I 

113TH CONGRESS 

1ST SESSION H. R. 2821 

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 

JULY 24, 2013 

Ms. WILSON of Florida (for herself, Ms. PELOSI, Mr. CLYBURN, Ms. FUDGE, 

Mr. CICILLINE, Mr. ENYART, Ms. HANABUSA, Ms. NORTON, Ms. BASS, 

Mr. BUTTERFIELD, Ms. SEWELL of Alabama, Mr. RICHMOND, Mr. CONYERS, Ms. BROWN of Florida, Mrs. CHRISTENSEN, Mr. CA ́RDENAS, Ms. 

LEE of California, Mr. TAKANO, Mrs. NAPOLITANO, Ms. DELAURO, Ms. 

FRANKEL of Florida, Ms. CLARKE, Mr. BRADY of Pennsylvania, Ms. 

SCHAKOWSKY, Mr. TONKO, Ms. SHEA-PORTER, Mr. GRIJALVA, Mr. 

HOLT, Mr. SABLAN, Mr. CARTWRIGHT, Ms. WASSERMAN SCHULTZ, Mr. 

NADLER, Mr. LARSON of Connecticut, Mr. PAYNE, Mr. MCGOVERN, Ms. 

EDDIE BERNICE JOHNSON of Texas, Mr. RUSH, Ms. MOORE, Mr. 

VEASEY, Mrs. BEATTY, Ms. KELLY of Illinois, Mr. AL GREEN of Texas, 

Mr. SCOTT of Virginia, Mr. DAVID SCOTT of Georgia, Mr. JOHNSON of 

Georgia, Ms. EDWARDS, Mr. RANGEL, Ms. JACKSON LEE, Mr. JEFFRIES, 

Mr. BISHOP of Georgia, Mr. CLEAVER, Mr. DANNY K. DAVIS of Illinois, 

Mr. THOMPSON of Mississippi, Mr. CARSON of Indiana, Ms. WATERS, Mr. 

WATT, Mr. LEWIS, Mr. GUTIE ́RREZ, Mr. CLAY, Mr. CUMMINGS, Mr. 

GARCIA, Ms. MCCOLLUM, Mr. ELLISON, Mr. FATTAH, Mr. DEUTCH, Mr. 

MEEKS, Ms. HAHN, Mr. CARNEY, and Mr. KEATING) introduced the following bill; which was referred to the Committee on Ways and Means, 

and in addition to the Committees on Small Business, Education and the 

Workforce, the Judiciary, Transportation and Infrastructure, Financial 

Services, House Administration, Oversight and Government Reform, and 

the Budget, 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 


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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 2013’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. References. 

Sec. 3. Severability. 

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

Sec. 5. Wage rate and employment protection requirements. 

TITLE I—RELIEF FOR WORKERS AND BUSINESSES 

Subtitle A—Making Work Pay Credit 

Sec. 101. Making work pay credit. 

Subtitle B—Other Relief for Businesses 

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

business assets. 

Sec. 112. Surety bonds. 

TITLE II—PUTTING WORKERS BACK ON THE JOB WHILE 

REBUILDING AND MODERNIZING AMERICA 

Subtitle A—Teacher Stabilization 

Sec. 201. Purpose. 

Sec. 202. Grants for the outlying areas and the Secretary of the Interior; availability of funds. 

Sec. 203. State allocation. 

Sec. 204. State application. 

Sec. 205. State reservation and responsibilities. 

Sec. 206. Local educational agencies. 

Sec. 207. Early learning. 


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Sec. 208. Maintenance of effort. 

Sec. 209. Reporting. 

Sec. 210. Definitions. 

Sec. 211. Authorization of appropriations. 

Subtitle B—First Responder Stabilization 

Sec. 212. Purpose. 

Sec. 213. Grant program. 

Sec. 214. Appropriations. 

Subtitle C—School Modernization 

PART I—ELEMENTARY AND SECONDARY SCHOOLS

Sec. 221. Purpose. 

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—DEFINITIONS

Sec. 230. Definitions. 

Subtitle D—Immediate Transportation Infrastructure Investments 

Sec. 241. Immediate transportation infrastructure investments. 

Subtitle E—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. 


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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. 

Subtitle F—Project Rebuild 

Sec. 261. Project rebuild. 

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

with programs in law. 

Sec. 342. Temporary financing of short-time compensation agreements. 

Sec. 343. Grants for short-time compensation programs. 

Sec. 344. Assistance and guidance in implementing programs. 

Sec. 345. Reports. 


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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. Authorization of appropriations. 

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. 

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. 


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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—Repeal of Sequestration 

Sec. 451. Repeal of sequestration. 

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. 

6 SEC. 3. SEVERABILITY. 

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

8 to any person or circumstance, is held invalid, the remain9 der of the Act and the application of such provision to 

10 other persons or circumstances shall not be affected there11 by. 

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

13 AND MANUFACTURED GOODS. 

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

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

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

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

18 manufactured goods used in the project are produced in 

19 the United States. 


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1 (b) Subsection (a) shall not apply in any case or cat2 egory of cases in which the head of the Federal depart3 ment or agency involved finds that— 

4 (1) applying subsection (a) would be incon5 sistent with the public interest; 

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

7 goods are not produced in the United States in suffi8 cient and reasonably available quantities and of a 

9 satisfactory quality; or 

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

11 goods produced in the United States will increase 

12 the cost of the overall project by more than 25 per13 cent. 

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

15 determines that it is necessary to waive the application 

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

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

18 Federal Register a detailed written justification as to why 

19 the provision is being waived. 

20 (d) This section shall be applied in a manner con21 sistent with United States obligations under international 

22 agreements. 


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1 SEC. 5. WAGE RATE AND EMPLOYMENT PROTECTION RE2 QUIREMENTS. 

3 (a) Notwithstanding any other provision of law and 

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

5 all laborers and mechanics employed by contractors and 

6 subcontractors on projects funded directly by or assisted 

7 in whole or in part by and through the Federal Govern8 ment pursuant to this Act shall be paid wages at rates 

9 not less than those prevailing on projects of a character 

10 similar in the locality as determined by the Secretary of 

11 Labor in accordance with subchapter IV of chapter 31 of 

12 title 40, United States Code. 

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

14 this section, the Secretary of Labor shall have the author15 ity and functions set forth in Reorganization Plan Num16 bered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and sec17 tion 3145 of title 40, United States Code. 

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

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

20 by and through the Federal Government pursuant to this 

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

22 of title 49, United States Code. 


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1 TITLE I—RELIEF FOR WORKERS 

2 AND BUSINESSES 

3 Subtitle A—Making Work Pay 

4 Credit 

5 SEC. 101. MAKING WORK PAY CREDIT. 

6 (a) IN GENERAL.—Subsection (e) of section 36A of 

7 the Internal Revenue Code of 1986 is amended to read 

8 as follows: 

9 ‘‘(e) TERMINATION.—This section shall not apply 

10 to— 

11 ‘‘(1) beginning after December 31, 2010, and 

12 before January 1, 2014, and 

13 ‘‘(2) taxable years beginning after December 

14 31, 2014.’’. 

15 (b) TREATMENT OF POSSESSIONS.—Rules similar to 

16 the rules of subsections (b) and (c) of section 1001 of the 

17 American Recovery and Reinvestment Tax Act of 2009 

18 shall apply with respect to the amendment made by sub19 section (a). For purposes of the preceding sentence, such 

20 section shall be applied by substituting ‘‘taxable years be21 ginning in 2014’’ for ‘‘taxable years beginning in 2009 

22 and 2010’’ each place it occurs. 

23 (c) EFFECTIVE DATE.—This section, and the amend24 ments made by this section, shall apply to taxable years 

25 beginning after December 31, 2013. 


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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, 2015’’, and 

10 (2) by striking ‘‘January 1, 2013’’ and insert11 ing ‘‘January 1, 2016’’. 

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-2014 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, 2014. 

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 TITLE II—PUTTING WORKERS 

11 BACK ON THE JOB WHILE RE12 BUILDING AND MODERNIZING 

13 AMERICA 

14 Subtitle A—Teacher Stabilization 

15 SEC. 201. PURPOSE. 

16 The purpose of this subtitle is to provide funds to 

17 States to prevent teacher layoffs and support the creation 

18 of additional jobs in public early childhood, elementary, 

19 and secondary education in the 2013–2014 and 2014– 

20 2015 school years. 


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1 SEC. 202. 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, 2014. 

24 SEC. 203. 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 2014 and 2015 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 2014 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. 204. 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. 205. 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; 

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 2013; 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. 206. 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, 2015; 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. 207. 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, 2015. 

3 SEC. 208. 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 2014— 

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 2013; 

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 2013; and 

3 (2) for State fiscal year 2015— 

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 2014; 

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 2014. 

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. 209. 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. 210. 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. 211. 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 2014. 

20 Subtitle B—First Responder 

21 Stabilization 

22 SEC. 212. 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. 213. 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. 214. 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 C—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, 2014. 

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 2013, 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 

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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 2013; 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 2013 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 2013, 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, 

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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 02:19 Jul 30, 2013 Jkt 029200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821

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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, 2014, 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 2014. 

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—DEFINITIONS 

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 02:19 Jul 30, 2013 Jkt 029200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821

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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 Subtitle D—Immediate Transpor11 tation Infrastructure Invest12 ments 

13 SEC. 241. IMMEDIATE TRANSPORTATION INFRASTRUCTURE 

14 INVESTMENTS. 

15 (a) GRANTS-IN-AID FOR AIRPORTS.— 

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

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

18 carry out airport improvement under subchapter I of 

19 chapter 471 and subchapter I of chapter 475 of title 

20 49, United States Code. 

21 (2) FEDERAL SHARE; LIMITATION ON OBLIGA22 TIONS.—The Federal share payable of the costs for 

23 which a grant is made under this subsection, shall 

24 be 100 percent. The amount made available under 

25 this subsection shall not be subject to any limitation 


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

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

3 States Code. 

4 (3) DISTRIBUTION OF FUNDS.—Funds provided 

5 to the Secretary under this subsection shall not be 

6 subject to apportionment formulas, special appor7 tionment categories, or minimum percentages under 

8 chapter 471 of such title. 

9 (4) AVAILABILITY.—The amounts made avail10 able under this subsection shall be available for obli11 gation until the date that is two years after the date 

12 of the enactment of this Act. The Secretary shall ob13 ligate amounts totaling not less than 50 percent of 

14 the funds made available within one year of enact15 ment and obligate remaining amounts not later than 

16 two years after enactment. 

17 (5) ADMINISTRATIVE EXPENSES.—Of the funds 

18 made available under this subsection, 0.3 percent 

19 shall be available to the Secretary for administrative 

20 expenses, shall remain available for obligation until 

21 September 30, 2015, and may be used in conjunc22 tion with funds otherwise provided for the adminis23 tration of the Grants-In-Aid for Airports program. 

24 (b) NEXT GENERATION AIR TRAFFIC CONTROL AD25 VANCEMENTS.— 


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

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

3 necessary Federal Aviation Administration capital, 

4 research, and operating costs to carry out Next Gen5 eration air traffic control system advancements. 

6 (2) AVAILABILITY.—The amounts made avail7 able under this subsection shall be available for obli8 gation until the date that is two years after the date 

9 of the enactment of this Act. 

10 (c) HIGHWAY INFRASTRUCTURE INVESTMENT.— 

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

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

13 for restoration, repair, construction and other activi14 ties eligible under section 133(b) of title 23, United 

15 States Code, and for passenger and freight rail 

16 transportation and port infrastructure projects eligi17 ble for assistance under section 601(a)(8) of title 23. 

18 (2) FEDERAL SHARE; LIMITATION ON OBLIGA19 TIONS.—The Federal share payable on account of 

20 any project or activity carried out with funds made 

21 available under this subsection shall be, at the op22 tion of the recipient, up to 100 percent of the total 

23 cost thereof. The amount made available under this 

24 subsection shall not be subject to any limitation on 

25 obligations for Federal-aid highways and highway 


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1 safety construction programs set forth in any Act or 

2 in title 23, United States Code. 

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.—Of the funds 

12 provided in this subsection, after making the set13 asides required by paragraphs (9), (10), (11), (12), 

14 and (15), 50 percent of the funds shall be appor15 tioned to States using the formula set forth in sec16 tion 104(b)(3) of title 23, United States Code, and 

17 the remaining funds shall be apportioned to States 

18 in the same ratio as the obligation limitation for fis19 cal year 2010 was distributed among the States in 

20 accordance with the formula specified in section 

21 120(a)(6) of division A of Public Law 111–117. 

22 (5) APPORTIONMENT.—Apportionments under 

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

24 after the date of the enactment of this Act. 

25 (6) REDISTRIBUTION.— 


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1 (A) The Secretary shall, 180 days fol2 lowing the date of apportionment, withdraw 

3 from each State an amount equal to 50 percent 

4 of the funds apportioned under paragraph (4) 

5 to that State (excluding funds suballocated 

6 within the State) less the amount of funding 

7 obligated (excluding funds suballocated within 

8 the State), and the Secretary shall redistribute 

9 such amounts to other States that have had no 

10 funds withdrawn under this subparagraph in 

11 the manner described in section 120(c) of divi12 sion A of Public Law 111–117. 

13 (B) One year following the date of appor14 tionment, the Secretary shall withdraw from 

15 each recipient of funds apportioned under para16 graph (4) any unobligated funds, and the Sec17 retary shall redistribute such amounts to States 

18 that have had no funds withdrawn under this 

19 paragraph (excluding funds suballocated within 

20 the State) in the manner described in section 

21 120(c) of division A of Public Law 111–117. 

22 (C) At the request of a State, the Sec23 retary may provide an extension of the one-year 

24 period only to the extent that the Secretary de25 termines that the State has encountered exVerDate Mar 15 2010 02:19 Jul 30, 2013 Jkt 029200 PO 00000 Frm 00050 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821

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1 treme conditions that create an unworkable bid2 ding environment or other extenuating cir3 cumstances. Before granting an extension, the 

4 Secretary notify in writing the Committee on 

5 Transportation and Infrastructure and the 

6 Committee on Environment and Public Works, 

7 providing a thorough justification for the exten8 sion. 

9 (7) TRANSPORTATION ENHANCEMENTS.—Three 

10 percent of the funds apportioned to a State under 

11 paragraph (4) shall be set aside for the purposes de12 scribed in section 133(d)(2) of title 23, United 

13 States Code (without regard to the comparison to 

14 fiscal year 2005). 

15 (8) SUBALLOCATION.—Thirty percent of the 

16 funds apportioned to a State under this subsection 

17 shall be suballocated within the State in the manner 

18 and for the purposes described in the first sentence 

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

20 133(d)(3)(D) of title 23, United States Code. Such 

21 suballocation shall be conducted in every State. 

22 Funds suballocated within a State to urbanized 

23 areas and other areas shall not be subject to the re24 distribution of amounts required 180 days following 


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1 the date of apportionment of funds provided by 

2 paragraph (6)(A). 

3 (9) PUERTO RICO AND TERRITORIAL HIGHWAY

4 PROGRAMS.—Of the funds provided under this sub5 section, $105,000,000 shall be set aside for the 

6 Puerto Rico highway program authorized under sec7 tion 165 of title 23, United States Code, and 

8 $45,000,000 shall be for the territorial highway pro9 gram authorized under section 215 of title 23, 

10 United States Code. 

11 (10) FEDERAL LANDS AND INDIAN RESERVA12 TIONS.—Of the funds provided under this sub13 section, $550,000,000 shall be set aside for invest14 ments in transportation at Indian reservations and 

15 Federal lands in accordance with the following:. 

16 (A) Of the funds set aside by this para17 graph, $310,000,000 shall be for the Indian 

18 Reservation Roads program, $170,000,000 

19 shall be for the Park Roads and Parkways pro20 gram, $60,000,000 shall be for the Forest 

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

22 for the Refuge Roads program. 

23 (B) For investments at Indian reservations 

24 and Federal lands, priority shall be given to 

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1 ties that can be completed within 2 years of en2 actment of this Act. 

3 (C) One year following the enactment of 

4 this Act, to ensure the prompt use of the fund5 ing provided for investments at Indian reserva6 tions and Federal lands, the Secretary shall 

7 have the authority to redistribute unobligated 

8 funds within the respective program for which 

9 the funds were appropriated. 

10 (D) Up to four percent of the funding pro11 vided for Indian Reservation Roads may be 

12 used by the Secretary of the Interior for pro13 gram management and oversight and project-re14 lated administrative expenses. 

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

16 United States Code, shall not apply to funds set 

17 aside by this paragraph. 

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

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

20 for the development and administration of transpor21 tation training programs under section 140(b) title 

22 23, United States Code. 

23 (A) Funds set aside under this subsection 

24 shall be competitively awarded and used for the 

25 purpose of providing training, apprenticeship 


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1 (including Registered Apprenticeship), skill de2 velopment, and skill improvement programs, as 

3 well as summer transportation institutes and 

4 may be transferred to, or administered in part5 nership with, the Secretary of Labor and shall 

6 demonstrate to the Secretary of Transportation 

7 program outcomes, including— 

8 (i) impact on areas with transpor9 tation workforce shortages; 

10 (ii) diversity of training participants; 

11 (iii) number of participants obtaining 

12 certifications or credentials required for 

13 specific types of employment; 

14 (iv) employment outcome metrics, 

15 such as job placement and job retention 

16 rates, established in consultation with the 

17 Secretary of Labor and consistent with 

18 metrics used by programs under the Work19 force Investment Act; 

20 (v) to the extent practical, evidence 

21 that the program did not preclude workers 

22 that participate in training or apprentice23 ship activities under the program from 

24 being referred to, or hired on, projects 

25 funded under this chapter; and 


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1 (vi) identification of areas of collabo2 ration with the Department of Labor pro3 grams, including co-enrollment. 

4 (B) To be eligible to receive a competitively 

5 awarded grant under this subsection, a State 

6 must certify that at least 0.1 percent of the 

7 amounts apportioned under the Surface Trans8 portation Program and Bridge Program will be 

9 obligated in the first fiscal year after enactment 

10 of this act for job training activities consistent 

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

12 Code. 

13 (12) DISADVANTAGED BUSINESS ENTER14 PRISES.—Of the funds provided under this sub15 section, $10,000,000 shall be set aside for training 

16 programs and assistance programs under section 

17 140(c) of title 23, United States Code. Funds set 

18 aside under this paragraph should be allocated to 

19 businesses that have proven success in adding staff 

20 while effectively completing projects. 

21 (13) STATE PLANNING AND OVERSIGHT EX22 PENSES.—Of amounts apportioned under paragraph 

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

24 percent for activities related to projects funded 

25 under this subsection, including activities eligible 


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1 under sections 134 and 135 of title 23, United 

2 States Code, State administration of subgrants, and 

3 State oversight of subrecipients. 

4 (14) CONDITIONS.— 

5 (A) Funds made available under this sub6 section shall be administered as if apportioned 

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

8 except for funds made available for investments 

9 in transportation at Indian reservations and 

10 Federal lands, and for the territorial highway 

11 program, which shall be administered in accord12 ance with chapter 2 of title 23, United States 

13 Code, and except for funds made available for 

14 disadvantaged business enterprises bonding as15 sistance, which shall be administered in accord16 ance with chapter 3 of title 49, United States 

17 Code. 

18 (B) Funds made available under this sub19 section shall not be obligated for the purposes 

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

21 United States Code. 

22 (C) Funding provided under this sub23 section shall be in addition to any and all funds 

24 provided for fiscal years 2011 and 2012 in any 

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


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1 not affect the distribution of funds provided for 

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

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

4 shall apply to funds apportioned under this sub5 section. 

6 (15) OVERSIGHT.—The Administrator of the 

7 Federal Highway Administration may set aside up 

8 to 0.15 percent of the funds provided under this 

9 subsection to fund the oversight by the Adminis10 trator of projects and activities carried out with 

11 funds made available to the Federal Highway Ad12 ministration in this Act, and such funds shall be 

13 available through September 30, 2015. 

14 (d) CAPITAL ASSISTANCE FOR HIGH-SPEED RAIL

15 CORRIDORS AND INTERCITY PASSENGER RAIL SERV16 ICE.— 

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

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

19 grants for high-speed rail projects as authorized 

20 under sections 26104 and 26106 of title 49, United 

21 States Code, capital investment grants to support 

22 intercity passenger rail service as authorized under 

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

24 congestion grants as authorized under section 24105 

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1 operative agreements for these purposes as author2 ized, except that the Administrator of the Federal 

3 Railroad Administration may retain up to one per4 cent of the funds provided under this heading to 

5 fund the award and oversight by the Administrator 

6 of grants made under this subsection, which retained 

7 amount shall remain available for obligation until 

8 September 30, 2015. 

9 (2) AVAILABILITY.—The amounts made avail10 able under this subsection shall be available for obli11 gation until the date that is two years after the date 

12 of the enactment of this Act. The Secretary shall ob13 ligate amounts totaling not less than 50 percent of 

14 the funds made available within one year of enact15 ment and obligate remaining amounts not later than 

16 two years after enactment. 

17 (3) FEDERAL SHARE.—The Federal share pay18 able of the costs for which a grant or cooperative 

19 agreements is made under this subsection shall be, 

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

21 (4) INTERIM GUIDANCE.—The Secretary shall 

22 issue interim guidance to applicants covering appli23 cation procedures and administer the grants pro24 vided under this subsection pursuant to that guid25 ance until final regulations are issued. 


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1 (5) INTERCITY PASSENGER RAIL CORRIDORS.— 

2 Not less than 85 percent of the funds provided 

3 under this subsection shall be for cooperative agree4 ments that lead to the development of entire seg5 ments or phases of intercity or high-speed rail cor6 ridors. 

7 (6) CONDITIONS.— 

8 (A) In addition to the provisions of title 

9 49, United States Code, that apply to each of 

10 the individual programs funded under this sub11 section, subsections 24402(a)(2), 24402(i), and 

12 24403(a) and (c) of title 49, United States 

13 Code, shall also apply to the provision of funds 

14 provided under this subsection. 

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

16 plan developed under Chapter 227 of title 49, 

17 United States Code, to be eligible for assistance 

18 under this subsection. 

19 (C) Recipients of grants under this para20 graph shall conduct all procurement trans21 actions using such grant funds in a manner 

22 that provides full and open competition, as de23 termined by the Secretary, in compliance with 

24 existing labor agreements. 


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1 (e) CAPITAL GRANTS TO THE NATIONAL RAILROAD

2 PASSENGER CORPORATION.— 

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

4 $2,000,000,000 to enable the Secretary of Transpor5 tation to make capital grants to the National Rail6 road Passenger Corporation (Amtrak), as authorized 

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

8 and Improvement Act of 2008 (Public Law 110– 

9 432). 

10 (2) AVAILABILITY.—The amounts made avail11 able under this subsection shall be available for obli12 gation until the date that is two years after the date 

13 of the enactment of this Act. The Secretary shall ob14 ligate amounts totaling not less than 50 percent of 

15 the funds made available within one year of enact16 ment and obligate remaining amounts not later than 

17 two years after enactment. 

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

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

20 rehabilitation, or upgrade of railroad assets or infra21 structure, and for capital projects that expand pas22 senger rail capacity including the rehabilitation of 

23 rolling stock. 

24 (4) CONDITIONS.— 


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1 (A) None of the funds under this sub2 section shall be used to subsidize the operating 

3 losses of Amtrak. 

4 (B) The funds provided under this sub5 section shall be awarded not later than 90 days 

6 after the date of enactment of this Act. 

7 (C) The Secretary shall take measures to 

8 ensure that projects funded under this sub9 section shall be completed within 2 years of en10 actment of this Act, and shall serve to supple11 ment and not supplant planned expenditures for 

12 such activities from other Federal, State, local 

13 and corporate sources. The Secretary shall cer14 tify to the House and Senate Committees on 

15 Appropriations in writing compliance with the 

16 preceding sentence. 

17 (5) OVERSIGHT.—The Administrator of the 

18 Federal Railroad Administration may set aside 0.5 

19 percent of the funds provided under this subsection 

20 to fund the oversight by the Administrator of 

21 projects and activities carried out with funds made 

22 available in this subsection, and such funds shall be 

23 available through September 30, 2015. 

24 (f) TRANSIT CAPITAL ASSISTANCE.— 


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

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

3 grants for transit capital assistance grants as de4 fined by section 5302(a)(1) of title 49, United 

5 States Code. Notwithstanding any provision of chap6 ter 53 of title 49, however, a recipient of funding 

7 under this subsection may use up to 10 percent of 

8 the amount provided for the operating costs of 

9 equipment and facilities for use in public transpor10 tation or for other eligible activities. 

11 (2) FEDERAL SHARE; LIMITATION ON OBLIGA12 TIONS.—The applicable requirements of chapter 53 

13 of title 49, United States Code, shall apply to fund14 ing provided under this subsection, except that the 

15 Federal share of the costs for which any grant is 

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

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

18 available under this subsection shall not be subject 

19 to any limitation on obligations for transit programs 

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

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

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


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

3 two years after enactment. 

4 (4) DISTRIBUTION OF FUNDS.—The Secretary 

5 of Transportation shall— 

6 (A) provide 80 percent of the funds appro7 priated under this subsection for grants under 

8 section 5307 of title 49, United States Code, 

9 and apportion such funds in accordance with 

10 section 5336 of such title; 

11 (B) provide 10 percent of the funds appro12 priated under this subsection in accordance 

13 with section 5340 of such title; and 

14 (C) provide 10 percent of the funds appro15 priated under this subsection for grants under 

16 section 5311 of title 49, United States Code, 

17 and apportion such funds in accordance with 

18 such section. 

19 (5) APPORTIONMENT.—The funds apportioned 

20 under this subsection shall be apportioned not later 

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

22 Act. 

23 (6) REDISTRIBUTION.— 

24 (A) The Secretary shall, 180 days fol25 lowing the date of apportionment, withdraw 


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1 from each urbanized area or State an amount 

2 equal to 50 percent of the funds apportioned to 

3 such urbanized areas or States less the amount 

4 of funding obligated, and the Secretary shall re5 distribute such amounts to other urbanized 

6 areas or States that have had no funds with7 drawn under this proviso utilizing whatever 

8 method he deems appropriate to ensure that all 

9 funds redistributed under this proviso shall be 

10 utilized promptly. 

11 (B) One year following the date of appor12 tionment, the Secretary shall withdraw from 

13 each urbanized area or State any unobligated 

14 funds, and the Secretary shall redistribute such 

15 amounts to other urbanized areas or States 

16 that have had no funds withdrawn under this 

17 proviso utilizing whatever method the Secretary 

18 deems appropriate to ensure that all funds re19 distributed under this proviso shall be utilized 

20 promptly. 

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

22 State, the Secretary of Transportation may pro23 vide an extension of such 1-year period if the 

24 Secretary determines that the urbanized area or 

25 State has encountered an unworkable bidding 


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1 environment or other extenuating cir2 cumstances. Before granting an extension, the 

3 Secretary shall notify in writing the Committee 

4 on Transportation and Infrastructure and the 

5 Committee on Banking, Housing and Urban 

6 Affairs, providing a thorough justification for 

7 the extension. 

8 (7) CONDITIONS.— 

9 (A) Of the funds provided for section 5311 

10 of title 49, United States Code, 2.5 percent 

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

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

13 shall apply to funds appropriated under this 

14 subsection. 

15 (C) The funds appropriated under this 

16 subsection shall not be comingled with any prior 

17 year funds. 

18 (8) OVERSIGHT.—Notwithstanding any other 

19 provision of law, 0.3 percent of the funds provided 

20 for grants under section 5307 and section 5340, and 

21 0.3 percent of the funds provided for grants under 

22 section 5311, shall be available for administrative 

23 expenses and program management oversight, and 

24 such funds shall be available through September 30, 

25 2015. 


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1 (g) STATE OF GOOD REPAIR.— 

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

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

4 capital expenditures as authorized by sections 

5 5309(b)(2) and (3) of title 49, United States Code. 

6 (2) FEDERAL SHARE.—The applicable require7 ments of chapter 53 of title 49, United States Code, 

8 shall apply, except that the Federal share of the 

9 costs for which a grant is made under this sub10 section shall be, at the option of the recipient, up to 

11 100 percent. 

12 (3) AVAILABILITY.—The amounts made avail13 able under this subsection shall be available for obli14 gation until the date that is two years after the date 

15 of the enactment of this Act. The Secretary shall ob16 ligate amounts totaling not less than 50 percent of 

17 the funds made available within one year of enact18 ment and obligate remaining amounts not later than 

19 two years after enactment. 

20 (4) DISTRIBUTION OF FUNDS.— 

21 (A) The Secretary of Transportation shall 

22 apportion not less than 75 percent of the funds 

23 under this subsection for the modernization of 

24 fixed guideway systems, pursuant to the for25 mula set forth in section 5336(b) title 49, 


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1 United States Code, other than subsection 

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

3 (B) Of the funds appropriated under this 

4 subsection, not less than 25 percent shall be 

5 available for the restoration or replacement of 

6 existing public transportation assets related to 

7 bus systems, pursuant to the formula set forth 

8 in section 5336 other than subsection (b). 

9 (5) APPORTIONMENT.—The funds made avail10 able under this subsection shall be apportioned not 

11 later than 30 days after the date of the enactment 

12 of this Act. 

13 (6) REDISTRIBUTION.— 

14 (A) The Secretary shall, 180 days fol15 lowing the date of apportionment, withdraw 

16 from each urbanized area an amount equal to 

17 50 percent of the funds apportioned to such ur18 banized area less the amount of funding obli19 gated, and the Secretary shall redistribute such 

20 amounts to other urbanized areas that have had 

21 no funds withdrawn under this paragraph uti22 lizing whatever method the Secretary deems ap23 propriate to ensure that all funds redistributed 

24 under this paragraph shall be utilized promptly. 


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1 (B) One year following the date of appor2 tionment, the Secretary shall withdraw from 

3 each urbanized area any unobligated funds, and 

4 the Secretary shall redistribute such amounts to 

5 other urbanized areas that have had no funds 

6 withdrawn under this paragraph, utilizing what7 ever method the Secretary deems appropriate to 

8 ensure that all funds redistributed under this 

9 paragraph shall be utilized promptly. 

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

11 the Secretary may provide an extension of the 

12 1-year period if the Secretary finds that the ur13 banized area has encountered an unworkable 

14 bidding environment or other extenuating cir15 cumstances. Before granting an extension, the 

16 Secretary shall notify the Committee on Trans17 portation and Infrastructure and the Com18 mittee on Banking, Housing, and Urban Af19 fairs, providing a thorough justification for the 

20 extension. 

21 (7) CONDITIONS.— 

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

23 Public Law 109–59 shall apply to funds made 

24 available under this subsection. 


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1 (B) The funds appropriated under this 

2 subsection shall not be commingled with any 

3 prior year funds. 

4 (8) OVERSIGHT.—Notwithstanding any other 

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

6 subsection shall be available for administrative ex7 penses and program management oversight and shall 

8 remain available for obligation until September 30, 

9 2015. 

10 (h) TRANSPORTATION INFRASTRUCTURE GRANTS

11 AND FINANCING.— 

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

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

14 capital investments in surface transportation infra15 structure. The Secretary shall distribute funds pro16 vided under this subsection as discretionary grants 

17 to be awarded to State and local governments or 

18 transit agencies on a competitive basis for projects 

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

20 metropolitan area, or a region. 

21 (2) FEDERAL SHARE; LIMITATION ON OBLIGA22 TIONS.—The Federal share payable of the costs for 

23 which a grant is made under this subsection, shall 

24 be 100 percent. 


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

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

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

8 two years after enactment. 

9 (4) PROJECT ELIGIBILITY.—Projects eligible for 

10 funding provided under this subsection include— 

11 (A) highway or bridge projects eligible 

12 under title 23, United States Code, including 

13 interstate rehabilitation, improvements to the 

14 rural collector road system, the reconstruction 

15 of overpasses and interchanges, bridge replace16 ments, seismic retrofit projects for bridges, and 

17 road realignments; 

18 (B) public transportation projects eligible 

19 under chapter 53 of title 49, United States 

20 Code, including investments in projects partici21 pating in the New Starts or Small Starts pro22 grams that will expedite the completion of those 

23 projects and their entry into revenue service; 

24 (C) passenger and freight rail transpor25 tation projects; and 


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1 (D) port infrastructure investments, in2 cluding projects that connect ports to other 

3 modes of transportation and improve the effi4 ciency of freight movement. 

5 (5) TIFIA PROGRAM.—The Secretary may 

6 transfer to the Federal Highway Administration 

7 funds made available under this subsection for the 

8 purpose of paying the subsidy and administrative 

9 costs of projects eligible for Federal credit assistance 

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

11 the Secretary finds that such use of the funds would 

12 advance the purposes of this subsection. 

13 (6) PROJECT PRIORITY.—The Secretary shall 

14 give priority to projects that are expected to be com15 pleted within 3 years of the date of the enactment 

16 of this Act. 

17 (7) DEADLINE FOR ISSUANCE OF COMPETITION

18 CRITERIA.—The Secretary shall publish criteria on 

19 which to base the competition for any grants award20 ed under this subsection not later than 90 days after 

21 enactment of this Act. The Secretary shall require 

22 applications for funding provided under this sub23 section to be submitted not later than 180 days after 

24 the publication of the criteria, and announce all 

25 projects selected to be funded from such funds not 


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

2 the Act. 

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

4 conducted using funds provided under this sub5 section shall comply with the requirements of sub6 chapter IV of chapter 31 of title 40, United States 

7 Code. 

8 (9) ADMINISTRATIVE EXPENSES.—The Sec9 retary may retain up to one half of one percent of 

10 the funds provided under this subsection, and may 

11 transfer portions of those funds to the Administra12 tors of the Federal Highway Administration, the 

13 Federal Transit Administration, the Federal Rail14 road Administration and the Maritime Administra15 tion, to fund the award and oversight of grants 

16 made under this subsection. Funds retained shall re17 main available for obligation until September 30, 

18 2015. 

19 (i) LOCAL HIRING.— 

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

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

22 this section, the Secretary of Transportation may es23 tablish standards under which a contract for con24 struction may be advertised that contains require25 ments for the employment of individuals residing in 


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

2 is to be performed to perform construction work re3 quired under the contract, provided that— 

4 (A) all or part of the construction work 

5 performed under the contract occurs in an area 

6 designated by the Secretary as an area of high 

7 unemployment, using data reported by the 

8 United States Department of Labor, Bureau of 

9 Labor Statistics; 

10 (B) the estimated cost of the project of 

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

12 million, except that the estimated cost of the 

13 project in the case of construction funded under 

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

15 and 

16 (C) the recipient may not require the hir17 ing of individuals who do not have the nec18 essary skills to perform work in any craft or 

19 trade; provided that the recipient may require 

20 the hiring of such individuals if the recipient es21 tablishes reasonable provisions to train such in22 dividuals to perform any such work under the 

23 contract effectively. 

24 (2) PROJECT STANDARDS.— 


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1 (A) IN GENERAL.—Any standards estab2 lished by the Secretary under this section shall 

3 ensure that any requirements specified under 

4 subsection (c)(1)— 

5 (i) do not compromise the quality of 

6 the project; 

7 (ii) are reasonable in scope and appli8 cation; 

9 (iii) do not unreasonably delay the 

10 completion of the project; and 

11 (iv) do not unreasonably increase the 

12 cost of the project. 

13 (B) AVAILABLE PROGRAMS.—The Sec14 retary shall make available to recipients the 

15 workforce development and training programs 

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

17 to assist recipients who wish to establish train18 ing programs that satisfy the provisions of sec19 tion (c)(1)(C). The Secretary of Labor shall 

20 make available its qualifying workforce and 

21 training development programs to recipients 

22 who wish to establish training programs that 

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


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1 (3) IMPLEMENTING REGULATIONS.—The Sec2 retary shall promulgate final regulations to imple3 ment the authority of this subsection. 

4 (j) ADMINISTRATIVE PROVISIONS.— 

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

6 conducted using funds provided under this subtitle 

7 shall comply with the requirements of subchapter IV 

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

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

10 A of the American Recovery and Reinvestment Act 

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

12 conducted using funds provided under this subtitle. 

13 Subtitle E—Building and Upgrad14 ing Infrastructure for Long15 Term Development 

16 SEC. 242. SHORT TITLE. 

17 This subtitle may be cited as the ‘‘Building and Up18 grading Infrastructure for Long-Term Development Act’’. 

19 SEC. 243. FINDINGS AND PURPOSE. 

20 (a) FINDINGS.—Congress finds that— 

21 (1) infrastructure has always been a vital ele22 ment of the economic strength of the United States 

23 and a key indicator of the international leadership of 

24 the United States; 


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1 (2) the Erie Canal, the Hoover Dam, the rail2 roads, and the interstate highway system are all tes3 taments to American ingenuity and have helped pro4 pel and maintain the United States as the world’s 

5 largest economy; 

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

7 Global Competitiveness Report, the United States 

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

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

10 overall infrastructure’’ category of the same report, 

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

12 (4) according to the World Bank’s 2010 Logis13 tic Performance Index, the capacity of countries to 

14 efficiently move goods and connect manufacturers 

15 and consumers with international markets is improv16 ing around the world, and the United States now 

17 ranks seventh in the world in logistics-related infra18 structure behind countries from both Europe and 

19 Asia; 

20 (5) according to a January 2009 report from 

21 the University of Massachusetts/Alliance for Amer22 ican Manufacturing entitled ‘‘Employment, Produc23 tivity and Growth,’’ infrastructure investment is a 

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


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1 (6) according to the American Society of Civil 

2 Engineers, the current condition of the infrastruc3 ture in the United States earns a grade point aver4 age of D, and an estimated $2,200,000,000,000 in5 vestment is needed over the next 5 years to bring 

6 American infrastructure up to adequate condition; 

7 (7) according to the National Surface Trans8 portation Policy and Revenue Study Commission, 

9 $225,000,000,000 is needed annually from all 

10 sources for the next 50 years to upgrade the United 

11 States surface transportation system to a state of 

12 good repair and create a more advanced system; 

13 (8) the current infrastructure financing mecha14 nisms of the United States, both on the Federal and 

15 State level, will fail to meet current and foreseeable 

16 demands and will create large funding gaps; 

17 (9) published reports state that there may not 

18 be enough demand for municipal bonds to maintain 

19 the same level of borrowing at the same rates, re20 sulting in significantly decreased infrastructure in21 vestment at the State and local level; 

22 (10) current funding mechanisms are not read23 ily scalable and do not— 

24 (A) serve large in-State or cross jurisdic25 tion infrastructure projects, projects of regional 


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1 or national significance, or projects that cross 

2 sector silos; 

3 (B) sufficiently catalyze private sector in4 vestment; or 

5 (C) ensure the optimal return on public re6 sources; 

7 (11) although grant programs of the United 

8 States Government must continue to play a central 

9 role in financing the transportation, environment, 

10 and energy infrastructure needs of the United 

11 States, current and foreseeable demands on existing 

12 Federal, State, and local funding for infrastructure 

13 expansion clearly exceed the resources to support 

14 these programs by margins wide enough to prompt 

15 serious concerns about the United States ability to 

16 sustain long-term economic development, produc17 tivity, and international competitiveness; 

18 (12) the capital markets, including pension 

19 funds, private equity funds, mutual funds, sovereign 

20 wealth funds, and other investors, have a growing 

21 interest in infrastructure investment and represent 

22 hundreds of billions of dollars of potential invest23 ment; and 

24 (13) the establishment of a United States Gov25 ernment-owned, independent, professionally managed 


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1 institution that could provide credit support to quali2 fied infrastructure projects of regional and national 

3 significance, making transparent merit-based invest4 ment decisions based on the commercial viability of 

5 infrastructure projects, would catalyze the participa6 tion of significant private investment capital. 

7 (b) PURPOSE.—The purpose of this Act is to facili8 tate investment in, and long-term financing of, economi9 cally viable infrastructure projects of regional or national 

10 significance in a manner that both complements existing 

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

12 projects and introduces a merit-based system for financing 

13 such projects, in order to mobilize significant private sec14 tor investment, create jobs, and ensure United States com15 petitiveness through an institution that limits the need for 

16 ongoing Federal funding. 

17 SEC. 244. DEFINITIONS. 

18 For purposes of this Act, the following definitions 

19 shall apply: 

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

21 American Infrastructure Financing Authority estab22 lished under this Act. 

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

24 means a trust in which the beneficiary has no knowl25 edge of the specific holdings and no rights over how 


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1 those holdings are managed by the fiduciary of the 

2 trust prior to the dissolution of the trust. 

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

4 of Directors’’ means Board of Directors of AIFA. 

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

6 means the Chairperson of the Board of Directors of 

7 AIFA. 

8 (5) CHIEF EXECUTIVE OFFICER.—The term 

9 ‘‘chief executive officer’’ means the chief executive 

10 officer of AIFA, appointed under section 247. 

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

12 meaning as in section 502 of the Federal Credit Re13 form Act of 1990 (2 U.S.C. 661a). 

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

15 the same meaning as in section 502 of the Federal 

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

17 (8) ELIGIBLE ENTITY.—The term ‘‘eligible enti18 ty’’ means an individual, corporation, partnership 

19 (including a public-private partnership), joint ven20 ture, trust, State, or other non-Federal govern21 mental entity, including a political subdivision or any 

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

23 (9) INFRASTRUCTURE PROJECT.— 

24 (A) IN GENERAL.—The term ‘‘eligible in25 frastructure project’’ means any non-Federal 


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1 transportation, water, or energy infrastructure 

2 project, or an aggregation of such infrastruc3 ture projects, as provided in this Act. 

4 (B) TRANSPORTATION INFRASTRUCTURE

5 PROJECT.—The term ‘‘transportation infra6 structure project’’ means the construction, al7 teration, or repair, including the facilitation of 

8 intermodal transit, of the following subsectors: 

9 (i) Highway or road. 

10 (ii) Bridge. 

11 (iii) Mass transit. 

12 (iv) Inland waterways. 

13 (v) Commercial ports. 

14 (vi) Airports. 

15 (vii) Air traffic control systems. 

16 (viii) Passenger rail, including high17 speed rail. 

18 (ix) Freight rail systems. 

19 (C) WATER INFRASTRUCTURE PROJECT.— 

20 The term ‘‘water infrastructure project’’ means 

21 the construction, consolidation, alteration, or 

22 repair of the following subsectors: 

23 (i) Waterwaste treatment facility. 

24 (ii) Storm water management system. 

25 (iii) Dam. 


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1 (iv) Solid waste disposal facility. 

2 (v) Drinking water treatment facility. 

3 (vi) Levee. 

4 (vii) Open space management system. 

5 (D) ENERGY INFRASTRUCTURE

6 PROJECT.—The term ‘‘energy infrastructure 

7 project’’ means the construction, alteration, or 

8 repair of the following subsectors: 

9 (i) Pollution reduced energy genera10 tion. 

11 (ii) Transmission and distribution. 

12 (iii) Storage. 

13 (iv) Energy efficiency enhancements 

14 for buildings, including public and com15 mercial buildings. 

16 (E) BOARD AUTHORITY TO MODIFY SUB17 SECTORS.—The Board of Directors may make 

18 modifications, at the discretion of the Board, to 

19 the subsectors described in this paragraph by a 

20 vote of not fewer than 5 of the voting members 

21 of the Board of Directors. 

22 (10) INVESTMENT PROSPECTUS.— 

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

24 means the processes and publications described 

25 below that will guide the priorities and strategic 


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1 focus for AIFA’s investments. The investment 

2 prospectus shall follow rulemaking procedures 

3 under section 553 of title 5, United States 

4 Code. 

5 (B) AIFA shall publish a detailed descrip6 tion of its strategy in an investment prospectus 

7 within one year of the enactment of this sub8 chapter. The investment prospectus shall— 

9 (i) specify what AIFA shall consider 

10 significant to the economic competitiveness 

11 of the United States or a region thereof in 

12 a manner consistent with the primary ob13 jective; 

14 (ii) specify the priorities and strategic 

15 focus of AIFA in forwarding its strategic 

16 objectives and carrying out AIFA strategy; 

17 (iii) specify the priorities and strategic 

18 focus of AIFA in promoting greater effi19 ciency in the movement of freight; 

20 (iv) specify the priorities and strategic 

21 focus of AIFA in promoting the use of in22 novation and best practices in the plan23 ning, design, development and delivery of 

24 projects; 


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1 (v) describe in detail the framework 

2 and methodology for calculating applica3 tion qualification scores and associated 

4 ranges as specified in this subchapter, 

5 along with the data to be requested from 

6 applicants and the mechanics of calcula7 tions to be applied to that data to deter8 mine qualification scores and ranges; 

9 (vi) describe how selection criteria will 

10 be applied by the Chief Executive Officer 

11 in determining the competitiveness of an 

12 application and its qualification score and 

13 range relative to other current applications 

14 and previously funded applications; and 

15 (vii) describe how the qualification 

16 score and range methodology and project 

17 selection framework are consistent with 

18 maximizing AIFA goals in both urban and 

19 rural areas. 

20 (C) The investment prospectus and any 

21 subsequent updates thereto shall be approved 

22 by a majority vote of the Board of Directors 

23 prior to publication. 


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1 (D) AIFA shall update the investment pro2 spectus on every biennial anniversary of its 

3 original publication. 

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

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

6 minus, Baa3, or higher assigned to an infrastructure 

7 project by a ratings agency. 

8 (12) LOAN GUARANTEE.—The term ‘‘loan guar9 antee’’ has the same meaning as in section 502 of 

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

11 661a). 

12 (13) PUBLIC-PRIVATE PARTNERSHIP.—The 

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

14 entity— 

15 (A)(i) which is undertaking the develop16 ment of all or part of an infrastructure project 

17 that will have a public benefit, pursuant to re18 quirements established in one or more contracts 

19 between the entity and a State or an instru20 mentality of a State; or 

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

22 such an infrastructure project, are subject to 

23 regulation by a State or any instrumentality of 

24 a State; 


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

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

3 in part; and 

4 (C) the participants in which include not 

5 fewer than 1 nongovernmental entity with sig6 nificant investment and some control over the 

7 project or project vehicle. 

8 (14) RURAL INFRASTRUCTURE PROJECT.—The 

9 term ‘‘rural infrastructure project’’ means an infra10 structure project in a rural area, as that term is de11 fined in section 343(a)(13)(A) of the Consolidated 

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

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

14 (15) SECRETARY.—Unless the context other15 wise requires, the term ‘‘Secretary’’ means the Sec16 retary of the Treasury or the designee thereof. 

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

18 management’’ means the chief financial officer, chief 

19 risk officer, chief compliance officer, general counsel, 

20 chief lending officer, and chief operations officer of 

21 AIFA established under section 249, and such other 

22 officers as the Board of Directors may, by majority 

23 vote, add to senior management. 

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

25 District of Columbia, Puerto Rico, Guam, American 


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1 Samoa, the Virgin Islands, the Commonwealth of 

2 Northern Mariana Islands, and any other territory 

3 of the United States. 

4 PART I—AMERICAN INFRASTRUCTURE 

5 FINANCING AUTHORITY 

6 SEC. 245. ESTABLISHMENT AND GENERAL AUTHORITY OF 

7 AIFA. 

8 (a) ESTABLISHMENT OF AIFA.—The American In9 frastructure Financing Authority is established as a whol10 ly owned Government corporation. 

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

12 provide direct loans and loan guarantees to facilitate infra13 structure projects that are both economically viable and 

14 of regional or national significance, and shall have such 

15 other authority, as provided in this Act. 

16 (c) INCORPORATION.— 

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

18 appointed shall be deemed the incorporator of AIFA, 

19 and the incorporation shall be held to have been ef20 fected from the date of the first meeting of the 

21 Board of Directors. 

22 (2) CORPORATE OFFICE.—AIFA shall— 

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

24 and 


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

2 be considered to be a resident of Washington, 

3 DC. 

4 (d) RESPONSIBILITY OF THE SECRETARY.—The Sec5 retary shall take such action as may be necessary to assist 

6 in implementing AIFA, and in carrying out the purpose 

7 of this Act. 

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

9 31, United States Code, does not apply to AIFA, unless 

10 otherwise specifically provided in this Act. 

11 SEC. 246. VOTING MEMBERS OF THE BOARD OF DIREC12 TORS. 

13 (a) VOTING MEMBERSHIP OF THE BOARD OF DIREC14 TORS.— 

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

16 Directors consisting of 7 voting members appointed 

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

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

19 from the same political party. 

20 (2) CHAIRPERSON.—One of the voting members 

21 of the Board of Directors shall be designated by the 

22 President to serve as Chairperson thereof. 

23 (3) CONGRESSIONAL RECOMMENDATIONS.—Not 

24 later than 30 days after the date of enactment of 

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1 nority leader of the Senate, the Speaker of the 

2 House of Representatives, and the minority leader of 

3 the House of Representatives shall each submit a 

4 recommendation to the President for appointment of 

5 a member of the Board of Directors, after consulta6 tion with the appropriate committees of Congress. 

7 (b) VOTING RIGHTS.—Each voting member of the 

8 Board of Directors shall have an equal vote in all decisions 

9 of the Board of Directors. 

10 (c) QUALIFICATIONS OF VOTING MEMBERS.—Each 

11 voting member of the Board of Directors shall— 

12 (1) be a citizen of the United States; and 

13 (2) have significant demonstrated expertise in— 

14 (A) the management and administration of 

15 a financial institution relevant to the operation 

16 of AIFA; or a public financial agency or author17 ity; 

18 (B) the financing, development, or oper19 ation of infrastructure projects; or 

20 (C) analyzing the economic benefits of in21 frastructure investment. 

22 (d) TERMS.— 

23 (1) IN GENERAL.—Except as otherwise pro24 vided in this Act, each voting member of the Board 

25 of Directors shall be appointed for a term of 4 years. 


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1 (2) INITIAL STAGGERED TERMS.—Of the voting 

2 members first appointed to the Board of Directors— 

3 (A) the initial Chairperson and 3 of the 

4 other voting members shall each be appointed 

5 for a term of 4 years; and 

6 (B) the remaining 3 voting members shall 

7 each be appointed for a term of 2 years. 

8 (3) DATE OF INITIAL NOMINATIONS.—The ini9 tial nominations for the appointment of all voting 

10 members of the Board of Directors shall be made 

11 not later than 60 days after the date of enactment 

12 of this Act. 

13 (4) BEGINNING OF TERM.—The term of each of 

14 the initial voting members appointed under this sec15 tion shall commence immediately upon the date of 

16 appointment, except that, for purposes of calculating 

17 the term limits specified in this subsection, the ini18 tial terms shall each be construed as beginning on 

19 January 22 of the year following the date of the ini20 tial appointment. 

21 (5) VACANCIES.—A vacancy in the position of 

22 a voting member of the Board of Directors shall be 

23 filled by the President, and a member appointed to 

24 fill a vacancy on the Board of Directors occurring 

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1 ecessor was appointed shall be appointed only for 

2 the remainder of that term. 

3 (e) MEETINGS.— 

4 (1) OPEN TO THE PUBLIC; NOTICE.—Except as 

5 provided in paragraph (3), all meetings of the Board 

6 of Directors shall be— 

7 (A) open to the public; and 

8 (B) preceded by reasonable public notice. 

9 (2) FREQUENCY.—The Board of Directors shall 

10 meet not later than 60 days after the date on which 

11 all members of the Board of Directors are first ap12 pointed, at least quarterly thereafter, and otherwise 

13 at the call of either the Chairperson or 5 voting 

14 members of the Board of Directors. 

15 (3) EXCEPTION FOR CLOSED MEETINGS.—The 

16 voting members of the Board of Directors may, by 

17 majority vote, close a meeting to the public if, dur18 ing the meeting to be closed, there is likely to be dis19 closed proprietary or sensitive information regarding 

20 an infrastructure project under consideration for as21 sistance under this Act. The Board of Directors 

22 shall prepare minutes of any meeting that is closed 

23 to the public, and shall make such minutes available 

24 as soon as practicable, not later than 1 year after 

25 the date of the closed meeting, with any necessary 


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1 redactions to protect any proprietary or sensitive in2 formation. 

3 (4) QUORUM.—For purposes of meetings of the 

4 Board of Directors, 5 voting members of the Board 

5 of Directors shall constitute a quorum. 

6 (f) COMPENSATION OF MEMBERS.—Each voting 

7 member of the Board of Directors shall be compensated 

8 at a rate equal to the daily equivalent of the annual rate 

9 of basic pay prescribed for level III of the Executive 

10 Schedule under section 5314 of title 5, United States 

11 Code, for each day (including travel time) during which 

12 the member is engaged in the performance of the duties 

13 of the Board of Directors. 

14 (g) CONFLICTS OF INTEREST.—A voting member of 

15 the Board of Directors may not participate in any review 

16 or decision affecting an infrastructure project under con17 sideration for assistance under this Act, if the member has 

18 or is affiliated with an entity who has a financial interest 

19 in such project. 

20 SEC. 247. CHIEF EXECUTIVE OFFICER OF AIFA. 

21 (a) IN GENERAL.—The chief executive officer of 

22 AIFA shall be a nonvoting member of the Board of Direc23 tors, who shall be responsible for all activities of AIFA, 

24 and shall support the Board of Directors as set forth in 


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1 this Act and as the Board of Directors deems necessary 

2 or appropriate. 

3 (b) APPOINTMENT AND TENURE OF THE CHIEF EX4 ECUTIVE OFFICER.— 

5 (1) IN GENERAL.—The President shall appoint 

6 the chief executive officer, by and with the advice 

7 and consent of the Senate. 

8 (2) TERM.—The chief executive officer shall be 

9 appointed for a term of 6 years. 

10 (3) VACANCIES.—Any vacancy in the office of 

11 the chief executive officer shall be filled by the Presi12 dent, and the person appointed to fill a vacancy in 

13 that position occurring before the expiration of the 

14 term for which the predecessor was appointed shall 

15 be appointed only for the remainder of that term. 

16 (c) QUALIFICATIONS.—The chief executive officer— 

17 (1) shall have significant expertise in manage18 ment and administration of a financial institution, 

19 or significant expertise in the financing and develop20 ment of infrastructure projects, or significant exper21 tise in analyzing the economic benefits of infrastruc22 ture investment; and 

23 (2) may not— 

24 (A) hold any other public office; 


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1 (B) have any financial interest in an infra2 structure project then being considered by the 

3 Board of Directors, unless that interest is 

4 placed in a blind trust; or 

5 (C) have any financial interest in an in6 vestment institution or its affiliates or any 

7 other entity seeking or likely to seek financial 

8 assistance for any infrastructure project from 

9 AIFA, unless any such interest is placed in a 

10 blind trust for the tenure of the service of the 

11 chief executive officer plus 2 additional years. 

12 (d) RESPONSIBILITIES.—The chief executive officer 

13 shall have such executive functions, powers, and duties as 

14 may be prescribed by this Act, the bylaws of AIFA, or 

15 the Board of Directors, including— 

16 (1) responsibility for the development and im17 plementation of the strategy of AIFA, including— 

18 (A) the development and submission to the 

19 Board of Directors of the investment pro20 spectus, the annual business plans and budget; 

21 (B) the development and submission to the 

22 Board of Directors of a long-term strategic 

23 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, and where, 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. At the discre5 tion of the Board of Directors, specific func6 tions of the Chief Financial Officer may be del7 egated 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; 

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; and 

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, except that the functions of 

24 the Chief Financial Officer set forth in subsection (e) shall 


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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 

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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 the Govern4 ment; 

5 (C) demonstrate a clear and significant 

6 public benefit; 

7 (D) lead to job creation; and 

8 (E) mitigate environmental concerns; 

9 (2) the means by which development of the in10 frastructure project under consideration is being fi11 nanced, including— 

12 (A) the terms, conditions, and structure of 

13 the proposed financing; 

14 (B) the credit worthiness and standing of 

15 the project sponsors, providers of equity, and 

16 cofinanciers; 

17 (C) the financial assumptions and projec18 tions on which the infrastructure project is 

19 based; and 

20 (D) whether there is sufficient State or 

21 municipal political support for the successful 

22 completion of the infrastructure project; 

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1 ceed more promptly and with lower costs than would 

2 be the case without such assistance; 

3 (4) the extent to which the provision of assist4 ance by AIFA maximizes the level of private invest5 ment in the infrastructure project or supports a 

6 public-private partnership, while providing a signifi7 cant public benefit; 

8 (5) the extent to which the provision of assist9 ance by AIFA can mobilize the participation of other 

10 financing partners in the infrastructure project; 

11 (6) the technical and operational viability of the 

12 infrastructure project; 

13 (7) the proportion of financial assistance from 

14 AIFA; 

15 (8) the geographic location of the project in an 

16 effort to have geographic diversity of projects funded 

17 by AIFA; 

18 (9) the size of the project and its impact on the 

19 resources of AIFA; 

20 (10) the infrastructure sector of the project, in 

21 an effort to have projects from more than one sector 

22 funded by AIFA; and 

23 (11) Encourages use of innovative procurement, 

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1 in-life-cycle cost, and improve the cost-effectiveness 

2 of a project. 

3 (c) APPLICATION.— 

4 (1) IN GENERAL.—Any eligible entity seeking 

5 assistance from AIFA under this Act for an eligible 

6 infrastructure project shall submit an application to 

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

8 such information as the Board of Directors or the 

9 chief executive officer may require. 

10 (2) REVIEW OF APPLICATIONS.—AIFA shall re11 view applications for assistance under this Act on an 

12 ongoing basis. The chief executive officer, working 

13 with the senior management, shall prepare eligible 

14 infrastructure projects for review and approval by 

15 the Board of Directors. 

16 (3) DEDICATED REVENUE SOURCES.—The Fed17 eral credit instrument shall be repayable, in whole or 

18 in part, from tolls, user fees, or other dedicated rev19 enue sources that also secure the infrastructure 

20 project obligations. 

21 (d) ELIGIBLE INFRASTRUCTURE PROJECT COSTS.— 

22 (1) IN GENERAL.—Except as provided in para23 graph (2), to be eligible for assistance under this 

24 Act, an infrastructure project shall have project 


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1 costs that are reasonably anticipated to equal or ex2 ceed $100,000,000. 

3 (2) RURAL INFRASTRUCTURE PROJECTS.—To 

4 be eligible for assistance under this Act a rural in5 frastructure project shall have project costs that are 

6 reasonably anticipated to equal or exceed 

7 $25,000,000. 

8 (e) LOAN ELIGIBILITY AND MAXIMUM AMOUNTS.— 

9 (1) IN GENERAL.—The amount of a direct loan 

10 or loan guarantee under this Act shall not exceed 

11 the lesser of 50 percent of the reasonably anticipated 

12 eligible infrastructure project costs or, if the direct 

13 loan or loan guarantee does not receive an invest14 ment grade rating, the amount of the senior project 

15 obligations. 

16 (2) MAXIMUM ANNUAL LOAN AND LOAN GUAR17 ANTEE VOLUME.—The aggregate amount of direct 

18 loans and loan guarantees made by AIFA in any 

19 single fiscal year may not exceed— 

20 (A) during the first 2 fiscal years of the 

21 operations of AIFA, $10,000,000,000; 

22 (B) during fiscal years 3 through 9 of the 

23 operations of AIFA, $20,000,000,000; or 

24 (C) during any fiscal year thereafter, 

25 $50,000,000,000. 


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1 (f) STATE AND LOCAL PERMITS REQUIRED.—The 

2 provision of assistance by the Board of Directors pursuant 

3 to this Act shall not be deemed to relieve any recipient 

4 of such assistance, or the related infrastructure project, 

5 of any obligation to obtain required State and local per6 mits and approvals. 

7 (g) EMPLOYEE PROTECTIONS.—As a condition for 

8 the provision of financial assistance by the Board of Direc9 tors pursuant to this Act, the interests of employees af10 fected by the financial assistance shall be protected under 

11 arrangements the Secretary of Labor concludes are fair 

12 and equitable in accordance with section 5333(b)(2) of 

13 title 49, United States Code. 

14 SEC. 254. LOAN TERMS AND REPAYMENT. 

15 (a) IN GENERAL.—A direct loan or loan guarantee 

16 under this Act with respect to an eligible infrastructure 

17 project shall be on such terms, subject to such conditions, 

18 and contain such covenants, representations, warranties, 

19 and requirements (including requirements for audits) as 

20 the chief executive officer determines appropriate. 

21 (b) TERMS.—A direct loan or loan guarantee under 

22 this Act— 

23 (1) shall— 

24 (A) be payable, in whole or in part, from 

25 tolls, user fees, or other dedicated revenue 


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1 sources that also secure the senior project obli2 gations (such as availability payments and dedi3 cated State or local revenues); and 

4 (B) include a rate covenant, coverage re5 quirement, or similar security feature sup6 porting the project obligations; and 

7 (2) may have a lien on revenues described in 

8 paragraph (1), subject to any lien securing project 

9 obligations. 

10 (c) BASE INTEREST RATE.—The base interest rate 

11 on a direct loan under this Act shall be not less than the 

12 yield on United States Treasury obligations of a similar 

13 maturity to the maturity of the direct loan. 

14 (d) RISK ASSESSMENT.—Before entering into an 

15 agreement for assistance under this Act, the chief execu16 tive officer, in consultation with the Director of the Office 

17 of Management and Budget and considering rating agency 

18 preliminary or final rating opinion letters of the project 

19 under this section, shall estimate an appropriate Federal 

20 credit subsidy amount for each direct loan and loan guar21 antee, taking into account such letter, as well as any com22 parable market rates available for such a loan or loan 

23 guarantee, should any exist. The final credit subsidy cost 

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1 sistent with the Federal Credit Reform Act, 2 U.S.C. 

2 661a, et seq. 

3 (e) CREDIT FEE.— 

4 (1) IN GENERAL.—With respect to each agree5 ment for assistance under this Act, the chief execu6 tive officer may charge a credit fee to the recipient 

7 of such assistance to pay for, over time, all or a por8 tion of the Federal credit subsidy determined under 

9 subsection (d), with the remainder paid by the ac10 count established for AIFA. 

11 (2) TREATMENT OF SOURCE OF FEES.—The 

12 source of fees paid under this section shall not be a 

13 loan or debt obligation guaranteed by the Federal 

14 Government. 

15 (3) CREDIT FEE ON A DIRECT LOAN.—In the 

16 case of a direct loan, such credit fee shall be in addi17 tion to the base interest rate established under sub18 section (c). 

19 (f) MATURITY DATE.—The final maturity date of a 

20 direct loan or loan guaranteed by AIFA under this Act 

21 shall be not later than 35 years after the date of substan22 tial completion of the infrastructure project, as determined 

23 by the chief executive officer. 

24 (g) RATING OPINION LETTER.— 


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1 (1) IN GENERAL.—The chief executive officer 

2 shall require each applicant for assistance under this 

3 Act to provide a rating opinion letter from at least 

4 1 ratings agency, indicating that the senior obliga5 tions of the infrastructure project, which may be the 

6 Federal credit instrument, have the potential to 

7 achieve an investment-grade rating. 

8 (2) RURAL INFRASTRUCTURE PROJECTS.—With 

9 respect to a rural infrastructure project, a rating 

10 agency opinion letter described in paragraph (1) 

11 shall not be required, except that the loan or loan 

12 guarantee shall receive an internal rating score, 

13 using methods similar to the ratings agencies gen14 erated by AIFA, measuring the proposed direct loan 

15 or loan guarantee against comparable direct loans or 

16 loan guarantees of similar credit quality in a similar 

17 sector. 

18 (h) INVESTMENT-GRADE RATING REQUIREMENT.— 

19 (1) LOANS AND LOAN GUARANTEES.—The exe20 cution of a direct loan or loan guarantee under this 

21 Act shall be contingent on the senior obligations of 

22 the infrastructure project receiving an investment23 grade rating. 

24 (2) RATING OF AIFA OVERALL PORTFOLIO.— 

25 The average rating of the overall portfolio of AIFA 


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1 shall be not less than investment grade after 5 years 

2 of operation. 

3 (i) TERMS AND REPAYMENT OF DIRECT LOANS.— 

4 (1) SCHEDULE.—The chief executive officer 

5 shall establish a repayment schedule for each direct 

6 loan under this Act, based on the projected cash 

7 flow from infrastructure project revenues and other 

8 repayment sources. 

9 (2) COMMENCEMENT.—Scheduled loan repay10 ments of principal or interest on a direct loan under 

11 this Act shall commence not later than 5 years after 

12 the date of substantial completion of the infrastruc13 ture project, as determined by the chief executive of14 ficer of AIFA. 

15 (3) DEFERRED PAYMENTS OF DIRECT

16 LOANS.— 

17 (A) AUTHORIZATION.—If, at any time 

18 after the date of substantial completion of an 

19 infrastructure project assisted under this Act, 

20 the infrastructure project is unable to generate 

21 sufficient revenues to pay the scheduled loan re22 payments of principal and interest on the direct 

23 loan under this Act, the chief executive officer 

24 may allow the obligor to add unpaid principal 

25 and interest to the outstanding balance of the 


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1 direct loan, if the result would benefit the Gov2 ernment. 

3 (B) INTEREST.—Any payment deferred 

4 under subparagraph (A) shall— 

5 (i) continue to accrue interest, in ac6 cordance with the terms of the obligation, 

7 until fully repaid; and 

8 (ii) be scheduled to be amortized over 

9 the remaining term of the loan. 

10 (C) CRITERIA.— 

11 (i) IN GENERAL.—Any payment defer12 ral under subparagraph (A) shall be con13 tingent on the infrastructure project meet14 ing criteria established by the Board of Di15 rectors. 

16 (ii) REPAYMENT STANDARDS.—The 

17 criteria established under clause (i) shall 

18 include standards for reasonable assurance 

19 of repayment. 

20 (4) PREPAYMENT OF DIRECT LOANS.— 

21 (A) USE OF EXCESS REVENUES.—Any ex22 cess revenues that remain after satisfying 

23 scheduled debt service requirements on the in24 frastructure project obligations and direct loan 

25 and all deposit requirements under the terms of 


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1 any trust agreement, bond resolution, or similar 

2 agreement securing project obligations under 

3 this Act may be applied annually to prepay the 

4 direct loan, without penalty. 

5 (B) USE OF PROCEEDS OF REFI6 NANCING.—A direct loan under this Act may be 

7 prepaid at any time, without penalty, from the 

8 proceeds of refinancing from non-Federal fund9 ing sources. 

10 (5) SALE OF DIRECT LOANS.— 

11 (A) IN GENERAL.—As soon as is prac12 ticable after substantial completion of an infra13 structure project assisted under this Act, and 

14 after notifying the obligor, the chief executive 

15 officer may sell to another entity, or reoffer into 

16 the capital markets, a direct loan for the infra17 structure project, if the chief executive officer 

18 determines that the sale or reoffering can be 

19 made on favorable terms for the Government. 

20 (B) CONSENT OF OBLIGOR.—In making a 

21 sale or reoffering under subparagraph (A), the 

22 chief executive officer may not change the origi23 nal terms and conditions of the direct loan, 

24 without the written consent of the obligor. 

25 (j) LOAN GUARANTEES.— 


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1 (1) TERMS.—The terms of a loan guaranteed 

2 by AIFA under this Act shall be consistent with the 

3 terms set forth in this section for a direct loan, ex4 cept that the rate on the guaranteed loan and any 

5 payment, pre-payment, or refinancing features shall 

6 be negotiated between the obligor and the lender, 

7 with the consent of the chief executive officer. 

8 (2) GUARANTEED LENDER.—A guaranteed 

9 lender shall be limited to those lenders meeting the 

10 definition of that term in section 601(a) of title 23, 

11 United States Code. 

12 (k) COMPLIANCE WITH FCRA; IN GENERAL.—Di13 rect loans and loan guarantees authorized by this Act shall 

14 be subject to the provisions of the Federal Credit Reform 

15 Act of 1990 (2 U.S.C. 661 et seq.). 

16 SEC. 255. COMPLIANCE AND ENFORCEMENT. 

17 (a) CREDIT AGREEMENT.—Notwithstanding any 

18 other provision of law, each eligible entity that receives 

19 assistance under this Act from AIFA shall enter into a 

20 credit agreement that requires such entity to comply with 

21 all applicable policies and procedures of AIFA, in addition 

22 to all other provisions of the loan agreement. 

23 (b) AIFA AUTHORITY ON NONCOMPLIANCE.—In any 

24 case in which a recipient of assistance under this Act is 

25 materially out of compliance with the loan agreement, or 


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1 any applicable policy or procedure of AIFA, the Board of 

2 Directors may take action to cancel unutilized loan 

3 amounts, or to accelerate the repayment terms of any out4 standing obligation. 

5 (c) CONSTRUCTION.—Nothing in this Act is intended 

6 to affect existing provisions of law applicable to the plan7 ning, development, construction, or operation of projects 

8 funded under the Act. 

9 SEC. 256. AUDITS; REPORTS TO THE PRESIDENT AND CON10 GRESS. 

11 (a) ACCOUNTING.—The books of account of AIFA 

12 shall be maintained in accordance with generally accepted 

13 accounting principles, and shall be subject to an annual 

14 audit by independent public accountants of nationally rec15 ognized standing appointed by the Board of Directors. 

16 (b) REPORTS.— 

17 (1) BOARD OF DIRECTORS.—Not later than 90 

18 days after the last day of each fiscal year, the Board 

19 of Directors shall submit to the President and Con20 gress a complete and detailed report with respect to 

21 the preceding fiscal year, setting forth— 

22 (A) a summary of the operations of AIFA, 

23 for such fiscal year; 

24 (B) a schedule of the obligations of AIFA 

25 and capital securities outstanding at the end of 


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1 such fiscal year, with a statement of the 

2 amounts issued and redeemed or paid during 

3 such fiscal year; 

4 (C) the status of infrastructure projects re5 ceiving funding or other assistance pursuant to 

6 this Act during such fiscal year, including all 

7 nonperforming loans, and including disclosure 

8 of all entities with a development, ownership, or 

9 operational interest in such infrastructure 

10 projects; 

11 (D) a description of the successes and 

12 challenges encountered in lending to rural com13 munities, including the role of the Center for 

14 Excellence and the Office of Rural Assistance 

15 established under this Act; and 

16 (E) an assessment of the risks of the port17 folio of AIFA, prepared by an independent 

18 source. 

19 (2) GAO.—Not later than 5 years after the 

20 date of enactment of this Act, the Comptroller Gen21 eral of the United States shall conduct an evaluation 

22 of, and shall submit to Congress a report on, activi23 ties of AIFA for the fiscal years covered by the re24 port that includes an assessment of the impact and 

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1 cluding a review of how effectively each such infra2 structure project accomplished the goals prioritized 

3 by the infrastructure project criteria of AIFA. 

4 (c) BOOKS AND RECORDS.— 

5 (1) IN GENERAL.—AIFA shall maintain ade6 quate books and records to support the financial 

7 transactions of AIFA, with a description of financial 

8 transactions and infrastructure projects receiving 

9 funding, and the amount of funding for each such 

10 project maintained on a publically accessible data11 base. 

12 (2) AUDITS BY THE SECRETARY AND GAO.— 

13 The books and records of AIFA shall at all times be 

14 open to inspection by the Secretary of the Treasury, 

15 the Special Inspector General, and the Comptroller 

16 General of the United States. 

17 PART III—FUNDING OF AIFA 

18 SEC. 257. ADMINISTRATIVE FEES. 

19 (a) IN GENERAL.—In addition to fees that may be 

20 collected under section 254(e), the chief executive officer 

21 shall establish and collect fees from eligible funding recipi22 ents with respect to loans and loan guarantees under this 

23 Act that— 

24 (1) are sufficient to cover all or a portion of the 

25 administrative costs to the Federal Government for 


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1 the operations of AIFA, including the costs of expert 

2 firms, including counsel in the field of municipal and 

3 project finance, and financial advisors to assist with 

4 underwriting, credit analysis, or other independent 

5 reviews, as appropriate; 

6 (2) may be in the form of an application or 

7 transaction fee, or other form established by the 

8 chief executive officer; and 

9 (3) may be based on the risk premium associ10 ated with the loan or loan guarantee, taking into 

11 consideration— 

12 (A) the price of United States Treasury 

13 obligations of a similar maturity; 

14 (B) prevailing market conditions; 

15 (C) the ability of the infrastructure project 

16 to support the loan or loan guarantee; and 

17 (D) the total amount of the loan or loan 

18 guarantee. 

19 (b) AVAILABILITY OF AMOUNTS.—Amounts collected 

20 under subsections (a)(1), (a)(2)(a)(3) shall be available 

21 without further action, and the source of fees paid under 

22 this section shall not be a loan or debt obligation guaran23 teed by the Federal Government. 


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1 SEC. 258. EFFICIENCY OF AIFA. 

2 The chief executive officer shall, to the extent pos3 sible, take actions consistent with this Act to minimize the 

4 risk and cost to the Government of AIFA activities. Fees 

5 and premiums for loan guarantee or insurance coverage 

6 will be set at levels that minimize administrative and Fed7 eral credit subsidy costs to the Government, as defined 

8 in section 502 of the Federal Credit Reform Act of 1990, 

9 of such coverage, while supporting achievement of the pro10 gram’s objectives, consistent with policies as set forth in 

11 the business plan. 

12 SEC. 259. FUNDING. 

13 (a) IN GENERAL.—There is hereby appropriated to 

14 AIFA to carry out this Act, for the cost of direct loans 

15 and loan guarantees subject to the limitations under sec16 tion 253, and for administrative costs, $10,000,000,000, 

17 to remain available until expended. 

18 (b) COSTS DEFINED.—Such costs, including the 

19 costs of modifying such loans, shall be as defined in sec20 tion 502 of the Federal Credit Reform Act of 1990. 

21 (c) ADMINISTRATIVE COSTS.—Of the amounts appro22 priated under subsection (a), not more than $25,000,000 

23 for each of fiscal years 2012 through 2013, and not more 

24 than $50,000,000 for fiscal year 2014 may be used for 

25 administrative costs of AIFA. 


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1 (d) OFFSETS OF SUBSIDY COSTS.—Not more than 

2 5 percent of such amount may be used to offset subsidy 

3 costs associated with rural projects. 

4 PART IV—EXTENSION OF EXEMPTION FROM AL5 TERNATIVE MINIMUM TAX TREATMENT FOR 

6 CERTAIN TAX-EXEMPT BONDS 

7 SEC. 260. EXTENSION OF EXEMPTION FROM ALTERNATIVE 

8 MINIMUM TAX TREATMENT FOR CERTAIN 

9 TAX-EXEMPT BONDS. 

10 (a) IN GENERAL.—Clause (vi) of section 57(a)(5)(C) 

11 of the Internal Revenue Code of 1986 is amended— 

12 (1) by striking ‘‘January 1, 2011’’ in subclause 

13 (I) and inserting ‘‘January 1, 2015’’; and 

14 (2) by striking ‘‘IN 2009 AND 2010’’ in the head15 ing and inserting ‘‘DURING THE PERIOD 2009

16 THROUGH 2014’’. 

17 (b) ADJUSTED CURRENT EARNINGS.—Clause (iv) of 

18 section 56(g)(4)(B) of the Internal Revenue Code of 1986 

19 is amended— 

20 (1) by striking ‘‘January 1, 2011’’ in subclause 

21 (I) and inserting ‘‘January 1, 2015’’; and 

22 (2) by striking ‘‘IN 2009 AND 2010’’ in the head23 ing and inserting ‘‘DURING THE PERIOD 2009

24 THROUGH 2014’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to obligations issued after Decem3 ber 31, 2010. 

4 Subtitle F—Project Rebuild 

5 SEC. 261. PROJECT REBUILD. 

6 (a) DIRECT APPROPRIATIONS.—There is appro7 priated, out of any money in the Treasury not otherwise 

8 appropriated, $15,000,000,000, to remain available until 

9 September 30, 2016, for assistance to eligible entities in10 cluding States and units of general local government (as 

11 such terms are defined in section 102 of the Housing and 

12 Community Development Act of 1974 (42 U.S.C. 5302)), 

13 and qualified nonprofit organizations, businesses or con14 sortia of eligible entities for the redevelopment of aban15 doned and foreclosed-upon properties and for the stabiliza16 tion of affected neighborhoods. 

17 (b) ALLOCATION OF APPROPRIATED AMOUNTS.— 

18 (1) IN GENERAL.—Of the amounts appro19 priated, two thirds shall be allocated to States and 

20 units of general local government based on a funding 

21 formula established by the Secretary of Housing and 

22 Urban Development (in this subtitle referred to as 

23 the ‘‘Secretary’’). Of the amounts appropriated, one 

24 third shall be distributed competitively to eligible en25 tities. 


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1 (2) FORMULA TO BE DEVISED SWIFTLY.—The 

2 funding formula required under paragraph (1) shall 

3 be established and the Secretary shall announce for4 mula funding allocations, not later than 30 days 

5 after the date of enactment of this section. 

6 (3) FORMULA CRITERIA.—The Secretary may 

7 establish a minimum grant size, and the funding for8 mula required under paragraph (1) shall ensure that 

9 any amounts appropriated or otherwise made avail10 able under this section are allocated to States and 

11 units of general local government with the greatest 

12 need, as such need is determined in the discretion of 

13 the Secretary based on— 

14 (A) the number and percentage of home 

15 foreclosures in each State or unit of general 

16 local government; 

17 (B) the number and percentage of homes 

18 in default or delinquency in each State or unit 

19 of general local government; and 

20 (C) other factors such as established pro21 gram designs, grantee capacity and perform22 ance, number and percentage of commercial 

23 foreclosures, overall economic conditions, and 

24 other market needs data, as determined by the 

25 Secretary. 


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1 (4) COMPETITION CRITERIA.— 

2 (A) For the funds distributed competi3 tively, eligible entities shall be States, units of 

4 general local government, nonprofit entities, 

5 for-profit entities, and consortia of eligible enti6 ties that demonstrate capacity to use funding 

7 within the period of this program. 

8 (B) In selecting grantees, the Secretary 

9 shall ensure that grantees are in areas with the 

10 greatest number and percentage of residential 

11 and commercial foreclosures and other market 

12 needs data, as determined by the Secretary. Ad13 ditional award criteria shall include dem14 onstrated grantee capacity to execute projects 

15 involving acquisition and rehabilitation or rede16 velopment of foreclosed residential and commer17 cial property and neighborhood stabilization, le18 verage, knowledge of market conditions and of 

19 effective stabilization activities to address iden20 tified conditions, and any additional factors de21 termined by the Secretary. 

22 (C) The Secretary may establish a min23 imum grant size. 

24 (D) The Secretary shall publish competi25 tion criteria for any grants awarded under this 


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1 heading not later than 60 days after appropria2 tion of funds, and applications shall be due to 

3 the Secretary within 120 days. 

4 (c) USE OF FUNDS.— 

5 (1) OBLIGATION AND EXPENDITURE.—The Sec6 retary shall obligate all funding within 150 days of 

7 enactment of this Act. Any eligible entity that re8 ceives amounts pursuant to this section shall expend 

9 all funds allocated to it within three years of the 

10 date the funds become available to the grantee for 

11 obligation. Furthermore, the Secretary shall by No12 tice establish intermediate expenditure benchmarks 

13 at the one and two year dates from the date the 

14 funds become available to the grantee for obligation. 

15 (2) PRIORITIES.— 

16 (A) JOB CREATION.—Each grantee or eli17 gible entity shall describe how its proposed use 

18 of funds will prioritize job creation, and sec19 ondly, will address goals to stabilize neighbor20 hoods, reverse vacancy, or increase or stabilize 

21 residential and commercial property values. 

22 (B) TARGETING.—Any State or unit of 

23 general local government that receives formula 

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1 ority emphasis and consideration to those met2 ropolitan areas, metropolitan cities, urban 

3 areas, rural areas, low- and moderate-income 

4 areas, and other areas with the greatest need, 

5 including those— 

6 (i) with the greatest percentage of 

7 home foreclosures; 

8 (ii) identified as likely to face a sig9 nificant rise in the rate of residential or 

10 commercial foreclosures; and 

11 (iii) with higher than national average 

12 unemployment rate. 

13 (C) LEVERAGE.—Each grantee or eligible 

14 entity shall describe how its proposed use of 

15 funds will leverage private funds. 

16 (3) ELIGIBLE USES.—Amounts made available 

17 under this section may be used to— 

18 (A) establish financing mechanisms for the 

19 purchase and redevelopment of abandoned and 

20 foreclosed-upon properties, including such 

21 mechanisms as soft-seconds, loan loss reserves, 

22 and shared-equity loans for low- and moderate23 income homebuyers; 

24 (B) purchase and rehabilitate properties 

25 that have been abandoned or foreclosed upon, 


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1 in order to sell, rent, or redevelop such prop2 erties; 

3 (C) establish and operate land banks for 

4 properties that have been abandoned or fore5 closed upon; 

6 (D) demolish blighted structures; 

7 (E) redevelop abandoned, foreclosed, de8 molished, or vacant properties; and 

9 (F) engage in other activities, as deter10 mined by the Secretary through notice, that are 

11 consistent with the goals of creating jobs, stabi12 lizing neighborhoods, reversing vacancy reduc13 tion, and increasing or stabilizing residential 

14 and commercial property values. 

15 (d) LIMITATIONS.— 

16 (1) ON PURCHASES.—Any purchase of a prop17 erty under this section shall be at a price not to ex18 ceed its current market value, taking into account 

19 its current condition. 

20 (2) REHABILITATION.—Any rehabilitation of an 

21 eligible property under this section shall be to the 

22 extent necessary to comply with applicable laws, and 

23 other requirements relating to safety, quality, mar24 ketability, and habitability, in order to sell, rent, or 


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1 redevelop such properties or provide a renewable en2 ergy source or sources for such properties. 

3 (3) SALE OF HOMES.—If an abandoned or fore4 closed-upon home is purchased, redeveloped, or oth5 erwise sold to an individual as a primary residence, 

6 then such sale shall be in an amount equal to or less 

7 than the cost to acquire and redevelop or rehabilitate 

8 such home or property up to a decent, safe, market9 able, and habitable condition. 

10 (4) ON DEMOLITION OF PUBLIC HOUSING.— 

11 Public housing, as defined at section 3(b)(6) of the 

12 United States Housing Act of 1937, may not be de13 molished with funds under this section. 

14 (5) ON DEMOLITION ACTIVITIES.—No more 

15 than 10 percent of any grant made under this sec16 tion may be used for demolition activities unless the 

17 Secretary determines that such use represents an 

18 appropriate response to local market conditions. 

19 (6) ON USE OF FUNDS FOR NON-RESIDENTIAL

20 PROPERTY.—No more than 30 percent of any grant 

21 made under this section may be used for eligible ac22 tivities under subparagraphs (A), (B), and (E) of 

23 subsection (c)(3) that will not result in residential 

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1 termines that such use represents an appropriate re2 sponse to local market conditions. 

3 (e) RULES OF CONSTRUCTION.— 

4 (1) IN GENERAL.—Except as otherwise pro5 vided by this section, amounts appropriated, reve6 nues generated, or amounts otherwise made avail7 able to eligible entities under this section shall be 

8 treated as though such funds were community devel9 opment block grant funds under title I of the Hous10 ing and Community Development Act of 1974 (42 

11 U.S.C. 5301 et seq.). 

12 (2) NO MATCH.—No matching funds shall be 

13 required in order for an eligible entity to receive any 

14 amounts under this section. 

15 (3) TENANT PROTECTIONS.—An eligible entity 

16 receiving a grant under this section shall comply 

17 with the 14th, 17th, 18th, 19th, 20th, 21st, 22nd, 

18 and 23rd provisos under the heading ‘‘Department 

19 of Housing and Urban Development—Community 

20 Planning and Development—Community Develop21 ment Fund’’ in title XII of division A of the Amer22 ican Recovery and Reinvestment Act of 

23 2009American Recovery and Reinvestment Act of 

24 2009 (Public Law 111–5, 123 Stat. 218–19), as 

25 amended by section 1497(b)(2) of the Dodd-Frank 


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1 Wall Street Reform and Consumer Protection Act 

2 (Public Law 111–203, 124 Stat. 2211). 

3 (4) VICINITY HIRING.—An eligible entity receiv4 ing a grant under this section shall comply with sec5 tion 1497(a)(8) of the Dodd-Frank Wall Street Re6 form and Consumer Protection Act (Public Law 

7 111–203, 129 Stat. 2210). 

8 (f) AUTHORITY TO SPECIFY ALTERNATIVE RE9 QUIREMENTS.— 

10 (1) IN GENERAL.—In administering the pro11 gram under this section, the Secretary may specify 

12 alternative requirements to any provision under title 

13 I of the Housing and Community Development Act 

14 of 1974 or under title I of the Cranston-Gonzalez 

15 National Affordable Housing Act of 1990 (except for 

16 those provisions in these laws related to fair hous17 ing, nondiscrimination, labor standards, and the en18 vironment) for the purpose of expediting and facili19 tating the use of funds under this section. 

20 (2) NOTICE.—The Secretary shall provide writ21 ten notice of intent to the public via internet to exer22 cise the authority to specify alternative requirements 

23 under paragraph. 

24 (3) LOW AND MODERATE INCOME REQUIRE25 MENT.— 


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1 (A) IN GENERAL.—Notwithstanding the 

2 authority of the Secretary under paragraph 

3 (1)— 

4 (i) all of the formula and competitive 

5 grantee funds appropriated or otherwise 

6 made available under this section shall be 

7 used with respect to individuals and fami8 lies whose income does not exceed 120 per9 cent of area median income; and 

10 (ii) not less than 25 percent of the 

11 formula and competitive grantee funds ap12 propriated or otherwise made available 

13 under this section shall be used for the 

14 purchase and redevelopment of eligible 

15 properties that will be used to house indi16 viduals or families whose incomes do not 

17 exceed 50 percent of area median income. 

18 (B) RECURRENT REQUIREMENT.—The 

19 Secretary shall, by rule or order, ensure, to the 

20 maximum extent practicable and for the longest 

21 feasible term, that the sale, rental, or redevelop22 ment of abandoned and foreclosed-upon homes 

23 and residential properties under this section re24 main affordable to individuals or families de25 scribed in subparagraph (A). 


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1 (g) NATIONWIDE DISTRIBUTION OF RESOURCES.— 

2 Notwithstanding any other provision of this section or the 

3 amendments made by this section, each State shall receive 

4 not less than $20,000,000 of formula funds. 

5 (h) LIMITATION ON USE OF FUNDS WITH RESPECT

6 TO EMINENT DOMAIN.—No State or unit of general local 

7 government may use any amounts received pursuant to 

8 this section to fund any project that seeks to use the power 

9 of eminent domain, unless eminent domain is employed 

10 only for a public use, which shall not be construed to in11 clude economic development that primarily benefits pri12 vate entities. 

13 (i) LIMITATION ON DISTRIBUTION OF FUNDS.— 

14 (1) IN GENERAL.—None of the funds made 

15 available under this section shall be distributed to— 

16 (A) an organization which has been in17 dicted for a violation under Federal law relating 

18 to an election for Federal office; or 

19 (B) an organization which employs applica20 ble individuals. 

21 (2) APPLICABLE INDIVIDUALS DEFINED.—In 

22 this section, the term ‘‘applicable individual’’ means 

23 an individual who— 

24 (A) is— 


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1 (i) employed by the organization in a 

2 permanent or temporary capacity; 

3 (ii) contracted or retained by the or4 ganization; or 

5 (iii) acting on behalf of, or with the 

6 express or apparent authority of, the orga7 nization; and 

8 (B) has been indicted for a violation under 

9 Federal law relating to an election for Federal 

10 office. 

11 (j) RENTAL HOUSING PREFERENCES.—Each State 

12 and local government receiving formula amounts shall es13 tablish procedures to create preferences for the develop14 ment of affordable rental housing. 

15 (k) JOB CREATION.—If a grantee chooses to use 

16 funds to create jobs by establishing and operating a pro17 gram to maintain eligible neighborhood properties, not 

18 more than 10 percent of any grant may be used for that 

19 purpose. 

20 (l) PROGRAM SUPPORT AND CAPACITY BUILDING.— 

21 The Secretary may use up to 0.75 percent of the funds 

22 appropriated for capacity building of and support for eligi23 ble entities and grantees undertaking neighborhood sta24 bilization programs, staffing, training, technical assist25 ance, technology, monitoring, travel, enforcement, reVerDate Mar 15 2010 02:19 Jul 30, 2013 Jkt 029200 PO 00000 Frm 00145 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821

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1 search, and evaluation activities, subject to the following 

2 requirements: 

3 (1) Funds set aside for the purposes of this 

4 subparagraph shall remain available until September 

5 30, 2018. 

6 (2) Any funds made available under this sub7 paragraph and used by the Secretary for personnel 

8 expenses related to administering funding under this 

9 subparagraph shall be transferred to ‘‘Personnel 

10 Compensation and Benefits, Community Planning 

11 and Development’’. 

12 (3) Any funds made available under this sub13 paragraph and used by the Secretary for training or 

14 other administrative expenses shall be transferred to 

15 ‘‘Administration, Operations, and Management, 

16 Community Planning and Development’’ for non17 personnel expenses. 

18 (4) Any funds made available under this sub19 paragraph and used by the Secretary for technology 

20 shall be transferred to ‘‘Working Capital Fund’’. 

21 (m) ENFORCEMENT AND PREVENTION OF FRAUD

22 AND ABUSE.—The Secretary shall establish and imple23 ment procedures to prevent fraud and abuse of funds 

24 under this section, and shall impose a requirement that 

25 grantees have an internal auditor to continuously monitor 


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1 grantee performance to prevent fraud, waste, and abuse. 

2 Grantees shall provide the Secretary and citizens with 

3 quarterly progress reports. The Secretary shall recapture 

4 funds from formula and competitive grantees that do not 

5 expend 100 percent of allocated funds within 3 years of 

6 the date that funds become available, and from underper7 forming or mismanaged grantees, and shall re-allocate 

8 those funds by formula to target areas with the greatest 

9 need, as determined by the Secretary through notice. The 

10 Secretary may take an alternative sanctions action only 

11 upon determining that such action is necessary to achieve 

12 program goals in a timely manner. 

13 (n) CONFORMANCE OF POLICIES AND PROCE14 DURES.—The Secretary of Housing and Urban Develop15 ment shall to the extent feasible conform policies and pro16 cedures for grants made under this section to the policies 

17 and practices already in place for the grants made under 

18 section 2301 of the Housing and Economic Recovery Act 

19 of 2008 (42 U.S.C. 5301 note); title XII of division A 

20 of the American Recovery and Reinvestment Act of 2009 

21 (Public Law 111–5; 123 Stat. 203); or section 1497 of 

22 the Dodd-Frank Wall Street Reform and Consumer Pro23 tection Act (42 U.S.C. 5301 note). 


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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 2013’’. 

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 by striking ‘‘January 1, 

19 2014’’ and inserting ‘‘January 1, 2016’’. 

20 (b) FUNDING.—Section 4004(e)(1) of the Supple21 mental Appropriations Act, 2008 (Public Law 110–252; 

22 26 U.S.C. 3304 note) is amended— 

23 (1) in subparagraph (I), by striking ‘‘and’’ at 

24 the end; 


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1 (2) in subparagraph (J), by inserting ‘‘and’’ at 

2 the end; and 

3 (3) by inserting after subparagraph (J) the fol4 lowing: 

5 ‘‘(K) the amendments made by section 

6 311(a) of the Supporting Unemployed Workers 

7 Act of 2013; and’’. 

8 (c) EFFECTIVE DATE.—The amendments made by 

9 this section shall take effect as if included in the enact10 ment of the Tax Relief, Unemployment Insurance Reau11 thorization, and Job Creation Act of 2010 (Public Law 

12 111–312; 26 U.S.C. 3304 note). 

13 SEC. 312. TEMPORARY EXTENSION OF EXTENDED BENEFIT 

14 PROVISIONS. 

15 (a) IN GENERAL.—Section 2005 of the Assistance for 

16 Unemployed Workers and Struggling Families Act, as 

17 contained in Public Law 111–5 (26 U.S.C. 3304 note), 

18 is amended— 

19 (1) by striking ‘‘December 31, 2013’’ each 

20 place it appears and inserting ‘‘December 31, 

21 2015’’; and 

22 (2) in subsection (c), by striking ‘‘June 30, 

23 2014’’ and inserting ‘‘June 30, 2016’’. 

24 (b) EXTENSION OF MATCHING FOR STATES WITH

25 NO WAITING WEEK.—Section 5 of the Unemployment 


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1 Compensation Extension Act of 2008 (Public Law 110– 

2 449; 26 U.S.C. 3304 note) is amended by striking ‘‘June 

3 30, 2014’’ and inserting ‘‘June 30, 2016’’. 

4 (c) EXTENSION OF MODIFICATION OF INDICATORS

5 UNDER THE EXTENDED BENEFIT PROGRAM.—Section 

6 203 of the Federal-State Extended Unemployment Com7 pensation Act of 1970 (26 U.S.C. 3304 note) is amend8 ed— 

9 (1) in subsection (d), by striking ‘‘December 

10 31, 2013’’ and inserting ‘‘December 31, 2015’’; and 

11 (2) in subsection (f)(2), by striking ‘‘December 

12 31, 2013’’ and inserting ‘‘December 31, 2015’’. 

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

14 this section shall take effect as if included in the enact15 ment of the Tax Relief, Unemployment Insurance Reau16 thorization, and Job Creation Act of 2010 (Public Law 

17 111–312; 26 U.S.C. 3304 note). 

18 SEC. 313. ADDITIONAL EXTENDED UNEMPLOYMENT BENE19 FITS UNDER THE RAILROAD UNEMPLOY20 MENT INSURANCE ACT. 

21 (a) EXTENSION.—Section 2(c)(2)(D)(iii) of the Rail22 road Unemployment Insurance Act (45 U.S.C. 

23 352(c)(2)(D)(iii)) is amended— 

24 (1) by striking ‘‘June 30, 2013’’ and inserting 

25 ‘‘June 30, 2015’’; and 


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1 (2) by striking ‘‘December 31, 2013’’ and in2 serting ‘‘December 31, 2015’’. 

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 (45 U.S.C. 

7 352(c)(2)(D)) shall be available to cover the cost of addi8 tional extended unemployment benefits provided under 

9 such section 2(c)(2)(D) by reason of the amendments 

10 made by subsection (a) as well as to cover the cost of such 

11 benefits provided under such section 2(c)(2)(D), as in ef12 fect on the day before the date of the enactment of this 

13 Act. 

14 PART II—REEMPLOYMENT NOW PROGRAM 

15 SEC. 321. ESTABLISHMENT OF REEMPLOYMENT NOW PRO16 GRAM. 

17 (a) IN GENERAL.—There is established the Reem18 ployment NOW program to be carried out by the Sec19 retary of Labor in accordance with this part in order to 

20 facilitate the reemployment of individuals who are receiv21 ing emergency unemployment compensation under title IV 

22 of the Supplemental Appropriations Act, 2008 (Public 

23 Law 110–252; 26 U.S.C. 3304 note) (hereafter in this 

24 part referred to as ‘‘EUC claimants’’). 


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1 (b) AUTHORIZATION AND APPROPRIATION.—There 

2 are authorized to be appropriated $4,000,000,000 for fis3 cal year 2014 to carry out the Reemployment NOW pro4 gram under this part. 

5 SEC. 322. DISTRIBUTION OF FUNDS. 

6 (a) IN GENERAL.—Of the amount made available 

7 under section 321(b) to carry out this part, the Secretary 

8 of Labor shall— 

9 (1) reserve up to 1 percent for the costs of Fed10 eral administration and for carrying out rigorous 

11 evaluations of the activities conducted under this 

12 part; and 

13 (2) allot the remainder of the funds not re14 served under paragraph (1) in accordance with the 

15 requirements of subsection (b) and (c) to States that 

16 have approved plans under section 323. 

17 (b) ALLOTMENT FORMULA.— 

18 (1) FORMULA FACTORS.—The Secretary of 

19 Labor shall allot the funds available under sub20 section (a)(2) as follows— 

21 (A) two-thirds of such funds shall be allot22 ted on the basis of the relative number of un23 employed individuals in each State, compared to 

24 the total number of unemployed individuals in 

25 all States; and 


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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, 2015. 

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 

25 basis and may be customized to meet the reemployVerDate Mar 15 2010 02:19 Jul 30, 2013 Jkt 029200 PO 00000 Frm 00170 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821

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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 

25 date of the participation) or allow a program particiVerDate Mar 15 2010 02:19 Jul 30, 2013 Jkt 029200 PO 00000 Frm 00172 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821

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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 

23 of title 5, United States Code, such additional require24 ments, including requirements regarding the allotment, re25 capture, and reallotment of funds, and reporting requireVerDate Mar 15 2010 02:19 Jul 30, 2013 Jkt 029200 PO 00000 Frm 00173 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821

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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. TEMPORARY FINANCING OF SHORT-TIME COM20 PENSATION PAYMENTS IN STATES WITH PRO21 GRAMS IN LAW. 

22 (a) PAYMENTS TO STATES.— 

23 (1) IN GENERAL.—Subject to paragraph (3), 

24 there shall be paid to a State an amount equal to 

25 100 percent of the amount of short-time compensaVerDate Mar 15 2010 02:19 Jul 30, 2013 Jkt 029200 PO 00000 Frm 00174 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821

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1 tion paid under a short-time compensation program 

2 (as defined in section 3306(v) of the Internal Rev3 enue Code of 1986) under the provisions of the 

4 State law. 

5 (2) TERMS OF PAYMENTS.—Payments made to 

6 a State under paragraph (1) shall be payable by way 

7 of reimbursement in such amounts as the Secretary 

8 estimates the State will be entitled to receive under 

9 this section for each calendar month, reduced or in10 creased, as the case may be, by any amount by 

11 which the Secretary finds that the Secretary’s esti12 mates for any prior calendar month were greater or 

13 less than the amounts which should have been paid 

14 to the State. Such estimates may be made on the 

15 basis of such statistical, sampling, or other method 

16 as may be agreed upon by the Secretary and the 

17 State agency of the State involved. 

18 (3) LIMITATIONS ON PAYMENTS.— 

19 (A) GENERAL PAYMENT LIMITATIONS.— 

20 No payments shall be made to a State under 

21 this section for short-time compensation paid to 

22 an individual by the State during a benefit year 

23 in excess of 26 times the amount of regular 

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1 ances) under the State law payable to such in2 dividual for a week of total unemployment. 

3 (B) EMPLOYER LIMITATIONS.—No pay4 ments shall be made to a State under this sec5 tion for benefits paid to an individual by the 

6 State under a short-time compensation program 

7 if such individual is employed by the partici8 pating employer on a seasonal, temporary, or 

9 intermittent basis. 

10 (b) APPLICABILITY.— 

11 (1) IN GENERAL.—Payments to a State under 

12 subsection (a) shall be available for weeks of unem13 ployment— 

14 (A) beginning on or after the date of the 

15 enactment of this Act; and 

16 (B) ending on or before the date that is 3 

17 years and 6 months after the date of the enact18 ment of this Act. 

19 (2) THREE-YEAR FUNDING LIMITATION FOR

20 COMBINED PAYMENTS UNDER THIS SECTION AND

21 SECTION 343.—States may receive payments under 

22 this section and section 343 with respect to a total 

23 of not more than 156 weeks. 

24 (c) TWO-YEAR TRANSITION PERIOD FOR EXISTING

25 PROGRAMS.—During any period that the transition proviVerDate Mar 15 2010 02:19 Jul 30, 2013 Jkt 029200 PO 00000 Frm 00176 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821

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1 sion under section 341(a)(3) is applicable to a State with 

2 respect to a short-time compensation program, such State 

3 shall be eligible for payments under this section. Subject 

4 to paragraphs (1)(B) and (2) of subsection (b), if at any 

5 point after the date of the enactment of this Act the State 

6 enacts a State law providing for the payment of short7 time compensation under a short-time compensation pro8 gram that meets the definition of such a program under 

9 section 3306(v) of the Internal Revenue Code of 1986, the 

10 State shall be eligible for payments under this section 

11 after the effective date of such enactment. 

12 (d) FUNDING AND CERTIFICATIONS.— 

13 (1) FUNDING.—There are appropriated, out of 

14 moneys in the Treasury not otherwise appropriated, 

15 such sums as may be necessary for purposes of car16 rying out this section. 

17 (2) CERTIFICATIONS.—The Secretary shall 

18 from time to time certify to the Secretary of the 

19 Treasury for payment to each State the sums pay20 able to such State under this section. 

21 (e) DEFINITIONS.—In this section: 

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

23 the Secretary of Labor. 

24 (2) STATE; STATE AGENCY; STATE LAW.—The 

25 terms ‘‘State’’, ‘‘State agency’’, and ‘‘State law’’ 


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1 have the meanings given those terms in section 205 

2 of the Federal-State Extended Unemployment Com3 pensation Act of 1970 (26 U.S.C. 3304 note). 

4 SEC. 342. TEMPORARY FINANCING OF SHORT-TIME COM5 PENSATION AGREEMENTS. 

6 (a) FEDERAL-STATE AGREEMENTS.— 

7 (1) IN GENERAL.—Any State which desires to 

8 do so may enter into, and participate in, an agree9 ment under this section with the Secretary provided 

10 that such State’s law does not provide for the pay11 ment of short-time compensation under a short-time 

12 compensation program (as defined in section 

13 3306(v) of the Internal Revenue Code of 1986). 

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 

25 Internal Revenue Code of 1986. 


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1 (2) LIMITATIONS ON PLANS.— 

2 (A) GENERAL PAYMENT LIMITATIONS.—A 

3 short-time compensation plan approved by a 

4 State shall not permit the payment of short5 time compensation to an individual by the State 

6 during a benefit year in excess of 26 times the 

7 amount of regular compensation (including de8 pendents’ allowances) under the State law pay9 able to such individual for a week of total un10 employment. 

11 (B) EMPLOYER LIMITATIONS.—A short12 time compensation plan approved by a State 

13 shall not provide payments to an individual if 

14 such individual is employed by the participating 

15 employer on a seasonal, temporary, or intermit16 tent basis. 

17 (3) EMPLOYER PAYMENT OF COSTS.—Any 

18 short-time compensation plan entered into by an em19 ployer must provide that the employer will pay the 

20 State an amount equal to one-half of the amount of 

21 short-time compensation paid under such plan. Such 

22 amount shall be deposited in the State’s unemploy23 ment fund and shall not be used for purposes of cal24 culating an employer’s contribution rate under secVerDate Mar 15 2010 02:19 Jul 30, 2013 Jkt 029200 PO 00000 Frm 00179 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821

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1 tion 3303(a)(1) of the Internal Revenue Code of 

2 1986. 

3 (c) PAYMENTS TO STATES.— 

4 (1) IN GENERAL.—There shall be paid to each 

5 State with an agreement under this section an 

6 amount equal to— 

7 (A) one-half of the amount of short-time 

8 compensation paid to individuals by the State 

9 pursuant to such agreement; and 

10 (B) any additional administrative expenses 

11 incurred by the State by reason of such agree12 ment (as determined by the Secretary). 

13 (2) TERMS OF PAYMENTS.—Payments made to 

14 a State under paragraph (1) shall be payable by way 

15 of reimbursement in such amounts as the Secretary 

16 estimates the State will be entitled to receive under 

17 this section for each calendar month, reduced or in18 creased, as the case may be, by any amount by 

19 which the Secretary finds that the Secretary’s esti20 mates for any prior calendar month were greater or 

21 less than the amounts which should have been paid 

22 to the State. Such estimates may be made on the 

23 basis of such statistical, sampling, or other method 

24 as may be agreed upon by the Secretary and the 

25 State agency of the State involved. 


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1 (3) FUNDING.—There are appropriated, out of 

2 moneys in the Treasury not otherwise appropriated, 

3 such sums as may be necessary for purposes of car4 rying out this section. 

5 (4) CERTIFICATIONS.—The Secretary shall 

6 from time to time certify to the Secretary of the 

7 Treasury for payment to each State the sums pay8 able to such State under this section. 

9 (d) APPLICABILITY.— 

10 (1) IN GENERAL.—An agreement entered into 

11 under this section shall apply to weeks of unemploy12 ment— 

13 (A) beginning on or after the date on 

14 which such agreement is entered into; and 

15 (B) ending on or before the date that is 2 

16 years and 13 weeks after the date of the enact17 ment of this Act. 

18 (2) TWO-YEAR FUNDING LIMITATION.—States 

19 may receive payments under this section with re20 spect to a total of not more than 104 weeks. 

21 (e) SPECIAL RULE.—If a State has entered into an 

22 agreement under this section and subsequently enacts a 

23 State law providing for the payment of short-time com24 pensation under a short-time compensation program that 

25 meets the definition of such a program under section 


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1 3306(v) of the Internal Revenue Code of 1986, the 

2 State— 

3 (1) shall not be eligible for payments under this 

4 section for weeks of unemployment beginning after 

5 the effective date of such State law; and 

6 (2) subject to paragraphs (1)(B) and (2) of sec7 tion 342(b), shall be eligible to receive payments 

8 under section 342 after the effective date of such 

9 State law. 

10 (f) DEFINITIONS.—In this section: 

11 (1) SECRETARY.—The term ‘‘Secretary’’ means 

12 the Secretary of Labor. 

13 (2) STATE; STATE AGENCY; STATE LAW.—The 

14 terms ‘‘State’’, ‘‘State agency’’, and ‘‘State law’’ 

15 have the meanings given those terms in section 205 

16 of the Federal-State Extended Unemployment Com17 pensation Act of 1970 (26 U.S.C. 3304 note). 

18 SEC. 343. GRANTS FOR SHORT-TIME COMPENSATION PRO19 GRAMS. 

20 (a) GRANTS.— 

21 (1) FOR IMPLEMENTATION OR IMPROVED AD22 MINISTRATION.—The Secretary shall award grants 

23 to States that enact short-time compensation pro24 grams (as defined in subsection (i)(2)) for the purVerDate Mar 15 2010 02:19 Jul 30, 2013 Jkt 029200 PO 00000 Frm 00182 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821

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1 pose of implementation or improved administration 

2 of such programs. 

3 (2) FOR PROMOTION AND ENROLLMENT.—The 

4 Secretary shall award grants to States that are eligi5 ble and submit plans for a grant under paragraph 

6 (1) for such States to promote and enroll employers 

7 in short-time compensation programs (as so de8 fined). 

9 (3) ELIGIBILITY.— 

10 (A) IN GENERAL.—The Secretary shall de11 termine eligibility criteria for the grants under 

12 paragraph (1) and (2). 

13 (B) CLARIFICATION.—A State admin14 istering a short-time compensation program, in15 cluding a program being administered by a 

16 State that is participating in the transition 

17 under the provisions of sections 341(a)(3) and 

18 342(c), that does not meet the definition of a 

19 short-time compensation program under section 

20 3306(v) of the Internal Revenue Code of 1986, 

21 and a State with an agreement under section 

22 343, shall not be eligible to receive a grant 

23 under this section until such time as the State 

24 law of the State provides for payments under a 


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1 short-time compensation program that meets 

2 such definition and such law. 

3 (b) AMOUNT OF GRANTS.— 

4 (1) IN GENERAL.—The maximum amount avail5 able for making grants to a State under paragraphs 

6 (1) and (2) shall be equal to the amount obtained 

7 by multiplying $700,000,000 (less the amount used 

8 by the Secretary under subsection (e)) by the same 

9 ratio as would apply under subsection (a)(2)(B) of 

10 section 903 of the Social Security Act (42 U.S.C. 

11 1103) for purposes of determining such State’s 

12 share of any excess amount (as described in sub13 section (a)(1) of such section) that would have been 

14 subject to transfer to State accounts, as of October 

15 1, 2013, under the provisions of subsection (a) of 

16 such section. 

17 (2) AMOUNT AVAILABLE FOR DIFFERENT

18 GRANTS.—Of the maximum incentive payment deter19 mined under paragraph (1) with respect to a 

20 State— 

21 (A) one-third shall be available for a grant 

22 under subsection (a)(1); and 

23 (B) two-thirds shall be available for a 

24 grant under subsection (a)(2). 

25 (c) GRANT APPLICATION AND DISBURSAL.— 


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1 (1) APPLICATION.—Any State seeking a grant 

2 under paragraph (1) or (2) of subsection (a) shall 

3 submit an application to the Secretary at such time, 

4 in such manner, and complete with such information 

5 as the Secretary may require. In no case may the 

6 Secretary award a grant under this section with re7 spect to an application that is submitted after De8 cember 31, 2014. 

9 (2) NOTICE.—The Secretary shall, within 30 

10 days after receiving a complete application, notify 

11 the State agency of the State of the Secretary’s find12 ings with respect to the requirements for a grant 

13 under paragraph (1) or (2) (or both) of subsection 

14 (a). 

15 (3) CERTIFICATION.—If the Secretary finds 

16 that the State law provisions meet the requirements 

17 for a grant under subsection (a), the Secretary shall 

18 thereupon make a certification to that effect to the 

19 Secretary of the Treasury, together with a certifi20 cation as to the amount of the grant payment to be 

21 transferred to the State account in the Unemploy22 ment Trust Fund (as established in section 904(a) 

23 of the Social Security Act (42 U.S.C. 1104(a))) pur24 suant to that finding. The Secretary of the Treasury 

25 shall make the appropriate transfer to the State acVerDate Mar 15 2010 02:19 Jul 30, 2013 Jkt 029200 PO 00000 Frm 00185 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821

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1 count within 7 days after receiving such certifi2 cation. 

3 (4) REQUIREMENT.—No certification of compli4 ance with the requirements for a grant under para5 graph (1) or (2) of subsection (a) may be made with 

6 respect to any State whose— 

7 (A) State law is not otherwise eligible for 

8 certification under section 303 of the Social Se9 curity Act (42 U.S.C. 503) or approvable under 

10 section 3304 of the Internal Revenue Code of 

11 1986; or 

12 (B) short-time compensation program is 

13 subject to discontinuation or is not scheduled to 

14 take effect within 12 months of the certifi15 cation. 

16 (d) USE OF FUNDS.—The amount of any grant 

17 awarded under this section shall be used for the implemen18 tation of short-time compensation programs and the over19 all administration of such programs and the promotion 

20 and enrollment efforts associated with such programs, 

21 such as through— 

22 (1) the creation or support of rapid response 

23 teams to advise employers about alternatives to lay24 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. 

18 (3) STATE; STATE AGENCY; STATE LAW.—The 

19 terms ‘‘State’’, ‘‘State agency’’, and ‘‘State law’’ 

20 have the meanings given those terms in section 205 

21 of the Federal-State Extended Unemployment Com22 pensation Act of 1970 (26 U.S.C. 3304 note). 


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1 SEC. 344. 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), the Secretary of Labor 

7 (in this section referred to as the ‘‘Secretary’’) shall— 

8 (1) develop model legislative language which 

9 may be used by States in developing and enacting 

10 such programs and periodically review and revise 

11 such model legislative language; 

12 (2) provide technical assistance and guidance in 

13 developing, enacting, and implementing such pro14 grams; 

15 (3) establish reporting requirements for States, 

16 including reporting on— 

17 (A) the number of estimated averted lay18 offs; 

19 (B) the number of participating employers 

20 and workers; and 

21 (C) such other items as the Secretary of 

22 Labor determines are appropriate. 

23 (b) MODEL LANGUAGE AND GUIDANCE.—The model 

24 language and guidance developed under subsection (a) 

25 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. 345. 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). 

22 (B) An analysis of the significant chal23 lenges to State enactment and implementation 

24 of short-time compensation programs. 


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1 (C) A survey of employers in States that 

2 have not enacted a short-time compensation 

3 program or entered into an agreement with the 

4 Secretary on a short-time compensation plan to 

5 determine the level of interest among such em6 ployers in participating in short-time compensa7 tion programs. 

8 (b) FUNDING.—There are appropriated, out of any 

9 moneys in the Treasury not otherwise appropriated, to the 

10 Secretary of Labor, $1,500,000 to carry out this section, 

11 to remain available without fiscal year limitation. 

12 Subtitle B—Long-Term 

13 Unemployed Hiring Preferences 

14 SEC. 351. LONG-TERM UNEMPLOYED WORKERS WORK OP15 PORTUNITY TAX CREDITS. 

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

17 the Internal Revenue Code is amended by inserting 

18 ‘‘$10,000 per year in the case of any individual who is 

19 a qualified long-term unemployed individual by reason of 

20 subsection (d)(11), and’’ before ‘‘$12,000 per year’’. 

21 (b) LONG-TERM UNEMPLOYED INDIVIDUALS TAX

22 CREDITS.—Subsection (d) of section 51 of the Internal 

23 Revenue Code is amended— 

24 (1) in paragraph (1), by striking ‘‘or’’ at the 

25 end of subparagraph (H), by striking the period at 


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1 the end of subparagraph (I) and inserting ‘‘, or’’, 

2 and by inserting after subparagraph (I) the fol3 lowing: 

4 ‘‘(J) a qualified long-term unemployed in5 dividual.’’, and 

6 (2) by redesignating paragraphs (11) through 

7 (14) as paragraphs (12) through (15), respectively, 

8 and by inserting after paragraph (10) the following 

9 new paragraph: 

10 ‘‘(11) QUALIFIED LONG-TERM UNEMPLOYED

11 INDIVIDUAL.— 

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

13 long-term unemployed individual’ means any in14 dividual who was not a student for at least 6 

15 months during the 1-year period ending on the 

16 hiring date and is certified by the designated 

17 local agency as having aggregate periods of un18 employment during the 1-year period ending on 

19 the hiring date which equal or exceed 6 months. 

20 ‘‘(B) STUDENT.—For purposes of this sub21 section, a student is an individual enrolled at 

22 least half-time in a program that leads to a de23 gree, certificate, or other recognized educational 

24 credential for at least 6 months whether or not 


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1 consecutive during the 1-year period ending on 

2 the hiring date.’’. 

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

4 the Internal Revenue Code, as amended by subsection (b), 

5 is amended by adding at the end the following new para6 graph: 

7 ‘‘(16) CREDIT ALLOWED FOR QUALIFIED LONG8 TERM UNEMPLOYED INDIVIDUALS.— 

9 ‘‘(A) IN GENERAL.—Any qualified long10 term unemployed individual under paragraph 

11 (11) will be treated as certified by the des12 ignated local agency as having aggregate peri13 ods of unemployment if the individual is cer14 tified by the designated local agency as being in 

15 receipt of unemployment compensation under 

16 State or Federal law for not less than 6 months 

17 during the 1-year period ending on the hiring 

18 date. 

19 ‘‘(B) REGULATORY AUTHORITY.—The Sec20 retary in his discretion may provide alternative 

21 methods for certification.’’. 

22 (d) CREDIT MADE AVAILABLE TO TAX-EXEMPT EM23 PLOYERS IN CERTAIN CIRCUMSTANCES.—Section 3111(e) 

24 of the Internal Revenue Code is amended— 


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1 (1) in the heading for the subsection is amend2 ed by inserting ‘‘AND QUALIFIED LONG-TERM UN3 EMPLOYED INDIVIDUALS’’ after ‘‘QUALIFIED VET4 ERANS’’, 

5 (2) in paragraph (1) by inserting ‘‘or qualified 

6 long-term unemployed individual’’ after ‘‘qualified 

7 veteran’’, 

8 (3) in paragraph (2) by inserting ‘‘and qualified 

9 long-term unemployed individuals’’ after ‘‘qualified 

10 veterans’’, 

11 (4) in paragraph (3)(C) by inserting ‘‘and 

12 qualified long-term unemployed individual, as the 

13 case may be,’’ after ‘‘qualified veteran’’, 

14 (5) in paragraph (4) by inserting ‘‘or qualified 

15 long-term unemployed individual’’ after ‘‘qualified 

16 veteran’’ both places it appears, and 

17 (6) in paragraph (5) by striking ‘‘and’’ at the 

18 end of subparagraph (A), by striking the period at 

19 the end of subparagraph (B) and inserting ‘‘, and’’, 

20 and by adding at the end the following: 

21 ‘‘(C) the term ‘qualified long-term unem22 ployed individual’ has meaning given such term 

23 by section 51(d)(11).’’. 


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1 (e) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to individuals who begin work for 

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

4 Subtitle C—Pathways Back to 

5 Work 

6 SEC. 361. SHORT TITLE. 

7 This subtitle may be cited as the ‘‘Pathways Back 

8 to Work Act of 2013’’. 

9 SEC. 362. AUTHORIZATION OF APPROPRIATIONS. 

10 There is authorized to be appropriated to the Sec11 retary of Labor $5,000,000,000 to carry out this subtitle. 

12 SEC. 363. AVAILABILITY OF FUNDS. 

13 (a) IN GENERAL.—Of the amounts available under 

14 section 362(b), the Secretary of Labor shall— 

15 (1) allot $2,000,000,000 in accordance with 

16 section 364 to provide subsidized employment to un17 employed, low-income adults; 

18 (2) allot $1,500,000,000 in accordance with 

19 section 365 to provide summer and year-round em20 ployment opportunities to low-income youth; and 

21 (3) award $1,500,000,000 in competitive grants 

22 in accordance with section 366 to local entities to 

23 carry out work-based training and other work-re24 lated and educational strategies and activities of 

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1 come adults and low-income youth to provide the 

2 skills and assistance needed to obtain employment. 

3 (b) RESERVATION.—The Secretary of Labor may re4 serve not more than 1 percent of amounts available under 

5 each of paragraphs (1) through (3) of subsection (a) for 

6 the costs of technical assistance, evaluations and Federal 

7 administration of this Act. 

8 (c) PERIOD OF AVAILABILITY.—The amounts appro9 priated under this Act shall be available for obligation by 

10 the Secretary of Labor until December 31, 2014, and shall 

11 be available for expenditure by grantees and subgrantees 

12 until September 30, 2015. 

13 SEC. 364. SUBSIDIZED EMPLOYMENT FOR UNEMPLOYED, 

14 LOW-INCOME ADULTS. 

15 (a) IN GENERAL.— 

16 (1) ALLOTMENTS.—From the funds available 

17 under section 363(a)(1), the Secretary of Labor 

18 shall make an allotment under subsection (b) to each 

19 State that has a State plan approved under sub20 section (c) and to each outlying area and Native 

21 American grantee under section 166 of the Work22 force Investment Act of 1998 that meets the re23 quirements of this section, for the purpose of pro24 viding subsidized employment opportunities to unem25 ployed, low-income adults. 


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

2 the date of enactment of this Act, the Secretary of 

3 Labor, in coordination with the Secretary of Health 

4 and Human Services, shall issue guidance regarding 

5 the implementation of this section. Such guidance 

6 shall, consistent with this section, include procedures 

7 for the submission and approval of State and local 

8 plans and the allotment and allocation of funds, in9 cluding reallotment and reallocation of such funds, 

10 that promote the expeditious and effective implemen11 tation of the activities authorized under this section. 

12 (b) STATE ALLOTMENTS.— 

13 (1) RESERVATIONS FOR OUTLYING AREAS AND

14 TRIBES.—Of the funds described subsection (a)(1), 

15 the Secretary shall reserve— 

16 (A) not more than one-quarter of one per17 cent to provide assistance to outlying areas to 

18 provide subsidized employment to low-income 

19 adults who are unemployed; 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 subsidized employment 

24 to low-income adults who are unemployed. 


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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)(1) among the States as fol5 lows— 

6 (A) one-third shall be allotted on the basis 

7 of the relative number of unemployed individ8 uals in areas of substantial unemployment in 

9 each State, compared to the total number of 

10 unemployed individuals in areas of substantial 

11 unemployment in all States; 

12 (B) one-third shall be allotted on the basis 

13 of the relative excess number of unemployed in14 dividuals in each State, compared to the total 

15 excess number of unemployed individuals in all 

16 States; and 

17 (C) one-third shall be allotted on the basis 

18 of the relative number of disadvantaged adults 

19 and youth in each State, compared to the total 

20 number of disadvantaged adults and youth in 

21 all States. 

22 (3) DEFINITIONS.—For purposes of the for23 mula described in paragraph (2)— 

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1 ployment’’ means any contiguous area with a 

2 population of at least 10,000 and that has an 

3 average rate of unemployment of at least 6.5 

4 percent for the most recent 12 months, as de5 termined by the Secretary. 

6 (B) DISADVANTAGED ADULTS AND

7 YOUTH.—The term ‘‘disadvantaged adults and 

8 youth’’ means an individual who is age 16 and 

9 older (subject to section 132(b)(1)(B)(v)(I) of 

10 the Workforce Investment Act of 1998) who re11 ceived an income, or is a member of a family 

12 that received a total family income, that, in re13 lation to family size, does not exceed the higher 

14 of— 

15 (i) the poverty line; or 

16 (ii) 70 percent of the lower living 

17 standard income level. 

18 (C) EXCESS NUMBER.—The term ‘‘excess 

19 number’’ means, used with respect to the excess 

20 number of unemployed individuals within a 

21 State, the higher of— 

22 (i) the number that represents the 

23 number of unemployed individuals in ex24 cess of 4.5 percent of the civilian labor 

25 force in the State; or 


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1 (ii) the number that represents the 

2 number of unemployed individuals in ex3 cess of 4.5 percent of the civilian labor 

4 force in areas of substantial unemployment 

5 in such State. 

6 (4) REALLOTMENT.—If the Governor of a State 

7 does not submit a State plan by the time specified 

8 in subsection (c), or a State does not receive ap9 proval of a State plan, the amount the State would 

10 have been eligible to receive pursuant to the formula 

11 under paragraph (2) shall be added to the amounts 

12 available for the competitive grants under section 

13 363(a)(3). 

14 (c) STATE PLAN.— 

15 (1) IN GENERAL.—For a State to be eligible to 

16 receive an allotment of the funds under subsection 

17 (b), the Governor of the State shall submit to the 

18 Secretary of Labor a State plan in such form and 

19 containing such information as the Secretary may 

20 require. At a minimum, such plan shall include— 

21 (A) a description of the strategies and ac22 tivities to be carried out by the State, in coordi23 nation with employers in the State, to provide 

24 subsidized employment opportunities to unem25 ployed, low-income adults, including strategies 


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1 relating to the level and duration of subsidies 

2 consistent with subsection (e)(2); 

3 (B) a description of the requirements the 

4 State will apply relating to the eligibility of un5 employed, low-income adults, consistent with 

6 section 368(6), for subsidized employment op7 portunities, which may include criteria to target 

8 assistance to particular categories of such 

9 adults, such as individuals with disabilities or 

10 individuals who have exhausted all rights to un11 employment compensation; 

12 (C) a description of how the funds allotted 

13 to provide subsidized employment opportunities 

14 will be administered in the State and local 

15 areas, in accordance with subsection (d); 

16 (D) a description of the performance out17 comes to be achieved by the State through the 

18 activities carried out under this section and the 

19 processes the State will use to track perform20 ance, consistent with guidance provided by the 

21 Secretary of Labor regarding such outcomes 

22 and processes and with section 367(b); 

23 (E) a description of the coordination of ac24 tivities to be carried out with the funds pro25 vided under this section with activities under 


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1 title I of the Workforce Investment Act of 

2 1998, the TANF program under part A of title 

3 IV of the Social Security Act, and other appro4 priate Federal and State programs that may as5 sist unemployed, low-income adults in obtaining 

6 and retaining employment; 

7 (F) a description of the timelines for im8 plementation of the activities described in sub9 paragraph (A), and the number of unemployed, 

10 low-income adults expected to be placed in sub11 sidized employment by quarter; 

12 (G) assurances that the State will report 

13 such information as the Secretary of Labor may 

14 require relating to fiscal, performance and other 

15 matters that the Secretary determines is nec16 essary to effectively monitor the activities car17 ried out under this section; and 

18 (H) assurances that the State will ensure 

19 compliance with the labor standards and protec20 tions described in section 367(a) of this Act. 

21 (2) SUBMISSION AND APPROVAL OF STATE

22 PLAN.— 

23 (A) SUBMISSION WITH OTHER PLANS.— 

24 The State plan described in this subsection may 

25 be submitted in conjunction with the State plan 


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1 modification or request for funds required 

2 under section 365, and may be submitted as a 

3 modification to a State plan that has been ap4 proved under section 112 of the Workforce In5 vestment Act of 1998. 

6 (B) SUBMISSION AND APPROVAL.— 

7 (i) SUBMISSION.—The Governor shall 

8 submit a plan to the Secretary of Labor 

9 not later than 75 days after the enactment 

10 of this Act and the Secretary of Labor 

11 shall make a determination regarding the 

12 approval or disapproval of such plans not 

13 later than 45 days after the submission of 

14 such plan. If the plan is disapproved, the 

15 Secretary of Labor may provide a reason16 able period of time in which a disapproved 

17 plan may be amended and resubmitted for 

18 approval. 

19 (ii) APPROVAL.—The Secretary of 

20 Labor shall approve a State plan that the 

21 Secretary determines is consistent with re22 quirements of this section and reasonably 

23 appropriate and adequate to carry out the 

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1 proved, the Secretary shall allot funds to 

2 States within 30 days after such approval. 

3 (3) MODIFICATIONS TO STATE PLAN.—The 

4 Governor may submit a modification to a State plan 

5 under this subsection consistent with the require6 ments of this section. 

7 (d) ADMINISTRATION WITHIN THE STATE.— 

8 (1) OPTION.—The State may administer the 

9 funds for activities under this section through— 

10 (A) the State and local entities responsible 

11 for the administration of the adult formula pro12 gram under title I–B of the Workforce Invest13 ment Act of 1998; 

14 (B) the entities responsible for the admin15 istration of the TANF program under part A of 

16 title IV of the Social Security Act; or 

17 (C) a combination of the entities described 

18 in subparagraphs (A) and (B). 

19 (2) WITHIN-STATE ALLOCATIONS.— 

20 (A) ALLOCATION OF FUNDS.—The Gov21 ernor may reserve up to 5 percent of the allot22 ment under subsection (b)(2) for administration 

23 and technical assistance, and shall allocate the 

24 remainder, in accordance with the option elect25 ed under paragraph (1)— 


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1 (i) among local workforce investment 

2 areas within the State in accordance with 

3 the factors identified in subsection (b)(2), 

4 except that for purposes of such allocation 

5 references to a State in such paragraph 

6 shall be deemed to be references to a local 

7 workforce investment area and references 

8 to all States shall be deemed to be ref9 erences to all local areas in the State in10 volved, of which not more than 10 percent 

11 of the funds allocated to a local workforce 

12 investment area may be used for the costs 

13 of administration of this section; or 

14 (ii) through entities responsible for 

15 the administration of the TANF program 

16 under part A of title IV of the Social Secu17 rity Act in local areas in such manner as 

18 the State may determine appropriate. 

19 (B) LOCAL PLANS.— 

20 (i) IN GENERAL.—In the case where 

21 the responsibility for the administration of 

22 activities is to be carried out by the enti23 ties described under paragraph (1)(A), in 

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1 ment board, in partnership with the chief 

2 elected official of the local workforce in3 vestment area involved, shall submit to the 

4 Governor a local plan for the use of such 

5 funds under this section not later than 30 

6 days after the submission of the State 

7 plan. Such local plan may be submitted as 

8 a modification to a local plan approved 

9 under section 118 of the Workforce Invest10 ment Act of 1998. 

11 (ii) CONTENTS.—The local plan de12 scribed in clause (i) shall contain the ele13 ments described in subparagraphs (A)–(H) 

14 of subsection (c)(1), as applied to the local 

15 workforce investment area. 

16 (iii) APPROVAL.—The Governor shall 

17 approve or disapprove the local plan sub18 mitted under clause (i) within 30 days 

19 after submission, or if later, 30 days after 

20 the approval of the State plan. The Gov21 ernor shall approve the plan unless the 

22 Governor determines that the plan is in23 consistent with requirements of this section 

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1 tion. If the Governor has not made a de2 termination within the period specified 

3 under the first sentence of this clause, the 

4 plan shall be considered approved. If the 

5 plan is disapproved, the Governor may pro6 vide a reasonable period of time in which 

7 a disapproved plan may be amended and 

8 resubmitted for approval. The Governor 

9 shall allocate funds to local workforce in10 vestment areas with approved plans within 

11 30 days after such approval. 

12 (C) REALLOCATION OF FUNDS TO LOCAL

13 AREAS.—If a local workforce investment board 

14 does not submit a local plan by the time speci15 fied in subparagraph (B) or the Governor does 

16 not approve a local plan, the amount the local 

17 workforce investment area would have been eli18 gible to receive pursuant to the formula under 

19 subparagraph (A)(i) shall be allocated to local 

20 workforce investment areas that receive ap21 proval of the local plan under subparagraph 

22 (B). Such reallocations shall be made in accord23 ance with the relative share of the allocations to 

24 such local workforce investment areas applying 


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1 the formula factors described under subpara2 graph (A)(i). 

3 (e) USE OF FUNDS.— 

4 (1) IN GENERAL.—The funds under this section 

5 shall be used to provide subsidized employment for 

6 unemployed, low-income adults. The State and local 

7 entities described in subsection (d)(1) may use a va8 riety of strategies in recruiting employers and identi9 fying appropriate employment opportunities, with a 

10 priority to be provided to employment opportunities 

11 likely to lead to unsubsidized employment in emerg12 ing or in-demand occupations in the local area. 

13 Funds under this section may be used to provide 

14 support services, such as transportation and child 

15 care, that are necessary to enable the participation 

16 of individuals in subsidized employment opportuni17 ties. 

18 (2) LEVEL OF SUBSIDY AND DURATION.—The 

19 States or local entities described in subsection (d)(1) 

20 may determine the percentage of the wages and 

21 costs of employing a participant for which an em22 ployer may receive a subsidy with the funds provided 

23 under this section, and the duration of such subsidy, 

24 in accordance with guidance issued by the Secretary. 

25 The State or local entities may establish criteria for 


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1 determining such percentage or duration using ap2 propriate factors such as the size of the employer 

3 and types of employment. 

4 (f) COORDINATION OF FEDERAL ADMINISTRATION.— 

5 The Secretary of Labor shall administer this section in 

6 coordination with the Secretary of Health and Human 

7 Services to ensure the effective implementation of this sec8 tion. 

9 SEC. 365. SUMMER EMPLOYMENT AND YEAR-ROUND EM10 PLOYMENT OPPORTUNITIES FOR LOW-IN11 COME YOUTH. 

12 (a) IN GENERAL.—From the funds available under 

13 section 363(a)(2), the Secretary of Labor shall make an 

14 allotment under subsection (c) to each State that has a 

15 State plan modification (or other form of request for funds 

16 specified in guidance under subsection (b)) approved 

17 under subsection (d) and to each outlying area and Native 

18 American grantee under section 166 of the Workforce In19 vestment Act of 1998 that meets the requirements of this 

20 section, for the purpose of providing summer employment 

21 and year-round employment opportunities to low-income 

22 youth. 

23 (b) GUIDANCE AND APPLICATION OF REQUIRE24 MENTS.— 


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1 (1) GUIDANCE.—Not later than 20 days after 

2 the date of enactment of this Act, the Secretary of 

3 Labor shall issue guidance regarding the implemen4 tation of this section. Such guidance shall, consistent 

5 with this section, include procedures for the submis6 sion and approval of State plan modifications, or for 

7 forms of requests for funds by the State as may be 

8 identified in such guidance, local plan modifications, 

9 or other forms of requests for funds from local work10 force investment areas as may be identified in such 

11 guidance, and the allotment and allocation of funds, 

12 including reallotment and reallocation of such funds, 

13 that promote the expeditious and effective implemen14 tation of the activities authorized under this section. 

15 (2) REQUIREMENTS.—Except as otherwise pro16 vided in the guidance described in paragraph (1) 

17 and in this section and other provisions of this Act, 

18 the funds provided for activities under this section 

19 shall be administered in accordance with subtitles B 

20 and E of title I of the Workforce Investment Act of 

21 1998 relating to youth activities. 

22 (c) STATE ALLOTMENTS.— 

23 (1) RESERVATIONS FOR OUTLYING AREAS AND

24 TRIBES.—Of the funds described subsection (a), the 

25 Secretary shall reserve— 


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1 (A) not more than one-quarter of one per2 cent to provide assistance to outlying areas to 

3 provide summer and year-round employment 

4 opportunities to low-income youth; and 

5 (B) 1.5 percent to provide assistance to 

6 grantees of the Native American programs 

7 under section 166 of the Workforce Investment 

8 Act of 1998 to provide summer and year-round 

9 employment opportunities to low-income youth. 

10 (2) STATES.—After determining the amounts to 

11 be reserved under paragraph (1), the Secretary of 

12 Labor shall allot the remainder of the amounts de13 scribed in subsection (a) among the States in ac14 cordance with the factors described in section 

15 364(b)(2) of this Act. 

16 (3) REALLOTMENT.—If the Governor of a State 

17 does not submit a State plan modification or other 

18 request for funds specified in guidance under sub19 section (b) by the time specified in subsection 

20 (d)(2)(B), or a State does not receive approval of 

21 such State plan modification or request, the amount 

22 the State would have been eligible to receive pursu23 ant to the formula under paragraph (2) shall be 

24 added to the amounts available for the competitive 

25 grants under section 363(a)(3). 


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1 (d) STATE PLAN MODIFICATION.— 

2 (1) IN GENERAL.—For a State to be eligible to 

3 receive an allotment of the funds under subsection 

4 (c), the Governor of the State shall submit to the 

5 Secretary of Labor a modification to a State plan 

6 approved under section 112 of the Workforce Invest7 ment Act of 1998, or other request for funds de8 scribed in guidance in subsection (b), in such form 

9 and containing such information as the Secretary 

10 may require. At a minimum, such plan modification 

11 or request shall include— 

12 (A) a description of the strategies and ac13 tivities to be carried out to provide summer em14 ployment opportunities and year-round employ15 ment opportunities, including the linkages to 

16 educational activities, consistent with subsection 

17 (f); 

18 (B) a description of the requirements the 

19 States will apply relating to the eligibility of 

20 low-income youth, consistent with section 

21 368(4), for summer employment opportunities 

22 and year-round employment opportunities, 

23 which may include criteria to target assistance 

24 to particular categories of such low-income 


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1 youth, such as youth with disabilities, con2 sistent with subsection (f); 

3 (C) a description of the performance out4 comes to be achieved by the State through the 

5 activities carried out under this section and the 

6 processes the State will use to track perform7 ance, consistent with guidance provided by the 

8 Secretary of Labor regarding such outcomes 

9 and processes and with section 367(b); 

10 (D) a description of the timelines for im11 plementation of the activities described in sub12 paragraph (A), and the number of low-income 

13 youth expected to be placed in summer employ14 ment opportunities, and year-round employment 

15 opportunities, respectively, by quarter; 

16 (E) assurances that the State will report 

17 such information as the Secretary may require 

18 relating to fiscal, performance and other mat19 ters that the Secretary determines is necessary 

20 to effectively monitor the activities carried out 

21 under this section; and 

22 (F) assurances that the State will ensure 

23 compliance with the labor standards protections 

24 described in section 367(a). 


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1 (2) SUBMISSION AND APPROVAL OF STATE

2 PLAN MODIFICATION OR REQUEST.— 

3 (A) SUBMISSION.—The Governor shall 

4 submit a modification of the State plan or other 

5 request for funds described in guidance in sub6 section (b) to the Secretary of Labor not later 

7 than 30 days after the issuance of such guid8 ance. The State plan modification or request for 

9 funds required under this subsection may be 

10 submitted in conjunction with the State plan re11 quired under section 364. 

12 (B) APPROVAL.—The Secretary of Labor 

13 shall approve the plan or request submitted 

14 under subparagraph (A) within 30 days after 

15 submission, unless the Secretary determines 

16 that the plan or request is inconsistent with the 

17 requirements of this section. If the Secretary 

18 has not made a determination within 30 days, 

19 the plan or request shall be considered ap20 proved. If the plan or request is disapproved, 

21 the Secretary may provide a reasonable period 

22 of time in which a disapproved plan or request 

23 may be amended and resubmitted for approval. 

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1 retary shall allot funds to States within 30 days 

2 after such approval. 

3 (3) MODIFICATIONS TO STATE PLAN OR RE4 QUEST.—The Governor may submit further modi5 fications to a State plan or request for funds identi6 fied under subsection (b) to carry out this section in 

7 accordance with the requirements of this section. 

8 (e) WITHIN-STATE ALLOCATION AND ADMINISTRA9 TION.— 

10 (1) IN GENERAL.—Of the funds allotted to the 

11 State under subsection (c), the Governor— 

12 (A) may reserve up to 5 percent of the al13 lotment for administration and technical assist14 ance; and 

15 (B) shall allocate the remainder of the al16 lotment among local workforce investment areas 

17 within the State in accordance with the factors 

18 identified in section 364(b)(2), except that for 

19 purposes of such allocation references to a 

20 State in such paragraph shall be deemed to be 

21 references to a local workforce investment area 

22 and references to all States shall be deemed to 

23 be references to all local areas in the State in24 volved. Not more than 10 percent of the funds 

25 allocated to a local workforce investment area 


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1 may be used for the costs of administration of 

2 this section. 

3 (2) LOCAL PLAN.— 

4 (A) SUBMISSION.—In order to receive an 

5 allocation under paragraph (1)(B), the local 

6 workforce investment board, in partnership with 

7 the chief elected official for the local workforce 

8 investment area involved, shall submit to the 

9 Governor a modification to a local plan ap10 proved under section 118 of the Workforce In11 vestment Act of 1998, or other form of request 

12 for funds as may be identified in the guidance 

13 issued under subsection (b), not later than 30 

14 days after the submission by the State of the 

15 modification to the State plan or other request 

16 for funds identified in subsection (b), describing 

17 the strategies and activities to be carried out 

18 under this section. 

19 (B) APPROVAL.—The Governor shall ap20 prove the local plan submitted under subpara21 graph (A) within 30 days after submission, un22 less the Governor determines that the plan is 

23 inconsistent with requirements of this section. 

24 If the Governor has not made a determination 

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1 proved. If the plan is disapproved, the Governor 

2 may provide a reasonable period of time in 

3 which a disapproved plan may be amended and 

4 resubmitted for approval. The Governor shall 

5 allocate funds to local workforce investment 

6 areas with approved plans within 30 days after 

7 approval. 

8 (3) REALLOCATION.—If a local workforce in9 vestment board does not submit a local plan modi10 fication (or other request for funds identified in 

11 guidance under subsection (b)) by the time specified 

12 in paragraph (2), or does not receive approval of a 

13 local plan, the amount the local workforce invest14 ment area would have been eligible to receive pursu15 ant to the formula under paragraph (1)(B) shall be 

16 allocated to local workforce investment areas that re17 ceive approval of the local plan modification or re18 quest for funds under paragraph (2). Such realloca19 tions shall be made in accordance with the relative 

20 share of the allocations to such local workforce in21 vestment areas applying the formula factors de22 scribed under paragraph (1)(B). 

23 (f) USE OF FUNDS.— 

24 (1) IN GENERAL.—The funds provided under 

25 this section shall be used— 


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1 (A) to provide summer employment oppor2 tunities for low-income youth, ages 16 through 

3 24, with direct linkages to academic and occu4 pational learning, and may include the provision 

5 of supportive services, such as transportation or 

6 child care, necessary to enable such youth to 

7 participate; and 

8 (B) to provide year round employment op9 portunities, which may be combined with other 

10 activities authorized under section 129 of the 

11 Workforce Investment Act of 1998,to low-in12 come youth, ages 16 through 24, with a priority 

13 to out-of school youth who are— 

14 (i) high school dropouts; or 

15 (ii) recipients of a secondary school 

16 diploma or its equivalent but who are basic 

17 skills deficient unemployed or under18 employed. 

19 (2) PROGRAM PRIORITIES.—In administering 

20 the funds under this section, the local board and 

21 local chief elected officials shall give a priority to— 

22 (A) identifying employment opportunities 

23 that are— 


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1 (i) in emerging or in-demand occupa2 tions in the local workforce investment 

3 area; or 

4 (ii) in the public or nonprofit sector 

5 that meet community needs; and 

6 (B) linking year-round program partici7 pants to training and educational activities that 

8 will provide such participants an industry-recog9 nized certificate or credential. 

10 (3) PERFORMANCE ACCOUNTABILITY.—For ac11 tivities funded under this section, in lieu of the re12 quirements described in section 136 of the Work13 force Investment Act of 1998, State and local work14 force investment areas shall provide such reports as 

15 the Secretary of Labor may require regarding the 

16 performance outcomes described in section 

17 367(a)(5). 

18 SEC. 366. WORK-BASED EMPLOYMENT STRATEGIES OF 

19 DEMONSTRATED EFFECTIVENESS. 

20 (a) IN GENERAL.—From the funds available under 

21 section 363(a)(3), the Secretary of Labor shall award 

22 grants on a competitive basis to eligible entities to carry 

23 out work-based strategies of demonstrated effectiveness. 

24 (b) USE OF FUNDS.—The grants awarded under this 

25 section shall be used to support strategies and activities 


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1 of demonstrated effectiveness that are designed to provide 

2 unemployed, low-income adults or low-income youth with 

3 the skills that will lead to employment as part of or upon 

4 completion of participation in such activities. Such strate5 gies and activities may include— 

6 (1) on-the-job training, registered apprentice7 ship programs, or other programs that combine work 

8 with skills development; 

9 (2) sector-based training programs that have 

10 been designed to meet the specific requirements of 

11 an employer or group of employers in that sector 

12 and where employers are committed to hiring indi13 viduals upon successful completion of the training; 

14 (3) training that supports an industry sector or 

15 an employer-based or labor-management committee 

16 industry partnership which includes a significant 

17 work-experience component; 

18 (4) acquisition of industry-recognized creden19 tials in a field identified by the State or local work20 force investment area as a growth sector or demand 

21 industry in which there are likely to be significant 

22 job opportunities in the short term; 

23 (5) connections to immediate work opportuni24 ties, including subsidized employment opportunities, 

25 or summer employment opportunities for youth, that 


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1 includes concurrent skills training and other sup2 ports; 

3 (6) career academies that provide students with 

4 the academic preparation and training, including 

5 paid internships and concurrent enrollment in com6 munity colleges or other postsecondary institutions, 

7 needed to pursue a career pathway that leads to 

8 postsecondary credentials and high-demand jobs; 

9 and 

10 (7) adult basic education and integrated basic 

11 education and training models for low-skilled adults, 

12 hosted at community colleges or at other sites, to 

13 prepare individuals for jobs that are in demand in 

14 a local area. 

15 (c) ELIGIBLE ENTITY.—An eligible entity shall in16 clude a local chief elected official, in collaboration with the 

17 local workforce investment board for the local workforce 

18 investment area involved (which may include a partnership 

19 with of such officials and boards in the region and in the 

20 State), or an entity eligible to apply for an Indian and 

21 Native American grant under section 166 of the Work22 force Investment Act of 1998, and may include, in part23 nership with such officials, boards, and entities, the fol24 lowing— 

25 (1) employers or employer associations; 


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1 (2) adult education providers and postsecondary 

2 educational institutions, including community col3 leges; 

4 (3) community-based organizations; 

5 (4) joint labor-management committees; 

6 (5) work-related intermediaries; or 

7 (6) other appropriate organizations. 

8 (d) APPLICATION.—An eligible entity seeking to re9 ceive a grant under this section shall submit to the Sec10 retary of Labor an application at such time, in such man11 ner, and containing such information as the Secretary may 

12 require. At a minimum, the application shall— 

13 (1) describe the strategies and activities of dem14 onstrated effectiveness that the eligible entities will 

15 carry out to provide unemployed, low-income adults 

16 and low-income youth with the skills that will lead 

17 to employment upon completion of participation in 

18 such activities; 

19 (2) describe the requirements that will apply re20 lating to the eligibility of unemployed, low-income 

21 adults or low-income youth, consistent with para22 graphs (4) and (6) of section 368, for activities car23 ried out under this section, which may include cri24 teria to target assistance to particular categories of 

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1 abilities or individuals who have exhausted all rights 

2 to unemployment compensation; 

3 (3) describe how the strategies and activities 

4 address the needs of the target populations identi5 fied in paragraph (2) and the needs of employers in 

6 the local area; 

7 (4) describe the expected outcomes to be 

8 achieved by implementing the strategies and activi9 ties; 

10 (5) provide evidence that the funds provided 

11 may be expended expeditiously and efficiently to im12 plement the strategies and activities; 

13 (6) describe how the strategies and activities 

14 will be coordinated with other Federal, State and 

15 local programs providing employment, education and 

16 supportive activities; 

17 (7) provide evidence of employer commitment to 

18 participate in the activities funded under this sec19 tion, including identification of anticipated occupa20 tional and skill needs; 

21 (8) provide assurances that the grant recipient 

22 will report such information as the Secretary may 

23 require relating to fiscal, performance and other 

24 matters that the Secretary determines is necessary 


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1 to effectively monitor the activities carried out under 

2 this section; and 

3 (9) provide assurances that the use of the funds 

4 provided under this section will comply with the 

5 labor standards and protections described section 

6 367(a). 

7 (e) PRIORITY IN AWARDS.—In awarding grants 

8 under this section, the Secretary of Labor shall give a pri9 ority to applications submitted by eligible entities from 

10 areas of high poverty and high unemployment, as defined 

11 by the Secretary, such as Public Use Microdata Areas 

12 (PUMAs) as designated by the Census Bureau. 

13 (f) COORDINATION OF FEDERAL ADMINISTRATION.— 

14 The Secretary of Labor shall administer this section in 

15 coordination with the Secretary of Education, Secretary 

16 of Health and Human Services, and other appropriate 

17 agency heads, to ensure the effective implementation of 

18 this section. 

19 SEC. 367. GENERAL REQUIREMENTS. 

20 (a) LABOR STANDARDS AND PROTECTIONS.—Activi21 ties provided with funds under this Act shall be subject 

22 to the requirements and restrictions, including the labor 

23 standards, described in section 181 of the Workforce In24 vestment Act of 1998 and the nondiscrimination proviVerDate Mar 15 2010 02:19 Jul 30, 2013 Jkt 029200 PO 00000 Frm 00224 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821

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1 sions of section 188 of such Act, in addition to other appli2 cable Federal laws. 

3 (b) REPORTING.—The Secretary may require the re4 porting of information relating to fiscal, performance and 

5 other matters that the Secretary determines is necessary 

6 to effectively monitor the activities carried out with funds 

7 provided under this Act. At a minimum, grantees and sub8 grantees shall provide information relating to— 

9 (1) the number individuals participating in ac10 tivities with funds provided under this Act and the 

11 number of such individuals who have completed such 

12 participation; 

13 (2) the expenditures of funds provided under 

14 the Act; 

15 (3) the number of jobs created pursuant to the 

16 activities carried out under this Act; 

17 (4) the demographic characteristics of individ18 uals participating in activities under this Act; and 

19 (5) the performance outcomes of individuals 

20 participating in activities under this Act, including— 

21 (A) for adults participating in activities 

22 funded under section 364 of this Act— 

23 (i) entry in unsubsidized employment, 

24 (ii) retention in unsubsidized employ25 ment, and 


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1 (iii) earnings in unsubsidized employ2 ment; 

3 (B) for low-income youth participating in 

4 summer employment activities under sections 

5 365 and 366— 

6 (i) work readiness skill attainment 

7 using an employer validated checklist; and 

8 (ii) placement in or return to sec9 ondary or postsecondary education or 

10 training, or entry into unsubsidized em11 ployment; 

12 (C) for low-income youth participating in 

13 year-round employment activities under section 

14 365 or in activities under section 366— 

15 (i) placement in or return to post-sec16 ondary education; 

17 (ii) attainment of high school diploma 

18 or its equivalent; 

19 (iii) attainment of an industry-recog20 nized credential; and 

21 (iv) entry into unsubsidized employ22 ment, retention, and earnings as described 

23 in subparagraph (A); and 

24 (D) for unemployed, low-income adults 

25 participating in activities under section 366— 


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1 (i) entry into unsubsidized employ2 ment, retention, and earnings as described 

3 in subparagraph (A); and 

4 (ii) the attainment of industry-recog5 nized credentials. 

6 (c) ACTIVITIES REQUIRED TO BE ADDITIONAL.— 

7 Funds provided under this Act shall only be used for ac8 tivities that are in addition to activities that would other9 wise be available in the State or local area in the absence 

10 of such funds. 

11 (d) ADDITIONAL REQUIREMENTS.—The Secretary of 

12 Labor may establish such additional requirements as the 

13 Secretary determines may be necessary to ensure fiscal in14 tegrity, effective monitoring, and the appropriate and 

15 prompt implementation of the activities under this Act. 

16 (e) REPORT OF INFORMATION AND EVALUATIONS TO

17 CONGRESS AND THE PUBLIC.—The Secretary of Labor 

18 shall provide to the appropriate Committees of the Con19 gress and make available to the public the information re20 ported pursuant to subsection (b) and the evaluations of 

21 activities carried out pursuant to the funds reserved under 

22 section 363(b). 

23 SEC. 368. DEFINITIONS. 

24 In this Act: 


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1 (1) LOCAL CHIEF ELECTED OFFICIAL.—The 

2 term ‘‘local chief elected official’’ means the chief 

3 elected executive officer of a unit of local govern4 ment in a local workforce investment area or in the 

5 case where more than one unit of general govern6 ment, the individuals designated under an agreement 

7 described in section 117(c)(1)(B) of the Workforce 

8 Investment Act of 1998. 

9 (2) LOCAL WORKFORCE INVESTMENT AREA.— 

10 The term ‘‘local workforce investment area’’ means 

11 such area designated under section 116 of the Work12 force Investment Act of 1998. 

13 (3) LOCAL WORKFORCE INVESTMENT BOARD.— 

14 The term ‘‘local workforce investment board’’ means 

15 such board established under section 117 of the 

16 Workforce Investment Act of 1998. 

17 (4) LOW-INCOME YOUTH.—The term ‘‘low-in18 come youth’’ means an individual who— 

19 (A) is aged 16 through 24; 

20 (B) meets the definition of a low-income 

21 individual provided in section 101(25) of the 

22 Workforce Investment Act of 1998, except that 

23 States, local workforce investment areas under 

24 section 365 and eligible entities under section 

25 366(c), subject to approval in the applicable 


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1 State plans, local plans, and applications for 

2 funds, may increase the income level specified 

3 in subparagraph (B)(i) of such section to an 

4 amount not in excess of 200 percent of the pov5 erty line for purposes of determining eligibility 

6 for participation in activities under sections 365 

7 and 366 of this Act; and 

8 (C) is in one or more of the categories 

9 specified in section 101(13)(C) of the Work10 force Investment Act of 1998. 

11 (5) OUTLYING AREA.—The term ‘‘outlying 

12 area’’ means the United States Virgin Islands, 

13 Guam, American Samoa, the Commonwealth of the 

14 Northern Mariana Islands, and the Republic of 

15 Palau. 

16 (6) UNEMPLOYED, LOW-INCOME ADULT.—The 

17 term ‘‘unemployed, low-income adult’’ means an in18 dividual who— 

19 (A) is age 18 or older; 

20 (B) is without employment and is seeking 

21 assistance under this Act to obtain employment; 

22 and 

23 (C) meets the definition of a ‘‘low-income 

24 individual’’ under section 101(25) of the Work25 force Investment Act of 1998, except that for 


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1 that States, local entities described in section 

2 364(d)(1) and eligible entities under section 

3 366(c), subject to approval in the applicable 

4 State plans, local plans, and applications for 

5 funds, may increase the income level specified 

6 in subparagraph (B)(i) of such section to an 

7 amount not in excess of 200 percent of the pov8 erty line for purposes of determining eligibility 

9 for participation in activities under sections 364 

10 and 366 of this Act. 

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

12 the several States of the United States, the District 

13 of Columbia, and Puerto Rico. 

14 Subtitle D—Prohibition of Dis15 crimination in Employment on 

16 the Basis of an Individual’s Sta17 tus as Unemployed 

18 SEC. 371. SHORT TITLE. 

19 This subtitle may be cited as the ‘‘Fair Employment 

20 Opportunity Act of 2013’’. 

21 SEC. 372. FINDINGS AND PURPOSE. 

22 (a) FINDINGS.—Congress finds that denial of em23 ployment opportunities to individuals because of their sta24 tus as unemployed is discriminatory and burdens com25 merce by— 


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1 (1) reducing personal consumption and under2 mining economic stability and growth; 

3 (2) squandering human capital essential to the 

4 Nation’s economic vibrancy and growth; 

5 (3) increasing demands for Federal and State 

6 unemployment insurance benefits, reducing trust 

7 fund assets, and leading to higher payroll taxes for 

8 employers, cuts in benefits for jobless workers, or 

9 both; 

10 (4) imposing additional burdens on publicly 

11 funded health and welfare programs; and 

12 (5) depressing income, property, and other tax 

13 revenues that the Federal Government, States, and 

14 localities rely on to support operations and institu15 tions essential to commerce. 

16 (b) PURPOSES.—The purposes of this subtitle are— 

17 (1) to prohibit employers and employment agen18 cies from disqualifying an individual from employ19 ment opportunities because of that individual’s sta20 tus as unemployed; 

21 (2) to prohibit employers and employment agen22 cies from publishing or posting any advertisement or 

23 announcement for an employment opportunity that 

24 indicates that an individual’s status as unemployed 

25 disqualifies that individual for the opportunity; and 


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1 (3) to eliminate the burdens imposed on com2 merce due to the exclusion of such individuals from 

3 employment. 

4 SEC. 373. DEFINITIONS. 

5 As used in this subtitle— 

6 (1) the term ‘‘affected individual’’ means any 

7 person who was subject to an unlawful employment 

8 practice solely because of that individual’s status as 

9 unemployed; 

10 (2) the term ‘‘Commission’’ means the Equal 

11 Employment Opportunity Commission; 

12 (3) the term ‘‘employee’’ means— 

13 (A) an employee as defined in section 

14 701(f) of the Civil Rights Act of 1964 (42 

15 U.S.C. 2000e(f)); 

16 (B) a State employee to which section 

17 302(a)(1) of the Government Employee Rights 

18 Act of 1991 (42 U.S.C. 2000e–16b(a)(1)) ap19 plies; 

20 (C) a covered employee, as defined in sec21 tion 101 of the Congressional Accountability 

22 Act of 1995 (2 U.S.C. 1301) or section 411(c) 

23 of title 3, United States Code; or 


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1 (D) an employee or applicant to which sec2 tion 717(a) of the Civil Rights Act of 1964 (42 

3 U.S.C. 2000e–16(a)) applies; 

4 (4) the term ‘‘employer’’ means— 

5 (A) a person engaged in an industry affect6 ing commerce (as defined in section 701(h) of 

7 the Civil Rights Act of 1964 (42 U.S.C. 

8 2000e(h)) who has 15 or more employees for 

9 each working day in each of 20 or more cal10 endar weeks in the current or preceding cal11 endar year, and any agent of such a person, but 

12 does not include a bona fide private member13 ship club that is exempt from taxation under 

14 section 501(c) of the Internal Revenue Code of 

15 1986; 

16 (B) an employing authority to which sec17 tion 302(a)(1) of the Government Employee 

18 Rights Act of 1991 applies; 

19 (C) an employing office, as defined in sec20 tion 101 of the Congressional Accountability 

21 Act of 1995 or section 411(c) of title 3, United 

22 States Code; or 

23 (D) an entity to which section 717(a) of 

24 the Civil Rights Act of 1964 (42 U.S.C. 2000e– 

25 16(a)) applies; 


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1 (5) the term ‘‘employment agency’’ means any 

2 person regularly undertaking with or without com3 pensation to procure employees for an employer or 

4 to procure for individuals opportunities to work as 

5 employees for an employer and includes an agent of 

6 such a person, and any person who maintains an 

7 Internet website or print medium that publishes ad8 vertisements or announcements of openings in jobs 

9 for employees; 

10 (6) the term ‘‘person’’ has the meaning given 

11 the term in section 701(a) of the Civil Rights Act 

12 of 1964 (42 U.S.C. 2000e(a)); and 

13 (7) the term ‘‘status as unemployed’’, used with 

14 respect to an individual, means that the individual, 

15 at the time of application for employment or at the 

16 time of action alleged to violate this subtitle, does 

17 not have a job, is available for work and is searching 

18 for work. 

19 SEC. 374. PROHIBITED ACTS. 

20 (a) EMPLOYERS.—It shall be an unlawful employ21 ment practice for an employer to— 

22 (1) publish in print, on the Internet, or in any 

23 other medium, an advertisement or announcement 

24 for an employee for any job that includes— 


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1 (A) any provision stating or indicating that 

2 an individual’s status as unemployed disquali3 fies the individual for any employment oppor4 tunity; or 

5 (B) any provision stating or indicating that 

6 an employer will not consider or hire an indi7 vidual for any employment opportunity based 

8 on that individual’s status as unemployed; 

9 (2) fail or refuse to consider for employment, or 

10 fail or refuse to hire, an individual as an employee 

11 because of the individual’s status as unemployed; or 

12 (3) direct or request that an employment agen13 cy take an individual’s status as unemployed into ac14 count to disqualify an applicant for consideration, 

15 screening, or referral for employment as an em16 ployee. 

17 (b) EMPLOYMENT AGENCIES.—It shall be an unlaw18 ful employment practice for an employment agency to— 

19 (1) publish, in print or on the Internet or in 

20 any other medium, an advertisement or announce21 ment for any vacancy in a job, as an employee, that 

22 includes— 

23 (A) any provision stating or indicating that 

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1 fies the individual for any employment oppor2 tunity; or 

3 (B) any provision stating or indicating that 

4 the employment agency or an employer will not 

5 consider or hire an individual for any employ6 ment opportunity based on that individual’s sta7 tus as unemployed; 

8 (2) screen, fail or refuse to consider, or fail or 

9 refuse to refer an individual for employment as an 

10 employee because of the individual’s status as unem11 ployed; or 

12 (3) limit, segregate, or classify any individual in 

13 any manner that would limit or tend to limit the in14 dividual’s access to information about jobs, or con15 sideration, screening, or referral for jobs, as employ16 ees, solely because of an individual’s status as unem17 ployed. 

18 (c) INTERFERENCE WITH RIGHTS, PROCEEDINGS OR

19 INQUIRIES.—It shall be unlawful for any employer or em20 ployment agency to— 

21 (1) interfere with, restrain, or deny the exercise 

22 of or the attempt to exercise, any right provided 

23 under this subtitle; or 


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1 (2) fail or refuse to hire, to discharge, or in any 

2 other manner to discriminate against any individual, 

3 as an employee, because such individual— 

4 (A) opposed any practice made unlawful by 

5 this subtitle; 

6 (B) has asserted any right, filed any 

7 charge, or has instituted or caused to be insti8 tuted any proceeding, under or related to this 

9 subtitle; 

10 (C) has given, or is about to give, any in11 formation in connection with any inquiry or 

12 proceeding relating to any right provided under 

13 this subtitle; or 

14 (D) has testified, or is about to testify, in 

15 any inquiry or proceeding relating to any right 

16 provided under this subtitle. 

17 (d) CONSTRUCTION.—Nothing in this subtitle is in18 tended to preclude an employer or employment agency 

19 from considering an individual’s employment history, or 

20 from examining the reasons underlying an individual’s sta21 tus as unemployed, in assessing an individual’s ability to 

22 perform a job or in otherwise making employment deci23 sions about that individual. Such consideration or exam24 ination may include an assessment of whether an individ25 ual’s employment in a similar or related job for a period 


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1 of time reasonably proximate to the consideration of such 

2 individual for employment is job-related or consistent with 

3 business necessity. 

4 SEC. 375. ENFORCEMENT. 

5 (a) ENFORCEMENT POWERS.—With respect to the 

6 administration and enforcement of this subtitle— 

7 (1) the Commission shall have the same powers 

8 as the Commission has to administer and enforce— 

9 (A) title VII of the Civil Rights Act of 

10 1964 (42 U.S.C. 2000e et seq.); or 

11 (B) sections 302 and 304 of the Govern12 ment Employee Rights Act of 1991 (42 U.S.C. 

13 2000e–16b and 2000e–16c), in the case of an 

14 affected individual who would be covered by 

15 such title, or by section 302(a)(1) of the Gov16 ernment Employee Rights Act of 1991 (42 

17 U.S.C. 2000e–16b(a)(1)), respectively; 

18 (2) the Librarian of Congress shall have the 

19 same powers as the Librarian of Congress has to ad20 minister and enforce title VII of the Civil Rights Act 

21 of 1964 (42 U.S.C. 2000e et seq.) in the case of an 

22 affected individual who would be covered by such 

23 title; 

24 (3) the Board (as defined in section 101 of the 

25 Congressional Accountability Act of 1995 (2 U.S.C. 


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1 1301)) shall have the same powers as the Board has 

2 to administer and enforce the Congressional Ac3 countability Act of 1995 (2 U.S.C. 1301 et seq.) in 

4 the case of an affected individual who would be cov5 ered by section 201(a)(1) of such Act (2 U.S.C. 

6 1311(a)(1)); 

7 (4) the Attorney General shall have the same 

8 powers as the Attorney General has to administer 

9 and enforce— 

10 (A) title VII of the Civil Rights Act of 

11 1964 (42 U.S.C. 2000e et seq.); or 

12 (B) sections 302 and 304 of the Govern13 ment Employee Rights Act of 1991 (42 U.S.C. 

14 2000e–16b and 2000e–16c); in the case of an 

15 affected individual who would be covered by 

16 such title, or of section 302(a)(1) of the Gov17 ernment Employee Rights Act of 1991 (42 

18 U.S.C. 2000e–16b(a)(1)), respectively; 

19 (5) the President, the Commission, and the 

20 Merit Systems Protection Board shall have the same 

21 powers as the President, the Commission, and the 

22 Board, respectively, have to administer and enforce 

23 chapter 5 of title 3, United States Code, in the case 

24 of an affected individual who would be covered by 

25 section 411 of such title; and 


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1 (6) a court of the United States shall have the 

2 same jurisdiction and powers as the court has to en3 force— 

4 (A) title VII of the Civil Rights Act of 

5 1964 (42 U.S.C. 2000e et seq.) in the case of 

6 a claim alleged by such individual for a viola7 tion of such title; 

8 (B) sections 302 and 304 of the Govern9 ment Employee Rights Act of 1991 (42 U.S.C. 

10 2000e–16b and 2000e–16c) in the case of a 

11 claim alleged by such individual for a violation 

12 of section 302(a)(1) of such Act (42 U.S.C. 

13 2000e–16b(a)(1)); 

14 (C) the Congressional Accountability Act 

15 of 1995 (2 U.S.C. 1301 et seq.) in the case of 

16 a claim alleged by such individual for a viola17 tion of section 201(a)(1) of such Act (2 U.S.C. 

18 1311(a)(1)); and 

19 (D) chapter 5 of title 3, United States 

20 Code, in the case of a claim alleged by such in21 dividual for a violation of section 411 of such 

22 title. 

23 (b) PROCEDURES.—The procedures applicable to a 

24 claim alleged by an individual for a violation of this sub25 title are— 


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1 (1) the procedures applicable for a violation of 

2 title VII of the Civil Rights Act of 1964 (42 U.S.C. 

3 2000e et seq.) in the case of a claim alleged by such 

4 individual for a violation of such title; 

5 (2) the procedures applicable for a violation of 

6 section 302(a)(1) of the Government Employee 

7 Rights Act of 1991 (42 U.S.C. 2000e–16b(a)(1)) in 

8 the case of a claim alleged by such individual for a 

9 violation of such section; 

10 (3) the procedures applicable for a violation of 

11 section 201(a)(1) of the Congressional Account12 ability Act of 1995 (2 U.S.C. 1311(a)(1)) in the 

13 case of a claim alleged by such individual for a viola14 tion of such section; and 

15 (4) the procedures applicable for a violation of 

16 section 411 of title 3, United States Code, in the 

17 case of a claim alleged by such individual for a viola18 tion of such section. 

19 (c) REMEDIES.— 

20 (1) In any claim alleging a violation of section 

21 374(a)(1) or 374(b)(1) of this subtitle, an indi22 vidual, or any person acting on behalf of the indi23 vidual as set forth in section 375(a) of this subtitle, 

24 may be awarded, as appropriate: 


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1 (A) An order enjoining the respondent 

2 from engaging in the unlawful employment 

3 practice. 

4 (B) Reimbursement of costs expended as a 

5 result of the unlawful employment practice. 

6 (C) An amount in liquidated damages not 

7 to exceed $1,000 for each day of the violation. 

8 (D) Reasonable attorney’s fees (including 

9 expert fees) and costs attributable to the pur10 suit of a claim under this subtitle, except that 

11 no person identified in section 733(a) of this 

12 subtitle shall be eligible to receive attorney’s 

13 fees. 

14 (2) In any claim alleging a violation of any 

15 other subsection of this subtitle, an individual, or 

16 any person acting on behalf of the individual as set 

17 forth in section 375(a) of this subtitle, may be 

18 awarded, as appropriate, the remedies available for 

19 a violation of title VII of the Civil Rights Act of 

20 1964 (42 U.S.C. 2000e et seq.), section 302(a)(1) of 

21 the Government Employee Rights Act of 1991 (42 

22 U.S.C. 2000e–16b(a)(1)), section 201(a)(1) of the 

23 Congressional Accountability Act of 1995 (2 U.S.C. 

24 1311(a)(1)), and section 411 of title 3, United 

25 States Code, except that in a case in which wages, 


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1 salary, employment benefits, or other compensation 

2 have not been denied or lost to the individual, dam3 ages may be awarded in an amount not to exceed 

4 $5,000. 

5 SEC. 376. FEDERAL AND STATE IMMUNITY. 

6 (a) ABROGATION OF STATE IMMUNITY.—A State 

7 shall not be immune under the 11th Amendment to the 

8 Constitution from a suit brought in a Federal court of 

9 competent jurisdiction for a violation of this subtitle. 

10 (b) WAIVER OF STATE IMMUNITY.— 

11 (1) IN GENERAL.— 

12 (A) WAIVER.—A State’s receipt or use of 

13 Federal financial assistance for any program or 

14 activity of a State shall constitute a waiver of 

15 sovereign immunity, under the 11th Amend16 ment to the Constitution or otherwise, to a suit 

17 brought by an employee or applicant for em18 ployment of that program or activity under this 

19 subtitle for a remedy authorized under section 

20 375(c) of this subtitle. 

21 (B) DEFINITION.—In this paragraph, the 

22 term ‘‘program or activity’’ has the meaning 

23 given the term in section 606 of the Civil 

24 Rights Act of 1964 (42 U.S.C. 2000d–4a). 


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1 (2) EFFECTIVE DATE.—With respect to a par2 ticular program or activity, paragraph (1) applies to 

3 conduct occurring on or after the day, after the date 

4 of enactment of this Act, on which a State first re5 ceives or uses Federal financial assistance for that 

6 program or activity. 

7 (c) REMEDIES AGAINST STATE OFFICIALS.—An offi8 cial of a State may be sued in the official capacity of the 

9 official by any employee or applicant for employment who 

10 has complied with the applicable procedures of this sub11 title, for relief that is authorized under this subtitle. 

12 (d) REMEDIES AGAINST THE UNITED STATES AND

13 THE STATES.—Notwithstanding any other provision of 

14 this subtitle, in an action or administrative proceeding 

15 against the United States or a State for a violation of this 

16 subtitle, remedies (including remedies at law and in eq17 uity) are available for the violation to the same extent as 

18 such remedies would be available against a non-govern19 mental entity. 

20 SEC. 377. RELATIONSHIP TO OTHER LAWS. 

21 This subtitle shall not invalidate or limit the rights, 

22 remedies, or procedures available to an individual claiming 

23 discrimination prohibited under any other Federal law or 

24 regulation or any law or regulation of a State or political 

25 subdivision of a State. 


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1 SEC. 378. SEVERABILITY. 

2 If any provision of this subtitle, or the application 

3 of the provision to any person or circumstance, is held to 

4 be invalid, the remainder of this subtitle and the applica5 tion of the provision to any other person or circumstances 

6 shall not be affected by the invalidity. 

7 SEC. 379. EFFECTIVE DATE. 

8 This subtitle shall take effect on the date of enact9 ment of this Act and shall not apply to conduct occurring 

10 before the effective date. 

11 TITLE IV—OFFSETS 

12 Subtitle A—28 Percent Limitation 

13 on Certain Deductions and Ex14 clusions 

15 SEC. 401. 28 PERCENT LIMITATION ON CERTAIN DEDUC16 TIONS AND EXCLUSIONS. 

17 (a) IN GENERAL.—Part I of subchapter B of chapter 

18 1 of the Internal Revenue Code of 1986 is amended by 

19 adding at the end the following new section: 

20 ‘‘SEC. 69. LIMITATION ON CERTAIN DEDUCTIONS AND EX21 CLUSIONS. 

22 ‘‘(a) IN GENERAL.—In the case of an individual for 

23 any taxable year, if— 

24 ‘‘(1) the taxpayer’s adjusted gross income is 

25 above— 


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1 ‘‘(A) $250,000 in the case of a joint return 

2 within the meaning of section 6013, 

3 ‘‘(B) $225,000 in the case of a head of 

4 household return, 

5 ‘‘(C) $125,000 in the case of a married fil6 ing separately return, or 

7 ‘‘(D) $200,000 in all other cases; and 

8 ‘‘(2) the taxpayer’s adjusted taxable income for 

9 such taxable year exceeds the minimum marginal 

10 rate amount, then the tax imposed under section 1 

11 with respect to such taxpayer for such taxable year 

12 shall be increased by the amount determined under 

13 subsection (b). If the taxpayer is subject to tax 

14 under section 55, then in lieu of an increase in tax 

15 under section 1, the tax imposed under section 55 

16 with respect to such taxpayer for such taxable year 

17 shall be increased by the amount determined under 

18 subsection (c). 

19 ‘‘(b) ADDITIONAL AMOUNT.—The amount deter20 mined under this subsection with respect to any taxpayer 

21 for any taxable year is the excess (if any) of— 

22 ‘‘(1) the tax which would be imposed under sec23 tion 1 with respect to such taxpayer for such taxable 

24 year if ‘adjusted taxable income’ were substituted 


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1 for ‘taxable income’ each place it appears therein, 

2 over 

3 ‘‘(2) the sum of— 

4 ‘‘(A) the tax which would be imposed 

5 under such section with respect to such tax6 payer for such taxable year on the greater of— 

7 ‘‘(i) taxable income, or 

8 ‘‘(ii) the minimum marginal rate 

9 amount, plus 

10 ‘‘(B) 28 percent of the excess (if any) of 

11 the taxpayer’s adjusted taxable income over the 

12 greater of— 

13 ‘‘(i) the taxpayer’s taxable income, or 

14 ‘‘(ii) the minimum marginal rate 

15 amount. 

16 ‘‘(c) ADDITIONAL AMT AMOUNT.— 

17 ‘‘(1) The amount determined under this sub18 section with respect to any taxpayer for any taxable 

19 year is the additional amount computed under sub20 section (b) multiplied by the ratio that— 

21 ‘‘(A) the result of— 

22 ‘‘(i) all itemized deductions (before 

23 the application of section 68), plus 

24 ‘‘(ii) the specified above-the-line de25 ductions and specified exclusions, minus 


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1 ‘‘(iii) the amount of deductions dis2 allowed under section 56(b)(1)(A) and (B), 

3 minus 

4 ‘‘(iv) the non-preference disallowed de5 ductions, bears to— 

6 ‘‘(B) the sum of— 

7 ‘‘(i) the total of itemized deductions 

8 (after the application of section 68), plus 

9 ‘‘(ii) the specified above-the-line de10 ductions and specified exclusions. 

11 ‘‘(2) If the top of the AMT exemption phase12 out range for the taxpayer exceeds the minimum 

13 marginal rate amount for the taxpayer and if the 

14 taxpayer’s alternative minimum taxable income does 

15 not exceed the top of the AMT exemption phase-out 

16 range, the taxpayer must increase its additional 

17 AMT amount by 7 percent of the excess of— 

18 ‘‘(A) the lesser of— 

19 ‘‘(i) the top of the AMT exemption 

20 phase-out range, or 

21 ‘‘(ii) the taxpayer’s alternative min22 imum taxable income, computed— 

23 ‘‘(I) without regard to any 

24 itemized deduction or any specified 

25 above-the-line deduction, and 


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1 ‘‘(II) by including the amount of 

2 any specified exclusion; over 

3 ‘‘(B) the greater of— 

4 ‘‘(i) the taxpayer’s alternative min5 imum taxable income, or 

6 ‘‘(ii) the minimum marginal rate 

7 amount. 

8 ‘‘(d) MINIMUM MARGINAL RATE AMOUNT.—For pur9 poses of this section, the term ‘minimum marginal rate 

10 amount’ means, with respect to any taxpayer for any tax11 able year, the highest amount of the taxpayer’s taxable 

12 income which would be subject to a marginal rate of tax 

13 under section 1 that is less than 36 percent with respect 

14 to such taxable year. 

15 ‘‘(e) ADJUSTED TAXABLE INCOME.—For purposes of 

16 this section— 

17 ‘‘(1) IN GENERAL.—The term ‘adjusted taxable 

18 income’ means taxable income computed— 

19 ‘‘(A) without regard to any itemized deduc20 tion or any specified above-the-line deduction, 

21 and 

22 ‘‘(B) by including in gross income any 

23 specified exclusion. 


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1 ‘‘(2) SPECIFIED ABOVE-THE-LINE DEDUC2 TION.—The term ‘specified above-the-line deduction’ 

3 means— 

4 ‘‘(A) the deduction provided under section 

5 162(l) (relating to special rules for health insur6 ance costs of self-employed individuals), 

7 ‘‘(B) the deduction provided under section 

8 199 (relating to income attributable to domestic 

9 production activities), and 

10 ‘‘(C) the deductions provided under the fol11 lowing paragraphs of section 62(a): 

12 ‘‘(i) Paragraph (2) (relating to certain 

13 trade and business deductions of employ14 ees), other than subparagraph (A) thereof. 

15 ‘‘(ii) Paragraph (15) (relating to mov16 ing expenses). 

17 ‘‘(iii) Paragraph (16) (relating to Ar18 cher MSAs). 

19 ‘‘(iv) Paragraph (17) (relating to in20 terest on education loans). 

21 ‘‘(v) Paragraph (18) (relating to high22 er education expenses). 

23 ‘‘(vi) Paragraph (19) (relating to 

24 health savings accounts). 


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1 ‘‘(3) SPECIFIED EXCLUSION.—The term ‘speci2 fied exclusion’ means— 

3 ‘‘(A) any interest excluded under section 

4 103, 

5 ‘‘(B) any exclusion with respect to the cost 

6 described in section 6051(a)(14) (without re7 gard to subparagraph (B) thereof), and 

8 ‘‘(C) any foreign earned income excluded 

9 under section 911. 

10 ‘‘(f) NON-PREFERENCE DISALLOWED DEDUC11 TIONS.—For purposes of this section, the term ‘AMT-al12 lowed deductions’ means all itemized deductions dis13 allowed by section 68 multiplied by the ratio that— 

14 ‘‘(1) a taxpayer’s itemized deductions for the 

15 taxable year that are subject to section 68 (that is, 

16 not including those excluded under section 68(c)) 

17 and that are not limited under section 56(b)(1)(A) 

18 or (B), bears to 

19 ‘‘(2) the taxpayer’s itemized deductions for the 

20 taxable year that are subject to section 68 (that is, 

21 not including those excluded under section 68(c)). 

22 ‘‘(g) REGULATIONS.—The Secretary shall prescribe 

23 such regulations as may be appropriate to carry out this 

24 section, including regulations which provide appropriate 

25 adjustments to the additional AMT amount.’’. 


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1 (b) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning on or 

3 after January 1, 2013. 

4 Subtitle B—Tax Carried Interest in 

5 Investment Partnerships as Or6 dinary Income 

7 SEC. 411. PARTNERSHIP INTERESTS TRANSFERRED IN 

8 CONNECTION WITH PERFORMANCE OF SERV9 ICES. 

10 (a) MODIFICATION TO ELECTION TO INCLUDE PART11 NERSHIP INTEREST IN GROSS INCOME IN YEAR OF

12 TRANSFER.—Subsection (c) of section 83 of the Internal 

13 Revenue Code of 1986 is amended by redesignating para14 graph (4) as paragraph (5) and by inserting after para15 graph (3) the following new paragraph: 

16 ‘‘(4) PARTNERSHIP INTERESTS.—Except as 

17 provided by the Secretary— 

18 ‘‘(A) IN GENERAL.—In the case of any 

19 transfer of an interest in a partnership in con20 nection with the provision of services to (or for 

21 the benefit of) such partnership— 

22 ‘‘(i) the fair market value of such in23 terest shall be treated for purposes of this 

24 section as being equal to the amount of the 

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1 ceive if the partnership sold (at the time of 

2 the transfer) all of its assets at fair market 

3 value and distributed the proceeds of such 

4 sale (reduced by the liabilities of the part5 nership) to its partners in liquidation of 

6 the partnership, and 

7 ‘‘(ii) the person receiving such interest 

8 shall be treated as having made the elec9 tion under subsection (b)(1) unless such 

10 person makes an election under this para11 graph to have such subsection not apply. 

12 ‘‘(B) ELECTION.—The election under sub13 paragraph (A)(ii) shall be made under rules 

14 similar to the rules of subsection (b)(2).’’. 

15 (b) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to interests in partnerships trans17 ferred after December 31, 2013. 

18 SEC. 412. SPECIAL RULES FOR PARTNERS PROVIDING IN19 VESTMENT MANAGEMENT SERVICES TO 

20 PARTNERSHIPS. 

21 (a) IN GENERAL.—Part I of subchapter K of chapter 

22 1 of the Internal Revenue Code of 1986 is amended by 

23 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 02:19 Jul 30, 2013 Jkt 029200 PO 00000 Frm 00254 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821

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1 terest for all preceding partnership taxable 

2 years to which this section applies, over 

3 ‘‘(B) the aggregate amount treated as or4 dinary loss under paragraph (1)(B) with re5 spect to such interest for all preceding partner6 ship taxable years to which this section applies. 

7 ‘‘(3) ALLOCATION TO ITEMS OF GAIN AND

8 LOSS.— 

9 ‘‘(A) NET CAPITAL GAIN.—The amount 

10 treated as ordinary income under paragraph 

11 (1)(A) shall be allocated ratably among the 

12 items of long-term capital gain taken into ac13 count in determining such net capital gain. 

14 ‘‘(B) NET CAPITAL LOSS.—The amount 

15 treated as ordinary loss under paragraph (1)(B) 

16 shall be allocated ratably among the items of 

17 long-term capital loss and short-term capital 

18 loss taken into account in determining such net 

19 capital loss. 

20 ‘‘(4) TERMS RELATING TO CAPITAL GAINS AND

21 LOSSES.—For purposes of this section— 

22 ‘‘(A) IN GENERAL.—Net capital gain, long23 term capital gain, and long-term capital loss, 

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1 termined under section 1222, except that such 

2 section shall be applied— 

3 ‘‘(i) without regard to the recharacter4 ization of any item as ordinary income or 

5 ordinary loss under this section, 

6 ‘‘(ii) by only taking into account items 

7 of gain and loss taken into account by the 

8 holder of such interest under section 702 

9 with respect to such interest for such tax10 able year, 

11 ‘‘(iii) by treating property which is 

12 taken into account in determining gains 

13 and losses to which section 1231 applies as 

14 capital assets held for more than 1 year, 

15 and 

16 ‘‘(iv) without regard to section 1202. 

17 ‘‘(B) NET CAPITAL LOSS.—The term ‘net 

18 capital loss’ means the excess of the losses from 

19 sales or exchanges of capital assets over the 

20 gains from such sales or exchanges. Rules simi21 lar to the rules of clauses (i) through (iv) of 

22 subparagraph (A) shall apply for purposes of 

23 the preceding sentence. 

24 ‘‘(5) SPECIAL RULES FOR DIVIDENDS.— 


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1 ‘‘(A) INDIVIDUALS.—Any dividend allo2 cated to any investment services partnership in3 terest shall not be treated as qualified dividend 

4 income for purposes of section 1(h). 

5 ‘‘(B) CORPORATIONS.—No deduction shall 

6 be allowed under section 243 or 245 with re7 spect to any dividend allocated to any invest8 ment services partnership interest. 

9 ‘‘(b) DISPOSITIONS OF PARTNERSHIP INTERESTS.— 

10 ‘‘(1) GAIN.— 

11 ‘‘(A) IN GENERAL.—Any gain on the dis12 position of an investment services partnership 

13 interest shall be— 

14 ‘‘(i) treated as ordinary income, and 

15 ‘‘(ii) recognized notwithstanding any 

16 other provision of this subtitle. 

17 ‘‘(B) EXCEPTIONS; CERTAIN TRANSFERS

18 TO CHARITIES AND RELATED PERSONS.—Sub19 paragraph (A) shall not apply to— 

20 ‘‘(i) a disposition by gift, 

21 ‘‘(ii) a transfer at death, or 

22 ‘‘(iii) other disposition identified by 

23 the Secretary as a disposition with respect 

24 to which it would be inconsistent with the 

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1 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 

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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). 

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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, 2014.’’. 

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, 2013. 


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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, 2014, 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, 2013. 

18 (B) INDIRECT DISPOSITIONS.—The amend19 ments made by subsection (b) shall apply to 

20 transactions after December 31, 2013. 

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, 2014. 


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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 2013. 

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, 2013.’’. 

17 (b) EFFECTIVE DATE.—The amendment made by 

18 this section shall apply to amounts paid or incurred after 

19 December 31, 2013. 

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, 2013. 

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. 

18 ‘‘The allowance for depletion under section 611 with 

19 respect to any oil and gas well shall be computed without 

20 regard to section 613.’’. 

21 (b) EFFECTIVE DATE.—The amendment made by 

22 this section shall apply to taxable years beginning after 

23 December 31, 2013. 


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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, 2013. 


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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 2013.’’. 

10 (b) EFFECTIVE DATE.—The amendment made by 

11 this section shall apply to taxable years beginning after 

12 December 31, 2013. 

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, 2013. 


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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, 2013. 

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, 2013. 

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, 2013. 


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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, 2013. 

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 2013 (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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1 Subtitle F—Repeal of 

2 Sequestration 

3 SEC. 451. REPEAL OF SEQUESTRATION. 

4 Section 251A of the Balanced Budget and Emer5 gency Deficit Control Act of 1985 is repealed. 

Æ 


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