subsection (h). 

8 (2) AUTHORIZED ACTIVITIES.—Funds allotted 

9 to a State under this part for the program— 

10 (A) shall be used to— 

11 (i) recruit employers for participation 

12 in the program; 

13 (ii) review and certify employers iden14 tified by eligible individuals seeking to par15 ticipate in the program; 

16 (iii) ensure that reemployment and 

17 counseling services are available for pro18 gram participants, including services de19 scribing the program under subsection (b), 

20 prior to an individual’s participation in 

21 such program; 

22 (iv) establish and implement processes 

23 to monitor the progress and performance 

24 of individual participants for the duration 

25 of the program; 


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1 (v) prevent misuse of the program; 

2 and 

3 (vi) pay augmented wages to eligible 

4 individuals, if necessary, as described in 

5 subsection (e); and 

6 (B) may be used— 

7 (i) to pay workers’ compensation in8 surance premiums to cover all individuals 

9 participating in the program, except that, 

10 if a State opts not to make such payments 

11 directly to a State administered workers’ 

12 compensation program, the State involved 

13 shall describe in the approved State plan 

14 the means by which such State shall en15 sure workers’ compensation or equivalent 

16 coverage for all individuals who participate 

17 in the program; 

18 (ii) to pay compensation to a partici19 pating individual that is in addition to the 

20 amounts described in subsections (c)(1) 

21 and (e) as wages for work performed; 

22 (iii) to provide supportive services, 

23 such as transportation, child care, and de24 pendent care, that would enable individuals 

25 to participate in the program; 


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1 (iv) for the administration and over2 sight of the program; and 

3 (v) to fulfill additional program re4 quirements included in the approved State 

5 plan. 

6 (e) PAYMENT OF AUGMENTED WAGES IF NEC7 ESSARY.—In the event that the wages described in sub8 section (c)(1) are not sufficient to equal or exceed the min9 imum wages that are required to be paid by an employer 

10 under section 6(a)(1) of the Fair Labor Standards Act 

11 of 1938 (29 U.S.C. 206(a)(1)) or the applicable State or 

12 local minimum wage law, whichever is higher, a State shall 

13 pay augmented wages to a program participant in any 

14 amount necessary to cover the difference between— 

15 (1) such minimum wages amount; and 

16 (2) the wages payable under subsection (c)(1). 

17 (f) EFFECT OF WAGES ON ELIGIBILITY FOR OTHER

18 PROGRAMS.—None of the wages paid under this section 

19 shall be considered as income for the purposes of deter20 mining eligibility for and the amount of income transfer 

21 and in-kind aid furnished under any Federal or Federally 

22 assisted program based on need. 

23 (g) EFFECT OF WAGES, WORK ACTIVITIES, AND

24 PROGRAM PARTICIPATION ON CONTINUING ELIGIBILITY

25 FOR EMERGENCY UNEMPLOYMENT COMPENSATION.— 


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1 Any wages paid under this section and any additional 

2 wages paid by an employer to an individual described in 

3 subsection (c)(1), and any work activities performed by 

4 such individual as a participant in the program, shall not 

5 be construed so as to render such individual ineligible to 

6 receive emergency unemployment compensation under title 

7 IV of the Supplemental Appropriations Act, 2008 (Public 

8 Law 110–252; 26 U.S.C. 3304 note). 

9 (h) NONDISPLACEMENT OF EMPLOYEES.— 

10 (1) PROHIBITION.—An employer shall not use a 

11 program participant to displace (including a partial 

12 displacement, such as a reduction in the hours of 

13 non-overtime work, wages, or employment benefits) 

14 any current employee (as of the date of the partici15 pation). 

16 (2) OTHER PROHIBITIONS.—An employer shall 

17 not permit a program participant to perform work 

18 activities related to any job for which— 

19 (A) any other individual is on layoff from 

20 the same or any substantially equivalent posi21 tion; 

22 (B) the employer has terminated the em23 ployment of any employee or otherwise reduced 

24 the workforce of the employer with the inten25 tion of filling or partially filling the vacancy so 


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1 created with the work activities to be performed 

2 by a program participant; 

3 (C) there is a strike or lock out at the 

4 worksite that is the participant’s place of em5 ployment; or 

6 (D) the job is created in a manner that 

7 will infringe in any way upon the promotional 

8 opportunities of currently employed individuals 

9 (as of the date of the participation). 

10 (i) PROHIBITION ON IMPAIRMENT OF CONTRACTS.— 

11 An employer shall not, by means of assigning work activi12 ties under this section, impair an existing contract for 

13 services or a collective bargaining agreement, and no such 

14 activity that would be inconsistent with the terms of a col15 lective bargaining agreement shall be undertaken without 

16 the written concurrence of the labor organization that is 

17 signatory to the collective bargaining agreement. 

18 (j) LIMITATION ON EMPLOYER PARTICIPATION.—If, 

19 after 24 weeks of participation in the program, an em20 ployer has not made an offer of suitable long-term employ21 ment to any individual described under subsection (c)(1) 

22 who was placed with such employer and has completed the 

23 program, a State shall bar such employer from further 

24 participation in the program. States may impose addi25 tional conditions on participating employers to ensure that 


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1 an appropriate number of participants receive offers of 

2 suitable long term employment. 

3 (k) FAILURE TO MEET PROGRAM REQUIREMENTS.— 

4 If a State makes a determination based on information 

5 provided to the State, or acquired by the State by means 

6 of its administration and oversight functions, that a par7 ticipating employer under this section has violated a re8 quirement of this section, the State shall bar such em9 ployer from further participation in the program. The 

10 State shall establish a process whereby an individual de11 scribed in subsection (c)(1), or any other affected indi12 vidual or entity, may file a complaint with the State relat13 ing to a violation of any requirement or prohibition under 

14 this section. 

15 (l) PARTICIPANT OPTION TO TERMINATE PARTICIPA16 TION IN BRIDGE TO WORK PROGRAM.— 

17 (1) TERMINATION.—An individual who is par18 ticipating in a program described in subsection (b) 

19 may opt to discontinue participation in such pro20 gram. 

21 (2) CONTINUED ELIGIBILITY FOR EMERGENCY

22 UNEMPLOYMENT COMPENSATION.—An individual 

23 who opts to discontinue participation in such pro24 gram, is terminated from such program by a partici25 pating employer, or who has completed participation 


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1 in such program, and who continues to meet the eli2 gibility requirements for emergency unemployment 

3 compensation under title IV of the Supplemental 

4 Appropriations Act, 2008 (Public Law 110–252; 26 

5 U.S.C. 3304 note), shall receive emergency unem6 ployment compensation payments with respect to 

7 subsequent weeks of unemployment, to the extent 

8 that amounts remain in the account established for 

9 such individual under section 4002(b) of such Act or 

10 to the extent that such individual commences receiv11 ing the amounts described in subsections (c), (d), or 

12 (e) of such section, respectively. 

13 (m) EFFECT OF OTHER LAWS.—Unless otherwise 

14 provided in this section, nothing in this section shall be 

15 construed to alter or affect the rights or obligations under 

16 any Federal, State, or local laws with respect to any indi17 vidual described in subsection (c)(1) and with respect to 

18 any participating employer under this section. 

19 (n) TREATMENT OF PAYMENTS.—All wages or other 

20 payments to an individual under this section shall be treat21 ed as payments of unemployment compensation for pur22 poses of section 209 of the Social Security Act (42 U.S.C. 

23 409) and for purposes of subtitle A and sections 3101, 

24 3111, and 3301 of the Internal Revenue Code of 1986. 


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1 SEC. 325. WAGE INSURANCE. 

2 (a) IN GENERAL.—A State may use the funds allot3 ted to the State under this part to provide a wage insur4 ance program for EUC claimants. 

5 (b) BENEFITS.—The wage insurance program pro6 vided under this section may use funds allotted to the 

7 State under this part to pay, for a period not to exceed 

8 2 years, to a worker described in subsection (c), up to 50 

9 percent of the difference between— 

10 (1) the wages received by the worker at the 

11 time of separation; and 

12 (2) the wages received by the worker for reem13 ployment. 

14 (c) INDIVIDUAL ELIGIBILITY.—The benefits de15 scribed in subsection (b) may be paid to an individual who 

16 is an EUC claimant at the time such individual obtains 

17 reemployment and who— 

18 (1) is at least 50 years of age; 

19 (2) earns not more than $50,000 per year in 

20 wages from reemployment; 

21 (3) is employed on a full-time basis as defined 

22 by the law of the State; and 

23 (4) is not employed by the employer from which 

24 the individual was last separated. 

25 (d) TOTAL AMOUNT OF PAYMENTS.—A State shall 

26 establish a maximum amount of payments per individual 


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1 for purposes of payments described in subsection (b) dur2 ing the eligibility period described in such subsection. 

3 (e) NON-DISCRIMINATION REGARDING WAGES.—An 

4 employer shall not pay a worker described in subsection 

5 (c) less than such employer pays to a regular worker in 

6 the same or substantially equivalent position. 

7 SEC. 326. ENHANCED REEMPLOYMENT STRATEGIES. 

8 (a) IN GENERAL.—A State may use funds allotted 

9 under this part to provide a program of enhanced reem10 ployment services to EUC claimants. In addition to the 

11 provision of services to such claimants, the program may 

12 include the provision of reemployment services to individ13 uals who are unemployed and have exhausted their rights 

14 to emergency unemployment compensation under title IV 

15 of the Supplemental Appropriations Act, 2008, (Public 

16 Law 110–252; 26 U.S.C. 3304 note). The program shall 

17 provide reemployment services that are more intensive 

18 than the reemployment services provided by the State 

19 prior to the receipt of the allotment under this part. 

20 (b) TYPES OF SERVICES.—The enhanced reemploy21 ment services described in subsection (a) may include serv22 ices such as— 

23 (1) assessments, counseling, and other intensive 

24 services that are provided by staff on a one-to-one 

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1 ment needs of EUC claimants and individuals de2 scribed in subsection (a); 

3 (2) comprehensive assessments designed to 

4 identify alternative career paths; 

5 (3) case management; 

6 (4) reemployment services that are provided 

7 more frequently and more intensively than such re8 employment services have previously been provided 

9 by the State; and 

10 (5) services that are designed to enhance com11 munication skills, interviewing skills, and other skills 

12 that would assist in obtaining reemployment. 

13 SEC. 327. SELF-EMPLOYMENT PROGRAMS. 

14 A State may use funds allotted to the State under 

15 this part, in an amount specified under an approved State 

16 plan, for the administrative costs associated with starting 

17 up the self-employment assistance program described in 

18 section 4001(i) of the Supplemental Appropriations Act, 

19 2008, (Public Law 110–252; 26 U.S.C. 3304 note). 

20 SEC. 328. ADDITIONAL INNOVATIVE PROGRAMS. 

21 (a) IN GENERAL.—A State may use funds allotted 

22 under this part to provide a program for innovative activi23 ties, which use a strategy that is different from the reem24 ployment strategies described in sections 324–327 and 

25 which are designed to facilitate the reemployment of EUC 


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1 claimants. In addition to the provision of activities to such 

2 claimants, the program may include the provision of activi3 ties to individuals who are unemployed and have exhausted 

4 their rights to emergency unemployment compensation 

5 under title IV of the Supplemental Appropriations Act, 

6 2008, (Public Law 110–252; 26 U.S.C. 3304 note). 

7 (b) CONDITIONS.—The innovative activities approved 

8 in accordance with subsection (a)— 

9 (1) shall directly benefit EUC claimants and, if 

10 applicable, individuals described in subsection (a), ei11 ther as a benefit paid to such claimant or individual 

12 or as a service provided to such claimant or indi13 vidual; 

14 (2) shall not result in a reduction in the dura15 tion or amount of, emergency unemployment com16 pensation for which EUC claimants would otherwise 

17 be eligible; 

18 (3) shall not include a reduction in the dura19 tion, amount of or eligibility for regular compensa20 tion or extended benefits; 

21 (4) shall not be used to displace (including a 

22 partial displacement, such as a reduction in the 

23 hours of non-overtime work, wages, or employment 

24 benefits) any currently employed employee (as of the 

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1 pant to perform work activities related to any job for 

2 which— 

3 (A) any other individual is on layoff from 

4 the same or any substantially equivalent job; 

5 (B) the employer has terminated the em6 ployment of any regular employee or otherwise 

7 reduced the workforce of the employer with the 

8 intention of filling or partially filling the va9 cancy so created with the work activities to be 

10 performed by a program participant; 

11 (C) there is a strike or lock out at the 

12 worksite that is the participant’s place of em13 ployment; or 

14 (D) the job is created in a manner that 

15 will infringe in any way upon the promotional 

16 opportunities of currently employed individuals 

17 (as of the date of the participation); and 

18 (5) shall not be in violation of any Federal, 

19 State, or local law. 

20 SEC. 329. GUIDANCE AND ADDITIONAL REQUIREMENTS. 

21 The Secretary of Labor may establish through guid22 ance, without regard to the requirements of section 553 

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1 ments, as the Secretary determines to be necessary to en2 sure fiscal integrity, effective monitoring, and appropriate 

3 and prompt implementation of the activities under this 

4 Act. 

5 SEC. 330. REPORT OF INFORMATION AND EVALUATIONS TO 

6 CONGRESS AND THE PUBLIC. 

7 The Secretary of Labor shall provide to the appro8 priate Committees of the Congress and make available to 

9 the public the information reported pursuant to section 

10 329 and the evaluations of activities carried out pursuant 

11 to the funds reserved under section 322(a)(1). 

12 SEC. 331. STATE. 

13 For purposes of this part, the term ‘‘State’’ has the 

14 meaning given that term in section 205 of the Federal15 State Extended Unemployment Compensation Act of 1970 

16 (26 U.S.C. 3304 note). 

17 PART III—SHORT-TIME COMPENSATION 

18 PROGRAM 

19 SEC. 341. TREATMENT OF SHORT-TIME COMPENSATION 

20 PROGRAMS. 

21 (a) DEFINITION.— 

22 (1) IN GENERAL.—Section 3306 of the Internal 

23 Revenue Code of 1986 (26 U.S.C. 3306) is amended 

24 by adding at the end the following new subsection: 


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1 ‘‘(v) SHORT-TIME COMPENSATION PROGRAM.—For 

2 purposes of this chapter, the term ‘short-time compensa3 tion program’ means a program under which— 

4 ‘‘(1) the participation of an employer is vol5 untary; 

6 ‘‘(2) an employer reduces the number of hours 

7 worked by employees in lieu of layoffs; 

8 ‘‘(3) such employees whose workweeks have 

9 been reduced by at least 10 percent, and by not 

10 more than the percentage, if any, that is determined 

11 by the State to be appropriate (but in no case more 

12 than 60 percent), are eligible for unemployment 

13 compensation; 

14 ‘‘(4) the amount of unemployment compensa15 tion payable to any such employee is a pro rata por16 tion of the unemployment compensation which would 

17 otherwise be payable to the employee if such em18 ployee were totally unemployed from the partici19 pating employer; 

20 ‘‘(5) such employees meet the availability for 

21 work and work search test requirements while col22 lecting short-time compensation benefits, by being 

23 available for their workweek as required by their 

24 participation in the short-time compensation pro25 gram; 


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1 ‘‘(6) eligible employees may participate, as ap2 propriate, in training (including employer-sponsored 

3 training or worker training funded under the Work4 force Investment Act of 1998) to enhance job skills 

5 if such program has been approved by the State 

6 agency; 

7 ‘‘(7) the State agency shall require employers to 

8 certify that if the employer provides health benefits 

9 and retirement benefits under a defined benefit plan 

10 (as defined in section 414(j)) or contributions under 

11 a defined contribution plan (as defined in section 

12 414(i)) to any employee whose workweek is reduced 

13 under the program that such benefits will continue 

14 to be provided to employees participating in the 

15 short-time compensation program under the same 

16 terms and conditions as though the workweek of 

17 such employee had not been reduced or to the same 

18 extent as other employees not participating in the 

19 short-time compensation program, subject to other 

20 requirements in this section; 

21 ‘‘(8) the State agency shall require an employer 

22 to submit a written plan describing the manner in 

23 which the requirements of this subsection will be im24 plemented (including a plan for giving advance no25 tice, where feasible, to an employee whose workweek 


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1 is to be reduced) together with an estimate of the 

2 number of layoffs that would have occurred absent 

3 the ability to participate in short-time compensation 

4 and such other information as the Secretary of 

5 Labor determines is appropriate; 

6 ‘‘(9) in the case of employees represented by a 

7 union as the sole and exclusive representative, the 

8 appropriate official of the union has agreed to the 

9 terms of the employer’s written plan and implemen10 tation is consistent with employer obligations under 

11 the applicable Federal laws; and 

12 ‘‘(10) upon request by the State and approval 

13 by the Secretary of Labor, only such other provi14 sions are included in the State law that are deter15 mined to be appropriate for purposes of a short-time 

16 compensation program.’’. 

17 (2) EFFECTIVE DATE.—Subject to paragraph 

18 (3), the amendment made by paragraph (1) shall 

19 take effect on the date of the enactment of this Act. 

20 (3) TRANSITION PERIOD FOR EXISTING PRO21 GRAMS.—In the case of a State that is administering 

22 a short-time compensation program as of the date of 

23 the enactment of this Act and the State law cannot 

24 be administered consistent with the amendment 


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1 made by paragraph (1), such amendment shall take 

2 effect on the earlier of— 

3 (A) the date the State changes its State 

4 law in order to be consistent with such amend5 ment; or 

6 (B) the date that is 2 years and 6 months 

7 after the date of the enactment of this Act. 

8 (b) CONFORMING AMENDMENT.— 

9 (1) INTERNAL REVENUE CODE OF 1986.— 

10 (A) Subparagraph (E) of section 

11 3304(a)(4) of the Internal Revenue Code of 

12 1986 is amended to read as follows: 

13 ‘‘(E) amounts may be withdrawn for the 

14 payment of short-time compensation under a 

15 short-time compensation program (as defined 

16 under section 3306(v));’’. 

17 (B) Subsection (f) of section 3306 of the 

18 Internal Revenue Code of 1986 is amended— 

19 (i) by striking paragraph (5) (relating 

20 to short-time compensation) and inserting 

21 the following new paragraph: 

22 ‘‘(5) amounts may be withdrawn for the pay23 ment of short-time compensation under a short-time 

24 compensation program (as defined in subsection (v)); 

25 and’’; and 


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1 (ii) by redesignating paragraph (5) 

2 (relating to self-employment assistance 

3 program) as paragraph (6). 

4 (2) SOCIAL SECURITY ACT.—Section 303(a)(5) 

5 of the Social Security Act is amended by striking 

6 ‘‘the payment of short-time compensation under a 

7 plan approved by the Secretary of Labor’’ and in8 serting ‘‘the payment of short-time compensation 

9 under a short-time compensation program (as de10 fined in section 3306(v) of the Internal Revenue 

11 Code of 1986)’’. 

12 (3) UNEMPLOYMENT COMPENSATION AMEND13 MENTS OF 1992.—Subsections (b) through (d) of sec14 tion 401 of the Unemployment Compensation 

15 Amendments of 1992 (26 U.S.C. 3304 note) are re16 pealed. 

17 SEC. 342. TEMPORARY FINANCING OF SHORT-TIME COM18 PENSATION PAYMENTS IN STATES WITH PRO19 GRAMS IN LAW. 

20 (a) PAYMENTS TO STATES.— 

21 (1) IN GENERAL.—Subject to paragraph (3), 

22 there shall be paid to a State an amount equal to 

23 100 percent of the amount of short-time compensa24 tion paid under a short-time compensation program 

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1 enue Code of 1986, as added by section 341(a)) 

2 under the provisions of the State law. 

3 (2) TERMS OF PAYMENTS.—Payments made to 

4 a State under paragraph (1) shall be payable by way 

5 of reimbursement in such amounts as the Secretary 

6 estimates the State will be entitled to receive under 

7 this section for each calendar month, reduced or in8 creased, as the case may be, by any amount by 

9 which the Secretary finds that the Secretary’s esti10 mates for any prior calendar month were greater or 

11 less than the amounts which should have been paid 

12 to the State. Such estimates may be made on the 

13 basis of such statistical, sampling, or other method 

14 as may be agreed upon by the Secretary and the 

15 State agency of the State involved. 

16 (3) LIMITATIONS ON PAYMENTS.— 

17 (A) GENERAL PAYMENT LIMITATIONS.— 

18 No payments shall be made to a State under 

19 this section for short-time compensation paid to 

20 an individual by the State during a benefit year 

21 in excess of 26 times the amount of regular 

22 compensation (including dependents’ allow23 ances) under the State law payable to such in24 dividual for a week of total unemployment. 


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1 (B) EMPLOYER LIMITATIONS.—No pay2 ments shall be made to a State under this sec3 tion for benefits paid to an individual by the 

4 State under a short-time compensation program 

5 if such individual is employed by the partici6 pating employer on a seasonal, temporary, or 

7 intermittent basis. 

8 (b) APPLICABILITY.— 

9 (1) IN GENERAL.—Payments to a State under 

10 subsection (a) shall be available for weeks of unem11 ployment— 

12 (A) beginning on or after the date of the 

13 enactment of this Act; and 

14 (B) ending on or before the date that is 3 

15 years and 6 months after the date of the enact16 ment of this Act. 

17 (2) THREE-YEAR FUNDING LIMITATION FOR

18 COMBINED PAYMENTS UNDER THIS SECTION AND

19 SECTION 343.—States may receive payments under 

20 this section and section 343 with respect to a total 

21 of not more than 156 weeks. 

22 (c) TWO-YEAR TRANSITION PERIOD FOR EXISTING

23 PROGRAMS.—During any period that the transition provi24 sion under section 341(a)(3) is applicable to a State with 

25 respect to a short-time compensation program, such State 


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1 shall be eligible for payments under this section. Subject 

2 to paragraphs (1)(B) and (2) of subsection (b), if at any 

3 point after the date of the enactment of this Act the State 

4 enacts a State law providing for the payment of short5 time compensation under a short-time compensation pro6 gram that meets the definition of such a program under 

7 section 3306(v) of the Internal Revenue Code of 1986, as 

8 added by section 341(a), the State shall be eligible for pay9 ments under this section after the effective date of such 

10 enactment. 

11 (d) FUNDING AND CERTIFICATIONS.— 

12 (1) FUNDING.—There are appropriated, out of 

13 moneys in the Treasury not otherwise appropriated, 

14 such sums as may be necessary for purposes of car15 rying out this section. 

16 (2) CERTIFICATIONS.—The Secretary shall 

17 from time to time certify to the Secretary of the 

18 Treasury for payment to each State the sums pay19 able to such State under this section. 

20 (e) DEFINITIONS.—In this section: 

21 (1) SECRETARY.—The term ‘‘Secretary’’ means 

22 the Secretary of Labor. 

23 (2) STATE; STATE AGENCY; STATE LAW.—The 

24 terms ‘‘State’’, ‘‘State agency’’, and ‘‘State law’’ 

25 have the meanings given those terms in section 205 


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1 of the Federal-State Extended Unemployment Com2 pensation Act of 1970 (26 U.S.C. 3304 note). 

3 SEC. 343. TEMPORARY FINANCING OF SHORT-TIME COM4 PENSATION AGREEMENTS. 

5 (a) FEDERAL-STATE AGREEMENTS.— 

6 (1) IN GENERAL.—Any State which desires to 

7 do so may enter into, and participate in, an agree8 ment under this section with the Secretary provided 

9 that such State’s law does not provide for the pay10 ment of short-time compensation under a short-time 

11 compensation program (as defined in section 

12 3306(v) of the Internal Revenue Code of 1986, as 

13 added by section 341(a)). 

14 (2) ABILITY TO TERMINATE.—Any State which 

15 is a party to an agreement under this section may, 

16 upon providing 30 days’ written notice to the Sec17 retary, terminate such agreement. 

18 (b) PROVISIONS OF FEDERAL-STATE AGREEMENT.— 

19 (1) IN GENERAL.—Any agreement under this 

20 section shall provide that the State agency of the 

21 State will make payments of short-time compensa22 tion under a plan approved by the State. Such plan 

23 shall provide that payments are made in accordance 

24 with the requirements under section 3306(v) of the 


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1 Internal Revenue Code of 1986, as added by section 

2 341(a). 

3 (2) LIMITATIONS ON PLANS.— 

4 (A) GENERAL PAYMENT LIMITATIONS.—A 

5 short-time compensation plan approved by a 

6 State shall not permit the payment of short7 time compensation to an individual by the State 

8 during a benefit year in excess of 26 times the 

9 amount of regular compensation (including de10 pendents’ allowances) under the State law pay11 able to such individual for a week of total un12 employment. 

13 (B) EMPLOYER LIMITATIONS.—A short14 time compensation plan approved by a State 

15 shall not provide payments to an individual if 

16 such individual is employed by the participating 

17 employer on a seasonal, temporary, or intermit18 tent basis. 

19 (3) EMPLOYER PAYMENT OF COSTS.—Any 

20 short-time compensation plan entered into by an em21 ployer must provide that the employer will pay the 

22 State an amount equal to one-half of the amount of 

23 short-time compensation paid under such plan. Such 

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1 culating an employer’s contribution rate under sec2 tion 3303(a)(1) of the Internal Revenue Code of 

3 1986. 

4 (c) PAYMENTS TO STATES.— 

5 (1) IN GENERAL.—There shall be paid to each 

6 State with an agreement under this section an 

7 amount equal to— 

8 (A) one-half of the amount of short-time 

9 compensation paid to individuals by the State 

10 pursuant to such agreement; and 

11 (B) any additional administrative expenses 

12 incurred by the State by reason of such agree13 ment (as determined by the Secretary). 

14 (2) TERMS OF PAYMENTS.—Payments made to 

15 a State under paragraph (1) shall be payable by way 

16 of reimbursement in such amounts as the Secretary 

17 estimates the State will be entitled to receive under 

18 this section for each calendar month, reduced or in19 creased, as the case may be, by any amount by 

20 which the Secretary finds that the Secretary’s esti21 mates for any prior calendar month were greater or 

22 less than the amounts which should have been paid 

23 to the State. Such estimates may be made on the 

24 basis of such statistical, sampling, or other method 


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1 as may be agreed upon by the Secretary and the 

2 State agency of the State involved. 

3 (3) FUNDING.—There are appropriated, out of 

4 moneys in the Treasury not otherwise appropriated, 

5 such sums as may be necessary for purposes of car6 rying out this section. 

7 (4) CERTIFICATIONS.—The Secretary shall 

8 from time to time certify to the Secretary of the 

9 Treasury for payment to each State the sums pay10 able to such State under this section. 

11 (d) APPLICABILITY.— 

12 (1) IN GENERAL.—An agreement entered into 

13 under this section shall apply to weeks of unemploy14 ment— 

15 (A) beginning on or after the date on 

16 which such agreement is entered into; and 

17 (B) ending on or before the date that is 2 

18 years and 13 weeks after the date of the enact19 ment of this Act. 

20 (2) TWO-YEAR FUNDING LIMITATION.—States 

21 may receive payments under this section with re22 spect to a total of not more than 104 weeks. 

23 (e) SPECIAL RULE.—If a State has entered into an 

24 agreement under this section and subsequently enacts a 

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1 pensation under a short-time compensation program that 

2 meets the definition of such a program under section 

3 3306(v) of the Internal Revenue Code of 1986, as added 

4 by section 341(a), the State— 

5 (1) shall not be eligible for payments under this 

6 section for weeks of unemployment beginning after 

7 the effective date of such State law; and 

8 (2) subject to paragraphs (1)(B) and (2) of sec9 tion 342(b), shall be eligible to receive payments 

10 under section 342 after the effective date of such 

11 State law. 

12 (f) DEFINITIONS.—In this section: 

13 (1) SECRETARY.—The term ‘‘Secretary’’ means 

14 the Secretary of Labor. 

15 (2) STATE; STATE AGENCY; STATE LAW.—The 

16 terms ‘‘State’’, ‘‘State agency’’, and ‘‘State law’’ 

17 have the meanings given those terms in section 205 

18 of the Federal-State Extended Unemployment Com19 pensation Act of 1970 (26 U.S.C. 3304 note). 

20 SEC. 344. GRANTS FOR SHORT-TIME COMPENSATION PRO21 GRAMS. 

22 (a) GRANTS.— 

23 (1) FOR IMPLEMENTATION OR IMPROVED AD24 MINISTRATION.—The Secretary shall award grants 

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1 grams (as defined in subsection (i)(2)) for the pur2 pose of implementation or improved administration 

3 of such programs. 

4 (2) FOR PROMOTION AND ENROLLMENT.—The 

5 Secretary shall award grants to States that are eligi6 ble and submit plans for a grant under paragraph 

7 (1) for such States to promote and enroll employers 

8 in short-time compensation programs (as so de9 fined). 

10 (3) ELIGIBILITY.— 

11 (A) IN GENERAL.—The Secretary shall de12 termine eligibility criteria for the grants under 

13 paragraph (1) and (2). 

14 (B) CLARIFICATION.—A State admin15 istering a short-time compensation program, in16 cluding a program being administered by a 

17 State that is participating in the transition 

18 under the provisions of sections 341(a)(3) and 

19 342(c), that does not meet the definition of a 

20 short-time compensation program under section 

21 3306(v) of the Internal Revenue Code of 1986 

22 (as added by 341(a)), and a State with an 

23 agreement under section 343, shall not be eligi24 ble to receive a grant under this section until 

25 such time as the State law of the State provides 


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1 for payments under a short-time compensation 

2 program that meets such definition and such 

3 law. 

4 (b) AMOUNT OF GRANTS.— 

5 (1) IN GENERAL.—The maximum amount avail6 able for making grants to a State under paragraphs 

7 (1) and (2) shall be equal to the amount obtained 

8 by multiplying $700,000,000 (less the amount used 

9 by the Secretary under subsection (e)) by the same 

10 ratio as would apply under subsection (a)(2)(B) of 

11 section 903 of the Social Security Act (42 U.S.C. 

12 1103) for purposes of determining such State’s 

13 share of any excess amount (as described in sub14 section (a)(1) of such section) that would have been 

15 subject to transfer to State accounts, as of October 

16 1, 2010, under the provisions of subsection (a) of 

17 such section. 

18 (2) AMOUNT AVAILABLE FOR DIFFERENT

19 GRANTS.—Of the maximum incentive payment deter20 mined under paragraph (1) with respect to a 

21 State— 

22 (A) one-third shall be available for a grant 

23 under subsection (a)(1); and 

24 (B) two-thirds shall be available for a 

25 grant under subsection (a)(2). 


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1 (c) GRANT APPLICATION AND DISBURSAL.— 

2 (1) APPLICATION.—Any State seeking a grant 

3 under paragraph (1) or (2) of subsection (a) shall 

4 submit an application to the Secretary at such time, 

5 in such manner, and complete with such information 

6 as the Secretary may require. In no case may the 

7 Secretary award a grant under this section with re8 spect to an application that is submitted after De9 cember 31, 2014. 

10 (2) NOTICE.—The Secretary shall, within 30 

11 days after receiving a complete application, notify 

12 the State agency of the State of the Secretary’s find13 ings with respect to the requirements for a grant 

14 under paragraph (1) or (2) (or both) of subsection 

15 (a). 

16 (3) CERTIFICATION.—If the Secretary finds 

17 that the State law provisions meet the requirements 

18 for a grant under subsection (a), the Secretary shall 

19 thereupon make a certification to that effect to the 

20 Secretary of the Treasury, together with a certifi21 cation as to the amount of the grant payment to be 

22 transferred to the State account in the Unemploy23 ment Trust Fund (as established in section 904(a) 

24 of the Social Security Act (42 U.S.C. 1104(a))) pur25 suant to that finding. The Secretary of the Treasury 


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1 shall make the appropriate transfer to the State ac2 count within 7 days after receiving such certifi3 cation. 

4 (4) REQUIREMENT.—No certification of compli5 ance with the requirements for a grant under para6 graph (1) or (2) of subsection (a) may be made with 

7 respect to any State whose— 

8 (A) State law is not otherwise eligible for 

9 certification under section 303 of the Social Se10 curity Act (42 U.S.C. 503) or approvable under 

11 section 3304 of the Internal Revenue Code of 

12 1986; or 

13 (B) short-time compensation program is 

14 subject to discontinuation or is not scheduled to 

15 take effect within 12 months of the certifi16 cation. 

17 (d) USE OF FUNDS.—The amount of any grant 

18 awarded under this section shall be used for the implemen19 tation of short-time compensation programs and the over20 all administration of such programs and the promotion 

21 and enrollment efforts associated with such programs, 

22 such as through— 

23 (1) the creation or support of rapid response 

24 teams to advise employers about alternatives to lay25 offs; 


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1 (2) the provision of education or assistance to 

2 employers to enable them to assess the feasibility of 

3 participating in short-time compensation programs; 

4 and 

5 (3) the development or enhancement of systems 

6 to automate— 

7 (A) the submission and approval of plans; 

8 and 

9 (B) the filing and approval of new and on10 going short-time compensation claims. 

11 (e) ADMINISTRATION.—The Secretary is authorized 

12 to use 0.25 percent of the funds available under subsection 

13 (g) to provide for outreach and to share best practices with 

14 respect to this section and short-time compensation pro15 grams. 

16 (f) RECOUPMENT.—The Secretary shall establish a 

17 process under which the Secretary shall recoup the 

18 amount of any grant awarded under paragraph (1) or (2) 

19 of subsection (a) if the Secretary determines that, during 

20 the 5-year period beginning on the first date that any such 

21 grant is awarded to the State, the State— 

22 (1) terminated the State’s short-time compensa23 tion program; or 


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1 (2) failed to meet appropriate requirements 

2 with respect to such program (as established by the 

3 Secretary). 

4 (g) FUNDING.—There are appropriated, out of mon5 eys in the Treasury not otherwise appropriated, to the 

6 Secretary, $700,000,000 to carry out this section, to re7 main available without fiscal year limitation. 

8 (h) REPORTING.—The Secretary may establish re9 porting requirements for States receiving a grant under 

10 this section in order to provide oversight of grant funds. 

11 (i) DEFINITIONS.—In this section: 

12 (1) SECRETARY.—The term ‘‘Secretary’’ means 

13 the Secretary of Labor. 

14 (2) SHORT-TIME COMPENSATION PROGRAM.— 

15 The term ‘‘short-time compensation program’’ has 

16 the meaning given such term in section 3306(v) of 

17 the Internal Revenue Code of 1986, as added by sec18 tion 341(a). 

19 (3) STATE; STATE AGENCY; STATE LAW.—The 

20 terms ‘‘State’’, ‘‘State agency’’, and ‘‘State law’’ 

21 have the meanings given those terms in section 205 

22 of the Federal-State Extended Unemployment Com23 pensation Act of 1970 (26 U.S.C. 3304 note). 


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1 SEC. 345. ASSISTANCE AND GUIDANCE IN IMPLEMENTING 

2 PROGRAMS. 

3 (a) IN GENERAL.—In order to assist States in estab4 lishing, qualifying, and implementing short-time com5 pensation programs (as defined in section 3306(v) of the 

6 Internal Revenue Code of 1986, as added by section 

7 341(a)), the Secretary of Labor (in this section referred 

8 to as the ‘‘Secretary’’) shall— 

9 (1) develop model legislative language which 

10 may be used by States in developing and enacting 

11 such programs and periodically review and revise 

12 such model legislative language; 

13 (2) provide technical assistance and guidance in 

14 developing, enacting, and implementing such pro15 grams; 

16 (3) establish reporting requirements for States, 

17 including reporting on— 

18 (A) the number of estimated averted lay19 offs; 

20 (B) the number of participating employers 

21 and workers; and 

22 (C) such other items as the Secretary of 

23 Labor determines are appropriate. 

24 (b) MODEL LANGUAGE AND GUIDANCE.—The model 

25 language and guidance developed under subsection (a) 

26 shall allow sufficient flexibility by States and participating 


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1 employers while ensuring accountability and program in2 tegrity. 

3 (c) CONSULTATION.—In developing the model legisla4 tive language and guidance under subsection (a), and in 

5 order to meet the requirements of subsection (b), the Sec6 retary shall consult with employers, labor organizations, 

7 State workforce agencies, and other program experts. 

8 SEC. 346. REPORTS. 

9 (a) REPORTS.— 

10 (1) IN GENERAL.—Not later than 4 years after 

11 the date of the enactment of this Act, the Secretary 

12 of Labor shall submit to Congress and to the Presi13 dent a report or reports on the implementation of 

14 the provisions of this Act. 

15 (2) REQUIREMENTS.—Any report under para16 graph (1) shall at a minimum include the following: 

17 (A) A description of best practices by 

18 States and employers in the administration, 

19 promotion, and use of short-time compensation 

20 programs (as defined in section 3306(v) of the 

21 Internal Revenue Code of 1986, as added by 

22 section 341(a)). 

23 (B) An analysis of the significant chal24 lenges to State enactment and implementation 

25 of short-time compensation programs. 


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1 (C) A survey of employers in States that 

2 have not enacted a short-time compensation 

3 program or entered into an agreement with the 

4 Secretary on a short-time compensation plan to 

5 determine the level of interest among such em6 ployers in participating in short-time compensa7 tion programs. 

8 (b) FUNDING.—There are appropriated, out of any 

9 moneys in the Treasury not otherwise appropriated, to the 

10 Secretary of Labor, $1,500,000 to carry out this section, 

11 to remain available without fiscal year limitation. 

12 Subtitle B—Long Term 

13 Unemployed Hiring Preferences 

14 SEC. 351. LONG TERM UNEMPLOYED WORKERS WORK OP15 PORTUNITY TAX CREDITS. 

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

17 the Internal Revenue Code is amended by inserting 

18 ‘‘$10,000 per year in the case of any individual who is 

19 a qualified long term unemployed individual by reason of 

20 subsection (d)(11), and’’ before ‘‘$12,000 per year’’. 

21 (b) LONG TERM UNEMPLOYEED INDIVIDUALS TAX

22 CREDITS.—Paragraph (d) of section 51 of the Internal 

23 Revenue Code is amended by— 

24 (1) inserting ‘‘(J) qualified long term unem25 ployed individual’’ at the end of paragraph (d)(1), 


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1 (2) inserting a new paragraph after paragraph 

2 (10) as follows: 

3 ‘‘(11) QUALIFIED LONG TERM UNEMPLOYED

4 INDIVIDUAL.— 

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

6 long term unemployed individual’ means any in7 dividual who was not a student for at least 6 

8 months during the 1-year period ending on the 

9 hiring date and is certified by the designated 

10 local agency as having aggregate periods of un11 employment during the 1-year period ending on 

12 the hiring date which equal or exceed 6 months. 

13 ‘‘(B) STUDENT.—For purposes of this sub14 section, a student is an individual enrolled at 

15 least half-time in a program that leads to a de16 gree, certificate, or other recognized educational 

17 credential for at least 6 months whether or not 

18 consecutive during the 1-year period ending on 

19 the hiring date.’’; and 

20 (3) renumbering current paragraphs (11) 

21 through (14) as paragraphs (12) through (15). 

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

23 the Internal Revenue Code is amended by adding a new 

24 paragraph 16 as follows: 


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1 ‘‘(16) Credit allowed for qualified long term un2 employed individuals. 

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

4 term unemployed individual under paragraph 

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

8 ‘‘(i) the individual is certified by the 

9 designated local agency as being in receipt 

10 of unemployment compensation under 

11 State or Federal law for not less than 6 

12 months during the 1-year period ending on 

13 the hiring date. 

14 ‘‘(B) REGULATORY AUTHORITY.—The Sec15 retary in his discretion may provide alternative 

16 methods for certification.’’. 

17 (d) CREDIT MADE AVAILABLE TO TAX-EXEMPT EM18 PLOYERS IN CERTAIN CIRCUMSTANCES.—Section 52(c) of 

19 the Internal Revenue Code is amended— 

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

21 of the section and replacing it with ‘‘Except as pro22 vided in this subsection, no’’; and 

23 (2) the following new paragraphs are inserted 

24 at the end of section 52(c)— 


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

2 employer, there shall be treated as a credit allowable 

3 under subpart C (and not allowable under subpart 

4 D) the lesser of— 

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

6 credit determined under this subpart with re7 spect to such employer that is related to the 

8 hiring of qualified long term unemployed indi9 viduals described in subsection (d)(11); or 

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

11 employer during the calendar year in which the 

12 taxable year begins. 

13 ‘‘(2) CREDIT AMOUNT.—In calculating tax-ex14 empt employers, the work opportunity credit shall be 

15 determined by substituting ‘26 percent’ for ‘40 per16 cent’ in section 51(a) and by substituting ‘16.25 

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

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

19 of this subtitle, the term ‘tax-exempt employer’ 

20 means an employer that is— 

21 ‘‘(A) an organization described in section 

22 501(c) and exempt from taxation under section 

23 501(a), or 


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1 ‘‘(B) a public higher education institution 

2 (as defined in section 101 of the Higher Edu3 cation Act of 1965). 

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

5 subsection: 

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

7 taxes’ means— 

8 ‘‘(i) amounts required to be withheld 

9 from the employees of the tax-exempt em10 ployer under section 3401(a), 

11 ‘‘(ii) amounts required to be withheld 

12 from such employees under section 3101, 

13 and 

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

15 the tax-exempt employer under section 

16 3111.’’ 

17 (e) TREATMENT OF POSSESSIONS.— 

18 (1) PAYMENTS TO POSSESSIONS.— 

19 (A) MIRROR CODE POSSESSIONS.—The 

20 Secretary of the Treasury shall pay to each pos21 session of the United States with a mirror code 

22 tax system amounts equal to the loss to that 

23 possession by reason of the application of this 

24 section (other than this subsection). Such 

25 amounts shall be determined by the Secretary 


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1 of the Treasury based on information provided 

2 by the government of the respective possession 

3 of the United States. 

4 (B) OTHER POSSESSIONS.—The Secretary 

5 of the Treasury shall pay to each possession of 

6 the United States, which does not have a mirror 

7 code tax system, amounts estimated by the Sec8 retary of the Treasury as being equal to the ag9 gregate credits that would have been provided 

10 by the possession by reason of the application 

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

12 mirror code tax system had been in effect in 

13 such possession. The preceding sentence shall 

14 not apply with respect to any possession of the 

15 United States unless such possession has a 

16 plan, which has been approved by the Secretary 

17 of the Treasury, under which such possession 

18 will promptly distribute such payments. 

19 (2) COORDINATION WITH CREDIT ALLOWED

20 AGAINST UNITED STATES INCOME TAXES.—No in21 crease in the credit determined under section 38(b) 

22 of the Internal Revenue Code of 1986 that is attrib23 utable to the credit provided by this section (other 

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

25 with respect to any person— 


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1 (A) to whom a credit is allowed against 

2 taxes imposed by the possession of the United 

3 States by reason of this section for such taxable 

4 year; or 

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

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

7 to such taxable year. 

8 (3) DEFINITIONS AND SPECIAL RULES.— 

9 (A) POSSESSION OF THE UNITED

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

11 the term ‘‘possession of the United States’’ in12 cludes American Samoa, the Commonwealth of 

13 the Northern Mariana Islands, the Common14 wealth of Puerto Rico, Guam, and the United 

15 States Virgin Islands. 

16 (B) MIRROR CODE TAX SYSTEM.—For pur17 poses of this subsection, the term ‘‘mirror code 

18 tax system’’ means, with respect to any posses19 sion of the United States, the income tax sys20 tem of such possession if the income tax liabil21 ity of the residents of such possession under 

22 such system is determined by reference to the 

23 income tax laws of the United States as if such 

24 possession were the United States. 


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1 (C) TREATMENT OF PAYMENTS.—For pur2 poses of section 1324(b)(2) of title 31, United 

3 States Code, rules similar to the rules of section 

4 1001(b)(3)(C) of the American Recovery and 

5 Reinvestment Tax Act of 2009 shall apply. 

6 (f) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to individuals who begin work for 

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

9 Subtitle C—Pathways Back to 

10 Work 

11 SEC. 361. SHORT TITLE. 

12 This subtitle may be cited as the ‘‘Pathways Back 

13 to Work Act of 2011’’. 

14 SEC. 362. ESTABLISHMENT OF PATHWAYS BACK TO WORK 

15 FUND. 

16 (a) ESTABLISHMENT.—There is established in the 

17 Treasury of the United States a fund which shall be 

18 known as the Pathways Back to Work Fund (hereafter 

19 in this Act referred to as ‘‘the Fund’’). 

20 (b) DEPOSITS INTO THE FUND.—Out of any 

21 amounts in the Treasury of the United States not other22 wise appropriated, there are appropriated $5,000,000,000 

23 for payment to the Fund to be used by the Secretary of 

24 Labor to carry out this Act. 


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1 SEC. 363. AVAILABILITY OF FUNDS. 

2 (a) IN GENERAL.—Of the amounts available to the 

3 Fund under section 362(b), the Secretary of Labor shall— 

4 (1) allot $2,000,000,000 in accordance with 

5 section 364 to provide subsidized employment to un6 employed, low-income adults; 

7 (2) allot $1,500,000,000 in accordance with 

8 section 365 to provide summer and year-round em9 ployment opportunities to low-income youth; and 

10 (3) award $1,500,000,000 in competitive grants 

11 in accordance with section 366 to local entities to 

12 carry out work-based training and other work-re13 lated and educational strategies and activities of 

14 demonstrated effectiveness to unemployed, low-in15 come adults and low-income youth to provide the 

16 skills and assistance needed to obtain employment. 

17 (b) RESERVATION.—The Secretary of Labor may re18 serve not more than 1 percent of amounts available to the 

19 Fund under each of paragraphs (1)–(3) of subsection (a) 

20 for the costs of technical assistance, evaluations and Fed21 eral administration of this Act. 

22 (c) PERIOD OF AVAILABILITY.—The amounts appro23 priated under this Act shall be available for obligation by 

24 the Secretary of Labor until December 31, 2012, and shall 

25 be available for expenditure by grantees and subgrantees 

26 until September 30, 2013. 


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1 SEC. 364. SUBSIDIZED EMPLOYMENT FOR UNEMPLOYED, 

2 LOW-INCOME ADULTS. 

3 (a) IN GENERAL.— 

4 (1) ALLOTMENTS.—From the funds available 

5 under section 363(a)(1), the Secretary of Labor 

6 shall make an allotment under subsection (b) to each 

7 State that has a State plan approved under sub8 section (c) and to each outlying area and Native 

9 American grantee under section 166 of the Work10 force Investment Act of 1998 that meets the re11 quirements of this section, for the purpose of pro12 viding subsidized employment opportunities to unem13 ployed, low-income adults. 

14 (2) GUIDANCE.—Not later than 30 days after 

15 the date of enactment of this Act, the Secretary of 

16 Labor, in coordination with the Secretary of Health 

17 and Human Services, shall issue guidance regarding 

18 the implementation of this section. Such guidance 

19 shall, consistent with this section, include procedures 

20 for the submission and approval of State and local 

21 plans and the allotment and allocation of funds, in22 cluding reallotment and reallocation of such funds, 

23 that promote the expeditious and effective implemen24 tation of the activities authorized under this section. 

25 (b) STATE ALLOTMENTS.— 


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1 (1) RESERVATIONS FOR OUTLYING AREAS AND

2 TRIBES.—Of the funds described subsection (a)(1), 

3 the Secretary shall reserve— 

4 (A) not more than one-quarter of one per5 cent to provide assistance to outlying areas to 

6 provide subsidized employment to low-income 

7 adults who are unemployed; and 

8 (B) 1.5 percent to provide assistance to 

9 grantees of the Native American programs 

10 under section 166 of the Workforce Investment 

11 Act of 1998 to provide subsidized employment 

12 to low-income adults who are unemployed. 

13 (2) STATES.—After determining the amounts to 

14 be reserved under paragraph (1), the Secretary of 

15 Labor shall allot the remainder of the amounts de16 scribed in subsection (a)(1) among the States as fol17 lows— 

18 (A) one-third shall be allotted on the basis 

19 of the relative number of unemployed individ20 uals in areas of substantial unemployment in 

21 each State, compared to the total number of 

22 unemployed individuals in areas of substantial 

23 unemployment in all States; 

24 (B) one-third shall be allotted on the basis 

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1 dividuals in each State, compared to the total 

2 excess number of unemployed individuals in all 

3 States; and 

4 (C) one-third shall be allotted on the basis 

5 of the relative number of disadvantaged adults 

6 and youth in each State, compared to the total 

7 number of disadvantaged adults and youth in 

8 all States. 

9 (3) DEFINITIONS.—For purposes of the for10 mula described in paragraph (2)— 

11 (A) AREA OF SUBSTANTIAL UNEMPLOY12 MENT.—The term ‘‘area of substantial unem13 ployment’’ means any contiguous area with a 

14 population of at least 10,000 and that has an 

15 average rate of unemployment of at least 6.5 

16 percent for the most recent 12 months, as de17 termined by the Secretary. 

18 (B) DISADVANTAGED ADULTS AND

19 YOUTH.—The term ‘‘disadvantaged adults and 

20 youth’’ means an individual who is age 16 and 

21 older (subject to section 132(b)(1)(B)(v)(I) of 

22 the Workforce Investment Act of 1998) who re23 ceived an income, or is a member of a family 

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1 lation to family size, does not exceed the higher 

2 of— 

3 (i) the poverty line; or 

4 (ii) 70 percent of the lower living 

5 standard income level. 

6 (C) EXCESS NUMBER.—The term ‘‘excess 

7 number’’ means, used with respect to the excess 

8 number of unemployed individuals within a 

9 State, the higher of— 

10 (i) the number that represents the 

11 number of unemployed individuals in ex12 cess of 4.5 percent of the civilian labor 

13 force in the State; or 

14 (ii) the number that represents the 

15 number of unemployed individuals in ex16 cess of 4.5 percent of the civilian labor 

17 force in areas of substantial unemployment 

18 in such State. 

19 (4) REALLOTMENT.—If the Governor of a State 

20 does not submit a State plan by the time specified 

21 in subsection (c), or a State does not receive ap22 proval of a State plan, the amount the State would 

23 have been eligible to receive pursuant to the formula 

24 under paragraph (2) shall be transferred within the 


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1 Fund and added to the amounts available for the 

2 competitive grants under section 363(a)(3). 

3 (c) STATE PLAN.— 

4 (1) IN GENERAL.—For a State to be eligible to 

5 receive an allotment of the funds under subsection 

6 (b), the Governor of the State shall submit to the 

7 Secretary of Labor a State plan in such form and 

8 containing such information as the Secretary may 

9 require. At a minimum, such plan shall include— 

10 (A) a description of the strategies and ac11 tivities to be carried out by the State, in coordi12 nation with employers in the State, to provide 

13 subsidized employment opportunities to unem14 ployed, low-income adults, including strategies 

15 relating to the level and duration of subsidies 

16 consistent with subsection (e)(2); 

17 (B) a description of the requirements the 

18 State will apply relating to the eligibility of un19 employed, low-income adults, consistent with 

20 section 368(6), for subsidized employment op21 portunities, which may include criteria to target 

22 assistance to particular categories of such 

23 adults, such as individuals with disabilities or 

24 individuals who have exhausted all rights to un25 employment compensation; 


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1 (C) a description of how the funds allotted 

2 to provide subsidized employment opportunities 

3 will be administered in the State and local 

4 areas, in accordance with subsection (d); 

5 (D) a description of the performance out6 comes to be achieved by the State through the 

7 activities carried out under this section and the 

8 processes the State will use to track perform9 ance, consistent with guidance provided by the 

10 Secretary of Labor regarding such outcomes 

11 and processes and with section 367(b); 

12 (E) a description of the coordination of ac13 tivities to be carried out with the funds pro14 vided under this section with activities under 

15 title I of the Workforce Investment Act of 

16 1998, the TANF program under part A of title 

17 IV of the Social Security Act, and other appro18 priate Federal and State programs that may as19 sist unemployed, low-income adults in obtaining 

20 and retaining employment; 

21 (F) a description of the timelines for im22 plementation of the activities described in sub23 paragraph (A), and the number of unemployed, 

24 low-income adults expected to be placed in sub25 sidized employment by quarter; 


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1 (G) assurances that the State will report 

2 such information as the Secretary of Labor may 

3 require relating to fiscal, performance and other 

4 matters that the Secretary determines is nec5 essary to effectively monitor the activities car6 ried out under this section; and 

7 (H) assurances that the State will ensure 

8 compliance with the labor standards and protec9 tions described in section 367(a) of this Act. 

10 (2) SUBMISSION AND APPROVAL OF STATE

11 PLAN.— 

12 (A) SUBMISSION WITH OTHER PLANS.— 

13 The State plan described in this subsection may 

14 be submitted in conjunction with the State plan 

15 modification or request for funds required 

16 under section 365, and may be submitted as a 

17 modification to a State plan that has been ap18 proved under section 112 of the Workforce In19 vestment Act of 1998. 

20 (B) SUBMISSION AND APPROVAL.— 

21 (i) SUBMISSION.—The Governor shall 

22 submit a plan to the Secretary of Labor 

23 not later than 75 days after the enactment 

24 of this Act and the Secretary of Labor 

25 shall make a determination regarding the 


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1 approval or disapproval of such plans not 

2 later than 45 days after the submission of 

3 such plan. If the plan is disapproved, the 

4 Secretary of Labor may provide a reason5 able period of time in which a disapproved 

6 plan may be amended and resubmitted for 

7 approval. 

8 (ii) APPROVAL.—The Secretary of 

9 Labor shall approve a State plan that the 

10 Secretary determines is consistent with re11 quirements of this section and reasonably 

12 appropriate and adequate to carry out the 

13 purposes of this section. If the plan is ap14 proved, the Secretary shall allot funds to 

15 States within 30 days after such approval. 

16 (3) MODIFICATIONS TO STATE PLAN.—The 

17 Governor may submit a modification to a State plan 

18 under this subsection consistent with the require19 ments of this section. 

20 (d) ADMINISTRATION WITHIN THE STATE.— 

21 (1) OPTION.—The State may administer the 

22 funds for activities under this section through— 

23 (A) the State and local entities responsible 

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1 gram under title I–B of the Workforce Invest2 ment Act of 1998; 

3 (B) the entities responsible for the admin4 istration of the TANF program under part A of 

5 title IV of the Social Security Act; or 

6 (C) a combination of the entities described 

7 in subparagraphs (A) and (B). 

8 (2) WITHIN-STATE ALLOCATIONS.— 

9 (A) ALLOCATION OF FUNDS.—The Gov10 ernor may reserve up to 5 percent of the allot11 ment under subsection (b)(2) for administration 

12 and technical assistance, and shall allocate the 

13 remainder, in accordance with the option elect14 ed under paragraph (1)— 

15 (i) among local workforce investment 

16 areas within the State in accordance with 

17 the factors identified in subsection (b)(2), 

18 except that for purposes of such allocation 

19 references to a State in such paragraph 

20 shall be deemed to be references to a local 

21 workforce investment area and references 

22 to all States shall be deemed to be ref23 erences to all local areas in the State in24 volved, of which not more than 10 percent 

25 of the funds allocated to a local workforce 


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1 investment area may be used for the costs 

2 of administration of this section; or 

3 (ii) through entities responsible for 

4 the administration of the TANF program 

5 under part A of title IV of the Social Secu6 rity Act in local areas in such manner as 

7 the State may determine appropriate. 

8 (B) LOCAL PLANS.— 

9 (i) IN GENERAL.—In the case where 

10 the responsibility for the administration of 

11 activities is to be carried out by the enti12 ties described under paragraph (1)(A), in 

13 order to receive an allocation under sub14 paragraph (A)(i), a local workforce invest15 ment board, in partnership with the chief 

16 elected official of the local workforce in17 vestment area involved, shall submit to the 

18 Governor a local plan for the use of such 

19 funds under this section not later than 30 

20 days after the submission of the State 

21 plan. Such local plan may be submitted as 

22 a modification to a local plan approved 

23 under section 118 of the Workforce Invest24 ment Act of 1998. 


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1 (ii) CONTENTS.—The local plan de2 scribed in clause (i) shall contain the ele3 ments described in subparagraphs (A)–(H) 

4 of subsection (c)(1), as applied to the local 

5 workforce investment area. 

6 (iii) APPROVAL.—The Governor shall 

7 approve or disapprove the local plan sub8 mitted under clause (i) within 30 days 

9 after submission, or if later, 30 days after 

10 the approval of the State plan. The Gov11 ernor shall approve the plan unless the 

12 Governor determines that the plan is in13 consistent with requirements of this section 

14 or is not reasonably appropriate and ade15 quate to carry out the purposes of this sec16 tion. If the Governor has not made a de17 termination within the period specified 

18 under the first sentence of this clause, the 

19 plan shall be considered approved. If the 

20 plan is disapproved, the Governor may pro21 vide a reasonable period of time in which 

22 a disapproved plan may be amended and 

23 resubmitted for approval. The Governor 

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1 vestment areas with approved plans within 

2 30 days after such approval. 

3 (C) REALLOCATION OF FUNDS TO LOCAL

4 AREAS.—If a local workforce investment board 

5 does not submit a local plan by the time speci6 fied in subparagraph (B) or the Governor does 

7 not approve a local plan, the amount the local 

8 workforce investment area would have been eli9 gible to receive pursuant to the formula under 

10 subparagraph (A)(i) shall be allocated to local 

11 workforce investment areas that receive ap12 proval of the local plan under subparagraph 

13 (B). Such reallocations shall be made in accord14 ance with the relative share of the allocations to 

15 such local workforce investment areas applying 

16 the formula factors described under subpara17 graph (A)(i). 

18 (e) USE OF FUNDS.— 

19 (1) IN GENERAL.—The funds under this section 

20 shall be used to provide subsidized employment for 

21 unemployed, low-income adults. The State and local 

22 entities described in subsection (d)(1) may use a va23 riety of strategies in recruiting employers and identi24 fying appropriate employment opportunities, with a 

25 priority to be provided to employment opportunities 


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1 likely to lead to unsubsidized employment in emerg2 ing or in-demand occupations in the local area. 

3 Funds under this section may be used to provide 

4 support services, such as transportation and child 

5 care, that are necessary to enable the participation 

6 of individuals in subsidized employment opportuni7 ties. 

8 (2) LEVEL OF SUBSIDY AND DURATION.—The 

9 States or local entities described in subsection (d)(1) 

10 may determine the percentage of the wages and 

11 costs of employing a participant for which an em12 ployer may receive a subsidy with the funds provided 

13 under this section, and the duration of such subsidy, 

14 in accordance with guidance issued by the Secretary. 

15 The State or local entities may establish criteria for 

16 determining such percentage or duration using ap17 propriate factors such as the size of the employer 

18 and types of employment. 

19 (f) COORDINATION OF FEDERAL ADMINISTRATION.— 

20 The Secretary of Labor shall administer this section in 

21 coordination with the Secretary of Health and Human 

22 Services to ensure the effective implementation of this sec23 tion. 


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1 SEC. 365. SUMMER EMPLOYMENT AND YEAR-ROUND EM2 PLOYMENT OPPORTUNITIES FOR LOW-IN3 COME YOUTH. 

4 (a) IN GENERAL.—From the funds available under 

5 section 363(a)(2), the Secretary of Labor shall make an 

6 allotment under subsection (c) to each State that has a 

7 State plan modification (or other form of request for funds 

8 specified in guidance under subsection (b)) approved 

9 under subsection (d) and to each outlying area and Native 

10 American grantee under section 166 of the Workforce In11 vestment Act of 1998 that meets the requirements of this 

12 section, for the purpose of providing summer employment 

13 and year-round employment opportunities to low-income 

14 youth. 

15 (b) GUIDANCE AND APPLICATION OF REQUIRE16 MENTS.— 

17 (1) GUIDANCE.—Not later than 20 days after 

18 the date of enactment of this Act, the Secretary of 

19 Labor shall issue guidance regarding the implemen20 tation of this section. Such guidance shall, consistent 

21 with this section, include procedures for the submis22 sion and approval of State plan modifications, or for 

23 forms of requests for funds by the State as may be 

24 identified in such guidance, local plan modifications, 

25 or other forms of requests for funds from local work26 force investment areas as may be identified in such 


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1 guidance, and the allotment and allocation of funds, 

2 including reallotment and reallocation of such funds, 

3 that promote the expeditious and effective implemen4 tation of the activities authorized under this section. 

5 (2) REQUIREMENTS.—Except as otherwise pro6 vided in the guidance described in paragraph (1) 

7 and in this section and other provisions of this Act, 

8 the funds provided for activities under this section 

9 shall be administered in accordance with subtitles B 

10 and E of title I of the Workforce Investment Act of 

11 1998 relating to youth activities. 

12 (c) STATE ALLOTMENTS.— 

13 (1) RESERVATIONS FOR OUTLYING AREAS AND

14 TRIBES.—Of the funds described subsection (a), the 

15 Secretary shall reserve— 

16 (A) not more than one-quarter of one per17 cent to provide assistance to outlying areas to 

18 provide summer and year-round employment 

19 opportunities to low-income youth; and 

20 (B) 1.5 percent to provide assistance to 

21 grantees of the Native American programs 

22 under section 166 of the Workforce Investment 

23 Act of 1998 to provide summer and year-round 

24 employment opportunities to low-income youth. 


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1 (2) STATES.—After determining the amounts to 

2 be reserved under paragraph (1), the Secretary of 

3 Labor shall allot the remainder of the amounts de4 scribed in subsection (a) among the States in ac5 cordance with the factors described in section 

6 364(b)(2) of this Act. 

7 (3) REALLOTMENT.—If the Governor of a State 

8 does not submit a State plan modification or other 

9 request for funds specified in guidance under sub10 section (b) by the time specified in subsection 

11 (d)(2)(B), or a State does not receive approval of 

12 such State plan modification or request, the amount 

13 the State would have been eligible to receive pursu14 ant to the formula under paragraph (2) shall be 

15 transferred within the Fund and added to the 

16 amounts available for the competitive grants under 

17 section 363(a)(3). 

18 (d) STATE PLAN MODIFICATION.— 

19 (1) IN GENERAL.—For a State to be eligible to 

20 receive an allotment of the funds under subsection 

21 (c), the Governor of the State shall submit to the 

22 Secretary of Labor a modification to a State plan 

23 approved under section 112 of the Workforce Invest24 ment Act of 1998, or other request for funds de25 scribed in guidance in subsection (b), in such form 


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1 and containing such information as the Secretary 

2 may require. At a minimum, such plan modification 

3 or request shall include— 

4 (A) a description of the strategies and ac5 tivities to be carried out to provide summer em6 ployment opportunities and year-round employ7 ment opportunities, including the linkages to 

8 educational activities, consistent with subsection 

9 (f); 

10 (B) a description of the requirements the 

11 States will apply relating to the eligibility of 

12 low-income youth, consistent with section 

13 368(4), for summer employment opportunities 

14 and year-round employment opportunities, 

15 which may include criteria to target assistance 

16 to particular categories of such low-income 

17 youth, such as youth with disabilities, con18 sistent with subsection (f); 

19 (C) a description of the performance out20 comes to be achieved by the State through the 

21 activities carried out under this section and the 

22 processes the State will use to track perform23 ance, consistent with guidance provided by the 

24 Secretary of Labor regarding such outcomes 

25 and processes and with section 367(b); 


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1 (D) a description of the timelines for im2 plementation of the activities described in sub3 paragraph (A), and the number of low-income 

4 youth expected to be placed in summer employ5 ment opportunities, and year-round employment 

6 opportunities, respectively, by quarter; 

7 (E) assurances that the State will report 

8 such information as the Secretary may require 

9 relating to fiscal, performance and other mat10 ters that the Secretary determines is necessary 

11 to effectively monitor the activities carried out 

12 under this section; and 

13 (F) assurances that the State will ensure 

14 compliance with the labor standards protections 

15 described in section 367(a). 

16 (2) SUBMISSION AND APPROVAL OF STATE

17 PLAN MODIFICATION OR REQUEST.— 

18 (A) SUBMISSION.—The Governor shall 

19 submit a modification of the State plan or other 

20 request for funds described in guidance in sub21 section (b) to the Secretary of Labor not later 

22 than 30 days after the issuance of such guid23 ance. The State plan modification or request for 

24 funds required under this subsection may be 


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1 submitted in conjunction with the State plan re2 quired under section 364. 

3 (B) APPROVAL.—The Secretary of Labor 

4 shall approve the plan or request submitted 

5 under subparagraph (A) within 30 days after 

6 submission, unless the Secretary determines 

7 that the plan or request is inconsistent with the 

8 requirements of this section. If the Secretary 

9 has not made a determination within 30 days, 

10 the plan or request shall be considered ap11 proved. If the plan or request is disapproved, 

12 the Secretary may provide a reasonable period 

13 of time in which a disapproved plan or request 

14 may be amended and resubmitted for approval. 

15 If the plan or request is approved, the Sec16 retary shall allot funds to States within 30 days 

17 after such approval. 

18 (3) MODIFICATIONS TO STATE PLAN OR RE19 QUEST.—The Governor may submit further modi20 fications to a State plan or request for funds identi21 fied under subsection (b) to carry out this section in 

22 accordance with the requirements of this section. 

23 (e) WITHIN-STATE ALLOCATION AND ADMINISTRA24 TION.— 


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1 (1) IN GENERAL.—Of the funds allotted to the 

2 State under subsection (c), the Governor— 

3 (A) may reserve up to 5 percent of the al4 lotment for administration and technical assist5 ance; and 

6 (B) shall allocate the remainder of the al7 lotment among local workforce investment areas 

8 within the State in accordance with the factors 

9 identified in section 364(b)(2), except that for 

10 purposes of such allocation references to a 

11 State in such paragraph shall be deemed to be 

12 references to a local workforce investment area 

13 and references to all States shall be deemed to 

14 be references to all local areas in the State in15 volved. Not more than 10 percent of the funds 

16 allocated to a local workforce investment area 

17 may be used for the costs of administration of 

18 this section. 

19 (2) LOCAL PLAN.— 

20 (A) SUBMISSION.—In order to receive an 

21 allocation under paragraph (1)(B), the local 

22 workforce investment board, in partnership with 

23 the chief elected official for the local workforce 

24 investment area involved, shall submit to the 

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1 proved under section 118 of the Workforce In2 vestment Act of 1998, or other form of request 

3 for funds as may be identified in the guidance 

4 issued under subsection (b), not later than 30 

5 days after the submission by the State of the 

6 modification to the State plan or other request 

7 for funds identified in subsection (b), describing 

8 the strategies and activities to be carried out 

9 under this section. 

10 (B) APPROVAL.—The Governor shall ap11 prove the local plan submitted under subpara12 graph (A) within 30 days after submission, un13 less the Governor determines that the plan is 

14 inconsistent with requirements of this section. 

15 If the Governor has not made a determination 

16 within 30 days, the plan shall be considered ap17 proved. If the plan is disapproved, the Governor 

18 may provide a reasonable period of time in 

19 which a disapproved plan may be amended and 

20 resubmitted for approval. The Governor shall 

21 allocate funds to local workforce investment 

22 areas with approved plans within 30 days after 

23 approval. 

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1 fication (or other request for funds identified in 

2 guidance under subsection (b)) by the time specified 

3 in paragraph (2), or does not receive approval of a 

4 local plan, the amount the local workforce invest5 ment area would have been eligible to receive pursu6 ant to the formula under paragraph (1)(B) shall be 

7 allocated to local workforce investment areas that re8 ceive approval of the local plan modification or re9 quest for funds under paragraph (2). Such realloca10 tions shall be made in accordance with the relative 

11 share of the allocations to such local workforce in12 vestment areas applying the formula factors de13 scribed under paragraph (1)(B). 

14 (f) USE OF FUNDS.— 

15 (1) IN GENERAL.—The funds provided under 

16 this section shall be used— 

17 (A) to provide summer employment oppor18 tunities for low-income youth, ages 16 through 

19 24, with direct linkages to academic and occu20 pational learning, and may include the provision 

21 of supportive services, such as transportation or 

22 child care, necessary to enable such youth to 

23 participate; and 

24 (B) to provide year round employment op25 portunities, which may be combined with other 


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1 activities authorized under section 129 of the 

2 Workforce Investment Act of 1998,to low-in3 come youth, ages 16 through 24, with a priority 

4 to out-of school youth who are— 

5 (i) high school dropouts; or 

6 (ii) recipients of a secondary school 

7 diploma or its equivalent but who are basic 

8 skills deficient unemployed or under9 employed. 

10 (2) PROGRAM PRIORITIES.—In administering 

11 the funds under this section, the local board and 

12 local chief elected officials shall give a priority to— 

13 (A) identifying employment opportunities 

14 that are— 

15 (i) in emerging or in-demand occupa16 tions in the local workforce investment 

17 area; or 

18 (ii) in the public or nonprofit sector 

19 that meet community needs; and 

20 (B) linking year-round program partici21 pants to training and educational activities that 

22 will provide such participants an industry-recog23 nized certificate or credential. 

24 (3) PERFORMANCE ACCOUNTABILITY.—For ac25 tivities funded under this section, in lieu of the reVerDate Mar 15 2010 22:52 Sep 27, 2011 Jkt 099200 PO 00000 Frm 00331 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 quirements described in section 136 of the Work2 force Investment Act of 1998, State and local work3 force investment areas shall provide such reports as 

4 the Secretary of Labor may require regarding the 

5 performance outcomes described in section 

6 367(a)(5). 

7 SEC. 366. WORK-BASED EMPLOYMENT STRATEGIES OF 

8 DEMONSTRATED EFFECTIVENESS. 

9 (a) IN GENERAL.—From the funds available under 

10 section 363(a)(3), the Secretary of Labor shall award 

11 grants on a competitive basis to eligible entities to carry 

12 out work-based strategies of demonstrated effectiveness. 

13 (b) USE OF FUNDS.—The grants awarded under this 

14 section shall be used to support strategies and activities 

15 of demonstrated effectiveness that are designed to provide 

16 unemployed, low-income adults or low-income youth with 

17 the skills that will lead to employment as part of or upon 

18 completion of participation in such activities. Such strate19 gies and activities may include— 

20 (1) on-the-job training, registered apprentice21 ship programs, or other programs that combine work 

22 with skills development; 

23 (2) sector-based training programs that have 

24 been designed to meet the specific requirements of 

25 an employer or group of employers in that sector 


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1 and where employers are committed to hiring indi2 viduals upon successful completion of the training; 

3 (3) training that supports an industry sector or 

4 an employer-based or labor-management committee 

5 industry partnership which includes a significant 

6 work-experience component; 

7 (4) acquisition of industry-recognized creden8 tials in a field identified by the State or local work9 force investment area as a growth sector or demand 

10 industry in which there are likely to be significant 

11 job opportunities in the short-term; 

12 (5) connections to immediate work opportuni13 ties, including subsidized employment opportunities, 

14 or summer employment opportunities for youth, that 

15 includes concurrent skills training and other sup16 ports; 

17 (6) career academies that provide students with 

18 the academic preparation and training, including 

19 paid internships and concurrent enrollment in com20 munity colleges or other postsecondary institutions, 

21 needed to pursue a career pathway that leads to 

22 postsecondary credentials and high-demand jobs; 

23 and 

24 (7) adult basic education and integrated basic 

25 education and training models for low-skilled adults, 


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1 hosted at community colleges or at other sites, to 

2 prepare individuals for jobs that are in demand in 

3 a local area. 

4 (c) ELIGIBLE ENTITY.—An eligible entity shall in5 clude a local chief elected official, in collaboration with the 

6 local workforce investment board for the local workforce 

7 investment area involved (which may include a partnership 

8 with of such officials and boards in the region and in the 

9 State), or an entity eligible to apply for an Indian and 

10 Native American grant under section 166 of the Work11 force Investment Act of 1998, and may include, in part12 nership with such officials, boards, and entities, the fol13 lowing— 

14 (1) employers or employer associations; 

15 (2) adult education providers and postsecondary 

16 educational institutions, including community col17 leges; 

18 (3) community-based organizations; 

19 (4) joint labor-management committees; 

20 (5) work-related intermediaries; or 

21 (6) other appropriate organizations. 

22 (d) APPLICATION.—An eligible entity seeking to re23 ceive a grant under this section shall submit to the Sec24 retary of Labor an application at such time, in such manVerDate Mar 15 2010 22:52 Sep 27, 2011 Jkt 099200 PO 00000 Frm 00334 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 ner, and containing such information as the Secretary may 

2 require. At a minimum, the application shall— 

3 (1) describe the strategies and activities of dem4 onstrated effectiveness that the eligible entities will 

5 carry out to provide unemployed, low-income adults 

6 and low-income youth with the skills that will lead 

7 to employment upon completion of participation in 

8 such activities; 

9 (2) describe the requirements that will apply re10 lating to the eligibility of unemployed, low-income 

11 adults or low-income youth, consistent with para12 graphs (4) and (6) of section 368, for activities car13 ried out under this section, which may include cri14 teria to target assistance to particular categories of 

15 such adults and youth, such as individuals with dis16 abilities or individuals who have exhausted all rights 

17 to unemployment compensation; 

18 (3) describe how the strategies and activities 

19 address the needs of the target populations identi20 fied in paragraph (2) and the needs of employers in 

21 the local area; 

22 (4) describe the expected outcomes to be 

23 achieved by implementing the strategies and activi24 ties; 


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1 (5) provide evidence that the funds provided 

2 may be expended expeditiously and efficiently to im3 plement the strategies and activities; 

4 (6) describe how the strategies and activities 

5 will be coordinated with other Federal, State and 

6 local programs providing employment, education and 

7 supportive activities; 

8 (7) provide evidence of employer commitment to 

9 participate in the activities funded under this sec10 tion, including identification of anticipated occupa11 tional and skill needs; 

12 (8) provide assurances that the grant recipient 

13 will report such information as the Secretary may 

14 require relating to fiscal, performance and other 

15 matters that the Secretary determines is necessary 

16 to effectively monitor the activities carried out under 

17 this section; and 

18 (9) provide assurances that the use of the funds 

19 provided under this section will comply with the 

20 labor standards and protections described section 

21 367(a). 

22 (e) PRIORITY IN AWARDS.—In awarding grants 

23 under this section, the Secretary of Labor shall give a pri24 ority to applications submitted by eligible entities from 

25 areas of high poverty and high unemployment, as defined 


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1 by the Secretary, such as Public Use Microdata Areas 

2 (PUMAs) as designated by the Census Bureau. 

3 (f) COORDINATION OF FEDERAL ADMINISTRATION.— 

4 The Secretary of Labor shall administer this section in 

5 coordination with the Secretary of Education, Secretary 

6 of Health and Human Services, and other appropriate 

7 agency heads, to ensure the effective implementation of 

8 this section. 

9 SEC. 367. GENERAL REQUIREMENTS. 

10 (a) LABOR STANDARDS AND PROTECTIONS.—Activi11 ties provided with funds under this Act shall be subject 

12 to the requirements and restrictions, including the labor 

13 standards, described in section 181 of the Workforce In14 vestment Act of 1998 and the nondiscrimination provi15 sions of section 188 of such Act, in addition to other appli16 cable Federal laws. 

17 (b) REPORTING.—The Secretary may require the re18 porting of information relating to fiscal, performance and 

19 other matters that the Secretary determines is necessary 

20 to effectively monitor the activities carried out with funds 

21 provided under this Act. At a minimum, grantees and sub22 grantees shall provide information relating to— 

23 (1) the number individuals participating in ac24 tivities with funds provided under this Act and the 


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1 number of such individuals who have completed such 

2 participation; 

3 (2) the expenditures of funds provided under 

4 the Act; 

5 (3) the number of jobs created pursuant to the 

6 activities carried out under this Act; 

7 (4) the demographic characteristics of individ8 uals participating in activities under this Act; 

9 (5) the performance outcomes of individuals 

10 participating in activities under this Act, including— 

11 (A) for adults participating in activities 

12 funded under section 364 of this Act— 

13 (i) entry in unsubsidized employment, 

14 (ii) retention in unsubsidized employ15 ment, and 

16 (iii) earnings in unsubsidized employ17 ment; 

18 (B) for low-income youth participating in 

19 summer employment activities under sections 

20 365 and 366— 

21 (i) work readiness skill attainment 

22 using an employer validated checklist; and 

23 (ii) placement in or return to sec24 ondary or postsecondary education or 


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1 training, or entry into unsubsidized em2 ployment; 

3 (C) for low-income youth participating in 

4 year-round employment activities under section 

5 365 or in activities under section 366— 

6 (i) placement in or return to post-sec7 ondary education; 

8 (ii) attainment of high school diploma 

9 or its equivalent; 

10 (iii) attainment of an industry-recog11 nized credential; and 

12 (iv) entry into unsubsidized employ13 ment, retention, and earnings as described 

14 in subparagraph (A); and 

15 (D) for unemployed, low-income adults 

16 participating in activities under section 366— 

17 (i) entry into unsubsidized employ18 ment, retention, and earnings as described 

19 in subparagraph (A); and 

20 (ii) the attainment of industry-recog21 nized credentials. 

22 (c) ACTIVITIES REQUIRED TO BE ADDITIONAL.— 

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1 wise be available in the State or local area in the absence 

2 of such funds. 

3 (d) ADDITIONAL REQUIREMENTS.—The Secretary of 

4 Labor may establish such additional requirements as the 

5 Secretary determines may be necessary to ensure fiscal in6 tegrity, effective monitoring, and the appropriate and 

7 prompt implementation of the activities under this Act. 

8 (e) REPORT OF INFORMATION AND EVALUATIONS TO

9 CONGRESS AND THE PUBLIC.—The Secretary of Labor 

10 shall provide to the appropriate Committees of the Con11 gress and make available to the public the information re12 ported pursuant to subsection (b) and the evaluations of 

13 activities carried out pursuant to the funds reserved under 

14 section 363(b). 

15 SEC. 368. DEFINITIONS. 

16 In this Act: 

17 (1) LOCAL CHIEF ELECTED OFFICIAL.—The 

18 term ‘‘local chief elected official’’ means the chief 

19 elected executive officer of a unit of local govern20 ment in a local workforce investment area or in the 

21 case where more than one unit of general govern22 ment, the individuals designated under an agreement 

23 described in section 117(c)(1)(B) of the Workforce 

24 Investment Act of 1998. 


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1 (2) LOCAL WORKFORCE INVESTMENT AREA.— 

2 The term ‘‘local workforce investment area’’ means 

3 such area designated under section 116 of the Work4 force Investment Act of 1998. 

5 (3) LOCAL WORKFORCE INVESTMENT BOARD.— 

6 The term ‘‘local workforce investment board’’ means 

7 such board established under section 117 of the 

8 Workforce Investment Act of 1998. 

9 (4) LOW-INCOME YOUTH.—The term ‘‘low-in10 come youth’’ means an individual who— 

11 (A) is aged 16 through 24; 

12 (B) meets the definition of a low-income 

13 individual provided in section 101(25) of the 

14 Workforce Investment Act of 1998 , except that 

15 States, local workforce investment areas under 

16 section 365 and eligible entities under section 

17 366(c), subject to approval in the applicable 

18 State plans, local plans, and applications for 

19 funds, may increase the income level specified 

20 in subparagraph (B)(i) of such section to an 

21 amount not in excess of 200 percent of the pov22 erty line for purposes of determining eligibility 

23 for participation in activities under sections 365 

24 and 366 of this Act; and 


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1 (C) is in one or more of the categories 

2 specified in section 101(13)(C) of the Work3 force Investment Act of 1998. 

4 (5) OUTLYING AREA.—The term ‘‘outlying 

5 area’’ means the United States Virgin Islands, 

6 Guam, American Samoa, the Commonwealth of the 

7 Northern Mariana Islands, and the Republic of 

8 Palau. 

9 (6) UNEMPLOYED, LOW-INCOME ADULT.—The 

10 term ‘‘unemployed, low-income adult’’ means an in11 dividual who— 

12 (A) is age 18 or older; 

13 (B) is without employment and is seeking 

14 assistance under this Act to obtain employment; 

15 and 

16 (C) meets the definition of a ‘‘low-income 

17 individual’’ under section 101(25) of the Work18 force Investment Act of 1998, except that for 

19 that States, local entities described in section 

20 364(d)(1) and eligible entities under section 

21 366(c), subject to approval in the applicable 

22 State plans, local plans, and applications for 

23 funds, may increase the income level specified 

24 in subparagraph (B)(i) of such section to an 

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1 erty line for purposes of determining eligibility 

2 for participation in activities under sections 364 

3 and 366 of this Act. 

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

5 the several States of the United States, the District 

6 of Columbia, and Puerto Rico. 

7 Subtitle D—Prohibition of Dis8 crimination in Employment on 

9 the Basis of an Individual’s Sta10 tus as Unemployed 

11 SEC. 371. SHORT TITLE. 

12 This subtitle may be cited as the ‘‘Fair Employment 

13 Opportunity Act of 2011’’. 

14 SEC. 372. FINDINGS AND PURPOSE. 

15 (a) FINDINGS.—Congress finds that denial of em16 ployment opportunities to individuals because of their sta17 tus as unemployed is discriminatory and burdens com18 merce by— 

19 (1) reducing personal consumption and under20 mining economic stability and growth; 

21 (2) squandering human capital essential to the 

22 Nation’s economic vibrancy and growth; 

23 (3) increasing demands for Federal and State 

24 unemployment insurance benefits, reducing trust 

25 fund assets, and leading to higher payroll taxes for 


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1 employers, cuts in benefits for jobless workers, or 

2 both; 

3 (4) imposing additional burdens on publicly 

4 funded health and welfare programs; and 

5 (5) depressing income, property, and other tax 

6 revenues that the Federal Government, States, and 

7 localities rely on to support operations and institu8 tions essential to commerce. 

9 (b) PURPOSES.—The purposes of this Act are— 

10 (1) to prohibit employers and employment agen11 cies from disqualifying an individual from employ12 ment opportunities because of that individual’s sta13 tus as unemployed; 

14 (2) to prohibit employers and employment agen15 cies from publishing or posting any advertisement or 

16 announcement for an employment opportunity that 

17 indicates that an individual’s status as unemployed 

18 disqualifies that individual for the opportunity; and 

19 (3) to eliminate the burdens imposed on com20 merce due to the exclusion of such individuals from 

21 employment. 

22 SEC. 373. DEFINITIONS. 

23 As used in this Act— 

24 (1) the term ‘‘affected individual’’ means any 

25 person who was subject to an unlawful employment 


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1 practice solely because of that individual’s status as 

2 unemployed; 

3 (2) the term ‘‘Commission’’ means the Equal 

4 Employment Opportunity Commission; 

5 (3) the term ‘‘employee’’ means— 

6 (A) an employee as defined in section 

7 701(f) of the Civil Rights Act of 1964 (42 

8 U.S.C. 2000e(f)); 

9 (B) a State employee to which section 

10 302(a)(1) of the Government Employee Rights 

11 Act of 1991 (42 U.S.C. 2000e-16b(a)(1)) ap12 plies; 

13 (C) a covered employee, as defined in sec14 tion 101 of the Congressional Accountability 

15 Act of 1995 (2 U.S.C. 1301) or section 411(c) 

16 of title 3, United States Code; or 

17 (D) an employee or applicant to which sec18 tion 717(a) of the Civil Rights Act of 1964 (42 

19 U.S.C. 2000e-16(a)) applies; 

20 (4) the term ‘‘employer’’ means— 

21 (A) a person engaged in an industry affect22 ing commerce (as defined in section 701(h) of 

23 the Civil Rights Act of 1964 (42 U.S.C. 

24 2000e(h)) who has 15 or more employees for 

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1 endar weeks in the current or preceding cal2 endar year, and any agent of such a person, but 

3 does not include a bona fide private member4 ship club that is exempt from taxation under 

5 section 501(c) of the Internal Revenue Code of 

6 1986; 

7 (B) an employing authority to which sec8 tion 302(a)(1) of the Government Employee 

9 Rights Act of 1991 applies; 

10 (C) an employing office, as defined in sec11 tion 101 of the Congressional Accountability 

12 Act of 1995 or section 411(c) of title 3, United 

13 States Code; or 

14 (D) an entity to which section 717(a) of 

15 the Civil Rights Act of 1964 (42 U.S.C. 2000e– 

16 16(a)) applies; 

17 (5) the term ‘‘employment agency’’ means any 

18 person regularly undertaking with or without com19 pensation to procure employees for an employer or 

20 to procure for individuals opportunities to work as 

21 employees for an employer and includes an agent of 

22 such a person, and any person who maintains an 

23 Internet website or print medium that publishes ad24 vertisements or announcements of openings in jobs 

25 for employees; 


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1 (6) the term ‘‘person’’ has the meaning given 

2 the term in section 701(a) of the Civil Rights Act 

3 of 1964 (42 U.S.C. 2000e(a)); 

4 (7) the term ‘‘status as unemployed’’, used with 

5 respect to an individual, means that the individual, 

6 at the time of application for employment or at the 

7 time of action alleged to violate this Act, does not 

8 have a job, is available for work and is searching for 

9 work. 

10 SEC. 374. PROHIBITED ACTS. 

11 (a) EMPLOYERS.—It shall be an unlawful employ12 ment practice for an employer to— 

13 (1) publish in print, on the Internet, or in any 

14 other medium, an advertisement or announcement 

15 for an employee for any job that includes— 

16 (A) any provision stating or indicating that 

17 an individual’s status as unemployed disquali18 fies the individual for any employment oppor19 tunity; or 

20 (B) any provision stating or indicating that 

21 an employer will not consider or hire an indi22 vidual for any employment opportunity based 

23 on that individual’s status as unemployed; or 


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1 (2) fail or refuse to consider for employment, or 

2 fail or refuse to hire, an individual as an employee 

3 because of the individual’s status as unemployed; or 

4 (3) direct or request that an employment agen5 cy take an individual’s status as unemployed into ac6 count to disqualify an applicant for consideration, 

7 screening, or referral for employment as an em8 ployee. 

9 (b) EMPLOYMENT AGENCIES.—It shall be an unlaw10 ful employment practice for an employment agency to— 

11 (1) publish, in print or on the Internet or in 

12 any other medium, an advertisement or announce13 ment for any vacancy in a job, as an employee, that 

14 includes— 

15 (A) any provision stating or indicating that 

16 an individual’s status as unemployed disquali17 fies the individual for any employment oppor18 tunity; or 

19 (B) any provision stating or indicating that 

20 the employment agency or an employer will not 

21 consider or hire an individual for any employ22 ment opportunity based on that individual’s sta23 tus as unemployed; 

24 (2) screen, fail or refuse to consider, or fail or 

25 refuse to refer an individual for employment as an 


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1 employee because of the individual’s status as unem2 ployed; or 

3 (3) limit, segregate, or classify any individual in 

4 any manner that would limit or tend to limit the in5 dividual’s access to information about jobs, or con6 sideration, screening, or referral for jobs, as employ7 ees, solely because of an individual’s status as unem8 ployed. 

9 (c) INTERFERENCE WITH RIGHTS, PROCEEDINGS OR

10 INQUIRIES.—It shall be unlawful for any employer or em11 ployment agency to— 

12 (1) interfere with, restrain, or deny the exercise 

13 of or the attempt to exercise, any right provided 

14 under this Act; or 

15 (2) fail or refuse to hire, to discharge, or in any 

16 other manner to discriminate against any individual, 

17 as an employee, because such individual— 

18 (A) opposed any practice made unlawful by 

19 this Act; 

20 (B) has asserted any right, filed any 

21 charge, or has instituted or caused to be insti22 tuted any proceeding, under or related to this 

23 Act; 

24 (C) has given, or is about to give, any in25 formation in connection with any inquiry or 


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1 proceeding relating to any right provided under 

2 this Act; or 

3 (D) has testified, or is about to testify, in 

4 any inquiry or proceeding relating to any right 

5 provided under this Act. 

6 (d) CONSTRUCTION.—Nothing in this Act is intended 

7 to preclude an employer or employment agency from con8 sidering an individual’s employment history, or from ex9 amining the reasons underlying an individual’s status as 

10 unemployed, in assessing an individual’s ability to perform 

11 a job or in otherwise making employment decisions about 

12 that individual. Such consideration or examination may in13 clude an assessment of whether an individual’s employ14 ment in a similar or related job for a period of time rea15 sonably proximate to the consideration of such individual 

16 for employment is job-related or consistent with business 

17 necessity. 

18 SEC. 375. ENFORCEMENT. 

19 (a) ENFORCEMENT POWERS.—With respect to the 

20 administration and enforcement of this Act— 

21 (1) the Commission shall have the same powers 

22 as the Commission has to administer and enforce— 

23 (A) title VII of the Civil Rights Act of 

24 1964 (42 U.S.C. 2000e et seq.); or 


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1 (B) sections 302 and 304 of the Govern2 ment Employee Rights Act of 1991 (42 U.S.C. 

3 2000e–16b and 2000e–16c), in the case of an 

4 affected individual who would be covered by 

5 such title, or by section 302(a)(1) of the Gov6 ernment Employee Rights Act of 1991 (42 

7 U.S.C. 2000e–16b(a)(1)), respectively; 

8 (2) the Librarian of Congress shall have the 

9 same powers as the Librarian of Congress has to ad10 minister and enforce title VII of the Civil Rights Act 

11 of 1964 (42 U.S.C. 2000e et seq.) in the case of an 

12 affected individual who would be covered by such 

13 title; 

14 (3) the Board (as defined in section 101 of the 

15 Congressional Accountability Act of 1995 (2 U.S.C. 

16 1301)) shall have the same powers as the Board has 

17 to administer and enforce the Congressional Ac18 countability Act of 1995 (2 U.S.C. 1301 et seq.) in 

19 the case of an affected individual who would be cov20 ered by section 201(a)(1) of such Act (2 U.S.C. 

21 1311(a)(1)); 

22 (4) the Attorney General shall have the same 

23 powers as the Attorney General has to administer 

24 and enforce— 


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1 (A) title VII of the Civil Rights Act of 

2 1964 (42 U.S.C. 2000e et seq.); or 

3 (B) sections 302 and 304 of the Govern4 ment Employee Rights Act of 1991 (42 U.S.C. 

5 2000e–16b and 2000e–16c); in the case of an 

6 affected individual who would be covered by 

7 such title, or of section 302(a)(1) of the Gov8 ernment Employee Rights Act of 1991 (42 

9 U.S.C. 2000e–16b(a)(1)), respectively; 

10 (5) the President, the Commission, and the 

11 Merit Systems Protection Board shall have the same 

12 powers as the President, the Commission, and the 

13 Board, respectively, have to administer and enforce 

14 chapter 5 of title 3, United States Code, in the case 

15 of an affected individual who would be covered by 

16 section 411 of such title; and 

17 (6) a court of the United States shall have the 

18 same jurisdiction and powers as the court has to en19 force— 

20 (A) title VII of the Civil Rights Act of 

21 1964 (42 U.S.C. 2000e et seq.) in the case of 

22 a claim alleged by such individual for a viola23 tion of such title; 

24 (B) sections 302 and 304 of the Govern25 ment Employee Rights Act of 1991 (42 U.S.C. 


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1 2000e–16b and 2000e–16c) in the case of a 

2 claim alleged by such individual for a violation 

3 of section 302(a)(1) of such Act (42 U.S.C. 

4 2000e–16b(a)(1)); 

5 (C) the Congressional Accountability Act 

6 of 1995 (2 U.S.C. 1301 et seq.) in the case of 

7 a claim alleged by such individual for a viola8 tion of section 201(a)(1) of such Act (2 U.S.C. 

9 1311(a)(1)); and 

10 (D) chapter 5 of title 3, United States 

11 Code, in the case of a claim alleged by such in12 dividual for a violation of section 411 of such 

13 title. 

14 (b) PROCEDURES.—The procedures applicable to a 

15 claim alleged by an individual for a violation of this Act 

16 are— 

17 (1) the procedures applicable for a violation of 

18 title VII of the Civil Rights Act of 1964 (42 U.S.C. 

19 2000e et seq.) in the case of a claim alleged by such 

20 individual for a violation of such title; 

21 (2) the procedures applicable for a violation of 

22 section 302(a)(1) of the Government Employee 

23 Rights Act of 1991 (42 U.S.C. 2000e–16b(a)(1)) in 

24 the case of a claim alleged by such individual for a 

25 violation of such section; 


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1 (3) the procedures applicable for a violation of 

2 section 201(a)(1) of the Congressional Account3 ability Act of 1995 (2 U.S.C. 1311(a)(1)) in the 

4 case of a claim alleged by such individual for a viola5 tion of such section; and 

6 (4) the procedures applicable for a violation of 

7 section 411 of title 3, United States Code, in the 

8 case of a claim alleged by such individual for a viola9 tion of such section. 

10 (c) REMEDIES.— 

11 (1) In any claim alleging a violation of Section 

12 374(a)(1) or 374(b)(1) of this Act, an individual, or 

13 any person acting on behalf of the individual as set 

14 forth in Section 375(a) of this Act, may be awarded, 

15 as appropriate: 

16 (A) an order enjoining the respondent from 

17 engaging in the unlawful employment practice; 

18 (B) reimbursement of costs expended as a 

19 result of the unlawful employment practice; 

20 (C) an amount in liquidated damages not 

21 to exceed $1,000 for each day of the violation; 

22 and 

23 (D) reasonable attorney’s fees (including 

24 expert fees) and costs attributable to the pur25 suit of a claim under this Act, except that no 


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1 person identified in Section 103(a) of this Act 

2 shall be eligible to receive attorney’s fees. 

3 (2) In any claim alleging a violation of any 

4 other subsection of this Act, an individual, or any 

5 person acting on behalf of the individual as set forth 

6 in Section 375(a) of this Act, may be awarded, as 

7 appropriate, the remedies available for a violation of 

8 title VII of the Civil Rights Act of 1964 (42 U.S.C. 

9 2000e et seq.), section 302(a)(1) of the Government 

10 Employee Rights Act of 1991 (42 U.S.C. 2000e– 

11 16b(a)(1)), section 201(a)(1) of the Congressional 

12 Accountability Act of 1995 (2 U.S.C. 1311(a)(1)), 

13 and section 411 of title 3, United States Code, ex14 cept that in a case in which wages, salary, employ15 ment benefits, or other compensation have not been 

16 denied or lost to the individual, damages may be 

17 awarded in an amount not to exceed $5,000. 

18 SEC. 376. FEDERAL AND STATE IMMUNITY. 

19 (a) ABROGATION OF STATE IMMUNITY.—A State 

20 shall not be immune under the 11th Amendment to the 

21 Constitution from a suit brought in a Federal court of 

22 competent jurisdiction for a violation of this Act. 

23 (b) WAIVER OF STATE IMMUNITY.— 

24 (1) IN GENERAL.— 


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1 (A) WAIVER.—A State’s receipt or use of 

2 Federal financial assistance for any program or 

3 activity of a State shall constitute a waiver of 

4 sovereign immunity, under the 11th Amend5 ment to the Constitution or otherwise, to a suit 

6 brought by an employee or applicant for em7 ployment of that program or activity under this 

8 Act for a remedy authorized under Section 

9 375(c) of this Act. 

10 (B) DEFINITION.—In this paragraph, the 

11 term ‘‘program or activity’’ has the meaning 

12 given the term in section 606 of the Civil 

13 Rights Act of 1964 (42 U.S.C. 2000d–4a). 

14 (2) EFFECTIVE DATE.—With respect to a par15 ticular program or activity, paragraph (1) applies to 

16 conduct occurring on or after the day, after the date 

17 of enactment of this Act, on which a State first re18 ceives or uses Federal financial assistance for that 

19 program or activity. 

20 (c) REMEDIES AGAINST STATE OFFICIALS.—An offi21 cial of a State may be sued in the official capacity of the 

22 official by any employee or applicant for employment who 

23 has complied with the applicable procedures of this Act, 

24 for relief that is authorized under this Act. 


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1 (d) REMEDIES AGAINST THE UNITED STATES AND

2 THE STATES.—Notwithstanding any other provision of 

3 this Act, in an action or administrative proceeding against 

4 the United States or a State for a violation of this Act, 

5 remedies (including remedies at law and in equity) are 

6 available for the violation to the same extent as such rem7 edies would be available against a non-governmental enti8 ty. 

9 SEC. 377. RELATIONSHIP TO OTHER LAWS. 

10 This Act shall not invalidate or limit the rights, rem11 edies, or procedures available to an individual claiming 

12 discrimination prohibited under any other Federal law or 

13 regulation or any law or regulation of a State or political 

14 subdivision of a State. 

15 SEC. 378. SEVERABILITY. 

16 If any provision of this Act, or the application of the 

17 provision to any person or circumstance, is held to be in18 valid, the remainder of this Act and the application of the 

19 provision to any other person or circumstances shall not 

20 be affected by the invalidity. 

21 SEC. 379. EFFECTIVE DATE. 

22 This Act shall take effect on the date of enactment 

23 of this Act and shall not apply to conduct occurring before 

24 the effective date. 


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1 TITLE IV—OFFSETS 

2 Subtitle A—28 Percent Limitation 

3 on Certain Deductions and Ex4 clusions 

5 SEC. 401. 28 PERCENT LIMITATION ON CERTAIN DEDUC6 TIONS AND EXCLUSIONS. 

7 (a) IN GENERAL.—Part I of subchapter B of chapter 

8 1 of the Internal Revenue Code of 1986 is amended by 

9 adding at the end the following new section: 

10 ‘‘SEC. 69. LIMITATION ON CERTAIN DEDUCTIONS AND EX11 CLUSIONS. 

12 ‘‘(a) IN GENERAL.—In the case of an individual for 

13 any taxable year, if— 

14 ‘‘(1) the taxpayer’s adjusted gross income is 

15 above— 

16 ‘‘(A) $250,000 in the case of a joint return 

17 within the meaning of section 6013, 

18 ‘‘(B) $225,000 in the case of a head of 

19 household return, 

20 ‘‘(C) $125,000 in the case of a married fil21 ing separately return, or 

22 ‘‘(D) $200,000 in all other cases; and 

23 ‘‘(2) the taxpayer’s adjusted taxable income for 

24 such taxable year exceeds the minimum marginal 

25 rate amount, then the tax imposed under section 1 


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1 with respect to such taxpayer for such taxable year 

2 shall be increased by the amount determined under 

3 subsection (b). If the taxpayer is subject to tax 

4 under section 55, then in lieu of an increase in tax 

5 under section 1, the tax imposed under section 55 

6 with respect to such taxpayer for such taxable year 

7 shall be increased by the amount determined under 

8 subsection (c). 

9 ‘‘(b) ADDITIONAL AMOUNT.—The amount deter10 mined under this subsection with respect to any taxpayer 

11 for any taxable year is the excess (if any) of— 

12 ‘‘(1) the tax which would be imposed under sec13 tion 1 with respect to such taxpayer for such taxable 

14 year if ‘adjusted taxable income’ were substituted 

15 for ‘taxable income’ each place it appears therein, 

16 over 

17 ‘‘(2) the sum of— 

18 ‘‘(A) the tax which would be imposed 

19 under such section with respect to such tax20 payer for such taxable year on the greater of— 

21 ‘‘(i) taxable income, or 

22 ‘‘(ii) the minimum marginal rate 

23 amount, plus 


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1 ‘‘(B) 28 percent of the excess (if any) of 

2 the taxpayer’s adjusted taxable income over the 

3 greater of— 

4 ‘‘(i) the taxpayer’s taxable income, or 

5 ‘‘(ii) the minimum marginal rate 

6 amount. 

7 ‘‘(c) ADDITIONAL AMT AMOUNT.— 

8 ‘‘(1) The amount determined under this sub9 section with respect to any taxpayer for any taxable 

10 year is the additional amount computed under sub11 section (b) multiplied by the ratio that— 

12 ‘‘(A) the result of— 

13 ‘‘(i) all itemized deductions (before 

14 the application of section 68), plus 

15 ‘‘(ii) the specified above-the-line de16 ductions and specified exclusions, minus 

17 ‘‘(iii) the amount of deductions dis18 allowed under section 56(b)(1)(A) and (B), 

19 minus 

20 ‘‘(iv) the non-preference disallowed de21 ductions, bears to— 

22 ‘‘(B) the sum of— 

23 ‘‘(i) the total of itemized deductions 

24 (after the application of section 68), plus 


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1 ‘‘(ii) the specified above-the-line de2 ductions and specified exclusions. 

3 ‘‘(2) If the top of the AMT exemption phase4 out range for the taxpayer exceeds the minimum 

5 marginal rate amount for the taxpayer and if the 

6 taxpayer’s alternative minimum taxable income does 

7 not exceed the top of the AMT exemption phase-out 

8 range, the taxpayer must increase its additional 

9 AMT amount by 7 percent of the excess of— 

10 ‘‘(A) the lesser of— 

11 ‘‘(i) the top of the AMT exemption 

12 phase-out range, or 

13 ‘‘(ii) the taxpayer’s alternative min14 imum taxable income, computed— 

15 ‘‘(I) without regard to any 

16 itemized deduction or any specified 

17 above-the-line deduction, and 

18 ‘‘(II) by including the amount of 

19 any specified exclusion; over 

20 ‘‘(B) the greater of— 

21 ‘‘(i) the taxpayer’s alternative min22 imum taxable income, or 

23 ‘‘(ii) the minimum marginal rate 

24 amount. 


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1 ‘‘(d) MINIMUM MARGINAL RATE AMOUNT.—For pur2 poses of this section, the term ‘minimum marginal rate 

3 amount’ means, with respect to any taxpayer for any tax4 able year, the highest amount of the taxpayer’s taxable 

5 income which would be subject to a marginal rate of tax 

6 under section 1 that is less than 36 percent with respect 

7 to such taxable year. 

8 ‘‘(e) ADJUSTED TAXABLE INCOME.—For purposes of 

9 this section— 

10 ‘‘(1) IN GENERAL.—The term ‘adjusted taxable 

11 income’ means taxable income computed— 

12 ‘‘(A) without regard to any itemized deduc13 tion or any specified above-the-line deduction, 

14 and 

15 ‘‘(B) by including in gross income any 

16 specified exclusion. 

17 ‘‘(2) SPECIFIED ABOVE-THE-LINE DEDUC18 TION.—The term ‘specified above-the-line deduction’ 

19 means— 

20 ‘‘(A) the deduction provided under section 

21 162(l) (relating to special rules for health insur22 ance costs of self-employed individuals), 

23 ‘‘(B) the deduction provided under section 

24 199 (relating to income attributable to domestic 

25 production activities), and 


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1 ‘‘(C) the deductions provided under the fol2 lowing paragraphs of section 62(a): 

3 ‘‘(i) Paragraph (2) (relating to certain 

4 trade and business deductions of employ5 ees), other than subparagraph (A) thereof. 

6 ‘‘(ii) Paragraph (15) (relating to mov7 ing expenses). 

8 ‘‘(iii) Paragraph (16) (relating to Ar9 cher MSAs). 

10 ‘‘(iv) Paragraph (17) (relating to in11 terest on education loans). 

12 ‘‘(v) Paragraph (18) (relating to high13 er education expenses). 

14 ‘‘(vi) Paragraph (19) (relating to 

15 health savings accounts). 

16 ‘‘(3) SPECIFIED EXCLUSION.—The term ‘speci17 fied exclusion’ means— 

18 ‘‘(A) any interest excluded under section 

19 103, 

20 ‘‘(B) any exclusion with respect to the cost 

21 described in section 6051(a)(14) (without re22 gard to subparagraph (B) thereof), and 

23 ‘‘(C) any foreign earned income excluded 

24 under section 911. 


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1 ‘‘(f) NON-PREFERENCE DISALLOWED DEDUC2 TIONS.—For purposes of this section, the term ‘AMT-al3 lowed deductions’ means all itemized deductions dis4 allowed by section 68 multiplied by the ratio that— 

5 ‘‘(1) a taxpayer’s itemized deductions for the 

6 taxable year that are subject to section 68 (that is, 

7 not including those excluded under section 68(c)) 

8 and that are not limited under section 56(b)(1)(A) 

9 or (B), bears to 

10 ‘‘(2) the taxpayer’s itemized deductions for the 

11 taxable year that are subject to section 68 (that is, 

12 not including those excluded under section 68(c)). 

13 ‘‘(g) REGULATIONS.—The Secretary shall prescribe 

14 such regulations as may be appropriate to carry out this 

15 section, including regulations which provide appropriate 

16 adjustments to the additional AMT amount.’’. 

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

18 this section shall apply to taxable years beginning on or 

19 after January 1, 2013. 


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1 Subtitle B—Tax Carried Interest in 

2 Investment Partnerships as Or3 dinary Income 

4 SEC. 411. PARTNERSHIP INTERESTS TRANSFERRED IN 

5 CONNECTION WITH PERFORMANCE OF SERV6 ICES. 

7 (a) MODIFICATION TO ELECTION TO INCLUDE PART8 NERSHIP INTEREST IN GROSS INCOME IN YEAR OF

9 TRANSFER.—Subsection (c) of section 83 of the Internal 

10 Revenue Code of 1986 is amended by redesignating para11 graph (4) as paragraph (5) and by inserting after para12 graph (3) the following new paragraph: 

13 ‘‘(4) PARTNERSHIP INTERESTS.—Except as 

14 provided by the Secretary— 

15 ‘‘(A) IN GENERAL.—In the case of any 

16 transfer of an interest in a partnership in con17 nection with the provision of services to (or for 

18 the benefit of) such partnership— 

19 ‘‘(i) the fair market value of such in20 terest shall be treated for purposes of this 

21 section as being equal to the amount of the 

22 distribution which the partner would re23 ceive if the partnership sold (at the time of 

24 the transfer) all of its assets at fair market 

25 value and distributed the proceeds of such 


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1 sale (reduced by the liabilities of the part2 nership) to its partners in liquidation of 

3 the partnership, and 

4 ‘‘(ii) the person receiving such interest 

5 shall be treated as having made the elec6 tion under subsection (b)(1) unless such 

7 person makes an election under this para8 graph to have such subsection not apply. 

9 ‘‘(B) ELECTION.—The election under sub10 paragraph (A)(ii) shall be made under rules 

11 similar to the rules of subsection (b)(2).’’. 

12 (b) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to interests in partnerships trans14 ferred after December 31, 2012. 

15 SEC. 412. SPECIAL RULES FOR PARTNERS PROVIDING IN16 VESTMENT MANAGEMENT SERVICES TO 

17 PARTNERSHIPS. 

18 (a) IN GENERAL.—Part I of subchapter K of chapter 

19 1 of the Internal Revenue Code of 1986 is amended by 

20 adding at the end the following new section: 


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1 ‘‘SEC. 710. SPECIAL RULES FOR PARTNERS PROVIDING IN2 VESTMENT MANAGEMENT SERVICES TO 

3 PARTNERSHIPS. 

4 ‘‘(a) TREATMENT OF DISTRIBUTIVE SHARE OF

5 PARTNERSHIP ITEMS.—For purposes of this title, in the 

6 case of an investment services partnership interest— 

7 ‘‘(1) IN GENERAL.—Notwithstanding section 

8 702(b)— 

9 ‘‘(A) an amount equal to the net capital 

10 gain with respect to such interest for any part11 nership taxable year shall be treated as ordi12 nary income, and 

13 ‘‘(B) subject to the limitation of paragraph 

14 (2), an amount equal to the net capital loss 

15 with respect to such interest for any partner16 ship taxable year shall be treated as an ordi17 nary loss. 

18 ‘‘(2) RECHARACTERIZATION OF LOSSES LIM19 ITED TO RECHARACTERIZED GAINS.—The amount 

20 treated as ordinary loss under paragraph (1)(B) for 

21 any taxable year shall not exceed the excess (if any) 

22 of— 

23 ‘‘(A) the aggregate amount treated as ordi24 nary income under paragraph (1)(A) with re25 spect to the investment services partnership inVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00367 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 terest for all preceding partnership taxable 

2 years to which this section applies, over 

3 ‘‘(B) the aggregate amount treated as or4 dinary loss under paragraph (1)(B) with re5 spect to such interest for all preceding partner6 ship taxable years to which this section applies. 

7 ‘‘(3) ALLOCATION TO ITEMS OF GAIN AND

8 LOSS.— 

9 ‘‘(A) NET CAPITAL GAIN.—The amount 

10 treated as ordinary income under paragraph 

11 (1)(A) shall be allocated ratably among the 

12 items of long-term capital gain taken into ac13 count in determining such net capital gain. 

14 ‘‘(B) NET CAPITAL LOSS.—The amount 

15 treated as ordinary loss under paragraph (1)(B) 

16 shall be allocated ratably among the items of 

17 long-term capital loss and short-term capital 

18 loss taken into account in determining such net 

19 capital loss. 

20 ‘‘(4) TERMS RELATING TO CAPITAL GAINS AND

21 LOSSES.—For purposes of this section— 

22 ‘‘(A) IN GENERAL.—Net capital gain, long23 term capital gain, and long-term capital loss, 

24 with respect to any investment services partner25 ship interest for any taxable year, shall be deVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00368 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 termined under section 1222, except that such 

2 section shall be applied— 

3 ‘‘(i) without regard to the recharacter4 ization of any item as ordinary income or 

5 ordinary loss under this section, 

6 ‘‘(ii) by only taking into account items 

7 of gain and loss taken into account by the 

8 holder of such interest under section 702 

9 with respect to such interest for such tax10 able year, 

11 ‘‘(iii) by treating property which is 

12 taken into account in determining gains 

13 and losses to which section 1231 applies as 

14 capital assets held for more than 1 year, 

15 and 

16 ‘‘(iv) without regard to section 1202. 

17 ‘‘(B) NET CAPITAL LOSS.—The term ‘net 

18 capital loss’ means the excess of the losses from 

19 sales or exchanges of capital assets over the 

20 gains from such sales or exchanges. Rules simi21 lar to the rules of clauses (i) through (iv) of 

22 subparagraph (A) shall apply for purposes of 

23 the preceding sentence. 

24 ‘‘(5) SPECIAL RULES FOR DIVIDENDS.— 


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1 ‘‘(A) INDIVIDUALS.—Any dividend allo2 cated to any investment services partnership in3 terest shall not be treated as qualified dividend 

4 income for purposes of section 1(h). 

5 ‘‘(B) CORPORATIONS.—No deduction shall 

6 be allowed under section 243 or 245 with re7 spect to any dividend allocated to any invest8 ment services partnership interest. 

9 ‘‘(b) DISPOSITIONS OF PARTNERSHIP INTERESTS.— 

10 ‘‘(1) GAIN.— 

11 ‘‘(A) IN GENERAL.—Any gain on the dis12 position of an investment services partnership 

13 interest shall be— 

14 ‘‘(i) treated as ordinary income, and 

15 ‘‘(ii) recognized notwithstanding any 

16 other provision of this subtitle. 

17 ‘‘(B) EXCEPTIONS; CERTAIN TRANSFERS

18 TO CHARITIES AND RELATED PERSONS.—Sub19 paragraph (A) shall not apply to— 

20 ‘‘(i) a disposition by gift, 

21 ‘‘(ii) a transfer at death, or 

22 ‘‘(iii) other disposition identified by 

23 the Secretary as a disposition with respect 

24 to which it would be inconsistent with the 

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1 graph (A), if such gift, transfer, or other 

2 disposition is to an organization described 

3 in section 170(b)(1)(A) (other than any or4 ganization described in section 509(a)(3) 

5 or any fund or account described in section 

6 4966(d)(2)) or a person with respect to 

7 whom the transferred interest is an invest8 ment services partnership interest. 

9 ‘‘(2) LOSS.—Any loss on the disposition of an 

10 investment services partnership interest shall be 

11 treated as an ordinary loss to the extent of the ex12 cess (if any) of— 

13 ‘‘(A) the aggregate amount treated as ordi14 nary income under subsection (a) with respect 

15 to such interest for all partnership taxable 

16 years to which this section applies, over 

17 ‘‘(B) the aggregate amount treated as or18 dinary loss under subsection (a) with respect to 

19 such interest for all partnership taxable years 

20 to which this section applies. 

21 ‘‘(3) ELECTION WITH RESPECT TO CERTAIN EX22 CHANGES.—Paragraph (1)(A)(ii) shall not apply to 

23 the contribution of an investment services partner24 ship interest to a partnership in exchange for an in25 terest in such partnership if— 


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1 ‘‘(A) the taxpayer makes an irrevocable 

2 election to treat the partnership interest re3 ceived in the exchange as an investment serv4 ices partnership interest, and 

5 ‘‘(B) the taxpayer agrees to comply with 

6 such reporting and recordkeeping requirements 

7 as the Secretary may prescribe. 

8 ‘‘(4) DISTRIBUTIONS OF PARTNERSHIP PROP9 ERTY.— 

10 ‘‘(A) IN GENERAL.—In the case of any dis11 tribution of property by a partnership with re12 spect to any investment services partnership in13 terest held by a partner, the partner receiving 

14 such property shall recognize gain equal to the 

15 excess (if any) of— 

16 ‘‘(i) the fair market value of such 

17 property at the time of such distribution, 

18 over 

19 ‘‘(ii) the adjusted basis of such prop20 erty in the hands of such partner (deter21 mined without regard to subparagraph 

22 (C)). 

23 ‘‘(B) TREATMENT OF GAIN AS ORDINARY

24 INCOME.—Any gain recognized by such partner 

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1 dinary income to the same extent and in the 

2 same manner as the increase in such partner’s 

3 distributive share of the taxable income of the 

4 partnership would be treated under subsection 

5 (a) if, immediately prior to the distribution, the 

6 partnership had sold the distributed property at 

7 fair market value and all of the gain from such 

8 disposition were allocated to such partner. For 

9 purposes of applying paragraphs (2) and (3) of 

10 subsection (a), any gain treated as ordinary in11 come under this subparagraph shall be treated 

12 as an amount treated as ordinary income under 

13 subsection (a)(1)(A). 

14 ‘‘(C) ADJUSTMENT OF BASIS.—In the case 

15 a distribution to which subparagraph (A) ap16 plies, the basis of the distributed property in 

17 the hands of the distributee partner shall be the 

18 fair market value of such property. 

19 ‘‘(D) SPECIAL RULES WITH RESPECT TO

20 MERGERS, DIVISIONS, AND TECHNICAL TERMI21 NATIONS.—In the case of a taxpayer which sat22 isfies requirements similar to the requirements 

23 of subparagraphs (A) and (B) of paragraph (3), 

24 this paragraph and paragraph (1)(A)(ii) shall 

25 not apply to the distribution of a partnership 


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1 interest if such distribution is in connection 

2 with a contribution (or deemed contribution) of 

3 any property of the partnership to which sec4 tion 721 applies pursuant to a transaction de5 scribed in paragraph (1)(B) or (2) of section 

6 708(b). 

7 ‘‘(c) INVESTMENT SERVICES PARTNERSHIP INTER8 EST.—For purposes of this section— 

9 ‘‘(1) IN GENERAL.—The term ‘investment serv10 ices partnership interest’ means any interest in an 

11 investment partnership acquired or held by any per12 son in connection with the conduct of a trade or 

13 business described in paragraph (2) by such person 

14 (or any person related to such person). An interest 

15 in an investment partnership held by any person— 

16 ‘‘(A) shall not be treated as an investment 

17 services partnership interest for any period be18 fore the first date on which it is so held in con19 nection with such a trade or business, 

20 ‘‘(B) shall not cease to be an investment 

21 services partnership interest merely because 

22 such person holds such interest other than in 

23 connection with such a trade or business, and 

24 ‘‘(C) shall be treated as an investment 

25 services partnership interest if acquired from a 


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1 related person in whose hands such interest was 

2 an investment services partnership interest. 

3 ‘‘(2) BUSINESSES TO WHICH THIS SECTION AP4 PLIES.—A trade or business is described in this 

5 paragraph if such trade or business primarily in6 volves the performance of any of the following serv7 ices with respect to assets held (directly or indi8 rectly) by the investment partnership referred to in 

9 paragraph (1): 

10 ‘‘(A) Advising as to the advisability of in11 vesting in, purchasing, or selling any specified 

12 asset. 

13 ‘‘(B) Managing, acquiring, or disposing of 

14 any specified asset. 

15 ‘‘(C) Arranging financing with respect to 

16 acquiring specified assets. 

17 ‘‘(D) Any activity in support of any service 

18 described in subparagraphs (A) through (C). 

19 ‘‘(3) INVESTMENT PARTNERSHIP.— 

20 ‘‘(A) IN GENERAL.—The term ‘investment 

21 partnership’ means any partnership if, at the 

22 end of any calendar quarter ending after De23 cember 31, 2012— 

24 ‘‘(i) substantially all of the assets of 

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1 mined without regard to any section 197 

2 intangible within the meaning of section 

3 197(d)), and 

4 ‘‘(ii) more than half of the contributed 

5 capital of the partnership is attributable to 

6 contributions of property by one or more 

7 persons in exchange for interests in the 

8 partnership which (in the hands of such 

9 persons) constitute property held for the 

10 production of income. 

11 ‘‘(B) SPECIAL RULES FOR DETERMINING

12 IF PROPERTY HELD FOR THE PRODUCTION OF

13 INCOME.—Except as otherwise provided by the 

14 Secretary, for purposes of determining whether 

15 any interest in a partnership constitutes prop16 erty held for the production of income under 

17 subparagraph (A)(ii)— 

18 ‘‘(i) any election under subsection (e) 

19 or (f) of section 475 shall be disregarded, 

20 and 

21 ‘‘(ii) paragraph (5)(B) shall not apply. 

22 ‘‘(C) ANTIABUSE RULES.—The Secretary 

23 may issue regulations or other guidance which 

24 prevent the avoidance of the purposes of sub25 paragraph (A), including regulations or other 


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1 guidance which treat convertible and contingent 

2 debt (and other debt having the attributes of 

3 equity) as a capital interest in the partnership. 

4 ‘‘(D) CONTROLLED GROUPS OF ENTI5 TIES.— 

6 ‘‘(i) IN GENERAL.—In the case of a 

7 controlled group of entities, if an interest 

8 in the partnership received in exchange for 

9 a contribution to the capital of the part10 nership by any member of such controlled 

11 group would (in the hands of such mem12 ber) constitute property not held for the 

13 production of income, then any interest in 

14 such partnership held by any member of 

15 such group shall be treated for purposes of 

16 subparagraph (A) as constituting (in the 

17 hands of such member) property not held 

18 for the production of income. 

19 ‘‘(ii) CONTROLLED GROUP OF ENTI20 TIES.—For purposes of clause (i), the term 

21 ‘controlled group of entities’ means a con22 trolled group of corporations as defined in 

23 section 1563(a)(1), applied without regard 

24 to subsections (a)(4) and (b)(2) of section 

25 1563. A partnership or any other entity 


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1 (other than a corporation) shall be treated 

2 as a member of a controlled group of enti3 ties if such entity is controlled (within the 

4 meaning of section 954(d)(3)) by members 

5 of such group (including any entity treated 

6 as a member of such group by reason of 

7 this sentence). 

8 ‘‘(4) SPECIFIED ASSET.—The term ‘specified 

9 asset’ means securities (as defined in section 

10 475(c)(2) without regard to the last sentence there11 of), real estate held for rental or investment, inter12 ests in partnerships, commodities (as defined in sec13 tion 475(e)(2)), cash or cash equivalents, or options 

14 or derivative contracts with respect to any of the 

15 foregoing. 

16 ‘‘(5) RELATED PERSONS.— 

17 ‘‘(A) IN GENERAL.—A person shall be 

18 treated as related to another person if the rela19 tionship between such persons is described in 

20 section 267(b) or 707(b). 

21 ‘‘(B) ATTRIBUTION OF PARTNER SERV22 ICES.—Any service described in paragraph (2) 

23 which is provided by a partner of a partnership 

24 shall be treated as also provided by such part25 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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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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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 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00381 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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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 subsection— 

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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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 January 1, 2013 unless such repayment 

9 is made with the proceeds of a loan or other ad10 vance described in the preceding sentence. 

11 ‘‘(B) REDUCTION IN ALLOCATIONS TO

12 QUALIFIED CAPITAL INTERESTS FOR LOANS

13 FROM NONSERVICE-PROVIDING PARTNERS TO

14 THE PARTNERSHIP.—For purposes of this sub15 section, any loan or other advance to the part16 nership made or guaranteed, directly or indi17 rectly, by a partner not providing services de18 scribed in subsection (c)(2) to the partnership 

19 (or any person related to such partner) shall be 

20 taken into account in determining the qualified 

21 capital interests of the partners in the partner22 ship. 

23 ‘‘(e) OTHER INCOME AND GAIN IN CONNECTION

24 WITH INVESTMENT MANAGEMENT SERVICES.— 

25 ‘‘(1) IN GENERAL.—If— 


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1 ‘‘(A) a person performs (directly or indi2 rectly) investment management services for any 

3 investment entity, 

4 ‘‘(B) such person holds (directly or indi5 rectly) a disqualified interest with respect to 

6 such entity, and 

7 ‘‘(C) the value of such interest (or pay8 ments thereunder) is substantially related to 

9 the amount of income or gain (whether or not 

10 realized) from the assets with respect to which 

11 the investment management services are per12 formed, any income or gain with respect to such 

13 interest shall be treated as ordinary income. 

14 Rules similar to the rules of subsections (a)(5) 

15 and (d) shall apply for purposes of this sub16 section. 

17 ‘‘(2) DEFINITIONS.—For purposes of this sub18 section— 

19 ‘‘(A) DISQUALIFIED INTEREST.— 

20 ‘‘(i) IN GENERAL.—The term ‘dis21 qualified interest’ means, with respect to 

22 any investment entity— 

23 ‘‘(I) any interest in such entity 

24 other than indebtedness, 


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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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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, and 

21 ‘‘(2) coordinate this section with the other pro22 visions of this title. 

23 ‘‘(g) CROSS REFERENCE.—For 40 percent penalty on 

24 certain underpayments due to the avoidance of this sec25 tion, see section 6662.’’. 


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1 (b) APPLICATION OF SECTION 751 TO INDIRECT DIS2 POSITIONS OF INVESTMENT SERVICES PARTNERSHIP IN3 TERESTS.— 

4 (1) IN GENERAL.—Subsection (a) of section 

5 751 of the Internal Revenue Code of 1986 is amend6 ed by striking ‘‘or’’ at the end of paragraph (1), by 

7 inserting ‘‘or’’ at the end of paragraph (2), and by 

8 inserting after paragraph (2) the following new 

9 paragraph: 

10 ‘‘(3) investment services partnership interests 

11 held by the partnership,’’. 

12 (2) CERTAIN DISTRIBUTIONS TREATED AS

13 SALES OR EXCHANGES.—Subparagraph (A) of sec14 tion 751(b)(1) of the Internal Revenue Code of 1986 

15 is amended by striking ‘‘or’’ at the end of clause (i), 

16 by inserting ‘‘or’’ at the end of clause (ii), and by 

17 inserting after clause (ii) the following new clause: 

18 ‘‘(iii) investment services partnership 

19 interests held by the partnership,’’. 

20 (3) APPLICATION OF SPECIAL RULES IN THE

21 CASE OF TIERED PARTNERSHIPS.—Subsection (f) of 

22 section 751 of the Internal Revenue Code of 1986 

23 is amended by striking ‘‘or’’ at the end of paragraph 

24 (1), by inserting ‘‘or’’ at the end of paragraph (2), 


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1 and by inserting after paragraph (2) the following 

2 new paragraph: 

3 ‘‘(3) investment services partnership interests 

4 held by the partnership,’’. 

5 (4) INVESTMENT SERVICES PARTNERSHIP IN6 TERESTS; QUALIFIED CAPITAL INTERESTS.—Section 

7 751 of the Internal Revenue Code of 1986 is amend8 ed by adding at the end the following new sub9 section: 

10 ‘‘(g) INVESTMENT SERVICES PARTNERSHIP INTER11 ESTS.—For purposes of this section— 

12 ‘‘(1) IN GENERAL.—The term ‘investment serv13 ices partnership interest’ has the meaning given 

14 such term by section 710(c). 

15 ‘‘(2) ADJUSTMENTS FOR QUALIFIED CAPITAL

16 INTERESTS.—The amount to which subsection (a) 

17 applies by reason of paragraph (3) thereof shall not 

18 include so much of such amount as is attributable 

19 to any portion of the investment services partnership 

20 interest which is a qualified capital interest (deter21 mined under rules similar to the rules of section 

22 710(d)). 

23 ‘‘(3) RECOGNITION OF GAINS.—Any gain with 

24 respect to which subsection (a) applies by reason of 


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1 paragraph (3) thereof shall be recognized notwith2 standing any other provision of this title. 

3 ‘‘(4) COORDINATION WITH INVENTORY

4 ITEMS.—An investment services partnership interest 

5 held by the partnership shall not be treated as an 

6 inventory item of the partnership. 

7 ‘‘(5) PREVENTION OF DOUBLE COUNTING.— 

8 Under regulations or other guidance prescribed by 

9 the Secretary, subsection (a)(3) shall not apply with 

10 respect to any amount to which section 710 ap11 plies.’’. 

12 (c) TREATMENT FOR PURPOSES OF SECTION

13 7704.—Subsection (d) of section 7704 of the Internal 

14 Revenue Code of 1986 is amended by adding at the end 

15 the following new paragraph: 

16 ‘‘(6) INCOME FROM CERTAIN CARRIED INTER17 ESTS NOT QUALIFIED.— 

18 ‘‘(A) IN GENERAL.—Specified carried in19 terest income shall not be treated as qualifying 

20 income. 

21 ‘‘(B) SPECIFIED CARRIED INTEREST IN22 COME.—For purposes of this paragraph— 

23 ‘‘(i) IN GENERAL.—The term ‘speci24 fied carried interest income’ means— 


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1 ‘‘(I) any item of income or gain 

2 allocated to an investment services 

3 partnership interest (as defined in 

4 section 710(c)) held by the partner5 ship, 

6 ‘‘(II) any gain on the disposition 

7 of an investment services partnership 

8 interest (as so defined) or a partner9 ship interest to which (in the hands of 

10 the partnership) section 751 applies, 

11 and 

12 ‘‘(III) any income or gain taken 

13 into account by the partnership under 

14 subsection (b)(4) or (e) of section 

15 710. 

16 ‘‘(ii) EXCEPTION FOR QUALIFIED CAP17 ITAL INTERESTS.—A rule similar to the 

18 rule of section 710(d) shall apply for pur19 poses of clause (i). 

20 ‘‘(C) COORDINATION WITH OTHER PROVI21 SIONS.—Subparagraph (A) shall not apply to 

22 any item described in paragraph (1)(E) (or so 

23 much of paragraph (1)(F) as relates to para24 graph (1)(E)). 


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1 ‘‘(D) SPECIAL RULES FOR CERTAIN PART2 NERSHIPS.— 

3 ‘‘(i) CERTAIN PARTNERSHIPS OWNED

4 BY REAL ESTATE INVESTMENT TRUSTS.— 

5 Subparagraph (A) shall not apply in the 

6 case of a partnership which meets each of 

7 the following requirements: 

8 ‘‘(I) Such partnership is treated 

9 as publicly traded under this section 

10 solely by reason of interests in such 

11 partnership being convertible into in12 terests in a real estate investment 

13 trust which is publicly traded. 

14 ‘‘(II) 50 percent or more of the 

15 capital and profits interests of such 

16 partnership are owned, directly or in17 directly, at all times during the tax18 able year by such real estate invest19 ment trust (determined with the ap20 plication of section 267(c)). 

21 ‘‘(III) Such partnership meets 

22 the requirements of paragraphs (2), 

23 (3), and (4) of section 856(c). 

24 ‘‘(ii) CERTAIN PARTNERSHIPS OWN25 ING OTHER PUBLICLY TRADED PARTNERVerDate Mar 15 2010 05:20 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00393 Fmt 6652 Sfmt 6201 E:\BILLS\H12.IH H12

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1 SHIPS.—Subparagraph (A) shall not apply 

2 in the case of a partnership which meets 

3 each of the following requirements: 

4 ‘‘(I) Substantially all of the as5 sets of such partnership consist of in6 terests in one or more publicly traded 

7 partnerships (determined without re8 gard to subsection (b)(2)). 

9 ‘‘(II) Substantially all of the in10 come of such partnership is ordinary 

11 income or section 1231 gain (as de12 fined in section 1231(a)(3)). 

13 ‘‘(E) TRANSITIONAL RULE.—Subpara14 graph (A) shall not apply to any taxable year 

15 of the partnership beginning before the date 

16 which is 10 years after January 1, 2013’’. 

17 (d) IMPOSITION OF PENALTY ON UNDERPAY18 MENTS.— 

19 (1) IN GENERAL.—Subsection (b) of section 

20 6662 of the Internal Revenue Code of 1986 is 

21 amended by inserting after paragraph (7) the fol22 lowing new paragraph: 

23 ‘‘(8) The application of section 710(e) or the 

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1 tion 710(h) to prevent the avoidance of the purposes 

2 of section 710.’’. 

3 (2) AMOUNT OF PENALTY.— 

4 (A) IN GENERAL.—Section 6662 of the In5 ternal Revenue Code of 1986 is amended by 

6 adding at the end the following new subsection: 

7 ‘‘(k) INCREASE IN PENALTY IN CASE OF PROPERTY

8 TRANSFERRED FOR INVESTMENT MANAGEMENT SERV9 ICES.—In the case of any portion of an underpayment to 

10 which this section applies by reason of subsection (b)(8), 

11 subsection (a) shall be applied with respect to such portion 

12 by substituting ‘40 percent’ for ‘20 percent’.’’. 

13 (B) CONFORMING AMENDMENT.—Subpara14 graph (B) of section 6662A(e)(2) is amended 

15 by striking ‘‘or (i)’’ and inserting ‘‘, (i), or (k)’’. 

16 (3) SPECIAL RULES FOR APPLICATION OF REA17 SONABLE CAUSE EXCEPTION.—Subsection (c) of sec18 tion 6664 is amended— 

19 (A) by redesignating paragraphs (3) and 

20 (4) as paragraphs (4) and (5), respectively; 

21 (B) by striking ‘‘paragraph (3)’’ in para22 graph (5)(A), as so redesignated, and inserting 

23 ‘‘paragraph (4)’’; and 

24 (C) by inserting after paragraph (2) the 

25 following new paragraph: 


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1 ‘‘(3) SPECIAL RULE FOR UNDERPAYMENTS AT2 TRIBUTABLE TO INVESTMENT MANAGEMENT SERV3 ICES.— 

4 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

5 not apply to any portion of an underpayment to 

6 which section 6662 applies by reason of sub7 section (b)(8) unless— 

8 ‘‘(i) the relevant facts affecting the 

9 tax treatment of the item are adequately 

10 disclosed, 

11 ‘‘(ii) there is or was substantial au12 thority for such treatment, and 

13 ‘‘(iii) the taxpayer reasonably believed 

14 that such treatment was more likely than 

15 not the proper treatment. 

16 ‘‘(B) RULES RELATING TO REASONABLE

17 BELIEF.—Rules similar to the rules of sub18 section (d)(3) shall apply for purposes of sub19 paragraph (A)(iii).’’. 

20 (e) INCOME AND LOSS FROM INVESTMENT SERVICES

21 PARTNERSHIP INTERESTS TAKEN INTO ACCOUNT IN DE22 TERMINING NET EARNINGS FROM SELF-EMPLOYMENT.— 

23 (1) INTERNAL REVENUE CODE.— 

24 (A) IN GENERAL.—Section 1402(a) of the 

25 Internal Revenue Code of 1986 is amended by 


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1 striking ‘‘and’’ at the end of paragraph (16), by 

2 striking the period at the end of paragraph (17) 

3 and inserting ‘‘; and’’, and by inserting after 

4 paragraph (17) the following new paragraph: 

5 ‘‘(18) notwithstanding the preceding provisions 

6 of this subsection, in the case of any individual en7 gaged in the trade or business of providing services 

8 described in section 710(c)(2) with respect to any 

9 entity, investment services partnership income or 

10 loss (as defined in subsection (m)) of such individual 

11 with respect to such entity shall be taken into ac12 count in determining the net earnings from self-em13 ployment of such individual.’’. 

14 (B) INVESTMENT SERVICES PARTNERSHIP

15 INCOME OR LOSS.—Section 1402 of the Inter16 nal Revenue Code is amended by adding at the 

17 end the following new subsection: 

18 ‘‘(m) INVESTMENT SERVICES PARTNERSHIP INCOME

19 OR LOSS.—For purposes of subsection (a)— 

20 ‘‘(1) IN GENERAL.—The term ‘investment serv21 ices partnership income or loss’ means, with respect 

22 to any investment services partnership interest (as 

23 defined in section 710(c)), the net of— 


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1 ‘‘(A) the amounts treated as ordinary in2 come or ordinary loss under subsections (b) and 

3 (e) of section 710 with respect to such interest, 

4 ‘‘(B) all items of income, gain, loss, and 

5 deduction allocated to such interest, and 

6 ‘‘(C) the amounts treated as realized from 

7 the sale or exchange of property other than a 

8 capital asset under section 751 with respect to 

9 such interest. 

10 ‘‘(2) EXCEPTION FOR QUALIFIED CAPITAL IN11 TERESTS.—A rule similar to the rule of section 

12 710(d) shall apply for purposes of applying para13 graph (1)(B)(ii).’’. 

14 (2) SOCIAL SECURITY ACT.—Section 211(a) of 

15 the Social Security Act is amended by striking 

16 ‘‘and’’ at the end of paragraph (15), by striking the 

17 period at the end of paragraph (16) and inserting ‘‘; 

18 and’’, and by inserting after paragraph (16) the fol19 lowing new paragraph: 

20 ‘‘(17) Notwithstanding the preceding provisions 

21 of this subsection, in the case of any individual en22 gaged in the trade or business of providing services 

23 described in section 710(c)(2) of the Internal Rev24 enue Code of 1986 with respect to any entity, invest25 ment services partnership income or loss (as defined 


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1 in section 1402(m) of such Code) shall be taken into 

2 account in determining the net earnings from self3 employment of such individual.’’. 

4 (f) CONFORMING AMENDMENTS.— 

5 (1) Subsection (d) of section 731 of the Inter6 nal Revenue Code of 1986 is amended by inserting 

7 ‘‘section 710(b)(4) (relating to distributions of part8 nership property),’’ after ‘‘to the extent otherwise 

9 provided by’’. 

10 (2) Section 741 of the Internal Revenue Code 

11 of 1986 is amended by inserting ‘‘or section 710 (re12 lating to special rules for partners providing invest13 ment management services to partnerships)’’ before 

14 the period at the end. 

15 (3) The table of sections for part I of sub16 chapter K of chapter 1 of the Internal Revenue Code 

17 of 1986 is amended by adding at the end the fol18 lowing new item: 

‘‘Sec. 710. Special rules for partners providing investment management services 

to partnerships.’’. 

19 (g) EFFECTIVE DATE.— 

20 (1) IN GENERAL.—Except as otherwise pro21 vided in this subsection, the amendments made by 

22 this section shall apply to taxable years ending after 

23 December 31, 2012. 


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1 (2) PARTNERSHIP TAXABLE YEARS WHICH IN2 CLUDE EFFECTIVE DATE.—In applying section 

3 710(a) of the Internal Revenue Code of 1986 (as 

4 added by this section) in the case of any partnership 

5 taxable year which includes January 1, 2013, the 

6 amount of the net income referred to in such section 

7 shall be treated as being the lesser of the net income 

8 for the entire partnership taxable year or the net in9 come determined by only taking into account items 

10 attributable to the portion of the partnership taxable 

11 year which is after such date. 

12 (3) DISPOSITIONS OF PARTNERSHIP INTER13 ESTS.— 

14 (A) IN GENERAL.—Section 710(b) of such 

15 Code (as added by this section) shall apply to 

16 dispositions and distributions after December 

17 31, 2012. 

18 (B) INDIRECT DISPOSITIONS.—The amend19 ments made by subsection (b) shall apply to 

20 transactions after December 31, 2012. 

21 (4) OTHER INCOME AND GAIN IN CONNECTION

22 WITH INVESTMENT MANAGEMENT SERVICES.—Sec23 tion 710(e) of such Code (as added by this section) 

24 shall take effect on January 1, 2013. 


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1 Subtitle C—Close Loophole for 

2 Corporate Jet Depreciation 

3 SEC. 421. GENERAL AVIATION AIRCRAFT TREATED AS 7- 

4 YEAR PROPERTY. 

5 (a) IN GENERAL.—Subparagraph (C) of section 

6 168(e)(3) of the Internal Revenue Code of 1986 (relating 

7 to classification of certain property) is amended by strik8 ing ‘‘and’’ at the end of clause (iv), by redesignating clause 

9 (v) as clause (vi), and by inserting after clause (iv) the 

10 following new clause: 

11 ‘‘(v) any general aviation aircraft, and’’. 

12 (b) CLASS LIFE.—Paragraph (3) of section 168(g) 

13 Internal Revenue Code of 1986 is amended by inserting 

14 after subparagraph (E) the following new subparagraph: 

15 ‘‘(F) General aviation aircraft. In the case 

16 of any general aviation aircraft, the recovery 

17 period used for purposes of paragraph (2) shall 

18 be 12 years.’’. 

19 (c) GENERAL AVIATION AIRCRAFT.—Subsection (i) 

20 of section 168 Internal Revenue Code of 1986 is amended 

21 by inserting after paragraph (19) the following new para22 graph: 

23 ‘‘(20) GENERAL AVIATION AIRCRAFT.—The 

24 term ‘general aviation aircraft’ means any airplane 

25 or helicopter (including airframes and engines) not 


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1 used in commercial or contract carrying of pas2 sengers or freight, but which primarily engages in 

3 the carrying of passengers.’’. 

4 (d) EFFECTIVE DATE.—This section shall be effec5 tive for property placed in service after December 31, 

6 2012. 

7 Subtitle D—Repeal Oil Subsidies 

8 SEC. 431. REPEAL OF DEDUCTION FOR INTANGIBLE DRILL9 ING AND DEVELOPMENT COSTS IN THE CASE 

10 OF OIL AND GAS WELLS. 

11 (a) IN GENERAL.—Section 263(c) of the Internal 

12 Revenue Code of 1986 (relating to intangible drilling and 

13 development costs) is amended by adding at the end the 

14 following new sentence: ‘‘This subsection shall not apply 

15 in the case of oil and gas wells with respect to amounts 

16 paid or incurred after December 31, 2012.’’. 

17 (b) EFFECTIVE DATE.—The amendment made by 

18 this section shall apply to amounts paid or incurred after 

19 December 31, 2012. 

20 SEC. 432. REPEAL OF DEDUCTION FOR TERTIARY 

21 INJECTANTS. 

22 (a) IN GENERAL.—Part VI of subchapter B of chap23 ter 1 of the Internal Revenue Code of 1986 (relating to 

24 itemized deductions for individuals and corporations) is 


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1 amended by striking section 193 (relating to tertiary 

2 injectants). 

3 (b) CLERICAL AMENDMENT.—The table of sections 

4 for part VI of subchapter B of chapter 1 of the Internal 

5 Revenue Code of 1986 is amended by striking the item 

6 relating to section 193. 

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

8 this section shall apply to amounts paid or incurred after 

9 December 31, 2012. 

10 SEC. 433. REPEAL OF PERCENTAGE DEPLETION FOR OIL 

11 AND GAS WELLS. 

12 (a) IN GENERAL.—Section 613A of the Internal Rev13 enue Code of 1986 (relating to limitation on percentage 

14 depletion in the case of oil and gas wells) is amended to 

15 read as follows: 

16 ‘‘SEC. 613A. PERCENTAGE DEPLETION NOT ALLOWED IN 

17 CASE OF OIL AND GAS WELLS. THE ALLOW18 ANCE FOR DEPLETION UNDER SECTION 611 

19 WITH RESPECT TO ANY OIL AND GAS WELL 

20 SHALL BE COMPUTED WITHOUT REGARD TO 

21 SECTION 613.’’. 

22 (b) EFFECTIVE DATE.—The amendment made by 

23 this section shall apply to taxable years beginning after 

24 December 31, 2012. 


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1 SEC. 434. SECTION 199 DEDUCTION NOT ALLOWED WITH 

2 RESPECT TO OIL, NATURAL GAS, OR PRIMARY 

3 PRODUCTS THEREOF. 

4 (a) IN GENERAL.—Subparagraph (B) of section 

5 199(c)(4) of the Internal Revenue Code of 1986 (relating 

6 to income attributable to domestic production activities) 

7 is amended— 

8 (1) by striking ‘‘or’’ at the end of clause (ii), 

9 (2) by striking the period at the end of clause 

10 (iii) and inserting in lieu thereof ‘‘, or’’, and 

11 (3) by adding at the end thereof the following 

12 new clause: 

13 ‘‘(iv) the production, refining, proc14 essing, transportation, or distribution of 

15 oil, natural gas, or any primary product 

16 (within the meaning of subsection (d)(9)) 

17 thereof.’’. 

18 (b) CONFORMING AMENDMENT.—Paragraph (9) of 

19 section 199(d) is amended to read as follows: 

20 ‘‘(9) PRIMARY PRODUCT.—For purposes of sub21 section (c)(4)(B)(iv), the term ‘primary product’ has 

22 the same meaning as when used in section 

23 927(a)(2)(C) as in effect before its repeal.’’. 

24 (c) EFFECTIVE DATE.—The amendments made by 

25 this section shall apply to taxable years beginning after 

26 December 31, 2012. 


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1 SEC. 435. REPEAL OIL AND GAS WORKING INTEREST EX2 CEPTION TO PASSIVE ACTIVITY RULES. 

3 (a) IN GENERAL.—Paragraph (3) of section 469(c) 

4 of the Internal Revenue Code of 1986 (relating to passive 

5 activity defined) is amended by adding at the end thereof 

6 the following new subparagraph— 

7 ‘‘(C) TERMINATION.—Subparagraph (A) 

8 shall not apply for any taxable year beginning 

9 after December 31 2012.’’. 

10 (b) EFFECTIVE DATE.—The amendment made by 

11 this section shall apply to taxable years beginning after 

12 December 31, 2012. 

13 SEC. 436. REPEAL ENHANCED OIL RECOVERY CREDIT. 

14 (a) IN GENERAL.—Subpart D of part IV of sub15 chapter A of chapter 1of the Internal Revenue Code of 

16 1986 (relating to business related credits) is amended by 

17 striking section 43 (relating to enhanced oil recovery cred18 it). 

19 (b) CLERICAL AMENDMENT.—The table of sections 

20 for subpart D of part IV of subchapter A of chapter 1 

21 of the Internal Revenue Code of 1986 is amended by strik22 ing the item relating to section 43. 

23 (c) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply to taxable years beginning after 

25 December 31, 2012. 


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1 SEC. 437. UNIFORM SEVEN-YEAR AMORTIZATION FOR GEO2 LOGICAL AND GEOPHYSICAL EXPENDITURES. 

3 (a) IN GENERAL.—Paragraph (1) of section 167(h) 

4 of the Internal Revenue Code of 1986 (relating to amorti5 zation of geological and geophysical expenditures) is 

6 amended by striking ‘‘24-month’’ and inserting in lieu 

7 thereof ‘‘7-year’’. 

8 (b) CONFORMING AMENDMENTS.—Section 167(h) is 

9 amended— 

10 (1) by striking ‘‘24-month’’ in paragraph (4) 

11 and inserting in lieu thereof ‘‘7-year’’, and 

12 (2) by striking paragraph (5). 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to amounts paid or incurred after 

15 December 31, 2012. 

16 SEC. 438. REPEAL MARGINAL WELL PRODUCTION CREDIT. 

17 (a) IN GENERAL.—Subpart D of part IV of sub18 chapter A of chapter 1of the Internal Revenue Code of 

19 1986 (relating to business related credits) is amended by 

20 striking section 45I (relating to credit for producing oil 

21 and gas from marginal wells). 

22 (b) CLERICAL AMENDMENT.—The table of sections 

23 for subpart D of part IV of subchapter A of chapter 1 

24 of the Internal Revenue Code of 1986 is amended by strik25 ing the item relating to section 45I. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2012. 

4 Subtitle E—Dual Capacity 

5 Taxpayers 

6 SEC. 441. MODIFICATIONS OF FOREIGN TAX CREDIT RULES 

7 APPLICABLE TO DUAL CAPACITY TAXPAYERS. 

8 (a) IN GENERAL.—Section 901 of the Internal Rev9 enue Code of 1986 (relating to credit for taxes of foreign 

10 countries and of possessions of the United States) is 

11 amended by redesignating subsection (n) as subsection (o) 

12 and by inserting after subsection (m) the following new 

13 subsection: 

14 ‘‘(n) SPECIAL RULES RELATING TO DUAL CAPACITY

15 TAXPAYERS.— 

16 ‘‘(1) GENERAL RULE.—Notwithstanding any 

17 other provision of this chapter, any amount paid or 

18 accrued by a dual capacity taxpayer or any member 

19 of the worldwide affiliated group of which such dual 

20 capacity taxpayer is also a member to any foreign 

21 country or to any possession of the United States 

22 for any period shall not be considered a tax to the 

23 extent such amount exceeds the amount (determined 

24 in accordance with regulations) which would have 


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1 been required to be paid if the taxpayer were not a 

2 dual capacity taxpayer. 

3 ‘‘(2) DUAL CAPACITY TAXPAYER.—For pur4 poses of this subsection, the term ‘dual capacity tax5 payer’ means, with respect to any foreign country or 

6 possession of the United States, a person who— 

7 ‘‘(A) is subject to a levy of such country or 

8 possession, and 

9 ‘‘(B) receives (or will receive) directly or 

10 indirectly a specific economic benefit (as deter11 mined in accordance with regulations) from 

12 such country or possession. 

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

14 such regulations or other guidance as is necessary or 

15 appropriate to carry out the purposes of this sub16 section.’’. 

17 (b) CONTRARY TREATY OBLIGATIONS UPHELD.— 

18 The amendments made by this section shall not apply to 

19 the extent contrary to any treaty obligation of the United 

20 States. 

21 (c) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to amounts that, if such amounts 

23 were an amount of tax paid or accrued, would be consid24 ered paid or accrued in taxable years beginning after De25 cember 31, 2012. 


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409 

•HR 12 IH

1 SEC. 442. SEPARATE BASKET TREATMENT TAXES PAID ON 

2 FOREIGN OIL AND GAS INCOME. 

3 (a) SEPARATE BASKET FOR FOREIGN TAX CRED4 IT.—Paragraph (1) of section 904(d) of the Internal Rev5 enue Code of 1986 is amended by striking ‘‘and’’ at the 

6 end of subparagraph (A), by striking the period at the 

7 end of subparagraph (B) and inserting ‘‘, and’’, and by 

8 adding at the end the following: 

9 ‘‘(C) combined foreign oil and gas income 

10 (as defined in section 907(b)(1)).’’. 

11 (b) COORDINATION.—Section 904(d)(2)of such Code 

12 is amended by redesignating subparagraphs (J) and (K) 

13 as subparagraphs (K) and (L) and by inserting after sub14 paragraph (I) the following: 

15 ‘‘(J) COORDINATION WITH COMBINED FOR16 EIGN OIL AND GAS INCOME.—For purposes of 

17 this section, passive category income and gen18 eral category income shall not include combined 

19 foreign oil and gas income (as defined in section 

20 907(b)(1)).’’. 

21 (c) CONFORMING AMENDMENTS.— 

22 (1) Section 907(a) is hereby repealed. 

23 (2) Section 907(c)(4) is hereby repealed. 

24 (3) Section 907(f) is hereby repealed. 

25 (d) EFFECTIVE DATES.— 


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1 (1) IN GENERAL.—The amendments made by 

2 this section shall apply to taxable years beginning 

3 after December 31, 2012. 

4 (2) TRANSITIONAL RULES.— 

5 (A) CARRYOVERS.—Any unused foreign oil 

6 and gas taxes which under section 907(f) of 

7 such Code (as in effect before the amendment 

8 made by subsection (c)(3)) would have been al9 lowable as a carryover to the taxpayer’s first 

10 taxable year beginning after December 31, 

11 2012 (without regard to the limitation of para12 graph (2) of such section 907(f) for first tax13 able year) shall be allowed as carryovers under 

14 section 904(c) of such Code in the same man15 ner as if such taxes were unused taxes under 

16 such section 904(c) with respect to foreign oil 

17 and gas extraction income. 

18 (B) LOSSES.—The amendment made by 

19 subsection (c)(2) shall not apply to foreign oil 

20 and gas extraction losses arising in taxable 

21 years beginning on or before the date of the en22 actment of this Act. 


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•HR 12 IH

1 Subtitle F—Increased Target and 

2 Trigger for Joint Select Com3 mittee on Deficit Reduction 

4 SEC. 451. INCREASED TARGET AND TRIGGER FOR JOINT 

5 SELECT COMMITTEE ON DEFICIT REDUC6 TION. 

7 (a) INCREASED TARGET FOR JOINT SELECT COM8 MITTEE.—Section 401(b)(2) of the Budget Control Act of 

9 2011 is amended by striking ‘‘$1,500,000,000,000’’ and 

10 inserting ‘‘$1,950,000,000,000’’. 

11 (b) TRIGGER FOR JOINT SELECT COMMITTEE.—Sec12 tion 302 of the Budget Control Act of 2011 is amended 

13 by redesignating subsection (b) as subsection (c) and by 

14 inserting after subsection (a) the following new subsection: 

15 ‘‘(b) TRIGGER.—If a joint committee bill achieving 

16 an amount greater than ‘$1,650,000,000,000’ in deficit 

17 reduction as provided in section 401(b)(3)(B)(i)(II) of this 

18 Act is enacted by January 15, 2012, then the amendments 

19 to the Internal Revenue Code of 1986 made by subtitles 

20 A through E of title IV of the American Jobs Act of 2011, 

21 shall not be in effect for any taxable year.’’. 

Æ 


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