WPA Act
Bill: H.R.1388 | Sponsor: Rep. Watson Coleman, Bonnie (D-NJ)
Policy area: Labor and Employment

Summary:
Workforce Promotion and Access Act or the WPA Act
This bill requires the Department of Labor to establish a program to provide grants for job guarantee programs. Specifically, such grants are awarded on a competitive basis to political subdivisions of states, tribal entities, and outlying areas with a high unemployment rate to establish a program to ensure employment to residents. A job guarantee program qualifies under this bill if the jobs provided under the program pay a certain wage, are included in an established bargaining unit, provide health insurance, and comply with certain leave requirements.
The bill also imposes a trading excise tax, with certain exemptions, on certain transactions occurring on a qualified board or exchange in the United States or with respect to a derivative. The rate of such tax is 0.1% on purchases of stocks, bonds, and derivatives.
The tax applies to transactions by a controlled foreign corporation and must be paid by its U.S. shareholders.

To require the Secretary of Labor to establish a program to provide 
                   grants for job guarantee programs.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Workforce Promotion and Access Act'' 
or the ``WPA Act''.

SEC. 2. JOB GUARANTEE GRANT PROGRAM.

    (a) Definitions.--In this section:
            (1) Eligible entity.--The term ``eligible entity'' means an 
        entity that is a political subdivision of a State, Tribal 
        entity, outlying area, or a combination of contiguous political 
        subdivisions or Tribal entities that--
                    (A) has an unemployment rate that is equal to the 
                lower of 10 or 80 percent of the national unemployment 
                rate, as determined by the Bureau of Labor Statistics 
                (except in the case of Tribal entities which may submit 
                their own employment data where no such Federal data is 
                available for such entities) based on the most recent 
                data available at the time the Secretary solicits 
                applications for grants under this section; and
                    (B) submits an application in accordance with 
                subsection (e).
            (2) Job guarantee program.--The term ``job guarantee 
        program'' means a program that meets the requirements of 
        subsection (c).
            (3) Rural area.--The term ``rural area'' means an area that 
        is located outside of an urban area.
            (4) Tribal entity.--The term ``Tribal entity'' means an 
        Indian tribe or tribal organization as such terms are defined 
        in section 4 of the Indian Self-Determination Act (25 U.S.C. 
        5304).
            (5) Urban area.--The term ``urban area'' means an urbanized 
        area (a region of 50,000 or more residents) and an urbanized 
        cluster (an area encompassing between 2,500 and 50,000 
        residents), according to the Census Bureau's urban-rural 
        classification in the 2010 census.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Labor.
            (7) WIOA definitions.--The terms ``adult education and 
        literacy activities'', ``career planning'', ``individual with a 
        barrier to employment'', ``in-demand industry sector or 
        occupation'', ``local board'', ``outlying area'', ``recognized 
        postsecondary credential'', ``State'', ``State board'', 
        ``supportive services'', and ``workplace learning advisor'' 
        have the meanings given such terms in section 3 of the 
        Workforce Innovation and Opportunity Act (29 U.S.C. 3102).
    (b) Establishment.--
            (1) In general.--The Secretary shall establish a program to 
        provide competitive grants to eligible entities to establish 
        programs to ensure that any individual within the area served 
        by the entity who applies for a job through the program will be 
        provided with employment as provided for in this section.
            (2) Termination.--Federal funding for a job guarantee 
        program established under a grant under this section shall 
        terminate on the earlier of--
                    (A) the end of the 3-year period beginning on the 
                date of the grant; or
                    (B) the date of any revocation of the grantee as an 
                eligible entity.
            (3) Grant renewal.--An eligible entity that receives a 
        grant under this section may reapply under this section for an 
        additional grant after the first 3-year grant period.
    (c) Job Guarantee Programs.--A job guarantee program meets the 
requirements of this subsection if the jobs provided under such 
program--
            (1) are available to any unemployed individual who--
                    (A) is 18 years of age or older; and
                    (B) resides in the eligible entity as of the date 
                that the grant is awarded under this subsection to such 
                eligible entity,
        except that participants may be released, and/or suspended if 
        they fail to perform the stipulated duties or they are 
        generally disruptive to the workplace involved under procedures 
        established by the Secretary that provide for an opportunity 
        for a review of such determinations;
            (2) are, with respect to individual participants, included 
        as part of an established bargaining unit and covered by any 
        applicable collective bargaining agreement in effect if 
        similarly situated employees are part of such unit and 
        represented by an exclusive bargaining representative;
            (3) are available for the duration of the program;
            (4) provide a wage of not less than the greater of--
                    (A) $15 per hour, or the hourly wage otherwise 
                required to be paid to employees in the area to be 
                served under the program, whichever is greater;
                    (B) the prevailing wage in the area involved for a 
                similar job as required by chapter 67 of title 41, 
                United States Code, and other related laws; or
                    (C) the applicable wage under an applicable 
                collective bargaining agreement as provided for under 
                paragraph (2);
            (5) provide for coverage of the worker under a health 
        insurance program that is comparable to that offered to Federal 
        employees under the Federal Employee Health Benefits Program; 
        and
            (6) provide at a minimum--
                    (A) family and medical leave consistent with the 
                provisions of the Family and Medical Leave Act of 1993 
                and applicable State law, except that such leave shall 
                be paid leave; and
                    (B) the Emergency Paid Sick Leave Act under 
                division E of the Families First Coronavirus Response 
                Act (29 U.S.C. 2601 note).
    (d) Other Uses.--Funds may be used to provide workers in a job 
guarantee program with--
            (1) supportive services, which can include transportation, 
        child care, dependent care, housing, and needs-related 
        payments, that are necessary to enable an individual to 
        participate in activities authorized under this Act;
            (2) access to a workplace learning advisor to support the 
        education, skill development, job training, career planning, 
        and credentials required to progress toward career goals of 
        such employees in order to meet employer requirements related 
        to job openings and career advancements that support economic 
        self-sufficiency;
            (3) adult education and literacy activities, including 
        those provided by public libraries;
            (4) activities that assist justice-involved individuals, 
        formerly incarcerated individuals, and individuals with 
        criminal records in reentering the workforce; and
            (5) financial literacy activities including those described 
        in section 129(b)(2)(D) of the Workforce Innovation and 
        Opportunity Act.
    (e) Applications.--An eligible entity seeking a grant under this 
section shall submit an application to the Secretary at such time, in 
such manner, and containing such information as the Secretary may 
require. Such application shall include--
            (1) a description of the geographic area and population 
        that the entity intends to serve under the job guarantee 
        program established under the grant, including the area 
        unemployment rate, underemployment rate, unemployment rate for 
        individuals with disabilities, poverty rate, housing vacancy 
        rate, crime rate, household income, home-ownership rate, labor 
        force participation rate, and educational attainment;
            (2) to the extent practicable, a description of the jobs 
        that will be offered under the job guarantee program, 
        including--
                    (A) a description of supports provided to 
                individuals with disabilities and accommodations 
                required under the Americans with Disabilities Act of 
                1990 (42 U.S.C. 12101 et seq.); and
                    (B) a description of supports and procedures to 
                ensure job access and opportunities for individuals 
                with criminal records, including information on 
                physical and programmatic accessibility, in accordance 
                with section 188 of the Workforce Innovation and 
                Opportunity Act, if applicable, and the Americans with 
                Disabilities Act of 1990, for individuals with 
                disabilities;
            (3) the need in the area for jobs to be performed, 
        including for jobs designated as a high-skill, high-wage or in-
        demand industry sector or occupation by the Secretary, State 
        board, or local board;
            (4) a description of State, local, or philanthropic 
        funding, including through coordination and in-kind or 
        nonfinancial support, if any, that will be provided to assist 
        in carrying out the job guarantee program;
            (5) an assurance that the eligible entity will establish--
                    (A) a public internet website, in conjunction with 
                the Secretary, to post all available jobs under the job 
                guarantee program; and
                    (B) a process for individuals to apply for such 
                jobs;
            (6) a comprehensive plan to describe how the funding under 
        the program will leverage existing or anticipated local, State, 
        and Federal funding;
            (7) an assurance that necessary administrative data systems 
        and information technology infrastructure are available, or 
        will be available, to provide for full participation in the 
        evaluation under subsection (k);
            (8) a description of how the eligible entity will comply 
        with the requirements described in subsection (c)(6);
            (9) an assurance that the entity will enter into an 
        allocation agreement with the Secretary under subsection 
        (j)(2)(A); and
            (10) an assurance that energy and infrastructure jobs 
        provided under the program will not exacerbate the impacts of 
        climate change.
    (f) Selection.--In awarding such grant under this section, the 
Secretary shall consider diversity in geographic location, urban-rural 
composition, and political entity, including the representation of 
Tribal entities.
    (g) Amount of Grant.--
            (1) Establishment of fund.--There is established in the 
        Treasury of the United States a separate account to be known as 
        the ``Job Guarantee Program Trust Fund'' (referred to in this 
        section as the ``Fund'').
            (2) Transfers to fund.--There is hereby appropriated to the 
        Fund amounts equivalent to--
                    (A) taxes received in the Treasury under subchapter 
                C of chapter 36 of the Internal Revenue Code of 1986; 
                and
                    (B) interest earned on investment of amounts in the 
                Fund under rules similar to the rules of section 
                9602(b) of such Code.
            (3) Use of amounts.--The Secretary shall use amounts in the 
        Fund to make payments to grantees under grants under this 
        section in accordance with paragraph (4).
            (4) Payments.--
                    (A) In general.--The Secretary shall determine the 
                annual amount of a grant under this section based on a 
                formula to be developed by the Secretary.
                    (B) Payments.--The Secretary shall make payments to 
                grantees under this section in a manner determined 
                appropriate by the Secretary. The Secretary shall not 
                make subsequent payments to a grantee after the initial 
                payment until the grantee certifies to the Secretary 
                that the grantee has expended, transferred, or 
                obligated not less than 80 percent of the most recent 
                payment made under this subsection.
    (h) Limitations.--An eligible entity may not use amounts received 
under a grant under this section to--
            (1) employ individuals who will replace, or lead to the 
        displacement of, existing employees, positions, or individuals 
        who would otherwise perform similar employment, or disrupt 
        existing contracts and collective bargaining agreements, as 
        defined in section 181(b) of the Workforce Innovation and 
        Opportunity Act (Public Law 113-128);
            (2) perform functions otherwise prohibited by Federal, 
        State, or local laws; and
            (3) carry out other prohibited activities, as determined by 
        the Secretary.
    (i) Federal Provision of Jobs in Program Sites.--
            (1) Guidance.--Not later than 30 days after the date on 
        which the Secretary awards the first grant under this section, 
        the Secretary shall--
                    (A) provide guidance to the heads of appropriate 
                Federal agencies to notify such agencies of job 
                guarantee programs established under the grants awarded 
                under this section;
                    (B) request that such agencies notify the 
                Secretary, within 30 days of the date on which the 
                guidance is received under paragraph (1), of the number 
                and types of jobs that each such agency would make 
                available through each of the programs; and
                    (C) ensure that each such agency makes best efforts 
                to provide jobs through the programs established under 
                such grants.
            (2) Application of provisions.--The requirements of 
        subsection (c) relating to wages and benefits provided to 
        participants in jobs provided under job guarantee programs, and 
        the limitations in subsection (h), shall apply to Federal 
        agencies and jobs provided under this subsection, except that a 
        Federal agency shall employ each individual under this 
        subsection for up to 3 years.
            (3) Listing of jobs on website.--The Secretary shall 
        establish procedures to ensure that jobs identified under 
        paragraph (1)(B) are listed on the appropriate public internet 
        website as provided for under subsection (e)(5)(A).
            (4) Reimbursement.--At the end of each fiscal year, the 
        Secretary shall transfer from the Fund to each Federal agency 
        that employs individuals under a job guarantee program under 
        this section, an amount necessary to reimburse such agency for 
        the full cost of employing each such individual during such 
        fiscal year.
    (j) Training.--
            (1) In general.--The Secretary shall develop procedures to 
        support up to 8 weeks of paid training (through privately or 
        publicly funded training programs, such as those provided by 
        the public workforce system) to participants in order to 
        perform duties required by job guarantee programs under this 
        section, including a new period of training, not to exceed 8 
        weeks, prior to commencing any new job under the program.
            (2) Specific populations.--With respect to certain 
        populations with barriers to employment (as defined in section 
        3(24) of the Workforce Innovation and Opportunity Act (Public 
        Law 113-128)), the 8-week training period may include specific 
        job-related training and counseling and other general skills 
        training to prepare such individuals to reenter the workforce.
    (k) Priorities and Audits.--
            (1) Priorities.--Prior to awarding the initial grants under 
        this section, the Secretary shall issue a list of national job 
        priorities relating to jobs that may be carried out under job 
        guarantee programs, that shall include but not be limited to 
        child care, care for seniors and individuals with disabilities, 
        clean energy jobs, community investment projects, and 
        sustainable infrastructure activities. The Secretary shall take 
        State board and local board suggestions into consideration when 
        issuing such list.
            (2) Audits.--
                    (A) In general.--The Secretary, acting through the 
                Inspector General of the Department of Labor, shall 
                carry out annual audits of the use of grant funds 
                provided to eligible entities under this section.
                    (B) Allocation agreements and misuse of funds.--
                            (i) Allocation agreements.--An eligible 
                        entity shall enter into an allocation agreement 
                        with the Secretary that shall provide that the 
                        Secretary shall recoup any amounts paid to the 
                        entity under a grant under this section if the 
                        results of an audit under subparagraph (A) 
                        include a finding that there was an intentional 
                        or reckless misuse of such funds by such 
                        entity.
                            (ii) Loss of eligibility.--An eligible 
                        entity that is determined to have falsified or 
                        otherwise misstated data in any report 
                        submitted to the Secretary with the intent to 
                        deceive or mislead the Secretary shall be 
                        ineligible to receive additional funds under 
                        this section.
    (l) Reports.--Not later than 90 days after the end of each calendar 
year for which an eligible entity obligates or expends any amounts made 
available under a grant under this section, the eligible entity shall 
submit to the Secretary a report that--
            (1) specifies the amount of grant funds obligated or 
        expended for the preceding fiscal year;
            (2) specifies any purposes for which the funds were 
        obligated or expended; and
            (3) includes any other information that the Secretary may 
        require to more effectively administer the grant program under 
        this section, including the indicators of performance under 
        section 116(b)(2)(A)(i) of the Workforce Innovation and 
        Opportunity Act (29 U.S.C. 3141(b)(2)(A)(i)), with the 
        performance data disaggregated by race, ethnicity, sex, age, 
        and membership in a population specified in section 3(24) of 
        such Act (29 U.S.C. 3102(24)).
    (m) Evaluation.--The Chief Evaluation Officer at the Department of 
Labor shall provide for the conduct of an evaluation of the program, 
using a rigorous design and evaluation methods to assess the 
implementation of the programs and their impact on--
            (1) overall employment, public-sector employment, and 
        private-sector employment;
            (2) private-sector employment, wages, and benefits;
            (3) poverty rate;
            (4) public assistance spending and other Federal spending 
        in the area served by the program;
            (5) child health and educational outcomes;
            (6) health and well-being of those with mental, emotional, 
        and behavioral health needs;
            (7) incarceration rates;
            (8) the environment, including air quality and water 
        quality;
            (9) the indicators of performance as described in 
        subsection (l)(3); and
            (10) other economic development and individual outcome 
        indicators, as determined by the Secretary.
    (n) Expansion of Work Opportunity Credit To Include Participants in 
Job Guarantee Programs.--
            (1) In general.--Subsection (d) of section 51 of the 
        Internal Revenue Code of 1986 is amended--
                    (A) in paragraph (1)--
                            (i) in subparagraph (I), by striking ``or'' 
                        at the end,
                            (ii) in subparagraph (J), by striking the 
                        period at the end and inserting ``, or'', and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(K) a qualified participant in a job guarantee 
                program.'', and
                    (B) by adding at the end the following new 
                paragraph:
            ``(16) Qualified participant in a job guarantee program.--
        The term `qualified participant in a job guarantee program' 
        means any individual who is certified by the designated local 
        agency as having participated in a job guarantee program under 
        section 2 of the Federal Jobs Guarantee Program Act of 2020 for 
        not less than 3 months during the 6-month period ending on the 
        hiring date.''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to individuals who begin work for the employer 
        after December 31, 2021.
    (o) Appropriations.--From funds in the Treasury not otherwise 
appropriated, there are appropriated to the Secretary such sums as may 
be necessary to carry out this section.

SEC. 3. TRANSACTION TAX.

    (a) In General.--Chapter 36 of the Internal Revenue Code of 1986 is 
amended by inserting after subchapter B the following new subchapter:

              ``Subchapter C--Tax on Trading Transactions

``Sec. 4475. Tax on trading transactions.
``Sec. 4476. Derivative defined.

``SEC. 4475. TAX ON TRADING TRANSACTIONS.

    ``(a) Imposition of Tax.--There is hereby imposed a tax on each 
covered transaction with respect to any security.
    ``(b) Rate of Tax.--The tax imposed under subsection (a) with 
respect to any covered transaction shall be 0.1 percent of the 
specified base amount with respect to such covered transaction.
    ``(c) Specified Base Amount.--For purposes of this section, the 
term `specified base amount' means--
            ``(1) except as provided in paragraph (2), the fair market 
        value of a security (determined as of the time of the covered 
        transaction), and
            ``(2) in the case of any payment with respect to a 
        derivative, the amount of such payment.
    ``(d) Covered Transaction.--For purposes of this section--
            ``(1) In general.--The term `covered transaction' means--
                    ``(A) except as provided in subparagraph (B), any 
                purchase if--
                            ``(i) such purchase occurs on, or is 
                        subject to the rules of, a qualified board or 
                        exchange located in the United States, or
                            ``(ii) the purchaser or seller is a United 
                        States person, and
                    ``(B) any transaction with respect to a derivative 
                if--
                            ``(i) such derivative is traded on, or is 
                        subject to the rules of, a qualified board or 
                        exchange located in the United States, or
                            ``(ii) any party with rights under such 
                        derivative is a United States person.
            ``(2) Exception for initial issues.--No tax shall be 
        imposed under subsection (a) on any covered transaction with 
        respect to the initial issuance of any security described in 
        subparagraph (A), (B), or (C) of subsection (e)(1).
    ``(e) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Security.--For purposes of this section, the term 
        `security' means--
                    ``(A) any share of stock in a corporation,
                    ``(B) any partnership or beneficial ownership 
                interest in a partnership or trust,
                    ``(C) except as provided in paragraph (2), any 
                note, bond, debenture, or other evidence of 
                indebtedness, and
                    ``(D) any derivative (as defined in section 4476).
            ``(2) Exception for certain traded short-term 
        indebtedness.--A note, bond, debenture, or other evidence of 
        indebtedness which--
                    ``(A) is traded on, or is subject to the rules of, 
                a qualified board or exchange located in the United 
                States, and
                    ``(B) has a fixed maturity of not more than 100 
                days,
        shall not be treated as described in paragraph (1)(C).
            ``(3) Qualified board or exchange.--The term `qualified 
        board or exchange' has the meaning given such term by section 
        1256(g)(7).
    ``(f) By Whom Paid.--
            ``(1) In general.--The tax imposed by this section shall be 
        paid by--
                    ``(A) in the case of a transaction which occurs on, 
                or is subject to the rules of, a qualified board or 
                exchange located in the United States, such qualified 
                board or exchange, and
                    ``(B) in the case of a purchase not described in 
                subparagraph (A) which is executed by a broker (as 
                defined in section 6045(c)(1)) which is a United States 
                person, such broker.
            ``(2) Special rules for direct, etc., transactions.--In the 
        case of any transaction to which paragraph (1) does not apply, 
        the tax imposed by this section shall be paid by--
                    ``(A) in the case of a transaction described in 
                subsection (d)(1)(A)--
                            ``(i) the purchaser if the purchaser is a 
                        United States person, and
                            ``(ii) the seller if the purchaser is not a 
                        United States person, and
                    ``(B) in the case of a transaction described in 
                subsection (d)(1)(B)--
                            ``(i) the payor if the payor is a United 
                        States person, and
                            ``(ii) the payee if the payor is not a 
                        United States person.
    ``(g) Treatment of Exchanges and Payments With Respect to 
Derivatives.--For purposes of this section--
            ``(1) Treatment of exchanges.--
                    ``(A) In general.--An exchange shall be treated as 
                the sale of the property transferred and a purchase of 
                the property received by each party to the exchange.
                    ``(B) Certain deemed exchanges.--In the case of a 
                distribution treated as an exchange for stock under 
                section 302 or 331, the corporation making such 
                distribution shall be treated as having purchased such 
                stock for purposes of this section.
            ``(2) Payments with respect to derivatives treated as 
        separate transactions.--Except as otherwise provided by the 
        Secretary, any payment with respect to any derivative shall be 
        treated as a separate transaction for purposes of this section.
    ``(h) Application to Transactions by Controlled Foreign 
Corporations.--
            ``(1) In general.--For purposes of this section, a 
        controlled foreign corporation shall be treated as a United 
        States person.
            ``(2) Special rules for payment of tax on direct, etc., 
        transactions.--In the case of any transaction which is a 
        covered transaction solely by reason of paragraph (1) and which 
        is not described in subsection (f)(1)--
                    ``(A) Payment by united states shareholders.--Any 
                tax which would (but for this paragraph) be payable 
                under subsection (f)(2) by the controlled foreign 
                corporation shall, in lieu thereof, be paid by the 
                United States shareholders of such controlled foreign 
                corporation as provided in subparagraph (B).
                    ``(B) Pro rata shares.--Each such United States 
                shareholder shall pay the same proportion of such tax 
                as--
                            ``(i) the stock which such United States 
                        shareholder owns (within the meaning of section 
                        958(a)) in such controlled foreign corporation, 
                        bears to
                            ``(ii) the stock so owned by all United 
                        States shareholders in such controlled foreign 
                        corporation.
                    ``(C) Definitions.--For purposes of this 
                subsection, the terms `United States shareholder' and 
                `controlled foreign corporation' have the meanings 
                given such terms in sections 951(b) and 957(a), 
                respectively.
    ``(i) Administration.--The Secretary shall carry out this section 
in consultation with the Securities and Exchange Commission and the 
Commodity Futures Trading Commission.
    ``(j) Guidance; Regulations.--The Secretary shall--
            ``(1) provide guidance regarding such information reporting 
        concerning covered transactions as the Secretary deems 
        appropriate, and
            ``(2) prescribe such regulations as are necessary or 
        appropriate to prevent avoidance of the purposes of this 
        section, including the use of non-United States persons in such 
        transactions.

``SEC. 4476. DERIVATIVE DEFINED.

    ``(a) In General.--For purposes of this subchapter, except as 
otherwise provided in this section, the term `derivative' means any 
contract (including any option, forward contract, futures contract, 
short position, swap, or similar contract) the value of which, or any 
payment or other transfer with respect to which, is (directly or 
indirectly) determined by reference to one or more of the following:
            ``(1) Any share of stock in a corporation.
            ``(2) Any partnership or beneficial ownership interest in a 
        partnership or trust.
            ``(3) Any evidence of indebtedness.
            ``(4) Except as provided in subsection (b)(1), any real 
        property.
            ``(5) Any commodity which is actively traded (within the 
        meaning of section 1092(d)(1)).
            ``(6) Any currency.
            ``(7) Any rate, price, amount, index, formula, or 
        algorithm.
            ``(8) Any other item as the Secretary may prescribe.
Except as provided in regulations prescribed by the Secretary to 
prevent the avoidance of the purposes of this subchapter, such term 
shall not include any item described in paragraphs (1) through (8).
    ``(b) Exceptions.--
            ``(1) Certain real property.--
                    ``(A) In general.--For purposes of this subchapter, 
                the term `derivative' shall not include any contract 
                with respect to interests in real property (as defined 
                in section 856(c)(5)(C)) if such contract requires 
                physical delivery of such real property.
                    ``(B) Options to settle in cash.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A), a contract which provides for 
                        an option of cash settlement shall not be 
                        treated as requiring physical delivery of real 
                        property unless the option is--
                                    ``(I) not exercisable 
                                unconditionally, and
                                    ``(II) exercisable only in unusual 
                                and exceptional circumstances.
                            ``(ii) Option of cash settlement.--For 
                        purposes of clause (i), a contract provides an 
                        option of cash settlement if the contract 
                        settles in (or could be settled in) cash or 
                        property other than the underlying real 
                        property.
            ``(2) Securities lending, sale-repurchase, and similar 
        financing transactions.--To the extent provided by the 
        Secretary, for purposes of this subchapter, the term 
        `derivative' shall not include the right to the return of the 
        same or substantially identical securities transferred in a 
        securities lending transaction, sale-repurchase transaction, or 
        similar financing transaction.
            ``(3) Options received in connection with the performance 
        of services.--For purposes of this subchapter, the term 
        `derivative' shall not include any option described in section 
        83(e)(3) received in connection with the performance of 
        services.
            ``(4) Insurance contracts, annuities, and endowments.--For 
        purposes of this subchapter, the term `derivative' shall not 
        include any insurance, annuity, or endowment contract issued by 
        an insurance company to which subchapter L applies (or issued 
        by any foreign corporation to which such subchapter would apply 
        if such foreign corporation were a domestic corporation).
            ``(5) Derivatives with respect to stock of members of same 
        worldwide affiliated group.--For purposes of this subchapter, 
        the term `derivative' shall not include any derivative 
        (determined without regard to this paragraph) with respect to 
        stock issued by any member of the same worldwide affiliated 
        group (as defined in section 864(f)) in which the taxpayer is a 
        member.
            ``(6) Commodities used in normal course of trade or 
        business.--For purposes of this subchapter, the term 
        `derivative' shall not include any contract with respect to any 
        commodity if--
                    ``(A) such contract requires physical delivery with 
                the option of cash settlement only in unusual and 
                exceptional circumstances, and
                    ``(B) such commodity is used (and is used in 
                quantities with respect to which such derivative 
                relates) in the normal course of the taxpayer's trade 
                or business (or, in the case of an individual, for 
                personal consumption).
    ``(c) Contracts With Embedded Derivative Components.--
            ``(1) In general.--If a contract has derivative and 
        nonderivative components, then each derivative component shall 
        be treated as a derivative for purposes of this subchapter. If 
        the derivative component cannot be separately valued, then the 
        entire contract shall be treated as a derivative for purposes 
        of this subchapter.
            ``(2) Exception for certain embedded derivative components 
        of debt instruments.--A debt instrument shall not be treated as 
        having a derivative component merely because--
                    ``(A) such debt instrument is denominated in a 
                nonfunctional currency (as defined in section 
                988(c)(1)(C)(ii)), or
                    ``(B) payments with respect to such debt instrument 
                are determined by reference to the value of a 
                nonfunctional currency (as so defined).
    ``(d) Treatment of American Depository Receipts and Similar 
Instruments.--Except as otherwise provided by the Secretary, for 
purposes of this subchapter, American depository receipts (and similar 
instruments) with respect to shares of stock in foreign corporations 
shall be treated as shares of stock in such foreign corporations.''.
    (b) Information Reporting With Respect to Controlled Foreign 
Corporations.--Section 6038(a)(1)(B) of such Code is amended by 
inserting ``and transactions which are covered transactions for 
purposes of section 4475 by reason of the application of section 
4475(h)(1) to such corporation'' before the semicolon at the end.
    (c) Conforming Amendment.--The table of subchapters for chapter 36 
of such Code is amended by inserting after the item relating to 
subchapter B the following new item:

             ``subchapter c. tax on trading transactions''.

    (d) Effective Date.--The amendments made by this section shall 
apply to transactions after December 31, 2021.
                                 <all>