[House Document 112-53]
[From the U.S. Government Publishing Office]
112th Congress, 1st Session - - - - - - - - - - - - - House Document 112-53
THE ``AMERICAN JOBS ACT OF 2011'' LEGISLATIVE PROPOSAL
__________
MESSAGE
from
THE PRESIDENT OF THE UNITED STATES
transmitting
A LEGISLATIVE PROPOSAL ENTITLED THE ``AMERICAN JOBS ACT OF 2011''
September 13, 2011.--Message and accompanying papers referred to the
Committees on Education and the Workforce, Energy and Commerce,
Financial Services, House Administration, the Judiciary, Oversight and
Government Reform, Rules, Science, Space, and Technology, Small
Business, Transportation and Infrastructure, and Ways and Means and
ordered to be printed
To the Congress of the United States:
Today, I am pleased to submit to the Congress the enclosed
legislative proposal, the ``American Jobs Act of 2011,''
together with a section-by-section analysis of the legislation.
The American people understand that the economic crisis and
the deep recession were not created overnight and will not be
solved overnight. The economic security of the middle class has
been under attack for decades. That is why I believe we need to
do more than just recover from this economic crisis--we need to
rebuild the economy the American way, based on balance,
fairness, and the same set of rules for everyone from Wall
Street to Main Street. We can work together to create the jobs
of the future by helping small business entrepreneurs, by
investing in education, and by making things the world buys.
To create jobs, I am submitting the American Jobs Act of
2011--nearly all of which is made up of the kinds of proposals
supported by both Republicans and Democrats, and that the
Congress should pass right away to get the economy moving now.
The purpose of the American Jobs Act of 2011 is simple: put
more people back to work and put more money in the pockets of
working Americans. And it will do so without adding a dime to
the deficit.
First, the American Jobs Act of 2011 provides a tax cut for
small businesses, to help them hire and expand now, and an
additional tax cut to any business that hires or increases
wages. In addition, the American Jobs Act of 2011 puts more
money in the pockets of working and middle class Americans by
cutting in half the payroll tax that comes out of the paycheck
of every worker, saving typical families an average of $1,500 a
year.
Second, the American Jobs Act of 2011 puts more people back
to work, including teachers laid off by State budget cuts,
first responders and veterans coming back from Iraq and
Afghanistan, and construction workers repairing crumbling
bridges, roads and more than 35,000 schools, with projects
chosen by need and impact, not earmarks and politics. It will
repair and refurbish hundreds of thousands of foreclosed homes
and businesses in communities across the country.
Third, the American Jobs Act of 2011 helps out-of-work
Americans by extending unemployment benefits to help them
support their families while looking for work, and by reforming
the system with training programs that build real skills,
connect to real jobs, and help the long-term unemployed. It
bans employers from discriminating against the unemployed when
hiring, and provides a new tax credit to employers hiring
workers who have been out of a job for over 6 months. And, it
expands job opportunities for hundreds of thousands of low
income youth and adults through a new Pathways Back to Work
Fund that supports summer and year round jobs for youth;
innovative new job training programs to connect low-income
workers to jobs quickly; and successful programs to encourage
employers to bring on disadvantaged workers.
Lastly, this legislation is fully paid for. The legislation
includes specific offsets to close corporate tax loopholes and
asks the wealthiest Americans to pay their fair share that more
than cover the cost of the jobs measures. The legislation also
increases the deficit reduction target for the Joint Committee
by the amount of the cost of the jobs package and specifies
that, if the Committee reaches that higher target, then their
measures would replace and turn off the specific offsets in
this legislation.
I urge the prompt and favorable consideration of this
proposal.
Barack Obama.
The White House, September 12, 2011.
Section-by-Section Analysis and Explanation of the ``American Jobs Act
of 2011''
Section 1--Short Title; Table of Contents. This section
provides that the bill may be cited as the ``American Jobs Act
of 2011'' and includes a table of contents for the bill.
Section 2--References. This section specifies that
generally any reference to ``this Act'' contained in any
subtitle of the bill refers only to the provisions of that
subtitle.
Section 3--Severability. This section specifies that, if
any provision of the bill is held invalid, the remainder of the
bill is not affected.
Section 4--Buy American--Use of American Iron, Steel, and
Manufactured Goods. This section provides for the use of
American iron, steel and manufactured goods, except in certain
instances.
Section 5--Wage Rate Requirements. This section provides
for specific wage rate requirements. All laborers and mechanics
employed by contractors and subcontractors on projects funded
directly by or assisted in whole or in part by and through the
Federal government pursuant to the American Jobs Act of 2011
would have to be paid not less than the wages prevailing in the
locality for similar projects as determined by the Secretary of
Labor in accordance with the Davis-Bacon Act.
TITLE I--TAX RELIEF FOR WORKERS AND BUSINESSES
SUBTITLE A--PAYROLL TAX RELIEF
Section 101--Temporary Payroll Tax Cut for Employers,
Employees, and the Self-Employed. This section extends and
expands the existing temporary reduction in payroll taxes. For
calendar year 2012, it: (a) further reduces the Old Age,
Survivors and Disability Insurance (social security) portion of
the payroll tax that was paid by employees during 2011 from 4.2
percent (reflecting the existing 2 percent temporary reduction
from the permanent rate) to 3.1 percent; and (b) adds a new
reduction in the portion of this tax that is paid by employers
from 6.2 percent to 3.1 percent. The employer reduction applies
to up to $5 million of wages that are paid by the employer.
With limited exceptions, the reduction in amounts paid by
employers is available to all employers, whether private
businesses or tax-exempt organizations. The employer reduction
is not available, however, to Federal, State and local
government employers (other than State colleges and
universities) or with respect to household workers. This
section contains equivalent reductions for individuals subject
to self-employment taxes. Transfers from general revenues are
provided to protect the social security trust fund.
Section 102--Temporary Tax Credit for Increased Payroll.
For the last quarter of 2011 and for calendar year 2012, the
proposal provides a payroll tax credit that fully offsets the
employer social security tax that otherwise would apply to
increases in wages from the corresponding period of the prior
year. For example, if an employer paid wages subject to social
security tax of $5 million in 2011 and $6 million in 2012, the
credit to which the employer would be entitled would eliminate
the employer's portion of social security taxes on the $1
million of increased wages. The credit would be available on up
to $50 million of an employer's increased wages. Generally, the
credit is available to all employers, whether private
businesses or tax-exempt organizations, but would not be
available to Federal, State and local government employers
(other than State colleges and universities) or with respect to
household workers. Transfers from general revenues are provided
to protect the social security trust fund.
SUBTITLE B--OTHER RELIEF FOR BUSINESSES
Section 111--Extension of Temporary 100 Percent Bonus
Depreciation for Certain Business Assets. Under current law,
businesses generally are allowed to immediately deduct 100
percent of the cost of qualified property placed in service in
2011 and 50 percent of the cost of such property placed in
service in 2012. To encourage additional capital investment,
this section extends the ability of businesses to deduct 100
percent of the cost of qualified property through the end of
2012.
Section 112--Surety Bonds. Subsection (a) temporarily
increases the size of contract surety bond that the Small
Business Administration (SBA) can guarantee from $2,000,000 to
$5,000,000. This will make it easier for small businesses to
take advantage of contracting opportunities generated by the
American Jobs Act's proposed infrastructure investments.
Subsection (b) amends the section of the Small Business
Investment Act that limits liability for surety bond guarantees
in situations when the guarantee was obtained by fraud or
material misrepresentation, the surety has breached a material
item of the guarantee agreement, or the surety has violated
SBA's surety bond regulations, in order to make that section
consistent with the higher surety bond guarantee limit.
Subsection (c) provides that the increased surety loan size
will sunset at the end of fiscal year 2012. Subsection (d)
provides $3,000,000 in mandatory funding to the Surety Bond
Guarantees Revolving Fund to cover the estimated cost of this
section.
Section 113--Delay in Application of Withholding on
Government Contractors. This section would delay the effective
date of the requirement that governmental entities withhold at
a 3 percent rate from payments to persons providing certain
property or services. Under this section, this withholding
requirement would apply to payments made after December 31,
2013.
TITLE II--PUTTING WORKERS BACK ON THE JOB WHILE REBUILDING AND
MODERNIZING AMERICA
SUBTITLE A--VETERANS HIRING PREFERENCES
Section 201--Returning Heroes and Wounded Warriors Work
Opportunity Tax Credits. Under current law, employers that hire
veterans who have been unemployed for at least 6 months and
have a service-connected disability are eligible for a maximum
tax credit of $4,800. This section increases the amount of that
credit to $9,600. This section also creates two new hiring
credits for veterans. The first is a credit of $2,400 for
employers that hire veterans who have been unemployed for at
least 4 weeks. The second is credit of $5,600 for veterans who
have been unemployed for at least 6 months. Under this section,
these credits are also available to tax-exempt entities and
public universities. Finally, this section authorizes the
Secretary of the treasury to provide alternative methods for
certifying a veteran's unemployed status.
SUBTITLE B--TEACHER STABILIZATION
Section 202--Purpose. This section establishes the purpose
of this subtitle as the prevention of teacher layoffs and
creation of additional jobs in public early childhood,
elementary, and secondary education.
Section 203--Grants for the Outlying Areas and the
Secretary of the Interior; Availability of Funds. This section
reserves, from the amount provided in section 212, up to one-
half of one percent for outlying areas and up to one-half of
one percent for Bureau of Indian Education (BIE) schools, and
allow the Secretary to reserve up to $2,000,000 for
administration and oversight. Under subsection (b), funds
provided in section 212 would be made available to the
Secretary until September 30, 2012.
Section 204--State Allocation. This section allocates the
remaining funds to the States based on population, through a
grant to the Governor of each State who submits an approvable
application. Under subsection (c), if a Governor does not
submit an approvable application, the Secretary of Education
would distribute those funds to other entities in the State,
provided the Governor assures maintenance of effort for fiscal
years 2012 and 2013. Under subsection (d), the Secretary would
reallocate funds to the remaining States if a State does not
receive funding or receives only 50 percent of its allocation.
Section 205--State Application. This section allows
Governors 30 days from the enactment of the Act to submit an
application for a grant.
Section 206--State Reservation and Responsibilities. This
section authorizes States to reserve 10 percent of their grants
for State-funded preschool programs and to reserve 2 percent
for administrative costs. Subsection (b) would require States
to support early, elementary, and secondary education by
distributing the remaining grant funds to local educational
agencies (LEAs) no later than 100 days after receiving a grant.
Subsection (c) prohibits a State from using the funds to
support a rainy-day fund or reduce debt obligations.
Section 207--Local Educational Agencies. This section
limits the use of funds by local educational agencies to those
necessary to retain existing employees, rehire former
employees, or hire new employees to provide early, elementary,
or secondary educational and related services and excludes the
use of funds for general administrative expenses. It also
requires the funds to be obligated by September 30, 2013.
Section 208--Early Learning. This section limits the use of
funds by State-funded preschool programs to those necessary to
retain early childhood educators, recall or rehire former early
childhood educators, or hire new early childhood educators to
provide early learning services, and requires the funds to be
obligated by September 30, 2013.
Section 209--Maintenance of Effort. This section of the
bill requires a State to provide an assurance to the Secretary
that, for fiscal years 2012 and 2013, the State will maintain
State support for early childhood, elementary, and secondary
education and public institutions of higher education at the
same level of support as the previous fiscal year or higher.
Subsection (b) allows the Secretary to waive this maintenance
of effort requirement in the event of exceptional or
uncontrollable circumstances, or a precipitous decline in the
financial resources of the State.
Section 210--Reporting. This section requires each State
that receives a grant under this part to submit, on an annual
basis, a report to the Secretary that contains a description of
how funds received were expended or obligated, and an estimate
of the number of jobs supported by the State using funds
received under this subtitle.
Section 211--Definitions. This section defines the terms
used in Subtitle B.
Section 212--Authorization of Appropriations. This section
authorizes and appropriates $30,000,000,000 to carry out this
subtitle for fiscal year 2012.
SUBTITLE C--FIRST RESPONDER STABILIZATION
Section 213--Purpose. This section indicates that the
purpose of this subtitle is to provide funding to States and
localities to prevent layoffs and support the creation of
additional jobs for law enforcement officers and other first
responders.
Section 214--Grant Program. This section provides authority
for the Attorney General to carry out a competitive grant
program as authorized by section 1701 of title I of the Omnibus
Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796dd)
to support hiring, rehiring, and retention of career law
enforcement officers. This section further waives the
requirements of subsections (g) and (i) of section 1701 and
section 1704 of such Act (42 U.S.C. 3796dd-3(c)), which limit
the Federal contribution for grants to 75 percent, terminate
the authority to hire and rehire law enforcement officers after
September 13, 2000, and limit annual salaries and benefits paid
for by the grants to $75,000.
Section 215--Appropriations. This section makes available
$5,000,000,000 to carry out the program identified in section
214 for fiscal year 2012, permitting funds to remain available
through September 30, 2012. This section further authorizes the
transfer of $1,000,000,000 of this funding to the Department of
Homeland Security to provide for competitive grants to support
the hiring of first responder personnel, as authorized by 15
U.S.C. 2201 et seq., and to carry out section 34 of that Act
(15 U.S.C. 2229a). This section also permits the Secretary to
waive the requirements of subsections (a)(1)(A), (a)(1)(B),
(a)(1)(E), (c)(1), (c)(2), and (c)(4)(A) of section 34, which,
among other requirements, would limit the use of the funds as
well as the duration of availability and funding amounts of
grants. This section further permits that up to $8,000,000 of
the amounts made available to the Department of Justice to be
used for program administration, and up to $2,000,000 of
amounts made available to the Department of Homeland Security
may be used for program administration.
SUBTITLE D--SCHOOL MODERNIZATION
Part I--Elementary and Secondary Schools
Section 221--Purpose. This section states that the purpose
of Subtitle D is to provide assistance for the modernization,
renovation, and repair of elementary and secondary school
buildings in public school districts across America, in order
to support the achievement of improved educational outcomes in
those schools.
Section 222--Authorization of Appropriations. This section
authorizes and appropriates $25,000,000,000, which would be
available for obligation until September 30, 2012, to carry out
this part.
Section 223--Allocation of Funds. This section reserves
one-half of one percent of the appropriated funds for BIE
schools and outlying areas. It also permits funds to be
reserved for a National Center for Education Statistics (NCES)
survey on public school modernization, renovation, and repair
needs. This section also allocates funds to the 100 LEAs with
the largest numbers of children living in poverty, and provides
for the remainder of funds to be allocated to States in
proportion to their respective allocations under Part A of
Title I of the Elementary and Secondary Education Act (ESEA)
for fiscal year 2011.
Section 224--State Use of Funds. This section allows a
State to reserve no more than 1 percent (with a maximum of
$750,000) for grant administration. It would also require
States to allocate at least 50 percent of their funds to LEAs
(other than those 100 LEAs described in section 1203(b)) based
on their respective allocations under Part A of Title I of the
ESEA for FY2011, with a minimum grant of $10,000. This section
also authorizes States to use any remaining funds for grants to
LEAs as needed, with priority to rural LEAs.
Section 225--State and Local Applications. This section
describes State and local application requirements.
Section 226--Use of Funds. This section provides for the
use of funds under this part.
Section 227--Private Schools. This section allows certain
private, nonprofit elementary or secondary schools to be
eligible to receive program services for limited purposes,
including meeting requirements of the Americans with
Disabilities Act and the Rehabilitation Act.
Section 228--Additional Provisions. This section makes
funds appropriated under this Part available to LEAs for
obligation for 24 months, and allows LEAs to obligate funds for
36 months from the date of enactment. It also states that
section 439 of the General Education Provisions Act (GEPA)
applies to this Part and clarifies that Hawaii, the District of
Columbia, and the Commonwealth of Puerto Rico are not LEAs for
the purpose of receiving direct grants from the Secretary under
subsection 223(b)(1).
Part II--Community College Modernization
Section 229--Federal Assistance for Community College
Modernization. This section authorizes the Secretary of
Education to award grants to States to modernize, renovate, or
repair existing facilities at community colleges. This section
also reserves up to 0.25 percent for grants to Tribally
Controlled Universities and outlying areas and provides for the
Secretary's allocation to each State. It also: (1) allows the
Secretary to reallocate any remaining funds proportionately;
(2) allows a State to reserve 1 percent (up to $750,000) for
grant administration; (3) requires that funds be used to
supplement, and not supplant, other Federal, State, and local
funds that would otherwise be expended to modernize, renovate,
or repair existing community college facilities; (4) lists the
application requirements for States; (5) prohibits the use of
funds under this Part for the payment of routine maintenance
costs, or for construction, modernization, renovation, or
repair of stadiums or facilities used for religious instruction
or worship; (6) requires States to consider ``green projects''
in their funding of subgrants; (7) establishes that section 439
GEPA applies to this part; (8) requires States to report on
their use of funds and job creation; (9) requires the Secretary
of Education to report on grants made; and (10) authorizes and
appropriates $5,000,000,000 for fiscal year 2012, available for
obligation only during the period that ends 36 months after the
date of enactment of this Act.
Part III--General Provisions
Section 230--Definitions. This section defines several
applicable terms used in this subtitle.
Section 231--Buy American. This section establishes that
Section 1605 of Division A of the American Recovery and
Reinvestment Act of 2009 (P.L. 111-5) applies to funds made
available under this subtitle.
SUBTITLE E--IMMEDIATE TRANSPORTATION INFRASTRUCTURE INVESTMENTS
Section 241--Immediate Transportation Infrastructure
Investments. Subsection (a) of this section makes available $2
billion for airport development grants. Grants made available
under the section would have a 100 percent Federal share.
Additionally, this subsection permits 0.3 percent of the
available funds to be used for administrative expenses.
Subsection (b) makes $1 billion available to conduct
research and development and demonstrations and to acquire,
establish, and improve FAA air navigation facilities, systems,
and procedures to advance NextGen.
Subsection (c) provides $27 billion for highway
restoration, repair, and construction projects, as well as
passenger and freight rail transportation projects, distributed
via traditional formulas that were also utilized in the
Recovery Act. A portion of the funds within each State would be
sub-allocated by population areas. To speed project delivery,
the Federal share of project costs would be 100 percent. In
addition, set asides are specifically provided for: (1) Puerto
Rico and territorial highways; (2) Indian reservation roads;
(3) park roads and parkways; (4) forest highways; (5) refuge
roads; and (6) management and oversight, including funding for
State Departments of Transportation planning activities.
Competitive funding is also provided for transportation
training programs, particularly focused on workforce skill
gaps, and disadvantaged business enterprise training
assistance.
Subsection (d) makes available $4 billion for projects to
improve the Nation's existing intercity passenger rail network
and develop new high speed rail corridors. Grants made
available under the section would have a 100 percent Federal
share. The Secretary would be required to issue interim
guidance to applicants detailing the application process and
eligibility criteria, and not less than 85 percent of the funds
awarded shall be for projects supporting the development of
intercity or high speed passenger rail corridors.
Subsection (e) makes available $2 billion to Amtrak for the
repair, rehabilitation, and upgrade of Amtrak's assets and
infrastructure, including rolling stock.
Subsection (f) makes available $3 billion for transit
capital projects, particularly for the purchase of new buses
and for the repair and rehabilitation of existing rail and bus
systems, including rolling stock. To speed project delivery,
the Federal share of project costs would be 100 percent. Of the
funds provided, 80 percent would be apportioned to urbanized
areas with a population of at least 50,000, 10 percent shall be
apportioned to ``Growing States and High Density States'' as
provided in Section 5340 of title 49, and 10 percent shall be
apportioned to non-urbanized areas with populations below
50,000. In addition, within the amount made available for
apportionment to non-urbanized areas, 2.5 percent would be made
available for tribal transit programs as provided in Section
5311(c)(1) of title 49. Funds apportioned to urbanized areas
with a population of at least 50,000, but not more than 200,000
are eligible for both capital and operating assistance. Funds
apportioned to non-urbanized areas are also eligible for
operating assistance.
Subsection (g) makes available $6 billion for capital
projects to modernize existing fixed guideway systems and to
replace and rehabilitate buses and bus facilities. To speed
project delivery, the Federal share of project costs would be
100 percent. To target fixed guideway modernization funding to
the transit systems with the highest need for state of good
repair upgrades, 75 percent of the funds provided will be
apportioned based on fixed guideway revenue vehicle miles and
passenger miles, as provided in Section 5336(b) of Title 49.
The remaining 25 percent shall be available for bus and bus
facilities and shall be apportioned based on formula in Section
5336 other than subsection (b).
Subsection (h) provides $5 billion to award grants on a
competitive basis for projects across all surface
transportation modes that will have a significant impact on the
Nation, a metropolitan area or a region. Provisions require the
Secretary to publish criteria on which to base competition for
the grants within 90 days of enactment, with priority for
distribution of funds given to projects expected to be
completed within three years of the date of enactment of the
Act. This subsection also provides the Secretary the
flexibility to provide other forms of federal credit assistance
for capital investments in surface transportation
infrastructure.
Subsection (i) authorizes the Secretary to establish
standards under which a contract for construction funded under
subsections (a) through (h) of this section may be advertised
that contains ``local hiring'' requirements in some limited
circumstances.
SUBTITLE F--BUILDING AND UPGRADING INFRASTRUCTURE FOR LONG-TERM
DEVELOPMENT
Section 242--Short Title; Table of Contents. The Act is
entitled the Building and Upgrading Infrastructure for Long-
Term Development (BUILD) Act.
Section 243--Findings and Purpose. This section sets forth
findings concerning, among other things, the importance of
infrastructure and investing in infrastructure, the status of
U.S. infrastructure as compared to other nations, and the
issues surrounding our current funding mechanisms. It also sets
forth the purpose of the Act, which is to create an institution
that will mobilize significant private investment in
economically viable infrastructure projects of regional or
national significance in order to create jobs, reduce our
infrastructure deficit, and support U.S. competitiveness.
Section 244--Definitions. In this section-by-section, the
definitions of significant terms are discussed in the sections
below in which they appear.
Part I--American Infrastructure Financing Authority
Section 245--Establishment and General Authority of AIFA.
This section establishes the American Infrastructure Financing
Authority (AIFA) as a wholly-owned government corporation that
will provide direct loans and loan guarantees to facilitate
investment in economically-viable infrastructure projects of
regional or national significance. As set forth in the--
Definitions section of the Act, the term--infrastructure
project includes projects from the transportation, water, and
energy sectors. These sectors, in turn, include highways,
roads, bridges, mass transit, inland waterways, commercial
ports, airports, air traffic control systems, passenger rail,
freight rail, water-waste treatment facilities, storm-water
management systems, dams, solid-waste disposal facilities,
levees, open-space management systems, pollution-reduced energy
generation, transmission and distribution of energy, storage of
energy, and energy-efficiency enhancements for buildings. The
Board of Directors may make changes at its discretion to the
subsectors by a vote of at least five of the voting members of
the Board. This section further provides that AIFA shall be
incorporated on the date of the first meeting of the Board of
Directors, shall maintain and be considered a resident of
Washington, D.C., and shall be exempt from the requirements set
forth in chapter 91 of title 31 related to government
corporations. Finally, this section requires the Secretary of
the Treasury to take such action as may be necessary to assist
AIFA in carrying out the purposes of this Act.
Section 246--Voting Members of the Board of Directors.
AIFA's Board of Directors will consist of seven voting members,
each of whom will have an equal vote and all of whom will be
appointed by the President with the advice and consent of the
Senate. The President will also designate the Chairperson of
the Board. Congressional Leadership (the Majority and Minority
Leaders of the Senate, and the Speaker and Minority Leader of
the House) will submit recommendations to the President after
consulting with the appropriate Congressional committees. No
more than four of the voting members can be from the same
political party. Further, to be eligible to serve on the Board,
the person must be a U.S. citizen and have significant
expertise either in the management and administration of a
relevant financial institution or in the financing,
development, or operation of infrastructure projects. Voting
members will serve a term of four years, except that the
initial terms will be staggered for a subset of the Board.
Voting members will be compensated at the daily equivalent of
the annual rate of basic pay prescribed for level III of the
Executive Schedule under section 5314 of Title 5 for each day
during which the member is engaged in the performance of Board
duties. A board member will not participate in decisions
regarding any AIFA project in which the member has a financial
interest.
Section 247--Chief Executive Officer of AIFA. This section
provides that the President will appoint, with the advice and
consent of the Senate, a Chief Executive Officer of AIFA for a
term of six years. The CEO will be a nonvoting member of the
Board of Directors. To be eligible to serve as CEO, the person
must be a U.S. citizen and have significant expertise in the
management or administration of a financial institution or the
financing and development of infrastructure projects.
Additionally, to be eligible, the candidate must not hold any
other public office or have any interest in an infrastructure
project that is being considered by the Board (unless that
interest is placed in a blind trust). The CEO will be
responsible for all activities of AIFA, including
responsibility for the development of AIFA's internal policies
and responsibility for managing and overseeing AIFA's daily
activities and personnel. More specifically, the CEO will be
responsible for appointing senior management (subject to Board
approval), hiring and terminating all other AIFA personnel,
overseeing AIFA's involvement in the funded projects, and
assessing and recommending in the first instance (subject to
ultimate approval or disapproval by the Board) the compensation
of all AIFA personnel. Although the Board is responsible for
ultimately approving or disapproving loans and loan guarantees
for applying projects, the CEO is responsible, in consultation
with his or her staff, for developing eligible projects for
AIFA support, for preparing the financial assistance packages
for Board approval, and for monitoring any projects that
receive funding. The CEO's compensation recommendations will be
without regard to chapter 51 or subchapter III of chapter 53 of
title 5.
Section 248--Powers and Duties of the Board of Directors.
This section lays out the powers and duties of the Board. It
provides that the Board will be responsible for the ultimate
review and approval of the eligible project applications and
financial packages that are submitted by the CEO and senior
management. The Board will also be responsible for, among other
things, approving or disapproving any senior management
appointed by the CEO, approving CEO-submitted documents
concerning application and lending procedures, approving the
compensation of AIFA personnel, approving business plans,
strategies, and budgets, developing bylaws and conflict of
interest policies, establishing subcommittees of the Board
(including an audit committee), and ensuring that AIFA is
operated in compliance with the Act. In setting and approving
the compensation for the CEO and other AIFA personnel, the
Board will consult with the Office of Personnel Management and
seek to maintain comparability with other comparable federal
personnel. The Board will also have the general authority to
execute and oversee AIFA's contractual agreements, to determine
appropriate expenses and obligations of AIFA, to approve other
forms of credit enhancement that AIFA may provide to eligible
projects consistent with the Act, to sue and be sued in AIFA's
corporate capacity, and to exercise all other lawful powers
that are necessary to carry out AIFA's purposes.
Section 249--Senior Management. Senior management will be
appointed by the CEO, subject to approval by the Board of
Directors, and will serve at the pleasure of the CEO and the
Board. Members of senior management include the Chief Financial
Officer, Chief Risk Officer, Chief Compliance Officer, General
Counsel, Chief Operations Officer, and Chief Lending Officer--
each of whom will report directly to the CEO except for the
Chief Risk Officer, who will report directly to the Board. The
primary function of senior management will be to provide
professional support to the CEO in the discharge of his or her
duties. The section provides that: (1) the Chief Financial
Officer will be responsible for all financial functions of AIFA
except those functions that the Board delegates externally; (2)
the Chief Risk Officer will be responsible for the creation of
financial, credit, and operational risk management guidelines,
the establishment of guidelines to ensure diversification of
lending activities, the monitoring of the financial, credit,
and operational exposure of AIFA, and the development of risk-
management actions; (3) the Chief Compliance Officer will be
responsible for AIFA functions relating to audits and
accounting safeguards; that the General Counsel will be
responsible for legal matters; (4) the Chief Operations Officer
will be responsible for all AIFA operational functions,
including those related to operations generally and human
resources; and (5) the Chief Lending Officer will be
responsible for all functions relating to the development of
project pipelines, the financial structuring of projects, the
selection of infrastructure projects to be reviewed by the
Board, and related functions. The Chief Lending Officer will
also be responsible for creating and managing both a Center for
Excellence to provide technical assistance to public-sector
borrowers and an Office of Rural Assistance to provide
technical assistance for rural infrastructure projects.
Finally, this section prevents members of senior management
from holding any other public office and from having a
financial interest in projects being considered (unless that
interest is placed in a blind trust).
Section 250--Special Inspector General for AIFA. This
section provides that an Inspector General will oversee AIFA's
operations. For the first five years of AIFA's existence,
oversight responsibility will fall to the Inspector General of
the Department of the Treasury. Beginning five years after
enactment of the Act, an Office of the Special Inspector
General for AIFA will be created. The Special IG for AIFA will
be appointed by the President, with the advice and consent of
the Senate. The primary duties of this office will be to
conduct, supervise, and coordinate audits and investigations of
AIFA's business activities. The Inspector General Act of 1978
will apply to the Special IG of AIFA, and the Special IG may
appoint and employ personnel in accordance with Title 5. Other
federal entities, departments, and agencies are obliged to
comply with requests for information from the Special IG of
AIFA. Not later than one year after the confirmation of the
Special IG of AIFA, and every calendar year thereafter, the
Special IG will submit to the President a report of his or her
activities during the previous year.
Section 251--Other Personnel. Except as otherwise provided
in the bylaws of AIFA, the CEO (in consultation with the Board)
shall appoint, remove, and define the duties of such qualified
personnel as are necessary to carry out the duties and purposes
of AIFA. Members of senior management are excluded from this
section, as they are addressed in section 295.
Section 252--Compliance. This section provides that the
provision of financial assistance to projects under this Act
shall not be construed as superseding any provision of State
law or any regulation that is otherwise applicable to an
infrastructure project.
Part II--Terms and Limitations on Direct Loans and Loan Guarantees
Section 253--Eligibility Criteria for Assistance from AIFA
and Terms and Limitations of Loans. Financial assistance under
this Act shall not be provided for any project whose purpose is
private and for which no public benefit is created. Nor will
financial assistance be provided for the refinancing of an
existing project. Applicants are required to demonstrate to the
satisfaction of the Board of Directors that the non-Federal
project meets any pertinent requirements of this Act, any
criteria established by the Board of Directors or CEO of AIFA,
and the definition of a transportation and transportation-
related infrastructure project, water infrastructure project,
or energy infrastructure project as defined by this Act. The
criteria established by the Board of Directors shall provide
adequate consideration of the economic, financial, technical,
environmental, and public costs of each infrastructure project
under consideration for financial assistance under this Act.
The criteria established by the Board of Directors shall also
provide adequate consideration of: (1) the means by which an
infrastructure project is being financed; (2) the likelihood
that assistance from AIFA will accelerate the development of
the project and lower the overall costs; (3) the extent to
which assistance from AIFA maximizes private investment or
supports a public-private partnership; (4) the extent to which
the support mobilizes other financing; (5) the technical and
operational viability of the infrastructure project; (6) the
proportions of financial assistance from AIFA; (7) the
geographic location of the project (in an effort to have
geographic diversity); (8) the size of the project and its
impact on the resources of AIFA; and (9) the infrastructure
sector of the project (in an effort to have projects from more
than one sector financed by AIFA). Entities seeking assistance
from AIFA for an eligible infrastructure project shall submit
an application to AIFA. The CEO, working with the senior
management of AIFA, will prepare eligible infrastructure
projects for review and approval by the Board of Directors.
Applications are reviewed on an ongoing basis. An eligible
project has a cost that is reasonably anticipated to equal or
exceed $100 million, with the exception of rural projects. An
eligible rural project has a cost that is reasonably
anticipated to equal or exceed $25 million. Once selected for
financing, the amount of any direct loan or loan guarantee
shall not exceed the lesser of 50 percent of the reasonably
anticipated eligible infrastructure project costs or--if the
direct loan or loan guarantee does not receive an investment
grade rating--the amount of the senior project obligations. The
maximum amount of new direct loans and loan guarantees in
AIFA's first two fiscal years is limited to $10 billion each
year. This increases to $20 billion per year after the second
year of operations and through the ninth year, and increases to
$50 billion per year after the ninth year of operations.
Section 254--Loan Terms and Repayment. A direct loan or
loan guarantee under this Act shall be on such terms and
subject to such conditions as the CEO of AIFA determines
appropriate, but there are certain threshold terms that will
apply. First, a direct loan or loan guarantee under this Act
shall be payable (in whole or part) from tolls, user fees, or
other dedicated revenue sources that secure the senior payment
obligations and shall include a rate covenant, coverage
requirement, or similar security feature supporting the project
obligations. Second, the base interest rate on a direct loan
shall not be less than the yield on United States Treasury
obligations of a similar maturity to the maturity of the direct
loan. Third, the CEO of AIFA (in consultation with the Director
of the Office of Management and Budget) shall estimate an
appropriate federal credit subsidy amount for each direct loan
and loan guarantee before entering an agreement for assistance.
The final credit subsidy cost will be determined consistent
with the Federal Credit Reform Act. The CEO of AIFA may charge
a credit fee to the borrower to pay for all or a portion of the
Federal credit subsidy. Fourth, the final maturity date of a
direct loan or loan guarantee by AIFA shall be no later than 35
years after the date of substantial completion of the project
(as determined by the CEO of AIFA). The CEO of AIFA will also
require each applicant to provide an opinion letter from at
least one rating agency. An opinion letter is not required for
rural projects, as these projects will receive an internal
rating score. The execution of loan and loan guarantees under
this Act will be contingent on the senior obligations of the
infrastructure project receiving an investment grade rating.
The CEO of AIFA will establish a repayment schedule for each
direct loan, with the repayment commencing no later than five
years after the date of substantial completion. After the first
five years of AIFA operations, the average rating of AIFA's
overall portfolio must be investment grade. The terms for loan
guarantees are consistent with the terms set forth in this
section for direct loans, except that a rate on the guaranteed
loan and any payment, pre-payment, or refinancing features will
be negotiated between the obligor and the lenders with the
consent of the CEO of AIFA. Direct loans and loan guarantees
under this Act are subject to the Federal Credit Reform Act.
Section 255--Compliance and Enforcement. Entities that
receive assistance from AIFA are required to enter into a
credit agreement promising compliance with all policies and
procedures of AIFA. The Board of Directors may take action to
cancel utilized loan amounts or to accelerate the repayment
terms of any outstanding obligations if a recipient of
assistance is materially out of compliance with the loan
agreement or any applicable procedure of AIFA.
Section 256--Audits; reports to the President and Congress.
The books of AIFA shall be maintained with generally accepted
accounting principles and shall be subject to an annual audit
by public accountants appointed by the Board of Directors.
Ninety days after the last day of each fiscal year, the Board
of Directors will be required to submit to the President and
Congress an annual report that provides a detailed assessment
of the preceding fiscal year. The Government Accountability
Office (GAO) is required to conduct an evaluation and to submit
a report to Congress on the activities of AIFA no later than
five years after the date of enactment. AIFA is required to
maintain appropriate records to support AIFA's financial
transactions. The AIFA records are at all times open to
inspection by the Secretary of the Treasury, the Special
Inspector General, and the Comptroller General of the United
States.
Part III--Funding of AIFA
Section 257--Administrative Fees. The CEO of AIFA shall
establish fees that are sufficient to cover all or a portion of
the administrative costs of AIFA.
Section 258--Efficiency of AIFA. The CEO of AIFA shall make
efforts to minimize the risk and cost to the taxpayer of AIFA
activities while supporting the program's objectives, in
establishing fees and risk premiums on loans and loan
guarantees.
Section 259--Funding. This section authorizes and
appropriates $10 billion, which is to remain available until
expended. Portions of these funds are set aside in the early
years for administrative costs. No more than five percent will
be used to offset subsidy costs associated with rural
infrastructure projects.
Part IV--Extension of Exemption from Alternative Minimum Tax Treatment
for Certain Tax-Exempt Bonds
Section 260--Extension of Exemption from Alternative
Minimum Tax Treatment for Certain Tax-Exempt Bonds. This
section excludes from the alternative minimum tax (AMT)
interest on tax-exempt private activity bonds for bonds issued
in 2011 or 2012.
SUBTITLE G--PROJECT REBUILD
This subtitle authorizes $15 billion in investments to put
construction workers on the job rehabilitating and refurbishing
hundreds of thousands of vacant and foreclosed homes and
businesses. Building on proven approaches to stabilizing
neighborhoods with high concentrations of foreclosures, Project
Rebuild will bring in expertise and capital from the private
sector, focus on commercial and residential property
improvements, and expand innovative property solutions like
land banks. The goals of this subtitle are to create jobs, as
well as stabilize neighborhoods, reverse vacancy reduction, and
increase or stabilize residential and commercial property
values.
Section 261--Project Rebuild. Subsection (a) includes $15
billion in direct appropriations and enumerates the eligible
entities, including units of general local government, states,
nonprofits, for-profits, and consortia. This section makes for-
profits eligible to be a potential direct grant recipients and
not only as partners with a local government or non-profit
entity. This addition is consistent with the added emphasis on
job creation, innovation, and capacity to carry out real
property acquisition. To offset potential new risks inherent in
direct grants to for-profit entities, HUD will implement the
enforcement policies and procedures as described at the end of
the subtitle.
Subsection (b)(1) describes the allocation of funds, with
two-thirds allocated by formula to States and local governments
and one-third allocated competitively to all types of eligible
entity. This split allows the program both to use the speed of
a formula and to use the more policy-driven competitive process
to bring new players with capacity into the program, spurring
leverage and innovation. The formula mandated by subsections
(b)(2) and (b)(3) will be developed and allocations made within
30 days of enactment. Entities eligible to receive formula
allocations are States and units of general local government.
The formula criteria subsection includes factors such as home
foreclosures, mortgage defaults and delinquencies, and other
criteria determined by the Secretary. As the nature of the
causes of neighborhood de-stabilizing foreclosures has shifted
over time, the formula factors are designed to capture greatest
need areas and high capacity grantees. These factors will allow
HUD to prepare a formula that will target effectively.
Subsection (b)(4) describes the eligible entities for the
competitively distributed funds and the competition factors.
For-profit entities are included as possible direct grantees
and factors have been added to identify applicant capacity to
acquire foreclosed residential and commercial property and to
demonstrate their knowledge of market conditions and
appropriate responses. Capacity to undertake acquisition and
stabilization activities is the most critical factor, so
eligible entities will include consortia. The subsection
requires publication of the competition NOFA within 60 days of
enactment and submission of applications within 120 days.
Under subsection (c), all funding must be obligated by HUD
within 150 days, and eligible entities will have ambitious
expenditure goals: 100 percent of funds expended within 3 years
of receipt by the grantee, and the Secretary shall, by notice,
establish expenditure benchmarks at the one- and two-year
milestones. This ensures the program leverages experience and
begins generating benefits sooner for targeted high need
neighborhoods. Subsection (c) also requires each grantee to
address how the use of funds will prioritize job creation.
Other goals that must be addressed include neighborhood
stabilization, vacancy rates, and stabilization of property
values. This subsection also governs grantee targeting of
resources. It requires grantees to target funds to needy
geographical areas based on foreclosure-related factors. In
addition, commercial foreclosures and higher than average
unemployment will be considered in targeting. Grantees will be
required to describe how their proposed use of funds will
leverage private funds.
Eligible uses of these funds include financing mechanisms,
property acquisition/rehabilitation, land banks, demolition,
and redevelopment. In addition, other eligible activities are
property acquisition, direct homeownership assistance,
homebuyer rehabilitation, property maintenance and disposition,
and public improvements of public facilities. Eligible property
types include foreclosed, abandoned, blighted, demolished, and
vacant residential and commercial property. Commercial
properties may be used for job generating activities, providing
another employment and neighborhood stabilization tool. Another
eligible use will allow the Secretary to support innovative
uses of funds that support program goals, especially job
creation through special economic development or modernization
of public facilities.
Subsection (d)(1) requires that grantees not purchase
properties at a price in excess of current market value.
Subsection (d)(2) requires quality rehabilitation that brings
properties to applicable codes and permits use of renewable
energy sources. Subsection (d)(3) requires the sale of homes at
an amount less than or equal to the acquisition or
rehabilitation cost to ensure housing affordability. Subsection
(d)(4) prohibits using the funds to demolish public housing.
This is an important safeguard to ensure that funds are not
used to decrease affordable housing. Subsection (d)(5) limits
the use of funds for demolition of other types of housing
unless the Secretary determines that more demolition is an
appropriate response to market conditions. This helps focus
grantees on appropriate responses to market conditions and
ensures that the vast majority of funds are used in ways that
increase job opportunities and affordable housing. Subsection
(d)(6) limits the use of funds under certain eligible uses for
commercial purposes to 30 percent of each grant. The majority
of properties in foreclosure nationally are residential, not
commercial. This limitation will help maintain an appropriate
focus on each property type. The limitation will not apply to
properties in land banks. Land banks are frequently used in
areas of very high unemployment where a focus on commercial
uses is appropriate. Further, the Secretary will be able to
provide exceptions to this limitation where appropriate to
address local market conditions.
Subsection (e)(1) establishes the program within the
frameworks of the Housing and Community Development Act of 1974
and title I of the Cranston-Gonzalez National Affordable
Housing Act of 1990, which ensure strong financial management
accountability, citizen participation, environmental review
delegations, and other time-tested established requirements.
Subsection (e)(2) states that no match will be required.
Subsection (e)(3) references the tenant protections
requirements in prior enacted language to be applicable in this
Act. The provisions require grantees to extend certain
protections to legal tenants of foreclosed property acquired
with funds. Subsection (e)(4) includes vicinity hiring
requirements to emphasize local hiring preferences. Subsection
(e)(5) applies the Buy American provisions that was in the
American Recovery and Reinvestment Act of 2009 to this program.
Subsection (f)(1) permits the Secretary to specify waivers
and alternative requirements for provisions that underlie the
Housing and Community Development Act of 1974 and the National
Affordable Housing Act, to expedite and facilitate use of
funds. However, the Secretary may not specify alternative
requirements to fair housing, nondiscrimination, labor
standards or environmental provisions under these laws.
Subsection (f)(2) provides for the Secretary to provide written
notice of intent to exercise the authority to specify
alternative requirements. This is consistent with the policy
goal of increasing transparency. Subsection (f)(3) provides
that the beneficiaries of the program are individuals and
families whose income are 120 percent or less of the area
median with 25 percent of the funds set aside for uses that
provide housing for persons whose incomes are 50 percent or
less of area median. This allows Project Rebuild to address the
employment and housing needs of families with a wider range of
incomes, but still ensuring assistance to lower income
families. The Recurrent Requirement under subsection (f)(3)(B)
directs the Secretary to take action to ensure long term
affordability of residential property treated with Project
Rebuild funds. Through notice, HUD will prescribe different
affordability periods for different investment amounts, with
greater investment resulting in longer affordability periods.
Resale or recapture provisions are used for homeowner
properties.
Subsection (g) assures nationwide distribution of formula
funds by providing a minimum of $20 million for each state.
Subsection (h) limits the use of eminent domain so that it
may not be used for purposes of economic development that
primarily benefits private entities.
Subsection (i) Limitation on distribution of funds does not
allow grants to an organization that is itself or has employees
that have been indicted for a violation under Federal law
relating to election for Federal office.
Subsection (j) requires every formula grantee to establish
procedures related to the development of affordable rental
housing. Many Project Rebuild grantees will be working in
markets in which more rental housing is needed and this
provision requires grantees to consider how to address these
needs.
Subsection (k) provides a 10 percent cap on the amount of
funds in any grant that may be used to support a job-creating
property maintenance program. This allows grantees to create
short-term jobs on an interim basis while taking other actions
to stabilize the neighborhood for the longer term.
Subsection (l) allows 0.75 percent of the funds to be
directed by HUD for grantee capacity building assistance and
HUD expenses including, enforcement and program evaluation.
With these funds, HUD will carry out its role in launching,
overseeing, and closing out these grants. HUD's use of the
grantee capacity building funds will support continued
improvements and operations of the online reporting system used
to track financial and activity progress.
Subsection (m) requires the Secretary to establish and
implement procedures to prevent fraud, waste, and abuse of
funds. Further, grantees will be required to have an internal
auditor and to provide performance reports to HUD on a
quarterly basis. This subsection also specifies that the
sanction for failure to meet expenditure requirements, as
determined by the Secretary, shall be recapture of funds and
reallocation. The Secretary will only be able to take an
alternative sanction if the action is necessary to achieve
program goals in a timely manner.
SUBTITLE H--NATIONAL WIRELESS INITIATIVE
Section 271--Definitions. This section defines several
applicable terms used in this subtitle.
Part I--Auctions of Spectrum and Spectrum Management
Section 272--Clarification of Authorities to Repurpose
Federal Spectrum for Commercial Purposes. Subsections (a) and
(b) permit Federal agencies to be fully reimbursed through the
Spectrum Relocation Fund (SRF) for relocation costs (including
planning costs that occur before an auction), to better enable
agencies to evaluate the cost and scheduling implications of
relocation activities, and thereby facilitate both an improved
auction and relocation process while ensuring the continuity of
agency missions. Also, subsection (b) allows for support of
costs incurred by Federal agencies to allow shared and
unlicensed use of spectrum assigned to agencies.
Subsection (c) permits Federal agencies to be reimbursed
for costs incurred in accommodating additional non-Federal
access to their frequencies, as well as for studies related to
sharing bands among Federal users. Reimbursable costs to enable
sharing are consistent with system modifications made in the
context of relocation.
In addition, subsection (c) clarifies that the agencies are
permitted to acquire state of the art replacement systems under
the current-law standard of comparable capability of systems.
Section 101(c) also permits agencies to hire term-limited civil
servant and contractor support staff to implement relocation
projects, and provides further authority for expenditures
related to planning in advance of an auction. Subsection (c)
furthermore clarifies that the SRF can be used to reimburse
agencies for the cost of using commercial services, if these
services are the most cost effective way of vacating Federal
frequencies while maintaining agency missions. Subsection (d)
allows Federal agencies to enter into sharing arrangements with
non-Federal entities, upon approval of NTIA and the Office of
Management and Budget (OMB). Subsection (e) provides authority
to the Director of OMB to transfer amounts from the SRF for the
costs of activities (including planning) directly attributable
to relocation of Federal systems. This section also extends the
period of funds availability in the SRF from 8 to 15 years, and
provides additional flexibility beyond that period upon
notification of the Congress. Furthermore, subsection (e)
provides that up to 20 percent of the revenue from the auction
of licenses associated with frequencies vacated by Federal
agencies, or made available through sharing, may be used to
enhance agency communications, radar and other spectrum using
capabilities; this funding availability for enhancements would
be in addition to the relocation costs covered under the
current authorities, which provide for maintaining comparable
capability for agencies. Use of funds for enhancements, like
current authorities for relocation cost reimbursement, would be
subject to notification of the appropriate Congressional
committees. Subsection (f) clarifies that proceeds from non-
federal spectrum auctioned and paired with spectrum from
federal inventories is available to support relocation
activities after retention of revenues by the Federal
Communications Commission to support its auctions program.
Subsection (g) provides for a classified annex, if required,
for any reports and notifications arising from the requirements
of Sections 923 and 928 of Title 47, including the provisions
of the bill.
Section 273--Incentive Auction Authority. Subsection (a)
authorizes the FCC to hold incentive auctions, where non-
government holders of spectrum will be reimbursed for its value
from a portion of auction proceeds in return for voluntarily
relinquishing their spectrum rights. The method of determining
the portion paid to licensees would be subject to review prior
to implementation. This section would require the FCC to assign
at least the first 84 megahertz from certain specified bands
through a competitive bidding process.
Section 274--Requirements When Repurposing Mobile Satellite
Services Spectrum for Terrestrial Broadband Use. This section
would require the FCC to recover a significant portion of the
value of new terrestrial broadband deployment rights in certain
spectrum frequencies that were originally set aside for
satellite services either through competitive bidding
procedures or spectrum fee authority.
Section 275--Permanent Extension of Auction Authority. This
section would make permanent FCC's authority to auction
spectrum, which expires on September 30, 2012, under current
law.
Section 276--Authority to Auction Licenses for Domestic
Satellite Services. This section would clarify FCC's authority
to auction certain spectrum that is solely or predominantly
used for domestic satellite communications.
Section 277--Directed Auction of Certain Spectrum. This
section requires certain spectrum assigned to Federal agencies
or in FCC inventories to be identified by NTIA and auctioned by
the Commission. The section provides procedures for the
President to not auction certain Federal spectrum if the
President determines that it is not in the public interest to
do so and provided that alternative spectrum is identified.
Section 278--Authority to Establish Spectrum License User
Fees. This section creates a new subsection (m) under section
309 of the Communications Act of 1934, which provides the FCC
with authority to establish, assess, and collect fees for
initial spectrum licenses and construction permits that were
not assigned by auction (competitive bidding) under section
309(j) and for modifications or renewals of initial licenses
and other authorizations, whether granted through competitive
bidding or not, based upon public interest principles (for
example, if a modification increases the value of a license).
Fee authority will assist the FCC in managing the spectrum
efficiently in cases in which auctions are prohibited or may
not be an appropriate assignment tool but in which it is
important to ensure that license holders pay the opportunity
costs of their spectrum use, such as mobile satellite spectrum
that is also licensed for ancillary terrestrial services.
Paragraph (1) of new subsection (m) requires the FCC to
collect certain amounts in fees in each fiscal year from 2012
through 2021. Paragraph (2) governs the FCC's development of
regulations to implement its fee authority. Subparagraph (A)
requires the FCC to conduct a rulemaking to establish a fee
methodology and a fee collection schedule. The FCC is directed
to develop a fee methodology consistent with the public
interest, convenience, and necessity requirement, which is
found throughout the Communications Act. The FCC is expected to
undertake a multi-stage rulemaking during which fees for
different classes of spectrum licenses or construction permits
may be developed and phased-in over time, consistent with sound
spectrum management principles. It is expected that fees would
encourage efficient allocation and use of the radio spectrum,
as the opportunity cost of spectrum resources would be
reflected to commercial license holders that did not receive
authorizations through competitive bidding. The proposal
specifies that the FCC may take the following factors into
account when developing a fee methodology: (1) the highest
value use of the spectrum that is forgone by the license or
class of licenses or construction permits (i.e., the
opportunity cost of spectrum use); (2) the scope and type of
permissible services and uses; (3) the amount of spectrum and
licensed coverage area; (4) shared versus exclusive use; (5)
the level of demand for spectrum licenses or construction
permits within a certain spectrum band or geographic area; (6)
the amount of revenue raised on comparable licenses awarded
through auction; and (7) such other factors that the FCC
determines, in its discretion, are necessary to promote
efficient and effective spectrum use. These factors may assist
the FCC in determining which classes of spectrum licenses and
construction permits should be subject to user fees and in
developing a methodology that addresses the relative value of
the spectrum to different classes of users. The FCC may
consider other factors that may be raised during the rulemaking
process. The FCC may also determine that certain classes of
licenses or permits should be exempt from fees.
Subparagraph (B) requires the FCC to conduct a rulemaking
to establish a fee methodology and a fee collection schedule
for entities holding Ancillary Terrestrial Component (ATC)
authority on Mobile Satellite Service spectrum licenses. The
FCC is directed to develop a fee methodology to collect an
amount not less than a reasonable estimate of the value of the
licenses over their term regardless of whether the spectrum is
used for the ATC service. The FCC may take the same factors
under subparagraph (A) into account when developing a fee
methodology for the spectrum used for ATC service.
Subparagraph (C) directs the FCC to commence a rulemaking
regarding fees as a spectrum management tool within 60 days of
enactment of the Act. The FCC is also directed to take all
actions necessary so that fees for first class or classes of
spectrum licenses or construction permits can be collected by
September 30, 2012.
Subparagraph (D) provides clarification that the FCC may
modify the fee methodology or revise the rules implementing
fees either through separate rulemakings, or as part of
rulemakings or proceedings involving spectrum-based services,
licenses, permits, and uses. Such modifications or revisions
may add or modify classes of spectrum license or construction
permit holders that must pay fees, and reflect appropriate
increases or decreases in fees as a result of the addition,
deletion, reclassification, or other change in a spectrum-based
service or use, including changes in the nature of a spectrum-
based service or use as a consequence of FCC rulemaking
proceedings or changes in law. Such modifications or revisions
can take effect upon the date established in the FCC's
rulemaking or in the law.
Subparagraph (E) provides an exemption from spectrum
licensing fees for holders of licenses for broadcast television
and public safety radio services. The meaning of ``emergency
response providers'' is derived from the definition of the term
found in section 2(6) of the Homeland Security Act of 2002.
Federal agencies are not FCC licensees and would not be subject
to FCC fees.
Paragraph (3) directs the FCC to assess penalties for late
payment of fees. Paragraph (4) provides the FCC with the
authority to revoke a license or permit if the license or
construction permit holder has failed to pay to the FCC the fee
or penalty authorized under this subsection. Paragraph (5)
requires that all proceeds collected by the FCC under this
section of the legislation be deposited in the Treasury's
General Fund.
Part II--Public Safety Broadband Network
Section 281--Reallocation of D Block for Public Safety.
This section would reallocate spectrum known as the D block for
use by first responders and other public safety uses. Under
current law, the spectrum would be auctioned.
Section 282--Flexible Use of Narrowband Spectrum. This
section would allow the FCC to authorize broadband technologies
to operate in spectrum currently designated for legacy
narrowband and other land mobile radio technologies used for
public safety operations.
Section 283--Single Public Safety Wireless Licensee. This
section would grant the Public Safety Broadband Corporation,
which is established under section 284, the license for the D
block of spectrum in addition to certain spectrum held for
public safety use by broadband technologies.
Section 284--Establishment of Public Safety Broadband
Corporation. This section establishes the Public Safety
Broadband Corporation to promote the construction and
development of a nationwide public safety network. The section
designates that the Corporation is not an agency or
establishment of the U.S. or District of Columbia governments.
Section 285--Board of Directors of the Corporation. This
section establishes that the Corporation shall have a board of
directors comprised of Federal and non-Federal members. The
section also provides procedures for the election of non-
Federal members, qualifications, terms of apportionment, and
other matters.
Section 286--Officers, Employees, and Committees of the
Corporation. This section describes the officers and employees
of the corporation and compensation among other issues.
Section 287--Nonprofit and Nonpolitical Nature of the
Corporation. This section prohibits the Corporation from
profiting on its assets, issuing stock, or supporting political
parties or candidates for elective office.
Section 288--Powers, Duties, and Responsibilities of the
Corporation. This section describes the Corporation's
authorities and responsibilities in deploying a nationwide
public safety broadband network.
Section 289--Initial Funding for the Corporation. This
section provides up to $50 million to the National
Telecommunications and Information Administration to transfer
to the Corporation for expenses before proceeds from spectrum
auctions authorized in this bill are realized.
Section 290--Permanent Self-Funding; Duty to Assess and
Collect Fees for Network Use. This section allows the
Corporation to charge fees for the use of the public safety
broadband network's capacity, whether public safety users or
commercial users on a secondary basis. It also requires that
fees cover the operations of the network after the initial
expenditure of Federal funds and that proceeds from fees be
reinvested in the network.
Section 291--Audit and Report. This section requires that
the Comptroller General have access to the Corporation's
financial records in years where federal funds are available to
finance operations. The section also requires the Comptroller
General to submit reports to appropriate committees of
Congress, the President, and the Corporation after an audit is
conducted.
Section 292--Annual Report to Congress. This section
requires the Corporation to submit an annual report to Congress
and the President on its activities.
Section 293--Provision of Technical Assistance. This
section allows the Commission and the Departments of Commerce,
Justice and Homeland Security to provide technical assistance
to the Corporation in carrying out its duties.
Section 294--State and Local Implementation. This section
authorizes a grant program to be administered by NTIA for
states and localities to plan for the nationwide public safety
broadband network.
Section 295--State and Local Implementation Fund. This
section creates a State and Local Implementation Fund for the
grant program authorized in section 294. The fund is authorized
to spend up to $100 million, and up to this amount could be
borrowed from future spectrum proceeds to operate the program
before proceeds from an auction are realized.
Section 296--Public Safety Wireless Communications Research
and Development. This section authorizes the program at the
National Institute of Standards and Technology to develop
technical requirements and standards for the public safety
broadband network.
Section 297--Public Safety Trust Fund. This section
establishes the Public Safety Trust Fund, where proceeds from
certain spectrum auctions are authorized to be deposited. This
section provides $7 billion to build and operate the nationwide
public safety broadband network as well as conduct research to
develop standards for the network. Specifically, $200 million
is provided to the state and local grant program to plan for
and implement the network, $6.5 billion is provided for network
construction (including up to $50 million of initial funding
provided by NTIA) and up to $300 million is provided for the
public safety communications research and development
activities authorized in section 296. Funds are available until
fiscal year 2016. In addition, after funds have been provided
to licensees that participate in incentive auctions, the
Commission may deposit $1 billion in the incentive auction
relocation fund for the purpose of compensating licensees for
costs incurred in repacking spectrum to make contiguous blocks
available.
Section 298--FCC Report on Efficient Use of Public Safety
Spectrum. This section requires the Commission to report on use
of spectrum assigned to public safety entities. This includes
an examination of spectrum use, whether efficiency can be
increased, and the feasibility of repurposing spectrum.
Section 299--Public Safety Roaming and Priority Access.
This section provides the Commission with authority to adopt
rules that allow public safety entities to roam and have
priority access on commercial networks in emergencies if
certain conditions are met.
TITLE III--ASSISTANCE FOR THE UNEMPLOYED AND PATHWAYS BACK TO WORK
SUBTITLE A--SUPPORTING UNEMPLOYED WORKERS
Section 301--Short Title. This section provides that this
subtitle may be cited as the ``Supporting Unemployed Workers
Act of 2011''.
Part I--Extension of Emergency Unemployment Compensation and Certain
Extended Benefits Provisions, and Establishment of Self-
Employment Assistance Program
This part provides for the extension of emergency
unemployment compensation and certain extended benefits and
establishes the self-employment assistance program.
Section 311--Extension of Emergency Unemployment
Compensation Program. This section generally provides for the
extension of emergency unemployment compensation benefits.
Subsection (a) would extend the emergency unemployment
compensation (EUC) program for individuals to enter the program
(upon exhaustion of regular unemployment compensation (UC)
payments) by one year to January 3, 2013. It also would extend
the transition period so individuals would be permitted to
continue to receive amounts remaining in their EUC accounts
until June 8, 2013. Subsection (b) would continue general
revenue funding of EUC benefits and related administrative
costs. Subsection (c) would provide that the amendments made by
this section take effect as if included in the enactment of the
Unemployment Compensation Extension Act of 2010.
Section 312--Temporary Extension of Extended Benefit
Provisions. This section generally provides for the extension
of certain extended benefits. Subsection (a) would extend 100
percent Federal funding of most extended benefits (EB) by one
year to January 4, 2013. It also would extend the transition
period by one year so 100 percent federal funding of EB would
continue until June 11, 2013 for individuals who started
receiving EB before January 4, 2013. Subsection (b) would
extend 100 percent Federal funding of the first week of EB by
one year to June 9, 2013. Subsection (c) would extend by one
year the temporary modification to EB indicators, which makes
it easier for EB to remain payable in states, to December 31,
2012. Subsection (d) would provide that the amendments made by
this section take effect as if included in the enactment of the
Unemployment Compensation Extension Act of 2010.
Section 313--Reemployment Services and Reemployment and
Eligibility Assessment Activities. This section generally
provides for the establishment of requirements for States to
provide reemployment services and reemployment and eligibility
assessments to certain emergency unemployment compensation
recipients. Subsection (a) would require, as a condition of the
Federal-State agreement permitting States to pay EUC, that
States provide reemployment services and reemployment and
eligibility assessment activities to each individual receiving
EUC who, beginning 30 days after enactment of the Act, first
establishes an EUC account or who begins to receive the amounts
available under tiers 2, 3, or 4 of the EUC program.
These services and activities would be provided from funds
appropriated for this purpose. Staff of State agencies
administering UI or the Wagner-Peyser Act would provide these
services and activities, which would include: the provision of
labor market and career information; an assessment of the
individual's skills; orientation to services available in One-
Stop centers; job search counseling and development or review
of individual's reemployment plan (including participation in
job search activities, workshops, or appropriate training); and
review of the individual's eligibility for EUC relating to the
individual's job search efforts. States also would be
authorized to use the funds to provide: comprehensive and
specialized assessments; career counseling; and additional
reemployment services. EUC claimants would be required to
participate in the services or activities to which they are
referred, as a condition of continuing EUC eligibility, unless
the State agency determines there is justifiable cause for the
failure to participate. Finally, the Secretary of Labor would
be required to issue guidance on implementation of the required
services and assessments no later than 30 days after enactment
of the Act.
Subsection (b) provides that the funds for such services
and assessments would be appropriated from the general fund of
the Treasury out of the employment security administration
account. The total amount of funding appropriated would equal
the number of individuals the Secretary estimates would receive
such services and assessment activities multiplied by $200.
Each State would then receive a distribution equal to the
number of individuals who would receive the services and
assessment activities multiplied by $200.
Section 314--Federal-State Agreements to Administer a Self-
Employment Assistance Program. This section would amend the EUC
law to permit States to enter into an agreement with the
Secretary of Labor to establish self-employment assistance
(SEA) programs, which would permit the payment of EUC as self-
employment allowances to eligible individuals. For an
individual who chooses to participate in the program, the SEA
allowances would be paid for up to 26 weeks from amounts
remaining in such individual's EUC account, and the amounts in
such account would be reduced accordingly. For purposes of this
title, the term ``self employment assistance program'' would
mean a program as defined in section 3306(t) of the Internal
Revenue Code of 1986, except as follows: participation would
not be limited to individuals who were identified pursuant to a
State worker profiling system as likely to exhaust regular
unemployment compensation; entrepreneurial training would not
be mandatory and would be available in coordination with
programs of the Small Business Administration; and
participation would be capped at 1 percent of the number of
individuals receiving EUC. SEA allowances only would be
available to individuals that the State agency reasonably
expects would have at least 26 times their average weekly
benefit amount in potential EUC entitlement remaining. Further,
an individual who chooses to terminate his or her participation
in the SEA program, or who has completed participation in the
program, and who continues to meet the EUC eligibility
requirements, would be permitted to receive amounts remaining
in their EUC accounts with respect to subsequent weeks of
unemployment.
Section 315--Conforming Amendment on Payment of Bridge To
Work Wages. This section would authorize States that establish
a bridge to work program under Part II of this Act to deduct
amounts from an individual's EUC account to pay the
individual's wages during participation in the program.
Section 316--Additional Extended Unemployment Benefits
Under the Railroad Unemployment Insurance Act. This section 106
would amend the Railroad Unemployment Insurance Act to extend
through December 31, 2012, the temporary increase in extended
unemployment benefits for employees with 10 or more years of
service and for those with less than 10 years of service. This
section would make pre-existing appropriated funds under such
Act available to cover the cost of such extended unemployment
benefits as well as the costs of current benefits.
Part II--Reemployment NOW program
This part establishes the Reemployment NOW program.
Section 321--Establishment of Reemployment NOW Program.
This section would authorize and appropriate $4 billion for
fiscal year 2012 for the Secretary of Labor to establish and
carry out a Reemployment NOW program, which would facilitate
the reemployment of individuals receiving emergency
unemployment compensation.
Section 322--Distribution of Funds. This section provides
for the distribution of funds to carry out the Reemployment NOW
program. Subsection (a) provides that the Secretary of Labor
may reserve up to 1 percent of the funds appropriated for the
program to pay the costs of Federal administration and for
rigorous evaluations of the activities that are carried out by
the States under the program. The remaining 99 percent or more
of the funds would be allotted among the States that receive
approval of State plans. Subsection (b) provides the formula
for allotting funds among the States. Two-thirds of the funds
would be allotted on the basis of the relative number of
unemployed individuals in each State and one-third would be
allotted on the basis of the relative number of individuals who
have been unemployed for 27 weeks or more in each State.
Subsection (c) provides for the reallotment of funds. If a
State does not submit a plan by the required date, or fails to
receive approval of its plan, the State's allotment is
reallotted to States with approved plans, using the allotment
formula. The Secretary of Labor also is authorized, in
accordance with guidance issued by the Secretary, to recapture
and reobligate funds if the funds are not being obligated at a
rate sufficient to meet the purposes of the program. Funds
recaptured by the Secretary would be available for reobligation
until December 31, 2012.
Section 323--State Plan. This section provides the
requirements for the State plan. Subsection (a) provides that
for a State to be eligible to receive an allotment under the
program, the State must submit a State plan in the form and
containing the information the Secretary may require. At a
minimum, the plan is to include: (1) a description of the
activities to be carried out and an estimate of how the State
intends to allocate funds among the authorized activities; (2)
the performance outcomes to be achieved; (3) the coordination
of activities with the activities under other Federal programs;
(4) timelines for implementation; assurances that the State
will participate in evaluation activities; (5) assurances that
reemployment services will be provided for EUC claimants who
participate in program activities; and (6) assurances that the
State will report on any information required by the Secretary
relating to fiscal, performance and other matters. Subsection
(b) requires that a State submit plans not later than 30 days
after the Secretary issues guidance. The Secretary is to
approve the plans that meet the requirements of the program and
are appropriate and adequate to carry out the program's
purposes. Subsection (c) authorizes modifications to the State
plan.
Section 324--Bridge to Work Program. This section provides
for the establishment of a bridge to work program. Subsection
(a) would authorize a State to use Reemployment NOW funds to
provide a bridge to work program.
Subsection (b) would provide that, under the bridge to work
program, eligible individuals would have the option to engage
in short-term work experiences with an eligible employer.
During participation in the bridge to work program, an
individual receiving EUC would: continue to receive EUC as
wages for work performed for the participating employer;
receive any augmented wages, if applicable, under subsection
(e); and could be paid compensation by a participating employer
or by a State that is in addition to EUC and augmented wages
paid.
Subsection (c) establishes program and eligibility
requirements. Under this provision, an individual would be paid
EUC from his or her EUC account as wages during the bridge to
work program. Bridge to work wages are to be paid in the same
amount as EUC; however, some EUC requirements would not apply,
specifically, requirements with respect to work search and
disqualifying income would not apply, as long as a
participating individual works at least 25 hours.
Subsection (c) further provides that State limitations or
prohibitions on the work status of an EUC claimant shall not
render the individual ineligible to participate in, or receive
wages from, the bridge to work program. A participating
individual would be permitted to accept an offer of long-term
employment from a participating employer that commences after
the conclusion of the bridge to work program, and this
acceptance would not render such individual ineligible to
participate in, or receive wages from, the program.
Subsection (c) would also require a State to structure the
program so that bridge to work placements could last for up to
8 weeks and could provide an individual who voluntarily
participates in the program with up to 38 hours of work
experience per week with an eligible employer. Additionally,
this subsection would require that the State ensure that all
bridge to work participants are covered by a workers'
compensation insurance program, and that the State meets other
requirements as may be established by the Secretary of Labor.
Subsection (d) would establish eligibility requirements for
employers wishing to participate in the program. Specifically,
subsection (d) would provide that an employer is not eligible
for the bridge to work program if the employer is: a Federal,
State, or local government entity; would provide work relating
to government contracts and grants (other than supply
contracts); is delinquent on any Federal unemployment insurance
tax or State contribution obligations, or related reporting
requirements; is engaged in the business of supplying workers
to other employers and would participate in the program to
supply participating individuals to other employers; or has
previously failed to meet program requirements. In addition,
the employer must provide assurances that it has not displaced
existing workers.
Subsection (d) would also require that States use allotted
funds to: recruit employers for participation in the program;
review and certify employers identified by eligible individuals
seeking to participate in the program; ensure that reemployment
and counseling services are made available to program
participants; establish and implement processes to monitor the
progress and performance of individual participants for the
duration of the program; prevent misuse of the program; and pay
augmented wages under subsection (e) to eligible individuals,
if necessary.
Finally, subsection (d) would permit States to use allotted
funds to pay workers' compensation insurance premiums to cover
all individuals participating in the program through a State
administered workers' compensation program, except that a State
could choose another method of providing this coverage, which
the State would have to describe in the approved State plan.
The State also could use allotted funds: to pay compensation to
participating individuals that is in addition to EUC and
augmented wages paid; to provide supportive services, such as
transportation, child care, and dependent care, which would
enable individuals to participate in the program; to administer
and oversee the program; and to fulfill additional program
requirements included in the approved State plan.
Subsection (e) would require that, to the degree EUC
payments are insufficient to meet minimum wage thresholds under
the Fair Labor Standards Act of 1938, or any applicable State
or local laws (whichever is higher), the State would be
required to augment a bridge to work participant's wages by the
amount necessary to meet the applicable minimum wage.
Subsection (f) would specify that neither the emergency
unemployment compensation paid as wages, nor the augmented
wages received by a program participant, could be treated as
income for Federal needs-based programs.
Subsection (g) would prohibit any wages or participation
relating to the bridge to work program from being considered as
factors that render an individual ineligible for emergency
unemployment compensation.
Subsection (h) would prohibit a participating employer
from: displacing current employees with a program participant.
In addition, an employer could not permit a program participant
to perform work activities relating to any job for which any
other individual is on layoff, a current worker was terminated,
there is a strike or lockout at the workplace, or for which the
job would infringe on a current worker's promotional
opportunities.
Subsection (i) would provide that work activities under the
program also could not impair a contract for services or a
collective bargaining agreement without the concurrence of the
relevant labor organization.
Subsection (j) would place certain limits on employer
participation. Specifically, if, after 24 weeks an employer has
not provided an offer of suitable employment to any individual
who has participated in the program with the employer, the
State would be required to bar the employer from further
participation. In addition, States would be permitted to impose
additional conditions on participating employers to ensure that
an appropriate number of participants receive offers of
suitable long term employment.
Subsection (k) would permit a State to bar an employer from
further participation if the State receives information or,
through its oversight and administration of the program,
determines that the employer has violated a requirement or a
prohibition relating to the program. Subsection (k) also would
require a participating State to establish a process whereby a
participating individual may file a complaint with the State
relating to any violation of a requirement or prohibition under
this section.
Subsection (l) would provide that an eligible individual's
participation in the program is voluntary, and may be
terminated by the individual or the participating employer. If
a bridge to work participant opts to discontinue participation
in the program, or is terminated by the employer, the
individual would potentially remain eligible for continued
receipt of emergency unemployment compensation under the terms
of the applicable law, as long as amounts remain available in
such individual's emergency unemployment compensation account.
Subsection (m) provides that nothing in this section is to
be construed to alter or affect the rights or obligations under
any Federal, State, or local laws that apply to individual
participants and to employer participants under the program.
Subsection (n) provides that all wages and other payments
to participating individuals under this section would be
treated as payments of unemployment insurance for purposes of
section 209 of the Social Security Act, subtitle A of the
Internal Revenue Code of 1986, and sections 3101 and 3111 of
such Code.
Section 325--Wage Insurance. This section generally
provides for a wage insurance program. Subsection (a) would
permit a State to use Reemployment NOW funds to establish a
wage insurance program in the State for EUC claimants.
Subsection (b) provides that the State may make payments to EUC
claimants who obtain reemployment that pays less than the
employment from which the claimant was separated. The amount of
the payments could be up to 50 percent of the difference
between the reemployment wages and the wages at separation, and
such payments could last for a period of up to 2 years.
Subsection (c) provides that in order to be eligible for wage
insurance payments, the EUC claimant must be at least 50 years
of age, earn not more than $50,000 in wages from reemployment,
be reemployed on a full-time basis, and not be reemployed by
the same employer from which the claimant was laid off.
Subsection (d) provides that the State is to establish a
maximum amount that an eligible individual may receive under
the program. Subsection (e) requires that the employer who
provides the reemployment is to pay the eligible individual the
same wages as regular workers in the same or substantially
equivalent position.
Section 326--Enhanced Reemployment Strategies. This section
would permit a State to use allotted Reemployment NOW funds to
provide EUC claimants with enhanced reemployment services. A
State also could opt to provide individuals who have exhausted
their right to EUC, and who remain unemployed, with such
services. Subsection (a) would require that the services
offered under any such program must be more intensive than the
reemployment services previously provided by the State.
Subsection (b) provides that services that qualify as
enhanced reemployment services include: assessments,
counseling, and other intensive services that are provided by
staff on a one-to-one basis and may be customized to meet the
reemployment needs of the EUC claimant and individuals who have
exhausted their right to EUC and who remain unemployed;
comprehensive assessments designed to identify alternative
career paths; case management; reemployment services that are
provided more frequently and more intensively than those
previously offered by the State; and services that are designed
to enhance communication skills, interviewing skills, and other
skills that would assist in obtaining reemployment.
Section 327--Self-Employment Programs. This section would
authorize a State to use allotted Reemployment NOW funds for
administrative costs related to the start-up of a self-
employment assistance program. The amount of any funds a State
intends to use for such costs must be specified in the State's
approved State plan.
Section 328--Additional Innovative Programs. Subsection (a)
would permit the Secretary of Labor to authorize a State to use
allotted Reemployment NOW funds for other innovative activities
designed to facilitate the reemployment of EUC claimants. The
State also could opt to provide such activities to individuals
who have exhausted their right to EUC and who remain
unemployed.
Subsection (b) would require that innovative activities
directly benefit EUC claimants. In addition, subsection (b)
provides that approved innovative activities shall not: (1)
result in a reduction in the duration or amount of emergency
unemployment compensation for which EUC claimants would
otherwise be eligible; (2) include a reduction in the duration,
amount of or eligibility for regular compensation or extended
benefits; (3) be used to displace any currently employed
employee; (4) allow a program participant to perform work
activities related to any job that meets certain enumerated
criteria; or (5) violate of any State, local or Federal law.
Section 329--Guidance and Additional Requirements. This
section would grant the Secretary of Labor the authority to
issue guidance establishing such additional requirements as the
Secretary determines to be necessary to ensure fiscal
integrity, effective monitoring, and appropriate and prompt
implementation of the activities under the Act. The guidance
may include reporting requirements on employment outcomes.
Section 330--Report of Information and Evaluations to
Congress and the Public. This section would require the
Secretary of Labor to provide the appropriate Congressional
Committees with information reported pursuant to section 209
and the evaluations of activities carried out pursuant to the
funds reserved under section 202(a)(1). This section would also
require that the Secretary of Labor make the information and
evaluations available to the public.
Section 331--State. This section defines the term State for
purposes of this part.
Part III--Short-Time Compensation Program
This subtitle provides clarification for short-time
compensation programs.
Section 341--Treatment of Short-Time Compensation Programs.
This section would generally make clear that the requirements
relating to short-time compensation (STC or ``worksharing'')
programs under the Internal Revenue Code and the Social
Security Act. Under STC programs, employers reduce the workweek
of their employees in lieu of temporary layoffs and the
affected employees receive a pro-rated share of their weekly
benefit amount for the period not worked.
Section 342--Temporary Financing of Short-Time Compensation
Payments in States With Programs in Law. This section provides
States with temporary Federal financing of 100 percent of STC
benefits paid to individual workers for up to 26 weeks.
Payments are available to the State for no more than 156 weeks
(3 years) under either Section 302 or 303.
Section 343--Temporary Financing of Short-Time Compensation
Agreements. This section provides that any State without an STC
program may enter into an agreement with the Secretary of Labor
and receive one-half of the STC paid by the State. States may
receive payments for a total of not more than 104 weeks (2
years). Under a special rule, if a State enacts a law providing
for payment of STC, the State shall be eligible to receive
payments for 100 percent of the costs after the effective date
of the State law.
Section 344--Grants for Short-Time Compensation Programs.
This section requires the Secretary to award grants to States
that enact STC programs. One-third of each State's grant shall
be available for the purposes of implementation and improved
administration, and two-thirds shall be available for promotion
of the programs and enrollment of employers. The maximum amount
of all grants is $700 million.
Section 345--Assistance and Guidance in Implementing
Programs. This section requires the Secretary to develop for
State's use model legislative language for STC, provide
technical assistance to the States, and establish reporting
requirements, including the number of averted layoffs, the
number of participating employers and workers, and other items
the Secretary determines are appropriate. The section also
would require the Secretary to consult with employers, labor
organizations, state workforce agencies and other experts in
developing model STC legislative language.
Section 346--Reports. This section requires the Secretary
to submit to Congress and to the President reports on the
implementation of the Act, including a description of best
practices, analysis of significant challenges, and surveys of
employers in states without STC programs to determine level of
interest. The section also provides $1.5 million for this
purpose.
SUBTITLE B--LONG-TERM UNEMPLOYED HIRING PREFERENCES
Section 351--Long Term Unemployed Workers Work Opportunity
Tax Credits. This section makes employers eligible for a
maximum tax credit of $4,000 if they hire individuals who have
been unemployed for at least 6 months. This credit is also made
available to tax-exempt entities and public universities.
Finally, this section authorizes the Secretary of the Treasury
to provide alternative methods for certifying an individual's
unemployed status.
SUBTITLE C--PATHWAYS BACK TO WORK
The ``Pathways Back to Work Act of 2011'' would establish a
$5 billion fund to support subsidized employment opportunities,
summer and year-round youth employment, and work-based training
and education programs for unemployed, low-income adults and
low-income youth.
Section 361--Short Title. This section provides that this
subtitle may be cited as the ``Pathways Back to Work Act of
2011''.
Section 362--Establishment of Pathways Back to Work Fund.
This section would establish the Pathways Back to Work Fund
(the Fund) and appropriates $5 billion to the Fund for the
Secretary of Labor to carry out the Act.
Section 363--Availability of Funds. This section would
direct the Secretary of Labor (the Secretary) to use the $5
billion in the Fund as follows: $2 billion would be available
for subsidized employment for unemployed, low-income adults;
$1.5 billion would be available to provide summer and year-
round employment opportunities to low-income youth; and $1.5
billion would be available for competitive grants to local
entities to carry out work-based training for unemployed, low-
income adults and low-income youth. The Secretary is authorized
to reserve up to 1 percent of funding for technical assistance,
evaluations, and Federal administration. The funds would be
available for obligation by the Secretary of Labor through
December 31, 2012, and for available for expenditure by
grantees and subgrantees through September 30, 2013.
Section 364--Subsidized Employment for Unemployed, Low-
Income Adults. This section describes how the $2 billion of
funding for subsidized employment for unemployed, low-income
adults would be allotted and administered. Under subsection
(a), the Secretary would be required, not later than 30 days
after the enactment of the Act, to issue guidance relating to
the implementation of this section. The guidance would be
issued in coordination with the Secretary of Health and Human
Services, and consistent with the specified requirements in the
Act, address procedures to promote the expeditious and
effective implementation of the activities.
Subsection (b) describes the allotment of funds. The
Secretary would reserve 0.25 percent for outlying areas and 1.5
percent for Native American programs, and then allot the
remainder by formula to States that submit plans which are
approved by the Secretary. Two-thirds of the formula would be
based on measures of a State's relative share of unemployed
individuals and one-third would be based on the relative share
of disadvantaged individuals. States that do not submit a plan,
or do not have a plan approved, would have their share of
funding reallotted to the portion of the Fund used for
competitive grants to local areas for work-based training.
Subsection (c) contains the requirements for the State
plan. The State plan is to include a description of: the
strategies and activities to be carried out, in coordination
with employers, to provide subsidized employment opportunities;
the requirements relating to the eligibility of unemployed,
low-income adults, including the targeting of assistance to
categories within that group, such as individuals with
disabilities and individuals who have exhausted all rights to
unemployment compensation; the administration of activities at
the State and local levels; performance outcomes to be
achieved; coordination with activities funded under WIA, TANF,
and other programs; timelines for implementation and the number
of participants expected to be placed in subsidized employment;
assurances regarding the reporting of information to the
Secretary; and assurances regarding compliance with labor
standards and protections.
The State plan may be submitted in conjunction with the
request for funds to serve low-income youth under section 365
or as a modification to the WIA plan. The plan must be
submitted within 75 days after enactment, and a determination
regarding approval or disapproval made by the Secretary of
Labor within 45 days after submission. The Secretary is to
approve plans that the Secretary determines are consistent with
the requirements of the section and reasonably appropriate and
adequate to carry out the purposes of this section.
Under subsection (d), States would have the option to
administer the subsidized employment program through local
entities responsible for the Workforce Investment Act (WIA)
adult program, entities responsible for Temporary Assistance
for Needy Families (TANF), or both in coordination. The States
would allocate funding to local WIA entities that submit plans
which are approved by the Governor by formula (using the same
factors as the State formula), or to TANF agencies by any
method a State determines is appropriate.
The local plans from the WIA entities are to be submitted
within 30 days of the submission of the State plan and may be
submitted as a modification of the local WIA plan. The plan
would contain the elements required in the State plan. The
Governor is to approve or disapprove the plan within 30 days,
and if approved, allocate funds to the local areas within 30
days after approval.
The State would reallocate funding from local WIA entities
that do not submit or have an approved plan to other local
areas. States would reserve up to 5 percent of funds for
administration and technical assistance, and local WIA areas
would be permitted to use up to 10 percent of their funding for
administrative costs.
Under subsection (e), funds would be used to provide
subsidized employment to unemployed, low-income adults, with a
priority for opportunities likely to lead to unsubsidized
employment. The funds could also be used to provide support
services that enable participation in subsidized employment.
The States or local entities administering the program may, in
accordance with guidance issued by the Secretary, determine the
percentage of the wages and costs of employing a participant
for which an employer will receive a subsidy, and the duration
of the subsidy.
Section 365--Summer Employment and Year-Round Employment
Opportunities for Low-Income Youth. This section describes how
the $1.5 billion from the Fund for summer jobs and year-round
employment opportunities for low-income youth is to be allotted
and administered. Subsection (a) authorizes the allotments.
Subsection (b) requires the Secretary of Labor to issue
guidance regarding the implementation of this section not later
than 20 days after the date the Act is enacted. That subsection
also provides that except as otherwise provided in guidance or
in this section, the activities are to be administered in
accordance with the youth formula program under title I of WIA.
Subsection (c) provides for State allotments. After a
reservation of not more than 0.25 percent for outlying areas
and 1.5 percent for Indian and Native American grantees, the
Secretary of Labor would allot funds among States in accordance
with the same formula (based on relative unemployment and the
number of disadvantaged individuals) that is used under section
364.
Subsection (d) provides that for a State to be eligible to
receive funds under this section, the State must submit a State
plan modification to its WIA plan or other request in a form
specified by the Secretary in guidance. The plan modification
or request is to include: the strategies and activities to
provide summer employment opportunities and year-round
employment opportunities for low-income youth, including
linkages to educational activities; the requirements relating
to eligibility and targeting of assistance among low-income
youth; performance outcomes; timelines for implementation and
the number of youth expected to be placed in employment
opportunities; assurances regarding reporting to the Secretary;
and assurances regarding compliance with labor standards.
The State plan modification or request is to be submitted
within 30 days of the issuance of guidance by the Secretary.
The Secretary is then to approve the State plan modification or
request unless it is inconsistent with the requirements of this
section. The funds are to be allotted within 30 days after the
Secretary approves the plan.
Subsection (e) relates to within-State allocation and
administration of funds. The State may reserve up to 5 percent
of the funds for administration and technical assistance and is
to allocate the remainder to local workforce investment areas
in accordance with the same formula factors used to allot funds
among States. To be eligible for an allocation, the local
workforce investment boards must submit to the Governor a local
plan modification (or other form of request specified in
guidance issued by the Secretary), describing the strategies
and activities to be carried out under this section. The
Governor is to approve the plan modification or request within
30 days of submission if it is not inconsistent with the
requirements of this section, and allocate the funds within 30
days of approval. If a local area does not submit a plan or its
plan is not approved, the Governor may recapture and reallocate
the funds to the other local areas in the State according to
their relative shares under the formula.
Subsection (f) relates to the use of funds. The local areas
are to provide summer employment opportunities with direct
linkages to academic and occupational learning to low-income
youth ages 16-24. In addition, the local area is to provide
year-round employment opportunities, which may be combined with
other activities, to low-income youth with a priority to out-
of-school youth who are high school dropouts or basic skills
deficient and unemployed or underemployed. In identifying
employment opportunities, priority is to be given to emerging
or in-demand occupations or in the public or nonprofit sector
that meet community needs. The local areas must also give
priority to linking year-round program participants to training
and educational activities that will provide an industry-
recognized certificate or credential.
Section 366--Work-Based Employment Strategies of
Demonstrated Effectiveness. This section describes how the $1.5
billion from the Fund for competitive grants to local areas to
provide work-based training would be administered. Subsection
(a) authorizes the Secretary of Labor to competitively award
grants to eligible entities to support strategies and
activities of demonstrated effectiveness.
Under subsection (b), these strategies and activities are
to be designed to provide unemployed, low-income adults or low-
income youth with skills that will lead to employment upon
completion of the activities. These activities may include: on-
the-job training, registered apprenticeship programs, or other
programs that combine work with skills development; sector-
based training programs that are designed to meet specific
needs of employers or include a significant work experience
component; acquisition of industry-recognized credentials in a
growth sector or demand industry; connections to immediate work
opportunities that includes concurrent skills training and
other supports; career academies that include paid internships
and concurrent enrollment in community colleges; and integrated
basic education and training for low-skilled adults.
Subsection (c) describes the eligible entities that may
apply for the competitive grants. These entities would include
a local chief elected official, in collaboration with the local
workforce investment board (or a partnership of such officials
and boards from a region or State), or an entity eligible to
apply for an Indian and Native American grant under section 166
of the WIA. These officials, boards and entities would be able
to partner with a variety of other organizations, including
employers and employer associations, community colleges and
other postsecondary and adult education institutions;
community-based organizations; joint labor-management
committees; and work-related intermediaries.
Subsection (d) relates to the application for funds. At a
minimum, the application is to include the strategies and
activities that will be used to provide unemployed, low-income
adults or low-income youth with the skills needed for
employment; target populations within those categories, such as
individuals with disabilities and individuals who have
exhausted all rights to unemployment compensation; how the
activities will address the needs of the target populations and
employers in the local area; expected outcomes; evidence that
the funds may be expended expeditiously; coordination with
other programs; evidence of employer commitment to participate,
including identification of anticipated occupational and skill
needs; and assurances regarding reporting and labor standards
and protections.
Subsection (e) provides that in awarding grants, the
Secretary would give priority to grant applicants from areas of
high poverty and high unemployment, including Public Use
Microdata Areas (PUMAs).
Subsection (f) provides that the Secretary of Labor would
administer this section in coordination with the Secretary of
Education, Secretary of Health and Human Services, and other
appropriate agency heads.
Section 367--General Requirements. This section contains
general requirements applicable to all of the activities
carried out under the Fund. Under subsection (a), the labor
standards and protections and nondiscrimination requirements
specified under WIA would apply to activities carried out under
this Act, in addition to other Federal laws.
Under subsection (b), the Secretary of Labor is to require
funding recipients to report fiscal, performance, and other
information, and would require several minimum reporting
elements, including: the number and demographic characteristics
of participants; the amount of fund expenditures; the number of
jobs created; and specified participant outcomes.
Under subsection (c), funds provided under this Act may
only be used for activities that are in addition to activities
that would otherwise be available in the State or local area in
the absence of such funds.
Under subsection (d), the Secretary of Labor may establish
additional requirements to ensure the appropriate and prompt
implementation of this Act.
Under subsection (e), the Secretary of Labor is to report
performance information and evaluation results to Congress and
the public.
Section 368--Definitions. This section would establish
definitions for the following terms which are used in the Act:
local chief elected official; local workforce investment area;
local workforce investment board; low-income youth; outlying
area; unemployed, low-income adult; and State.
SUBTITLE D--PROHIBITION OF DISCRIMINATION IN EMPLOYMENT ON THE BASIS OF
AN INDIVIDUAL'S STATUS AS UNEMPLOYED
Section 371--Short Title. This section provides that this
subtitle may be cited as the ``Fair Employment Opportunity Act
of 2011.''
Section 372--Findings and Purpose. This section sets forth
Congress's findings and the purposes of the Act. Subsection (a)
states that Congress has found that the denial of employment
opportunities to individuals because they are currently
unemployed is discriminatory and burdens commerce in ways
explained in subsections of this Section. Subsections (a)(1)-
(5) describe the burdens on commerce imposed by denial of
employment opportunities to individuals who are currently
unemployed. Those burdens include: (1) reducing personal
consumption and undermining economic stability; (2) squandering
essential human capital; (3) increasing demands for
unemployment insurance, reducing trust fund assets, and raising
payroll taxes for employers and/or cutting benefits for jobless
workers; (4) imposing additional burdens on publicly funded
health and welfare programs; and (5) depressing income and
other tax revenues that governments rely on to support
operations and institutions essential to commerce.
Subsection (b) sets out the purposes of the Act. Subsection
(b)(1) states that the Act is intended to prohibit employers
and employment agencies from disqualifying an individual from
employment opportunities because of that individual's status as
unemployed. Subsection (b)(2) states that the Act is intended
to prohibit employers and employment agencies from publishing
or posting any advertisement or announcement for an employment
opportunity that indicates that an individual's status as
unemployed disqualifies the individual for the opportunity.
Subsection (b)(3) states that the Act is intended to eliminate
the burdens on commerce caused by the exclusion of such
individuals from employment.
Section 373--Definitions. Subsection (1) defines ``affected
individual'' to mean any person who was subject to an unlawful
employment practice because of his or her status as unemployed.
Subsection (2) states that ``Commission'' means the Equal
Employment Opportunity Commission.
Subsection (3) defines ``employee'' to include employees
covered under Section 701(f) of the Civil Rights Act of 1964;
State employees covered by Section 302(a)(1) of the Government
Employee Rights Act of 1991; covered employees as defined in
Section 101 of the Congressional Accountability Act of 1995; or
employees or applicants covered by Section 717(a) of the Civil
Rights Act of 1964.
Subsection (4) defines ``employer'' to mean a person
engaged in an industry affecting commerce who has 15 or more
employees for each working day in each of 20 or more calendar
weeks in the current or preceding calendar year and any agent
of such a person. This subsection excludes from the definition
of ``employer'' a bona fide private membership club that is
exempt from taxation under Section 501(c) of the Internal
Revenue Code of 1986. The subsection further defines
``employer'' to mean an employing authority to which Section
302(a)(1) of the Government Employee Rights Act of 1991
applies; an employing office as defined in Section 101 of the
Congressional Accountability Act of 1995 or section 411(c) of
title 3, United States Code; or an entity to which Section
717(a) of the Civil Rights Act of 1964 applies.
Subsection (5) defines ``employment agency'' to mean any
person that regularly undertakes, with or without compensation,
to procure employees for an employer or to procure for
individuals opportunities to work as employees of an employer
and includes an agent of such a person. Subsection (5) further
defines ``employment agency'' to mean any person who maintains
a website or print medium that publishes advertisements or
announcements of openings in jobs for employees.
Subsection (6) states that the term ``person'' has the
meaning given that term in Section 701(a) of the Civil Rights
Act of 1964.
Subsection (7) defines ``status as unemployed'' to mean,
with respect to an individual, that the individual at the time
of application for employment or at the time of action alleged
to violate this Act does not have a job, is available for work,
and is searching for work.
Section 374--Prohibited Acts. This section sets forth the
actions that the Act prohibits employers and employment
agencies from taking. Subsection (a) describes unlawful
employment practices by an employer. Subsection (a)(1) states
that it shall be an unlawful employment practice for an
employer to publish, in print, on the Internet, or in any
medium, an advertisement or announcement for a job that
includes any provision stating or indicating that an
individual's status as unemployed disqualifies the individual
for any employment opportunity. The subsection also bars any
provision stating or indicating that an employer will not
consider or hire an individual based on that individual's
status as unemployed.
Subsection (a)(2) states that it shall be an unlawful
employment practice for an employer to fail or refuse to
consider for employment, or fail or refuse to hire an
individual as an employee because of the individual's status as
unemployed.
Subsection (a)(3) states that it shall be an unlawful
employment practice for an employer to direct or request that
an employment agency take an individual's status as unemployed
into account to disqualify an applicant for consideration,
screening, or referral for employment as an employee.
Subsection (b) describes unlawful employment practices by
an employment agency. Subsection (b)(1) states that it shall be
an unlawful employment practice for an employment agency to
publish, in print, on the Internet, or in any medium, an
advertisement or announcement for a job that includes any
provision stating or indicating that an individual's status as
unemployed disqualifies the individual for any employment
opportunity. The subsection also bars any provision stating or
indicating that an employer or an employment agency will not
consider or hire an individual based on that individual's
status as unemployed.
Subsection (b)(2) bars employment agencies from screening,
failing or refusing to consider or refer an individual for
employment as an employee because of the individual's status as
unemployed.
Subsection (b)(3) prohibits an employment agency from
limiting, segregating or classifying individuals in any manner
that would limit or tend to limit their access to information
about jobs or consideration, screening or referral for jobs as
employees, because of their status as unemployed.
Subsection (c) bars interference with rights, proceedings
and inquiries under the Act and makes it unlawful for any
employer or employment agency to: interfere with, restrain, or
deny the exercise of or the attempt to exercise, any right
provided under the Act. The subsection further bars any
employer or employment agency from failing or refusing to hire,
discharging, or otherwise discriminating against any
individual, as an employee, because the individual opposed
practices made unlawful by the Act; asserted any right, filed
any charge, or instituted any proceeding under or related to
the Act; gave (or is about to give) any information, or
testified (or is about to testify) in connection with any
inquiry or proceeding related to any right provided under the
Act.
Subsection (d) sets forth a rule of construction that
nothing in the Act is intended to preclude an employer or
employment agency from considering an individual's employment
history or examining the reasons underlying an individual's
status as unemployed in assessing the individual's ability to
perform the job or otherwise making employment decisions about
the individual. The subsection further states that such
consideration or examination may include an assessment of
whether an individual's employment in a similar or related job
for a period of time reasonably proximate to the consideration
of such individual for employment is job-related and consistent
with business necessity.
Section 375--Enforcement. Subsection (a) sets out the
powers provided to different entities to administer and enforce
the Act. Subsection (a) states that the Equal Employment
Opportunity Commission; the Librarian of Congress; the Board as
defined in Section 101 of the Congressional Accountability Act;
the Attorney General; the President, the Commission and the
Merit Systems Protection Board; and the courts of the United
States shall have the same powers under the Act as each entity
does under other non-discrimination statutes each enforces when
addressing the case of an affected individual who would be
covered by such statutes.
Subsection (b) describes the procedures applicable to a
claim alleged by an individual for a violation of the Act.
Those procedures are the procedures that apply for a violation
of Title VII of the Civil Rights Act of 1964 in the case of a
claim alleged by the individual for a violation of that title;
those that are applicable for a violation of Section 302(a)(1)
of the Government Employee Rights Act of 1991 in the case of a
claim alleged by the individual for a violation of such
section; the procedures applicable for a violation of Section
201(a)(1) or the Congressional Accountability Act of 1995 in
the case of a claim alleged by the individual for a violation
of such section; and the procedures applicable for a violation
of Section 411 of Title 3, United States Code, in the case of a
claim alleged by the individual for a violation of such
section.
Subsection (c)(1) identifies the remedies available for a
violation of section 374(a)(1) or 374(b)(1) of the Act: (a) an
order enjoining the respondent from engaging in the unlawful
employment practice; (b) reimbursement of costs expended as a
result of the unlawful employment practice; (c) liquidated
damages not to exceed $1,000 for each day of the violation; and
(d) reasonable attorney's fees (including expert fees) and
costs attributable to pursuit of a claim under the Act, except
that no person identified in Section 375(a) of the Act is
eligible to receive attorney's fees.
Subsection (c)(2) identifies the remedies available for a
violation of any other subsection of the Act as available under
other existing law, except that in a case in which wages,
salary, employment benefits, or other compensation have not
been denied or lost to the individual, damages may be awarded
in an amount not to exceed $5,000. Those remedies are the
remedies available for a violation of Title VII of the Civil
Rights Act of 1964 in the case of a claim alleged by the
individual for a violation of that title; those that are
applicable for a violation of Section 302(a)(1) of the
Government Employee Rights Act of 1991 in the case of a claim
alleged by the individual for a violation of such section;
those that are applicable for a violation of Section 201(a)(1)
or the Congressional Accountability Act of 1995 in the case of
a claim alleged by the individual for a violation of such
section; and those that are applicable for a violation of
Section 411 of Title 3, United States Code, in the case of a
claim alleged by the individual for a violation of such
section.
Section 376--Federal and State Immunity. Subsection (a)
states that a State shall not be immune under the 11th
Amendment to the Constitution to suits brought in federal court
challenging a violation of the Act.
Subsection (b) states that a State's receipt or use of
Federal financial assistance for any program or activity shall
constitute a waiver of sovereign immunity to a suit brought by
an employee or applicant for employment of that program or
activity for a remedy authorized under the Act. Subsection (b)
defines ``program or activity'' to have the meaning given the
term in Section 606 of the Civil Rights Act of 1964 and
provides that the waiver of sovereign immunity with respect to
a program or activity applies to conduct occurring on or after
the day, after the date of enactment of the Act, on which a
State first receives or uses Federal financial assistance for
the program or activity.
Subsection (c) states that an official of a State may be
sued in his official capacity by any employee or applicant for
employment who has complied with the applicable procedures of
the Act for a remedy authorized under the Act.
Subsection (d) states that in an action or administrative
proceeding against the United States or a State for a violation
of the Act, remedies are available to the same extent as such
remedies would be available against a non-governmental entity.
Section 377--Relationship to Other Laws. This section
states that the Act does not invalidate or limit the rights,
remedies or procedures available to an individual claiming
discrimination prohibited under any other Federal law or
regulation or any law or regulation of a State or political
subdivision of a State.
Section 378--Severability. This section states that if any
provision of the Act, or application of the provision to any
person or circumstance, is held to be invalid, the remainder of
the Act and the application of the provision to other persons
or circumstances shall not be affected.
Section 379--Effective Date. This section states that the
Act shall take effect on the date of enactment and shall not
apply to conduct occurring before the effective date.
TITLE IV--OFFSETS
The following subtitles raise revenue to support the hiring
incentives and important tax relief provided by the American
Jobs Act to American taxpayers.
SUBTITLE A--28 PERCENT LIMITATION ON CERTAIN DEDUCTIONS AND EXCLUSIONS
Section 401--28 Percent Limitation on Certain Deductions
and Exclusions. This section would limit the value of all
itemized deductions and certain other tax expenditures for
high-income taxpayers by limiting the tax value of otherwise
allowable deductions and exclusions to 28 percent. No taxpayer
with adjusted gross income under $250,000 for married couples
filing jointly (or $200,000 for single taxpayers) would be
subject to this limitation. The limitation would affect
itemized deductions and certain other tax expenditures that
would otherwise reduce taxable income in the 36 or 39.6 percent
tax brackets. A similar limitation also would apply under the
alternative minimum tax. This section would be effective for
taxable years beginning on or after January 1, 2013.
SUBTITLE B--TAX CARRIED INTEREST IN INVESTMENT PARTNERSHIPS AS ORDINARY
INCOME
Section 411--Partnership Interests Transferred in
Connection With Performance of Services. Current law allows
service partners to receive capital gains treatment on labor
income without limit, which creates an unfair and inefficient
tax preference. This section would tax as ordinary income, and
make subject to self-employment tax, a service partner's share
of the income of an investment partnership attributable to a
carried interest because such income is derived from the
performance of services.
Section 412--Special Rules for Partners Providing
Investment Management Services to Partnerships. To the extent
that a service partner contributes ``invested capital'' and the
partnership reasonably allocates its income and loss between
such invested capital and the remaining interest, income
attributable to the invested capital would not be
recharacterized. This subtitle would be effective for taxable
years beginning after December 31, 2012.
SUBTITLE C--CLOSE LOOPHOLE FOR CORPORATE JET DEPRECIATION
Section 421--General Aviation Aircraft Treated as 7-Year
Property. The cost of capital assets used in businesses
generally cannot be deducted immediately, but instead may be
depreciated over a period of years. Current law contains a
loophole that allows corporate jets to be depreciated faster
than jets used by airlines to carry passengers. This section
closes this loophole, requiring corporate jets to be
depreciated over the same number of years as other aircraft.
This section would be effective for taxable years beginning
after December 31, 2012.
SUBTITLE D--REPEAL OIL SUBSIDIES
Section 431--Repeal of Deduction for Intangible Drilling
and Development Costs in the Case of Oil and Gas Wells. This
section would not allow expensing of IDCs or 60-month
amortization of capitalized IDCs. Instead, IDCs would be
capitalized as depreciable or depletable property, depending on
the nature of the cost incurred, in accordance with generally
applicable rules. This section would repeal current law
expensing of IDCs and 60-month amortization of capitalized IDCs
effective for costs paid or incurred after December 31, 2012.
Section 432--Repeal of Deduction for Tertiary Injectants.
This section would repeal the deduction available under
existing law for the cost of qualified tertiary injectant
expenses. Qualified tertiary injectant expenses are amounts
paid or incurred for any tertiary injectants (other than
recoverable hydrocarbon injectants) that are used as a part of
a tertiary recovery method to increase the recovery of crude
oil. This section would repeal the deduction for qualified
tertiary injectant expenses effective for amounts paid or
incurred after December 31, 2012.
Section 433--Repeal of Percentage Depletion for Oil and Gas
Wells. This section would repeal the percentage depletion
method available under existing law for recovery of the capital
costs of oil and gas wells. Under the percentage depletion
method, the amount of the deduction is a statutory percentage
of the gross income from the property. Instead of the
percentage depletion method, taxpayers would be permitted to
claim cost depletion on their adjusted basis, if any, in oil
and gas wells. Under the cost depletion method, the basis
recovery for a taxable year is proportional to the exhaustion
of the property during the year. This method does not permit
cost recovery deductions that exceed basis or that are
allowable on an accelerated basis. This section would be
effective for taxable years beginning after December 31, 2012.
Section 434--Section 199 Deduction Not Allowed With Respect
to Oil, Natural Gas, or Primary Products Thereof. This section
would deny the deduction available under existing law with
respect to income attributable to domestic production
activities (the manufacturing deduction) for oil and gas
production. For taxable years beginning after 2009, the
manufacturing deduction is generally equal to 9 percent of the
lesser of qualified production activities income for the
taxable year or taxable income for the taxable year, limited to
50 percent of the W-2 wages of the taxpayer for the taxable
year. The deduction for income from oil and gas production
activities is computed at a 6 percent rate. Qualified
production activities income is generally calculated as a
taxpayer's domestic production gross receipts minus the cost of
goods sold and other expenses, losses, or deductions
attributable to such receipts. The manufacturing deduction
generally is available to all taxpayers that generate qualified
production activities income, which under current law includes
income from the sale, exchange or disposition of oil, natural
gas or primary products thereof produced in the United States.
The proposal would retain the overall manufacturing deduction,
but exclude from the definition of domestic production gross
receipts all gross receipts derived from the sale, exchange or
other disposition of oil, natural gas or a primary product
thereof. This section would be effective for taxable years
beginning after December 31, 2012.
Section 435--Repeal Oil and Gas Working Interest Exception
to Passive Activity Rules. This section would repeal the
exception under existing law for oil and gas working interests
from the passive loss rules that limit deductions and credits
from passive trade or business activities. Deductions
attributable to passive activities, to the extent they exceed
income from passive activities, generally may not be deducted
against other income, such as wages, portfolio income, or
business income that is not derived from a passive activity. A
similar rule applies to credits. Suspended deductions and
credits are carried forward and treated as deductions and
credits from passive activities in the next year. The suspended
losses and credits from a passive activity are allowed in full
when the taxpayer completely disposes of the activity. Passive
activities are defined to include trade or business activities
in which the taxpayer does not materially participate. Under
existing law, an exception is provided, however, for any
working interest in an oil or gas property that the taxpayer
holds directly or through an entity that does not limit the
liability of the taxpayer with respect to the interest. This
section would repeal this exception for taxable years beginning
after December 31, 2012.
Section 436--Uniform Seven-Year Amortization for Geological
and Geophysical Expenditures. Geological and geophysical
expenditures are costs incurred for the purpose of obtaining
and accumulating data that will serve as the basis for the
acquisition and retention of mineral properties. Under existing
law, the amortization period for geological and geophysical
expenditures incurred in connection with oil and gas
exploration in the United States is two years for independent
producers and seven years for integrated oil and gas producers.
The proposal would increase the amortization period from two
years to seven years for geological and geophysical
expenditures incurred by independent producers in connection
with all oil and gas exploration in the United States. Seven-
year amortization would apply even if the property is abandoned
and any remaining basis of the abandoned property would be
recovered over the remainder of the seven-year period. This
section would be effective for amounts paid or incurred after
December 31, 2012.
Section 437--Repeal Enhanced Oil Recovery (EOR) Credit.
This section would repeal the 15-percent credit available under
existing law for eligible costs attributable to EOR projects.
Eligible costs currently include the cost of constructing a gas
treatment plant to prepare Alaska natural gas for pipeline
transportation and any of the following costs with respect to a
qualified EOR project: (1) the cost of depreciable or
amortizable tangible property that is an integral part of the
project; (2) intangible drilling and development costs (IDCs)
that the taxpayer can elect to deduct; and (3) deductible
tertiary injectant costs. Additional limitations apply, and the
allowable credit is phased out under existing law over a $6
range for a taxable year if the annual average unregulated
wellhead price per barrel of domestic crude oil during the
calendar year preceding the calendar year in which the taxable
year begins (the reference price) exceeds an inflation adjusted
threshold. The repeal of the EOR credit would be effective for
taxable years beginning after December 31, 2012.
Section 438--Repeal Marginal Well Production Credit. This
section would repeal the credit available under existing law
for crude oil and natural gas produced from marginal wells.
Under existing law, the credit rate is $3.00 per barrel of oil
and 50 cents per 1,000 cubic feet of natural gas for taxable
years beginning in 2005 and is adjusted for inflation in
taxable years beginning after 2005. The credit can be carried
back up to five years. The credit is available for production
from wells that produce oil and gas qualifying as marginal
production for purposes of the percentage depletion rules or
that have average daily production of not more than 25 barrel-
of-oil equivalents and produce at least 95 percent water. The
credit per well is limited to 1,095 barrels of oil or barrel-
of-oil equivalents per year. The credit rate for crude oil is
phased out for a taxable year if the annual average unregulated
wellhead price per barrel of domestic crude oil during the
calendar year preceding the calendar year in which the taxable
year begins (the reference price) exceeds the applicable
threshold. The repeal of the marginal well credit would be
effective for taxable years beginning after December 31, 2012.
SUBTITLE E--DUAL CAPACITY TAXPAYERS
Section 441--Modifications of Foreign Tax Credit Rules
Applicable to Dual Capacity Taxpayers. The purpose of the
foreign tax credit is to mitigate double taxation of income by
the United States and a foreign country. When a payment is made
to a foreign country in exchange for a specific economic
benefit, there is no double taxation. Current law recognizes
the distinction between a payment of creditable taxes and a
payment in exchange for a specific economic benefit but fails
to achieve the appropriate split between the two when a single
payment is made in a case where, for example, a foreign country
imposes a levy only on oil and gas income, or imposes a higher
levy on oil and gas income as compared to other income. This
section would allow a dual capacity taxpayer to treat as a
creditable tax the portion of a foreign levy that does not
exceed the foreign levy that the taxpayer would pay if it were
not a dual-capacity taxpayer.
Section 442--Separate Basket Treatment Taxes Paid on
Foreign Oil and Gas Income. This section would convert the
special foreign tax credit limitation rules of section 907 into
a separate category within section 904 for foreign oil and gas
income. This section would yield to United States treaty
obligations to the extent that they explicitly allow a credit
for taxes paid or accrued on certain oil or gas income. This
subtitle would be effective for taxable years beginning after
December 31, 2012.
SUBTITLE F--INCREASED TARGET AND TRIGGER FOR JOINT SELECT COMMITTEE ON
DEFICIT REDUCTION
Section 451--Increased Target and Trigger for Joint Select
Committee on Deficit Reduction. Subtitles A through E of Title
IV of this bill enact offsets to pay for the jobs creation
provisions of the bill. If the Joint Select Committee on
Deficit Reduction achieves additional savings in the amount of
the cost of these jobs creation provisions, the offsets do not
take effect.
Subsection (a) of Section 451 amends the Budget Control Act
of 2011 to increase the $1.5 trillion deficit reduction target
of the Joint Committee by the cost of the jobs creation
provisions (Titles I-III). This increased amount would be
revised based on the final score of the jobs provisions.
Subsection (b) of Section 451 amends the Budget Control Act
to specify that if the Joint Committee exceeds the $1.2
trillion in deficit reduction necessary to avoid sequestration
by the cost of the jobs creation provisions, then the offsets
in Title IV of this bill will not take effect. As in subsection
(a) of this section, this increased amount would be revised
based on the final score of the jobs provisions (Titles I-III).
Subsection (b) does not affect the existing requirement in the
Budget Control Act for sequestration if the Joint Committee
does not hit its minimum deficit reduction target of $1.2
trillion.
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``American
Jobs Act of 2011''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. References.
Sec. 3. Severability.
Sec. 4. Buy American--Use of American iron, steel, and manufactured
goods.
Sec. 5. Wage rate and employment protection requirements.
TITLE I--RELIEF FOR WORKERS AND BUSINESSES
Subtitle A--Payroll Tax Relief
Sec. 101. Temporary payroll tax cut for employers, employees and the
self-employed.
Sec. 102. Temporary tax credit for increased payroll.
Subtitle B--Other Relief for Businesses
Sec. 111. Extension of temporary 100 percent bonus depreciation for
certain business assets.
Sec. 112. Surety bonds.
Sec. 113. Delay in application of withholding on government contractors.
TITLE II--PUTTING WORKERS BACK ON THE JOB WHILE REBUILDING AND
MODERNIZING AMERICA
Subtitle A--Veterans Hiring Preferences
Sec. 201. Returning heroes and wounded warriors work opportunity tax
credits.
Subtitle B--Teacher Stabilization
Sec. 202. Purpose.
Sec. 203. Grants for the outlying areas and the Secretary of the
Interior; availability of funds.
Sec. 204. State allocation.
Sec. 205. State application.
Sec. 206. State reservation and responsibilities.
Sec. 207. Local educational agencies.
Sec. 208. Early learning.
Sec. 209. Maintenance of effort.
Sec. 210. Reporting.
Sec. 211. Definitions.
Sec. 212. Authorization of appropriations.
Subtitle C--First Responder Stabilization
Sec. 213. Purpose.
Sec. 214. Grant program.
Sec. 215. Appropriations.
Subtitle D--School Modernization
PART I--Elementary and Secondary Schools
Sec. 221. Purpose.
Sec. 222. Authorization of appropriations.
Sec. 223. Allocation of funds.
Sec. 224. State use of funds.
Sec. 225. State and local applications.
Sec. 226. Use of funds.
Sec. 227. Private schools.
Sec. 228. Additional provisions.
PART II--Community College Modernization
Sec. 229. Federal assistance for community college modernization.
PART III--General Provisions
Sec. 230. Definitions.
Sec. 231. Buy American.
Subtitle E--Immediate Transportation Infrastrucure Investments
Sec. 241. Immediate transportation infrastructure investments.
Subtitle F--Building and Upgrading Infrastructure for Long-Term
Development
Sec. 242. Short title; table of contents.
Sec. 243. Findings and purpose.
Sec. 244. Definitions.
PART I--American Infrastructure Financing Authority
Sec. 245. Establishment and general authority of AIFA.
Sec. 246. Voting members of the board of directors.
Sec. 247. Chief executive officer of AIFA.
Sec. 248. Powers and duties of the board of directors.
Sec. 249. Senior management.
Sec. 250. Special Inspector General for AIFA.
Sec. 251. Other personnel.
Sec. 252. Compliance.
PART II--Terms and Limitations on Direct Loans and Loan Guarantees
Sec. 253. Eligibility criteria for assistance from AIFA and terms and
limitations of loans.
Sec. 254. Loan terms and repayment.
Sec. 255. Compliance and enforcement.
Sec. 256. Audits; reports to the President and Congress.
PART III--Funding of AIFA
Sec. 257. Administrative fees.
Sec. 258. Efficiency of AIFA.
Sec. 259. Funding.
PART IV--Extension of Exemption From Alternative Minimum Tax Treatment
for Certain Tax-Exempt Bonds
Sec. 260. Extension of exemption from alternative minimum tax treatment
for certain tax-exempt bonds.
Subtitle G--Project Rebuild
Sec. 261. Project rebuild.
Subtitle H--National Wireless Initiative
Sec. 271. Definitions.
PART I--Auctions of Spectrum and Spectrum Management
Sec. 272. Clarification of authorities to repurpose Federal spectrum for
commercial purposes.
Sec. 273. Incentive auction authority.
Sec. 274. Requirements when repurposing certain mobile satellite
services spectrum for terrestrial broadband use.
Sec. 275. Permanent extension of auction authority.
Sec. 276. Authority to auction licenses for domestic satellite services.
Sec. 277. Directed auction of certain spectrum.
Sec. 278. Authority to establish spectrum license user fees.
PART II--Public Safety Broadband Network
Sec. 281. Reallocation of D block for public safety.
Sec. 282. Flexible use of narrowband spectrum.
Sec. 283. Single public safety wireless network licensee.
Sec. 284. Establishment of Public Safety Broadband Corporation.
Sec. 285. Board of directors of the corporation.
Sec. 286. Officers, employees, and committees of the corporation.
Sec. 287. Nonprofit and nonpolitical nature of the corporation.
Sec. 288. Powers, duties, and responsibilities of the corporation.
Sec. 289. Initial funding for corporation.
Sec. 290. Permanent self-funding; duty to assess and collect fees for
network use.
Sec. 291. Audit and report.
Sec. 292. Annual report to Congress.
Sec. 293. Provision of technical assistance.
Sec. 294. State and local implementation.
Sec. 295. State and local implementation fund.
Sec. 296. Public safety wireless communications research and
development.
Sec. 297. Public Safety Trust Fund.
Sec. 298. FCC report on efficient use of public safety spectrum.
Sec. 299. Public safety roaming and priority access.
TITLE III--ASSISTANCE FOR THE UNEMPLOYED AND PATHWAYS BACK TO WORK
Subtitle A--Supporting Unemployed Workers
Sec. 301. Short title.
PART I--Extension of Emergency Unemployment Compensation and Certain
Extended Benefits Provisions, and Establishment of Self-Employment
Assistance Program
Sec. 311. Extension of emergency unemployment compensation program.
Sec. 312. Temporary extension of extended benefit provisions.
Sec. 313. Reemployment services and reemployment and eligibility
assessment activities.
Sec. 314. Federal-State agreements to administer a self-employment
assistance program.
Sec. 315. Conforming amendment on payment of bridge to work wages.
Sec. 316. Additional extended unemployment benefits under the Railroad
Unemployment Insurance Act.
PART II--Reemployment NOW Program
Sec. 321. Establishment of reemployment NOW program.
Sec. 322. Distribution of funds.
Sec. 323. State plan.
Sec. 324. Bridge to work program.
Sec. 325. Wage insurance.
Sec. 326. Enhanced reemployment strategies.
Sec. 327. Self-employment programs.
Sec. 328. Additional innovative programs.
Sec. 329. Guidance and additional requirements.
Sec. 330. Report of information and evaluations to Congress and the
public.
Sec. 331. State.
PART III--Short-Time Compensation Program
Sec. 341. Treatment of short-time compensation programs.
Sec. 342. Temporary financing of short-time compensation payments in
states with programs in law.
Sec. 343. Temporary financing of short-time compensation agreements.
Sec. 344. Grants for short-time compensation programs.
Sec. 345. Assistance and guidance in implementing programs.
Sec. 346. Reports.
Subtitle B--Long Term Unemployed Hiring Preferences
Sec. 351. Long term unemployeed workers work opportunity tax credits.
Subtitle C--Pathways Back to Work
Sec. 361. Short title.
Sec. 362. Establishment of Pathways Back to Work Fund.
Sec. 363. Availability of funds.
Sec. 364. Subsidized employment for unemployed, low-income adults.
Sec. 365. Summer employment and year-round employment opportunities for
low-income youth.
Sec. 366. Work-based employment strategies of demonstrated
effectiveness.
Sec. 367. General requirements.
Sec. 368. Definitions.
Subtitle D--Prohibition of Discrimination in Employment on the Basis of
an Individual's Status as Unemployed
Sec. 371. Short title.
Sec. 372. Findings and purpose.
Sec. 373. Definitions.
Sec. 374. Prohibited acts.
Sec. 375. Enforcement.
Sec. 376. Federal and State immunity.
Sec. 377. Relationship to other laws.
Sec. 378. Severability.
Sec. 379. Effective date.
TITLE IV--OFFSETS
Subtitle A--28 Percent Limitation on Certain Deductions and Exclusions
Sec. 401. 28 percent limitation on certain deductions and exclusions.
Subtitle B--Tax Carried Interest in Investment Partnerships as Ordinary
Income
Sec. 411. Partnership interests transferred in connection with
performance of services.
Sec. 412. Special rules for partners providing investment management
services to partnerships.
Subtitle C--Close Loophole for Corporate Jet Depreciation
Sec. 421. General aviation aircraft treated as 7-year property.
Subtitle D--Repeal Oil Subsidies
Sec. 431. Repeal of deduction for intangible drilling and development
costs in the case of oil and gas wells.
Sec. 432. Repeal of deduction for tertiary injectants.
Sec. 433. Repeal of percentage depletion for oil and gas wells.
Sec. 434. Section 199 deduction not allowed with respect to oil, natural
gas, or primary products thereof.
Sec. 435. Repeal oil and gas working interest exception to passive
activity rules.
Sec. 436. Uniform seven-year amortization for geological and geophysical
expenditures.
Sec. 437. Repeal enhanced oil recovery credit.
Sec. 438. Repeal marginal well production credit.
Subtitle E--Dual Capacity Taxpayers
Sec. 441. Modifications of foreign tax credit rules applicable to dual
capacity taxpayers.
Sec. 442. Separate basket treatment taxes paid on foreign oil and gas
income.
Subtitle F--Increased Target and Trigger for Joint Select Committee on
Deficit Reduction
Sec. 451. Increased target and trigger for joint select committee on
deficit reduction.
SEC. 2. REFERENCES.
Except as expressly provided otherwise, any reference to
``this Act'' contained in any subtitle of this Act shall be
treated as referring only to the provisions of that subtitle.
SEC. 3. SEVERABILITY.
If any provision of this Act, or the application thereof to
any person or circumstance, is held invalid, the remainder of
the Act and the application of such provision to other persons
or circumstances shall not be affected thereby.
SEC. 4. BUY AMERICAN--USE OF AMERICAN IRON, STEEL, AND MANUFACTURED
GOODS.
(a) None of the funds appropriated or otherwise made
available by this Act may be used for a project for the
construction, alteration, maintenance, or repair of a public
building or public work unless all of the iron, steel, and
manufactured goods used in the project are produced in the
United States.
(b) Subsection (a) shall not apply in any case or category
of cases in which the head of the Federal department or agency
involved finds that--
(1) applying subsection (a) would be inconsistent
with the public interest;
(2) iron, steel, and the relevant manufactured
goods are not produced in the United States in
sufficient and reasonably available quantities and of a
satisfactory quality; or
(3) inclusion of iron, steel, and manufactured
goods produced in the United States will increase the
cost of the overall project by more than 25 percent.
(c) If the head of a Federal department or agency
determines that it is necessary to waive the application of
subsection (a) based on a finding under subsection (b), the
head of the department or agency shall publish in the Federal
Register a detailed written justification as to why the
provision is being waived.
(d) This section shall be applied in a manner consistent
with United States obligations under international agreements.
SEC. 5. WAGE RATE AND EMPLOYMENT PROTECTION REQUIREMENTS.
(a) Notwithstanding any other provision of law and in a
manner consistent with other provisions in this Act, all
laborers and mechanics employed by contractors and
subcontractors on projects funded directly by or assisted in
whole or in part by and through the Federal Government pursuant
to this Act shall be paid wages at rates not less than those
prevailing on projects of a character similar in the locality
as determined by the Secretary of Labor in accordance with
subchapter IV of chapter 31 of title 40, United States Code.
(b) With respect to the labor standards specified in this
section, the Secretary of Labor shall have the authority and
functions set forth in Reorganization Plan Numbered 14 of 1950
(64 Stat. 1267; 5 U.S.C. App.) and section 3145 of title 40,
United States Code.
(c) Projects as defined under title 49, United States Code,
funded directly by or assisted in whole or in part by and
through the Federal Government pursuant to this Act shall be
subject to the requirements of section 5333(b) of title 49,
United States Code.
TITLE I--RELIEF FOR WORKERS AND BUSINESSES
Subtitle A--Payroll Tax Relief
SEC. 101. TEMPORARY PAYROLL TAX CUT FOR EMPLOYERS, EMPLOYEES AND THE
SELF-EMPLOYED.
(a) Wages.--Notwithstanding any other provision of law--
(1) with respect to remuneration received during
the payroll tax holiday period, the rate of tax under
3101(a) of the Internal Revenue Code of 1986 shall be
3.1 percent (including for purposes of determining the
applicable percentage under sections 3201(a) and
3211(a) of such Code), and
(2) with respect to remuneration paid during the
payroll tax holiday period, the rate of tax under
3111(a) of such Code shall be 3.1 percent (including
for purposes of determining the applicable percentage
under sections 3221(a) and 3211(a) of such Code).
(3) Subsection (a)(2) shall only apply to--
(A) employees performing services in a
trade or business of a qualified employer, or
(B) in the case of a qualified employer
exempt from tax under section 501(a), in
furtherance of the activities related to the
purpose or function constituting the basis of
the employer's exemption under section 501.
(4) Subsection (a)(2) shall apply only to the first
$5 million of remuneration or compensation paid by a
qualified employer subject to section 3111(a) or a
corresponding amount of compensation subject to
3221(a).
(b) Self-Employment Taxes.--
(1) In general.--Notwithstanding any other
provision of law, with respect to any taxable year
which begins in the payroll tax holiday period, the
rate of tax under section 1401(a) of the Internal
Revenue Code of 1986 shall be--
(A) 6.2 percent on the portion of net
earnings from self-employment subject to
1401(a) during the payroll tax period that does
not exceed the amount of the excess of $5
million over total remuneration, if any,
subject to section 3111(a) paid during the
payroll tax holiday period to employees of the
self-employed person, and
(B) 9.3 percent for any portion of net
earnings from self-employment not subject to
subsection (b)(1)(A).
(2) Coordination with deductions for employment
taxes.--For purposes of the Internal Revenue Code of
1986, in the case of any taxable year which begins in
the payroll tax holiday period--
(A) Deduction in computing net earnings
from self-employment.--The deduction allowed
under section 1402(a)(12) of such Code shall be
the sum of (i) 4.55 percent times the amount of
the taxpayer's net earnings from self-
employment for the taxable year subject to
paragraph (b)(1)(A) of this section, plus (ii)
7.65 percent of the taxpayers net earnings from
self-employment in excess of that amount.
(B) Individual deduction.--The deduction
under section 164(f) of such Code shall be
equal to the sum of ((i) one-half of the taxes
imposed by section 1401 (after the application
of this section) with respect to the taxpayer's
net earnings from self-employment for the
taxable year subject to paragraph (b)(1)(A) of
this section plus (ii) 62.7 percent of the
taxes imposed by section 1401 (after the
application of this section) with respect to
the excess.
(c) Regulatory Authority.--The Secretary may prescribe any
such regulations or other guidance necessary or appropriate to
carry out this section, including the allocation of the excess
of $5 million over total remuneration subject to section
3111(a) paid during the payroll tax holiday period among
related taxpayers treated as a single qualified employer.
(d) Definitions.--
(1) Payroll tax holiday period.--The term ``payroll
tax holiday period'' means calendar year 2012.
(2) Qualified employer.--For purposes of this
paragraph,
(A) In general.--The term ``qualified
employer'' means any employer other than the
United States, any State or possession of the
United States, or any political subdivision
thereof, or any instrumentality of the
foregoing.
(B) Treatment of employees of post-
secondary educational institutions.--
Notwithstanding paragraph (A), the term
``qualified employer'' includes any employer
which is a public institution of higher
education (as defined in section 101 of the
Higher Education Act of 1965).
(3) Aggregation rules.--For purposes of this
subsection rules similar to sections 414(b), 414(c),
414(m) and 414(o) shall apply to determine when
multiple entities shall be treated as a single
employer, and rules with respect to predecessor and
successor employers may be applied, in such manner as
may be prescribed by the Secretary.
(e) Transfers of Funds.--
(1) Transfers to federal old-age and survivors
insurance trust fund.--There are hereby appropriated to
the Federal Old-Age and Survivors Trust Fund and the
Federal Disability Insurance Trust Fund established
under section 201 of the Social Security Act (42 U.S.C.
401) amounts equal to the reduction in revenues to the
Treasury by reason of the application of subsections
(a) and (b) to employers other than those described in
(e)(2). Amounts appropriated by the preceding sentence
shall be transferred from the general fund at such
times and in such manner as to replicate to the extent
possible the transfers which would have occurred to
such Trust Fund had such amendments not been enacted.
(2) Transfers to social security equivalent benefit
account.--There are hereby appropriated to the Social
Security Equivalent Benefit Account established under
section 15A(a) of the Railroad Retirement Act of 1974
(45 U.S.C. 231n-1(a)) amounts equal to the reduction in
revenues to the Treasury by reason of the application
of subsection (a) to employers subject to the Railroad
Retirement Tax. Amounts appropriated by the preceding
sentence shall be transferred from the general fund at
such times and in such manner as to replicate to the
extent possible the transfers which would have occurred
to such Account had such amendments not been enacted.
(f) Coordination With Other Federal Laws.--For purposes of
applying any provision of Federal law other than the provisions
of the Internal Revenue Code of 1986, the rate of tax in effect
under section 3101(a) of such Code shall be determined without
regard to the reduction in such rate under this section.
SEC. 102. TEMPORARY TAX CREDIT FOR INCREASED PAYROLL.
(a) In General.--Notwithstanding any other provision of
law, each qualified employer shall be allowed, with respect to
wages for services performed for such qualified employer, a
payroll increase credit determined as follows:
(1) With respect to the period from October 1, 2011
through December 31, 2011, 6.2 percent of the excess,
if any, (but not more than $12.5 million of the excess)
of the wages subject to tax under section 3111(a) of
the Internal Revenue Code of 1986 for such period over
such wages for the corresponding period of 2010.
(2) With respect to the period from January 1, 2012
through December 31, 2012,
(A) 6.2 percent of the excess, if any, (but
not more than $50 million of the excess) of the
wages subject to tax under section 3111(a) of
the Internal Revenue Code of 1986 for such
period over such wages for calendar year 2011,
minus
(B) 3.1 percent of the result (but not less
than zero) of subtracting from $5 million such
wages for calendar year 2011.
(3) In the case of a qualified employer for which
the wages subject to tax under section 3111(a) of the
Internal Revenue Code of 1986 (a) were zero for the
corresponding period of 2010 referred to in subsection
(a)(1), the amount of such wages shall be deemed to be
80 percent of the amount of wages taken into account
for the period from October 1, 2011 through December
31, 2011 and (b) were zero for the calendar year 2011
referred to in subsection (a)(2), then the amount of
such wages shall be deemed to be 80 percent of the
amount of wages taken into account for 2012.
(4) This subsection (a) shall only apply with
respect to the wages of employees performing services
in a trade or business of a qualified employer or, in
the case of a qualified employer exempt from tax under
section 501(a) of the Internal Revenue Code of 1986, in
furtherance of the activities related to the purpose or
function constituting the basis of the employer's
exemption under section 501.
(b) Qualified Employers.--For purposes of this section--
(1) In general.--The term ``qualified employer''
means any employer other than the United States, any
State or possession of the United States, or any
political subdivision thereof, or any instrumentality
of the foregoing.
(2) Treatment of employees of post-secondary
educational institutions.--Notwithstanding subparagraph
(1), the term ``qualified employer'' includes any
employer which is a public institution of higher
education (as defined in section 101 of the Higher
Education Act of 1965).
(c) Aggregation Rules.--For purposes of this subsection
rules similar to sections 414(b), 414(c), 414(m) and 414(o) of
the Internal Revenue Code of 1986 shall apply to determine when
multiple entities shall be treated as a single employer, and
rules with respect to predecessor and successor employers may
be applied, in such manner as may be prescribed by the
Secretary.
(d) Application of Credits.--The payroll increase credit
shall be treated as a credit allowable under Subtitle C of the
Internal Revenue Code of 1986 under rules prescribed by the
Secretary of the Treasury, provided that the amount so treated
for the period described in section (a)(1) or section (a)(2)
shall not exceed the amount of tax imposed on the qualified
employer under section 3111(a) of such Code for the relevant
period. Any income tax deduction by a qualified employer for
amounts paid under section 3111(a) of such Code or similar
Railroad Retirement Tax provisions shall be reduced by the
amounts so credited.
(e) Transfers to Federal Old-Age and Survivors Insurance
Trust Fund.--There are hereby appropriated to the Federal Old-
Age and Survivors Trust Fund and the Federal Disability
Insurance Trust Fund established under section 201 of the
Social Security Act (42 U.S.C. 401) amounts equal to the
reduction in revenues to the Treasury by reason of the
amendments made by subsection (d). Amounts appropriated by the
preceding sentence shall be transferred from the general fund
at such times and in such manner as to replicate to the extent
possible the transfers which would have occurred to such Trust
Fund had such amendments not been enacted.
(f) Application to Railroad Retirement Taxes.--For purposes
of qualified employers that are employers under section 3231(a)
of the Internal Revenue Code of 1986, subsections (a)(1) and
(a)(2) of this section shall apply by substituting section 3221
for section 3111, and substituting the term ``compensation''
for ``wages'' as appropriate.
Subtitle B--Other Relief for Businesses
SEC. 111. EXTENSION OF TEMPORARY 100 PERCENT BONUS DEPRECIATION FOR
CERTAIN BUSINESS ASSETS.
(a) In General.--Paragraph (5) of section 168(k) of the
Internal Revenue Code is amended--
(1) by striking ``January 1, 2012'' each place it
appears and inserting ``January 1, 2013'', and
(2) by striking ``January 1, 2013'' and inserting
``January 1, 2014''.
(b) Conforming Amendment.--The heading for paragraph (5) of
section 168(k) of the Internal Revenue Code is amended by
striking ``PRE-2012 PERIODS'' and inserting ``PRE-2013
PERIODS''.
SEC. 112. SURETY BONDS.
(a) Maximum Bond Amount.--Section 411(a)(1) of the Small
Business Investment Act of 1958 (15 U.S.C. 694b(a)(1)) is
amended by striking ``$2,000,000'' and inserting
``$5,000,000''.
(b) Denial of Liability.--Section 411(e)(2) of the Small
Business Investment Act of 1958 (15 U.S.C. 694b(e)(2)) is
amended by striking ``$2,000,000'' and inserting
``$5,000,000''.
(c) Sunset.--The amendments made by subsections (a) and (b)
of this section shall remain in effect until September 30,
2012.
(d) Funding.--There is appropriated out of any money in the
Treasury not otherwise appropriated, $3,000,000, to remain
available until expended, for additional capital for the Surety
Bond Guarantees Revolving Fund, as authorized by the Small
Business Investment Act of 1958, as amended.
SEC. 113. DELAY IN APPLICATION OF WITHHOLDING ON GOVERNMENT
CONTRACTORS.
Subsection (b) of section 511 of the Tax Increase
Prevention and Reconciliation Act of 2005 is amended by
striking ``December 31, 2011'' and inserting ``December 31,
2013''.
TITLE II--PUTTING WORKERS BACK ON THE JOB WHILE REBUILDING AND
MODERNIZING AMERICA
Subtitle A--Veterans Hiring Preferences
SEC. 201. RETURNING HEROES AND WOUNDED WARRIORS WORK OPPORTUNITY TAX
CREDITS.
(a) In General.--Paragraph (3) of section 51(b) of the
Internal Revenue Code is amended by striking ``($12,000 per
year in the case of any individual who is a qualified veteran
by reason of subsection (d)(3)(A)(ii))'' and inserting
``($12,000 per year in the case of any individual who is a
qualified veteran by reason of subsection (d)(3)(A)(ii)(I),
$14,000 per year in the case of any individual who is a
qualified veteran by reason of subsection (d)(3)(A)(iv), and
$24,000 per year in the case of any individual who is a
qualified veteran by reason of subsection (d)(3)(A)(ii)(II))''.
(b) Returning Heroes Tax Credits.--Section 51(d)(3)(A) of
the Internal Revenue Code is amended by striking ``or'' at the
end of paragraph (3)(A)(i), and inserting the following new
paragraphs after paragraph (ii)--
``(iii) having aggregate periods of
unemployment during the 1-year period
ending on the hiring date which equal
or exceed 4 weeks (but less than 6
months), or
``(iv) having aggregate periods of
unemployment during the 1-year period
ending on the hiring date which equal
or exceed 6 months.''.
(c) Simplified Certification.--Section 51(d) of the
Internal revenue Code is amended by adding a new paragraph 15
as follows--
``(15) Credit allowed for unemployed veterans.--
``(A) In general.--Any qualified veteran
under paragraphs (3)(A)(ii)(II), (3)(A)(iii),
and (3)(A)(iv) will be treated as certified by
the designated local agency as having aggregate
periods of unemployment if--
``(i) In the case of qualified
veterans under paragraphs
(3)(A)(ii)(II) and (3)(A)(iv), the
veteran is certified by the designated
local agency as being in receipt of
unemployment compensation under State
or Federal law for not less than 6
months during the 1-year period ending
on the hiring date; or
``(ii) In the case of a qualified
veteran under paragraph (3)(A)(iii),
the veteran is certified by the
designated local agency as being in
receipt of unemployment compensation
under State or Federal law for not less
than 4 weeks (but less than 6 months)
during the 1-year period ending on the
hiring date.
``(B) Regulatory authority.--The Secretary
in his discretion may provide alternative
methods for certification.''.
(d) Credit Made Available to Tax-Exempt Employers in
Certain Circumstances.--Section 52(c) of the Internal Revenue
Code is amended--
(1) by striking the word ``No'' at the beginning of
the section and replacing it with ``Except as provided
in this subsection, no'';
(2) the following new paragraphs are inserted at
the end of section 52(c)--
``(1) In general.--In the case of a tax-exempt
employer, there shall be treated as a credit allowable
under subpart C (and not allowable under subpart D) the
lesser of--
``(A) The amount of the work opportunity
credit determined under this subpart with
respect to such employer that is related to the
hiring of qualified veterans described in
sections 51(d)(3)(A)(ii)(II), (iii) or (iv); or
``(B) The amount of the payroll taxes of
the employer during the calendar year in which
the taxable year begins.
``(2) Credit amount.--In calculating for tax-exempt
employers, the work opportunity credit shall be
determined by substituting `26 percent' for `40
percent' in section 51(a) and by substituting `16.25
percent' for `25 percent' in section 51(i)(3)(A).
``(3) Tax-exempt employer.--For purposes of this
subpart, the term `tax-exempt employer' means an
employer that is--
``(i) an organization described in section
501(c) and exempt from taxation under section
501(a), or
``(ii) a public higher education
institution (as defined in section 101 of the
Higher Education Act of 1965).
``(4) Payroll taxes.--For purposes of this
subsection--
``(A) In general.--The term `payroll taxes'
means--
``(i) amounts required to be
withheld from the employees of the tax-
exempt employer under section 3401(a),
``(ii) amounts required to be
withheld from such employees under
section 3101(a), and
``(iii) amounts of the taxes
imposed on the tax-exempt employer
under section 3111(a).''.
(e) Treatment of Possessions.--
(1) Payments to possessions.--
(A) Mirror code possessions.--The Secretary
of the Treasury shall pay to each possession of
the United States with a mirror code tax system
amounts equal to the loss to that possession by
reason of the application of this section
(other than this subsection). Such amounts
shall be determined by the Secretary of the
Treasury based on information provided by the
government of the respective possession of the
United States.
(B) Other possessions.--The Secretary of
the Treasury shall pay to each possession of
the United States, which does not have a mirror
code tax system, amounts estimated by the
Secretary of the Treasury as being equal to the
aggregate credits that would have been provided
by the possession by reason of the application
of this section (other than this subsection) if
a mirror code tax system had been in effect in
such possession. The preceding sentence shall
not apply with respect to any possession of the
United States unless such possession has a
plan, which has been approved by the Secretary
of the Treasury, under which such possession
will promptly distribute such payments.
(2) Coordination with credit allowed against united
states income taxes.--No increase in the credit
determined under section 38(b) of the Internal Revenue
Code of 1986 that is attributable to the credit
provided by this section (other than this subsection
(e)) shall be taken into account with respect to any
person--
(A) to whom a credit is allowed against
taxes imposed by the possession of the United
States by reason of this section for such
taxable year, or
(B) who is eligible for a payment under a
plan described in paragraph (1)(B) with respect
to such taxable year.
(3) Definitions and special rules.--
(A) Possession of the united states.--For
purposes of this subsection (e), the term
``possession of the United States'' includes
American Samoa, the Commonwealth of the
Northern Mariana Islands, the Commonwealth of
Puerto Rico, Guam, and the United States Virgin
Islands.
(B) Mirror code tax system.--For purposes
of this subsection, the term ``mirror code tax
system'' means, with respect to any possession
of the United States, the income tax system of
such possession if the income tax liability of
the residents of such possession under such
system is determined by reference to the income
tax laws of the United States as if such
possession were the United States.
(C) Treatment of payments.--For purposes of
section 1324(b)(2) of title 31, United States
Code, rules similar to the rules of section
1001(b)(3)(C) of the American Recovery and
Reinvestment Tax Act of 2009 shall apply.
(f) Effective Date.--The amendment made by this section
shall apply to individuals who begin work for the employer
after the date of the enactment of this Act.
Subtitle B--Teacher Stabilization
SEC. 202. PURPOSE.
The purpose of this subtitle is to provide funds to States
to prevent teacher layoffs and support the creation of
additional jobs in public early childhood, elementary, and
secondary education in the 2011-2012 and 2012-2013 school
years.
SEC. 203. GRANTS FOR THE OUTLYING AREAS AND THE SECRETARY OF THE
INTERIOR; AVAILABILITY OF FUNDS.
(a) Reservation of Funds.--From the amount appropriated to
carry out this subtitle under section 212, the Secretary--
(1) shall reserve up to one-half of one percent to
provide assistance to the outlying areas on the basis
of their respective needs, as determined by the
Secretary, for activities consistent with this part
under such terms and conditions as the Secretary may
determine;
(2) shall reserve up to one-half of one percent to
provide assistance to the Secretary of the Interior to
carry out activities consistent with this part, in
schools operated or funded by the Bureau of Indian
Education; and
(3) may reserve up to $2,000,000 for administration
and oversight of this part, including program
evaluation.
(b) Availability of Funds.--Funds made available under
section 212 shall remain available to the Secretary until
September 30, 2012.
SEC. 204. STATE ALLOCATION.
(a) Allocation.--After reserving funds under section
203(a), the Secretary shall allocate to the States--
(1) 60 percent on the basis of their relative
population of individuals aged 5 through 17; and
(2) 40 percent on the basis of their relative total
population.
(b) Awards.--From the funds allocated under subsection (a),
the Secretary shall make a grant to the Governor of each State
who submits an approvable application under section 214.
(c) Alternate Distribution of Funds.--
(1) If, within 30 days after the date of enactment
of this Act, a Governor has not submitted an approvable
application to the Secretary, the Secretary shall,
consistent with paragraph (2), provide for funds
allocated to that State to be distributed to another
entity or other entities in the State for the support
of early childhood, elementary, and secondary
education, under such terms and conditions as the
Secretary may establish.
(2) Maintenance of effort.--
(A) Governor assurance.--The Secretary
shall not allocate funds under paragraph (1)
unless the Governor of the State provides an
assurance to the Secretary that the State will
for fiscal years 2012 and 2013 meet the
requirements of section 209.
(B) Notwithstanding subparagraph (A), the
Secretary may allocate up to 50 percent of the
funds that are available to the State under
paragraph (1) to another entity or entities in
the State, provided that the State educational
agency submits data to the Secretary
demonstrating that the State will for fiscal
year 2012 meet the requirements of section
209(a) or the Secretary otherwise determines
that the State will meet those requirements, or
such comparable requirements as the Secretary
may establish, for that year.
(3) Requirements.--An entity that receives funds
under paragraph (1) shall use those funds in accordance
with the requirements of this subtitle.
(d) Reallocation.--If a State does not receive funding
under this subtitle or only receives a portion of its
allocation under subsection (c), the Secretary shall reallocate
the State's entire allocation or the remaining portion of its
allocation, as the case may be, to the remaining States in
accordance with subsection (a).
SEC. 205. STATE APPLICATION.
The Governor of a State desiring to receive a grant under
this subtitle shall submit an application to the Secretary
within 30 days of the date of enactment of this Act, in such
manner, and containing such information as the Secretary may
reasonably require to determine the State's compliance with
applicable provisions of law.
SEC. 206. STATE RESERVATION AND RESPONSIBILITIES.
(a) Reservation.--Each State receiving a grant under
section 204(b) may reserve--
(1) not more than 10 percent of the grant funds for
awards to State-funded early learning programs; and
(2) not more than 2 percent of the grant funds for
the administrative costs of carrying out its
responsibilities under this subtitle.
(b) State Responsibilities.--Each State receiving a grant
under this subtitle shall, after reserving any funds under
subsection (a)--
(1) use the remaining grant funds only for awards
to local educational agencies for the support of early
childhood, elementary, and secondary education; and
(2) distribute those funds, through subgrants, to
its local educational agencies by distributing--
(A) 60 percent on the basis of the local
educational agencies' relative shares of
enrollment; and
(B) 40 percent on the basis of the local
educational agencies' relative shares of funds
received under part A of title I of the
Elementary and Secondary Education Act of 1965
for fiscal year 2011; and
(3) make those funds available to local educational
agencies no later than 100 days after receiving a grant
from the Secretary.
(c) Prohibitions.--A State shall not use funds received
under this subtitle to directly or indirectly--
(1) establish, restore, or supplement a rainy-day
fund;
(2) supplant State funds in a manner that has the
effect of establishing, restoring, or supplementing a
rainy-day fund;
(3) reduce or retire debt obligations incurred by
the State; or
(4) supplant State funds in a manner that has the
effect of reducing or retiring debt obligations
incurred by the State.
SEC. 207. LOCAL EDUCATIONAL AGENCIES.
Each local educational agency that receives a subgrant
under this subtitle--
(1) shall use the subgrant funds only for
compensation and benefits and other expenses, such as
support services, necessary to retain existing
employees, recall or rehire former employees, or hire
new employees to provide early childhood, elementary,
or secondary educational and related services;
(2) shall obligate those funds no later than
September 30, 2013; and
(3) may not use those funds for general
administrative expenses or for other support services
or expenditures, as those terms are defined by the
National Center for Education Statistics in the Common
Core of Data, as of the date of enactment of this Act.
SEC. 208. EARLY LEARNING.
Each State-funded early learning program that receives
funds under this subtitle shall--
(1) use those funds only for compensation,
benefits, and other expenses, such as support services,
necessary to retain early childhood educators, recall
or rehire former early childhood educators, or hire new
early childhood educators to provide early learning
services; and
(2) obligate those funds no later than September
30, 2013.
SEC. 209. MAINTENANCE OF EFFORT.
(a) The Secretary shall not allocate funds to a State under
this subtitle unless the State provides an assurance to the
Secretary that--
(1) for State fiscal year 2012--
(A) the State will maintain State support
for early childhood, elementary, and secondary
education (in the aggregate or on the basis of
expenditure per pupil) and for public
institutions of higher education (not including
support for capital projects or for research
and development or tuition and fees paid by
students) at not less than the level of such
support for each of the two categories for
State fiscal year 2011; or
(B) the State will maintain State support
for early childhood, elementary, and secondary
education and for public institutions of higher
education (not including support for capital
projects or for research and development or
tuition and fees paid by students) at a
percentage of the total revenues available to
the State that is equal to or greater than the
percentage provided for State fiscal year 2011;
and
(2) for State fiscal year 2013--
(A) the State will maintain State support
for early childhood, elementary, and secondary
education (in the aggregate or on the basis of
expenditure per pupil) and for public
institutions of higher education (not including
support for capital projects or for research
and development or tuition and fees paid by
students) at not less than the level of such
support for each of the two categories for
State fiscal year 2012; or
(B) the State will maintain State support
for early childhood, elementary, and secondary
education and for public institutions of higher
education (not including support for capital
projects or for research and development or
tuition and fees paid by students) at a
percentage of the total revenues available to
the State that is equal to or greater than the
percentage provided for State fiscal year 2012.
(b) Waiver.--The Secretary may waive the requirements of
this section if the Secretary determines that a waiver would be
equitable due to--
(1) exceptional or uncontrollable circumstances,
such as a natural disaster; or
(2) a precipitous decline in the financial
resources of the State.
SEC. 210. REPORTING.
Each State that receives a grant under this subtitle shall
submit, on an annual basis, a report to the Secretary that
contains--
(1) a description of how funds received under this
part were expended or obligated; and
(2) an estimate of the number of jobs supported by
the State using funds received under this subtitle.
SEC. 211. DEFINITIONS.
(a) Except as otherwise provided, the terms ``local
educational agency'', ``outlying area'', ``Secretary'',
``State'', and ``State educational agency'' have the meanings
given those terms in section 9101 of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 7801).
(b) The term ``State'' does not include an outlying area.
(c) The term ``early childhood educator'' means an
individual who--
(1) works directly with children in a State-funded
early learning program in a low-income community;
(2) is involved directly in the care, development,
and education of infants, toddlers, or young children
age five and under; and
(3) has completed a baccalaureate or advanced
degree in early childhood development or early
childhood education, or in a field related to early
childhood education.
(d) The term ``State-funded early learning program'' means
a program that provides educational services to children from
birth to kindergarten entry and receives funding from the
State.
SEC. 212. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated, and there are
appropriated, $30,000,000,000 to carry out this subtitle for
fiscal year 2012.
Subtitle C--First Responder Stabilization
SEC. 213. PURPOSE.
The purpose of this subtitle is to provide funds to States
and localities to prevent layoffs of, and support the creation
of additional jobs for, law enforcement officers and other
first responders.
SEC. 214. GRANT PROGRAM.
The Attorney General shall carry out a competitive grant
program pursuant to section 1701 of title I of the Omnibus
Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796dd)
for hiring, rehiring, or retention of career law enforcement
officers under part Q of such title. Grants awarded under this
section shall not be subject to subsections (g) or (i) of
section 1701 or to section 1704 of such Act (42 U.S.C. 3796dd-
3(c)).
SEC. 215. APPROPRIATIONS.
There are hereby appropriated to the Community Oriented
Policing Stabilization Fund out of any money in the Treasury
not otherwise obligated, $5,000,000,000, to remain available
until September 30, 2012, of which $4,000,000,000 shall be for
the Attorney General to carry out the competitive grant program
under Section 214; and of which $1,000,000,000 shall be
transferred by the Attorney General to a First Responder
Stabilization Fund from which the Secretary of Homeland
Security shall make competitive grants for hiring, rehiring, or
retention pursuant to the Federal Fire Prevention and Control
Act of 1974 (15 U.S.C. 2201 et seq.), to carry out section 34
of such Act (15 U.S.C. 2229a). In making such grants, the
Secretary may grant waivers from the requirements in
subsections (a)(1)(A), (a)(1)(B), (a)(1)(E), (c)(1), (c)(2),
and (c)(4)(A) of section 34. Of the amounts appropriated
herein, not to exceed $8,000,000 shall be for administrative
costs of the Attorney General, and not to exceed $2,000,000
shall be for administrative costs of the Secretary of Homeland
Security.
Subtitle D--School Modernization
PART I--ELEMENTARY AND SECONDARY SCHOOLS
SEC. 221. PURPOSE.
The purpose of this part is to provide assistance for the
modernization, renovation, and repair of elementary and
secondary school buildings in public school districts across
America in order to support the achievement of improved
educational outcomes in those schools.
SEC. 222. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated, and there are
appropriated, $25,000,000,000 to carry out this part, which
shall be available for obligation by the Secretary until
September 30, 2012.
SEC. 223. ALLOCATION OF FUNDS.
(a) Reservations.--Of the amount made available to carry
out this part, the Secretary shall reserve--
(1) one-half of one percent for the Secretary of
the Interior to carry out modernization, renovation,
and repair activities described in section 226 in
schools operated or funded by the Bureau of Indian
Education;
(2) one-half of one percent to make grants to the
outlying areas for modernization, renovation, and
repair activities described in section 226; and
(3) such funds as the Secretary determines are
needed to conduct a survey, by the National Center for
Education Statistics, of the school construction,
modernization, renovation, and repair needs of the
public schools of the United States.
(b) State Allocation.--After reserving funds under
subsection (a), the Secretary shall allocate the remaining
amount among the States in proportion to their respective
allocations under part A of title I of the Elementary and
Secondary Education Act (ESEA) (20 U.S.C. 6311 et seq.) for
fiscal year 2011, except that--
(1) the Secretary shall allocate 40 percent of such
remaining amount to the 100 local educational agencies
with the largest numbers of children aged 5-17 living
in poverty, as determined using the most recent data
available from the Department of Commerce that are
satisfactory to the Secretary, in proportion to those
agencies' respective allocations under part A of title
I of the ESEA for fiscal year 2011; and
(2) the allocation to any State shall be reduced by
the aggregate amount of the allocations under paragraph
(1) to local educational agencies in that State.
(c) Remaining Allocation.--
(1) If a State does not apply for its allocation
(or applies for less than the full allocation for which
it is eligible) or does not use that allocation in a
timely manner, the Secretary may--
(A) reallocate all or a portion of that
allocation to the other States in accordance
with subsection (b); or
(B) use all or a portion of that allocation
to make direct allocations to local educational
agencies within the State based on their
respective allocations under part A of title I
of the ESEA for fiscal year 2011 or such other
method as the Secretary may determine.
(2) If a local educational agency does not apply
for its allocation under subsection (b)(1), applies for
less than the full allocation for which it is eligible,
or does not use that allocation in a timely manner, the
Secretary may reallocate all or a portion of its
allocation to the State in which that agency is
located.
SEC. 224. STATE USE OF FUNDS.
(a) Reservation.--Each State that receives a grant under
this part may reserve not more than one percent of the State's
allocation under section 223(b) for the purpose of
administering the grant, except that no State may reserve more
than $750,000 for this purpose.
(b) Funds to Local Educational Agencies.--
(1) Formula subgrants.--From the grant funds that
are not reserved under subsection (a), a State shall
allocate at least 50 percent to local educational
agencies, including charter schools that are local
educational agencies, that did not receive funds under
section 223(b)(1) from the Secretary, in accordance
with their respective allocations under part A of title
I of the ESEA for fiscal year 2011, except that no such
local educational agency shall receive less than
$10,000.
(2) Additional subgrants.--The State shall use any
funds remaining, after reserving funds under subsection
(a) and allocating funds under paragraph (1), for
subgrants to local educational agencies that did not
receive funds under section 223(b)(1), including
charter schools that are local educational agencies, to
support modernization, renovation, and repair projects
that the State determines, using objective criteria,
are most needed in the State, with priority given to
projects in rural local educational agencies.
(c) Remaining Funds.--If a local educational agency does
not apply for an allocation under subsection (b)(1), applies
for less than its full allocation, or fails to use that
allocation in a timely manner, the State may reallocate any
unused portion to other local educational agencies in
accordance with subsection (b).
SEC. 225. STATE AND LOCAL APPLICATIONS.
(a) State Application.--A State that desires to receive a
grant under this part shall submit an application to the
Secretary at such time, in such manner, and containing such
information and assurances as the Secretary may require, which
shall include--
(1) an identification of the State agency or entity
that will administer the program;
(2) the State's process for determining how the
grant funds will be distributed and administered,
including--
(A) how the State will determine the
criteria and priorities in making subgrants
under section 224(b)(2);
(B) any additional criteria the State will
use in determining which projects it will fund
under that section;
(C) a description of how the State will
consider--
(i) the needs of local educational
agencies for assistance under this
part;
(ii) the impact of potential
projects on job creation in the State;
(iii) the fiscal capacity of local
educational agencies applying for
assistance;
(iv) the percentage of children in
those local educational agencies who
are from low-income families; and
(v) the potential for leveraging
assistance provided by this program
through matching or other financing
mechanisms;
(D) a description of how the State will
ensure that the local educational agencies
receiving subgrants meet the requirements of
this part;
(E) a description of how the State will
ensure that the State and its local educational
agencies meet the deadlines established in
section 228;
(F) a description of how the State will
give priority to the use of green practices
that are certified, verified, or consistent
with any applicable provisions of--
(i) the LEED Green Building Rating
System;
(ii) Energy Star;
(iii) the CHPS Criteria;
(iv) Green Globes; or
(v) an equivalent program adopted
by the State or another jurisdiction
with authority over the local
educational agency;
(G) a description of the steps that the
State will take to ensure that local
educational agencies receiving subgrants will
adequately maintain any facilities that are
modernized, renovated, or repaired with
subgrant funds under this part; and
(H) such additional information and
assurances as the Secretary may require.
(b) Local Application.--A local educational agency that is
eligible under section 223(b)(1) that desires to receive a
grant under this part shall submit an application to the
Secretary at such time, in such manner, and containing such
information and assurances as the Secretary may require, which
shall include--
(1) a description of how the local educational
agency will meet the deadlines and requirements of this
part;
(2) a description of the steps that the local
educational agency will take to adequately maintain any
facilities that are modernized, renovated, or repaired
with funds under this part; and
(3) such additional information and assurances as
the Secretary may require.
SEC. 226. USE OF FUNDS.
(a) In General.--Funds awarded to local educational
agencies under this part shall be used only for either or both
of the following modernization, renovation, or repair
activities in facilities that are used for elementary or
secondary education or for early learning programs:
(1) Direct payments for school modernization,
renovation, and repair.
(2) To pay interest on bonds or payments for other
financing instruments that are newly issued for the
purpose of financing school modernization, renovation,
and repair.
(b) Supplement, Not Supplant.--Funds made available under
this part shall be used to supplement, and not supplant, other
Federal, State, and local funds that would otherwise be
expended to modernize, renovate, or repair eligible school
facilities.
(c) Prohibition.--Funds awarded to local educational
agencies under this part may not be used for--
(1) new construction;
(2) payment of routine maintenance costs; or
(3) modernization, renovation, or repair of
stadiums or other facilities primarily used for
athletic contests or exhibitions or other events for
which admission is charged to the general public.
SEC. 227. PRIVATE SCHOOLS.
(a) In General.--Section 9501 of the ESEA (20 U.S.C. 7881)
shall apply to this part in the same manner as it applies to
activities under that Act, except that--
(1) section 9501 shall not apply with respect to
the title to any real property modernized, renovated,
or repaired with assistance provided under this
section;
(2) the term ``services'', as used in section 9501
with respect to funds under this part, shall be
provided only to private, nonprofit elementary or
secondary schools with a rate of child poverty of at
least 40 percent and may include only--
(A) modifications of school facilities
necessary to meet the standards applicable to
public schools under the Americans with
Disabilities Act of 1990 (42 U.S.C. 12101 et
seq.);
(B) modifications of school facilities
necessary to meet the standards applicable to
public schools under section 504 of the
Rehabilitation Act of 1973 (29 U.S.C. 794); and
(C) asbestos or polychlorinated biphenyls
abatement or removal from school facilities;
and
(3) expenditures for services provided using funds
made available under section 226 shall be considered
equal for purposes of section 9501(a)(4) of the ESEA if
the per-pupil expenditures for services described in
paragraph (2) for students enrolled in private
nonprofit elementary and secondary schools that have
child-poverty rates of at least 40 percent are
consistent with the per-pupil expenditures under this
subpart for children enrolled in the public schools of
the local educational agency receiving funds under this
subpart.
(b) Remaining Funds.--If the expenditure for services
described in paragraph (2) is less than the amount calculated
under paragraph (3) because of insufficient need for those
services, the remainder shall be available to the local
educational agency for modernization, renovation, and repair of
its school facilities.
(c) Application.--If any provision of this section, or the
application thereof, to any person or circumstance is
judicially determined to be invalid, the remainder of the
section and the application to other persons or circumstances
shall not be affected thereby.
SEC. 228. ADDITIONAL PROVISIONS.
(a) Funds appropriated under section 222 shall be available
for obligation by local educational agencies receiving grants
from the Secretary under section 223(b)(1), by States reserving
funds under section 224(a), and by local educational agencies
receiving subgrants under section 224(b)(1) only during the
period that ends 24 months after the date of enactment of this
Act.
(b) Funds appropriated under section 222 shall be available
for obligation by local educational agencies receiving
subgrants under section 224(b)(2) only during the period that
ends 36 months after the date of enactment of this Act.
(c) Section 439 of the General Education Provisions Act (20
U.S.C. 1232b) shall apply to funds available under this part.
(d) For purposes of section 223(b)(1), Hawaii, the District
of Columbia, and the Commonwealth of Puerto Rico are not local
educational agencies.
PART II--COMMUNITY COLLEGE MODERNIZATION
SEC. 229. FEDERAL ASSISTANCE FOR COMMUNITY COLLEGE MODERNIZATION.
(a) In General.--
(1) Grant program.--From the amounts made available
under subsection (h), the Secretary shall award grants
to States to modernize, renovate, or repair existing
facilities at community colleges.
(2) Allocation.--
(A) Reservations.--Of the amount made
available to carry out this section, the
Secretary shall reserve--
(i) up to 0.25 percent for grants
to institutions that are eligible under
section 316 of the Higher Education Act
of 1965 (20 U.S.C. 1059c) to provide
for modernization, renovation, and
repair activities described in this
section; and
(ii) up to 0.25 percent for grants
to the outlying areas to provide for
modernization, renovation, and repair
activities described in this section.
(B) Allocation.--After reserving funds
under subparagraph (A), the Secretary shall
allocate to each State that has an application
approved by the Secretary an amount that bears
the same relation to any remaining funds as the
total number of students in such State who are
enrolled in institutions described in section
230(b)(1)(A) plus the number of students who
are estimated to be enrolled in and pursuing a
degree or certificate that is not a bachelor's,
master's, professional, or other advanced
degree in institutions described in section
230(b)(1)(B), based on the proportion of
degrees or certificates awarded by such
institutions that are not bachelor's, master's,
professional, or other advanced degrees, as
reported to the Integrated Postsecondary Data
System bears to the estimated total number of
such students in all States, except that no
State shall receive less than $2,500,000.
(C) Reallocation.--Amounts not allocated
under this section to a State because the State
either did not submit an application under
subsection (b), the State submitted an
application that the Secretary determined did
not meet the requirements of such subsection,
or the State cannot demonstrate to the
Secretary a sufficient demand for projects to
warrant the full allocation of the funds, shall
be proportionately reallocated under this
paragraph to the other States that have a
demonstrated need for, and are receiving,
allocations under this section.
(D) State administration.--A State that
receives a grant under this section may use not
more than one percent of that grant to
administer it, except that no State may use
more than $750,000 of its grant for this
purpose.
(3) Supplement, not supplant.--Funds made available
under this section shall be used to supplement, and not
supplant, other Federal, State, and local funds that
would otherwise be expended to modernize, renovate, or
repair existing community college facilities.
(b) Application.--A State that desires to receive a grant
under this section shall submit an application to the Secretary
at such time, in such manner, and containing such information
and assurances as the Secretary may require. Such application
shall include a description of--
(1) how the funds provided under this section will
improve instruction at community colleges in the State
and will improve the ability of those colleges to
educate and train students to meet the workforce needs
of employers in the State; and
(2) the projected start of each project and the
estimated number of persons to be employed in the
project.
(c) Prohibited Uses of Funds.--
(1) In general.--No funds awarded under this
section may be used for--
(i) payment of routine maintenance costs;
(ii) construction, modernization,
renovation, or repair of stadiums or other
facilities primarily used for athletic contests
or exhibitions or other events for which
admission is charged to the general public; or
(iii) construction, modernization,
renovation, or repair of facilities--
(I) used for sectarian instruction,
religious worship, or a school or
department of divinity; or
(II) in which a substantial portion
of the functions of the facilities are
subsumed in a religious mission.
(2) Four-year institutions.--No funds awarded to a
four-year public institution of higher education under
this section may be used for any facility, service, or
program of the institution that is not available to
students who are pursuing a degree or certificate that
is not a bachelor's, master's, professional, or other
advanced degree.
(d) Green Projects.--In providing assistance to community
college projects under this section, the State shall consider
the extent to which a community college's project involves
activities that are certified, verified, or consistent with the
applicable provisions of--
(1) the LEED Green Building Rating System;
(2) Energy Star;
(3) the CHPS Criteria, as applicable;
(4) Green Globes; or
(5) an equivalent program adopted by the State or
the State higher education agency that includes a
verifiable method to demonstrate compliance with such
program.
(e) Application of GEPA.--Section 439 of the General
Education Provisions Act such Act (20 U.S.C. 1232b) shall apply
to funds available under this subtitle.
(f) Reports by the States.--Each State that receives a
grant under this section shall, not later than September 30,
2012, and annually thereafter for each fiscal year in which the
State expends funds received under this section, submit to the
Secretary a report that includes--
(1) a description of the projects for which the
grant was, or will be, used;
(2) a description of the amount and nature of the
assistance provided to each community college under
this section; and
(3) the number of jobs created by the projects
funded under this section.
(g) Report by the Secretary.--The Secretary shall submit to
the authorizing committees (as defined in section 103 of the
Higher Education Act of 1965; 20 U.S.C. 1003) an annual report
on the grants made under this section, including the
information described in subsection (f).
(h) Availability of Funds.--
(1) There are authorized to be appropriated, and
there are appropriated, to carry out this section (in
addition to any other amounts appropriated to carry out
this section and out of any money in the Treasury not
otherwise appropriated), $5,000,000,000 for fiscal year
2012.
(2) Funds appropriated under this subsection shall
be available for obligation by community colleges only
during the period that ends 36 months after the date of
enactment of this Act.
PART III--GENERAL PROVISIONS
SEC. 230. DEFINITIONS.
(a) ESEA Terms.--Except as otherwise provided, in this
subtitle, the terms ``local educational agency'',
``Secretary'', and ``State educational agency'' have the
meanings given those terms in section 9101 of the Elementary
and Secondary Education Act of 1965 (20 U.S.C. 7801).
(b) Additional Definitions.--The following definitions
apply to this title:
(1) Community college.--The term ``community
college'' means--
(A) a junior or community college, as that
term is defined in section 312(f) of the Higher
Education Act of 1965 (20 U.S.C. 1058(f)); or
(B) a four-year public institution of
higher education (as defined in section 101 of
the Higher Education Act of 1965 (20 U.S.C.
1001)) that awards a significant number of
degrees and certificates, as determined by the
Secretary, that are not--
(i) bachelor's degrees (or an
equivalent); or
(ii) master's, professional, or
other advanced degrees.
(2) CHPS criteria.--The term ``CHPS Criteria''
means the green building rating program developed by
the Collaborative for High Performance Schools.
(3) Energy star.--The term ``Energy Star'' means
the Energy Star program of the United States Department
of Energy and the United States Environmental
Protection Agency.
(4) Green globes.--The term ``Green Globes'' means
the Green Building Initiative environmental design and
rating system referred to as Green Globes.
(5) Leed green building rating system.--The term
``LEED Green Building Rating System'' means the United
States Green Building Council Leadership in Energy and
Environmental Design green building rating standard
referred to as the LEED Green Building Rating System.
(6) Modernization, renovation, and repair.--The
term ``modernization, renovation and repair'' means--
(A) comprehensive assessments of facilities
to identify--
(i) facility conditions or
deficiencies that could adversely
affect student and staff health,
safety, performance, or productivity or
energy, water, or materials efficiency;
and
(ii) needed facility improvements;
(B) repairing, replacing, or installing
roofs (which may be extensive, intensive, or
semi-intensive ``green'' roofs); electrical
wiring; water supply and plumbing systems,
sewage systems, storm water runoff systems,
lighting systems (or components of such
systems); or building envelope, windows,
ceilings, flooring, or doors, including
security doors;
(C) repairing, replacing, or installing
heating, ventilation, or air conditioning
systems, or components of those systems
(including insulation), including by conducting
indoor air quality assessments;
(D) compliance with fire, health, seismic,
and safety codes, including professional
installation of fire and life safety alarms,
and modernizations, renovations, and repairs
that ensure that facilities are prepared for
such emergencies as acts of terrorism, campus
violence, and natural disasters, such as
improving building infrastructure to
accommodate security measures and installing or
upgrading technology to ensure that a school or
incident is able to respond to such
emergencies;
(E) making modifications necessary to make
educational facilities accessible in compliance
with the Americans with Disabilities Act of
1990 (42 U.S.C. 12101 et seq.) and section 504
of the Rehabilitation Act of 1973 (29 U.S.C.
794), except that such modifications shall not
be the primary use of a grant or subgrant;
(F) abatement, removal, or interim controls
of asbestos, polychlorinated biphenyls, mold,
mildew, or lead-based hazards, including lead-
based paint hazards;
(G) retrofitting necessary to increase
energy efficiency;
(H) measures, such as selection and
substitution of products and materials, and
implementation of improved maintenance and
operational procedures, such as ``green
cleaning'' programs, to reduce or eliminate
potential student or staff exposure to--
(i) volatile organic compounds;
(ii) particles such as dust and
pollens; or
(iii) combustion gases;
(I) modernization, renovation, or repair
necessary to reduce the consumption of coal,
electricity, land, natural gas, oil, or water;
(J) installation or upgrading of
educational technology infrastructure;
(K) installation or upgrading of renewable
energy generation and heating systems,
including solar, photovoltaic, wind, biomass
(including wood pellet and woody biomass),
waste-to-energy, solar-thermal, and geothermal
systems, and energy audits;
(L) modernization, renovation, or repair
activities related to energy efficiency and
renewable energy, and improvements to building
infrastructures to accommodate bicycle and
pedestrian access;
(M) Ground improvements, storm water
management, landscaping and environmental
clean-up when necessary;
(N) other modernization, renovation, or
repair to--
(i) improve teachers' ability to
teach and students' ability to learn;
(ii) ensure the health and safety
of students and staff; or
(iii) improve classroom,
laboratory, and vocational facilities
in order to enhance the quality of
science, technology, engineering, and
mathematics instruction; and
(O) required environmental remediation
related to facilities modernization,
renovation, or repair activities described in
subparagraphs (A) through (L).
(7) Outlying area.--The term ``outlying area''
means the U.S. Virgin Islands, Guam, American Samoa,
the Commonwealth of the Northern Mariana Islands, and
the Republic of Palau.
(8) State.--The term ``State'' means each of the 50
States of the United States, the Commonwealth of Puerto
Rico, and the District of Columbia.
SEC. 231. BUY AMERICAN.
Section 1605 of division A of the American Recovery and
Reinvestment Act of 2009 (Public Law 111-5) applies to funds
made available under this title.
Subtitle E--Immediate Transportation Infrastrucure Investments
SEC. 241. IMMEDIATE TRANSPORTATION INFRASTRUCTURE INVESTMENTS.
(a) Grants-in-Aid for Airports.--
(1) In general.--There is made available to the
Secretary of Transportation $2,000,000,000 to carry out
airport improvement under subchapter I of chapter 471
and subchapter I of chapter 475 of title 49, United
States Code.
(2) Federal share; limitation on obligations.--The
Federal share payable of the costs for which a grant is
made under this subsection, shall be 100 percent. The
amount made available under this subsection shall not
be subject to any limitation on obligations for the
Grants-In-Aid for Airports program set forth in any Act
or in title 49, United States Code.
(3) Distribution of funds.--Funds provided to the
Secretary under this subsection shall not be subject to
apportionment formulas, special apportionment
categories, or minimum percentages under chapter 471 of
such title.
(4) Availability.--The amounts made available under
this subsection shall be available for obligation until
the date that is two years after the date of the
enactment of this Act. The Secretary shall obligate
amounts totaling not less than 50 percent of the funds
made available within one year of enactment and
obligate remaining amounts not later than two years
after enactment.
(5) Administrative expenses.--Of the funds made
available under this subsection, 0.3 percent shall be
available to the Secretary for administrative expenses,
shall remain available for obligation until September
30, 2015, and may be used in conjunction with funds
otherwise provided for the administration of the
Grants-In-Aid for Airports program.
(b) Next Generation Air Traffic Control Advancements.--
(1) In general.--There is made available to the
Secretary of Transportation $1,000,000,000 for
necessary Federal Aviation Administration capital,
research and operating costs to carry out Next
Generation air traffic control system advancements.
(2) Availability.--The amounts made available under
this subsection shall be available for obligation until
the date that is two years after the date of the
enactment of this Act.
(c) Highway Infrastructure Investment.--
(1) In general.--There is made available to the
Secretary of Transportation $27,000,000,000 for
restoration, repair, construction and other activities
eligible under section 133(b) of title 23, United
States Code, and for passenger and freight rail
transportation and port infrastructure projects
eligible for assistance under section 601(a)(8) of
title 23.
(2) Federal share; limitation on obligations.--The
Federal share payable on account of any project or
activity carried out with funds made available under
this subsection shall be, at the option of the
recipient, up to 100 percent of the total cost thereof.
The amount made available under this subsection shall
not be subject to any limitation on obligations for
Federal-aid highways and highway safety construction
programs set forth in any Act or in title 23, United
States Code.
(3) Availability.--The amounts made available under
this subsection shall be available for obligation until
the date that is two years after the date of the
enactment of this Act. The Secretary shall obligate
amounts totaling not less than 50 percent of the funds
made available within one year of enactment and
obligate remaining amounts not later than two years
after enactment.
(4) Distribution of funds.--Of the funds provided
in this subsection, after making the set-asides
required by paragraphs (9), (10), (11), (12), and (15),
50 percent of the funds shall be apportioned to States
using the formula set forth in section 104(b)(3) of
title 23, United States Code, and the remaining funds
shall be apportioned to States in the same ratio as the
obligation limitation for fiscal year 2010 was
distributed among the States in accordance with the
formula specified in section 120(a)(6) of division A of
Public Law 111-117.
(5) Apportionment.--Apportionments under paragraph
(4) shall be made not later than 30 days after the date
of the enactment of this Act.
(6) Redistribution.--
(A) The Secretary shall, 180 days following
the date of apportionment, withdraw from each
State an amount equal to 50 percent of the
funds apportioned under paragraph (4) to that
State (excluding funds suballocated within the
State) less the amount of funding obligated
(excluding funds suballocated within the
State), and the Secretary shall redistribute
such amounts to other States that have had no
funds withdrawn under this subparagraph in the
manner described in section 120(c) of division
A of Public Law 111-117.
(B) One year following the date of
apportionment, the Secretary shall withdraw
from each recipient of funds apportioned under
paragraph (4) any unobligated funds, and the
Secretary shall redistribute such amounts to
States that have had no funds withdrawn under
this paragraph (excluding funds suballocated
within the State) in the manner described in
section 120(c) of division A of Public Law 111-
117.
(C) At the request of a State, the
Secretary may provide an extension of the one-
year period only to the extent that the
Secretary determines that the State has
encountered extreme conditions that create an
unworkable bidding environment or other
extenuating circumstances. Before granting an
extension, the Secretary notify in writing the
Committee on Transportation and Infrastructure
and the Committee on Environment and Public
Works, providing a thorough justification for
the extension.
(7) Transportation enhancements.--Three percent of
the funds apportioned to a State under paragraph (4)
shall be set aside for the purposes described in
section 133(d)(2) of title 23, United States Code
(without regard to the comparison to fiscal year 2005).
(8) Suballocation.--Thirty percent of the funds
apportioned to a State under this subsection shall be
suballocated within the State in the manner and for the
purposes described in the first sentence of sections
133(d)(3)(A), 133(d)(3)(B), and 133(d)(3)(D) of title
23, United States Code. Such suballocation shall be
conducted in every State. Funds suballocated within a
State to urbanized areas and other areas shall not be
subject to the redistribution of amounts required 180
days following the date of apportionment of funds
provided by paragraph (6)(A).
(9) Puerto rico and territorial highway programs.--
Of the funds provided under this subsection,
$105,000,000 shall be set aside for the Puerto Rico
highway program authorized under section 165 of title
23, United States Code, and $45,000,000 shall be for
the territorial highway program authorized under
section 215 of title 23, United States Code.
(10) Federal lands and indian reservations.--Of the
funds provided under this subsection, $550,000,000
shall be set aside for investments in transportation at
Indian reservations and Federal lands in accordance
with the following:
(A) Of the funds set aside by this
paragraph, $310,000,000 shall be for the Indian
Reservation Roads program, $170,000,000 shall
be for the Park Roads and Parkways program,
$60,000,000 shall be for the Forest Highway
Program, and $10,000,000 shall be for the
Refuge Roads program.
(B) For investments at Indian reservations
and Federal lands, priority shall be given to
capital investments, and to projects and
activities that can be completed within 2 years
of enactment of this Act.
(C) One year following the enactment of
this Act, to ensure the prompt use of the
funding provided for investments at Indian
reservations and Federal lands, the Secretary
shall have the authority to redistribute
unobligated funds within the respective program
for which the funds were appropriated.
(D) Up to four percent of the funding
provided for Indian Reservation Roads may be
used by the Secretary of the Interior for
program management and oversight and project-
related administrative expenses.
(E) Section 134(f)(3)(C)(ii)(II) of title
23, United States Code, shall not apply to
funds set aside by this paragraph.
(11) Job training.--Of the funds provided under
this subsection, $50,000,000 shall be set aside for the
development and administration of transportation
training programs under section 140(b) title 23, United
States Code.
(A) Funds set aside under this subsection
shall be competitively awarded and used for the
purpose of providing training, apprenticeship
(including Registered Apprenticeship), skill
development, and skill improvement programs, as
well as summer transportation institutes and
may be transferred to, or administered in
partnership with, the Secretary of Labor and
shall demonstrate to the Secretary of
Transportation program outcomes, including--
(i) impact on areas with
transportation workforce shortages;
(ii) diversity of training
participants;
(iii) number of participants
obtaining certifications or credentials
required for specific types of
employment;
(iv) employment outcome metrics,
such as job placement and job retention
rates, established in consultation with
the Secretary of Labor and consistent
with metrics used by programs under the
Workforce Investment Act;
(v) to the extent practical,
evidence that the program did not
preclude workers that participate in
training or apprenticeship activities
under the program from being referred
to, or hired on, projects funded under
this chapter; and
(vi) identification of areas of
collaboration with the Department of
Labor programs, including co-
enrollment.
(B) To be eligible to receive a
competitively awarded grant under this
subsection, a State must certify that at least
0.1 percent of the amounts apportioned under
the Surface Transportation Program and Bridge
Program will be obligated in the first fiscal
year after enactment of this act for job
training activities consistent with section
140(b) of title 23, United States Code.
(12) Disadvantaged business enterprises.--Of the
funds provided under this subsection, $10,000,000 shall
be set aside for training programs and assistance
programs under section 140(c) of title 23, United
States Code. Funds set aside under this paragraph
should be allocated to businesses that have proven
success in adding staff while effectively completing
projects.
(13) State planning and oversight expenses.--Of
amounts apportioned under paragraph (4) of this
subsection, a State may use up to 0.5 percent for
activities related to projects funded under this
subsection, including activities eligible under
sections 134 and 135 of title 23, United States Code,
State administration of subgrants, and State oversight
of subrecipients.
(14) Conditions.--
(A) Funds made available under this
subsection shall be administered as if
apportioned under chapter 1 of title 23, United
States Code, except for funds made available
for investments in transportation at Indian
reservations and Federal lands, and for the
territorial highway program, which shall be
administered in accordance with chapter 2 of
title 23, United States Code, and except for
funds made available for disadvantaged business
enterprises bonding assistance, which shall be
administered in accordance with chapter 3 of
title 49, United States Code.
(B) Funds made available under this
subsection shall not be obligated for the
purposes authorized under section 115(b) of
title 23, United States Code.
(C) Funding provided under this subsection
shall be in addition to any and all funds
provided for fiscal years 2011 and 2012 in any
other Act for ``Federal-aid Highways'' and
shall not affect the distribution of funds
provided for ``Federal-aid Highways'' in any
other Act.
(D) Section 1101(b) of Public Law 109-59
shall apply to funds apportioned under this
subsection.
(15) Oversight.--The Administrator of the Federal
Highway Administration may set aside up to 0.15 percent
of the funds provided under this subsection to fund the
oversight by the Administrator of projects and
activities carried out with funds made available to the
Federal Highway Administration in this Act, and such
funds shall be available through September 30, 2015.
(d) Capital Assistance for High Speed Rail Corridors and
Intercity Passenger Rail Service.--
(1) In general.--There is made available to the
Secretary of Transportation $4,000,000,000 for grants
for high-speed rail projects as authorized under
sections 26104 and 26106 of title 49, United States
Code, capital investment grants to support intercity
passenger rail service as authorized under section
24406 of title 49, United States Code, and congestion
grants as authorized under section 24105 of title 49,
United States Code, and to enter into cooperative
agreements for these purposes as authorized, except
that the Administrator of the Federal Railroad
Administration may retain up to one percent of the
funds provided under this heading to fund the award and
oversight by the Administrator of grants made under
this subsection, which retained amount shall remain
available for obligation until September 30, 2015.
(2) Availability.--The amounts made available under
this subsection shall be available for obligation until
the date that is two years after the date of the
enactment of this Act. The Secretary shall obligate
amounts totaling not less than 50 percent of the funds
made available within one year of enactment and
obligate remaining amounts not later than two years
after enactment.
(3) Federal share.--The Federal share payable of
the costs for which a grant or cooperative agreements
is made under this subsection shall be, at the option
of the recipient, up to 100 percent.
(4) Interim guidance.--The Secretary shall issue
interim guidance to applicants covering application
procedures and administer the grants provided under
this subsection pursuant to that guidance until final
regulations are issued.
(5) Intercity passenger rail corridors.--Not less
than 85 percent of the funds provided under this
subsection shall be for cooperative agreements that
lead to the development of entire segments or phases of
intercity or high-speed rail corridors.
(6) Conditions.--
(A) In addition to the provisions of title
49, United States Code, that apply to each of
the individual programs funded under this
subsection, subsections 24402(a)(2), 24402(i),
and 24403(a) and (c) of title 49, United States
Code, shall also apply to the provision of
funds provided under this subsection.
(B) A project need not be in a State rail
plan developed under Chapter 227 of title 49,
United States Code, to be eligible for
assistance under this subsection.
(C) Recipients of grants under this
paragraph shall conduct all procurement
transactions using such grant funds in a manner
that provides full and open competition, as
determined by the Secretary, in compliance with
existing labor agreements.
(e) Capital Grants to the National Railroad Passenger
Corporation.--
(1) In general.--There is made available
$2,000,000,000 to enable the Secretary of
Transportation to make capital grants to the National
Railroad Passenger Corporation (Amtrak), as authorized
by section 101(c) of the Passenger Rail Investment and
Improvement Act of 2008 (Public Law 110-432).
(2) Availability.--The amounts made available under
this subsection shall be available for obligation until
the date that is two years after the date of the
enactment of this Act. The Secretary shall obligate
amounts totaling not less than 50 percent of the funds
made available within one year of enactment and
obligate remaining amounts not later than two years
after enactment.
(3) Project priority.--The priority for the use of
funds shall be given to projects for the repair,
rehabilitation, or upgrade of railroad assets or
infrastructure, and for capital projects that expand
passenger rail capacity including the rehabilitation of
rolling stock.
(4) Conditions.--
(A) None of the funds under this subsection
shall be used to subsidize the operating losses
of Amtrak.
(B) The funds provided under this
subsection shall be awarded not later than 90
days after the date of enactment of this Act.
(C) The Secretary shall take measures to
ensure that projects funded under this
subsection shall be completed within 2 years of
enactment of this Act, and shall serve to
supplement and not supplant planned
expenditures for such activities from other
Federal, State, local and corporate sources.
The Secretary shall certify to the House and
Senate Committees on Appropriations in writing
compliance with the preceding sentence.
(5) Oversight.--The Administrator of the Federal
Railroad Administration may set aside 0.5 percent of
the funds provided under this subsection to fund the
oversight by the Administrator of projects and
activities carried out with funds made available in
this subsection, and such funds shall be available
through September 30, 2015.
(f) Transit Capital Assistance.--
(1) In general.--There is made available to the
Secretary of Transportation $3,000,000,000 for grants
for transit capital assistance grants as defined by
section 5302(a)(1) of title 49, United States Code.
Notwithstanding any provision of chapter 53 of title
49, however, a recipient of funding under this
subsection may use up to 10 percent of the amount
provided for the operating costs of equipment and
facilities for use in public transportation or for
other eligible activities.
(2) Federal share; limtation on obligations.--The
applicable requirements of chapter 53 of title 49,
United States Code, shall apply to funding provided
under this subsection, except that the Federal share of
the costs for which any grant is made under this
subsection shall be, at the option of the recipient, up
to 100 percent. The amount made available under this
subsection shall not be subject to any limitation on
obligations for transit programs set forth in any Act
or chapter 53 of title 49.
(3) Availability.--The amounts made available under
this subsection shall be available for obligation until
the date that is two years after the date of the
enactment of this Act. The Secretary shall obligate
amounts totaling not less than 50 percent of the funds
made available within one year of enactment and
obligate remaining amounts not later than two years
after enactment.
(4) Distribution of funds.--The Secretary of
Transportation shall--
(A) provide 80 percent of the funds
appropriated under this subsection for grants
under section 5307 of title 49, United States
Code, and apportion such funds in accordance
with section 5336 of such title;
(B) provide 10 percent of the funds
appropriated under this subsection in
accordance with section 5340 of such title; and
(C) provide 10 percent of the funds
appropriated under this subsection for grants
under section 5311 of title 49, United States
Code, and apportion such funds in accordance
with such section.
(5) Apportionment.--The funds apportioned under
this subsection shall be apportioned not later than 21
days after the date of the enactment of this Act.
(6) Redistribution.--
(A) The Secretary shall, 180 days following
the date of apportionment, withdraw from each
urbanized area or State an amount equal to 50
percent of the funds apportioned to such
urbanized areas or States less the amount of
funding obligated, and the Secretary shall
redistribute such amounts to other urbanized
areas or States that have had no funds
withdrawn under this proviso utilizing whatever
method he deems appropriate to ensure that all
funds redistributed under this proviso shall be
utilized promptly.
(B) One year following the date of
apportionment, the Secretary shall withdraw
from each urbanized area or State any
unobligated funds, and the Secretary shall
redistribute such amounts to other urbanized
areas or States that have had no funds
withdrawn under this proviso utilizing whatever
method the Secretary deems appropriate to
ensure that all funds redistributed under this
proviso shall be utilized promptly.
(C) At the request of an urbanized area or
State, the Secretary of Transportation may
provide an extension of such 1-year period if
the Secretary determines that the urbanized
area or State has encountered an unworkable
bidding environment or other extenuating
circumstances. Before granting an extension,
the Secretary shall notify in writing the
Committee on Transportation and Infrastructure
and the Committee on Banking, Housing and Urban
Affairs, providing a thorough justification for
the extension.
(7) Conditions.--
(A) Of the funds provided for section 5311
of title 49, United States Code, 2.5 percent
shall be made available for section 5311(c)(1).
(B) Section 1101(b) of Public Law 109-59
shall apply to funds appropriated under this
subsection.
(C) The funds appropriated under this
subsection shall not be comingled with any
prior year funds.
(8) Oversight.--Notwithstanding any other provision
of law, 0.3 percent of the funds provided for grants
under section 5307 and section 5340, and 0.3 percent of
the funds provided for grants under section 5311, shall
be available for administrative expenses and program
management oversight, and such funds shall be available
through September 30, 2015.
(g) State of Good Repair.--
(1) In general.--There is made available to the
Secretary of Transportation $6,000,000,000 for capital
expenditures as authorized by sections 5309(b)(2) and
(3) of title 49, United States Code.
(2) Federal share.--The applicable requirements of
chapter 53 of Title 49, United States Code, shall
apply, except that the Federal share of the costs for
which a grant is made under this subsection shall be,
at the option of the recipient, up to 100 percent.
(3) Availability.--The amounts made available under
this subsection shall be available for obligation until
the date that is two years after the date of the
enactment of this Act. The Secretary shall obligate
amounts totaling not less than 50 percent of the funds
made available within one year of enactment and
obligate remaining amounts not later than two years
after enactment.
(4) Distribution of funds.--
(A) The Secretary of Transportation shall
apportion not less than 75 percent of the funds
under this subsection for the modernization of
fixed guideway systems, pursuant to the formula
set forth in section 5336(b) title 49, United
States Code, other than subsection
(b)(2)(A)(ii).
(B) Of the funds appropriated under this
subsection, not less than 25 percent shall be
available for the restoration or replacement of
existing public transportation assets related
to bus systems, pursuant to the formula set
forth in section 5336 other than subsection
(b).
(5) Apportionment.--The funds made available under
this subsection shall be apportioned not later than 30
days after the date of the enactment of this Act.
(6) Redistribution.--
(A) The Secretary shall, 180 days following
the date of apportionment, withdraw from each
urbanized area an amount equal to 50 percent of
the funds apportioned to such urbanized area
less the amount of funding obligated, and the
Secretary shall redistribute such amounts to
other urbanized areas that have had no funds
withdrawn under this paragraph utilizing
whatever method the Secretary deems appropriate
to ensure that all funds redistributed under
this paragraph shall be utilized promptly:
(B) One year following the date of
apportionment, the Secretary shall withdraw
from each urbanized area any unobligated funds,
and the Secretary shall redistribute such
amounts to other urbanized areas that have had
no funds withdrawn under this paragraph,
utilizing whatever method the Secretary deems
appropriate to ensure that all funds
redistributed under this paragraph shall be
utilized promptly:
(C) At the request of an urbanized area,
the Secretary may provide an extension of the
1-year period if the Secretary finds that the
urbanized area has encountered an unworkable
bidding environment or other extenuating
circumstances. Before granting an extension,
the Secretary shall notify the Committee on
Transportation and Infrastructure and the
Committee on Banking, Housing, and Urban
Affairs, providing a thorough justification for
the extension.
(7) Conditions.--
(A) The provisions of section 1101(b) of
Public Law 109-59 shall apply to funds made
available under this subsection.
(B) The funds appropriated under this
subsection shall not be commingled with any
prior year funds.
(8) Oversight.--Notwithstanding any other provision
of law, 0.3 percent of the funds under this subsection
shall be available for administrative expenses and
program management oversight and shall remain available
for obligation until September 30, 2015.
(h) Transportation Infrastructure Grants and Financing.--
(1) In general.--There is made available to the
Secretary of Transportation $5,000,000,000 for capital
investments in surface transportation infrastructure.
The Secretary shall distribute funds provided under
this subsection as discretionary grants to be awarded
to State and local governments or transit agencies on a
competitive basis for projects that will have a
significant impact on the Nation, a metropolitan area,
or a region.
(2) Federal share; limtation on obligations.--The
Federal share payable of the costs for which a grant is
made under this subsection, shall be 100 percent.
(3) Availability.--The amounts made available under
this subsection shall be available for obligation until
the date that is two years after the date of the
enactment of this Act. The Secretary shall obligate
amounts totaling not less than 50 percent of the funds
made available within one year of enactment and
obligate remaining amounts not later than two years
after enactment.
(4) Project eligibility.--Projects eligible for
funding provided under this subsection include--
(A) highway or bridge projects eligible
under title 23, United States Code, including
interstate rehabilitation, improvements to the
rural collector road system, the reconstruction
of overpasses and interchanges, bridge
replacements, seismic retrofit projects for
bridges, and road realignments;
(B) public transportation projects eligible
under chapter 53 of title 49, United States
Code, including investments in projects
participating in the New Starts or Small Starts
programs that will expedite the completion of
those projects and their entry into revenue
service;
(C) passenger and freight rail
transportation projects; and
(D) port infrastructure investments,
including projects that connect ports to other
modes of transportation and improve the
efficiency of freight movement.
(5) TIFIA program.--The Secretary may transfer to
the Federal Highway Administration funds made available
under this subsection for the purpose of paying the
subsidy and administrative costs of projects eligible
for federal credit assistance under chapter 6 of title
23, United States Code, if the Secretary finds that
such use of the funds would advance the purposes of
this subsection.
(6) Project priority.--The Secretary shall give
priority to projects that are expected to be completed
within 3 years of the date of the enactment of this
Act.
(7) Deadline for issuance of competition
criteria.--The Secretary shall publish criteria on
which to base the competition for any grants awarded
under this subsection not later than 90 days after
enactment of this Act. The Secretary shall require
applications for funding provided under this subsection
to be submitted not later than 180 days after the
publication of the criteria, and announce all projects
selected to be funded from such funds not later than 1
year after the date of the enactment of the Act.
(8) Applicability of title 40.--Each project
conducted using funds provided under this subsection
shall comply with the requirements of subchapter IV of
chapter 31 of title 40, United States Code.
(9) Administrative expenses.--The Secretary may
retain up to one half of one percent of the funds
provided under this subsection, and may transfer
portions of those funds to the Administrators of the
Federal Highway Administration, the Federal Transit
Administration, the Federal Railroad Administration and
the Maritime Administration, to fund the award and
oversight of grants made under this subsection. Funds
retained shall remain available for obligation until
September 30, 2015.
(i) Local Hiring.--
(1) In general.--In the case of the funding made
available under subsections (a) through (h) of this
section, the Secretary of Transportation may establish
standards under which a contract for construction may
be advertised that contains requirements for the
employment of individuals residing in or adjacent to
any of the areas in which the work is to be performed
to perform construction work required under the
contract, provided that--
(A) all or part of the construction work
performed under the contract occurs in an area
designated by the Secretary as an area of high
unemployment, using data reported by the United
States Department of Labor, Bureau of Labor
Statistics;
(B) the estimated cost of the project of
which the contract is a part is greater than
$10 million, except that the estimated cost of
the project in the case of construction funded
under subsection (c) shall be greater than $50
million; and
(C) the recipient may not require the
hiring of individuals who do not have the
necessary skills to perform work in any craft
or trade; provided that the recipient may
require the hiring of such individuals if the
recipient establishes reasonable provisions to
train such individuals to perform any such work
under the contract effectively.
(2) Project standards.--
(A) In general.--Any standards established
by the Secretary under this section shall
ensure that any requirements specified under
subsection (c)(1)--
(i) do not compromise the quality
of the project;
(ii) are reasonable in scope and
application;
(iii) do not unreasonably delay the
completion of the project; and
(iv) do not unreasonably increase
the cost of the project.
(B) Available programs.--The Secretary
shall make available to recipients the
workforce development and training programs set
forth in section 24604(e)(1)(D) of this title
to assist recipients who wish to establish
training programs that satisfy the provisions
of section (c)(1)(C). The Secretary of Labor
shall make available its qualifying workforce
and training development programs to recipients
who wish to establish training programs that
satisfy the provisions of section (c)(1)(C).
(3) Implementing regulations.--The Secretary shall
promulgate final regulations to implement the authority
of this subsection.
(j) Administrative Provisions.--
(1) Applicability of title 40.--Each project
conducted using funds provided under this subtitle
shall comply with the requirements of subchapter IV of
chapter 31 of title 40, United States Code.
(2) Buy american.--Section 1605 of division A of
the American Recovery and Reinvestment Act of 2009
(Public Law 111-5) applies to each project conducted
using funds provided under this subtitle.
Subtitle F--Building and Upgrading Infrastructure for Long-Term
Development
SEC. 242. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This subtitle may be cited as the
``Building and Upgrading Infrastructure for Long-Term
Development Act''.
SEC. 243. FINDINGS AND PURPOSE.
(a) Findings.--Congress finds that--
(1) infrastructure has always been a vital element
of the economic strength of the United States and a key
indicator of the international leadership of the United
States;
(2) the Erie Canal, the Hoover Dam, the railroads,
and the interstate highway system are all testaments to
American ingenuity and have helped propel and maintain
the United States as the world's largest economy;
(3) according to the World Economic Forum's Global
Competitiveness Report, the United States fell to
second place in 2009, and dropped to fourth place
overall in 2010, however, in the ``Quality of overall
infrastructure'' category of the same report, the
United States ranked twenty-third in the world;
(4) according to the World Bank's 2010 Logistic
Performance Index, the capacity of countries to
efficiently move goods and connect manufacturers and
consumers with international markets is improving
around the world, and the United States now ranks
seventh in the world in logistics-related
infrastructure behind countries from both Europe and
Asia;
(5) according to a January 2009 report from the
University of Massachusetts/Alliance for American
Manufacturing entitled ``Employment, Productivity and
Growth,'' infrastructure investment is a ``highly
effective engine of job creation'';
(6) according to the American Society of Civil
Engineers, the current condition of the infrastructure
in the United States earns a grade point average of D,
and an estimated $2,200,000,000,000 investment is
needed over the next 5 years to bring American
infrastructure up to adequate condition;
(7) according to the National Surface
Transportation Policy and Revenue Study Commission,
$225,000,000,000 is needed annually from all sources
for the next 50 years to upgrade the United States
surface transportation system to a state of good repair
and create a more advanced system;
(8) the current infrastructure financing mechanisms
of the United States, both on the Federal and State
level, will fail to meet current and foreseeable
demands and will create large funding gaps;
(9) published reports state that there may not be
enough demand for municipal bonds to maintain the same
level of borrowing at the same rates, resulting in
significantly decreased infrastructure investment at
the State and local level;
(10) current funding mechanisms are not readily
scalable and do not--
(A) serve large in-State or cross
jurisdiction infrastructure projects, projects
of regional or national significance, or
projects that cross sector silos;
(B) sufficiently catalyze private sector
investment; or
(C) ensure the optimal return on public
resources;
(11) although grant programs of the United States
Government must continue to play a central role in
financing the transportation, environment, and energy
infrastructure needs of the United States, current and
foreseeable demands on existing Federal, State, and
local funding for infrastructure expansion clearly
exceed the resources to support these programs by
margins wide enough to prompt serious concerns about
the United States ability to sustain long-term economic
development, productivity, and international
competitiveness;
(12) the capital markets, including pension funds,
private equity funds, mutual funds, sovereign wealth
funds, and other investors, have a growing interest in
infrastructure investment and represent hundreds of
billions of dollars of potential investment; and
(13) the establishment of a United States
Government-owned, independent, professionally managed
institution that could provide credit support to
qualified infrastructure projects of regional and
national significance, making transparent merit-based
investment decisions based on the commercial viability
of infrastructure projects, would catalyze the
participation of significant private investment
capital.
(b) Purpose.--The purpose of this Act is to facilitate
investment in, and long-term financing of, economically viable
infrastructure projects of regional or national significance in
a manner that both complements existing Federal, State, local,
and private funding sources for these projects and introduces a
merit-based system for financing such projects, in order to
mobilize significant private sector investment, create jobs,
and ensure United States competitiveness through an institution
that limits the need for ongoing Federal funding.
SEC. 244. DEFINITIONS.
For purposes of this Act, the following definitions shall
apply:
(1) AIFA.--The term ``AIFA'' means the American
Infrastructure Financing Authority established under
this Act.
(2) Blind trust.--The term ``blind trust'' means a
trust in which the beneficiary has no knowledge of the
specific holdings and no rights over how those holdings
are managed by the fiduciary of the trust prior to the
dissolution of the trust.
(3) Board of directors.--The term ``Board of
Directors'' means Board of Directors of AIFA.
(4) Chairperson.--The term ``Chairperson'' means
the Chairperson of the Board of Directors of AIFA.
(5) Chief executive officer.--The term ``chief
executive officer'' means the chief executive officer
of AIFA, appointed under section 247.
(6) Cost.--The term ``cost'' has the same meaning
as in section 502 of the Federal Credit Reform Act of
1990 (2 U.S.C. 661a).
(7) Direct loan.--The term ``direct loan'' has the
same meaning as in section 502 of the Federal Credit
Reform Act of 1990 (2 U.S.C. 661a).
(8) Eligible entity.--The term ``eligible entity''
means an individual, corporation, partnership
(including a public-private partnership), joint
venture, trust, State, or other non-Federal
governmental entity, including a political subdivision
or any other instrumentality of a State, or a revolving
fund.
(9) Infrastructure project.--
(A) In general.--The term ``eligible
infrastructure project'' means any non-Federal
transportation, water, or energy infrastructure
project, or an aggregation of such
infrastructure projects, as provided in this
Act.
(B) Transportation infrastructure
project.--The term ``transportation
infrastructure project'' means the
construction, alteration, or repair, including
the facilitation of intermodal transit, of the
following subsectors:
(i) Highway or road.
(ii) Bridge.
(iii) Mass transit.
(iv) Inland waterways.
(v) Commercial ports.
(vi) Airports.
(vii) Air traffic control systems.
(viii) Passenger rail, including
high-speed rail.
(ix) Freight rail systems.
(C) Water infrastructure project.--The term
``water infrastructure project'' means the
construction, consolidation, alteration, or
repair of the following subsectors:
(i) Waterwaste treatment facility.
(ii) Storm water management system.
(iii) Dam.
(iv) Solid waste disposal facility.
(v) Drinking water treatment
facility.
(vi) Levee.
(vii) Open space management system.
(D) Energy infrastructure project.--The
term ``energy infrastructure project'' means
the construction, alteration, or repair of the
following subsectors:
(i) Pollution reduced energy
generation.
(ii) Transmission and distribution.
(iii) Storage.
(iv) Energy efficiency enhancements
for buildings, including public and
commercial buildings.
(E) Board authority to modify subsectors.--
The Board of Directors may make modifications,
at the discretion of the Board, to the
subsectors described in this paragraph by a
vote of not fewer than 5 of the voting members
of the Board of Directors.
(10) Investment prospectus.--
(A) The term ``investment prospectus''
means the processes and publications described
below that will guide the priorities and
strategic focus for the Bank's investments. The
investment prospectus shall follow rulemaking
procedures under section 553 of title 5, United
States Code.
(B) The Bank shall publish a detailed
description of its strategy in an Investment
Prospectus within one year of the enactment of
this subchapter. The Investment Prospectus
shall--
(i) specify what the Bank shall
consider significant to the economic
competitiveness of the United States or
a region thereof in a manner consistent
with the primary objective;
(ii) specify the priorities and
strategic focus of the Bank in
forwarding its strategic objectives and
carrying out the Bank strategy;
(iii) specify the priorities and
strategic focus of the Bank in
promoting greater efficiency in the
movement of freight;
(iv) specify the priorities and
strategic focus of the Bank in
promoting the use of innovation and
best practices in the planning, design,
development and delivery of projects;
(v) describe in detail the
framework and methodology for
calculating application qualification
scores and associated ranges as
specified in this subchapter, along
with the data to be requested from
applicants and the mechanics of
calculations to be applied to that data
to determine qualification scores and
ranges;
(vi) describe how selection
criteria will be applied by the Chief
Executive Officer in determining the
competitiveness of an application and
its qualification score and range
relative to other current applications
and previously funded applications; and
(vii) describe how the
qualification score and range
methodology and project selection
framework are consistent with
maximizing the Bank goals in both urban
and rural areas.
(C) The Investment Prospectus and any
subsequent updates thereto shall be approved by
a majority vote of the Board of Directors prior
to publication.
(D) The Bank shall update the Investment
Prospectus on every biennial anniversary of its
original publication.
(11) Investment-grade rating.--The term
``investment-grade rating'' means a rating of BBB
minus, Baa3, or higher assigned to an infrastructure
project by a ratings agency.
(12) Loan guarantee.--The term ``loan guarantee''
has the same meaning as in section 502 of the Federal
Credit Reform Act of 1990 (2 U.S.C. 661a).
(13) Public-private partnership.--The term
``public-private partnership'' means any eligible
entity--
(A)(i) which is undertaking the development
of all or part of an infrastructure project
that will have a public benefit, pursuant to
requirements established in one or more
contracts between the entity and a State or an
instrumentality of a State; or
(ii) the activities of which, with respect
to such an infrastructure project, are subject
to regulation by a State or any instrumentality
of a State;
(B) which owns, leases, or operates or will
own, lease, or operate, the project in whole or
in part; and
(C) the participants in which include not
fewer than 1 nongovernmental entity with
significant investment and some control over
the project or project vehicle.
(14) Rural infrastructure project.--The term
``rural infrastructure project'' means an
infrastructure project in a rural area, as that term is
defined in section 343(a)(13)(A) of the Consolidated
Farm and Rural Development Act (7 U.S.C.
1991(a)(13)(A)).
(15) Secretary.--Unless the context otherwise
requires, the term ``Secretary'' means the Secretary of
the Treasury or the designee thereof.
(16) Senior management.--The term ``senior
management'' means the chief financial officer, chief
risk officer, chief compliance officer, general
counsel, chief lending officer, and chief operations
officer of AIFA established under section 249, and such
other officers as the Board of Directors may, by
majority vote, add to senior management.
(17) State.--The term ``State'' includes the
District of Columbia, Puerto Rico, Guam, American
Samoa, the Virgin Islands, the Commonwealth of Northern
Mariana Islands, and any other territory of the United
States.
PART I--AMERICAN INFRASTRUCTURE FINANCING AUTHORITY
SEC. 245. ESTABLISHMENT AND GENERAL AUTHORITY OF AIFA.
(a) Establishment of AIFA.--The American Infrastructure
Financing Authority is established as a wholly owned Government
corporation.
(b) General Authority of AIFA.--AIFA shall provide direct
loans and loan guarantees to facilitate infrastructure projects
that are both economically viable and of regional or national
significance, and shall have such other authority, as provided
in this Act.
(c) Incorporation.--
(1) In general.--The Board of Directors first
appointed shall be deemed the incorporator of AIFA, and
the incorporation shall be held to have been effected
from the date of the first meeting of the Board of
Directors.
(2) Corporate office.--AIFA shall--
(A) maintain an office in Washington, DC;
and
(B) for purposes of venue in civil actions,
be considered to be a resident of Washington,
DC.
(d) Responsibility of the Secretary.--The Secretary shall
take such action as may be necessary to assist in implementing
AIFA, and in carrying out the purpose of this Act.
(e) Rule of Construction.--Chapter 91 of title 31, United
States Code, does not apply to AIFA, unless otherwise
specifically provided in this Act.
SEC. 246. VOTING MEMBERS OF THE BOARD OF DIRECTORS.
(a) Voting Membership of the Board of Directors.--
(1) In general.--AIFA shall have a Board of
Directors consisting of 7 voting members appointed by
the President, by and with the advice and consent of
the Senate, not more than 4 of whom shall be from the
same political party.
(2) Chairperson.--One of the voting members of the
Board of Directors shall be designated by the President
to serve as Chairperson thereof.
(3) Congressional recommendations.--Not later than
30 days after the date of enactment of this Act, the
majority leader of the Senate, the minority leader of
the Senate, the Speaker of the House of
Representatives, and the minority leader of the House
of Representatives shall each submit a recommendation
to the President for appointment of a member of the
Board of Directors, after consultation with the
appropriate committees of Congress.
(b) Voting Rights.--Each voting member of the Board of
Directors shall have an equal vote in all decisions of the
Board of Directors.
(c) Qualifications of Voting Members.--Each voting member
of the Board of Directors shall--
(1) be a citizen of the United States; and
(2) have significant demonstrated expertise in--
(A) the management and administration of a
financial institution relevant to the operation
of AIFA; or a public financial agency or
authority; or
(B) the financing, development, or
operation of infrastructure projects; or
(C) analyzing the economic benefits of
infrastructure investment.
(d) Terms.--
(1) In general.--Except as otherwise provided in
this Act, each voting member of the Board of Directors
shall be appointed for a term of 4 years.
(2) Initial staggered terms.--Of the voting members
first appointed to the Board of Directors--
(A) the initial Chairperson and 3 of the
other voting members shall each be appointed
for a term of 4 years; and
(B) the remaining 3 voting members shall
each be appointed for a term of 2 years.
(3) Date of initial nominations.--The initial
nominations for the appointment of all voting members
of the Board of Directors shall be made not later than
60 days after the date of enactment of this Act.
(4) Beginning of term.--The term of each of the
initial voting members appointed under this section
shall commence immediately upon the date of
appointment, except that, for purposes of calculating
the term limits specified in this subsection, the
initial terms shall each be construed as beginning on
January 22 of the year following the date of the
initial appointment.
(5) Vacancies.--A vacancy in the position of a
voting member of the Board of Directors shall be filled
by the President, and a member appointed to fill a
vacancy on the Board of Directors occurring before the
expiration of the term for which the predecessor was
appointed shall be appointed only for the remainder of
that term.
(e) Meetings.--
(1) Open to the public; notice.--Except as provided
in paragraph (3), all meetings of the Board of
Directors shall be--
(A) open to the public; and
(B) preceded by reasonable public notice.
(2) Frequency.--The Board of Directors shall meet
not later than 60 days after the date on which all
members of the Board of Directors are first appointed,
at least quarterly thereafter, and otherwise at the
call of either the Chairperson or 5 voting members of
the Board of Directors.
(3) Exception for closed meetings.--The voting
members of the Board of Directors may, by majority
vote, close a meeting to the public if, during the
meeting to be closed, there is likely to be disclosed
proprietary or sensitive information regarding an
infrastructure project under consideration for
assistance under this Act. The Board of Directors shall
prepare minutes of any meeting that is closed to the
public, and shall make such minutes available as soon
as practicable, not later than 1 year after the date of
the closed meeting, with any necessary redactions to
protect any proprietary or sensitive information.
(4) Quorum.--For purposes of meetings of the Board
of Directors, 5 voting members of the Board of
Directors shall constitute a quorum.
(f) Compensation of Members.--Each voting member of the
Board of Directors shall be compensated at a rate equal to the
daily equivalent of the annual rate of basic pay prescribed for
level III of the Executive Schedule under section 5314 of title
5, United States Code, for each day (including travel time)
during which the member is engaged in the performance of the
duties of the Board of Directors.
(g) Conflicts of Interest.--A voting member of the Board of
Directors may not participate in any review or decision
affecting an infrastructure project under consideration for
assistance under this Act, if the member has or is affiliated
with an entity who has a financial interest in such project.
SEC. 247. CHIEF EXECUTIVE OFFICER OF AIFA.
(a) In General.--The chief executive officer of AIFA shall
be a nonvoting member of the Board of Directors, who shall be
responsible for all activities of AIFA, and shall support the
Board of Directors as set forth in this Act and as the Board of
Directors deems necessary or appropriate.
(b) Appointment and Tenure of the Chief Executive
Officer.--
(1) In general.--The President shall appoint the
chief executive officer, by and with the advice and
consent of the Senate.
(2) Term.--The chief executive officer shall be
appointed for a term of 6 years.
(3) Vacancies.--Any vacancy in the office of the
chief executive officer shall be filled by the
President, and the person appointed to fill a vacancy
in that position occurring before the expiration of the
term for which the predecessor was appointed shall be
appointed only for the remainder of that term.
(c) Qualifications.--The chief executive officer--
(1) shall have significant expertise in management
and administration of a financial institution, or
significant expertise in the financing and development
of infrastructure projects, or significant expertise in
analyzing the economic benefits of infrastructure
investment; and
(2) may not--
(A) hold any other public office;
(B) have any financial interest in an
infrastructure project then being considered by
the Board of Directors, unless that interest is
placed in a blind trust; or
(C) have any financial interest in an
investment institution or its affiliates or any
other entity seeking or likely to seek
financial assistance for any infrastructure
project from AIFA, unless any such interest is
placed in a blind trust for the tenure of the
service of the chief executive officer plus 2
additional years.
(d) Responsibilities.--The chief executive officer shall
have such executive functions, powers, and duties as may be
prescribed by this Act, the bylaws of AIFA, or the Board of
Directors, including--
(1) responsibility for the development and
implementation of the strategy of AIFA, including--
(A) the development and submission to the
Board of Directors of the investment
prospectus, the annual business plans and
budget;
(B) the development and submission to the
Board of Directors of a long-term strategic
plan; and
(C) the development, revision, and
submission to the Board of Directors of
internal policies; and
(2) responsibility for the management and oversight
of the daily activities, decisions, operations, and
personnel of AIFA, including--
(A) the appointment of senior management,
subject to approval by the voting members of
the Board of Directors, and the hiring and
termination of all other AIFA personnel;
(B) requesting the detail, on a
reimbursable basis, of personnel from any
Federal agency having specific expertise not
available from within AIFA, following which
request the head of the Federal agency may
detail, on a reimbursable basis, any personnel
of such agency reasonably requested by the
chief executive officer;
(C) assessing and recommending in the first
instance, for ultimate approval or disapproval
by the Board of Directors, compensation and
adjustments to compensation of senior
management and other personnel of AIFA as may
be necessary for carrying out the functions of
AIFA;
(D) ensuring, in conjunction with the
general counsel of AIFA, that all activities of
AIFA are carried out in compliance with
applicable law;
(E) overseeing the involvement of AIFA in
all projects, including--
(i) developing eligible projects
for AIFA financial assistance;
(ii) determining the terms and
conditions of all financial assistance
packages;
(iii) monitoring all infrastructure
projects assisted by AIFA, including
responsibility for ensuring that the
proceeds of any loan made, guaranteed,
or participated in are used only for
the purposes for which the loan or
guarantee was made;
(iv) preparing and submitting for
approval by the Board of Directors the
documents required under paragraph (1);
and
(v) ensuring the implementation of
decisions of the Board of Directors;
and
(F) such other activities as may be
necessary or appropriate in carrying out this
Act.
(e) Compensation.--
(1) In general.--Any compensation assessment or
recommendation by the chief executive officer under
this section shall be without regard to the provisions
of chapter 51 or subchapter III of chapter 53 of title
5, United States Code.
(2) Considerations.--The compensation assessment or
recommendation required under this subsection shall
take into account merit principles, where applicable,
as well as the education, experience, level of
responsibility, geographic differences, and retention
and recruitment needs in determining compensation of
personnel.
SEC. 248. POWERS AND DUTIES OF THE BOARD OF DIRECTORS.
The Board of Directors shall--
(1) as soon as is practicable after the date on
which all members are appointed, approve or disapprove
senior management appointed by the chief executive
officer;
(2) not later than 180 days after the date on which
all members are appointed--
(A) develop and approve the bylaws of AIFA,
including bylaws for the regulation of the
affairs and conduct of the business of AIFA,
consistent with the purpose, goals, objectives,
and policies set forth in this Act;
(B) establish subcommittees, including an
audit committee that is composed solely of
members of the Board of Directors who are
independent of the senior management of AIFA;
(C) develop and approve, in consultation
with senior management, a conflict-of-interest
policy for the Board of Directors and for
senior management;
(D) approve or disapprove internal policies
that the chief executive officer shall submit
to the Board of Directors, including--
(i) policies regarding the loan
application and approval process,
including--
(I) disclosure and
application procedures to be
followed by entities in the
course of nominating
infrastructure projects for
assistance under this Act;
(II) guidelines for the
selection and approval of
projects;
(III) specific criteria for
determining eligibility for
project selection, consistent
with title II; and
(IV) standardized terms and
conditions, fee schedules, or
legal requirements of a
contract or program, so as to
carry out this Act; and
(ii) operational guidelines; and
(E) approve or disapprove a multi-year or
1-year business plan and budget for AIFA;
(3) ensure that AIFA is at all times operated in a
manner that is consistent with this Act, by--
(A) monitoring and assessing the
effectiveness of AIFA in achieving its
strategic goals;
(B) periodically reviewing internal
policies;
(C) reviewing and approving annual business
plans, annual budgets, and long-term strategies
submitted by the chief executive officer;
(D) reviewing and approving annual reports
submitted by the chief executive officer;
(E) engaging one or more external auditors,
as set forth in this Act; and
(F) reviewing and approving all changes to
the organization of senior management;
(4) appoint and fix, by a vote of 5 of the 7 voting
members of the Board of Directors, and without regard
to the provisions of chapter 51 or subchapter III of
chapter 53 of title 5, United Sates Code, the
compensation and adjustments to compensation of all
AIFA personnel, provided that in appointing and fixing
any compensation or adjustments to compensation under
this paragraph, the Board shall--
(A) consult with, and seek to maintain
comparability with, other comparable Federal
personnel;
(B) consult with the Office of Personnel
Management; and
(C) carry out such duties consistent with
merit principles, where applicable, as well as
the education, experience, level of
responsibility, geographic differences, and
retention and recruitment needs in determining
compensation of personnel;
(5) establish such other criteria, requirements, or
procedures as the Board of Directors may consider to be
appropriate in carrying out this Act;
(6) serve as the primary liaison for AIFA in
interactions with Congress, the Executive Branch, and
State and local governments, and to represent the
interests of AIFA in such interactions and others;
(7) approve by a vote of 5 of the 7 voting members
of the Board of Directors any changes to the bylaws or
internal policies of AIFA;
(8) have the authority and responsibility--
(A) to oversee entering into and carry out
such contracts, leases, cooperative agreements,
or other transactions as are necessary to carry
out this Act with--
(i) any Federal department or
agency;
(ii) any State, territory, or
possession (or any political
subdivision thereof, including State
infrastructure banks) of the United
States; and
(iii) any individual, public-
private partnership, firm, association,
or corporation;
(B) to approve of the acquisition, lease,
pledge, exchange, and disposal of real and
personal property by AIFA and otherwise approve
the exercise by AIFA of all of the usual
incidents of ownership of property, to the
extent that the exercise of such powers is
appropriate to and consistent with the purposes
of AIFA;
(C) to determine the character of, and the
necessity for, the obligations and expenditures
of AIFA, and the manner in which the
obligations and expenditures will be incurred,
allowed, and paid, subject to this Act and
other Federal law specifically applicable to
wholly owned Federal corporations;
(D) to execute, in accordance with
applicable bylaws and regulations, appropriate
instruments;
(E) to approve other forms of credit
enhancement that AIFA may provide to eligible
projects, as long as the forms of credit
enhancements are consistent with the purposes
of this Act and terms set forth in title II;
(F) to exercise all other lawful powers
which are necessary or appropriate to carry
out, and are consistent with, the purposes of
AIFA;
(G) to sue or be sued in the corporate
capacity of AIFA in any court of competent
jurisdiction;
(H) to indemnify the members of the Board
of Directors and officers of AIFA for any
liabilities arising out of the actions of the
members and officers in such capacity, in
accordance with, and subject to the limitations
contained in this Act;
(I) to review all financial assistance
packages to all eligible infrastructure
projects, as submitted by the chief executive
officer and to approve, postpone, or deny the
same by majority vote;
(J) to review all restructuring proposals
submitted by the chief executive officer,
including assignation, pledging, or disposal of
the interest of AIFA in a project, including
payment or income from any interest owned or
held by AIFA, and to approve, postpone, or deny
the same by majority vote; and
(K) to enter into binding commitments, as
specified in approved financial assistance
packages;
(9) delegate to the chief executive officer those
duties that the Board of Directors deems appropriate,
to better carry out the powers and purposes of the
Board of Directors under this section; and
(10) to approve a maximum aggregate amount of
outstanding obligations of AIFA at any given time,
taking into consideration funding, and the size of
AIFA's addressable market for infrastructure projects.
SEC. 249. SENIOR MANAGEMENT.
(a) In General.--Senior management shall support the chief
executive officer in the discharge of the responsibilities of
the chief executive officer.
(b) Appointment of Senior Management.--The chief executive
officer shall appoint such senior managers as are necessary to
carry out the purpose of AIFA, as approved by a majority vote
of the voting members of the Board of Directors.
(c) Term.--Each member of senior management shall serve at
the pleasure of the chief executive officer and the Board of
Directors.
(d) Removal of Senior Management.--Any member of senior
management may be removed, either by a majority of the voting
members of the Board of Directors upon request by the chief
executive officer, or otherwise by vote of not fewer than 5
voting members of the Board of Directors.
(e) Senior Management.--
(1) In general.--Each member of senior management
shall report directly to the chief executive officer,
other than the Chief Risk Officer, who shall report
directly to the Board of Directors.
(2) Duties and responsibilities.--
(A) Chief financial officer.--The Chief
Financial Officer shall be responsible for all
financial functions of AIFA, provided that, at
the discretion of the Board of Directors,
specific functions of the Chief Financial
Officer may be delegated externally.
(B) Chief risk officer.--The Chief Risk
Officer shall be responsible for all functions
of AIFA relating to--
(i) the creation of financial,
credit, and operational risk management
guidelines and policies;
(ii) credit analysis for
infrastructure projects;
(iii) the creation of conforming
standards for infrastructure finance
agreements;
(iv) the monitoring of the
financial, credit, and operational
exposure of AIFA; and
(v) risk management and mitigation
actions, including by reporting such
actions, or recommendations of such
actions to be taken, directly to the
Board of Directors.
(C) Chief compliance officer.--The Chief
Compliance Officer shall be responsible for all
functions of AIFA relating to internal audits,
accounting safeguards, and the enforcement of
such safeguards and other applicable
requirements.
(D) General counsel.--The General Counsel
shall be responsible for all functions of AIFA
relating to legal matters and, in consultation
with the chief executive officer, shall be
responsible for ensuring that AIFA complies
with all applicable law.
(E) Chief operations officer.--The Chief
Operations Officer shall be responsible for all
operational functions of AIFA, including those
relating to the continuing operations and
performance of all infrastructure projects in
which AIFA retains an interest and for all AIFA
functions related to human resources.
(F) Chief lending officer.--The Chief
Lending Officer shall be responsible for--
(i) all functions of AIFA relating
to the development of project pipeline,
financial structuring of projects,
selection of infrastructure projects to
be reviewed by the Board of Directors,
preparation of infrastructure projects
to be presented to the Board of
Directors, and set aside for rural
infrastructure projects; and
(ii) the creation and management
of--
(I) a Center for Excellence
to provide technical assistance
to public sector borrowers in
the development and financing
of infrastructure projects; and
(II) an Office of Rural
Assistance to provide technical
assistance in the development
and financing of rural
infrastructure projects; and
(iii) the establishment of
guidelines to ensure diversification of
lending activities by region,
infrastructure project type, and
project size.
(f) Changes to Senior Management.--The Board of Directors,
in consultation with the chief executive officer, may alter the
structure of the senior management of AIFA at any time to
better accomplish the goals, objectives, and purposes of AIFA,
provided that the functions of the Chief Financial Officer set
forth in subsection (e) remain separate from the functions of
the Chief Risk Officer set forth in subsection (e).
(g) Conflicts of Interest.--No individual appointed to
senior management may--
(1) hold any other public office;
(2) have any financial interest in an
infrastructure project then being considered by the
Board of Directors, unless that interest is placed in a
blind trust; or
(3) have any financial interest in an investment
institution or its affiliates, AIFA or its affiliates,
or other entity then seeking or likely to seek
financial assistance for any infrastructure project
from AIFA, unless any such interest is placed in a
blind trust during the term of service of that
individual in a senior management position, and for a
period of 2 years thereafter.
SEC. 250. SPECIAL INSPECTOR GENERAL FOR AIFA.
(a) In General.--During the first 5 operating years of
AIFA, the Office of the Inspector General of the Department of
the Treasury shall have responsibility for AIFA.
(b) Office of the Special Inspector General.--Effective 5
years after the date of enactment of the commencement of the
operations of AIFA, there is established the Office of the
Special Inspector General for AIFA.
(c) Appointment of Inspector General; Removal.--
(1) Head of office.--The head of the Office of the
Special Inspector General for AIFA shall be the Special
Inspector General for AIFA (in this Act referred to as
the ``Special Inspector General''), who shall be
appointed by the President, by and with the advice and
consent of the Senate.
(2) Basis of appointment.--The appointment of the
Special Inspector General shall be made on the basis of
integrity and demonstrated ability in accounting,
auditing, financial analysis, law, management analysis,
public administration, or investigations.
(3) Timing of nomination.--The nomination of an
individual as Special Inspector General shall be made
as soon as is practicable after the effective date
under subsection (b).
(4) Removal.--The Special Inspector General shall
be removable from office in accordance with the
provisions of section 3(b) of the Inspector General Act
of 1978 (5 U.S.C. App.).
(5) Rule of construction.--For purposes of section
7324 of title 5, United States Code, the Special
Inspector General shall not be considered an employee
who determines policies to be pursued by the United
States in the nationwide administration of Federal law.
(6) Rate of pay.--The annual rate of basic pay of
the Special Inspector General shall be the annual rate
of basic pay for an Inspector General under section
3(e) of the Inspector General Act of 1978 (5 U.S.C.
App.).
(d) Duties.--
(1) In general.--It shall be the duty of the
Special Inspector General to conduct, supervise, and
coordinate audits and investigations of the business
activities of AIFA.
(2) Other systems, procedures, and controls.--The
Special Inspector General shall establish, maintain,
and oversee such systems, procedures, and controls as
the Special Inspector General considers appropriate to
discharge the duty under paragraph (1).
(3) Additional duties.--In addition to the duties
specified in paragraphs (1) and (2), the Inspector
General shall also have the duties and responsibilities
of inspectors general under the Inspector General Act
of 1978.
(e) Powers and Authorities.--
(1) In general.--In carrying out the duties
specified in subsection (c), the Special Inspector
General shall have the authorities provided in section
6 of the Inspector General Act of 1978.
(2) Additional authority.--The Special Inspector
General shall carry out the duties specified in
subsection (c)(1) in accordance with section 4(b)(1) of
the Inspector General Act of 1978.
(f) Personnel, Facilities, and Other Resources.--
(1) Additional officers.--
(A) The Special Inspector General may
select, appoint, and employ such officers and
employees as may be necessary for carrying out
the duties of the Special Inspector General,
subject to the provisions of title 5, United
States Code, governing appointments in the
competitive service, and the provisions of
chapter 51 and subchapter III of chapter 53 of
such title, relating to classification and
General Schedule pay rates.
(B) The Special Inspector General may
exercise the authorities of subsections (b)
through (i) of section 3161 of title 5, United
States Code (without regard to subsection (a)
of that section).
(2) Retention of services.--The Special Inspector
General may obtain services as authorized by section
3109 of title 5, United States Code, at daily rates not
to exceed the equivalent rate prescribed for grade GS-
15 of the General Schedule by section 5332 of such
title.
(3) Ability to contract for audits, studies, and
other services.--The Special Inspector General may
enter into contracts and other arrangements for audits,
studies, analyses, and other services with public
agencies and with private persons, and make such
payments as may be necessary to carry out the duties of
the Special Inspector General.
(4) Request for information.--
(A) In general.--Upon request of the
Special Inspector General for information or
assistance from any department, agency, or
other entity of the Federal Government, the
head of such entity shall, insofar as is
practicable and not in contravention of any
existing law, furnish such information or
assistance to the Special Inspector General, or
an authorized designee.
(B) Refusal to comply.--Whenever
information or assistance requested by the
Special Inspector General is, in the judgment
of the Special Inspector General, unreasonably
refused or not provided, the Special Inspector
General shall report the circumstances to the
Secretary of the Treasury, without delay.
(g) Reports.--
(1) Annual report.--Not later than 1 year after the
confirmation of the Special Inspector General, and
every calendar year thereafter, the Special Inspector
General shall submit to the President a report
summarizing the activities of the Special Inspector
General during the previous 1-year period ending on the
date of such report.
(2) Public disclosures.--Nothing in this subsection
shall be construed to authorize the public disclosure
of information that is--
(A) specifically prohibited from disclosure
by any other provision of law;
(B) specifically required by Executive
order to be protected from disclosure in the
interest of national defense or national
security or in the conduct of foreign affairs;
or
(C) a part of an ongoing criminal
investigation.
SEC. 251. OTHER PERSONNEL.
Except as otherwise provided in the bylaws of AIFA, the
chief executive officer, in consultation with the Board of
Directors, shall appoint, remove, and define the duties of such
qualified personnel as are necessary to carry out the powers,
duties, and purpose of AIFA, other than senior management, who
shall be appointed in accordance with section 249.
SEC. 252. COMPLIANCE.
The provision of assistance by the Board of Directors
pursuant to this Act shall not be construed as superseding any
provision of State law or regulation otherwise applicable to an
infrastructure project.
PART II--TERMS AND LIMITATIONS ON DIRECT LOANS AND LOAN GUARANTEES
SEC. 253. ELIGIBILITY CRITERIA FOR ASSISTANCE FROM AIFA AND TERMS AND
LIMITATIONS OF LOANS.
(a) In General.--Any project whose use or purpose is
private and for which no public benefit is created shall not be
eligible for financial assistance from AIFA under this Act.
Financial assistance under this Act shall only be made
available if the applicant for such assistance has demonstrated
to the satisfaction of the Board of Directors that the
infrastructure project for which such assistance is being
sought--
(1) is not for the refinancing of an existing
infrastructure project; and
(2) meets--
(A) any pertinent requirements set forth in
this Act;
(B) any criteria established by the Board
of Directors or chief executive officer in
accordance with this Act; and
(C) the definition of a transportation
infrastructure project, water infrastructure
project, or energy infrastructure project.
(b) Considerations.--The criteria established by the Board
of Directors pursuant to this Act shall provide adequate
consideration of--
(1) the economic, financial, technical,
environmental, and public benefits and costs of each
infrastructure project under consideration for
financial assistance under this Act, prioritizing
infrastructure projects that--
(A) contribute to regional or national
economic growth;
(B) offer value for money to taxpayers;
(C) demonstrate a clear and significant
public benefit;
(D) lead to job creation; and
(E) mitigate environmental concerns;
(2) the means by which development of the
infrastructure project under consideration is being
financed, including--
(A) the terms, conditions, and structure of
the proposed financing;
(B) the credit worthiness and standing of
the project sponsors, providers of equity, and
cofinanciers;
(C) the financial assumptions and
projections on which the infrastructure project
is based; and
(D) whether there is sufficient State or
municipal political support for the successful
completion of the infrastructure project;
(3) the likelihood that the provision of assistance
by AIFA will cause such development to proceed more
promptly and with lower costs than would be the case
without such assistance;
(4) the extent to which the provision of assistance
by AIFA maximizes the level of private investment in
the infrastructure project or supports a public-private
partnership, while providing a significant public
benefit;
(5) the extent to which the provision of assistance
by AIFA can mobilize the participation of other
financing partners in the infrastructure project;
(6) the technical and operational viability of the
infrastructure project;
(7) the proportion of financial assistance from
AIFA;
(8) the geographic location of the project in an
effort to have geographic diversity of projects funded
by AIFA;
(9) the size of the project and its impact on the
resources of AIFA;
(10) the infrastructure sector of the project, in
an effort to have projects from more than one sector
funded by AIFA; and
(11) Encourages use of innovative procurement,
asset management, or financing to minimize the all-in-
life-cycle cost, and improve the cost-effectiveness of
a project.
(c) Application.--
(1) In general.--Any eligible entity seeking
assistance from AIFA under this Act for an eligible
infrastructure project shall submit an application to
AIFA at such time, in such manner, and containing such
information as the Board of Directors or the chief
executive officer may require.
(2) Review of applications.--AIFA shall review
applications for assistance under this Act on an
ongoing basis. The chief executive officer, working
with the senior management, shall prepare eligible
infrastructure projects for review and approval by the
Board of Directors.
(3) Dedicated revenue sources.--The Federal credit
instrument shall be repayable, in whole or in part,
from tolls, user fees, or other dedicated revenue
sources that also secure the infrastructure project
obligations.
(d) Eligible Infrastructure Project Costs.--
(1) In general.--Except as provided in paragraph
(2), to be eligible for assistance under this Act, an
infrastructure project shall have project costs that
are reasonably anticipated to equal or exceed
$100,000,000.
(2) Rural infrastructure projects.--To be eligible
for assistance under this Act a rural infrastructure
project shall have project costs that are reasonably
anticipated to equal or exceed $25,000,000.
(e) Loan Eligibility and Maximum Amounts.--
(1) In general.--The amount of a direct loan or
loan guarantee under this Act shall not exceed the
lesser of 50 percent of the reasonably anticipated
eligible infrastructure project costs or, if the direct
loan or loan guarantee does not receive an investment
grade rating, the amount of the senior project
obligations.
(2) Maximum annual loan and loan guarantee
volume.--The aggregate amount of direct loans and loan
guarantees made by AIFA in any single fiscal year may
not exceed--
(A) during the first 2 fiscal years of the
operations of AIFA, $10,000,000,000;
(B) during fiscal years 3 through 9 of the
operations of AIFA, $20,000,000,000; or
(C) during any fiscal year thereafter,
$50,000,000,000.
(f) State and Local Permits Required.--The provision of
assistance by the Board of Directors pursuant to this Act shall
not be deemed to relieve any recipient of such assistance, or
the related infrastructure project, of any obligation to obtain
required State and local permits and approvals.
SEC. 254. LOAN TERMS AND REPAYMENT.
(a) In General.--A direct loan or loan guarantee under this
Act with respect to an eligible infrastructure project shall be
on such terms, subject to such conditions, and contain such
covenants, representations, warranties, and requirements
(including requirements for audits) as the chief executive
officer determines appropriate.
(b) Terms.--A direct loan or loan guarantee under this
Act--
(1) shall--
(A) be payable, in whole or in part, from
tolls, user fees, or other dedicated revenue
sources that also secure the senior project
obligations (such as availability payments and
dedicated State or local revenues); and
(B) include a rate covenant, coverage
requirement, or similar security feature
supporting the project obligations; and
(2) may have a lien on revenues described in
paragraph (1), subject to any lien securing project
obligations.
(c) Base Interest Rate.--The base interest rate on a direct
loan under this Act shall be not less than the yield on United
States Treasury obligations of a similar maturity to the
maturity of the direct loan.
(d) Risk Assessment.--Before entering into an agreement for
assistance under this Act, the chief executive officer, in
consultation with the Director of the Office of Management and
Budget and considering rating agency preliminary or final
rating opinion letters of the project under this section, shall
estimate an appropriate Federal credit subsidy amount for each
direct loan and loan guarantee, taking into account such
letter, as well as any comparable market rates available for
such a loan or loan guarantee, should any exist. The final
credit subsidy cost for each loan and loan guarantee shall be
determined consistent with the Federal Credit Reform Act, 2
U.S.C. 661a et seq.
(e) Credit Fee.--With respect to each agreement for
assistance under this Act, the chief executive officer may
charge a credit fee to the recipient of such assistance to pay
for, over time, all or a portion of the Federal credit subsidy
determined under subsection (d), with the remainder paid by the
account established for AIFA; provided, that the source of fees
paid under this section shall not be a loan or debt obligation
guaranteed by the Federal Government. In the case of a direct
loan, such credit fee shall be in addition to the base interest
rate established under subsection (c).
(f) Maturity Date.--The final maturity date of a direct
loan or loan guaranteed by AIFA under this Act shall be not
later than 35 years after the date of substantial completion of
the infrastructure project, as determined by the chief
executive officer.
(g) Rating Opinion Letter.--
(1) In general.--The chief executive officer shall
require each applicant for assistance under this Act to
provide a rating opinion letter from at least 1 ratings
agency, indicating that the senior obligations of the
infrastructure project, which may be the Federal credit
instrument, have the potential to achieve an
investment-grade rating.
(2) Rural infrastructure projects.--With respect to
a rural infrastructure project, a rating agency opinion
letter described in paragraph (1) shall not be
required, except that the loan or loan guarantee shall
receive an internal rating score, using methods similar
to the ratings agencies generated by AIFA, measuring
the proposed direct loan or loan guarantee against
comparable direct loans or loan guarantees of similar
credit quality in a similar sector.
(h) Investment-Grade Rating Requirement.--
(1) Loans and loan guarantees.--The execution of a
direct loan or loan guarantee under this Act shall be
contingent on the senior obligations of the
infrastructure project receiving an investment-grade
rating.
(2) Rating of aifa overall portfolio.--The average
rating of the overall portfolio of AIFA shall be not
less than investment grade after 5 years of operation.
(i) Terms and Repayment of Direct Loans.--
(1) Schedule.--The chief executive officer shall
establish a repayment schedule for each direct loan
under this Act, based on the projected cash flow from
infrastructure project revenues and other repayment
sources.
(2) Commencement.--Scheduled loan repayments of
principal or interest on a direct loan under this Act
shall commence not later than 5 years after the date of
substantial completion of the infrastructure project,
as determined by the chief executive officer of AIFA.
(3) Deferred payments of direct loans.--
(A) Authorization.--If, at any time after
the date of substantial completion of an
infrastructure project assisted under this Act,
the infrastructure project is unable to
generate sufficient revenues to pay the
scheduled loan repayments of principal and
interest on the direct loan under this Act, the
chief executive officer may allow the obligor
to add unpaid principal and interest to the
outstanding balance of the direct loan, if the
result would benefit the taxpayer.
(B) Interest.--Any payment deferred under
subparagraph (A) shall--
(i) continue to accrue interest, in
accordance with the terms of the
obligation, until fully repaid; and
(ii) be scheduled to be amortized
over the remaining term of the loan.
(C) Criteria.--
(i) In general.--Any payment
deferral under subparagraph (A) shall
be contingent on the infrastructure
project meeting criteria established by
the Board of Directors.
(ii) Repayment standards.--The
criteria established under clause (i)
shall include standards for reasonable
assurance of repayment.
(4) Prepayment of direct loans.--
(A) Use of excess revenues.--Any excess
revenues that remain after satisfying scheduled
debt service requirements on the infrastructure
project obligations and direct loan and all
deposit requirements under the terms of any
trust agreement, bond resolution, or similar
agreement securing project obligations under
this Act may be applied annually to prepay the
direct loan, without penalty.
(B) Use of proceeds of refinancing.--A
direct loan under this Act may be prepaid at
any time, without penalty, from the proceeds of
refinancing from non-Federal funding sources.
(5) Sale of direct loans.--
(A) In general.--As soon as is practicable
after substantial completion of an
infrastructure project assisted under this Act,
and after notifying the obligor, the chief
executive officer may sell to another entity,
or reoffer into the capital markets, a direct
loan for the infrastructure project, if the
chief executive officer determines that the
sale or reoffering can be made on favorable
terms for the taxpayer.
(B) Consent of obligor.--In making a sale
or reoffering under subparagraph (A), the chief
executive officer may not change the original
terms and conditions of the direct loan,
without the written consent of the obligor.
(j) Loan Guarantees.--
(1) Terms.--The terms of a loan guaranteed by AIFA
under this Act shall be consistent with the terms set
forth in this section for a direct loan, except that
the rate on the guaranteed loan and any payment, pre-
payment, or refinancing features shall be negotiated
between the obligor and the lender, with the consent of
the chief executive officer.
(2) Guaranteed lender.--A guaranteed lender shall
be limited to those lenders meeting the definition of
that term in section 601(a) of title 23, United States
Code.
(k) Compliance With FCRA--In General.--Direct loans and
loan guarantees authorized by this Act shall be subject to the
provisions of the Federal Credit Reform Act of 1990 (2 U.S.C.
661 et seq.), as amended.
SEC. 255. COMPLIANCE AND ENFORCEMENT.
(a) Credit Agreement.--Notwithstanding any other provision
of law, each eligible entity that receives assistance under
this Act from AIFA shall enter into a credit agreement that
requires such entity to comply with all applicable policies and
procedures of AIFA, in addition to all other provisions of the
loan agreement.
(b) AIFA Authority on Noncompliance.--In any case in which
a recipient of assistance under this Act is materially out of
compliance with the loan agreement, or any applicable policy or
procedure of AIFA, the Board of Directors may take action to
cancel unutilized loan amounts, or to accelerate the repayment
terms of any outstanding obligation.
(c) Nothing in this Act is intended to affect existing
provisions of law applicable to the planning, development,
construction, or operation of projects funded under the Act.
SEC. 256. AUDITS; REPORTS TO THE PRESIDENT AND CONGRESS.
(a) Accounting.--The books of account of AIFA shall be
maintained in accordance with generally accepted accounting
principles, and shall be subject to an annual audit by
independent public accountants of nationally recognized
standing appointed by the Board of Directors.
(b) Reports.--
(1) Board of directors.--Not later than 90 days
after the last day of each fiscal year, the Board of
Directors shall submit to the President and Congress a
complete and detailed report with respect to the
preceding fiscal year, setting forth--
(A) a summary of the operations of AIFA,
for such fiscal year;
(B) a schedule of the obligations of AIFA
and capital securities outstanding at the end
of such fiscal year, with a statement of the
amounts issued and redeemed or paid during such
fiscal year;
(C) the status of infrastructure projects
receiving funding or other assistance pursuant
to this Act during such fiscal year, including
all nonperforming loans, and including
disclosure of all entities with a development,
ownership, or operational interest in such
infrastructure projects;
(D) a description of the successes and
challenges encountered in lending to rural
communities, including the role of the Center
for Excellence and the Office of Rural
Assistance established under this Act; and
(E) an assessment of the risks of the
portfolio of AIFA, prepared by an independent
source.
(2) GAO.--Not later than 5 years after the date of
enactment of this Act, the Comptroller General of the
United States shall conduct an evaluation of, and shall
submit to Congress a report on, activities of AIFA for
the fiscal years covered by the report that includes an
assessment of the impact and benefits of each funded
infrastructure project, including a review of how
effectively each such infrastructure project
accomplished the goals prioritized by the
infrastructure project criteria of AIFA.
(c) Books and Records.--
(1) In general.--AIFA shall maintain adequate books
and records to support the financial transactions of
AIFA, with a description of financial transactions and
infrastructure projects receiving funding, and the
amount of funding for each such project maintained on a
publically accessible database.
(2) Audits by the secretary and gao.--The books and
records of AIFA shall at all times be open to
inspection by the Secretary of the Treasury, the
Special Inspector General, and the Comptroller General
of the United States.
PART III--FUNDING OF AIFA
SEC. 257. ADMINISTRATIVE FEES.
(a) In General.--In addition to fees that may be collected
under section 254(e), the chief executive officer shall
establish and collect fees from eligible funding recipients
with respect to loans and loan guarantees under this Act that--
(1) are sufficient to cover all or a portion of the
administrative costs to the Federal Government for the
operations of AIFA, including the costs of expert
firms, including counsel in the field of municipal and
project finance, and financial advisors to assist with
underwriting, credit analysis, or other independent
reviews, as appropriate;
(2) may be in the form of an application or
transaction fee, or other form established by the CEO;
and
(3) may be based on the risk premium associated
with the loan or loan guarantee, taking into
consideration--
(A) the price of United States Treasury
obligations of a similar maturity;
(B) prevailing market conditions;
(C) the ability of the infrastructure
project to support the loan or loan guarantee;
and
(D) the total amount of the loan or loan
guarantee.
(b) Availability of Amounts.--Amounts collected under
subsections (a)(1), (a)(2), and (a)(3) shall be available
without further action; provided further, that the source of
fees paid under this section shall not be a loan or debt
obligation guaranteed by the Federal Government.
SEC. 258. EFFICIENCY OF AIFA.
The chief executive officer shall, to the extent possible,
take actions consistent with this Act to minimize the risk and
cost to the taxpayer of AIFA activities. Fees and premiums for
loan guarantee or insurance coverage will be set at levels that
minimize administrative and Federal credit subsidy costs to the
Government, as defined in Section 502 of the Federal Credit
Reform Act of 1990, as amended, of such coverage, while
supporting achievement of the program's objectives, consistent
with policies as set forth in the Business Plan.
SEC. 259. FUNDING.
There is hereby appropriated to AIFA to carry out this Act,
for the cost of direct loans and loan guarantees subject to the
limitations under Section 253, and for administrative costs,
$10,000,000,000, to remain available until expended; Provided,
That such costs, including the costs of modifying such loans,
shall be as defined in section 502 of the Federal Credit Reform
Act of 1990, as amended; Provided further, that of this amount,
not more than $25,000,000 for each of fiscal years 2012 through
2013, and not more than $50,000,000 for fiscal year 2014 may be
used for administrative costs of AIFA; provided further, that
not more than 5 percent of such amount shall be used to offset
subsidy costs associated with rural projects. Amounts
authorized shall be available without further action.
PART IV--EXTENSION OF EXEMPTION FROM ALTERNATIVE MINIMUM TAX TREATMENT
FOR CERTAIN TAX-EXEMPT BONDS
SEC. 260. EXTENSION OF EXEMPTION FROM ALTERNATIVE MINIMUM TAX TREATMENT
FOR CERTAIN TAX-EXEMPT BONDS.
(a) In General.--Clause (vi) of section 57(a)(5)(C) of the
Internal Revenue Code of 1986 is amended--
(1) by striking ``January 1, 2011'' in subclause
(I) and inserting ``January 1, 2013''; and
(2) by striking ``AND 2010'' in the heading and
inserting ``, 2010, 2011, AND 2012''.
(b) Adjusted Current Earnings.--Clause (iv) of section
56(g)(4)(B) of the Internal Revenue Code of 1986 is amended--
(1) by striking ``January 1, 2011'' in subclause
(I) and inserting ``January 1, 2013''; and
(2) by striking ``AND 2010'' in the heading and
inserting ``, 2010, 2011, AND 2012''.
(c) Effective Date.--The amendments made by this section
shall apply to obligations issued after December 31, 2010.
Subtitle G--Project Rebuild
SEC. 261. PROJECT REBUILD.
(a) Direct Appropriations.--There is appropriated, out of
any money in the Treasury not otherwise appropriated,
$15,000,000,000, to remain available until September 30, 2014,
for assistance to eligible entities including States and units
of general local government (as such terms are defined in
section 102 of the Housing and Community Development Act of
1974 (42 U.S.C. 5302)), and qualified nonprofit organizations,
businesses or consortia of eligible entities for the
redevelopment of abandoned and foreclosed-upon properties and
for the stabilization of affected neighborhoods.
(b) Allocation of Appropriated Amounts.--
(1) In general.--Of the amounts appropriated, two
thirds shall be allocated to States and units of
general local government based on a funding formula
established by the Secretary of Housing and Urban
Development (in this subtitle referred to as the
``Secretary''). Of the amounts appropriated, one third
shall be distributed competitively to eligible
entities.
(2) Formula to be devised swiftly.--The funding
formula required under paragraph (1) shall be
established and the Secretary shall announce formula
funding allocations, not later than 30 days after the
date of enactment of this section.
(3) Formula criteria.--The Secretary may establish
a minimum grant size, and the funding formula required
under paragraph (1) shall ensure that any amounts
appropriated or otherwise made available under this
section are allocated to States and units of general
local government with the greatest need, as such need
is determined in the discretion of the Secretary based
on--
(A) the number and percentage of home
foreclosures in each State or unit of general
local government;
(B) the number and percentage of homes in
default or delinquency in each State or unit of
general local government; and
(C) other factors such as established
program designs, grantee capacity and
performance, number and percentage of
commercial foreclosures, overall economic
conditions, and other market needs data, as
determined by the Secretary.
(4) Competition criteria.--
(A) For the funds distributed
competitively, eligible entities shall be
States, units of general local government,
nonprofit entities, for-profit entities, and
consortia of eligible entities that demonstrate
capacity to use funding within the period of
this program.
(B) In selecting grantees, the Secretary
shall ensure that grantees are in areas with
the greatest number and percentage of
residential and commercial foreclosures and
other market needs data, as determined by the
Secretary. Additional award criteria shall
include demonstrated grantee capacity to
execute projects involving acquisition and
rehabilitation or redevelopment of foreclosed
residential and commercial property and
neighborhood stabilization, leverage, knowledge
of market conditions and of effective
stabilization activities to address identified
conditions, and any additional factors
determined by the Secretary.
(C) The Secretary may establish a minimum
grant size; and
(D) The Secretary shall publish competition
criteria for any grants awarded under this
heading not later than 60 days after
appropriation of funds, and applications shall
be due to the Secretary within 120 days.
(c) Use of Funds.--
(1) Obligation and expenditure.--The Secretary
shall obligate all funding within 150 days of enactment
of this Act. Any eligible entity that receives amounts
pursuant to this section shall expend all funds
allocated to it within three years of the date the
funds become available to the grantee for obligation.
Furthermore, the Secretary shall by Notice establish
intermediate expenditure benchmarks at the one and two
year dates from the date the funds become available to
the grantee for obligation.
(2) Priorities.--
(A) Job creation.--Each grantee or eligible
entity shall describe how its proposed use of
funds will prioritize job creation, and
secondly, will address goals to stabilize
neighborhoods, reverse vacancy, or increase or
stabilize residential and commercial property
values.
(B) Targeting.--Any State or unit of
general local government that receives formula
amounts pursuant to this section shall, in
distributing and targeting such amounts give
priority emphasis and consideration to those
metropolitan areas, metropolitan cities, urban
areas, rural areas, low- and moderate-income
areas, and other areas with the greatest need,
including those--
(i) with the greatest percentage of
home foreclosures;
(ii) identified as likely to face a
significant rise in the rate of
residential or commercial foreclosures;
and
(iii) with higher than national
average unemployment rate.
(C) Leverage.--Each grantee or eligible
entity shall describe how its proposed use of
funds will leverage private funds.
(3) Eligible uses.--Amounts made available under
this section may be used to--
(A) establish financing mechanisms for the
purchase and redevelopment of abandoned and
foreclosed-upon properties, including such
mechanisms as soft-seconds, loan loss reserves,
and shared-equity loans for low- and moderate-
income homebuyers;
(B) purchase and rehabilitate properties
that have been abandoned or foreclosed upon, in
order to sell, rent, or redevelop such
properties;
(C) establish and operate land banks for
properties that have been abandoned or
foreclosed upon;
(D) demolish blighted structures;
(E) redevelop abandoned, foreclosed,
demolished, or vacant properties; and
(F) engage in other activities, as
determined by the Secretary through notice,
that are consistent with the goals of creating
jobs, stabilizing neighborhoods, reversing
vacancy reduction, and increasing or
stabilizing residential and commercial property
values.
(d) Limitations.--
(1) On purchases.--Any purchase of a property under
this section shall be at a price not to exceed its
current market value, taking into account its current
condition.
(2) Rehabilitation.--Any rehabilitation of an
eligible property under this section shall be to the
extent necessary to comply with applicable laws, and
other requirements relating to safety, quality,
marketability, and habitability, in order to sell,
rent, or redevelop such properties or provide a
renewable energy source or sources for such properties.
(3) Sale of homes.--If an abandoned or foreclosed-
upon home is purchased, redeveloped, or otherwise sold
to an individual as a primary residence, then such sale
shall be in an amount equal to or less than the cost to
acquire and redevelop or rehabilitate such home or
property up to a decent, safe, marketable, and
habitable condition.
(4) On demolition of public housing.--Public
housing, as defined at section 3(b)(6) of the United
States Housing Act of 1937, may not be demolished with
funds under this section.
(5) On demolition activities.--No more than 10
percent of any grant made under this section may be
used for demolition activities unless the Secretary
determines that such use represents an appropriate
response to local market conditions.
(6) On use of funds for non-residential property.--
No more than 30 percent of any grant made under this
section may be used for eligible activities under
subparagraphs (A), (B), and (E) of subsection (c)(3)
that will not result in residential use of the property
involved unless the Secretary determines that such use
represents an appropriate response to local market
conditions.
(e) Rules of Construction.--
(1) In general.--Except as otherwise provided by
this section, amounts appropriated, revenues generated,
or amounts otherwise made available to eligible
entities under this section shall be treated as though
such funds were community development block grant funds
under title I of the Housing and Community Development
Act of 1974 (42 U.S.C. 5301 et seq.).
(2) No match.--No matching funds shall be required
in order for an eligible entity to receive any amounts
under this section.
(3) Tenant protections.--An eligible entity
receiving a grant under this section shall comply with
the 14th, 17th, 18th, 19th, 20th, 21st, 22nd and 23rd
provisos of the American Recovery and Reinvestment Act
of 2009 (Pub. L. 111-5, 123 Stat. 218-19), as amended
by section 1497(b)(2) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (Pub. L. 111-203,
124 Stat. 2211).
(4) Vicinity hiring.--An eligible entity receiving
a grant under this section shall comply with section
1497(a)(8) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (Pub. L. 111-203, 129 Stat.
2210).
(5) Buy american.--Section 1605 of Title XVI--
General Provisions of the American Recovery and
Reinvestment Act of 2009--shall apply to amounts
appropriated, revenues generated, and amounts otherwise
made available to eligible entities under this section.
(f) Authority To Specify Alternative Requirements.--
(1) In general.--In administering the program under
this section, the Secretary may specify alternative
requirements to any provision under title I of the
Housing and Community Development Act of 1974 or under
title I of the Cranston-Gonzalez National Affordable
Housing Act of 1990 (except for those provisions in
these laws related to fair housing, nondiscrimination,
labor standards, and the environment) for the purpose
of expediting and facilitating the use of funds under
this section.
(2) Notice.--The Secretary shall provide written
notice of intent to the public via internet to exercise
the authority to specify alternative requirements under
paragraph.
(3) Low and moderate income requirement.--
(A) In general.--Notwithstanding the
authority of the Secretary under paragraph
(1)--
(i) all of the formula and
competitive grantee funds appropriated
or otherwise made available under this
section shall be used with respect to
individuals and families whose income
does not exceed 120 percent of area
median income; and
(ii) not less than 25 percent of
the formula and competitive grantee
funds appropriated or otherwise made
available under this section shall be
used for the purchase and redevelopment
of eligible properties that will be
used to house individuals or families
whose incomes do not exceed 50 percent
of area median income.
(B) Recurrent requirement.--The Secretary
shall, by rule or order, ensure, to the maximum
extent practicable and for the longest feasible
term, that the sale, rental, or redevelopment
of abandoned and foreclosed-upon homes and
residential properties under this section
remain affordable to individuals or families
described in subparagraph (A).
(g) Nationwide Distribution of Resources.--Notwithstanding
any other provision of this section or the amendments made by
this section, each State shall receive not less than
$20,000,000 of formula funds.
(h) Limitation on Use of Funds With Respect to Eminent
Domain.--No State or unit of general local government may use
any amounts received pursuant to this section to fund any
project that seeks to use the power of eminent domain, unless
eminent domain is employed only for a public use, which shall
not be construed to include economic development that primarily
benefits private entities.
(i) Limitation on Distribution of Funds.--
(1) In general.--None of the funds made available
under this title or title IV shall be distributed to--
(A) an organization which has been indicted
for a violation under Federal law relating to
an election for Federal office; or
(B) an organization which employs
applicable individuals.
(2) Applicable individuals defined.--In this
section, the term ``applicable individual'' means an
individual who--
(A) is--
(i) employed by the organization in
a permanent or temporary capacity;
(ii) contracted or retained by the
organization; or
(iii) acting on behalf of, or with
the express or apparent authority of,
the organization; and
(B) has been indicted for a violation under
Federal law relating to an election for Federal
office.
(j) Rental Housing Preferences.--Each State and local
government receiving formula amounts shall establish procedures
to create preferences for the development of affordable rental
housing.
(k) Job Creation.--If a grantee chooses to use funds to
create jobs by establishing and operating a program to maintain
eligible neighborhood properties, not more than 10 percent of
any grant may be used for that purpose.
(l) Program Support and Capacity Building.--The Secretary
may use up to 0.75 percent of the funds appropriated for
capacity building of and support for eligible entities and
grantees undertaking neighborhood stabilization programs,
staffing, training, technical assistance, technology,
monitoring, travel, enforcement, research and evaluation
activities.
(1) Funds set aside for the purposes of this
subparagraph shall remain available until September 30,
2016;
(2) Any funds made available under this
subparagraph and used by the Secretary for personnel
expenses related to administering funding under this
subparagraph shall be transferred to ``Personnel
Compensation and Benefits, Community Planning and
Development'';
(3) Any funds made available under this
subparagraph and used by the Secretary for training or
other administrative expenses shall be transferred to
``Administration, Operations, and Management, Community
Planning and Development'' for non-personnel expenses;
and
(4) Any funds made available under this
subparagraph and used by the Secretary for technology
shall be transferred to ``Working Capital Fund''.
(m) Enforcement and Prevention of Fraud and Abuse.--The
Secretary shall establish and implement procedures to prevent
fraud and abuse of funds under this section, and shall impose a
requirement that grantees have an internal auditor to
continuously monitor grantee performance to prevent fraud,
waste, and abuse. Grantees shall provide the Secretary and
citizens with quarterly progress reports. The Secretary shall
recapture funds from formula and competitive grantees that do
not expend 100 percent of allocated funds within 3 years of the
date that funds become available, and from underperforming or
mismanaged grantees, and shall re-allocate those funds by
formula to target areas with the greatest need, as determined
by the Secretary through notice. The Secretary may take an
alternative sanctions action only upon determining that such
action is necessary to achieve program goals in a timely
manner.
(n) The Secretary of Housing and Urban Development shall to
the extent feasible conform policies and procedures for grants
made under this section to the policies and practices already
in place for the grants made under Section 2301 of the Housing
and Economic Recovery Act of 2008; Division A, Title XII of the
American Recovery and Reinvestment Act of 2009; or Section 1497
of the Dodd-Frank Wall Street Reform and Consumer Protection
Act.
Subtitle H--National Wireless Initiative
SEC. 271. DEFINITIONS.
In this subtitle, the following definitions shall apply:
(1) 700 mhz band.--The term ``700 MHz band'' means
the portion of the electromagnetic spectrum between the
frequencies from 698 megahertz to 806 megahertz.
(2) 700 mhz d block spectrum.--The term ``700 MHz D
block spectrum'' means the portion of the
electromagnetic spectrum frequencies from 758 megahertz
to 763 megahertz and from 788 megahertz to 793
megahertz.
(3) Appropriate committees of congress.--Except as
otherwise specifically provided, the term ``appropriate
committees of Congress'' means--
(A) the Committee on Commerce, Science, and
Transportation of the Senate; and
(B) the Committee on Energy and Commerce of
the House of Representatives.
(4) Assistant secretary.--The term ``Assistant
Secretary'' means the Assistant Secretary of Commerce
for Communications and Information.
(5) Commission.--The term ``Commission'' means the
Federal Communications Commission.
(6) Corporation.--The term ``Corporation'' means
the Public Safety Broadband Corporation established in
section 284.
(7) Existing public safety broadband spectrum.--The
term ``existing public safety broadband spectrum''
means the portion of the electromagnetic spectrum
between the frequencies--
(A) from 763 megahertz to 768 megahertz;
(B) from 793 megahertz to 798 megahertz;
(C) from 768 megahertz to 769 megahertz;
and
(D) from 798 megahertz to 799 megahertz.
(8) Federal entity.--The term ``Federal entity''
has the same meaning as in section 113(i) of the
National Telecommunications and Information
Administration Organization Act (47 U.S.C. 923(i)).
(9) Narrowband spectrum.--The term ``narrowband
spectrum'' means the portion of the electromagnetic
spectrum between the frequencies from 769 megahertz to
775 megahertz and between the frequencies from 799
megahertz to 805 megahertz.
(10) NIST.--The term ``NIST'' means the National
Institute of Standards and Technology.
(11) NTIA.--The term ``NTIA'' means the National
Telecommunications and Information Administration.
(12) Public safety entity.--The term ``public
safety entity'' means an entity that provides public
safety services.
(13) Public safety services.--The term ``public
safety services''--
(A) has the meaning given the term in
section 337(f) of the Communications Act of
1934 (47 U.S.C. 337(f)); and
(B) includes services provided by emergency
response providers, as that term is defined in
section 2 of the Homeland Security Act of 2002
(6 U.S.C. 101).
PART I--AUCTIONS OF SPECTRUM AND SPECTRUM MANAGEMENT
SEC. 272. CLARIFICATION OF AUTHORITIES TO REPURPOSE FEDERAL SPECTRUM
FOR COMMERCIAL PURPOSES.
(a) Paragraph (1) of subsection 113(g) of the National
Telecommunications and Information Administration Organization
Act (47 U.S.C. 923(g)(1)) is amended by striking paragraph (1)
and inserting the following:
``(1) Eligible federal entities.--Any Federal
entity that operates a Federal Government station
authorized to use a band of frequencies specified in
paragraph (2) and that incurs relocation costs because
of planning for a potential auction of spectrum
frequencies, a planned auction of spectrum frequencies
or the reallocation of spectrum frequencies from
Federal use to exclusive non-Federal use, or shared
Federal and non-Federal use may receive payment for
such costs from the Spectrum Relocation Fund, in
accordance with section 118 of this Act. For purposes
of this paragraph, Federal power agencies exempted
under subsection (c)(4) that choose to relocate from
the frequencies identified for reallocation pursuant to
subsection (a), are eligible to receive payment under
this paragraph.''.
(b) Eligible Frequencies.--Section 113(g)(2)(B) of the
National Telecommunications and Information Administration
Organization Act (47 U.S.C. 923(g)(2)) is amended by deleting
and replacing subsection (B) with the following:
``(B) any other band of frequencies
reallocated from Federal use to non-Federal or
shared use after January 1, 2003, that is
assigned by competitive bidding pursuant to
section 309(j) of the Communications Act of
1934 (47 U.S.C 309(j)) or is assigned as a
result of later legislation or other
administrative direction.''.
(c) Paragraph (3) of subsection 113(g) of the National
Telecommunications and Information Administration Organization
Act (47 U.S.C. 923(g)(3)) is amended by striking it in its
entirety and replacing it with the following:
``(3) Definition of relocation and sharing costs.--
For purposes of this subsection, the terms `relocation
costs' and `sharing costs' mean the costs incurred by a
Federal entity to plan for a potential or planned
auction or sharing of spectrum frequencies and to
achieve comparable capability of systems, regardless of
whether that capability is achieved by relocating to a
new frequency assignment, relocating a Federal
Government station to a different geographic location,
modifying Federal government equipment to mitigate
interference or use less spectrum, in terms of
bandwidth, geography or time, and thereby permitting
spectrum sharing (including sharing among relocated
Federal entities and incumbents to make spectrum
available for non-Federal use) or relocation, or by
utilizing an alternative technology. Comparable
capability of systems includes the acquisition of
state-of-the art replacement systems intended to meet
comparable operational scope, which may include
incidental increases in functionality. Such costs
include--
``(A) the costs of any modification or
replacement of equipment, spares, associated
ancillary equipment, software, facilities,
operating manuals, training costs, or
regulations that are attributable to relocation
or sharing;
``(B) the costs of all engineering,
equipment, software, site acquisition and
construction costs, as well as any legitimate
and prudent transaction expense, including
term-limited Federal civil servant and
contractor staff necessary, which may be
renewed, to carry out the relocation activities
of an eligible Federal entity, and reasonable
additional costs incurred by the Federal entity
that are attributable to relocation or sharing,
including increased recurring costs above
recurring costs of the system before relocation
for the remaining estimated life of the system
being relocated;
``(C) the costs of research, engineering
studies, economic analyses, or other expenses
reasonably incurred in connection with (i)
calculating the estimated relocation costs that
are provided to the Commission pursuant to
paragraph (4) of this subsection, or in
calculating the estimated sharing costs; (ii)
determining the technical or operational
feasibility of relocation to one or more
potential relocation bands; or (iii) planning
for or managing a relocation or sharing project
(including spectrum coordination with auction
winners) or potential relocation or sharing
project;
``(D) the one-time costs of any
modification of equipment reasonably necessary
to accommodate commercial use of shared
frequencies or, in the case of frequencies
reallocated to exclusive commercial use, prior
to the termination of the Federal entity's
primary allocation or protected status, when
the eligible frequencies as defined in
paragraph (2) of this subsection are made
available for private sector uses by
competitive bidding and a Federal entity
retains primary allocation or protected status
in those frequencies for a period of time after
the completion of the competitive bidding
process;
``(E) the costs associated with the
accelerated replacement of systems and
equipment if such acceleration is necessary to
ensure the timely relocation of systems to a
new frequency assignment or the timely
accommodation of sharing of Federal
frequencies; and
``(F) the costs of the use of commercial
systems and services (including systems not
utilizing spectrum) to replace Federal systems
discontinued or relocated pursuant to this Act,
including lease, subscription, and equipment
costs over an appropriate period, such as the
anticipated life of an equivalent Federal
system or other period determined by the
Director of the Office of Management and
Budget.''.
(d) A new subsection (7) is added to Section 113(g) as
follows:
``(7) Spectrum sharing.--Federal entities are
permitted to allow access to their frequency
assignments by non-Federal entities upon approval of
the terms of such access by NTIA, in consultation with
the Office of Management and Budget. Such non-Federal
entities must comply with all applicable rules of the
Commission and NTIA, including any regulations
promulgated pursuant to this section. Remuneration
associated with such access shall be deposited into the
Spectrum Relocation Fund. Federal entities that incur
costs as a result of such access are eligible for
payment from the Fund for the purposes specified in
subsection (3) of this section. The revenue associated
with such access must be at least 110 percent of the
estimated Federal costs.''.
(e) Section 118 of such Act (47 U.S.C. 928) is amended by:
(1) In subsection (b), adding at the end, ``and any
payments made by non-Federal entities for access to
Federal spectrum pursuant to 47 U.S.C. 113(g)(7)'';
(2) replacing subsection (c) with the following:
``The amounts in the Fund from auctions of eligible
frequencies are authorized to be used to pay relocation costs,
as defined in section (g)(3) of this title, of an eligible
Federal entity incurring such costs with respect to relocation
from any eligible frequency. In addition, the amounts in the
Fund from payments by non-Federal entities for access to
Federal spectrum are authorized to be used to pay Federal costs
associated with such sharing, as defined in section (g)(3) of
this title. The Director of the Office of Management and Budget
(OMB) may transfer at any time (including prior to any auction
or contemplated auction, or sharing initiative) such sums as
may be available in the Fund to an eligible federal entity to
pay eligible relocation or sharing costs related to pre-auction
estimates or research as defined in subparagraph (C) of section
923(g)(3) of this title. However, the Director may not transfer
more than $100,000,000 associated with authorized pre-auction
activities before an auction is completed and proceeds are
deposited in the Spectrum Relocation Fund. Within the
$100,000,000 that may be transferred before an auction, the
Director of OMB may transfer up to $10,000,000 in total to
eligible federal entities for eligible relocation or sharing
costs related to pre-auction estimates or research as defined
in subparagraph (C) of section 923(g)(3) of this title for
costs incurred prior to the enactment of this legislation, but
after June 28th, 2010. These amounts transferred pursuant to
the previous proviso are in addition to amounts that the
Director of OMB may transfer after the enactment of this
legislation.'';
(3) amending subsection (d)(1) to add, ``and
sharing'' before ``costs'';
(4) amending subsection (d)(2)(B) to add, ``and
sharing'' before ``costs'', and adding at the end,
``and sharing'';
(5) replacing subsection (d)(3) with the following:
``Any amounts in the Fund that are remaining after the
payment of the relocation and sharing costs that are payable
from the Fund shall revert to and be deposited in the general
fund of the Treasury not later than 15 years after the date of
the deposit of such proceeds to the Fund, unless the Director
of OMB, in consultation with the Assistant Secretary for
Communications and Information, notifies the Committees on
Appropriations and Energy and Commerce of the House of
Representative and the Committees on Appropriations and
Commerce, Science, and Transportation of the Senate at least 60
days in advance of the reversion of the funds to the general
fund of the Treasury that such funds are needed to complete or
to implement current or future relocations or sharing
initiatives.'';
(6) amending subsection (e)(2) by adding ``and
sharing'' before ``costs''; by adding ``or sharing''
before ``is complete''; and by adding ``or sharing''
before ``in accordance''; and
(7) adding a new subsection at the end thereof:
``(f) Notwithstanding subsections (c) through (e) of this
section and after the amount specified in subsection (b), up to
twenty percent of the amounts deposited in the Spectrum
Relocation Fund from the auction of licenses following the date
of enactment of this section for frequencies vacated by Federal
entities, or up to twenty percent of the amounts paid by non-
Federal entities for sharing of Federal spectrum, after the
date of enactment are hereby appropriated and available at the
discretion of the Director of the Office of Management and
Budget, in consultation with the Assistant Secretary for
Communications and Information, for payment to the eligible
Federal entities, in addition to the relocation and sharing
costs defined in paragraph (3) of subsection 923(g), for the
purpose of encouraging timely access to those frequencies,
provided that:
``(1) Such payments may be based on the market
value of the spectrum, timeliness of clearing, and
needs for agencies' essential missions;
``(2) Such payments are authorized for:
``(A) the purposes of achieving enhanced
capabilities of systems that are affected by
the activities specified in subparagraphs (A)
through (F) of paragraph (3) of subsection
923(g) of this title; and
``(B) other communications, radar and
spectrum-using investments not directly
affected by such reallocation or sharing but
essential for the missions of the Federal
entity that is relocating its systems or
sharing frequencies;
``(3) The increase to the Fund due to any one
auction after any payment is not less than 10 percent
of the winning bids in the relevant auction, or is not
less than 10 percent of the payments from non-Federal
entities in the relevant sharing agreement;
``(4) Payments to eligible entities must be based
on the proceeds generated in the auction that an
eligible entity participates in; and
``(5) Such payments will not be made until 30 days
after the Director of OMB has notified the Committees
on Appropriations and Commerce, Science, and
Transportation of the Senate, and the Committees on
Appropriations and Energy and Commerce of the House of
Representatives.''.
(f) Subparagraph D of section 309 (j)(8) of the
Communications Act of 1934 (47 U.S.C. 309(j)(8)(D)) is amended
by adding ``, after the retention of revenue described in
subparagraph (B),'' before ``attributable'' and ``and
frequencies identified by the Federal Communications Commission
to be auctioned in conjunction with eligible frequencies
described in 47 U.S.C. 923(g)(2)'' before the first ``shall''
in the subparagraph.
(g) If the head of an executive agency of the Federal
Government determines that public disclosure of any information
contained in notifications and reports required by sections 923
or 928 of Title 47 of the United States Code would reveal
classified national security information or other information
for which there is a legal basis for nondisclosure and such
public disclosure would be detrimental to national security,
homeland security, public safety, or jeopardize law enforcement
investigations the head of the executive agency shall notify
the NTIA of that determination prior to release of such
information. In that event, such information shall be included
in a separate annex, as needed and to the extent the agency
head determines is consistent with national security or law
enforcement purposes. These annexes shall be provided to the
appropriate subcommittee in accordance with applicable
stipulations, but shall not be disclosed to the public or
provided to any unauthorized person through any other means.
SEC. 273. INCENTIVE AUCTION AUTHORITY.
(a) Paragraph (8) of section 309(j) of the Communications
Act of 1934 (47 U.S.C. 309(j)) is amended--
(1) in subparagraph (A), by deleting ``and (E)''
and inserting ``(E) and (F)'' after ``subparagraphs
(B), (D),''; and
(2) by adding at the end the following new
subparagraphs:
``(F) Notwithstanding any other provision
of law, if the Commission determines that it is
consistent with the public interest in
utilization of the spectrum for a licensee to
voluntarily relinquish some or all of its
licensed spectrum usage rights in order to
permit the assignment of new initial licenses
through a competitive bidding process subject
to new service rules, or the designation of
spectrum for unlicensed use, the Commission may
pay to such licensee a portion of any auction
proceeds that the Commission determines, in its
discretion, are attributable to the spectrum
usage rights voluntarily relinquished by such
licensee. If the Commission also determines
that it is in the public interest to modify the
spectrum usage rights of any incumbent licensee
in order to facilitate the assignment of such
new initial licenses subject to new service
rules, or the designation of spectrum for
unlicensed use, the Commission may pay to such
licensee a portion of the auction proceeds for
the purpose of relocating to any alternative
frequency or location that the Commission may
designate; Provided, however, that with respect
to frequency bands between 54 megahertz and 72
megahertz, 76 megahertz and 88 megahertz, 174
megahertz and 216 megahertz, and 470 megahertz
and 698 megahertz (`the specified bands'), any
spectrum made available for alternative use
utilizing payments authorized under this
subsection shall be assigned via the
competitive bidding process until the winning
bidders for licenses covering at least 84
megahertz from the specified bands deposit the
full amount of their bids in accordance with
the Commission's instructions. In addition, if
more than 84 megahertz of spectrum from the
specified bands is made available for
alternative use utilizing payments under this
subsection, and such spectrum is assigned via
competitive bidding, a portion of the proceeds
may be disbursed to licensees of other
frequency bands for the purpose of making
additional spectrum available, provided that a
majority of such additional spectrum is
assigned via competitive bidding. Also,
provided that in exercising the authority
provided under this section:
``(i) The Chairman of the
Commission, in consultation with the
Director of OMB, shall notify the
Committees on Appropriations and
Commerce, Science, and Transportation
of the Senate, and the Committees on
Appropriations and Energy and Commerce
of the House of Representatives of the
methodology for calculating such
payments to licensees at least 3 months
in advance of the relevant auction, and
that such methodology consider the
value of spectrum vacated in its
current use and the timeliness of
clearing; and
``(ii) Notwithstanding subparagraph
(A), and except as provided in
subparagraphs (B), (C), and (D), all
proceeds (including deposits and up
front payments from successful bidders)
from the auction of spectrum under this
section and section 106 of this Act
shall be deposited with the Public
Safety Trust Fund established under
section 217 of this Act.
``(G) Establishment of incentive auction
relocation fund.--
``(i) In general.--There is
established in the Treasury of the
United States a fund to be known as the
`Incentive Auction Relocation Fund'.
``(ii) Administration.--The
Assistant Secretary shall administer
the Incentive Auction Relocation Fund
using the amounts deposited pursuant to
this section.
``(iii) Crediting of receipts.--
There shall be deposited into or
credited to the Incentive Auction
Relocation Fund any amounts specified
in section 217 of this Act.
``(iv) Availability.--Amounts in
the Incentive Auction Relocation Fund
shall be available to the NTIA for
use--
``(I) without fiscal year
limitation;
``(II) for a period not to
exceed 18 months following the
later of--
``(aa) the
completion of incentive
auction from which such
amounts were derived;
``(bb) the date on
which the Commission
issues all the new
channel assignments
pursuant to any
repacking required
under subparagraph
(F)(ii); or
``(cc) the issuance
of a construction
permit by the
Commission for a
station to change
channels, geographic
locations, to collocate
on the same channel or
notification by a
station to the
Assistant Secretary
that it is impacted by
such a change; and
``(III) without further
appropriation.
``(v) Use of funds.--Amounts in the
Incentive Auction Relocation Fund may
only be used by the NTIA, in
consultation with the Commission, to
cover--
``(I) the reasonable costs
of television broadcast
stations that are relocated to
a different spectrum channel or
geographic location following
an incentive auction under
subparagraph (F), or that are
impacted by such relocations,
including to cover the cost of
new equipment, installation,
and construction; and
``(II) the costs incurred
by multichannel video
programming distributors for
new equipment, installation,
and construction related to the
carriage of such relocated
stations or the carriage of
stations that voluntarily elect
to share a channel, but retain
their existing rights to
carriage pursuant to sections
338, 614, and 615.''.
SEC. 274. REQUIREMENTS WHEN REPURPOSING CERTAIN MOBILE SATELLITE
SERVICES SPECTRUM FOR TERRESTRIAL BROADBAND USE.
To the extent that the Commission makes available
terrestrial broadband rights on spectrum primarily licensed for
mobile satellite services, the Commission shall recover a
significant portion of the value of such right either through
the authority provided in section 309(j) of the Communications
Act of 1934 (47 U.S.C. 309(j)) or by section 278 of this
subtitle.
SEC. 275. PERMANENT EXTENSION OF AUCTION AUTHORITY.
Section 309(j)(11) of the Communications Act of 1934 (47
U.S.C. 309(j)(11)) is repealed.
SEC. 276. AUTHORITY TO AUCTION LICENSES FOR DOMESTIC SATELLITE
SERVICES.
Section 309(j) of the Communications Act of 1934 is amended
by adding the following new subsection at the end thereof:
``(17) Notwithstanding any other provision of law,
the Commission shall use competitive bidding under this
subsection to assign any license, construction permit,
reservation, or similar authorization or modification
thereof, that may be used solely or predominantly for
domestic satellite communications services, including
satellite-based television or radio services. A service
is defined to be predominantly for domestic satellite
communications services if the majority of customers
that may be served are located within the geographic
boundaries of the United States. The Commission may,
however, use an alternative approach to assignment of
such licenses or similar authorities if it finds that
such an alternative to competitive bidding would serve
the public interest, convenience, and necessity. This
paragraph shall be effective on the date of its
enactment and shall apply to all Commission assignments
or reservations of spectrum for domestic satellite
services, including, but not limited to, all
assignments or reservations for satellite-based
television or radio services as of the effective
date.''.
SEC. 277. DIRECTED AUCTION OF CERTAIN SPECTRUM.
(a) Identification of Spectrum.--Not later than 1 year
after the date of enactment of this subtitle, the Assistant
Secretary shall identify and make available for immediate
reallocation, at a minimum, 15 megahertz of contiguous spectrum
at frequencies located between 1675 megahertz and 1710
megahertz, inclusive, minus the geographic exclusion zones, or
any amendment thereof, identified in NTIA's October 2010 report
entitled ``An Assessment of Near-Term Viability of
Accommodating Wireless Broadband Systems in 1675-1710 MHz,
1755-1780 MHz, 3500-3650 MHz, and 4200-4220 MHz, 4380-4400 MHz
Bands'', to be made available for reallocation or sharing with
incumbent Government operations.
(b) Auction.--Not later than January 31, 2016, the
Commission shall conduct, in such combination as deemed
appropriate by the Commission, the auctions of the following
licenses covering at least the frequencies described in this
section, by commencing the bidding for:
(1) The spectrum between the frequencies of 1915
megahertz and 1920 megahertz, inclusive.
(2) The spectrum between the frequencies of 1995
megahertz and 2000 megahertz, inclusive.
(3) The spectrum between the frequencies of 2020
megahertz and 2025 megahertz, inclusive.
(4) The spectrum between the frequencies of 2155
megahertz and 2175 megahertz, inclusive.
(5) The spectrum between the frequencies of 2175
megahertz and 2180 megahertz, inclusive.
(6) At least 25 megahertz of spectrum between the
frequencies of 1755 megahertz and 1850 megahertz, minus
appropriate geographic exclusion zones if necessary,
unless the President of the United States determines
that--
(A) such spectrum should not be reallocated
due to the need to protect incumbent Federal
operations; or reallocation must be delayed or
progressed in phases to ensure protection or
continuity of Federal operations; and
(B) allocation of other spectrum--
(i) better serves the public
interest, convenience, and necessity;
and
(ii) can reasonably be expected to
produce receipts comparable to auction
of spectrum frequencies identified in
this paragraph.
(7) The Commission may substitute alternative
spectrum frequencies for the spectrum frequencies
identified in paragraphs (1) through (5) of this
subsection, if the Commission determines that
alternative spectrum would better serve the public
interest and the Office of Management and Budget
certifies that such alternative spectrum frequencies
are reasonably expected to produce receipts comparable
to auction of the spectrum frequencies identified in
paragraphs (1) through (5) of this subsection.
(c) Auction Organization.--The Commission may, if
technically feasible and consistent with the public interest,
combine the spectrum identified in paragraphs (4), (5), and the
portion of paragraph (6) between the frequencies of 1755
megahertz and 1850 megahertz, inclusive, of subsection (b) in
an auction of licenses for paired spectrum blocks.
(d) Further Reallocation of Certain Other Spectrum.--
(1) Covered spectrum.--For purposes of this
subsection, the term ``covered spectrum'' means the
portion of the electromagnetic spectrum between the
frequencies of 3550 to 3650 megahertz, inclusive, minus
the geographic exclusion zones, or any amendment
thereof, identified in NTIA's October 2010 report
entitled ``An Assessment of Near-Term Viability of
Accommodating Wireless Broadband Systems in 1675-1710
MHz, 1755-1780 MHz, 3500-3650 MHz, and 4200-4220 MHz,
4380-4400 MHz Bands''.
(2) In general.--Consistent with requirements of
section 309(j) of the Communications Act of 1934, the
Commission shall reallocate covered spectrum for
assignment by competitive bidding or allocation to
unlicensed use, minus appropriate exclusion zones if
necessary, unless the President of the United States
determines that--
(A) such spectrum cannot be reallocated due
to the need to protect incumbent Federal
systems from interference; or
(B) allocation of other spectrum--
(i) better serves the public
interest, convenience, and necessity;
and
(ii) can reasonably be expected to
produce receipts comparable to what the
covered spectrum might auction for
without the geographic exclusion zones.
(3) Actions required if covered spectrum cannot be
reallocated.--
(A) In general.--If the President makes a
determination under paragraph (2) that the
covered spectrum cannot be reallocated, then
the President shall, within 1 year after the
date of such determination--
(i) identify alternative bands of
frequencies totaling more than 20
megahertz and no more than 100
megahertz of spectrum used primarily by
Federal agencies that satisfy the
requirements of clauses (i) and (ii) of
paragraph (2)(B);
(ii) report to the appropriate
committees of Congress and the
Commission an identification of such
alternative spectrum for assignment by
competitive bidding; and
(iii) make such alternative
spectrum for assignment immediately
available for reallocation.
(B) Auction.--If the President makes a
determination under paragraph (2) that the
covered spectrum cannot be reallocated, the
Commission shall commence the bidding of the
alternative spectrum identified pursuant to
subparagraph (A) within 3 years of the date of
enactment of this subtitle.
(4) Actions required if covered spectrum can be
reallocated.--If the President does not make a
determination under paragraph (1) that the covered
spectrum cannot be reallocated, the Commission shall
commence the competitive bidding for the covered
spectrum within 3 years of the date of enactment of
this subtitle.
(e) Amendments to Design Requirements Related to
Competitive Bidding.--Section 309(j) of the Communications Act
of 1934 (47 U.S.C. 309(j)) is amended--
(1) in paragraph (3)--
(A) in subparagraph (E)(ii), by striking
``; and'' and inserting a semicolon;
(B) in subparagraph (F), by striking the
period at the end and inserting a semicolon;
and
(2) by amending clause (i) of the second sentence
of paragraph (8)(C) to read as follows:
``(i) the deposits--
``(I) of successful bidders
of any auction conducted
pursuant to subparagraph (F) of
section 106 of this act shall
be paid to the Public Safety
Trust Fund established under
section 217 of such Act; and
``(II) of successful
bidders of any other auction
shall be paid to the
Treasury;''.
SEC. 278. AUTHORITY TO ESTABLISH SPECTRUM LICENSE USER FEES.
Section 309 of the Communications Act of 1934 is amended by
adding the following new subsection at the end thereof:
``(m) Use of Spectrum License User Fees.--For initial
licenses or construction permits that are not granted through
the use of competitive bidding as set forth in subsection (j),
and for renewals or modifications of initial licenses or other
authorizations, whether granted through competitive bidding or
not, the Commission may, where warranted, establish, assess,
and collect annual user fees on holders of spectrum licenses or
construction permits, including their successors or assignees,
in order to promote efficient and effective use of the
electromagnetic spectrum.
``(1) Required collections.--The Commission shall
collect at least the following amounts--
``(A) $200,000,000 in fiscal year 2012;
``(B) $300,000,000 in fiscal year 2013;
``(C) $425,000,000 in fiscal year 2014;
``(D) $550,000,000 in fiscal year 2015;
``(E) $550,000,000 in fiscal year 2016;
``(F) $550,000,000 in fiscal year 2017;
``(G) $550,000,000 in fiscal year 2018;
``(H) $550,000,000 in fiscal year 2019;
``(I) $550,000,000 in fiscal year 2020; and
``(J) $550,000,000 in fiscal year 2021.
``(2) Development of spectrum fee regulations.--
``(A) The Commission shall, by regulation,
establish a methodology for assessing annual
spectrum user fees and a schedule for
collection of such fees on classes of spectrum
licenses or construction permits or other
instruments of authorization, consistent with
the public interest, convenience and necessity.
The Commission may determine over time
different classes of spectrum licenses or
construction permits upon which such fees may
be assessed. In establishing the fee
methodology, the Commission may consider the
following factors:
``(i) the highest value alternative
spectrum use forgone;
``(ii) scope and type of
permissible services and uses;
``(iii) amount of spectrum and
licensed coverage area;
``(iv) shared versus exclusive use;
``(v) level of demand for spectrum
licenses or construction permits within
a certain spectrum band or geographic
area;
``(vi) the amount of revenue raised
on comparable licenses awarded through
an auction; and
``(vii) such factors that the
Commission determines, in its
discretion, are necessary to promote
efficient and effective spectrum use.
``(B) In addition, the Commission shall, by
regulation, establish a methodology for
assessing annual user fees and a schedule for
collection of such fees on entities holding
Ancillary Terrestrial Component authority in
conjunction with Mobile Satellite Service
spectrum licenses, where the Ancillary
Terrestrial Component authority was not
assigned through use of competitive bidding.
The Commission shall not collect less from the
holders of such authority than a reasonable
estimate of the value of such authority over
its term, regardless of whether terrestrial
services is actually provided during this term.
In determining a reasonable estimate of the
value of such authority, the Commission may
consider factors listed in subsection (A).
``(C) Within 60 days of enactment of this
Act, the Commission shall commence a rulemaking
to develop the fee methodology and regulations.
The Commission shall take all actions necessary
so that it can collect fees from the first
class or classes of spectrum license or
construction permit holders no later than
September 30, 2012.
``(D) The Commission, from time to time,
may commence further rulemakings (separate from
or in connection with other rulemakings or
proceedings involving spectrum-based services,
licenses, permits and uses) and modify the fee
methodology or revise its rules required by
paragraph (B) to add or modify classes of
spectrum license or construction permit holders
that must pay fees, and assign or adjust such
fee as a result of the addition, deletion,
reclassification or other change in a spectrum-
based service or use, including changes in the
nature of a spectrum-based service or use as a
consequence of Commission rulemaking
proceedings or changes in law. Any resulting
changes in the classes of spectrum licenses,
construction permits or fees shall take effect
upon the dates established in the Commission's
rulemaking proceeding in accordance with
applicable law.
``(E) The Commission shall exempt from such
fees holders of licenses for broadcast
television and public safety services. The term
`emergency response providers' includes State,
local, and tribal, emergency public safety, law
enforcement, firefighter, emergency response,
emergency medical (including hospital emergency
facilities), and related personnel, agencies
and authorities.
``(3) Penalties for late payment.--The Commission
shall prescribe by regulation an additional charge
which shall be assessed as a penalty for late payment
of fees required by this subsection.
``(4) Revocation of license or permit.--The
Commission may revoke any spectrum license or
construction permit for a licensee's or permitee's
failure to pay in a timely manner any fee or penalty to
the Commission under this subsection. Such revocation
action may be taken by the Commission after notice of
the Commission's intent to take such action is sent to
the licensee by registered mail, return receipt
requested, at the licensee's last known address. The
notice will provide the licensee at least 30 days to
either pay the fee or show cause why the fee does not
apply to the licensee or should otherwise be waived or
payment deferred. A hearing is not required under this
subsection unless the licensee's response presents a
substantial and material question of fact. In any case
where a hearing is conducted pursuant to this section,
the hearing shall be based on written evidence only,
and the burden of proceeding with the introduction of
evidence and the burden of proof shall be on the
licensee. Unless the licensee substantially prevails in
the hearing, the Commission may assess the licensee for
the costs of such hearing. Any Commission order adopted
pursuant to this subsection shall determine the amount
due, if any, and provide the licensee with at least 30
days to pay that amount or have its authorization
revoked. No order of revocation under this subsection
shall become final until the licensee has exhausted its
right to judicial review of such order under section
402(b)(5) of this title.
``(5) Treatment of revenues.--All proceeds obtained
pursuant to the regulations required by this subsection
shall be deposited in the General Fund of the
Treasury.''.
PART II--PUBLIC SAFETY BROADBAND NETWORK
SEC. 281. REALLOCATION OF D BLOCK FOR PUBLIC SAFETY.
(a) In General.--The Commission shall reallocate the 700
MHz D block spectrum for use by public safety entities in
accordance with the provisions of this subtitle.
(b) Spectrum Allocation.--Section 337(a) of the
Communications Act of 1934 (47 U.S.C. 337(a)) is amended--
(1) by striking ``24'' in paragraph (1) and
inserting ``34''; and
(2) by striking ``36'' in paragraph (2) and
inserting ``26''.
SEC. 282. FLEXIBLE USE OF NARROWBAND SPECTRUM.
The Commission may allow the narrowband spectrum to be used
in a flexible manner, including usage for public safety
broadband communications, subject to such technical and
interference protection measures as the Commission may require
and subject to interoperability requirements of the Commission
and the Corporation established in section 204 of this
subtitle.
SEC. 283. SINGLE PUBLIC SAFETY WIRELESS NETWORK LICENSEE.
(a) Reallocation and Grant of License.--Notwithstanding any
other provision of law, and subject to the provisions of this
subtitle, including section 290, the Commission shall grant a
license to the Public Safety Broadband Corporation established
under section 284 for the use of the 700 MHz D block spectrum
and existing public safety broadband spectrum.
(b) Term of License.--
(1) Initial license.--The license granted under
subsection (a) shall be for an initial term of 10 years
from the date of the initial issuance of the license.
(2) Renewal of license.--Prior to expiration of the
term of the initial license granted under subsection
(a) or the expiration of any subsequent renewal of such
license, the Corporation shall submit to the Commission
an application for the renewal of such license. Such
renewal application shall demonstrate that, during the
preceding license term, the Corporation has met the
duties and obligations set forth under this subtitle. A
renewal license granted under this paragraph shall be
for a term of not to exceed 15 years.
(c) Facilitation of Transition.--The Commission shall take
all actions necessary to facilitate the transition of the
existing public safety broadband spectrum to the Public Safety
Broadband Corporation established under section 284.
SEC. 284. ESTABLISHMENT OF PUBLIC SAFETY BROADBAND CORPORATION.
(a) Establishment.--There is authorized to be established a
private, nonprofit corporation, to be known as the ``Public
Safety Broadband Corporation'', which is neither an agency nor
establishment of the United States Government or the District
of Columbia Government.
(b) Application of Provisions.--The Corporation shall be
subject to the provisions of this subtitle, and, to the extent
consistent with this subtitle, to the District of Columbia
Nonprofit Corporation Act (sec. 29-301.01 et seq., D.C.
Official Code).
(c) Residence.--The Corporation shall have its place of
business in the District of Columbia and shall be considered,
for purposes of venue in civil actions, to be a resident of the
District of Columbia.
(d) Powers Under DC Act.--In order to carry out the duties
and activities of the Corporation, the Corporation shall have
the usual powers conferred upon a nonprofit corporation by the
District of Columbia Nonprofit Corporation Act.
(e) Incorporation.--The members of the initial Board of
Directors of the Corporation shall serve as incorporators and
shall take whatever steps that are necessary to establish the
Corporation under the District of Columbia Nonprofit
Corporation Act.
SEC. 285. BOARD OF DIRECTORS OF THE CORPORATION.
(a) Membership.--The management of the Corporation shall be
vested in a Board of Directors (referred to in this Title as
the ``Board''), which shall consist of the following members:
(1) Federal members.--The following individuals, or
their respective designees, shall serve as Federal
members:
(A) The Secretary of Commerce.
(B) The Secretary of Homeland Security.
(C) The Attorney General of the United
States.
(D) The Director of the Office of
Management and Budget.
(2) Non-federal members.--
(A) In general.--The Secretary of Commerce,
in consultation with the Secretary of Homeland
Security and the Attorney General of the United
States, shall appoint 11 individuals to serve
as non-Federal members of the Board.
(B) State, territorial, tribal and local
government interests.--In making appointments
under subparagraph (A), the Secretary of
Commerce should--
(i) appoint at least 3 individuals
with significant expertise in the
collective interests of State,
Territorial, Tribal and Local
governments; and
(ii) seek to ensure geographic and
regional representation of the United
States in such appointments;
(iii) seek to ensure rural and
urban representation in such
appointments.
(C) Public safety interests.--In making
appointments under subparagraph (A), the
Secretary of Commerce should appoint at least 3
individuals who have served or are currently
serving as public safety professionals.
(D) Required qualifications.--
(i) In general.--Each non-Federal
member appointed under subparagraph (A)
should meet at least 1 of the following
criteria:
(I) Public safety
experience.--Knowledge and
experience in the use of
Federal, State, local, or
tribal public safety or
emergency response.
(II) Technical expertise.--
Technical expertise and fluency
regarding broadband
communications, including
public safety communications
and cybersecurity.
(III) Network expertise.--
Expertise in building,
deploying, and operating
commercial telecommunications
networks.
(IV) Financial expertise.--
Expertise in financing and
funding telecommunications
networks.
(ii) Expertise to be represented.--
In making appointments under
subparagraph (A), the Secretary of
Commerce should appoint--
(I) at least one individual
who satisfies the requirement
under subclause (II) of clause
(i);
(II) at least one
individual who satisfies the
requirement under subclause
(III) of clause (i); and
(III) at least one
individual who satisfies the
requirement under subclause
(IV) of clause (i).
(E) Independence.--
(i) In general.--Each non-Federal
member of the Board shall be
independent and neutral and maintain a
fiduciary relationship with the
Corporation in performing his or her
duties.
(ii) Independence determination.--
In order to be considered independent
for purposes of this subparagraph, a
member of the Board--
(I) may not, other than in
his or her capacity as a member
of the Board or any committee
thereof--
(aa) accept any
consulting, advisory,
or other compensatory
fee from the
Corporation; or
(bb) be a person
associated with the
Corporation or with any
affiliated company
thereof; and
(II) shall be disqualified
from any deliberation involving
any transaction of the
Corporation in which the Board
member has a financial interest
in the outcome of the
transaction.
(F) Not officers or employees.--The non-
Federal members of the Board shall not, by
reason of such membership, be considered to be
officers or employees of the United States
Government or of the District of Columbia
Government.
(G) Citizenship.--No individual other than
a citizen of the United States may serve as a
non-Federal member of the Board.
(H) Clearance for classified information.--
In order to have the threat and vulnerability
information necessary to make risk management
decisions regarding the network, the non-
Federal members of the Board shall be required,
prior to appointment, to obtain a clearance
held by the Director of National Intelligence
that permits them to receive information
classified at the level of Top Secret, Special
Compartmented Information.
(b) Terms of Appointment.--
(1) Initial appointment deadline.--Members of the
Board shall be appointed not later than 180 days after
the date of the enactment of this subtitle.
(2) Terms.--
(A) Length.--
(i) Federal members.--Each Federal
member of the Board shall serve as a
member of the Board for the life of the
Corporation while serving in their
appointed capacity.
(ii) Non-federal members.--The term
of office of each non-Federal member of
the Board shall be 3 years. No non-
Federal member of the Board may serve
more than 2 consecutive full 3-year
terms.
(B) Expiration of term.--Any member whose
term has expired may serve until such member's
successor has taken office, or until the end of
the calendar year in which such member's term
has expired, whichever is earlier.
(C) Appointment to fill vacancy.--Any non-
Federal member appointed to fill a vacancy
occurring prior to the expiration of the term
for which that member's predecessor was
appointed shall be appointed for the remainder
of the predecessor's term.
(D) Staggered terms.--With respect to the
initial non-Federal members of the Board--
(i) 4 members shall serve for a
term of 3 years;
(ii) 4 members shall serve for a
term of 2 years; and
(iii) 3 members shall serve for a
term of 1 year.
(3) Vacancies.--A vacancy in the membership of the
Board shall not affect the Board's powers, and shall be
filled in the same manner as the original member was
appointed.
(c) Chair.--
(1) Selection.--The Secretary of Commerce, in
consultation with the Secretary of Homeland Security
and the Attorney General of the United States, shall
select, from among the members of the Board, an
individual to serve for a 2-year term as Chair of the
Board.
(2) Consecutive terms.--An individual may not serve
for more than 2 consecutive terms as Chair of the
Board.
(3) Removal for cause.--The Secretary of Commerce,
in consultation with the Secretary of Homeland Security
and the Attorney General of the United States, may
remove the Chair of the Board and any non-Federal
member for good cause.
(d) Removal.--All members of the Board may by majority
vote--
(1) remove any non-Federal member of the Board from
office for conduct determined by the Board to be
detrimental to the Board or Corporation; and
(2) request that the Secretary of Commerce exercise
his or her authority to remove the Chair of the Board
for conduct determined by the Board to be detrimental
to the Board or Corporation.
(e) Meetings.--
(1) Frequency.--The Board shall meet in accordance
with the bylaws of the Corporation--
(A) at the call of the Chairperson; and
(B) not less frequently than once each
quarter.
(2) Transparency.--Meetings of the Board, including
any committee of the Board, shall be open to the
public. The Board may, by majority vote, close any such
meeting only for the time necessary to preserve the
confidentiality of commercial or financial information
that is privileged or confidential, to discuss
personnel matters, to discuss security vulnerabilities
when making those vulnerabilities public would increase
risk to the network or otherwise materially threaten
network operations, or to discuss legal matters
affecting the Corporation, including pending or
potential litigation.
(f) Quorum.--Eight members of the Board shall constitute a
quorum.
(g) Bylaws.--A majority of the members of the Board of
Directors may amend the bylaws of the Corporation.
(h) Attendance.--Members of the Board of Directors may
attend meetings of the Corporation and vote in person, via
telephone conference, or via video conference.
(i) Prohibition on Compensation.--Members of the Board of
the Corporation shall serve without pay, and shall not
otherwise benefit, directly or indirectly, as a result of their
service to the Corporation, but shall be allowed a per diem
allowance for travel expenses, at rates authorized for an
employee of an agency under subchapter I of chapter 57 of title
5, United States Code, while away from the home or regular
place of business of the member in the performance of the
duties of the Corporation.
SEC. 286. OFFICERS, EMPLOYEES, AND COMMITTEES OF THE CORPORATION.
(a) Officers and Employees.--
(1) In general.--The Corporation shall have a Chief
Executive Officer, and such other officers and
employees as may be named and appointed by the Board
for terms and at rates of compensation fixed by the
Board pursuant to this subsection. The Chief Executive
Officer may name and appoint such employees as are
necessary. All officers and employees shall serve at
the pleasure of the Board.
(2) Limitation.--No individual other than a citizen
of the United States may be an officer of the
Corporation.
(3) Nonpolitical nature of appointment.--No
political test or qualification shall be used in
selecting, appointing, promoting, or taking other
personnel actions with respect to officers, agents, or
employees of the Corporation.
(4) Compensation.--
(A) In general.--The Board may hire and fix
the compensation of employees hired under this
subsection as may be necessary to carry out the
purposes of the Corporation.
(B) Approval by compensation by federal
members.--Notwithstanding any other provision
of law, or any bylaw adopted by the
Corporation, all rates of compensation,
including benefit plans and salary ranges, for
officers and employees of the Board, shall be
jointly approved by the Federal members of the
Board.
(C) Limitation on other compensation.--No
officer or employee of the Corporation may
receive any salary or other compensation
(except for compensation for services on boards
of directors of other organizations that do not
receive funds from the Corporation, on
committees of such boards, and in similar
activities for such organizations) from any
sources other than the Corporation for services
rendered during the period of the employment of
the officer or employee by the Corporation,
unless unanimously approved by all voting
members of the Corporation.
(5) Service on other boards.--Service by any
officer on boards of directors of other organizations,
on committees of such boards, and in similar activities
for such organizations shall be subject to annual
advance approval by the Board and subject to the
provisions of the Corporation's Statement of Ethical
Conduct.
(6) Rule of construction.--No officer or employee
of the Board or of the Corporation shall be considered
to be an officer or employee of the United States
Government or of the government of the District of
Columbia.
(7) Clearance for classified information.--In order
to have the threat and vulnerability information
necessary to make risk management decisions regarding
the network, at a minimum the Chief Executive Officer
and any officers filling the roles normally titled as
Chief Information Officers, Chief Information Security
Officer, and Chief Operations Officer shall--
(A) be required, within six months of being
hired, to obtain a clearance held by the
Director of National Intelligence that permits
them to receive information classified at the
level of Top Secret, Special Compartmented
Information.
(b) Advisory Committees.--The Board--
(1) shall establish a standing public safety
advisory committee to assist the Board in carrying out
its duties and responsibilities under this Title; and
(2) may establish additional standing or ad hoc
committees, panels, or councils as the Board determines
are necessary.
SEC. 287. NONPROFIT AND NONPOLITICAL NATURE OF THE CORPORATION.
(a) Stock.--The Corporation shall have no power to issue
any shares of stock, or to declare or pay any dividends.
(b) Profit.--No part of the income or assets of the
Corporation shall inure to the benefit of any director,
officer, employee, or any other individual associated with the
Corporation, except as salary or reasonable compensation for
services.
(c) Politics.--The Corporation may not contribute to or
otherwise support any political party or candidate for elective
public office.
(d) Prohibition on Lobbying Activities.--The Corporation
shall not engage in lobbying activities (as defined in section
3(7) of the Lobbying Disclosure Act of 1995 (5 U.S.C.
1602(7))).
SEC. 288. POWERS, DUTIES, AND RESPONSIBILITIES OF THE CORPORATION.
(a) General Powers.--The Corporation shall have the
authority to do the following:
(1) To adopt and use a corporate seal.
(2) To have succession until dissolved by an Act of
Congress.
(3) To prescribe, through the actions of its Board,
bylaws not inconsistent with Federal law and the laws
of the District of Columbia, regulating the manner in
which the Corporation's general business may be
conducted and the manner in which the privileges
granted to the Corporation by law may be exercised.
(4) To exercise, through the actions of its Board,
all powers specifically granted by the provisions of
this Title, and such incidental powers as shall be
necessary.
(5) To hold such hearings, sit and act at such
times and places, take such testimony, and receive such
evidence as the Corporation considers necessary to
carry out its responsibilities and duties.
(6) To obtain grants and funds from and make
contracts with individuals, private companies,
organizations, institutions, and Federal, State,
regional, and local agencies, pursuant to guidelines
established by the Director of the Office of Management
and Budget.
(7) To accept, hold, administer, and utilize gifts,
donations, and bequests of property, both real and
personal, for the purposes of aiding or facilitating
the work of the Corporation.
(8) To issue notes or bonds, which shall not be
guaranteed or backed in any manner by the Government of
the United States, to purchasers of such instruments in
the private capital markets.
(9) To incur indebtedness, which shall be the sole
liability of the Corporation and shall not be
guaranteed or backed by the Government of the United
States, to carry out the purposes of this Title.
(10) To spend funds under paragraph (6) in a manner
authorized by the Board, but only for purposes that
will advance or enhance public safety communications
consistent with this subtitle.
(11) To establish reserve accounts with funds that
the Corporation may receive from time to time that
exceed the amounts required by the Corporation to
timely pay its debt service and other obligations.
(12) To expend the funds placed in any reserve
accounts established under paragraph (11) (including
interest earned on any such amounts) in a manner
authorized by the Board, but only for purposes that--
(A) will advance or enhance public safety
communications consistent with this subtitle;
or
(B) are otherwise approved by an Act of
Congress.
(13) To build, operate and maintain the public
safety interoperable broadband network.
(14) To take such other actions as the Corporation
(through its Board) may from time to time determine
necessary, appropriate, or advisable to accomplish the
purposes of this subtitle.
(b) Duty and Responsibility To Deploy and Operate a
Nationwide Public Safety Interoperable Broadband Network.--
(1) In general.--The Corporation shall hold the
single public safety wireless license granted under
section 281 and take all actions necessary to ensure
the building, deployment, and operation of a secure and
resilient nationwide public safety interoperable
broadband network in consultation with Federal, State,
tribal, and local public safety entities, the Director
of NIST, the Commission, and the public safety advisory
committee established in section 284(b)(1), including
by,--
(A) ensuring nationwide standards including
encryption requirements for use and access of
the network;
(B) issuing open, transparent, and
competitive requests for proposals to private
sector entities for the purposes of building,
operating, and maintaining the network;
(C) managing and overseeing the
implementation and execution of contracts or
agreements with non-Federal entities to build,
operate, and maintain the network; and
(D) establishing policies regarding Federal
and public safety support use.
(2) Interoperability, security and standards.--In
carrying out the duties and responsibilities of this
subsection, including issuing requests for proposals,
the Corporation shall--
(A) ensure the safety, security, and
resiliency of the network, including
requirements for protecting and monitoring the
network to protect against cyber intrusions or
cyberattack;
(B) be informed of and manage supply chain
risks to the network, including requirements to
provide insight into the suppliers and supply
chains for critical network components and to
implement risk management best practice in
network design, contracting, operations and
maintenance;
(C) promote competition in the equipment
market, including devices for public safety
communications, by requiring that equipment and
devices for use on the network be--
(i) built to open, non-proprietary,
commercially available standards;
(ii) capable of being used across
the nationwide public safety broadband
network operating in the 700 MHz band;
(iii) be able to be interchangeable
with other vendors' equipment; and
(iv) backward-compatible with
existing second and third generation
commercial networks to the extent that
such capabilities are necessary and
technically and economically
reasonable; and
(D) promote integration of the network with
public safety answering points or their
equivalent.
(3) Rural coverage.--In carrying out the duties and
responsibilities of this subsection, including issuing
requests for proposals, the Corporation, consistent
with the license granted under section 281, shall
require deployment phases with substantial rural
coverage milestones as part of each phase of the
construction and deployment of the network.
(4) Execution of authority.--In carrying out the
duties and responsibilities of this subsection, the
Corporation may--
(A) obtain grants from and make contracts
with individuals, private companies, and
Federal, State, regional, and local agencies;
(B) hire or accept voluntary services of
consultants, experts, advisory boards, and
panels to aid the Corporation in carrying out
such duties and responsibilities;
(C) receive payment for use of--
(i) network capacity licensed to
the Corporation; and
(ii) network infrastructure
constructed, owned, or operated by the
Corporation; and
(D) take such other actions as may be
necessary to accomplish the purposes set forth
in this subsection.
(c) Other Specific Duties and Responsibilities.--
(1) Establishment of network policies.--In carrying
out the requirements under subsection (b), the
Corporation shall take such actions as may be
necessary, including the development of requests for
proposals--
(A) request for proposals should include--
(i) build timetables, including by
taking into consideration the time
needed to build out to rural areas;
(ii) coverage areas, including
coverage in rural and nonurban areas;
(iii) service levels;
(iv) performance criteria; and
(v) other similar matters for the
construction and deployment of such
network;
(B) the technical, operational and security
requirements of the network and, as
appropriate, network suppliers;
(C) practices, procedures, and standards
for the management and operation of such
network;
(D) terms of service for the use of such
network, including billing practices; and
(E) ongoing compliance review and
monitoring of the--
(i) management and operation of
such network;
(ii) practices and procedures of
the entities operating on and the
personnel using such network; and
(iii) training needs of entities
operating on and personnel using such
network.
(2) State and local planning.--
(A) Required consultation.--In developing
requests for proposal and otherwise carrying
out its responsibilities under this subtitle,
the Corporation shall consult with regional,
State, tribal, and local jurisdictions
regarding the distribution and expenditure of
any amounts required to carry out the policies
established under paragraph (1), including with
regard to the--
(i) construction of an Evolved
Packet Core or Cores and any Radio
Access Network build out;
(ii) placement of towers;
(iii) coverage areas of the
network, whether at the regional,
State, tribal, or local level;
(iv) adequacy of hardening,
security, reliability, and resiliency
requirements;
(v) assignment of priority to local
users;
(vi) assignment of priority and
selection of entities seeking access to
or use of the nationwide public safety
interoperable broadband network
established under subsection (b); and
(vii) training needs of local
users.
(B) Method of consultation.--The
consultation required under subparagraph (A)
shall occur between the Corporation and the
single officer or governmental body designated
under section 294(d).
(3) Leveraging existing infrastructure.--In
carrying out the requirement under subsection (b), the
Corporation shall enter into agreements to utilize, to
the maximum economically desirable, existing--
(A) commercial or other communications
infrastructure; and
(B) Federal, State, tribal, or local
infrastructure.
(4) Maintenance and upgrades.--The Corporation
shall ensure through the maintenance, operation, and
improvement of the nationwide public safety
interoperable broadband network established under
subsection (b), including by ensuring that the
Corporation updates and revises any policies
established under paragraph (1) to take into account
new and evolving technologies and security concerns.
(5) Roaming agreements.--The Corporation shall
negotiate and enter into, as it determines appropriate,
roaming agreements with commercial network providers to
allow the nationwide public safety interoperable
broadband users to roam onto commercial networks and
gain prioritization of public safety communications
over such networks in times of an emergency.
(6) Network infrastructure and device criteria.--
The Director of NIST, in consultation with the
Corporation and the Commission, shall ensure the
development of a list of certified devices and
components meeting appropriate protocols, encryption
requirements, and standards for public safety entities
and commercial vendors to adhere to, if such entities
or vendors seek to have access to, use of, or
compatibility with the nationwide public safety
interoperable broadband network established under
subsection (b).
(7) Representation before standard setting
entities.--The Corporation, in consultation with the
Director of NIST, the Commission, and the public safety
advisory committee established under section 284(b)(1),
shall represent the interests of public safety users of
the nationwide public safety interoperable broadband
network established under subsection (b) before any
proceeding, negotiation, or other matter in which a
standards organization, standards body, standards
development organization, or any other recognized
standards-setting entity regarding the development of
standards relating to interoperability.
(8) Prohibition on negotiation with foreign
governments.--Except as authorized by the President,
the Corporation shall not have the authority to
negotiate or enter into any agreements with a foreign
government on behalf of the United States.
(d) Use of Mails.--The Corporation may use the United
States mails in the same manner and under the same conditions
as the departments and agencies of the United States.
SEC. 289. INITIAL FUNDING FOR CORPORATION.
(a) NTIA Provision of Initial Funding to the Corporation.--
(1) In general.--Prior to the commencement of
incentive auctions to be carried out under section
309(j)(8)(F) of the Communications Act of 1934 or the
auction of spectrum pursuant to section 273 of this
subtitle, the NTIA is hereby appropriated $50,000,000
for reasonable administrative expenses and other costs
associated with the establishment of the Corporation,
and that may be transferred as needed to the
Corporation for expenses before the commencement of
incentive auction: Provided, That funding shall expire
on September 30, 2014.
(2) Condition of funding.--At the time of
application for, and as a condition to, any such
funding, the Corporation shall file with the NTIA a
statement with respect to the anticipated use of the
proceeds of this funding.
(3) NTIA approval.--If the NTIA determines that
such funding is necessary for the Corporation to carry
out its duties and responsibilities under this Title
and that Corporation has submitted a plan, then the
NTIA shall notify the appropriate committees of
Congress 30 days before each transfer of funds takes
place.
SEC. 290. PERMANENT SELF-FUNDING; DUTY TO ASSESS AND COLLECT FEES FOR
NETWORK USE.
(a) In General.--The Corporation shall have the authority
to assess and collect the following fees:
(1) Network user fee.--A user or subscription fee
from each entity, including any public safety entity or
secondary user, that seeks access to or use of the
nationwide public safety interoperable broadband
network established under this Title.
(2) Lease fees related to network capacity.--
(A) In general.--A fee from any non-Federal
entity that seeks to enter into a covered
leasing agreement.
(B) Covered leasing agreement.--For
purposes of subparagraph (A), a ``covered
leasing agreement'' means a written agreement
between the Corporation and secondary user to
permit--
(i) access to network capacity on a
secondary basis for non-public safety
services; and
(ii) the spectrum allocated to such
entity to be used for commercial
transmissions along the dark fiber of
the long-haul network of such entity.
(3) Lease fees related to network equipment and
infrastructure.--A fee from any non-Federal entity that
seeks access to or use of any equipment or
infrastructure, including antennas or towers,
constructed or otherwise owned by the Corporation.
(b) Establishment of Fee Amounts; Permanent Self-Funding.--
The total amount of the fees assessed for each fiscal year
pursuant to this section shall be sufficient, and shall not
exceed the amount necessary, to recoup the total expenses of
the Corporation in carrying out its duties and responsibilities
described under this Title for the fiscal year involved.
(c) Required Reinvestment of Funds.--The Corporation shall
reinvest amounts received from the assessment of fees under
this section in the nationwide public safety interoperable
broadband network by using such funds only for constructing,
maintaining, managing or improving the network.
SEC. 291. AUDIT AND REPORT.
(a) Audit.--
(1) In general.--The financial transactions of the
Corporation for any fiscal year during which Federal
funds are available to finance any portion of its
operations shall be audited by the Comptroller General
of the United States in accordance with the principles
and procedures applicable to commercial corporate
transactions and under such rules and regulations as
may be prescribed by the Comptroller General.
(2) Location.--Any audit conducted under paragraph
(1) shall be conducted at the place or places where
accounts of the Corporation are normally kept.
(3) Access to corporation books and documents.--
(A) In general.--For purposes of an audit
conducted under paragraph (1), the
representatives of the Comptroller General
shall--
(i) have access to all books,
accounts, records, reports, files, and
all other papers, things, or property
belonging to or in use by the
Corporation that pertain to the
financial transactions of the
Corporation and are necessary to
facilitate the audit; and
(ii) be afforded full facilities
for verifying transactions with the
balances or securities held by
depositories, fiscal agents, and
custodians.
(B) Requirement.--All books, accounts,
records, reports, files, papers, and property
of the Corporation shall remain in the
possession and custody of the Corporation.
(b) Report.--
(1) In general.--The Comptroller General of the
United States shall submit a report of each audit
conducted under subsection (a) to--
(A) the appropriate committees of Congress;
(B) the President; and
(C) the Corporation.
(2) Contents.--Each report submitted under
paragraph (1) shall contain--
(A) such comments and information as the
Comptroller General determines necessary to
inform Congress of the financial operations and
condition of the Corporation;
(B) any recommendations of the Comptroller
General relating to the financial operations
and condition of the Corporation; and
(C) a description of any program,
expenditure, or other financial transaction or
undertaking of the Corporation that was
observed during the course of the audit, which,
in the opinion of the Comptroller General, has
been carried on or made without the authority
of law.
SEC. 292. ANNUAL REPORT TO CONGRESS.
(a) In General.--Not later than 1 year after the date of
enactment of this subtitle, and each year thereafter, the
Corporation shall submit an annual report covering the
preceding fiscal year to the President and the appropriate
committees of Congress.
(b) Required Content.--The report required under subsection
(a) shall include--
(1) a comprehensive and detailed report of the
operations, activities, financial condition, and
accomplishments of the Corporation under this section;
and
(2) such recommendations or proposals for
legislative or administrative action as the Corporation
deems appropriate.
(c) Availability To Testify.--The directors, officers,
employees, and agents of the Corporation shall be available to
testify before the appropriate committees of the Congress with
respect to--
(1) the report required under subsection (a);
(2) the report of any audit made by the Comptroller
General under section 291; or
(3) any other matter which such committees may
determine appropriate.
SEC. 293. PROVISION OF TECHNICAL ASSISTANCE.
The Commission and the Departments of Homeland Security,
Justice and Commerce may provide technical assistance to the
Corporation and may take any action at the request of the
Corporation in effectuating its duties and responsibilities
under this Title.
SEC. 294. STATE AND LOCAL IMPLEMENTATION.
(a) Establishment of State and Local Implementation Grant
Program.--The Assistant Secretary, in consultation with the
Corporation, shall take such action as is necessary to
establish a grant program to make grants to States to assist
State, regional, tribal, and local jurisdictions to identify,
plan, and implement the most efficient and effective way for
such jurisdictions to utilize and integrate the infrastructure,
equipment, and other architecture associated with the
nationwide public safety interoperable broadband network
established in this subtitle to satisfy the wireless
communications and data services needs of that jurisdiction,
including with regards to coverage, siting, identity management
for public safety users and their devices, and other needs.
(b) Matching Requirements; Federal Share.--
(1) In general.--The Federal share of the cost of
any activity carried out using a grant under this
section may not exceed 80 percent of the eligible costs
of carrying out that activity, as determined by the
Assistant Secretary, in consultation with the
Corporation.
(2) Waiver.--The Assistant Secretary may waive, in
whole or in part, the requirements of paragraph (1) for
good cause shown if the Assistant Secretary determines
that such a waiver is in the public interest.
(c) Programmatic Requirements.--Not later than 6 months
after the establishment of the bylaws of the Corporation
pursuant to section 286 of this subtitle, the Assistant
Secretary, in consultation with the Corporation, shall
establish requirements relating to the grant program to be
carried out under this section, including the following:
(1) Defining eligible costs for purposes of
subsection (b)(1).
(2) Determining the scope of eligible activities
for grant funding under this section.
(3) Prioritizing grants for activities that ensure
coverage in rural as well as urban areas.
(d) Certification and Designation of Officer or
Governmental Body.--In carrying out the grant program
established under this section, the Assistant Secretary shall
require each State to certify in its application for grant
funds that the State has designated a single officer or
governmental body to serve as the coordinator of implementation
of the grant funds.
SEC. 295. STATE AND LOCAL IMPLEMENTATION FUND.
(a) Establishment.--There is established in the Treasury of
the United States a fund to be known as the ``State and Local
Implementation Fund''.
(b) Purpose.--The Assistant Secretary shall establish and
administer the grant program authorized under section 294 of
this subtitle using funds deposited in the State and Local
Implementation Fund.
(c) Crediting of Receipts.--There shall be deposited into
or credited to the State and Local Implementation Fund--
(1) any amounts specified in section 297; and
(2) any amounts borrowed by the Assistant Secretary
under subsection (d).
(d) Borrowing Authority.--
(1) In general.--The Assistant Secretary may borrow
from the General Fund of the Treasury beginning on
October 1, 2011, such sums as may be necessary, but not
to exceed $100,000,000 to implement section 294.
(2) Reimbursement.--The Assistant Secretary shall
reimburse the General Fund of the Treasury, with
interest, for any amounts borrowed under subparagraph
(1) as funds are deposited into the State and Local
Implementation Fund.
SEC. 296. PUBLIC SAFETY WIRELESS COMMUNICATIONS RESEARCH AND
DEVELOPMENT.
(a) NIST Directed Research and Development Program.--From
amounts made available from the Public Safety Trust Fund
established under section 297, the Director of NIST, in
consultation with the Commission, the Secretary of Homeland
Security, and the National Institute of Justice of the
Department of Justice, as appropriate, shall conduct research
and assist with the development of standards, technologies, and
applications to advance wireless public safety communications.
(b) Required Activities.--In carrying out the requirement
under subsection (a), the Director of NIST, in consultation
with the Corporation and the public safety advisory committee
established under section 286(b)(1), shall--
(1) document public safety wireless communications
technical requirements;
(2) accelerate the development of the capability
for communications between currently deployed public
safety narrowband systems and the nationwide public
safety interoperable broadband network to be
established under this title;
(3) establish a research plan, and direct research,
that addresses the wireless communications needs of
public safety entities beyond what can be provided by
the current generation of broadband technology;
(4) accelerate the development of mission critical
voice, including device-to-device ``talkaround''
standards for broadband networks, if necessary and
practical, public safety prioritization, authentication
capabilities, as well as a standard application
programing interfaces for the nationwide public safety
interoperable broadband network to be established under
this title, if necessary and practical;
(5) seek to develop technologies, standards,
processes, and architectures that provide a significant
improvement in network security, resiliency and
trustworthiness; and
(6) convene working groups of relevant government
and commercial parties to achieve the requirements in
paragraphs (1) through (5).
(c) Transfer Authority.--If in the determination of the
Director of NIST another Federal agency is better suited to
carry out and oversee the research and development of any
activity to be carried out in accordance with the requirements
of this section, the Director may transfer any amounts provided
under this section to such agency, including to the National
Institute of Justice of the Department of Justice and the
Department of Homeland Security.
SEC. 297. PUBLIC SAFETY TRUST FUND.
(a) Establishment of Public Safety Trust Fund.--
(1) In general.--There is established in the
Treasury of the United States a trust fund to be known
as the ``Public Safety Trust Fund''.
(2) Crediting of receipts.--
(A) In general.--There shall be deposited
into or credited to the Public Safety Trust
Fund the proceeds from the auction of spectrum
carried out pursuant to--
(i) section 273 of this subtitle;
and
(ii) section 309(j)(8)(F) of the
Communications Act of 1934, as added by
section 273 of this subtitle.
(B) Availability.--Amounts deposited into
or credited to the Public Safety Trust Fund in
accordance with subparagraph (A) shall remain
available until the end of fiscal year 2018.
Upon the expiration of the period described in
the prior sentence such amounts shall be
deposited in the General Fund of the Treasury,
where such amounts shall be dedicated for the
sole purpose of deficit reduction.
(b) Use of Fund.--Amounts deposited in the Public Safety
Trust Fund shall be used in the following manner:
(1) Payment of auction incentive.--
(A) Required disbursals.--Amounts in the
Public Safety Trust Fund shall be used to make
any required disbursal of payments to licensees
required pursuant to clause (i) and subclause
(IV) of clause (ii) of section 309(j)(8)(F) of
the Communications Act of 1934.
(B) Notification to congress.--
(i) In general.--At least 3 months
in advance of any incentive auction
conducted pursuant to subparagraph (F)
of section 309(j)(8) of the
Communications Act of 1934, the
Chairman of the Commission, in
consultation with the Director of the
Office of Management and Budget, shall
notify the appropriate committees of
Congress--
(I) of the methodology for
calculating the disbursal of
payments to certain licensees
required pursuant to clause (i)
and subclauses (III) and (IV)
of clause of (ii) of such
section;
(II) that such methodology
considers the value of the
spectrum voluntarily
relinquished in its current use
and the timeliness with which
the licensee cleared its use of
such spectrum; and
(III) of the estimated
payments to be made from the
Incentive Auction Relocation
fund established under section
309(j)(8)(G) of the
Communications Act of 1934.
(ii) Definition.--In this clause,
the term ``appropriate committees of
Congress'' means--
(I) the Committee on
Commerce, Science, and
Transportation of the Senate;
(II) the Committee on
Appropriations of the Senate;
(III) the Committee on
Energy and Commerce of the
House of Representatives; and
(IV) the Committee on
Appropriations of the House of
Representatives.
(2) Incentive auction relocation fund.--Not more
than $1,000,000,000 shall be deposited in the Incentive
Auction Relocation Fund established under section
309(j)(8)(G) of the Communications Act of 1934.
(3) State and local implementation fund.--
$200,000,000 shall be deposited in the State and Local
Implementation Fund established under section 294.
(4) Public safety broadband corporation.--
$6,450,000,000 shall deposited with the Public Safety
Broadband Corporation established under section 284, of
which pursuant to its responsibilities and duties set
forth under section 288 to deploy and operate a
nationwide public safety interoperable broadband
network. Funds deposited with the Public Safety
Broadband Corporation shall be available after
submission of a five-year budget by the Corporation and
approval by the Secretary of Commerce, in consultation
with the Secretary of Homeland Security, Director of
the Office of Management and Budget and Attorney
General of the United States.
(5) Public safety research and development.--After
approval by the Office of Management and Budget of a
spend plan developed by the Director of NIST, a
Wireless Innovation (WIN) Fund of up to $300,000,000
shall be made available for use by the Director of NIST
to carry out the research program established under
section 296 and be available until expended. If less
than $300,000,000 is approved by the Office of
Management and Budget, the remainder shall be
transferred to the Public Safety Broadband Corporation
established in section 284 and be available for duties
set forth under section 288 to deploy and operate a
nationwide public safety interoperable broadband
network.
(6) Deficit reduction.--Any amounts remaining after
the deduction of the amounts required under paragraphs
(1) through (5) shall be deposited in the General Fund
of the Treasury, where such amounts shall be dedicated
for the sole purpose of deficit reduction.
SEC. 298. FCC REPORT ON EFFICIENT USE OF PUBLIC SAFETY SPECTRUM.
(a) In General.--Not later than 180 days after the date of
the enactment of this subtitle and every 2 years thereafter,
the Commission shall, in consultation with the Assistant
Secretary and the Director of NIST, conduct a study and submit
to the appropriate committees of Congress a report on the
spectrum allocated for public safety use.
(b) Contents.--The report required by subsection (a) shall
include--
(1) an examination of how such spectrum is being
used;
(2) recommendations on how such spectrum may be
used more efficiently;
(3) an assessment of the feasibility of public
safety entities relocating from other bands to the
public safety broadband spectrum; and
(4) an assessment of whether any spectrum made
available by the relocation described in paragraph (3)
could be returned to the Commission for reassignment
through auction, including through use of incentive
auction authority under subparagraph (G) of section
309(j)(8) of the Communications Act of 1934 (47 U.S.C.
309(j)(8)), as added by section 273(a).
SEC. 299. PUBLIC SAFETY ROAMING AND PRIORITY ACCESS.
The Commission may adopt rules, if necessary in the public
interest, to improve the ability of public safety users to roam
onto commercial networks and to gain priority access to
commercial networks in an emergency if--
(1) the public safety entity equipment is
technically compatible with the commercial network;
(2) the commercial network is reasonably
compensated; and
(3) such access does not preempt or otherwise
terminate or degrade all existing voice conversations
or data sessions.
TITLE III--ASSISTANCE FOR THE UNEMPLOYED AND PATHWAYS BACK TO WORK
Subtitle A--Supporting Unemployed Workers
SEC. 301. SHORT TITLE.
This subtitle may be cited as the ``Supporting Unemployed
Workers Act of 2011''.
PART I--EXTENSION OF EMERGENCY UNEMPLOYMENT COMPENSATION AND CERTAIN
EXTENDED BENEFITS PROVISIONS, AND ESTABLISHMENT OF SELF-EMPLOYMENT
ASSISTANCE PROGRAM
SEC. 311. EXTENSION OF EMERGENCY UNEMPLOYMENT COMPENSATION PROGRAM.
(a) In General.--Section 4007 of the Supplemental
Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C. 3304
note), is amended--
(1) by striking ``January 3, 2012'' each place it
appears and inserting ``January 3, 2013'';
(2) in the heading for subsection (b)(2), by
striking ``January 3, 2012'' and inserting ``January 3,
2013''; and
(3) in subsection (b)(3), by striking ``June 9,
2012'' and inserting ``June 8, 2013''.
(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 (F), by striking ``and'' at the
end; and
(2) by inserting after subparagraph (G) the
following:
``(H) the amendments made by section 101 of
the Supporting Unemployed Workers Act of 2011;
and.''.
(c) Effective Date.--The amendments made by this section
shall take effect as if included in the enactment of the
Unemployment Compensation Extension Act of 2010 (Public Law
111-205).
SEC. 312. TEMPORARY EXTENSION OF EXTENDED BENEFIT PROVISIONS.
(a) In General.--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), is amended--
(1) by striking ``January 4, 2012'' each place it
appears and inserting ``January 4, 2013'';
(2) in the heading for subsection (b)(2), by
striking ``January 4, 2012'' and inserting ``January 4,
2013''; and
(3) in subsection (c), by striking ``June 11,
2012'' and inserting ``June 11, 2013''.
(b) Extension of Matching for States With No Waiting
Week.--Section 5 of the Unemployment Compensation Extension Act
of 2008 (Public Law 110-449; 26 U.S.C. 3304 note) is amended by
striking ``June 10, 2012'' and inserting ``June 9, 2013''.
(c) Extension of Modification of Indicators Under the
Extended Benefit Program.--Section 502 of the Tax Relief,
Unemployment Insurance Reauthorization, and Job Creation Act of
2010 (Public Law 111-312; 26 U.S.C. 3304 note) is amended--
(1) in subsection (a) by striking ``December 31,
2011'' and inserting ``December 31, 2012''; and
(2) in subsection (b)(2) by striking ``December 31,
2011'' and inserting ``December 31, 2012''.
(d) Effective Date.--The amendments made by this section
shall take effect as if included in the enactment of the
Unemployment Compensation Extension Act of 2010 (Public Law
111-205).
SEC. 313. REEMPLOYMENT SERVICES AND REEMPLOYMENT AND ELIGIBILITY
ASSESSMENT ACTIVITIES.
(a) In General.--
(1) Provision of services and activities.--Section
4001 of the Supplemental Appropriations Act, 2008,
(Public Law 110-252; 26 U.S.C. 3304 note), is amended
by inserting the following new subsection (h):
``(h) In General.--
``(1) Required provision of services and
activities.--An agreement under this section shall
require that the State provide reemployment services
and reemployment and eligibility assessment activities
to each individual receiving emergency unemployment
compensation who, on or after the date that is 30 days
after the date of enactment of the Supporting
Unemployed Workers Act of 2011, establishes an account
under section 4002(b), commences receiving the amounts
described in section 4002(c), commences receiving the
amounts described in section 4002(d), or commences
receiving the amounts described in subsection 4002(e),
whichever occurs first. Such services and activities
shall be provided by the staff of the State agency
responsible for administration of the State
unemployment compensation law or the Wagner-Peyser Act
from funds available pursuant to section 4004(c)(2) and
may also be provided from funds available under the
Wagner-Peyser Act.
``(2) Description of services and activities.--The
reemployment services and in-person reemployment and
eligibility assessment activities provided to
individuals receiving emergency unemployment
compensation described in paragraph (1)--
``(A) shall include--
``(i) the provision of labor market
and career information;
``(ii) an assessment of the skills
of the individual;
``(iii) orientation to the services
available through the One-Stop centers
established under title I of the
Workforce Investment Act of 1998;
``(iv) job search counseling and
the development or review of an
individual reemployment plan that
includes participation in job search
activities and appropriate workshops
and may include referrals to
appropriate training services; and
``(v) review of the eligibility of
the individual for emergency
unemployment compensation relating to
the job search activities of the
individual; and
``(B) may include the provision of--
``(i) comprehensive and specialized
assessments;
``(ii) individual and group career
counseling; and
``(iii) additional reemployment
services.
``(3) Participation requirement.--As a condition of
continuing eligibility for emergency unemployment
compensation for any week, an individual who has been
referred to reemployment services or reemployment and
eligibility assessment activities under this subsection
shall participate, or shall have completed
participation in, such services or activities, unless
the State agency responsible for the administration of
State unemployment compensation law determines that
there is justifiable cause for failure to participate
or complete such services or activities, as defined in
guidance to be issued by the Secretary of Labor.''.
(2) Issuance of guidance.--Not later than 30 days
after the date of enactment of this Act, the Secretary
shall issue guidance on the implementation of the
reemployment services and reemployment and eligibility
assessments activities required to be provided under
the amendments made by paragraph (1).
(b) Funding.--
(1) In general.--Section 4004(c) of the
Supplemental Appropriations Act, 2008 (Public Law 110-
252; 26 U.S.C. 3304 note), is amended--
(A) by striking ``There'' and inserting
``(1) administration.--There''; and
(B) by inserting the following new
paragraph:
``(2) Reemployment services and reemployment and
eligibility assessment activities.--
``(A) Appropriation.--There are
appropriated from the general fund of the
Treasury, without fiscal year limitation, out
of the employment security administration
account as established by section 901(a) of the
Social Security Act, such sums as determined by
the Secretary of Labor in accordance with
subparagraph (B) to assist States in providing
reemployment services and reemployment and
eligibility assessment activities described in
section 4001(h)(2).
``(B) Determination of total amount.--The
amount referred to in subparagraph (A) is the
amount the Secretary estimates is equal to--
``(i) the number of individuals who
will receive reemployment services and
reemployment eligibility and assessment
activities described in section
4001(h)(2) in all States through the
date specified in section 4007(b)(3),
multiplied by
``(ii) $200.
``(C) Distribution among states.--Of the
amounts appropriated under subparagraph (A),
the Secretary of Labor shall distribute amounts
to each State, in accordance with section
4003(c), that the Secretary estimates is equal
to--
``(i) the number of individuals who
will receive reemployment services and
reemployment and eligibility assessment
activities described in section
4001(h)(2) in such State through the
date specified in section 4007(b)(3),
multiplied by
``(ii) $200.''.
(2) Transfer of funds.--Section 4004(e) of the
Supplemental Appropriations Act, 2008 (Public Law 110-
252; 26 U.S.C. 3304 note), is amended--
(A) in paragraph (2), by striking the
period and inserting ``; and''; and
(B) by inserting the following paragraph
(3):
``(3) to the employment security administration
account (as established by section 901(a) of the Social
Security Act) such sums as the Secretary of Labor
determines to be necessary in accordance with
subsection (c)(2) to assist States in providing
reemployment services and reemployment eligibility and
assessment activities described in section
4001(h)(2).''.
SEC. 314. FEDERAL-STATE AGREEMENTS TO ADMINISTER A SELF-EMPLOYMENT
ASSISTANCE PROGRAM.
Section 4001 of the Supplemental Appropriations Act, 2008
(Public Law 110-252; 26 U.S.C. 3304 note), as amended by
section 313, is further amended by inserting a new subsection
(i) as follows:
``(i) Authority To Conduct Self-Employment Assistance
Program.--
``(1) In general.--
``(A) Establishment.--Any agreement under
subsection (a) may provide that the State
agency of the State shall establish a self-
employment assistance program described in
paragraph (2), to provide for the payment of
emergency unemployment compensation as self-
employment assistance allowances to individuals
who meet the eligibility criteria specified in
subsection (b).
``(B) Payment of allowances.--The self-
employment assistance allowance described in
subparagraph (A) shall be paid for up to 26
weeks to an eligible individual from such
individual's emergency unemployment
compensation account described in section 4002,
and the amount in such account shall be reduced
accordingly.
``(2) Definition of `self-employment assistance
program'.--For the purposes of this title, the term
`self-employment assistance program' means a program as
defined under section 3306(t) of the Internal Revenue
Code of 1986 (26 U.S.C. 3306(t)), except as follows:
``(A) all references to `regular
unemployment compensation under the State law'
shall be deemed to refer instead to `emergency
unemployment compensation under title IV of the
Supplemental Appropriations Act, 2008 (Public
Law 110-252; 26 U.S.C. 3304 note)';
``(B) paragraph (3)(B) shall not apply;
``(C) clause (i) of paragraph (3)(C) shall
be deemed to state as follows:
```(i) include any entrepreneurial
training that the State may provide in
coordination with programs of training
offered by the Small Business
Administration, which may include
business counseling, mentorship for
participants, access to small business
development resources, and technical
assistance; and;';
``(D) the reference to `5 percent' in
paragraph (4) shall be deemed to refer instead
to `1 percent'; and
``(E) paragraph (5) shall not apply.
``(3) Availability of self-employment assistance
allowances.--In the case of an individual who has
received any emergency unemployment compensation
payment under this title, such individual shall not
receive self-employment assistance allowances under
this subsection unless the State agency has a
reasonable expectation that such individual will be
entitled to at least 26 times the individual's average
weekly benefit amount of emergency unemployment
compensation.
``(4) Participant option to terminate participation
in self-employment assistance program.--
``(A) Termination.--An individual who is
participating in a State's self -employment
assistance program may opt to discontinue
participation in such program.
``(B) Continued eligibility for emergency
unemployment compensation.--An individual whose
participation in the self-employment assistance
program is terminated as described in paragraph
(1) or who has completed participation in such
program, and who continues to meet the
eligibility requirements for emergency
unemployment compensation under this title,
shall receive emergency unemployment
compensation payments with respect to
subsequent weeks of unemployment, to the extent
that amounts remain in the account established
for such individual under section 4002(b) or to
the extent that such individual commences
receiving the amounts described in subsections
(c), (d), or (e) of such section,
respectively.''.
SEC. 315. CONFORMING AMENDMENT ON PAYMENT OF BRIDGE TO WORK WAGES.
Section 4001 of the Supplemental Appropriations Act, 2008
(Public Law 110-252; 26 U.S.C. 3304 note), as amended by
section 103, is further amended by inserting a new subsection
(j) as follows:
``(j) Authorization To Pay Wages for Purposes of a Bridge
to Work Program.--Any State that establishes a Bridge to Work
program under section 204 of the Supporting Unemployed Workers
Act of 2011 is authorized to deduct from an emergency
unemployment compensation account established for such
individual under section 4002 such sums as may be necessary to
pay wages for such individual as authorized under section
204(b)(1) of such Act.''.
SEC. 316. ADDITIONAL EXTENDED UNEMPLOYMENT BENEFITS UNDER THE RAILROAD
UNEMPLOYMENT INSURANCE ACT.
(a) Extension.--Section 2(c)(2)(D)(iii) of the Railroad
Unemployment Insurance Act, as added by section 2006 of the
American Recovery and Reinvestment Act of 2009 (Public Law 111-
5) and as amended by section 9 of the Worker, Homeownership,
and Business Assistance Act of 2009 (Public Law 111-92), is
amended--
(1) by striking ``June 30, 2011'' and inserting
``June 30, 2012''; and
(2) by striking ``December 31, 2011'' and inserting
``December 31, 2012''.
(b) Clarification on Authority To Use Funds.--Funds
appropriated under either the first or second sentence of
clause (iv) of section 2(c)(2)(D) of the Railroad Unemployment
Insurance Act shall be available to cover the cost of
additional extended unemployment benefits provided under such
section 2(c)(2)(D) by reason of the amendments made by
subsection (a) as well as to cover the cost of such benefits
provided under such section 2(c)(2)(D), as in effect on the day
before the date of the enactment of this Act.
PART II--REEMPLOYMENT NOW PROGRAM
SEC. 321. ESTABLISHMENT OF REEMPLOYMENT NOW PROGRAM.
(a) In General.--There is hereby established the
Reemployment NOW program to be carried out by the Secretary of
Labor in accordance with this part in order to facilitate the
reemployment of individuals who are receiving emergency
unemployment compensation under title IV of the Supplemental
Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C. 3304
note) (hereafter in this part referred to as ``EUC
claimants'').
(b) Authorization and Appropriation.--There are authorized
to be appropriated and appropriated from the general fund of
the Treasury for fiscal year 2012 $4,000,000,000 to carry out
the Reemployment NOW program under this part.
SEC. 322. DISTRIBUTION OF FUNDS.
(a) In General.--Of the funds appropriated under section
321(b) to carry out this part, the Secretary of Labor shall--
(1) reserve up to 1 percent for the costs of
Federal administration and for carrying out rigorous
evaluations of the activities conducted under this
part; and
(2) allot the remainder of the funds not reserved
under paragraph (1) in accordance with the requirements
of subsection (b) and (c) to States that have approved
plans under section 323.
(b) Allotment Formula.--
(1) Formula factors.--The Secretary of Labor shall
allot the funds available under subsection (a)(2) as
follows:
(A) two-thirds of such funds shall be
allotted on the basis of the relative number of
unemployed individuals in each State, compared
to the total number of unemployed individuals
in all States;
(B) one-third of such funds shall be
allotted on the basis of the relative number of
individuals in each State who have been
unemployed for 27 weeks or more, compared to
the total number of individuals in all States
who have been unemployed for 27 weeks or more.
(2) Calculation.--For purposes of paragraph (1),
the number of unemployed individuals and the number of
individuals unemployed for 27 weeks or more shall be
based on the data for the most recent 12-month period,
as determined by the Secretary.
(c) Reallotment.--
(1) Failure to submit state plan.--If a State does
not submit a State plan by the time specified in
section 323(b), or a State does not receive approval of
a State plan, the amount the State would have been
eligible to receive pursuant to the formula under
subsection (b) shall be allotted to States that receive
approval of the State plan under section 323 in
accordance with the relative allotments of such States
as determined by the Secretary under subsection (b).
(2) Failure to implement activities on a timely
basis.--The Secretary of Labor may, in accordance with
procedures and criteria established by the Secretary,
recapture the portion of the State allotment under this
part that remains unobligated if the Secretary
determines such funds are not being obligated at a rate
sufficient to meet the purposes of this part. The
Secretary shall reallot such recaptured funds to other
States that are not subject to recapture in accordance
with the relative share of the allotments of such
States as determined by the Secretary under subsection
(b).
(3) Recapture of funds.--Funds recaptured under
paragraph (2) shall be available for reobligation not
later than December 31, 2012.
SEC. 323. STATE PLAN.
(a) In General.--For a State to be eligible to receive an
allotment under section 322, a State shall submit to the
Secretary of Labor a State plan in such form and containing
such information as the Secretary may require, which at a
minimum shall include:
(1) a description of the activities to be carried
out by the State to assist in the reemployment of
eligible individuals to be served in accordance with
this part, including which of the activities authorized
in sections 324-328 the State intends to carry out and
an estimate of the amounts the State intends to
allocate to the activities, respectively;
(2) a description of the performance outcomes to be
achieved by the State through the activities carried
out under this part, including the employment outcomes
to be achieved by participants and the processes the
State will use to track performance, consistent with
guidance provided by the Secretary of Labor regarding
such outcomes and processes;
(3) a description of coordination of activities to
be carried out under this part with activities under
title I of the Workforce Investment Act of 1998, the
Wagner-Peyser Act, and other appropriate Federal
programs;
(4) the timelines for implementation of the
activities described in the plan and the number of EUC
claimants expected to be enrolled in such activities by
quarter;
(5) assurances that the State will participate in
the evaluation activities carried out by the Secretary
of Labor under this section;
(6) assurances that the State will provide
appropriate reemployment services, including
counseling, to any EUC claimant who participates in any
of the programs authorized under this part; and
(7) assurances that the State will report such
information as the Secretary may require relating to
fiscal, performance and other matters, including
employment outcomes and effects, which the Secretary
determines are necessary to effectively monitor the
activities carried out under this part.
(b) Plan Submission and Approval.--A State plan under this
section shall be submitted to the Secretary of Labor for
approval not later than 30 days after the Secretary issues
guidance relating to submission of such plan. The Secretary
shall approve such plans if the Secretary determines that the
plans meet the requirements of this part and are appropriate
and adequate to carry out the purposes of this part.
(c) Plan Modifications.--A State may submit modifications
to a State plan that has been approved under this part, and the
Secretary of Labor may approve such modifications, if the plan
as modified would meet the requirements of this part and are
appropriate and adequate to carry out the purposes of this
part.
SEC. 324. BRIDGE TO WORK PROGRAM.
(a) In General.--A State may use funds allotted to the
State under this part to establish and administer a Bridge to
Work program described in this section.
(b) Description of Program.--In order to increase
individuals' opportunities to move to permanent employment, a
State may establish a Bridge to Work program to provide an EUC
claimant with short-term work experience placements with an
eligible employer, during which time such individual--
(1) shall be paid emergency unemployment
compensation payable under title IV of the Supplemental
Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C.
3304 note), as wages for work performed, and as
specified in subsection (c);
(2) shall be paid the additional amount described
in subsection (e) as augmented wages for work
performed; and
(3) may be paid compensation in addition to the
amounts described in paragraphs (1) and (2) by a State
or by a participating employer as wages for work
performed.
(c) Program Eligibility and Other Requirements.--For
purposes of this program--
(1) individuals who, except for the requirements
described in paragraph (3), are eligible to receive
emergency unemployment compensation payments under
title IV of the Supplemental Appropriations Act, 2008
(Public Law 110-252; 26 U.S.C. 3304 note), and who
choose to participate in the program described in
subsection (b), shall receive such payments as wages
for work performed during their voluntary participation
in the program described under subsection (b);
(2) the wages payable to individuals described in
paragraph (1) shall be paid from the emergency
unemployment compensation account for such individual
as described in section 4002 of the Supplemental
Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C.
3304 note), and the amount in such individual's account
shall be reduced accordingly;
(3) The wages payable to an individual described in
paragraph (1) shall be payable in the same amount, at
the same interval, on the same terms, and subject to
the same conditions under title IV of the Supplemental
Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C.
3304 note), except that--
(A) State requirements applied under such
Act relating to availability for work and
active search for work are not applicable to
such individuals who participate for at least
25 hours per week in the program described in
subsection (b) for the duration of such
individual's participation in the program;
(B) State requirements applied under such
act relating to disqualifying income regarding
wages earned shall not apply to such
individuals who participate for at least 25
hours per week in the program described in
subsection (b), and shall not apply with
respect to--
(i) the wages described under
subsection (b); and
(ii) any wages, in addition to
those described under subsection (b),
whether paid by a State or a
participating employer for the same
work activities;
(C) State prohibitions or limitations
applied under such Act relating to employment
status shall not apply to such individuals who
participate in the program described in
subsection (b); and
(D) State requirements applied under such
Act relating to an individual's acceptance of
an offer of employment shall not apply with
regard to an offer of long-term employment from
a participating employer made to such
individual who is participating in the program
described in subsection (b) in a work
experience provided by such employer, where
such long-term employment is expected to
commence or commences at the conclusion of the
duration specified in paragraph (4)(A);
(4) the program shall be structured so that
individuals described in paragraph (1) may participate
in the program for up to--
(A) 8 weeks, and
(B) 38 hours for each such week;
(5) a State shall ensure that all individuals
participating in the program are covered by a workers'
compensation insurance program; and
(6) the program meets such other requirements as
the Secretary of Labor determines to be appropriate in
guidance issued by the Secretary.
(d) State Requirements.--
(1) Certification of eligible employer.--A State
may certify as eligible for participation in the
program under this section any employer that meets the
eligibility criteria as established in guidance by the
Secretary of Labor, except that an employer shall not
be certified as eligible for participation in the
program described under subsection (b)--
(A) if such employer--
(i) is a Federal, State, or local
government entity;
(ii) would engage an eligible
individual in work activities under any
employer's grant, contract, or
subcontract with a Federal, State, or
local government entity, except with
regard to work activities under any
employer's supply contract or
subcontract;
(iii) is delinquent with respect to
any taxes or employer contributions
described under sections 3301 and
3303(a)(1) of the Internal Revenue Code
of 1986 or with respect to any related
reporting requirements;
(iv) is engaged in the business of
supplying workers to other employers
and would participate in the program
for the purpose of supplying
individuals participating in the
program to other employers; or
(v) has previously participated in
the program and the State has
determined that such employer has
failed to abide by any of the
requirements specified in subsections
(h), (i), or (j), or by any other
requirements that the Secretary may
establish for employers under
subsection (c)(6); and
(B) unless such employer provides
assurances that it has not displaced existing
workers pursuant to the requirements of
subsection (h).
(2) Authorized activities.--Funds allotted to a
State under this part for the program--
(A) shall be used to--
(i) recruit employers for
participation in the program;
(ii) review and certify employers
identified by eligible individuals
seeking to participate in the program;
(iii) ensure that reemployment and
counseling services are available for
program participants, including
services describing the program under
subsection (b), prior to an
individual's participation in such
program;
(iv) establish and implement
processes to monitor the progress and
performance of individual participants
for the duration of the program;
(v) prevent misuse of the program;
and
(vi) pay augmented wages to
eligible individuals, if necessary, as
described in subsection (e); and
(B) may be used--
(i) to pay workers' compensation
insurance premiums to cover all
individuals participating in the
program, except that, if a State opts
not to make such payments directly to a
State administered workers'
compensation program, the State
involved shall describe in the approved
State plan the means by which such
State shall ensure workers'
compensation or equivalent coverage for
all individuals who participate in the
program;
(ii) to pay compensation to a
participating individual that is in
addition to the amounts described in
subsections (c)(1) and (e) as wages for
work performed;
(iii) to provide supportive
services, such as transportation, child
care, and dependent care, that would
enable individuals to participate in
the program;
(iv) for the administration and
oversight of the program; and
(v) to fulfill additional program
requirements included in the approved
State plan.
(e) Payment of Augmented Wages if Necessary.--In the event
that the wages described in subsection (c)(1) are not
sufficient to equal or exceed the minimum wages that are
required to be paid by an employer under section 6(a)(1) of the
Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)) or the
applicable State or local minimum wage law, whichever is
higher, a State shall pay augmented wages to a program
participant in any amount necessary to cover the difference
between--
(1) such minimum wages amount; and
(2) the wages payable under subsection (c)(1).
(f) Effect of Wages on Eligibility for Other Programs.--
None of the wages paid under this section shall be considered
as income for the purposes of determining eligibility for and
the amount of income transfer and in-kind aid furnished under
any Federal or Federally assisted program based on need.
(g) Effect of Wages, Work Activities, and Program
Participation on Continuing Eligibility for Emergency
Unemployment Compensation.--Any wages paid under this section
and any additional wages paid by an employer to an individual
described in subsection (c)(1), and any work activities
performed by such individual as a participant in the program,
shall not be construed so as to render such individual
ineligible to receive emergency unemployment compensation under
title IV of the Supplemental Appropriations Act, 2008 (Public
Law 110-252; 26 U.S.C. 3304 note).
(h) Nondisplacement of Employees.--
(1) Prohibition.--An employer shall not use a
program participant to displace (including a partial
displacement, such as a reduction in the hours of non-
overtime work, wages, or employment benefits) any
current employee (as of the date of the participation).
(2) Other prohibitions.--An employer shall not
permit a program participant to perform work activities
related to any job for which--
(A) any other individual is on layoff from
the same or any substantially equivalent
position;
(B) the employer has terminated the
employment of any employee or otherwise reduced
the workforce of the employer with the
intention of filling or partially filling the
vacancy so created with the work activities to
be performed by a program participant;
(C) there is a strike or lock out at the
worksite that is the participant's place of
employment; or
(D) the job is created in a manner that
will infringe in any way upon the promotional
opportunities of currently employed individuals
(as of the date of the participation).
(i) Prohibition on impairment of
contracts.--An employer shall not, by
means of assigning work activities
under this section, impair an existing
contract for services or a collective
bargaining agreement, and no such
activity that would be inconsistent
with the terms of a collective
bargaining agreement shall be
undertaken without the written
concurrence of the labor organization
that is signatory to the collective
bargaining agreement.
(j) Limitation on Employer Participation.--If, after 24
weeks of participation in the program, an employer has not made
an offer of suitable long-term employment to any individual
described under subsection (c)(1) who was placed with such
employer and has completed the program, a State shall bar such
employer from further participation in the program. States may
impose additional conditions on participating employers to
ensure that an appropriate number of participants receive
offers of suitable long term employment.
(k) Failure To Meet Program Requirements.--If a State makes
a determination based on information provided to the State, or
acquired by the State by means of its administration and
oversight functions, that a participating employer under this
section has violated a requirement of this section, the State
shall bar such employer from further participation in the
program. The State shall establish a process whereby an
individual described in subsection (c)(1), or any other
affected individual or entity, may file a complaint with the
State relating to a violation of any requirement or prohibition
under this section.
(l) Participant Option To Terminate Participation in Bridge
to Work Program.--
(1) Termination.--An individual who is
participating in a program described in subsection (b)
may opt to discontinue participation in such program.
(2) Continued eligibility for emergency
unemployment compensation.--An individual who opts to
discontinue participation in such program, is
terminated from such program by a participating
employer, or who has completed participation in such
program, and who continues to meet the eligibility
requirements for emergency unemployment compensation
under title IV of the Supplemental Appropriations Act,
2008 (Public Law 110-252; 26 U.S.C. 3304 note), shall
receive emergency unemployment compensation payments
with respect to subsequent weeks of unemployment, to
the extent that amounts remain in the account
established for such individual under section 4002(b)
of such Act or to the extent that such individual
commences receiving the amounts described in
subsections (c), (d), or (e) of such section,
respectively.
(m) Effect of Other Laws.--Unless otherwise provided in
this section, nothing in this section shall be construed to
alter or affect the rights or obligations under any Federal,
State, or local laws with respect to any individual described
in subsection (c)(1) and with respect to any participating
employer under this section.
(n) Treatment of Payments.--All wages or other payments to
an individual under this section shall be treated as payments
of unemployment insurance for purposes of section 209 of the
Social Security Act (42 U.S.C. 409) and for purposes of
subtitle A and sections 3101 and 3111 of the Internal Revenue
Code of 1986.
SEC. 325. WAGE INSURANCE.
(a) In General.--A State may use the funds allotted to the
State under this part to provide a wage insurance program for
EUC claimants.
(b) Benefits.--The wage insurance program provided under
this section may use funds allotted to the State under this
part to pay, for a period not to exceed 2 years, to a worker
described in subsection (c), up to 50 percent of the difference
between--
(1) the wages received by the worker at the time of
separation; and
(2) the wages received by the worker for
reemployment.
(c) Individual Eligibility.--The benefits described in
subsection (b) may be paid to an individual who is an EUC
claimant at the time such individual obtains reemployment and
who--
(1) is at least 50 years of age;
(2) earns not more than $50,000 per year in wages
from reemployment;
(3) is employed on a full-time basis as defined by
the law of the State; and
(4) is not employed by the employer from which the
individual was last separated.
(d) Total Amount of Payments.--A State shall establish a
maximum amount of payments per individual for purposes of
payments described in subsection (b) during the eligibility
period described in such subsection.
(e) Non-Discrimination Regarding Wages.--An employer shall
not pay a worker described in subsection (c) less than such
employer pays to a regular worker in the same or substantially
equivalent position.
SEC. 326. ENHANCED REEMPLOYMENT STRATEGIES.
(a) In General.--A State may use funds allotted under this
part to provide a program of enhanced reemployment services to
EUC claimants. In addition to the provision of services to such
claimants, the program may include the provision of
reemployment services to individuals who are unemployed and
have exhausted their rights to emergency unemployment
compensation under title IV of the Supplemental Appropriations
Act, 2008, (Public Law 110-252; 26 U.S.C. 3304 note). The
program shall provide reemployment services that are more
intensive than the reemployment services provided by the State
prior to the receipt of the allotment under this part.
(b) Types of Services.--The enhanced reemployment services
described in subsection (a) may include services such as--
(1) assessments, counseling, and other intensive
services that are provided by staff on a one-to-one
basis and may be customized to meet the reemployment
needs of EUC claimants and individuals described in
subsection (a);
(2) comprehensive assessments designed to identify
alternative career paths;
(3) case management;
(4) reemployment services that are provided more
frequently and more intensively than such reemployment
services have previously been provided by the State;
and
(5) services that are designed to enhance
communication skills, interviewing skills, and other
skills that would assist in obtaining reemployment.
SEC. 327. SELF-EMPLOYMENT PROGRAMS.
A State may use funds allotted to the State under this
part, in an amount specified under an approved State plan, for
the administrative costs associated with starting up the self-
employment assistance program described in section 4001(i) of
the Supplemental Appropriations Act, 2008, (Public Law 110-252;
26 U.S.C. 3304 note).
SEC. 328. ADDITIONAL INNOVATIVE PROGRAMS.
(a) In General.--A State may use funds allotted under this
part to provide a program for innovative activities, which use
a strategy that is different from the reemployment strategies
described in sections 324-327 and which are designed to
facilitate the reemployment of EUC claimants. In addition to
the provision of activities to such claimants, the program may
include the provision of activities to individuals who are
unemployed and have exhausted their rights to emergency
unemployment compensation under title IV of the Supplemental
Appropriations Act, 2008, (Public Law 110-252; 26 U.S.C. 3304
note).
(b) Conditions.--The innovative activities approved in
accordance with subsection (a)--
(1) shall directly benefit EUC claimants and, if
applicable, individuals described in subsection (a),
either as a benefit paid to such claimant or individual
or as a service provided to such claimant or
individual;
(2) shall not result in a reduction in the duration
or amount of, emergency unemployment compensation for
which EUC claimants would otherwise be eligible;
(3) shall not include a reduction in the duration,
amount of or eligibility for regular compensation or
extended benefits;
(4) shall not be used to displace (including a
partial displacement, such as a reduction in the hours
of non-overtime work, wages, or employment benefits)
any currently employed employee (as of the date of the
participation) or allow a program participant to
perform work activities related to any job for which--
(A) any other individual is on layoff from
the same or any substantially equivalent job;
(B) the employer has terminated the
employment of any regular employee or otherwise
reduced the workforce of the employer with the
intention of filling or partially filling the
vacancy so created with the work activities to
be performed by a program participant;
(C) there is a strike or lock out at the
worksite that is the participant's place of
employment; or
(D) the job is created in a manner that
will infringe in any way upon the promotional
opportunities of currently employed individuals
(as of the date of the participation);
(5) shall not be in violation of any Federal,
State, or local law.
SEC. 329. GUIDANCE AND ADDITIONAL REQUIREMENTS.
The Secretary of Labor may establish through guidance,
without regard to the requirements of section 553 of title 5,
United States Code, such additional requirements, including
requirements regarding the allotment, recapture, and
reallotment of funds, and reporting requirements, as the
Secretary determines to be necessary to ensure fiscal
integrity, effective monitoring, and appropriate and prompt
implementation of the activities under this Act.
SEC. 330. REPORT OF INFORMATION AND EVALUATIONS TO CONGRESS AND THE
PUBLIC.
The Secretary of Labor shall provide to the appropriate
Committees of the Congress and make available to the public the
information reported pursuant to section 329 and the
evaluations of activities carried out pursuant to the funds
reserved under section 322(a)(1).
SEC. 331. STATE.
For purposes of this part, the term ``State'' has the
meaning given that term in section 205 of the Federal-State
Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304
note).
PART III--SHORT-TIME COMPENSATION PROGRAM
SEC. 341. TREATMENT OF SHORT-TIME COMPENSATION PROGRAMS.
(a) Definition.--
(1) In general.--Section 3306 of the Internal
Revenue Code of 1986 (26 U.S.C. 3306) is amended by
adding at the end the following new subsection:
``(v) Short-Time Compensation Program.--For purposes of
this chapter, the term `short-time compensation program' means
a program under which--
``(1) the participation of an employer is
voluntary;
``(2) an employer reduces the number of hours
worked by employees in lieu of layoffs;
``(3) such employees whose workweeks have been
reduced by at least 10 percent, and by not more than
the percentage, if any, that is determined by the State
to be appropriate (but in no case more than 60
percent), are eligible for unemployment compensation;
``(4) the amount of unemployment compensation
payable to any such employee is a pro rata portion of
the unemployment compensation which would otherwise be
payable to the employee if such employee were totally
unemployed from the participating employer;
``(5) such employees meet the availability for work
and work search test requirements while collecting
short-time compensation benefits, by being available
for their workweek as required by their participation
in the short-time compensation program;
``(6) eligible employees may participate, as
appropriate, in training (including employer-sponsored
training or worker training funded under the Workforce
Investment Act of 1998) to enhance job skills if such
program has been approved by the State agency;
``(7) the State agency shall require employers to
certify that if the employer provides health benefits
and retirement benefits under a defined benefit plan
(as defined in section 414(j)) or contributions under a
defined contribution plan (as defined in section
414(i)) to any employee whose workweek is reduced under
the program that such benefits will continue to be
provided to employees participating in the short-time
compensation program under the same terms and
conditions as though the workweek of such employee had
not been reduced or to the same extent as other
employees not participating in the short-time
compensation program, subject to other requirements in
this section;
``(8) the State agency shall require an employer to
submit a written plan describing the manner in which
the requirements of this subsection will be implemented
(including a plan for giving advance notice, where
feasible, to an employee whose workweek is to be
reduced) together with an estimate of the number of
layoffs that would have occurred absent the ability to
participate in short-time compensation and such other
information as the Secretary of Labor determines is
appropriate;
``(9) in the case of employees represented by a
union as the sole and exclusive representative, the
appropriate official of the union has agreed to the
terms of the employer's written plan and implementation
is consistent with employer obligations under the
applicable Federal laws; and
``(10) upon request by the State and approval by
the Secretary of Labor, only such other provisions are
included in the State law that are determined to be
appropriate for purposes of a short-time compensation
program.''.
(2) Effective date.--Subject to paragraph (3), the
amendment made by paragraph (1) shall take effect on
the date of the enactment of this Act.
(3) Transition period for existing programs.--In
the case of a State that is administering a short-time
compensation program as of the date of the enactment of
this Act and the State law cannot be administered
consistent with the amendment made by paragraph (1),
such amendment shall take effect on the earlier of--
(A) the date the State changes its State
law in order to be consistent with such
amendment; or
(B) the date that is 2 years and 6 months
after the date of the enactment of this Act.
(b) Conforming Amendments.--
(1) Internal revenue code of 1986.--
(A) Subparagraph (E) of section 3304(a)(4)
of the Internal Revenue Code of 1986 is amended
to read as follows:
``(E) amounts may be withdrawn for the
payment of short-time compensation under a
short-time compensation program (as defined
under section 3306(v));''.
(B) Subsection (f) of section 3306 of the
Internal Revenue Code of 1986 is amended--
(i) by striking paragraph (5)
(relating to short-time compensation)
and inserting the following new
paragraph:
``(5) amounts may be withdrawn for the payment of
short-time compensation under a short-time compensation
program (as defined in subsection (v)); and''; and
(ii) by redesignating paragraph (5)
(relating to self-employment assistance
program) as paragraph (6).
(2) Social security act.--Section 303(a)(5) of the
Social Security Act is amended by striking ``the
payment of short-time compensation under a plan
approved by the Secretary of Labor'' and inserting
``the payment of short-time compensation under a short-
time compensation program (as defined in section
3306(v) of the Internal Revenue Code of 1986)''.
(3) Unemployment compensation amendments of 1992.--
Subsections (b) through (d) of section 401 of the
Unemployment Compensation Amendments of 1992 (26 U.S.C.
3304 note) are repealed.
SEC. 342. TEMPORARY FINANCING OF SHORT-TIME COMPENSATION PAYMENTS IN
STATES WITH PROGRAMS IN LAW.
(a) Payments to States.--
(1) In general.--Subject to paragraph (3), there
shall be paid to a State an amount equal to 100 percent
of the amount of short-time compensation paid under a
short-time compensation program (as defined in section
3306(v) of the Internal Revenue Code of 1986, as added
by section 341(a)) under the provisions of the State
law.
(2) Terms of payments.--Payments made to a State
under paragraph (1) shall be payable by way of
reimbursement in such amounts as the Secretary
estimates the State will be entitled to receive under
this section for each calendar month, reduced or
increased, as the case may be, by any amount by which
the Secretary finds that the Secretary's estimates for
any prior calendar month were greater or less than the
amounts which should have been paid to the State. Such
estimates may be made on the basis of such statistical,
sampling, or other method as may be agreed upon by the
Secretary and the State agency of the State involved.
(3) Limitations on payments.--
(A) General payment limitations.--No
payments shall be made to a State under this
section for short-time compensation paid to an
individual by the State during a benefit year
in excess of 26 times the amount of regular
compensation (including dependents' allowances)
under the State law payable to such individual
for a week of total unemployment.
(B) Employer limitations.--No payments
shall be made to a State under this section for
benefits paid to an individual by the State
under a short-time compensation program if such
individual is employed by the participating
employer on a seasonal, temporary, or
intermittent basis.
(b) Applicability.--
(1) In general.--Payments to a State under
subsection (a) shall be available for weeks of
unemployment--
(A) beginning on or after the date of the
enactment of this Act; and
(B) ending on or before the date that is 3
years and 6 months after the date of the
enactment of this Act.
(2) Three-year funding limitation for combined
payments under this section and section 343.--States
may receive payments under this section and section 343
with respect to a total of not more than 156 weeks.
(c) Two-Year Transition Period for Existing Programs.--
During any period that the transition provision under section
341(a)(3) is applicable to a State with respect to a short-time
compensation program, such State shall be eligible for payments
under this section. Subject to paragraphs (1)(B) and (2) of
subsection (b), if at any point after the date of the enactment
of this Act the State enacts a State law providing for the
payment of short-time compensation under a short-time
compensation program that meets the definition of such a
program under section 3306(v) of the Internal Revenue Code of
1986, as added by section 341(a), the State shall be eligible
for payments under this section after the effective date of
such enactment.
(d) Funding and Certifications.--
(1) Funding.--There are appropriated, out of moneys
in the Treasury not otherwise appropriated, such sums
as may be necessary for purposes of carrying out this
section.
(2) Certifications.--The Secretary shall from time
to time certify to the Secretary of the Treasury for
payment to each State the sums payable to such State
under this section.
(e) Definitions.--In this section:
(1) Secretary.--The term ``Secretary'' means the
Secretary of Labor.
(2) State; state agency; state law.--The terms
``State'', ``State agency'', and ``State law'' have the
meanings given those terms in section 205 of the
Federal-State Extended Unemployment Compensation Act of
1970 (26 U.S.C. 3304 note).
SEC. 343. TEMPORARY FINANCING OF SHORT-TIME COMPENSATION AGREEMENTS.
(a) Federal-State Agreements.--
(1) In general.--Any State which desires to do so
may enter into, and participate in, an agreement under
this section with the Secretary provided that such
State's law does not provide for the payment of short-
time compensation under a short-time compensation
program (as defined in section 3306(v) of the Internal
Revenue Code of 1986, as added by section 341(a)).
(2) Ability to terminate.--Any State which is a
party to an agreement under this section may, upon
providing 30 days' written notice to the Secretary,
terminate such agreement.
(b) Provisions of Federal-State Agreement.--
(1) In general.--Any agreement under this section
shall provide that the State agency of the State will
make payments of short-time compensation under a plan
approved by the State. Such plan shall provide that
payments are made in accordance with the requirements
under section 3306(v) of the Internal Revenue Code of
1986, as added by section 341(a).
(2) Limitations on plans.--
(A) General payment limitations.--A short-
time compensation plan approved by a State
shall not permit the payment of short-time
compensation to an individual by the State
during a benefit year in excess of 26 times the
amount of regular compensation (including
dependents' allowances) under the State law
payable to such individual for a week of total
unemployment.
(B) Employer limitations.--A short-time
compensation plan approved by a State shall not
provide payments to an individual if such
individual is employed by the participating
employer on a seasonal, temporary, or
intermittent basis.
(3) Employer payment of costs.--Any short-time
compensation plan entered into by an employer must
provide that the employer will pay the State an amount
equal to one-half of the amount of short-time
compensation paid under such plan. Such amount shall be
deposited in the State's unemployment fund and shall
not be used for purposes of calculating an employer's
contribution rate under section 3303(a)(1) of the
Internal Revenue Code of 1986.
(c) Payments to States.--
(1) In general.--There shall be paid to each State
with an agreement under this section an amount equal
to--
(A) one-half of the amount of short-time
compensation paid to individuals by the State
pursuant to such agreement; and
(B) any additional administrative expenses
incurred by the State by reason of such
agreement (as determined by the Secretary).
(2) Terms of payments.--Payments made to a State
under paragraph (1) shall be payable by way of
reimbursement in such amounts as the Secretary
estimates the State will be entitled to receive under
this section for each calendar month, reduced or
increased, as the case may be, by any amount by which
the Secretary finds that the Secretary's estimates for
any prior calendar month were greater or less than the
amounts which should have been paid to the State. Such
estimates may be made on the basis of such statistical,
sampling, or other method as may be agreed upon by the
Secretary and the State agency of the State involved.
(3) Funding.--There are appropriated, out of moneys
in the Treasury not otherwise appropriated, such sums
as may be necessary for purposes of carrying out this
section.
(4) Certifications.--The Secretary shall from time
to time certify to the Secretary of the Treasury for
payment to each State the sums payable to such State
under this section.
(d) Applicability.--
(1) In general.--An agreement entered into under
this section shall apply to weeks of unemployment--
(A) beginning on or after the date on which
such agreement is entered into; and
(B) ending on or before the date that is 2
years and 13 weeks after the date of the
enactment of this Act.
(2) Two-year funding limitation.--States may
receive payments under this section with respect to a
total of not more than 104 weeks.
(e) Special Rule.--If a State has entered into an agreement
under this section and subsequently enacts a State law
providing for the payment of short-time compensation under a
short-time compensation program that meets the definition of
such a program under section 3306(v) of the Internal Revenue
Code of 1986, as added by section 341(a), the State--
(1) shall not be eligible for payments under this
section for weeks of unemployment beginning after the
effective date of such State law; and
(2) subject to paragraphs (1)(B) and (2) of section
342(b), shall be eligible to receive payments under
section 342 after the effective date of such State law.
(f) Definitions.--In this section:
(1) Secretary.--The term ``Secretary'' means the
Secretary of Labor.
(2) State; state agency; state law.--The terms
``State'', ``State agency'', and ``State law'' have the
meanings given those terms in section 205 of the
Federal-State Extended Unemployment Compensation Act of
1970 (26 U.S.C. 3304 note).
SEC. 344. GRANTS FOR SHORT-TIME COMPENSATION PROGRAMS.
(a) Grants.--
(1) For implementation or improved
administration.--The Secretary shall award grants to
States that enact short-time compensation programs (as
defined in subsection (i)(2)) for the purpose of
implementation or improved administration of such
programs.
(2) For promotion and enrollment.--The Secretary
shall award grants to States that are eligible and
submit plans for a grant under paragraph (1) for such
States to promote and enroll employers in short-time
compensation programs (as so defined).
(3) Eligibility.--
(A) In general.--The Secretary shall
determine eligibility criteria for the grants
under paragraph (1) and (2).
(B) Clarification.--A State administering a
short-time compensation program, including a
program being administered by a State that is
participating in the transition under the
provisions of sections 341(a)(3) and 342(c),
that does not meet the definition of a short-
time compensation program under section 3306(v)
of the Internal Revenue Code of 1986 (as added
by 341(a)), and a State with an agreement under
section 343, shall not be eligible to receive a
grant under this section until such time as the
State law of the State provides for payments
under a short-time compensation program that
meets such definition and such law.
(b) Amount of Grants.--
(1) In general.--The maximum amount available for
making grants to a State under paragraphs (1) and (2)
shall be equal to the amount obtained by multiplying
$700,000,000 (less the amount used by the Secretary
under subsection (e)) by the same ratio as would apply
under subsection (a)(2)(B) of section 903 of the Social
Security Act (42 U.S.C. 1103) for purposes of
determining such State's share of any excess amount (as
described in subsection (a)(1) of such section) that
would have been subject to transfer to State accounts,
as of October 1, 2010, under the provisions of
subsection (a) of such section.
(2) Amount available for different grants.--Of the
maximum incentive payment determined under paragraph
(1) with respect to a State--
(A) one-third shall be available for a
grant under subsection (a)(1); and
(B) two-thirds shall be available for a
grant under subsection (a)(2).
(c) Grant Application and Disbursal.--
(1) Application.--Any State seeking a grant under
paragraph (1) or (2) of subsection (a) shall submit an
application to the Secretary at such time, in such
manner, and complete with such information as the
Secretary may require. In no case may the Secretary
award a grant under this section with respect to an
application that is submitted after December 31, 2014.
(2) Notice.--The Secretary shall, within 30 days
after receiving a complete application, notify the
State agency of the State of the Secretary's findings
with respect to the requirements for a grant under
paragraph (1) or (2) (or both) of subsection (a).
(3) Certification.--If the Secretary finds that the
State law provisions meet the requirements for a grant
under subsection (a), the Secretary shall thereupon
make a certification to that effect to the Secretary of
the Treasury, together with a certification as to the
amount of the grant payment to be transferred to the
State account in the Unemployment Trust Fund (as
established in section 904(a) of the Social Security
Act (42 U.S.C. 1104(a))) pursuant to that finding. The
Secretary of the Treasury shall make the appropriate
transfer to the State account within 7 days after
receiving such certification.
(4) Requirement.--No certification of compliance
with the requirements for a grant under paragraph (1)
or (2) of subsection (a) may be made with respect to
any State whose--
(A) State law is not otherwise eligible for
certification under section 303 of the Social
Security Act (42 U.S.C. 503) or approvable
under section 3304 of the Internal Revenue Code
of 1986; or
(B) short-time compensation program is
subject to discontinuation or is not scheduled
to take effect within 12 months of the
certification.
(d) Use of Funds.--The amount of any grant awarded under
this section shall be used for the implementation of short-time
compensation programs and the overall administration of such
programs and the promotion and enrollment efforts associated
with such programs, such as through--
(1) the creation or support of rapid response teams
to advise employers about alternatives to layoffs;
(2) the provision of education or assistance to
employers to enable them to assess the feasibility of
participating in short-time compensation programs; and
(3) the development or enhancement of systems to
automate--
(A) the submission and approval of plans;
and
(B) the filing and approval of new and
ongoing short-time compensation claims.
(e) Administration.--The Secretary is authorized to use
0.25 percent of the funds available under subsection (g) to
provide for outreach and to share best practices with respect
to this section and short-time compensation programs.
(f) Recoupment.--The Secretary shall establish a process
under which the Secretary shall recoup the amount of any grant
awarded under paragraph (1) or (2) of subsection (a) if the
Secretary determines that, during the 5-year period beginning
on the first date that any such grant is awarded to the State,
the State--
(1) terminated the State's short-time compensation
program; or
(2) failed to meet appropriate requirements with
respect to such program (as established by the
Secretary).
(g) Funding.--There are appropriated, out of moneys in the
Treasury not otherwise appropriated, to the Secretary,
$700,000,000 to carry out this section, to remain available
without fiscal year limitation.
(h) Reporting.--The Secretary may establish reporting
requirements for States receiving a grant under this section in
order to provide oversight of grant funds.
(i) Definitions.--In this section:
(1) Secretary.--The term ``Secretary'' means the
Secretary of Labor.
(2) Short-time compensation program.--The term
``short-time compensation program'' has the meaning
given such term in section 3306(v) of the Internal
Revenue Code of 1986, as added by section 341(a).
(3) State; state agency; state law.--The terms
``State'', ``State agency'', and ``State law'' have the
meanings given those terms in section 205 of the
Federal-State Extended Unemployment Compensation Act of
1970 (26 U.S.C. 3304 note).
SEC. 345. ASSISTANCE AND GUIDANCE IN IMPLEMENTING PROGRAMS.
(a) In General.--In order to assist States in establishing,
qualifying, and implementing short-time compensation programs
(as defined in section 3306(v) of the Internal Revenue Code of
1986, as added by section 341(a)), the Secretary of Labor (in
this section referred to as the ``Secretary'') shall--
(1) develop model legislative language which may be
used by States in developing and enacting such programs
and periodically review and revise such model
legislative language;
(2) provide technical assistance and guidance in
developing, enacting, and implementing such programs;
(3) establish reporting requirements for States,
including reporting on--
(A) the number of estimated averted
layoffs;
(B) the number of participating employers
and workers; and
(C) such other items as the Secretary of
Labor determines are appropriate.
(b) Model Language and Guidance.--The model language and
guidance developed under subsection (a) shall allow sufficient
flexibility by States and participating employers while
ensuring accountability and program integrity.
(c) Consultation.--In developing the model legislative
language and guidance under subsection (a), and in order to
meet the requirements of subsection (b), the Secretary shall
consult with employers, labor organizations, State workforce
agencies, and other program experts.
SEC. 346. REPORTS.
(a) Report.--
(1) In general.--Not later than 4 years after the
date of the enactment of this Act, the Secretary of
Labor shall submit to Congress and to the President a
report or reports on the implementation of the
provisions of this Act.
(2) Requirements.--Any report under paragraph (1)
shall at a minimum include the following:
(A) A description of best practices by
States and employers in the administration,
promotion, and use of short-time compensation
programs (as defined in section 3306(v) of the
Internal Revenue Code of 1986, as added by
section 341(a)).
(B) An analysis of the significant
challenges to State enactment and
implementation of short-time compensation
programs.
(C) A survey of employers in States that
have not enacted a short-time compensation
program or entered into an agreement with the
Secretary on a short-time compensation plan to
determine the level of interest among such
employers in participating in short-time
compensation programs.
(b) Funding.--There are appropriated, out of any moneys in
the Treasury not otherwise appropriated, to the Secretary of
Labor, $1,500,000 to carry out this section, to remain
available without fiscal year limitation.
Subtitle B--Long Term Unemployed Hiring Preferences
SEC. 351. LONG TERM UNEMPLOYEED WORKERS WORK OPPORTUNITY TAX CREDITS.
(a) In General.--Paragraph (3) of section 51(b) of the
Internal Revenue Code is amended by inserting ``$10,000 per
year in the case of any individual who is a qualified long term
unemployed individual by reason of subsection (d)(11), and''
before ``$12,000 per year''.
(b) Long Term Unemployeed Individuals Tax Credits.--
Paragraph (d) of section 51 of the Internal Revenue Code is
amended by--
(1) inserting ``(J) qualified long term unemployed
individual'' at the end of paragraph (d)(1);
(2) inserting a new paragraph after paragraph (10)
as follows--
``(11) Qualified long term unemployed individual.
``(A) In general.--The term `qualified long
term unemployed individual' means any
individual who was not a student for at least 6
months during the 1-year period ending on the
hiring date and is certified by the designated
local agency as having aggregate periods of
unemployment during the 1-year period ending on
the hiring date which equal or exceed 6 months.
``(B) Student.--For purposes of this
subsection, a student is an individual enrolled
at least half-time in a program that leads to a
degree, certificate, or other recognized
educational credential for at least 6 months
whether or not consecutive during the 1-year
period ending on the hiring date.''; and
(3) renumbering current paragraphs (11) through
(14) as paragraphs (12) through (15).
(c) Simplified Certification.--Section 51(d) of the
Internal Revenue Code is amended by adding a new paragraph 16
as follows:
``(16) Credit allowed for qualified long term
unemployed individuals.
``(A) In general.--Any qualified long term
unemployed individual under paragraph (11) will
be treated as certified by the designated local
agency as having aggregate periods of
unemployment if--
``(i) the individual is certified
by the designated local agency as being
in receipt of unemployment compensation
under State or Federal law for not less
than 6 months during the 1-year period
ending on the hiring date.
``(B) Regulatory authority.--The Secretary
in his discretion may provide alternative
methods for certification.''.
(d) Credit Made Available to Tax-Exempt Employers in
Certain Circumstances.--Section 52(c) of the Internal Revenue
Code is amended--
(1) by striking the word ``No'' at the beginning of
the section and replacing it with ``Except as provided
in this subsection, no''; and
(2) the following new paragraphs are inserted at
the end of section 52(c)--
``(1) In general.--In the case of a tax-exempt
employer, there shall be treated as a credit allowable
under subpart C (and not allowable under subpart D) the
lesser of--
``(A) the amount of the work opportunity
credit determined under this subpart with
respect to such employer that is related to the
hiring of qualified long term unemployed
individuals described in subsection (d)(11); or
``(B) the amount of the payroll taxes of
the employer during the calendar year in which
the taxable year begins.
``(2) Credit amount.--In calculating tax-exempt
employers, the work opportunity credit shall be
determined by substituting `26 percent' for `40
percent' in section 51(a) and by substituting `16.25
percent' for `25 percent' in section 51(i)(3)(A).
``(3) Tax-exempt employer.--For purposes of this
subtitle, the term `tax-exempt employer' means an
employer that is--
``(A) an organization described in section
501(c) and exempt from taxation under section
501(a), or
``(B) a public higher education institution
(as defined in section 101 of the Higher
Education Act of 1965).
``(4) Payroll taxes.--For purposes of this
subsection--
``(A) In general.--The term `payroll taxes'
means--
``(i) amounts required to be
withheld from the employees of the tax-
exempt employer under section 3401(a),
``(ii) amounts required to be
withheld from such employees under
section 3101, and
``(iii) amounts of the taxes
imposed on the tax-exempt employer
under section 3111.''.
(e) Treatment of Possessions.--
(1) Payments to possessions.--
(A) Mirror code possessions.--The Secretary
of the Treasury shall pay to each possession of
the United States with a mirror code tax system
amounts equal to the loss to that possession by
reason of the application of this section
(other than this subsection). Such amounts
shall be determined by the Secretary of the
Treasury based on information provided by the
government of the respective possession of the
United States.
(B) Other possessions.--The Secretary of
the Treasury shall pay to each possession of
the United States, which does not have a mirror
code tax system, amounts estimated by the
Secretary of the Treasury as being equal to the
aggregate credits that would have been provided
by the possession by reason of the application
of this section (other than this subsection) if
a mirror code tax system had been in effect in
such possession. The preceding sentence shall
not apply with respect to any possession of the
United States unless such possession has a
plan, which has been approved by the Secretary
of the Treasury, under which such possession
will promptly distribute such payments.
(2) Coordination with credit allowed against united
states income taxes.--No increase in the credit
determined under section 38(b) of the Internal Revenue
Code of 1986 that is attributable to the credit
provided by this section (other than this subsection
(e)) shall be taken into account with respect to any
person--
(A) to whom a credit is allowed against
taxes imposed by the possession of the United
States by reason of this section for such
taxable year, or
(B) who is eligible for a payment under a
plan described in paragraph (1)(B) with respect
to such taxable year.
(3) Definitions and special rules.--
(A) Possession of the united states.--For
purposes of this subsection (e), the term
``possession of the United States'' includes
American Samoa, the Commonwealth of the
Northern Mariana Islands, the Commonwealth of
Puerto Rico, Guam, and the United States Virgin
Islands.
(B) Mirror code tax system.--For purposes
of this subsection, the term ``mirror code tax
system'' means, with respect to any possession
of the United States, the income tax system of
such possession if the income tax liability of
the residents of such possession under such
system is determined by reference to the income
tax laws of the United States as if such
possession were the United States.
(C) Treatment of payments.--For purposes of
section 1324(b)(2) of title 31, United States
Code, rules similar to the rules of section
1001(b)(3)(C) of the American Recovery and
Reinvestment Tax Act of 2009 shall apply.
(f) Effective Date.--The amendments made by this section
shall apply to individuals who begin work for the employer
after the date of the enactment of this Act.
Subtitle C--Pathways Back to Work
SEC. 361. SHORT TITLE.
This subtitle may be cited as the ``Pathways Back to Work
Act of 2011''.
SEC. 362. ESTABLISHMENT OF PATHWAYS BACK TO WORK FUND.
(a) Establishment.--There is established in the Treasury of
the United States a fund which shall be known as the Pathways
Back to Work Fund (hereafter in this Act referred to as ``the
Fund'').
(b) Deposits Into the Fund.--Out of any amounts in the
Treasury of the United States not otherwise appropriated, there
are appropriated $5,000,000,000 for payment to the Fund to be
used by the Secretary of Labor to carry out this Act.
SEC. 363. AVAILABILITY OF FUNDS.
(a) In General.--Of the amounts available to the Fund under
section 362(b), the Secretary of Labor shall--
(1) allot $2,000,000,000 in accordance with section
364 to provide subsidized employment to unemployed,
low-income adults;
(2) allot $1,500,000,000 in accordance with section
365 to provide summer and year-round employment
opportunities to low-income youth;
(3) award $1,500,000,000 in competitive grants in
accordance with section 366 to local entities to carry
out work-based training and other work-related and
educational strategies and activities of demonstrated
effectiveness to unemployed, low-income adults and low-
income youth to provide the skills and assistance
needed to obtain employment.
(b) Reservation.--The Secretary of Labor may reserve not
more than 1 percent of amounts available to the Fund under each
of paragraphs (1)-(3) of subsection (a) for the costs of
technical assistance, evaluations and Federal administration of
this Act.
(c) Period of Availability.--The amounts appropriated under
this Act shall be available for obligation by the Secretary of
Labor until December 31, 2012, and shall be available for
expenditure by grantees and subgrantees until September 30,
2013.
SEC. 364. SUBSIDIZED EMPLOYMENT FOR UNEMPLOYED, LOW-INCOME ADULTS.
(a) In General.--
(1) Allotments.--From the funds available under
section 363(a)(1), the Secretary of Labor shall make an
allotment under subsection (b) to each State that has a
State plan approved under subsection (c) and to each
outlying area and Native American grantee under section
166 of the Workforce Investment Act of 1998 that meets
the requirements of this section, for the purpose of
providing subsidized employment opportunities to
unemployed, low-income adults.
(2) Guidance.--Not later than 30 days after the
date of enactment of this Act, the Secretary of Labor,
in coordination with the Secretary of Health and Human
Services, shall issue guidance regarding the
implementation of this section. Such guidance shall,
consistent with this section, include procedures for
the submission and approval of State and local plans
and the allotment and allocation of funds, including
reallotment and reallocation of such funds, that
promote the expeditious and effective implementation of
the activities authorized under this section.
(b) State Allotments.--
(1) Reservations for outlying areas and tribes.--Of
the funds described subsection (a)(1), the Secretary
shall reserve--
(A) not more than one-quarter of one
percent to provide assistance to outlying areas
to provide subsidized employment to low-income
adults who are unemployed; and
(B) 1.5 percent to provide assistance to
grantees of the Native American programs under
section 166 of the Workforce Investment Act of
1998 to provide subsidized employment to low-
income adults who are unemployed.
(2) States.--After determining the amounts to be
reserved under paragraph (1), the Secretary of Labor
shall allot the remainder of the amounts described in
subsection (a)(1) among the States as follows:
(A) one-third shall be allotted on the
basis of the relative number of unemployed
individuals in areas of substantial
unemployment in each State, compared to the
total number of unemployed individuals in areas
of substantial unemployment in all States;
(B) one-third shall be allotted on the
basis of the relative excess number of
unemployed individuals in each State, compared
to the total excess number of unemployed
individuals in all States; and
(C) one-third shall be allotted on the
basis of the relative number of disadvantaged
adults and youth in each State, compared to the
total number of disadvantaged adults and youth
in all States.
(3) Definitions.--For purposes of the formula
described in paragraph (2)--
(A) Area of substantial unemployment.--The
term ``area of substantial unemployment'' means
any contiguous area with a population of at
least 10,000 and that has an average rate of
unemployment of at least 6.5 percent for the
most recent 12 months, as determined by the
Secretary.
(B) Disadvantaged adults and youth.--The
term ``disadvantaged adults and youth'' means
an individual who is age 16 and older (subject
to section 132(b)(1)(B)(v)(I) of the Workforce
Investment Act of 1998) who received an income,
or is a member of a family that received a
total family income, that, in relation to
family size, does not exceed the higher of--
(i) the poverty line; or
(ii) 70 percent of the lower living
standard income level.
(C) Excess number.--The term ``excess
number'' means, used with respect to the excess
number of unemployed individuals within a
State, the higher of--
(i) the number that represents the
number of unemployed individuals in
excess of 4.5 percent of the civilian
labor force in the State; or
(ii) the number that represents the
number of unemployed individuals in
excess of 4.5 percent of the civilian
labor force in areas of substantial
unemployment in such State.
(4) Reallotment.--If the Governor of a State does
not submit a State plan by the time specified in
subsection (c), or a State does not receive approval of
a State plan, the amount the State would have been
eligible to receive pursuant to the formula under
paragraph (2) shall be transferred within the Fund and
added to the amounts available for the competitive
grants under section 363(a)(3).
(c) State Plan.--
(1) In general.--For a State to be eligible to
receive an allotment of the funds under subsection (b),
the Governor of the State shall submit to the Secretary
of Labor a State plan in such form and containing such
information as the Secretary may require. At a minimum,
such plan shall include--
(A) a description of the strategies and
activities to be carried out by the State, in
coordination with employers in the State, to
provide subsidized employment opportunities to
unemployed, low-income adults, including
strategies relating to the level and duration
of subsidies consistent with subsection (e)(2);
(B) a description of the requirements the
State will apply relating to the eligibility of
unemployed, low-income adults, consistent with
section 368(6), for subsidized employment
opportunities, which may include criteria to
target assistance to particular categories of
such adults, such as individuals with
disabilities or individuals who have exhausted
all rights to unemployment compensation;
(C) a description of how the funds allotted
to provide subsidized employment opportunities
will be administered in the State and local
areas, in accordance with subsection (d);
(D) a description of the performance
outcomes to be achieved by the State through
the activities carried out under this section
and the processes the State will use to track
performance, consistent with guidance provided
by the Secretary of Labor regarding such
outcomes and processes and with section 367(b);
(E) a description of the coordination of
activities to be carried out with the funds
provided under this section with activities
under title I of the Workforce Investment Act
of 1998, the TANF program under part A of title
IV of the Social Security Act, and other
appropriate Federal and State programs that may
assist unemployed, low-income adults in
obtaining and retaining employment;
(F) a description of the timelines for
implementation of the activities described in
subparagraph (A), and the number of unemployed,
low-income adults expected to be placed in
subsidized employment by quarter;
(G) assurances that the State will report
such information as the Secretary of Labor may
require relating to fiscal, performance and
other matters that the Secretary determines is
necessary to effectively monitor the activities
carried out under this section; and
(H) assurances that the State will ensure
compliance with the labor standards and
protections described in section 367(a) of this
Act.
(2) Submission and approval of state plan.--
(A) Submission with other plans.--The State
plan described in this subsection may be
submitted in conjunction with the State plan
modification or request for funds required
under section 365, and may be submitted as a
modification to a State plan that has been
approved under section 112 of the Workforce
Investment Act of 1998.
(B) Submission and approval.--
(i) Submission.--The Governor shall
submit a plan to the Secretary of Labor
not later than 75 days after the
enactment of this Act and the Secretary
of Labor shall make a determination
regarding the approval or disapproval
of such plans not later than 45 days
after the submission of such plan. If
the plan is disapproved, the Secretary
of Labor may provide a reasonable
period of time in which a disapproved
plan may be amended and resubmitted for
approval.
(ii) Approval.--The Secretary of
Labor shall approve a State plan that
the Secretary determines is consistent
with requirements of this section and
reasonably appropriate and adequate to
carry out the purposes of this section.
If the plan is approved, the Secretary
shall allot funds to States within 30
days after such approval.
(3) Modifications to state plan.--The Governor may
submit a modification to a State plan under this
subsection consistent with the requirements of this
section.
(d) Administration Within the State.--
(1) Option.--The State may administer the funds for
activities under this section through--
(A) the State and local entities
responsible for the administration of the adult
formula program under title I-B of the
Workforce Investment Act of 1998;
(B) the entities responsible for the
administration of the TANF program under part A
of title IV of the Social Security Act; or
(C) a combination of the entities described
in subparagraphs (A) and (B).
(2) Within-state allocations.--
(A) Allocation of funds.--The Governor may
reserve up to 5 percent of the allotment under
subsection (b)(2) for administration and
technical assistance, and shall allocate the
remainder, in accordance with the option
elected under paragraph (1)--
(i) among local workforce
investment areas within the State in
accordance with the factors identified
in subsection (b)(2), except that for
purposes of such allocation references
to a State in such paragraph shall be
deemed to be references to a local
workforce investment area and
references to all States shall be
deemed to be references to all local
areas in the State involved, of which
not more than 10 percent of the funds
allocated to a local workforce
investment area may be used for the
costs of administration of this
section; or
(ii) through entities responsible
for the administration of the TANF
program under part A of title IV of the
Social Security Act in local areas in
such manner as the State may determine
appropriate.
(B) Local plans.--
(i) In general.--In the case where
the responsibility for the
administration of activities is to be
carried out by the entities described
under paragraph (1)(A), in order to
receive an allocation under
subparagraph (A)(i), a local workforce
investment board, in partnership with
the chief elected official of the local
workforce investment area involved,
shall submit to the Governor a local
plan for the use of such funds under
this section not later than 30 days
after the submission of the State plan.
Such local plan may be submitted as a
modification to a local plan approved
under section 118 of the Workforce
Investment Act of 1998.
(ii) Contents.--The local plan
described in clause (i) shall contain
the elements described in subparagraphs
(A)-(H) of subsection (c)(1), as
applied to the local workforce
investment area.
(iii) Approval.--The Governor shall
approve or disapprove the local plan
submitted under clause (i) within 30
days after submission, or if later, 30
days after the approval of the State
plan. The Governor shall approve the
plan unless the Governor determines
that the plan is inconsistent with
requirements of this section or is not
reasonably appropriate and adequate to
carry out the purposes of this section.
If the Governor has not made a
determination within the period
specified under the first sentence of
this clause, the plan shall be
considered approved. If the plan is
disapproved, the Governor may provide a
reasonable period of time in which a
disapproved plan may be amended and
resubmitted for approval. The Governor
shall allocate funds to local workforce
investment areas with approved plans
within 30 days after such approval.
(C) Reallocation of funds to local areas.--
If a local workforce investment board does not
submit a local plan by the time specified in
subparagraph (B) or the Governor does not
approve a local plan, the amount the local
workforce investment area would have been
eligible to receive pursuant to the formula
under subparagraph (A)(i) shall be allocated to
local workforce investment areas that receive
approval of the local plan under subparagraph
(B). Such reallocations shall be made in
accordance with the relative share of the
allocations to such local workforce investment
areas applying the formula factors described
under subparagraph (A)(i).
(e) Use of Funds.--
(1) In general.--The funds under this section shall
be used to provide subsidized employment for
unemployed, low-income adults. The State and local
entities described in subsection (d)(1) may use a
variety of strategies in recruiting employers and
identifying appropriate employment opportunities, with
a priority to be provided to employment opportunities
likely to lead to unsubsidized employment in emerging
or in-demand occupations in the local area. Funds under
this section may be used to provide support services,
such as transportation and child care, that are
necessary to enable the participation of individuals in
subsidized employment opportunities.
(2) Level of subsidy and duration.--The States or
local entities described in subsection (d)(1) may
determine the percentage of the wages and costs of
employing a participant for which an employer may
receive a subsidy with the funds provided under this
section, and the duration of such subsidy, in
accordance with guidance issued by the Secretary. The
State or local entities may establish criteria for
determining such percentage or duration using
appropriate factors such as the size of the employer
and types of employment.
(f) Coordination of Federal Administration.--The Secretary
of Labor shall administer this section in coordination with the
Secretary of Health and Human Services to ensure the effective
implementation of this section.
SEC. 365. SUMMER EMPLOYMENT AND YEAR-ROUND EMPLOYMENT OPPORTUNITIES FOR
LOW-INCOME YOUTH.
(a) In General.--From the funds available under section
363(a)(2), the Secretary of Labor shall make an allotment under
subsection (c) to each State that has a State plan modification
(or other form of request for funds specified in guidance under
subsection (b)) approved under subsection (d) and to each
outlying area and Native American grantee under section 166 of
the Workforce Investment Act of 1998 that meets the
requirements of this section, for the purpose of providing
summer employment and year-round employment opportunities to
low-income youth.
(b) Guidance and Application of Requirements.--
(1) Guidance.--Not later than 20 days after the
date of enactment of this Act, the Secretary of Labor
shall issue guidance regarding the implementation of
this section. Such guidance shall, consistent with this
section, include procedures for the submission and
approval of State plan modifications, or for forms of
requests for funds by the State as may be identified in
such guidance, local plan modifications, or other forms
of requests for funds from local workforce investment
areas as may be identified in such guidance, and the
allotment and allocation of funds, including
reallotment and reallocation of such funds, that
promote the expeditious and effective implementation of
the activities authorized under this section.
(2) Requirements.--Except as otherwise provided in
the guidance described in paragraph (1) and in this
section and other provisions of this Act, the funds
provided for activities under this section shall be
administered in accordance with subtitles B and E of
title I of the Workforce Investment Act of 1998
relating to youth activities.
(c) State Allotments.--
(1) Reservations for outlying areas and tribes.--Of
the funds described subsection (a), the Secretary shall
reserve--
(A) not more than one-quarter of one
percent to provide assistance to outlying areas
to provide summer and year-round employment
opportunities to low-income youth; and
(B) 1.5 percent to provide assistance to
grantees of the Native American programs under
section 166 of the Workforce Investment Act of
1998 to provide summer and year-round
employment opportunities to low-income youth.
(2) States.--After determining the amounts to be
reserved under paragraph (1), the Secretary of Labor
shall allot the remainder of the amounts described in
subsection (a) among the States in accordance with the
factors described in section 364(b)(2) of this Act.
(3) Reallotment.--If the Governor of a State does
not submit a State plan modification or other request
for funds specified in guidance under subsection (b) by
the time specified in subsection (d)(2)(B), or a State
does not receive approval of such State plan
modification or request, the amount the State would
have been eligible to receive pursuant to the formula
under paragraph (2) shall be transferred within the
Fund and added to the amounts available for the
competitive grants under section 363(a)(3).
(d) State Plan Modification.--
(1) In general.--For a State to be eligible to
receive an allotment of the funds under subsection (c),
the Governor of the State shall submit to the Secretary
of Labor a modification to a State plan approved under
section 112 of the Workforce Investment Act of 1998, or
other request for funds described in guidance in
subsection (b), in such form and containing such
information as the Secretary may require. At a minimum,
such plan modification or request shall include--
(A) a description of the strategies and
activities to be carried out to provide summer
employment opportunities and year-round
employment opportunities, including the
linkages to educational activities, consistent
with subsection (f);
(B) a description of the requirements the
States will apply relating to the eligibility
of low-income youth, consistent with section
368(4), for summer employment opportunities and
year-round employment opportunities, which may
include criteria to target assistance to
particular categories of such low-income youth,
such as youth with disabilities, consistent
with subsection (f);
(C) a description of the performance
outcomes to be achieved by the State through
the activities carried out under this section
and the processes the State will use to track
performance, consistent with guidance provided
by the Secretary of Labor regarding such
outcomes and processes and with section 367(b);
(D) a description of the timelines for
implementation of the activities described in
subparagraph (A), and the number of low-income
youth expected to be placed in summer
employment opportunities, and year-round
employment opportunities, respectively, by
quarter;
(E) assurances that the State will report
such information as the Secretary may require
relating to fiscal, performance and other
matters that the Secretary determines is
necessary to effectively monitor the activities
carried out under this section; and
(F) assurances that the State will ensure
compliance with the labor standards protections
described in section 367(a).
(2) Submission and approval of state plan
modification or request.--
(A) Submission.--The Governor shall submit
a modification of the State plan or other
request for funds described in guidance in
subsection (b) to the Secretary of Labor not
later than 30 days after the issuance of such
guidance. The State plan modification or
request for funds required under this
subsection may be submitted in conjunction with
the State plan required under section 364.
(B) Approval.--The Secretary of Labor shall
approve the plan or request submitted under
subparagraph (A) within 30 days after
submission, unless the Secretary determines
that the plan or request is inconsistent with
the requirements of this section. If the
Secretary has not made a determination within
30 days, the plan or request shall be
considered approved. If the plan or request is
disapproved, the Secretary may provide a
reasonable period of time in which a
disapproved plan or request may be amended and
resubmitted for approval. If the plan or
request is approved, the Secretary shall allot
funds to States within 30 days after such
approval.
(3) Modifications to state plan or request.--The
Governor may submit further modifications to a State
plan or request for funds identified under subsection
(b) to carry out this section in accordance with the
requirements of this section.
(e) Within-State Allocation and Administration.--
(1) In general.--Of the funds allotted to the State
under subsection (c), the Governor--
(A) may reserve up to 5 percent of the
allotment for administration and technical
assistance; and
(B) shall allocate the remainder of the
allotment among local workforce investment
areas within the State in accordance with the
factors identified in section 364(b)(2), except
that for purposes of such allocation references
to a State in such paragraph shall be deemed to
be references to a local workforce investment
area and references to all States shall be
deemed to be references to all local areas in
the State involved. Not more than 10 percent of
the funds allocated to a local workforce
investment area may be used for the costs of
administration of this section.
(2) Local plan.--
(A) Submission.--In order to receive an
allocation under paragraph (1)(B), the local
workforce investment board, in partnership with
the chief elected official for the local
workforce investment area involved, shall
submit to the Governor a modification to a
local plan approved under section 118 of the
Workforce Investment Act of 1998, or other form
of request for funds as may be identified in
the guidance issued under subsection (b), not
later than 30 days after the submission by the
State of the modification to the State plan or
other request for funds identified in
subsection (b), describing the strategies and
activities to be carried out under this
section.
(B) Approval.--The Governor shall approve
the local plan submitted under subparagraph (A)
within 30 days after submission, unless the
Governor determines that the plan is
inconsistent with requirements of this section.
If the Governor has not made a determination
within 30 days, the plan shall be considered
approved. If the plan is disapproved, the
Governor may provide a reasonable period of
time in which a disapproved plan may be amended
and resubmitted for approval. The Governor
shall allocate funds to local workforce
investment areas with approved plans within 30
days after approval.
(3) Reallocation.--If a local workforce investment
board does not submit a local plan modification (or
other request for funds identified in guidance under
subsection (b)) by the time specified in paragraph (2),
or does not receive approval of a local plan, the
amount the local workforce investment area would have
been eligible to receive pursuant to the formula under
paragraph (1)(B) shall be allocated to local workforce
investment areas that receive approval of the local
plan modification or request for funds under paragraph
(2). Such reallocations shall be made in accordance
with the relative share of the allocations to such
local workforce investment areas applying the formula
factors described under paragraph (1)(B).
(f) Use of Funds.--
(1) In general.--The funds provided under this
section shall be used--
(A) to provide summer employment
opportunities for low-income youth, ages 16
through 24, with direct linkages to academic
and occupational learning, and may include the
provision of supportive services, such as
transportation or child care, necessary to
enable such youth to participate; and
(B) to provide year round employment
opportunities, which may be combined with other
activities authorized under section 129 of the
workforce investment act of 1998, to low-income
youth, ages 16 through 24, with a priority to
out-of school youth who are--
(i) high school dropouts; or
(ii) recipients of a secondary
school diploma or its equivalent but
who are basic skills deficient
unemployed or underemployed.
(2) Program priorities.--In administering the funds
under this section, the local board and local chief
elected officials shall give a priority to--
(A) identifying employment opportunities
that are--
(i) in emerging or in-demand
occupations in the local workforce
investment area; or
(ii) in the public or nonprofit
sector that meet community needs; and
(B) linking year-round program participants
to training and educational activities that
will provide such participants an industry-
recognized certificate or credential.
(3) Performance accountability.--For activities
funded under this section, in lieu of the requirements
described in section 136 of the Workforce Investment
Act of 1998, State and local workforce investment areas
shall provide such reports as the Secretary of Labor
may require regarding the performance outcomes
described in section 367(a)(5).
SEC. 366. WORK-BASED EMPLOYMENT STRATEGIES OF DEMONSTRATED
EFFECTIVENESS.
(a) In General.--From the funds available under section
363(a)(3), the Secretary of Labor shall award grants on a
competitive basis to eligible entities to carry out work-based
strategies of demonstrated effectiveness.
(b) Use of Funds.--The grants awarded under this section
shall be used to support strategies and activities of
demonstrated effectiveness that are designed to provide
unemployed, low-income adults or low-income youth with the
skills that will lead to employment as part of or upon
completion of participation in such activities. Such strategies
and activities may include--
(1) on-the-job training, registered apprenticeship
programs, or other programs that combine work with
skills development;
(2) sector-based training programs that have been
designed to meet the specific requirements of an
employer or group of employers in that sector and where
employers are committed to hiring individuals upon
successful completion of the training;
(3) training that supports an industry sector or an
employer-based or labor-management committee industry
partnership which includes a significant work-
experience component;
(4) acquisition of industry-recognized credentials
in a field identified by the State or local workforce
investment area as a growth sector or demand industry
in which there are likely to be significant job
opportunities in the short-term;
(5) connections to immediate work opportunities,
including subsidized employment opportunities, or
summer employment opportunities for youth, that
includes concurrent skills training and other supports;
(6) career academies that provide students with the
academic preparation and training, including paid
internships and concurrent enrollment in community
colleges or other postsecondary institutions, needed to
pursue a career pathway that leads to postsecondary
credentials and high-demand jobs; and
(7) adult basic education and integrated basic
education and training models for low-skilled adults,
hosted at community colleges or at other sites, to
prepare individuals for jobs that are in demand in a
local area.
(c) Eligible Entity.--An eligible entity shall include a
local chief elected official, in collaboration with the local
workforce investment board for the local workforce investment
area involved (which may include a partnership with of such
officials and boards in the region and in the State), or an
entity eligible to apply for an Indian and Native American
grant under section 166 of the Workforce Investment Act of
1998, and may include, in partnership with such officials,
boards, and entities, the following:
(1) employers or employer associations;
(2) adult education providers and postsecondary
educational institutions, including community colleges;
(3) community-based organizations;
(4) joint labor-management committees;
(5) work-related intermediaries; or
(6) other appropriate organizations.
(d) Application.--An eligible entity seeking to receive a
grant under this section shall submit to the Secretary of Labor
an application at such time, in such manner, and containing
such information as the Secretary may require. At a minimum,
the application shall--
(1) describe the strategies and activities of
demonstrated effectiveness that the eligible entities
will carry out to provide unemployed, low-income adults
and low-income youth with the skills that will lead to
employment upon completion of participation in such
activities;
(2) describe the requirements that will apply
relating to the eligibility of unemployed, low-income
adults or low-income youth, consistent with paragraphs
(4) and (6) of section 368, for activities carried out
under this section, which may include criteria to
target assistance to particular categories of such
adults and youth, such as individuals with disabilities
or individuals who have exhausted all rights to
unemployment compensation;
(3) describe how the strategies and activities
address the needs of the target populations identified
in paragraph (2) and the needs of employers in the
local area;
(4) describe the expected outcomes to be achieved
by implementing the strategies and activities;
(5) provide evidence that the funds provided may be
expended expeditiously and efficiently to implement the
strategies and activities;
(6) describe how the strategies and activities will
be coordinated with other Federal, State and local
programs providing employment, education and supportive
activities;
(7) provide evidence of employer commitment to
participate in the activities funded under this
section, including identification of anticipated
occupational and skill needs;
(8) provide assurances that the grant recipient
will report such information as the Secretary may
require relating to fiscal, performance and other
matters that the Secretary determines is necessary to
effectively monitor the activities carried out under
this section; and
(9) provide assurances that the use of the funds
provided under this section will comply with the labor
standards and protections described section 367(a).
(e) Priority in Awards.--In awarding grants under this
section, the Secretary of Labor shall give a priority to
applications submitted by eligible entities from areas of high
poverty and high unemployment, as defined by the Secretary,
such as Public Use Microdata Areas (PUMAs) as designated by the
Census Bureau.
(f) Coordination of Federal Administration.--The Secretary
of Labor shall administer this section in coordination with the
Secretary of Education, Secretary of Health and Human Services,
and other appropriate agency heads, to ensure the effective
implementation of this section.
SEC. 367. GENERAL REQUIREMENTS.
(a) Labor Standards and Protections.--Activities provided
with funds under this Act shall be subject to the requirements
and restrictions, including the labor standards, described in
section 181 of the Workforce Investment Act of 1998 and the
nondiscrimination provisions of section 188 of such Act, in
addition to other applicable federal laws.
(b) Reporting.--The Secretary may require the reporting of
information relating to fiscal, performance and other matters
that the Secretary determines is necessary to effectively
monitor the activities carried out with funds provided under
this Act. At a minimum, grantees and subgrantees shall provide
information relating to--
(1) the number individuals participating in
activities with funds provided under this Act and the
number of such individuals who have completed such
participation;
(2) the expenditures of funds provided under the
Act;
(3) the number of jobs created pursuant to the
activities carried out under this Act;
(4) the demographic characteristics of individuals
participating in activities under this Act; and
(5) the performance outcomes of individuals
participating in activities under this act, including--
(A) for adults participating in activities
funded under section 364 of this act--
(i) entry in unsubsidized
employment,
(ii) retention in unsubsidized
employment, and
(iii) earnings in unsubsidized
employment;
(B) for low-income youth participating in
summer employment activities under sections 365
and 366--
(i) work readiness skill attainment
using an employer validated checklist;
or
(ii) placement in or return to
secondary or postsecondary education or
training, or entry into unsubsidized
employment;
(C) for low-income youth participating in
year-round employment activities under section
365 or in activities under section 366--
(i) placement in or return to post-
secondary education;
(ii) attainment of high school
diploma or its equivalent;
(iii) attainment of an industry-
recognized credential; and
(iv) entry into unsubsidized
employment, retention, and earnings as
described in subparagraph (A);
(D) for unemployed, low-income adults
participating in activities under section 366--
(i) entry into unsubsidized
employment, retention, and earnings as
described in subparagraph (A); and
(ii) the attainment of industry-
recognized credentials.
(c) Activities Required To Be Additional.--Funds provided
under this Act shall only be used for activities that are in
addition to activities that would otherwise be available in the
State or local area in the absence of such funds.
(d) Additional Requirements.--The Secretary of Labor may
establish such additional requirements as the Secretary
determines may be necessary to ensure fiscal integrity,
effective monitoring, and the appropriate and prompt
implementation of the activities under this Act.
(e) Report of Information and Evaluations to Congress and
the Public.--The Secretary of Labor shall provide to the
appropriate Committees of the Congress and make available to
the public the information reported pursuant to subsection (b)
and the evaluations of activities carried out pursuant to the
funds reserved under section 363(b).
SEC. 368. DEFINITIONS.
In this Act:
(1) Local chief elected official.--The term ``local
chief elected official'' means the chief elected
executive officer of a unit of local government in a
local workforce investment area or in the case where
more than one unit of general government, the
individuals designated under an agreement described in
section 117(c)(1)(B) of the Workforce Investment Act of
1998.
(2) Local workforce investment area.--The term
``local workforce investment area'' means such area
designated under section 116 of the Workforce
Investment Act of 1998.
(3) Local workforce investment board.--The term
``local workforce investment board'' means such board
established under section 117 of the Workforce
Investment Act of 1998.
(4) Low-income youth.--The term ``low-income
youth'' means an individual who--
(A) is aged 16 through 24;
(B) meets the definition of a low-income
individual provided in section 101(25) of the
Workforce Investment Act of 1998, except that
States, local workforce investment areas under
section 365 and eligible entities under section
366(c), subject to approval in the applicable
State plans, local plans, and applications for
funds, may increase the income level specified
in subparagraph (B)(i) of such section to an
amount not in excess of 200 percent of the
poverty line for purposes of determining
eligibility for participation in activities
under sections 365 and 366 of this Act; and
(C) is in one or more of the categories
specified in section 101(13)(C) of the
Workforce Investment Act of 1998.
(5) Outlying area.--The term ``outlying area''
means the United States Virgin Islands, Guam, American
Samoa, the Commonwealth of the Northern Mariana
Islands, and the Republic of Palau.
(6) Unemployed, low-income adult.--The term
``unemployed, low-income adult'' means an individual
who--
(A) is age 18 or older;
(B) is without employment and is seeking
assistance under this Act to obtain employment;
and
(C) meets the definition of a ``low-income
individual'' under section 101(25) of the
Workforce Investment Act of 1998, except that
for that States, local entities described in
section 364(d)(1) and eligible entities under
section 366(c), subject to approval in the
applicable State plans, local plans, and
applications for funds, may increase the income
level specified in subparagraph (B)(i) of such
section to an amount not in excess of 200
percent of the poverty line for purposes of
determining eligibility for participation in
activities under sections 364 and 366 of this
Act.
(7) State.--The term ``State'' means each of the
several States of the United States, the District of
Columbia, and Puerto Rico.
Subtitle D--Prohibition of Discrimination in Employment on the Basis of
an Individual's Status as Unemployed
SEC. 371. SHORT TITLE.
This subtitle may be cited as the ``Fair Employment
Opportunity Act of 2011''.
SEC. 372. FINDINGS AND PURPOSE.
(a) Findings.--Congress finds that denial of employment
opportunities to individuals because of their status as
unemployed is discriminatory and burdens commerce by--
(1) reducing personal consumption and undermining
economic stability and growth;
(2) squandering human capital essential to the
Nation's economic vibrancy and growth;
(3) increasing demands for Federal and State
unemployment insurance benefits, reducing trust fund
assets, and leading to higher payroll taxes for
employers, cuts in benefits for jobless workers, or
both;
(4) imposing additional burdens on publicly funded
health and welfare programs; and
(5) depressing income, property, and other tax
revenues that the Federal Government, States, and
localities rely on to support operations and
institutions essential to commerce.
(b) Purposes.--The purposes of this Act are--
(1) to prohibit employers and employment agencies
from disqualifying an individual from employment
opportunities because of that individual's status as
unemployed;
(2) to prohibit employers and employment agencies
from publishing or posting any advertisement or
announcement for an employment opportunity that
indicates that an individual's status as unemployed
disqualifies that individual for the opportunity; and
(3) to eliminate the burdens imposed on commerce
due to the exclusion of such individuals from
employment.
SEC. 373. DEFINITIONS.
As used in this Act--
(1) the term ``affected individual'' means any
person who was subject to an unlawful employment
practice solely because of that individual's status as
unemployed;
(2) the term ``Commission'' means the Equal
Employment Opportunity Commission;
(3) the term ``employee'' means--
(A) an employee as defined in section
701(f) of the Civil Rights Act of 1964 (42
U.S.C. 2000e(f));
(B) a State employee to which section
302(a)(1) of the Government Employee Rights Act
of 1991 (42 U.S.C. 2000e-16b(a)(1)) applies;
(C) a covered employee, as defined in
section 101 of the Congressional Accountability
Act of 1995 (2 U.S.C. 1301) or section 411(c)
of title 3, United States Code; or
(D) an employee or applicant to which
section 717(a) of the Civil Rights Act of 1964
(42 U.S.C. 2000e-16(a)) applies;
(4) the term ``employer'' means--
(A) a person engaged in an industry
affecting commerce (as defined in section
701(h) of the Civil Rights Act of 1964 (42
U.S.C. 2000e(h)) who has 15 or more employees
for each working day in each of 20 or more
calendar weeks in the current or preceding
calendar year, and any agent of such a person,
but does not include a bona fide private
membership club that is exempt from taxation
under section 501(c) of the Internal Revenue
Code of 1986;
(B) an employing authority to which section
302(a)(1) of the Government Employee Rights Act
of 1991 applies;
(C) an employing office, as defined in
section 101 of the Congressional Accountability
Act of 1995 or section 411(c) of title 3,
United States Code; or
(D) an entity to which section 717(a) of
the Civil Rights Act of 1964 (42 U.S.C. 2000e-
16(a)) applies;
(5) the term ``employment agency'' means any person
regularly undertaking with or without compensation to
procure employees for an employer or to procure for
individuals opportunities to work as employees for an
employer and includes an agent of such a person, and
any person who maintains an Internet website or print
medium that publishes advertisements or announcements
of openings in jobs for employees;
(6) the term ``person'' has the meaning given the
term in section 701(a) of the Civil Rights Act of 1964
(42 U.S.C. 2000e(a)); and
(7) the term ``status as unemployed'', used with
respect to an individual, means that the individual, at
the time of application for employment or at the time
of action alleged to violate this Act, does not have a
job, is available for work and is searching for work.
SEC. 374. PROHIBITED ACTS.
(a) Employers.--It shall be an unlawful employment practice
for an employer to--
(1) publish in print, on the Internet, or in any
other medium, an advertisement or announcement for an
employee for any job that includes--
(A) any provision stating or indicating
that an individual's status as unemployed
disqualifies the individual for any employment
opportunity; or
(B) any provision stating or indicating
that an employer will not consider or hire an
individual for any employment opportunity based
on that individual's status as unemployed;
(2) fail or refuse to consider for employment, or
fail or refuse to hire, an individual as an employee
because of the individual's status as unemployed; or
(3) direct or request that an employment agency
take an individual's status as unemployed into account
to disqualify an applicant for consideration,
screening, or referral for employment as an employee.
(b) Employment Agencies.--It shall be an unlawful
employment practice for an employment agency to--
(1) publish, in print or on the Internet or in any
other medium, an advertisement or announcement for any
vacancy in a job, as an employee, that includes--
(A) any provision stating or indicating
that an individual's status as unemployed
disqualifies the individual for any employment
opportunity; or
(B) any provision stating or indicating
that the employment agency or an employer will
not consider or hire an individual for any
employment opportunity based on that
individual's status as unemployed;
(2) screen, fail or refuse to consider, or fail or
refuse to refer an individual for employment as an
employee because of the individual's status as
unemployed; or
(3) limit, segregate, or classify any individual in
any manner that would limit or tend to limit the
individual's access to information about jobs, or
consideration, screening, or referral for jobs, as
employees, solely because of an individual's status as
unemployed.
(c) Interference With Rights, Proceedings or Inquiries.--It
shall be unlawful for any employer or employment agency to--
(1) interfere with, restrain, or deny the exercise
of or the attempt to exercise, any right provided under
this Act; or
(2) fail or refuse to hire, to discharge, or in any
other manner to discriminate against any individual, as
an employee, because such individual--
(A) opposed any practice made unlawful by
this Act;
(B) has asserted any right, filed any
charge, or has instituted or caused to be
instituted any proceeding, under or related to
this Act;
(C) has given, or is about to give, any
information in connection with any inquiry or
proceeding relating to any right provided under
this Act; or
(D) has testified, or is about to testify,
in any inquiry or proceeding relating to any
right provided under this Act.
(d) Construction.--Nothing in this Act is intended to
preclude an employer or employment agency from considering an
individual's employment history, or from examining the reasons
underlying an individual's status as unemployed, in assessing
an individual's ability to perform a job or in otherwise making
employment decisions about that individual. Such consideration
or examination may include an assessment of whether an
individual's employment in a similar or related job for a
period of time reasonably proximate to the consideration of
such individual for employment is job-related or consistent
with business necessity.
SEC. 375. ENFORCEMENT.
(a) Enforcement Powers.--With respect to the administration
and enforcement of this Act--
(1) the Commission shall have the same powers as
the Commission has to administer and enforce--
(A) title VII of the Civil Rights Act of
1964 (42 U.S.C. 2000e et seq.); or
(B) sections 302 and 304 of the Government
Employee Rights Act of 1991 (42 U.S.C. 2000e-
16b and 2000e-16c),
in the case of an affected individual who would be
covered by such title, or by section 302(a)(1) of the
Government Employee Rights Act of 1991 (42 U.S.C.
2000e-16b(a)(1)), respectively;
(2) the Librarian of Congress shall have the same
powers as the Librarian of Congress has to administer
and enforce title VII of the Civil Rights Act of 1964
(42 U.S.C. 2000e et seq.) in the case of an affected
individual who would be covered by such title;
(3) the Board (as defined in section 101 of the
Congressional Accountability Act of 1995 (2 U.S.C.
1301)) shall have the same powers as the Board has to
administer and enforce the Congressional Accountability
Act of 1995 (2 U.S.C. 1301 et seq.) in the case of an
affected individual who would be covered by section
201(a)(1) of such Act (2 U.S.C. 1311(a)(1));
(4) the Attorney General shall have the same powers
as the Attorney General has to administer and enforce--
(A) title VII of the Civil Rights Act of
1964 (42 U.S.C. 2000e et seq.); or
(B) sections 302 and 304 of the Government
Employee Rights Act of 1991 (42 U.S.C. 2000e-
16b and 2000e-16c);
in the case of an affected individual who would be
covered by such title, or of section 302(a)(1) of the
Government Employee Rights Act of 1991 (42 U.S.C.
2000e-16b(a)(1)), respectively;
(5) the President, the Commission, and the Merit
Systems Protection Board shall have the same powers as
the President, the Commission, and the Board,
respectively, have to administer and enforce chapter 5
of title 3, United States Code, in the case of an
affected individual who would be covered by section 411
of such title; and
(6) a court of the United States shall have the
same jurisdiction and powers as the court has to
enforce--
(A) title VII of the Civil Rights Act of
1964 (42 U.S.C. 2000e et seq.) in the case of a
claim alleged by such individual for a
violation of such title;
(B) sections 302 and 304 of the Government
Employee Rights Act of 1991 (42 U.S.C. 2000e-
16b and 2000e-16c) in the case of a claim
alleged by such individual for a violation of
section 302(a)(1) of such Act (42 U.S.C. 2000e-
16b(a)(1));
(C) the Congressional Accountability Act of
1995 (2 U.S.C. 1301 et seq.) in the case of a
claim alleged by such individual for a
violation of section 201(a)(1) of such Act (2
U.S.C. 1311(a)(1)); and
(D) chapter 5 of title 3, United States
Code, in the case of a claim alleged by such
individual for a violation of section 411 of
such title.
(b) Procedures.--The procedures applicable to a claim
alleged by an individual for a violation of this Act are--
(1) the procedures applicable for a violation of
title VII of the Civil Rights Act of 1964 (42 U.S.C.
2000e et seq.) in the case of a claim alleged by such
individual for a violation of such title;
(2) the procedures applicable for a violation of
section 302(a)(1) of the Government Employee Rights Act
of 1991 (42 U.S.C. 2000e-16b(a)(1)) in the case of a
claim alleged by such individual for a violation of
such section;
(3) the procedures applicable for a violation of
section 201(a)(1) of the Congressional Accountability
Act of 1995 (2 U.S.C. 1311(a)(1)) in the case of a
claim alleged by such individual for a violation of
such section; and
(4) the procedures applicable for a violation of
section 411 of title 3, United States Code, in the case
of a claim alleged by such individual for a violation
of such section.
(c) Remedies.--
(1) In any claim alleging a violation of Section
374(a)(1) or 374(b)(1) of this Act, an individual, or
any person acting on behalf of the individual as set
forth in Section 375(a) of this Act, may be awarded, as
appropriate--
(A) an order enjoining the respondent from
engaging in the unlawful employment practice;
(B) reimbursement of costs expended as a
result of the unlawful employment practice;
(C) an amount in liquidated damages not to
exceed $1,000 for each day of the violation;
and
(D) reasonable attorney's fees (including
expert fees) and costs attributable to the
pursuit of a claim under this Act, except that
no person identified in Section 103(a) of this
Act shall be eligible to receive attorney's
fees.
(2) In any claim alleging a violation of any other
subsection of this Act, an individual, or any person
acting on behalf of the individual as set forth in
Section 375(a) of this Act, may be awarded, as
appropriate, the remedies available for a violation of
title VII of the Civil Rights Act of 1964 (42 U.S.C.
2000e et seq.), section 302(a)(1) of the Government
Employee Rights Act of 1991 (42 U.S.C. 2000e-
16b(a)(1)), section 201(a)(1) of the Congressional
Accountability Act of 1995 (2 U.S.C. 1311(a)(1)), and
section 411 of title 3, United States Code, except that
in a case in which wages, salary, employment benefits,
or other compensation have not been denied or lost to
the individual, damages may be awarded in an amount not
to exceed $5,000.
SEC. 376. FEDERAL AND STATE IMMUNITY.
(a) Abrogation of State Immunity.--A State shall not be
immune under the 11th Amendment to the Constitution from a suit
brought in a Federal court of competent jurisdiction for a
violation of this Act.
(b) Waiver of State Immunity.--
(1) In general.--
(A) Waiver.--A State's receipt or use of
Federal financial assistance for any program or
activity of a State shall constitute a waiver
of sovereign immunity, under the 11th Amendment
to the Constitution or otherwise, to a suit
brought by an employee or applicant for
employment of that program or activity under
this Act for a remedy authorized under Section
375(c) of this Act.
(B) Definition.--In this paragraph, the
term ``program or activity'' has the meaning
given the term in section 606 of the Civil
Rights Act of 1964 (42 U.S.C. 2000d-4a).
(2) Effective date.--With respect to a particular
program or activity, paragraph (1) applies to conduct
occurring on or after the day, after the date of
enactment of this Act, on which a State first receives
or uses Federal financial assistance for that program
or activity.
(c) Remedies Against State Officials.--An official of a
State may be sued in the official capacity of the official by
any employee or applicant for employment who has complied with
the applicable procedures of this Act, for relief that is
authorized under this Act.
(d) Remedies Against the United States and the States.--
Notwithstanding any other provision of this Act, in an action
or administrative proceeding against the United States or a
State for a violation of this Act, remedies (including remedies
at law and in equity) are available for the violation to the
same extent as such remedies would be available against a non-
governmental entity.
SEC. 377. RELATIONSHIP TO OTHER LAWS.
This Act shall not invalidate or limit the rights,
remedies, or procedures available to an individual claiming
discrimination prohibited under any other Federal law or
regulation or any law or regulation of a State or political
subdivision of a State.
SEC. 378. SEVERABILITY.
If any provision of this Act, or the application of the
provision to any person or circumstance, is held to be invalid,
the remainder of this Act and the application of the provision
to any other person or circumstances shall not be affected by
the invalidity.
SEC. 379. EFFECTIVE DATE.
This Act shall take effect on the date of enactment of this
Act and shall not apply to conduct occurring before the
effective date.
TITLE IV--OFFSETS
Subtitle A--28 Percent Limitation on Certain Deductions and Exclusions
SEC. 401. 28 PERCENT LIMITATION ON CERTAIN DEDUCTIONS AND EXCLUSIONS.
(a) In General.--Part I of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following new section:
``SEC. 69. LIMITATION ON CERTAIN DEDUCTIONS AND EXCLUSIONS.
``(a) In General.--In the case of an individual for any
taxable year, if--
``(1) the taxpayer's adjusted gross income is
above--
``(A) $250,000 in the case of a joint
return within the meaning of section 6013,
``(B) $225,000 in the case of a head of
household return,
``(C) $125,000 in the case of a married
filing separately return, or
``(D) $200,000 in all other cases; and
``(2) the taxpayer's adjusted taxable income for
such taxable year exceeds the minimum marginal rate
amount,
then the tax imposed under section 1 with respect to such
taxpayer for such taxable year shall be increased by the amount
determined under subsection (b). If the taxpayer is subject to
tax under section 55, then in lieu of an increase in tax under
section 1, the tax imposed under section 55 with respect to
such taxpayer for such taxable year shall be increased by the
amount determined under subsection (c).
``(b) Additional Amount.--The amount determined under this
subsection with respect to any taxpayer for any taxable year is
the excess (if any) of--
``(1) the tax which would be imposed under section
1 with respect to such taxpayer for such taxable year
if `adjusted taxable income' were substituted for
`taxable income' each place it appears therein, over
``(2) the sum of--
``(A) the tax which would be imposed under
such section with respect to such taxpayer for
such taxable year on the greater of--
``(i) taxable income, or
``(ii) the minimum marginal rate
amount, plus
``(B) 28 percent of the excess (if any) of
the taxpayer's adjusted taxable income over the
greater of--
``(i) the taxpayer's taxable
income, or
``(ii) the minimum marginal rate
amount.
``(c) Additional AMT Amount.--
``(1) The amount determined under this subsection
with respect to any taxpayer for any taxable year is
the additional amount computed under subsection (b)
multiplied by the ratio that--
``(A) the result of--
``(i) all itemized deductions
(before the application of section 68),
plus
``(ii) the specified above-the-line
deductions and specified exclusions,
minus
``(iii) the amount of deductions
disallowed under section 56(b)(1)(A)
and (B), minus
``(iv) the non-preference
disallowed deductions, bears to
``(B) the sum of--
``(i) the total of itemized
deductions (after the application of
section 68), plus
``(ii) the specified above-the-line
deductions and specified exclusions.
``(2) If the top of the AMT exemption phase-out
range for the taxpayer exceeds the minimum marginal
rate amount for the taxpayer and if the taxpayer's
alternative minimum taxable income does not exceed the
top of the AMT exemption phase-out range, the taxpayer
must increase its additional AMT amount by 7 percent of
the excess of--
``(A) the lesser of--
``(i) the top of the AMT exemption
phase-out range, or
``(ii) the taxpayer's alternative
minimum taxable income, computed--
``(I) without regard to any
itemized deduction or any
specified above-the-line
deduction, and
``(II) by including the
amount of any specified
exclusion; over
``(B) the greater of--
``(i) the taxpayer's alternative
minimum taxable income, or
``(ii) the minimum marginal rate
amount.
``(d) Minimum Marginal Rate Amount.--For purposes of this
section, the term `minimum marginal rate amount' means, with
respect to any taxpayer for any taxable year, the highest
amount of the taxpayer's taxable income which would be subject
to a marginal rate of tax under section 1 that is less than 36
percent with respect to such taxable year.
``(e) Adjusted Taxable Income.--For purposes of this
section--
``(1) In general.--The term `adjusted taxable
income' means taxable income computed--
``(A) without regard to any itemized
deduction or any specified above-the-line
deduction, and
``(B) by including in gross income any
specified exclusion.
``(2) Specified above-the-line deduction.--The term
`specified above-the-line deduction' means--
``(A) the deduction provided under section
162(l) (relating to special rules for health
insurance costs of self-employed individuals),
``(B) the deduction provided under section
199 (relating to income attributable to
domestic production activities), and
``(C) the deductions provided under the
following paragraphs of section 62(a):
``(i) Paragraph (2) (relating to
certain trade and business deductions
of employees), other than subparagraph
(A) thereof.
``(ii) Paragraph (15) (relating to
moving expenses).
``(iii) Paragraph (16) (relating to
Archer MSAs).
``(iv) Paragraph (17) (relating to
interest on education loans).
``(v) Paragraph (18) (relating to
higher education expenses).
``(vi) Paragraph (19) (relating to
health savings accounts).
``(3) Specified exclusion.--The term `specified
exclusion' means--
``(A) any interest excluded under section
103,
``(B) any exclusion with respect to the
cost described in section 6051(a)(14) (without
regard to subparagraph (B) thereof), and
``(C) any foreign earned income excluded
under section 911.
``(f) Non-Preference Disallowed Deductions.--For purposes
of this section, the term `AMT-allowed deductions' means all
itemized deductions disallowed by section 68 multiplied by the
ratio that--
``(1) a taxpayer's itemized deductions for the
taxable year that are subject to section 68 (that is,
not including those excluded under section 68(c)) and
that are not limited under section 56(b)(1)(A) or (B),
bears to
``(2) the taxpayer's itemized deductions for the
taxable year that are subject to section 68 (that is,
not including those excluded under section 68(c)).
``(g) Regulations.--The Secretary shall prescribe such
regulations as may be appropriate to carry out this section,
including regulations which provide appropriate adjustments to
the additional AMT amount.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning on or after January 1,
2013.
Subtitle B--Tax Carried Interest in Investment Partnerships as Ordinary
Income
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 of the Internal Revenue Code of 1986 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--
``(A) In general.--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--
``(i) 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
``(ii) 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) Election.--The election under
subparagraph (A)(ii) shall be made under rules
similar to the rules of subsection (b)(2).''.
(b) Effective Date.--The amendments made by this section
shall apply to interests in partnerships transferred after
December 31, 2012.
SEC. 412. SPECIAL RULES FOR PARTNERS PROVIDING INVESTMENT MANAGEMENT
SERVICES TO PARTNERSHIPS.
(a) In General.--Part I of subchapter K of chapter 1 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following new section:
``SEC. 710. SPECIAL RULES FOR PARTNERS PROVIDING INVESTMENT MANAGEMENT
SERVICES TO PARTNERSHIPS.
``(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) an amount equal to the net capital
gain with respect to such interest for any
partnership taxable year shall be treated as
ordinary income, and
``(B) subject to the limitation of
paragraph (2), an amount equal to the net
capital loss with respect to such interest for
any partnership taxable year shall be treated
as an ordinary loss.
``(2) Recharacterization of losses limited to
recharacterized gains.--The amount treated as ordinary
loss under paragraph (1)(B) for any taxable year shall
not exceed the excess (if any) of--
``(A) the aggregate amount treated as
ordinary income under paragraph (1)(A) with
respect to the investment services partnership
interest for all preceding partnership taxable
years to which this section applies, over
``(B) the aggregate amount treated as
ordinary loss under paragraph (1)(B) with
respect to such interest for all preceding
partnership taxable years to which this section
applies.
``(3) Allocation to items of gain and loss.--
``(A) Net capital gain.--The amount treated
as ordinary income under paragraph (1)(A) shall
be allocated ratably among the items of long-
term capital gain taken into account in
determining such net capital gain.
``(B) Net capital loss.--The amount treated
as ordinary loss under paragraph (1)(B) shall
be allocated ratably among the items of long-
term capital loss and short-term capital loss
taken into account in determining such net
capital loss.
``(4) Terms relating to capital gains and losses.--
For purposes of this section--
``(A) In general.--Net capital gain, long-
term capital gain, and long-term capital loss,
with respect to any investment services
partnership interest for any taxable year,
shall be determined under section 1222, except
that such section shall be applied--
``(i) without regard to the
recharacterization of any item as
ordinary income or ordinary loss under
this section,
``(ii) by only taking into account
items of gain and loss taken into
account by the holder of such interest
under section 702 with respect to such
interest for such taxable year,
``(iii) by treating property which
is taken into account in determining
gains and losses to which section 1231
applies as capital assets held for more
than 1 year, and
``(iv) without regard to section
1202.
``(B) Net capital loss.--The term `net
capital loss' means the excess of the losses
from sales or exchanges of capital assets over
the gains from such sales or exchanges. Rules
similar to the rules of clauses (i) through
(iv) of subparagraph (A) shall apply for
purposes of the preceding sentence.
``(5) Special rules for dividends.--
``(A) Individuals.--Any dividend allocated
to any investment services partnership interest
shall not be treated as qualified dividend
income for purposes of section 1(h).
``(B) Corporations.--No deduction shall be
allowed under section 243 or 245 with respect
to any dividend allocated to any investment
services partnership interest.
``(b) Dispositions of Partnership Interests.--
``(1) Gain.--
``(A) In general.--Any gain on the
disposition of an investment services
partnership interest shall be--
``(i) treated as ordinary income,
and
``(ii) recognized notwithstanding
any other provision of this subtitle.
``(B) Exceptions--Certain transfers to
charities and related persons.--Subparagraph
(A) shall not apply to--
``(i) a disposition by gift,
``(ii) a transfer at death, or
``(iii) other disposition
identified by the Secretary as a
disposition with respect to which it
would be inconsistent with the purposes
of this section to apply subparagraph
(A),
if such gift, transfer, or other disposition is
to an organization described in section
170(b)(1)(A) (other than any organization
described in section 509(a)(3) or any fund or
account described in section 4966(d)(2)) or a
person with respect to whom the transferred
interest is an investment services partnership
interest.
``(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 amount treated as
ordinary income under subsection (a) with
respect to such interest for all partnership
taxable years to which this section applies,
over
``(B) the aggregate amount treated as
ordinary loss under subsection (a) with respect
to such interest for all partnership taxable
years to which this section applies.
``(3) Election with respect to certain exchanges.--
Paragraph (1)(A)(ii) 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.
``(4) Distributions of partnership property.--
``(A) In general.--In the case of any
distribution of property by a partnership with
respect to any investment services partnership
interest held by a partner, the partner
receiving such property shall recognize gain
equal to 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 such partner
(determined without regard to
subparagraph (C)).
``(B) Treatment of gain as ordinary
income.--Any gain recognized by such partner
under subparagraph (A) shall be treated as
ordinary income to the same extent and in the
same manner as the increase in such partner's
distributive share of the taxable income of the
partnership would be treated under subsection
(a) if, immediately prior to the distribution,
the partnership had sold the distributed
property at fair market value and all of the
gain from such disposition were allocated to
such partner. For purposes of applying
paragraphs (2) and (3) of subsection (a), any
gain treated as ordinary income under this
subparagraph shall be treated as an amount
treated as ordinary income under subsection
(a)(1)(A).
``(C) Adjustment of basis.--In the case a
distribution to which subparagraph (A) applies,
the basis of the distributed property in the
hands of the distributee partner shall be the
fair market value of such property.
``(D) Special rules with respect to
mergers, divisions, and technical
terminations.--In the case of a taxpayer which
satisfies requirements similar to the
requirements of subparagraphs (A) and (B) of
paragraph (3), this paragraph and paragraph
(1)(A)(ii) 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).
``(c) Investment Services Partnership Interest.--For
purposes of this section--
``(1) In general.--The term `investment services
partnership interest' means any interest in an
investment partnership acquired or held by any person
in connection with the conduct of a trade or business
described in paragraph (2) by such person (or any
person related to such person). An interest in an
investment partnership held by any person--
``(A) shall not be treated as an investment
services partnership interest for any period
before the first date on which it is so held in
connection with such a trade or business,
``(B) shall not cease to be an investment
services partnership interest merely because
such person holds such interest other than in
connection with such a trade or business, and
``(C) shall be treated as an investment
services partnership interest if acquired from
a related person in whose hands such interest
was an investment services partnership
interest.
``(2) Businesses to which this section applies.--A
trade or business is described in this paragraph if
such trade or business primarily involves the
performance of any of the following services with
respect to assets held (directly or indirectly) by the
investment partnership referred to in paragraph (1):
``(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).
``(3) Investment partnership.--
``(A) In general.--The term `investment
partnership' means any partnership if, at the
end of any calendar quarter ending after
December 31, 2012--
``(i) substantially all of the
assets of the partnership are specified
assets (determined without regard to
any section 197 intangible within the
meaning of section 197(d)), and
``(ii) more than half of the
contributed capital of the partnership
is attributable to contributions of
property by one or more persons in
exchange for interests in the
partnership which (in the hands of such
persons) constitute property held for
the production of income.
``(B) Special rules for determining if
property held for the production of income.--
Except as otherwise provided by the Secretary,
for purposes of determining whether any
interest in a partnership constitutes property
held for the production of income under
subparagraph (A)(ii)--
``(i) any election under subsection
(e) or (f) of section 475 shall be
disregarded, and
``(ii) paragraph (5)(B) shall not
apply.
``(C) Antiabuse rules.--The Secretary may
issue regulations or other guidance which
prevent the avoidance of the purposes of
subparagraph (A), including regulations or
other guidance which treat convertible and
contingent debt (and other debt having the
attributes of equity) as a capital interest in
the partnership.
``(D) Controlled groups of entities.--
``(i) In general.--In the case of a
controlled group of entities, if an
interest in the partnership received in
exchange for a contribution to the
capital of the partnership by any
member of such controlled group would
(in the hands of such member)
constitute property not held for the
production of income, then any interest
in such partnership held by any member
of such group shall be treated for
purposes of subparagraph (A) as
constituting (in the hands of such
member) property not held for the
production of income.
``(ii) Controlled group of
entities.--For purposes of clause (i),
the term `controlled group of entities'
means a controlled group of
corporations as defined in section
1563(a)(1), applied without regard to
subsections (a)(4) and (b)(2) of
section 1563. A partnership or any
other entity (other than a corporation)
shall be treated as a member of a
controlled group of entities if such
entity is controlled (within the
meaning of section 954(d)(3)) by
members of such group (including any
entity treated as a member of such
group by reason of this sentence).
``(4) 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)), cash or cash equivalents, or options or
derivative contracts with respect to any of the
foregoing.
``(5) Related persons.--
``(A) In general.--A person shall be
treated as related to another person if the
relationship between such persons is described
in section 267(b) or 707(b).
``(B) Attribution of partner services.--Any
service described in paragraph (2) which is
provided by a partner of a partnership shall be
treated as also provided by such partnership.
``(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 gain and loss
(and any dividends) 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)(2) 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 gain and loss (and any
dividends) 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 and
capital contributions.--In the case of an interest in a
partnership which was 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 or by reason of a
change in the capital contributions to such
partnership, becomes an investment services partnership
interest, the qualified capital interest of the holder
of such partnership interest immediately after such
change shall not, for purposes of this subsection, 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)(2) 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.
``(C) Technical terminations, etc.,
disregarded.--No increase or decrease in the
qualified capital interest of any partner shall
result from a termination, merger,
consolidation, or division described in section
708, or any similar transaction.
``(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). The preceding sentence shall not
apply to the extent the loan or other advance
is repaid before January 1, 2013 unless such
repayment is made with the proceeds of a loan
or other advance described in the preceding
sentence.
``(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)(2) 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 investment 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)(5) 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 investment 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)(2).
``(D) Investment entity.--The term
`investment entity' means any entity which, if
it were a partnership, would be an investment
partnership.
``(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, and
``(2) coordinate this section with the other
provisions of this title.
``(g) Cross Reference.--For 40 percent penalty on certain
underpayments due to the avoidance of this section, see section
6662.''.
(b) Application of Section 751 to Indirect Dispositions of
Investment Services Partnership Interests.--
(1) In general.--Subsection (a) of section 751 of
the Internal Revenue Code of 1986 is amended by
striking ``or'' at the end of paragraph (1), by
inserting ``or'' at the end of paragraph (2), and by
inserting after paragraph (2) the following new
paragraph:
``(3) investment services partnership interests
held by the partnership,''.
(2) Certain distributions treated as sales or
exchanges.--Subparagraph (A) of section 751(b)(1) of
the Internal Revenue Code of 1986 is amended by
striking ``or'' at the end of clause (i), by inserting
``or'' at the end of clause (ii), and by inserting
after clause (ii) the following new clause:
``(iii) investment services
partnership interests held by the
partnership,''.
(3) Application of special rules in the case of
tiered partnerships.--Subsection (f) of section 751 of
the Internal Revenue Code of 1986 is amended by
striking ``or'' at the end of paragraph (1), by
inserting ``or'' at the end of paragraph (2), and by
inserting after paragraph (2) the following new
paragraph:
``(3) investment services partnership interests
held by the partnership,''.
(4) Investment services partnership interests;
qualified capital interests.--Section 751 of the
Internal Revenue Code of 1986 is amended by adding at
the end the following new subsection:
``(g) Investment Services Partnership Interests.--For
purposes of this section--
``(1) In general.--The term `investment services
partnership interest' has the meaning given such term
by section 710(c).
``(2) Adjustments for qualified capital
interests.--The amount to which subsection (a) applies
by reason of paragraph (3) thereof shall not include so
much of such amount as is attributable to any portion
of the investment services partnership interest which
is a qualified capital interest (determined under rules
similar to the rules of section 710(d)).
``(3) Recognition of gains.--Any gain with respect
to which subsection (a) applies by reason of paragraph
(3) thereof shall be recognized notwithstanding any
other provision of this title.
``(4) Coordination with inventory items.--An
investment services partnership interest held by the
partnership shall not be treated as an inventory item
of the partnership.
``(5) Prevention of double counting.--Under
regulations or other guidance prescribed by the
Secretary, subsection (a)(3) shall not apply with
respect to any amount to which section 710 applies.''.
(c) Treatment for Purposes of Section 7704.--Subsection (d)
of section 7704 of the Internal Revenue Code of 1986 is amended
by adding at the end the following new paragraph:
``(6) Income from certain carried interests not
qualified.--
``(A) In general.--Specified carried
interest income shall not be treated as
qualifying income.
``(B) Specified carried interest income.--
For purposes of this paragraph--
``(i) In general.--The term
`specified carried interest income'
means--
``(I) any item of income or
gain allocated to an investment
services partnership interest
(as defined in section 710(c))
held by the partnership,
``(II) any gain on the
disposition of an investment
services partnership interest
(as so defined) or a
partnership interest to which
(in the hands of the
partnership) section 751
applies, and
``(III) any income or gain
taken into account by the
partnership under subsection
(b)(4) or (e) of section 710.
``(ii) Exception for qualified
capital interests.--A rule similar to
the rule of section 710(d) shall apply
for purposes of clause (i).
``(C) Coordination with other provisions.--
Subparagraph (A) shall not apply to any item
described in paragraph (1)(E) (or so much of
paragraph (1)(F) as relates to paragraph
(1)(E)).
``(D) 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)).
``(E) Transitional rule.--Subparagraph (A)
shall not apply to any taxable year of the
partnership beginning before the date which is
10 years after January 1, 2013.''.
(d) Imposition of Penalty on Underpayments.--
(1) In general.--Subsection (b) of section 6662 of
the Internal Revenue Code of 1986 is amended by
inserting after paragraph (7) the following new
paragraph:
``(8) The application of section 710(e) or the
regulations or other guidance prescribed under section
710(h) to prevent the avoidance of the purposes of
section 710.''.
(2) Amount of penalty.--
(A) In general.--Section 6662 of the
Internal Revenue Code of 1986 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 section 6662 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).''.
(e) Income and Loss From Investment Services Partnership
Interests Taken Into Account in Determining Net Earnings From
Self-Employment.--
(1) Internal revenue code.--
(A) In general.--Section 1402(a) of the
Internal Revenue Code of 1986 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)(2) with respect to any
entity, investment services partnership income or loss
(as defined in subsection (m)) of such individual with
respect to such entity shall be taken into account in
determining the net earnings from self-employment of
such individual.''.
(B) Investment services partnership income
or loss.--Section 1402 of the Internal Revenue
Code is amended by adding at the end the
following new subsection:
``(m) Investment Services Partnership Income or Loss.--For
purposes of subsection (a)--
``(1) In general.--The term `investment services
partnership income or loss' means, with respect to any
investment services partnership interest (as defined in
section 710(c)), the net of--
``(A) the amounts treated as ordinary
income or ordinary loss under subsections (b)
and (e) of section 710 with respect to such
interest,
``(B) all items of income, gain, loss, and
deduction allocated to such interest, and
``(C) the amounts treated as realized from
the sale or exchange of property other than a
capital asset under section 751 with respect to
such interest.
``(2) Exception for qualified capital interests.--A
rule similar to the rule of section 710(d) shall apply
for purposes of applying paragraph (1)(B)(ii).''.
(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)(2) of the Internal Revenue
Code of 1986 with respect to any entity, investment
services partnership income or loss (as defined in
section 1402(m) of such Code) shall be taken into
account in determining the net earnings from self-
employment of such individual.''.
(f) Conforming Amendments.--
(1) Subsection (d) of section 731 of the Internal
Revenue Code of 1986 is amended by inserting ``section
710(b)(4) (relating to distributions of partnership
property),'' after ``to the extent otherwise provided
by''.
(2) Section 741 of the Internal Revenue Code of
1986 is amended by inserting ``or section 710 (relating
to special rules for partners providing investment
management services to partnerships)'' before the
period at the end.
(3) The table of sections for part I of subchapter
K of chapter 1 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new item:
``Sec. 710. Special rules for partners providing investment management
services to partnerships.''.
(g) 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,
2012.
(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 January 1, 2013, 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.--
(A) In general.--Section 710(b) of such
Code (as added by this section) shall apply to
dispositions and distributions after December
31, 2012.
(B) Indirect dispositions.--The amendments
made by subsection (b) shall apply to
transactions after December 31, 2012.
(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
January 1, 2013.
Subtitle C--Close Loophole for Corporate Jet Depreciation
SECTION 421. GENERAL AVIATION AIRCRAFT TREATED AS 7-YEAR PROPERTY.
(a) In General.--Subparagraph (C) of section 168(e)(3) of
the Internal Revenue Code of 1986 (relating to classification
of certain property) is amended by striking ``and'' at the end
of clause (iv), by redesignating clause (v) as clause (vi), and
by inserting after clause (iv) the following new clause:
``(v) any general aviation
aircraft, and''.
(b) Class Life.--Paragraph (3) of section 168(g) Internal
Revenue Code of 1986 is amended by inserting after subparagraph
(E) the following new subparagraph:
``(F) General aviation aircraft.--In the
case of any general aviation aircraft, the
recovery period used for purposes of paragraph
(2) shall be 12 years.''.
(c) General Aviation Aircraft.--Subsection (i) of section
168 Internal Revenue Code of 1986 is amended by inserting after
paragraph (19) the following new paragraph:
``(20) General aviation aircraft.--The term
`general aviation aircraft' means any airplane or
helicopter (including airframes and engines) not used
in commercial or contract carrying of passengers or
freight, but which primarily engages in the carrying of
passengers.''.
(d) Effective Date.--This section shall be effective for
property placed in service after December 31, 2012.
Subtitle D--Repeal Oil Subsidies
SEC. 431. REPEAL OF DEDUCTION FOR INTANGIBLE DRILLING AND DEVELOPMENT
COSTS IN THE CASE OF OIL AND GAS WELLS.
(a) In General.--Section 263(c) of the Internal Revenue
Code of 1986 (relating to intangible drilling and development
costs) is amended by adding at the end the following new
sentence: ``This subsection shall not apply in the case of oil
and gas wells with respect to amounts paid or incurred after
December 31, 2012.''.
(b) Effective Date.--The amendment made by this section
shall apply to amounts paid or incurred after December 31,
2012.
SEC. 432. REPEAL OF DEDUCTION FOR TERTIARY INJECTANTS.
(a) In General.--Part VI of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 (relating to itemized
deductions for individuals and corporations) is amended by
striking section 193 (relating to tertiary injectants).
(b) Clerical Amendment.--The table of sections for part VI
of subchapter B of chapter 1 of the Internal Revenue Code of
1986 is amended by striking the item relating to section 193.
(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred after December 31,
2012.
SEC. 433. REPEAL OF PERCENTAGE DEPLETION FOR OIL AND GAS WELLS.
(a) In General.--Section 613A of the Internal Revenue Code
of 1986 (relating to limitation on percentage depletion in the
case of oil and gas wells) is amended to read as follows:
``SEC. 613A. PERCENTAGE DEPLETION NOT ALLOWED IN CASE OF OIL AND GAS
WELLS.
``The allowance for depletion under section 611 with
respect to any oil and gas well shall be computed without
regard to section 613.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31, 2012.
SEC. 434. SECTION 199 DEDUCTION NOT ALLOWED WITH RESPECT TO OIL,
NATURAL GAS, OR PRIMARY PRODUCTS THEREOF.
(a) In General.--Subparagraph (B) of section 199(c)(4) of
the Internal Revenue Code of 1986 (relating to income
attributable to domestic production activities) is amended--
(1) by striking ``or'' at the end of clause (ii),
(2) by striking the period at the end of clause
(iii) and inserting in lieu thereof ``, or'', and
(3) by adding at the end thereof the following new
clause:
``(iv) the production, refining,
processing, transportation, or
distribution of oil, natural gas, or
any primary product (within the meaning
of subsection (d)(9)) thereof.''.
(b) Conforming Amendment.--Paragraph (9) of section 199(d)
is amended to read as follows:
``(9) Primary product.--For purposes of subsection
(c)(4)(B)(iv), the term `primary product' has the same
meaning as when used in section 927(a)(2)(C) as in
effect before its repeal.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2012.
SEC. 435. REPEAL OIL AND GAS WORKING INTEREST EXCEPTION TO PASSIVE
ACTIVITY RULES.
(a) In General.--Paragraph (3) of section 469(c) of the
Internal Revenue Code of 1986 (relating to passive activity
defined) is amended by adding at the end thereof the following
new subparagraph--
``(C) Termination.--Subparagraph (A) shall
not apply for any taxable year beginning after
December 31 2012.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31, 2012.
SEC. 436. UNIFORM SEVEN-YEAR AMORTIZATION FOR GEOLOGICAL AND
GEOPHYSICAL EXPENDITURES.
(a) In General.--Paragraph (1) of section 167(h) of the
Internal Revenue Code of 1986 (relating to amortization of
geological and geophysical expenditures) is amended by striking
``24-month'' and inserting in lieu thereof ``7-year''.
(b) Conforming Amendments.--Section 167(h) is amended--
(1) by striking ``24-month'' in paragraph (4) and
inserting in lieu thereof ``7-year'', and
(2) by striking paragraph (5).
(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred after December 31,
2012.
SEC. 437. REPEAL ENHANCED OIL RECOVERY CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
business related credits) is amended by striking section 43
(relating to enhanced oil recovery credit).
(b) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by striking the item relating
to section 43.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2012.
SEC. 438. REPEAL MARGINAL WELL PRODUCTION CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1of the Internal Revenue Code of 1986 (relating to
business related credits) is amended by striking section 45I
(relating to credit for producing oil and gas from marginal
wells).
(b) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by striking the item relating
to section 45I.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2012.
Subtitle E--Dual Capacity Taxpayers
SEC. 441. MODIFICATIONS OF FOREIGN TAX CREDIT RULES APPLICABLE TO DUAL
CAPACITY TAXPAYERS.
(a) In General.--Section 901 of the Internal Revenue Code
of 1986 (relating to credit for taxes of foreign countries and
of possessions of the United States) is amended by
redesignating subsection (n) as subsection (o) and by inserting
after subsection (m) the following new subsection:
``(n) Special Rules Relating to Dual Capacity Taxpayers.--
``(1) General rule.--Notwithstanding any other
provision of this chapter, any amount paid or accrued
by a dual capacity taxpayer or any member of the
worldwide affiliated group of which such dual capacity
taxpayer is also a member to any foreign country or to
any possession of the United States for any period
shall not be considered a tax to the extent such amount
exceeds the amount (determined in accordance with
regulations) which would have been required to be paid
if the taxpayer were not a dual capacity taxpayer.
``(2) Dual capacity taxpayer.--For purposes of this
subsection, the term `dual capacity taxpayer' means,
with respect to any foreign country or possession of
the United States, a person who--
``(A) is subject to a levy of such country
or possession, and
``(B) receives (or will receive) directly
or indirectly a specific economic benefit (as
determined in accordance with regulations) from
such country or possession.
``(3) Regulations.--The Secretary may issue such
regulations or other guidance as is necessary or
appropriate to carry out the purposes of this
subsection.''.
(b) Contrary Treaty Obligations Upheld.--The amendments
made by this section shall not apply to the extent contrary to
any treaty obligation of the United States.
(c) Effective Date.--The amendments made by this section
shall apply to amounts that, if such amounts were an amount of
tax paid or accrued, would be considered paid or accrued in
taxable years beginning after December 31, 2012.
SEC. 442. SEPARATE BASKET TREATMENT TAXES PAID ON FOREIGN OIL AND GAS
INCOME.
(a) Separate Basket for Foreign Tax Credit.--Paragraph (1)
of section 904(d) of the Internal Revenue Code of 1986 is
amended by striking ``and'' at the end of subparagraph (A), by
striking the period at the end of subparagraph (B) and
inserting ``, and'', and by adding at the end the following:
``(C) combined foreign oil and gas income
(as defined in section 907(b)(1)).''.
(b) Coordination.--Section 904(d)(2)of such Code is amended
by redesignating subparagraphs (J) and (K) as subparagraphs (K)
and (L) and by inserting after subparagraph (I) the following:
``(J) Coordination with combined foreign
oil and gas income.--For purposes of this
section, passive category income and general
category income shall not include combined
foreign oil and gas income (as defined in
section 907(b)(1)).''.
(c) Conforming Amendments.--
(1) Section 907(a) is hereby repealed.
(2) Section 907(c)(4) is hereby repealed.
(3) Section 907(f) is hereby repealed.
(d) Effective Dates.--
(1) In general.--The amendments made by this
section shall apply to taxable years beginning after
December 31, 2012.
(2) Transitional rules.--
(A) Carryovers.--Any unused foreign oil and
gas taxes which under section 907(f) of such
Code (as in effect before the amendment made by
subsection (c)(3)) would have been allowable as
a carryover to the taxpayer's first taxable
year beginning after December 31, 2012 (without
regard to the limitation of paragraph (2) of
such section 907(f) for first taxable year)
shall be allowed as carryovers under section
904(c) of such Code in the same manner as if
such taxes were unused taxes under such section
904(c) with respect to foreign oil and gas
extraction income.
(B) Losses.--The amendment made by
subsection (c)(2) shall not apply to foreign
oil and gas extraction losses arising in
taxable years beginning on or before the date
of the enactment of this Act.
Subtitle F--Increased Target and Trigger for Joint Select Committee on
Deficit Reduction
SEC. 451. INCREASED TARGET AND TRIGGER FOR JOINT SELECT COMMITTEE ON
DEFICIT REDUCTION.
(a) Increased Target for Joint Select Committee.--Section
401(b)(2) of the Budget Control Act of 2011 is amended by
striking ``$1,500,000,000,000'' and inserting
``$1,950,000,000,000''.
(b) Trigger for Joint Select Committee.--Section 302 of the
Budget Control Act of 2011 is amended by redesignating
subsection (b) as subsection (c) and by inserting after
subsection (a) the following new subsection:
``(b) Trigger.--If a joint committee bill achieving an
amount greater than `$1,650,000,000,000' in deficit reduction
as provided in section 401(b)(3)(B)(i)(II) of this Act is
enacted by January 15, 2012, then the amendments to the
Internal Revenue Code of 1986 made by subtitles A through E of
title IV of the American Jobs Act of 2011, shall not be in
effect for any taxable year.''.