[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]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. JOHNSON of South Dakota:
S. 1547. A bill to reauthorize the Export-Import Bank of the United
States, and for other purposes; from the Committee on Banking, Housing,
and Urban Affairs; placed on the calendar.
Mr. JOHNSON of South Dakota. Mr. President, I rise today to speak
about the Export-Import Bank. Earlier today, I filed the Export-Import
Bank Reauthorization Act of 2011. This legislation was approved
unanimously by the Committee on Banking, Housing, and Urban Affairs
last Thursday.
This legislation will ensure that the Bank remains able to continue
to provide support for U.S. exporters and workers. The bill extends the
authorization of the Bank for 4 years, and will increase the Bank's
lending authority to $140 billion by 2015. It also strengthens
transparency and accountability at the Bank, seeks to modernize the
Bank's IT, encourages the Bank to increase projects designed to create
renewable energies, and provides for greater oversight of the Bank's
financing and any risks it might have to taxpayers.
The Bank's current authorization expires on September 30, 2011, and I
hope that this legislation will pass as soon as possible to ensure that
the Bank continues to operate.
The Export-Import Bank is the official export credit agency of the
United States and it assists in financing the export of U.S. goods and
services to international markets. Following the financial crisis, the
Bank experienced a dramatic increase in its activities as many
companies struggled to find financing in the private market. In Fiscal
Year 2010, the Bank saw a 70 percent increase in authorizations from
2008. In fact, last year the Bank committed almost $25 billion in
support of U.S. exports--a record.
The Bank has been self-funding since 2008, regularly returning
millions of dollars each year to the Treasury. This is a testament to
the Bank's leadership under Chairman Fred Hochberg, as well as the good
work of the dedicated staff and Board of the Bank.
All of the Bank's transactions are backed by the full faith and
credit of the United States. Therefore, I am pleased that this
legislation will help ensure that the Bank is working as efficiently
and effectively as possible to protect the taxpayers.
Equally important is the Bank's goal to use exports to help create
and maintain jobs here at home. This mission, embodied in the Bank's
Charter, is at the very core of what Congress intended the Bank to do.
I believe that while the Bank is doing a good job, it can--and must--do
more. I believe this legislation will help the Bank reach that goal.
This bill is a bipartisan effort and I thank Senator Shelby for his
support. In addition, I thank Senator Warner, the Chairman of the
Subcommittee on Security and International Trade and Finance, Senator
Bennet and Senator Hagan for their extremely important input into this
legislation. I urge all my colleagues to support the bill.
______
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
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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.''.
______
By Mr. KIRK (for himself, Mr. Alexander, Mr. Rubio, and Mr.
Wyden):
S. 1551. A bill to establish a smart card pilot program under the
Medicare program; to the Committee on Finance.
Mr. KIRK. Mr. President, I am pleased to stand here today and
introduce the Medicare Common Access Card Act of 2011 with my colleague
from Oregon, Senator Ron Wyden. Every year, at least $60 billion in the
Medicare program is attributed to waste, fraud, and abuse in the
Medicare program. One of the fundamental steps Congress can take to
address this is to upgrade the beneficiary's Medicare card using secure
smart card technology, similar to the one already used for Department
of Defense personnel.
Verifying identity through a secure smart card will protect a
beneficiary's personal information, prevent fraud among beneficiaries
and providers, and legitimize Medicare claims. The Department of
Defense has issued over 20 million secure smart cards as their ``Common
Access Card,'' CAC, to authenticate and verify users for access to
programs and facilities. To date, DoD reports that not a single Common
Access Card has been counterfeited. We cannot stop or prevent fraud in
the system until we find a way to know and verify who is authorized to
provide and receive benefits.
The Medicare Common Access Card Act of 2011 builds on the success of
the DoD CAC card to establish a program that simply and securely
verifies the identity of both Medicare beneficiaries and providers. By
implementing well-established Common Access Card technology to protect
the Medicare program, we can save U.S. taxpayers billions of dollars
while securing the privacy of America's seniors. I urge my colleagues
to join us in supporting the Medicare Common Access Card Act--a common
sense approach to reforming Medicare, protecting seniors and preventing
millions of dollars in waste, fraud, and abuse.
____________________