IB 
Union Calendar No. 257 
111TH CONGRESS 
2D SESSION 
H. R. 4849 
[Report No. 111–447] 
To amend the Internal Revenue Code of 1986 to provide tax incentives 
for small business job creation, extend the Build America Bonds pro-
gram, provide other infrastructure job creation tax incentives, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 16, 2010 
Mr. LEVIN (for himself, Mr. RANGEL, Mr. LEWIS of Georgia, Mr. NEAL of 
Massachusetts, Mr. POMEROY, Mr. THOMPSON of California, Mr. LARSON 
of Connecticut, Mr. KIND, Mr. PASCRELL, Ms. BERKLEY, Mr. CROWLEY, 
Mr. VAN HOLLEN, Ms. SCHWARTZ, Mr. DAVIS of Alabama, Mr. DAVIS 
of Illinois, Mr. ETHERIDGE, Ms. LINDA T. SA´NCHEZ of California, and 
Mr. YARMUTH) introduced the following bill; which was referred to the 
Committee on Ways and Means 
MARCH 19, 2010 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on March 16, 2010] 
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A BILL 
To amend the Internal Revenue Code of 1986 to provide 
tax incentives for small business job creation, extend 
the Build America Bonds program, provide other infra-
structure job creation tax incentives, and for other pur-
poses. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Small Business and Infrastructure Jobs Tax Act of 2010’’. 
(b) AMENDMENT OF 1986 CODE.—Except as otherwise 
expressly provided, whenever in this Act an amendment or 
repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be consid-
ered to be made to a section or other provision of the Inter-
nal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; etc. 
TITLE I—SMALL BUSINESS TAX INCENTIVES 
Subtitle A—General Provisions 
Sec. 101. Temporary exclusion of 100 percent of gain on certain small business 
stock. 
Subtitle B—Limitations and Reporting on Certain Penalties 
Sec. 111. Limitation on penalty for failure to disclose certain information. 
Sec. 112. Annual reports on penalties and certain other enforcement actions. 
Subtitle C—Other Provisions 
Sec. 121. Nonrecourse small business investment company loans from the Small 
Business Administration treated as amounts at risk. 
Sec. 122. Increase in amount allowed as deduction for start-up expenditures. 
TITLE II—INFRASTRUCTURE INCENTIVES 
Sec. 201. Extension of Build America Bonds. 
Sec. 202. Exempt-facility bonds for sewage and water supply facilities. 
Sec. 203. Extension of exemption from alternative minimum tax treatment for 
certain tax-exempt bonds. 
Sec. 204. Elective payments in lieu of low income housing credits. 
Sec. 205. Extension and additional allocations of recovery zone bond authority. 
Sec. 206. Allowance of new markets tax credit against alternative minimum tax. 
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TITLE III—REVENUE PROVISIONS 
Sec. 301. Limitation on treaty benefits for certain deductible payments. 
Sec. 302. Treatment of securities of a controlled corporation exchanged for assets 
in certain reorganizations. 
Sec. 303. Repeal of special rules for interest and dividends received from persons 
meeting the 80-percent foreign business requirements. 
Sec. 304. Information reporting for rental property expense payments. 
Sec. 305. Application of levy to payments to Federal vendors relating to property. 
Sec. 306. Application of continuous levy to employment tax liability of certain 
Federal contractors. 
Sec. 307. Required minimum 10-year term, etc., for grantor retained annuity 
trusts. 
Sec. 308. Increase in information return penalties. 
TITLE I—SMALL BUSINESS TAX 
INCENTIVES 
Subtitle A—General Provisions 
SEC. 101. TEMPORARY EXCLUSION OF 100 PERCENT OF 
GAIN ON CERTAIN SMALL BUSINESS STOCK. 
(a) IN GENERAL.—Subsection (a) of section 1202 is 
amended by adding at the end the following new paragraph: 
‘‘(4) SPECIAL 100 PERCENT EXCLUSION.—In the 
case of qualified small business stock acquired after 
March 15, 2010, and before January 1, 2012— 
‘‘(A) paragraph (1) shall be applied by sub-
stituting ‘100 percent’ for ‘50 percent’, 
‘‘(B) paragraph (2) shall not apply, and 
‘‘(C) paragraph (7) of section 57(a) shall 
not apply.’’. 
(b) CONFORMING AMENDMENTS.—Paragraph (3) of 
section 1202(a) is amended— 
(1) by striking ‘‘after the date of the enactment 
of this paragraph and before January 1, 2011’’ and 
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inserting ‘‘after February 17, 2009, and before March 
16, 2010’’, and 
(2) by striking ‘‘SPECIAL RULES FOR 2009 AND 
2010’’ in the heading and inserting ‘‘SPECIAL 75 PER-
CENT EXCLUSION’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to stock acquired after March 15, 2010. 
Subtitle B—Limitations and 
Reporting on Certain Penalties 
SEC. 111. LIMITATION ON PENALTY FOR FAILURE TO DIS-
CLOSE CERTAIN INFORMATION. 
(a) IN GENERAL.—Subsection (b) of section 6707A is 
amended to read as follows: 
‘‘(b) AMOUNT OF PENALTY.— 
‘‘(1) IN GENERAL.—Except as otherwise provided 
in this subsection, the amount of the penalty under 
subsection (a) with respect to any reportable trans-
action shall be 75 percent of the decrease in tax shown 
on the return as a result of such transaction (or 
which would have resulted from such transaction if 
such transaction were respected for Federal tax pur-
poses). 
‘‘(2) MAXIMUM
PENALTY.—The amount of the 
penalty under subsection (a) with respect to any re-
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portable transaction for any taxable year shall not ex-
ceed— 
‘‘(A) in the case of a listed transaction, 
$200,000 ($100,000 in the case of a natural per-
son), or 
‘‘(B) in the case of any other reportable 
transaction, $50,000 ($10,000 in the case of a 
natural person). 
‘‘(3) MINIMUM
PENALTY.—The amount of the 
penalty under subsection (a) with respect to any 
transaction for any taxable year shall not be less than 
$10,000 ($5,000 in the case of a natural person).’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to penalties assessed after December 31, 
2006. 
SEC. 112. ANNUAL REPORTS ON PENALTIES AND CERTAIN 
OTHER ENFORCEMENT ACTIONS. 
(a) IN GENERAL.—The Commissioner of Internal Rev-
enue, in consultation with the Secretary of the Treasury, 
shall submit to the Committee on Ways and Means of the 
House of Representatives and the Committee on Finance 
of the Senate an annual report on the penalties assessed 
by the Internal Revenue Service during the preceding year 
under each of the following provisions of the Internal Rev-
enue Code of 1986: 
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(1) Section 6662A (relating to accuracy-related 
penalty on understatements with respect to reportable 
transactions). 
(2) Section 6700(a) (relating to promoting abu-
sive tax shelters). 
(3) Section 6707 (relating to failure to furnish 
information regarding reportable transactions). 
(4) Section 6707A (relating to failure to include 
reportable transaction information with return). 
(5) Section 6708 (relating to failure to maintain 
lists of advisees with respect to reportable trans-
actions). 
(b) ADDITIONAL INFORMATION.—The report required 
under subsection (a) shall also include information on the 
following with respect to each year: 
(1) Any action taken under section 330(b) of 
title 31, United States Code, with respect to any re-
portable transaction (as defined in section 6707A(c) 
of the Internal Revenue Code of 1986). 
(2) Any extension of the time for assessment of 
tax enforced, or assessment of any amount under such 
an extension, under paragraph (10) of section 6501(c) 
of the Internal Revenue Code of 1986. 
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(c) DATE
OF REPORT.—The first report required 
under subsection (a) shall be submitted not later than De-
cember 31, 2010. 
Subtitle C—Other Provisions 
SEC. 121. NONRECOURSE SMALL BUSINESS INVESTMENT 
COMPANY LOANS FROM THE SMALL BUSI-
NESS 
ADMINISTRATION 
TREATED 
AS 
AMOUNTS AT RISK. 
(a) IN
GENERAL.—Subparagraph (B) of section 
465(b)(6) is amended to read as follows: 
‘‘(B) QUALIFIED
NONRECOURSE
FINANC-
ING.—For purposes of this paragraph— 
‘‘(i) IN GENERAL.—The term ‘qualified 
nonrecourse financing’ means any financ-
ing— 
‘‘(I) which is qualified real prop-
erty financing or qualified SBIC fi-
nancing, 
‘‘(II) except to the extent provided 
in regulations, with respect to which 
no person is personally liable for re-
payment, and 
‘‘(III) which is not convertible 
debt. 
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‘‘(ii) QUALIFIED REAL PROPERTY FI-
NANCING.—The term ‘qualified real prop-
erty 
financing’ 
means 
any 
financing 
which— 
‘‘(I) is borrowed by the taxpayer 
with respect to the activity of holding 
real property, 
‘‘(II) is secured by real property 
used in such activity, and 
‘‘(III) is borrowed by the taxpayer 
from a qualified person or represents a 
loan from any Federal, State, or local 
government or instrumentality thereof, 
or is guaranteed by any Federal, State, 
or local government. 
‘‘(iii) QUALIFIED
SBIC
FINANCING.— 
The term ‘qualified SBIC financing’ means 
any financing which— 
‘‘(I) is borrowed by a small busi-
ness investment company (within the 
meaning of section 301 of the Small 
Business Investment Act of 1958), and 
‘‘(II) is borrowed from, or guar-
anteed by, the Small Business Admin-
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istration under the authority of section 
303(b) of such Act.’’. 
(b) CONFORMING AMENDMENTS.—Subparagraph (A) 
of section 465(b)(6) is amended— 
(1) by striking ‘‘in the case of an activity of 
holding real property,’’, and 
(2) by striking ‘‘which is secured by real prop-
erty used in such activity’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to loans and guarantees made after the 
date of the enactment of this Act. 
SEC. 122. INCREASE IN AMOUNT ALLOWED AS DEDUCTION 
FOR START-UP EXPENDITURES. 
(a) IN GENERAL.—Subsection (b) of section 195 is 
amended by adding at the end the following new paragraph: 
‘‘(3) INCREASED
LIMITATION
FOR
TAXABLE 
YEARS BEGINNING IN 2010 OR 2011.—In the case of 
any taxable year beginning in 2010 or 2011, para-
graph (1)(A)(ii) shall be applied— 
‘‘(A) by substituting ‘$20,000’ for ‘$5,000’, 
and 
‘‘(B) 
by 
substituting 
‘$75,000’ 
for 
‘$50,000’.’’. 
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(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2009. 
TITLE II—INFRASTRUCTURE 
INCENTIVES 
SEC. 201. EXTENSION OF BUILD AMERICA BONDS. 
(a) IN
GENERAL.—Subparagraph (B) of section 
54AA(d)(1) is amended by striking ‘‘January 1, 2011’’ and 
inserting ‘‘April 1, 2013’’. 
(b) EXTENSION OF PAYMENTS TO ISSUERS.— 
(1) IN GENERAL.—Subsection (a) of section 6431 
is amended by striking ‘‘January 1, 2011’’ and in-
serting ‘‘April 1, 2013’’. 
(2) CONFORMING AMENDMENTS.—Subsection (g) 
of section 54AA is amended— 
(A) by striking ‘‘January 1, 2011’’ and in-
serting ‘‘April 1, 2013’’, and 
(B) by striking ‘‘QUALIFIED BONDS ISSUED 
BEFORE 2011’’ in the heading and inserting 
‘‘CERTAIN QUALIFIED BONDS’’. 
(c) REDUCTION IN PERCENTAGE OF PAYMENTS TO 
ISSUERS.—Subsection (b) of section 6431 is amended— 
(1) by striking ‘‘The Secretary’’ and inserting 
the following: 
‘‘(1) IN GENERAL.—The Secretary’’, 
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(2) by striking ‘‘35 percent’’ and inserting ‘‘the 
applicable percentage’’, and 
(3) by adding at the end the following new para-
graph: 
‘‘(2) APPLICABLE
PERCENTAGE.—For purposes 
of this subsection, the term ‘applicable percentage’ 
means the percentage determined in accordance with 
the following table: 
‘‘In the case of a qualified bond issued during cal-
endar year: 
The applicable percentage 
is: 
2009 or 2010 ..................................................................
35 percent 
2011 ................................................................................
33 percent 
2012 ................................................................................
31 percent 
2013 ................................................................................
30 percent’’. 
(d) CURRENT REFUNDINGS PERMITTED.—Subsection 
(g) of section 54AA is amended by adding at the end the 
following new paragraph: 
‘‘(3) TREATMENT
OF
CURRENT
REFUNDING 
BONDS.— 
‘‘(A) IN
GENERAL.—For purposes of this 
subsection, the term ‘qualified build America 
bond’ includes any bond (or series of bonds) 
issued to refund a qualified build America bond 
if— 
‘‘(i) the average maturity date of the 
issue of which the refunding bond is a part 
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is not later than the average maturity date 
of the bonds to be refunded by such issue, 
‘‘(ii) the amount of the refunding bond 
does not exceed the outstanding amount of 
the refunded bond, and 
‘‘(iii) the refunded bond is redeemed 
not later than 90 days after the date of the 
issuance of the refunding bond. 
‘‘(B) APPLICABLE
PERCENTAGE.—In the 
case of a refunding bond referred to in subpara-
graph (A), the applicable percentage with respect 
to such bond under section 6431(b) shall be the 
lowest percentage specified in paragraph (2) of 
such section. 
‘‘(C) DETERMINATION OF AVERAGE MATU-
RITY.—For purposes of subparagraph (A)(i), av-
erage maturity shall be determined in accord-
ance with section 147(b)(2)(A).’’. 
(e) CLARIFICATION RELATED TO LEVEES AND FLOOD 
CONTROL
PROJECTS.—Subparagraph 
(A) 
of 
section 
54AA(g)(2) is amended by inserting ‘‘(including capital ex-
penditures for levees and other flood control projects)’’ after 
‘‘capital expenditures’’. 
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SEC. 202. EXEMPT-FACILITY BONDS FOR SEWAGE AND 
WATER SUPPLY FACILITIES. 
(a) BONDS FOR WATER AND SEWAGE FACILITIES EX-
EMPT FROM VOLUME CAP ON PRIVATE ACTIVITY BONDS.— 
(1) IN
GENERAL.—Paragraph (3) of section 
146(g) is amended by inserting ‘‘(4), (5),’’ after 
‘‘(2),’’. 
(2) CONFORMING AMENDMENT.—Paragraphs (2) 
and (3)(B) of section 146(k) are both amended by 
striking ‘‘(4), (5), (6),’’ and inserting ‘‘(6)’’. 
(b) TAX-EXEMPT ISSUANCE BY INDIAN TRIBAL GOV-
ERNMENTS.— 
(1) IN GENERAL.—Subsection (c) of section 7871 
is amended by adding at the end the following new 
paragraph: 
‘‘(4) EXCEPTION FOR BONDS FOR WATER AND 
SEWAGE FACILITIES.—Paragraph (2) shall not apply 
to an exempt facility bond 95 percent or more of the 
net proceeds (as defined in section 150(a)(3)) of which 
are to be used to provide facilities described in para-
graph (4) or (5) of section 142(a).’’. 
(2) CONFORMING AMENDMENT.—Paragraph (2) 
of section 7871(c) is amended by striking ‘‘paragraph 
(3)’’ and inserting ‘‘paragraphs (3) and (4)’’. 
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(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to obligations issued after the date of 
the enactment of this Act. 
SEC. 203. EXTENSION OF EXEMPTION FROM ALTERNATIVE 
MINIMUM TAX TREATMENT FOR CERTAIN 
TAX-EXEMPT BONDS. 
(a) IN GENERAL.—Clause (vi) of section 57(a)(5)(C) 
is amended— 
(1) by striking ‘‘January 1, 2011’’ in subclause 
(I) and inserting ‘‘January 1, 2012’’, and 
(2) by striking ‘‘AND 2010’’ in the heading and 
inserting ‘‘, 2010, AND 2011’’. 
(b) ADJUSTED CURRENT EARNINGS.—Clause (iv) of 
section 56(g)(4)(B) is amended— 
(1) by striking ‘‘January 1, 2011’’ in subclause 
(I) and inserting ‘‘January 1, 2012’’, and 
(2) by striking ‘‘AND 2010’’ in the heading and 
inserting ‘‘, 2010, AND 2011’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to obligations issued after December 31, 
2010. 
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SEC. 204. ELECTIVE PAYMENTS IN LIEU OF LOW INCOME 
HOUSING CREDITS. 
(a) IN GENERAL.—Chapter 65 (relating to abatements, 
credits, and refunds) is amended by adding at the end the 
following new subchapter: 
‘‘Subchapter C—Direct Payment Provisions 
‘‘Sec. 6451. Elective payments in lieu of low income housing credit for bond-fi-
nanced buildings. 
‘‘SEC. 6451. ELECTIVE PAYMENTS IN LIEU OF LOW INCOME 
HOUSING 
CREDIT 
FOR 
BOND-FINANCED 
BUILDINGS. 
‘‘(a) IN GENERAL.—Any person making an election 
under this section with respect to any qualified bond-fi-
nanced low-income building originally placed in service by 
such person during the taxable year shall be treated as mak-
ing a payment, against the tax imposed by subtitle A for 
the taxable year, equal to the direct payment amount with 
respect to such building. Such payment shall be treated as 
made on the later of the due date of the return of such tax 
or the date on which such return is filed. 
‘‘(b) QUALIFIED BOND-FINANCED LOW-INCOME BUILD-
ING.—For purposes of this section, the term ‘qualified bond- 
financed low-income building’ means any qualified low-in-
come building to which paragraph (1) of section 42(h) does 
not apply by reason of paragraph (4)(B) of such section. 
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‘‘(c) DIRECT PAYMENT AMOUNT.—For purposes of this 
section, the term ‘direct payment amount’ means, with re-
spect to any building, 25.5 percent of the qualified basis 
of such building. 
‘‘(d) SPECIAL
RULES
FOR
CERTAIN
NON-TAX-
PAYERS.— 
‘‘(1) DENIAL OF PAYMENT.—Subsection (a) shall 
not apply with respect to any building placed in serv-
ice by— 
‘‘(A) any governmental entity, or 
‘‘(B) any organization described in section 
501(c) or 401(a) and exempt from tax under sec-
tion 501(a). 
‘‘(2) SPECIAL RULES FOR PARTNERSHIPS AND S 
CORPORATIONS.—In the case of property originally 
placed in service by a partnership or an S corpora-
tion— 
‘‘(A) the election under subsection (a) may 
be made only by such partnership or S corpora-
tion, 
‘‘(B) such partnership or S corporation 
shall be treated as making the payment referred 
to in subsection (a) only to the extent of the pro-
portionate share of such partnership or S cor-
poration as is owned by persons who would be 
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treated as making such payment if the building 
were placed in service by such persons, and 
‘‘(C) the return required to be made by such 
partnership or S corporation under section 6031 
or 6037 (as the case may be) shall be treated as 
a return of tax for purposes of subsection (a). 
For purposes of subparagraph (B), rules similar to the rules 
of section 168(h)(6) (other than subparagraph (F) thereof) 
shall apply. 
‘‘ 
‘‘(e) COORDINATION WITH LOW INCOME HOUSING 
CREDIT.—In the case of any property with respect to which 
an election is made under this section, no credit shall be 
determined under section 42 with respect to such building 
for any taxable year. 
‘‘(f) OTHER DEFINITIONS AND SPECIAL RULES.—For 
purposes of this section— 
‘‘(1) OTHER DEFINITIONS.—Terms used in this 
section which are also used in section 42 shall have 
the same meaning for purposes of this section as when 
used in such section. 
‘‘(2) 
APPLICATION
OF
RECAPTURE
RULES, 
ETC.—Except as otherwise provided by the Secretary, 
rules similar to the rules of section 42 shall apply, in-
cluding the recapture rules of section 42(j). 
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‘‘(3) PROVISION
OF
INFORMATION.—A person 
shall not be treated as having elected the application 
of this section unless the taxpayer provides such infor-
mation as the Secretary may require for purposes of 
verifying the proper amount to be treated as a pay-
ment under subsection (a) and evaluating the effec-
tiveness of this section. 
‘‘(4) EXCLUSION
FROM
GROSS
INCOME.—Any 
credit or refund allowed or made by reason of this 
section shall not be includible in gross income or al-
ternative minimum taxable income. 
‘‘(g) TERMINATION.—Subsection (a) shall not apply 
with respect to any building placed in service during a tax-
able year beginning after December 31, 2010.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Subparagraph (A) of section 6211(b)(4) is 
amended by inserting ‘‘and subchapter C of chapter 
65 (including any payment treated as made under 
such subchapter)’’ after ‘‘6431’’. 
(2) Subparagraph (B) of section 6425(c)(1) is 
amended— 
(A) by striking ‘‘the credits’’ and inserting 
‘‘the sum of— 
‘‘(i) the credits’’, 
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(B) by striking the period at the end of 
clause (i) thereof (as amended by this para-
graph) and inserting ‘‘, plus’’, and 
(C) by adding at the end the following new 
clause: 
‘‘(ii) the credits allowed (and payments 
treated as made) under subchapter C.’’. 
(3) Paragraph (3) of section 6654(f) is amend-
ed— 
(A) by striking ‘‘the credits’’ and inserting 
‘‘the sum of— 
‘‘(A) the credits’’, 
(B) by striking the period at the end of sub-
paragraph (A) thereof (as amended by this para-
graph) and inserting ‘‘, and’’, and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(B) the credits allowed (and payments 
treated as made) under subchapter C of chapter 
65.’’. 
(4) Subparagraph (B) of section 6655(g)(1) is 
amended— 
(A) by striking ‘‘the credits’’ and inserting 
‘‘the sum of— 
‘‘(i) the credits’’, 
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(B) by striking the period at the end of 
clause (i) thereof (as amended by this para-
graph) and inserting ‘‘, plus’’, and 
(C) by adding at the end the following new 
clause: 
‘‘(ii) the credits allowed (and payments 
treated as made) under subchapter C of 
chapter 65.’’. 
(5) Paragraph (2) of section 1324(b) of title 31, 
United States Code, is amended by inserting ‘‘, or 
from the provisions of subchapter C of chapter 65 of 
such Code’’ before the period at the end. 
(6) The table of subchapters for chapter 65 is 
amended by adding at the end the following new item: 
SUBCHAPTER C. DIRECT PAYMENT PROVISIONS 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to buildings placed in service after the 
date of the enactment of this Act. 
SEC. 205. EXTENSION AND ADDITIONAL ALLOCATIONS OF 
RECOVERY ZONE BOND AUTHORITY. 
(a) EXTENSION OF RECOVERY ZONE BOND AUTHOR-
ITY.—Section 
1400U–2(b)(1) 
and 
section 
1400U– 
3(b)(1)(B) are each amended by striking ‘‘January 1, 
2011’’ and inserting ‘‘January 1, 2012’’. 
(b) ADDITIONAL ALLOCATIONS OF RECOVERY ZONE 
BOND AUTHORITY BASED ON UNEMPLOYMENT.—Section 
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1400U–1 is amended by adding at the end the following 
new subsection: 
‘‘(c) ALLOCATION OF 2010 RECOVERY ZONE BOND 
LIMITATIONS BASED ON UNEMPLOYMENT.— 
‘‘(1) IN GENERAL.—The Secretary shall allocate 
the 2010 national recovery zone economic development 
bond limitation and the 2010 national recovery zone 
facility bond limitation among the States in the pro-
portion that each such State’s 2009 unemployment 
number bears to the aggregate of the 2009 unemploy-
ment numbers for all of the States. 
‘‘(2) MINIMUM
ALLOCATION.—The Secretary 
shall adjust the allocations under paragraph (1) for 
each State to the extent necessary to ensure that no 
State (prior to any reduction under paragraph (3)) 
receives less than 0.9 percent of the 2010 national re-
covery zone economic development bond limitation 
and 0.9 percent of the 2010 national recovery zone fa-
cility bond limitation. 
‘‘(3) ALLOCATIONS BY STATES.— 
‘‘(A) IN GENERAL.—Each State with respect 
to which an allocation is made under paragraph 
(1) shall reallocate such allocation among the 
counties and large municipalities (as defined in 
subsection (a)(3)(B)) in such State in the pro-
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portion that each such county’s or municipality’s 
2009 unemployment number bears to the aggre-
gate of the 2009 unemployment numbers for all 
the counties and large municipalities (as so de-
fined) in such State. 
‘‘(B) 
2010 
ALLOCATION
REDUCED
BY 
AMOUNT OF PREVIOUS ALLOCATION.—Each State 
shall reduce (but not below zero)— 
‘‘(i) the amount of the 2010 national 
recovery zone economic development bond 
limitation allocated to each county or large 
municipality (as so defined) in such State 
by the amount of the national recovery zone 
economic development bond limitation allo-
cated to such county or large municipality 
under 
subsection 
(a)(3)(A) 
(determined 
without regard to any waiver thereof), and 
‘‘(ii) the amount of the 2010 national 
recovery zone facility bond limitation allo-
cated to each county or large municipality 
(as so defined) in such State by the amount 
of the national recovery zone facility bond 
limitation allocated to such county or large 
municipality under subsection (a)(3)(A) 
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(determined without regard to any waiver 
thereof). 
‘‘(C) 
WAIVER
OF
SUBALLOCATIONS.—A 
county or municipality may waive any portion 
of an allocation made under this paragraph. A 
State may by law treat a county or munici-
pality as waiving any portion of an allocation 
made under this paragraph if there is a reason-
able expectation that such allocation would not 
otherwise be used. 
‘‘(D) SPECIAL RULE FOR A MUNICIPALITY 
IN A COUNTY.—In the case of any large munici-
pality any portion of which is in a county, such 
portion shall be treated as part of such munici-
pality and not part of such county. 
‘‘(4) 2009 UNEMPLOYMENT NUMBER.—For pur-
poses of this subsection, the term ‘2009 unemployment 
number’ means, with respect to any State, county or 
municipality, the number of individuals in such 
State, county, or municipality who were determined 
to be unemployed by the Bureau of Labor Statistics 
for December 2009. 
‘‘(5) 2010 NATIONAL LIMITATIONS.— 
‘‘(A) RECOVERY ZONE ECONOMIC DEVELOP-
MENT BONDS.—The 2010 national recovery zone 
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economic 
development 
bond 
limitation 
is 
$10,000,000,000. Any allocation of such limita-
tion under this subsection shall be treated for 
purposes of section 1400U–2 in the same manner 
as an allocation of national recovery zone eco-
nomic development bond limitation. 
‘‘(B) RECOVERY ZONE FACILITY BONDS.— 
The 2010 national recovery zone facility bond 
limitation is $15,000,000,000. Any allocation of 
such limitation under this subsection shall be 
treated for purposes of section 1400U–3 in the 
same manner as an allocation of national recov-
ery zone facility bond limitation.’’. 
(c) AUTHORITY OF STATE TO WAIVE CERTAIN 2009 
ALLOCATIONS.—Subparagraph (A) of section 1400U– 
1(a)(3) is amended by adding at the end the following: ‘‘A 
State may by law treat a county or municipality as 
waiving any portion of an allocation made under this sub-
paragraph if there is a reasonable expectation that such al-
location would not otherwise be used.’’. 
SEC. 206. ALLOWANCE OF NEW MARKETS TAX CREDIT 
AGAINST ALTERNATIVE MINIMUM TAX. 
(a) IN
GENERAL.—Subparagraph (B) of section 
38(c)(4) is amended by redesignating clauses (v) through 
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(viii) as clauses (vi) through (ix), respectively, and by in-
serting after clause (iv) the following new clause: 
‘‘(v) the credit determined under sec-
tion 45D, but only with respect to credits 
determined with respect to qualified equity 
investments (as defined in section 45D(b)) 
initially made before January 1, 2012,’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to qualified equity investments (as de-
fined in section 45D(b) of the Internal Revenue Code of 
1986) initially made after March 15, 2010. 
TITLE III—REVENUE 
PROVISIONS 
SEC. 301. LIMITATION ON TREATY BENEFITS FOR CERTAIN 
DEDUCTIBLE PAYMENTS. 
(a) IN GENERAL.—Section 894 (relating to income af-
fected by treaty) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(d) LIMITATION ON TREATY BENEFITS FOR CERTAIN 
DEDUCTIBLE PAYMENTS.— 
‘‘(1) IN GENERAL.—In the case of any deductible 
related-party payment, any withholding tax imposed 
under chapter 3 (and any tax imposed under subpart 
A or B of this part) with respect to such payment 
may not be reduced under any treaty of the United 
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