[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4213 Engrossed Amendment House (EAH)]
In the House of Representatives, U. S.,
May 28, 2010.
Resolved, That the House agree to the amendment of the Senate to
the bill (H.R. 4213) entitled ``An Act to amend the Internal Revenue
Code of 1986 to extend certain expiring provisions, and for other
purposes.'', with the following
HOUSE AMENDMENT TO SENATE AMENDMENT:
In lieu of the matter proposed to be inserted by the
amendment of the Senate, insert the following:
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``American Jobs and
Closing Tax Loopholes Act of 2010''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in titles I, II, and IV of 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 considered to be
made to a section or other provision of the Internal Revenue Code of
1986.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; amendment of 1986 Code; table of contents.
TITLE I--INFRASTRUCTURE INCENTIVES
Sec. 101. Extension of Build America Bonds.
Sec. 102. Exempt-facility bonds for sewage and water supply facilities.
Sec. 103. Extension of exemption from alternative minimum tax treatment
for certain tax-exempt bonds.
Sec. 104. Extension and additional allocations of recovery zone bond
authority.
Sec. 105. Allowance of new markets tax credit against alternative
minimum tax.
Sec. 106. Extension of tax-exempt eligibility for loans guaranteed by
Federal home loan banks.
Sec. 107. Extension of temporary small issuer rules for allocation of
tax-exempt interest expense by financial
institutions.
TITLE II--EXTENSION OF EXPIRING PROVISIONS
Subtitle A--Energy
Sec. 201. Alternative motor vehicle credit for new qualified hybrid
motor vehicles other than passenger
automobiles and light trucks.
Sec. 202. Incentives for biodiesel and renewable diesel.
Sec. 203. Credit for electricity produced at certain open-loop biomass
facilities.
Sec. 204. Extension and modification of credit for steel industry fuel.
Sec. 205. Credit for producing fuel from coke or coke gas.
Sec. 206. New energy efficient home credit.
Sec. 207. Excise tax credits and outlay payments for alternative fuel
and alternative fuel mixtures.
Sec. 208. Special rule for sales or dispositions to implement FERC or
State electric restructuring policy for
qualified electric utilities.
Sec. 209. Suspension of limitation on percentage depletion for oil and
gas from marginal wells.
Sec. 210. Direct payment of energy efficient appliances tax credit.
Sec. 211. Modification of standards for windows, doors, and skylights
with respect to the credit for nonbusiness
energy property.
Subtitle B--Individual Tax Relief
Part I--Miscellaneous Provisions
Sec. 221. Deduction for certain expenses of elementary and secondary
school teachers.
Sec. 222. Additional standard deduction for State and local real
property taxes.
Sec. 223. Deduction of State and local sales taxes.
Sec. 224. Contributions of capital gain real property made for
conservation purposes.
Sec. 225. Above-the-line deduction for qualified tuition and related
expenses.
Sec. 226. Tax-free distributions from individual retirement plans for
charitable purposes.
Sec. 227. Look-thru of certain regulated investment company stock in
determining gross estate of nonresidents.
Part II--Low-income Housing Credits
Sec. 231. Election for direct payment of low-income housing credit for
2010.
Subtitle C--Business Tax Relief
Sec. 241. Research credit.
Sec. 242. Indian employment tax credit.
Sec. 243. New markets tax credit.
Sec. 244. Railroad track maintenance credit.
Sec. 245. Mine rescue team training credit.
Sec. 246. Employer wage credit for employees who are active duty
members of the uniformed services.
Sec. 247. 5-year depreciation for farming business machinery and
equipment.
Sec. 248. 15-year straight-line cost recovery for qualified leasehold
improvements, qualified restaurant
buildings and improvements, and qualified
retail improvements.
Sec. 249. 7-year recovery period for motorsports entertainment
complexes.
Sec. 250. Accelerated depreciation for business property on an Indian
reservation.
Sec. 251. Enhanced charitable deduction for contributions of food
inventory.
Sec. 252. Enhanced charitable deduction for contributions of book
inventories to public schools.
Sec. 253. Enhanced charitable deduction for corporate contributions of
computer inventory for educational
purposes.
Sec. 254. Election to expense mine safety equipment.
Sec. 255. Special expensing rules for certain film and television
productions.
Sec. 256. Expensing of environmental remediation costs.
Sec. 257. Deduction allowable with respect to income attributable to
domestic production activities in Puerto
Rico.
Sec. 258. Modification of tax treatment of certain payments to
controlling exempt organizations.
Sec. 259. Exclusion of gain or loss on sale or exchange of certain
brownfield sites from unrelated business
income.
Sec. 260. Timber REIT modernization.
Sec. 261. Treatment of certain dividends of regulated investment
companies.
Sec. 262. RIC qualified investment entity treatment under FIRPTA.
Sec. 263. Exceptions for active financing income.
Sec. 264. Look-thru treatment of payments between related controlled
foreign corporations under foreign personal
holding company rules.
Sec. 265. Basis adjustment to stock of S corps making charitable
contributions of property.
Sec. 266. Empowerment zone tax incentives.
Sec. 267. Tax incentives for investment in the District of Columbia.
Sec. 268. Renewal community tax incentives.
Sec. 269. Temporary increase in limit on cover over of rum excise taxes
to Puerto Rico and the Virgin Islands.
Sec. 270. Payment to American Samoa in lieu of extension of economic
development credit.
Sec. 271. Election to temporarily utilize unused AMT credits determined
by domestic investment.
Sec. 272. Study of extended tax expenditures.
Subtitle D--Temporary Disaster Relief Provisions
Part I--National Disaster Relief
Sec. 281. Waiver of certain mortgage revenue bond requirements.
Sec. 282. Losses attributable to federally declared disasters.
Sec. 283. Special depreciation allowance for qualified disaster
property.
Sec. 284. Net operating losses attributable to federally declared
disasters.
Sec. 285. Expensing of qualified disaster expenses.
Part II--Regional Provisions
subpart a--new york liberty zone
Sec. 291. Special depreciation allowance for nonresidential and
residential real property.
Sec. 292. Tax-exempt bond financing.
subpart b--go zone
Sec. 295. Increase in rehabilitation credit.
Sec. 296. Work opportunity tax credit with respect to certain
individuals affected by Hurricane Katrina
for employers inside disaster areas.
Sec. 297. Extension of low-income housing credit rules for buildings in
GO zones.
TITLE III--PENSION PROVISIONS
Subtitle A--Pension Funding Relief
Part 1--Single-Employer Plans
Sec. 301. Extended period for single-employer defined benefit plans to
amortize certain shortfall amortization
bases.
Sec. 302. Application of extended amortization period to plans subject
to prior law funding rules.
Sec. 303. Suspension of certain funding level limitations.
Sec. 304. Lookback for credit balance rule.
Sec. 305. Information reporting.
Sec. 306. Rollover of amounts received in airline carrier bankruptcy.
Part 2--Multiemployer Plans
Sec. 311. Optional use of 30-year amortization periods.
Sec. 312. Optional longer recovery periods for multiemployer plans in
endangered or critical status.
Sec. 313. Modification of certain amortization extensions under prior
law.
Sec. 314. Alternative default schedule for plans in endangered or
critical status.
Sec. 315. Transition rule for certifications of plan status.
Subtitle B--Fee Disclosure
Sec. 321. Short title of subtitle.
Sec. 322. Amendments to the Employee Retirement Income Security Act of
1974.
Sec. 323. Amendments to the Internal Revenue Code of 1986.
Sec. 324. Regulatory authority and coordination.
Sec. 325. Effective date of subtitle.
TITLE IV--REVENUE OFFSETS
Subtitle A--Foreign Provisions
Sec. 401. Rules to prevent splitting foreign tax credits from the
income to which they relate.
Sec. 402. Denial of foreign tax credit with respect to foreign income
not subject to United States taxation by
reason of covered asset acquisitions.
Sec. 403. Separate application of foreign tax credit limitation, etc.,
to items resourced under treaties.
Sec. 404. Limitation on the amount of foreign taxes deemed paid with
respect to section 956 inclusions.
Sec. 405. Special rule with respect to certain redemptions by foreign
subsidiaries.
Sec. 406. Modification of affiliation rules for purposes of rules
allocating interest expense.
Sec. 407. Termination of special rules for interest and dividends
received from persons meeting the 80-
percent foreign business requirements.
Sec. 408. Source rules for income on guarantees.
Sec. 409. Limitation on extension of statute of limitations for failure
to notify Secretary of certain foreign
transfers.
Subtitle B--Personal Service Income Earned in Pass-thru Entities
Sec. 411. Partnership interests transferred in connection with
performance of services.
Sec. 412. Income of partners for performing investment management
services treated as ordinary income
received for performance of services.
Sec. 413. Employment tax treatment of professional service businesses.
Subtitle C--Corporate Provisions
Sec. 421. Treatment of securities of a controlled corporation exchanged
for assets in certain reorganizations.
Sec. 422. Taxation of boot received in reorganizations.
Subtitle D--Other Provisions
Sec. 431. Modifications with respect to Oil Spill Liability Trust Fund.
Sec. 432. Time for payment of corporate estimated taxes.
TITLE V--UNEMPLOYMENT, HEALTH, AND OTHER ASSISTANCE
Subtitle A--Unemployment Insurance and Other Assistance
Sec. 501. Extension of unemployment insurance provisions.
Sec. 502. Coordination of emergency unemployment compensation with
regular compensation.
Sec. 503. Extension of the Emergency Contingency Fund.
Subtitle B--Health Provisions
Sec. 511. Extension of section 508 reclassifications.
Sec. 512. Repeal of delay of RUG-IV.
Sec. 513. Limitation on reasonable costs payments for certain clinical
diagnostic laboratory tests furnished to
hospital patients in certain rural areas.
Sec. 514. Funding for claims reprocessing.
Sec. 515. Medicaid and CHIP technical corrections.
Sec. 516. Addition of inpatient drug discount program to 340B drug
discount program.
Sec. 517. Continued inclusion of orphan drugs in definition of covered
outpatient drugs with respect to children's
hospitals under the 340B drug discount
program.
Sec. 518. Conforming amendment related to waiver of coinsurance for
preventive services.
Sec. 519. Establish a CMS-IRS data match to identify fraudulent
providers.
Sec. 520. Clarification of effective date of part B special enrollment
period for disabled TRICARE beneficiaries.
Sec. 521. Physician payment update.
Sec. 522. Adjustment to Medicare payment localities.
Sec. 523. Clarification of 3-day payment window.
TITLE VI--OTHER PROVISIONS
Sec. 601. Extension of national flood insurance program.
Sec. 602. Allocation of geothermal receipts.
Sec. 603. Small business loan guarantee enhancement extensions.
Sec. 604. Emergency agricultural disaster assistance.
Sec. 605. Summer employment for youth.
Sec. 606. Housing Trust Fund.
Sec. 607. The Individual Indian Money Account Litigation Settlement Act
of 2010.
Sec. 608. Appropriation of funds for final settlement of claims from In
re Black Farmers Discrimination Litigation.
Sec. 609. Expansion of eligibility for concurrent receipt of military
retired pay and veterans' disability
compensation to include all chapter 61
disability retirees regardless of
disability rating percentage or years of
service.
Sec. 610. Extension of use of 2009 poverty guidelines.
Sec. 611. Refunds disregarded in the administration of Federal programs
and federally assisted programs.
Sec. 612. State court improvement program.
Sec. 613. Qualifying timber contract options.
Sec. 614. Extension and flexibility for certain allocated surface
transportation programs.
Sec. 615. Community College and Career Training Grant Program.
Sec. 616. Extensions of duty suspensions on cotton shirting fabrics and
related provisions.
Sec. 617. Modification of Wool Apparel Manufacturers Trust Fund.
Sec. 618. Department of Commerce Study.
Sec. 619. ARRA planning and reporting.
TITLE VII--BUDGETARY PROVISIONS
Sec. 701. Budgetary provisions.
TITLE I--INFRASTRUCTURE INCENTIVES
SEC. 101. EXTENSION OF BUILD AMERICA BONDS.
(a) In General.--Subparagraph (B) of section 54AA(d)(1) is amended
by striking ``January 1, 2011'' and inserting ``January 1, 2013''.
(b) Extension of Payments to Issuers.--
(1) In general.--Section 6431 is amended--
(A) by striking ``January 1, 2011'' in subsection
(a) and inserting ``January 1, 2013''; and
(B) by striking ``January 1, 2011'' in subsection
(f)(1)(B) and inserting ``a particular date''.
(2) Conforming amendments.--Subsection (g) of section 54AA
is amended--
(A) by striking ``January 1, 2011'' and inserting
``January 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'';
(2) by striking ``35 percent'' and inserting ``the
applicable percentage''; and
(3) by adding at the end the following new paragraph:
``(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 calendar
year: The applicable percentage is:
----------------------------------------------------------------------------------------------------------------
2009 or 2010............................................... 35 percent
2011....................................................... 32 percent
2012....................................................... 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 bond' includes any bond (or series
of bonds) issued to refund a qualified bond if--
``(i) the average maturity date of the
issue of which the refunding bond is a part 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 subparagraph (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 maturity.--For
purposes of subparagraph (A)(i), average maturity shall
be determined in accordance 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 expenditures for levees and other flood control
projects)'' after ``capital expenditures''.
SEC. 102. EXEMPT-FACILITY BONDS FOR SEWAGE AND WATER SUPPLY FACILITIES.
(a) Bonds for Water and Sewage Facilities Exempt 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 Governments.--
(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 paragraph (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)''.
(c) Effective Date.--The amendments made by this section shall
apply to obligations issued after the date of the enactment of this
Act.
SEC. 103. 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.
SEC. 104. EXTENSION AND ADDITIONAL ALLOCATIONS OF RECOVERY ZONE BOND
AUTHORITY.
(a) Extension of Recovery Zone Bond Authority.--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 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 proportion that each such State's 2009
unemployment number bears to the aggregate of the 2009
unemployment 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 recovery zone economic development bond limitation and
0.9 percent of the 2010 national recovery zone facility 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 proportion that each such county's or
municipality's 2009 unemployment number bears to the
aggregate of the 2009 unemployment numbers for all the
counties and large municipalities (as so defined) 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 allocated
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
allocated 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)
(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 county or municipality
shall be treated as having waived any portion of an
allocation made under this paragraph which has not been
allocated to a bond issued before May 1, 2011. Any
allocation waived (or treated as waived) under this
subparagraph may be used or reallocated by the State.
``(D) Special rule for a municipality in a
county.--In the case of any large municipality any
portion of which is in a county, such portion shall be
treated as part of such municipality and not part of
such county.
``(4) 2009 unemployment number.--For purposes 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 development bonds.--
The 2010 national recovery zone economic development
bond limitation is $10,000,000,000. Any allocation of
such limitation under this subsection shall be treated
for purposes of section 1400U-2 in the same manner as
an allocation of national recovery zone economic
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 recovery 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 county or municipality shall be treated as
having waived any portion of an allocation made under this subparagraph
which has not been allocated to a bond issued before May 1, 2011. Any
allocation waived (or treated as waived) under this subparagraph may be
used or reallocated by the State.''.
SEC. 105. ALLOWANCE OF NEW MARKETS TAX CREDIT AGAINST ALTERNATIVE
MINIMUM TAX.
(a) In General.--Subparagraph (B) of section 38(c)(4), as amended
by the Patient Protection and Affordable Care Act, is amended by
redesignating clauses (v) through (ix) as clauses (vi) through (x),
respectively, and by inserting after clause (iv) the following new
clause:
``(v) the credit determined under section
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 credits determined with respect to qualified equity
investments (as defined in section 45D(b) of the Internal Revenue Code
of 1986) initially made after March 15, 2010.
SEC. 106. EXTENSION OF TAX-EXEMPT ELIGIBILITY FOR LOANS GUARANTEED BY
FEDERAL HOME LOAN BANKS.
Clause (iv) of section 149(b)(3)(A) is amended by striking
``December 31, 2010'' and inserting ``December 31, 2011''.
SEC. 107. EXTENSION OF TEMPORARY SMALL ISSUER RULES FOR ALLOCATION OF
TAX-EXEMPT INTEREST EXPENSE BY FINANCIAL INSTITUTIONS.
(a) In General.--Clauses (i), (ii), and (iii) of section
265(b)(3)(G) are each amended by striking ``or 2010'' and inserting ``,
2010, or 2011''.
(b) Conforming Amendment.--Subparagraph (G) of section 265(b)(3) is
amended 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.
TITLE II--EXTENSION OF EXPIRING PROVISIONS
Subtitle A--Energy
SEC. 201. ALTERNATIVE MOTOR VEHICLE CREDIT FOR NEW QUALIFIED HYBRID
MOTOR VEHICLES OTHER THAN PASSENGER AUTOMOBILES AND LIGHT
TRUCKS.
(a) In General.--Paragraph (3) of section 30B(k) is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to property purchased after December 31, 2009.
SEC. 202. INCENTIVES FOR BIODIESEL AND RENEWABLE DIESEL.
(a) Credits for Biodiesel and Renewable Diesel Used as Fuel.--
Subsection (g) of section 40A is amended by striking ``December 31,
2009'' and inserting ``December 31, 2010''.
(b) Excise Tax Credits and Outlay Payments for Biodiesel and
Renewable Diesel Fuel Mixtures.--
(1) Paragraph (6) of section 6426(c) is amended by striking
``December 31, 2009'' and inserting ``December 31, 2010''.
(2) Subparagraph (B) of section 6427(e)(6) is amended by
striking ``December 31, 2009'' and inserting ``December 31,
2010''.
(c) Effective Date.--The amendments made by this section shall
apply to fuel sold or used after December 31, 2009.
SEC. 203. CREDIT FOR ELECTRICITY PRODUCED AT CERTAIN OPEN-LOOP BIOMASS
FACILITIES.
(a) In General.--Clause (ii) of section 45(b)(4)(B) is amended--
(1) by striking ``5-year period'' and inserting ``6-year
period''; and
(2) by adding at the end the following: ``In the case of
the last year of the 6-year period described in the preceding
sentence, the credit determined under subsection (a) with
respect to electricity produced during such year shall not
exceed 80 percent of such credit determined without regard to
this sentence.''.
(b) Effective Date.--The amendment made by this section shall apply
to electricity produced and sold after December 31, 2009.
SEC. 204. EXTENSION AND MODIFICATION OF CREDIT FOR STEEL INDUSTRY FUEL.
(a) Credit Period.--
(1) In general.--Subclause (II) of section 45(e)(8)(D)(ii)
is amended to read as follows:
``(II) Credit period.--In lieu of
the 10-year period referred to in
clauses (i) and (ii)(II) of
subparagraph (A), the credit period
shall be the period beginning on the
date that the facility first produces
steel industry fuel that is sold to an
unrelated person after September 30,
2008, and ending 2 years after such
date.''.
(2) Conforming amendment.--Section 45(e)(8)(D) is amended
by striking clause (iii) and by redesignating clause (iv) as
clause (iii).
(b) Extension of Placed-in-service Date.--Subparagraph (A) of
section 45(d)(8) is amended--
(1) by striking ``(or any modification to a facility)'';
and
(2) by striking ``2010'' and inserting ``2011''.
(c) Clarifications.--
(1) Steel industry fuel.--Subclause (I) of section
45(c)(7)(C)(i) is amended by inserting ``, a blend of coal and
petroleum coke, or other coke feedstock'' after ``on coal''.
(2) Ownership interest.--Section 45(d)(8) is amended by
adding at the end the following new flush sentence:
``With respect to a facility producing steel industry fuel, no
person (including a ground lessor, customer, supplier, or
technology licensor) shall be treated as having an ownership
interest in the facility or as otherwise entitled to the credit
allowable under subsection (a) with respect to such facility if
such person's rent, license fee, or other entitlement to net
payments from the owner of such facility is measured by a fixed
dollar amount or a fixed amount per ton, or otherwise
determined without regard to the profit or loss of such
facility.''.
(3) Production and sale.--Subparagraph (D) of section
45(e)(8), as amended by subsection (a)(2), is amended by
redesignating clause (iii) as clause (iv) and by inserting
after clause (ii) the following new clause:
``(iii) Production and sale.--The owner of
a facility producing steel industry fuel shall
be treated as producing and selling steel
industry fuel where that owner manufactures
such steel industry fuel from coal, a blend of
coal and petroleum coke, or other coke
feedstock to which it has title. The sale of
such steel industry fuel by the owner of the
facility to a person who is not the owner of
the facility shall not fail to qualify as a
sale to an unrelated person solely because such
purchaser may also be a ground lessor,
supplier, or customer.''.
(d) Specified Credit for Purposes of Alternative Minimum Tax
Exclusion.--Subclause (II) of section 38(c)(4)(B)(iii) is amended by
inserting ``(in the case of a refined coal production facility
producing steel industry fuel, during the credit period set forth in
section 45(e)(8)(D)(ii)(II))'' after ``service''.
(e) Effective Dates.--
(1) In general.--The amendments made by subsections (a),
(b), and (d) shall take effect on the date of the enactment of
this Act.
(2) Clarifications.--The amendments made by subsection (c)
shall take effect as if included in the amendments made by the
Energy Improvement and Extension Act of 2008.
SEC. 205. CREDIT FOR PRODUCING FUEL FROM COKE OR COKE GAS.
(a) In General.--Paragraph (1) of section 45K(g) is amended by
striking ``January 1, 2010'' and inserting ``January 1, 2011''.
(b) Effective Date.--The amendment made by this section shall apply
to facilities placed in service after December 31, 2009.
SEC. 206. NEW ENERGY EFFICIENT HOME CREDIT.
(a) In General.--Subsection (g) of section 45L is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to homes acquired after December 31, 2009.
SEC. 207. EXCISE TAX CREDITS AND OUTLAY PAYMENTS FOR ALTERNATIVE FUEL
AND ALTERNATIVE FUEL MIXTURES.
(a) Alternative Fuel Credit.--Paragraph (5) of section 6426(d) is
amended by striking ``after December 31, 2009'' and all that follows
and inserting ``after--
``(A) September 30, 2014, in the case of liquefied
hydrogen,
``(B) December 31, 2010, in the case of fuels
described in subparagraph (A), (C), (F), or (G) of
paragraph (2), and
``(C) December 31, 2009, in any other case.''.
(b) Alternative Fuel Mixture Credit.--Paragraph (3) of section
6426(e) is amended by striking ``after December 31, 2009'' and all that
follows and inserting ``after--
``(A) September 30, 2014, in the case of liquefied
hydrogen,
``(B) December 31, 2010, in the case of fuels
described in subparagraph (A), (C), (F), or (G) of
subsection (d)(2), and
``(C) December 31, 2009, in any other case.''.
(c) Payment Authority.--
(1) In general.--Paragraph (6) of section 6427(e) is
amended by striking ``and'' at the end of subparagraph (C), by
striking the period at the end of subparagraph (D) and
inserting ``, and'', and by adding at the end the following new
subparagraph:
``(E) any alternative fuel or alternative fuel
mixture (as so defined) involving fuel described in
subparagraph (A), (C), (F), or (G) of section
6426(d)(2) sold or used after December 31, 2010.''.
(2) Conforming amendment.--Subparagraph (C) of section
6427(e)(6) is amended by inserting ``or (E)'' after
``subparagraph (D)''.
(d) Exclusion of Black Liquor From Credit Eligibility.--The last
sentence of section 6426(d)(2) is amended by striking ``or biodiesel''
and inserting ``biodiesel, or any fuel (including lignin, wood
residues, or spent pulping liquors) derived from the production of
paper or pulp''.
(e) Effective Date.--The amendments made by this section shall
apply to fuel sold or used after December 31, 2009.
SEC. 208. SPECIAL RULE FOR SALES OR DISPOSITIONS TO IMPLEMENT FERC OR
STATE ELECTRIC RESTRUCTURING POLICY FOR QUALIFIED
ELECTRIC UTILITIES.
(a) In General.--Paragraph (3) of section 451(i) is amended by
striking ``January 1, 2010'' and inserting ``January 1, 2011''.
(b) Modification of Definition of Independent Transmission
Company.--
(1) In general.--Clause (i) of section 451(i)(4)(B) is
amended to read as follows:
``(i) who the Federal Energy Regulatory
Commission determines in its authorization of
the transaction under section 203 of the
Federal Power Act (16 U.S.C. 824b) or by
declaratory order--
``(I) is not itself a market
participant as determined by the
Commission, and also is not controlled
by any such market participant, or
``(II) to be independent from
market participants or to be an
independent transmission company within
the meaning of such Commission's rules
applicable to independent transmission
providers, and''.
(2) Related persons.--Paragraph (4) of section 451(i) is
amended by adding at the end the following flush sentence:
``For purposes of subparagraph (B)(i)(I), a person shall be
treated as controlled by another person if such persons would
be treated as a single employer under section 52.''.
(c) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
apply to dispositions after December 31, 2009.
(2) Modifications.--The amendments made by subsection (b)
shall apply to dispositions after the date of the enactment of
this Act.
SEC. 209. SUSPENSION OF LIMITATION ON PERCENTAGE DEPLETION FOR OIL AND
GAS FROM MARGINAL WELLS.
(a) In General.--Clause (ii) of section 613A(c)(6)(H) is amended by
striking ``January 1, 2010'' and inserting ``January 1, 2011''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2009.
SEC. 210. DIRECT PAYMENT OF ENERGY EFFICIENT APPLIANCES TAX CREDIT.
In the case of any taxable year which includes the last day of
calendar year 2009 or calendar year 2010, a taxpayer who elects to
waive the credit which would otherwise be determined with respect to
the taxpayer under section 45M of the Internal Revenue Code of 1986 for
such taxable year shall be treated as making a payment against the tax
imposed under subtitle A of such Code for such taxable year in an
amount equal to 85 percent of the amount of the credit which would
otherwise be so determined. 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. Elections under this section may be made
separately for 2009 and 2010, but once made shall be irrevocable. No
amount shall be includible in gross income or alternative minimum
taxable income by reason of this section.
SEC. 211. MODIFICATION OF STANDARDS FOR WINDOWS, DOORS, AND SKYLIGHTS
WITH RESPECT TO THE CREDIT FOR NONBUSINESS ENERGY
PROPERTY.
(a) In General.--Paragraph (4) of section 25C(c) is amended by
striking ``unless'' and all that follows and inserting ``unless--
``(A) in the case of any component placed in
service after the date which is 90 days after the date
of the enactment of the American Jobs and Closing Tax
Loopholes Act of 2010, such component meets the
criteria for such components established by the 2010
Energy Star Program Requirements for Residential
Windows, Doors, and Skylights, Version 5.0 (or any
subsequent version of such requirements which is in
effect after January 4, 2010),
``(B) in the case of any component placed in
service after the date of the enactment of the American
Jobs and Closing Tax Loopholes Act of 2010 and on or
before the date which is 90 days after such date, such
component meets the criteria described in subparagraph
(A) or is equal to or below a U factor of 0.30 and SHGC
of 0.30, and
``(C) in the case of any component which is a
garage door, such component is equal to or below a U
factor of 0.30 and SHGC of 0.30.''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after the date of the enactment of this
Act.
Subtitle B--Individual Tax Relief
PART I--MISCELLANEOUS PROVISIONS
SEC. 221. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND SECONDARY
SCHOOL TEACHERS.
(a) In General.--Subparagraph (D) of section 62(a)(2) is amended by
striking ``or 2009'' and inserting ``2009, or 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2009.
SEC. 222. ADDITIONAL STANDARD DEDUCTION FOR STATE AND LOCAL REAL
PROPERTY TAXES.
(a) In General.--Subparagraph (C) of section 63(c)(1) is amended by
striking ``or 2009'' and inserting ``2009, or 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2009.
SEC. 223. DEDUCTION OF STATE AND LOCAL SALES TAXES.
(a) In General.--Subparagraph (I) of section 164(b)(5) is amended
by striking ``January 1, 2010'' and inserting ``January 1, 2011''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2009.
SEC. 224. CONTRIBUTIONS OF CAPITAL GAIN REAL PROPERTY MADE FOR
CONSERVATION PURPOSES.
(a) In General.--Clause (vi) of section 170(b)(1)(E) is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Contributions by Certain Corporate Farmers and Ranchers.--
Clause (iii) of section 170(b)(2)(B) is amended by striking ``December
31, 2009'' and inserting ``December 31, 2010''.
(c) Effective Date.--The amendments made by this section shall
apply to contributions made in taxable years beginning after December
31, 2009.
SEC. 225. ABOVE-THE-LINE DEDUCTION FOR QUALIFIED TUITION AND RELATED
EXPENSES.
(a) In General.--Subsection (e) of section 222 is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2009.
(c) Temporary Coordination With Hope and Lifetime Learning
Credits.--In the case of any taxpayer for any taxable year beginning in
2010, no deduction shall be allowed under section 222 of the Internal
Revenue Code of 1986 if--
(1) the taxpayer's net Federal income tax reduction which
would be attributable to such deduction for such taxable year,
is less than
(2) the credit which would be allowed to the taxpayer for
such taxable year under section 25A of such Code (determined
without regard to sections 25A(e) and 26 of such Code).
SEC. 226. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT PLANS FOR
CHARITABLE PURPOSES.
(a) In General.--Subparagraph (F) of section 408(d)(8) is amended
by striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to distributions made in taxable years beginning after December 31,
2009.
SEC. 227. LOOK-THRU OF CERTAIN REGULATED INVESTMENT COMPANY STOCK IN
DETERMINING GROSS ESTATE OF NONRESIDENTS.
(a) In General.--Paragraph (3) of section 2105(d) is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to estates of decedents dying after December 31, 2009.
PART II--LOW-INCOME HOUSING CREDITS
SEC. 231. ELECTION FOR DIRECT PAYMENT OF LOW-INCOME HOUSING CREDIT FOR
2010.
(a) In General.--Section 42 is amended by redesignating subsection
(n) as subsection (o) and by inserting after subsection (m) the
following new subsection:
``(n) Election for Direct Payment of Credit.--
``(1) In general.--The housing credit agency of each State
shall be allowed a credit in an amount equal to such State's
2010 low-income housing refundable credit election amount,
which shall be payable by the Secretary as provided in
paragraph (5).
``(2) 2010 low-income housing refundable credit election
amount.--For purposes of this subsection, the term `2010 low-
income housing refundable credit election amount' means, with
respect to any State, such amount as the State may elect which
does not exceed 85 percent of the product of--
``(A) the sum of--
``(i) 100 percent of the State housing
credit ceiling for 2010 which is attributable
to amounts described in clauses (i) and (iii)
of subsection (h)(3)(C), and
``(ii) 40 percent of the State housing
credit ceiling for 2010 which is attributable
to amounts described in clauses (ii) and (iv)
of such subsection, multiplied by
``(B) 10.
``(3) Coordination with non-refundable credit.--For
purposes of this section, the amounts described in clauses (i)
through (iv) of subsection (h)(3)(C) with respect to any State
for 2010 shall each be reduced by so much of such amount as is
taken into account in determining the amount of the credit
allowed with respect to such State under paragraph (1).
``(4) Special rule for basis.--Basis of a qualified low-
income building shall not be reduced by the amount of any
payment made under this subsection.
``(5) Payment of credit; use to finance low-income
buildings.--The Secretary shall pay to the housing credit
agency of each State an amount equal to the credit allowed
under paragraph (1). Rules similar to the rules of subsections
(c) and (d) of section 1602 of the American Recovery and
Reinvestment Tax Act of 2009 shall apply with respect to any
payment made under this paragraph, except that such subsection
(d) shall be applied by substituting `January 1, 2012' for
`January 1, 2011'.''.
(b) Conforming Amendment.--Section 1324(b)(2) of title 31, United
States Code, is amended by inserting ``42(n),'' after ``36C,''.
Subtitle C--Business Tax Relief
SEC. 241. RESEARCH CREDIT.
(a) In General.--Subparagraph (B) of section 41(h)(1) is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Conforming Amendment.--Subparagraph (D) of section 45C(b)(1) is
amended by striking ``December 31, 2009'' and inserting ``December 31,
2010''.
(c) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred after December 31, 2009.
SEC. 242. INDIAN EMPLOYMENT TAX CREDIT.
(a) In General.--Subsection (f) of section 45A is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2009.
SEC. 243. NEW MARKETS TAX CREDIT.
(a) In General.--Subparagraph (F) of section 45D(f)(1) is amended
by inserting ``and 2010'' after ``2009''.
(b) Conforming Amendment.--Paragraph (3) of section 45D(f) is
amended by striking ``2014'' and inserting ``2015''.
(c) Effective Date.--The amendments made by this section shall
apply to calendar years beginning after 2009.
SEC. 244. RAILROAD TRACK MAINTENANCE CREDIT.
(a) In General.--Subsection (f) of section 45G is amended by
striking ``January 1, 2010'' and inserting ``January 1, 2011''.
(b) Effective Date.--The amendment made by this section shall apply
to expenditures paid or incurred in taxable years beginning after
December 31, 2009.
SEC. 245. MINE RESCUE TEAM TRAINING CREDIT.
(a) In General.--Subsection (e) of section 45N is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Credit Allowable Against AMT.--Subparagraph (B) of section
38(c)(4), as amended by section 105, is amended--
(1) by redesignating clauses (vii) through (x) as clauses
(viii) through (xi), respectively; and
(2) by inserting after clause (vi) the following new
clause:
``(vii) the credit determined under section
45N,''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2009.
(2) Allowance against amt.--The amendments made by
subsection (b) shall apply to credits determined for taxable
years beginning after December 31, 2009, and to carrybacks of
such credits.
SEC. 246. EMPLOYER WAGE CREDIT FOR EMPLOYEES WHO ARE ACTIVE DUTY
MEMBERS OF THE UNIFORMED SERVICES.
(a) In General.--Subsection (f) of section 45P is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to payments made after December 31, 2009.
SEC. 247. 5-YEAR DEPRECIATION FOR FARMING BUSINESS MACHINERY AND
EQUIPMENT.
(a) In General.--Clause (vii) of section 168(e)(3)(B) is amended by
striking ``January 1, 2010'' and inserting ``January 1, 2011''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2009.
SEC. 248. 15-YEAR STRAIGHT-LINE COST RECOVERY FOR QUALIFIED LEASEHOLD
IMPROVEMENTS, QUALIFIED RESTAURANT BUILDINGS AND
IMPROVEMENTS, AND QUALIFIED RETAIL IMPROVEMENTS.
(a) In General.--Clauses (iv), (v), and (ix) of section
168(e)(3)(E) are each amended by striking ``January 1, 2010'' and
inserting ``January 1, 2011''.
(b) Conforming Amendments.--
(1) Clause (i) of section 168(e)(7)(A) is amended by
striking ``if such building is placed in service after December
31, 2008, and before January 1, 2010,''.
(2) Paragraph (8) of section 168(e) is amended by striking
subparagraph (E).
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2009.
SEC. 249. 7-YEAR RECOVERY PERIOD FOR MOTORSPORTS ENTERTAINMENT
COMPLEXES.
(a) In General.--Subparagraph (D) of section 168(i)(15) is amended
by striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2009.
SEC. 250. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON AN INDIAN
RESERVATION.
(a) In General.--Paragraph (8) of section 168(j) is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2009.
SEC. 251. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF FOOD
INVENTORY.
(a) In General.--Clause (iv) of section 170(e)(3)(C) is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made after December 31, 2009.
SEC. 252. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF BOOK
INVENTORIES TO PUBLIC SCHOOLS.
(a) In General.--Clause (iv) of section 170(e)(3)(D) is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made after December 31, 2009.
SEC. 253. ENHANCED CHARITABLE DEDUCTION FOR CORPORATE CONTRIBUTIONS OF
COMPUTER INVENTORY FOR EDUCATIONAL PURPOSES.
(a) In General.--Subparagraph (G) of section 170(e)(6) is amended
by striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made in taxable years beginning after December 31,
2009.
SEC. 254. ELECTION TO EXPENSE MINE SAFETY EQUIPMENT.
(a) In General.--Subsection (g) of section 179E is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2009.
SEC. 255. SPECIAL EXPENSING RULES FOR CERTAIN FILM AND TELEVISION
PRODUCTIONS.
(a) In General.--Subsection (f) of section 181 is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to productions commencing after December 31, 2009.
SEC. 256. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.
(a) In General.--Subsection (h) of section 198 is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to expenditures paid or incurred after December 31, 2009.
SEC. 257. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME ATTRIBUTABLE TO
DOMESTIC PRODUCTION ACTIVITIES IN PUERTO RICO.
(a) In General.--Subparagraph (C) of section 199(d)(8) is amended--
(1) by striking ``first 4 taxable years'' and inserting
``first 5 taxable years''; and
(2) by striking ``January 1, 2010'' and inserting ``January
1, 2011''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2009.
SEC. 258. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS TO
CONTROLLING EXEMPT ORGANIZATIONS.
(a) In General.--Clause (iv) of section 512(b)(13)(E) is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to payments received or accrued after December 31, 2009.
SEC. 259. EXCLUSION OF GAIN OR LOSS ON SALE OR EXCHANGE OF CERTAIN
BROWNFIELD SITES FROM UNRELATED BUSINESS INCOME.
(a) In General.--Subparagraph (K) of section 512(b)(19) is amended
by striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to property acquired after December 31, 2009.
SEC. 260. TIMBER REIT MODERNIZATION.
(a) In General.--Paragraph (8) of section 856(c) is amended by
striking ``means'' and all that follows and inserting ``means December
31, 2010.''.
(b) Conforming Amendments.--
(1) Subparagraph (I) of section 856(c)(2) is amended by
striking ``the first taxable year beginning after the date of
the enactment of this subparagraph'' and inserting ``a taxable
year beginning on or before the termination date''.
(2) Clause (iii) of section 856(c)(5)(H) is amended by
inserting ``in taxable years beginning'' after
``dispositions''.
(3) Clause (v) of section 857(b)(6)(D) is amended by
inserting ``in a taxable year beginning'' after ``sale''.
(4) Subparagraph (G) of section 857(b)(6) is amended by
inserting ``in a taxable year beginning'' after ``In the case
of a sale''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending after May 22, 2009.
SEC. 261. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED INVESTMENT
COMPANIES.
(a) In General.--Paragraphs (1)(C) and (2)(C) of section 871(k) are
each amended by striking ``December 31, 2009'' and inserting ``December
31, 2010''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2009.
SEC. 262. RIC QUALIFIED INVESTMENT ENTITY TREATMENT UNDER FIRPTA.
(a) In General.--Clause (ii) of section 897(h)(4)(A) is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
take effect on January 1, 2010. Notwithstanding the preceding
sentence, such amendment shall not apply with respect to the
withholding requirement under section 1445 of the Internal
Revenue Code of 1986 for any payment made before the date of
the enactment of this Act.
(2) Amounts withheld on or before date of enactment.--In
the case of a regulated investment company--
(A) which makes a distribution after December 31,
2009, and before the date of the enactment of this Act;
and
(B) which would (but for the second sentence of
paragraph (1)) have been required to withhold with
respect to such distribution under section 1445 of such
Code,
such investment company shall not be liable to any person to
whom such distribution was made for any amount so withheld and
paid over to the Secretary of the Treasury.
SEC. 263. EXCEPTIONS FOR ACTIVE FINANCING INCOME.
(a) In General.--Sections 953(e)(10) and 954(h)(9) are each amended
by striking ``January 1, 2010'' and inserting ``January 1, 2011''.
(b) Conforming Amendment.--Section 953(e)(10) is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years of foreign corporations beginning after December
31, 2009, and to taxable years of United States shareholders with or
within which any such taxable year of such foreign corporation ends.
SEC. 264. LOOK-THRU TREATMENT OF PAYMENTS BETWEEN RELATED CONTROLLED
FOREIGN CORPORATIONS UNDER FOREIGN PERSONAL HOLDING
COMPANY RULES.
(a) In General.--Subparagraph (C) of section 954(c)(6) is amended
by striking ``January 1, 2010'' and inserting ``January 1, 2011''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years of foreign corporations beginning after December 31,
2009, and to taxable years of United States shareholders with or within
which any such taxable year of such foreign corporation ends.
SEC. 265. BASIS ADJUSTMENT TO STOCK OF S CORPS MAKING CHARITABLE
CONTRIBUTIONS OF PROPERTY.
(a) In General.--Paragraph (2) of section 1367(a) is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made in taxable years beginning after December 31,
2009.
SEC. 266. EMPOWERMENT ZONE TAX INCENTIVES.
(a) In General.--Section 1391 is amended--
(1) by striking ``December 31, 2009'' in subsection
(d)(1)(A)(i) and inserting ``December 31, 2010''; and
(2) by striking the last sentence of subsection (h)(2).
(b) Increased Exclusion of Gain on Stock of Empowerment Zone
Businesses.--Subparagraph (C) of section 1202(a)(2) is amended--
(1) by striking ``December 31, 2014'' and inserting
``December 31, 2015''; and
(2) by striking ``2014'' in the heading and inserting
``2015''.
(c) Treatment of Certain Termination Dates Specified in
Nominations.--In the case of a designation of an empowerment zone the
nomination for which included a termination date which is
contemporaneous with the date specified in subparagraph (A)(i) of
section 1391(d)(1) of the Internal Revenue Code of 1986 (as in effect
before the enactment of this Act), subparagraph (B) of such section
shall not apply with respect to such designation unless, after the date
of the enactment of this section, the entity which made such nomination
reconfirms such termination date, or amends the nomination to provide
for a new termination date, in such manner as the Secretary of the
Treasury (or the Secretary's designee) may provide.
(d) Effective Date.--The amendments made by this section shall
apply to periods after December 31, 2009.
SEC. 267. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF COLUMBIA.
(a) In General.--Subsection (f) of section 1400 is amended by
striking ``December 31, 2009'' each place it appears and inserting
``December 31, 2010''.
(b) Tax-exempt DC Empowerment Zone Bonds.--Subsection (b) of
section 1400A is amended by striking ``December 31, 2009'' and
inserting ``December 31, 2010''.
(c) Zero-percent Capital Gains Rate.--
(1) Acquisition date.--Paragraphs (2)(A)(i), (3)(A),
(4)(A)(i), and (4)(B)(i)(I) of section 1400B(b) are each
amended by striking ``January 1, 2010'' and inserting ``January
1, 2011''.
(2) Limitation on period of gains.--
(A) In general.--Paragraph (2) of section 1400B(e)
is amended--
(i) by striking ``December 31, 2014'' and
inserting ``December 31, 2015''; and
(ii) by striking ``2014'' in the heading
and inserting ``2015''.
(B) Partnerships and s-corps.--Paragraph (2) of
section 1400B(g) is amended by striking ``December 31,
2014'' and inserting ``December 31, 2015''.
(d) First-time Homebuyer Credit.--Subsection (i) of section 1400C
is amended by striking ``January 1, 2010'' and inserting ``January 1,
2011''.
(e) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
periods after December 31, 2009.
(2) Tax-exempt dc empowerment zone bonds.--The amendment
made by subsection (b) shall apply to bonds issued after
December 31, 2009.
(3) Acquisition dates for zero-percent capital gains
rate.--The amendments made by subsection (c) shall apply to
property acquired or substantially improved after December 31,
2009.
(4) Homebuyer credit.--The amendment made by subsection (d)
shall apply to homes purchased after December 31, 2009.
SEC. 268. RENEWAL COMMUNITY TAX INCENTIVES.
(a) In General.--Subsection (b) of section 1400E is amended--
(1) by striking ``December 31, 2009'' in paragraphs (1)(A)
and (3) and inserting ``December 31, 2010''; and
(2) by striking ``January 1, 2010'' in paragraph (3) and
inserting ``January 1, 2011''.
(b) Zero-percent Capital Gains Rate.--
(1) Acquisition date.--Paragraphs (2)(A)(i), (3)(A),
(4)(A)(i), and (4)(B)(i) of section 1400F(b) are each amended
by striking ``January 1, 2010'' and inserting ``January 1,
2011''.
(2) Limitation on period of gains.--Paragraph (2) of
section 1400F(c) is amended--
(A) by striking ``December 31, 2014'' and inserting
``December 31, 2015''; and
(B) by striking ``2014'' in the heading and
inserting ``2015''.
(3) Clerical amendment.--Subsection (d) of section 1400F is
amended by striking ``and `December 31, 2014' for `December 31,
2014'''.
(c) Commercial Revitalization Deduction.--
(1) In general.--Subsection (g) of section 1400I is amended
by striking ``December 31, 2009'' and inserting ``December 31,
2010''.
(2) Conforming amendment.--Subparagraph (A) of section
1400I(d)(2) is amended by striking ``after 2001 and before
2010'' and inserting ``which begins after 2001 and before the
date referred to in subsection (g)''.
(d) Increased Expensing Under Section 179.--Subparagraph (A) of
section 1400J(b)(1) is amended by striking ``January 1, 2010'' and
inserting ``January 1, 2011''.
(e) Treatment of Certain Termination Dates Specified in
Nominations.--In the case of a designation of a renewal community the
nomination for which included a termination date which is
contemporaneous with the date specified in subparagraph (A) of section
1400E(b)(1) of the Internal Revenue Code of 1986 (as in effect before
the enactment of this Act), subparagraph (B) of such section shall not
apply with respect to such designation unless, after the date of the
enactment of this section, the entity which made such nomination
reconfirms such termination date, or amends the nomination to provide
for a new termination date, in such manner as the Secretary of the
Treasury (or the Secretary's designee) may provide.
(f) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
periods after December 31, 2009.
(2) Acquisitions.--The amendments made by subsections
(b)(1) and (d) shall apply to acquisitions after December 31,
2009.
(3) Commercial revitalization deduction.--
(A) In general.--The amendment made by subsection
(c)(1) shall apply to buildings placed in service after
December 31, 2009.
(B) Conforming amendment.--The amendment made by
subsection (c)(2) shall apply to calendar years
beginning after December 31, 2009.
SEC. 269. TEMPORARY INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAXES
TO PUERTO RICO AND THE VIRGIN ISLANDS.
(a) In General.--Paragraph (1) of section 7652(f) is amended by
striking ``January 1, 2010'' and inserting ``January 1, 2011''.
(b) Effective Date.--The amendment made by this section shall apply
to distilled spirits brought into the United States after December 31,
2009.
SEC. 270. PAYMENT TO AMERICAN SAMOA IN LIEU OF EXTENSION OF ECONOMIC
DEVELOPMENT CREDIT.
The Secretary of the Treasury (or his designee) shall pay
$18,000,000 to the Government of American Samoa for purposes of
economic development. The payment made under the preceding sentence
shall be treated for purposes of section 1324 of title 31, United
States Code, as a refund of internal revenue collections to which such
section applies.
SEC. 271. ELECTION TO TEMPORARILY UTILIZE UNUSED AMT CREDITS DETERMINED
BY DOMESTIC INVESTMENT.
(a) In General.--Section 53 is amended by adding at the end the
following new subsection:
``(g) Election for Corporations With New Domestic Investments.--
``(1) In general.--If a corporation elects to have this
subsection apply for its first taxable year beginning after
December 31, 2009, the limitation imposed by subsection (c) for
such taxable year shall be increased by the AMT credit
adjustment amount.
``(2) AMT credit adjustment amount.--For purposes of
paragraph (1), the term `AMT credit adjustment amount' means,
the lesser of--
``(A) 50 percent of a corporation's minimum tax
credit for its first taxable year beginning after
December 31, 2009, determined under subsection (b), or
``(B) 10 percent of new domestic investments made
during such taxable year.
``(3) New domestic investments.--For purposes of this
subsection, the term `new domestic investments' means the cost
of qualified property (as defined in section 168(k)(2)(A)(i))--
``(A) the original use of which commences with the
taxpayer during the taxable year, and
``(B) which is placed in service in the United
States by the taxpayer during such taxable year.
``(4) Credit refundable.--For purposes of subsection (b) of
section 6401, the aggregate increase in the credits allowable
under this part for any taxable year resulting from the
application of this subsection shall be treated as allowed
under subpart C (and not under any other subpart). For purposes
of section 6425, any amount treated as so allowed shall be
treated as a payment of estimated income tax for the taxable
year.
``(5) Election.--An election under this subsection shall be
made at such time and in such manner as prescribed by the
Secretary, and once made, may be revoked only with the consent
of the Secretary. Not later than 90 days after the date of the
enactment of this subsection, the Secretary shall issue
guidance specifying such time and manner.
``(6) Treatment of certain partnership investments.--For
purposes of this subsection, a corporation shall take into
account its allocable share of any new domestic investments by
a partnership for any taxable year if, and only if, more than
90 percent of the capital and profits interests in such
partnership are owned by such corporation (directly or
indirectly) at all times during such taxable year.
``(7) No double benefit.--
``(A) In general.--A corporation making an election
under this subsection may not make an election under
subparagraph (H) of section 172(b)(1).
``(B) Special rules with respect to taxpayers
previously electing applicable net operating losses.--
In the case of a corporation which made an election
under subparagraph (H) of section 172(b)(1) and elects
the application of this subsection--
``(i) Election of applicable net operating
loss treated as revoked.--The election under
such subparagraph (H) shall (notwithstanding
clause (iii)(II) of such subparagraph) be
treated as having been revoked by the taxpayer.
``(ii) Coordination with provision for
expedited refund.--The amount otherwise treated
as a payment of estimated income tax under the
last sentence of paragraph (4) shall be reduced
(but not below zero) by the aggregate increase
in unpaid tax liability determined under this
chapter by reason of the revocation of the
election under clause (i).
``(iii) Application of statute of
limitations.--With respect to the revocation of
an election under clause (i)--
``(I) the statutory period for the
assessment of any deficiency
attributable to such revocation shall
not expire before the end of the 3-year
period beginning on the date of the
election to have this subsection apply,
and
``(II) such deficiency may be
assessed before the expiration of such
3-year period notwithstanding the
provisions of any other law or rule of
law which would otherwise prevent such
assessment.
``(C) Exception for eligible small businesses.--
Subparagraphs (A) and (B) shall not apply to an
eligible small business as defined in section
172(b)(1)(H)(v)(II).
``(8) Regulations.--The Secretary may issue such
regulations or other guidance as may be necessary or
appropriate to carry out the purposes of this subsection,
including to prevent fraud and abuse under this subsection.''.
(b) Conforming Amendments.--
(1) Section 6211(b)(4)(A) is amended by inserting
``53(g),'' after ``53(e),''.
(2) Section 1324(b)(2) of title 31, United States Code, is
amended by inserting ``53(g),'' after ``53(e),''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2009.
SEC. 272. STUDY OF EXTENDED TAX EXPENDITURES.
(a) Findings.--Congress finds the following:
(1) Currently, the aggregate cost of Federal tax
expenditures rivals, or even exceeds, the amount of total
Federal discretionary spending.
(2) Given the escalating public debt, a critical
examination of this use of taxpayer dollars is essential.
(3) Additionally, tax expenditures can complicate the
Internal Revenue Code of 1986 for taxpayers and complicate tax
administration for the Internal Revenue Service.
(4) To facilitate a better understanding of tax
expenditures in the future, it is constructive for legislation
extending these provisions to include a study of such
provisions.
(b) Requirement to Report.--Not later than November 30, 2010, the
Chief of Staff of the Joint Committee on Taxation, in consultation with
the Comptroller General of the United States, shall submit to the
Committee on Ways and Means of the House of Representatives and the
Committee on Finance of the Senate a report on each tax expenditure (as
defined in section 3(3) of the Congressional Budget Impoundment Control
Act of 1974 (2 U.S.C. 622(3)) extended by this title.
(c) Rolling Submission of Reports.--The Chief of Staff of the Joint
Committee on Taxation shall initially submit the reports for each such
tax expenditure enacted in this subtitle (relating to business tax
relief) and subtitle A (relating to energy) in order of the tax
expenditure incurring the least aggregate cost to the greatest
aggregate cost (determined by reference to the cost estimate of this
Act by the Joint Committee on Taxation). Thereafter, such reports may
be submitted in such order as the Chief of Staff determines
appropriate.
(d) Contents of Report.--Such reports shall contain the following:
(1) An explanation of the tax expenditure and any relevant
economic, social, or other context under which it was first
enacted.
(2) A description of the intended purpose of the tax
expenditure.
(3) An analysis of the overall success of the tax
expenditure in achieving such purpose, and evidence supporting
such analysis.
(4) An analysis of the extent to which further extending
the tax expenditure, or making it permanent, would contribute
to achieving such purpose.
(5) A description of the direct and indirect beneficiaries
of the tax expenditure, including identifying any unintended
beneficiaries.
(6) An analysis of whether the tax expenditure is the most
cost-effective method for achieving the purpose for which it
was intended, and a description of any more cost-effective
methods through which such purpose could be accomplished.
(7) A description of any unintended effects of the tax
expenditure that are useful in understanding the tax
expenditure's overall value.
(8) An analysis of how the tax expenditure could be
modified to better achieve its original purpose.
(9) A brief description of any interactions (actual or
potential) with other tax expenditures or direct spending
programs in the same or related budget function worthy of
further study.
(10) A description of any unavailable information the staff
of the Joint Committee on Taxation may need to complete a more
thorough examination and analysis of the tax expenditure, and
what must be done to make such information available.
(e) Minimum Analysis by Deadline.--In the event the Chief of Staff
of the Joint Committee on Taxation concludes it will not be feasible to
complete all reports by the date specified in subsection (a), at a
minimum, the reports for each tax expenditure enacted in this subtitle
(relating to business tax relief) and subtitle A (relating to energy)
shall be completed by such date.
Subtitle D--Temporary Disaster Relief Provisions
PART I--NATIONAL DISASTER RELIEF
SEC. 281. WAIVER OF CERTAIN MORTGAGE REVENUE BOND REQUIREMENTS.
(a) In General.--Paragraph (11) of section 143(k) is amended by
striking ``January 1, 2010'' and inserting ``January 1, 2011''.
(b) Special Rule for Residences Destroyed in Federally Declared
Disasters.--Paragraph (13) of section 143(k), as redesignated by
subsection (c), is amended by striking ``January 1, 2010'' in
subparagraphs (A)(i) and (B)(i) and inserting ``January 1, 2011''.
(c) Technical Amendment.--Subsection (k) of section 143 is amended
by redesignating the second paragraph (12) (relating to special rules
for residences destroyed in federally declared disasters) as paragraph
(13).
(d) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendment made by this section shall apply to
bonds issued after December 31, 2009.
(2) Residences destroyed in federally declared disasters.--
The amendments made by subsection (b) shall apply with respect
to disasters occurring after December 31, 2009.
(3) Technical amendment.--The amendment made by subsection
(c) shall take effect as if included in section 709 of the Tax
Extenders and Alternative Minimum Tax Relief Act of 2008.
SEC. 282. LOSSES ATTRIBUTABLE TO FEDERALLY DECLARED DISASTERS.
(a) In General.--Subclause (I) of section 165(h)(3)(B)(i) is
amended by striking ``January 1, 2010'' and inserting ``January 1,
2011''.
(b) $500 Limitation.--Paragraph (1) of section 165(h) is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(c) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
apply to federally declared disasters occurring after December
31, 2009.
(2) $500 limitation.--The amendment made by subsection (b)
shall apply to taxable years beginning after December 31, 2009.
SEC. 283. SPECIAL DEPRECIATION ALLOWANCE FOR QUALIFIED DISASTER
PROPERTY.
(a) In General.--Subclause (I) of section 168(n)(2)(A)(ii) is
amended by striking ``January 1, 2010'' and inserting ``January 1,
2011''.
(b) Effective Date.--The amendment made by this section shall apply
to disasters occurring after December 31, 2009.
SEC. 284. NET OPERATING LOSSES ATTRIBUTABLE TO FEDERALLY DECLARED
DISASTERS.
(a) In General.--Subclause (I) of section 172(j)(1)(A)(i) is
amended by striking ``January 1, 2010'' and inserting ``January 1,
2011''.
(b) Effective Date.--The amendment made by this section shall apply
to losses attributable to disasters occurring after December 31, 2009.
SEC. 285. EXPENSING OF QUALIFIED DISASTER EXPENSES.
(a) In General.--Subparagraph (A) of section 198A(b)(2) is amended
by striking ``January 1, 2010'' and inserting ``January 1, 2011''.
(b) Effective Date.--The amendment made by this section shall apply
to expenditures on account of disasters occurring after December 31,
2009.
PART II--REGIONAL PROVISIONS
Subpart A--New York Liberty Zone
SEC. 291. SPECIAL DEPRECIATION ALLOWANCE FOR NONRESIDENTIAL AND
RESIDENTIAL REAL PROPERTY.
(a) In General.--Subparagraph (A) of section 1400L(b)(2) is amended
by striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2009.
SEC. 292. TAX-EXEMPT BOND FINANCING.
(a) In General.--Subparagraph (D) of section 1400L(d)(2) is amended
by striking ``January 1, 2010'' and inserting ``January 1, 2011''.
(b) Effective Date.--The amendment made by this section shall apply
to bonds issued after December 31, 2009.
Subpart B--GO Zone
SEC. 295. INCREASE IN REHABILITATION CREDIT.
(a) In General.--Subsection (h) of section 1400N is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to amounts paid or incurred after December 31, 2009.
SEC. 296. WORK OPPORTUNITY TAX CREDIT WITH RESPECT TO CERTAIN
INDIVIDUALS AFFECTED BY HURRICANE KATRINA FOR EMPLOYERS
INSIDE DISASTER AREAS.
(a) In General.--Paragraph (1) of section 201(b) of the Katrina
Emergency Tax Relief Act of 2005 is amended by striking ``4-year'' and
inserting ``5-year''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to individuals hired after August 27, 2009.
SEC. 297. EXTENSION OF LOW-INCOME HOUSING CREDIT RULES FOR BUILDINGS IN
GO ZONES.
Section 1400N(c)(5) is amended by striking ``January 1, 2011'' and
inserting ``January 1, 2013''.
TITLE III--PENSION PROVISIONS
Subtitle A--Pension Funding Relief
PART 1--SINGLE-EMPLOYER PLANS
SEC. 301. EXTENDED PERIOD FOR SINGLE-EMPLOYER DEFINED BENEFIT PLANS TO
AMORTIZE CERTAIN SHORTFALL AMORTIZATION BASES.
(a) ERISA Amendments.--
(1) In general.--Section 303(c)(2) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1083(c)(2))
is amended by adding at the end the following subparagraphs:
``(D) Special rule.--
``(i) In general.--In the case of the
shortfall amortization base of a plan for any
applicable plan year, the shortfall
amortization installments are the amounts
described in clause (ii) or (iii), if made
applicable by an election under clause (iv). In
the absence of a timely election, such
installments shall be determined without regard
to this subparagraph.
``(ii) 2 plus 7 amortization schedule.--The
shortfall amortization installments described
in this clause are--
``(I) in the case of the first 2
plan years in the 9-plan-year period
beginning with the applicable plan
year, interest on the shortfall
amortization base (determined by using
the effective interest rate for the
applicable plan year), and
``(II) in the case of the last 7
plan years in such 9-plan-year period,
the amounts necessary to amortize the
balance of such shortfall amortization
base in level annual installments over
such last 7 plan years (determined
using the segment rates determined
under subparagraph (C) of subsection
(h)(2) for the applicable plan year,
applied under rules similar to the
rules of subparagraph (B) of subsection
(h)(2)).
``(iii) 15-year amortization.--The
shortfall amortization installments described
in this clause are the amounts under
subparagraphs (A) and (B) determined by
substituting `15 plan-year period' for `7-plan-
year period'.
``(iv) Election.--
``(I) In general.--The plan sponsor
may, with respect to a plan, elect,
with respect to any of not more than 2
applicable plan years, to determine
shortfall amortization installments
under this subparagraph. An election
under either clause (ii) or clause
(iii) may be made with respect to
either of such applicable plan years.
``(II) Eligibility for election.--
An election may be made to determine
shortfall amortization installments
under this subparagraph with respect to
a plan only if, as of the date of the
election--
``(aa) the plan sponsor is
not a debtor in a case under
title 11, United States Code,
or similar Federal or State
law,
``(bb) there are no unpaid
minimum required contributions
with respect to the plan for
purposes of section 4971 of the
Internal Revenue Code of 1986,
``(cc) there is no lien in
favor of the plan under
subsection (k) or under section
430(k) of such Code, and
``(dd) a distress
termination has not been
initiated for the plan under
section 4041(c).
``(III) Rules relating to
election.--Such election shall be made
at such times, and in such form and
manner, as shall be prescribed by the
Secretary of the Treasury and shall be
irrevocable, except under such limited
circumstances, and subject to such
conditions, as such Secretary may
prescribe.
``(E) Applicable plan year.--
``(i) In general.--For purposes of this
paragraph, the term `applicable plan year'
means, subject to the election of the plan
sponsor under subparagraph (D)(iv), each of not
more than 2 of the plan years beginning in
2008, 2009, 2010, or 2011.
``(ii) Special rule relating to 2008.--A
plan year may be elected as an applicable plan
year pursuant to this subparagraph only if the
due date under subsection (j)(1) for the
payment of the minimum required contribution
for such plan year occurs on or after March 10,
2010.
``(F) Increases in shortfall amortization
installments in cases of excess compensation or certain
dividends or stock redemptions.--
``(i) In general.--If, with respect to an
election for an applicable plan year under
subparagraph (D), there is an installment
acceleration amount with respect to a plan for
any plan year in the restriction period (or if
there is an installment acceleration amount
carried forward to a plan year not in the
restriction period), then the shortfall
amortization installment otherwise determined
and payable under this paragraph for such plan
year shall be increased by such amount.
``(ii) Back-end adjustment to amortization
schedule.--Subject to rules prescribed by the
Secretary of the Treasury, if a shortfall
amortization installment with respect to any
shortfall amortization base for an applicable
plan year is required to be increased for any
plan year under clause (i), subsequent
shortfall amortization installments with
respect to such base shall be reduced, in
reverse order of the otherwise required
installments beginning with the final scheduled
installment, to the extent necessary to limit
the present value of such subsequent shortfall
amortization installments (after application of
this subparagraph) to the present value of the
remaining unamortized shortfall amortization
base.
``(iii) Installment acceleration amount.--
For purposes of this subparagraph--
``(I) In general.--The term
`installment acceleration amount'
means, with respect to any plan year in
a restriction period with respect to an
applicable plan year, the sum of--
``(aa) the aggregate amount
of excess employee compensation
determined under clause (iv)
for the plan year, plus
``(bb) the dividend and
redemption amount determined
under clause (v) for the plan
year.
``(II) Cumulative limitation.--The
installment acceleration amount for any
plan year shall not exceed the excess
(if any) of--
``(aa) the sum of the
shortfall amortization
installments for the plan year
and all preceding plan years in
the amortization period elected
under subparagraph (D) with
respect to the shortfall
amortization base with respect
to an applicable year,
determined without regard to
subparagraph (D) and this
subparagraph, over
``(bb) the sum of the
shortfall amortization
installments for such plan year
and all such preceding plan
years, determined after
application of subparagraph (D)
(and in the case of any
preceding plan year, after
application of this
subparagraph).
``(III) Carryover of excess
installment acceleration amounts.--
``(aa) In general.--If the
installment acceleration amount
for any plan year (determined
without regard to subclause
(II)) exceeds the limitation
under subclause (II), then,
subject to item (bb), such
excess shall be treated as an
installment acceleration amount
for the succeeding plan year.
``(bb) Cap to apply.--If
any amount treated as an
installment acceleration amount
under item (aa) or this item
with respect any succeeding
plan year, when added to other
installment acceleration
amounts (determined without
regard to subclause (II)) with
respect to the plan year,
exceeds the limitation under
subclause (II), the portion of
such amount representing such
excess shall be treated as an
installment acceleration amount
with respect to the next
succeeding plan year.
``(cc) Limitation on years
to which amounts carried
forward.--No amount shall be
carried forward under item (aa)
or (bb) to a plan year which
begins after the last plan year
in the restriction period (or
after the second plan year
following such last plan year
in the case of an election year
with respect to which 15-year
amortization was elected under
subparagraph (D)(iii)).
``(dd) Ordering rules.--For
purposes of applying item (bb),
installment acceleration
amounts for the plan year
(determined without regard to
any carryover under this
clause) shall be applied first
against the limitation under
subclause (II) and then
carryovers to such plan year
shall be applied against such
limitation on a first-in,
first-out basis.
``(iv) Excess employee compensation.--
``(I) In general.--For purposes of
this paragraph, the term `excess
employee compensation' means the sum
of--
``(aa) with respect to any
employee, for any plan year,
the excess (if any) of--
``(AA) the
aggregate amount
includible in income
under chapter 1 of the
Internal Revenue Code
of 1986 for
remuneration during the
calendar year in which
such plan year begins
for services performed
by the employee for the
plan sponsor (whether
or not performed during
such calendar year),
over
``(BB) $1,000,000,
plus
``(bb) the amount of assets
set aside or reserved (directly
or indirectly) in a trust (or
other arrangement as determined
by the Secretary of the
Treasury), or transferred to
such a trust or other
arrangement, during the
calendar year by a plan sponsor
for purposes of paying deferred
compensation of an employee
under a nonqualified deferred
compensation plan (as defined
in section 409A of such Code)
of the plan sponsor.
``(II) No double counting.--No
amount shall be taken into account
under subclause (I) more than once.
``(III) Employee; remuneration.--
For purposes of this clause, the term
`employee' includes, with respect to a
calendar year, a self-employed
individual who is treated as an
employee under section 401(c) of the
Internal Revenue Code of 1986 for the
taxable year ending during such
calendar year, and the term
`remuneration' shall include earned
income of such an individual.
``(IV) Certain payments under
existing contracts.--There shall not be
taken into account under subclause
(I)(aa) any remuneration consisting of
nonqualified deferred compensation,
restricted stock (or restricted stock
units), stock options, or stock
appreciation rights payable or granted
under a written binding contract that
was in effect on March 1, 2010, and
which was not modified in any material
respect before such remuneration is
paid.
``(V) Only remuneration for post-
2009 services counted.--Remuneration
shall be taken into account under
subclause (I)(aa) only to the extent
attributable to services performed by
the employee for the plan sponsor after
December 31, 2009.
``(VI) Commissions.--
``(aa) In general.--There
shall not be taken into account
under subclause (I)(aa) any
remuneration payable on a
commission basis solely on
account of income directly
generated by the individual
performance of the individual
to whom such remuneration is
payable.
``(bb) Specified
employees.--Item (aa) shall not
apply in the case of any
specified employee (within the
meaning of section
409A(a)(2)(B)(i) of the
Internal Revenue Code of 1986)
or any employee who would be
such a specified employee if
the plan sponsor were a
corporation described in such
section.
``(VII) Indexing of amount.--In the
case of any calendar year beginning
after 2010, the dollar amount under
subclause (I)(aa)(BB) shall be
increased by an amount equal to--
``(aa) such dollar amount,
multiplied by
``(bb) the cost-of-living
adjustment determined under
section 1(f)(3) of the Internal
Revenue Code of 1986 for the
calendar year, determined by
substituting `calendar year
2009' for `calendar year 1992'
in subparagraph (B) thereof.
If the amount of any increase under
clause (i) is not a multiple of
$20,000, such increase shall be rounded
to the next lowest multiple of $20,000.
``(v) Certain dividends and redemptions.--
``(I) In general.--The dividend and
redemption amount determined under this
clause for any plan year is the lesser
of--
``(aa) the excess of--
``(AA) the sum of
the dividends paid
during the plan year by
the plan sponsor, plus
the amounts paid for
the redemption of stock
of the plan sponsor
redeemed during the
plan year, over
``(BB) an amount
equal to the average of
adjusted annual net
income of the plan
sponsor for the last 5
fiscal years of the
plan sponsor ending
before such plan year,
or
``(bb) the sum of--
``(AA) the amounts
paid for the redemption
of stock of the plan
sponsor redeemed during
the plan year, plus
``(BB) the excess
of dividends paid
during the plan year by
the plan sponsor over
the dividend base
amount.
``(II) Definitions.--
``(aa) Adjusted annual net
income.--For purposes of
subclause (I)(aa)(BB), the term
`adjusted annual net income'
with respect to any fiscal year
means annual net income,
determined in accordance with
generally accepted accounting
principles (before after-tax
gain or loss on any sale of
assets), but without regard to
any reduction by reason of
depreciation or amortization,
except that in no event shall
adjusted annual net income for
any fiscal year be less than
zero.
``(bb) Dividend base
amount.--For purposes of this
clause, the term `dividend base
amount' means, with respect to
a plan year, an amount equal to
the greater of--
``(AA) the median
of the amounts of the
dividends paid during
each of the last 5
fiscal years of the
plan sponsor ending
before such plan year,
or
``(BB) the amount
of dividends paid
during such plan year
on preferred stock that
was issued on or before
May 21, 2010, or that
is replacement stock
for such preferred
stock.
``(III) Only certain post-2009
dividends and redemptions counted.--For
purposes of subclause (I) (other than
for purposes of calculating the
dividend base amount), there shall only
be taken into account dividends
declared, and redemptions occurring,
after February 28, 2010.
``(IV) Exception for intra-group
dividends.--Dividends paid by one
member of a controlled group (as
defined in section 302(d)(3)) to
another member of such group shall not
be taken into account under subclause
(I).
``(V) Exception for stock
dividends.--Any distribution by the
plan sponsor to its shareholders of
stock issued by the plan sponsor shall
not be taken into account under
subclause (I).
``(VI) Exception for certain
redemptions.--The following shall not
be taken into account under subclause
(I):
``(aa) Redemptions of
securities which, at the time
of redemption, are not listed
on an established securities
market and--
``(AA) are made
pursuant to a pension
plan that is qualified
under section 401 of
the Internal Revenue
Code of 1986 or a
shareholder-approved
program, or
``(BB) are made on
account of an
employee's termination
of employment with the
plan sponsor, or the
death or disability of
a shareholder.
``(bb) Redemptions of
securities which are not,
immediately after issuance,
listed on an established
securities market and are, or
had previously been--
``(AA) held,
directly or indirectly,
by, or for the benefit
of, the Federal
Government or a Federal
reserve bank, or
``(BB) held by a
national government (or
a government-related
entity of such a
government) or an
employee benefit plan
if such shares are
substantially identical
to shares described in
subitem (AA).
``(vi) Other definitions and rules.--For
purposes of this subparagraph--
``(I) Plan sponsor.--The term `plan
sponsor' includes any member of the
plan sponsor's controlled group (as
defined in section 302(d)(3)).
``(II) Restriction period.--The
term `restriction period' means, with
respect to any applicable plan year
with respect to which an election is
made under subparagraph (D)--
``(aa) except as provided
in item (bb), the 3-year period
beginning with the applicable
plan year (or, if later, the
first plan year beginning after
December 31, 2009), or
``(bb) if the plan sponsor
elects 15-year amortization for
the shortfall amortization base
for the applicable plan year,
the 5-year period beginning
with such plan year (or, if
later, the first plan year
beginning after December 31,
2009).
``(III) Elections for multiple
plans.--If a plan sponsor makes
elections under subparagraph (D) with
respect to 2 or more plans, the
Secretary of the Treasury shall provide
rules for the application of this
subparagraph to such plans, including
rules for the ratable allocation of any
installment acceleration amount among
such plans on the basis of each plan's
relative reduction in the plan's
shortfall amortization installment for
the first plan year in the amortization
period described in clause (i)
(determined without regard to this
subparagraph).
``(G) Mergers and acquisitions.--The Secretary of
the Treasury shall prescribe rules for the application
of subparagraphs (D) and (F) in any case where there is
a merger or acquisition involving a plan sponsor making
the election under subparagraph (D).
``(H) Regulations and guidance.--The Secretary of
the Treasury may prescribe such regulations and other
guidance of general applicability as such Secretary may
determine necessary to achieve the purposes of
subparagraphs (D) and (F).''.
(2) Notice requirement.--Section 204 of such Act (29 U.S.C.
1054) is amended--
(A) by redesignating subsection (k) as subsection
(l); and
(B) by inserting after subsection (j) the following
new subsection:
``(k) Notice in Connection With Shortfall Amortization Election.--
``(1) In general.--Not later 30 days after the date of an
election under clause (iv) of section 303(c)(2)(D) in
connection with a single-employer plan, the plan administrator
shall provide notice of such election in accordance with this
subsection to each plan participant and beneficiary, each labor
organization representing such participants and beneficiaries,
and the Pension Benefit Guaranty Corporation.
``(2) Matters included in notice.--Each notice provided
pursuant to this subsection shall set forth--
``(A) a statement that recently enacted legislation
permits employers to delay pension funding;
``(B) with respect to required contributions--
``(i) the amount of contributions that
would have been required had the election not
been made;
``(ii) the amount of the reduction in
required contributions for the applicable plan
year that occurs on account of the election;
and
``(iii) the number of plan years to which
such reduction will apply;
``(C) with respect to a plan's funding status as of
the end of the plan year preceding the applicable plan
year--
``(i) the liabilities determined under
section 4010(d)(1)(A); and
``(ii) the market value of assets of the
plan; and
``(D) with respect to installment acceleration
amounts (as defined in section 303(c)(2)(F)(iii)(I))--
``(i) an explanation of section
303(c)(2)(F) (relating to increases in
shortfall amortization installments in cases of
excess compensation or certain dividends or
stock redemptions); and
``(ii) a statement that increases in
required contributions may occur in the event
of future payments of excess employee
compensation or certain share repurchasing or
dividend activity and that subsequent notices
of any such payments or activity will be
provided in the annual funding notice provided
pursuant to section 101(f).
``(3) Other requirements.--
``(A) Form.--The notice required by paragraph (1)
shall be written in a manner calculated to be
understood by the average plan participant. The
Secretary of the Treasury shall prescribe a model
notice that a plan administrator may use to satisfy the
requirements of paragraph (1).
``(B) Provision to designated persons.--Any notice
under paragraph (1) may be provided to a person
designated, in writing, by the person to which it would
otherwise be provided.
``(4) Effect of egregious failure.--
``(A) In general.--In the case of any egregious
failure to meet any requirement of this subsection with
respect to any election, such election shall be treated
as having not been made.
``(B) Egregious failure.--For purposes of
subparagraph (A), there is an egregious failure to meet
the requirements of this subsection if such failure is
in the control of the plan sponsor and is--
``(i) an intentional failure (including any
failure to promptly provide the required notice
or information after the plan administrator
discovers an unintentional failure to meet the
requirements of this subsection),
``(ii) a failure to provide most of the
participants and beneficiaries with most of the
information they are entitled to receive under
this subsection, or
``(iii) a failure which is determined to be
egregious under regulations prescribed by the
Secretary of the Treasury.
``(5) Use of new technologies.--The Secretary of the
Treasury may, in consultation with the Secretary, by
regulations or other guidance of general applicability, allow
any notice under this subsection to be provided using new
technologies.''.
(C) Subsequent supplemental notices.--Section
101(f)(2)(C) of such Act (29 U.S.C. 1021(f)(2)(C)) is
amended--
(i) by striking ``and'' at the end of
clause (i);
(ii) by redesignating clause (ii) as clause
(iii); and
(iii) by inserting after clause (i) the
following new clause:
``(ii) any excess employee compensation
amounts and any dividends and redemptions
amounts determined under section 303(c)(2)(F)
for the preceding plan year with respect to the
plan, and''.
(3) Disregard of installment acceleration amounts in
determining quarterly contributions.--Section 303(j)(3) of such
Act (29 U.S.C. 1083(j)(3)) is amended by adding at the end the
following new subparagraph:
``(F) Disregard of installment acceleration
amounts.--Subparagraph (D) shall be applied without
regard to any increase under subsection (c)(2)(F).''.
(4) Conforming amendment.--Section 303(c)(1) of such Act
(29 U.S.C. 1083(c)(1)) is amended by striking ``the shortfall
amortization bases for such plan year and each of the 6
preceding plan years'' and inserting ``any shortfall
amortization base which has not been fully amortized under this
subsection''.
(b) IRC Amendments.--
(1) In general.--Section 430(c)(2) of the Internal Revenue
Code of 1986 is amended by adding at the end the following
subparagraphs:
``(D) Special rule.--
``(i) In general.--In the case of the
shortfall amortization base of a plan for any
applicable plan year, the shortfall
amortization installments are the amounts
described in clause (ii) or (iii), if made
applicable by an election under clause (iv). In
the absence of a timely election, such
installments shall be determined without regard
to this subparagraph.
``(ii) 2 plus 7 amortization schedule.--The
shortfall amortization installments described
in this clause are--
``(I) in the case of the first 2
plan years in the 9-plan-year period
beginning with the applicable plan
year, interest on the shortfall
amortization base (determined by using
the effective interest rate for the
applicable plan year), and
``(II) in the case of the last 7
plan years in such 9-plan-year period,
the amounts necessary to amortize the
balance of such shortfall amortization
base in level annual installments over
such last 7 plan years (determined
using the segment rates determined
under subparagraph (C) of subsection
(h)(2) for the applicable plan year,
applied under rules similar to the
rules of subparagraph (B) of subsection
(h)(2)).
``(iii) 15-year amortization.--The
shortfall amortization installments described
in this clause are the amounts under
subparagraphs (A) and (B) determined by
substituting `15 plan-year period' for `7-plan-
year period'.
``(iv) Election.--
``(I) In general.--The plan sponsor
may, with respect to a plan, elect,
with respect to any of not more than 2
applicable plan years, to determine
shortfall amortization installments
under this subparagraph. An election
under either clause (ii) or clause
(iii) may be made with respect to
either of such applicable plan years.
``(II) Eligibility for election.--
An election may be made to determine
shortfall amortization installments
under this subparagraph with respect to
a plan only if, as of the date of the
election--
``(aa) the plan sponsor is
not a debtor in a case under
title 11, United States Code,
or similar Federal or State
law,
``(bb) there are no unpaid
minimum required contributions
with respect to the plan for
purposes of section 4971,
``(cc) there is no lien in
favor of the plan under
subsection (k) or under section
303(k) of the Employee
Retirement Income Security Act
of 1974, and
``(dd) a distress
termination has not been
initiated for the plan under
section 4041(c) of such Act.
``(III) Rules relating to
election.--Such election shall be made
at such times, and in such form and
manner, as shall be prescribed by the
Secretary and shall be irrevocable,
except under such limited
circumstances, and subject to such
conditions, as the Secretary may
prescribe.
``(E) Applicable plan year.--
``(i) In general.--For purposes of this
paragraph, the term `applicable plan year'
means, subject to the election of the plan
sponsor under subparagraph (D)(iv), each of not
more than 2 of the plan years beginning in
2008, 2009, 2010, or 2011.
``(ii) Special rule relating to 2008.--A
plan year may be elected as an applicable plan
year pursuant to this subparagraph only if the
due date under subsection (j)(1) for the
payment of the minimum required contribution
for such plan year occurs on or after March 10,
2010.
``(F) Increases in shortfall amortization
installments in cases of excess compensation or certain
dividends or stock redemptions.--
``(i) In general.--If, with respect to an
election for an applicable plan year under
subparagraph (D), there is an installment
acceleration amount with respect to a plan for
any plan year in the restriction period (or if
there is an installment acceleration amount
carried forward to a plan year not in the
restriction period), then the shortfall
amortization installment otherwise determined
and payable under this paragraph for such plan
year shall be increased by such amount.
``(ii) Back-end adjustment to amortization
schedule.--Subject to rules prescribed by the
Secretary, if a shortfall amortization
installment with respect to any shortfall
amortization base for an applicable plan year
is required to be increased for any plan year
under clause (i), subsequent shortfall
amortization installments with respect to such
base shall be reduced, in reverse order of the
otherwise required installments beginning with
the final scheduled installment, to the extent
necessary to limit the present value of such
subsequent shortfall amortization installments
(after application of this subparagraph) to the
present value of the remaining unamortized
shortfall amortization base.
``(iii) Installment acceleration amount.--
For purposes of this subparagraph--
``(I) In general.--The term
`installment acceleration amount'
means, with respect to any plan year in
a restriction period with respect to an
applicable plan year, the sum of--
``(aa) the aggregate amount
of excess employee compensation
determined under clause (iv)
for the plan year, plus
``(bb) the dividend and
redemption amount determined
under clause (v) for the plan
year.
``(II) Cumulative limitation.--The
installment acceleration amount for any
plan year shall not exceed the excess
(if any) of--
``(aa) the sum of the
shortfall amortization
installments for the plan year
and all preceding plan years in
the amortization period elected
under subparagraph (D) with
respect to the shortfall
amortization base with respect
to an applicable year,
determined without regard to
subparagraph (D) and this
subparagraph, over
``(bb) the sum of the
shortfall amortization
installments for such plan year
and all such preceding plan
years, determined after
application of subparagraph (D)
(and in the case of any
preceding plan year, after
application of this
subparagraph).
``(III) Carryover of excess
installment acceleration amounts.--
``(aa) In general.--If the
installment acceleration amount
for any plan year (determined
without regard to subclause
(II)) exceeds the limitation
under subclause (II), then,
subject to item (bb), such
excess shall be treated as an
installment acceleration amount
for the succeeding plan year.
``(bb) Cap to apply.--If
any amount treated as an
installment acceleration amount
under item (aa) or this item
with respect any succeeding
plan year, when added to other
installment acceleration
amounts (determined without
regard to subclause (II)) with
respect to the plan year,
exceeds the limitation under
subclause (II), the portion of
such amount representing such
excess shall be treated as an
installment acceleration amount
with respect to the next
succeeding plan year.
``(cc) Limitation on years
to which amounts carried
forward.--No amount shall be
carried forward under item (aa)
or (bb) to a plan year which
begins after the last plan year
in the restriction period (or
after the second plan year
following such last plan year
in the case of an election year
with respect to which 15-year
amortization was elected under
subparagraph (D)(iii)).
``(dd) Ordering rules.--For
purposes of applying item (bb),
installment acceleration
amounts for the plan year
(determined without regard to
any carryover under this
clause) shall be applied first
against the limitation under
subclause (II) and then
carryovers to such plan year
shall be applied against such
limitation on a first-in,
first-out basis.
``(iv) Excess employee compensation.--
``(I) In general.--For purposes of
this paragraph, the term `excess
employee compensation' means the sum
of--
``(aa) with respect to any
employee, for any plan year,
the excess (if any) of--
``(AA) the
aggregate amount
includible in income
under chapter 1 for
remuneration during the
calendar year in which
such plan year begins
for services performed
by the employee for the
plan sponsor (whether
or not performed during
such calendar year),
over
``(BB) $1,000,000,
plus
``(bb) the amount of assets
set aside or reserved (directly
or indirectly) in a trust (or
other arrangement as determined
by the Secretary), or
transferred to such a trust or
other arrangement, during the
calendar year by a plan sponsor
for purposes of paying deferred
compensation of an employee
under a nonqualified deferred
compensation plan (as defined
in section 409A) of the plan
sponsor.
``(II) No double counting.--No
amount shall be taken into account
under subclause (I) more than once.
``(III) Employee; remuneration.--
For purposes of this clause, the term
`employee' includes, with respect to a
calendar year, a self-employed
individual who is treated as an
employee under section 401(c) for the
taxable year ending during such
calendar year, and the term
`remuneration' shall include earned
income of such an individual.
``(IV) Certain payments under
existing contracts.--There shall not be
taken into account under subclause (I)
any remuneration consisting of
nonqualified deferred compensation,
restricted stock (or restricted stock
units), stock options, or stock
appreciation rights payable or granted
under a written binding contract that
was in effect on March 1, 2010, and
which was not modified in any material
respect before such remuneration is
paid.
``(V) Only remuneration for post-
2009 services counted.--Remuneration
shall be taken into account under
subclause (I)(aa) only to the extent
attributable to services performed by
the employee for the plan sponsor after
December 31, 2009.
``(VI) Commissions.--
``(aa) In general.--There
shall not be taken into account
under subclause (I)(aa) any
remuneration payable on a
commission basis solely on
account of income directly
generated by the individual
performance of the individual
to whom such remuneration is
payable.
``(bb) Specified
employees.--Item (aa) shall not
apply in the case of any
specified employee (within the
meaning of section
409A(a)(2)(B)(i)) or any
employee who would be such a
specified employee if the plan
sponsor were a corporation
described in such section.
``(VII) Indexing of amount.--In the
case of any calendar year beginning
after 2010, the dollar amount under
subclause (I)(aa)(BB) shall be
increased by an amount equal to--
``(aa) such dollar amount,
multiplied by
``(bb) the cost-of-living
adjustment determined under
section 1(f)(3) for the
calendar year, determined by
substituting `calendar year
2009' for `calendar year 1992'
in subparagraph (B) thereof.
If the amount of any increase under
clause (i) is not a multiple of
$20,000, such increase shall be rounded
to the next lowest multiple of $20,000.
``(v) Certain dividends and redemptions.--
``(I) In general.--The dividend and
redemption amount determined under this
clause for any plan year is the lesser
of--
``(aa) the excess of--
``(AA) the sum of
the dividends paid
during the plan year by
the plan sponsor, plus
the amounts paid for
the redemption of stock
of the plan sponsor
redeemed during the
plan year, over
``(BB) an amount
equal to the average of
adjusted annual net
income of the plan
sponsor for the last 5
fiscal years of the
plan sponsor ending
before such plan year,
or
``(bb) the sum of--
``(AA) the amounts
paid for the redemption
of stock of the plan
sponsor redeemed during
the plan year, plus
``(BB) the excess
of dividends paid
during the plan year by
the plan sponsor over
the dividend base
amount.
``(II) Definitions.--
``(aa) Adjusted annual net
income.--For purposes of
subclause (I)(aa)(BB), the term
`adjusted annual net income'
with respect to any fiscal year
means annual net income,
determined in accordance with
generally accepted accounting
principles (before after-tax
gain or loss on any sale of
assets), but without regard to
any reduction by reason of
depreciation or amortization,
except that in no event shall
adjusted annual net income for
any fiscal year be less than
zero.
``(bb) Dividend base
amount.--For purposes of this
clause, the term `dividend base
amount' means, with respect to
a plan year, an amount equal to
the greater of--
``(AA) the median
of the amounts of the
dividends paid during
each of the last 5
fiscal years of the
plan sponsor ending
before such plan year,
or
``(BB) the amount
of dividends paid
during such plan year
on preferred stock that
was issued on or before
May 21, 2010, or that
is replacement stock
for such preferred
stock.
``(III) Only certain post-2009
dividends and redemptions counted.--For
purposes of subclause (I) (other than
for purposes of calculating the
dividend base amount), there shall only
be taken into account dividends
declared, and redemptions occurring,
after February 28, 2010.
``(IV) Exception for intra-group
dividends.--Dividends paid by one
member of a controlled group (as
defined in section 412(d)(3)) to
another member of such group shall not
be taken into account under subclause
(I).
``(V) Exception for stock
dividends.--Any distribution by the
plan sponsor to its shareholders of
stock issued by the plan sponsor shall
not be taken into account under
subclause (I).
``(VI) Exception for certain
redemptions.--The following shall not
be taken into account under subclause
(I):
``(aa) Redemptions of
securities which, at the time
of redemption, are not listed
on an established securities
market and--
``(AA) are made
pursuant to a pension
plan that is qualified
under section 401 or a
shareholder-approved
program, or
``(BB) are made on
account of an
employee's termination
of employment with the
plan sponsor, or the
death or disability of
a shareholder.
``(bb) Redemptions of
securities which are not,
immediately after issuance,
listed on an established
securities market and are, or
had previously been--
``(AA) held,
directly or indirectly,
by, or for the benefit
of, the Federal
Government or a Federal
reserve bank, or
``(BB) held by a
national government (or
a government-related
entity of such a
government) or an
employee benefit plan
if such shares are
substantially identical
to shares described in
subitem (AA).
``(vi) Other definitions and rules.--For
purposes of this subparagraph--
``(I) Plan sponsor.--The term `plan
sponsor' includes any group of which
the plan sponsor is a member and which
is treated as a single employer under
subsection (b), (c), (m), or (o) of
section 414.
``(II) Restriction period.--The
term `restriction period' means, with
respect to any applicable plan year
with respect to which an election is
made under subparagraph (D)--
``(aa) except as provided
in item (bb), the 3-year period
beginning with the applicable
plan year (or, if later, the
first plan year beginning after
December 31, 2009), or
``(bb) if the plan sponsor
elects 15-year amortization for
the shortfall amortization base
for the applicable plan year,
the 5-year period beginning
with such plan year (or, if
later, the first plan year
beginning after December 31,
2009).
``(III) Elections for multiple
plans.--If a plan sponsor makes
elections under subparagraph (D) with
respect to 2 or more plans, the
Secretary shall provide rules for the
application of this subparagraph to
such plans, including rules for the
ratable allocation of any installment
acceleration amount among such plans on
the basis of each plan's relative
reduction in the plan's shortfall
amortization installment for the first
plan year in the amortization period
described in clause (i) (determined
without regard to this subparagraph).
``(G) Mergers and acquisitions.--The Secretary
shall prescribe rules for the application of
subparagraphs (D) and (F) in any case where there is a
merger or acquisition involving a plan sponsor making
the election under subparagraph (D).
``(H) Regulations and guidance.--The Secretary may
prescribe such regulations and other guidance of
general applicability as the Secretary may determine
necessary to achieve the purposes of subparagraphs (D)
and (F).''.
(2) Notice requirement.--
(A) In general.--Section 4980F of such Code is
amended--
(i) by striking ``subsection (e)'' each
place it appears in subsection (a) and
paragraphs (1) and (3) of subsection (c) and
inserting ``subsections (e) and (f)'';
(ii) by striking ``subsection (e)'' in
subsection (c)(2)(A) and inserting ``subsection
(e), (f), or both, as the case may be''; and
(iii) by redesignating subsection (f) as
subsection (g) and by inserting after
subsection (e) the following new subsection:
``(f) Notice in Connection With Shortfall Amortization Election.--
``(1) In general.--Not later 30 days after the date of an
election under clause (iv) of section 430(c)(2)(D) in
connection with a plan, the plan administrator shall provide
notice of such election in accordance with this subsection to
each plan participant and beneficiary, each labor organization
representing such participants and beneficiaries, and the
Pension Benefit Guaranty Corporation.
``(2) Matters included in notice.--Each notice provided
pursuant to this subsection shall set forth--
``(A) a statement that recently enacted legislation
permits employers to delay pension funding;
``(B) with respect to required contributions--
``(i) the amount of contributions that
would have been required had the election not
been made;
``(ii) the amount of the reduction in
required contributions for the applicable plan
year that occurs on account of the election;
and
``(iii) the number of plan years to which
such reduction will apply;
``(C) with respect to a plan's funding status as of
the end of the plan year preceding the applicable plan
year--
``(i) the liabilities determined under
section 4010(d)(1)(A) of the Employee
Retirement Income Security Act of 1974; and
``(ii) the market value of assets of the
plan; and
``(D) with respect to installment acceleration
amounts (as defined in section 430(c)(2)(F)(iii)(I))--
``(i) an explanation of section
430(c)(2)(F) (relating to increases in
shortfall amortization installments in cases of
excess compensation or certain dividends or
stock redemptions); and
``(ii) a statement that increases in
required contributions may occur in the event
of future payments of excess employee
compensation or certain share repurchasing or
dividend activity and that subsequent notices
of any such payments or activity will be
provided in the annual funding notice provided
pursuant to section 101(f) of the Employee
Retirement Income Security Act of 1974.
``(3) Other requirements.--
``(A) Form.--The notice required by paragraph (1)
shall be written in a manner calculated to be
understood by the average plan participant and shall
provide sufficient information (as determined in
accordance with regulations or other guidance of
general applicability prescribed by the Secretary) to
allow plan participants and beneficiaries to understand
the effect of the election. The Secretary shall
prescribe a model notice that a plan administrator may
use to satisfy the requirements of paragraph (1).
``(B) Provision to designated persons.--Any notice
under paragraph (1) may be provided to a person
designated, in writing, by the person to which it would
otherwise be provided.''.
(B) Conforming amendment.--Subsection (g) of
section 4980F of such Code is amended by inserting ``or
(f)'' after ``subsection (e)''.
(3) Disregard of installment acceleration amounts in
determining quarterly contributions.--Section 430(j)(3) of such
Code is amended by adding at the end the following new
subparagraph:
``(F) Disregard of installment acceleration
amounts.--Subparagraph (D) shall be applied without
regard to any increase under subsection (c)(2)(F).''.
(4) Conforming amendment.--Paragraph (1) of section 430(c)
of such Code is amended by striking ``the shortfall
amortization bases for such plan year and each of the 6
preceding plan years'' and inserting ``any shortfall
amortization base which has not been fully amortized under this
subsection''.
(c) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2007.
SEC. 302. APPLICATION OF EXTENDED AMORTIZATION PERIOD TO PLANS SUBJECT
TO PRIOR LAW FUNDING RULES.
(a) In General.--Title I of the Pension Protection Act of 2006 is
amended by redesignating section 107 as section 108 and by inserting
the following after section 106:
``SEC. 107. APPLICATION OF FUNDING RELIEF TO PLANS WITH DELAYED
EFFECTIVE DATE.
``(a) Alternative Elections.--
``(1) In general.--Subject to this section, a plan sponsor
of a plan to which section 104, 105, or 106 of this Act applies
may either elect the application of subsection (b) with respect
to the plan for not more than 2 applicable plan years or elect
the application of subsection (c) with respect to the plan for
1 applicable plan year.
``(2) Eligibility for elections.--An election may be made
by a plan sponsor under paragraph (1) with respect to a plan
only if at the time of the election--
``(A) the plan sponsor is not a debtor in a case
under title 11, United States Code, or similar Federal
or State law,
``(B) there are no accumulated funding deficiencies
(as defined in section 302(a)(2) of the Employee
Retirement Income Security Act of 1974 (as in effect
immediately before the enactment of this Act) or in
section 412(a) of the Internal Revenue Code of 1986 (as
so in effect)) with respect to the plan,
``(C) there is no lien in favor of the plan under
section 302(d) (as so in effect) or under section
412(n) of such Code (as so in effect), and
``(D) a distress termination has not been initiated
for the plan under section 4041(c) of the Employee
Retirement Income Security Act of 1974.
``(b) Alternative Additional Funding Charge.--If the plan sponsor
elects the application of this subsection with respect to the plan, for
purposes of applying section 302(d) of the Employee Retirement Income
Security Act of 1974 (as in effect before the amendments made by this
subtitle and subtitle B) and section 412(l) of the Internal Revenue
Code of 1986 (as so in effect)--
``(1) the deficit reduction contribution under paragraph
(2) of such section 302(d) and paragraph (2) of such section
412(l) for such plan for any applicable plan year, shall be
zero, and
``(2) the additional funding charge under paragraph (1) of
such section 302(d) and paragraph (1) of such section 412(l)
for such plan for any applicable plan year shall be increased
by an amount equal to the installment acceleration amount (as
defined in sections 303(c)(2)(F)(iii)(I) of such Act (as
amended by the American Jobs and Closing Tax Loopholes Act of
2010) and 430(c)(2)(F)(iii)(I) of such Code (as so amended))
with respect to the plan sponsor for such plan year, determined
by treating the later of such plan year or the first plan year
beginning after December 31, 2009, as the restriction period.
``(c) Application of 15-year Amortization.--If the plan sponsor
elects the application of this subsection with respect to the plan, for
purposes of applying section 302(d) of such Act (as in effect before
the amendments made by this subtitle and subtitle B) and section 412(l)
of such Code (as so in effect)--
``(1) in the case of the increased unfunded new liability
of the plan, the applicable percentage described in paragraph
(4)(C) of such section 302(d) and paragraph (4)(C) of such
section 412(l) for any pre-effective date plan year beginning
with or after the applicable plan year shall be the ratio of--
``(A) the annual installments payable in each plan
year if the increased unfunded new liability for such
plan year were amortized in equal installments over the
period beginning with such plan year and ending with
the last plan year in the period of 15 plan years
beginning with the applicable plan year, using an
interest rate equal to the third segment rate described
in sections 104(b), 105(b), and 106(b) of this Act, to
``(B) the increased unfunded new liability for such
plan year,
``(2) in the case of the excess of the unfunded new
liability over the increased unfunded new liability, such
applicable percentage shall be determined without regard to
this section, and
``(3) the additional funding charge with respect to the
plan for a plan year shall be increased by an amount equal to
the installment acceleration amount (as defined in section
303(c)(2)(F)(iii) of such Act (as amended by the American Jobs
and Closing Tax Loopholes Act of 2010 and section
430(c)(2)(F)(iii) of such Code (as so amended)) with respect to
the plan sponsor for such plan year, determined without regard
to subclause (II) of such sections 303(c)(2)(F)(iii) and
430(c)(2)(F)(iii).
``(d) Definitions and Special Rules.--For purposes of this
section--
``(1) Applicable plan year.--
``(A) In general.--The term `applicable plan year'
with respect to a plan means, subject to the election
of the plan sponsor under subsection (a), a plan year
beginning in 2009, 2010, or 2011.
``(B) Election.--
``(i) In general.--The election described
in subsection (a) shall be made at such times,
and in such form and manner, as shall be
prescribed by the Secretary of the Treasury.
``(ii) Reduction in years which may be
elected.--The number of applicable plan years
for which an election may be made under section
303(c)(2)(D) of the Employee Retirement Income
Security Act of 1974 (as amended by the
American Jobs and Closing Tax Loopholes Act of
2010) or section 430(c)(2)(D) of the Internal
Revenue Code of 1986 (as so amended) shall be
reduced by the number of applicable plan years
for which an election under this section is
made.
``(C) Allocation of installment acceleration amount
for multiple plan election.--In the case of an election
under this section with respect to 2 or more plans by
the same plan sponsor, the installment acceleration
amount shall be apportioned ratably with respect to
such plans in proportion to the deficit reduction
contributions of the plans determined without regard to
subsection (b)(1).
``(2) Plan sponsor.--The term `plan sponsor' shall have the
meaning provided such term in section 303(c)(2)(F)(vi)(I) of
the Employee Retirement Income Security Act of 1974 (as amended
by the American Jobs and Closing Tax Loopholes Act of 2010) and
section 430(c)(2)(F)(vi)(I) of the Internal Revenue Code of
1986 (as so amended).
``(3) Pre-effective date plan year.--The term `pre-
effective date plan year' means, with respect to a plan, any
plan year prior to the first year in which the amendments made
by this subtitle and subtitle B apply to the plan.
``(4) Increased unfunded new liability.--The term
`increased unfunded new liability' means, with respect to a
year, the excess (if any) of the unfunded new liability over
the amount of unfunded new liability determined as if the value
of the plan's assets determined under subsection 302(c)(2) of
such Act (as in effect before the amendments made by this
subtitle and subtitle B) and section 412(c)(2) of such Code (as
so in effect) equaled the product of the current liability of
the plan for the year multiplied by the funded current
liability percentage (as defined in section 302(d)(8)(B) of
such Act (as so in effect) and 412(l)(8)(B) of such Code (as so
in effect)) of the plan for the second plan year preceding the
first applicable plan year of such plan for which an election
under this section is made.
``(5) Other definitions.--The terms `unfunded new
liability' and `current liability' shall have the meanings set
forth in section 302(d) of such Act (as so in effect) and
section 412(l) of such Code (as so in effect).
``(6) Additional funding charge increase not to exceed
relief.--
``(A) Election under subsection (b).--In the case
of an election under subsection (b), an increase
resulting from the application of subsection (b)(2) in
the additional funding charge with respect to a plan
for a plan year shall not exceed the excess (if any)
of--
``(i) the deficit reduction contribution
under section 302(d)(2) of such Act (as so in
effect) and section 412(l)(2) of such Code (as
so in effect) for such plan year, determined as
if the election had not been made, over
``(ii) the deficit reduction contribution
under such sections for such plan (determined
without regard to any increase under subsection
(b)(2)).
``(B) Election under subsection (c).--An increase
resulting from the application of subsection (c)(3) in
the additional funding charge with respect to a plan
for a plan year shall not exceed the excess (if any)
of--
``(i) the sum of the deficit reduction
contributions under section 302(d)(2) of such
Act (as so in effect) and section 412(l)(2) of
such Code (as so in effect) for such plan for
such plan year and for all preceding plan years
beginning with or after the applicable plan
year, determined as if the election had not
been made, over
``(ii) the sum of the deficit reduction
contributions under such sections for such plan
years (determined without regard to any
increase under subsection (c)(3)).
``(e) Notice.--Not later 30 days after the date of an election
under subsection (a) in connection with a plan, the plan administrator
shall provide notice pursuant to, and subject to, rules similar to the
rules of sections 204(k) of the Employee Retirement Income Security Act
of 1974 (as amended by the American Jobs and Closing Tax Loopholes Act
of 2010) and 4980F(f) of the Internal Revenue Code of 1986 (as so
amended).''.
(b) Eligible Charity Plans.--Section 104 of such Act is amended--
(1) by striking ``eligible cooperative plan'' wherever it
appears in subsections (a) and (b) and inserting ``eligible
cooperative plan or an eligible charity plan''; and
(2) by adding at the end the following new subsection:
``(d) Eligible Charity Plan Defined.--For purposes of this section,
a plan shall be treated as an eligible charity plan for a plan year
if--
``(1) the plan is maintained by one or more employers
employing employees who are accruing benefits based on service
for the plan year,
``(2) such employees are employed in at least 20 States,
``(3) each such employee (other than a de minimis number of
employees) is employed by an employer described in section
501(c)(3) of such Code and the primary exempt purpose of each
such employer is to provide services with respect to children,
and
``(4) the plan sponsor elects (at such time and in such
form and manner as shall be prescribed by the Secretary of the
Treasury) to be so treated.
Any election under this subsection may be revoked only with the consent
of the Secretary of the Treasury.''.
(c) Regulations.--The Secretary of the Treasury may prescribe such
regulations as may be necessary to carry out the purposes of the
amendments made by this section.
(d) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
apply to plan years beginning on or after January 1, 2009.
(2) Eligible charity plans.--The amendments made by
subsection (b) shall apply to plan years beginning after
December 31, 2009.
SEC. 303. SUSPENSION OF CERTAIN FUNDING LEVEL LIMITATIONS.
(a) Limitations on Benefit Accruals.--Section 203 of the Worker,
Retiree, and Employer Recovery Act of 2008 (Public Law 110-458; 122
Stat. 5118) is amended--
(1) by striking ``the first plan year beginning during the
period beginning on October 1, 2008, and ending on September
30, 2009'' and inserting ``any plan year beginning during the
period beginning on October 1, 2008, and ending on December 31,
2011'';
(2) by striking ``substituting'' and all that follows
through ``for such plan year'' and inserting ``substituting for
such percentage the plan's adjusted funding target attainment
percentage for the last plan year ending before September 30,
2009,''; and
(3) by striking ``for the preceding plan year is greater''
and inserting ``for such last plan year is greater''.
(b) Social Security Level-income Options.--
(1) ERISA amendment.--Section 206(g)(3)(E) of the Employee
Retirement Income Security Act of 1974 is amended by adding at
the end the following new sentence: ``For purposes of applying
clause (i) in the case of payments the annuity starting date
for which occurs on or before December 31, 2011, payments under
a social security leveling option shall be treated as not in
excess of the monthly amount paid under a single life annuity
(plus an amount not in excess of a social security supplement
described in the last sentence of section 204(b)(1)(G)).''.
(2) IRC amendment.--Section 436(d)(5) of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new sentence: ``For purposes of applying subparagraph
(A) in the case of payments the annuity starting date for which
occurs on or before December 31, 2011, payments under a social
security leveling option shall be treated as not in excess of
the monthly amount paid under a single life annuity (plus an
amount not in excess of a social security supplement described
in the last sentence of section 411(a)(9)).''.
(3) Effective date.--
(A) In general.--The amendments made by this
subsection shall apply to annuity payments the annuity
starting date for which occurs on or after January 1,
2011.
(B) Permitted application.--A plan shall not be
treated as failing to meet the requirements of sections
206(g) of the Employee Retirement Income Security Act
of 1974 (as amended by this subsection) and section
436(d) of the Internal Revenue Code of 1986 (as so
amended) if the plan sponsor elects to apply the
amendments made by this subsection to payments the
annuity starting date for which occurs on or after the
date of the enactment of this Act and before January 1,
2011.
(c) Application of Credit Balance With Respect to Limitations on
Shutdown Benefits and Unpredictable Contingent Event Benefits.--With
respect to plan years beginning on or before December 31, 2011, in
applying paragraph (5)(C) of subsection (g) of section 206 of the
Employee Retirement Income Security Act of 1974 and subsection (f)(3)
of section 436 of the Internal Revenue Code of 1986 in the case of
unpredictable contingent events (within the meaning of section
206(g)(1)(C) of such Act and section 436(b)(3) of such Code) occurring
on or after January 1, 2010, the references, in clause (i) of such
paragraph (5)(C) and subparagraph (A) of such subsection (f)(3), to
paragraph (1)(B) of such subsection (g) and subsection (b)(2) of such
section 436 shall be disregarded.
SEC. 304. LOOKBACK FOR CREDIT BALANCE RULE.
(a) Amendment to Erisa.--Paragraph (3) of section 303(f) of the
Employee Retirement Income Security Act of 1974 is amended by adding
the following at the end thereof:
``(D) Special rule for certain plan years.--
``(i) In general.--For purposes of applying
subparagraph (C) for plan years beginning after
June 30, 2009, and on or before December 31,
2011, the ratio determined under such
subparagraph for the preceding plan year shall
be the greater of--
``(I) such ratio, as determined
without regard to this subparagraph, or
``(II) the ratio for such plan for
the plan year beginning after June 30,
2007, and on or before June 30, 2008,
as determined under rules prescribed by
the Secretary of the Treasury.
``(ii) Special rule.--In the case of a plan
for which the valuation date is not the first
day of the plan year--
``(I) clause (i) shall apply to
plan years beginning after December 31,
2008, and on or before December 31,
2010, and
``(II) clause (i)(II) shall apply
based on the last plan year beginning
before July 1, 2007, as determined
under rules prescribed by the Secretary
of the Treasury.''.
(b) Amendment to Internal Revenue Code of 1986.--Paragraph (3) of
section 430(f) of the Internal Revenue Code of 1986 is amended by
adding the following at the end thereof:
``(D) Special rule for certain plan years.--
``(i) In general.--For purposes of applying
subparagraph (C) for plan years beginning after
June 30, 2009, and on or before December 31,
2011, the ratio determined under such
subparagraph for the preceding plan year shall
be the greater of--
``(I) such ratio, as determined
without regard to this subparagraph, or
``(II) the ratio for such plan for
the plan year beginning after June 30,
2007, and on or before June 30, 2008,
as determined under rules prescribed by
the Secretary.
``(ii) Special rule.--In the case of a plan
for which the valuation date is not the first
day of the plan year--
``(I) clause (i) shall apply to
plan years beginning after December 31,
2008, and on or before December 31,
2010, and
``(II) clause (i)(II) shall apply
based on the last plan year beginning
before July 1, 2007, as determined
under rules prescribed by the
Secretary.''.
SEC. 305. INFORMATION REPORTING.
(a) In General.--Section 4010(b) of the Employee Retirement
Security Act of 1974 (29 U.S.C. 1310(b)) is amended by striking
paragraph (1) and inserting the following:
``(1) either of the following requirements are met:
``(A) the funding target attainment percentage (as
defined in subsection (d)(2)(B)) at the end of the
preceding plan year of a plan maintained by the
contributing sponsor or any member of its controlled
group is less than 80 percent; or
``(B) the aggregate unfunded vested benefits (as
determined under section 4006(a)(3)(E)(iii)) of plans
maintained by the contributing sponsor and the members
of its controlled group exceed $75,000,000
(disregarding plans with no unfunded vested
benefits);''.
(b) Effective Date.--The amendment made by this section shall apply
to years beginning after 2009.
SEC. 306. ROLLOVER OF AMOUNTS RECEIVED IN AIRLINE CARRIER BANKRUPTCY.
(a) General Rules.--
(1) Rollover of airline payment amount.--If a qualified
airline employee receives any airline payment amount and
transfers any portion of such amount to a traditional IRA
within 180 days of receipt of such amount (or, if later, within
180 days of the date of the enactment of this Act), then such
amount (to the extent so transferred) shall be treated as a
rollover contribution described in section 402(c) of the
Internal Revenue Code of 1986. A qualified airline employee
making such a transfer may exclude from gross income the amount
transferred, in the taxable year in which the airline payment
amount was paid to the qualified airline employee by the
commercial passenger airline carrier.
(2) Transfer of amounts attributable to airline payment
amount following rollover to roth ira.--A qualified airline
employee who has contributed an airline payment amount to a
Roth IRA that is treated as a qualified rollover contribution
pursuant to section 125 of the Worker, Retiree, and Employer
Recovery Act of 2008 may transfer to a traditional IRA, in a
trustee-to-trustee transfer, all or any part of the
contribution (together with any net income allocable to such
contribution), and the transfer to the traditional IRA will be
deemed to have been made at the time of the rollover to the
Roth IRA, if such transfer is made within 180 days of the date
of the enactment of this Act. A qualified airline employee
making such a transfer may exclude from gross income the
airline payment amount previously rolled over to the Roth IRA,
to the extent an amount attributable to the previous rollover
was transferred to a traditional IRA, in the taxable year in
which the airline payment amount was paid to the qualified
airline employee by the commercial passenger airline carrier.
No amount so transferred to a traditional IRA may be treated as
a qualified rollover contribution with respect to a Roth IRA
within the 5-taxable year period beginning with the taxable
year in which such transfer was made.
(3) Extension of time to file claim for refund.--A
qualified airline employee who excludes an amount from gross
income in a prior taxable year under paragraph (1) or (2) may
reflect such exclusion in a claim for refund filed within the
period of limitation under section 6511(a) (or, if later, April
15, 2011).
(b) Treatment of Airline Payment Amounts and Transfers for
Employment Taxes.--For purposes of chapter 21 of the Internal Revenue
Code of 1986 and section 209 of the Social Security Act, an airline
payment amount shall not fail to be treated as a payment of wages by
the commercial passenger airline carrier to the qualified airline
employee in the taxable year of payment because such amount is excluded
from the qualified airline employee's gross income under subsection
(a).
(c) Definitions and Special Rules.--For purposes of this section--
(1) Airline payment amount.--
(A) In general.--The term ``airline payment
amount'' means any payment of any money or other
property which is payable by a commercial passenger
airline carrier to a qualified airline employee--
(i) under the approval of an order of a
Federal bankruptcy court in a case filed after
September 11, 2001, and before January 1, 2007;
and
(ii) in respect of the qualified airline
employee's interest in a bankruptcy claim
against the carrier, any note of the carrier
(or amount paid in lieu of a note being
issued), or any other fixed obligation of the
carrier to pay a lump sum amount.
The amount of such payment shall be determined without
regard to any requirement to deduct and withhold tax
from such payment under sections 3102(a) and 3402(a).
(B) Exception.--An airline payment amount shall not
include any amount payable on the basis of the
carrier's future earnings or profits.
(2) Qualified airline employee.--The term ``qualified
airline employee'' means an employee or former employee of a
commercial passenger airline carrier who was a participant in a
defined benefit plan maintained by the carrier which--
(A) is a plan described in section 401(a) of the
Internal Revenue Code of 1986 which includes a trust
exempt from tax under section 501(a) of such Code; and
(B) was terminated or became subject to the
restrictions contained in paragraphs (2) and (3) of
section 402(b) of the Pension Protection Act of 2006.
(3) Traditional ira.--The term ``traditional IRA'' means an
individual retirement plan (as defined in section 7701(a)(37)
of the Internal Revenue Code of 1986) which is not a Roth IRA.
(4) Roth ira.--The term ``Roth IRA'' has the meaning given
such term by section 408A(b) of such Code.
(d) Surviving Spouse.--If a qualified airline employee died after
receiving an airline payment amount, or if an airline payment amount
was paid to the surviving spouse of a qualified airline employee in
respect of the qualified airline employee, the surviving spouse of the
qualified airline employee may take all actions permitted under section
125 of the Worker, Retiree and Employer Recovery Act of 2008, or under
this section, to the same extent that the qualified airline employee
could have done had the qualified airline employee survived.
(e) Effective Date.--This section shall apply to transfers made
after the date of the enactment of this Act with respect to airline
payment amounts paid before, on, or after such date.
PART 2--MULTIEMPLOYER PLANS
SEC. 311. OPTIONAL USE OF 30-YEAR AMORTIZATION PERIODS.
(a) Elective Special Relief Rules.--
(1) ERISA amendment.--Section 304(b) of the Employee
Retirement Income Security Act of 1974 is amended by adding at
the end the following new paragraph:
``(8) Elective special relief rules.--Notwithstanding any
other provision of this subsection--
``(A) Amortization of net investment losses.--
``(i) In general.--The plan sponsor of a
multiemployer plan with respect to which the
solvency test under subparagraph (B) is met may
elect to treat the portion of any experience
loss or gain for a plan year that is
attributable to the allocable portion of the
net investment losses incurred in either or
both of the first two plan years ending on or
after June 30, 2008, as an experience loss
separate from other experience losses or gains
to be amortized in equal annual installments
(until fully amortized) over the period--
``(I) beginning with the plan year
for which the allocable portion is
determined, and
``(II) ending with the last plan
year in the 30-plan year period
beginning with the plan year following
the plan year in which such net
investment loss was incurred.
``(ii) Coordination with extensions.--If an
election is made under clause (i) for any plan
year--
``(I) no extension of the
amortization period under clause (i)
shall be allowed under subsection (d),
and
``(II) if an extension was granted
under subsection (d) for any plan year
before the plan year for which the
election under this subparagraph is
made, such extension shall not result
in such amortization period exceeding
30 years.
``(iii) Definitions and rules.--For
purposes of this subparagraph--
``(I) Net investment losses.--
``(aa) In general.--The net
investment loss incurred by a
plan in a plan year is equal to
the excess of--
``(AA) the expected
value of the assets as
of the end of the plan
year, over
``(BB) the market
value of the assets as
of the end of the plan
year,
including any difference
attributable to a criminally
fraudulent investment
arrangement.
``(bb) Expected value.--For
purposes of item (aa), the
expected value of the assets as
of the end of a plan year is
the excess of--
``(AA) the market
value of the assets at
the beginning of the
plan year plus
contributions made
during the plan year,
over
``(BB)
disbursements made
during the plan year.
The amounts described in
subitems (AA) and (BB) shall be
adjusted with interest at the
valuation rate to the end of
the plan year.
``(II) Criminally fraudulent
investment arrangements.--The
determination as to whether an
arrangement is a criminally fraudulent
investment arrangement shall be made
under rules substantially similar to
the rules prescribed by the Secretary
of the Treasury for purposes of section
165 of the Internal Revenue Code of
1986.
``(III) Amount attributable to
allocable portion of net investment
loss.--The amount attributable to the
allocable portion of the net investment
loss for a plan year shall be an amount
equal to the allocable portion of net
investment loss for the plan year under
subclauses (IV) and (V), increased with
interest at the valuation rate
determined from the plan year after the
plan year in which the net investment
loss was incurred.
``(IV) Allocable portion of net
investment losses.--Except as provided
in subclause (V), the net investment
loss incurred in a plan year shall be
allocated among the 5 plan years
following the plan year in which the
investment loss is incurred in
accordance with the following table:
``Plan year after the plan year in
which the net investment loss Allocable portion of net
was incurred investment loss
1st.......................................... \1/2\
2nd.......................................... 0
3rd.......................................... \1/6\
4th.......................................... \1/6\
5th.......................................... \1/6\
``(V) Special rule for plans that
adopt longer smoother period.--If a
plan sponsor elects an extended
smoothing period for its asset
valuation method under subsection
(c)(2)(B), then the allocable portion
of net investment loss for the first
two plan years following the plan year
the investment loss is incurred is the
same as determined under subclause
(IV), but the remaining \1/2\ of the
net investment loss is allocated
ratably over the period beginning with
the third plan year following the plan
year the net investment loss is
incurred and ending with the last plan
year in the extended smoothing period.
``(VI) Special rule for
overstatement of loss.--If, for a plan
year, there is an experience loss for
the plan and the amount described in
subclause (III) exceeds the total
amount of the experience loss for the
plan year, then the excess shall be
treated as an experience gain.
``(VII) Special rule in years for
which overall experience is gain.--If,
for a plan year, there is no experience
loss for the plan, then, in addition to
amortization of net investment losses
under clause (i), the amount described
in subclause (III) shall be treated as
an experience gain in addition to any
other experience gain.
``(B) Solvency test.--
``(i) In general.--An election may be made
under this paragraph if the election includes
certification by the plan actuary in connection
with the election that the plan is projected to
have a funded percentage at the end of the
first 15 plan years that is not less than 100
percent of the funded percentage for the plan
year of the election.
``(ii) Funded percentage.-- For purposes of
clause (i), the term `funded percentage' has
the meaning provided in section 305(i)(2),
except that the value of the plan's assets
referred to in section 305(i)(2)(A) shall be
the market value of such assets.
``(iii) Actuarial assumptions.--In making
any certification under this subparagraph, the
plan actuary shall use the same actuarial
estimates, assumptions, and methods as those
applicable for the most recent certification
under section 305, except that the plan actuary
may take into account benefit reductions and
increases in contribution rates, under either
funding improvement plans adopted under section
305(c) or under section 432(c) of the Internal
Revenue Code of 1986 or rehabilitation plans
adopted under section 305(e) or under section
432(e) of such Code, that the plan actuary
reasonably anticipates will occur without
regard to any change in status of the plan
resulting from the election.
``(C) Additional restriction on benefit
increases.--If an election is made under subparagraph
(A), then, in addition to any other applicable
restrictions on benefit increases, a plan amendment
which is adopted on or after March 10, 2010, and which
increases benefits may not go into effect during the
period beginning on such date and ending with the
second plan year beginning after such date unless--
``(i) the plan actuary certifies that--
``(I) any such increase is paid for
out of additional contributions not
allocated to the plan immediately
before the election to have this
paragraph apply to the plan, and
``(II) the plan's funded percentage
and projected credit balances for the
first 3 plan years ending on or after
such date are reasonably expected to be
at least as high as such percentage and
balances would have been if the benefit
increase had not been adopted, or
``(ii) the amendment is required as a
condition of qualification under part I of
subchapter D of chapter 1 of the Internal
Revenue Code of 1986 or to comply with other
applicable law.
``(D) Time, form, and manner of election.--An
election under this paragraph shall be made not later
than June 30, 2011, and shall be made in such form and
manner as the Secretary of the Treasury may prescribe.
``(E) Reporting.--A plan sponsor of a plan to which
this paragraph applies shall--
``(i) give notice of such election to
participants and beneficiaries of the plan, and
``(ii) inform the Pension Benefit Guaranty
Corporation of such election in such form and
manner as the Pension Benefit Guaranty
Corporation may prescribe.''.
(2) IRC amendment.--Section 431(b) of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
paragraph:
``(8) Elective special relief rules.--Notwithstanding any
other provision of this subsection--
``(A) Amortization of net investment losses.--
``(i) In general.--The plan sponsor of a
multiemployer plan with respect to which the
solvency test under subparagraph (B) is met may
elect to treat the portion of any experience
loss or gain for a plan year that is
attributable to the allocable portion of the
net investment losses incurred in either or
both of the first two plan years ending on or
after June 30, 2008, as an experience loss
separate from other experience losses and gains
to be amortized in equal annual installments
(until fully amortized) over the period--
``(I) beginning with the plan year
for which the allocable portion is
determined, and
``(II) ending with the last plan
year in the 30-plan year period
beginning with the plan year following
the plan year in which such net
investment loss was incurred.
``(ii) Coordination with extensions.--If an
election is made under clause (i) for any plan
year--
``(I) no extension of the
amortization period under clause (i)
shall be allowed under subsection (d),
and
``(II) if an extension was granted
under subsection (d) for any plan year
before the plan year for which the
election under this subparagraph is
made, such extension shall not result
in such amortization period exceeding
30 years.
``(iii) Definitions and rules.--For
purposes of this subparagraph--
``(I) Net investment losses.--
``(aa) In general.--The net
investment loss incurred by a
plan in a plan year is equal to
the excess of--
``(AA) the expected
value of the assets as
of the end of the plan
year, over
``(BB) the market
value of the assets as
of the end of the plan
year,
including any difference
attributable to a criminally
fraudulent investment
arrangement.
``(bb) Expected value.--For
purposes of item (aa), the
expected value of the assets as
of the end of a plan year is
the excess of--
``(AA) the market
value of the assets at
the beginning of the
plan year plus
contributions made
during the plan year,
over
``(BB)
disbursements made
during the plan year.
The amounts described in
subitems (AA) and (BB) shall be
adjusted with interest at the
valuation rate to the end of
the plan year.
``(II) Criminally fraudulent
investment arrangements.--The
determination as to whether an
arrangement is a criminally fraudulent
investment arrangement shall be made
under rules substantially similar to
the rules prescribed by the Secretary
for purposes of section 165.
``(III) Amount attributable to
allocable portion of net investment
loss.--The amount attributable to the
allocable portion of the net investment
loss for a plan year shall be an amount
equal to the allocable portion of net
investment loss for the plan year under
subclauses (IV) and (V), increased with
interest at the valuation rate
determined from the plan year after the
plan year in which the net investment
loss was incurred.
``(IV) Allocable portion of net
investment losses.--Except as provided
in subclause (V), the net investment
loss incurred in a plan year shall be
allocated among the 5 plan years
following the plan year in which the
investment loss is incurred in
accordance with the following table:
``Plan year after the plan year in
which the net investment loss Allocable portion of net
was incurred investment loss
1st.......................................... \1/2\
2nd.......................................... 0
3rd.......................................... \1/6\
4th.......................................... \1/6\
5th.......................................... \1/6\
``(V) Special rule for plans that
adopt longer smoother period.--If a
plan sponsor elects an extended
smoothing period for its asset
valuation method under subsection
(c)(2)(B), then the allocable portion
of net investment loss for the first
two plan years following the plan year
the investment loss is incurred is the
same as determined under subclause
(IV), but the remaining \1/2\ of the
net investment loss is allocated
ratably over the period beginning with
the third plan year following the plan
year the net investment loss is
incurred and ending with the last plan
year in the extended smoothing period.
``(VI) Special rule for
overstatement of loss.--If, for a plan
year, there is an experience loss for
the plan and the amount described in
subclause (III) exceeds the total
amount of the experience loss for the
plan year, then the excess shall be
treated as an experience gain.
``(VII) Special rule in years for
which overall experience is gain.--If,
for a plan year, there is no experience
loss for the plan, then, in addition to
amortization of net investment losses
under clause (i), the amount described
in subclause (III) shall be treated as
an experience gain in addition to any
other experience gain.
``(B) Solvency test.--
``(i) In general.--An election may be made
under this paragraph if the election includes
certification by the plan actuary in connection
with the election that the plan is projected to
have a funded percentage at the end of the
first 15 plan years that is not less than 100
percent of the funded percentage for the plan
year of the election.
``(ii) Funded percentage.-- For purposes of
clause (i), the term `funded percentage' has
the meaning provided in section 432(i)(2),
except that the value of the plan's assets
referred to in section 432(i)(2)(A) shall be
the market value of such assets.
``(iii) Actuarial assumptions.--In making
any certification under this subparagraph, the
plan actuary shall use the same actuarial
estimates, assumptions, and methods as those
applicable for the most recent certification
under section 432, except that the plan actuary
may take into account benefit reductions and
increases in contribution rates, under either
funding improvement plans adopted under section
432(c) or under section 305(c) of the Employee
Retirement Income Security Act of 1974 or
rehabilitation plans adopted under section
432(e) or under section 305(e) of such Act,
that the plan actuary reasonably anticipates
will occur without regard to any change in
status of the plan resulting from the election.
``(C) Additional restriction on benefit
increases.--If an election is made under subparagraph
(A), then, in addition to any other applicable
restrictions on benefit increases, a plan amendment
which is adopted on or after March 10, 2010, and which
increases benefits may not go into effect during the
period beginning on such date and ending with the
second plan year beginning after such date unless--
``(i) the plan actuary certifies that--
``(I) any such increase is paid for
out of additional contributions not
allocated to the plan immediately
before the election to have this
paragraph apply to the plan, and
``(II) the plan's funded percentage
and projected credit balances for the
first 3 plan years ending on or after
such date are reasonably expected to be
at least as high as such percentage and
balances would have been if the benefit
increase had not been adopted, or
``(ii) the amendment is required as a
condition of qualification under part I or to
comply with other applicable law.
``(D) Time, form, and manner of election.--An
election under this paragraph shall be made not later
than June 30, 2011, and shall be made in such form and
manner as the Secretary may prescribe.
``(E) Reporting.--A plan sponsor of a plan to which
this paragraph applies shall--
``(i) give notice of such election to
participants and beneficiaries of the plan, and
``(ii) inform the Pension Benefit Guaranty
Corporation of such election in such form and
manner as the Pension Benefit Guaranty
Corporation may prescribe.''.
(b) Asset Smoothing for Multiemployer Plans.--
(1) ERISA amendment.--Section 304(c)(2) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1084(c)(2))
is amended--
(A) by redesignating subparagraph (B) as
subparagraph (C); and
(B) by inserting after subparagraph (A) the
following new subparagraph:
``(B) Extended asset smoothing period for certain
investment losses.--The Secretary of the Treasury shall
not treat the asset valuation method of a multiemployer
plan as unreasonable solely because such method spreads
the difference between expected and actual returns for
either or both of the first 2 plan years ending on or
after June 30, 2008, over a period of not more than 10
years. Any change in valuation method to so spread such
difference shall be treated as approved, but only if,
in the case that the plan sponsor has made an election
under subsection (b)(8), any resulting change in asset
value is treated for purposes of amortization as a net
experience loss or gain.''.
(2) IRC amendment.--Section 431(c)(2) of the Internal
Revenue Code of 1986 is amended--
(A) by redesignating subparagraph (B) as
subparagraph (C); and
(B) by inserting after subparagraph (A) the
following new subparagraph:
``(B) Extended asset smoothing period for certain
investment losses.--The Secretary shall not treat the
asset valuation method of a multiemployer plan as
unreasonable solely because such method spreads the
difference between expected and actual returns for
either or both of the first 2 plan years ending on or
after June 30, 2008, over a period of not more than 10
years. Any change in valuation method to so spread such
difference shall be treated as approved, but only if,
in the case that the plan sponsor has made an election
under subsection (b)(8), any resulting change in asset
value is treated for purposes of amortization as a net
experience loss or gain.''.
(c) Effective Date and Special Rules.--
(1) Effective date.--The amendments made by this section
shall take effect as of the first day of the first plan year
beginning after June 30, 2008, except that any election a plan
sponsor makes pursuant to this section or the amendments made
thereby that affects the plan's funding standard account for
any plan year beginning before October 1, 2009, shall be
disregarded for purposes of applying the provisions of section
305 of the Employee Retirement Income Security Act of 1974 and
section 432 of the Internal Revenue Code of 1986 to that plan
year.
(2) Deemed approval for certain funding method changes.--In
the case of a multiemployer plan with respect to which an
election has been made under section 304(b)(8) of the Employee
Retirement Income Security Act of 1974 (as amended by this
section) or section 431(b)(8) of the Internal Revenue Code of
1986 (as so amended)--
(A) any change in the plan's funding method for a
plan year beginning on or after July 1, 2008, and on or
before December 31, 2010, from a method that does not
establish a base for experience gains and losses to one
that does establish such a base shall be treated as
approved by the Secretary of the Treasury; and
(B) any resulting funding method change base shall
be treated for purposes of amortization as a net
experience loss or gain.
SEC. 312. OPTIONAL LONGER RECOVERY PERIODS FOR MULTIEMPLOYER PLANS IN
ENDANGERED OR CRITICAL STATUS.
(a) ERISA Amendments.--
(1) Funding improvement period.--Section 305(c)(4) of the
Employee Retirement Income Security Act of 1974 is amended--
(A) by redesignating subparagraphs (C) and (D) as
subparagraphs (D) and (E), respectively; and
(B) by inserting after subparagraph (B) the
following new subparagraph:
``(C) Election to extend period.--The plan sponsor
of an endangered or seriously endangered plan may elect
to extend the applicable funding improvement period by
up to 5 years, reduced by any extension of the period
previously elected pursuant to section 205 of the
Worker, Retiree and Employer Relief Act of 2008. Such
an election shall be made not later than June 30, 2011,
and in such form and manner as the Secretary of the
Treasury may prescribe.''.
(2) Rehabilitation period.--Section 305(e)(4) of such Act
is amended--
(A) by redesignating subparagraph (B) as
subparagraph (C);
(B) in last sentence of subparagraph (A), by
striking ``subparagraph (B)'' each place it appears and
inserting ``subparagraph (C)''; and
(C) by inserting after subparagraph (A) the
following new subparagraph:
``(B) Election to extend period.--The plan sponsor
of a plan in critical status may elect to extend the
rehabilitation period by up to five years, reduced by
any extension of the period previously elected pursuant
to section 205 of the Worker, Retiree and Employer
Relief Act of 2008. Such an election shall be made not
later than June 30, 2011, and in such form and manner
as the Secretary of the Treasury may prescribe.''.
(b) IRC Amendments.--
(1) Funding improvement period.--Section 432(c)(4) of the
Internal Revenue Code of 1986 is amended--
(A) by redesignating subparagraphs (C) and (D) as
subparagraphs (D) and (E), respectively; and
(B) by inserting after subparagraph (B) the
following new subparagraph:
``(C) Election to extend period.--The plan sponsor
of an endangered or seriously endangered plan may elect
to extend the applicable funding improvement period by
up to 5 years, reduced by any extension of the period
previously elected pursuant to section 205 of the
Worker, Retiree and Employer Relief Act of 2008. Such
an election shall be made not later than June 30, 2011,
and in such form and manner as the Secretary may
prescribe.''.
(2) Rehabilitation period.--Section 432(e)(4) of such Code
is amended--
(A) by redesignating subparagraph (B) as
subparagraph (C);
(B) in last sentence of subparagraph (A), by
striking ``subparagraph (B)'' each place it appears and
inserting ``subparagraph (C)''; and
(C) by inserting after subparagraph (A) the
following new subparagraph:
``(B) Election to extend period.--The plan sponsor
of a plan in critical status may elect to extend the
rehabilitation period by up to five years, reduced by
any extension of the period previously elected pursuant
to section 205 of the Worker, Retiree and Employer
Relief Act of 2008. Such an election shall be made not
later than June 30, 2011, and in such form and manner
as the Secretary may prescribe.''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to funding improvement periods and rehabilitation
periods in connection with funding improvement plans and rehabilitation
plans adopted or updated on or after the date of the enactment of this
Act.
SEC. 313. MODIFICATION OF CERTAIN AMORTIZATION EXTENSIONS UNDER PRIOR
LAW.
(a) In General.--In the case of an amortization extension that was
granted to a multiemployer plan under the terms of section 304 of the
Employee Retirement Income Security Act of 1974 (as in effect
immediately prior to enactment of the Pension Protection Act of 2006)
or section 412(e) of the Internal Revenue Code (as so in effect), the
determination of whether any financial condition on the amortization
extension is satisfied shall be made by assuming that for any plan year
that contains some or all of the period beginning June 30, 2008, and
ending October 31, 2008, the actual rate of return on the plan assets
was equal to the interest rate used for purposes of charging or
crediting the funding standard account in such plan year, unless the
plan sponsor elects otherwise in such form and manner as shall be
prescribed by the Secretary of Treasury.
(b) Revocation of Amortization Extensions.--The plan sponsor of a
multiemployer plan may, in such form and manner and after such notice
as may be prescribed by the Secretary, revoke any amortization
extension described in subsection (a), effective for plan years
following the date of the revocation.
SEC. 314. ALTERNATIVE DEFAULT SCHEDULE FOR PLANS IN ENDANGERED OR
CRITICAL STATUS.
(a) ERISA Amendments.--
(1) Endangered status.--Section 305(c)(7) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1085(c)(7))
is amended by adding at the end the following new subparagraph:
``(D) Alternative default schedule.--
``(i) In general.--A plan sponsor may, for
purposes of this paragraph, designate an
alternative schedule of contribution rates and
related benefit changes meeting the
requirements of clause (ii) as the default
schedule, in lieu of the default schedule
referred to in subparagraph (A).
``(ii) Requirements.--An alternative
schedule designated pursuant to clause (i)
meets the requirements of this clause if such
schedule has been adopted in collective
bargaining agreements covering at least 75
percent of the active participants as of the
date of the designation.''.
(2) Critical status.--Section 305(e)(3) of such Act (29
U.S.C. 1085(e)(3)) is amended by adding at the end the
following new subparagraph:
``(D) Alternative default schedule.--
``(i) In general.--A plan sponsor may, for
purposes of subparagraph (C), designate an
alternative schedule of contribution rates and
related benefit changes meeting the
requirements of clause (ii) as the default
schedule, in lieu of the default schedule
referred to in subparagraph (C)(i).
``(ii) Requirements.--An alternative
schedule designated pursuant to clause (i)
meets the requirements of this clause if such
schedule has been adopted in collective
bargaining agreements covering at least 75
percent of the active participants as of the
date of the designation.''.
(b) Internal Revenue Code Amendments.--
(1) Endangered status.--Section 432(c)(7) of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new subparagraph:
``(C) Alternative default schedule.--
``(i) In general.--A plan sponsor may, for
purposes of this paragraph, designate an
alternative schedule of contribution rates and
related benefit changes meeting the
requirements of clause (ii) as the default
schedule, in lieu of the default schedule
referred to in subparagraph (A).
``(ii) Requirements.--An alternative
schedule designated pursuant to clause (i)
meets the requirements of this clause if such
schedule has been adopted in collective
bargaining agreements covering at least 75
percent of the active participants as of the
date of the designation.''.
(2) Critical status.--Section 432(e)(3) of such Code is
amended by adding at the end the following new subparagraph:
``(D) Alternative default schedule.--
``(i) In general.--A plan sponsor may, for
purposes of subparagraph (C), designate an
alternative schedule of contribution rates and
related benefit changes meeting the
requirements of clause (ii) as the default
schedule, in lieu of the default schedule
referred to in subparagraph (C)(i).
``(ii) Requirements.--An alternative
schedule designated pursuant to clause (i)
meets the requirements of this clause if such
schedule has been adopted in collective
bargaining agreements covering at least 75
percent of the active participants as of the
date of the designation.''.
(c) Effective Date.--The amendments made by this section shall
apply to designations of default schedules by plan sponsors on or after
the date of the enactment of this Act.
(d) Cross-reference.--For sunset of the amendments made by this
section, see section 221(c) of the Pension Protection Act of 2006.
SEC. 315. TRANSITION RULE FOR CERTIFICATIONS OF PLAN STATUS.
(a) In General.--A plan actuary shall not be treated as failing to
meet the requirements of section 305(b)(3)(A) of the Employee
Retirement Income Security Act of 1974 and section 432(b)(3)(A) of the
Internal Revenue Code of 1986 in connection with a certification
required under such sections the deadline for which is after the date
of the enactment of this Act if the plan actuary makes such
certification at any time earlier than 75 days after the date of the
enactment of this Act.
(b) Revision of Prior Certification.--
(1) In general.--If--
(A) a plan sponsor makes an election under section
304(b)(8) of the Employee Retirement Income Security
Act of 1974 and section 431(b)(8) of the Internal
Revenue Code of 1986, or under section 304(c)(2)(B) of
such Act and section 432(c)(2)(B) such Code, with
respect to a plan for a plan year beginning on or after
October 1, 2009; and
(B) the plan actuary's certification of the plan
status for such plan year (hereinafter in this
subsection referred to as ``original certification'')
did not take into account any election so made,
then the plan sponsor may direct the plan actuary to make a new
certification with respect to the plan for the plan year which
takes into account such election (hereinafter in this
subsection referred to as ``new certification'') if the plan's
status under section 305 of such Act and section 432 of such
Code would change as a result of such election. Any such new
certification shall be treated as the most recent certification
referred to in section 304(b)(3)(B)(iii) of such Act and
section 431(b)(8)(B)(iii) of such Code.
(2) Due date for new certification.--Any such new
certification shall be made pursuant to section 305(b)(3) of
such Act and section 432(b)(3) of such Code; except that any
such new certification shall be made not later than 75 days
after the date of the enactment of this Act.
(3) Notice.--
(A) In general.--Except as provided in subparagraph
(B), any such new certification shall be treated as the
original certification for purposes of section
305(b)(3)(D) of such Act and section 432(b)(3)(D) of
such Code.
(B) Notice already provided.--In any case in which
notice has been provided under such sections with
respect to the original certification, not later than
30 days after the new certification is made, the plan
sponsor shall provide notice of any change in status
under rules similar to the rules such sections.
(4) Effect of change in status.--If a plan ceases to be in
critical status pursuant to the new certification, then the
plan shall, not later than 30 days after the due date described
in paragraph (2), cease any restriction of benefit payments,
and imposition of contribution surcharges, under section 305 of
such Act and section 432 of such Code by reason of the original
certification.
Subtitle B--Fee Disclosure
SEC. 321. SHORT TITLE OF SUBTITLE.
This subtitle may be cited as the ``Defined Contribution Fee
Disclosure Act of 2010''.
SEC. 322. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974.
(a) Requirements Relating to Service Providers and Plan
Administrators of Individual Account Plans.--
(1) In general.--Part 1 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 is amended--
(A) by redesignating section 111 (29 U.S.C. 1031)
as section 113; and
(B) by inserting after section 110 (29 U.S.C. 1030)
the following new sections:
``SEC. 111. REQUIREMENT TO PROVIDE NOTICE OF PLAN FEE INFORMATION TO
PLAN ADMINISTRATORS.
``(a) Initial Statement of Services Provided and Revenues
Received.--
``(1) In general.--In any case in which a service provider
enters into a contract or arrangement to provide services to an
individual account plan, the service provider shall, before
entering into such contract or arrangement, provide to the plan
administrator a single written statement which includes, with
respect to the first plan year covered under such contract or
arrangement, the following information:
``(A) A detailed description of the services which
will be provided to the plan by the service provider,
the amount of total expected annual revenue with
respect to such services, the manner in which such
revenue will be collected, and the extent to which such
revenue varies between specific investment options.
``(B)(i) In the case of a service provider who is
providing recordkeeping services with respect to any
investment option, such information as is necessary for
the plan administrator to satisfy the requirements of
subparagraphs (B)(ii)(IV) and (C) of section 105(a)(2)
and paragraphs (1) and (3) of section 112(a) with
respect to such option, including specifying the method
used by the service provider in disclosing or
estimating expenses under subparagraphs (C)(iv) and (E)
of section 105(a)(2).
``(ii) To the extent provided in regulations issued
by the Secretary, clause (i) shall not apply in the
case of a service provider described in such clause if
the service provider receives a written notification
from the plan administrator that the information
described in such clause in connection with the
investment option is provided by another service
provider pursuant to a contract or arrangement to
provide services to the plan.
``(C) A statement indicating--
``(i) the identity of any investment
options offered under the plan with respect to
which the service provider provides substantial
investment, trustee, custodial, or
administrative services, and
``(ii) in the case of any investment
option, whether the service provider expects to
receive any component of total expected annual
revenue described in paragraph (2)(A)(ii)(II)
with respect to such option and the amount of
any such component.
``(D) The portion of total expected annual revenue
which is properly allocable to each of the following:
``(i) Administration and recordkeeping.
``(ii) Investment management.
``(iii) Other services or amounts not
described in clause (i) or (ii).
``(2) Definition of total expected annual revenue.--For
purposes of this section--
``(A) In general.--The term `total expected annual
revenue' means, with respect to any plan year--
``(i) any amount expected to be received
during such plan year from the plan (including
amounts paid from participant accounts), any
participant or beneficiary, or any plan sponsor
in connection with the contract or arrangement
referred to in paragraph (1), and
``(ii) any amount not taken into account
under clause (i) which is expected to be
received during such plan year by the service
provider in connection with--
``(I) plan administration,
recordkeeping, consulting, management,
or investment or other service
activities undertaken by the service
provider with respect to the plan, or
``(II) plan administration,
recordkeeping, consulting, management,
or investment or other service
activities undertaken by any other
person with respect to the plan.
``(B) Expressed as dollar amount or percentage of
assets.--Total expected annual revenue and any amount
indicated under paragraph (1)(C)(ii) may be expressed
as a dollar amount or as a percentage of assets (or a
combination thereof), as appropriate. To the extent
that total expected annual revenue is expressed as a
percentage of assets, such percentage shall be properly
allocated among clauses (i), (ii), and (iii) of
paragraph (1)(D).
``(C) Provision of fee schedule for certain
participant initiated transactions.--In the case of
amounts expected to be received from participants or
beneficiaries under the plan (or from an account of a
participant or beneficiary) as a fee or charge in
connection with a transaction initiated by the
participant (other than loads, commissions, brokerage
fees, and other investment related transactions)--
``(i) such amounts shall not be taken into
account in determining total expected annual
revenue, and
``(ii) the service provider shall provide
to the plan administrator, as part of the
statement referred to in paragraph (1), a fee
schedule which describes each such fee or
charge, the amount thereof, and the manner in
which such amount is collected.
``(D) Estimations.--In determining under this
subsection any amount which is expected to be received
by the service provider, the service provider shall
provide a reasonable estimate of such amount and shall
indicate in the statement referred to in paragraph (1)
whether such amount disclosed is an estimate. Any such
estimate shall be based on reasonable assumptions
specified in such statement.
``(3) Allocation rules.--The Secretary shall provide rules
for defining total expected annual revenue and for the
appropriate and consistent allocation of total expected annual
revenue among clauses (i), (ii), and (iii) of paragraph (1)(D),
except that the entire amount of such revenue shall be
allocated among such clauses and no amount may be taken into
account under more than one clause.
``(4) Disclosure of different pricing of investment
options.--In the case of investment options with more than one
share class or price level, the Secretary shall prescribe
regulations for the disclosure of the different share classes
or price levels available as part of the statement in paragraph
(1). Such regulations shall provide guidance with respect to
the disclosure of the basis for qualifying for such share
classes or price levels, which may include amounts invested,
number of participants, or other factors.
``(5) Disclosure of investment transaction costs.--To the
extent provided in regulations issued by the Secretary, a
service provider shall separately disclose the transaction
costs (including sales commissions) for each investment option
for the preceding year or the plan's allocable share of such
costs for the preceding year.
``(b) Annual Statements.--With respect to each plan year after the
plan year covered by the statement described in subsection (a), the
service provider shall provide the plan administrator a single written
statement which includes the information described in subsection (a)
with respect to such subsequent plan year.
``(c) Material Change Statements.--In the case of any event or
other change during a plan year which causes the information included
in any statement described in subsection (a) or (b) with respect to
such plan year to become materially incorrect, the service provider
shall provide the plan administrator a written statement providing the
corrected information not later than 30 days after the service provider
knows, or exercising reasonable diligence would have known, of such
event or other change.
``(d) Time and Manner of Providing Statement and Other Materials.--
The statement referred to in subsections (a)(1) and (b) shall be made
at such time and in such manner as the Secretary may provide. Other
materials required to be provided under this section shall be provided
in such manner as the Secretary may provide. All information included
in such statements and other materials shall be presented in a manner
which is easily understood by the typical plan administrator.
``(e) Exception for Small Service Providers.--The requirements of
this section shall not apply with respect to any contract or
arrangement for services provided with respect to an individual account
plan for any plan year if--
``(1) the total annual revenue expected by the service
provider to be received with respect to the plan for such plan
year is less than $5,000, and
``(2) the service provider provides a written statement to
the plan administrator that the total annual revenue expected
by the service provider to be received with respect to the plan
is less than $5,000.
Service providers who expect to receive de minimis annual revenue from
the plan need not provide the written statement described in paragraph
(2). The Secretary may by regulation or other guidance adjust the
dollar amount specified in this subsection.
``(f) Definition of Service Provider.--For purposes of this
section--
``(1) In general.--The term `service provider' includes any
person providing administration, recordkeeping, consulting,
investment management services, or investment advice to an
individual account plan under a contract or arrangement.
``(2) Controlled groups treated as one service provider.--
All persons which would be treated as a single employer under
subsection (b) or (c) of section 414 of the Internal Revenue
Code of 1986 if section 1563(a)(1) of such Code were applied--
``(A) except as provided by subparagraph (B), by
substituting `more than 50 percent' for `at least 80
percent' each place it appears therein, or
``(B) for purposes of subsection (a)(1)(C)(i), by
substituting `at least 20 percent' for `at least 80
percent' each place it appears therein,
shall be treated as one person for purposes of this section.
``SEC. 112. REQUIREMENT TO PROVIDE NOTICE TO PARTICIPANTS OF PLAN FEE
INFORMATION.
``(a) Disclosures to Participants and Beneficiaries.--
``(1) Advance notice of available investment options.--
``(A) In general.--The plan administrator of an
applicable individual account plan shall provide to the
participant or beneficiary notice of the investment
options available under the plan before--
``(i) the earliest date provided for under
the plan for the participant's initial
investment of any contribution made on behalf
of such participant, and
``(ii) the effective date of any change in
the list of investment options available under
the plan, unless such advance notice is
impracticable, and in such case, as soon as is
practicable.
``(B) Information included in notice.--The notice
required under subparagraph (A) shall--
``(i) set forth, with respect to each
available investment option--
``(I) the name of the option,
``(II) a general description of the
option's investment objectives and
principal investment strategies,
principal risk and return
characteristics, and the name of the
option's investment manager,
``(III) whether the investment
option is designed to be a
comprehensive, stand-alone investment
for retirement that provides varying
degrees of long-term appreciation and
capital preservation through a mix of
equity and fixed income exposures,
``(IV) the extent to which the
investment option is actively managed
or passively managed in relation to an
index and the difference between active
management and passive management,
``(V) where, and the manner in
which, additional plan-specific,
option-specific, and generally
available investment information may be
obtained, and
``(VI) a statement explaining that
investment options should not be
evaluated solely on the basis of the
charges for each option but should also
be based on consideration of other key
factors, including the risk level of
the option, the investment objectives
of the option, historical returns of
the option, and the participant's
personal investment objectives,
``(ii) include a statement of the right
under paragraph (2) of participants and
beneficiaries to request, and a description of
how a participant or beneficiary may request, a
copy of the statements received by the plan
administrator under section 111 with respect to
the plan, and
``(iii) include the plan fee comparison
chart described in subparagraph (C).
``(C) Plan fee comparison chart.--
``(i) In general.--
``(I) In general.--The notice
provided under this paragraph shall
include a plan fee comparison chart
consisting of a comparison of the
service and investment charges that
will or could be assessed against the
account of the participant or
beneficiary with respect to the plan
year.
``(II) Expressed as dollar amount
or formula.--For purposes of this
subparagraph, such charges shall be
provided in the form of a dollar amount
or as a formula (such as a percentage
of assets), as appropriate.
``(ii) Categorization of charges.--The plan
fee comparison chart shall provide information
in relation to the following categories of
charges that will or could be assessed against
the account of the participant or beneficiary:
``(I) Asset-based charges specific
to investment.--Charges that vary
depending on the investment options
selected by the participant or
beneficiary, including the annual
operating expenses of the investment
option and investment-specific asset-
based charges (such as loads,
commissions, brokerage fees, exchange
fees, redemption fees, and surrender
charges). Except as provided by the
Secretary in regulations under this
section, the information relating to
such charges shall include a statement
noting any charges for 1 or more
investment options which pay for
services other than investment
management.
``(II) Recurring asset-based
charges not specific to investment.--
Charges that are assessed as a
percentage of the total assets in the
account of the participant or
beneficiary, regardless of the
investment option selected.
``(III) Administrative and
transaction-based charges.--
Administration and transaction-based
charges, including fees charged to
participants to cover plan
administration, compliance, and
recordkeeping costs, plan loan
origination fees, possible redemption
fees, and possible surrender charges,
that are not assessed as a percentage
of the total assets in the account and
are either automatically deducted each
year or result from certain
transactions engaged in by the
participant or beneficiary.
``(IV) Other charges.--Any other
charges which may be deducted from
participants' or beneficiaries'
accounts and which are not described in
subclauses (I), (II), and (III).
``(iii) Fees and historical returns.--The
plan fee comparison chart shall include--
``(I) the historical returns, net
of fees and expenses, for the previous
year, 5 years, and 10 years (or for the
period since inception, if shorter)
with respect to such investment option,
and
``(II) the historical returns of an
appropriate benchmark, index, or other
point of comparison for each such
period.
``(D) Model notices.--The Secretary shall prescribe
one or more model notices that may be used for purposes
of satisfying the requirements of this paragraph,
including model plan fee comparison charts.
``(E) Estimations.--For purposes of providing the
notice required under this paragraph, the plan
administrator may provide a reasonable and
representative estimate for any charges or percentages
disclosed under subparagraph (B) or (C) and shall
indicate whether the amount of any such charges or
percentages disclosed is an estimate.
``(2) Disclosure of service provider statements.--The plan
administrator shall provide to any participant or beneficiary a
copy of any statement received pursuant to section 111 within
30 days after receipt of a request for such a statement.
``(3) Notice of material changes.--In the case of any event
or other change which causes the information included in any
notice described in paragraph (1) to become materially
incorrect, the plan administrator shall provide participants
and beneficiaries a written statement providing the corrected
information not later than 30 days after the plan administrator
knows, or exercising reasonable diligence would have known, of
such event or other change.
``(4) Time and manner of providing notices and
disclosures.--
``(A) In general.--The notices described in
paragraph (1) shall be provided at such times and in
such manner as the Secretary may provide. Other notices
and materials required to be provided under this
subsection shall be provided in such manner as the
Secretary may provide.
``(B) Manner of presentation.--
``(i) In general.--All information included
in such notices or explanations shall be
presented in a manner which is easily
understood by the typical participant.
``(ii) Generic example of operating
expenses of investment options.--The
information described in paragraph
(1)(C)(ii)(I) shall include a generic example
describing the charges that would apply during
an annual period with respect to a $10,000
investment in the investment option.
``(b) Applicable Individual Account Plan.--For purposes of this
section, the term `applicable individual account plan' means the
portion of any individual account plan which permits a participant or
beneficiary to exercise control over assets in his or her account.
``(c) Regulations.--The Secretary shall prescribe such regulations
or other guidance as may be necessary or appropriate to carry out the
purposes of this section, including regulations or other guidance
which--
``(1) provide a later deadline for providing the notice of
investment menu changes described in subsection (a)(3) in
appropriate circumstances, and
``(2) provide guidelines, and a safe harbor, for the
selection of an appropriate benchmark, index, or other point of
comparison for an investment option under subsection
(a)(1)(C)(iii)(II).''.
(2) Clerical amendment.--The table of contents in section 1
of such Act is amended by striking the item relating to section
111 and inserting the following new items:
``Sec. 111. Requirement to provide notice of plan fee information to
plan administrators.
``Sec. 112. Requirement to provide notice to participants of plan fee
information.
``Sec. 113. Repeal and effective date.''.
(b) Quarterly Benefit Statements.--Section 105 of such Act (29
U.S.C. 1025) is amended--
(1) in subsection (a)(2)--
(A) by redesignating subparagraph (C) as
subparagraph (G);
(B) in subparagraph (B)(ii)--
(i) in subclause (II), by striking
``diversified, and'' and inserting
``diversified,'';
(ii) in subclause (III) by striking the
period and inserting ``, and''; and
(iii) by adding after subclause (III) the
following new subclause:
``(IV) with respect to the portion
of a participant's account for which
the participant has the right to direct
the investment of assets, the
information described in subparagraph
(C).''; and
(C) by inserting after subparagraph (B) the
following new subparagraphs:
``(C) Quarterly benefit statements.--The plan
administrator shall provide to each participant and
beneficiary, at least once each calendar quarter, an
explanation describing the investment options in which
the participant's or beneficiary's account is invested
as of the last day of the preceding quarter. Such
explanation shall provide, to the extent applicable,
the following for the preceding quarter:
``(i) As of the last day of the quarter, a
statement of the different asset classes that
the participant's or beneficiary's account is
invested in and the percentage of the account
allocated to each asset class.
``(ii) A statement of the starting and
ending balance of the participant's or
beneficiary's account for such quarter.
``(iii) A statement of the total
contributions made to the participant's or
beneficiary's account during the quarter and a
separate statement of--
``(I) the amount of such
contributions, and the total amount of
any restorative payments, which were
made by the employer during the
quarter, and
``(II) the amount of such
contributions which were made by the
employee.
``(iv) A statement of the total fees and
expenses which were directly deducted from the
participant's or beneficiary's account during
the quarter and an itemization of such fees and
expenses.
``(v) A statement of the net returns for
the year to date, expressed as a percentage,
and a statement as to whether the net returns
include amounts described in clause (iv).
``(vi) With respect to each investment
option in which the participant or beneficiary
was invested as of the last day of the quarter,
the following:
``(I) A statement of the percentage
of the participant's or beneficiary's
account that is invested in such option
as of the last day of such quarter.
``(II) A statement of the starting
and ending balance of the participant's
or beneficiary's account that is
invested in such option for such
quarter.
``(III) A statement of the annual
operating expenses of the investment
option.
``(IV) A statement of whether the
disclosure described in clause (iv)
includes the annual operating expenses
of the investment options of the
participant or beneficiary.
``(vii) The statement described in section
112(a)(1)(B)(i)(VI).
``(viii) A statement regarding how a
participant or beneficiary may access the
information required to be disclosed under
section 112(a)(1).
``(D) Model explanations.--The Secretary shall
prescribe one or more model explanations that may be
used for purposes of satisfying the requirements of
subparagraph (C).
``(E) Determination of expenses.--For purposes of
subparagraph (C)(vi)(III)--
``(i) Expenses may be expressed as a dollar
amount or as a percentage of assets (or a
combination thereof).
``(ii) The plan administrator may provide
disclosure of the expenses for the quarter or
may provide a reasonable and representative
estimate of such expenses and shall indicate
any such estimate as being an estimate. Any
such estimate shall be based on reasonable
assumptions stated together with such estimate.
``(iii) To the extent that estimated
expenses are expressed as a percentage of
assets, the disclosure shall also include one
of the following, stated in dollar amounts:
``(I) an estimate of the expenses
for the quarter based on the amount
invested in the option; or
``(II) an example describing the
expenses that would apply during the
quarter with respect to a hypothetical
$10,000 investment in the option.
``(F) Annual compliance for small plans.--A plan
that has fewer than 100 participants and beneficiaries
as of the first day of the plan year may provide the
explanation described in subparagraph (C) on an annual
rather than a quarterly basis.''.
(c) Assistance From the Department of Labor.--Section 105 of such
Act (29 U.S.C. 1025) is amended by adding at the end the following new
subsections:
``(d) Assistance to Small Employers.--The Secretary shall make
available to employers with 100 or fewer employees--
``(1) educational and compliance materials designed to
assist such employers in selecting and monitoring service
providers for individual account plans which permit a
participant or beneficiary to exercise control over the assets
in the account of the participant or beneficiary, investment
options under such plans, and charges relating to such options,
and
``(2) services designed to assist such employers in finding
and understanding affordable investment options for such plans
and in comparing the investment performance of, and charges
for, such options on an ongoing basis against appropriate
benchmarks or other appropriate measures.
``(e) Assistance to Plan Sponsors and Plan Participants and
Beneficiaries.--The Secretary shall provide plan administrators and
plan sponsors of individual account plans and participants and
beneficiaries under such plans assistance with any questions or
problems regarding compliance with the requirements of subparagraphs
(B)(ii)(IV) and (C) of subsection (a)(2) and section 112.''.
(d) Enforcement.--
(1) Penalties.--Section 502 of such Act (29 U.S.C. 1132) is
amended--
(A) in subsection (a)(6), by striking ``under
paragraph (2)'' and all that follows through
``subsection (c)'' and inserting ``under paragraph (2),
(4), (5), (6), (7), (8), (9), (10), (11), or (12) of
subsection (c)''; and
(B) in subsection (c), by redesignating the second
paragraph (10) as paragraph (13), and by inserting
after the first paragraph (10) the following new
paragraphs:
``(11)(A) In the case of any failure by a service provider (as
defined in section 111(f)(1)) to provide a statement in violation of
section 111, the service provider may be assessed by the Secretary a
civil penalty of up to $1,000 for each day in the noncompliance period.
``(B) For purposes of subparagraph (A), the noncompliance period
with respect to the failure to provide any statement is the period
beginning on the date that such statement was required to be provided
and ending on the date that such statement is provided or the failure
is otherwise corrected.
``(C)(i) The total amount of a penalty assessed under this
paragraph on any service provider with respect to any individual
account plan for any plan year shall not exceed an amount equal to the
lesser of--
``(I) 10 percent of the assets of the plan, determined as
of the first day of such plan year, or
``(II) $1,000,000.
``(ii) No penalty shall be imposed by subparagraph (A) on any
failure if--
``(I) the service provider subject to liability for the
penalty under subparagraph (A) exercised reasonable diligence
to meet the requirement with respect to which the failure
relates, and
``(II) such service provider provides the information
required under section 111 during the 30-day period beginning
on the date such person knew, or exercising reasonable
diligence would have known, that such failure existed.
``(iii) In the case of a failure which is due to reasonable cause
and not to willful neglect, the Secretary may waive part or all of the
penalty under subparagraph (A) to the extent that the payment of such
penalty would be excessive or otherwise inequitable relative to the
failure involved.
``(D) The penalty imposed under this paragraph with respect to any
failure shall be reduced by the amount of any tax imposed on such
person with respect to such failure under section 4980J of the Internal
Revenue Code of 1986.
``(12)(A) Any plan administrator with respect to a plan who fails
or refuses to provide a notice, explanation, or statement to
participants and beneficiaries in accordance with subparagraphs
(B)(ii)(IV) and (C) of section 105(a)(2) and section 112 may be
assessed by the Secretary a civil penalty of up to $110 for each day in
the noncompliance period.
``(B) For purposes of subparagraph (A), the noncompliance period
with respect to the failure to provide any notice, explanation, or
statement referred to in subparagraph (B)(ii)(IV) or (C) of section
105(a)(2) or section 112 with respect to any participant or beneficiary
is the period beginning on the date that such notice, explanation, or
statement was required to be provided and ending on the date that such
notice, explanation, or statement is provided or the failure is
otherwise corrected.
``(C)(i) The total amount of penalty assessed under this paragraph
with respect to any plan for any plan year shall not exceed an amount
equal to the lesser of--
``(I) 10 percent of the assets of the plan, determined as
of the first day of such plan year, or
``(II) $500,000.
``(ii) No penalty shall be imposed under subparagraph (A) on any
failure to meet the requirements of subparagraphs (B)(ii)(IV) and (C)
of section 105(a)(2) and section 112 if--
``(I) any person subject to liability for the penalty under
subparagraph (A) exercised reasonable diligence to meet such
requirements, and
``(II) such person provides the notice, explanation, or
statement to which the failure relates during the 30-day period
beginning on the date such person knew, or exercising
reasonable diligence would have known, that such failure
existed.
``(iii) In the case of a failure which is due to reasonable cause
and not to willful neglect, the Secretary shall waive part or all of
the penalty under subparagraph (A) to the extent that the payment of
such penalty would be excessive or otherwise inequitable relative to
the failure involved.
``(iv) The penalty imposed under this paragraph with respect to any
failure shall be reduced by the amount of any tax imposed on such
person with respect to such failure under section 4980K of the Internal
Revenue Code of 1986.''.
(2) Enforcement coordination and review by the department
of labor.--Section 502 of such Act (29 U.S.C. 1132) is amended
by adding at the end the following new subsection:
``(n) Enforcement Coordination of Certain Disclosure Requirements
Relating to Individual Account Plans and Review by the Department of
Labor.--
``(1) Notification and action relating to service
providers.--The Secretary shall notify the applicable
regulatory authority in any case in which the Secretary
determines that a service provider is engaged in a pattern or
practice that precludes compliance by plan administrators with
subparagraphs (B)(ii)(IV) and (C) of section 105(a)(2) and
section 112. The Secretary shall, in consultation with the
applicable authority, take such timely enforcement action under
this title as is necessary to assure that such pattern or
practice ceases and desists and assess any appropriate
penalties.
``(2) Annual audit of representative sampling of individual
account plans.--The Secretary shall annually audit a
representative sampling of individual account plans covered by
this title to determine compliance with the requirements of
subparagraphs (B)(ii)(IV) and (C) of section 105(a)(2), section
111, and section 112. The Secretary shall annually report the
results of such audit and any related recommendations of the
Secretary to the Committee on Education and Labor of the House
of Representatives and the Committee on Health, Education,
Labor, and Pensions of the Senate.''.
(e) Review and Report to the Congress by Secretary of Labor
Relating to Reporting and Disclosure Requirements.--
(1) Study.--As soon as practicable after the date of the
enactment of this Act, the Secretary of Labor shall review the
reporting and disclosure requirements of part 1 of subtitle B
of title I of the Employee Retirement Income Security Act of
1974 and related provisions of the Pension Protection Act of
2006.
(2) Report.--Not later than 18 months after the date of the
enactment of this Act, the Secretary of Labor, in consultation
with the Secretary of the Treasury, shall make such
recommendations as the Secretary of Labor considers appropriate
to the appropriate committees of the Congress to consolidate,
simplify, standardize, and improve the applicable reporting and
disclosure requirements so as to simplify reporting for
employee pension benefit plans and ensure that needed
understandable information is provided to participants and
beneficiaries of such plans.
SEC. 323. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.
(a) In General.--Chapter 43 of the Internal Revenue Code of 1986
(relating to qualified pension, etc. plans) is amended by adding at the
end the following new sections:
``SEC. 4980J. FAILURE TO PROVIDE NOTICE OF PLAN FEE INFORMATION TO PLAN
ADMINISTRATORS.
``(a) Imposition of Tax.--
``(1) In general.--There is hereby imposed a tax on each
failure of a service provider to meet the requirements of
paragraph (2) with respect to any applicable defined
contribution plan.
``(2) Failures described.--The failures described in this
paragraph are--
``(A) any failure to provide an initial statement
described in subsection (d),
``(B) any failure to provide an annual statement
described in subsection (e), and
``(C) any failure to provide a material change
statement described in subsection (f).
``(b) Amount of Tax.--
``(1) In general.--The amount of the tax imposed by
subsection (a) on any failure shall be $1,000 for each day in
the noncompliance period.
``(2) Noncompliance period.--For purposes of paragraph (1),
the noncompliance period with respect to the failure to provide
any statement is the period beginning on the date that such
statement was required to be provided and ending on the date
that such statement is provided or the failure is otherwise
corrected.
``(c) Limitations.--
``(1) Aggregate limitation.--The total amount of tax
imposed by this section on any service provider with respect to
any applicable defined contribution plan for any plan year
shall not exceed an amount equal to the lesser of--
``(A) 10 percent of the assets of the plan,
determined as of the first day of such plan year, or
``(B) $1,000,000.
``(2) Tax not to apply to failures corrected within 30
days.--No tax shall be imposed by subsection (a) on any failure
if--
``(A) the service provider subject to liability for
the tax under subsection (a) exercised reasonable
diligence to meet the requirement with respect to which
the failure relates, and
``(B) such service provider provides the
information required under subsection (a) during the
30-day period beginning on the date such person knew,
or exercising reasonable diligence would have known,
that such failure existed.
``(3) Waiver by secretary.--In the case of a failure which
is due to reasonable cause and not to willful neglect, the
Secretary may waive part or all of the tax imposed by
subsection (a) to the extent that the payment of such tax would
be excessive or otherwise inequitable relative to the failure
involved.
``(d) Initial Statement of Services Provided and Revenues
Received.--
``(1) In general.--Before entering into any contract or
arrangement to provide services to an applicable defined
contribution plan, the service provider shall provide to the
plan administrator a single written statement which includes,
with respect to the first plan year covered under such contract
or arrangement, the following:
``(A) A detailed description of the services which
will be provided to the plan by the service provider,
the amount of total expected annual revenue with
respect to such services, the manner in which such
revenue will be collected, and the extent to which such
revenue varies between specific investment options.
``(B)(i) In the case of a service provider who is
providing recordkeeping services with respect to any
investment option, such information as is necessary for
the plan administrator to satisfy the requirements of
paragraphs (1), (2) and (4) of section 4980K(e) with
respect to such option, including specifying the method
used by the service provider in disclosing or
estimating expenses under subparagraphs (A)(iv) and (C)
of such paragraph (2).
``(ii) To the extent provided in regulations issued
by the Secretary of Labor, clause (i) shall not apply
in the case of a service provider described in such
clause if the service provider receives a written
notification from the plan administrator that the
information described in such clause in connection with
the investment option is provided by another service
provider pursuant to a contract or arrangement to
provide services to the plan.
``(C) A statement indicating--
``(i) the identity of any investment
options offered under the plan with respect to
which the service provider provides substantial
investment, trustee, custodial, or
administrative services, and
``(ii) in the case of any investment
option, whether the service provider expects to
receive any component of total expected annual
revenue described in paragraph (2)(A)(ii)(II)
with respect to such option and the amount of
any such component.
``(D) The portion of total expected annual revenue
which is properly allocable to each of the following:
``(i) Administration and recordkeeping.
``(ii) Investment management.
``(iii) Other services or amounts not
described in clause (i) or (ii).
``(2) Definition of total expected annual revenue.--For
purposes of this section--
``(A) In general.--The term `total expected annual
revenue' means, with respect to any plan year--
``(i) any amount expected to be received
during such plan year from the plan (including
amounts paid from participant accounts), any
participant or beneficiary, or any plan sponsor
in connection with the contract or arrangement
referred to in paragraph (1), and
``(ii) any amount not taken into account
under clause (i) which is expected to be
received during such plan year by the service
provider in connection with--
``(I) plan administration,
recordkeeping, consulting, management,
or investment or other service
activities undertaken by the service
provider with respect to the plan, or
``(II) plan administration,
recordkeeping, consulting, management,
or investment or other service
activities undertaken by any other
person with respect to the plan.
``(B) Expressed as dollar amount or percentage of
assets.--Total expected annual revenue and any amount
indicated under paragraph (1)(C)(ii) may be expressed
as a dollar amount or as a percentage of assets (or a
combination thereof), as appropriate. To the extent
that total expected annual revenue is expressed as a
percentage of assets, such percentage shall be properly
allocated among clauses (i), (ii), and (iii) of
paragraph (1)(D).
``(C) Provision of fee schedule for certain
participant initiated transactions.--In the case of
amounts expected to be received from participants or
beneficiaries under the plan (or from the account of a
participant or beneficiary) as a fee or charge in
connection with a transaction initiated by the
participant (other than loads, commissions, brokerage
fees, and other investment related transactions)--
``(i) such amounts shall not be taken into
account in determining total expected annual
revenue, and
``(ii) the service provider shall provide
to the plan administrator, as part of the
statement referred to in paragraph (1), a fee
schedule which describes each such fee or
charge, the amount thereof, and the manner in
which such amount is collected.
``(D) Estimations.--In determining under this
subsection any amount which is expected to be received
by the service provider, the service provider shall
provide a reasonable estimate of such amount and shall
indicate in the statement referred to in paragraph (1)
whether such amount disclosed is an estimate. Any such
estimate shall be based on reasonable assumptions
specified in such statement.
``(3) Allocation rules.--The Secretary of Labor shall
provide rules for defining total expected annual revenue and
for the appropriate and consistent allocation of total expected
annual revenue among clauses (i), (ii), and (iii) of paragraph
(1)(D), except that the entire amount of such revenue shall be
allocated among such clauses and no amount may be taken into
account under more than one clause.
``(4) Disclosure of different pricing of investment
options.--In the case of investment options with more than one
share class or price level, the Secretary of Labor shall
prescribe regulations for the disclosure of the different share
classes or price levels available as part of the statement in
paragraph (1). Such regulations shall provide guidance with
respect to the disclosure of the basis for qualifying for such
share classes or price levels, which may include amounts
invested, number of participants, or other factors.
``(5) Disclosure of investment transaction costs.--To the
extent provided in regulations issued by the Secretary of
Labor, a service provider shall separately disclose the
transaction costs (including sales commissions) for each
investment option for the preceding year or the plan's
allocable share of such costs for the preceding year.
``(e) Annual Statements.--With respect to each plan year after the
plan year covered by the statement described in subsection (d), the
service provider shall provide the plan administrator a single written
statement which includes the information described in subsection (d)
with respect to such subsequent plan year.
``(f) Material Change Statements.--In the case of any event or
other change during a plan year which causes the information included
in any statement described in subsection (d) or (e) with respect to
such plan year to become materially incorrect, the service provider
shall provide the plan administrator a written statement providing the
corrected information not later than 30 days after the service provider
knows, or exercising reasonable diligence would have known, of such
event or other change.
``(g) Time and Manner of Providing Statement and Other Materials.--
The statement referred to in subsections (d)(1) and (e) shall be made
at such time and in such manner as the Secretary of Labor may provide.
Other materials required to be provided under this section shall be
provided in such manner as such Secretary may provide. All information
included in such statements and other materials shall be presented in a
manner which is easily understood by the typical plan administrator.
``(h) Exception for Small Service Providers.--The requirements of
this section shall not apply with respect to any contract or
arrangement for services provided with respect to an individual account
plan for any plan year if--
``(1) the total annual revenue expected by the service
provider to be received with respect to the plan for such plan
year is less than $5,000, and
``(2) the service provider provides a written statement to
the plan administrator that the total annual revenue expected
by the service provider to be received with respect to the plan
is less than $5,000.
Service providers who expect to receive de minimis annual revenue from
the plan need not provide the written statement described in paragraph
(2). The Secretary of Labor may by regulation or other guidance adjust
the dollar amount specified in this subsection.
``(i) Definitions.--For purposes of this section--
``(1) Service provider.--
``(A) In general.--The term `service provider'
includes any person providing administration,
recordkeeping, consulting, investment management
services, or investment advice to an applicable defined
contribution plan under a contract or arrangement.
``(B) Controlled groups treated as one service
provider.--All persons which would be treated as a
single employer under subsection (b) or (c) of section
414 if section 1563(a)(1) were applied--
``(i) except as provided by subparagraph
(B), by substituting `more than 50 percent' for
`at least 80 percent' each place it appears
therein, or
``(ii) for purposes of subsection
(d)(1)(C)(i), by substituting `at least 20
percent' for `at least 80 percent' each place
it appears therein,
shall be treated as one person for purposes of this
section.
``(2) Applicable defined contribution plan.--The term
`applicable defined contribution plan' means any defined
contribution plan described in clauses (iii) through (vi) of
section 402(c)(8)(B).
``(3) Plan administrator.--The term `plan administrator'
has the meaning given such term by section 414(g).
``SEC. 4980K. FAILURE TO PROVIDE NOTICE TO PARTICIPANTS OF PLAN FEE
INFORMATION.
``(a) Imposition of Tax.--
``(1) In general.--There is hereby imposed a tax on each
failure of a plan administrator of an applicable defined
contribution plan to meet the requirements of paragraph (2)
with respect to any participant or beneficiary.
``(2) Failures described.--The failures described in this
paragraph are--
``(A) any failure to provide an advance notice of
available investment options described in subsection
(e)(1),
``(B) any failure to provide an account explanation
described in subsection (e)(2),
``(C) any failure to provide a service provider
statement referred to in subsection (e)(3), and
``(D) any failure to provide a notice of material
change described in subsection (e)(4).
``(b) Amount of Tax.--
``(1) In general.--The amount of the tax imposed by
subsection (a) on any failure with respect to any participant
or beneficiary shall be $100 for each day in the noncompliance
period.
``(2) Noncompliance period.--For purposes of paragraph (1),
the noncompliance period with respect to the failure to provide
any notice, explanation, or statement referred to in subsection
(a)(2) with respect to any participant or beneficiary is the
period beginning on the date that such notice, explanation, or
statement was required to be provided and ending on the date
that such notice, explanation, or statement is provided or the
failure is otherwise corrected.
``(c) Limitations on Amount of Tax.--
``(1) Aggregate limitation.--The total amount of tax
imposed by this section with respect to any plan for any plan
year shall not exceed an amount equal to the lesser of--
``(A) 10 percent of the assets of the plan,
determined as of the first day of such plan year, or
``(B) $500,000.
``(2) Tax not to apply to failures corrected within 30
days.--No tax shall be imposed by subsection (a) on any failure
if--
``(A) any person subject to liability for the tax
under subsection (a) exercised reasonable diligence to
meet the requirements of subsection (e), and
``(B) such person provides the notice, explanation,
or statement to which the failure relates during the
30-day period beginning on the date such person knew,
or exercising reasonable diligence would have known,
that such failure existed.
``(3) Waiver by secretary.--In the case of a failure which
is due to reasonable cause and not to willful neglect, the
Secretary shall waive part or all of the tax imposed by
subsection (a) to the extent that the payment of such tax would
be excessive or otherwise inequitable relative to the failure
involved.
``(d) Liability for Tax.--The plan administrator shall be liable
for the tax imposed by subsection (a).
``(e) Disclosures to Participants and Beneficiaries.--
``(1) Advance notice of available investment options.--
``(A) In general.--The plan administrator of an
applicable defined contribution plan shall provide to
the participant or beneficiary notice of the investment
options available under the plan before--
``(i) the earliest date provided for under
the plan for the participant's initial
investment of any contribution made on behalf
of such participant, and
``(ii) the effective date of any change in
the list of investment options available under
the plan, unless such advance notice is
impracticable, and in such case, as soon as is
practicable.
``(B) Information included in notice.--The notice
required under subparagraph (A) shall--
``(i) set forth, with respect to each
available investment option--
``(I) the name of the option,
``(II) a general description of the
option's investment objectives and
principal investment strategies,
principal risk and return
characteristics, and the name of the
option's investment manager,
``(III) whether the investment
option is designed to be a
comprehensive, stand-alone investment
for retirement that provides varying
degrees of long-term appreciation and
capital preservation through a mix of
equity and fixed income exposures,
``(IV) the extent to which the
investment option is actively managed
or passively managed in relation to an
index and the difference between active
management and passive management,
``(V) where, and the manner in
which, additional plan-specific,
option-specific, and generally
available investment information may be
obtained, and
``(VI) a statement explaining that
investment options should not be
evaluated solely on the basis of the
charges for each option but should also
be based on consideration of other key
factors, including the risk level of
the option, the investment objectives
of the option, historical returns of
the option, and the participant's
personal investment objectives,
``(ii) include a statement of the right
under paragraph (3) of participants and
beneficiaries to request, and a description of
how participant or beneficiary may request, a
copy of the statements received by the plan
administrator under section 4980J with respect
to the plan, and
``(iii) include the plan fee comparison
chart described in subparagraph (C).
``(C) Plan fee comparison chart.--
``(i) In general.--
``(I) In general.--The notice
provided under this paragraph shall
include a plan fee comparison chart
consisting of a comparison of the
service and investment charges that
will or could be assessed against the
account of the participant or
beneficiary with respect to the plan
year.
``(II) Expressed as dollar amount
or formula.--For purposes of this
subparagraph, such charges shall be
provided in the form of a dollar amount
or as a formula (such as a percentage
of assets), as appropriate.
``(ii) Categorization of charges.--The plan
fee comparison chart shall provide information
in relation to the following categories of
charges that will or could be assessed against
the account of the participant or beneficiary:
``(I) Asset-based charges specific
to investment.--Charges that vary
depending on the investment options
selected by the participant or
beneficiary, including the annual
operating expenses of the investment
option and investment-specific asset-
based charges (such as loads,
commissions, brokerage fees, exchange
fees, redemption fees, and surrender
charges). Except as provided by the
Secretary of Labor in regulations under
this section, the information relating
to such charges shall include a
statement noting any charges for 1 or
more investment options which pay for
services other than investment
management.
``(II) Recurring asset-based
charges not specific to investment.--
Charges that are assessed as a
percentage of the total assets in the
account of the participant or
beneficiary, regardless of the
investment option selected.
``(III) Administrative and
transaction-based charges.--
Administration and transaction-based
charges, including fees charged to
participants to cover plan
administration, compliance, and
recordkeeping costs, plan loan
origination fees, possible redemption
fees, and possible surrender charges,
that are not assessed as a percentage
of the total assets in the account and
are either automatically deducted each
year or result from certain
transactions engaged in by the
participant or beneficiary.
``(IV) Other charges.--Any other
charges which may be deducted from
participants' or beneficiaries'
accounts and which are not described in
subclauses (I), (II), and (III).
``(iii) Fees and historical returns.--The
plan fee comparison chart shall include--
``(I) the historical returns, net
of fees and expenses, for the previous
year, 5 years, and 10 years (or for the
period since inception, if shorter)
with respect to such investment option,
and
``(II) the historical returns of an
appropriate benchmark, index, or other
point of comparison for each such
period.
``(D) Model notices.--The Secretary of Labor shall
prescribe one or more model notices that may be used
for purposes of satisfying the requirements of this
paragraph, including model plan fee comparison charts.
``(E) Estimations.--For purposes of providing the
notice required under this paragraph, the plan
administrator may provide a reasonable and
representative estimate for any charges or percentages
disclosed under subparagraph (B) or (C) and shall
indicate whether the amount of any such charges or
percentages disclosed is an estimate.
``(2) Quarterly benefit statement.--
``(A) Requirements.--The plan administrator shall
provide to each participant and beneficiary, at least
once each calendar quarter, an explanation describing
the investment options in which the participant's or
beneficiary's account is invested as of the last day of
the preceding quarter. Such explanation shall provide,
to the extent applicable, the following for the
preceding quarter:
``(i) As of the last day of the quarter, a
statement of the different asset classes that
the participant's or beneficiary's account is
invested in and the percentage of the account
allocated to each asset class.
``(ii) A statement of the starting and
ending balance of the participant's or
beneficiary's account for such quarter.
``(iii) A statement of the total
contributions made to the participant's or
beneficiary's account during the quarter and a
separate statement of--
``(I) the amount of such
contributions, and the total amount of
any restorative payments, which were
made by the employer during the
quarter, and
``(II) the amount of such
contributions which were made by the
employee.
``(iv) A statement of the total fees and
expenses which were directly deducted from the
participant's or beneficiary's account during
the quarter and an itemization of such fees and
expenses.
``(v) A statement of the net returns for
the year to date, expressed as a percentage,
and a statement as to whether the net returns
include amounts described in clause (iv).
``(vi) With respect to each investment
option in which the participant or beneficiary
was invested as of the last day of the quarter,
the following:
``(I) A statement of the percentage
of the participant's or beneficiary's
account that is invested in such option
as of the last day of such quarter.
``(II) A statement of the starting
and ending balance of the participant's
or beneficiary's account that is
invested in such option for such
quarter.
``(III) A statement of the annual
operating expenses of the investment
option.
``(IV) A statement of whether the
disclosure described in clause (iv)
includes the annual operating expenses
of the investment options of the
participant or beneficiary.
``(vii) The statement described in
paragraph (1)(B)(i)(VI).
``(viii) A statement regarding how a
participant or beneficiary may access the
information required to be disclosed under
paragraph (1).
``(B) Model explanations.--The Secretary of Labor
shall prescribe one or more model explanations that may
be used for purposes of satisfying the requirements of
this paragraph.
``(C) Determination of expenses.--For purposes of
subparagraph (A)(vi)(III)--
``(i) Expenses may be expressed as a dollar
amount or as a percentage of assets (or a
combination thereof).
``(ii) The plan administrator may provide
disclosure of the expenses for the quarter or
may provide a reasonable and representative
estimate of such expenses and shall indicate
any such estimate as being an estimate. Any
such estimate shall be based on reasonable
assumptions stated together with such estimate.
``(iii) To the extent that estimated
expenses are expressed as a percentage of
assets, the disclosure shall also include one
of the following, stated in dollar amounts:
``(I) an estimate of the expenses
for the quarter based on the amount
invested in the option; or
``(II) an example describing the
expenses that would apply during the
quarter with respect to a hypothetical
$10,000 investment in the option.
``(3) Disclosure of service provider statements.--The plan
administrator shall provide to any participant or beneficiary a
copy of any statement received pursuant to section 4980J within
30 days after receipt of a request for such a statement.
``(4) Notice of material changes.--In the case of any event
or other change which causes the information included in any
notice described in paragraph (1) to become materially
incorrect, the plan administrator shall provide participants
and beneficiaries a written statement providing the corrected
information not later than 30 days after the plan administrator
knows, or exercising reasonable diligence would have known, of
such event or other change.
``(5) Time and manner of providing notices and
disclosures.--
``(A) In general.--The notices described in
paragraph (1) shall be provided at such times and in
such manner as the Secretary of Labor may provide.
Other notices and materials required to be provided
under this subsection shall be provided in such manner
as such Secretary may provide.
``(B) Manner of presentation.--
``(i) In general.--All information included
in such notices or explanations shall be
presented in a manner which is easily
understood by the typical participant.
``(ii) Generic example of operating
expenses of investment options.--The
information described in paragraphs
(1)(C)(ii)(I) shall include a generic example
describing the charges that would apply during
an annual period with respect to a $10,000
investment in the investment option.
``(C) Annual compliance for small plans.--A plan
that has fewer than 100 participants and beneficiaries
as of the first day of the plan year may provide the
explanation described in paragraph (2) on an annual
rather than a quarterly basis.
``(f) Definitions.--
``(1) Applicable defined contribution plan.--The term
`applicable defined contribution plan' means the portion of any
defined contribution plan which--
``(A) permits a participant or beneficiary to
exercise control over assets in his or her account, and
``(B) is described in clauses (iii) through (vi) of
section 402(c)(8)(B).
``(2) Plan administrator.--The term `plan administrator'
has the meaning given such term by section 414(g).
``(g) Regulations.--The Secretary of Labor shall prescribe such
regulations or other guidance as may be necessary or appropriate to
carry out the purposes of this section, including regulations or other
guidance which--
``(1) provide a later deadline for providing the notice of
investment menu changes described in subsection (e)(4) in
appropriate circumstances, and
``(2) provide guidelines, and a safe harbor, for the
selection of an appropriate benchmark, index, or other point of
comparison for an investment option under subsection
(e)(1)(C)(iii)(II).''.
(b) Clerical Amendment.--The table of sections for chapter 43 of
such Code is amended by adding at the end the following new items:
``Sec. 4980J. Failure to provide notice of plan fee information to plan
administrators.
``Sec. 4980K. Failure to provide notice to participants of plan fee
information.''.
SEC. 324. REGULATORY AUTHORITY AND COORDINATION.
(a) Regulatory Authority.--The Secretary of Labor shall prescribe
regulations or other guidance to the extent the Secretary determines
necessary or appropriate to carry out the purposes of sections 105,
111, and 112 of the Employee Retirement Income Security Act of 1974 and
sections 4980J and 4980K of the Internal Revenue Code of 1986,
including regulations or other guidance which--
(1) provide safe harbor and simplified methods for making
the allocations described in subsection (a)(1)(D) of such
section 111 and subsection (d)(1)(D) of such section 4980J; and
(2) provide special rules for the application of such
sections to--
(A) investments with a guaranteed rate of return;
(B) investments with an insurance component; and
(C) employer sponsored retirement plans funded
through an individual retirement account.
(3) address notices with respect to investments provided
through participant directed brokerage trading;
(4) address the disclosure of information that is not
proprietary to the service provider; and
(5) provide rules to allow service providers to consolidate
information to satisfy the requirements of such sections with
respect to all such service providers.
(b) Certain Electronic Disclosures Permitted.--Any disclosure
required under section 112 of the Employee Retirement Income Security
Act of 1974 or section 4980K of the Internal Revenue Code of 1986 may
be provided through an electronic medium under such rules as shall be
prescribed under such section by the Secretary of Labor not later than
1 year after the date of the enactment of this Act. Such rules shall be
similar to those applicable under the Internal Revenue Code of 1986
with respect to notices to participants in pension plans. Such
Secretary shall regularly modify such rules as appropriate to take into
account new developments, including new forms of electronic media, and
to fairly take into consideration the interests of plan sponsors,
service providers, and participants. The rules prescribed by such
Secretary pursuant to this subsection shall provide for a method for
the typical participant or beneficiary to obtain without undue burden
any such disclosure in writing on paper in lieu of receipt through an
electronic medium.
SEC. 325. EFFECTIVE DATE OF SUBTITLE.
(a) In General.--The amendments made by this subtitle shall apply
to plan years beginning after December 31, 2011.
(b) Application of Service Provider Disclosures to Existing
Contracts and Arrangements.--For purposes of section 111 of the
Employee Retirement Income Security Act of 1974 and section 4980J of
the Internal Revenue Code of 1986, any contract or arrangement to
provide services to a plan which is in effect on January 1, 2012, shall
be treated as a new contract or arrangement entered into on such date.
(c) Special Rule for Compliance With Subtitle.--Until 12 months
after final regulations are issued by the Secretary of Labor pursuant
to the amendments made by this subtitle, a service provider or plan
administrator shall be treated as having complied with such amendments
if such service provider or plan administrator complies with a
reasonable good faith interpretation of such amendments.
TITLE IV--REVENUE OFFSETS
Subtitle A--Foreign Provisions
SEC. 401. RULES TO PREVENT SPLITTING FOREIGN TAX CREDITS FROM THE
INCOME TO WHICH THEY RELATE.
(a) In General.--Subpart A of part III of subchapter N of chapter 1
is amended by adding at the end the following new section:
``SEC. 909. SUSPENSION OF TAXES AND CREDITS UNTIL RELATED INCOME TAKEN
INTO ACCOUNT.
``(a) In General.--If there is a foreign tax credit splitting event
with respect to a foreign income tax paid or accrued by the taxpayer,
such tax shall not be taken into account for purposes of this title
before the taxable year in which the related income is taken into
account under this chapter by the taxpayer.
``(b) Special Rules With Respect to Section 902 Corporations.--If
there is a foreign tax credit splitting event with respect to a foreign
income tax paid or accrued by a section 902 corporation, such tax shall
not be taken into account--
``(1) for purposes of section 902 or 960, or
``(2) for purposes of determining earnings and profits
under section 964(a),
before the taxable year in which the related income is taken into
account under this chapter by such section 902 corporation or a
domestic corporation which meets the ownership requirements of
subsection (a) or (b) of section 902 with respect to such section 902
corporation.
``(c) Special Rules.--For purposes of this section--
``(1) Application to partnerships, etc.--In the case of a
partnership, subsections (a) and (b) shall be applied at the
partner level. Except as otherwise provided by the Secretary, a
rule similar to the rule of the preceding sentence shall apply
in the case of any S corporation or trust.
``(2) Treatment of foreign taxes after suspension.--In the
case of any foreign income tax not taken into account by reason
of subsection (a) or (b), except as otherwise provided by the
Secretary, such tax shall be so taken into account in the
taxable year referred to in such subsection (other than for
purposes of section 986(a)) as a foreign income tax paid or
accrued in such taxable year.
``(d) Definitions.--For purposes of this section--
``(1) Foreign tax credit splitting event.--There is a
foreign tax credit splitting event with respect to a foreign
income tax if the related income is (or will be) taken into
account under this chapter by a covered person.
``(2) Foreign income tax.--The term `foreign income tax'
means any income, war profits, or excess profits tax paid or
accrued to any foreign country or to any possession of the
United States.
``(3) Related income.--The term `related income' means,
with respect to any portion of any foreign income tax, the
income (or, as appropriate, earnings and profits) to which such
portion of foreign income tax relates.
``(4) Covered person.--The term `covered person' means,
with respect to any person who pays or accrues a foreign income
tax (hereafter in this paragraph referred to as the `payor')--
``(A) any entity in which the payor holds, directly
or indirectly, at least a 10 percent ownership interest
(determined by vote or value),
``(B) any person which holds, directly or
indirectly, at least a 10 percent ownership interest
(determined by vote or value) in the payor,
``(C) any person which bears a relationship to the
payor described in section 267(b) or 707(b), and
``(D) any other person specified by the Secretary
for purposes of this paragraph.
``(5) Section 902 corporation.--The term `section 902
corporation' means any foreign corporation with respect to
which one or more domestic corporations meets the ownership
requirements of subsection (a) or (b) of section 902.
``(e) Regulations.--The Secretary may issue such regulations or
other guidance as is necessary or appropriate to carry out the purposes
of this section, including regulations or other guidance which
provides--
``(1) appropriate exceptions from the provisions of this
section, and
``(2) for the proper application of this section with
respect to hybrid instruments.''.
(b) Clerical Amendment.--The table of sections for subpart A of
part III of subchapter N of chapter 1 is amended by adding at the end
the following new item:
``Sec. 909. Suspension of taxes and credits until related income taken
into account.''.
(c) Effective Date.--The amendments made by this section shall
apply to--
(1) foreign income taxes (as defined in section 909(d) of
the Internal Revenue Code of 1986, as added by this section)
paid or accrued after May 20, 2010; and
(2) foreign income taxes (as so defined) paid or accrued by
a section 902 corporation (as so defined) on or before such
date (and not deemed paid under section 902(a) or 960 of such
Code on or before such date), but only for purposes of applying
sections 902 and 960 with respect to periods after such date.
Section 909(b)(2) of the Internal Revenue Code of 1986, as added by
this section, shall not apply to foreign income taxes described in
paragraph (2).
SEC. 402. DENIAL OF FOREIGN TAX CREDIT WITH RESPECT TO FOREIGN INCOME
NOT SUBJECT TO UNITED STATES TAXATION BY REASON OF
COVERED ASSET ACQUISITIONS.
(a) In General.--Section 901 is amended by redesignating subsection
(m) as subsection (n) and by inserting after subsection (l) the
following new subsection:
``(m) Denial of Foreign Tax Credit With Respect to Foreign Income
Not Subject to United States Taxation by Reason of Covered Asset
Acquisitions.--
``(1) In general.--In the case of a covered asset
acquisition, the disqualified portion of any foreign income tax
determined with respect to the income or gain attributable to
the relevant foreign assets--
``(A) shall not be taken into account in
determining the credit allowed under subsection (a),
and
``(B) in the case of a foreign income tax paid by a
section 902 corporation (as defined in section
909(d)(5)), shall not be taken into account for
purposes of section 902 or 960.
``(2) Covered asset acquisition.--For purposes of this
section, the term `covered asset acquisition' means--
``(A) a qualified stock purchase (as defined in
section 338(d)(3)) to which section 338(a) applies,
``(B) any transaction which--
``(i) is treated as an acquisition of
assets for purposes of this chapter, and
``(ii) is treated as the acquisition of
stock of a corporation (or is disregarded) for
purposes of the foreign income taxes of the
relevant jurisdiction,
``(C) any acquisition of an interest in a
partnership which has an election in effect under
section 754, and
``(D) to the extent provided by the Secretary, any
other similar transaction.
``(3) Disqualified portion.--For purposes of this section--
``(A) In general.--The term `disqualified portion'
means, with respect to any covered asset acquisition,
for any taxable year, the ratio (expressed as a
percentage) of--
``(i) the aggregate basis differences (but
not below zero) allocable to such taxable year
under subparagraph (B) with respect to all
relevant foreign assets, divided by
``(ii) the income on which the foreign
income tax referred to in paragraph (1) is
determined (or, if the taxpayer fails to
substantiate such income to the satisfaction of
the Secretary, such income shall be determined
by dividing the amount of such foreign income
tax by the highest marginal tax rate applicable
to such income in the relevant jurisdiction).
``(B) Allocation of basis difference.--For purposes
of subparagraph (A)(i)--
``(i) In general.--The basis difference
with respect to any relevant foreign asset
shall be allocated to taxable years using the
applicable cost recovery method under this
chapter.
``(ii) Special rule for disposition of
assets.--Except as otherwise provided by the
Secretary, in the case of the disposition of
any relevant foreign asset--
``(I) the basis difference
allocated to the taxable year which
includes the date of such disposition
shall be the excess of the basis
difference with respect to such asset
over the aggregate basis difference
with respect to such asset which has
been allocated under clause (i) to all
prior taxable years, and
``(II) no basis difference with
respect to such asset shall be
allocated under clause (i) to any
taxable year thereafter.
``(C) Basis difference.--
``(i) In general.--The term `basis
difference' means, with respect to any relevant
foreign asset, the excess of--
``(I) the adjusted basis of such
asset immediately after the covered
asset acquisition, over
``(II) the adjusted basis of such
asset immediately before the covered
asset acquisition.
``(ii) Built-in loss assets.--In the case
of a relevant foreign asset with respect to
which the amount described in clause (i)(II)
exceeds the amount described in clause (i)(I),
such excess shall be taken into account under
this subsection as a basis difference of a
negative amount.
``(iii) Special rule for section 338
elections.--In the case of a covered asset
acquisition described in paragraph (2)(A), the
covered asset acquisition shall be treated for
purposes of this subparagraph as occurring at
the close of the acquisition date (as defined
in section 338(h)(2)).
``(4) Relevant foreign assets.--For purposes of this
section, the term `relevant foreign asset' means, with respect
to any covered asset acquisition, any asset (including any
goodwill, going concern value, or other intangible) with
respect to such acquisition if income, deduction, gain, or loss
attributable to such asset is taken into account in determining
the foreign income tax referred to in paragraph (1).
``(5) Foreign income tax.--For purposes of this section,
the term `foreign income tax' means any income, war profits, or
excess profits tax paid or accrued to any foreign country or to
any possession of the United States.
``(6) Taxes allowed as a deduction, etc.--Sections 275 and
78 shall not apply to any tax which is not allowable as a
credit under subsection (a) by reason of this subsection.
``(7) Regulations.--The Secretary may issue such
regulations or other guidance as is necessary or appropriate to
carry out the purposes of this subsection, including to exempt
from the application of this subsection certain covered asset
acquisitions, and relevant foreign assets with respect to which
the basis difference is de minimis.''.
(b) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to covered asset
acquisitions (as defined in section 901(m)(2) of the Internal
Revenue Code of 1986, as added by this section) after--
(A) May 20, 2010, if the transferor and the
transferee are related; and
(B) the date of the enactment of this Act in any
other case.
(2) Transition rule.--The amendments made by this section
shall not apply to any covered asset acquisition (as so
defined) with respect to which the transferor and the
transferee are not related if such acquisition is--
(A) made pursuant to a written agreement which was
binding on May 20, 2010, and at all times thereafter,
(B) described in a ruling request submitted to the
Internal Revenue Service on or before such date; or
(C) described on or before such date in a public
announcement or in a filing with the Securities and
Exchange Commission.
(3) Related persons.--For purposes of this subsection, a
person shall be treated as related to another person if the
relationship between such persons is described in section 267
or 707(b) of the Internal Revenue Code of 1986.
SEC. 403. SEPARATE APPLICATION OF FOREIGN TAX CREDIT LIMITATION, ETC.,
TO ITEMS RESOURCED UNDER TREATIES.
(a) In General.--Subsection (d) of section 904 is amended by
redesignating paragraph (6) as paragraph (7) and by inserting after
paragraph (5) the following new paragraph:
``(6) Separate application to items resourced under
treaties.--
``(A) In general.--If--
``(i) without regard to any treaty
obligation of the United States, any item of
income would be treated as derived from sources
within the United States,
``(ii) under a treaty obligation of the
United States, such item would be treated as
arising from sources outside the United States,
and
``(iii) the taxpayer chooses the benefits
of such treaty obligation,
subsections (a), (b), and (c) of this section and
sections 902, 907, and 960 shall be applied separately
with respect to each such item.
``(B) Coordination with other provisions.--This
paragraph shall not apply to any item of income to
which subsection (h)(10) or section 865(h) applies.
``(C) Regulations.--The Secretary may issue such
regulations or other guidance as is necessary or
appropriate to carry out the purposes of this
paragraph, including regulations or other guidance
which provides that related items of income may be
aggregated for purposes of this paragraph.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 404. LIMITATION ON THE AMOUNT OF FOREIGN TAXES DEEMED PAID WITH
RESPECT TO SECTION 956 INCLUSIONS.
(a) In General.--Section 960 is amended by adding at the end the
following new subsection:
``(c) Limitation With Respect to Section 956 Inclusions.--
``(1) In general.--If there is included under section
951(a)(1)(B) in the gross income of a domestic corporation any
amount attributable to the earnings and profits of a foreign
corporation which is a member of a qualified group (as defined
in section 902(b)) with respect to the domestic corporation,
the amount of any foreign income taxes deemed to have been paid
during the taxable year by such domestic corporation under
section 902 by reason of subsection (a) with respect to such
inclusion in gross income shall not exceed the amount of the
foreign income taxes which would have been deemed to have been
paid during the taxable year by such domestic corporation if
cash in an amount equal to the amount of such inclusion in
gross income were distributed as a series of distributions
(determined without regard to any foreign taxes which would be
imposed on an actual distribution) through the chain of
ownership which begins with such foreign corporation and ends
with such domestic corporation.
``(2) Authority to prevent abuse.--The Secretary shall
issue such regulations or other guidance as is necessary or
appropriate to carry out the purposes of this subsection,
including regulations or other guidance which prevent the
inappropriate use of the foreign corporation's foreign income
taxes not deemed paid by reason of paragraph (1).''.
(b) Effective Date.--The amendment made by this section shall apply
to acquisitions of United States property (as defined in section 956(c)
of the Internal Revenue Code of 1986) after May 20, 2010.
SEC. 405. SPECIAL RULE WITH RESPECT TO CERTAIN REDEMPTIONS BY FOREIGN
SUBSIDIARIES.
(a) In General.--Paragraph (5) of section 304(b) is amended by
redesignating subparagraph (B) as subparagraph (C) and by inserting
after subparagraph (A) the following new subparagraph:
``(B) Special rule in case of foreign acquiring
corporation.--In the case of any acquisition to which
subsection (a) applies in which the acquiring
corporation is a foreign corporation, no earnings and
profits shall be taken into account under paragraph
(2)(A) (and subparagraph (A) shall not apply) if more
than 50 percent of the dividends arising from such
acquisition (determined without regard to this
subparagraph) would not--
``(i) be subject to tax under this chapter
for the taxable year in which the dividends
arise, or
``(ii) be includible in the earnings and
profits of a controlled foreign corporation (as
defined in section 957 and without regard to
section 953(c)).''.
(b) Effective Date.--The amendments made by this section shall
apply to acquisitions after May 20, 2010.
SEC. 406. MODIFICATION OF AFFILIATION RULES FOR PURPOSES OF RULES
ALLOCATING INTEREST EXPENSE.
(a) In General.--Subparagraph (A) of section 864(e)(5) is amended
by adding at the end the following: ``Notwithstanding the preceding
sentence, a foreign corporation shall be treated as a member of the
affiliated group if--
``(i) more than 50 percent of the gross
income of such foreign corporation for the
taxable year is effectively connected with the
conduct of a trade or business within the
United States, and
``(ii) at least 80 percent of either the
vote or value of all outstanding stock of such
foreign corporation is owned directly or
indirectly by members of the affiliated group
(determined with regard to this sentence).''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
SEC. 407. TERMINATION OF SPECIAL RULES FOR INTEREST AND DIVIDENDS
RECEIVED FROM PERSONS MEETING THE 80-PERCENT FOREIGN
BUSINESS REQUIREMENTS.
(a) In General.--Paragraph (1) of section 861(a) is amended by
striking subparagraph (A) and by redesignating subparagraphs (B) and
(C) as subparagraphs (A) and (B), respectively.
(b) Grandfather Rule With Respect to Withholding on Interest and
Dividends Received From Persons Meeting the 80-percent Foreign Business
Requirements.--
(1) In general.--Subparagraph (B) of section 871(i)(2) is
amended to read as follows:
``(B) The active foreign business percentage of--
``(i) any dividend paid by an existing 80/
20 company, and
``(ii) any interest paid by an existing 80/
20 company.''.
(2) Definitions and special rules.--Section 871 is amended
by redesignating subsections (l) and (m) as subsections (m) and
(n), respectively, and by inserting after subsection (k) the
following new subsection:
``(l) Rules Relating to Existing 80/20 Companies.--For purposes of
this subsection and subsection (i)(2)(B)--
``(1) Existing 80/20 company.--
``(A) In general.--The term `existing 80/20
company' means any corporation if--
``(i) such corporation met the 80-percent
foreign business requirements of section
861(c)(1) (as in effect before the enactment of
this subsection) for such corporation's last
taxable year beginning before January 1, 2011,
``(ii) such corporation meets the 80-
percent foreign business requirements of
subparagraph (B) with respect to each taxable
year after the taxable year referred to in
clause (i), and
``(iii) there has not been an addition of a
substantial line of business with respect to
such corporation after the date of the
enactment of this subsection.
``(B) Foreign business requirements.--
``(i) In general.--A corporation meets the
80-percent foreign business requirements of
this subparagraph if it is shown to the
satisfaction of the Secretary that at least 80
percent of the gross income from all sources of
such corporation for the testing period is
active foreign business income.
``(ii) Active foreign business income.--For
purposes of clause (i), the term `active
foreign business income' means gross income
which--
``(I) is derived from sources
outside the United States (as
determined under this subchapter), and
``(II) is attributable to the
active conduct of a trade or business
in a foreign country or possession of
the United States.
``(iii) Testing period.--For purposes of
this subsection, the term `testing period'
means the 3-year period ending with the close
of the taxable year of the corporation
preceding the payment (or such part of such
period as may be applicable). If the
corporation has no gross income for such 3-year
period (or part thereof), the testing period
shall be the taxable year in which the payment
is made.
``(2) Active foreign business percentage.--The term `active
foreign business percentage' means, with respect to any
existing 80/20 company, the percentage which--
``(A) the active foreign business income of such
company for the testing period, is of
``(B) the gross income of such company for the
testing period from all sources.
``(3) Aggregation rules.--For purposes of applying
paragraph (1) (other than subparagraph (A)(i) thereof) and
paragraph (2)--
``(A) In general.--The corporation referred to in
paragraph (1)(A) and all of such corporation's
subsidiaries shall be treated as one corporation.
``(B) Subsidiaries.--For purposes of subparagraph
(A), the term `subsidiary' means any corporation in
which the corporation referred to in subparagraph (A)
owns (directly or indirectly) stock meeting the
requirements of section 1504(a)(2) (determined by
substituting `50 percent' for `80 percent' each place
it appears and without regard to section 1504(b)(3)).
``(4) Regulations.--The Secretary may issue such
regulations or other guidance as is necessary or appropriate to
carry out the purposes of this section, including regulations
or other guidance which provide for the proper application of
the aggregation rules described in paragraph (3).''.
(c) Conforming Amendments.--
(1) Section 861 is amended by striking subsection (c) and
by redesignating subsections (d), (e), and (f) as subsections
(c), (d), and (e), respectively.
(2) Paragraph (9) of section 904(h) is amended to read as
follows:
``(9) Treatment of certain domestic corporations.--In the
case of any dividend treated as not from sources within the
United States under section 861(a)(2)(A), the corporation
paying such dividend shall be treated for purposes of this
subsection as a United States-owned foreign corporation.''.
(3) Subsection (c) of section 2104 is amended in the last
sentence by striking ``or to a debt obligation of a domestic
corporation'' and all that follows and inserting a period.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2010.
(2) Grandfather rule for outstanding debt obligations.--
(A) In general.--The amendments made by this
section shall not apply to payments of interest on
obligations issued before the date of the enactment of
this Act.
(B) Exception for related party debt.--Subparagraph
(A) shall not apply to any interest which is payable to
a related person (determined under rules similar to the
rules of section 954(d)(3)).
(C) Significant modifications treated as new
issues.--For purposes of subparagraph (A), a
significant modification of the terms of any obligation
(including any extension of the term of such
obligation) shall be treated as a new issue.
SEC. 408. SOURCE RULES FOR INCOME ON GUARANTEES.
(a) Amounts Sourced Within the United States.--Subsection (a) of
section 861 is amended by adding at the end the following new
paragraph:
``(9) Guarantees.--Amounts--
``(A) received from noncorporate residents or
domestic corporations with respect to guarantees, and
``(B) paid by any foreign person with respect to
guarantees if such amount is connected with income
which is effectively connected (or treated as
effectively connected) with the conduct of a trade or
business in the United States.''.
(b) Amounts Sourced Without the United States.--Subsection (a) of
section 862 is amended by striking ``and'' at the end of paragraph (7),
by striking the period at the end of paragraph (8) and inserting ``;
and'', and by adding at the end the following new paragraph:
``(9) amounts received with respect to guarantees other
than those derived from sources within the United States as
provided in section 861(a)(9).''.
(c) Conforming Amendment.--Clause (ii) of section 864(c)(4)(B) is
amended by striking ``dividends or interest'' and inserting
``dividends, interest, or amounts with respect to guarantees''.
(d) Effective Date.--The amendments made by this section shall
apply to guarantees issued after the date of the enactment of this Act.
SEC. 409. LIMITATION ON EXTENSION OF STATUTE OF LIMITATIONS FOR FAILURE
TO NOTIFY SECRETARY OF CERTAIN FOREIGN TRANSFERS.
(a) In General.--Paragraph (8) of section 6501(c) is amended--
(1) by striking ``In the case of any information'' and
inserting the following:
``(A) In general.--In the case of any
information''; and
(2) by adding at the end the following:
``(B) Application to failures due to reasonable
cause.--If the failure to furnish the information
referred to in subparagraph (A) is due to reasonable
cause and not willful neglect, subparagraph (A) shall
apply only to the item or items related to such
failure.''.
(b) Effective Date.--The amendments made by this section shall take
effect as if included in section 513 of the Hiring Incentives to
Restore Employment Act.
Subtitle B--Personal Service Income Earned in Pass-thru Entities
SEC. 411. PARTNERSHIP INTERESTS TRANSFERRED IN CONNECTION WITH
PERFORMANCE OF SERVICES.
(a) Modification to Election To Include Partnership Interest in
Gross Income in Year of Transfer.--Subsection (c) of section 83 is
amended by redesignating paragraph (4) as paragraph (5) and by
inserting after paragraph (3) the following new paragraph:
``(4) Partnership interests.--Except as provided by the
Secretary, in the case of any transfer of an interest in a
partnership in connection with the provision of services to (or
for the benefit of) such partnership--
``(A) the fair market value of such interest shall
be treated for purposes of this section as being equal
to the amount of the distribution which the partner
would receive if the partnership sold (at the time of
the transfer) all of its assets at fair market value
and distributed the proceeds of such sale (reduced by
the liabilities of the partnership) to its partners in
liquidation of the partnership, and
``(B) the person receiving such interest shall be
treated as having made the election under subsection
(b)(1) unless such person makes an election under this
paragraph to have such subsection not apply.''.
(b) Conforming Amendment.--Paragraph (2) of section 83(b) is
amended by inserting ``or subsection (c)(4)(B)'' after ``paragraph
(1)''.
(c) Effective Date.--The amendments made by this section shall
apply to interests in partnerships transferred after the date of the
enactment of this Act.
SEC. 412. INCOME OF PARTNERS FOR PERFORMING INVESTMENT MANAGEMENT
SERVICES TREATED AS ORDINARY INCOME RECEIVED FOR
PERFORMANCE OF SERVICES.
(a) In General.--Part I of subchapter K of chapter 1 is amended by
adding at the end the following new section:
``SEC. 710. SPECIAL RULES FOR PARTNERS PROVIDING INVESTMENT MANAGEMENT
SERVICES TO PARTNERSHIP.
``(a) Treatment of Distributive Share of Partnership Items.--For
purposes of this title, in the case of an investment services
partnership interest--
``(1) In general.--Notwithstanding section 702(b)--
``(A) any net income with respect to such interest
for any partnership taxable year shall be treated as
ordinary income, and
``(B) any net loss with respect to such interest
for such year, to the extent not disallowed under
paragraph (2) for such year, shall be treated as an
ordinary loss.
All items of income, gain, deduction, and loss which are taken
into account in computing net income or net loss shall be
treated as ordinary income or ordinary loss (as the case may
be).
``(2) Treatment of losses.--
``(A) Limitation.--Any net loss with respect to
such interest shall be allowed for any partnership
taxable year only to the extent that such loss does not
exceed the excess (if any) of--
``(i) the aggregate net income with respect
to such interest for all prior partnership
taxable years, over
``(ii) the aggregate net loss with respect
to such interest not disallowed under this
subparagraph for all prior partnership taxable
years.
``(B) Carryforward.--Any net loss for any
partnership taxable year which is not allowed by reason
of subparagraph (A) shall be treated as an item of loss
with respect to such partnership interest for the
succeeding partnership taxable year.
``(C) Basis adjustment.--No adjustment to the basis
of a partnership interest shall be made on account of
any net loss which is not allowed by reason of
subparagraph (A).
``(D) Prior partnership years.--Any reference in
this paragraph to prior partnership taxable years shall
only include prior partnership taxable years to which
this section applies.
``(3) Net income and loss.--For purposes of this section--
``(A) Net income.--The term `net income' means,
with respect to any investment services partnership
interest for any partnership taxable year, the excess
(if any) of--
``(i) all items of income and gain taken
into account by the holder of such interest
under section 702 with respect to such interest
for such year, over
``(ii) all items of deduction and loss so
taken into account.
``(B) Net loss.--The term `net loss' means, with
respect to such interest for such year, the excess (if
any) of the amount described in subparagraph (A)(ii)
over the amount described in subparagraph (A)(i).
``(4) Special rule for dividends.--Any dividend taken into
account in determining net income or net loss for purposes of
paragraph (1) shall not be treated as qualified dividend income
for purposes of section 1(h).
``(b) Dispositions of Partnership Interests.--
``(1) Gain.--Any gain on the disposition of an investment
services partnership interest shall be--
``(A) treated as ordinary income, and
``(B) recognized notwithstanding any other
provision of this subtitle.
``(2) Loss.--Any loss on the disposition of an investment
services partnership interest shall be treated as an ordinary
loss to the extent of the excess (if any) of--
``(A) the aggregate net income with respect to such
interest for all partnership taxable years to which
this section applies, over
``(B) the aggregate net loss with respect to such
interest allowed under subsection (a)(2) for all
partnership taxable years to which this section
applies.
``(3) Exception for the disposition of an interest in a
publicly traded partnership by an individual.--Paragraphs (1)
and (2) shall not apply in the case of the disposition by an
individual of an investment services partnership interest which
is an interest in a publicly traded partnership (as defined in
section 7704) if neither such individual nor any member of such
individual's family (within the meaning of section 318(a)(1))
has (at any time) provided any of the services described in
subsection (c)(1) with respect to assets held (directly or
indirectly) by such publicly traded partnership.
``(4) Election with respect to certain exchanges.--
Paragraph (1)(B) shall not apply to the contribution of an
investment services partnership interest to a partnership in
exchange for an interest in such partnership if--
``(A) the taxpayer makes an irrevocable election to
treat the partnership interest received in the exchange
as an investment services partnership interest, and
``(B) the taxpayer agrees to comply with such
reporting and recordkeeping requirements as the
Secretary may prescribe.
``(5) Disposition of portion of interest.--In the case of
any disposition of an investment services partnership interest,
the amount of net loss which otherwise would have (but for
subsection (a)(2)(C)) applied to reduce the basis of such
interest shall be disregarded for purposes of this section for
all succeeding partnership taxable years.
``(6) Distributions of partnership property.--In the case
of any distribution of property by a partnership with respect
to any investment services partnership interest held by a
partner--
``(A) the excess (if any) of--
``(i) the fair market value of such
property at the time of such distribution, over
``(ii) the adjusted basis of such property
in the hands of the partnership,
shall be taken into account as an increase in such
partner's distributive share of the taxable income of
the partnership (except to the extent such excess is
otherwise taken into account in determining the taxable
income of the partnership),
``(B) such property shall be treated for purposes
of subpart B of part II as money distributed to such
partner in an amount equal to such fair market value,
and
``(C) the basis of such property in the hands of
such partner shall be such fair market value.
Subsection (b) of section 734 shall be applied without regard
to the preceding sentence. In the case of a taxpayer which
satisfies requirements similar to the requirements of
subparagraphs (A) and (B) of paragraph (4), this paragraph and
paragraph (1)(B) shall not apply to the distribution of a
partnership interest if such distribution is in connection with
a contribution (or deemed contribution) of any property of the
partnership to which section 721 applies pursuant to a
transaction described in paragraph (1)(B) or (2) of section
708(b).
``(7) Application of section 751.--In applying section 751,
an investment services partnership interest shall be treated as
an inventory item.
``(c) Investment Services Partnership Interest.--For purposes of
this section--
``(1) In general.--The term `investment services
partnership interest' means any interest in a partnership which
is held (directly or indirectly) by any person if it was
reasonably expected (at the time that such person acquired such
interest) that such person (or any person related to such
person) would provide (directly or indirectly) a substantial
quantity of any of the following services with respect to
assets held (directly or indirectly) by the partnership:
``(A) Advising as to the advisability of investing
in, purchasing, or selling any specified asset.
``(B) Managing, acquiring, or disposing of any
specified asset.
``(C) Arranging financing with respect to acquiring
specified assets.
``(D) Any activity in support of any service
described in subparagraphs (A) through (C).
``(2) Specified asset.--The term `specified asset' means
securities (as defined in section 475(c)(2) without regard to
the last sentence thereof), real estate held for rental or
investment, interests in partnerships, commodities (as defined
in section 475(e)(2)), or options or derivative contracts with
respect to any of the foregoing.
``(3) Exception for family farms.--The term `specified
asset' shall not include any farm used for farming purposes if
such farm is held by a partnership all of the interests in
which are held (directly or indirectly) by members of the same
family. Terms used in the preceding sentence which are also
used in section 2032A shall have the same meaning as when used
in such section.
``(4) Related persons.--A person shall be treated as
related to another person if the relationship between such
persons is described in section 267 or 707(b).
``(d) Exception for Certain Capital Interests.--
``(1) In general.--In the case of any portion of an
investment services partnership interest which is a qualified
capital interest, all items of income, gain, loss, and
deduction which are allocated to such qualified capital
interest shall not be taken into account under subsection (a)
if--
``(A) allocations of items are made by the
partnership to such qualified capital interest in the
same manner as such allocations are made to other
qualified capital interests held by partners who do not
provide any services described in subsection (c)(1) and
who are not related to the partner holding the
qualified capital interest, and
``(B) the allocations made to such other interests
are significant compared to the allocations made to
such qualified capital interest.
``(2) Authority to provide exceptions to allocation
requirements.--To the extent provided by the Secretary in
regulations or other guidance--
``(A) Allocations to portion of qualified capital
interest.--Paragraph (1) may be applied separately with
respect to a portion of a qualified capital interest.
``(B) No or insignificant allocations to nonservice
providers.--In any case in which the requirements of
paragraph (1)(B) are not satisfied, items of income,
gain, loss, and deduction shall not be taken into
account under subsection (a) to the extent that such
items are properly allocable under such regulations or
other guidance to qualified capital interests.
``(C) Allocations to service providers' qualified
capital interests which are less than other
allocations.--Allocations shall not be treated as
failing to meet the requirement of paragraph (1)(A)
merely because the allocations to the qualified capital
interest represent a lower return than the allocations
made to the other qualified capital interests referred
to in such paragraph.
``(3) Special rule for changes in services.--In the case of
an interest in a partnership which is not an investment
services partnership interest and which, by reason of a change
in the services with respect to assets held (directly or
indirectly) by the partnership, would (without regard to the
reasonable expectation exception of subsection (c)(1)) have
become such an interest--
``(A) notwithstanding subsection (c)(1), such
interest shall be treated as an investment services
partnership interest as of the time of such change, and
``(B) for purposes of this subsection, the
qualified capital interest of the holder of such
partnership interest immediately after such change
shall not be less than the fair market value of such
interest (determined immediately before such change).
``(4) Special rule for tiered partnerships.--Except as
otherwise provided by the Secretary, in the case of tiered
partnerships, all items which are allocated in a manner which
meets the requirements of paragraph (1) to qualified capital
interests in a lower-tier partnership shall retain such
character to the extent allocated on the basis of qualified
capital interests in any upper-tier partnership.
``(5) Exception for no-self-charged carry and management
fee provisions.--Except as otherwise provided by the Secretary,
an interest shall not fail to be treated as satisfying the
requirement of paragraph (1)(A) merely because the allocations
made by the partnership to such interest do not reflect the
cost of services described in subsection (c)(1) which are
provided (directly or indirectly) to the partnership by the
holder of such interest (or a related person).
``(6) Special rule for dispositions.--In the case of any
investment services partnership interest any portion of which
is a qualified capital interest, subsection (b) shall not apply
to so much of any gain or loss as bears the same proportion to
the entire amount of such gain or loss as--
``(A) the distributive share of gain or loss that
would have been allocated to the qualified capital
interest (consistent with the requirements of paragraph
(1)) if the partnership had sold all of its assets at
fair market value immediately before the disposition,
bears to
``(B) the distributive share of gain or loss that
would have been so allocated to the investment services
partnership interest of which such qualified capital
interest is a part.
``(7) Qualified capital interest.--For purposes of this
subsection--
``(A) In general.--The term `qualified capital
interest' means so much of a partner's interest in the
capital of the partnership as is attributable to--
``(i) the fair market value of any money or
other property contributed to the partnership
in exchange for such interest (determined
without regard to section 752(a)),
``(ii) any amounts which have been included
in gross income under section 83 with respect
to the transfer of such interest, and
``(iii) the excess (if any) of--
``(I) any items of income and gain
taken into account under section 702
with respect to such interest, over
``(II) any items of deduction and
loss so taken into account.
``(B) Adjustment to qualified capital interest.--
``(i) Distributions and losses.--The
qualified capital interest shall be reduced by
distributions from the partnership with respect
to such interest and by the excess (if any) of
the amount described in subparagraph
(A)(iii)(II) over the amount described in
subparagraph (A)(iii)(I).
``(ii) Special rule for contributions of
property.--In the case of any contribution of
property described in subparagraph (A)(i) with
respect to which the fair market value of such
property is not equal to the adjusted basis of
such property immediately before such
contribution, proper adjustments shall be made
to the qualified capital interest to take into
account such difference consistent with such
regulations or other guidance as the Secretary
may provide.
``(8) Treatment of certain loans.--
``(A) Proceeds of partnership loans not treated as
qualified capital interest of service providing
partners.--For purposes of this subsection, an
investment services partnership interest shall not be
treated as a qualified capital interest to the extent
that such interest is acquired in connection with the
proceeds of any loan or other advance made or
guaranteed, directly or indirectly, by any other
partner or the partnership (or any person related to
any such other partner or the partnership).
``(B) Reduction in allocations to qualified capital
interests for loans from nonservice providing partners
to the partnership.--For purposes of this subsection,
any loan or other advance to the partnership made or
guaranteed, directly or indirectly, by a partner not
providing services described in subsection (c)(1) to
the partnership (or any person related to such partner)
shall be taken into account in determining the
qualified capital interests of the partners in the
partnership.
``(e) Other Income and Gain in Connection With Investment
Management Services.--
``(1) In general.--If--
``(A) a person performs (directly or indirectly)
investment management services for any entity,
``(B) such person holds (directly or indirectly) a
disqualified interest with respect to such entity, and
``(C) the value of such interest (or payments
thereunder) is substantially related to the amount of
income or gain (whether or not realized) from the
assets with respect to which the investment management
services are performed,
any income or gain with respect to such interest shall be
treated as ordinary income. Rules similar to the rules of
subsections (a)(4) and (d) shall apply for purposes of this
subsection.
``(2) Definitions.--For purposes of this subsection--
``(A) Disqualified interest.--
``(i) In general.--The term `disqualified
interest' means, with respect to any entity--
``(I) any interest in such entity
other than indebtedness,
``(II) convertible or contingent
debt of such entity,
``(III) any option or other right
to acquire property described in
subclause (I) or (II), and
``(IV) any derivative instrument
entered into (directly or indirectly)
with such entity or any investor in
such entity.
``(ii) Exceptions.--Such term shall not
include--
``(I) a partnership interest,
``(II) except as provided by the
Secretary, any interest in a taxable
corporation, and
``(III) except as provided by the
Secretary, stock in an S corporation.
``(B) Taxable corporation.--The term `taxable
corporation' means--
``(i) a domestic C corporation, or
``(ii) a foreign corporation substantially
all of the income of which is--
``(I) effectively connected with
the conduct of a trade or business in
the United States, or
``(II) subject to a comprehensive
foreign income tax (as defined in
section 457A(d)(2)).
``(C) Investment management services.--The term
`investment management services' means a substantial
quantity of any of the services described in subsection
(c)(1).
``(f) Regulations.--The Secretary shall prescribe such regulations
or other guidance as is necessary or appropriate to carry out the
purposes of this section, including regulations or other guidance to--
``(1) provide modifications to the application of this
section (including treating related persons as not related to
one another) to the extent such modification is consistent with
the purposes of this section,
``(2) prevent the avoidance of the purposes of this
section, and
``(3) coordinate this section with the other provisions of
this title.
``(g) Special Rules for Individuals.--In the case of an
individual--
``(1) In general.--Subsection (a)(1) shall apply only to
the applicable percentage of the net income or net loss
referred to in such subsection.
``(2) Dispositions, etc.--The amount which (but for this
paragraph) would be treated as ordinary income by reason of
subsection (b) or (e) shall be the applicable percentage of
such amount.
``(3) Pro rata allocation to items.--For purposes of
applying subsections (a) and (e) the aggregate amount treated
as ordinary income for any such taxable year shall be allocated
ratably among the items of income, gain, loss, and deduction
taken into account in determining such amount.
``(4) Special rule for recognition of gain.--Gain which
(but for this section) would not be recognized shall be
recognized by reason of subsection (b) only to the extent that
such gain is treated as ordinary income after application of
paragraph (2).
``(5) Coordination with limitation on losses.--For purposes
of applying paragraph (2) of subsection (a) with respect to any
net loss for any taxable year--
``(A) such paragraph shall only apply with respect
to the applicable percentage of such net loss for such
taxable year,
``(B) in the case of a prior partnership taxable
year referred to in clause (i) or (ii) of subparagraph
(A) of such paragraph, only the applicable percentage
(as in effect for such prior taxable year) of net
income or net loss for such prior partnership taxable
year shall be taken into account, and
``(C) any net loss carried forward to the
succeeding partnership taxable year under subparagraph
(B) of such paragraph shall--
``(i) be taken into account in such
succeeding year without reduction under this
subsection, and
``(ii) in lieu of being taken into account
as an item of loss in such succeeding year,
shall be taken into account--
``(I) as an increase in net loss or
as a reduction in net income (including
below zero), as the case may be, and
``(II) after any reduction in the
amount of such net loss or net income
under this subsection.
A rule similar to the rule of the preceding sentence shall
apply for purposes of subsection (b)(2)(A).
``(6) Coordination with treatment of dividends.--Subsection
(a)(4) shall only apply to the applicable percentage of
dividends described therein.
``(7) Applicable percentage.--For purposes of this
subsection, the term `applicable percentage' means 75 percent
(50 percent in the case of any taxable year beginning before
January 1, 2013).
``(h) Cross Reference.--For 40 percent penalty on certain
underpayments due to the avoidance of this section, see section
6662.''.
(b) Treatment for Purposes of Section 7704.--Subsection (d) of
section 7704 is amended by adding at the end the following new
paragraph:
``(6) Income from investment services partnership interests
not qualified.--
``(A) In general.--Items of income and gain shall
not be treated as qualifying income if such items are
treated as ordinary income by reason of the application
of section 710 (relating to special rules for partners
providing investment management services to
partnership). The preceding sentence shall not apply to
any item described in paragraph (1)(E) (or so much of
paragraph (1)(F) as relates to paragraph (1)(E)).
``(B) Special rules for certain partnerships.--
``(i) Certain partnerships owned by real
estate investment trusts.--Subparagraph (A)
shall not apply in the case of a partnership
which meets each of the following requirements:
``(I) Such partnership is treated
as publicly traded under this section
solely by reason of interests in such
partnership being convertible into
interests in a real estate investment
trust which is publicly traded.
``(II) 50 percent or more of the
capital and profits interests of such
partnership are owned, directly or
indirectly, at all times during the
taxable year by such real estate
investment trust (determined with the
application of section 267(c)).
``(III) Such partnership meets the
requirements of paragraphs (2), (3),
and (4) of section 856(c).
``(ii) Certain partnerships owning other
publicly traded partnerships.--Subparagraph (A)
shall not apply in the case of a partnership
which meets each of the following requirements:
``(I) Substantially all of the
assets of such partnership consist of
interests in one or more publicly
traded partnerships (determined without
regard to subsection (b)(2)).
``(II) Substantially all of the
income of such partnership is ordinary
income or section 1231 gain (as defined
in section 1231(a)(3)).
``(C) Transitional rule.--Subparagraph (A) shall
not apply to any taxable year of the partnership
beginning before the date which is 10 years after the
date of the enactment of this paragraph.''.
(c) Imposition of Penalty on Underpayments.--
(1) In general.--Subsection (b) of section 6662 is amended
by inserting after paragraph (7) the following new paragraph:
``(8) The application of subsection (e) of section 710 or
the regulations prescribed under section 710(f) to prevent the
avoidance of the purposes of section 710.''.
(2) Amount of penalty.--
(A) In general.--Section 6662 is amended by adding
at the end the following new subsection:
``(k) Increase in Penalty in Case of Property Transferred for
Investment Management Services.--In the case of any portion of an
underpayment to which this section applies by reason of subsection
(b)(8), subsection (a) shall be applied with respect to such portion by
substituting `40 percent' for `20 percent'.''.
(B) Conforming amendment.--Subparagraph (B) of
section 6662A(e)(2) is amended by striking ``or (i)''
and inserting ``, (i), or (k)''.
(3) Special rules for application of reasonable cause
exception.--Subsection (c) of section 6664 is amended--
(A) by redesignating paragraphs (3) and (4) as
paragraphs (4) and (5), respectively;
(B) by striking ``paragraph (3)'' in paragraph
(5)(A), as so redesignated, and inserting ``paragraph
(4)''; and
(C) by inserting after paragraph (2) the following
new paragraph:
``(3) Special rule for underpayments attributable to
investment management services.--
``(A) In general.--Paragraph (1) shall not apply to
any portion of an underpayment to which this section
applies by reason of subsection (b)(8) unless--
``(i) the relevant facts affecting the tax
treatment of the item are adequately disclosed,
``(ii) there is or was substantial
authority for such treatment, and
``(iii) the taxpayer reasonably believed
that such treatment was more likely than not
the proper treatment.
``(B) Rules relating to reasonable belief.--Rules
similar to the rules of subsection (d)(3) shall apply
for purposes of subparagraph (A)(iii).''.
(d) Income and Loss From Investment Services Partnership Interests
Taken Into Account in Determining Net Earnings From Self-Employment.--
(1) Internal revenue code.--Section 1402(a) is amended by
striking ``and'' at the end of paragraph (16), by striking the
period at the end of paragraph (17) and inserting ``; and'',
and by inserting after paragraph (17) the following new
paragraph:
``(18) notwithstanding the preceding provisions of this
subsection, in the case of any individual engaged in the trade
or business of providing services described in section
710(c)(1) with respect to any entity, any amount treated as
ordinary income or ordinary loss of such individual under
section 710 with respect to such entity shall be taken into
account in determining the net earnings from self-employment of
such individual.''.
(2) Social security act.--Section 211(a) of the Social
Security Act is amended by striking ``and'' at the end of
paragraph (15), by striking the period at the end of paragraph
(16) and inserting ``; and'', and by inserting after paragraph
(16) the following new paragraph:
``(17) Notwithstanding the preceding provisions of this
subsection, in the case of any individual engaged in the trade
or business of providing services described in section
710(c)(1) of the Internal Revenue Code of 1986 with respect to
any entity, any amount treated as ordinary income or ordinary
loss of such individual under section 710 of such Code with
respect to such entity shall be taken into account in
determining the net earnings from self-employment of such
individual.''.
(e) Conforming Amendments.--
(1) Subsection (d) of section 731 is amended by inserting
``section 710(b)(4) (relating to distributions of partnership
property),'' after ``to the extent otherwise provided by''.
(2) Section 741 is amended by inserting ``or section 710
(relating to special rules for partners providing investment
management services to partnership)'' before the period at the
end.
(3) The table of sections for part I of subchapter K of
chapter 1 is amended by adding at the end the following new
item:
``Sec. 710. Special rules for partners providing investment management
services to partnership.''.
(f) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
taxable years ending after December 31, 2010.
(2) Partnership taxable years which include effective
date.--In applying section 710(a) of the Internal Revenue Code
of 1986 (as added by this section) in the case of any
partnership taxable year which includes December 31, 2010, the
amount of the net income referred to in such section shall be
treated as being the lesser of the net income for the entire
partnership taxable year or the net income determined by only
taking into account items attributable to the portion of the
partnership taxable year which is after such date.
(3) Dispositions of partnership interests.--Section 710(b)
of the Internal Revenue Code of 1986 (as added by this section)
shall apply to dispositions and distributions after December
31, 2010.
(4) Other income and gain in connection with investment
management services.--Section 710(e) of such Code (as added by
this section) shall take effect on December 31, 2010.
SEC. 413. EMPLOYMENT TAX TREATMENT OF PROFESSIONAL SERVICE BUSINESSES.
(a) In General.--Section 1402 is amended by adding at the end the
following new subsection:
``(m) Special Rules for Professional Service Businesses.--
``(1) Shareholders providing services to disqualified s
corporations.--
``(A) In general.--In the case of any disqualified
S corporation, each shareholder of such disqualified S
corporation who provides substantial services with
respect to the professional service business referred
to in subparagraph (C) shall take into account such
shareholder's pro rata share of all items of income or
loss described in section 1366 which are attributable
to such business in determining the shareholder's net
earnings from self-employment.
``(B) Treatment of family members.--Except as
otherwise provided by the Secretary, the shareholder's
pro rata share of items referred to in subparagraph (A)
shall be increased by the pro rata share of such items
of each member of such shareholder's family (within the
meaning of section 318(a)(1)) who does not provide
substantial services with respect to such professional
service business.
``(C) Disqualified s corporation.--For purposes of
this subsection, the term `disqualified S corporation'
means--
``(i) any S corporation which is a partner
in a partnership which is engaged in a
professional service business if substantially
all of the activities of such S corporation are
performed in connection with such partnership,
and
``(ii) any other S corporation which is
engaged in a professional service business if
the principal asset of such business is the
reputation and skill of 3 or fewer employees.
``(2) Partners.--In the case of any partnership which is
engaged in a professional service business, subsection (a)(13)
shall not apply to any partner who provides substantial
services with respect to such professional service business.
``(3) Professional service business.--For purposes of this
subsection, the term `professional service business' means any
trade or business if substantially all of the activities of
such trade or business involve providing services in the fields
of health, law, lobbying, engineering, architecture,
accounting, actuarial science, performing arts, consulting,
athletics, investment advice or management, or brokerage
services.
``(4) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out the
purposes of this subsection, including regulations which
prevent the avoidance of the purposes of this subsection
through tiered entities or otherwise.
``(5) Cross reference.--For employment tax treatment of
wages paid to shareholders of S corporations, see subtitle
C.''.
(b) Conforming Amendment.--Section 211 of the Social Security Act
is amended by adding at the end the following new subsection:
``(l) Special Rules for Professional Service Businesses.--
``(1) Shareholders providing services to disqualified s
corporations.--
``(A) In general.--In the case of any disqualified
S corporation, each shareholder of such disqualified S
corporation who provides substantial services with
respect to the professional service business referred
to in subparagraph (C) shall take into account such
shareholder's pro rata share of all items of income or
loss described in section 1366 of the Internal Revenue
Code of 1986 which are attributable to such business in
determining the shareholder's net earnings from self-
employment.
``(B) Treatment of family members.--Except as
otherwise provided by the Secretary of the Treasury,
the shareholder's pro rata share of items referred to
in subparagraph (A) shall be increased by the pro rata
share of such items of each member of such
shareholder's family (within the meaning of section
318(a)(1) of the Internal Revenue Code of 1986) who
does not provide substantial services with respect to
such professional service business.
``(C) Disqualified s corporation.--For purposes of
this subsection, the term `disqualified S corporation'
means--
``(i) any S corporation which is a partner
in a partnership which is engaged in a
professional service business if substantially
all of the activities of such S corporation are
performed in connection with such partnership,
and
``(ii) any other S corporation which is
engaged in a professional service business if
the principal asset of such business is the
reputation and skill of 3 or fewer employees.
``(2) Partners.--In the case of any partnership which is
engaged in a professional service business, subsection (a)(12)
shall not apply to any partner who provides substantial
services with respect to such professional service business.
``(3) Professional service business.--For purposes of this
subsection, the term `professional service business' means any
trade or business if substantially all of the activities of
such trade or business involve providing services in the fields
of health, law, lobbying, engineering, architecture,
accounting, actuarial science, performing arts, consulting,
athletics, investment advice or management, or brokerage
services.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2010.
Subtitle C--Corporate Provisions
SEC. 421. TREATMENT OF SECURITIES OF A CONTROLLED CORPORATION EXCHANGED
FOR ASSETS IN CERTAIN REORGANIZATIONS.
(a) In General.--Section 361 (relating to nonrecognition of gain or
loss to corporations; treatment of distributions) is amended by adding
at the end the following new subsection:
``(d) Special Rules for Transactions Involving Section 355
Distributions.--In the case of a reorganization described in section
368(a)(1)(D) with respect to which stock or securities of the
corporation to which the assets are transferred are distributed in a
transaction which qualifies under section 355--
``(1) this section shall be applied by substituting `stock
other than nonqualified preferred stock (as defined in section
351(g)(2))' for `stock or securities' in subsections (a) and
(b)(1), and
``(2) the first sentence of subsection (b)(3) shall apply
only to the extent that the sum of the money and the fair
market value of the other property transferred to such
creditors does not exceed the adjusted bases of such assets
transferred (reduced by the amount of the liabilities assumed
(within the meaning of section 357(c))).''.
(b) Conforming Amendment.--Paragraph (3) of section 361(b) is
amended by striking the last sentence.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to exchanges after
the date of the enactment of this Act.
(2) Transition rule.--The amendments made by this section
shall not apply to any exchange pursuant to a transaction which
is--
(A) made pursuant to a written agreement which was
binding on March 15, 2010, and at all times thereafter;
(B) described in a ruling request submitted to the
Internal Revenue Service on or before such date; or
(C) described on or before such date in a public
announcement or in a filing with the Securities and
Exchange Commission.
SEC. 422. TAXATION OF BOOT RECEIVED IN REORGANIZATIONS.
(a) In General.--Paragraph (2) of section 356(a) is amended--
(1) by striking ``If an exchange'' and inserting ``Except
as otherwise provided by the Secretary--
``(A) In general.--If an exchange'';
(2) by striking ``then there shall be'' and all that
follows through ``February 28, 1913'' and inserting ``then the
amount of other property or money shall be treated as a
dividend to the extent of the earnings and profits of the
corporation''; and
(3) by adding at the end the following new subparagraph:
``(B) Certain reorganizations.--In the case of a
reorganization described in section 368(a)(1)(D) to
which section 354(b)(1) applies or any other
reorganization specified by the Secretary, in applying
subparagraph (A)--
``(i) the earnings and profits of each
corporation which is a party to the
reorganization shall be taken into account, and
``(ii) the amount which is a dividend (and
source thereof) shall be determined under rules
similar to the rules of paragraphs (2) and (5)
of section 304(b).''.
(b) Earnings and Profits.--Paragraph (7) of section 312(n) is
amended by adding at the end the following: ``A similar rule shall
apply to an exchange to which section 356(a)(1) applies.''.
(c) Conforming Amendment.--Paragraph (1) of section 356(a) is
amended by striking ``then the gain'' and inserting ``then (except as
provided in paragraph (2)) the gain''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to exchanges after
the date of the enactment of this Act.
(2) Transition rule.--The amendments made by this section
shall not apply to any exchange between unrelated persons
pursuant to a transaction which is--
(A) made pursuant to a written agreement which was
binding on May 20, 2010, and at all times thereafter;
(B) described in a ruling request submitted to the
Internal Revenue Service on or before such date; or
(C) described in a public announcement or filing
with the Securities and Exchange Commission on or
before such date.
(3) Related persons.--For purposes of this subsection, a
person shall be treated as related to another person if the
relationship between such persons is described in section 267
or 707(b) of the Internal Revenue Code of 1986.
Subtitle D--Other Provisions
SEC. 431. MODIFICATIONS WITH RESPECT TO OIL SPILL LIABILITY TRUST FUND.
(a) Extension of Application of Oil Spill Liability Trust Fund
Financing Rate.--Paragraph (2) of section 4611(f) is amended by
striking ``December 31, 2017'' and inserting ``December 31, 2020''.
(b) Increase in Oil Spill Liability Trust Fund Financing Rate.--
Subparagraph (B) of section 4611(c)(2) is amended to read as follows:
``(B) the Oil Spill Liability Trust Fund financing
rate is 34 cents a barrel.''.
(c) Increase in Per Incident Limitations on Expenditures.--
Subparagraph (A) of section 9509(c)(2) is amended--
(1) by striking ``$1,000,000,000'' in clause (i) and
inserting ``$5,000,000,000'';
(2) by striking ``$500,000,000'' in clause (ii) and
inserting ``$2,500,000,000''; and
(3) by striking ``$1,000,000,000 per incident, etc'' in the
heading and inserting ``Per incident limitations''.
(d) Effective Date.--
(1) Extension of financing rate.--Except as provided in
paragraph (2), the amendments made by this section shall take
effect on the date of the enactment of this Act.
(2) Increase in financing rate.--The amendment made by
subsection (b) shall apply to crude oil received and petroleum
products entered during calendar quarters beginning more than
60 days after the date of the enactment of this Act.
SEC. 432. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.
The percentage under paragraph (2) of section 561 of the Hiring
Incentives to Restore Employment Act in effect on the date of the
enactment of this Act is increased by 36 percentage points.
TITLE V--UNEMPLOYMENT, HEALTH, AND OTHER ASSISTANCE
Subtitle A--Unemployment Insurance and Other Assistance
SEC. 501. EXTENSION OF UNEMPLOYMENT INSURANCE PROVISIONS.
(a) In General.--(1) Section 4007 of the Supplemental
Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C. 3304 note) is
amended--
(A) by striking ``June 2, 2010'' each place it appears and
inserting ``November 30, 2010'';
(B) in the heading for subsection (b)(2), by striking
``june 2, 2010'' and inserting ``november 30, 2010''; and
(C) in subsection (b)(3), by striking ``November 6, 2010''
and inserting ``April 30, 2011''.
(2) Section 2002(e) of the Assistance for Unemployed Workers and
Struggling Families Act, as contained in Public Law 111-5 (26 U.S.C.
3304 note; 123 Stat. 438), is amended--
(A) in paragraph (1)(B), by striking ``June 2, 2010'' and
inserting ``November 30, 2010'';
(B) in the heading for paragraph (2), by striking ``june 2,
2010'' and inserting ``november 30, 2010''; and
(C) in paragraph (3), by striking ``December 7, 2010'' and
inserting ``May 31, 2011''.
(3) Section 2005 of the Assistance for Unemployed Workers and
Struggling Families Act, as contained in Public Law 111-5 (26 U.S.C.
3304 note; 123 Stat. 444), is amended--
(A) by striking ``June 2, 2010'' each place it appears and
inserting ``December 1, 2010''; and
(B) in subsection (c), by striking ``November 6, 2010'' and
inserting ``May 1, 2011''.
(4) Section 5 of the Unemployment Compensation Extension Act of
2008 (Public Law 110-449; 26 U.S.C. 3304 note) is amended by striking
``November 6, 2010'' and inserting ``April 30, 2011''.
(b) Funding.--Section 4004(e)(1) of the Supplemental Appropriations
Act, 2008 (Public Law 110-252; 26 U.S.C. 3304 note) is amended--
(1) in subparagraph (D), by striking ``and'' at the end;
and
(2) by inserting after subparagraph (E) the following:
``(F) the amendments made by section 501(a)(1) of
the American Jobs and Closing Tax Loopholes Act of
2010; and''.
(c) Conditions for Receiving Emergency Unemployment Compensation.--
Section 4001(d)(2) of the Supplemental Appropriations Act, 2008 (Public
Law 110-252; 26 U.S.C. 3304 note) is amended, in the matter preceding
subparagraph (A), by inserting before ``shall apply'' the following:
``(including terms and conditions relating to availability for work,
active search for work, and refusal to accept work)''.
(d) Effective Date.--The amendments made by this section shall take
effect as if included in the enactment of the Continuing Extension Act
of 2010 (Public Law 111-157).
SEC. 502. COORDINATION OF EMERGENCY UNEMPLOYMENT COMPENSATION WITH
REGULAR COMPENSATION.
(a) Certain Individuals Not Ineligible by Reason of New Entitlement
to Regular Benefits.--Section 4002 of the Supplemental Appropriations
Act, 2008 (Public Law 110-252; 26 U.S.C. 3304 note) is amended by
adding at the end the following:
``(g) Coordination of Emergency Unemployment Compensation With
Regular Compensation.--
``(1) If--
``(A) an individual has been determined to be
entitled to emergency unemployment compensation with
respect to a benefit year,
``(B) that benefit year has expired,
``(C) that individual has remaining entitlement to
emergency unemployment compensation with respect to
that benefit year, and
``(D) that individual would qualify for a new
benefit year in which the weekly benefit amount of
regular compensation is at least either $100 or 25
percent less than the individual's weekly benefit
amount in the benefit year referred to in subparagraph
(A),
then the State shall determine eligibility for compensation as
provided in paragraph (2).
``(2) For individuals described in paragraph (1), the State
shall determine whether the individual is to be paid emergency
unemployment compensation or regular compensation for a week of
unemployment using one of the following methods:
``(A) The State shall, if permitted by State law,
establish a new benefit year, but defer the payment of
regular compensation with respect to that new benefit
year until exhaustion of all emergency unemployment
compensation payable with respect to the benefit year
referred to in paragraph (1)(A);
``(B) The State shall, if permitted by State law,
defer the establishment of a new benefit year (which
uses all the wages and employment which would have been
used to establish a benefit year but for the
application of this paragraph), until exhaustion of all
emergency unemployment compensation payable with
respect to the benefit year referred to in
paragraph(1)(A);
``(C) The State shall pay, if permitted by State
law--
``(i) regular compensation equal to the
weekly benefit amount established under the new
benefit year, and
``(ii) emergency unemployment compensation
equal to the difference between that weekly
benefit amount and the weekly benefit amount
for the expired benefit year; or
``(D) The State shall determine rights to emergency
unemployment compensation without regard to any rights
to regular compensation if the individual elects to not
file a claim for regular compensation under the new
benefit year.''.
(b) Effective Date.--The amendment made by this section shall apply
to individuals whose benefit years, as described in section
4002(g)(1)(B) the Supplemental Appropriations Act, 2008 (Public Law
110-252; 26 U.S.C. 3304 note), as amended by this section, expire after
the date of enactment of this Act.
SEC. 503. EXTENSION OF THE EMERGENCY CONTINGENCY FUND.
(a) In General.--Section 403(c) of the Social Security Act (42
U.S.C. 603(c)) is amended--
(1) in paragraph (2)(A), by inserting ``, and for fiscal
year 2011, $2,500,000,000'' before ``for payment'';
(2) by striking paragraph (2)(B) and inserting the
following:
``(B) Availability and use of funds.--
``(i) Fiscal years 2009 and 2010.--The
amounts appropriated to the Emergency Fund
under subparagraph (A) for fiscal year 2009
shall remain available through fiscal year 2010
and shall be used to make grants to States in
each of fiscal years 2009 and 2010 in
accordance with paragraph (3), except that the
amounts shall remain available through fiscal
year 2011 to make grants and payments to States
in accordance with paragraph (3)(C) to cover
expenditures to subsidize employment positions
held by individuals placed in the positions
before fiscal year 2011.
``(ii) Fiscal year 2011.--Subject to clause
(iii), the amounts appropriated to the
Emergency Fund under subparagraph (A) for
fiscal year 2011 shall remain available through
fiscal year 2012 and shall be used to make
grants to States based on expenditures in
fiscal year 2011 for benefits and services
provided in fiscal year 2011 in accordance with
the requirements of paragraph (3).
``(iii) Reservation of funds.--Of the
amounts appropriated to the Emergency Fund
under subparagraph (A) for fiscal year 2011,
$500,000 shall be placed in reserve for use in
fiscal year 2012, and shall be used to award
grants for any expenditures described in this
subsection incurred by States after September
30, 2011.'';
(3) in paragraph (2)(C), by striking ``2010'' and inserting
``2012'';
(4) in paragraph (3)--
(A) in clause (i) of each of subparagraphs (A),
(B), and (C)--
(i) by striking ``year 2009 or 2010'' and
inserting ``years 2009 through 2011'';
(ii) by striking ``and'' at the end of
subclause (I);
(iii) by striking the period at the end of
subclause (II) and inserting ``; and''; and
(iv) by adding at the end the following:
``(III) if the quarter is in fiscal
year 2011, has provided the Secretary
with such information as the Secretary
may find necessary in order to make the
determinations, or take any other
action, described in paragraph
(5)(C).''; and
(B) in subparagraph (C), by adding at the end the
following:
``(iv) Limitation on expenditures for
subsidized employment.--An expenditure for
subsidized employment shall be taken into
account under clause (ii) only if the
expenditure is used to subsidize employment
for--
``(I) a member of a needy family
(without regard to whether the family
is receiving assistance under the State
program funded under this part); or
``(II) an individual who has
exhausted (or, within 60 days, will
exhaust) all rights to receive
unemployment compensation under Federal
and State law, and who is a member of a
needy family.'';
(5) by striking paragraph (5) and inserting the following:
``(5) Limitations on payments; adjustment authority.--
``(A) Fiscal years 2009 and 2010.--The total amount
payable to a single State under subsection (b) and this
subsection for fiscal years 2009 and 2010 combined
shall not exceed 50 percent of the annual State family
assistance grant.
``(B) Fiscal year 2011.--Subject to subparagraph
(C), the total amount payable to a single State under
subsection (b) and this subsection for fiscal year 2011
shall not exceed 30 percent of the annual State family
assistance grant.
``(C) Adjustment authority.--If the Secretary
determines that the Emergency Fund is at risk of being
depleted before September 30, 2011, or that funds are
available to accommodate additional State requests
under this subsection, the Secretary may, through
program instructions issued without regard to the
requirements of section 553 of title 5, United States
Code--
``(i) specify priority criteria for
awarding grants to States during fiscal year
2011; and
``(ii) adjust the percentage limitation
applicable under subparagraph (B) with respect
to the total amount payable to a single State
for fiscal year 2011.''; and
(6) in paragraph (6), by inserting ``or for expenditures
described in paragraph (3)(C)(iv)'' before the period.
(b) Conforming Amendments.--Section 2101 of division B of the
American Recovery and Reinvestment Act of 2009 (Public Law 111-5) is
amended--
(1) in subsection (a)(2)--
(A) by striking ``2010'' and inserting ``2011'';
and
(B) by striking all that follows ``repealed'' and
inserting a period; and
(2) in subsection (d)(1), by striking ``2010'' and
inserting ``2011''.
(c) Program Guidance.--The Secretary of Health and Human Services
shall issue program guidance, without regard to the requirements of
section 553 of title 5, United States Code, which ensures that the
funds provided under the amendments made by this section to a
jurisdiction for subsidized employment do not support any subsidized
employment position the annual salary of which is greater than, at
State option--
(1) 200 percent of the poverty line (within the meaning of
section 673(2) of the Omnibus Budget Reconciliation Act of
1981, including any revision required by such section 673(2))
for a family of 4; or
(2) the median wage in the jurisdiction.
Subtitle B--Health Provisions
SEC. 511. EXTENSION OF SECTION 508 RECLASSIFICATIONS.
(a) In General.--Section 106(a) of division B of the Tax Relief and
Health Care Act of 2006 (42 U.S.C. 1395 note), as amended by section
117 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public
Law 110-173), section 124 of the Medicare Improvements for Patients and
Providers Act of 2008 (Public Law 110-275), and sections 3137(a) and
10317 of Public Law 111-148, is amended by striking ``September 30,
2010'' and inserting ``September 30, 2011''.
(b) Application.--For fiscal year 2011, the Secretary of Health and
Human Services may implement the amendment made by subsection (a) by
posting on the Internet website of the Centers for Medicare & Medicaid
Services a list of the areas and the hospitals whose reclassifications
will be extended pursuant to such amendment. Hospitals located in or
reclassified to labor market areas that are affected by such extension
may terminate or withdraw their reclassifications by following the
procedures included in section 412.273 of title 42, Code of Federal
Regulations, except that any request for such termination or withdrawal
must be received by the Medicare Geographic Classification Review Board
not later than the date that is 5 business days after the day of such
posting on the Internet website of the Centers for Medicare & Medicaid
Services or June 18, 2010, whichever date is later.
(c) Conforming Amendment.--Section 117(a)(3) of the Medicare,
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173)), is
amended by inserting ``in fiscal years 2008 and 2009'' after ``For
purposes of implementation of this subsection''.
SEC. 512. REPEAL OF DELAY OF RUG-IV.
Effective as if included in the enactment of Public Law 111-148,
section 10325 of such Act is repealed.
SEC. 513. LIMITATION ON REASONABLE COSTS PAYMENTS FOR CERTAIN CLINICAL
DIAGNOSTIC LABORATORY TESTS FURNISHED TO HOSPITAL
PATIENTS IN CERTAIN RURAL AREAS.
Section 3122 of Public Law 111-148 is repealed and the provision of
law amended by such section is restored as if such section had not been
enacted.
SEC. 514. FUNDING FOR CLAIMS REPROCESSING.
For purposes of carrying out the provisions of, and amendments made
by, this Act that relate to title XVIII of the Social Security Act, and
other provisions of such title that involve reprocessing of claims,
there are appropriated to the Secretary of Health and Human Services
for the Centers for Medicare & Medicaid Services Program Management
Account, from amounts in the general fund of the Treasury not otherwise
appropriated, $175,000,000. Amounts appropriated under the preceding
sentence shall remain available until expended.
SEC. 515. MEDICAID AND CHIP TECHNICAL CORRECTIONS.
(a) Repeal of Exclusion of Certain Individuals and Entities From
Medicaid.--Section 6502 of Public Law 111-148 is repealed and the
provisions of law amended by such section are restored as if such
section had never been enacted. Nothing in the previous sentence shall
affect the execution or placement of the insertion made by section 6503
of such Act.
(b) Income Level for Certain Children Under Medicaid.--Effective as
if included in the enactment of Public Law 111-148, section
2001(a)(5)(B) of such Act is amended by striking all that follows ``is
amended'' and inserting the following: ``by inserting after `100
percent' the following: `(or, beginning January 1, 2014, 133
percent)'.''.
(c) Calculation and Publication of Payment Error Rate Measurement
for Certain Years.--Section 601(b) of the Children's Health Insurance
Program Reauthorization Act of 2009 (Public Law 111-3) is amended by
adding at the end the following: ``The Secretary is not required under
this subsection to calculate or publish a national or a State-specific
error rate for fiscal year 2009 or fiscal year 2010.''.
(d) Corrections to Exceptions to Exclusion of Children of Certain
Employees.--Section 2110(b)(6) of the Social Security Act (42 U.S.C.
1397jj(b)(6)) is amended--
(1) in subparagraph (B)--
(A) by striking ``per person'' in the heading; and
(B) by striking ``each employee'' and inserting
``employees''; and
(2) in subparagraph (C), by striking ``, on a case-by-case
basis,''.
(e) Electronic Health Records.--Effective as if included in the
enactment of section 4201(a)(2) of the American Recovery and
Reinvestment Act of 2009 (Public Law 111-5), section 1903(t) of the
Social Security Act (42 U.S.C. 1396b(t)) is amended--
(1) in paragraph (3)(E), by striking ``reduced by any
payment that is made to such Medicaid provider from any other
source (other than under this subsection or by a State or local
government)'' and inserting ``reduced by the average payment
the Secretary estimates will be made to such Medicaid providers
(determined on a percentage or other basis for such classes or
types of providers as the Secretary may specify) from other
sources (other than under this subsection, or by the Federal
government or a State or local government)''; and
(2) in paragraph (6)(B), by inserting before the period the
following: ``and shall be determined to have met such
responsibility to the extent that the payment to the Medicaid
provider is not in excess of 85 percent of the net average
allowable cost''.
(f) Corrections of Designations.--
(1) Section 1902 of the Social Security Act (42 U.S.C.
1396a) is amended--
(A) in subsection (a)(10), in the matter following
subparagraph (G), by striking ``and'' before ``(XVI)
the medical'' and by striking ``(XVI) if'' and
inserting ``(XVII) if''; and
(B) in subsection (ii)(2), by striking ``(XV)'' and
inserting ``(XVI)''.
(2) Section 2107(e)(1) of the Social Security Act (42
U.S.C. 1397gg(e)(1)) is amended by redesignating the
subparagraph (N) of that section added by 2101(e) of Public Law
111-148 as subparagraph (O).
SEC. 516. ADDITION OF INPATIENT DRUG DISCOUNT PROGRAM TO 340B DRUG
DISCOUNT PROGRAM.
(a) Addition of Inpatient Drug Discount.--Title III of the Public
Health Service Act is amended by inserting after section 340B (42
U.S.C. 256b) the following:
``SEC. 340B-1. DISCOUNT INPATIENT DRUGS FOR INDIVIDUALS WITHOUT
PRESCRIPTION DRUG COVERAGE.
``(a) Requirements for Agreements With the Secretary.--
``(1) In general.--
``(A) Agreement.--The Secretary shall enter into an
agreement with each manufacturer of covered inpatient
drugs under which the amount required to be paid
(taking into account any rebate or discount, as
provided by the Secretary) to the manufacturer for
covered inpatient drugs (other than drugs described in
paragraph (3)) purchased by a covered entity on or
after January 1, 2011, does not exceed an amount equal
to the average manufacturer price for the drug under
title XIX of the Social Security Act in the preceding
calendar quarter, reduced by the rebate percentage
described in paragraph (2). For a covered inpatient
drug that also is a covered outpatient drug under
section 340B, the amount required to be paid under the
preceding sentence shall be equal to the amount
required to be paid under section 340B(a)(1) for such
drug. The agreement with a manufacturer under this
subparagraph may, at the discretion of the Secretary,
be included in the agreement with the same manufacturer
under section 340B.
``(B) Ceiling price.--Each such agreement shall
require that the manufacturer furnish the Secretary
with reports, on a quarterly basis, of the price for
each covered inpatient drug subject to the agreement
that, according to the manufacturer, represents the
maximum price that covered entities may permissibly be
required to pay for the drug (referred to in this
section as the `ceiling price'), and shall require that
the manufacturer offer each covered entity covered
inpatient drugs for purchase at or below the applicable
ceiling price if such drug is made available to any
other purchaser at any price.
``(C) Allocation method.--Each such agreement shall
require that, if the supply of a covered inpatient drug
is insufficient to meet demand, then the manufacturer
may use an allocation method that is reported in
writing to, and approved by, the Secretary and does not
discriminate on the basis of the price paid by covered
entities or on any other basis related to the
participation of an entity in the program under this
section.
``(2) Rebate percentage defined.--
``(A) In general.--For a covered inpatient drug
purchased in a calendar quarter, the `rebate
percentage' is the amount (expressed as a percentage)
equal to--
``(i) the average total rebate required
under section 1927(c) of the Social Security
Act (or the average total rebate that would be
required if the drug were a covered outpatient
drug under such section) with respect to the
drug (for a unit of the dosage form and
strength involved) during the preceding
calendar quarter; divided by
``(ii) the average manufacturer price for
such a unit of the drug during such quarter.
``(B) Over the counter drugs.--
``(i) In general.--For purposes of
subparagraph (A), in the case of over the
counter drugs, the `rebate percentage' shall be
determined as if the rebate required under
section 1927(c) of the Social Security Act is
based on the applicable percentage provided
under section 1927(c)(3) of such Act.
``(ii) Definition.--The term `over the
counter drug' means a drug that may be sold
without a prescription and which is prescribed
by a physician (or other persons authorized to
prescribe such drug under State law).
``(3) Drugs provided under state medicaid plans.--Drugs
described in this paragraph are drugs purchased by the entity
for which payment is made by the State under the State plan for
medical assistance under title XIX of the Social Security Act.
``(4) Requirements for covered entities.--
``(A) Prohibiting duplicate discounts or rebates.--
``(i) In general.--A covered entity shall
not request payment under title XIX of the
Social Security Act for medical assistance
described in section 1905(a)(12) of such Act
with respect to a drug that is subject to an
agreement under this section if the drug is
subject to the payment of a rebate to the State
under section 1927 of such Act.
``(ii) Establishment of mechanism.--The
Secretary shall establish a mechanism to ensure
that covered entities comply with clause (i).
If the Secretary does not establish a mechanism
under the previous sentence within 12 months of
the enactment of this section, the requirements
of section 1927(a)(5)(C) of the Social Security
Act shall apply.
``(iii) Prohibiting disclosure to group
purchasing organizations.--In the event that a
covered entity is a member of a group
purchasing organization, such entity shall not
disclose the price or any other information
pertaining to any purchases under this section
directly or indirectly to such group purchasing
organization.
``(B) Prohibiting resale, dispensing, or
administration of drugs except to certain patients.--
With respect to any covered inpatient drug that is
subject to an agreement under this subsection, a
covered entity shall not dispense, administer, resell,
or otherwise transfer the covered inpatient drug to a
person unless--
``(i) such person is a patient of the
entity; and
``(ii) such person does not have health
plan coverage (as defined in subsection (c)(3))
that provides prescription drug coverage in the
inpatient setting with respect to such covered
inpatient drug.
For purposes of clause (ii), a person shall be treated
as having health plan coverage (as defined in
subsection (c)(3)) with respect to a covered inpatient
drug if benefits are not payable under such coverage
with respect to such drug for reasons such as the
application of a deductible or cost sharing or the use
of utilization management.
``(C) Auditing.--A covered entity shall permit the
Secretary and the manufacturer of a covered inpatient
drug that is subject to an agreement under this
subsection with the entity (acting in accordance with
procedures established by the Secretary relating to the
number, duration, and scope of audits) to audit at the
Secretary's or the manufacturer's expense the records
of the entity that directly pertain to the entity's
compliance with the requirements described in
subparagraph (A) or (B) with respect to drugs of the
manufacturer. The use or disclosure of information for
performance of such an audit shall be treated as a use
or disclosure required by law for purposes of section
164.512(a) of title 45, Code of Federal Regulations.
``(D) Additional sanction for noncompliance.--If
the Secretary finds, after notice and hearing, that a
covered entity is in violation of a requirement
described in subparagraph (A) or (B), the covered
entity shall be liable to the manufacturer of the
covered inpatient drug that is the subject of the
violation in an amount equal to the reduction in the
price of the drug (as described in subparagraph (A))
provided under the agreement between the Secretary and
the manufacturer under this subsection.
``(E) Maintenance of records.--
``(i) In general.--A covered entity shall
establish and maintain an effective
recordkeeping system to comply with this
section and shall certify to the Secretary that
such entity is in compliance with subparagraphs
(A) and (B). The Secretary shall require that
hospitals that purchase covered inpatient drugs
for inpatient dispensing or administration
under this subsection appropriately segregate
inventory of such covered inpatient drugs,
either physically or electronically, from drugs
for outpatient use, as well as from drugs for
inpatient dispensing or administration to
individuals who have (for purposes of
subparagraph (B)) health plan coverage
described in clause (ii) of such subparagraph.
``(ii) Certification of no third-party
payer.--A covered entity shall maintain records
that contain certification by the covered
entity that no third party payment was received
for any covered inpatient drug that is subject
to an agreement under this subsection and that
was dispensed to an inpatient.
``(5) Treatment of distinct units of hospitals.--In the
case of a covered entity that is a distinct part of a hospital,
the distinct part of the hospital shall not be considered a
covered entity under this subsection unless the hospital is
otherwise a covered entity under this subsection.
``(6) Notice to manufacturers.--The Secretary shall notify
manufacturers of covered inpatient drugs and single State
agencies under section 1902(a)(5) of the Social Security Act of
the identities of covered entities under this subsection, and
of entities that no longer meet the requirements of paragraph
(4), by means of timely updates of the Internet website
supported by the Department of Health and Human Services
relating to this section.
``(7) No prohibition on larger discount.--Nothing in this
subsection shall prohibit a manufacturer from charging a price
for a drug that is lower than the maximum price that may be
charged under paragraph (1).
``(b) Covered Entity Defined.--In this section, the term `covered
entity' means an entity that meets the requirements described in
subsection (a)(4) and is one of the following:
``(1) A subsection (d) hospital (as defined in section
1886(d)(1)(B) of the Social Security Act) that--
``(A) is owned or operated by a unit of State or
local government, is a public or private non-profit
corporation which is formally granted governmental
powers by a unit of State or local government, or is a
private nonprofit hospital which has a contract with a
State or local government to provide health care
services to low income individuals who are not entitled
to benefits under title XVIII of the Social Security
Act or eligible for assistance under the State plan for
medical assistance under title XIX of such Act; and
``(B) for the most recent cost reporting period
that ended before the calendar quarter involved, had a
disproportionate share adjustment percentage (as
determined using the methodology under section
1886(d)(5)(F) of the Social Security Act as in effect
on the date of enactment of this section) greater than
20.20 percent or was described in section
1886(d)(5)(F)(i)(II) of such Act (as so in effect on
the date of enactment of this section).
``(2) A children's hospital excluded from the Medicare
prospective payment system pursuant to section
1886(d)(1)(B)(iii) of the Social Security Act that would meet
the requirements of paragraph (1), including the
disproportionate share adjustment percentage requirement under
subparagraph (B) of such paragraph, if the hospital were a
subsection (d) hospital as defined by section 1886(d)(1)(B) of
the Social Security Act.
``(3) A free-standing cancer hospital excluded from the
Medicare prospective payment system pursuant to section
1886(d)(1)(B)(v) of the Social Security Act that would meet the
requirements of paragraph (1), including the disproportionate
share adjustment percentage requirement under subparagraph (B)
of such paragraph, if the hospital were a subsection (d)
hospital as defined by section 1886(d)(1)(B) of the Social
Security Act.
``(4) An entity that is a critical access hospital (as
determined under section 1820(c)(2) of the Social Security
Act), and that meets the requirements of paragraph (1)(A).
``(5) An entity that is a rural referral center, as defined
by section 1886(d)(5)(C)(i) of the Social Security Act, or a
sole community hospital, as defined by section
1886(d)(5)(C)(iii) of such Act, and that both meets the
requirements of paragraph (1)(A) and has a disproportionate
share adjustment percentage equal to or greater than 8 percent.
``(c) Other Definitions.--In this section:
``(1) Average manufacturer price.--
``(A) In general.--The term `average manufacturer
price'--
``(i) has the meaning given such term in
section 1927(k) of the Social Security Act,
except that such term shall be applied under
this section with respect to covered inpatient
drugs in the same manner (as applicable) as
such term is applied under such section 1927(k)
with respect to covered outpatient drugs (as
defined in such section); and
``(ii) with respect to a covered inpatient
drug for which there is no average manufacturer
price (as defined in clause (i)), shall be the
amount determined under regulations promulgated
by the Secretary under subparagraph (B).
``(B) Rulemaking.--The Secretary shall by
regulation, in consultation with the Administrator of
the Centers for Medicare & Medicaid Services, establish
a method for determining the average manufacturer price
for covered inpatient drugs for which there is no
average manufacturer price (as defined in subparagraph
(A)(i)). Regulations promulgated with respect to
covered inpatient drugs under the preceding sentence
shall provide for the application of methods for
determining the average manufacturer price that are the
same as the methods used to determine such price in
calculating rebates required for such drugs under an
agreement between a manufacturer and a State that
satisfies the requirements of section 1927(b) of the
Social Security Act, as applicable.
``(2) Covered inpatient drug.--The term `covered inpatient
drug' means a drug--
``(A) that is described in section 1927(k)(2) of
the Social Security Act;
``(B) that, notwithstanding paragraph (3)(A) of
section 1927(k) of such Act, is used in connection with
an inpatient service provided by a covered entity that
is enrolled to participate in the drug discount program
under this section; and
``(C) that is not purchased by the covered entity
through or under contract with a group purchasing
organization.
``(3) Health plan coverage.--The term `health plan
coverage' means--
``(A) health insurance coverage (as defined in
section 2791, and including coverage under a State
health benefits risk pool);
``(B) coverage under a group health plan (as
defined in such section, and including coverage under a
church plan, a governmental plan, or a collectively
bargained plan);
``(C) coverage under a Federal health care program
(as defined by section 1128B(f) of the Social Security
Act); or
``(D) such other health benefits coverage as the
Secretary recognizes for purposes of this section.
``(4) Manufacturer.--The term `manufacturer' has the
meaning given such term in section 1927(k) of the Social
Security Act.
``(d) Program Integrity.--
``(1) Manufacturer compliance.--
``(A) In general.--From amounts appropriated under
subsection (f), the Secretary shall provide for
improvements in compliance by manufacturers with the
requirements of this section in order to prevent
overcharges and other violations of the discounted
pricing requirements specified in this section.
``(B) Improvements.--The improvements described in
subparagraph (A) shall include the following:
``(i) The establishment of a process to
enable the Secretary to verify the accuracy of
ceiling prices calculated by manufacturers
under subsection (a)(1) and charged to covered
entities, which shall include the following:
``(I) Developing and publishing
through an appropriate policy or
regulatory issuance, precisely defined
standards and methodology for the
calculation of ceiling prices under
such subsection.
``(II) Comparing regularly the
ceiling prices calculated by the
Secretary with the quarterly pricing
data that is reported by manufacturers
to the Secretary.
``(III) Conducting periodic
monitoring of sales transactions by
covered entities.
``(IV) Inquiring into any
discrepancies between ceiling prices
and manufacturer pricing data that may
be identified and taking, or requiring
manufacturers to take, corrective
action in response to such
discrepancies, including the issuance
of refunds pursuant to the procedures
set forth in clause (ii).
``(ii) The establishment of procedures for
manufacturers to issue refunds to covered
entities in the event that there is an
overcharge by the manufacturers, including the
following:
``(I) Providing the Secretary with
an explanation of why and how the
overcharge occurred, how the refunds
will be calculated, and to whom the
refunds will be issued.
``(II) Oversight by the Secretary
to ensure that the refunds are issued
accurately and within a reasonable
period of time.
``(iii) The provision of access through the
Internet website supported by the Department of
Health and Human Services to the applicable
ceiling prices for covered inpatient drugs as
calculated and verified by the Secretary in
accordance with this section, in a manner (such
as through the use of password protection) that
limits such access to covered entities and
adequately assures security and protection of
privileged pricing data from unauthorized re-
disclosure.
``(iv) The development of a mechanism by
which--
``(I) rebates, discounts, or other
price concessions provided by
manufacturers to other purchasers
subsequent to the sale of covered
inpatient drugs to covered entities are
reported to the Secretary; and
``(II) appropriate credits and
refunds are issued to covered entities
if such discounts, rebates, or other
price concessions have the effect of
lowering the applicable ceiling price
for the relevant quarter for the drugs
involved.
``(v) Selective auditing of manufacturers
and wholesalers to ensure the integrity of the
drug discount program under this section.
``(vi) The establishment of a requirement
that manufacturers and wholesalers use the
identification system developed by the
Secretary for purposes of facilitating the
ordering, purchasing, and delivery of covered
inpatient drugs under this section, including
the processing of chargebacks for such drugs.
``(vii) The imposition of sanctions in the
form of civil monetary penalties, which--
``(I) shall be assessed according
to standards and procedures established
in regulations to be promulgated by the
Secretary not later than January 1,
2011;
``(II) shall not exceed $10,000 per
single dosage form of a covered
inpatient drug purchased by a covered
entity where a manufacturer knowingly
charges such covered entity a price for
such drug that exceeds the ceiling
price under subsection (a)(1); and
``(III) shall not exceed $100,000
for each instance where a manufacturer
withholds or provides materially false
information to the Secretary or to
covered entities under this section or
knowingly violates any provision of
this section (other than subsection
(a)(1)).
``(2) Covered entity compliance.--
``(A) In general.--From amounts appropriated under
subsection (f), the Secretary shall provide for
improvements in compliance by covered entities with the
requirements of this section in order to prevent
diversion and violations of the duplicate discount
provision and other requirements specified under
subsection (a)(4).
``(B) Improvements.--The improvements described in
subparagraph (A) shall include the following:
``(i) The development of procedures to
enable and require covered entities to update
at least annually the information on the
Internet website supported by the Department of
Health and Human Services relating to this
section.
``(ii) The development of procedures for
the Secretary to verify the accuracy of
information regarding covered entities that is
listed on the website described in clause (i).
``(iii) The development of more detailed
guidance describing methodologies and options
available to covered entities for billing
covered inpatient drugs to State Medicaid
agencies in a manner that avoids duplicate
discounts pursuant to subsection (a)(4)(A).
``(iv) The establishment of a single,
universal, and standardized identification
system by which each covered entity site and
each covered entity's purchasing status under
sections 340B and this section can be
identified by manufacturers, distributors,
covered entities, and the Secretary for
purposes of facilitating the ordering,
purchasing, and delivery of covered inpatient
drugs under this section, including the
processing of chargebacks for such drugs.
``(v) The imposition of sanctions in the
form of civil monetary penalties, which--
``(I) shall be assessed according
to standards and procedures established
in regulations promulgated by the
Secretary; and
``(II) shall not exceed $10,000 for
each instance where a covered entity
knowingly violates subsection (a)(4)(B)
or knowingly violates any other
provision of this section.
``(vi) The termination of a covered
entity's participation in the program under
this section, for a period of time to be
determined by the Secretary, in cases in which
the Secretary determines, in accordance with
standards and procedures established by
regulation, that--
``(I) the violation by a covered
entity of a requirement of this section
was repeated and knowing; and
``(II) imposition of a monetary
penalty would be insufficient to
reasonably ensure compliance with the
requirements of this section.
``(vii) The referral of matters, as
appropriate, to the Food and Drug
Administration, the Office of the Inspector
General of the Department of Health and Human
Services, or other Federal or State agencies.
``(3) Administrative dispute resolution process.--From
amounts appropriated under subsection (f), the Secretary may
establish and implement an administrative process for the
resolution of the following:
``(A) Claims by covered entities that manufacturers
have violated the terms of their agreement with the
Secretary under subsection (a)(1).
``(B) Claims by manufacturers that covered entities
have violated subsection (a)(4)(A) or (a)(4)(B).
``(e) Audit and Sanctions.--
``(1) Audit.--From amounts appropriated under subsection
(f), the Inspector General of the Department of Health and
Human Services (referred to in this subsection as the
`Inspector General') shall audit covered entities under this
section to verify compliance with criteria for eligibility and
participation under this section, including the antidiversion
prohibitions under subsection (a)(4)(B), and take enforcement
action or provide information to the Secretary who shall take
action to ensure program compliance, as appropriate. A covered
entity shall provide to the Inspector General, upon request,
records relevant to such audits.
``(2) Report.--For each audit conducted under paragraph
(1), the Inspector General shall prepare and publish in a
timely manner a report which shall include findings and
recommendations regarding--
``(A) the appropriateness of covered entity
eligibility determinations and, as applicable,
certifications;
``(B) the effectiveness of antidiversion
prohibitions; and
``(C) the effectiveness of restrictions on
inpatient dispensing and administration.
``(f) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section such sums as may be necessary
for fiscal year 2011 and each succeeding fiscal year.''.
(b) Rulemaking.--Not later than January 1, 2011, the Secretary
shall promulgate regulations implementing section 340B-1 of the Public
Health Service Act (as added by subsection (a)).
(c) Conforming Amendment to Section 340B.--Paragraph (1) of section
340B(a) of the Public Health Service Act (42 U.S.C. 256b(a)) is amended
by adding at the end the following: ``Such agreement shall further
require that, if the supply of a covered outpatient drug is
insufficient to meet demand, then the manufacturer may use an
allocation method that is reported in writing to, and approved by, the
Secretary and does not discriminate on the basis of the price paid by
covered entities or on any other basis related to the participation of
an entity in the program under this section. The agreement with a
manufacturer under this paragraph may, at the discretion of the
Secretary, be included in the agreement with the same manufacturer
under section 340B-1.''.
(d) Conforming Amendments to Medicaid.--Section 1927 of the Social
Security Act (42 U.S.C. 1396r-8) is amended--
(1) in subsection (a)--
(A) in paragraph (1), in the first sentence, by
striking ``and paragraph (6)'' and inserting ``,
paragraph (6), and paragraph (8)''; and
(B) by adding at the end the following new
paragraph:
``(8) Limitation on prices of drugs purchased by 340b-1-
covered entities.--
``(A) Agreement with secretary.--A manufacturer
meets the requirements of this paragraph if the
manufacturer has entered into an agreement with the
Secretary that meets the requirements of section 340B-1
of the Public Health Service Act with respect to
covered inpatient drugs (as defined in such section)
purchased by a 340B-1-covered entity on or after
January 1, 2011.
``(B) 340B-1-covered entity defined.--In this
subsection, the term `340B-1-covered entity' means an
entity described in section 340B-1(b) of the Public
Health Service Act.''; and
(2) in subsection (c)(1)(C)(i)(I)--
(A) by striking ``or'' before ``a covered entity'';
and
(B) by inserting before the semicolon the
following: ``, or a covered entity for a covered
inpatient drug (as such terms are defined in section
340B-1of the Public Health Service Act)''.
SEC. 517. CONTINUED INCLUSION OF ORPHAN DRUGS IN DEFINITION OF COVERED
OUTPATIENT DRUGS WITH RESPECT TO CHILDREN'S HOSPITALS
UNDER THE 340B DRUG DISCOUNT PROGRAM.
(a) Definition of Covered Outpatient Drug.--
(1) Amendment.--Subsection (e) of section 340B of the
Public Health Service Act (42 U.S.C. 256b) is amended by
striking ``covered entities described in subparagraph (M)''and
inserting ``covered entities described in subparagraph (M)
(other than a children's hospital described in subparagraph
(M))''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect as if included in the enactment of section
2302 of the Health Care and Education Reconciliation Act of
2010 (Public Law 111-152).
(b) Technical Amendment.--Subparagraph (B) of section 1927(a)(5) of
the Social Security Act (42 U.S.C. 1396r-8(a)(5)) is amended by
striking ``and a children's hospital'' and all that follows through the
end of the subparagraph and inserting a period.
SEC. 518. CONFORMING AMENDMENT RELATED TO WAIVER OF COINSURANCE FOR
PREVENTIVE SERVICES.
Effective as if included in section 10501(i)(2)(A) of Public Law
111-148, section 1833(a)(3)(A) of the Social Security Act (42 U.S.C.
1395l(a)(3)(A)) is amended by striking ``section 1861(s)(10)(A)'' and
inserting ``section 1861(ddd)(3)''.
SEC. 519. ESTABLISH A CMS-IRS DATA MATCH TO IDENTIFY FRAUDULENT
PROVIDERS.
(a) Authority to Disclose Return Information Concerning Outstanding
Tax Debts for Purposes of Enhancing Medicare Program Integrity.--
(1) In general.--Section 6103(l) of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
paragraph:
``(22) Disclosure of return information to department of
health and human services for purposes of enhancing medicare
program integrity.--
``(A) In general.--The Secretary shall, upon
written request from the Secretary of Health and Human
Services, disclose to officers and employees of the
Department of Health and Human Services return
information with respect to a taxpayer who has applied
to enroll, or reenroll, as a provider of services or
supplier under the Medicare program under title XVIII
of the Social Security Act. Such return information
shall be limited to--
``(i) the taxpayer identity information
with respect to such taxpayer;
``(ii) the amount of the delinquent tax
debt owed by that taxpayer; and
``(iii) the taxable year to which the
delinquent tax debt pertains.
``(B) Restriction on disclosure.--Return
information disclosed under subparagraph (A) may be
used by officers and employees of the Department of
Health and Human Services for the purposes of, and to
the extent necessary in, establishing the taxpayer's
eligibility for enrollment or reenrollment in the
Medicare program, or in any administrative or judicial
proceeding relating to, or arising from, a denial of
such enrollment or reenrollment, or in determining the
level of enhanced oversight to be applied with respect
to such taxpayer pursuant to section 1866(j)(3) of the
Social Security Act.
``(C) Delinquent tax debt.--For purposes of this
paragraph, the term `delinquent tax debt' means an
outstanding debt under this title for which a notice of
lien has been filed pursuant to section 6323, but the
term does not include a debt that is being paid in a
timely manner pursuant to an agreement under section
6159 or 7122, or a debt with respect to which a
collection due process hearing under section 6330 is
requested, pending, or completed and no payment is
required.''.
(2) Conforming amendments.--Section 6103(p)(4) of such
Code, as amended by sections 1414 and 3308 of Public Law 111-
148, in the matter preceding subparagraph (A) and in
subparagraph (F)(ii), is amended by striking ``or (17)'' and
inserting ``(17), or (22)'' each place it appears.
(b) Secretary's Authority to Use Information From the Department of
Treasury in Medicare Enrollments and Reenrollments.--Section 1866(j)(2)
of the Social Security Act (42 U.S.C. 1395cc(j)), as inserted by
section 6401(a) of Public Law 111-148, is further amended--
(1) by redesignating subparagraph (E) as subparagraph (F);
and
(2) by inserting after subparagraph (D) the following new
subparagraph:
``(E) Use of information from the department of
treasury concerning tax debts.--In reviewing the
application of a provider of services or supplier to
enroll or reenroll under the program under this title,
the Secretary shall take into account the information
supplied by the Secretary of the Treasury pursuant to
section 6103(l)(22) of the Internal Revenue Code of
1986, in determining whether to deny such application
or to apply enhanced oversight to such provider of
services or supplier pursuant to paragraph (3) if the
Secretary determines such provider of services or
supplier owes such a debt.''.
(c) Authority to Adjust Payments of Providers of Services and
Suppliers With the Same Tax Identification Number for Medicare
Obligations.--Section 1866(j)(5) of the Social Security Act (42 U.S.C.
1395cc(j)(5)), as inserted by section 6401(a) of Public Law 111-148, is
amended--
(1) in the paragraph heading, by striking ``past-due'' and
inserting ``medicare'';
(2) in subparagraph (A), by striking ``past-due obligations
described in subparagraph (B)(ii) of an'' and inserting
``amount described in subparagraph (B)(ii) due from such''; and
(3) in subparagraph (B)(ii), by striking ``a past-due
obligation'' and inserting ``an amount that is more than the
amount required to be paid''.
SEC. 520. CLARIFICATION OF EFFECTIVE DATE OF PART B SPECIAL ENROLLMENT
PERIOD FOR DISABLED TRICARE BENEFICIARIES.
Effective as if included in the enactment of Public Law 111-148,
section 3110(a)(2) of such Act is amended to read as follows:
``(2) Effective date.--The amendment made by paragraph (1)
shall apply to elections made after the date of the enactment
of this Act.''.
SEC. 521. PHYSICIAN PAYMENT UPDATE.
(a) In General.--Section 1848(d) of the Social Security Act (42
U.S.C. 1395w-4(d)) is amended--
(1) in paragraph (10), in the heading, by striking
``portion'' and inserting ``the first 5 months ''; and
(2) by adding at the end the following new paragraphs:
``(11) Update for the last 7 months of 2010.--
``(A) In general.--Subject to paragraphs (7)(B),
(8)(B), (9)(B), and (10)(B), in lieu of the update to
the single conversion factor established in paragraph
(1)(C) that would otherwise apply for 2010 for the
period beginning on June 1, 2010, and ending on
December 31, 2010, the update to the single conversion
factor shall be 2.2 percent.
``(B) No effect on computation of conversion factor
for 2011 and subsequent years.--The conversion factor
under this subsection shall be computed under paragraph
(1)(A) for 2011 and subsequent years as if subparagraph
(A) had never applied.
``(12) Update for 2011.--
``(A) In general.--Subject to paragraphs (7)(B),
(8)(B), (9)(B), (10)(B), and (11)(B), in lieu of the
update to the single conversion factor established in
paragraph (1)(C) that would otherwise apply for 2011,
the update to the single conversion factor shall be 1.0
percent.
``(B) No effect on computation of conversion factor
for 2012 and subsequent years.--The conversion factor
under this subsection shall be computed under paragraph
(1)(A) for 2012 and subsequent years as if subparagraph
(A) had never applied.''.
(b) Statutory Paygo.--The budgetary effects of this Act, for the
purpose of complying with the Statutory Pay-As-You-Go Act of 2010,
shall be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation'' for this Act, jointly
submitted for printing in the Congressional Record by the Chairmen of
the House and Senate Budget Committees, provided that such statement
has been submitted prior to the vote on passage in the House acting
first on this conference report or amendment between the Houses.
SEC. 522. ADJUSTMENT TO MEDICARE PAYMENT LOCALITIES.
(a) In General.--Section 1848(e) of the Social Security Act (42
U.S.C.1395w-4(e)) is amended by adding at the end the following new
paragraph:
``(6) Transition to use of msas as fee schedule areas in
california.--
``(A) In general.--
``(i) Revision.--Subject to clause (ii) and
notwithstanding the previous provisions of this
subsection, for services furnished on or after
January 1, 2012, the Secretary shall revise the
fee schedule areas used for payment under this
section applicable to the State of California
using the Metropolitan Statistical Area (MSA)
iterative Geographic Adjustment Factor
methodology as follows:
``(I) The Secretary shall configure
the physician fee schedule areas using
the Metropolitan Statistical Areas
(each in this paragraph referred to as
an `MSA'), as defined by the Director
of the Office of Management and Budget
as of the date of the enactment of this
paragraph, as the basis for the fee
schedule areas.
``(II) For purposes of this clause,
the Secretary shall treat all areas not
included in an MSA as a single rest-of-
State MSA and any reference in this
paragraph to an MSA shall be deemed to
include a reference to such rest-of-
State MSA.
``(III) The Secretary shall list
all MSAs within the State by Geographic
Adjustment Factor described in
paragraph (2) (in this paragraph
referred to as a `GAF') in descending
order.
``(IV) In the first iteration, the
Secretary shall compare the GAF of the
highest cost MSA in the State to the
weighted-average GAF of all the
remaining MSAs in the State. If the
ratio of the GAF of the highest cost
MSA to the weighted-average of the GAF
of remaining lower cost MSAs is 1.05 or
greater, the highest cost MSA shall be
a separate fee schedule area.
``(V) In the next iteration, the
Secretary shall compare the GAF of the
MSA with the second-highest GAF to the
weighted-average GAF of the all the
remaining MSAs (excluding MSAs that
become separate fee schedule areas). If
the ratio of the second-highest MSA's
GAF to the weighted-average of the
remaining lower cost MSAs is 1.05 or
greater, the second-highest MSA shall
be a separate fee schedule area.
``(VI) The iterative process shall
continue until the ratio of the GAF of
the MSA with highest remaining GAF to
the weighted-average of the remaining
MSAs with lower GAFs is less than 1.05,
and the remaining group of MSAs with
lower GAFs shall be treated as a single
rest-of-State fee schedule area.
``(VII) For purposes of the
iterative process described in this
clause, if two MSAs have identical
GAFs, they shall be combined.
``(ii) Transition.--For services furnished
on or after January 1, 2012, and before January
1, 2017, in the State of California, after
calculating the work, practice expense, and
malpractice geographic indices that would
otherwise be determined under clauses (i),
(ii), and (iii) of paragraph (1)(A) for a fee
schedule area determined under clause (i), if
the index for a county within a fee schedule
area is less than the index that would
otherwise be in effect for such county, the
Secretary shall instead apply the index that
would otherwise be in effect for such county.
``(B) Subsequent revisions.--After the transition
described in subparagraph (A)(ii), not less than every
3 years the Secretary shall review and update the fee
schedule areas using the methodology described in
subparagraph (A)(i) and any updated MSAs as defined by
the Director of the Office of Management and Budget.
The Secretary shall review and make any changes
pursuant to such reviews concurrent with the
application of the periodic review of the adjustment
factors required under paragraph (1)(C) for California.
``(C) References to fee schedule areas.--Effective
for services furnished on or after January 1, 2012, for
the State of California, any reference in this section
to a fee schedule area shall be deemed a reference to a
fee schedule area established in accordance with this
paragraph.''.
(b) Conforming Amendment to Definition of Fee Schedule Area.--
Section 1848(j)(2) of the Social Security Act (42 U.S.C. 1395w(j)(2))
is amended by striking ``The term'' and inserting ``Except as provided
in subsection (e)(6)(C), the term''.
SEC. 523. CLARIFICATION OF 3-DAY PAYMENT WINDOW.
(a) In General.--Section 1886 of the Social Security Act (42 U.S.C.
1395ww) is amended--
(1) by adding at the end of subsection (a)(4) the following
new sentence: ``In applying the first sentence of this
paragraph, the term `other services related to the admission'
includes all services that are not diagnostic services (other
than ambulance and maintenance renal dialysis services) for
which payment may be made under this title that are provided by
a hospital (or an entity wholly owned or operated by the
hospital) to a patient--
``(A) on the date of the patient's inpatient
admission; or
``(B) during the 3 days (or, in the case of a
hospital that is not a subsection (d) hospital, during
the 1 day) immediately preceding the date of such
admission unless the hospital demonstrates (in a form
and manner, and at a time, specified by the Secretary)
that such services are not related (as determined by
the Secretary) to such admission.''; and
(2) in subsection (d)(7)--
(A) in subparagraph (A), by striking ``and'' at the
end;
(B) in subparagraph (B), by striking the period and
inserting ``, and''; and
(C) by adding at the end the following new
subparagraph:
``(C) the determination of whether services
provided prior to a patient's inpatient admission are
related to the admission (as described in subsection
(a)(4)).''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to services furnished on or after the date of the enactment of
this Act.
(c) No Reopening of Previously Bundled Claims.--
(1) In general.--The Secretary of Health and Human Services
may not reopen a claim, adjust a claim, or make a payment
pursuant to any request for payment under title XVIII of the
Social Security Act, submitted by an entity (including a
hospital or an entity wholly owned or operated by the hospital)
for services described in paragraph (2) for purposes of
treating, as unrelated to a patient's inpatient admission,
services provided during the 3 days (or, in the case of a
hospital that is not a subsection (d) hospital, during the 1
day) immediately preceding the date of the patient's inpatient
admission.
(2) Services described.--For purposes of paragraph (1), the
services described in this paragraph are other services related
to the admission (as described in section 1886(a)(4) of the
Social Security Act (42 U.S.C. 1395ww(a)(4)), as amended by
subsection (a)) which were previously included on a claim or
request for payment submitted under part A of title XVIII of
such Act for which a reopening, adjustment, or request for
payment under part B of such title, was not submitted prior to
the date of the enactment of this Act.
(d) Implementation.--Notwithstanding any other provision of law,
the Secretary of Health and Human Services may implement the provisions
of this section (and amendments made by this section) by program
instruction or otherwise.
(e) Rule of Construction.--Nothing in the amendments made by this
section shall be construed as changing the policy described in section
1886(a)(4) of the Social Security Act (42 U.S.C. 1395ww(a)(4)), as
applied by the Secretary of Health and Human Services before the date
of the enactment of this Act, with respect to diagnostic services.
TITLE VI--OTHER PROVISIONS
SEC. 601. EXTENSION OF NATIONAL FLOOD INSURANCE PROGRAM.
(a) Extension.--Section 129 of the Continuing Appropriations
Resolution, 2010 (Public Law 111-68), as amended by section 7(a) of
Public Law 111-157, is amended by striking ``by substituting'' and all
that follows through the period at the end, and inserting ``by
substituting December 31, 2010, for the date specified in each such
section.''.
(b) Effective Date.--The amendments made by subsection (a) shall be
considered to have taken effect on May 31, 2010.
SEC. 602. ALLOCATION OF GEOTHERMAL RECEIPTS.
Notwithstanding any other provision of law, for fiscal year 2010
only, all funds received from sales, bonuses, royalties, and rentals
under the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) shall
be deposited in the Treasury, of which--
(1) 50 percent shall be used by the Secretary of the
Treasury to make payments to States within the boundaries of
which the leased land and geothermal resources are located;
(2) 25 percent shall be used by the Secretary of the
Treasury to make payments to the counties within the boundaries
of which the leased land or geothermal resources are located;
and
(3) 25 percent shall be deposited in miscellaneous
receipts.
SEC. 603. SMALL BUSINESS LOAN GUARANTEE ENHANCEMENT EXTENSIONS.
(a) Appropriation.--There is appropriated, out of any funds in the
Treasury not otherwise appropriated, for an additional amount for
``Small Business Administration--Business Loans Program Account'',
$505,000,000, to remain available through December 31, 2010, for the
cost of--
(1) fee reductions and eliminations under section 501 of
division A of the American Recovery and Reinvestment Act of
2009 (Public Law 111-5; 123 Stat. 151), as amended by this
section; and
(2) loan guarantees under section 502 of division A of the
American Recovery and Reinvestment Act of 2009 (Public Law 111-
5; 123 Stat. 152), as amended by this section.
Such costs, including the cost of modifying such loans, shall be as
defined in section 502 of the Congressional Budget Act of 1974.
(b) Extension of Programs.--
(1) Fees.--Section 501 of division A of the American
Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123
Stat. 151) is amended by striking ``September 30, 2010'' each
place it appears and inserting ``December 31, 2010''.
(2) Loan guarantees.--Section 502(f) of division A of the
American Recovery and Reinvestment Act of 2009 (Public Law 111-
5; 123 Stat. 153) is amended by striking ``May 31, 2010'' and
inserting ``December 31, 2010''.
(c) Appropriation.--There is appropriated for an additional amount,
out of any funds in the Treasury not otherwise appropriated, for
administrative expenses to carry out sections 501 and 502 of division A
of the American Recovery and Reinvestment Act of 2009 (Public Law 111-
5), $5,000,000, to remain available until expended, which may be
transferred and merged with the appropriation for ``Small Business
Administration--Salaries and Expenses''.
SEC. 604. EMERGENCY AGRICULTURAL DISASTER ASSISTANCE.
(a) Definitions.--Except as otherwise provided in this section, in
this section:
(1) Disaster county.--
(A) In general.--The term ``disaster county'' means
a county included in the geographic area covered by a
qualifying natural disaster declaration for the 2009
crop year.
(B) Exclusion.--The term ``disaster county'' does
not include a contiguous county.
(2) Eligible aquaculture producer.--The term ``eligible
aquaculture producer'' means an aquaculture producer that
during the 2009 calendar year, as determined by the Secretary--
(A) produced an aquaculture species for which feed
costs represented a substantial percentage of the input
costs of the aquaculture operation; and
(B) experienced a substantial price increase of
feed costs above the previous 5-year average.
(3) Eligible producer.--The term ``eligible producer''
means an agricultural producer in a disaster county.
(4) Eligible specialty crop producer.--The term ``eligible
specialty crop producer'' means an agricultural producer that,
for the 2009 crop year, as determined by the Secretary--
(A) produced, or was prevented from planting, a
specialty crop; and
(B) experienced specialty crop losses in a disaster
county due to drought, excessive rainfall, or a related
condition.
(5) Qualifying natural disaster declaration.--The term
``qualifying natural disaster declaration'' means a natural
disaster declared by the Secretary for production losses under
section 321(a) of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1961(a)).
(6) Secretary.--The term ``Secretary'' means the Secretary
of Agriculture.
(7) Specialty crop.--The term ``specialty crop'' has the
meaning given the term in section 3 of the Specialty Crops
Competitiveness Act of 2004 (Public Law 108-465; 7 U.S.C. 1621
note).
(b) Supplemental Direct Payment.--
(1) In general.--Of the funds of the Commodity Credit
Corporation, the Secretary shall use such sums as are necessary
to make supplemental payments under sections 1103 and 1303 of
the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8713,
8753) to eligible producers on farms located in disaster
counties that had at least 1 crop of economic significance
(other than specialty crops or crops intended for grazing)
suffer at least a 5-percent crop loss on a farm due to a
natural disaster, including quality losses, as determined by
the Secretary, in an amount equal to 90 percent of the direct
payment the eligible producers received for the 2009 crop year
on the farm.
(2) ACRE program.--Eligible producers that received direct
payments under section 1105 of the Food, Conservation, and
Energy Act of 2008 (7 U.S.C. 8715) for the 2009 crop year and
that otherwise meet the requirements of paragraph (1) shall be
eligible to receive supplemental payments under that paragraph
in an amount equal to 112.5 percent of the reduced direct
payment the eligible producers received for the 2009 crop year
under section 1103 or 1303 of the Food, Conservation, and
Energy Act of 2008 (7 U.S.C. 8713, 8753).
(3) Relationship to other law.--Assistance received under
this subsection shall be included in the calculation of farm
revenue for the 2009 crop year under section 531(b)(4)(A) of
the Federal Crop Insurance Act (7 U.S.C. 1531(b)(4)(A)) and
section 901(b)(4)(A) of the Trade Act of 1974 (19 U.S.C.
2497(b)(4)(A)).
(c) Specialty Crop Assistance.--
(1) In general.--Of the funds of the Commodity Credit
Corporation, the Secretary shall use not more than
$300,000,000, to remain available until September 30, 2011, to
carry out a program of grants to States to assist eligible
specialty crop producers for losses due to a natural disaster
affecting the 2009 crops, of which not more than--
(A) $150,000,000 shall be used to assist eligible
specialty crop producers in counties that have been
declared a disaster as the result of drought; and
(B) $150,000,000 shall be used to assist eligible
specialty crop producers in counties that have been
declared a disaster as the result of excessive rainfall
or a related condition.
(2) Notification.--Not later than 45 days after the date of
enactment of this Act, the Secretary shall notify the State
department of agriculture (or similar entity) in each State of
the availability of funds to assist eligible specialty crop
producers, including such terms as are determined by the
Secretary to be necessary for the equitable treatment of
eligible specialty crop producers.
(3) Provision of grants.--
(A) In general.--The Secretary shall make grants to
States for disaster counties on a pro rata basis based
on the value of specialty crop losses in those counties
during the 2009 calendar year, as determined by the
Secretary.
(B) Administrative costs.--State Secretary of
Agriculture may not use more than five percent of the
funds provided for costs associated with the
administration of the grants provided in paragraph (1).
(C) Administration of grants.--State Secretary of
Agriculture may enter into a contract with the
Department of Agriculture to administer the grants
provided in paragraph (1).
(D) Timing.--Not later than 90 days after the date
of enactment of this Act, the Secretary shall make
grants to States to provide assistance under this
subsection.
(E) Maximum grant.--The maximum amount of a grant
made to a State for counties described in paragraph
(1)(B) may not exceed $40,000,000.
(4) Requirements.--The Secretary shall make grants under
this subsection only to States that demonstrate to the
satisfaction of the Secretary that the State will--
(A) use grant funds to issue payments to eligible
specialty crop producers;
(B) provide assistance to eligible specialty crop
producers not later than 60 days after the date on
which the State receives grant funds; and
(C) not later than 30 days after the date on which
the State provides assistance to eligible specialty
crop producers, submit to the Secretary a report that
describes--
(i) the manner in which the State provided
assistance;
(ii) the amounts of assistance provided by
type of specialty crop; and
(iii) the process by which the State
determined the levels of assistance to eligible
specialty crop producers.
(D) Relation to other law.--Assistance received
under this subsection shall be included in the
calculation of farm revenue for the 2009 crop year
under section 531(b)(4)(A) of the Federal Crop
Insurance Act (7 U.S.C. 1531(b)(4)(A)) and section
901(b)(4)(A) of the Trade Act of 1974 (19 U.S.C.
2497(b)(4)(A)).
(d) Cottonseed Assistance.--
(1) In general.--Of the funds of the Commodity Credit
Corporation, the Secretary shall use not more than $42,000,000
to provide supplemental assistance to eligible producers and
first-handlers of the 2009 crop of cottonseed in a disaster
county.
(2) General terms.--Except as otherwise provided in this
subsection, the Secretary shall provide disaster assistance
under this subsection under the same terms and conditions as
assistance provided under section 3015 of the Emergency
Agricultural Disaster Assistance Act of 2006 (title III of
Public Law 109-234; 120 Stat. 477).
(3) Distribution of assistance.--The Secretary shall
distribute assistance to first handlers for the benefit of
eligible producers in a disaster county in an amount equal to
the product obtained by multiplying--
(A) the payment rate, as determined under paragraph
(4); and
(B) the county-eligible production, as determined
under paragraph (5).
(4) Payment rate.--The payment rate shall be equal to the
quotient obtained by dividing--
(A) the total funds made available to carry out
this subsection; by
(B) the sum of the county-eligible production, as
determined under paragraph (5).
(5) County-eligible production.--The county-eligible
production shall be equal to the product obtained by
multiplying--
(A) the number of acres planted to cotton in the
disaster county, as reported to the Secretary by first
handlers;
(B) the expected cotton lint yield for the disaster
county, as determined by the Secretary based on the
best available information; and
(C) the national average seed-to-lint ratio, as
determined by the Secretary based on the best available
information for the 5 crop years immediately preceding
the 2009 crop, excluding the year in which the average
ratio was the highest and the year in which the average
ratio was the lowest in such period.
(e) Aquaculture Assistance.--
(1) In general.--Of the funds of the Commodity Credit
Corporation, the Secretary shall use not more than $25,000,000,
to remain available until September 30, 2011, to carry out a
program of grants to States to assist eligible aquaculture
producers for losses associated with high feed input costs
during the 2009 calendar year.
(2) Notification.--Not later than 45 days after the date of
enactment of this Act, the Secretary shall notify the State
department of agriculture (or similar entity) in each State of
the availability of funds to assist eligible aquaculture
producers, including such terms as are determined by the
Secretary to be necessary for the equitable treatment of
eligible aquaculture producers.
(3) Provision of grants.--
(A) In general.--The Secretary shall make grants to
States under this subsection on a pro rata basis based
on the amount of aquaculture feed used in each State
during the 2009 calendar year, as determined by the
Secretary.
(B) Timing.--Not later than 90 days after the date
of enactment of this Act, the Secretary shall make
grants to States to provide assistance under this
subsection.
(4) Requirements.--The Secretary shall make grants under
this subsection only to States that demonstrate to the
satisfaction of the Secretary that the State will--
(A) use grant funds to assist eligible aquaculture
producers;
(B) provide assistance to eligible aquaculture
producers not later than 60 days after the date on
which the State receives grant funds; and
(C) not later than 30 days after the date on which
the State provides assistance to eligible aquaculture
producers, submit to the Secretary a report that
describes--
(i) the manner in which the State provided
assistance;
(ii) the amounts of assistance provided per
species of aquaculture; and
(iii) the process by which the State
determined the levels of assistance to eligible
aquaculture producers.
(5) Reduction in payments.--An eligible aquaculture
producer that receives assistance under this subsection shall
not be eligible to receive any other assistance under the
supplemental agricultural disaster assistance program
established under section 531 of the Federal Crop Insurance Act
(7 U.S.C. 1531) and section 901 of the Trade Act of 1974 (19
U.S.C. 2497) for any losses in 2009 relating to the same
species of aquaculture.
(6) Report to congress.--Not later than 240 days after the
date of enactment of this Act, the Secretary shall submit to
the appropriate committees of Congress a report that--
(A) describes in detail the manner in which this
subsection has been carried out; and
(B) includes the information reported to the
Secretary under paragraph (4)(C).
(f) Hawaii Transportation Cooperative.--Notwithstanding any other
provision of law, the Secretary shall use $21,000,000 of funds of the
Commodity Credit Corporation to make a payment to an agricultural
transportation cooperative in the State of Hawaii, the members of which
are eligible to participate in the commodity loan program of the Farm
Service Agency, for assistance to maintain and develop employment.
(g) Livestock Forage Disaster Program.--
(1) Definition of disaster county.--In this subsection:
(A) In general.--The term ``disaster county'' means
a county included in the geographic area covered by a
qualifying natural disaster declaration announced by
the Secretary in calendar year 2009.
(B) Inclusion.--The term ``disaster county''
includes a contiguous county.
(2) Payments.--Of the funds of the Commodity Credit
Corporation, the Secretary shall use not more than $50,000,000
to carry out a program to make payments to eligible producers
that had grazing losses in disaster counties in calendar year
2009.
(3) Criteria.--
(A) In general.--Except as provided in subparagraph
(B), assistance under this subsection shall be
determined under the same criteria as are used to carry
out the programs under section 531(d) of the Federal
Crop Insurance Act (7 U.S.C. 1531(d)) and section
901(d) of the Trade Act of 1974 (19 U.S.C. 2497(d)).
(B) Drought intensity.--For purposes of this
subsection, an eligible producer shall not be required
to meet the drought intensity requirements of section
531(d)(3)(D)(ii) of the Federal Crop Insurance Act (7
U.S.C. 1531(d)(3)(D)(ii)) and section 901(d)(3)(D)(ii)
of the Trade Act of 1974 (19 U.S.C. 2497(d)(3)(D)(ii)).
(4) Amount.--Assistance under this subsection shall be in
an amount equal to 1 monthly payment using the monthly payment
rate under section 531(d)(3)(B) of the Federal Crop Insurance
Act (7 U.S.C. 1531(d)(3)(B)) and section 901(d)(3)(B) of the
Trade Act of 1974 (19 U.S.C. 2497(d)(3)(B)).
(5) Relation to other law.--An eligible producer that
receives assistance under this subsection shall be ineligible
to receive assistance for 2009 grazing losses under the program
carried out under section 531(d) of the Federal Crop Insurance
Act (7 U.S.C. 1531(d)) and section 901(d) of the Trade Act of
1974 (19 U.S.C. 2497(d)).
(h) Emergency Loans for Poultry Producers.--
(1) Definitions.--In this subsection:
(A) Announcement date.--The term ``announcement
date'' means the date on which the Secretary announces
the emergency loan program under this subsection.
(B) Poultry integrator.--The term ``poultry
integrator'' means a poultry integrator that filed
proceedings under chapter 11 of title 11, United States
Code, in United States Bankruptcy Court during the 30-
day period beginning on December 1, 2008.
(2) Loan program.--
(A) In general.--Of the funds of the Commodity
Credit Corporation, the Secretary shall use not more
than $75,000,000, to remain available until expended,
for the cost of making no-interest emergency loans
available to poultry producers that meet the
requirements of this subsection.
(B) Terms and conditions.--Except as otherwise
provided in this subsection, emergency loans under this
subsection shall be subject to such terms and
conditions as are determined by the Secretary.
(3) Loans.--
(A) In general.--An emergency loan made to a
poultry producer under this subsection shall be for the
purpose of providing financing to the poultry producer
in response to financial losses associated with the
termination or nonrenewal of any contract between the
poultry producer and a poultry integrator.
(B) Eligibility.--
(i) In general.--To be eligible for an
emergency loan under this subsection, not later
than 90 days after the announcement date, a
poultry producer shall submit to the Secretary
evidence that--
(I) the contract of the poultry
producer described in subparagraph (A)
was not continued; and
(II) no similar contract has been
awarded subsequently to the poultry
producer.
(ii) Requirement to offer loans.--
Notwithstanding any other provision of law, if
a poultry producer meets the eligibility
requirements described in clause (i), subject
to the availability of funds under paragraph
(2)(A), the Secretary shall offer to make a
loan under this subsection to the poultry
producer with a minimum term of 2 years.
(4) Additional requirements.--
(A) In general.--A poultry producer that receives
an emergency loan under this subsection may use the
emergency loan proceeds only to repay the amount that
the poultry producer owes to any lender for the
purchase, improvement, or operation of the poultry
farm.
(B) Conversion of the loan.--A poultry producer
that receives an emergency loan under this subsection
shall be eligible to have the balance of the emergency
loan converted, but not refinanced, to a loan that has
the same terms and conditions as an operating loan
under subtitle B of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1941 et seq.).
(i) State and Local Governments.--Section 1001(f)(6)(A) of the Food
Security Act of 1985 (7 U.S.C. 1308(f)(6)(A)) is amended by inserting
``(other than the conservation reserve program established under
subchapter B of chapter 1 of subtitle D of title XII of this Act)''
before the period at the end.
(j) Administration.--
(1) Regulations.--
(A) In general.--As soon as practicable after the
date of enactment of this Act, the Secretary shall
promulgate such regulations as are necessary to
implement this section and the amendment made by this
section.
(B) Procedure.--The promulgation of the regulations
and administration of this section and the amendment
made by this section shall be made without regard to--
(i) the notice and comment provisions of
section 553 of title 5, United States Code;
(ii) the Statement of Policy of the
Secretary of Agriculture effective July 24,
1971 (36 Fed. Reg. 13804), relating to notices
of proposed rulemaking and public participation
in rulemaking; and
(iii) chapter 35 of title 44, United States
Code (commonly known as the ``Paperwork
Reduction Act'').
(C) Congressional review of agency rulemaking.--In
carrying out this paragraph, the Secretary shall use
the authority provided under section 808 of title 5,
United States Code.
(2) Administrative costs.--Of the funds of the Commodity
Credit Corporation, the Secretary may use up to $10,000,000 to
pay administrative costs incurred by the Secretary that are
directly related to carrying out this Act.
(3) Prohibition.--None of the funds of the Agricultural
Disaster Relief Trust Fund established under section 902 of the
Trade Act of 1974 (19 U.S.C. 2497a) may be used to carry out
this Act.
SEC. 605. SUMMER EMPLOYMENT FOR YOUTH.
There is appropriated, out of any funds in the Treasury not
otherwise appropriated, for an additional amount for ``Department of
Labor--Employment and Training Administration--Training and Employment
Services'' for activities under the Workforce Investment Act of 1998
(``WIA''), $1,000,000,000 shall be available for obligation on the date
of enactment of this Act for grants to States for youth activities,
including summer employment for youth: Provided, That no portion of
such funds shall be reserved to carry out section 127(b)(1)(A) of the
WIA: Provided further, That for purposes of section 127(b)(1)(C)(iv) of
the WIA, funds available for youth activities shall be allotted as if
the total amount available for youth activities in the fiscal year does
not exceed $1,000,000,000: Provided further, That with respect to the
youth activities provided with such funds, section 101(13)(A) of the
WIA shall be applied by substituting ``age 24'' for ``age 21'':
Provided further, That the work readiness performance indicator
described in section 136(b)(2)(A)(ii)(I) of the WIA shall be the only
measure of performance used to assess the effectiveness of summer
employment for youth provided with such funds: Provided further, That
an amount that is not more than 1 percent of such amount may be used
for the administration, management, and oversight of the programs,
activities, and grants carried out with such funds, including the
evaluation of the use of such funds: Provided further, That funds
available under the preceding proviso, together with funds described in
section 801(a) of division A of the American Recovery and reinvestment
Act of 2009 (Public Law 111-5), and funds provided in such Act under
the heading ``Department of Labor-Departmental Management-Salaries and
Expenses'', shall remain available for obligation through September 30,
2011.
SEC. 606. HOUSING TRUST FUND.
(a) Funding.--There is hereby appropriated for the Housing Trust
Fund established pursuant to section 1338 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C.
4568), $1,065,000,000, for use under such section: Provided, That of
the total amount provided under this heading, $65,000,000 shall be
available to the Secretary of Housing and Urban Development only for
incremental project-based voucher assistance to be allocated to States
to be used solely in conjunction with grant funds awarded under such
section 1338, pursuant to the formula established under section 1338
and taking into account different per unit subsidy needs among states,
as determined by the Secretary.
(b) Amendments.--Section 1338 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4568) is
amended--
(1) in subsection (c)--
(A) in paragraph (4)(A) by inserting after the
period at the end the following: ``Notwithstanding any
other provision of law, for the fiscal year following
enactment of this sentence and thereafter, the
Secretary may make such notice available only on the
Internet at the appropriate government website or
websites or through other electronic media, as
determined by the Secretary.'';
(B) in paragraph (5)(C), by striking ``(8)'' and
inserting ``(9)''; and
(C) in paragraph (7)(A)--
(i) by striking ``section 1335(a)(2)(B)''
and inserting ``section 1335(a)(1)(B)''; and
(ii) by inserting ``the units funded
under'' after ``75 percent of''; and
(2) by adding at the end the following new subsection:
``(k) Environmental Review.--For the purpose of environmental
compliance review, funds awarded under this section shall be subject to
section 288 of the HOME Investment Partnerships Act (12 U.S.C. 12838)
and shall be treated as funds under the program established by such
Act.''.
SEC. 607. THE INDIVIDUAL INDIAN MONEY ACCOUNT LITIGATION SETTLEMENT ACT
OF 2010.
(a) Short Title.--This section may be cited as the ``Individual
Indian Money Account Litigation Settlement Act of 2010''.
(b) Definitions.--In this section:
(1) Amended complaint.--The term ``Amended Complaint''
means the Amended Complaint attached to the Settlement.
(2) Land consolidation program.--The term ``Land
Consolidation Program'' means a program conducted in accordance
with the Settlement and the Indian Land Consolidation Act (25
U.S.C. 2201 et seq.) under which the Secretary may purchase
fractional interests in trust or restricted land.
(3) Litigation.--The term ``Litigation'' means the case
entitled Elouise Cobell et al. v. Ken Salazar et al., United
States District Court, District of Columbia, Civil Action No.
96-1285 (JR).
(4) Plaintiff.--The term ``Plaintiff'' means a member of
any class certified in the Litigation.
(5) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(6) Settlement.--The term ``Settlement'' means the Class
Action Settlement Agreement dated December 7, 2009, in the
Litigation, as modified by the parties to the Litigation.
(7) Trust administration class.--The term ``Trust
Administration Class'' means the Trust Administration Class as
defined in the Settlement.
(c) Purpose.--The purpose of this section is to authorize the
Settlement.
(d) Authorization.--The Settlement is authorized, ratified, and
confirmed.
(e) Jurisdictional Provisions.--
(1) In general.--Notwithstanding the limitation of
jurisdiction of district courts contained in section 1346(a)(2)
of title 28, United States Code, the United States District
Court for the District of Columbia shall have jurisdiction over
the claims asserted in the Amended Complaint for purposes of
the Settlement.
(2) Certification of trust administration class.--
(A) In general.--Notwithstanding the requirements
of the Federal Rules of Civil Procedure, the court
overseeing the Litigation may certify the Trust
Administration Class.
(B) Treatment.--On certification under subparagraph
(A), the Trust Administration Class shall be treated as
a class under Federal Rule of Civil Procedure 23(b)(3)
for purposes of the Settlement.
(f) Trust Land Consolidation.--
(1) Trust land consolidation fund.--
(A) Establishment.--On final approval (as defined
in the Settlement) of the Settlement, there shall be
established in the Treasury of the United States a
fund, to be known as the ``Trust Land Consolidation
Fund''.
(B) Availability of amounts.--Amounts in the Trust
Land Consolidation Fund shall be made available to the
Secretary during the 10-year period beginning on the
date of final approval of the Settlement--
(i) to conduct the Land Consolidation
Program; and
(ii) for other costs specified in the
Settlement.
(C) Deposits.--
(i) In general.--On final approval (as
defined in the Settlement) of the Settlement,
the Secretary of the Treasury shall deposit in
the Trust Land Consolidation Fund
$2,000,000,000 of the amounts appropriated by
section 1304 of title 31, United States Code.
(ii) Conditions met.--The conditions
described in section 1304 of title 31, United
States Code, shall be considered to be met for
purposes of clause (i).
(D) Transfers.--In a manner designed to encourage
participation in the Land Consolidation Program, the
Secretary may transfer, at the discretion of the
Secretary, not more than $60,000,000 of amounts in the
Trust Land Consolidation Fund to the Indian Education
Scholarship Holding Fund established under paragraph 2.
(2) Indian education scholarship holding fund.--
(A) Establishment.--On the final approval (as
defined in the Settlement) of the Settlement, there
shall be established in the Treasury of the United
States a fund, to be known as the ``Indian Education
Scholarship Holding Fund''.
(B) Availability.--Notwithstanding any other
provision of law governing competition, public
notification, or Federal procurement or assistance,
amounts in the Indian Education Scholarship Holding
Fund shall be made available, without further
appropriation, to the Secretary to contribute to an
Indian Education Scholarship Fund, as described in the
Settlement, to provide scholarships for Native
Americans.
(3) Acquisition of trust or restricted land.--The Secretary
may acquire, at the discretion of the Secretary and in
accordance with the Land Consolidation Program, any fractional
interest in trust or restricted land.
(4) Treatment of unlocatable plaintiffs.--A Plaintiff the
whereabouts of whom are unknown and who, after reasonable
efforts by the Secretary, cannot be located during the 5 year
period beginning on the date of final approval (as defined in
the Settlement) of the Settlement shall be considered to have
accepted an offer made pursuant to the Land Consolidation
Program.
(g) Taxation and Other Benefits.--
(1) Internal revenue code.--For purposes of the Internal
Revenue Code of 1986, amounts received by an individual Indian
as a lump sum or a periodic payment pursuant to the
Settlement--
(A) shall not be included in gross income; and
(B) shall not be taken into consideration for
purposes of applying any provision of the Internal
Revenue Code of 1986 that takes into account excludible
income in computing adjusted gross income or modified
adjusted gross income, including section 86 of that
Code (relating to Social Security and tier 1 railroad
retirement benefits).
(2) Other benefits.--Notwithstanding any other provision of
law, for purposes of determining initial eligibility, ongoing
eligibility, or level of benefits under any Federal or
federally assisted program, amounts received by an individual
Indian as a lump sum or a periodic payment pursuant to the
Settlement shall not be treated for any household member,
during the 1-year period beginning on the date of receipt--
(A) as income for the month during which the
amounts were received; or
(B) as a resource.
SEC. 608. APPROPRIATION OF FUNDS FOR FINAL SETTLEMENT OF CLAIMS FROM IN
RE BLACK FARMERS DISCRIMINATION LITIGATION.
(a) Definitions.--In this section:
(1) Settlement agreement.--The term ``Settlement
Agreement'' means the settlement agreement dated February 18,
2010 (including any modifications agreed to by the parties and
approved by the court under that agreement) between certain
plaintiffs, by and through their counsel, and the Secretary of
Agriculture to resolve, fully and forever, the claims raised or
that could have been raised in the cases consolidated in In re
Black Farmers Discrimination Litigation, No. 08-511 (D.D.C.),
including Pigford claims asserted under section 14012 of the
Food, Conservation, and Energy Act of 2008 (Public Law 110-246;
122 Stat. 2209).
(2) Pigford claim.--The term ``Pigford claim'' has the
meaning given that term in section 14012(a)(3) of the Food,
Conservation, and Energy Act of 2008 (Public Law 110-246; 122
Stat. 2210).
(b) Appropriation of Funds.--There is hereby appropriated to the
Secretary of Agriculture $1,150,000,000, to remain available until
expended, to carry out the terms of the Settlement Agreement if the
Settlement Agreement is approved by a court order that is or becomes
final and nonappealable. The funds appropriated by this subsection are
in addition to the $100,000,000 of funds of the Commodity Credit
Corporation made available by section 14012(i) of the Food,
Conservation, and Energy Act of 2008 (Public Law 110-246; 122 Stat.
2212) and shall be available for obligation only after those Commodity
Credit Corporation funds are fully obligated. If the Settlement
Agreement is not approved as provided in this subsection, the
$100,000,000 of funds of the Commodity Credit Corporation made
available by section 14012(i) of the Food, Conservation, and Energy Act
of 2008 shall be the sole funding available for Pigford claims.
(c) Use of Funds.--The use of the funds appropriated by subsection
(b) shall be subject to the express terms of the Settlement Agreement.
(d) Treatment of Remaining Funds.--If any of the funds appropriated
by subsection (b) are not obligated and expended to carry out the
Settlement Agreement, the Secretary of Agriculture shall return the
unused funds to the Treasury and may not make the unused funds
available for any purpose related to section 14012 of the Food,
Conservation, and Energy Act of 2008, for any other settlement
agreement executed in In re Black Farmers Discrimination Litigation,
No. 08-511 (D.D.C.), or for any other purpose.
(e) Rules of Construction.--Nothing in this section shall be
construed as requiring the United States, any of its officers or
agencies, or any other party to enter into the Settlement Agreement or
any other settlement agreement. Nothing in this section shall be
construed as creating the basis for a Pigford claim.
(f) Conforming Amendments.--Section 14012 of the Food,
Conservation, and Energy Act of 2008 (Public Law 110-246; 122 Stat.
2209) is amended--
(1) in subsection (c)(1)--
(A) by striking ``subsection (h)'' and inserting
``subsection (g)''; and
(B) by striking ``subsection (i)'' and inserting
``subsection (h)'';
(2) by striking subsection (e);
(3) in subsection (g), by striking ``subsection (f)'' and
inserting ``subsection (e)'';
(4) in subsection (i)--
(A) by striking ``(1) In general.--Of the funds''
and inserting ``Of the funds''; and
(B) by striking paragraph (2);
(5) by striking subsection (j); and
(6) by redesignating subsections (f), (g), (h), (i), and
(k) as subsections (e), (f), (g), (h), and (i), respectively.
SEC. 609. EXPANSION OF ELIGIBILITY FOR CONCURRENT RECEIPT OF MILITARY
RETIRED PAY AND VETERANS' DISABILITY COMPENSATION TO
INCLUDE ALL CHAPTER 61 DISABILITY RETIREES REGARDLESS OF
DISABILITY RATING PERCENTAGE OR YEARS OF SERVICE.
(a) Phased Expansion Concurrent Receipt.--Subsection (a) of section
1414 of title 10, United States Code, is amended to read as follows:
``(a) Payment of Both Retired Pay and Disability Compensation.--
``(1) Payment of both required.--
``(A) In general.--Subject to subsection (b), a
member or former member of the uniformed services who
is entitled for any month to retired pay and who is
also entitled for that month to veterans' disability
compensation for a qualifying service-connected
disability (in this section referred to as a `qualified
retiree') is entitled to be paid both for that month
without regard to sections 5304 and 5305 of title 38.
``(B) Applicability of full concurrent receipt
phase-in requirement.--During the period beginning on
January 1, 2004, and ending on December 31, 2013,
payment of retired pay to a qualified retiree is
subject to subsection (c).
``(C) Phase-in exception for 100 percent disabled
retirees.--The payment of retired pay is subject to
subsection (c) only during the period beginning on
January 1, 2004, and ending on December 31, 2004, in
the case of the following qualified retirees:
``(i) A qualified retiree receiving
veterans' disability compensation for a
disability rated as 100 percent.
``(ii) A qualified retiree receiving
veterans' disability compensation at the rate
payable for a 100 percent disability by reason
of a determination of individual
unemployability.
``(D) Temporary phase-in exception for certain
chapter 61 disability retirees; termination.--Subject
to subsection (b), during the period beginning on
January 1, 2011, and ending on September 30, 2012,
subsection (c) shall not apply to a qualified retiree
described in subparagraph (B) or (C) of paragraph (2).
``(2) Qualifying service-connected disability defined.--In
this section:
``(A) 50 percent rating threshold.--In the case of
a member or former member receiving retired pay under
any provision of law other than chapter 61 of this
title, or under chapter 61 with 20 years or more of
service otherwise creditable under section 1405 or
computed under section 12732 of this title, the term
`qualifying service-connected disability' means a
service-connected disability or combination of service-
connected disabilities that is rated as not less than
50 percent disabling by the Secretary of Veterans
Affairs. However, during the period specified in
paragraph (1)(D), members or former members receiving
retired pay under chapter 61 with 20 years or more of
creditable service computed under section 12732 of this
title, but not otherwise entitled to retired pay under
any other provision of this title, shall qualify in
accordance with subparagraphs (B) and (C).
``(B) Inclusion of members not otherwise entitled
to retired pay.--In the case of a member or former
member receiving retired pay under chapter 61 of this
title, but who is not otherwise entitled to retired pay
under any other provision of this title, the term
`qualifying service-connected disability' means a
service-connected disability or combination of service-
connected disabilities that is rated by the Secretary
of Veterans Affairs at the disabling level specified in
one of the following clauses (which, subject to
paragraph (3), is effective on or after the date
specified in the applicable clause):
``(i) January 1, 2011, rated 100 percent,
or a rate payable at 100 percent by reason of
individual unemployability or rated 90 percent.
``(ii) January 1, 2012, rated 80 percent or
70 percent.
``(iii) January 1, 2013, rated 60 percent
or 50 percent.
``(C) Elimination of rating threshold.--In the case
of a member or former member receiving retired pay
under chapter 61 regardless of being otherwise eligible
for retirement, the term `qualifying service-connected
disability' means a service-connected disability or
combination of service-connected disabilities that is
rated by the Secretary of Veterans Affairs at the
disabling level specified in one of the following
clauses (which, subject to paragraph (3), is effective
on or after the date specified in the applicable
clause):
``(i) January 1, 2014, rated 40 percent or
30 percent.
``(ii) January 1, 2015, any rating.
``(3) Limited duration.--Notwithstanding the effective date
specified in each clause of subparagraphs (B) and (C) of
paragraph (2), the clause--
``(A) shall apply only if the termination date
specified in paragraph (1)(D) would occur during or
after the calendar year specified in the clause; and
``(B) shall not apply beyond the termination date
specified in paragraph (1)(D).''.
(b) Conforming Amendment to Special Rules for Chapter 61 Disability
Retirees.--Subsection (b) of such section is amended to read as
follows:
``(b) Special Rules for Chapter 61 Disability Retirees When
Eligibility Has Been Established for Such Retirees.--
``(1) General reduction rule.--The retired pay of a member
retired under chapter 61 of this title is subject to reduction
under sections 5304 and 5305 of title 38, but only to the
extent that the amount of the members retired pay under chapter
61 of this title exceeds the amount of retired pay to which the
member would have been entitled under any other provision of
law based upon the member's service in the uniformed services
if the member had not been retired under chapter 61 of this
title.
``(2) Chapter 61 retirees not otherwise entitled to retired
pay.--
``(A) Before termination date.--If a member with a
qualifying service-connected disability (as defined in
subsection (a)(2)) is retired under chapter 61 of this
title, but is not otherwise entitled to retired pay
under any other provision of this title, and the
termination date specified in subsection (a)(1)(D) has
not occurred, the retired pay of the member is subject
to reduction under sections 5304 and 5305 of title 38,
but only to the extent that the amount of the member's
retired pay under chapter 61 of this title exceeds the
amount equal to 2\1/2\ percent of the member's years of
creditable service multiplied by the member's retired
pay base under section 1406(b)(1) or 1407 of this
title, whichever is applicable to the member.
``(B) After termination date.--Subsection (a) does
not apply to a member described in subparagraph (A) if
the termination date specified in subsection (a)(1)(D)
has occurred.''.
(c) Conforming Amendment to Full Concurrent Receipt Phase-in.--
Subsection (c) of such section is amended by striking ``the second
sentence of''.
(d) Clerical Amendments.--
(1) Section heading.--The heading of such section is
amended to read as follows:
``Sec. 1414. Concurrent receipt of retired pay and veterans' disability
compensation''.
(2) Table of sections.--The table of sections at the
beginning of chapter 71 of such title is amended by striking
the item related to section 1414 and inserting the following
new item:
``1414. Concurrent receipt of retired pay and veterans' disability
compensation.''.
(e) Effective Date.--The amendments made by this section shall take
effect on January 1, 2011.
SEC. 610. EXTENSION OF USE OF 2009 POVERTY GUIDELINES.
Section 1012 of the Department of Defense Appropriations Act, 2010
(Public Law 111-118), as amended by section 6 of the Continuing
Extension Act of 2010 (Public Law 111-157), is amended--
(1) by striking ``before May 31, 2010''; and
(2) by inserting ``for 2011'' after ``until updated poverty
guidelines''.
SEC. 611. REFUNDS DISREGARDED IN THE ADMINISTRATION OF FEDERAL PROGRAMS
AND FEDERALLY ASSISTED PROGRAMS.
(a) In General.--Subchapter A of chapter 65 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new section:
``SEC. 6409. REFUNDS DISREGARDED IN THE ADMINISTRATION OF FEDERAL
PROGRAMS AND FEDERALLY ASSISTED PROGRAMS.
``(a) In General.--Notwithstanding any other provision of law, any
refund (or advance payment with respect to a refundable credit) made to
any individual under this title shall not be taken into account as
income, and shall not be taken into account as resources for a period
of 12 months from receipt, for purposes of determining the eligibility
of such individual (or any other individual) for benefits or assistance
(or the amount or extent of benefits or assistance) under any Federal
program or under any State or local program financed in whole or in
part with Federal funds.
``(b) Termination.--Subsection (a) shall not apply to any amount
received after December 31, 2010.''.
(b) Clerical Amendment.--The table of sections for such subchapter
is amended by adding at the end the following new item:
``Sec. 6409. Refunds disregarded in the administration of Federal
programs and federally assisted
programs.''.
(c) Effective Date.--The amendments made by this section shall
apply to amounts received after December 31, 2009.
SEC. 612. STATE COURT IMPROVEMENT PROGRAM.
Section 438 of the Social Security Act (42 U.S.C. 629h) is
amended--
(1) in subsection (c)(2)(A), by striking ``2010'' and
inserting ``2011''; and
(2) in subsection (e), by striking ``2010'' and inserting
``2011''.
SEC. 613. QUALIFYING TIMBER CONTRACT OPTIONS.
(a) Definitions.--In this section:
(1) Qualifying contract.--The term ``qualifying contract''
means a contract that has not been terminated by the Bureau of
Land Management for the sale of timber on lands administered by
the Bureau of Land Management that meets all of the following
criteria:
(A) The contract was awarded during the period
beginning on January 1, 2005, and ending on December
31, 2008.
(B) There is unharvested volume remaining for the
contract.
(C) The contract is not a salvage sale.
(D) The Secretary determined there is not an urgent
need to harvest under the contract due to deteriorating
timber conditions that developed after the award of the
contract.
(2) Secretary.--The term ``Secretary'' means the Secretary
of the Interior, acting through the Director of Bureau of Land
Management.
(3) Timber purchaser.--The term ``timber purchaser'' means
the party to the qualifying contract for the sale of timber
from lands administered by the Bureau of Land Management.
(b) Market-related Contract Extension Option.--Upon a timber
purchaser's written request, the Secretary may make a one-time
modification to the qualifying contract to add 3 years to the contract
expiration date if the written request--
(1) is received by the Secretary not later than 90 days
after the date of enactment of this Act; and
(2) contains a provision releasing the United States from
all liability, including further consideration or compensation,
resulting from the modification under this subsection of the
term of a qualifying contract.
(c) Reporting.--Not later than 6 months after the date of the
enactment of this Act, the Secretary shall submit to Congress a report
detailing a plan and timeline to promulgate new regulations authorizing
the Bureau of Land Management to extend timber contracts due to changes
in market conditions.
(d) Regulations.--Not later than 2 years after the date of the
enactment of this Act, the Secretary shall promulgate new regulations
authorizing the Bureau of Land Management to extend timber contracts
due to changes in market conditions.
(e) No Surrender of Claims.--This section shall not have the effect
of surrendering any claim by the United States against any timber
purchaser that arose under a timber sale contract, including a
qualifying contract, before the date on which the Secretary adjusts the
contract term under subsection (b).
SEC. 614. EXTENSION AND FLEXIBILITY FOR CERTAIN ALLOCATED SURFACE
TRANSPORTATION PROGRAMS.
(a) Modification of Allocation Rules.--Section 411(d) of the
Surface Transportation Extension Act of 2010 (Public Law 111-147; 124
Stat. 80) is amended--
(1) in paragraph (1)--
(A) in the matter preceding subparagraph (A)--
(i) by striking ``1301, 1302,''; and
(ii) by striking ``1198, 1204,''; and
(B) in subparagraph (A)--
(i) in the matter preceding clause (i) by
striking ``apportioned under sections 104(b)
and 144 of title 23, United States Code,'' and
inserting ``specified in section 105(a)(2) of
title 23, United States Code (except the high
priority projects program),''; and
(ii) in clause (ii) by striking
``apportioned under such sections of such
Code'' and inserting ``specified in such
section 105(a)(2) (except the high priority
projects program)'';
(2) in paragraph (2)--
(A) in the matter preceding subparagraph (A)--
(i) by striking ``1301, 1302,''; and
(ii) by striking ``1198, 1204,''; and
(B) in subparagraph (A)--
(i) in the matter preceding clause (i) by
striking ``apportioned under sections 104(b)
and 144 of title 23, United States Code,'' and
inserting ``specified in section 105(a)(2) of
title 23, United States Code (except the high
priority projects program),''; and
(ii) in clause (ii) by striking
``apportioned under such sections of such
Code'' and inserting ``specified in such
section 105(a)(2) (except the high priority
projects program)''; and
(3) by adding at the end the following:
``(5) Projects of national and regional significance and
national corridor infrastructure improvement programs.--
``(A) Redistribution among states.--Notwithstanding
sections 1301(m) and 1302(e) of SAFETEA-LU (119 Stat.
1202 and 1205), the Secretary shall apportion funds
authorized to be appropriated under subsection (b) for
the projects of national and regional significance
program and the national corridor infrastructure
improvement program among all States such that each
State's share of the funds so apportioned is equal to
the State's share for fiscal year 2009 of funds
apportioned or allocated for the programs specified in
section 105(a)(2) of title 23, United States Code.
``(B) Distribution among programs.--Funds
apportioned to a State pursuant to subparagraph (A)
shall be--
``(i) made available to the State for the
programs specified in section 105(a)(2) of
title 23, United States Code (except the high
priority projects program), and in the same
proportion for each such program that--
``(I) the amount apportioned to the
State for that program for fiscal year
2009; bears to
``(II) the amount apportioned to
the State for fiscal year 2009 for all
such programs; and
``(ii) administered in the same manner and
with the same period of availability as funding
is administered under programs identified in
clause (i).''.
(b) Expenditure Authority From Highway Trust Fund.--Paragraph (1)
of section 9503(c) of the Internal Revenue Code of 1986 is amended by
striking ``Surface Transportation Extension Act of 2010'' and inserting
``American Jobs and Closing Tax Loopholes Act of 2010''.
(c) Effective Date.--The amendments made by this section shall take
effect upon the date of enactment of the Surface Transportation
Extension Act of 2010 (Public Law 111-147; 124 Stat. 78 et seq.) and
shall be treated as being included in that Act at the time of the
enactment of that Act.
(d) Savings Clause.--
(1) In general.--For fiscal year 2010 and for the period
beginning on October 1, 2010, and ending on December 31, 2010,
the amount of funds apportioned to each State under section
411(d) of the Surface Transportation Extension Act of 2010
(Public Law 111-147) that is determined by the amount that the
State received or was authorized to receive for fiscal year
2009 to carry out the projects of national and regional
significance program and national corridor infrastructure
improvement program shall be the greater of--
(A) the amount that the State was authorized to
receive under section 411(d) of the Surface
Transportation Extension Act of 2010 with respect to
each such program according to the provisions of that
Act, as in effect on the day before the date of
enactment of this Act; or
(B) the amount that the State is authorized to
receive under section 411(d) of the Surface
Transportation Extension Act of 2010 with respect to
each such program pursuant to the provisions of that
Act, as amended by the amendments made by this section.
(2) Obligation authority.--For fiscal year 2010, the amount
of obligation authority distributed to each State shall be the
greater of--
(A) the amount that the State was authorized to
receive pursuant to section 120(a)(4)(A) (as it
pertains to the Appalachian Development Highway System
program) of title I of division A of the Consolidated
Appropriations Act, 2010 (Public Law 111-117) and
sections 120(a)(4)(B) and 120(a)(6) of such title, as
of the day before the date of enactment of this Act; or
(B) the amount that the State is authorized to
receive pursuant to section 120(a)(4)(A) (as it
pertains to the Appalachian Development Highway System
program) of title I of division A of the Consolidated
Appropriations Act, 2010 (Public Law 111-117) and
sections 120(a)(4)(B) and 120(a)(6) of such title, as
of the date of enactment of this Act.
(3) Authorization of appropriations.--There is authorized
to be appropriated out of the Highway Trust Fund (other than
the Mass Transit Account) such sums as may be necessary to
carry out this subsection.
(4) Increase in obligation limitation.--The limitation
under the heading ``Federal-aid Highways (Limitation on
Obligations) (Highway Trust Fund)'' in Public Law 111-117 is
increased by such sums as may be necessary to carry out this
subsection.
(5) Contract authority.--Funds made available to carry out
this subsection shall be available for obligation and
administered in the same manner as if such funds were
apportioned under chapter 1 of title 23, United States Code.
(6) Amounts.--The dollar amount specified in section
105(d)(1) of title 23, United States Code, the dollar amount
specified in section 120(a)(4)(B) of title I of division A of
the Consolidated Appropriations Act, 2010 (Public Law 111-117),
and the dollar amount specified in section 120(b)(10) of such
title shall each be increased as necessary to carry out this
subsection.
SEC. 615. COMMUNITY COLLEGE AND CAREER TRAINING GRANT PROGRAM.
(a) In General.--Section 278(a) of the Trade Act of 1974 (19 U.S.C.
2372(a)) is amended by adding at the end the following:
``(3) Rule of construction.--For purposes of this section,
any reference to `workers', `workers eligible for training
under section 236', or any other reference to workers under
this section shall be deemed to include individuals who are, or
are likely to become, eligible for unemployment compensation as
defined in section 85(b) of the Internal Revenue Code of 1986,
or who remain unemployed after exhausting all rights to such
compensation.''.
(b) Definition of Eligible Institution.--Section 278(b)(1) of the
Trade Act of 1974 (19 U.S.C. 2372(b)(1)) is amended--
(1) by striking ``section 102'' and inserting ``section
101(a)''; and
(2) by striking ``1002'' and inserting ``1001(a)''.
(c) Authorization of Appropriations.--Section 279 of the Trade Act
of 1974 (19 U.S.C. 2372a) is amended--
(1) in subsection (a), by striking the last sentence; and
(2) by adding at the end the following:
``(c) Administrative and Related Costs.--The Secretary may retain
not more than 5 percent of the funds appropriated under subsection (b)
for each fiscal year to administer, evaluate, and establish reporting
systems for the Community College and Career Training Grant program
under section 278.
``(d) Supplement Not Supplant.--Funds appropriated under subsection
(b) shall be used to supplement and not supplant other Federal, State,
and local public funds expended to support community college and career
training programs.
``(e) Availability.--Funds appropriated under subsection (b) shall
remain available for the fiscal year for which the funds are
appropriated and the subsequent fiscal year.''.
SEC. 616. EXTENSIONS OF DUTY SUSPENSIONS ON COTTON SHIRTING FABRICS AND
RELATED PROVISIONS.
(a) Extensions.--Each of the following headings of the Harmonized
Tariff Schedule of the United States is amended by striking the date in
the effective date column and inserting ``12/31/2013'':
(1) Heading 9902.52.08 (relating to woven fabrics of
cotton).
(2) Heading 9902.52.09 (relating to woven fabrics of
cotton).
(3) Heading 9902.52.10 (relating to woven fabrics of
cotton).
(4) Heading 9902.52.11 (relating to woven fabrics of
cotton).
(5) Heading 9902.52.12 (relating to woven fabrics of
cotton).
(6) Heading 9902.52.13 (relating to woven fabrics of
cotton).
(7) Heading 9902.52.14 (relating to woven fabrics of
cotton).
(8) Heading 9902.52.15 (relating to woven fabrics of
cotton).
(9) Heading 9902.52.16 (relating to woven fabrics of
cotton).
(10) Heading 9902.52.17 (relating to woven fabrics of
cotton).
(11) Heading 9902.52.18 (relating to woven fabrics of
cotton).
(12) Heading 9902.52.19 (relating to woven fabrics of
cotton).
(13) Heading 9902.52.20 (relating to woven fabrics of
cotton).
(14) Heading 9902.52.21 (relating to woven fabrics of
cotton).
(15) Heading 9902.52.22 (relating to woven fabrics of
cotton).
(16) Heading 9902.52.23 (relating to woven fabrics of
cotton).
(17) Heading 9902.52.24 (relating to woven fabrics of
cotton).
(18) Heading 9902.52.25 (relating to woven fabrics of
cotton).
(19) Heading 9902.52.26 (relating to woven fabrics of
cotton).
(20) Heading 9902.52.27 (relating to woven fabrics of
cotton).
(21) Heading 9902.52.28 (relating to woven fabrics of
cotton).
(22) Heading 9902.52.29 (relating to woven fabrics of
cotton).
(23) Heading 9902.52.30 (relating to woven fabrics of
cotton).
(24) Heading 9902.52.31 (relating to woven fabrics of
cotton).
(b) Extension of Duty Refunds and Pima Cotton Trust Fund;
Modification of Affidavit Requirements.--Section 407 of title IV of
division C of the Tax Relief and Health Care Act of 2006 (Public Law
109-432; 120 Stat. 3060) is amended--
(1) in subsection (b)--
(A) in paragraph (1), by striking ``amounts
determined by the Secretary'' and all that follows
through ``5208.59.80'' and inserting ``amounts received
in the general fund that are attributable to duties
received since January 1, 2004, on articles classified
under heading 5208''; and
(B) in paragraph (2), by striking ``October 1,
2008'' and inserting ``December 31, 2013'';
(2) in subsection (d)--
(A) in the matter preceding paragraph (1), by
inserting ``annually'' after ``provided''; and
(B) in paragraph (1), by inserting ``during the
year in which the affidavit is filed and'' after
``imported cotton fabric''; and
(3) in subsection (f)--
(A) in the matter preceding paragraph (1), by
inserting ``annually'' after ``provided''; and
(B) in paragraph (1), by inserting ``during the
year in which the affidavit is filed and'' after
``United States''.
(c) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act and apply with respect
to affidavits filed on or after such date of enactment.
SEC. 617. MODIFICATION OF WOOL APPAREL MANUFACTURERS TRUST FUND.
(a) In General.--Section 4002(c)(2)(A) of the Miscellaneous Trade
and Technical Corrections Act of 2004 (Public Law 108-429; 118 Stat.
2600) is amended by striking ``chapter 51'' and inserting ``chapter
62''.
(b) Full Restoration of Payment Levels in Fiscal Year 2010.--
(1) Transfer of amounts.--
(A) In general.--Not later than 30 days after the
date of the enactment of this Act, the Secretary of the
Treasury shall transfer to the Wool Apparel
Manufacturers Trust Fund, out of the general fund of
the Treasury of the United States, amounts determined
by the Secretary of the Treasury to be equivalent to
amounts received in the general fund that are
attributable to the duty received on articles
classified under chapter 62 of the Harmonized Tariff
Schedule of the United States, subject to the
limitation in subparagraph (B).
(B) Limitation.--The Secretary of the Treasury
shall not transfer more than the amount determined by
the Secretary to be necessary for--
(i) U.S. Customs and Border Protection to
make payments to eligible manufacturers under
section 4002(c)(3) of the Miscellaneous Trade
and Technical Corrections Act of 2004 so that
the amount of such payments, when added to any
other payments made to eligible manufacturers
under section 4002(c)(3) of such Act for
calendar year 2010, equal the total amount of
payments authorized to be provided to eligible
manufacturers under section 4002(c)(3) of such
Act for calendar year 2010; and
(ii) the Secretary of Commerce to provide
grants to eligible manufacturers under section
4002(c)(6) of the Miscellaneous Trade and
Technical Corrections Act of 2004 so that the
amounts of such grants, when added to any other
grants made to eligible manufacturers under
section 4002(c)(6) of such Act for calendar
year 2010, equal the total amount of grants
authorized to be provided to eligible
manufacturers under section 4002(c)(6) of such
Act for calendar year 2010.
(2) Payment of amounts.--U.S. Customs and Border Protection
shall make payments described in paragraph (1) to eligible
manufacturers not later than 30 days after such transfer of
amounts from the general fund of the Treasury of the United
States to the Wool Apparel Manufacturers Trust Fund. The
Secretary of Commerce shall promptly provide grants described
in paragraph (1) to eligible manufacturers after such transfer
of amounts from the general fund of the Treasury of the United
States to the Wool Apparel Manufacturers Trust Fund.
(c) Rule of Construction.--The amendment made by subsection (a)
shall not be construed to affect the availability of amounts
transferred to the Wool Apparel Manufacturers Trust Fund before the
date of the enactment of this Act.
SEC. 618. DEPARTMENT OF COMMERCE STUDY.
Not later than 180 days after the date of enactment of this Act,
the Secretary of Commerce shall report to Congress detailing--
(1) the pattern of job loss in the New England, Mid-
Atlantic, and Midwest States over the past 20 years;
(2) the role of the off-shoring of manufacturing jobs in
overall job loss in the regions; and
(3) recommendations to attract industries and bring jobs to
the region.
SEC. 619. ARRA PLANNING AND REPORTING.
Section 1512 of the American Recovery and Reinvestment Act of 2009
(Public Law 111-5; 123 Stat. 287) is amended--
(1) in subsection (d)--
(A) in the subsection heading, by inserting ``Plans
and'' after ``Agency'';
(B) by striking ``Not later than'' and inserting
the following:
``(1) Definition.--In this subsection, the term `covered
program' means a program for which funds are appropriated under
this division--
``(A) in an amount that is--
``(i) more than $2,000,000,000; and
``(ii) more than 150 percent of the funds
appropriated for the program for fiscal year
2008; or
``(B) that did not exist before the date of
enactment of this Act.
``(2) Plans.--Not later than July 1, 2010, the head of each
agency that distributes recovery funds shall submit to Congress
and make available on the website of the agency a plan for each
covered program, which shall, at a minimum, contain--
``(A) a description of the goals for the covered
program using recovery funds;
``(B) a discussion of how the goals described in
subparagraph (A) relate to the goals for ongoing
activities of the covered program, if applicable;
``(C) a description of the activities that the
agency will undertake to achieve the goals described in
subparagraph (A);
``(D) a description of the total recovery funding
for the covered program and the recovery funding for
each activity under the covered program, including
identifying whether the activity will be carried out
using grants, contracts, or other types of funding
mechanisms;
``(E) a schedule of milestones for major phases of
the activities under the covered program, with planned
delivery dates;
``(F) performance measures the agency will use to
track the progress of each of the activities under the
covered program in meeting the goals described in
subparagraph (A), including performance targets, the
frequency of measurement, and a description of the
methodology for each measure;
``(G) a description of the process of the agency
for the periodic review of the progress of the covered
program towards meeting the goals described in
subparagraph (A); and
``(H) a description of how the agency will hold
program managers accountable for achieving the goals
described in subparagraph (A).
``(3) Reports.--
``(A) In general.--Not later than''; and
(C) by adding at the end the following:
``(B) Reports on plans.--Not later than 30 days
after the end of the calendar quarter ending September
30, 2010, and every calendar quarter thereafter during
which the agency obligates or expends recovery funds,
the head of each agency that developed a plan for a
covered program under paragraph (2) shall submit to
Congress and make available on a website of the agency
a report for each covered program that--
``(i) discusses the progress of the agency
in implementing the plan;
``(ii) describes the progress towards
achieving the goals described in paragraph
(2)(A) for the covered program;
``(iii) discusses the status of each
activity carried out under the covered program,
including whether the activity is completed;
``(iv) details the unobligated and
unexpired balances and total obligations and
outlays under the covered program;
``(v) discusses--
``(I) whether the covered program
has met the milestones for the covered
program described in paragraph (2)(E);
``(II) if the covered program has
failed to meet the milestones, the
reasons why; and
``(III) any changes in the
milestones for the covered program,
including the reasons for the change;
``(vi) discusses the performance of the
covered program, including--
``(I) whether the covered program
has met the performance measures for
the covered program described in
paragraph (2)(F);
``(II) if the covered program has
failed to meet the performance
measures, the reasons why; and
``(III) any trends in information
relating to the performance of the
covered program; and
``(vii) evaluates the ability of the
covered program to meet the goals of the
covered program given the performance of the
covered program.'';
(2) in subsection (f)--
(A) by striking ``Within 180 days'' and inserting
the following:
``(1) In general.--Within 180 days''; and
(B) by adding at the end the following:
``(2) Penalties.--
``(A) In general.--Subject to subparagraphs (B),
(C), and (D), the Attorney General may bring a civil
action in an appropriate United States district court
against a recipient of recovery funds from an agency
that does not provide the information required under
subsection (c) or knowingly provides information under
subsection (c) that contains a material omission or
misstatement. In a civil action under this paragraph,
the court may impose a civil penalty on a recipient of
recovery funds in an amount not more than $250,000. Any
amounts received from a civil penalty under this
paragraph shall be deposited in the general fund of the
Treasury.
``(B) Notification.--
``(i) In general.--The head of an agency
shall provide a written notification to a
recipient of recovery funds from the agency
that fails to provide the information required
under subsection (c). A notification under this
subparagraph shall provide the recipient with
information on how to comply with the necessary
reporting requirements and notice of the
penalties for failing to do so.
``(ii) Limitation.--A court may not impose
a civil penalty under subparagraph (A) relating
to the failure to provide information required
under subsection (c) if, not later than 31 days
after the date of the notification under clause
(i), the recipient of the recovery funds
provides the information.
``(C) Considerations.--In determining the amount of
a penalty under this paragraph for a recipient of
recovery funds, a court shall consider--
``(i) the number of times the recipient has
failed to provide the information required
under subsection (c);
``(ii) the amount of recovery funds
provided to the recipient;
``(iii) whether the recipient is a
government, nonprofit entity, or educational
institution; and
``(iv) whether the recipient is a small
business concern (as defined under section 3 of
the Small Business Act (15 U.S.C. 632)), with
particular consideration given to businesses
with not more than 50 employees.
``(D) Applicability.--This paragraph shall apply to
any report required to be submitted on or after the
date of enactment of this paragraph.
``(E) Nonexclusivity.--The imposition of a civil
penalty under this subsection shall not preclude any
other criminal, civil, or administrative remedy
available to the United States or any other person
under Federal or State law.
``(3) Technical assistance.--Each agency distributing
recovery funds shall provide technical assistance, as
necessary, to assist recipients of recovery funds in complying
with the requirements to provide information under subsection
(c), which shall include providing recipients with a reminder
regarding each reporting requirement.
``(4) Public listing.--
``(A) In general.--Not later than 45 days after the
end of each calendar quarter, and subject to the
notification requirements under paragraph (2)(B), the
Board shall make available on the website established
under section 1526 a list of all recipients of recovery
funds that did not provide the information required
under subsection (c) for the calendar quarter.
``(B) Contents.--A list made available under
subparagraph (A) shall, for each recipient of recovery
funds on the list, include the name and address of the
recipient, the identification number for the award, the
amount of recovery funds awarded to the recipient, a
description of the activity for which the recovery
funds were provided, and, to the extent known by the
Board, the reason for noncompliance.
``(5) Regulations and reporting.--
``(A) Regulations.--Not later than 90 days after
the date of enactment of this paragraph, the Attorney
General, in consultation with the Director of the
Office of Management and Budget and the Chairperson,
shall promulgate regulations regarding implementation
of this section.
``(B) Reporting.--
``(i) In general.--Not later than July 1,
2010, and every 3 months thereafter, the
Director of the Office of Management and
Budget, in consultation with the Chairperson,
shall submit to Congress a report on the extent
of noncompliance by recipients of recovery
funds with the reporting requirements under
this section.
``(ii) Contents.--Each report submitted
under clause (i) shall include--
``(I) information, for the quarter
and in total, regarding the number and
amount of civil penalties imposed and
collected under this subsection, sorted
by agency and program;
``(II) information on the steps
taken by the Federal Government to
reduce the level of noncompliance; and
``(III) any other information
determined appropriate by the
Director.''; and
(3) by adding at the end the following:
``(i) Termination.--The reporting requirements under this section
shall terminate on September 30, 2013.''.
TITLE VII--BUDGETARY PROVISIONS
SEC. 701. BUDGETARY PROVISIONS.
(a) Statutory Paygo.--The budgetary effects of this Act, for the
purpose of complying with the Statutory Pay-As-You-Go Act of 2010,
shall be determined by reference to the latest statement titled
`Budgetary Effects of PAYGO Legislation' for this Act, jointly
submitted for printing in the Congressional Record by the Chairmen of
the House and Senate Budget Committees, provided that such statement
has been submitted prior to the vote on passage in the House acting
first on this conference report or amendment between the Houses.
(b) Emergency Designations.--Sections 501, 511, and 516--
(1) are designated as an emergency requirement pursuant to
section 4(g) of the Statutory Pay-As-You-Go Act of 2010 (Public
Law 111-139; 2 U.S.C. 933(g));
(2) in the House of Representatives, are designated as an
emergency for purposes of pay-as-you-go principles; and
(3) in the Senate, are designated as an emergency
requirement pursuant to section 403(a) of S. Con. Res. 13
(111th Congress), the concurrent resolution on the budget for
fiscal year 2010.
Attest:
Clerk.
111th CONGRESS
2d Session
H.R. 4213
_______________________________________________________________________
HOUSE AMENDMENT TO SENATE AMENDMENT