[Congressional Record Volume 157, Number 135 (Tuesday, September 13, 2011)]
[Senate]
[Pages S5537-S5580]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. REID (by request):
  S. 1549. A bill to provide tax relief for American workers and 
businesses, to put workers back on the job while rebuilding and 
modernizing America, and to provide pathways back to work for Americans 
looking for jobs; read the first time.

[[Page S5538]]

  Mr. REID. Mr. President, I ask unanimous consent the the text of the 
bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1549

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

     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.

[[Page S5539]]

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-

[[Page S5540]]

     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

[[Page S5541]]

     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;

[[Page S5542]]

       (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

[[Page S5543]]

     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

[[Page S5544]]

     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.

[[Page S5545]]

     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.

[[Page S5546]]

       (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

[[Page S5547]]

     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

[[Page S5548]]

     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

[[Page S5549]]

     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,

[[Page S5550]]

     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,

[[Page S5551]]

     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

[[Page S5552]]

     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

[[Page S5553]]

       (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.

[[Page S5554]]

       (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

[[Page S5555]]

     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

[[Page S5556]]

     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

[[Page S5557]]

     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

[[Page S5558]]

     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.

[[Page S5559]]

       (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.

[[Page S5560]]

       (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,

[[Page S5561]]

     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

[[Page S5562]]

     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

[[Page S5563]]

     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

[[Page S5564]]

       ``(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:

[[Page S5565]]

       (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;

[[Page S5566]]

       (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

[[Page S5567]]

     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

[[Page S5568]]

     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

[[Page S5569]]

     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),

[[Page S5570]]

       ``(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

[[Page S5571]]

     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.

[[Page S5572]]

       (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-

[[Page S5573]]

     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;

[[Page S5574]]

       (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

[[Page S5575]]

     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--

[[Page S5576]]

       ``(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

[[Page S5577]]

     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.--

[[Page S5578]]

       ``(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'.''.

[[Page S5579]]

       (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

[[Page S5580]]

     (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.''.
                                 ______