I 

116TH CONGRESS 

1ST SESSION H. R. 4321 

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

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 12, 2019 

Mr. RYAN 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 2019’’ or the ‘‘GET 

7 THE LEAD OUT Act of 2019’’. 

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

9 this Act is as follows: 


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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. 

1 SEC. 2. PURPOSES. 

2 The purposes of this Act are as follows: 

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

4 infrastructure necessary to eliminate lead-based pipe 

5 and tap hazards in housing; 


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1 (2) to reorient the national approach to the 

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

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

4 program to evaluate and reduce lead-based pipe haz5 ards in the Nation’s building stock; 

6 (3) to encourage effective action to prevent 

7 childhood lead poisoning by establishing a workable 

8 framework for lead-based pipe and tap hazard eval9 uation and reduction and by ending the current con10 fusion over reasonable standards of care; 

11 (4) to ensure and implement the definitions of 

12 lead hazards in section 1417 of the Safe Drinking 

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

14 existence of lead-based pipe and taps hazards is 

15 taken into account in the development of Federal 

16 Government housing policies and in the sale, rental 

17 and renovation of homes, and apartments; 

18 (5) to mobilize national resources expeditiously, 

19 through a partnership among all levels of govern20 ment and the private sector, to develop the most 

21 promising, cost-effective methods for evaluating and 

22 reducing lead-based pipe and tap hazards; 

23 (6) to reduce the threat of childhood lead poi24 soning in housing owned, assisted, or transferred by 

25 the Federal Government; and 


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1 (7) to educate the public concerning the haz2 ards and sources of lead-based pipes and taps poi3 soning and steps to reduce and eliminate such haz4 ards. 

5 SEC. 3. DEFINITIONS. 

6 For purposes of this Act, the following definitions 

7 shall apply: 

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

9 means any set of measures designed to permanently 

10 eliminate lead-based pipe hazards in accordance with 

11 standards established by appropriate Federal agen12 cies. Such term includes— 

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

14 taps; 

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

16 post-abatement clearance testing activities asso17 ciated with such measures; and 

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

19 (2) CERTIFIED CONTRACTOR.—The term ‘‘cer20 tified contractor’’ means— 

21 (A) a contractor, inspector, or supervisor 

22 who has completed a training program certified 

23 by the appropriate Federal agency and has met 

24 any other requirements for certification or li25 censure established by such agency or who has 


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1 been certified by any State through a program 

2 which has been found by such Federal agency 

3 to be at least as rigorous as the Federal certifi4 cation program; and 

5 (B) workers or designers who have fully 

6 met training requirements established by the 

7 appropriate Federal agency. 

8 (3) CONTRACT FOR THE PURCHASE AND SALE

9 OF RESIDENTIAL REAL PROPERTY.—The term ‘‘con10 tract for the purchase and sale of residential real 

11 property’’ means any contract or agreement in which 

12 one party agrees to purchase an interest in real 

13 property on which there is situated or more residen14 tial dwellings used or occupied, or intended to be 

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

16 or residence of one or more persons. 

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

18 means risk assessment, inspection, or risk assess19 ment and inspection. 

20 (5) FEDERALLY ASSISTED HOUSING.—The 

21 term ‘‘federally assisted housing’’ means residential 

22 dwellings receiving project-based assistance under 

23 programs including— 


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1 (A) section 221(d)(3) or 236 of the Na2 tional Housing Act (12 U.S.C. 1715l(d)(3); 

3 1715z–1); 

4 (B) section 101 of the Housing and Urban 

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

6 (C) section 8 of the United States Housing 

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

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

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

10 1472(a); 1474; 1484; 1485; 1486; 1490m). 

11 (6) FEDERALLY OWNED HOUSING.—The term 

12 ‘‘federally owned housing’’ means residential dwell13 ings owned or managed by a Federal agency, or for 

14 which a Federal agency is a trustee or conservator. 

15 For the purpose of this paragraph, the term ‘‘Fed16 eral agency’’ includes the Department of Housing 

17 and Urban Development, the Rural Housing Service 

18 of the Department of Agriculture, the Federal De19 posit Insurance Corporation, the General Services 

20 Administration, the Department of Defense, the De21 partment of Veterans Affairs, the Department of the 

22 Interior, the Department of Transportation, and any 

23 other Federal agency. 

24 (7) FEDERALLY SUPPORTED WORK.—The term 

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


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1 evaluation or reduction activities conducted in feder2 ally owned or assisted housing or funded in whole or 

3 in part through any financial assistance program of 

4 the Department of Housing and Urban Develop5 ment, the Rural Housing Service of the Department 

6 of Agriculture, or the Department of Veterans Af7 fairs. 

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

9 means an investigation to determine the presence of 

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

11 of the regulations of the Environmental Protection 

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

13 requirements for lead and copper in tap water) and 

14 the provision of a report explaining the results of the 

15 investigation. 

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

17 controls’’ means a set of measures designed to re18 duce temporarily human exposure or likely exposure 

19 to lead-based pipe hazards, including specialized 

20 cleaning, repairs, maintenance, ongoing monitoring 

21 of lead-based pipe or potential hazards, and the es22 tablishment and operation of management and resi23 dent education programs. 

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

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1 tures, solder, and flux that does not satisfy the defi2 nition of ‘‘lead-free’’ established under section 1417 

3 of the Safe Drinking Water Act. 

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

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

6 causes exposure to lead from lead-based pipe that 

7 would result in adverse human health effects, as es8 tablished by the Environmental Protection Agency. 

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

10 loan’’ includes any loan (other than temporary fi11 nancing such as a construction loan) that— 

12 (A) is secured by a first lien on any inter13 est in residential real property; and 

14 (B) either— 

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

16 assisted by the Department of Housing 

17 and Urban Development, the Department 

18 of Veterans Affairs, or the Rural Housing 

19 Service of the Department of Agriculture, 

20 or by any other agency of the Federal Gov21 ernment; or 

22 (ii) is intended to be sold by each 

23 originating mortgage institution to any 

24 federally chartered secondary mortgage 

25 market institution. 


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1 (13) ORIGINATING MORTGAGE INSTITUTION.— 

2 The term ‘‘originating mortgage institution’’ means 

3 a lender that provides mortgage loans. 

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

5 housing’’ means housing that qualifies as affordable 

6 housing under section 215 of the Cranston-Gonzalez 

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

8 12745), including housing that receives assistance 

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

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

11 1437f). 

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

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

14 3(b) of the United States Housing Act of 1937 (42 

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

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

17 means measures designed to reduce or eliminate 

18 human exposure to lead-based pipe hazards through 

19 methods including interim controls and abatement. 

20 (17) RESIDENTIAL DWELLING.—The term ‘‘res21 idential dwelling’’ means— 

22 (A) a single-family dwelling, including at23 tached structures such as porches and stoops; 

24 or 


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

2 structure that contains more than 1 separate 

3 residential dwelling unit, in which each such 

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

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

6 or residence of one or more persons. 

7 (18) RESIDENTIAL REAL PROPERTY.—The term 

8 ‘‘residential real property’’ means real property on 

9 which there is situated one or more residential dwell10 ings used or occupied, or intended to be used or oc11 cupied, in whole or in part, as the home or residence 

12 of one or more persons. 

13 (19) RISK ASSESSMENT.—The term ‘‘risk as14 sessment’’ means an on-site investigation to deter15 mine and report the existence, nature, severity, and 

16 location of lead-based pipe hazards in residential 

17 dwellings, including— 

18 (A) information gathering regarding the 

19 age and history of the housing and occupancy 

20 by children under age 6; 

21 (B) visual inspection; 

22 (C) other activities as may be appropriate; 

23 and 

24 (D) provision of a report explaining the re25 sults of the investigation. 


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

2 means the Secretary of Housing and Urban Develop3 ment. 

4 TITLE I—LEAD-BASED PIPE 

5 HAZARD REDUCTION 

6 SEC. 101. GRANTS FOR LEAD-BASED PIPE HAZARD REDUC7 TION IN HOUSING. 

8 (a) GENERAL AUTHORITY.—The Secretary of Hous9 ing and Urban Development is authorized to provide 

10 grants to eligible applicants to evaluate and reduce lead11 based pipes hazards in priority housing that is not feder12 ally assisted housing, federally owned housing, or public 

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

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

15 government that has an approved comprehensive housing 

16 affordability strategy under section 105 of the Cranston17 Gonzalez National Affordable Housing Act (42 U.S.C. 

18 12705) is eligible to apply for a grant under this section. 

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

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

21 shall submit an application in such form and in such man22 ner as the Secretary shall prescribe. An application shall 

23 contain— 

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

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1 quired by section 105(b)(16) of the Cranston-Gon2 zalez National Affordable Housing Act; 

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

4 applicant seeks under this section; 

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

6 undertaken with grants under this section, including 

7 an estimate of the amount to be allocated for each 

8 activity; 

9 (4) a description of the forms of financial as10 sistance to owners and occupants of priority housing 

11 that will be provided through grants under this sec12 tion; and 

13 (5) such assurances as the Secretary may re14 quire regarding the applicant’s capacity to carry out 

15 the activities. 

16 (d) SELECTION CRITERIA.—The Secretary shall 

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

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

19 basis of selection criteria, which shall include— 

20 (1) the extent to which the proposed activities 

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

22 children under the age of 6 who reside in priority 

23 housing; 

24 (2) the degree of severity and extent of lead25 based pipe hazards in the jurisdiction to be served; 


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1 (3) the ability of the applicant to leverage 

2 State, local, and private funds to supplement the 

3 grant under this section; 

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

5 proposed activities; and 

6 (5) such other factors as the Secretary deter7 mines appropriate to ensure that grants made avail8 able under this section are used effectively and to 

9 promote the purposes of this Act. 

10 (e) ELIGIBLE ACTIVITIES.—A grant under this sec11 tion may be used to— 

12 (1) perform risk assessments and inspections in 

13 priority housing; 

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

15 pipe hazards in priority housing; 

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

17 hazards in priority housing; 

18 (4) provide for the additional cost of reducing 

19 lead-based pipe hazards in units undergoing renova20 tion funded by other sources; 

21 (5) ensure that risk assessments, inspections, 

22 and abatements are carried out by certified contrac23 tors monitor the blood-lead levels of workers involved 

24 in lead hazard reduction activities funded under this 

25 section; 


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1 (6) assist in the temporary relocation of fami2 lies forced to vacate priority housing while lead3 based pipe hazard reduction measures are being con4 ducted; 

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

6 of lead poisoning and measures to reduce exposure 

7 to lead, including exposure due to residential lead8 based pipe hazards; 

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

10 the age of 6 residing in priority housing after lead11 based pipe hazard reduction activity has been con12 ducted, to assure that such activity does not cause 

13 excessive exposures to lead; and 

14 (9) carry out such other activities that the Sec15 retary determines appropriate to promote the pur16 poses of this Act. 

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

18 under this section may provide the services described in 

19 this section through a variety of programs, including 

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

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

22 other forms of assistance approved by the Secretary. 

23 (g) TECHNICAL ASSISTANCE AND CAPACITY BUILD24 INGS.— 


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

2 the capacity of eligible applicants to carry out the 

3 requirements of section 105(b)(18) of the Cranston4 Gonzalez National Affordable Housing Act and to 

5 carry out activities under this section. In fiscal years 

6 2020 and 2021, the Secretary may make grants of 

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

8 training, certification, or accreditation programs 

9 that meet the requirements of section 201 of this 

10 Act (relating to lead-based pipe activities training 

11 and certification). 

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

13 in appropriation Acts under section 301, there shall 

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

15 for each of fiscal years 2020 through 2029. 

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

17 grant under this section shall make contributions toward 

18 the cost of activities that receive assistance under this sec19 tion in an amount not less than 10 percent of the total 

20 grant amount under this section. 

21 (i) PROHIBITION OF SUBSTITUTION OF FUNDS.— 

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

23 amounts made available or designated by State or local 

24 governments for use for the purposes under this title. 


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

2 under this section shall ensure that not more than 10 per3 cent of the grant will be used for administrative expenses 

4 associated with the activities funded by the grant. 

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

6 under this section shall maintain and provide the Sec7 retary with financial records sufficient, in the determina8 tion of the Secretary, to ensure proper accounting and dis9 bursing of amounts received from a grant under this sec10 tion. 

11 (l) REPORT.—A recipient of a grant under this sec12 tion shall submit to the Secretary, for any fiscal year in 

13 which the recipient expends grant funds under this sec14 tion, a report that— 

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

16 (2) states the number of risk assessments and 

17 the number of inspections conducted in residential 

18 dwellings; 

19 (3) states the number of residential dwellings in 

20 which lead-based pipe hazards have been reduced 

21 through interim controls; 

22 (4) states the number of residential dwellings in 

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

24 (5) provides any other information that the Sec25 retary determines to be appropriate. 


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1 (m) NOTICE OF FUNDING AVAILABILITY.—The Sec2 retary shall publish a Notice of Funding Availability not 

3 later than 120 days after funds are appropriated to carry 

4 out this section. 

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

6 PIPE HAZARDS IN FEDERALLY ASSISTED 

7 HOUSING. 

8 (a) REQUIREMENTS FOR FEDERALLY ASSISTED

9 HOUSING.—The Secretary shall provide for appropriate 

10 measures and procedures to conduct risk assessments, in11 spections, interim controls, and abatement of lead-based 

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

13 such procedures shall require— 

14 (1) the provision of lead hazard information 

15 pamphlets, developed pursuant to section 205 of this 

16 Act for purchasers and tenants of such housing; 

17 (2) periodic risk assessments and interim con18 trols for such housing in accordance with a schedule 

19 determined by the Secretary, which shall provide for 

20 the initial risk assessment to be performed— 

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

22 dwelling units of such housing within 5 years 

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


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1 (B) in the remainder of the dwelling units 

2 of such housing within 10 years after such date 

3 of enactment; 

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

5 pipe in such housing prior to federally funded ren6 ovation or rehabilitation; 

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

8 housing in the course of rehabilitation projects re9 ceiving less than $25,000 per unit in Federal funds; 

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

11 such housing in the course of substantial rehabilita12 tion projects receiving more than $25,000 per unit 

13 in Federal funds; 

14 (6) where risk assessment, inspection, or reduc15 tion activities have been undertaken in such housing, 

16 the provision of notice to occupants describing the 

17 nature and scope of such activities and the actual 

18 risk assessment or inspection reports (including 

19 available information on the location of any remain20 ing lead-based pipe and lead-based pipe hazards); 

21 and 

22 (7) such other measures for such housing as 

23 the Secretary deems appropriate. 


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

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

3 amended— 

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

5 the end; 

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

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

8 (3) by adding at the end the following new sub9 paragraph: 

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

11 and reduction, as defined in section 3 of the 

12 Grants for Eliminating the Toxic Hazard of 

13 Environmental Lead in Our Towns Act of 

14 2019.’’. 

15 (c) HOME INVESTMENT PARTNERSHIPS.—Section 

16 212(a) of the Cranston-Gonzalez National Affordable 

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

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

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

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

21 paragraph: 

22 ‘‘(5) LEAD-BASED PIPE HAZARDS.—A partici23 pating jurisdiction may use funds provided under 

24 this subtitle for the evaluation and reduction of lead25 based pipe hazards’’. 


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1 (d) COMMUNITY DEVELOPMENT BLOCK GRANTS.— 

2 Section 105(a) of the Housing and Community Develop3 ment Act of 1974 (42 U.S.C. 5305(a)) is amended— 

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

5 the end; 

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

7 the end and inserting ‘‘; and’’; and 

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

9 ‘‘(26) lead-based pipe hazard evaluation and re10 duction, as defined in section 3 of the Grants for 

11 Eliminating the Toxic Hazard of Environmental 

12 Lead in Our Towns Act of 2019.’’. 

13 (e) SECTION 8 RENTAL ASSISTANCE.—Section 

14 8(c)(2)(B) of the United States Housing Act of 1937 (42 

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

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

17 the Secretary and subject to the availability of appropria18 tions for contract amendments), on a project-by-project 

19 basis for projects receiving project-based assistance, pro20 vide adjustments to the maximum monthly rents to cover 

21 the costs of evaluating and reducing lead-based pipe haz22 ards, as defined in section 3 of the Grants for Eliminating 

23 the Toxic Hazard of Environmental Lead in Our Towns 

24 Act of 2019.’’. 


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1 (f) HOPE FOR PUBLIC AND INDIAN HOUSING HOME2 OWNERSHIP.—Title III of the United States Housing Act 

3 of 1937 is amended— 

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

5 1(b))— 

6 (A) by redesignating paragraphs (5) 

7 through (9) as paragraphs (6) through (10), re8 spectively; and 

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

10 following: 

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

12 required by section 102(a) of the Grants for Elimi13 nating the Toxic Hazard of Environmental Lead in 

14 Our Towns Act of 2019;’’; and 

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

16 2(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 2019.’’. 


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1 (g) HOPE FOR HOMEOWNERSHIP OF MULTIFAMILY

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

4 (1) in section 422(b) (42 U.S.C. 12872(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 2019;’’; and 

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

15 (A) by redesignating paragraphs (5) 

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

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 2019.’’. 


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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 2019;’’; 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 2019.’’. 

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 2019.’’. 

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 2019’’. 

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 2019’’. 

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 2019’’. 

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 2019, 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 a appropriateness 

15 of requiring risk assessments or inspections and no16 tification 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 

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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 20:03 Sep 17, 2019 Jkt 089200 PO 00000 Frm 00043 Fmt 6652 Sfmt 6201 E:\BILLS\H4321.IH H4321

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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 20:03 Sep 17, 2019 Jkt 089200 PO 00000 Frm 00046 Fmt 6652 Sfmt 6201 E:\BILLS\H4321.IH H4321

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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 

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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 2020 through 2029. 

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 2020 through 

24 2029 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 is amended by 

16 redesignating paragraph (4) as paragraph (5) and by in17 serting after paragraph (3) the following new paragraph: 

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

19 provided by the Secretary— 

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

21 transfer of an interest in a partnership in con22 nection with the provision of services to (or for 

23 the benefit of) such partnership— 

24 ‘‘(i) the fair market value of such in25 terest shall be treated for purposes of this 


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1 section as being equal to the amount of the 

2 distribution which the partner would re3 ceive if the partnership sold (at the time of 

4 the transfer) all of its assets at fair market 

5 value and distributed the proceeds of such 

6 sale (reduced by the liabilities of the part7 nership) to its partners in liquidation of 

8 the partnership, and 

9 ‘‘(ii) the person receiving such interest 

10 shall be treated as having made the elec11 tion under subsection (b)(1) unless such 

12 person makes an election under this para13 graph to have such subsection not apply. 

14 ‘‘(B) ELECTION.—The election under sub15 paragraph (A)(ii) shall be made under rules 

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

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

18 this section shall apply to interests in partnerships trans19 ferred after the date of the enactment of this Act. 

20 SEC. 402. SPECIAL RULES FOR PARTNERS PROVIDING IN21 VESTMENT MANAGEMENT SERVICES TO 

22 PARTNERSHIPS. 

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

24 1 is amended by adding at the end the following new sec25 tion: 


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1 ‘‘SEC. 710. SPECIAL RULES FOR PARTNERS PROVIDING IN2 VESTMENT MANAGEMENT SERVICES TO 

3 PARTNERSHIPS. 

4 ‘‘(a) TREATMENT OF DISTRIBUTIVE SHARE OF

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

6 case of an investment services partnership interest— 

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

8 702(b)— 

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

10 gain with respect to such interest for any part11 nership taxable year shall be treated as ordi12 nary income, and 

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

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

15 with respect to such interest for any partner16 ship taxable year shall be treated as an ordi17 nary loss. 

18 ‘‘(2) RECHARACTERIZATION OF LOSSES LIM19 ITED TO RECHARACTERIZED GAINS.—The amount 

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

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

22 of— 

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1 terest for all preceding partnership taxable 

2 years to which this section applies, over 

3 ‘‘(B) the aggregate amount treated as or4 dinary loss under paragraph (1)(B) with re5 spect to such interest for all preceding partner6 ship taxable years to which this section applies. 

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

8 LOSS.— 

9 ‘‘(A) NET CAPITAL GAIN.—The amount 

10 treated as ordinary income under paragraph 

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

12 items of long-term capital gain taken into ac13 count in determining such net capital gain. 

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

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

16 shall be allocated ratably among the items of 

17 long-term capital loss and short-term capital 

18 loss taken into account in determining such net 

19 capital loss. 

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

21 LOSSES.—For purposes of this section— 

22 ‘‘(A) IN GENERAL.—Net capital gain, long23 term capital gain, and long-term capital loss, 

24 with respect to any investment services partner25 ship interest for any taxable year, shall be deVerDate Sep 11 2014 20:03 Sep 17, 2019 Jkt 089200 PO 00000 Frm 00061 Fmt 6652 Sfmt 6201 E:\BILLS\H4321.IH H4321

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1 termined under section 1222, except that such 

2 section shall be applied— 

3 ‘‘(i) without regard to the recharacter4 ization of any item as ordinary income or 

5 ordinary loss under this section, 

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

7 of gain and loss taken into account by the 

8 holder of such interest under section 702 

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

10 respect to such interest for such taxable 

11 year, and 

12 ‘‘(iii) by treating property which is 

13 taken into account in determining gains 

14 and losses to which section 1231 applies as 

15 capital assets held for more than 1 year. 

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

17 capital loss’ means the excess of the losses from 

18 sales or exchanges of capital assets over the 

19 gains from such sales or exchanges. Rules simi20 lar to the rules of clauses (i) through (iii) of 

21 subparagraph (A) shall apply for purposes of 

22 the preceding sentence. 

23 ‘‘(5) SPECIAL RULE FOR DIVIDENDS.—Any div24 idend allocated with respect to any investment serv25 ices partnership interest shall not be treated as 


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1 qualified dividend income for purposes of section 

2 1(h). 

3 ‘‘(6) SPECIAL RULE FOR QUALIFIED SMALL

4 BUSINESS STOCK.—Section 1202 shall not apply to 

5 any gain from the sale or exchange of qualified small 

6 business stock (as defined in section 1202(c)) allo7 cated with respect to any investment services part8 nership interest. 

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

10 ‘‘(1) GAIN.— 

11 ‘‘(A) IN GENERAL.—Any gain on the dis12 position of an investment services partnership 

13 interest shall be— 

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

15 ‘‘(ii) recognized notwithstanding any 

16 other provision of this subtitle. 

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

18 In the case of a disposition of an investment 

19 services partnership interest by gift or by rea20 son of death of the taxpayer— 

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

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

23 an investment services partnership interest 

24 in the hands of the person acquiring such 

25 interest, and 


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1 ‘‘(iii) any amount that would have 

2 been treated as ordinary income under this 

3 subsection had the decedent sold such in4 terest immediately before death shall be 

5 treated as an item of income in respect of 

6 a decedent under section 691. 

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

8 investment services partnership interest shall be 

9 treated as an ordinary loss to the extent of the ex10 cess (if any) of— 

11 ‘‘(A) the aggregate amount treated as ordi12 nary income under subsection (a) with respect 

13 to such interest for all partnership taxable 

14 years to which this section applies, over 

15 ‘‘(B) the aggregate amount treated as or16 dinary loss under subsection (a) with respect to 

17 such interest for all partnership taxable years 

18 to which this section applies. 

19 ‘‘(3) ELECTION WITH RESPECT TO CERTAIN EX20 CHANGES.—Paragraph (1)(A)(ii) shall not apply to 

21 the contribution of an investment services partner22 ship interest to a partnership in exchange for an in23 terest in such partnership if— 

24 ‘‘(A) the taxpayer makes an irrevocable 

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1 ceived in the exchange as an investment serv2 ices partnership interest, and 

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

4 such reporting and recordkeeping requirements 

5 as the Secretary may prescribe. 

6 ‘‘(4) DISTRIBUTIONS OF PARTNERSHIP PROP7 ERTY.— 

8 ‘‘(A) IN GENERAL.—In the case of any dis9 tribution of property by a partnership with re10 spect to any investment services partnership in11 terest held by a partner, the partner receiving 

12 such property shall recognize gain equal to the 

13 excess (if any) of— 

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

15 property at the time of such distribution, 

16 over 

17 ‘‘(ii) the adjusted basis of such prop18 erty in the hands of such partner (deter19 mined without regard to subparagraph 

20 (C)). 

21 ‘‘(B) TREATMENT OF GAIN AS ORDINARY

22 INCOME.—Any gain recognized by such partner 

23 under subparagraph (A) shall be treated as or24 dinary income to the same extent and in the 

25 same manner as the increase in such partner’s 


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1 distributive share of the taxable income of the 

2 partnership would be treated under subsection 

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

4 partnership had sold the distributed property at 

5 fair market value and all of the gain from such 

6 disposition were allocated to such partner. For 

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

8 treated as ordinary income under this subpara9 graph shall be treated as an amount treated as 

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

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

12 a distribution to which subparagraph (A) ap13 plies, the basis of the distributed property in 

14 the hands of the distributee partner shall be the 

15 fair market value of such property. 

16 ‘‘(D) SPECIAL RULES WITH RESPECT TO

17 MERGERS, DIVISIONS, AND TECHNICAL TERMI18 NATIONS.—In the case of a taxpayer which sat19 isfies requirements similar to the requirements 

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

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

22 not apply to the distribution of a partnership 

23 interest if such distribution is in connection 

24 with a contribution (or deemed contribution) of 

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1 tion 721 applies pursuant to a transaction de2 scribed in paragraph (1)(B) or (2) of section 

3 708(b). 

4 ‘‘(c) INVESTMENT SERVICES PARTNERSHIP INTER5 EST.—For purposes of this section— 

6 ‘‘(1) IN GENERAL.—The term ‘investment serv7 ices partnership interest’ means any interest in an 

8 investment partnership acquired or held by any per9 son in connection with the conduct of a trade or 

10 business described in paragraph (2) by such person 

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

12 in an investment partnership held by any person— 

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

14 services partnership interest for any period be15 fore the first date on which it is so held in con16 nection with such a trade or business, 

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

18 services partnership interest merely because 

19 such person holds such interest other than in 

20 connection with such a trade or business, and 

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

22 services partnership interest if acquired from a 

23 related person in whose hands such interest was 

24 an investment services partnership interest. 


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1 ‘‘(2) BUSINESSES TO WHICH THIS SECTION AP2 PLIES.—A trade or business is described in this 

3 paragraph if such trade or business primarily in4 volves the performance of any of the following serv5 ices with respect to assets held (directly or indi6 rectly) by one or more investment partnerships re7 ferred to in paragraph (1): 

8 ‘‘(A) Advising as to the advisability of in9 vesting in, purchasing, or selling any specified 

10 asset. 

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

12 any specified asset. 

13 ‘‘(C) Arranging financing with respect to 

14 acquiring specified assets. 

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

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

17 ‘‘(3) INVESTMENT PARTNERSHIP.— 

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

19 partnership’ means any partnership if, at the 

20 end of any two consecutive calendar quarters 

21 ending after the date of enactment of this sec22 tion— 

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

24 the partnership are specified assets (deter25 mined without regard to any section 197 


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1 intangible within the meaning of section 

2 197(d)), and 

3 ‘‘(ii) less than 75 percent of the cap4 ital of the partnership is attributable to 

5 qualified capital interests which constitute 

6 property held in connection with a trade or 

7 business of the owner of such interest. 

8 ‘‘(B) LOOK-THROUGH OF CERTAIN WHOL9 LY OWNED ENTITIES FOR PURPOSES OF DETER10 MINING ASSETS OF THE PARTNERSHIP.— 

11 ‘‘(i) IN GENERAL.—For purposes of 

12 determining the assets of a partnership 

13 under subparagraph (A)(i)— 

14 ‘‘(I) any interest in a specified 

15 entity shall not be treated as an asset 

16 of such partnership, and 

17 ‘‘(II) such partnership shall be 

18 treated as holding its proportionate 

19 share of each of the assets of such 

20 specified entity. 

21 ‘‘(ii) SPECIFIED ENTITY.—For pur22 poses of clause (i), the term ‘specified enti23 ty’ means, with respect to any partnership 

24 (hereafter referred to as the upper-tier 

25 partnership), any person which engages in 


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1 the same trade or business as the upper2 tier partnership and is— 

3 ‘‘(I) a partnership all of the cap4 ital and profits interests of which are 

5 held directly or indirectly by the 

6 upper-tier partnership, or 

7 ‘‘(II) a foreign corporation which 

8 does not engage in a trade or business 

9 in the United States and all of the 

10 stock of which is held directly or indi11 rectly by the upper-tier partnership. 

12 ‘‘(C) SPECIAL RULES FOR DETERMINING

13 IF PROPERTY HELD IN CONNECTION WITH

14 TRADE OR BUSINESS.— 

15 ‘‘(i) IN GENERAL.—Except as other16 wise provided by the Secretary, solely for 

17 purposes of determining whether any inter18 est in a partnership constitutes property 

19 held in connection with a trade or business 

20 under subparagraph (A)(ii)— 

21 ‘‘(I) a trade or business of any 

22 person closely related to the owner of 

23 such interest shall be treated as a 

24 trade or business of such owner, 


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1 ‘‘(II) such interest shall be treat2 ed as held by a person in connection 

3 with a trade or business during any 

4 taxable year if such interest was so 

5 held by such person during any 3 tax6 able years preceding such taxable 

7 year, and 

8 ‘‘(III) paragraph (5)(B) shall not 

9 apply. 

10 ‘‘(ii) CLOSELY RELATED PERSONS.— 

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

12 shall be treated as closely related to an13 other person if, taking into account the 

14 rules of section 267(c), the relationship be15 tween such persons is described in— 

16 ‘‘(I) paragraph (1) or (9) of sec17 tion 267(b), or 

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

19 in the case of a trust with respect to 

20 which each current beneficiary is the 

21 grantor or a person whose relationship 

22 to the grantor is described in para23 graph (1) or (9) of section 267(b). 

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

25 may issue regulations or other guidance which 


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1 prevent the avoidance of the purposes of sub2 paragraph (A), including regulations or other 

3 guidance which treat convertible and contingent 

4 debt (and other debt having the attributes of 

5 equity) as a capital interest in the partnership. 

6 ‘‘(E) CONTROLLED GROUPS OF ENTI7 TIES.— 

8 ‘‘(i) IN GENERAL.—In the case of a 

9 controlled group of entities, if an interest 

10 in the partnership received in exchange for 

11 a contribution to the capital of the part12 nership by any member of such controlled 

13 group would (in the hands of such mem14 ber) constitute property held in connection 

15 with a trade or business, then any interest 

16 in such partnership held by any member of 

17 such group shall be treated for purposes of 

18 subparagraph (A) as constituting (in the 

19 hands of such member) property held in 

20 connection with a trade or business. 

21 ‘‘(ii) CONTROLLED GROUP OF ENTI22 TIES.—For purposes of clause (i), the term 

23 ‘controlled group of entities’ means a con24 trolled group of corporations as defined in 

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


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

2 1563. A partnership or any other entity 

3 (other than a corporation) shall be treated 

4 as a member of a controlled group of enti5 ties if such entity is controlled (within the 

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

7 of such group (including any entity treated 

8 as a member of such group by reason of 

9 this sentence). 

10 ‘‘(F) SPECIAL RULE FOR CORPORA11 TIONS.—For purposes of this paragraph, in the 

12 case of a corporation, the determination of 

13 whether property is held in connection with a 

14 trade or business shall be determined as if the 

15 taxpayer were an individual. 

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

17 asset’ means securities (as defined in section 

18 475(c)(2) without regard to the last sentence there19 of), real estate held for rental or investment, inter20 ests in partnerships, commodities (as defined in sec21 tion 475(e)(2)), cash or cash equivalents, or options 

22 or derivative contracts with respect to any of the 

23 foregoing. 

24 ‘‘(5) RELATED PERSONS.— 


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

2 treated as related to another person if the rela3 tionship between such persons is described in 

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

5 ‘‘(B) ATTRIBUTION OF PARTNER SERV6 ICES.—Any service described in paragraph (2) 

7 which is provided by a partner of a partnership 

8 shall be treated as also provided by such part9 nership. 

10 ‘‘(d) EXCEPTION FOR CERTAIN CAPITAL INTER11 ESTS.— 

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

13 of an investment services partnership interest which 

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

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

16 qualified capital interest shall not be taken into ac17 count under subsection (a) if— 

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

19 partnership to such qualified capital interest in 

20 the same manner as such allocations are made 

21 to other qualified capital interests held by part22 ners who do not provide any services described 

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

24 the partner holding the qualified capital inter25 est, and 


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1 ‘‘(B) the allocations made to such other in2 terests are significant compared to the alloca3 tions made to such qualified capital interest. 

4 ‘‘(2) AUTHORITY TO PROVIDE EXCEPTIONS TO

5 ALLOCATION REQUIREMENTS.—To the extent pro6 vided by the Secretary in regulations or other guid7 ance— 

8 ‘‘(A) ALLOCATIONS TO PORTION OF QUALI9 FIED CAPITAL INTEREST.—Paragraph (1) may 

10 be applied separately with respect to a portion 

11 of a qualified capital interest. 

12 ‘‘(B) NO OR INSIGNIFICANT ALLOCATIONS

13 TO NONSERVICE PROVIDERS.—In any case in 

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

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

16 dividends) shall not be taken into account under 

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

18 properly allocable under such regulations or 

19 other guidance to qualified capital interests. 

20 ‘‘(C) ALLOCATIONS TO SERVICE PRO21 VIDERS’ QUALIFIED CAPITAL INTERESTS WHICH

22 ARE LESS THAN OTHER ALLOCATIONS.—Alloca23 tions shall not be treated as failing to meet the 

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1 terest represent a lower return than the alloca2 tions made to the other qualified capital inter3 ests referred to in such paragraph. 

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

5 AND CAPITAL CONTRIBUTIONS.—In the case of an 

6 interest in a partnership which was not an invest7 ment services partnership interest and which, by 

8 reason of a change in the services with respect to as9 sets held (directly or indirectly) by the partnership 

10 or by reason of a change in the capital contributions 

11 to such partnership, becomes an investment services 

12 partnership interest, the qualified capital interest of 

13 the holder of such partnership interest immediately 

14 after such change shall not, for purposes of this sub15 section, be less than the fair market value of such 

16 interest (determined immediately before such 

17 change). 

18 ‘‘(4) SPECIAL RULE FOR TIERED PARTNER19 SHIPS.—Except as otherwise provided by the Sec20 retary, in the case of tiered partnerships, all items 

21 which are allocated in a manner which meets the re22 quirements of paragraph (1) to qualified capital in23 terests in a lower-tier partnership shall retain such 

24 character to the extent allocated on the basis of 


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1 qualified capital interests in any upper-tier partner2 ship. 

3 ‘‘(5) EXCEPTION FOR NO-SELF-CHARGED

4 CARRY AND MANAGEMENT FEE PROVISIONS.—Ex5 cept as otherwise provided by the Secretary, an in6 terest shall not fail to be treated as satisfying the 

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

8 allocations made by the partnership to such interest 

9 do not reflect the cost of services described in sub10 section (c)(2) which are provided (directly or indi11 rectly) to the partnership by the holder of such in12 terest (or a related person). 

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

14 case of any investment services partnership interest 

15 any portion of which is a qualified capital interest, 

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

17 gain or loss as bears the same proportion to the en18 tire amount of such gain or loss as— 

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

20 that would have been allocated to the qualified 

21 capital interest (consistent with the require22 ments of paragraph (1)) if the partnership had 

23 sold all of its assets at fair market value imme24 diately before the disposition, bears to 


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

2 that would have been so allocated to the invest3 ment services partnership interest of which such 

4 qualified capital interest is a part. 

5 ‘‘(7) QUALIFIED CAPITAL INTEREST.—For pur6 poses of this section— 

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

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

9 interest in the capital of the partnership as is 

10 attributable to— 

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

12 money or other property contributed to the 

13 partnership in exchange for such interest 

14 (determined without regard to section 

15 752(a)), 

16 ‘‘(ii) any amounts which have been in17 cluded in gross income under section 83 

18 with respect to the transfer of such inter19 est, and 

20 ‘‘(iii) the excess (if any) of— 

21 ‘‘(I) any items of income and 

22 gain taken into account under section 

23 702 with respect to such interest, over 

24 ‘‘(II) any items of deduction and 

25 loss so taken into account. 


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1 ‘‘(B) ADJUSTMENT TO QUALIFIED CAPITAL

2 INTEREST.— 

3 ‘‘(i) DISTRIBUTIONS AND LOSSES.— 

4 The qualified capital interest shall be re5 duced by distributions from the partner6 ship with respect to such interest and by 

7 the excess (if any) of the amount described 

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

9 amount described in subparagraph 

10 (A)(iii)(I). 

11 ‘‘(ii) SPECIAL RULE FOR CONTRIBU12 TIONS OF PROPERTY.—In the case of any 

13 contribution of property described in sub14 paragraph (A)(i) with respect to which the 

15 fair market value of such property is not 

16 equal to the adjusted basis of such prop17 erty immediately before such contribution, 

18 proper adjustments shall be made to the 

19 qualified capital interest to take into ac20 count such difference consistent with such 

21 regulations or other guidance as the Sec22 retary may provide. 

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

24 DISREGARDED.—No increase or decrease in the 

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1 sult from a termination, merger, consolidation, 

2 or division described in section 708, or any 

3 similar transaction. 

4 ‘‘(8) TREATMENT OF CERTAIN LOANS.— 

5 ‘‘(A) PROCEEDS OF PARTNERSHIP LOANS

6 NOT TREATED AS QUALIFIED CAPITAL INTER7 EST OF SERVICE PROVIDING PARTNERS.—For 

8 purposes of this subsection, an investment serv9 ices partnership interest shall not be treated as 

10 a qualified capital interest to the extent that 

11 such interest is acquired in connection with the 

12 proceeds of any loan or other advance made or 

13 guaranteed, directly or indirectly, by any other 

14 partner or the partnership (or any person re15 lated to any such other partner or the partner16 ship). The preceding sentence shall not apply to 

17 the extent the loan or other advance is repaid 

18 before the date of the enactment of this section 

19 unless such repayment is made with the pro20 ceeds of a loan or other advance described in 

21 the preceding sentence. 

22 ‘‘(B) REDUCTION IN ALLOCATIONS TO

23 QUALIFIED CAPITAL INTERESTS FOR LOANS

24 FROM NONSERVICE-PROVIDING PARTNERS TO

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1 section, any loan or other advance to the part2 nership made or guaranteed, directly or indi3 rectly, by a partner not providing services de4 scribed in subsection (c)(2) to the partnership 

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

6 taken into account in determining the qualified 

7 capital interests of the partners in the partner8 ship. 

9 ‘‘(9) SPECIAL RULE FOR QUALIFIED FAMILY

10 PARTNERSHIPS.— 

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

12 specified family partnership interest, paragraph 

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

14 phrase ‘and who are not related to the partner 

15 holding the qualified capital interest’. 

16 ‘‘(B) SPECIFIED FAMILY PARTNERSHIP IN17 TEREST.—For purposes of this paragraph, the 

18 term ‘specified family partnership interest’ 

19 means any investment services partnership in20 terest if— 

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

22 qualified family partnership, 

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

24 person or by a trust with respect to which 

25 each beneficiary is a grantor or a person 


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1 whose relationship to the grantor is de2 scribed in section 267(b)(1), and 

3 ‘‘(iii) all other interests in such quali4 fied family partnership with respect to 

5 which significant allocations are made 

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

7 and in comparison to the allocations made 

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

9 held by persons who— 

10 ‘‘(I) are related to the natural 

11 person or trust referred to in clause 

12 (ii), or 

13 ‘‘(II) provide services described 

14 in subsection (c)(2). 

15 ‘‘(C) QUALIFIED FAMILY PARTNERSHIP.— 

16 For purposes of this paragraph, the term 

17 ‘qualified family partnership’ means any part18 nership if— 

19 ‘‘(i) all of the capital and profits in20 terests of such partnership are held by— 

21 ‘‘(I) specified family members, 

22 ‘‘(II) any person closely related 

23 (within the meaning of subsection 

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

25 member, or 


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1 ‘‘(III) any other person (not de2 scribed in subclause (I) or (II)) if 

3 such interest is an investment services 

4 partnership interest with respect to 

5 such person, and 

6 ‘‘(ii) such partnership does not hold 

7 itself out to the public as an investment 

8 advisor. 

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

10 purposes of subparagraph (C), individuals shall 

11 be treated as specified family members if such 

12 individuals would be treated as one person 

13 under the rules of section 1361(c)(1) if the ap14 plicable date (within the meaning of subpara15 graph (B)(iii) thereof) were the latest of— 

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

17 the partnership, 

18 ‘‘(ii) the earliest date that the com19 mon ancestor holds a capital or profits in20 terest in the partnership, or 

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

22 section. 

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

24 WITH INVESTMENT MANAGEMENT SERVICES.— 

25 ‘‘(1) IN GENERAL.—If— 


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1 ‘‘(A) a person performs (directly or indi2 rectly) investment management services for any 

3 investment entity, 

4 ‘‘(B) such person holds (directly or indi5 rectly) a disqualified interest with respect to 

6 such entity, and 

7 ‘‘(C) the value of such interest (or pay8 ments thereunder) is substantially related to 

9 the amount of income or gain (whether or not 

10 realized) from the assets with respect to which 

11 the investment management services are per12 formed, 

13 any income or gain with respect to such interest 

14 shall be treated as ordinary income. Rules similar to 

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

16 for purposes of this subsection. 

17 ‘‘(2) DEFINITIONS.—For purposes of this sub18 section— 

19 ‘‘(A) DISQUALIFIED INTEREST.— 

20 ‘‘(i) IN GENERAL.—The term ‘dis21 qualified interest’ means, with respect to 

22 any investment entity— 

23 ‘‘(I) any interest in such entity 

24 other than indebtedness, 


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1 ‘‘(II) convertible or contingent 

2 debt of such entity, 

3 ‘‘(III) any option or other right 

4 to acquire property described in sub5 clause (I) or (II), and 

6 ‘‘(IV) any derivative instrument 

7 entered into (directly or indirectly) 

8 with such entity or any investor in 

9 such entity. 

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

11 not include— 

12 ‘‘(I) a partnership interest, 

13 ‘‘(II) except as provided by the 

14 Secretary, any interest in a taxable 

15 corporation, and 

16 ‘‘(III) except as provided by the 

17 Secretary, stock in an S corporation. 

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

19 ‘taxable corporation’ means— 

20 ‘‘(i) a domestic C corporation, or 

21 ‘‘(ii) a foreign corporation substan22 tially all of the income of which is— 

23 ‘‘(I) effectively connected with 

24 the conduct of a trade or business in 

25 the United States, or 


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1 ‘‘(II) subject to a comprehensive 

2 foreign income tax (as defined in sec3 tion 457A(d)(2)). 

4 ‘‘(C) INVESTMENT MANAGEMENT SERV5 ICES.—The term ‘investment management serv6 ices’ means a substantial quantity of any of the 

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

8 ‘‘(D) INVESTMENT ENTITY.—The term ‘in9 vestment entity’ means any entity which, if it 

10 were a partnership, would be an investment 

11 partnership. 

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

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

14 of a domestic C corporation— 

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

16 any item allocated to such corporation with respect 

17 to any investment services partnership interest (or 

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

19 such an interest), and 

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

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

22 such regulations or other guidance as is necessary or ap23 propriate to carry out the purposes of this section, includ24 ing regulations or other guidance to— 


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1 ‘‘(1) require such reporting and recordkeeping 

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

3 the Secretary may prescribe for purposes of enabling 

4 the partnership to meet the requirements of section 

5 6031 with respect to any item described in section 

6 702(a)(9), 

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

8 this section (including treating related persons as 

9 not related to one another) to the extent such modi10 fication is consistent with the purposes of this sec11 tion, 

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

13 this section (including through the use of qualified 

14 family partnerships), and 

15 ‘‘(4) coordinate this section with the other pro16 visions of this title. 

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

18 on certain underpayments due to the avoidance of this sec19 tion, see section 6662.’’. 

20 (b) APPLICATION OF SECTION 751 TO INDIRECT DIS21 POSITIONS OF INVESTMENT SERVICES PARTNERSHIP IN22 TERESTS.— 

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

24 751 is amended by striking ‘‘or’’ at the end of para25 graph (1), by inserting ‘‘or’’ at the end of paragraph 


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1 (2), and by inserting after paragraph (2) the fol2 lowing new paragraph: 

3 ‘‘(3) investment services partnership interests 

4 held by the partnership,’’. 

5 (2) CERTAIN DISTRIBUTIONS TREATED AS

6 SALES OR EXCHANGES.—Subparagraph (A) of sec7 tion 751(b)(1) is amended by striking ‘‘or’’ at the 

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

9 clause (ii), and by inserting after clause (ii) the fol10 lowing new clause: 

11 ‘‘(iii) investment services partnership 

12 interests held by the partnership,’’. 

13 (3) APPLICATION OF SPECIAL RULES IN THE

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

15 section 751 is amended— 

16 (A) by striking ‘‘or’’ at the end of para17 graph (1), by inserting ‘‘or’’ at the end of para18 graph (2), and by inserting after paragraph (2) 

19 the following new paragraph: 

20 ‘‘(3) an investment services partnership interest 

21 held by the partnership,’’, and 

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

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

24 holds an investment services partnership inter25 est).’’. 


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1 (4) INVESTMENT SERVICES PARTNERSHIP IN2 TERESTS; QUALIFIED CAPITAL INTERESTS.—Section 

3 751 is amended by adding at the end the following 

4 new subsection: 

5 ‘‘(g) INVESTMENT SERVICES PARTNERSHIP INTER6 ESTS.—For purposes of this section— 

7 ‘‘(1) IN GENERAL.—The term ‘investment serv8 ices partnership interest’ has the meaning given 

9 such term by section 710(c). 

10 ‘‘(2) ADJUSTMENTS FOR QUALIFIED CAPITAL

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

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

13 include so much of such amount as is attributable 

14 to any portion of the investment services partnership 

15 interest which is a qualified capital interest (deter16 mined under rules similar to the rules of section 

17 710(d)). 

18 ‘‘(3) EXCEPTION FOR PUBLICLY TRADED PART19 NERSHIPS.—Except as otherwise provided by the 

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

21 in a publicly traded partnership (as defined in sec22 tion 7704) to which subsection (a) applies— 

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

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

25 (f)(3), and 


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

2 owning its proportionate share of the property 

3 of any other partnership in which it is a part4 ner. 

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

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

7 paragraph (3) thereof shall be recognized notwith8 standing any other provision of this title. 

9 ‘‘(5) COORDINATION WITH INVENTORY

10 ITEMS.—An investment services partnership interest 

11 held by the partnership shall not be treated as an 

12 inventory item of the partnership. 

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

14 Under regulations or other guidance prescribed by 

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

16 respect to any amount to which section 710 applies. 

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

18 shall prescribe regulations or other guidance which 

19 provide the acceptable methods for valuing invest20 ment services partnership interests for purposes of 

21 this section.’’. 

22 (c) TREATMENT FOR PURPOSES OF SECTION

23 7704.—Subsection (d) of section 7704 is amended by add24 ing at the end the following new paragraph: 


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1 ‘‘(6) INCOME FROM CERTAIN CARRIED INTER2 ESTS NOT QUALIFIED.— 

3 ‘‘(A) IN GENERAL.—Specified carried in4 terest income shall not be treated as qualifying 

5 income. 

6 ‘‘(B) SPECIFIED CARRIED INTEREST IN7 COME.—For purposes of this paragraph— 

8 ‘‘(i) IN GENERAL.—The term ‘speci9 fied carried interest income’ means— 

10 ‘‘(I) any item of income or gain 

11 allocated to an investment services 

12 partnership interest (as defined in 

13 section 710(c)) held by the partner14 ship, 

15 ‘‘(II) any gain on the disposition 

16 of an investment services partnership 

17 interest (as so defined) or a partner18 ship interest to which (in the hands of 

19 the partnership) section 751 applies, 

20 and 

21 ‘‘(III) any income or gain taken 

22 into account by the partnership under 

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

24 710. 


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1 ‘‘(ii) EXCEPTION FOR QUALIFIED CAP2 ITAL INTERESTS.—A rule similar to the 

3 rule of section 710(d) shall apply for pur4 poses of clause (i). 

5 ‘‘(C) COORDINATION WITH OTHER PROVI6 SIONS.—Subparagraph (A) shall not apply to 

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

8 much of paragraph (1)(F) as relates to para9 graph (1)(E)). 

10 ‘‘(D) SPECIAL RULES FOR CERTAIN PART11 NERSHIPS.— 

12 ‘‘(i) CERTAIN PARTNERSHIPS OWNED

13 BY REAL ESTATE INVESTMENT TRUSTS.— 

14 Subparagraph (A) shall not apply in the 

15 case of a partnership which meets each of 

16 the following requirements: 

17 ‘‘(I) Such partnership is treated 

18 as publicly traded under this section 

19 solely by reason of interests in such 

20 partnership being convertible into in21 terests in a real estate investment 

22 trust which is publicly traded. 

23 ‘‘(II) Fifty percent or more of 

24 the capital and profits interests of 

25 such partnership are owned, directly 


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1 or indirectly, at all times during the 

2 taxable year by such real estate in3 vestment trust (determined with the 

4 application of section 267(c)). 

5 ‘‘(III) Such partnership meets 

6 the requirements of paragraphs (2), 

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

8 ‘‘(ii) CERTAIN PARTNERSHIPS OWN9 ING OTHER PUBLICLY TRADED PARTNER10 SHIPS.—Subparagraph (A) shall not apply 

11 in the case of a partnership which meets 

12 each of the following requirements: 

13 ‘‘(I) Substantially all of the as14 sets of such partnership consist of in15 terests in one or more publicly traded 

16 partnerships (determined without re17 gard to subsection (b)(2)). 

18 ‘‘(II) Substantially all of the in19 come of such partnership is ordinary 

20 income or section 1231 gain (as de21 fined in section 1231(a)(3)). 

22 ‘‘(E) TRANSITIONAL RULE.—Subpara23 graph (A) shall not apply to any taxable year 

24 of the partnership beginning before the date 


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1 which is 10 years after the date of the enact2 ment of this paragraph.’’. 

3 (d) IMPOSITION OF PENALTY ON UNDERPAY4 MENTS.— 

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

6 6662 is amended by inserting after paragraph (7) 

7 the following new paragraph: 

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

9 regulations or other guidance prescribed under sec10 tion 710(g) to prevent the avoidance of the purposes 

11 of section 710.’’. 

12 (2) AMOUNT OF PENALTY.— 

13 (A) IN GENERAL.—Section 6662 is amend14 ed by adding at the end the following new sub15 section: 

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

17 TRANSFERRED FOR INVESTMENT MANAGEMENT SERV18 ICES.—In the case of any portion of an underpayment to 

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

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

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

22 (B) CONFORMING AMENDMENT.—Subpara23 graph (B) of section 6662A(e)(2) is amended 

24 by striking ‘‘or (i)’’ and inserting ‘‘, (i), or (k)’’. 


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1 (3) SPECIAL RULES FOR APPLICATION OF REA2 SONABLE CAUSE EXCEPTION.—Subsection (c) of sec3 tion 6664 is amended— 

4 (A) by redesignating paragraphs (3) and 

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

6 (B) by striking ‘‘paragraph (3)’’ in para7 graph (5)(A), as so redesignated, and inserting 

8 ‘‘paragraph (4)’’; and 

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

10 following new paragraph: 

11 ‘‘(3) SPECIAL RULE FOR UNDERPAYMENTS AT12 TRIBUTABLE TO INVESTMENT MANAGEMENT SERV13 ICES.— 

14 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

15 not apply to any portion of an underpayment to 

16 which section 6662 applies by reason of sub17 section (b)(8) unless— 

18 ‘‘(i) the relevant facts affecting the 

19 tax treatment of the item are adequately 

20 disclosed, 

21 ‘‘(ii) there is or was substantial au22 thority for such treatment, and 

23 ‘‘(iii) the taxpayer reasonably believed 

24 that such treatment was more likely than 

25 not the proper treatment. 


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1 ‘‘(B) RULES RELATING TO REASONABLE

2 BELIEF.—Rules similar to the rules of sub3 section (d)(3) shall apply for purposes of sub4 paragraph (A)(iii).’’. 

5 (e) INCOME AND LOSS FROM INVESTMENT SERVICES

6 PARTNERSHIP INTERESTS TAKEN INTO ACCOUNT IN DE7 TERMINING NET EARNINGS FROM SELF-EMPLOYMENT.— 

8 (1) INTERNAL REVENUE CODE.— 

9 (A) IN GENERAL.—Section 1402(a) is 

10 amended by striking ‘‘and’’ at the end of para11 graph (16), by striking the period at the end of 

12 paragraph (17) and inserting ‘‘; and’’, and by 

13 inserting after paragraph (17) the following 

14 new paragraph: 

15 ‘‘(18) 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) with respect to any 

19 entity, investment services partnership income or 

20 loss (as defined in subsection (m)) of such individual 

21 with respect to such entity shall be taken into ac22 count in determining the net earnings from self-em23 ployment of such individual.’’. 


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1 (B) INVESTMENT SERVICES PARTNERSHIP

2 INCOME OR LOSS.—Section 1402 is amended by 

3 adding at the end the following new subsection: 

4 ‘‘(m) INVESTMENT SERVICES PARTNERSHIP INCOME

5 OR LOSS.—For purposes of subsection (a)— 

6 ‘‘(1) IN GENERAL.—The term ‘investment serv7 ices partnership income or loss’ means, with respect 

8 to any investment services partnership interest (as 

9 defined in section 710(c)) or disqualified interest (as 

10 defined in section 710(e)), the net of— 

11 ‘‘(A) the amounts treated as ordinary in12 come or ordinary loss under subsections (b) and 

13 (e) of section 710 with respect to such interest, 

14 ‘‘(B) all items of income, gain, loss, and 

15 deduction allocated to such interest, and 

16 ‘‘(C) the amounts treated as realized from 

17 the sale or exchange of property other than a 

18 capital asset under section 751 with respect to 

19 such interest. 

20 ‘‘(2) EXCEPTION FOR QUALIFIED CAPITAL IN21 TERESTS.—A rule similar to the rule of section 

22 710(d) shall apply for purposes of applying para23 graph (1)(B).’’. 

24 (2) SOCIAL SECURITY ACT.—Section 211(a) of 

25 the Social Security Act is amended by striking 


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1 ‘‘and’’ at the end of paragraph (15), by striking the 

2 period at the end of paragraph (16) and inserting ‘‘; 

3 and’’, and by inserting after paragraph (16) the fol4 lowing new paragraph: 

5 ‘‘(17) Notwithstanding the preceding provisions 

6 of this subsection, in the case of any individual en7 gaged in the trade or business of providing services 

8 described in section 710(c)(2) of the Internal Rev9 enue Code of 1986 with respect to any entity, invest10 ment services partnership income or loss (as defined 

11 in section 1402(m) of such Code) shall be taken into 

12 account in determining the net earnings from self13 employment of such individual.’’. 

14 (f) SEPARATE ACCOUNTING BY PARTNER.—Section 

15 702(a) is amended by striking ‘‘and’’ at the end of para16 graph (7), by striking the period at the end of paragraph 

17 (8) and inserting ‘‘, and’’, and by inserting after para18 graph (8) the following: 

19 ‘‘(9) any amount treated as ordinary income or 

20 loss under subsection (a), (b), or (e) of section 

21 710.’’. 

22 (g) CONFORMING AMENDMENTS.— 

23 (1) Subsection (d) of section 731 is amended by 

24 inserting ‘‘section 710(b)(4) (relating to distribuVerDate Sep 11 2014 20:03 Sep 17, 2019 Jkt 089200 PO 00000 Frm 00098 Fmt 6652 Sfmt 6201 E:\BILLS\H4321.IH H4321

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1 tions of partnership property),’’ after ‘‘to the extent 

2 otherwise provided by’’. 

3 (2) Section 741 is amended by inserting ‘‘or 

4 section 710 (relating to special rules for partners 

5 providing investment management services to part6 nerships)’’ before the period at the end. 

7 (3) The table of sections for part I of sub8 chapter K of chapter 1 is amended by adding at the 

9 end the following new item: 

‘‘Sec. 710. Special rules for partners providing investment management services 

to partnerships.’’. 

10 (4) Part IV of subchapter O of chapter 1 is 

11 amended by striking section 1061, and the table of 

12 sections for such part is amended by striking the 

13 item relating to section 1061. 

14 (h) EFFECTIVE DATE.— 

15 (1) IN GENERAL.—Except as otherwise pro16 vided in this subsection, the amendments made by 

17 this section shall apply to taxable years ending after 

18 the date of the enactment of this Act. 

19 (2) PARTNERSHIP TAXABLE YEARS WHICH IN20 CLUDE EFFECTIVE DATE.—In applying section 

21 710(a) of the Internal Revenue Code of 1986 (as 

22 added by this section) in the case of any partnership 

23 taxable year which includes the date of the enact24 ment of this Act, the amount of the net capital gain 


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1 referred to in such section shall be treated as being 

2 the lesser of the net capital gain for the entire part3 nership taxable year or the net capital gain deter4 mined by only taking into account items attributable 

5 to the portion of the partnership taxable year which 

6 is after such date. 

7 (3) DISPOSITIONS OF PARTNERSHIP INTER8 ESTS.— 

9 (A) IN GENERAL.—Section 710(b) of such 

10 Code (as added by this section) shall apply to 

11 dispositions and distributions after the date of 

12 the enactment of this Act. 

13 (B) INDIRECT DISPOSITIONS.—The amend14 ments made by subsection (b) shall apply to 

15 transactions after the date of the enactment of 

16 this Act. 

17 (4) OTHER INCOME AND GAIN IN CONNECTION

18 WITH INVESTMENT MANAGEMENT SERVICES.—Sec19 tion 710(e) of such Code (as added by this section) 

20 shall take effect on the date of the enactment of this 

21 Act. 


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1 SEC. 403. RETURN TO PRE-2018 ESTATE AND GIFT TAX 

2 BASIC EXCLUSION AMOUNT. 

3 (a) IN GENERAL.—Section 2010(c)(3) of the Internal 

4 Revenue Code of 1986 is amended by striking subpara5 graph (C). 

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

7 this section shall apply to estates of decedents dying and 

8 gifts made after the date of the enactment of this Act. 

Æ 


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