I 

117TH CONGRESS 

1ST SESSION H. R. 1376 

To eliminate lead-based pipe and tap hazards in housing, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 25, 2021 

Mr. RYAN (for himself and Mr. MICHAEL F. DOYLE of Pennsylvania) introduced the following bill; which was referred to the Committee on Energy 

and Commerce, and in addition to the Committees on Financial Services, 

and Ways and Means, 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 eliminate lead-based pipe and tap hazards in housing, 

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; TABLE OF CONTENTS. 

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

5 ‘‘Grants for Eliminating the Toxic Hazard of Environ6 mental Lead in Our Towns Act of 2021’’ or the ‘‘GET 

7 THE LEAD OUT Act of 2021’’. 


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

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Purposes. 

Sec. 3. Definitions. 

TITLE I—LEAD-BASED PIPE HAZARD REDUCTION 

Sec. 101. Grants for lead-based pipe hazard reduction in housing. 

Sec. 102. Evaluation and reduction of lead-based pipe hazards in federally assisted housing. 

Sec. 103. Comprehensive housing affordability strategies. 

Sec. 104. Task force on lead-based pipe hazard reduction and financing. 

Sec. 105. National consultation on lead-based pipe hazard reduction. 

Sec. 106. Guidelines for lead-based pipe hazard evaluation and reduction activities. 

Sec. 107. Disclosure of information concerning lead upon transfer of residential 

property. 

TITLE II—LEAD EXPOSURE REDUCTION 

Sec. 201. Lead-based pipe activities training and certification. 

Sec. 202. Identification of dangerous levels of lead. 

Sec. 203. Authorized State programs. 

Sec. 204. Lead abatement and measurement. 

Sec. 205. Lead hazard information pamphlet. 

Sec. 206. Regulations. 

Sec. 207. Control of lead-based pipe hazards at Federal facilities. 

Sec. 208. Prohibited Acts. 

Sec. 209. Relationship to other Federal law. 

Sec. 210. General provisions relating to administrative proceedings. 

TITLE III—AUTHORIZATION OF APPROPRIATIONS FOR LEAD 

HAZARD REDUCTION 

Sec. 301. HUD grants for lead hazards reduction in housing. 

Sec. 302. EPA funding for lead exposure reduction. 

TITLE IV—REVENUE PROVISIONS 

Sec. 401. Partnership interests transferred in connection with performance of 

services. 

Sec. 402. Special rules for partners providing investment management services 

to partnerships. 

Sec. 403. Return to pre-2018 estate and gift tax basic exclusion amount. 

3 SEC. 2. PURPOSES. 

4 The purposes of this Act are as follows: 


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1 (1) to develop a national strategy to build the 

2 infrastructure necessary to eliminate lead-based pipe 

3 and tap hazards in housing; 

4 (2) to reorient the national approach to the 

5 presence of lead-based pipe and taps in public and 

6 private homes to implement, on a priority basis, a 

7 program to evaluate and reduce lead-based pipe haz8 ards in the Nation’s building stock; 

9 (3) to encourage effective action to prevent 

10 childhood lead poisoning by establishing a workable 

11 framework for lead-based pipe and tap hazard eval12 uation and reduction and by ending the current con13 fusion over reasonable standards of care; 

14 (4) to ensure and implement the definitions of 

15 lead hazards in section 1417 of the Safe Drinking 

16 Water Act (42 U.S.C. 300g–6) and ensure that the 

17 existence of lead-based pipe and taps hazards is 

18 taken into account in the development of Federal 

19 Government housing policies and in the sale, rental 

20 and renovation of homes, and apartments; 

21 (5) to mobilize national resources expeditiously, 

22 through a partnership among all levels of govern23 ment and the private sector, to develop the most 

24 promising, cost-effective methods for evaluating and 

25 reducing lead-based pipe and tap hazards; 


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1 (6) to reduce the threat of childhood lead poi2 soning in housing owned, assisted, or transferred by 

3 the Federal Government; and 

4 (7) to educate the public concerning the haz5 ards and sources of lead-based pipes and taps poi6 soning and steps to reduce and eliminate such haz7 ards. 

8 SEC. 3. DEFINITIONS. 

9 For purposes of this Act, the following definitions 

10 shall apply: 

11 (1) ABATEMENT.—The term ‘‘abatement’’ 

12 means any set of measures designed to permanently 

13 eliminate lead-based pipe hazards in accordance with 

14 standards established by appropriate Federal agen15 cies. Such term includes— 

16 (A) the removal of lead-based pipes and 

17 taps; 

18 (B) all preparation, cleanup, disposal, and 

19 post-abatement clearance testing activities asso20 ciated with such measures; and 

21 (C) all repair to damages post-abatement. 

22 (2) CERTIFIED CONTRACTOR.—The term ‘‘cer23 tified contractor’’ means— 

24 (A) a contractor, inspector, or supervisor 

25 who has completed a training program certified 


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1 by the appropriate Federal agency and has met 

2 any other requirements for certification or li3 censure established by such agency or who has 

4 been certified by any State through a program 

5 which has been found by such Federal agency 

6 to be at least as rigorous as the Federal certifi7 cation program; and 

8 (B) workers or designers who have fully 

9 met training requirements established by the 

10 appropriate Federal agency. 

11 (3) CONTRACT FOR THE PURCHASE AND SALE

12 OF RESIDENTIAL REAL PROPERTY.—The term ‘‘con13 tract for the purchase and sale of residential real 

14 property’’ means any contract or agreement in which 

15 one party agrees to purchase an interest in real 

16 property on which there is situated or more residen17 tial dwellings used or occupied, or intended to be 

18 used or occupied, in whole or in part, as the home 

19 or residence of one or more persons. 

20 (4) EVALUATION.—The term ‘‘evaluation’’ 

21 means risk assessment, inspection, or risk assess22 ment and inspection. 

23 (5) FEDERALLY ASSISTED HOUSING.—The 

24 term ‘‘federally assisted housing’’ means residential 


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1 dwellings receiving project-based assistance under 

2 programs including— 

3 (A) section 221(d)(3) or 236 of the Na4 tional Housing Act (12 U.S.C. 1715l(d)(3); 

5 1715z–1); 

6 (B) section 101 of the Housing and Urban 

7 Development Act of 1965 (12 U.S.C. 1701s); 

8 (C) section 8 of the United States Housing 

9 Act of 1937 (42 U.S.C. 1437f); and 

10 (D) sections 502(a), 504, 514, 515, 516, 

11 and 533 of the Housing Act of 1949 (42 U.S.C. 

12 1472(a); 1474; 1484; 1485; 1486; 1490m). 

13 (6) FEDERALLY OWNED HOUSING.—The term 

14 ‘‘federally owned housing’’ means residential dwell15 ings owned or managed by a Federal agency, or for 

16 which a Federal agency is a trustee or conservator. 

17 For the purpose of this paragraph, the term ‘‘Fed18 eral agency’’ includes the Department of Housing 

19 and Urban Development, the Rural Housing Service 

20 of the Department of Agriculture, the Federal De21 posit Insurance Corporation, the General Services 

22 Administration, the Department of Defense, the De23 partment of Veterans Affairs, the Department of the 

24 Interior, the Department of Transportation, and any 

25 other Federal agency. 


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1 (7) FEDERALLY SUPPORTED WORK.—The term 

2 ‘‘federally supported work’’ means any lead hazard 

3 evaluation or reduction activities conducted in feder4 ally owned or assisted housing or funded in whole or 

5 in part through any financial assistance program of 

6 the Department of Housing and Urban Develop7 ment, the Rural Housing Service of the Department 

8 of Agriculture, or the Department of Veterans Af9 fairs. 

10 (8) INSPECTION.—The term ‘‘inspection’’ 

11 means an investigation to determine the presence of 

12 lead-based pipe or taps as provided in section 141.86 

13 of the regulations of the Environmental Protection 

14 Agency (40 C.F.R. 181.46; relating to monitoring 

15 requirements for lead and copper in tap water) and 

16 the provision of a report explaining the results of the 

17 investigation. 

18 (9) INTERIM CONTROLS.—The term ‘‘interim 

19 controls’’ means a set of measures designed to re20 duce temporarily human exposure or likely exposure 

21 to lead-based pipe hazards, including specialized 

22 cleaning, repairs, maintenance, ongoing monitoring 

23 of lead-based pipe or potential hazards, and the es24 tablishment and operation of management and resi25 dent education programs. 


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1 (10) LEAD-BASED PIPE.—The term ‘‘lead-based 

2 pipe’’ means any pipe, including fittings, taps, fix3 tures, solder, and flux that does not satisfy the defi4 nition of ‘‘lead-free’’ established under section 1417 

5 of the Safe Drinking Water Act. 

6 (11) LEAD-BASED PIPE HAZARDS.—The term 

7 ‘‘lead-based pipe hazards’’ means any condition that 

8 causes exposure to lead from lead-based pipe that 

9 would result in adverse human health effects, as es10 tablished by the Environmental Protection Agency. 

11 (12) MORTGAGE LOAN.—The term ‘‘mortgage 

12 loan’’ includes any loan (other than temporary fi13 nancing such as a construction loan) that— 

14 (A) is secured by a first lien on any inter15 est in residential real property; and 

16 (B) either— 

17 (i) is insured, guaranteed, made, or 

18 assisted by the Department of Housing 

19 and Urban Development, the Department 

20 of Veterans Affairs, or the Rural Housing 

21 Service of the Department of Agriculture, 

22 or by any other agency of the Federal Gov23 ernment; or 

24 (ii) is intended to be sold by each 

25 originating mortgage institution to any 


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1 federally chartered secondary mortgage 

2 market institution. 

3 (13) ORIGINATING MORTGAGE INSTITUTION.— 

4 The term ‘‘originating mortgage institution’’ means 

5 a lender that provides mortgage loans. 

6 (14) PRIORITY HOUSING.—The term ‘‘priority 

7 housing’’ means housing that qualifies as affordable 

8 housing under section 215 of the Cranston-Gonzalez 

9 National Affordable Housing Act (42 U.S.C. 

10 12745), including housing that receives assistance 

11 under subsection (b) or (o) of section 8 of the 

12 United States Housing Act of 1937 (42 U.S.C. 

13 1437f). 

14 (15) PUBLIC HOUSING.—The term ‘‘public 

15 housing’’ has the meaning given such term in section 

16 3(b) of the United States Housing Act of 1937 (42 

17 U.S.C. 1437a(b)). 

18 (16) REDUCTION.—The term ‘‘reduction’’ 

19 means measures designed to reduce or eliminate 

20 human exposure to lead-based pipe hazards through 

21 methods including interim controls and abatement. 

22 (17) RESIDENTIAL DWELLING.—The term ‘‘res23 idential dwelling’’ means— 


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1 (A) a single-family dwelling, including at2 tached structures such as porches and stoops; 

3 or 

4 (B) a single-family dwelling unit in a 

5 structure that contains more than 1 separate 

6 residential dwelling unit, in which each such 

7 unit is used or occupied, or intended to be used 

8 or occupied, in whole or in part, as the home 

9 or residence of one or more persons. 

10 (18) RESIDENTIAL REAL PROPERTY.—The term 

11 ‘‘residential real property’’ means real property on 

12 which there is situated one or more residential dwell13 ings used or occupied, or intended to be used or oc14 cupied, in whole or in part, as the home or residence 

15 of one or more persons. 

16 (19) RISK ASSESSMENT.—The term ‘‘risk as17 sessment’’ means an on-site investigation to deter18 mine and report the existence, nature, severity, and 

19 location of lead-based pipe hazards in residential 

20 dwellings, including— 

21 (A) information gathering regarding the 

22 age and history of the housing and occupancy 

23 by children under age 6; 

24 (B) visual inspection; 


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1 (C) other activities as may be appropriate; 

2 and 

3 (D) provision of a report explaining the re4 sults of the investigation. 

5 (20) SECRETARY.—The term ‘‘Secretary’’ 

6 means the Secretary of Housing and Urban Develop7 ment. 

8 TITLE I—LEAD-BASED PIPE 

9 HAZARD REDUCTION 

10 SEC. 101. GRANTS FOR LEAD-BASED PIPE HAZARD REDUC11 TION IN HOUSING. 

12 (a) GENERAL AUTHORITY.—The Secretary of Hous13 ing and Urban Development is authorized to provide 

14 grants to eligible applicants to evaluate and reduce lead15 based pipes hazards in priority housing that is not feder16 ally assisted housing, federally owned housing, or public 

17 housing, in accordance with the provisions of this section. 

18 (b) ELIGIBLE APPLICANTS.—A State or unit of local 

19 government that has an approved comprehensive housing 

20 affordability strategy under section 105 of the Cranston21 Gonzalez National Affordable Housing Act (42 U.S.C. 

22 12705) is eligible to apply for a grant under this section. 

23 (c) FORM OF APPLICATION.—To receive a grant 

24 under this section, a State or unit of local government 

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1 ner as the Secretary shall prescribe. An application shall 

2 contain— 

3 (1) a copy of that portion of an applicant’s 

4 comprehensive housing affordability strategy re5 quired by section 105(b)(16) of the Cranston-Gon6 zalez National Affordable Housing Act; 

7 (2) a statement of the amount of assistance the 

8 applicant seeks under this section; 

9 (3) a description of the planned activities to be 

10 undertaken with grants under this section, including 

11 an estimate of the amount to be allocated for each 

12 activity; 

13 (4) a description of the forms of financial as14 sistance to owners and occupants of priority housing 

15 that will be provided through grants under this sec16 tion; and 

17 (5) such assurances as the Secretary may re18 quire regarding the applicant’s capacity to carry out 

19 the activities. 

20 (d) SELECTION CRITERIA.—The Secretary shall 

21 award grants under this section on the basis of the merit 

22 of the activities proposed to be carried out and on the 

23 basis of selection criteria, which shall include— 

24 (1) the extent to which the proposed activities 

25 will reduce the risk of lead-based water poisoning to 


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1 children under the age of 6 who reside in priority 

2 housing; 

3 (2) the degree of severity and extent of lead4 based pipe hazards in the jurisdiction to be served; 

5 (3) the ability of the applicant to leverage 

6 State, local, and private funds to supplement the 

7 grant under this section; 

8 (4) the ability of the applicant to carry out the 

9 proposed activities; and 

10 (5) such other factors as the Secretary deter11 mines appropriate to ensure that grants made avail12 able under this section are used effectively and to 

13 promote the purposes of this Act. 

14 (e) ELIGIBLE ACTIVITIES.—A grant under this sec15 tion may be used to— 

16 (1) perform risk assessments and inspections in 

17 priority housing; 

18 (2) provide for the interim control of lead-based 

19 pipe hazards in priority housing; 

20 (3) provide for the abatement of lead-based pipe 

21 hazards in priority housing; 

22 (4) provide for the additional cost of reducing 

23 lead-based pipe hazards in units undergoing renova24 tion funded by other sources; 


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1 (5) ensure that risk assessments, inspections, 

2 and abatements are carried out by certified contrac3 tors monitor the blood-lead levels of workers involved 

4 in lead hazard reduction activities funded under this 

5 section; 

6 (6) assist in the temporary relocation of fami7 lies forced to vacate priority housing while lead8 based pipe hazard reduction measures are being con9 ducted; 

10 (7) educate the public on the nature and causes 

11 of lead poisoning and measures to reduce exposure 

12 to lead, including exposure due to residential lead13 based pipe hazards; 

14 (8) test the blood-lead levels of children under 

15 the age of 6 residing in priority housing after lead16 based pipe hazard reduction activity has been con17 ducted, to assure that such activity does not cause 

18 excessive exposures to lead; and 

19 (9) carry out such other activities that the Sec20 retary determines appropriate to promote the pur21 poses of this Act. 

22 (f) FORMS OF ASSISTANCE.—A recipient of a grant 

23 under this section may provide the services described in 

24 this section through a variety of programs, including 

25 grants, loans, equity investments, revolving loan funds, 


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1 loan funds, loan guarantees, interest write-downs, and 

2 other forms of assistance approved by the Secretary. 

3 (g) TECHNICAL ASSISTANCE AND CAPACITY BUILD4 INGS.— 

5 (1) IN GENERAL.—The Secretary shall develop 

6 the capacity of eligible applicants to carry out the 

7 requirements of section 105(b)(18) of the Cranston8 Gonzalez National Affordable Housing Act and to 

9 carry out activities under this section. In fiscal years 

10 2022 and 2023, the Secretary may make grants of 

11 up to $200,000 for the purpose of establishing State 

12 training, certification, or accreditation programs 

13 that meet the requirements of section 201 of this 

14 Act (relating to lead-based pipe activities training 

15 and certification). 

16 (2) SET-ASIDE.—Of the total amount approved 

17 in appropriation Acts under section 301, there shall 

18 be set aside to carry out this subsection $3,000,000 

19 for each of fiscal years 2022 through 2031. 

20 (h) MATCHING REQUIREMENT.—The recipient of a 

21 grant under this section shall make contributions toward 

22 the cost of activities that receive assistance under this sec23 tion in an amount not less than 10 percent of the total 

24 grant amount under this section. 


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1 (i) PROHIBITION OF SUBSTITUTION OF FUNDS.— 

2 Grants under this section may not be used to replace other 

3 amounts made available or designated by State or local 

4 governments for use for the purposes under this title. 

5 (j) LIMITATION ON USE.—A recipient of a grant 

6 under this section shall ensure that not more than 10 per7 cent of the grant will be used for administrative expenses 

8 associated with the activities funded by the grant. 

9 (k) FINANCIAL RECORDS.—A recipient of a grant 

10 under this section shall maintain and provide the Sec11 retary with financial records sufficient, in the determina12 tion of the Secretary, to ensure proper accounting and dis13 bursing of amounts received from a grant under this sec14 tion. 

15 (l) REPORT.—A recipient of a grant under this sec16 tion shall submit to the Secretary, for any fiscal year in 

17 which the recipient expends grant funds under this sec18 tion, a report that— 

19 (1) describes the use of the amounts received; 

20 (2) states the number of risk assessments and 

21 the number of inspections conducted in residential 

22 dwellings; 

23 (3) states the number of residential dwellings in 

24 which lead-based pipe hazards have been reduced 

25 through interim controls; 


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1 (4) states the number of residential dwellings in 

2 which lead-based pipe hazards have been abated; and 

3 (5) provides any other information that the Sec4 retary determines to be appropriate. 

5 (m) NOTICE OF FUNDING AVAILABILITY.—The Sec6 retary shall publish a Notice of Funding Availability not 

7 later than 120 days after funds are appropriated to carry 

8 out this section. 

9 SEC. 102. EVALUATION AND REDUCTION OF LEAD-BASED 

10 PIPE HAZARDS IN FEDERALLY ASSISTED 

11 HOUSING. 

12 (a) REQUIREMENTS FOR FEDERALLY ASSISTED

13 HOUSING.—The Secretary shall provide for appropriate 

14 measures and procedures to conduct risk assessments, in15 spections, interim controls, and abatement of lead-based 

16 pipe hazards in federally assisted housing. At a minimum, 

17 such procedures shall require— 

18 (1) the provision of lead hazard information 

19 pamphlets, developed pursuant to section 205 of this 

20 Act for purchasers and tenants of such housing; 

21 (2) periodic risk assessments and interim con22 trols for such housing in accordance with a schedule 

23 determined by the Secretary, which shall provide for 

24 the initial risk assessment to be performed— 


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1 (A) in not less than 50 percent of the 

2 dwelling units of such housing within 5 years 

3 after the date of the enactment of this Act; and 

4 (B) in the remainder of the dwelling units 

5 of such housing within 10 years after such date 

6 of enactment; 

7 (3) inspection for the presence of lead-based 

8 pipe in such housing prior to federally funded ren9 ovation or rehabilitation; 

10 (4) reduction of lead-based pipe hazards in such 

11 housing in the course of rehabilitation projects re12 ceiving less than $25,000 per unit in Federal funds; 

13 (5) abatement of lead-based pipe hazards in 

14 such housing in the course of substantial rehabilita15 tion projects receiving more than $25,000 per unit 

16 in Federal funds; 

17 (6) where risk assessment, inspection, or reduc18 tion activities have been undertaken in such housing, 

19 the provision of notice to occupants describing the 

20 nature and scope of such activities and the actual 

21 risk assessment or inspection reports (including 

22 available information on the location of any remain23 ing lead-based pipe and lead-based pipe hazards); 

24 and 


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1 (7) such other measures for such housing as 

2 the Secretary deems appropriate. 

3 (b) PUBLIC HOUSING.—Section 9(d)(1) of the United 

4 States Housing Act of 1937 (42 U.S.C. 1437g(d)(1)) is 

5 amended— 

6 (1) in subparagraph (K), by striking ‘‘and’’ at 

7 the end; 

8 (2) in subparagraph (L), by striking the period 

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

10 (3) by adding at the end the following new sub11 paragraph: 

12 ‘‘(M) lead-based pipe hazard evaluation 

13 and reduction, as defined in section 3 of the 

14 Grants for Eliminating the Toxic Hazard of 

15 Environmental Lead in Our Towns Act of 

16 2021.’’. 

17 (c) HOME INVESTMENT PARTNERSHIPS.—Section 

18 212(a) of the Cranston-Gonzalez National Affordable 

19 Housing Act (42 U.S.C. 12742(a)) is amended— 

20 (1) by redesignating paragraph (5) (relating to 

21 lead-based paint hazards) as paragraph (4); and 

22 (2) by adding at the end the following new 

23 paragraph: 

24 ‘‘(5) LEAD-BASED PIPE HAZARDS.—A partici25 pating jurisdiction may use funds provided under 


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1 this subtitle for the evaluation and reduction of lead2 based pipe hazards.’’. 

3 (d) COMMUNITY DEVELOPMENT BLOCK GRANTS.— 

4 Section 105(a) of the Housing and Community Develop5 ment Act of 1974 (42 U.S.C. 5305(a)) is amended— 

6 (1) in paragraph (24)(D), by striking ‘‘and’’ at 

7 the end; 

8 (2) in paragraph (25), by striking the period at 

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

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

11 ‘‘(26) lead-based pipe hazard evaluation and re12 duction, as defined in section 3 of the Grants for 

13 Eliminating the Toxic Hazard of Environmental 

14 Lead in Our Towns Act of 2021.’’. 

15 (e) SECTION 8 RENTAL ASSISTANCE.—Section 

16 8(c)(2)(B) of the United States Housing Act of 1937 (42 

17 U.S.C. 1437f(c)(2)(B)) is amended by adding at the end 

18 the following: ‘‘The Secretary may (at the discretion of 

19 the Secretary and subject to the availability of appropria20 tions for contract amendments), on a project-by-project 

21 basis for projects receiving project-based assistance, pro22 vide adjustments to the maximum monthly rents to cover 

23 the costs of evaluating and reducing lead-based pipe haz24 ards, as defined in section 3 of the Grants for Eliminating 


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1 the Toxic Hazard of Environmental Lead in Our Towns 

2 Act of 2021.’’. 

3 (f) HOPE FOR PUBLIC AND INDIAN HOUSING HOME4 OWNERSHIP.—Title III of the United States Housing Act 

5 of 1937 is amended— 

6 (1) in section 302(b) (42 U.S.C. 1437aaa– 

7 1(b))— 

8 (A) by redesignating paragraphs (5) 

9 through (9) as paragraphs (6) through (10), re10 spectively; and 

11 (B) by inserting after paragraph (4) the 

12 following: 

13 ‘‘(5) inspection for lead-based pipe hazards, as 

14 required by section 102(a) of the Grants for Elimi15 nating the Toxic Hazard of Environmental Lead in 

16 Our Towns Act of 2021;’’; and 

17 (2) in section 303(b) (42 U.S.C. 1437aaa– 

18 2(b))— 

19 (A) by redesignating paragraphs (5) 

20 through (14) as paragraphs (6) through (15), 

21 respectively; and 

22 (B) by inserting after paragraph (4) the 

23 following: 

24 ‘‘(5) Abatement of lead-based pipe hazards, as 

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1 nating the Toxic Hazard of Environmental Lead in 

2 Our Towns Act of 2021.’’. 

3 (g) HOPE FOR HOMEOWNERSHIP OF MULTIFAMILY

4 UNITS.—Title IV of the Cranston-Gonzalez National Af5 fordable Housing Act is amended— 

6 (1) in section 422(b) (42 U.S.C. 12872(b))— 

7 (A) by redesignating paragraphs (5) 

8 through (9) as paragraphs (6) through (10), re9 spectively; and 

10 (B) by inserting after paragraph (4) the 

11 following: 

12 ‘‘(5) inspection for lead-based pipe hazards, as 

13 required by section 102(a) of the Grants for Elimi14 nating the Toxic Hazard of Environmental Lead in 

15 Our Towns Act of 2021;’’; and 

16 (2) in section 423(b) (42 U.S.C. 12873(b))— 

17 (A) by redesignating paragraphs (5) 

18 through (14) as paragraphs (6) through (15), 

19 respectively; and 

20 (B) by inserting after paragraph (4) the 

21 following: 

22 ‘‘(5) Abatement of lead-based pipe hazards, as 

23 required by section 102(a) of the Grants for Elimi24 nating the Toxic Hazard of Environmental Lead in 

25 Our Towns Act of 2021.’’. 


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1 (h) HOPE FOR HOMEOWNERSHIP OF SINGLE FAMILY

2 HOMES.—Title IV of the Cranston-Gonzalez National Af3 fordable Housing Act is amended— 

4 (1) in section 442(b) (42 U.S.C. 12892(b))— 

5 (A) by redesignating paragraphs (5) 

6 through (9) as paragraphs (6) through (10), re7 spectively; and 

8 (B) by inserting after paragraph (4) the 

9 following: 

10 ‘‘(5) inspection for lead-based pipe hazards, as 

11 required by section 102(a) of the Grants for Elimi12 nating the Toxic Hazard of Environmental Lead in 

13 Our Towns Act of 2021;’’; and 

14 (2) in section 443(b) (42 U.S.C. 12893(b))— 

15 (A) by redesignating paragraphs (5) 

16 through (11) as paragraphs (6) through (12), 

17 respectively; and 

18 (B) by inserting after paragraph (4) the 

19 following: 

20 ‘‘(5) Abatement of lead-based pipe hazards, as 

21 required by section 102(a) of the Grants for Elimi22 nating the Toxic Hazard of Environmental Lead in 

23 Our Towns Act of 2021.’’. 

24 (i) FHA INSURANCE FOR MORTGAGES FOR SINGLE

25 FAMILY HOMES.— 


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1 (1) HOME IMPROVEMENT.—The fourth undesig2 nated paragraph of section 2(a) of the National 

3 Housing Act (12 U.S.C. 1703(a)) is amended— 

4 (A) by inserting after the period at the end 

5 of the first sentence the following: ‘‘Alterations, 

6 repairs, and improvements upon or in connec7 tion with existing structures may also include 

8 the evaluation and reduction of lead-based pipes 

9 hazards.’’; and 

10 (B) in the last sentence— 

11 (i) in paragraph (2), by striking 

12 ‘‘and’’ at the end; 

13 (ii) in paragraph (3), by striking the 

14 period at the end and inserting ‘‘and’’; 

15 (iii) in paragraph (4)— 

16 (I) by inserting ‘‘, when used 

17 with respect to lead-based paint haz18 ards,’’ before ‘‘have’’; and 

19 (II) by striking the period at the 

20 end and inserting ‘‘and’’; and 

21 (iv) by adding at the end the fol22 lowing: 

23 ‘‘(5) the terms ‘evaluation’, ‘reduction’, and 

24 ‘lead-based pipe hazard’, when used with respect to 

25 lead-based pipe hazards, have the meaning given 


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1 such term in section 3 of the Grants for Eliminating 

2 the Toxic Hazard of Environmental Lead in Our 

3 Towns Act of 2021.’’. 

4 (2) REHABILITATION LOANS.—The last sen5 tence of section 203(k)(2)(B) of the National Hous6 ing Act (12 U.S.C. 1709(k)(2)(B)) is amended by 

7 inserting before the period at the end the following: 

8 ‘‘, and measures to evaluate and reduce lead-based 

9 pipe hazards, as such terms are defined in section 

10 3 of the Grants for Eliminating the Toxic Hazard 

11 of Environmental Lead in Our Towns Act of 2021’’. 

12 (j) FHA INSURANCE FOR MORTGAGES FOR MULTI13 FAMILY HOUSING.—Section 221(d)(4)(iv) of the National 

14 Housing Act (12 U.S.C. 17151(d)(4)(iv)) is amended by 

15 inserting before the closing parentheses the following: ‘‘, 

16 and the cost of evaluating and reducing lead-based pipe 

17 hazards, as such terms are defined in section 3 of the 

18 Grants for Eliminating the Toxic Hazard of Environ19 mental Lead in Our Towns Act of 2021’’. 

20 (k) RURAL HOUSING.—Section 501(a)(5) of the 

21 Housing Act of 1949 (42 U.S.C. 1471) is amended by in22 serting before the period at the end the following: ‘‘, and 

23 measures to evaluate and reduce lead-based pipe hazards, 

24 as such terms are defined in section 3 of the Grants for 


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1 Eliminating the Toxic Hazard of Environmental Lead in 

2 Our Towns Act of 2021’’. 

3 SEC. 103. COMPREHENSIVE HOUSING AFFORDABILITY 

4 STRATEGIES. 

5 Section 105 of the Cranston-Gonzalez National Af6 fordable Housing Act (42 U.S.C. 12705) is amended— 

7 (1) in subsection (b)— 

8 (A) by redesignating paragraphs (18), 

9 (19), and (20) as paragraphs (19), (20), and 

10 (21), respectively; and 

11 (B) by inserting after paragraph (17) the 

12 following new paragraph: 

13 ‘‘(18) estimate the number of housing units 

14 within the jurisdiction that are occupied by low-in15 come families or very low-income families and that 

16 contain lead-based pipe hazards, as defined in sec17 tion 3 of the Grants for Eliminating the Toxic Haz18 ard of Environmental Lead in Our Towns Act of 

19 2021, outline the actions proposed or being taken to 

20 evaluate and reduce lead-based pipe hazards, and de21 scribe how lead-based pipe hazard reduction will be 

22 integrated into housing policies and programs;’’; and 

23 (2) in subsection (e)— 


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1 (A) in paragraph (2), by striking ‘‘para2 graph (16)’’ and inserting ‘‘paragraph (17)’’; 

3 and 

4 (B) by adding at the end the following new 

5 paragraph: 

6 ‘‘(3) LEAD-BASED PIPE HAZARDS.—When pre7 paring the portion of a housing strategy required by 

8 subsection (b)(18), a jurisdiction shall consult with 

9 State or local health and child welfare agencies and 

10 examine existing data related to lead-based pipe haz11 ards and poisonings, including health department 

12 data on the addresses of housing units in which chil13 dren have been identified as lead poisoned.’’. 

14 SEC. 104. TASK FORCE ON LEAD-BASED PIPE HAZARD RE15 DUCTION AND FINANCING. 

16 (a) IN GENERAL.—The Secretary, in consultation 

17 with the Administrator of the Environmental Protection 

18 Agency shall establish a task force to make recommenda19 tions on expanding resources and efforts to evaluate and 

20 reduce lead-based pipe hazards in private housing. 

21 (b) MEMBERSHIP.—The task force shall include indi22 viduals representing the Department of Housing and 

23 Urban Development, the Rural Housing Service of the De24 partment of Agriculture, the Department of Veterans Af25 fairs, the Federal Home Loan Mortgage Corporation, the 


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1 Federal National Mortgage Association, the Environ2 mental Protection Agency, employee or organizations in 

3 the building and construction trades industry, landlords, 

4 tenants, primary lending institutions, private mortgage in5 surers, single family and multifamily real estate interests, 

6 nonprofit housing developers, property liability insurers, 

7 public housing agencies, low-income housing advocacy or8 ganizations, national, State and local lead-poisoning pre9 vention advocates and experts, and community-based or10 ganizations located in areas with substantial rental hous11 ing. 

12 (c) RESPONSIBILITIES.—The task force shall make 

13 recommendations to the Secretary and the Administrator 

14 of the Environmental Protection Agency concerning— 

15 (1) incorporating the need to finance lead-based 

16 pipe hazard reduction into underwriting standards; 

17 (2) developing new loan products and proce18 dures for financing lead-based pipe hazard evalua19 tion and reduction activities; 

20 (3) adjusting appraisal guidelines to address 

21 lead safety; 

22 (4) incorporating risk assessments or inspec23 tions for lead-based pipe as a routine procedure in 

24 the origination of new residential mortgages; 


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1 (5) revising guidelines, regulations, and edu2 cational pamphlets issued by the Department of 

3 Housing and Urban Development and other Federal 

4 agencies relating to lead-based pipe poisoning pre5 vention; 

6 (6) reducing the current uncertainties of liabil7 ity related to lead-based pipe in rental housing; 

8 clarifying standards of care for landlords and lend9 ers, and exploring the ‘‘safe harbor’’ concept; 

10 (7) increasing the availability of liability insur11 ance for owners of rental housing and certified con12 tractors and establishing alternative systems to com13 pensate victims of lead-based pipe poisoning; and 

14 (8) evaluating the utility and appropriateness of 

15 requiring risk assessments or inspections and notifi16 cation to prospective leases of rental housing. 

17 (d) COMPENSATION.—The members of the task force 

18 shall not receive Federal compensation for their participa19 tion. 

20 SEC. 105. NATIONAL CONSULTATION ON LEAD-BASED PIPE 

21 HAZARD REDUCTION. 

22 In carrying out this Act, the Secretary shall consult 

23 on an ongoing basis with the Administrator of the Envi24 ronmental Protection Agency, the Director of the Centers 

25 for Disease Control, other Federal agencies concerned 


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1 with lead poisoning prevention, and the task force estab2 lished pursuant to section 104. 

3 SEC. 106. GUIDELINES FOR LEAD-BASED PIPE HAZARD 

4 EVALUATION AND REDUCTION ACTIVITIES. 

5 Not later than 12 months after the date of the enact6 ment of this Act, the Secretary, in consultation with the 

7 Administrator of the Environmental Protection Agency, 

8 the Secretary of Labor, and the Secretary of Health and 

9 Human Services (acting through the Director of the Cen10 ters for Disease Control), shall issue guidelines for the 

11 conduct of federally supported work involving risk assess12 ments, regulations, inspections, interim controls, and 

13 abatement of lead-based pipe hazards. Such guidelines 

14 shall be based upon criteria that measure the condition 

15 of the housing (and the presence of children under age 

16 6 for the purposes of risk assessments) and shall not be 

17 based upon criteria that measure the health of the resi18 dents of the housing. 

19 SEC. 107. DISCLOSURE OF INFORMATION CONCERNING 

20 LEAD UPON TRANSFER OF RESIDENTIAL 

21 PROPERTY. 

22 (a) DISCLOSURE IN PURCHASE AND SALE OR LEASE

23 OF HOUSING.— 

24 (1) LEAD-BASED PIPE HAZARDS.—Not later 

25 than 2 years after the date of the enactment of this 


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1 Act, the Secretary and the Administrator of the En2 vironmental Protection Agency shall promulgate reg3 ulations under this section for the disclosure of lead4 based pipe hazards in housing that is offered for 

5 sale or lease. The regulations shall require that, be6 fore the purchaser or lessee is obligated under any 

7 contract to purchase or lease the housing, the seller 

8 or lessor shall— 

9 (A) provide the purchaser or lessee with a 

10 lead hazard information pamphlet, as pre11 scribed by the Administrator of the Environ12 mental Protection Agency under section 406 of 

13 the Toxic Substances Control Act; 

14 (B) disclose to the purchaser or lessee the 

15 presence of any known lead-based pipe, or any 

16 known lead-based pipe hazards, in such housing 

17 and provide to the purchaser or lessee a lead 

18 hazard evaluation report available to the seller 

19 or lessor; and 

20 (C) permit the purchaser a 10-day period 

21 (unless the parties mutually agree upon a dif22 ferent rid of time) to conduct a risk assessment 

23 or inspection or the presence of lead-based pipe 

24 hazards. 


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1 (2) CONTRACT FOR PURCHASE AND SALE.—The 

2 regulations promulgated under this section shall pro3 vide that every contract for the purchase and sale of 

4 any interest in housing shall contain a Lead Warn5 ing Statement and a statement signed by the pur6 chaser that the purchaser has— 

7 (A) read the Lead Warning Statement and 

8 understands its contents; 

9 (B) received a lead hazard information 

10 pamphlet; and 

11 (C) had a 10-day opportunity (unless the 

12 parties mutually agreed upon a different period 

13 of time) before becoming obligated under the 

14 contract to purchase the housing to conduct a 

15 risk assessment or inspection for the presence 

16 of lead-based pipe hazards. 

17 (3) CONTENTS OF LEAD WARNING STATE18 MENT.—The Lead Warning Statement referred to in 

19 paragraph (2) shall contain the following text print20 ed in large type on a separate sheet of paper at21 tached to the contract: ‘‘Every purchaser of any in22 terest in residential real property on which a resi23 dential dwelling was built prior to 1986 is notified 

24 that such property may present exposure to lead 

25 from lead-based pipes that may place young children 


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1 at risk of developing lead poisoning. Lead poisoning 

2 in young children may produce permanent neuro3 logical damage, including learning disabilities, re4 duced intelligence quotient, behavioral problems, and 

5 impaired memory. Lead poisoning also poses a par6 ticular risk to pregnant women. The seller interest 

7 in residential real property is required to provide the 

8 buyer with any information on lead-based pipe haz9 ards from risk assessment or inspections in the sell10 er’s possession and notify the buyer of any known 

11 lead-based pipe hazards. A risk assessment or in12 spection for possible lead-based pipe hazards is rec13 ommended prior to purchase.’’. 

14 (4) COMPLIANCE ASSURANCE.—Whenever a 

15 seller or lessor has entered into a contract with an 

16 agent for the purpose of selling or leasing a unit of 

17 housing, the regulations promulgated under this sec18 tion shall require the agent, on behalf of the seller 

19 or lessor, to ensure compliance with the require20 ments of this section. 

21 (b) PROMULGATION.—A suit may be brought against 

22 the Secretary of Housing and Urban Development and the 

23 Administrator of the Environmental Protection Agency 

24 under section 20 of the Toxic Substances Control Act to 

25 compel promulgation of the regulations required under 


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1 this section and the Federal district court shall have juris2 diction to order such promulgation. 

3 (c) PENALTIES FOR VIOLATIONS.— 

4 (1) MONETARY PENALTY.—Any person who 

5 knowingly violates any provision of this section shall 

6 be subject to civil money penalties in accordance 

7 with the provisions of section 102 of the Department 

8 of Housing and Urban Development Reform Act of 

9 1989 (42 U.S.C. 3545). 

10 (2) ACTION BY SECRETARY.—The Secretary is 

11 authorized to take such lawful action as may be nec12 essary to enjoin any violation of this section. 

13 (3) CIVIL LIABILITY.—Any person who know14 ingly violates the provisions of this section shall be 

15 jointly and severally liable to the purchaser or lessee 

16 in an amount equal to 3 times the amount of dam17 ages incurred by such individual. 

18 (4) COSTS.—In any civil action brought for 

19 damages, the appropriate court may award court 

20 costs to the party commencing such action, together 

21 with reasonable attorney fees and any expert witness 

22 fees, if that party prevails. 

23 (5) PROHIBITED ACT.—It shall be a prohibited 

24 act under section 409 of the Toxic Substances Con25 trol Act for any person to fail or refuse to comply 


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1 with a provision of this section or with any rule or 

2 order issued under this section. For purposes of en3 forcing this section under the Toxic Substances Con4 trol Act, the penalty for each violation applicable 

5 under section 16 of that Act shall not be more than 

6 $10,000. 

7 (d) VALIDITY OF CONTRACTS AND LIENS.—Nothing 

8 in this section shall affect the validity or enforceability of 

9 any sale or contract for the purchase and sale or lease 

10 of any interest in residential real property or any loan, 

11 loan agreement, mortgage, or lien made or arising in con12 nection with a mortgage loan, nor shall anything in this 

13 section create a defect in title. 

14 (e) EFFECTIVE DATE.—The regulations under this 

15 section shall take effect 3 years after the date of the enact16 ment of this Act. 

17 TITLE II—LEAD EXPOSURE 

18 REDUCTION 

19 SEC. 201. LEAD-BASED PIPE ACTIVITIES TRAINING AND 

20 CERTIFICATION. 

21 (a) REGULATIONS.— 

22 (1) IN GENERAL.—Not later than 18 months 

23 after the date of the enactment of this Act, the Ad24 ministrator of the Environmental Protection Agency 

25 (in this title referred to as the ‘‘Administrator’’) 


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1 shall, in consultation with the Secretary of Labor, 

2 the Secretary of Housing and Urban Development, 

3 and the Secretary of Health and Human Services 

4 (acting through the Director of the National Insti5 tute for Occupational Safety and Health), promul6 gate final regulations governing lead-based pipe ac7 tivities to ensure that individuals engaged in such 

8 activities are properly trained; that training pro9 grams are accredited; and that contractors are en10 gaged in such activities are certified. Such regula11 tions shall contain standards for performing lead12 based pipe activities, taking into account reliability, 

13 effectiveness, and safety. Such regulations shall re14 quire that all risk assessment, inspection, and abate15 ment activities performed in housing shall be per16 formed by certified contractors. 

17 (2) ACCREDITATION OF TRAINING PROGRAMS.— 

18 Final regulations shall contain specific requirements 

19 for the accreditation of lead-based pipe activities 

20 training programs for workers, supervisors, inspec21 tors and planners, and other individuals involved in 

22 lead-based pipe activities, including, but not limited 

23 to, each of the following: 

24 (A) Minimum requirements for the accredi25 tation of training providers. 


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1 (B) Minimum training curriculum require2 ments. 

3 (C) Minimum training hour requirements. 

4 (D) Minimum hands-on training require5 ments. 

6 (E) Minimum trainee competency and pro7 ficiency requirements. 

8 (F) Minimum requirements for training 

9 program quality control. 

10 (3) ACCREDITATION AND CERTIFICATION

11 FEES.—The Administrator (or the State in the case 

12 of an authorized State program) shall impose a fee 

13 on— 

14 (A) persons operating training programs 

15 accredited under this title; and 

16 (B) lead-based pipe activities contractors 

17 certified in accordance accreditation with para18 graph (1). 

19 The fees shall be established at such level as is nec20 essary to cover the costs of administering and en21 forcing the standards and regulations under this sec22 tion which are applicable to such programs and con23 tractors. The fee shall not be imposed on any State, 

24 local government, or nonprofit training program. 

25 The Administrator (or the State in the case of an 


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1 authorized State program) may waive the fee for 

2 lead-based pipe activities contractors for the purpose 

3 of training their own employees. 

4 (b) LEAD-BASED PIPE ACTIVITIES.—For purposes of 

5 this title, the term ‘‘lead-based pipe activities’’ means— 

6 (1) in the case of housing, risk assessment, in7 spection, and abatement; and 

8 (2) in the case of any public building con9 structed before 1986, commercial building, or any 

10 other structure, evaluation and abatement of lead11 based pipes and lead-based pipe hazards. 

12 (c) RENOVATION AND REMODELING.— 

13 (1) GUIDELINES.—In order to reduce the risk 

14 of exposure to lead in connection with renovation 

15 and remodeling of housing, public buildings, and 

16 commercial buildings, the Administrator shall, with17 in 18 months after the enactment of this section, 

18 promulgate guidelines for the conduct of such ren19 ovation and remodeling activities which may create 

20 a risk of exposure to dangerous levels of lead. The 

21 Administrator shall disseminate such guidelines to 

22 persons engaged in such renovation and remodeling 

23 through hardware stores, employee organizations, 

24 trade groups, State and local agencies, and through 

25 other appropriate means. 


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1 (2) STUDY OF CERTIFICATION.—The Adminis2 trator shall conduct a study of the extent to which 

3 persons engaged in various types of renovation and 

4 remodeling activities in housing, public buildings, 

5 and commercial buildings are exposed to lead in the 

6 conduct of such activities or disturb lead and create 

7 a lead-based pipe hazard on a regular or occasional 

8 basis. The Administrator shall complete such study 

9 and publish the results thereof within 30 months 

10 after the enactment of this section. 

11 (3) CERTIFICATION DETERMINATION.—Within 

12 4 years after the enactment of this section, the Ad13 ministrator shall revise the regulations to apply the 

14 regulations to renovation or remodeling activities in 

15 housing and commercial buildings that create lead16 based pipe hazards. In determining which contrac17 tors are engaged in such activities, the Adminis18 trator shall utilize the results of the study and con19 sult with the representatives of labor organizations, 

20 lead-based pipe activities contractors, persons en21 gaged in remodeling and renovation, experts in lead 

22 health effects, and others. If the Administrator de23 termines that a category of contractors engaged in 

24 renovation or remodeling does not require certifiVerDate Sep 11 2014 00:23 Apr 07, 2021 Jkt 019200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\H1376.IH H1376

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1 cation, the Administrator shall publish an expla2 nation of the basis for that determination. 

3 SEC. 202. IDENTIFICATION OF DANGEROUS LEVELS OF 

4 LEAD. 

5 Within 18 months after the enactment of this Act, 

6 the Administrator shall promulgate regulations which 

7 shall identify for purposes of this title lead-based pipe haz8 ards. 

9 SEC. 203. AUTHORIZED STATE PROGRAMS. 

10 (a) APPROVAL.—Any State which seeks to administer 

11 and enforce the standards, regulations, or other require12 ments established may, after notice and opportunity for 

13 public hearing, develop and submit to the Administrator 

14 an application, in such form as the Administrator shall 

15 require, for authorization of such a State program. Any 

16 such State may also certify to the Administrator at the 

17 time of submitting such program that the State program 

18 meets the requirements of paragraphs (1) and (2) of sub19 section (b). Upon submission of such certification, the 

20 State program shall be deemed to be authorized under this 

21 section, and shall apply in such State in lieu of the cor22 responding Federal program as the case may be, until 

23 such time as the Administrator disapproves the program 

24 or withdraws the authorization. 


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1 (b) APPROVAL OR DISAPPROVAL.—Within 180 days 

2 following submission of an application, the Administrator 

3 shall approve or disapprove the application. The Adminis4 trator may approve the application only if after notice and 

5 after opportunity for public hearing, the Administrator 

6 finds that— 

7 (1) the State program is at least as protective 

8 of human health and the environment as the Federal 

9 program as the case may be; and 

10 (2) such State program provides adequate en11 forcement. 

12 Upon authorization of a date program under this section, 

13 it shall be unlawful for any person to violate or fail or 

14 refuse to comply with any requirement of such program. 

15 (c) WITHDRAWAL OF AUTHORIZATION.—If a State is 

16 not administering and enforcing a program authorized 

17 under this section in compliance with standards, regula18 tions, and other requirements of this title, the Adminis19 trator shall so notify the State and, if corrective action 

20 is not completed within a reasonable time, not to exceed 

21 180 days, the Administrator shall withdraw authorization 

22 of such program and establish a Federal program pursu23 ant to this title. 

24 (d) MODEL STATE PROGRAM.—Within 18 months 

25 after the enactment of this title, the Administrator shall 


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1 promulgate a model State program which may be adopted 

2 by any State which seeks to administer and enforce a 

3 State program under this title. Such model program shall, 

4 to the extent practicable, encourage States to utilize exist5 ing State and local certification and accreditation pro6 grams and procedures. Such program shall encourage reci7 procity among the States with respect to the certification. 

8 (e) OTHER STATE REQUIREMENTS.—Nothing in this 

9 title shall be construed to prohibit any State or political 

10 subdivision thereof from imposing any requirements which 

11 are more stringent than those imposed by this title. 

12 (f) STATE AND LOCAL CERTIFICATION.—The regula13 tions under this title shall, to the extent appropriate, en14 courage States to seek program authorization and to use 

15 existing State and local certification and accreditation pro16 cedures, except that a State or local government shall not 

17 require more than 1 certification under this section for 

18 any lead-based pipe activities contractor to carry out lead19 based pipe activities in the State or political subdivision 

20 thereof. 

21 (g) GRANTS TO STATES.—The Administrator is au22 thorized to make grants to States to develop and carry 

23 out authorized State programs under this section. The 

24 grants shall be subject to such terms and conditions as 


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1 the Administrator may establish to further the purposes 

2 of this title. 

3 (h) ENFORCEMENT BY ADMINISTRATOR.—If a State 

4 does not have a State program authorized under this sec5 tion and in effect by the date which is 2 years after pro6 mulgation of the regulations the Administrator shall, by 

7 such date, establish a Federal program for such State. 

8 SEC. 204. LEAD ABATEMENT AND MEASUREMENT. 

9 (a) PROGRAM TO PROMOTE LEAD EXPOSURE

10 ABATEMENT.—The Administrator, in cooperation with 

11 other appropriate Federal departments and agencies, shall 

12 conduct a comprehensive program to promote safe, effec13 tive, and affordable monitoring, detection, and abatement 

14 of lead-based pipe and other lead exposure hazards. 

15 (b) STANDARDS FOR ENVIRONMENTAL SAMPLING

16 LABORATORIES.— 

17 (1) MINIMUM PERFORMANCE STANDARDS.— 

18 The Administrator shall establish protocols, criteria, 

19 and minimum performance standards for laboratory 

20 analysis of lead in paint pipes, taps, and water. 

21 Within 2 years after the enactment of this Act, the 

22 Administrator, in consultation with the Secretary of 

23 Health and Human Services, shall establish a pro24 gram to certify laboratories as qualified to test sub25 stances for lead content unless the Administrator deVerDate Sep 11 2014 00:23 Apr 07, 2021 Jkt 019200 PO 00000 Frm 00043 Fmt 6652 Sfmt 6201 E:\BILLS\H1376.IH H1376

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1 termines, by the date specified in this paragraph, 

2 that effective voluntary accreditation programs are 

3 in place and operating on a nationwide basis at the 

4 time of such determination. To be certified under 

5 such program, a laboratory shall, at a minimum, 

6 demonstrate an ability to test substances accurately 

7 for lead content. 

8 (2) PUBLIC INFORMATION.—Not later than 24 

9 months after the date of the enactment of this sec10 tion, and annually thereafter, the Administrator 

11 shall publish and make available to the public a list 

12 of certified or accredited environmental sampling 

13 laboratories. 

14 (3) CERTIFICATION PROGRAM.—If the Adminis15 trator determines that effective voluntary accredita16 tion programs are in place for environmental sam17 pling laboratories, the Administrator shall review the 

18 performance and effectiveness of such programs 

19 within 3 years after such determination. If, upon 

20 such review, the Administrator determines that the 

21 voluntary accreditation programs are not effective in 

22 assuring the quality and consistency of laboratory 

23 analyses, the Administrator shall, not more than 12 

24 months thereafter, establish a certification program 

25 that meets the requirements of paragraph (1). 


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1 (c) EXPOSURE STUDIES.— 

2 (1) CHILDREN.—The Secretary of Health and 

3 Human Services (in this subsection referred to as 

4 the ‘‘Secretary’’), acting through the Director of the 

5 Centers for Disease Control (CDC), and the Direc6 tor of the National Institute of Environmental 

7 Health Sciences, shall jointly conduct a study of the 

8 sources of lead exposure in children who have ele9 vated blood lead levels (or other indicators of ele10 vated lead body burden), as defined by the Director 

11 of the Centers for Disease Control. 

12 (2) WATER.—The Secretary, in consultation 

13 with the Director of the National Institute for Occu14 pational Safety and Health, shall conduct a com15 prehensive study of means to reduce hazardous occu16 pational lead abatement exposures in water. This 

17 study shall include, at a minimum, each of the fol18 lowing: 

19 (A) Surveillance and intention capability in 

20 the States to identify and prevent hazardous ex21 posures to lead abatement workers. 

22 (B) Demonstration of lead abatement con23 trol methods and devices and work practices to 

24 identify and prevent hazardous lead exposures 

25 in the workplace. 


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1 (C) Evaluation, in consultation with the 

2 National Institute of Environmental Health 

3 Sciences, of health effects of low and high levels 

4 of occupational lead exposures through fluids on 

5 reproductive, neurological, renal, and cardio6 vascular health. 

7 (D) Identification of high-risk occupational 

8 settings to which prevention activities and re9 sources should be targeted. 

10 (E) A study assessing the potential expo11 sures and risks from lead to janitorial and cus12 todial workers. 

13 (3) CONTRIBUTION TO ELEVATED LEAD BODY

14 BURDEN.—The studies described in paragraphs (1) 

15 and (2) shall as appropriate, examine the relative 

16 contributions to elevated lead body burden from each 

17 of the following: 

18 (A) Drinking water. 

19 (B) Food. 

20 (C) Occupational exposures, and other ex21 posures that the Secretary determines to be ap22 propriate. 

23 (4) REPORT.—Not later than 30 months after 

24 the date of the enactment of this section, the Sec25 retary shall submit a report to the Congress conVerDate Sep 11 2014 00:23 Apr 07, 2021 Jkt 019200 PO 00000 Frm 00046 Fmt 6652 Sfmt 6201 E:\BILLS\H1376.IH H1376

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1 cerning the studies described in paragraphs (1) and 

2 (2). 

3 (d) PUBLIC EDUCATION.— 

4 (1) IN GENERAL.—The Administrator, in con5 junction with the Secretary of Health and Human 

6 Services, acting through the Director of the Agency 

7 for Toxic Substances and Disease Registry, and in 

8 conjunction with the Secretary of Housing and 

9 Urban Development, shall sponsor public education 

10 and outreach activities to increase public awareness 

11 of— 

12 (A) the scope and severity of lead poi13 soning from household sources, particularly 

14 lead-based pipes; 

15 (B) potential exposure to sources of lead in 

16 schools and childhood day care centers, particu17 larly lead-based pipes; 

18 (C) the implications of exposures for men 

19 and women, particularly those of childbearing 

20 age; 

21 (D) the need for careful, quality, abate22 ment and management actions; 

23 (E) the need for universal screening of 

24 children; 


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1 (F) other components of a lead poisoning 

2 prevention program; 

3 (G) the health consequences of lead expo4 sure resulting from lead-based pipe hazards; 

5 (H) risk assessment and inspection meth6 ods for lead-based pipe hazards; and 

7 (I) measures to reduce the risk of lead ex8 posure from lead-based pipes. 

9 (2) TARGETED AUDIENCES.—The activities de10 scribed in paragraph (1) shall be designed to provide 

11 educational services and information to— 

12 (A) health professionals; 

13 (B) the general public, with emphasis on 

14 parents of young children; 

15 (C) homeowners, landlords, and tenants; 

16 (D) consumers of home improvement prod17 ucts; 

18 (E) the residential real estate industry; 

19 and 

20 (F) the home renovation industry. 

21 (e) TECHNICAL ASSISTANCE.— 

22 (1) CLEARINGHOUSE.—Not later than 6 

23 months after the enactment of this Act, the Admin24 istrator shall establish, in consultation with the Sec25 retary of Housing and Urban Development and the 


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1 Director of the Centers for Disease Control, a Na2 tional Clearinghouse on Childhood Lead Poisoning 

3 (in this section referred to as the ‘‘Clearinghouse’’). 

4 The Clearinghouse shall— 

5 (A) collect, evaluate, and disseminate cur6 rent information on the assessment and reduc7 tion of lead-based pipe hazards, adverse health 

8 effects, sources of exposure, detection and risk 

9 assessment methods, environmental hazards 

10 abatement, and clean-up standards; 

11 (B) maintain a rapid-alert system to in12 form certified lead-based pipe activities contrac13 tors of significant developments in research re14 lated to lead-based paint hazards; and 

15 (C) perform any other duty that the Ad16 ministration determines necessary to achieve 

17 the purposes of this Act. 

18 (2) HOTLINE.—Not later than 6 months after 

19 the enactment of this subsection, the Administrator, 

20 in cooperation with other Federal agencies and with 

21 State and local governments, shall establish a single 

22 lead-based pipe hazard hotline to provide the public 

23 with answers to questions about lead poison in pre24 vention and referrals to the Clearinghouse for tech25 nical information. 


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1 SEC. 205. LEAD HAZARD INFORMATION PAMPHLET. 

2 (a) IN GENERAL.—Not later than 2 years after the 

3 enactment of this Act, after notice and opportunity for 

4 comment, the Administrator of the Environmental Protec5 tion Agency, in consultation with the Secretary of Housing 

6 and Urban Development and with the Secretary of Health 

7 and Human Services, shall publish, and from time to time 

8 revise, a lead hazard information pamphlet. The pamphlet 

9 shall— 

10 (1) contain information regarding the health 

11 risks associated with exposure to lead; 

12 (2) provide information on the presence of lead13 based pipe hazards in federally assisted, federally 

14 owned, and other housing; 

15 (3) describe the risks of lead exposure for chil16 dren under 6 years of age, pregnant women, women 

17 of childbearing age, persons involved in home ren18 ovation, and others residing in a dwelling with lead19 based pipe hazards; 

20 (4) describe the risks of renovation in a dwell21 ing with lead-based pipe hazards; 

22 (5) provide information on approved methods 

23 for evaluating and reducing lead-based pipe hazards 

24 and their effectiveness in identifying, reducing, 

25 eliminating, or preventing exposure to lead-based 

26 pipe hazards; 


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1 (6) advise persons how to obtain a list of con2 tractors certified pursuant to this title in lead-based 

3 pipe hazard evaluation and reduction in the area in 

4 which the pamphlet is to be used; 

5 (7) state that a risk assessment or inspection 

6 for lead-based pipe is recommended prior to the pur7 chase, lease, or renovation of housing; 

8 (8) state that certain State and local laws im9 pose additional requirements related to lead-based 

10 pipe in housing and provide a listing of Federal, 

11 State, and local agencies in each State, including ad12 dress and telephone number, that can provide infor13 mation about applicable laws and available govern14 mental and private assistance and financing; and 

15 (9) provide such other information about envi16 ronmental hazards associated with residential real 

17 property as the Administrator deems appropriate. 

18 (b) RENOVATION OF HOUSING.—Within 2 years after 

19 the enactment of this section, the Administrator shall pro20 mulgate regulations under this subsection to require each 

21 person who performs for compensation a renovation of 

22 housing to provide a lead hazard information pamphlet to 

23 the owner and occupant of such housing prior to com24 mencing the renovation. 


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1 SEC. 206. REGULATIONS. 

2 The regulations of the Administrator under this title 

3 shall include such recordkeeping and reporting require4 ments as may be necessary to insure the effective imple5 mentation of this title. The regulations may be amended 

6 from time to time as necessary. 

7 SEC. 207. CONTROL OF LEAD-BASED PIPE HAZARDS AT 

8 FEDERAL FACILITIES. 

9 Each department, agency, and instrumentality of ex10 ecutive, legislative, and judicial branches of the Federal 

11 Government (1) having jurisdiction over any property or 

12 facility, or (2) engaged in any activity resulting, or which 

13 may result, in a lead-based pipe hazard, and each officer, 

14 agent, or employee thereof, shall be subject to, and comply 

15 with, all Federal, State, interstate, and local requirements, 

16 both substantive and procedural (including any require17 ment for certification, licensing, recordkeeping, or report18 ing or any provisions for injunctive relief and such sanc19 tions as may be imposed by a court to enforce such relief 

20 respecting lead-based pipe, lead-based pipe activities, and 

21 lead-based pipe hazards in the same manner, and to the 

22 same extent as any nongovernmental entity is subject to 

23 such requirements, including the payment of reasonable 

24 service charges). The Federal, State, interstate, and local 

25 substantive and procedural requirements referred to in 

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1 trative orders and all civil and administrative penalties 

2 and fines regardless of whether such penalties or fines are 

3 punitive or coercive in nature, or whether imposed for iso4 lated, intermittent or continuing violations. The United 

5 States hereby expressly waives any immunity otherwise 

6 applicable to the United States with respect to any such 

7 substantive or procedural requirement (including, but not 

8 limited to, any injunctive relief, administrative order, or 

9 civil or administrative penalty referred to in the preceding 

10 sentence, or reasonable service charge). The reasonable 

11 service charges referred to in this section include, but are 

12 not limited to, fees or charges assessed for certification 

13 and licensing, as well as any other nondiscriminatory 

14 charges that are assessed in connection with a Federal, 

15 State, interstate, or local lead-based pipe, lead-based pipe 

16 activities, or lead-based pipe hazard activities program. No 

17 agent, employee, or officer of the United States shall be 

18 personally liable for any civil penalty under any Federal, 

19 State, interstate, or local law relating to lead-based pipe, 

20 lead-based pipe activities, or lead-based pipe hazards with 

21 respect to any act or omission within the scope of his offi22 cial duties. 


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1 SEC. 208. PROHIBITED ACTS. 

2 It shall be unlawful for any person to fail or refuse 

3 to comply with a provision of this title or with any rule 

4 or order issued under this title. 

5 SEC. 209. RELATIONSHIP TO OTHER FEDERAL LAW. 

6 Nothing in this title shall affect the authority of other 

7 appropriate Federal agencies to establish or enforce any 

8 requirements which are at least as stringent as those es9 tablished pursuant to this title. 

10 SEC. 210. GENERAL PROVISIONS RELATING TO ADMINIS11 TRATIVE PROCEEDINGS. 

12 (a) APPLICABILITY.—This section applies to the pro13 mulgation or revision of any regulation issued under this 

14 title. 

15 (b) RULEMAKING DOCKET.—Not later than the date 

16 of proposal of an action to which this section applies, the 

17 Administrator shall establish a rulemaking docket for such 

18 action (in this subsection referred to as a ‘‘rule’’). When19 ever a rule applies only within a particular State, a second 

20 (identical) docket shall be established in the appropriate 

21 regional office of the Environmental Protection Agency. 

22 (c) INSPECTION AND COPYING.— 

23 (1) PUBLIC AVAILABILITY.—The rulemaking 

24 docket required under subsection (b) shall be open 

25 for inspection by the public at reasonable times spec26 ified in the notice of proposed rulemaking. Any perVerDate Sep 11 2014 00:23 Apr 07, 2021 Jkt 019200 PO 00000 Frm 00054 Fmt 6652 Sfmt 6201 E:\BILLS\H1376.IH H1376

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1 son may copy documents contained in the docket. 

2 The Administrator shall provide copying facilities 

3 which may be used at the expense of the person 

4 seeking copies, but the Administrator may waive or 

5 reduce such expenses in such instances as the public 

6 interest requires. Any person may request copies by 

7 mail if the person pays the expenses, including per8 sonnel costs to do the copying. 

9 (2) DOCKET.— 

10 (A) COMMENTS AND INFORMATION.— 

11 Promptly upon receipt by the agency, all writ12 ten comments and documentary information on 

13 the proposed rule received from any person for 

14 inclusion in the docket during the comment pe15 riod shall be placed in the docket. The tran16 script of public hearing if any, on the proposed 

17 rule shall also be included in the docket 

18 promptly upon receipt from the person who 

19 transcribed such hearings. All documents which 

20 become available after the proposed rule has 

21 been published and which the Administrator de22 termines are of central relevance to the rule23 making shall be placed in the docket as soon as 

24 possible after their availability. 


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1 (B) DRAFTS OF RULES.—The drafts of 

2 proposed rules submitted by the Administrator 

3 to the Office of Management and Budget for 

4 any interagency review process prior to proposal 

5 of any such rule, all documents accompanying 

6 such drafts, and all written comments thereon 

7 by other agencies and all written responses to 

8 such written comments by the Administrator 

9 shall be placed in the docket no later than the 

10 date of proposal of the rule. The drafts of the 

11 final rule submitted for such review process 

12 prior to promulgation and all such written com13 ments thereto all documents accompanying such 

14 drafts, and written responses thereto shall be 

15 placed in the docket no later than the date of 

16 promulgation. 

17 (d) EXPLANATION.— 

18 (1) MAJOR CHANGES.—The promulgated rule 

19 shall be accompanied by an explanation of the rea20 sons for any major changes in the promulgated rule 

21 from the proposed rule. 

22 (2) RESPONSES.—The promulgated rule shall 

23 also be accompanied by a response to each of the 

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1 mitted in written or oral presentations during the 

2 comment period. 

3 (3) LIMITATION.—The promulgated rule may 

4 not be based (in part or whole) on any information 

5 or data which has not been placed in the docket as 

6 of the date of such promulgation. 

7 (e) EFFECTIVE DATE.—The requirements of this sec8 tion shall take effect with respect to any rule the proposal 

9 of which occurs after 90 days after the date of the enact10 ment of this Act. 

11 TITLE III—AUTHORIZATION OF 

12 APPROPRIATIONS FOR LEAD 

13 HAZARD REDUCTION 

14 SEC. 301. HUD GRANTS FOR LEAD HAZARDS REDUCTION IN 

15 HOUSING. 

16 There is authorized to be appropriated for grants 

17 under section 101 of this Act and section 1011 of the Res18 idential Lead-Based Paint Hazard Reduction Act of 1992 

19 (42 U.S.C. 4852) $9,500,000,000 for each of fiscal years 

20 2022 through 2031. 

21 SEC. 302. EPA FUNDING FOR LEAD EXPOSURE REDUCTION. 

22 There is authorized to be appropriated such sums as 

23 may be necessary for each of fiscal years 2022 through 

24 2031 to carry out— 

25 (1) title II of this Act; 


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1 (2) title IV of the Toxic Substances Control Act 

2 (15 U.S.C. 2681 et seq.); and 

3 (3) such other lead hazard reduction activities 

4 as the Administrator of the Environmental Protec5 tion Agency is authorized under law to undertake, 

6 including activities under the Safe Drinking Water 

7 Act (42 U.S.C. 300f et seq.). 

8 TITLE IV—REVENUE 

9 PROVISIONS 

10 SEC. 401. PARTNERSHIP INTERESTS TRANSFERRED IN 

11 CONNECTION WITH PERFORMANCE OF SERV12 ICES. 

13 (a) MODIFICATION TO ELECTION TO INCLUDE PART14 NERSHIP INTEREST IN GROSS INCOME IN YEAR OF

15 TRANSFER.—Subsection (c) of section 83 of the Internal 

16 Revenue Code of 1986 is amended by redesignating para17 graph (4) as paragraph (5) and by inserting after para18 graph (3) the following new paragraph: 

19 ‘‘(4) PARTNERSHIP INTERESTS.—Except as 

20 provided by the Secretary— 

21 ‘‘(A) IN GENERAL.—In the case of any 

22 transfer of an interest in a partnership in con23 nection with the provision of services to (or for 

24 the benefit of) such partnership— 


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1 ‘‘(i) the fair market value of such in2 terest shall be treated for purposes of this 

3 section as being equal to the amount of the 

4 distribution which the partner would re5 ceive if the partnership sold (at the time of 

6 the transfer) all of its assets at fair market 

7 value and distributed the proceeds of such 

8 sale (reduced by the liabilities of the part9 nership) to its partners in liquidation of 

10 the partnership, and 

11 ‘‘(ii) the person receiving such interest 

12 shall be treated as having made the elec13 tion under subsection (b)(1) unless such 

14 person makes an election under this para15 graph to have such subsection not apply. 

16 ‘‘(B) ELECTION.—The election under sub17 paragraph (A)(ii) shall be made under rules 

18 similar to the rules of subsection (b)(2).’’. 

19 (b) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to interests in partnerships trans21 ferred after the date of the enactment of this Act. 


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1 SEC. 402. SPECIAL RULES FOR PARTNERS PROVIDING IN2 VESTMENT MANAGEMENT SERVICES TO 

3 PARTNERSHIPS. 

4 (a) IN GENERAL.—Part I of subchapter K of chapter 

5 1 of the Internal Revenue Code of 1986 is amended by 

6 adding at the end the following new section: 

7 ‘‘SEC. 710. SPECIAL RULES FOR PARTNERS PROVIDING IN8 VESTMENT MANAGEMENT SERVICES TO 

9 PARTNERSHIPS. 

10 ‘‘(a) TREATMENT OF DISTRIBUTIVE SHARE OF

11 PARTNERSHIP ITEMS.—For purposes of this title, in the 

12 case of an investment services partnership interest— 

13 ‘‘(1) IN GENERAL.—Notwithstanding section 

14 702(b)— 

15 ‘‘(A) an amount equal to the net capital 

16 gain with respect to such interest for any part17 nership taxable year shall be treated as ordi18 nary income, and 

19 ‘‘(B) subject to the limitation of paragraph 

20 (2), an amount equal to the net capital loss 

21 with respect to such interest for any partner22 ship taxable year shall be treated as an ordi23 nary loss. 

24 ‘‘(2) RECHARACTERIZATION OF LOSSES LIM25 ITED TO RECHARACTERIZED GAINS.—The amount 

26 treated as ordinary loss under paragraph (1)(B) for 


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•HR 1376 IH

1 any taxable year shall not exceed the excess (if any) 

2 of— 

3 ‘‘(A) the aggregate amount treated as ordi4 nary income under paragraph (1)(A) with re5 spect to the investment services partnership in6 terest for all preceding partnership taxable 

7 years to which this section applies, over 

8 ‘‘(B) the aggregate amount treated as or9 dinary loss under paragraph (1)(B) with re10 spect to such interest for all preceding partner11 ship taxable years to which this section applies. 

12 ‘‘(3) ALLOCATION TO ITEMS OF GAIN AND

13 LOSS.— 

14 ‘‘(A) NET CAPITAL GAIN.—The amount 

15 treated as ordinary income under paragraph 

16 (1)(A) shall be allocated ratably among the 

17 items of long-term capital gain taken into ac18 count in determining such net capital gain. 

19 ‘‘(B) NET CAPITAL LOSS.—The amount 

20 treated as ordinary loss under paragraph (1)(B) 

21 shall be allocated ratably among the items of 

22 long-term capital loss and short-term capital 

23 loss taken into account in determining such net 

24 capital loss. 


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1 ‘‘(4) TERMS RELATING TO CAPITAL GAINS AND

2 LOSSES.—For purposes of this section— 

3 ‘‘(A) IN GENERAL.—Net capital gain, long4 term capital gain, and long-term capital loss, 

5 with respect to any investment services partner6 ship interest for any taxable year, shall be de7 termined under section 1222, except that such 

8 section shall be applied— 

9 ‘‘(i) without regard to the recharacter10 ization of any item as ordinary income or 

11 ordinary loss under this section, 

12 ‘‘(ii) by only taking into account items 

13 of gain and loss taken into account by the 

14 holder of such interest under section 702 

15 (other than subsection (a)(9) thereof) with 

16 respect to such interest for such taxable 

17 year, and 

18 ‘‘(iii) by treating property which is 

19 taken into account in determining gains 

20 and losses to which section 1231 applies as 

21 capital assets held for more than 1 year. 

22 ‘‘(B) NET CAPITAL LOSS.—The term ‘net 

23 capital loss’ means the excess of the losses from 

24 sales or exchanges of capital assets over the 

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1 lar to the rules of clauses (i) through (iii) of 

2 subparagraph (A) shall apply for purposes of 

3 the preceding sentence. 

4 ‘‘(5) SPECIAL RULE FOR DIVIDENDS.—Any div5 idend allocated with respect to any investment serv6 ices partnership interest shall not be treated as 

7 qualified dividend income for purposes of section 

8 1(h). 

9 ‘‘(6) SPECIAL RULE FOR QUALIFIED SMALL

10 BUSINESS STOCK.—Section 1202 shall not apply to 

11 any gain from the sale or exchange of qualified small 

12 business stock (as defined in section 1202(c)) allo13 cated with respect to any investment services part14 nership interest. 

15 ‘‘(b) DISPOSITIONS OF PARTNERSHIP INTERESTS.— 

16 ‘‘(1) GAIN.— 

17 ‘‘(A) IN GENERAL.—Any gain on the dis18 position of an investment services partnership 

19 interest shall be— 

20 ‘‘(i) treated as ordinary income, and 

21 ‘‘(ii) recognized notwithstanding any 

22 other provision of this subtitle. 

23 ‘‘(B) GIFT AND TRANSFERS AT DEATH.— 

24 In the case of a disposition of an investment 


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1 services partnership interest by gift or by rea2 son of death of the taxpayer— 

3 ‘‘(i) subparagraph (A) shall not apply, 

4 ‘‘(ii) such interest shall be treated as 

5 an investment services partnership interest 

6 in the hands of the person acquiring such 

7 interest, and 

8 ‘‘(iii) any amount that would have 

9 been treated as ordinary income under this 

10 subsection had the decedent sold such in11 terest immediately before death shall be 

12 treated as an item of income in respect of 

13 a decedent under section 691. 

14 ‘‘(2) LOSS.—Any loss on the disposition of an 

15 investment services partnership interest shall be 

16 treated as an ordinary loss to the extent of the ex17 cess (if any) of— 

18 ‘‘(A) the aggregate amount treated as ordi19 nary income under subsection (a) with respect 

20 to such interest for all partnership taxable 

21 years to which this section applies, over 

22 ‘‘(B) the aggregate amount treated as or23 dinary loss under subsection (a) with respect to 

24 such interest for all partnership taxable years 

25 to which this section applies. 


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1 ‘‘(3) ELECTION WITH RESPECT TO CERTAIN EX2 CHANGES.—Paragraph (1)(A)(ii) shall not apply to 

3 the contribution of an investment services partner4 ship interest to a partnership in exchange for an in5 terest in such partnership if— 

6 ‘‘(A) the taxpayer makes an irrevocable 

7 election to treat the partnership interest re8 ceived in the exchange as an investment serv9 ices partnership interest, and 

10 ‘‘(B) the taxpayer agrees to comply with 

11 such reporting and recordkeeping requirements 

12 as the Secretary may prescribe. 

13 ‘‘(4) DISTRIBUTIONS OF PARTNERSHIP PROP14 ERTY.— 

15 ‘‘(A) IN GENERAL.—In the case of any dis16 tribution of property by a partnership with re17 spect to any investment services partnership in18 terest held by a partner, the partner receiving 

19 such property shall recognize gain equal to the 

20 excess (if any) of— 

21 ‘‘(i) the fair market value of such 

22 property at the time of such distribution, 

23 over 

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1 mined without regard to subparagraph 

2 (C)). 

3 ‘‘(B) TREATMENT OF GAIN AS ORDINARY

4 INCOME.—Any gain recognized by such partner 

5 under subparagraph (A) shall be treated as or6 dinary income to the same extent and in the 

7 same manner as the increase in such partner’s 

8 distributive share of the taxable income of the 

9 partnership would be treated under subsection 

10 (a) if, immediately prior to the distribution, the 

11 partnership had sold the distributed property at 

12 fair market value and all of the gain from such 

13 disposition were allocated to such partner. For 

14 purposes of applying subsection (a)(2), any gain 

15 treated as ordinary income under this subpara16 graph shall be treated as an amount treated as 

17 ordinary income under subsection (a)(1)(A). 

18 ‘‘(C) ADJUSTMENT OF BASIS.—In the case 

19 a distribution to which subparagraph (A) ap20 plies, the basis of the distributed property in 

21 the hands of the distributee partner shall be the 

22 fair market value of such property. 

23 ‘‘(D) SPECIAL RULES WITH RESPECT TO

24 MERGERS, DIVISIONS, AND TECHNICAL TERMI25 NATIONS.—In the case of a taxpayer which satVerDate Sep 11 2014 00:23 Apr 07, 2021 Jkt 019200 PO 00000 Frm 00066 Fmt 6652 Sfmt 6201 E:\BILLS\H1376.IH H1376

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1 isfies requirements similar to the requirements 

2 of subparagraphs (A) and (B) of paragraph (3), 

3 this paragraph and paragraph (1)(A)(ii) shall 

4 not apply to the distribution of a partnership 

5 interest if such distribution is in connection 

6 with a contribution (or deemed contribution) of 

7 any property of the partnership to which sec8 tion 721 applies pursuant to a transaction de9 scribed in paragraph (1)(B) or (2) of section 

10 708(b). 

11 ‘‘(c) INVESTMENT SERVICES PARTNERSHIP INTER12 EST.—For purposes of this section— 

13 ‘‘(1) IN GENERAL.—The term ‘investment serv14 ices partnership interest’ means any interest in an 

15 investment partnership acquired or held by any per16 son in connection with the conduct of a trade or 

17 business described in paragraph (2) by such person 

18 (or any person related to such person). An interest 

19 in an investment partnership held by any person— 

20 ‘‘(A) shall not be treated as an investment 

21 services partnership interest for any period be22 fore the first date on which it is so held in con23 nection with such a trade or business, 

24 ‘‘(B) shall not cease to be an investment 

25 services partnership interest merely because 


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1 such person holds such interest other than in 

2 connection with such a trade or business, and 

3 ‘‘(C) shall be treated as an investment 

4 services partnership interest if acquired from a 

5 related person in whose hands such interest was 

6 an investment services partnership interest. 

7 ‘‘(2) BUSINESSES TO WHICH THIS SECTION AP8 PLIES.—A trade or business is described in this 

9 paragraph if such trade or business primarily in10 volves the performance of any of the following serv11 ices with respect to assets held (directly or indi12 rectly) by one or more investment partnerships re13 ferred to in paragraph (1): 

14 ‘‘(A) Advising as to the advisability of in15 vesting in, purchasing, or selling any specified 

16 asset. 

17 ‘‘(B) Managing, acquiring, or disposing of 

18 any specified asset. 

19 ‘‘(C) Arranging financing with respect to 

20 acquiring specified assets. 

21 ‘‘(D) Any activity in support of any service 

22 described in subparagraphs (A) through (C). 

23 ‘‘(3) INVESTMENT PARTNERSHIP.— 

24 ‘‘(A) IN GENERAL.—The term ‘investment 

25 partnership’ means any partnership if, at the 


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1 end of any two consecutive calendar quarters 

2 ending after the date of enactment of this sec3 tion— 

4 ‘‘(i) substantially all of the assets of 

5 the partnership are specified assets (deter6 mined without regard to any section 197 

7 intangible within the meaning of section 

8 197(d)), and 

9 ‘‘(ii) less than 75 percent of the cap10 ital of the partnership is attributable to 

11 qualified capital interests which constitute 

12 property held in connection with a trade or 

13 business of the owner of such interest. 

14 ‘‘(B) LOOK-THROUGH OF CERTAIN WHOL15 LY OWNED ENTITIES FOR PURPOSES OF DETER16 MINING ASSETS OF THE PARTNERSHIP.— 

17 ‘‘(i) IN GENERAL.—For purposes of 

18 determining the assets of a partnership 

19 under subparagraph (A)(i)— 

20 ‘‘(I) any interest in a specified 

21 entity shall not be treated as an asset 

22 of such partnership, and 

23 ‘‘(II) such partnership shall be 

24 treated as holding its proportionate 


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1 share of each of the assets of such 

2 specified entity. 

3 ‘‘(ii) SPECIFIED ENTITY.—For pur4 poses of clause (i), the term ‘specified enti5 ty’ means, with respect to any partnership 

6 (hereafter referred to as the upper-tier 

7 partnership), any person which engages in 

8 the same trade or business as the upper9 tier partnership and is— 

10 ‘‘(I) a partnership all of the cap11 ital and profits interests of which are 

12 held directly or indirectly by the 

13 upper-tier partnership, or 

14 ‘‘(II) a foreign corporation which 

15 does not engage in a trade or business 

16 in the United States and all of the 

17 stock of which is held directly or indi18 rectly by the upper-tier partnership. 

19 ‘‘(C) SPECIAL RULES FOR DETERMINING

20 IF PROPERTY HELD IN CONNECTION WITH

21 TRADE OR BUSINESS.— 

22 ‘‘(i) IN GENERAL.—Except as other23 wise provided by the Secretary, solely for 

24 purposes of determining whether any inter25 est in a partnership constitutes property 


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1 held in connection with a trade or business 

2 under subparagraph (A)(ii)— 

3 ‘‘(I) a trade or business of any 

4 person closely related to the owner of 

5 such interest shall be treated as a 

6 trade or business of such owner, 

7 ‘‘(II) such interest shall be treat8 ed as held by a person in connection 

9 with a trade or business during any 

10 taxable year if such interest was so 

11 held by such person during any 3 tax12 able years preceding such taxable 

13 year, and 

14 ‘‘(III) paragraph (5)(B) shall not 

15 apply. 

16 ‘‘(ii) CLOSELY RELATED PERSONS.— 

17 For purposes of clause (i)(I), a person 

18 shall be treated as closely related to an19 other person if, taking into account the 

20 rules of section 267(c), the relationship be21 tween such persons is described in— 

22 ‘‘(I) paragraph (1) or (9) of sec23 tion 267(b), or 

24 ‘‘(II) section 267(b)(4), but solely 

25 in the case of a trust with respect to 


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1 which each current beneficiary is the 

2 grantor or a person whose relationship 

3 to the grantor is described in para4 graph (1) or (9) of section 267(b). 

5 ‘‘(D) ANTIABUSE RULES.—The Secretary 

6 may issue regulations or other guidance which 

7 prevent the avoidance of the purposes of sub8 paragraph (A), including regulations or other 

9 guidance which treat convertible and contingent 

10 debt (and other debt having the attributes of 

11 equity) as a capital interest in the partnership. 

12 ‘‘(E) CONTROLLED GROUPS OF ENTI13 TIES.— 

14 ‘‘(i) IN GENERAL.—In the case of a 

15 controlled group of entities, if an interest 

16 in the partnership received in exchange for 

17 a contribution to the capital of the part18 nership by any member of such controlled 

19 group would (in the hands of such mem20 ber) constitute property held in connection 

21 with a trade or business, then any interest 

22 in such partnership held by any member of 

23 such group shall be treated for purposes of 

24 subparagraph (A) as constituting (in the 


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1 hands of such member) property held in 

2 connection with a trade or business. 

3 ‘‘(ii) CONTROLLED GROUP OF ENTI4 TIES.—For purposes of clause (i), the term 

5 ‘controlled group of entities’ means a con6 trolled group of corporations as defined in 

7 section 1563(a)(1), applied without regard 

8 to subsections (a)(4) and (b)(2) of section 

9 1563. A partnership or any other entity 

10 (other than a corporation) shall be treated 

11 as a member of a controlled group of enti12 ties if such entity is controlled (within the 

13 meaning of section 954(d)(3)) by members 

14 of such group (including any entity treated 

15 as a member of such group by reason of 

16 this sentence). 

17 ‘‘(F) SPECIAL RULE FOR CORPORA18 TIONS.—For purposes of this paragraph, in the 

19 case of a corporation, the determination of 

20 whether property is held in connection with a 

21 trade or business shall be determined as if the 

22 taxpayer were an individual. 

23 ‘‘(4) SPECIFIED ASSET.—The term ‘specified 

24 asset’ means securities (as defined in section 

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1 of), real estate held for rental or investment, inter2 ests in partnerships, commodities (as defined in sec3 tion 475(e)(2)), cash or cash equivalents, or options 

4 or derivative contracts with respect to any of the 

5 foregoing. 

6 ‘‘(5) RELATED PERSONS.— 

7 ‘‘(A) IN GENERAL.—A person shall be 

8 treated as related to another person if the rela9 tionship between such persons is described in 

10 section 267(b) or 707(b). 

11 ‘‘(B) ATTRIBUTION OF PARTNER SERV12 ICES.—Any service described in paragraph (2) 

13 which is provided by a partner of a partnership 

14 shall be treated as also provided by such part15 nership. 

16 ‘‘(d) EXCEPTION FOR CERTAIN CAPITAL INTER17 ESTS.— 

18 ‘‘(1) IN GENERAL.—In the case of any portion 

19 of an investment services partnership interest which 

20 is a qualified capital interest, all items of gain and 

21 loss (and any dividends) which are allocated to such 

22 qualified capital interest shall not be taken into ac23 count under subsection (a) if— 

24 ‘‘(A) allocations of items are made by the 

25 partnership to such qualified capital interest in 


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1 the same manner as such allocations are made 

2 to other qualified capital interests held by part3 ners who do not provide any services described 

4 in subsection (c)(2) and who are not related to 

5 the partner holding the qualified capital inter6 est, and 

7 ‘‘(B) the allocations made to such other in8 terests are significant compared to the alloca9 tions made to such qualified capital interest. 

10 ‘‘(2) AUTHORITY TO PROVIDE EXCEPTIONS TO

11 ALLOCATION REQUIREMENTS.—To the extent pro12 vided by the Secretary in regulations or other guid13 ance— 

14 ‘‘(A) ALLOCATIONS TO PORTION OF QUALI15 FIED CAPITAL INTEREST.—Paragraph (1) may 

16 be applied separately with respect to a portion 

17 of a qualified capital interest. 

18 ‘‘(B) NO OR INSIGNIFICANT ALLOCATIONS

19 TO NONSERVICE PROVIDERS.—In any case in 

20 which the requirements of paragraph (1)(B) are 

21 not satisfied, items of gain and loss (and any 

22 dividends) shall not be taken into account under 

23 subsection (a) to the extent that such items are 

24 properly allocable under such regulations or 

25 other guidance to qualified capital interests. 


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1 ‘‘(C) ALLOCATIONS TO SERVICE PRO2 VIDERS’ QUALIFIED CAPITAL INTERESTS WHICH

3 ARE LESS THAN OTHER ALLOCATIONS.—Alloca4 tions shall not be treated as failing to meet the 

5 requirement of paragraph (1)(A) merely be6 cause the allocations to the qualified capital in7 terest represent a lower return than the alloca8 tions made to the other qualified capital inter9 ests referred to in such paragraph. 

10 ‘‘(3) SPECIAL RULE FOR CHANGES IN SERVICES

11 AND CAPITAL CONTRIBUTIONS.—In the case of an 

12 interest in a partnership which was not an invest13 ment services partnership interest and which, by 

14 reason of a change in the services with respect to as15 sets held (directly or indirectly) by the partnership 

16 or by reason of a change in the capital contributions 

17 to such partnership, becomes an investment services 

18 partnership interest, the qualified capital interest of 

19 the holder of such partnership interest immediately 

20 after such change shall not, for purposes of this sub21 section, be less than the fair market value of such 

22 interest (determined immediately before such 

23 change). 

24 ‘‘(4) SPECIAL RULE FOR TIERED PARTNER25 SHIPS.—Except as otherwise provided by the SecVerDate Sep 11 2014 00:23 Apr 07, 2021 Jkt 019200 PO 00000 Frm 00076 Fmt 6652 Sfmt 6201 E:\BILLS\H1376.IH H1376

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1 retary, in the case of tiered partnerships, all items 

2 which are allocated in a manner which meets the re3 quirements of paragraph (1) to qualified capital in4 terests in a lower-tier partnership shall retain such 

5 character to the extent allocated on the basis of 

6 qualified capital interests in any upper-tier partner7 ship. 

8 ‘‘(5) EXCEPTION FOR NO-SELF-CHARGED

9 CARRY AND MANAGEMENT FEE PROVISIONS.—Ex10 cept as otherwise provided by the Secretary, an in11 terest shall not fail to be treated as satisfying the 

12 requirement of paragraph (1)(A) merely because the 

13 allocations made by the partnership to such interest 

14 do not reflect the cost of services described in sub15 section (c)(2) which are provided (directly or indi16 rectly) to the partnership by the holder of such in17 terest (or a related person). 

18 ‘‘(6) SPECIAL RULE FOR DISPOSITIONS.—In the 

19 case of any investment services partnership interest 

20 any portion of which is a qualified capital interest, 

21 subsection (b) shall not apply to so much of any 

22 gain or loss as bears the same proportion to the en23 tire amount of such gain or loss as— 

24 ‘‘(A) the distributive share of gain or loss 

25 that would have been allocated to the qualified 


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1 capital interest (consistent with the require2 ments of paragraph (1)) if the partnership had 

3 sold all of its assets at fair market value imme4 diately before the disposition, bears to 

5 ‘‘(B) the distributive share of gain or loss 

6 that would have been so allocated to the invest7 ment services partnership interest of which such 

8 qualified capital interest is a part. 

9 ‘‘(7) QUALIFIED CAPITAL INTEREST.—For pur10 poses of this section— 

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

12 capital interest’ means so much of a partner’s 

13 interest in the capital of the partnership as is 

14 attributable to— 

15 ‘‘(i) the fair market value of any 

16 money or other property contributed to the 

17 partnership in exchange for such interest 

18 (determined without regard to section 

19 752(a)), 

20 ‘‘(ii) any amounts which have been in21 cluded in gross income under section 83 

22 with respect to the transfer of such inter23 est, and 

24 ‘‘(iii) the excess (if any) of— 


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1 ‘‘(I) any items of income and 

2 gain taken into account under section 

3 702 with respect to such interest, over 

4 ‘‘(II) any items of deduction and 

5 loss so taken into account. 

6 ‘‘(B) ADJUSTMENT TO QUALIFIED CAPITAL

7 INTEREST.— 

8 ‘‘(i) DISTRIBUTIONS AND LOSSES.— 

9 The qualified capital interest shall be re10 duced by distributions from the partner11 ship with respect to such interest and by 

12 the excess (if any) of the amount described 

13 in subparagraph (A)(iii)(II) over the 

14 amount described in subparagraph 

15 (A)(iii)(I). 

16 ‘‘(ii) SPECIAL RULE FOR CONTRIBU17 TIONS OF PROPERTY.—In the case of any 

18 contribution of property described in sub19 paragraph (A)(i) with respect to which the 

20 fair market value of such property is not 

21 equal to the adjusted basis of such prop22 erty immediately before such contribution, 

23 proper adjustments shall be made to the 

24 qualified capital interest to take into ac25 count such difference consistent with such 


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1 regulations or other guidance as the Sec2 retary may provide. 

3 ‘‘(C) TECHNICAL TERMINATIONS, ETC., 

4 DISREGARDED.—No increase or decrease in the 

5 qualified capital interest of any partner shall re6 sult from a termination, merger, consolidation, 

7 or division described in section 708, or any 

8 similar transaction. 

9 ‘‘(8) TREATMENT OF CERTAIN LOANS.— 

10 ‘‘(A) PROCEEDS OF PARTNERSHIP LOANS

11 NOT TREATED AS QUALIFIED CAPITAL INTER12 EST OF SERVICE PROVIDING PARTNERS.—For 

13 purposes of this subsection, an investment serv14 ices partnership interest shall not be treated as 

15 a qualified capital interest to the extent that 

16 such interest is acquired in connection with the 

17 proceeds of any loan or other advance made or 

18 guaranteed, directly or indirectly, by any other 

19 partner or the partnership (or any person re20 lated to any such other partner or the partner21 ship). The preceding sentence shall not apply to 

22 the extent the loan or other advance is repaid 

23 before the date of the enactment of this section 

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1 ceeds of a loan or other advance described in 

2 the preceding sentence. 

3 ‘‘(B) REDUCTION IN ALLOCATIONS TO

4 QUALIFIED CAPITAL INTERESTS FOR LOANS

5 FROM NONSERVICE-PROVIDING PARTNERS TO

6 THE PARTNERSHIP.—For purposes of this sub7 section, any loan or other advance to the part8 nership made or guaranteed, directly or indi9 rectly, by a partner not providing services de10 scribed in subsection (c)(2) to the partnership 

11 (or any person related to such partner) shall be 

12 taken into account in determining the qualified 

13 capital interests of the partners in the partner14 ship. 

15 ‘‘(9) SPECIAL RULE FOR QUALIFIED FAMILY

16 PARTNERSHIPS.— 

17 ‘‘(A) IN GENERAL.—In the case of any 

18 specified family partnership interest, paragraph 

19 (1)(A) shall be applied without regard to the 

20 phrase ‘and who are not related to the partner 

21 holding the qualified capital interest’. 

22 ‘‘(B) SPECIFIED FAMILY PARTNERSHIP IN23 TEREST.—For purposes of this paragraph, the 

24 term ‘specified family partnership interest’ 


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1 means any investment services partnership in2 terest if— 

3 ‘‘(i) such interest is an interest in a 

4 qualified family partnership, 

5 ‘‘(ii) such interest is held by a natural 

6 person or by a trust with respect to which 

7 each beneficiary is a grantor or a person 

8 whose relationship to the grantor is de9 scribed in section 267(b)(1), and 

10 ‘‘(iii) all other interests in such quali11 fied family partnership with respect to 

12 which significant allocations are made 

13 (within the meaning of paragraph (1)(B) 

14 and in comparison to the allocations made 

15 to the interest described in clause (ii)) are 

16 held by persons who— 

17 ‘‘(I) are related to the natural 

18 person or trust referred to in clause 

19 (ii), or 

20 ‘‘(II) provide services described 

21 in subsection (c)(2). 

22 ‘‘(C) QUALIFIED FAMILY PARTNERSHIP.— 

23 For purposes of this paragraph, the term 

24 ‘qualified family partnership’ means any part25 nership if— 


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1 ‘‘(i) all of the capital and profits in2 terests of such partnership are held by— 

3 ‘‘(I) specified family members, 

4 ‘‘(II) any person closely related 

5 (within the meaning of subsection 

6 (c)(3)(C)(ii)) to a specified family 

7 member, or 

8 ‘‘(III) any other person (not de9 scribed in subclause (I) or (II)) if 

10 such interest is an investment services 

11 partnership interest with respect to 

12 such person, and 

13 ‘‘(ii) such partnership does not hold 

14 itself out to the public as an investment 

15 advisor. 

16 ‘‘(D) SPECIFIED FAMILY MEMBERS.—For 

17 purposes of subparagraph (C), individuals shall 

18 be treated as specified family members if such 

19 individuals would be treated as one person 

20 under the rules of section 1361(c)(1) if the ap21 plicable date (within the meaning of subpara22 graph (B)(iii) thereof) were the latest of— 

23 ‘‘(i) the date of the establishment of 

24 the partnership, 


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1 ‘‘(ii) the earliest date that the com2 mon ancestor holds a capital or profits in3 terest in the partnership, or 

4 ‘‘(iii) the date of the enactment of this 

5 section. 

6 ‘‘(e) OTHER INCOME AND GAIN IN CONNECTION

7 WITH INVESTMENT MANAGEMENT SERVICES.— 

8 ‘‘(1) IN GENERAL.—If— 

9 ‘‘(A) a person performs (directly or indi10 rectly) investment management services for any 

11 investment entity, 

12 ‘‘(B) such person holds (directly or indi13 rectly) a disqualified interest with respect to 

14 such entity, and 

15 ‘‘(C) the value of such interest (or pay16 ments thereunder) is substantially related to 

17 the amount of income or gain (whether or not 

18 realized) from the assets with respect to which 

19 the investment management services are per20 formed, 

21 any income or gain with respect to such interest 

22 shall be treated as ordinary income. Rules similar to 

23 the rules of subsections (a)(5) and (d) shall apply 

24 for purposes of this subsection. 


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1 ‘‘(2) DEFINITIONS.—For purposes of this sub2 section— 

3 ‘‘(A) DISQUALIFIED INTEREST.— 

4 ‘‘(i) IN GENERAL.—The term ‘dis5 qualified interest’ means, with respect to 

6 any investment entity— 

7 ‘‘(I) any interest in such entity 

8 other than indebtedness, 

9 ‘‘(II) convertible or contingent 

10 debt of such entity, 

11 ‘‘(III) any option or other right 

12 to acquire property described in sub13 clause (I) or (II), and 

14 ‘‘(IV) any derivative instrument 

15 entered into (directly or indirectly) 

16 with such entity or any investor in 

17 such entity. 

18 ‘‘(ii) EXCEPTIONS.—Such term shall 

19 not include— 

20 ‘‘(I) a partnership interest, 

21 ‘‘(II) except as provided by the 

22 Secretary, any interest in a taxable 

23 corporation, and 

24 ‘‘(III) except as provided by the 

25 Secretary, stock in an S corporation. 


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1 ‘‘(B) TAXABLE CORPORATION.—The term 

2 ‘taxable corporation’ means— 

3 ‘‘(i) a domestic C corporation, or 

4 ‘‘(ii) a foreign corporation substan5 tially all of the income of which is— 

6 ‘‘(I) effectively connected with 

7 the conduct of a trade or business in 

8 the United States, or 

9 ‘‘(II) subject to a comprehensive 

10 foreign income tax (as defined in sec11 tion 457A(d)(2)). 

12 ‘‘(C) INVESTMENT MANAGEMENT SERV13 ICES.—The term ‘investment management serv14 ices’ means a substantial quantity of any of the 

15 services described in subsection (c)(2). 

16 ‘‘(D) INVESTMENT ENTITY.—The term ‘in17 vestment entity’ means any entity which, if it 

18 were a partnership, would be an investment 

19 partnership. 

20 ‘‘(f) EXCEPTION FOR DOMESTIC C CORPORATIONS.— 

21 Except as otherwise provided by the Secretary, in the case 

22 of a domestic C corporation— 

23 ‘‘(1) subsections (a) and (b) shall not apply to 

24 any item allocated to such corporation with respect 

25 to any investment services partnership interest (or 


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•HR 1376 IH

1 to any gain or loss with respect to the disposition of 

2 such an interest), and 

3 ‘‘(2) subsection (e) shall not apply. 

4 ‘‘(g) REGULATIONS.—The Secretary shall prescribe 

5 such regulations or other guidance as is necessary or ap6 propriate to carry out the purposes of this section, includ7 ing regulations or other guidance to— 

8 ‘‘(1) require such reporting and recordkeeping 

9 by any person in such manner and at such time as 

10 the Secretary may prescribe for purposes of enabling 

11 the partnership to meet the requirements of section 

12 6031 with respect to any item described in section 

13 702(a)(9), 

14 ‘‘(2) provide modifications to the application of 

15 this section (including treating related persons as 

16 not related to one another) to the extent such modi17 fication is consistent with the purposes of this sec18 tion, 

19 ‘‘(3) prevent the avoidance of the purposes of 

20 this section (including through the use of qualified 

21 family partnerships), and 

22 ‘‘(4) coordinate this section with the other pro23 visions of this title. 


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1 ‘‘(h) CROSS REFERENCE.—For 40-percent penalty 

2 on certain underpayments due to the avoidance of this sec3 tion, see section 6662.’’. 

4 (b) APPLICATION OF SECTION 751 TO INDIRECT DIS5 POSITIONS OF INVESTMENT SERVICES PARTNERSHIP IN6 TERESTS.— 

7 (1) IN GENERAL.—Subsection (a) of section 

8 751 is amended by striking ‘‘or’’ at the end of para9 graph (1), by inserting ‘‘or’’ at the end of paragraph 

10 (2), and by inserting after paragraph (2) the fol11 lowing new paragraph: 

12 ‘‘(3) investment services partnership interests 

13 held by the partnership,’’. 

14 (2) CERTAIN DISTRIBUTIONS TREATED AS

15 SALES OR EXCHANGES.—Subparagraph (A) of sec16 tion 751(b)(1) is amended by striking ‘‘or’’ at the 

17 end of clause (i), by inserting ‘‘or’’ at the end of 

18 clause (ii), and by inserting after clause (ii) the fol19 lowing new clause: 

20 ‘‘(iii) investment services partnership 

21 interests held by the partnership,’’. 

22 (3) APPLICATION OF SPECIAL RULES IN THE

23 CASE OF TIERED PARTNERSHIPS.—Subsection (f) of 

24 section 751 is amended— 


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1 (A) by striking ‘‘or’’ at the end of para2 graph (1), by inserting ‘‘or’’ at the end of para3 graph (2), and by inserting after paragraph (2) 

4 the following new paragraph: 

5 ‘‘(3) an investment services partnership interest 

6 held by the partnership,’’, and 

7 (B) by striking ‘‘partner.’’ and inserting 

8 ‘‘partner (other than a partnership in which it 

9 holds an investment services partnership inter10 est).’’. 

11 (4) INVESTMENT SERVICES PARTNERSHIP IN12 TERESTS; QUALIFIED CAPITAL INTERESTS.—Section 

13 751 is amended by adding at the end the following 

14 new subsection: 

15 ‘‘(g) INVESTMENT SERVICES PARTNERSHIP INTER16 ESTS.—For purposes of this section— 

17 ‘‘(1) IN GENERAL.—The term ‘investment serv18 ices partnership interest’ has the meaning given 

19 such term by section 710(c). 

20 ‘‘(2) ADJUSTMENTS FOR QUALIFIED CAPITAL

21 INTERESTS.—The amount to which subsection (a) 

22 applies by reason of paragraph (3) thereof shall not 

23 include so much of such amount as is attributable 

24 to any portion of the investment services partnership 

25 interest which is a qualified capital interest (deterVerDate Sep 11 2014 00:23 Apr 07, 2021 Jkt 019200 PO 00000 Frm 00089 Fmt 6652 Sfmt 6201 E:\BILLS\H1376.IH H1376

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1 mined under rules similar to the rules of section 

2 710(d)). 

3 ‘‘(3) EXCEPTION FOR PUBLICLY TRADED PART4 NERSHIPS.—Except as otherwise provided by the 

5 Secretary, in the case of an exchange of an interest 

6 in a publicly traded partnership (as defined in sec7 tion 7704) to which subsection (a) applies— 

8 ‘‘(A) this section shall be applied without 

9 regard to subsections (a)(3), (b)(1)(A)(iii), and 

10 (f)(3), and 

11 ‘‘(B) such partnership shall be treated as 

12 owning its proportionate share of the property 

13 of any other partnership in which it is a part14 ner. 

15 ‘‘(4) RECOGNITION OF GAINS.—Any gain with 

16 respect to which subsection (a) applies by reason of 

17 paragraph (3) thereof shall be recognized notwith18 standing any other provision of this title. 

19 ‘‘(5) COORDINATION WITH INVENTORY

20 ITEMS.—An investment services partnership interest 

21 held by the partnership shall not be treated as an 

22 inventory item of the partnership. 

23 ‘‘(6) PREVENTION OF DOUBLE COUNTING.— 

24 Under regulations or other guidance prescribed by 


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1 the Secretary, subsection (a)(3) shall not apply with 

2 respect to any amount to which section 710 applies. 

3 ‘‘(7) VALUATION METHODS.—The Secretary 

4 shall prescribe regulations or other guidance which 

5 provide the acceptable methods for valuing invest6 ment services partnership interests for purposes of 

7 this section.’’. 

8 (c) TREATMENT FOR PURPOSES OF SECTION

9 7704.—Subsection (d) of section 7704 of such Code is 

10 amended by adding at the end the following new para11 graph: 

12 ‘‘(6) INCOME FROM CERTAIN CARRIED INTER13 ESTS NOT QUALIFIED.— 

14 ‘‘(A) IN GENERAL.—Specified carried in15 terest income shall not be treated as qualifying 

16 income. 

17 ‘‘(B) SPECIFIED CARRIED INTEREST IN18 COME.—For purposes of this paragraph— 

19 ‘‘(i) IN GENERAL.—The term ‘speci20 fied carried interest income’ means— 

21 ‘‘(I) any item of income or gain 

22 allocated to an investment services 

23 partnership interest (as defined in 

24 section 710(c)) held by the partner25 ship, 


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1 ‘‘(II) any gain on the disposition 

2 of an investment services partnership 

3 interest (as so defined) or a partner4 ship interest to which (in the hands of 

5 the partnership) section 751 applies, 

6 and 

7 ‘‘(III) any income or gain taken 

8 into account by the partnership under 

9 subsection (b)(4) or (e) of section 

10 710. 

11 ‘‘(ii) EXCEPTION FOR QUALIFIED CAP12 ITAL INTERESTS.—A rule similar to the 

13 rule of section 710(d) shall apply for pur14 poses of clause (i). 

15 ‘‘(C) COORDINATION WITH OTHER PROVI16 SIONS.—Subparagraph (A) shall not apply to 

17 any item described in paragraph (1)(E) (or so 

18 much of paragraph (1)(F) as relates to para19 graph (1)(E)). 

20 ‘‘(D) SPECIAL RULES FOR CERTAIN PART21 NERSHIPS.— 

22 ‘‘(i) CERTAIN PARTNERSHIPS OWNED

23 BY REAL ESTATE INVESTMENT TRUSTS.— 

24 Subparagraph (A) shall not apply in the 


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1 case of a partnership which meets each of 

2 the following requirements: 

3 ‘‘(I) Such partnership is treated 

4 as publicly traded under this section 

5 solely by reason of interests in such 

6 partnership being convertible into in7 terests in a real estate investment 

8 trust which is publicly traded. 

9 ‘‘(II) Fifty percent or more of 

10 the capital and profits interests of 

11 such partnership are owned, directly 

12 or indirectly, at all times during the 

13 taxable year by such real estate in14 vestment trust (determined with the 

15 application of section 267(c)). 

16 ‘‘(III) Such partnership meets 

17 the requirements of paragraphs (2), 

18 (3), and (4) of section 856(c). 

19 ‘‘(ii) CERTAIN PARTNERSHIPS OWN20 ING OTHER PUBLICLY TRADED PARTNER21 SHIPS.—Subparagraph (A) shall not apply 

22 in the case of a partnership which meets 

23 each of the following requirements: 

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1 terests in one or more publicly traded 

2 partnerships (determined without re3 gard to subsection (b)(2)). 

4 ‘‘(II) Substantially all of the in5 come of such partnership is ordinary 

6 income or section 1231 gain (as de7 fined in section 1231(a)(3)). 

8 ‘‘(E) TRANSITIONAL RULE.—Subpara9 graph (A) shall not apply to any taxable year 

10 of the partnership beginning before the date 

11 which is 10 years after the date of the enact12 ment of this paragraph.’’. 

13 (d) IMPOSITION OF PENALTY ON UNDERPAY14 MENTS.— 

15 (1) IN GENERAL.—Subsection (b) of section 

16 6662 of such Code is amended by inserting after 

17 paragraph (7) the following new paragraph: 

18 ‘‘(8) The application of section 710(e) or the 

19 regulations or other guidance prescribed under sec20 tion 710(g) to prevent the avoidance of the purposes 

21 of section 710.’’. 

22 (2) AMOUNT OF PENALTY.— 

23 (A) IN GENERAL.—Section 6662 of such 

24 Code is amended by adding at the end the fol25 lowing new subsection: 


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1 ‘‘(k) INCREASE IN PENALTY IN CASE OF PROPERTY

2 TRANSFERRED FOR INVESTMENT MANAGEMENT SERV3 ICES.—In the case of any portion of an underpayment to 

4 which this section applies by reason of subsection (b)(8), 

5 subsection (a) shall be applied with respect to such portion 

6 by substituting ‘40 percent’ for ‘20 percent’.’’. 

7 (B) CONFORMING AMENDMENT.—Subpara8 graph (B) of section 6662A(e)(2) of such Code 

9 is amended by striking ‘‘or (i)’’ and inserting ‘‘, 

10 (i), or (k)’’. 

11 (3) SPECIAL RULES FOR APPLICATION OF REA12 SONABLE CAUSE EXCEPTION.—Subsection (c) of sec13 tion 6664 is amended— 

14 (A) by redesignating paragraphs (3) and 

15 (4) as paragraphs (4) and (5), respectively; 

16 (B) by striking ‘‘paragraph (3)’’ in para17 graph (5)(A), as so redesignated, and inserting 

18 ‘‘paragraph (4)’’; and 

19 (C) by inserting after paragraph (2) the 

20 following new paragraph: 

21 ‘‘(3) SPECIAL RULE FOR UNDERPAYMENTS AT22 TRIBUTABLE TO INVESTMENT MANAGEMENT SERV23 ICES.— 

24 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

25 not apply to any portion of an underpayment to 


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1 which section 6662 applies by reason of sub2 section (b)(8) unless— 

3 ‘‘(i) the relevant facts affecting the 

4 tax treatment of the item are adequately 

5 disclosed, 

6 ‘‘(ii) there is or was substantial au7 thority for such treatment, and 

8 ‘‘(iii) the taxpayer reasonably believed 

9 that such treatment was more likely than 

10 not the proper treatment. 

11 ‘‘(B) RULES RELATING TO REASONABLE

12 BELIEF.—Rules similar to the rules of sub13 section (d)(3) shall apply for purposes of sub14 paragraph (A)(iii).’’. 

15 (e) INCOME AND LOSS FROM INVESTMENT SERVICES

16 PARTNERSHIP INTERESTS TAKEN INTO ACCOUNT IN DE17 TERMINING NET EARNINGS FROM SELF-EMPLOYMENT.— 

18 (1) INTERNAL REVENUE CODE.— 

19 (A) IN GENERAL.—Section 1402(a) of 

20 such Code is amended by striking ‘‘and’’ at the 

21 end of paragraph (16), by striking the period at 

22 the end of paragraph (17) and inserting ‘‘; 

23 and’’, and by inserting after paragraph (17) the 

24 following new paragraph: 


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1 ‘‘(18) notwithstanding the preceding provisions 

2 of this subsection, in the case of any individual en3 gaged in the trade or business of providing services 

4 described in section 710(c)(2) with respect to any 

5 entity, investment services partnership income or 

6 loss (as defined in subsection (m)) of such individual 

7 with respect to such entity shall be taken into ac8 count in determining the net earnings from self-em9 ployment of such individual.’’. 

10 (B) INVESTMENT SERVICES PARTNERSHIP

11 INCOME OR LOSS.—Section 1402 of such Code 

12 is amended by adding at the end the following 

13 new subsection: 

14 ‘‘(m) INVESTMENT SERVICES PARTNERSHIP INCOME

15 OR LOSS.—For purposes of subsection (a)— 

16 ‘‘(1) IN GENERAL.—The term ‘investment serv17 ices partnership income or loss’ means, with respect 

18 to any investment services partnership interest (as 

19 defined in section 710(c)) or disqualified interest (as 

20 defined in section 710(e)), the net of— 

21 ‘‘(A) the amounts treated as ordinary in22 come or ordinary loss under subsections (b) and 

23 (e) of section 710 with respect to such interest, 

24 ‘‘(B) all items of income, gain, loss, and 

25 deduction allocated to such interest, and 


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1 ‘‘(C) the amounts treated as realized from 

2 the sale or exchange of property other than a 

3 capital asset under section 751 with respect to 

4 such interest. 

5 ‘‘(2) EXCEPTION FOR QUALIFIED CAPITAL IN6 TERESTS.—A rule similar to the rule of section 

7 710(d) shall apply for purposes of applying para8 graph (1)(B).’’. 

9 (2) SOCIAL SECURITY ACT.—Section 211(a) of 

10 the Social Security Act is amended by striking 

11 ‘‘and’’ at the end of paragraph (15), by striking the 

12 period at the end of paragraph (16) and inserting ‘‘; 

13 and’’, and by inserting after paragraph (16) the fol14 lowing new paragraph: 

15 ‘‘(17) Notwithstanding the preceding provisions 

16 of this subsection, in the case of any individual en17 gaged in the trade or business of providing services 

18 described in section 710(c)(2) of the Internal Rev19 enue Code of 1986 with respect to any entity, invest20 ment services partnership income or loss (as defined 

21 in section 1402(m) of such Code) shall be taken into 

22 account in determining the net earnings from self23 employment of such individual.’’. 

24 (f) SEPARATE ACCOUNTING BY PARTNER.—Section 

25 702(a) of the Internal Revenue Code of 1986 is amended 


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1 by striking ‘‘and’’ at the end of paragraph (7), by striking 

2 the period at the end of paragraph (8) and inserting ‘‘, 

3 and’’, and by inserting after paragraph (8) the following: 

4 ‘‘(9) any amount treated as ordinary income or 

5 loss under subsection (a), (b), or (e) of section 

6 710.’’. 

7 (g) CONFORMING AMENDMENTS.— 

8 (1) Subsection (d) of section 731 of such Code 

9 is amended by inserting ‘‘section 710(b)(4) (relating 

10 to distributions of partnership property),’’ after ‘‘to 

11 the extent otherwise provided by’’. 

12 (2) Section 741 of such Code is amended by in13 serting ‘‘or section 710 (relating to special rules for 

14 partners providing investment management services 

15 to partnerships)’’ before the period at the end. 

16 (3) The table of sections for part I of sub17 chapter K of chapter 1 of such Code is amended by 

18 adding at the end the following new item: 

‘‘Sec. 710. Special rules for partners providing investment management services 

to partnerships.’’. 

19 (4) Part IV of subchapter O of chapter 1 of 

20 such Code is amended by striking section 1061, and 

21 the table of sections for such part is amended by 

22 striking the item relating to section 1061. 

23 (h) EFFECTIVE DATE.— 


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1 (1) IN GENERAL.—Except as otherwise pro2 vided in this subsection, the amendments made by 

3 this section shall apply to taxable years ending after 

4 the date of the enactment of this Act. 

5 (2) PARTNERSHIP TAXABLE YEARS WHICH IN6 CLUDE EFFECTIVE DATE.—In applying section 

7 710(a) of the Internal Revenue Code of 1986 (as 

8 added by this section) in the case of any partnership 

9 taxable year which includes the date of the enact10 ment of this Act, the amount of the net capital gain 

11 referred to in such section shall be treated as being 

12 the lesser of the net capital gain for the entire part13 nership taxable year or the net capital gain deter14 mined by only taking into account items attributable 

15 to the portion of the partnership taxable year which 

16 is after such date. 

17 (3) DISPOSITIONS OF PARTNERSHIP INTER18 ESTS.— 

19 (A) IN GENERAL.—Section 710(b) of such 

20 Code (as added by this section) shall apply to 

21 dispositions and distributions after the date of 

22 the enactment of this Act. 

23 (B) INDIRECT DISPOSITIONS.—The amend24 ments made by subsection (b) shall apply to 


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1 transactions after the date of the enactment of 

2 this Act. 

3 (4) OTHER INCOME AND GAIN IN CONNECTION

4 WITH INVESTMENT MANAGEMENT SERVICES.—Sec5 tion 710(e) of such Code (as added by this section) 

6 shall take effect on the date of the enactment of this 

7 Act. 

8 SEC. 403. RETURN TO PRE-2018 ESTATE AND GIFT TAX 

9 BASIC EXCLUSION AMOUNT. 

10 (a) IN GENERAL.—Section 2010(c)(3) of the Internal 

11 Revenue Code of 1986 is amended by striking subpara12 graph (C). 

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

14 this section shall apply to estates of decedents dying and 

15 gifts made after the date of the enactment of this Act. 

Æ 


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