I 

113TH CONGRESS 

1ST SESSION H. R. 3491 

To amend the Internal Revenue Code of 1986 to regulate and tax Internet 

gambling, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 14, 2013 

Mr. MCDERMOTT introduced the following bill; which was referred to the 

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

Education and the Workforce, for a period to be subsequently determined 

by the Speaker, in each case for consideration of such provisions as fall 

within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 to regulate 

and tax Internet gambling, and for other purposes. 

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; AMENDMENT OF 1986 CODE. 

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

5 ‘‘Internet Gambling Regulation and Tax Enforcement Act 

6 of 2013’’. 

7 (b) AMENDMENT OF 1986 CODE.—Except as other8 wise expressly provided, whenever in this Act an amend9 ment is expressed in terms of an amendment of a section 


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1 or other provision, the reference shall be considered to be 

2 made to a section or other provision of the Internal Rev3 enue Code of 1986. 

4 SEC. 2. TAX ON INTERNET GAMBLING. 

5 (a) IN GENERAL.—Chapter 36 (relating to certain 

6 other excise taxes) is amended by adding at the end the 

7 following new subchapter: 

8 ‘‘Subchapter E—Internet Gambling 

‘‘Sec. 4491. Imposition of Internet gambling license tax. 

‘‘Sec. 4492. Record requirements. 

‘‘Sec. 4493. Elective State and Indian tribal government online gambling tax. 

‘‘Sec. 4494. Regulations. 

9 ‘‘SEC. 4491. IMPOSITION OF INTERNET GAMBLING LICENSE 

10 TAX. 

11 ‘‘(a) INTERNET GAMBLING LICENSEE.— 

12 ‘‘(1) IN GENERAL.—There is hereby imposed a 

13 tax on each Internet gambling licensee in an amount 

14 equal to 4 percent of all funds deposited by cus15 tomers making deposits while located within the 

16 United States during the preceding month into an 

17 account maintained by that Internet gambling li18 censee or any agent of that licensee that can be used 

19 for the purpose of placing a bet or wager as defined 

20 in section 5362(1) of title 31, United States Code. 

21 ‘‘(2) PERSONS LIABLE FOR TAX.—The tax im22 posed by subsection (a) shall be the direct and exclu23 sive obligation of the Internet gambling operator and 


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1 may not be deducted from the amounts available as 

2 deposits to the person placing a bet. Notwith3 standing the preceding sentence, any person making 

4 a deposit for the purpose of placing a bet or wager 

5 with a person who is required but has failed to ob6 tain a license pursuant to subchapter V of chapter 

7 53 of title 31, United States Code, shall be liable for 

8 and pay the tax under this subchapter on all such 

9 deposits, but such liability shall not excuse any fail10 ure to pay the tax on the part of the person who is 

11 required but has failed to obtain such license. The 

12 person making the deposit shall not be liable for the 

13 tax on deposits in cases of fraud. 

14 ‘‘(b) UNAUTHORIZED BETS OR WAGERS.— 

15 ‘‘(1) IN GENERAL.—There is hereby imposed a 

16 tax on any person who accepts a bet or wager and 

17 who is not authorized pursuant to section 5383(b) of 

18 title 31, United States Code, to accept such bet or 

19 wager. 

20 ‘‘(2) AMOUNT OF TAX.—The amount of such 

21 tax shall be equal to 50 percent of all funds depos22 ited into an account that can be used for placing a 

23 bet or wager within the meaning of section 5362(1) 

24 of that title. 

25 ‘‘(c) CREDITS FOR RETURNS OF FUNDS.— 


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1 ‘‘(1) IN GENERAL.—There shall be allowed as a 

2 credit against the tax imposed by this section an 

3 amount equal to the sum of the following taxes 

4 which are paid on any funds returned by or on be5 half of an Internet gambling licensee to the account 

6 of a customer: 

7 ‘‘(A) The tax imposed by this section. 

8 ‘‘(B) Any State or Indian tribal Internet 

9 gambling tax imposed under section 4493(b). 

10 ‘‘(C) Any tax imposed on overseas Internet 

11 gambling under section 4493(d). 

12 ‘‘(2) LIMITATION.—The amount allowed as a 

13 credit under paragraph (1) with respect to a cus14 tomer may not exceed 12 percent of the funds re15 ceived in deposits from the customer. 

16 ‘‘(d) WHEN DUE.—The tax imposed by this section 

17 shall be due at by the end of each calendar month with 

18 respect to deposits during the preceding month. 

19 ‘‘(e) DEFINITIONS AND SPECIAL RULES.—For pur20 poses of this subchapter— 

21 ‘‘(1) INTERNET GAMBLING LICENSEE.—The 

22 term ‘Internet gambling licensee’ means a licensee, 

23 as defined in section 5382 of title 31, United States 

24 Code. 


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1 ‘‘(2) DEPOSITS.—Deposits made by or on be2 half of an Internet gambling licensee of Internet 

3 gambling winnings or returns of funds by or on be4 half of an Internet gambling licensee to the account 

5 of a customer shall not be treated as a deposit for 

6 purposes of this section. 

7 ‘‘SEC. 4492. RECORD REQUIREMENTS. 

8 ‘‘Each person liable for taxes under this subchapter, 

9 except for a person making a deposit who is liable for 

10 taxes pursuant to section 4491(a)(2), shall keep a daily 

11 record showing deposits (within the meaning of this sub12 chapter), in addition to all other records required pursuant 

13 to section 6001. 

14 ‘‘SEC. 4493. ELECTIVE STATE AND INDIAN TRIBAL GOVERN15 MENT ONLINE GAMBLING TAX. 

16 ‘‘(a) IN GENERAL.— 

17 ‘‘(1) PAYMENT OF STATE AND INDIAN TRIBAL

18 GOVERNMENT TAX.—On a monthly basis, each 

19 Internet gambling licensee shall pay to each quali20 fied State and each qualified Indian tribal govern21 ment an amount equal to the monthly pro rata State 

22 and Indian tribal government online gambling tax. 

23 ‘‘(2) MONTHLY PRO RATA ONLINE GAMBLING

24 TAX.—For purposes of this section, with respect to 

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1 ernment for any calendar month, the monthly pro 

2 rata online gambling tax is the amount of the taxes 

3 described in subsection (b) received with respect to 

4 such calendar month. 

5 ‘‘(3) QUALIFIED STATE; QUALIFIED INDIAN

6 TRIBAL GOVERNMENT.— 

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

8 section, the terms ‘qualified State’ and ‘quali9 fied Indian tribal government’ mean a State or 

10 an Indian tribal government, respectively, for 

11 which an election to receive funds under this 

12 section is in effect. Notice of such election shall 

13 be provided by the Governor, principal chief, or 

14 other chief executive officer in such form and 

15 manner as the Secretary may prescribe. 

16 ‘‘(B) STATE ELECTION NOT TO AFFECT

17 TRIBAL ELECTION.—An election by a State 

18 under subparagraph (A) to receive funds under 

19 this section shall not constitute an election to 

20 be so included on behalf of any Indian tribe lo21 cated within or partially within the geographic 

22 boundaries of such State. 

23 ‘‘(C) REVOCATION OF STATE OR TRIBAL

24 ELECTION.— 


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1 ‘‘(i) IN GENERAL.—A State or Indian 

2 Tribal government may revoke its election 

3 by notice provided by the Governor, prin4 cipal chief, or other chief executive officer 

5 and in such form and manner as the Sec6 retary may prescribe. 

7 ‘‘(ii) TIMING OF REVOCATION.—Rev8 ocation of state election shall take effect 

9 the later of 6 months after receipt by the 

10 Secretary of such revocation, or on Janu11 ary 1st of the year following receipt by the 

12 Secretary of such revocation. 

13 ‘‘(D) STATE.—The term ‘State’ means any 

14 State, the District of Columbia, or any com15 monwealth, territory or other possession of the 

16 United States. 

17 ‘‘(E) INDIAN TRIBAL GOVERNMENT.—The 

18 term ‘Indian tribal government’ means the gov19 ernment of an Indian tribe (within the meaning 

20 of section 4 of the Indian Gaming Regulatory 

21 Act). 

22 ‘‘(4) TIME OF PAYMENTS.—The payment made 

23 under this subsection with respect to any calendar 

24 month shall be made not later than the 11th day of 

25 the succeeding calendar month. 


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1 ‘‘(5) LIST OF QUALIFIED STATES AND QUALI2 FIED INDIAN TRIBAL GOVERNMENTS.—The Sec3 retary shall maintain a current list of qualified 

4 States and qualified Indian tribal governments and 

5 shall publish such list online. 

6 ‘‘(b) STATE AND INDIAN TRIBAL GOVERNMENT ON7 LINE GAMBLING TAX.—The State and Indian tribal gov8 ernment online gambling tax shall be an amount equal to 

9 8 percent of all deposited funds deposited by customers 

10 located in each qualified state or area subject to the juris11 diction of a qualified Indian tribal government at the time 

12 of the deposit. 

13 ‘‘(c) EFFECT OF ACCEPTANCE OF TAX.—Acceptance 

14 by a State or Indian tribal government of the State and 

15 Indian tribal government online gambling tax shall relieve 

16 Internet gambling licensees from the obligation to pay any 

17 other fee or tax to the State or Indian tribal government 

18 relating to its online gambling services, except for— 

19 ‘‘(1) applicable State individual and corporate 

20 income taxes, which shall be unaffected by the elec21 tion, and 

22 ‘‘(2) any fees associated with an Internet gam23 bling licensee’s choice to rely on a State or Indian 

24 tribal regulatory body certification of suitability in 


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1 connection with a Federal online gambling licensing 

2 application. 

3 ‘‘(d) OVERSEAS INTERNET GAMBLING TAX.—There 

4 is hereby imposed a tax on each Internet gambling licensee 

5 in an amount equal to 12 percent of all funds deposited 

6 by customers making deposits while located without the 

7 United States during the preceding month into an account 

8 maintained by that Internet gambling licensee or any 

9 agent of that licensee that can be used for the purpose 

10 of placing a bet or wager as defined in section 5362(1) 

11 of title 31, United States Code. Deposited funds subject 

12 to the State and Indian tribal government Internet gam13 bling tax under this section shall not be taken into account 

14 for purposes of the preceding sentence. 

15 ‘‘SEC. 4494. REGULATIONS. 

16 ‘‘The Secretary shall prescribe such regulations as 

17 may be necessary or appropriate to carry out this sub18 chapter.’’. 

19 (b) CLERICAL AMENDMENT.—The table of sub20 chapters for chapter 36 is amended by adding at the end 

21 the following new item: 

‘‘SUBCHAPTER E. INTERNET GAMBLING.’’. 

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

23 this section shall apply to bets or wagers placed after the 

24 date of the enactment of this Act. 


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1 SEC. 3. INTERNET GAMBLING LICENSEE INFORMATION RE2 PORTING. 

3 (a) IN GENERAL.—Subpart A of part III of sub4 chapter A of chapter 61 (relating to information con5 cerning persons subject to special provisions) is amended 

6 by adding at the end the following new section: 

7 ‘‘SEC. 6050X. RETURNS RELATING TO INTERNET GAMBLING. 

8 ‘‘(a) REQUIREMENT.—Every person who is an Inter9 net gambling licensee or who otherwise is engaged in the 

10 business of accepting any bet or wager within the meaning 

11 of section 5382(1) of title 31, United States Code, during 

12 a taxable year shall furnish, at such time and in such man13 ner as the Secretary shall by regulations prescribe, the in14 formation described in subsection (b), and such person 

15 shall maintain (in the location, in the manner, and to the 

16 extent prescribed in regulations) such records as may be 

17 appropriate to the information described in subsection (b). 

18 ‘‘(b) REQUIRED INFORMATION.—For purposes of 

19 subsection (a), the information described is set forth 

20 below, which information may be modified as appropriate 

21 by the Secretary through regulation— 

22 ‘‘(1) the name, address, and TIN of the Inter23 net gambling licensee or other person engaged in the 

24 business of accepting any bet or wager, 

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1 bling licensee or other person engaged in the busi2 ness of accepting any bet or wager during the cal3 endar year, 

4 ‘‘(3) the gross winnings, gross wagers, and 

5 gross losses for the calendar year of each person 

6 placing a bet or wager with the Internet gambling 

7 licensee or other person engaged in the business of 

8 accepting any bet or wager during the year, 

9 ‘‘(4) the net Internet gambling winnings for 

10 each such person for the calendar year, 

11 ‘‘(5) the amount of tax withheld with respect to 

12 each such person for the calendar year, 

13 ‘‘(6) beginning and end-of-year account bal14 ances for each such person for the calendar year, 

15 and 

16 ‘‘(7) amounts deposited and withdrawn by each 

17 such person during the calendar year. 

18 ‘‘(c) STATEMENT TO BE FURNISHED TO PERSONS

19 WITH RESPECT TO WHOM INFORMATION IS REQUIRED.— 

20 Every person required to make a return under subsection 

21 (a) shall furnish to each person whose name is required 

22 to be set forth in such return by reason of placing a bet 

23 or wager a written statement showing— 


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1 ‘‘(1) the name, address, and phone number of 

2 the information contact of the person required to 

3 make such return, and 

4 ‘‘(2) the information required to be shown on 

5 such return with respect to each person whose name 

6 is required to be set forth in such return. 

7 The written statement required under the preceding sen8 tence shall be furnished to the person on or before Janu9 ary 31 of the year following the calendar year for which 

10 the return under subsection (a) was required to be made. 

11 ‘‘(d) DEFINITIONS.— 

12 ‘‘(1) INTERNET GAMBLING LICENSEE.—The 

13 term ‘Internet gambling licensee’ has the meaning 

14 given such term by section 4491(d)(1). 

15 ‘‘(2) NET INTERNET GAMBLING WINNINGS.— 

16 The term ‘net Internet gambling winnings’ means 

17 gross winnings from wagers placed over the Internet 

18 with a person required to be licensed under section 

19 5382 of chapter 53 of title 31, United States Code, 

20 less the amounts wagered. 

21 ‘‘(3) INTERNET; WAGER.—The terms ‘Internet’ 

22 and ‘wager’ shall have the respective meanings given 

23 such terms by section 5362 of chapter 53 of title 31, 

24 United States Code.’’. 


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1 (b) The table of sections for subpart B of part III 

2 of subchapter A of chapter 61 is amended by inserting 

3 after the item relating to section 6050W the following new 

4 item: 

‘‘Sec. 6050X. Returns relating to Internet gambling.’’. 

5 SEC. 4. WITHHOLDING FROM CERTAIN GAMBLING 

6 WINNINGS. 

7 (a) NET INTERNET GAMBLING WINNINGS.—Para8 graph (3) of section 3406(b) (relating to other reportable 

9 payments for purposes of backup withholding) is amend10 ed— 

11 (1) by striking ‘‘or’’ in subparagraph (E); 

12 (2) by striking ‘‘.’’ and inserting ‘‘, or’’ at the 

13 end of subparagraph (F); and 

14 (3) by adding at the end thereof the following 

15 new subparagraph: 

16 ‘‘(G) section 6050X(b)(4) (relating to net 

17 Internet gambling winnings).’’. 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 this section shall apply to bets or wagers placed after the 

20 date of the enactment of this Act. 

21 SEC. 5. WITHHOLDING OF TAX ON NONRESIDENT ALIENS. 

22 (a) TAX ON NONRESIDENT ALIEN INDIVIDUALS.— 

23 Paragraph (1) of section 871(a) (relating to income not 

24 connected with United States business) is amended— 


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1 (1) by striking ‘‘and’’ at the end of subpara2 graph (C), 

3 (2) by inserting ‘‘and’’ at the end of subpara4 graph (D), and 

5 (3) by inserting after subparagraph (D) the fol6 lowing new subparagraph: 

7 ‘‘(E) the gross amount of winnings from 

8 each wager placed over the Internet with a per9 son required to be licensed under section 5382 

10 of chapter 53 of title 31, United States Code 

11 (as such terms are defined in section 

12 6050X(d)(2)),’’. 

13 (b) EXEMPTION FOR CERTAIN GAMBLING

14 WINNINGS.—Section 871(j) (relating to exemption for cer15 tain gambling winnings) is amended by inserting before 

16 the period at the end the following: ‘‘or to any bets or 

17 wagers placed over the Internet (as such terms are defined 

18 in section 6050X(d)(2))’’. 

19 (c) WITHHOLDING OF TAX ON NONRESIDENT ALIEN

20 INDIVIDUALS.—The first sentence of subsection (b) of sec21 tion 1441 (relating to withholding of tax on nonresident 

22 aliens) is amended by inserting after ‘‘gains subject to tax 

23 under section 871(a)(1)(D),’’ the following: ‘‘the gross 

24 amount of winnings from wagers placed over the Internet 

25 described in section 871(a)(1)(E),’’. 


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1 (d) SOURCE OF INTERNET GAMBLING WINNINGS.— 

2 Subsection (a) of section 861 is amending by inserting at 

3 the end thereof the following new paragraph: 

4 ‘‘(10) INTERNET GAMBLING WINNINGS.—Any 

5 Internet gambling winnings received from an Inter6 net gambling licensee (as defined by section 

7 4491(d)(1)).’’. 

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

9 this section shall apply to bets or wagers placed after the 

10 date of the enactment of this Act. 

11 SEC. 6. TERRITORIAL EXTENT. 

12 (a) IN GENERAL.—Paragraph (2) of section 4404 is 

13 amended to read as follows: 

14 ‘‘(2) placed within the United States, or any 

15 Commonwealth, territory, or possession thereof, by a 

16 person who is a United States citizen or resident.’’. 

17 (b) EFFECTIVE DATE.—The amendment made by 

18 subsection (a) shall apply to wagers made after December 

19 31, 2012. 

20 SEC. 7. FOREIGN LICENSEES SUBJECT TO UNITED STATES 

21 FEDERAL INCOME TAX. 

22 (a) NONRESIDENT ALIEN INDIVIDUALS.—Section 

23 872 is amended by inserting after subsection (b) the fol24 lowing new subsection: 


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1 ‘‘(c) INCOME EARNED BY NONRESIDENT ALIEN IN2 DIVIDUALS OPERATING INTERNET GAMBLING FACILI3 TIES.— 

4 ‘‘(1) TREATMENT AS UNITED STATES TRADE

5 OR BUSINESS.—For purposes of this title, a non6 resident alien individual who is a licensee or operates 

7 an Internet gambling facility for which a license is 

8 required under section 103 of the Internet Gambling 

9 Regulation and Enforcement Act of 2013 at any 

10 time during a taxable year shall be deemed to be en11 gaged in the conduct of a trade or business within 

12 the United States during the taxable year. 

13 ‘‘(2) TREATMENT OF GROSS INCOME AS EFFEC14 TIVELY CONNECTED INCOME.—For purposes of this 

15 title, all gross income related to domestic wagers 

16 that are placed over the Internet shall be deemed to 

17 be effectively connected with the licensee’s trade or 

18 business within the United States. 

19 ‘‘(3) TREATMENT OF GROSS INCOME AS AT20 TRIBUTABLE TO PERMANENT ESTABLISHMENT.— 

21 For purposes of any applicable United States income 

22 tax treaty, a nonresident alien individual who is a li23 censee or operates an Internet gambling facility for 

24 which a license is required under section 103 of the 

25 Internet Gambling Regulation and Enforcement Act 


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1 of 2013 at any time during a taxable year shall be 

2 deemed to have a permanent establishment located 

3 in the United States, and all gross income arising 

4 from domestic wagers that are placed over the Inter5 net shall be treated as attributable to the permanent 

6 establishment of such nonresident alien individual. 

7 ‘‘(4) DEFINITIONS.—For purposes of this sub8 section— 

9 ‘‘(A) DOMESTIC WAGER.—The term ‘do10 mestic wager’ means a wager placed by a per11 son located in the United States. 

12 ‘‘(B) WAGER.—The term ‘wager’ has the 

13 meaning given the term ‘bet or wager’ in sec14 tion 102(2) of the Internet Gambling Regula15 tion and Enforcement Act of 2013. 

16 ‘‘(C) INTERNET.—The term ‘Internet’ has 

17 the meaning given in section 5362(5) of title 

18 31, United States Code.’’. 

19 (b) FOREIGN CORPORATIONS.—Section 882 is 

20 amended by— 

21 (1) redesignating subsections (e) and (f) as sub22 sections (f) and (g), respectively, and 

23 (2) by inserting after subsection (d) the fol24 lowing: 


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1 ‘‘(e) INCOME EARNED BY FOREIGN CORPORATIONS

2 OPERATING INTERNET GAMBLING FACILITIES.— 

3 ‘‘(1) TREATMENT AS UNITED STATES TRADE

4 OR BUSINESS.—For purposes of this title, a foreign 

5 corporation that is a licensee or operates an Internet 

6 gambling facility for which a license is required 

7 under section 103 of the Internet Gambling Regula8 tion and Enforcement Act of 2013 at any time dur9 ing a taxable year shall be deemed to be engaged in 

10 the conduct of a trade or business within the United 

11 States during the taxable year. 

12 ‘‘(2) TREATMENT OF GROSS INCOME AS EFFEC13 TIVELY CONNECTED INCOME.—For purposes of this 

14 title, all gross income related to domestic wagers 

15 that are placed over the Internet shall be deemed to 

16 be effectively connected with the licensee’s trade or 

17 business within the United States. 

18 ‘‘(3) TREATMENT OF GROSS INCOME AS AT19 TRIBUTABLE TO PERMANENT ESTABLISHMENT.— 

20 For purposes of any applicable United States income 

21 tax treaty, a foreign corporation that is a licensee or 

22 operates an Internet gambling facility for which a li23 cense is required under section 103 of the Internet 

24 Gambling Regulation and Enforcement Act of 2013 

25 at any time during a taxable year shall be deemed 


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1 to have a permanent establishment located in the 

2 United States, and all gross income arising from do3 mestic wagers that are placed over the Internet shall 

4 be treated as attributable to the permanent estab5 lishment of such foreign corporation. 

6 ‘‘(4) DEFINITIONS.— 

7 ‘‘(A) DOMESTIC WAGER.—The term ‘do8 mestic wager’ means a wager placed by a per9 son located in the United States. 

10 ‘‘(B) WAGER.—The term ‘wager’ has the 

11 meaning given the term ‘bet or wager’ in sec12 tion 102(2) of the Internet Gambling Regula13 tion and Enforcement Act of 2013. 

14 ‘‘(C) INTERNET.—The term ‘Internet’ has 

15 the meaning given in section 5362(5) of title 

16 31, United States Code.’’. 

17 (c) EFFECTIVE DATE.—The amendment made by 

18 this section shall apply to payments made after the date 

19 of the enactment of this Act. 

20 SEC. 8. AMERICAN HERITAGE PROGRAM. 

21 (a) IMPLEMENTATION OF PROGRAM.—From funds 

22 appropriated to the American Heritage Block Grant Fund 

23 for a fiscal year, the Secretary of the Treasury shall make 

24 grants to eligible States to carry out an American Herit25 age Program through State arts agencies. 


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1 (b) ALLOTMENT OF FUNDS.—Funds allotted for a 

2 fiscal year shall be allotted among eligible States in the 

3 same proportion as funds are allotted among the States 

4 under section 5(g)(3) of the National Foundation on the 

5 Arts and the Humanities Act of 1965 (20 U.S.C. 

6 954(g)(3)). 

7 (c) ELIGIBILITY TO RECEIVE GRANTS.—To be eligi8 ble to receive a grant under subsection (a) for a fiscal 

9 year, a State shall submit to the Secretary an application 

10 in such form, and containing such information and assur11 ances, as the Secretary may require by rule, including as12 surances that— 

13 (1) not more than 80 percent of the cost of any 

14 qualified activity carried out under this section shall 

15 be paid with such grant, and 

16 (2) not more that 20 percent of such grant may 

17 be expended for administrative costs. 

18 (d) DEFINITIONS.—For purposes of this section— 

19 (1) the term ‘‘American Heritage Program’’ 

20 means a program carried out by a State that pro21 vides qualified activities directly, or by contract with 

22 nonprofit organizations (including community-based 

23 organizations) or units of local government, for all 

24 the people and communities in the State, 


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1 (2) the term ‘‘Secretary’’ means the Secretary 

2 of the Treasury, 

3 (3) the term ‘‘State’’ has the meaning given 

4 such term in section 4 of the National Foundation 

5 on the Arts and the Humanities Act of 1965 (20 

6 U.S.C. 953), 

7 (4) the term ‘‘State arts agency’’ has the same 

8 meaning given such term as used in the National 

9 Foundation on the Arts and the Humanities Act of 

10 1965 (20 U.S.C. 951 et seq.), and 

11 (5) the term ‘‘qualified activities’’ means activi12 ties that develop projects, productions, workshops, or 

13 programs that will encourage public knowledge, edu14 cation, understanding, and appreciation of American 

15 heritage and the arts. 

16 (e) AMERICAN HERITAGE BLOCK GRANT FUND.— 

17 (1) ESTABLISHMENT.—There is established in 

18 the Treasury of the United States a trust fund to 

19 be known as the ‘‘American Heritage Block Grant 

20 Fund’’, consisting of such amounts as may be appro21 priated or credited to the American Heritage Block 

22 Grant Fund as provided in this subsection. 

23 (2) TRANSFER TO FUND.—There are appro24 priated to the American Heritage Block Grant Fund 

25 amounts equal to .5 percent of the taxes received by 


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1 the Treasury after December 31, 2012, that the Sec2 retary determines are attributable to Internet gam3 bling. 

4 (3) METHOD OF TRANSFER.—The amounts ap5 propriated by paragraph (1) shall be transferred 

6 from time to time from the general fund of the 

7 Treasury. Such amounts shall be determined on the 

8 basis of estimates by the Secretary of the taxes, 

9 specified in paragraph (1), paid to or deposited into 

10 the Treasury. Proper adjustments shall be made in 

11 amounts subsequently transferred to the extent prior 

12 estimates are in excess of or are less than the taxes 

13 specified in paragraph (1). 

14 (4) EXPENDITURES FROM AMERICAN HERITAGE

15 BLOCK GRANT FUND.—Amounts in the American 

16 Heritage Block Grant Fund shall be available, as 

17 provided by appropriation Acts, for making expendi18 tures to carry out subsection (a). 

19 SEC. 9. BLOCK GRANTS TO STATES FOR TRANSITIONAL AS20 SISTANCE. 

21 The Social Security Act is amended by adding at the 

22 end the following new title: 


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1 ‘‘TITLE XXII—BLOCK GRANTS TO 

2 STATES FOR TRANSITIONAL 

3 ASSISTANCE 

4 ‘‘SEC. 2201. TRANSITIONAL ASSISTANCE TRUST FUND. 

5 ‘‘(a) CREATION OF TRUST FUND.—There is estab6 lished in the Treasury of the United States a trust fund 

7 to be known as the ‘Transitional Assistance Trust Fund’, 

8 consisting of such amounts as may be appropriated or 

9 credited to the Transitional Assistance Trust Fund as pro10 vided in this section. 

11 ‘‘(b) TRANSFER TO TRANSITIONAL ASSISTANCE

12 TRUST FUND OF AMOUNTS EQUIVALENT TO CERTAIN

13 TAXES.— 

14 ‘‘(1) IN GENERAL.—There are hereby appro15 priated to the Transitional Assistance Trust Fund, 

16 out of any money in the Treasury not otherwise ap17 propriated, amounts equivalent to 25 percent of the 

18 taxes received in the Treasury after December 31, 

19 2012, that the Secretary of the Treasury determines 

20 are attributable to Internet gambling. 

21 ‘‘(2) METHOD OF TRANSFER.—The amounts 

22 appropriated by paragraph (1) shall be transferred 

23 from time to time from the general fund in the 

24 Treasury to the Transitional Assistance Trust Fund. 

25 Such amounts shall be determined on the basis of 


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1 estimates by the Secretary of the Treasury of the 

2 taxes, specified in paragraph (1) of this subsection, 

3 paid to or deposited into the Treasury. Proper ad4 justments shall be made in amounts subsequently 

5 transferred to the extent prior estimates were in ex6 cess of or were less than the taxes specified in para7 graph (1) of this subsection. 

8 ‘‘(c) EXPENDITURES FROM TRANSITIONAL ASSIST9 ANCE TRUST FUND.—Amounts in the Transitional Assist10 ance Trust Fund shall be available, as provided by appro11 priation Acts, for making expenditures to carry out section 

12 2202. 

13 ‘‘SEC. 2202. TRANSITIONAL ASSISTANCE GRANT PROGRAM. 

14 ‘‘(a) IN GENERAL.—Each State shall be entitled to 

15 a payment under this section for each fiscal year in an 

16 amount equal to its allotment for such fiscal year, to be 

17 used by such State to carry out the State’s plan for transi18 tional assistance described in subsection (c), subject to the 

19 requirements of this section. 

20 ‘‘(b) PLAN APPROVAL REQUIRED.—No State may re21 ceive a payment under this section unless the State sub22 mits the State’s plan for transitional assistance described 

23 in subsection (c) to the Secretary and the Secretary ap24 proves such plan. 


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1 ‘‘(c) STATE PLAN FOR TRANSITIONAL ASSIST2 ANCE.—A State plan for transitional assistance is de3 scribed by this subsection if the plan— 

4 ‘‘(1) provides for expanded education opportuni5 ties for individuals who are, or were formerly, in fos6 ter care, including streamlining and coordinating 

7 education financing opportunities and providing 

8 counseling and assistance to such individuals for the 

9 purpose of ensuring completion of their academic 

10 goals; 

11 ‘‘(2) provides for job training opportunities for 

12 individuals who are, or were formerly, in foster care; 

13 ‘‘(3) provides, primarily through expanding ac14 cess to and investment in community colleges, for 

15 expanded post-secondary education and job training 

16 opportunities that lead to a certificate, for individ17 uals who are working in, or had worked in, declining 

18 sectors of the economy, as defined by the Secretary, 

19 and who want to pursue a new career in a sector of 

20 the economy with the potential for high wages and 

21 high growth, as defined by the Secretary; and 

22 ‘‘(4) provides a subsidy for the use of public 

23 transportation by— 


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1 ‘‘(A) individuals qualifying for benefits or 

2 services under title XX, including the Federal3 State Unemployment Insurance Program; and 

4 ‘‘(B) individuals participating in programs 

5 under the Workforce Investment Act. 

6 ‘‘(d) ALLOTMENT.—The allotment for a fiscal year 

7 for a State receiving an allotment for such fiscal year shall 

8 be an amount equal to— 

9 ‘‘(1) the amount appropriated for such fiscal 

10 year under subsection (f), multiplied by 

11 ‘‘(2) the ratio by which the population of the 

12 State bears to the population of all the States receiv13 ing an allotment for such fiscal year as determined 

14 by the Secretary (on the basis of the most recent 

15 data available from the Department of Commerce). 

16 ‘‘(e) DEFINITIONS.—For purposes of this section: 

17 ‘‘(1) IN FOSTER CARE.—The term ‘in foster 

18 care’ means, with respect to an individual, an indi19 vidual who is under the care and placement respon20 sibility of the State agency responsible for admin21 istering a plan, in connection with such individual, 

22 under part B or part E of title IV. 

23 ‘‘(2) SECRETARY.—The term ‘Secretary’ means 

24 the Secretary of Health and Human Services. 


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1 ‘‘(3) STATE.—The term ‘State’ means the 50 

2 States of the United States, the District of Colum3 bia, the Commonwealth of Puerto Rico, the United 

4 States Virgin Islands, Guam, American Samoa, and 

5 the Northern Mariana Islands. 

6 ‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There 

7 are authorized to be appropriated for each fiscal year to 

8 the Secretary the amount deposited into the Transitional 

9 Assistance Trust Fund pursuant to section 2201 to carry 

10 out this section.’’. 

Æ 


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