[Congressional Record Volume 158, Number 109 (Thursday, July 19, 2012)]
[Senate]
[Pages S5224-S5238]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 2561. Mrs. SHAHEEN (for herself and Mr. Portman) submitted an 
amendment intended to be proposed by her to the bill S. 3364, to 
provide an incentive for businesses to bring jobs back to America; 
which was ordered to lie on the table; as follows:

       At the end of the bill, add the following:

        TITLE II--ENERGY SAVINGS AND INDUSTRIAL COMPETITIVENESS

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Energy Savings and 
     Industrial Competitiveness Act of 2012''.

                         Subtitle A--Buildings

                     PART I--BUILDING ENERGY CODES

     SEC. 211. GREATER ENERGY EFFICIENCY IN BUILDING CODES.

       (a) Definitions.--Section 303 of the Energy Conservation 
     and Production Act (42 U.S.C. 6832) is amended--
       (1) by striking paragraph (14) and inserting the following:
       ``(14) Model building energy code.--The term `model 
     building energy code' means a voluntary building energy code 
     and standards developed and updated through a consensus 
     process among interested persons, such as the IECC or the 
     code used by--
       ``(A) the Council of American Building Officials;
       ``(B) the American Society of Heating, Refrigerating, and 
     Air-Conditioning Engineers; or
       ``(C) other appropriate organizations.''; and
       (2) by adding at the end the following:
       ``(17) IECC.--The term `IECC' means the International 
     Energy Conservation Code.
       ``(18) Indian tribe.--The term `Indian tribe' has the 
     meaning given the term in section 4 of the Native American 
     Housing Assistance and Self-Determination Act of 1996 (25 
     U.S.C. 4103).''.
       (b) State Building Energy Efficiency Codes.--Section 304 of 
     the Energy Conservation and Production Act (42 U.S.C. 6833) 
     is amended to read as follows:

     ``SEC. 304. UPDATING STATE BUILDING ENERGY EFFICIENCY CODES.

       ``(a) In General.--The Secretary shall--
       ``(1) encourage and support the adoption of building energy 
     codes by States, Indian tribes, and, as appropriate, by local 
     governments that meet or exceed the model building energy 
     codes, or achieve equivalent or greater energy savings; and
       ``(2) support full compliance with the State and local 
     codes.
       ``(b) State and Indian Tribe Certification of Building 
     Energy Code Updates.--
       ``(1) Review and updating of codes by each state and indian 
     tribe.--
       ``(A) In general.--Not later than 2 years after the date on 
     which a model building energy code is updated, each State or 
     Indian tribe shall certify whether or not the State or Indian 
     tribe, respectively, has reviewed and updated the energy 
     provisions of the building code of the State or Indian tribe, 
     respectively.

[[Page S5225]]

       ``(B) Demonstration.--The certification shall include a 
     demonstration of whether or not the energy savings for the 
     code provisions that are in effect throughout the State or 
     Indian tribal territory meet or exceed--
       ``(i) the energy savings of the updated model building 
     energy code; or
       ``(ii) the targets established under section 307(b)(2).
       ``(C) No model building energy code update.--If a model 
     building energy code is not updated by a target date 
     established under section 307(b)(2)(D), each State or Indian 
     tribe shall, not later than 2 years after the specified date, 
     certify whether or not the State or Indian tribe, 
     respectively, has reviewed and updated the energy provisions 
     of the building code of the State or Indian tribe, 
     respectively, to meet or exceed the target in section 
     307(b)(2).
       ``(2) Validation by secretary.--Not later than 90 days 
     after a State or Indian tribe certification under paragraph 
     (1), the Secretary shall--
       ``(A) determine whether the code provisions of the State or 
     Indian tribe, respectively, meet the criteria specified in 
     paragraph (1); and
       ``(B) if the determination is positive, validate the 
     certification.
       ``(c) Improvements in Compliance With Building Energy 
     Codes.--
       ``(1) Requirement.--
       ``(A) In general.--Not later than 3 years after the date of 
     a certification under subsection (b), each State and Indian 
     tribe shall certify whether or not the State and Indian 
     tribe, respectively, has--
       ``(i) achieved full compliance under paragraph (3) with the 
     applicable certified State and Indian tribe building energy 
     code or with the associated model building energy code; or
       ``(ii) made significant progress under paragraph (4) toward 
     achieving compliance with the applicable certified State and 
     Indian tribe building energy code or with the associated 
     model building energy code.
       ``(B) Repeat certifications.--If the State or Indian tribe 
     certifies progress toward achieving compliance, the State or 
     Indian tribe shall repeat the certification until the State 
     or Indian tribe certifies that the State or Indian tribe has 
     achieved full compliance, respectively.
       ``(2) Measurement of compliance.--A certification under 
     paragraph (1) shall include documentation of the rate of 
     compliance based on--
       ``(A) independent inspections of a random sample of the 
     buildings covered by the code in the preceding year; or
       ``(B) an alternative method that yields an accurate measure 
     of compliance.
       ``(3) Achievement of compliance.--A State or Indian tribe 
     shall be considered to achieve full compliance under 
     paragraph (1) if--
       ``(A) at least 90 percent of building space covered by the 
     code in the preceding year substantially meets all the 
     requirements of the applicable code specified in paragraph 
     (1), or achieves equivalent or greater energy savings level; 
     or
       ``(B) the estimated excess energy use of buildings that did 
     not meet the applicable code specified in paragraph (1) in 
     the preceding year, compared to a baseline of comparable 
     buildings that meet this code, is not more than 5 percent of 
     the estimated energy use of all buildings covered by this 
     code during the preceding year.
       ``(4) Significant progress toward achievement of 
     compliance.--A State or Indian tribe shall be considered to 
     have made significant progress toward achieving compliance 
     for purposes of paragraph (1) if the State or Indian tribe--
       ``(A) has developed and is implementing a plan for 
     achieving compliance during the 8-year-period beginning on 
     the date of enactment of this paragraph, including annual 
     targets for compliance and active training and enforcement 
     programs; and
       ``(B) has met the most recent target under subparagraph 
     (A).
       ``(5) Validation by secretary.--Not later than 90 days 
     after a State or Indian tribe certification under paragraph 
     (1), the Secretary shall--
       ``(A) determine whether the State or Indian tribe has 
     demonstrated meeting the criteria of this subsection, 
     including accurate measurement of compliance; and
       ``(B) if the determination is positive, validate the 
     certification.
       ``(d) States or Indian Tribes That Do Not Achieve 
     Compliance.--
       ``(1) Reporting.--A State or Indian tribe that has not made 
     a certification required under subsection (b) or (c) by the 
     applicable deadline shall submit to the Secretary a report 
     on--
       ``(A) the status of the State or Indian tribe with respect 
     to meeting the requirements and submitting the certification; 
     and
       ``(B) a plan for meeting the requirements and submitting 
     the certification.
       ``(2) Federal support.--For any State or Indian tribe for 
     which the Secretary has not validated a certification by a 
     deadline under subsection (b) or (c), the lack of the 
     certification may be a consideration for Federal support 
     authorized under this section for code adoption and 
     compliance activities.
       ``(3) Local government.--In any State or Indian tribe for 
     which the Secretary has not validated a certification under 
     subsection (b) or (c), a local government may be eligible for 
     Federal support by meeting the certification requirements of 
     subsections (b) and (c).
       ``(4) Annual reports by secretary.--
       ``(A) In general.--The Secretary shall annually submit to 
     Congress, and publish in the Federal Register, a report on--
       ``(i) the status of model building energy codes;
       ``(ii) the status of code adoption and compliance in the 
     States and Indian tribes;
       ``(iii) implementation of this section; and
       ``(iv) improvements in energy savings over time as result 
     of the targets established under section 307(b)(2).
       ``(B) Impacts.--The report shall include estimates of 
     impacts of past action under this section, and potential 
     impacts of further action, on--
       ``(i) upfront financial and construction costs, cost 
     benefits and returns (using investment analysis), and 
     lifetime energy use for buildings;
       ``(ii) resulting energy costs to individuals and 
     businesses; and
       ``(iii) resulting overall annual building ownership and 
     operating costs.
       ``(e) Technical Assistance to States and Indian Tribes.--
     The Secretary shall provide technical assistance to States 
     and Indian tribes to implement the goals and requirements of 
     this section, including procedures and technical analysis for 
     States and Indian tribes--
       ``(1) to improve and implement State residential and 
     commercial building energy codes;
       ``(2) to demonstrate that the code provisions of the States 
     and Indian tribes achieve equivalent or greater energy 
     savings than the model building energy codes and targets;
       ``(3) to document the rate of compliance with a building 
     energy code; and
       ``(4) to otherwise promote the design and construction of 
     energy efficient buildings.
       ``(f) Availability of Incentive Funding.--
       ``(1) In general.--The Secretary shall provide incentive 
     funding to States and Indian tribes--
       ``(A) to implement the requirements of this section;
       ``(B) to improve and implement residential and commercial 
     building energy codes, including increasing and verifying 
     compliance with the codes and training of State, tribal, and 
     local building code officials to implement and enforce the 
     codes; and
       ``(C) to promote building energy efficiency through the use 
     of the codes.
       ``(2) Additional funding.--Additional funding shall be 
     provided under this subsection for implementation of a plan 
     to achieve and document full compliance with residential and 
     commercial building energy codes under subsection (c)--
       ``(A) to a State or Indian tribe for which the Secretary 
     has validated a certification under subsection (b) or (c); 
     and
       ``(B) in a State or Indian tribe that is not eligible under 
     subparagraph (A), to a local government that is eligible 
     under this section.
       ``(3) Training.--Of the amounts made available under this 
     subsection, the State may use amounts required, but not to 
     exceed $750,000 for a State, to train State and local 
     building code officials to implement and enforce codes 
     described in paragraph (2).
       ``(4) Local governments.--States may share grants under 
     this subsection with local governments that implement and 
     enforce the codes.
       ``(g) Stretch Codes and Advanced Standards.--
       ``(1) In general.--The Secretary shall provide technical 
     and financial support for the development of stretch codes 
     and advanced standards for residential and commercial 
     buildings for use as--
       ``(A) an option for adoption as a building energy code by 
     local, tribal, or State governments; and
       ``(B) guidelines for energy-efficient building design.
       ``(2) Targets.--The stretch codes and advanced standards 
     shall be designed--
       ``(A) to achieve substantial energy savings compared to the 
     model building energy codes; and
       ``(B) to meet targets under section 307(b), if available, 
     at least 3 to 6 years in advance of the target years.
       ``(h) Studies.--The Secretary, in consultation with 
     building science experts from the National Laboratories and 
     institutions of higher education, designers and builders of 
     energy-efficient residential and commercial buildings, code 
     officials, and other stakeholders, shall undertake a study of 
     the feasibility, impact, economics, and merit of--
       ``(1) code improvements that would require that buildings 
     be designed, sited, and constructed in a manner that makes 
     the buildings more adaptable in the future to become zero-
     net-energy after initial construction, as advances are 
     achieved in energy-saving technologies;
       ``(2) code procedures to incorporate measured lifetimes, 
     not just first-year energy use, in trade-offs and performance 
     calculations; and
       ``(3) legislative options for increasing energy savings 
     from building energy codes, including additional incentives 
     for effective State and local action, and verification of 
     compliance with and enforcement of a code other than by a 
     State or local government.
       ``(i) Effect on Other Laws.--Nothing in this section or 
     section 307 supersedes or modifies the application of 
     sections 321 through 346 of the Energy Policy and 
     Conservation Act (42 U.S.C. 6291 et seq.).
       ``(j) Authorization of Appropriations.--There are 
     authorized to be appropriated to

[[Page S5226]]

     carry out this section and section 307 $200,000,000, to 
     remain available until expended.''.
       (c) Federal Building Energy Efficiency Standards.--Section 
     305 of the Energy Conservation and Production Act (42 U.S.C. 
     6834) is amended by striking ``voluntary building energy 
     code'' each place it appears in subsections (a)(2)(B) and (b) 
     and inserting ``model building energy code''.
       (d) Model Building Energy Codes.--Section 307 of the Energy 
     Conservation and Production Act (42 U.S.C. 6836) is amended 
     to read as follows:

     ``SEC. 307. SUPPORT FOR MODEL BUILDING ENERGY CODES.

       ``(a) In General.--The Secretary shall support the updating 
     of model building energy codes.
       ``(b) Targets.--
       ``(1) In general.--The Secretary shall support the updating 
     of the model building energy codes to enable the achievement 
     of aggregate energy savings targets established under 
     paragraph (2).
       ``(2) Targets.--
       ``(A) In general.--The Secretary shall work with State, 
     Indian tribes, local governments, nationally recognized code 
     and standards developers, and other interested parties to 
     support the updating of model building energy codes by 
     establishing 1 or more aggregate energy savings targets to 
     achieve the purposes of this section.
       ``(B) Separate targets.--The Secretary may establish 
     separate targets for commercial and residential buildings.
       ``(C) Baselines.--The baseline for updating model building 
     energy codes shall be the 2009 IECC for residential buildings 
     and ASHRAE Standard 90.1-2010 for commercial buildings.
       ``(D) Specific years.--
       ``(i) In general.--Targets for specific years shall be 
     established and revised by the Secretary through rulemaking 
     and coordinated with nationally recognized code and standards 
     developers at a level that--

       ``(I) is at the maximum level of energy efficiency that is 
     technologically feasible and life-cycle cost effective, while 
     accounting for the economic considerations under paragraph 
     (4);
       ``(II) is higher than the preceding target; and
       ``(III) promotes the achievement of commercial and 
     residential high-performance buildings through high 
     performance energy efficiency (within the meaning of section 
     401 of the Energy Independence and Security Act of 2007 (42 
     U.S.C. 17061)).

       ``(ii) Initial targets.--Not later than 1 year after the 
     date of enactment of this clause, the Secretary shall 
     establish initial targets under this subparagraph.
       ``(iii) Different target years.--Subject to clause (i), 
     prior to the applicable year, the Secretary may set a later 
     target year for any of the model building energy codes 
     described in subparagraph (A) if the Secretary determines 
     that a target cannot be met.
       ``(iv) Small business.--When establishing targets under 
     this paragraph through rulemaking, the Secretary shall ensure 
     compliance with the Small Business Regulatory Enforcement 
     Fairness Act of 1996 (5 U.S.C. 601 note; Public Law 104-121).
       ``(3) Appliance standards and other factors affecting 
     building energy use.--In establishing building code targets 
     under paragraph (2), the Secretary shall develop and adjust 
     the targets in recognition of potential savings and costs 
     relating to--
       ``(A) efficiency gains made in appliances, lighting, 
     windows, insulation, and building envelope sealing;
       ``(B) advancement of distributed generation and on-site 
     renewable power generation technologies;
       ``(C) equipment improvements for heating, cooling, and 
     ventilation systems;
       ``(D) building management systems and SmartGrid 
     technologies to reduce energy use; and
       ``(E) other technologies, practices, and building systems 
     that the Secretary considers appropriate regarding building 
     plug load and other energy uses.
       ``(4) Economic considerations.--In establishing and 
     revising building code targets under paragraph (2), the 
     Secretary shall consider the economic feasibility of 
     achieving the proposed targets established under this section 
     and the potential costs and savings for consumers and 
     building owners, including a return on investment analysis.
       ``(c) Technical Assistance to Model Building Energy Code-
     setting and Standard Development Organizations.--
       ``(1) In general.--The Secretary shall, on a timely basis, 
     provide technical assistance to model building energy code-
     setting and standard development organizations consistent 
     with the goals of this section.
       ``(2) Assistance.--The assistance shall include, as 
     requested by the organizations, technical assistance in--
       ``(A) evaluating code or standards proposals or revisions;
       ``(B) building energy analysis and design tools;
       ``(C) building demonstrations;
       ``(D) developing definitions of energy use intensity and 
     building types for use in model building energy codes to 
     evaluate the efficiency impacts of the model building energy 
     codes;
       ``(E) performance-based standards;
       ``(F) evaluating economic considerations under subsection 
     (b)(4); and
       ``(G) developing model building energy codes by Indian 
     tribes in accordance with tribal law.
       ``(3) Amendment proposals.--The Secretary may submit timely 
     model building energy code amendment proposals to the model 
     building energy code-setting and standard development 
     organizations, with supporting evidence, sufficient to enable 
     the model building energy codes to meet the targets 
     established under subsection (b)(2).
       ``(4) Analysis methodology.--The Secretary shall make 
     publicly available the entire calculation methodology 
     (including input assumptions and data) used by the Secretary 
     to estimate the energy savings of code or standard proposals 
     and revisions.
       ``(d) Determination.--
       ``(1) Revision of model building energy codes.--If the 
     provisions of the IECC or ASHRAE Standard 90.1 regarding 
     building energy use are revised, the Secretary shall make a 
     preliminary determination not later than 90 days after the 
     date of the revision, and a final determination not later 
     than 15 months after the date of the revision, on whether or 
     not the revision will--
       ``(A) improve energy efficiency in buildings compared to 
     the existing model building energy code; and
       ``(B) meet the applicable targets under subsection (b)(2).
       ``(2) Codes or standards not meeting targets.--
       ``(A) In general.--If the Secretary makes a preliminary 
     determination under paragraph (1)(B) that a code or standard 
     does not meet the targets established under subsection 
     (b)(2), the Secretary may at the same time provide the model 
     building energy code or standard developer with proposed 
     changes that would result in a model building energy code 
     that meets the targets and with supporting evidence, taking 
     into consideration--
       ``(i) whether the modified code is technically feasible and 
     life-cycle cost effective;
       ``(ii) available appliances, technologies, materials, and 
     construction practices; and
       ``(iii) the economic considerations under subsection 
     (b)(4).
       ``(B) Incorporation of changes.--
       ``(i) In general.--On receipt of the proposed changes, the 
     model building energy code or standard developer shall have 
     an additional 270 days to accept or reject the proposed 
     changes of the Secretary to the model building energy code or 
     standard for the Secretary to make a final determination.
       ``(ii) Final determination.--A final determination under 
     paragraph (1) shall be on the modified model building energy 
     code or standard.
       ``(e) Administration.--In carrying out this section, the 
     Secretary shall--
       ``(1) publish notice of targets and supporting analysis and 
     determinations under this section in the Federal Register to 
     provide an explanation of and the basis for such actions, 
     including any supporting modeling, data, assumptions, 
     protocols, and cost-benefit analysis, including return on 
     investment; and
       ``(2) provide an opportunity for public comment on targets 
     and supporting analysis and determinations under this 
     section.
       ``(f) Voluntary Codes and Standards.--Nothwithstanding any 
     other provision of this section, any model building code or 
     standard established under this section shall not be binding 
     on a State, local government, or Indian tribe as a matter of 
     Federal law.''.

             PART II--WORKER TRAINING AND CAPACITY BUILDING

     SEC. 221. BUILDING TRAINING AND ASSESSMENT CENTERS.

       (a) In General.--The Secretary of Energy shall provide 
     grants to institutions of higher education (as defined in 
     section 101 of the Higher Education Act of 1965 (20 U.S.C. 
     1001)) and Tribal Colleges or Universities (as defined in 
     section 316(b) of that Act (20 U.S.C. 1059c(b)) to establish 
     building training and assessment centers--
       (1) to identify opportunities for optimizing energy 
     efficiency and environmental performance in buildings;
       (2) to promote the application of emerging concepts and 
     technologies in commercial and institutional buildings;
       (3) to train engineers, architects, building scientists, 
     building energy permitting and enforcement officials, and 
     building technicians in energy-efficient design and 
     operation;
       (4) to assist institutions of higher education and Tribal 
     Colleges or Universities in training building technicians;
       (5) to promote research and development for the use of 
     alternative energy sources and distributed generation to 
     supply heat and power for buildings, particularly energy-
     intensive buildings; and
       (6) to coordinate with and assist State-accredited 
     technical training centers, community colleges, Tribal 
     Colleges or Universities, and local offices of the National 
     Institute of Food and Agriculture and ensure appropriate 
     services are provided under this section to each region of 
     the United States.
       (b) Coordination and Nonduplication.--
       (1) In general.--The Secretary shall coordinate the program 
     with the Industrial Assessment Centers program and with other 
     Federal programs to avoid duplication of effort.
       (2) Collocation.--To the maximum extent practicable, 
     building, training, and assessment centers established under 
     this section shall be collocated with Industrial Assessment 
     Centers.

[[Page S5227]]

                Subtitle B--Building Efficiency Finance

     SEC. 231. LOAN PROGRAM FOR ENERGY EFFICIENCY UPGRADES TO 
                   EXISTING BUILDINGS.

       Title XVII of the Energy Policy Act of 2005 (42 U.S.C. 
     16511 et seq.) is amended by adding at the end the following:

     ``SEC. 1706. BUILDING RETROFIT FINANCING PROGRAM.

       ``(a) Definitions.--In this section:
       ``(1) Credit support.--The term `credit support' means a 
     guarantee or commitment to issue a guarantee or other forms 
     of credit enhancement to ameliorate risks for efficiency 
     obligations.
       ``(2) Efficiency obligation.--The term `efficiency 
     obligation' means a debt or repayment obligation incurred in 
     connection with financing a project, or a portfolio of such 
     debt or payment obligations.
       ``(3) Project.--The term `project' means the installation 
     and implementation of efficiency, advanced metering, 
     distributed generation, or renewable energy technologies and 
     measures in a building (or in multiple buildings on a given 
     property) that are expected to increase the energy efficiency 
     of the building (including fixtures) in accordance with 
     criteria established by the Secretary.
       ``(b) Eligible Projects.--
       ``(1) In general.--Notwithstanding sections 1703 and 1705, 
     the Secretary may provide credit support under this section, 
     in accordance with section 1702.
       ``(2) Inclusions.--Buildings eligible for credit support 
     under this section include commercial, multifamily 
     residential, industrial, municipal, government, institution 
     of higher education, school, and hospital facilities that 
     satisfy criteria established by the Secretary.
       ``(c) Guidelines.--
       ``(1) In general.--Not later than 180 days after the date 
     of enactment of this section, the Secretary shall--
       ``(A) establish guidelines for credit support provided 
     under this section; and
       ``(B) publish the guidelines in the Federal Register; and
       ``(C) provide for an opportunity for public comment on the 
     guidelines.
       ``(2) Requirements.--The guidelines established by the 
     Secretary under this subsection shall include--
       ``(A) standards for assessing the energy savings that could 
     reasonably be expected to result from a project;
       ``(B) examples of financing mechanisms (and portfolios of 
     such financing mechanisms) that qualify as efficiency 
     obligations;
       ``(C) the threshold levels of energy savings that a 
     project, at the time of issuance of credit support, shall be 
     reasonably expected to achieve to be eligible for credit 
     support;
       ``(D) the eligibility criteria the Secretary determines to 
     be necessary for making credit support available under this 
     section; and
       ``(E) notwithstanding subsections (d)(3) and (g)(2)(B) of 
     section 1702, any lien priority requirements that the 
     Secretary determines to be necessary, in consultation with 
     the Director of the Office of Management and Budget, which 
     may include--
       ``(i) requirements to preserve priority lien status of 
     secured lenders and creditors in buildings eligible for 
     credit support;
       ``(ii) remedies available to the Secretary under chapter 
     176 of title 28, United States Code, in the event of default 
     on the efficiency obligation by the borrower; and
       ``(iii) measures to limit the exposure of the Secretary to 
     financial risk in the event of default, such as--

       ``(I) the collection of a credit subsidy fee from the 
     borrower as a loan loss reserve, taking into account the 
     limitation on credit support under subsection (d);
       ``(II) minimum debt-to-income levels of the borrower;
       ``(III) minimum levels of value relative to outstanding 
     mortgage or other debt on a building eligible for credit 
     support;
       ``(IV) allowable thresholds for the percent of the 
     efficiency obligation relative to the amount of any mortgage 
     or other debt on an eligible building;
       ``(V) analysis of historic and anticipated occupancy levels 
     and rental income of an eligible building;
       ``(VI) requirements of third-party contractors to guarantee 
     energy savings that will result from a retrofit project, and 
     whether financing on the efficiency obligation will amortize 
     from the energy savings;
       ``(VII) requirements that the retrofit project incorporate 
     protocols to measure and verify energy savings; and
       ``(VIII) recovery of payments equally by the Secretary and 
     the retrofit.

       ``(3) Efficiency obligations.--The financing mechanisms 
     qualified by the Secretary under paragraph (2)(B) may 
     include--
       ``(A) loans, including loans made by the Federal Financing 
     Bank;
       ``(B) power purchase agreements, including energy 
     efficiency power purchase agreements;
       ``(C) energy services agreements, including energy 
     performance contracts;
       ``(D) property assessed clean energy bonds and other tax 
     assessment-based financing mechanisms;
       ``(E) aggregate on-meter agreements that finance retrofit 
     projects; and
       ``(F) any other efficiency obligations the Secretary 
     determines to be appropriate.
       ``(4) Priorities.--In carrying out this section, the 
     Secretary shall prioritize--
       ``(A) the maximization of energy savings with the available 
     credit support funding;
       ``(B) the establishment of a clear application and approval 
     process that allows private building owners, lenders, and 
     investors to reasonably expect to receive credit support for 
     projects that conform to guidelines;
       ``(C) the distribution of projects receiving credit support 
     under this section across States or geographical regions of 
     the United States; and
       ``(D) projects designed to achieve whole-building 
     retrofits.
       ``(d) Limitation.--Notwithstanding section 1702(c), the 
     Secretary shall not issue credit support under this section 
     in an amount that exceeds--
       ``(1) 90 percent of the principal amount of the efficiency 
     obligation that is the subject of the credit support; or
       ``(2) $10,000,000 for any single project.
       ``(e) Aggregation of Projects.--To the extent provided in 
     the guidelines developed in accordance with subsection (c), 
     the Secretary may issue credit support on a portfolio, or 
     pool of projects, that are not required to be geographically 
     contiguous, if each efficiency obligation in the pool 
     fulfills the requirements described in this section.
       ``(f) Application.--
       ``(1) In general.--To be eligible to receive credit support 
     under this section, the applicant shall submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary determines to be 
     necessary.
       ``(2) Contents.--An application submitted under this 
     section shall include assurances by the applicant that--
       ``(A) each contractor carrying out the project meets 
     minimum experience level criteria, including local retrofit 
     experience, as determined by the Secretary;
       ``(B) the project is reasonably expected to achieve energy 
     savings, as set forth in the application using any 
     methodology that meets the standards described in the program 
     guidelines;
       ``(C) the project meets any technical criteria described in 
     the program guidelines;
       ``(D) the recipient of the credit support and the parties 
     to the efficiency obligation will provide the Secretary 
     with--
       ``(i) any information the Secretary requests to assess the 
     energy savings that result from the project, including 
     historical energy usage data, a simulation-based benchmark, 
     and detailed descriptions of the building work, as described 
     in the program guidelines; and
       ``(ii) permission to access information relating to 
     building operations and usage for the period described in the 
     program guidelines; and
       ``(E) any other assurances that the Secretary determines to 
     be necessary.
       ``(3) Determination.--Not later than 90 days after 
     receiving an application, the Secretary shall make a final 
     determination on the application, which may include requests 
     for additional information.
       ``(g) Fees.--
       ``(1) In general.--In addition to the fees required by 
     section 1702(h)(1), the Secretary may charge reasonable fees 
     for credit support provided under this section.
       ``(2) Availability.--Fees collected under this section 
     shall be subject to section 1702(h)(2).
       ``(h) Underwriting.--The Secretary may delegate the 
     underwriting activities under this section to 1 or more 
     entities that the Secretary determines to be qualified.
       ``(i) Report.--Not later than 1 year after commencement of 
     the program, the Secretary shall submit to the appropriate 
     committees of Congress a report that describes in reasonable 
     detail--
       ``(1) the manner in which this section is being carried 
     out;
       ``(2) the number and type of projects supported;
       ``(3) the types of funding mechanisms used to provide 
     credit support to projects;
       ``(4) the energy savings expected to result from projects 
     supported by this section;
       ``(5) any tracking efforts the Secretary is using to 
     calculate the actual energy savings produced by the projects; 
     and
       ``(6) any plans to improve the tracking efforts described 
     in paragraph (5).
       ``(j) Funding.--
       ``(1) Authorization of appropriations.--There is authorized 
     to be appropriated to the Secretary to carry out this section 
     $400,000,000 for the period of fiscal years 2012 through 
     2021, to remain available until expended.
       ``(2) Administrative costs.--Not more than 1 percent of any 
     amounts made available to the Secretary under paragraph (1) 
     may be used by the Secretary for administrative costs 
     incurred in carrying out this section.''.

         Subtitle C--Industrial Efficiency and Competitiveness

                PART I--MANUFACTURING ENERGY EFFICIENCY

     SEC. 241. STATE PARTNERSHIP INDUSTRIAL ENERGY EFFICIENCY 
                   REVOLVING LOAN PROGRAM.

       Section 399A of the Energy Policy and Conservation Act (42 
     U.S.C. 6371h-1) is amended--
       (1) in the section heading, by inserting ``AND INDUSTRY'' 
     before the period at the end;
       (2) by redesignating subsections (h) and (i) as subsections 
     (i) and (j), respectively; and
       (3) by inserting after subsection (g) the following:
       ``(h) State Partnership Industrial Energy Efficiency 
     Revolving Loan Program.--

[[Page S5228]]

       ``(1) In general.--The Secretary shall carry out a program 
     under which the Secretary shall provide grants to eligible 
     lenders to pay the Federal share of creating a revolving loan 
     program under which loans are provided to commercial and 
     industrial manufacturers to implement commercially available 
     technologies or processes that significantly--
       ``(A) reduce systems energy intensity, including the use of 
     energy-intensive feedstocks; and
       ``(B) improve the industrial competitiveness of the United 
     States.
       ``(2) Eligible lenders.--To be eligible to receive cost-
     matched Federal funds under this subsection, a lender shall--
       ``(A) be a community and economic development lender that 
     the Secretary certifies meets the requirements of this 
     subsection;
       ``(B) lead a partnership that includes participation by, at 
     a minimum--
       ``(i) a State government agency; and
       ``(ii) a private financial institution or other provider of 
     loan capital;
       ``(C) submit an application to the Secretary, and receive 
     the approval of the Secretary, for cost-matched Federal funds 
     to carry out a loan program described in paragraph (1); and
       ``(D) ensure that non-Federal funds are provided to match, 
     on at least a dollar-for-dollar basis, the amount of Federal 
     funds that are provided to carry out a revolving loan program 
     described in paragraph (1).
       ``(3) Award.--The amount of cost-matched Federal funds 
     provided to an eligible lender shall not exceed $100,000,000 
     for any fiscal year.
       ``(4) Recapture of awards.--
       ``(A) In general.--An eligible lender that receives an 
     award under paragraph (1) shall be required to repay to the 
     Secretary an amount of cost-match Federal funds, as 
     determined by the Secretary under subparagraph (B), if the 
     eligible lender is unable or unwilling to operate a program 
     described in this subsection for a period of not less than 10 
     years beginning on the date on which the eligible lender 
     first receives funds made available through the award.
       ``(B) Determination by secretary.--The Secretary shall 
     determine the amount of cost-match Federal funds that an 
     eligible lender shall be required to repay to the Secretary 
     under subparagraph (A) based on the consideration by the 
     Secretary of--
       ``(i) the amount of non-Federal funds matched by the 
     eligible lender;
       ``(ii) the amount of loan losses incurred by the revolving 
     loan program described in paragraph (1); and
       ``(iii) any other appropriate factor, as determined by the 
     Secretary.
       ``(C) Use of recaptured cost-match federal funds.--The 
     Secretary may distribute to eligible lenders under this 
     subsection each amount received by the Secretary under this 
     paragraph.
       ``(5) Eligible projects.--A program for which cost-matched 
     Federal funds are provided under this subsection shall be 
     designed to accelerate the implementation of industrial and 
     commercial applications of technologies or processes 
     (including distributed generation, applications or 
     technologies that use sensors, meters, software, and 
     information networks, controls, and drives or that have been 
     installed pursuant to an energy savings performance contract, 
     project, or strategy) that--
       ``(A) improve energy efficiency, including improvements in 
     efficiency and use of water, power factor, or load 
     management;
       ``(B) enhance the industrial competitiveness of the United 
     States; and
       ``(C) achieve such other goals as the Secretary determines 
     to be appropriate.
       ``(6) Evaluation.--The Secretary shall evaluate 
     applications for cost-matched Federal funds under this 
     subsection on the basis of--
       ``(A) the description of the program to be carried out with 
     the cost-matched Federal funds;
       ``(B) the commitment to provide non-Federal funds in 
     accordance with paragraph (2)(D);
       ``(C) program sustainability over a 10-year period;
       ``(D) the capability of the applicant;
       ``(E) the quantity of energy savings or energy feedstock 
     minimization;
       ``(F) the advancement of the goal under this Act of 25-
     percent energy avoidance;
       ``(G) the ability to fund energy efficient projects not 
     later than 120 days after the date of the grant award; and
       ``(H) such other factors as the Secretary determines 
     appropriate.
       ``(7) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this subsection, 
     $400,000,000 for the period of fiscal years 2012 through 
     2021.''.

     SEC. 242. COORDINATION OF RESEARCH AND DEVELOPMENT OF ENERGY 
                   EFFICIENT TECHNOLOGIES FOR INDUSTRY.

       (a) In General.--As part of the research and development 
     activities of the Industrial Technologies Program of the 
     Department of Energy, the Secretary shall establish, as 
     appropriate, collaborative research and development 
     partnerships with other programs within the Office of Energy 
     Efficiency and Renewable Energy (including the Building 
     Technologies Program), the Office of Electricity Delivery and 
     Energy Reliability, and the Office of Science that--
       (1) leverage the research and development expertise of 
     those programs to promote early stage energy efficiency 
     technology development;
       (2) support the use of innovative manufacturing processes 
     and applied research for development, demonstration, and 
     commercialization of new technologies and processes to 
     improve efficiency (including improvements in efficient use 
     of water), reduce emissions, reduce industrial waste, and 
     improve industrial cost-competitiveness; and
       (3) apply the knowledge and expertise of the Industrial 
     Technologies Program to help achieve the program goals of the 
     other programs.
       (b) Reports.--Not later than 2 years after the date of 
     enactment of this Act and biennially thereafter, the 
     Secretary shall submit to Congress a report that describes 
     actions taken to carry out subsection (a) and the results of 
     those actions.

     SEC. 243. REDUCING BARRIERS TO THE DEPLOYMENT OF INDUSTRIAL 
                   ENERGY EFFICIENCY.

       (a) Definitions.--In this section:
       (1) Industrial energy efficiency.--The term ``industrial 
     energy efficiency'' means the energy efficiency derived from 
     commercial technologies and measures to improve energy 
     efficiency or to generate or transmit electric power and 
     heat, including electric motor efficiency improvements, 
     demand response, direct or indirect combined heat and power, 
     and waste heat recovery.
       (2) Industrial sector.--The term ``industrial sector'' 
     means any subsector of the manufacturing sector (as defined 
     in North American Industry Classification System codes 31-33 
     (as in effect on the date of enactment of this Act)) 
     establishments of which have, or could have, thermal host 
     facilities with electricity requirements met in whole, or in 
     part, by onsite electricity generation, including direct and 
     indirect combined heat and power or waste recovery.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (b) Report on the Deployment of Industrial Energy 
     Efficiency.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall submit to the 
     Committee on Energy and Commerce of the House of 
     Representatives and the Committee on Energy and Natural 
     Resources of the Senate a report describing--
       (A) the results of the study conducted under paragraph (2); 
     and
       (B) recommendations and guidance developed under paragraph 
     (3).
       (2) Study.--The Secretary, in coordination with the 
     industrial sector, shall conduct a study of the following:
       (A) The legal, regulatory, and economic barriers to the 
     deployment of industrial energy efficiency in all electricity 
     markets (including organized wholesale electricity markets, 
     and regulated electricity markets), including, as applicable, 
     the following:
       (i) Transmission and distribution interconnection 
     requirements.
       (ii) Standby, back-up, and maintenance fees (including 
     demand ratchets).
       (iii) Exit fees.
       (iv) Life of contract demand ratchets.
       (v) Net metering.
       (vi) Calculation of avoided cost rates.
       (vii) Power purchase agreements.
       (viii) Energy market structures.
       (ix) Capacity market structures.
       (x) Other barriers as may be identified by the Secretary, 
     in coordination with the industrial sector.
       (B) Examples of--
       (i) successful State and Federal policies that resulted in 
     greater use of industrial energy efficiency;
       (ii) successful private initiatives that resulted in 
     greater use of industrial energy efficiency; and
       (iii) cost-effective policies used by foreign countries to 
     foster industrial energy efficiency.
       (C) The estimated economic benefits to the national economy 
     of providing the industrial sector with Federal energy 
     efficiency matching grants of $5,000,000,000 for 5- and 10-
     year periods, including benefits relating to--
       (i) estimated energy and emission reductions;
       (ii) direct and indirect jobs saved or created;
       (iii) direct and indirect capital investment;
       (iv) the gross domestic product; and
       (v) trade balance impacts.
       (D) The estimated energy savings available from increased 
     use of recycled material in energy-intensive manufacturing 
     processes.
       (3) Recommendations and guidance.--The Secretary, in 
     coordination with the industrial sector, shall develop policy 
     recommendations regarding the deployment of industrial energy 
     efficiency, including proposed regulatory guidance to States 
     and relevant Federal agencies to address barriers to 
     deployment.

     SEC. 244. FUTURE OF INDUSTRY PROGRAM.

       (a) In General.--Section 452 of the Energy Independence and 
     Security Act of 2007 (42 U.S.C. 17111) is amended by striking 
     the section heading and inserting the following: ``future of 
     industry program''.
       (b) Definition of Energy Service Provider.--Section 452(a) 
     of the Energy Independence and Security Act of 2007 (42 
     U.S.C. 17111(a)) is amended--
       (1) by redesignating paragraphs (3) through (5) as 
     paragraphs (4) through (6), respectively; and
       (2) by inserting after paragraph (3):
       ``(5) Energy service provider.--The term `energy service 
     provider' means any private company or similar entity 
     providing technology or services to improve energy efficiency 
     in an energy-intensive industry.''.

[[Page S5229]]

       (c) Industrial Research and Assessment Centers.--
       (1) In general.--Section 452(e) of the Energy Independence 
     and Security Act of 2007 (42 U.S.C. 17111(e)) is amended--
       (A) by redesignating paragraphs (1) through (5) as 
     subparagraphs (A) through (E), respectively, and indenting 
     appropriately;
       (B) by striking ``The Secretary'' and inserting the 
     following:
       ``(1) In general.--The Secretary'';
       (C) in subparagraph (A) (as redesignated by subparagraph 
     (A)), by inserting before the semicolon at the end the 
     following: ``, including assessments of sustainable 
     manufacturing goals and the implementation of information 
     technology advancements for supply chain analysis, logistics, 
     system monitoring, industrial and manufacturing processes, 
     and other purposes''; and
       (D) by adding at the end the following:
       ``(2) Centers of excellence.--
       ``(A) In general.--The Secretary shall establish a Center 
     of Excellence at up to 10 of the highest performing 
     industrial research and assessment centers, as determined by 
     the Secretary.
       ``(B) Duties.--A Center of Excellence shall coordinate with 
     and advise the industrial research and assessment centers 
     located in the region of the Center of Excellence.
       ``(C) Funding.--Subject to the availability of 
     appropriations, of the funds made available under subsection 
     (f), the Secretary shall use to support each Center of 
     Excellence not less than $500,000 for fiscal year 2012 and 
     each fiscal year thereafter, as determined by the Secretary.
       ``(3) Expansion of centers.--The Secretary shall provide 
     funding to establish additional industrial research and 
     assessment centers at institutions of higher education that 
     do not have industrial research and assessment centers 
     established under paragraph (1), taking into account the size 
     of, and potential energy efficiency savings for, the 
     manufacturing base within the region of the proposed center.
       ``(4) Coordination.--
       ``(A) In general.--To increase the value and capabilities 
     of the industrial research and assessment centers, the 
     centers shall--
       ``(i) coordinate with Manufacturing Extension Partnership 
     Centers of the National Institute of Standards and 
     Technology;
       ``(ii) coordinate with the Building Technologies Program of 
     the Department of Energy to provide building assessment 
     services to manufacturers;
       ``(iii) increase partnerships with the National 
     Laboratories of the Department of Energy to leverage the 
     expertise and technologies of the National Laboratories for 
     national industrial and manufacturing needs;
       ``(iv) increase partnerships with energy service providers 
     and technology providers to leverage private sector expertise 
     and accelerate deployment of new and existing technologies 
     and processes for energy efficiency, power factor, and load 
     management;
       ``(v) identify opportunities for reducing greenhouse gas 
     emissions; and
       ``(vi) promote sustainable manufacturing practices for 
     small- and medium-sized manufacturers.
       ``(5) Outreach.--The Secretary shall provide funding for--
       ``(A) outreach activities by the industrial research and 
     assessment centers to inform small- and medium-sized 
     manufacturers of the information, technologies, and services 
     available; and
       ``(B) a full-time equivalent employee at each center of 
     excellence whose primary mission shall be to coordinate and 
     leverage the efforts of the center with--
       ``(i) Federal and State efforts;
       ``(ii) the efforts of utilities and energy service 
     providers;
       ``(iii) the efforts of regional energy efficiency 
     organizations; and
       ``(iv) the efforts of other centers in the region of the 
     center of excellence.
       ``(6) Workforce training.--
       ``(A) In general.--The Secretary shall pay the Federal 
     share of associated internship programs under which students 
     work with or for industries, manufacturers, and energy 
     service providers to implement the recommendations of 
     industrial research and assessment centers.
       ``(B) Federal share.--The Federal share of the cost of 
     carrying out internship programs described in subparagraph 
     (A) shall be 50 percent.
       ``(C) Funding.--Subject to the availability of 
     appropriations, of the funds made available under subsection 
     (f), the Secretary shall use to carry out this paragraph not 
     less than $5,000,000 for fiscal year 2012 and each fiscal 
     year thereafter.
       ``(7) Small business loans.--The Administrator of the Small 
     Business Administration shall, to the maximum practicable, 
     expedite consideration of applications from eligible small 
     business concerns for loans under the Small Business Act (15 
     U.S.C. 631 et seq.) to implement recommendations of 
     industrial research and assessment centers established under 
     paragraph (1).''.

     SEC. 245. SUSTAINABLE MANUFACTURING INITIATIVE.

       (a) In General.--Part E of title III of the Energy Policy 
     and Conservation Act (42 U.S.C. 6341) is amended by adding at 
     the end the following:

     ``SEC. 376. SUSTAINABLE MANUFACTURING INITIATIVE.

       ``(a) In General.--As part of the Industrial Technologies 
     Program of the Department of Energy, the Secretary shall 
     carry out a sustainable manufacturing initiative under which 
     the Secretary, on the request of a manufacturer, shall 
     conduct onsite technical assessments to identify 
     opportunities for--
       ``(1) maximizing the energy efficiency of industrial 
     processes and cross-cutting systems;
       ``(2) preventing pollution and minimizing waste;
       ``(3) improving efficient use of water in manufacturing 
     processes;
       ``(4) conserving natural resources; and
       ``(5) achieving such other goals as the Secretary 
     determines to be appropriate.
       ``(b) Coordination.--The Secretary shall carry out the 
     initiative in coordination with the private sector and 
     appropriate agencies, including the National Institute of 
     Standards and Technology to accelerate adoption of new and 
     existing technologies or processes that improve energy 
     efficiency.
       ``(c) Research and Development Program for Sustainable 
     Manufacturing and Industrial Technologies and Processes.--As 
     part of the Industrial Technologies Program of the Department 
     of Energy, the Secretary shall carry out a joint industry-
     government partnership program to research, develop, and 
     demonstrate new sustainable manufacturing and industrial 
     technologies and processes that maximize the energy 
     efficiency of industrial systems, reduce pollution, and 
     conserve natural resources.
       ``(d) Authorization of Appropriations.--There is authorized 
     to be to carry out this section $10,000,000 for the period of 
     fiscal years 2012 through 2021.''.
       (b) Table of Contents.--The table of contents of the Energy 
     Policy and Conservation Act (42 U.S.C. prec. 6201) is amended 
     by adding at the end of the items relating to part E of title 
     III the following:

``Sec. 376. Sustainable manufacturing initiative.''.

     SEC. 246. STUDY OF ADVANCED ENERGY TECHNOLOGY MANUFACTURING 
                   CAPABILITIES IN THE UNITED STATES.

       (a) In General.--Not later than 60 days after the date of 
     enactment of this Act, the Secretary shall enter into an 
     arrangement with the National Academy of Sciences under which 
     the Academy shall conduct a study of the development of 
     advanced manufacturing capabilities for various energy 
     technologies, including--
       (1) an assessment of the manufacturing supply chains of 
     established and emerging industries;
       (2) an analysis of--
       (A) the manner in which supply chains have changed over the 
     25-year period ending on the date of enactment of this Act;
       (B) current trends in supply chains; and
       (C) the energy intensity of each part of the supply chain 
     and opportunities for improvement;
       (3) for each technology or manufacturing sector, an 
     analysis of which sections of the supply chain are critical 
     for the United States to retain or develop to be competitive 
     in the manufacturing of the technology;
       (4) an assessment of which emerging energy technologies the 
     United States should focus on to create or enhance 
     manufacturing capabilities; and
       (5) recommendations on leveraging the expertise of energy 
     efficiency and renewable energy user facilities so that best 
     materials and manufacturing practices are designed and 
     implemented.
       (b) Report.--Not later than 2 years after the date on which 
     the Secretary enters into the agreement with the Academy 
     described in subsection (a), the Academy shall submit to the 
     Committee on Energy and Natural Resources of the Senate, the 
     Committee on Energy and Commerce of the House of 
     Representatives, and the Secretary a report describing the 
     results of the study required under this section, including 
     any findings and recommendations.

     SEC. 247. INDUSTRIAL TECHNOLOGIES STEERING COMMITTEE.

       The Secretary shall establish an advisory steering 
     committee that includes national trade associations 
     representing energy-intensive industries or energy service 
     providers to provide recommendations to the Secretary on 
     planning and implementation of the Industrial Technologies 
     Program of the Department of Energy.

                          PART II--SUPPLY STAR

     SEC. 251. SUPPLY STAR.

       Part B of title III of the Energy Policy and Conservation 
     Act (42 U.S.C. 6291) is amended by inserting after section 
     324A (42 U.S.C. 6294a) the following:

     ``SEC. 324B. SUPPLY STAR PROGRAM.

       ``(a) In General.--There is established within the 
     Department of Energy a Supply Star program to identify and 
     promote practices, recognize companies, and, as appropriate, 
     recognize products that use highly efficient supply chains in 
     a manner that conserves energy, water, and other resources.
       ``(b) Coordination.--In carrying out the program described 
     in subsection (a), the Secretary shall--
       ``(1) consult with other appropriate agencies; and
       ``(2) coordinate efforts with the Energy Star program 
     established under section 324A.
       ``(c) Duties.--In carrying out the Supply Star program 
     described in subsection (a), the Secretary shall--
       ``(1) promote practices, recognize companies, and, as 
     appropriate, recognize products that comply with the Supply 
     Star program as the preferred practices, companies, and 
     products in the marketplace for maximizing supply chain 
     efficiency;

[[Page S5230]]

       ``(2) work to enhance industry and public awareness of the 
     Supply Star program;
       ``(3) collect and disseminate data on supply chain energy 
     resource consumption;
       ``(4) develop and disseminate metrics, processes, and 
     analytical tools (including software) for evaluating supply 
     chain energy resource use;
       ``(5) develop guidance at the sector level for improving 
     supply chain efficiency;
       ``(6) work with domestic and international organizations to 
     harmonize approaches to analyzing supply chain efficiency, 
     including the development of a consistent set of tools, 
     templates, calculators, and databases; and
       ``(7) work with industry, including small businesses, to 
     improve supply chain efficiency through activities that 
     include--
       ``(A) developing and sharing best practices; and
       ``(B) providing opportunities to benchmark supply chain 
     efficiency.
       ``(d) Evaluation.--In any evaluation of supply chain 
     efficiency carried out by the Secretary with respect to a 
     specific product, the Secretary shall consider energy 
     consumption and resource use throughout the entire lifecycle 
     of a product, including production, transport, packaging, 
     use, and disposal.
       ``(e) Grants and Incentives.--
       ``(1) In general.--The Secretary may award grants or other 
     forms of incentives on a competitive basis to eligible 
     entities, as determined by the Secretary, for the purposes 
     of--
       ``(A) studying supply chain energy resource efficiency; and
       ``(B) demonstrating and achieving reductions in the energy 
     resource consumption of commercial products through changes 
     and improvements to the production supply and distribution 
     chain of the products.
       ``(2) Use of information.--Any information or data 
     generated as a result of the grants or incentives described 
     in paragraph (1) shall be used to inform the development of 
     the Supply Star Program.
       ``(f) Training.--The Secretary shall use funds to support 
     professional training programs to develop and communicate 
     methods, practices, and tools for improving supply chain 
     efficiency.
       ``(g) Effect of Impact on Climate Change.--For purposes of 
     this section, the impact on climate change shall not be a 
     factor in determining supply chain efficiency.
       ``(h) Effect of Outsourcing of American Jobs.--For purposes 
     of this section, the outsourcing of American jobs in the 
     production of a product shall not count as a positive factor 
     in determining supply chain efficiency.
       ``(i) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $10,000,000 for the period of fiscal years 2012 through 
     2021.''.

                PART III--ELECTRIC MOTOR REBATE PROGRAM

     SEC. 261. ENERGY SAVING MOTOR CONTROL REBATE PROGRAM.

       (a) Establishment.--Not later than January 1, 2012, the 
     Secretary of Energy (referred to in this section as the 
     ``Secretary'') shall establish a program to provide rebates 
     for expenditures made by entities for the purchase and 
     installation of a new constant speed electric motor control 
     that reduces motor energy use by not less than 5 percent.
       (b) Requirements.--
       (1) Application.--To be eligible to receive a rebate under 
     this section, an entity shall submit to the Secretary an 
     application in such form, at such time, and containing such 
     information as the Secretary may require, including--
       (A) demonstrated evidence that the entity purchased a 
     constant speed electric motor control that reduces motor 
     energy use by not less than 5 percent; and
       (B) the physical nameplate of the installed motor of the 
     entity to which the energy saving motor control is attached.
       (2) Authorized amount of rebate.--The Secretary may provide 
     to an entity that meets the requirements of paragraph (1) a 
     rebate the amount of which shall be equal to the product 
     obtained by multiplying--
       (A) the nameplate horsepower of the electric motor to which 
     the energy saving motor control is attached; and
       (B) $25.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $5,000,000 for 
     each of fiscal years 2012 and 2013, to remain available until 
     expended.

                  PART IV--TRANSFORMER REBATE PROGRAM

     SEC. 271. ENERGY EFFICIENT TRANSFORMER REBATE PROGRAM.

       (a) Definition of Qualified Transformer.--In this section, 
     the term ``qualified transformer'' means a transformer that 
     meets or exceeds the National Electrical Manufacturers 
     Association (NEMA) Premium Efficiency designation, calculated 
     to 2 decimal points, as having 30 percent fewer losses than 
     the NEMA TP-1-2002 efficiency standard for a transformer of 
     the same number of phases and capacity, as measured in 
     kilovolt-amperes.
       (b) Establishment.--Not later than January 1, 2012, the 
     Secretary of Energy (referred to in this section as the 
     ``Secretary'') shall establish a program to provide rebates 
     for expenditures made by owners of commercial buildings and 
     multifamily residential buildings for the purchase and 
     installation of a new energy efficient transformers.
       (c) Requirements.--
       (1) Application.--To be eligible to receive a rebate under 
     this section, an owner shall submit to the Secretary an 
     application in such form, at such time, and containing such 
     information as the Secretary may require, including 
     demonstrated evidence that the owner purchased a qualified 
     transformer.
       (2) Authorized amount of rebate.--For qualified 
     transformers, rebates, in dollars per kilovolt-ampere 
     (referred to in this paragraph as ``kVA'') shall be--
       (A) for 3-phase transformers--
       (i) with a capacity of not greater than 10 kVA, $15;
       (ii) with a capacity of not less than 10 kVA and not 
     greater than 100 kVA, the difference between 15 and the 
     quotient obtained by dividing--

       (I) the difference between--

       (aa) the capacity of the transformer in kVA; and
       (bb) 10; by

       (II) 9; and

       (iii) with a capacity greater than or equal to 100 kVA, $5; 
     and
       (B) for single-phase transformers, 75 percent of the rebate 
     for a 3-phase transformer of the same capacity.
       (d) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $5,000,000 for 
     each of fiscal years 2012 and 2013, to remain available until 
     expended.

              Subtitle D--Federal Agency Energy Efficiency

     SEC. 281. ADOPTION OF PERSONAL COMPUTER POWER SAVINGS 
                   TECHNIQUES BY FEDERAL AGENCIES.

       (a) In General.--Not later than 360 days after the date of 
     enactment of this Act, the Secretary of Energy, in 
     consultation with the Secretary of Defense, the Secretary of 
     Veterans Affairs, and the Administrator of General Services, 
     shall issue guidance for Federal agencies to employ advanced 
     tools allowing energy savings through the use of computer 
     hardware, energy efficiency software, and power management 
     tools.
       (b) Reports on Plans and Savings.--Not later than 180 days 
     after the date of the issuance of the guidance under 
     subsection (a), each Federal agency shall submit to the 
     Secretary of Energy a report that describes--
       (1) the plan of the agency for implementing the guidance 
     within the agency; and
       (2) estimated energy and financial savings from employing 
     the tools described in subsection (a).

     SEC. 282. AVAILABILITY OF FUNDS FOR DESIGN UPDATES.

       Section 3307 of title 40, United States Code, is amended--
       (1) by redesignating subsections (d) through (h) as 
     subsections (e) through (i), respectively; and
       (2) by inserting after subsection (c) the following:
       ``(d) Availability of Funds for Design Updates.--
       ``(1) In general.--Subject to paragraph (2), for any 
     project for which congressional approval is received under 
     subsection (a) and for which the design has been 
     substantially completed but construction has not begun, the 
     Administrator of General Services may use appropriated funds 
     to update the project design to meet applicable Federal 
     building energy efficiency standards established under 
     section 305 of the Energy Conservation and Production Act (42 
     U.S.C. 6834) and other requirements established under section 
     3312.
       ``(2) Limitation.--The use of funds under paragraph (1) 
     shall not exceed 125 percent of the estimated energy or other 
     cost savings associated with the updates as determined by a 
     life-cycle cost analysis under section 544 of the National 
     Energy Conservation Policy Act (42 U.S.C. 8254).''.

     SEC. 283. BEST PRACTICES FOR ADVANCED METERING.

       Section 543(e) of the National Energy Conservation Policy 
     Act (42 U.S.C. 8253(e) is amended by striking paragraph (3) 
     and inserting the following:
       ``(3) Plan.--
       ``(A) In general.--Not later than 180 days after the date 
     on which guidelines are established under paragraph (2), in a 
     report submitted by the agency under section 548(a), each 
     agency shall submit to the Secretary a plan describing the 
     manner in which the agency will implement the requirements of 
     paragraph (1), including--
       ``(i) how the agency will designate personnel primarily 
     responsible for achieving the requirements; and
       ``(ii) a demonstration by the agency, complete with 
     documentation, of any finding that advanced meters or 
     advanced metering devices (as those terms are used in 
     paragraph (1)), are not practicable.
       ``(B) Updates.--Reports submitted under subparagraph (A) 
     shall be updated annually.
       ``(4) Best practices report.--
       ``(A) In general.--Not later than 180 days after the date 
     of enactment of the Energy Savings and Industrial 
     Competitiveness Act of 2012, the Secretary of Energy, in 
     consultation with the Secretary of Defense and the 
     Administrator of General Services, shall develop, and issue a 
     report on, best practices for the use of advanced metering of 
     energy use in Federal facilities, buildings, and equipment by 
     Federal agencies.
       ``(B) Updating.--The report described under subparagraph 
     (A) shall be updated annually.
       ``(C) Components.--The report shall include, at a minimum--
       ``(i) summaries and analysis of the reports by agencies 
     under paragraph (3);

[[Page S5231]]

       ``(ii) recommendations on standard requirements or 
     guidelines for automated energy management systems, 
     including--

       ``(I) potential common communications standards to allow 
     data sharing and reporting;
       ``(II) means of facilitating continuous commissioning of 
     buildings and evidence-based maintenance of buildings and 
     building systems; and
       ``(III) standards for sufficient levels of security and 
     protection against cyber threats to ensure systems cannot be 
     controlled by unauthorized persons; and

       ``(iii) an analysis of--

       ``(I) the types of advanced metering and monitoring systems 
     being piloted, tested, or installed in Federal buildings; and
       ``(II) existing techniques used within the private sector 
     or other non-Federal government buildings.''.

     SEC. 284. FEDERAL ENERGY MANAGEMENT AND DATA COLLECTION 
                   STANDARD.

       Section 543 of the National Energy Conservation Policy Act 
     (42 U.S.C. 8253) is amended--
       (1) by redesignating the second subsection (f) (as added by 
     section 434(a) of Public Law 110-140 (121 Stat. 1614)) as 
     subsection (g); and
       (2) in subsection (f)(7), by striking subparagraph (A) and 
     inserting the following:
       ``(A) In general.--For each facility that meets the 
     criteria established by the Secretary under paragraph (2)(B), 
     the energy manager shall use the web-based tracking system 
     under subparagraph (B)--
       ``(i) to certify compliance with the requirements for--

       ``(I) energy and water evaluations under paragraph (3);
       ``(II) implementation of identified energy and water 
     measures under paragraph (4); and
       ``(III) follow-up on implemented measures under paragraph 
     (5); and

       ``(ii) to publish energy and water consumption data on an 
     individual facility basis.''.

     SEC. 285. ELECTRIC VEHICLE CHARGING INFRASTRUCTURE.

       Section 804(4) of the National Energy Conservation Policy 
     Act (42 U.S.C. 8287c(4)) is amended--
       (1) in subparagraph (A), by striking ``or'' after the 
     semicolon;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(C) a measure to support the use of electric vehicles or 
     the fueling or charging infrastructure necessary for electric 
     vehicles.''.

     SEC. 286. FEDERAL PURCHASE REQUIREMENT.

       Section 203 of the Energy Policy Act of 2005 (42 U.S.C. 
     15852) is amended--
       (1) in subsections (a) and (b)(2), by striking ``electric 
     energy'' each place it appears and inserting ``electric, 
     direct, and thermal energy'';
       (2) in subsection (b)(2)--
       (A) by inserting ``, or avoided by,'' after ``generated 
     from''; and
       (B) by inserting ``(including ground-source, reclaimed, and 
     ground water)''after ``geothermal'';
       (3) by redesignating subsection (d) as subsection (e); and
       (4) by inserting after subsection (c) the following:
       ``(d) Separate Calculation.--Renewable energy produced at a 
     Federal facility, on Federal land, or on Indian land (as 
     defined in section 2601 of the Energy Policy Act of 1992 (25 
     U.S.C. 3501))--
       ``(1) shall be calculated (on a BTU-equivalent basis) 
     separately from renewable energy used; and
       ``(2) may be used individually or in combination to comply 
     with subsection (a).''.

     SEC. 287. STUDY ON FEDERAL DATA CENTER CONSOLIDATION.

       (a) In General.--The Secretary of Energy shall conduct a 
     study on the feasibility of a government-wide data center 
     consolidation, with an overall Federal target of a minimum of 
     800 Federal data center closures by October 1, 2015.
       (b) Coordination.--In conducting the study, the Secretary 
     shall coordinate with Federal data center program managers, 
     facilities managers, and sustainability officers.
       (c) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report that describes the results of the study, including a 
     description of agency best practices in data center 
     consolidation.

                       Subtitle E--Miscellaneous

     SEC. 291. OFFSETS.

       (a) Zero-Net Energy Commercial Buildings Initiative.--
     Section 422(f) of the Energy Independence and Security Act of 
     2007 (42 U.S.C. 17082(f)) is amended by striking paragraphs 
     (2) through (4) and inserting the following:
       ``(2) $50,000,000 for each of fiscal years 2009 through 
     2012;
       ``(3) $100,000,000 for fiscal year 2013; and
       ``(4) $200,000,000 for each of fiscal years 2014 through 
     2018.''.
       (b) Energy Sustainability and Efficiency Grants and Loans 
     for Institutions.--Subsection (j) of section 399A of the 
     Energy Policy and Conservation Act (42 U.S.C. 6371h-1) (as 
     redesignated by section 241(2)) is amended--
       (1) in paragraph (1), by striking ``through 2013'' and 
     inserting ``and 2010, $100,000,000 for each of fiscal years 
     2011 and 2012, and $250,000,000 for fiscal year 2013''; and
       (2) in paragraph (2), by striking ``through 2013'' and 
     inserting ``and 2010, $100,000,000 for each of fiscal years 
     2011 and 2012, and $425,000,000 for fiscal year 2013''.
       (c) Waste Energy Recovery Incentive Program.--Section 
     373(f)(1) of the Energy Policy and Conservation Act (42 
     U.S.C. 6343(f)(1)) is amended--
       (1) by redesignating subparagraph (B) as subparagraph (D); 
     and
       (2) by striking subparagraph (A) and inserting the 
     following:
       ``(A) $100,000,000 for fiscal year 2008;
       ``(B) $200,000,000 for each of fiscal years 2009 and 2010;
       ``(C) $100,000,000 for each of fiscal years 2011 and 2012; 
     and''.
       (d) Energy-intensive Industries Program.--Section 452(f)(1) 
     of the Energy Independence and Security Act of 2007 (42 
     U.S.C. 17111(f)(1)) is amended--
       (1) in subparagraph (D), by striking ``$202,000,000'' and 
     inserting ``$102,000,000''; and
       (2) in subparagraph (E), by striking ``$208,000,000'' and 
     inserting ``$108,000,000''.

     SEC. 292. BUDGETARY EFFECTS.

       The budgetary effects of this Act, for the purpose of 
     complying with the Statutory Pay-As-You-Go-Act of 2010, shall 
     be determined by reference to the latest statement titled 
     ``Budgetary Effects of PAYGO Legislation'' for this Act, 
     submitted for printing in the Congressional Record by the 
     Chairman of the Senate Budget Committee, provided that such 
     statement has been submitted prior to the vote on passage.

     SEC. 293. ADVANCE APPROPRIATIONS REQUIRED.

       The authorization of amounts under this title and the 
     amendments made by this title shall be effective for any 
     fiscal year only to the extent and in the amount provided in 
     advance in appropriations Acts.
                                 ______
                                 
  SA 2562. Ms. COLLINS submitted an amendment intended to be proposed 
by her to the bill S. 3364, to provide an incentive for businesses to 
bring jobs back to America; which was ordered to lie on the table; as 
follows:

       At the end, add the following:

     SEC. _. EXTENSION OF 2001 AND 2003 TAX RELIEF.

       (a) In General.--Paragraph (1) of section 901(a) of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001 is 
     amended by striking ``December 31, 2012'' and inserting 
     ``December 31, 2013''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the enactment of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001.

     SEC. _. SURTAX ON MILLIONAIRES.

       (a) In General.--Subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new part:

                  ``PART VIII--SURTAX ON MILLIONAIRES

``Sec. 59B. Surtax on millionaires.

     ``SEC. 59B. SURTAX ON MILLIONAIRES.

       ``(a) General Rule.--In the case of a taxpayer other than a 
     corporation for any taxable year beginning after 2012 and 
     before 2014, there is hereby imposed (in addition to any 
     other tax imposed by this subtitle) a tax equal to 2 percent 
     of so much of the modified adjusted gross income of the 
     taxpayer for such taxable year as exceeds $1,000,000 
     ($500,000, in the case of a married individual filing a 
     separate return).
       ``(b) Modified Adjusted Gross Income.--For purposes of this 
     section--
       ``(1) In general.--The term `modified adjusted gross 
     income' means adjusted gross income reduced by the excess 
     of--
       ``(A) gross income from a small business (as defined in 
     section 6654(d)(1)(D)(iii))--
       ``(i) which is not a passive activity with respect to the 
     taxpayer (within the meaning of section 469(c)), and
       ``(ii) which pays wages to at least 1 full-time equivalent 
     employee (as defined in section 45R(d)(2)), other than the 
     taxpayer, the taxpayer's spouse, or an individual who bears a 
     relationship to the taxpayer described in section 152(d)(2), 
     over
       ``(B) the deductions which are properly allocable to such 
     income.
       ``(2) Aggregation rule.--All persons treated as a single 
     employer under subsection (a) or (b) of section 52 or 
     subsection (m) or (o) of section 414 shall be treated as one 
     employer for purposes of paragraph (1)(A).
       ``(3) Regulations.--The Secretary shall prescribe 
     regulations similar to the regulations under section 469(l) 
     for determining the income that is taken into account under 
     paragraph (1)(A).
       ``(c) Special Rules.--
       ``(1) Nonresident alien.--In the case of a nonresident 
     alien individual, only amounts taken into account in 
     connection with the tax imposed under section 871(b) shall be 
     taken into account under this section.
       ``(2) Citizens and residents living abroad.--The applicable 
     dollar amount under subsection (a) shall be decreased by the 
     excess of--
       ``(A) the amounts excluded from the taxpayer's gross income 
     under section 911, over
       ``(B) the amounts of any deductions or exclusions 
     disallowed under section 911(d)(6) with respect to the 
     amounts described in subparagraph (A).
       ``(3) Charitable trusts.--Subsection (a) shall not apply to 
     a trust all the unexpired interests in which are devoted to 
     one or more of the purposes described in section 
     170(c)(2)(B).
       ``(4) Not treated as tax imposed by this chapter for 
     certain purposes.--The tax

[[Page S5232]]

     imposed under this section shall not be treated as tax 
     imposed by this chapter for purposes of determining the 
     amount of any credit under this chapter or for purposes of 
     section 55.''.
       (b) Clerical Amendment.--The table of parts for subchapter 
     A of chapter 1 of the Internal Revenue Code of 1986 is 
     amended by adding at the end the following new item:

                ``part viii. surtax on millionaires.''.

       (c) Section 15 Not To Apply.--The amendment made by 
     subsection (a) shall not be treated as a change in a rate of 
     tax for purposes of section 15 of the Internal Revenue Code 
     of 1986.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2012.
                                 ______
                                 
  SA 2563. Mr. CORNYN submitted an amendment intended to be proposed by 
him to the bill S. 3364, to provide an incentive for businesses to 
bring jobs back to America; which was ordered to lie on the table; as 
follows:

       At the end, add the following:

     SEC. __. POINT OF ORDER ON LEGISLATION THAT RAISES INCOME TAX 
                   RATES ON SMALL BUSINESSES.

       (a) Point of Order.--
       (1) In general.--In the Senate, it shall not be in order to 
     consider any bill, joint resolution, amendment, motion, or 
     conference report that includes any provision which increases 
     Federal income tax rates.
       (2) Definition.--In this section, the term ``Federal income 
     tax rates'' means any rate of tax under--
       (A) subsection (a), (b), (c), (d), or (e) of section 1 of 
     the Internal Revenue Code of 1986,
       (B) section 11(b) of such Code, or
       (C) section 55(b) of such Code.
       (b) Supermajority Waiver and Appeals.--
       (1) Waiver.--This section may be waived or suspended in the 
     Senate only by an affirmative vote of three-fifths of the 
     Members, dully chosen and sworn.
       (2) Appeals.--An affirmative vote of three-fifths of the 
     Members of the Senate, duly chosen and sworn, shall be 
     required to sustain an appeal of the ruling of the Chair on a 
     point of order raised under this section.
                                 ______
                                 
  SA 2564. Mr. ENZI submitted an amendment intended to be proposed by 
him to the bill S. 3364, to provide an incentive for businesses to 
bring jobs back to America; which was ordered to lie on the table; as 
follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF 
                   CONTENTS.

       (a) Short Title.--This Act may be cited as the ``United 
     States Job Creation and International Tax Reform Act of 
     2012''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.

 TITLE I--PARTICIPATION EXEMPTION SYSTEM FOR TAXATION OF FOREIGN INCOME

Sec. 101. Deduction for dividends received by domestic corporations 
              from certain foreign corporations.
Sec. 102. Application of dividends received deduction to certain sales 
              and exchanges of stock.
Sec. 103. Deduction for foreign intangible income derived from trade or 
              business within the United States.
Sec. 104. Treatment of deferred foreign income upon transition to 
              participation exemption system of taxation.

               TITLE II--OTHER INTERNATIONAL TAX REFORMS

                 Subtitle A--Modifications of Subpart F

Sec. 201. Treatment of low-taxed foreign income as subpart F income.
Sec. 202. Permanent extension of look-thru rule for controlled foreign 
              corporations.
Sec. 203. Permanent extension of exceptions for active financing 
              income.
Sec. 204. Foreign base company income not to include sales or services 
              income.

        Subtitle B--Modifications Related to Foreign Tax Credit

Sec. 211. Modification of application of sections 902 and 960 with 
              respect to post-2012 earnings.
Sec. 212. Separate foreign tax credit basket for foreign intangible 
              income.
Sec. 213. Inventory property sales source rule exceptions not to apply 
              for foreign tax credit limitation.

         Subtitle C--Allocation of Interest on Worldwide Basis

Sec. 221. Acceleration of election to allocate interest on a worldwide 
              basis.

 TITLE I--PARTICIPATION EXEMPTION SYSTEM FOR TAXATION OF FOREIGN INCOME

     SEC. 101. DEDUCTION FOR DIVIDENDS RECEIVED BY DOMESTIC 
                   CORPORATIONS FROM CERTAIN FOREIGN CORPORATIONS.

       (a) Allowance of Deduction.--Part VIII of subchapter B of 
     chapter 1 is amended by inserting after section 245 the 
     following new section:

     ``SEC. 245A. DIVIDENDS RECEIVED BY DOMESTIC CORPORATIONS FROM 
                   CERTAIN FOREIGN CORPORATIONS.

       ``(a) In General.--In the case of any dividend received 
     from a controlled foreign corporation by a domestic 
     corporation which is a United States shareholder with respect 
     to such controlled foreign corporation, there shall be 
     allowed as a deduction an amount equal to 95 percent of the 
     qualified foreign-source portion of the dividend.
       ``(b) Treatment of Electing Noncontrolled Section 902 
     Corporations as Controlled Foreign Corporations.--
       ``(1) In general.--If a domestic corporation elects the 
     application of this subsection for any noncontrolled section 
     902 corporation with respect to the domestic corporation, 
     then, for purposes of this title--
       ``(A) the noncontrolled section 902 corporation shall be 
     treated as a controlled foreign corporation with respect to 
     the domestic corporation, and
       ``(B) the domestic corporation shall be treated as a United 
     States shareholder with respect to the noncontrolled section 
     902 corporation.
       ``(2) Election.--
       ``(A) Time of election.--Any election under this subsection 
     with respect to any noncontrolled section 902 corporation 
     shall be made not later than the due date for filing the 
     return of tax for the first taxable year of the taxpayer with 
     respect to which the foreign corporation is a noncontrolled 
     section 902 corporation with respect to the taxpayer (or, if 
     later, the first taxable year of the taxpayer for which this 
     section is in effect).
       ``(B) Revocation of election.--Any election under this 
     subsection, once made, may be revoked only with the consent 
     of the Secretary.
       ``(C) Controlled groups.--If a domestic corporation making 
     an election under this subsection with respect to any 
     noncontrolled section 902 corporation is a member of a 
     controlled group of corporations (within the meaning of 
     section 1563(a), except that `more than 50 percent' shall be 
     substituted for `at least 80 percent' each place it appears 
     therein), then, except as otherwise provided by the 
     Secretary, such election shall apply to all members of such 
     group.
       ``(c) Qualified Foreign-Source Portion of Dividends.--For 
     purposes of this section--
       ``(1) Qualified foreign-source portion.--
       ``(A) In general.--The qualified foreign-source portion of 
     any dividend is an amount which bears the same ratio to such 
     dividend as--
       ``(i) the post-2012 undistributed qualified foreign 
     earnings, bears to
       ``(ii) the total post-2012 undistributed earnings.
       ``(B) Post-2012 undistributed earnings.--The term `post-
     2012 undistributed earnings' means the amount of the earnings 
     and profits of a controlled foreign corporation (computed in 
     accordance with sections 964(a) and 986) accumulated in 
     taxable years beginning after December 31, 2012--
       ``(i) as of the close of the taxable year of the controlled 
     foreign corporation in which the dividend is distributed, and
       ``(ii) without diminution by reason of dividends 
     distributed during such taxable years.
       ``(C) Post-2012 undistributed qualified foreign earnings.--
     The term `post-2012 undistributed qualified foreign earnings' 
     means the portion of the post-2012 undistributed earnings 
     which is attributable to income other than--
       ``(i) income described in section 245(a)(5)(A), or
       ``(ii) dividends described in section 245(a)(5)(B).
       ``(2) Ordering rule for distributions of earnings and 
     profits.--Distributions shall be treated as first made out of 
     earnings and profits of a controlled foreign corporation 
     which are not post-2012 undistributed earnings and then out 
     of post-2012 undistributed earnings.
       ``(d) Disallowance of Foreign Tax Credit, etc.--
       ``(1) In general.--No credit shall be allowed under section 
     901 for any taxes paid or accrued (or treated as paid or 
     accrued) with respect to the qualified foreign-source portion 
     of any dividend.
       ``(2) Denial of deduction.--No deduction shall be allowed 
     under this chapter for any tax for which credit is not 
     allowable under section 901 by reason of paragraph (1).
       ``(3) Coordination with section 78.--Section 78 shall not 
     apply to any tax for which credit is not allowable under 
     section 901 by reason of paragraph (1).
       ``(4) Treatment of nondeductible portion in applying 
     foreign tax credit limit.--For purposes of applying the 
     limitation under section 904(a), the remaining 5 percent of 
     the qualified foreign-source portion of any dividend with 
     respect to which a deduction is not allowable to the domestic 
     corporation under subsection (a) shall be treated as income 
     from sources within the United States.
       ``(e) Special Rules for Hybrid Dividends.--
       ``(1) In general.--Subsection (a) shall not apply to any 
     dividend received by a United States shareholder from a 
     controlled foreign corporation if the dividend is a hybrid 
     dividend.

[[Page S5233]]

       ``(2) Hybrid dividends of tiered controlled foreign 
     corporations.--If a controlled foreign corporation with 
     respect to which a domestic corporation is a United States 
     shareholder receives a hybrid dividend from any other 
     controlled foreign corporation with respect to which such 
     domestic corporation is also a United States shareholder, 
     then, notwithstanding any other provision of this title--
       ``(A) the hybrid dividend shall be treated for purposes of 
     section 951(a)(1)(A) as subpart F income of the receiving 
     controlled foreign corporation for the taxable year of the 
     controlled foreign corporation in which the dividend was 
     received, and
       ``(B) the United States shareholder shall include in gross 
     income an amount equal to the shareholder's pro rata share 
     (determined in the same manner as under section 951(a)(2)) of 
     the subpart F income described in subparagraph (A).
       ``(3) Denial of foreign tax credit, etc.--The rules of 
     subsection (d) shall apply to any hybrid dividend received 
     by, or any amount included under paragraph (2) in the gross 
     income of, a United States shareholder, except that, for 
     purposes of applying subsection (d)(4), all of such dividend 
     or amount shall be treated as income from sources within the 
     United States.
       ``(4) Hybrid dividend.--The term `hybrid dividend' means an 
     amount received from a controlled foreign corporation--
       ``(A) which is treated as a dividend for purposes of this 
     title, and
       ``(B) for which the controlled foreign corporation received 
     a deduction (or similar tax benefit) under the laws of the 
     country in which the controlled foreign corporation was 
     created or organized.
       ``(f) Definitions.--For purposes of this section--
       ``(1) United states shareholder.--The term `United States 
     shareholder' has the meaning given such term in section 
     951(b).
       ``(2) Controlled foreign corporation.--The term `controlled 
     foreign corporation' has the meaning given such term in 
     section 957(a).
       ``(3) Noncontrolled section 902 corporation.--The term 
     `noncontrolled section 902 corporation' has the meaning given 
     such term in section 904(d)(2)(E)(i).
       ``(g) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the provisions of this section.''.
       (b) Application of Holding Period Requirement.--Subsection 
     (c) of section 246 is amended--
       (1) by striking ``or 245'' in paragraph (1) and inserting 
     ``245, or 245A'', and
       (2) by adding at the end the following new paragraph:
       ``(5) Special rules for qualified foreign-source portion of 
     dividends received from controlled foreign corporations.--
       ``(A) 1-year holding period requirement.--For purposes of 
     section 245A--
       ``(i) paragraph (1)(A) shall be applied--

       ``(I) by substituting `365 days' for `45 days' each place 
     it appears, and
       ``(II) by substituting `731-day period' for `91-day 
     period', and

       ``(ii) paragraph (2) shall not apply.
       ``(B) Status must be maintained during holding period.--For 
     purposes of section 245A, the holding period requirement of 
     this subsection shall be treated as met only if--
       ``(i) the controlled foreign corporation referred to in 
     section 245A(a) is a controlled foreign corporation at all 
     times during such period, and
       ``(ii) the taxpayer is a United States shareholder (as 
     defined in section 951) with respect to such controlled 
     foreign corporation at all times during such period.
       ``(C) Special rules for electing noncontrolled section 902 
     corporations.--In the case of an election under section 
     245A(b) to treat a noncontrolled section 902 corporation as a 
     controlled foreign corporation, the requirements of 
     subparagraph (B) shall be treated as met for any continuous 
     period ending on the day before the effective date of the 
     election for which the taxpayer met the ownership 
     requirements of section 904(d)(2)(E) with respect to such 
     corporation.''.
       (c) Application of Rules Generally Applicable to Deductions 
     for Dividends Received.--
       (1) Treatment of dividends from tax-exempt corporations.--
     Paragraph (1) of section 246(a) is amended by striking ``and 
     245'' and inserting ``245, and 245A''.
       (2) Assets generating tax-exempt portion of dividend not 
     taken into account in allocating and apportioning deductible 
     expenses.--Paragraph (3) of section 864(e) is amended by 
     striking ``or 245(a)'' and inserting ``, 245(a), or 245A''.
       (3) Coordination with section 1059.--Subparagraph (B) of 
     section 1059(b)(2) is amended by striking ``or 245'' and 
     inserting ``245, or 245A''.
       (d) Conforming Amendments.--
       (1) Clause (vi) of section 56(g)(4)(C) is amended by 
     inserting ``245A or'' before ``965''.
       (2) Subsection (b) of section 951 is amended--
       (A) by striking ``subpart'' and inserting ``title'', and
       (B) by adding at the end the following: ``Such term shall 
     include, with respect to any entity treated as a controlled 
     foreign corporation under section 245A(b), any domestic 
     corporation treated as a United States shareholder with 
     respect to such entity under such section.''.
       (3) Subsection (a) of section 957 is amended--
       (A) by striking ``subpart'' in the matter preceding 
     paragraph (1) and inserting ``title'', and
       (B) by adding at the end the following: ``Such term shall 
     include any entity treated as a controlled foreign 
     corporation under section 245A(b).''.
       (4) The table of sections for part VIII of subchapter B of 
     chapter 1 is amended by inserting after the item relating to 
     section 245 the following new item:

``Sec. 245A. Dividends received by domestic corporations from certain 
              foreign corporations.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years of foreign corporations 
     beginning after December 31, 2012, and to taxable years of 
     United States shareholders with or within which such taxable 
     years of foreign corporations end.

     SEC. 102. APPLICATION OF DIVIDENDS RECEIVED DEDUCTION TO 
                   CERTAIN SALES AND EXCHANGES OF STOCK.

       (a) Sales by United States Persons of Stock in CFC.--
     Section 1248 is amended by redesignating subsection (j) as 
     subsection (k) and by inserting after subsection (i) the 
     following new subsection:
       ``(j) Coordination With Dividends Received Deduction.--
       ``(1) In general.--In the case of the sale or exchange by a 
     domestic corporation of stock in a foreign corporation held 
     for 1 year or more, any amount received by the domestic 
     corporation which is treated as a dividend by reason of this 
     section shall be treated as a dividend for purposes of 
     applying section 245A.
       ``(2) Losses disallowed.--If a domestic corporation--
       ``(A) sells or exchanges stock in a foreign corporation in 
     a taxable year of the domestic corporation with or within 
     which a taxable year of the foreign corporation beginning 
     after December 31, 2012, ends, and
       ``(B) met the ownership requirements of subsection (a)(2) 
     with respect to such stock,
     no deduction shall be allowed to the domestic corporation 
     with respect to any loss from the sale or exchange.''.
       (b) Sale by a CFC of a Lower Tier CFC.--Section 964(e) is 
     amended by adding at the end the following new paragraph:
       ``(4) Coordination with dividends received deduction.--
       ``(A) In general.--If, for any taxable year of a controlled 
     foreign corporation beginning after December 31, 2012, any 
     amount is treated as a dividend under paragraph (1) by reason 
     of a sale or exchange by the controlled foreign corporation 
     of stock in another foreign corporation held for 1 year or 
     more, then, notwithstanding any other provision of this 
     title--
       ``(i) the qualified foreign-source portion of such dividend 
     shall be treated for purposes of section 951(a)(1)(A) as 
     subpart F income of the selling controlled foreign 
     corporation for such taxable year,
       ``(ii) a United States shareholder with respect to the 
     selling controlled foreign corporation shall include in gross 
     income for the taxable year of the shareholder with or within 
     which such taxable year of the controlled foreign corporation 
     ends an amount equal to the shareholder's pro rata share 
     (determined in the same manner as under section 951(a)(2)) of 
     the amount treated as subpart F income under clause (i), and
       ``(iii) the deduction under section 245A(a) shall be 
     allowable to the United States shareholder with respect to 
     the subpart F income included in gross income under clause 
     (ii) in the same manner as if such subpart F income were a 
     dividend received by the shareholder from the selling 
     controlled foreign corporation.
       ``(B) Effect of loss on earnings and profits.--For purposes 
     of this title, in the case of a sale or exchange by a 
     controlled foreign corporation of stock in another foreign 
     corporation in a taxable year of the selling controlled 
     foreign corporation beginning after December 31, 2012, to 
     which this paragraph would apply if gain were recognized, the 
     earnings and profits of the selling controlled foreign 
     corporation shall not be reduced by reason of any loss from 
     such sale or exchange.
       ``(C) Qualified foreign-source portion.--For purposes of 
     this paragraph, the qualified foreign-source portion of any 
     amount treated as a dividend under paragraph (1) shall be 
     determined in the same manner as under section 245A(c).''.

     SEC. 103. DEDUCTION FOR FOREIGN INTANGIBLE INCOME DERIVED 
                   FROM TRADE OR BUSINESS WITHIN THE UNITED 
                   STATES.

       (a) In General.--Part VIII of subchapter B of chapter 1 is 
     amended by adding at the end the following new section:

     ``SEC. 250. FOREIGN INTANGIBLE INCOME DERIVED FROM TRADE OR 
                   BUSINESS WITHIN THE UNITED STATES.

       ``(a) In General.--In the case of a domestic corporation, 
     there shall be allowed as a deduction an amount equal to 50 
     percent of the qualified foreign intangible income of such 
     domestic corporation for the taxable year.
       ``(b) Qualified Foreign Intangible Income.--
       ``(1) In general.--The term `qualified foreign intangible 
     income' means, with respect to any domestic corporation, 
     foreign intangible income which is derived by the domestic 
     corporation from the active conduct of a trade or business 
     within the United States with respect to the intangible 
     property giving rise to the income.

[[Page S5234]]

       ``(2) Requirements relating to trade or business within the 
     united states.--For purposes of this section, foreign 
     intangible income shall be treated as derived by a domestic 
     corporation from the active conduct of a trade or business 
     within the United States only if--
       ``(A) the domestic corporation developed, created, or 
     produced within the United States the intangible property 
     giving rise to the income, or
       ``(B) in any case in which the domestic corporation 
     acquired such intangible property, the domestic corporation 
     added substantial value to the property through the active 
     conduct of such trade or business within the United States.
       ``(c) Foreign Intangible Income.--For purposes of this 
     section--
       ``(1) In general.--The term `foreign intangible income' 
     means any intangible income which is derived in connection 
     with--
       ``(A) property which is sold, leased, licensed, or 
     otherwise disposed of for use, consumption, or disposition 
     outside the United States, or
       ``(B) services provided with respect to persons or property 
     located outside the United States.
       ``(2) Exceptions for certain income.--The following amounts 
     shall not be taken into account in computing foreign 
     intangible income:
       ``(A) Any amount treated as received by the domestic 
     corporation under section 367(d)(2) with respect to any 
     intangible property.
       ``(B) Any payment under a cost-sharing arrangement entered 
     into under section 482.
       ``(C) Any amount received from a controlled foreign 
     corporation with respect to which the domestic corporation is 
     a United States shareholder to the extent such amount is 
     attributable or properly allocable to income which is--
       ``(i) effectively connected with the conduct of a trade or 
     business within the United States and subject to tax under 
     this chapter, or
       ``(ii) subpart F income.
     For purposes of clause (ii), amounts not otherwise treated as 
     subpart F income shall be so treated if the amount creates 
     (or increases) a deficit which under section 952(c) may 
     reduce the subpart F income of the payor or any other 
     controlled foreign corporation.
       ``(3) Intangible income.--The term `intangible income' 
     means gross income from--
       ``(A) the sale, lease, license, or other disposition of 
     property in which intangible property is used directly or 
     indirectly, or
       ``(B) the provision of services related to intangible 
     property or in connection with property in which intangible 
     property is used directly or indirectly,
     to the extent that such gross income is properly attributable 
     to such intangible property.
       ``(4) Deductions to be taken into account.--The gross 
     income of a domestic corporation taken into account under 
     this subsection shall be reduced, under regulations 
     prescribed by the Secretary, so as to take into account 
     deductions properly allocable to such income.
       ``(5) Intangible property.--The term `intangible property' 
     has the meaning given such term by section 936(h)(3)(B).
       ``(d) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the provisions of this section.''.
       (b) Conforming Amendment.--The table of sections for part 
     VIII of subchapter B of chapter 1 is amended by adding at the 
     end the following new item:

``Sec. 250. Foreign intangible income derived from trade or business 
              within the United States.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years of domestic corporations 
     beginning after December 31, 2012.

     SEC. 104. TREATMENT OF DEFERRED FOREIGN INCOME UPON 
                   TRANSITION TO PARTICIPATION EXEMPTION SYSTEM OF 
                   TAXATION.

       (a) In General.--Section 965 is amended to read as follows:

     ``SEC. 965. TREATMENT OF DEFERRED FOREIGN INCOME UPON 
                   TRANSITION TO PARTICIPATION EXEMPTION SYSTEM OF 
                   TAXATION.

       ``(a) Deduction Allowed.--In the case of a domestic 
     corporation which elects the application of this section to 
     any controlled foreign corporation with respect to which it 
     is a United States shareholder, there shall be allowed as a 
     deduction for the taxable year of the United States 
     shareholder with or within which the first taxable year of 
     the controlled foreign corporation beginning after December 
     31, 2012, ends an amount equal to 70 percent of the amount 
     determined under subsection (b) for the taxable year.
       ``(b) Eligible Amount.--For purposes of subsection (a)--
       ``(1) In general.--The amount determined under this 
     subsection for a United States shareholder with respect to 
     any controlled foreign corporation for the taxable year of 
     the shareholder described in subsection (a) is the lesser 
     of--
       ``(A) the shareholder's pro rata share of the earnings and 
     profits of the controlled foreign corporation described in 
     section 959(c)(3) as of the close of the taxable year 
     preceding the first taxable year of the controlled foreign 
     corporation beginning after December 31, 2012, or
       ``(B) an amount equal to the sum of--
       ``(i) the dividends received by the shareholder during such 
     taxable year from the controlled foreign corporation which 
     are attributable to the earnings and profits described in 
     subparagraph (A), plus
       ``(ii) the increase in subpart F income required to be 
     included in gross income of the shareholder for the taxable 
     year by reason of the election under paragraph (2).
       ``(2) Election of deemed subpart f inclusion.--A United 
     States shareholder may elect for purposes of paragraph 
     (1)(B)(ii) to treat all (or any portion) of the shareholder's 
     pro rata share of the earnings and profits of a controlled 
     foreign corporation described in paragraph (1)(A) as subpart 
     F income includible in the gross income of the shareholder 
     for the taxable year of the shareholder described in 
     subsection (a).
       ``(3) Ordering rule.--For purposes of paragraph (1)(B)(i), 
     distributions shall be treated as first made out of earnings 
     and profits of a controlled foreign corporation described in 
     paragraph (1)(A).
       ``(4) Dividend.--The term `dividend' shall not include 
     amounts includible in gross income as a dividend under 
     section 78.
       ``(c) Disallowance of Foreign Tax Credit, etc.--In the case 
     of a domestic corporation making an election under subsection 
     (a) with respect to any controlled foreign corporation--
       ``(1) In general.--No credit shall be allowed under section 
     901 for any taxes paid or accrued (or treated as paid or 
     accrued) with respect to the earnings and profits taken into 
     account in determining the amount under subsection (b).
       ``(2) Denial of deduction.--No deduction shall be allowed 
     under this chapter for any tax for which credit is not 
     allowable under section 901 by reason of paragraph (1).
       ``(3) Coordination with section 78.--Section 78 shall not 
     apply to any tax for which credit is not allowable under 
     section 901 by reason of paragraph (1).
       ``(4) Treatment of nondeductible portion in applying 
     foreign tax credit limit.--For purposes of applying the 
     limitation under section 904(a), the remaining 30 percent of 
     the amount determined under subsection (b) with respect to 
     which a deduction is not allowable under subsection (a) shall 
     be treated as income from sources within the United States.
       ``(d) Election To Pay Liability for Deemed Subpart F Income 
     in Installments.--
       ``(1) In general.--In the case of a United States 
     shareholder with respect to 1 or more controlled foreign 
     corporations to which elections under subsections (a) and 
     (b)(2) apply, such United States shareholder may elect to pay 
     the net tax liability determined with respect to its deemed 
     subpart F inclusions with respect to such corporations under 
     subsection (b)(2) for the taxable year described in 
     subsection (a) in 2 or more (but not exceeding 8) equal 
     installments.
       ``(2) Date for payment of installments.--If an election is 
     made under paragraph (1), the first installment shall be paid 
     on the due date (determined without regard to any extension 
     of time for filing the return) for the return of tax for the 
     taxable year for which the election was made and each 
     succeeding installment shall be paid on the due date (as so 
     determined) for the return of tax for the taxable year 
     following the taxable year with respect to which the 
     preceding installment was made.
       ``(3) Acceleration of payment.--If there is an addition to 
     tax for failure to pay timely assessed with respect to any 
     installment required under this subsection, a liquidation or 
     sale of substantially all the assets of the taxpayer 
     (including in a title 11 or similar case), a cessation of 
     business by the taxpayer, or any similar circumstance, then 
     the unpaid portion of all remaining installments shall be due 
     on the date of such event (or in the case of a title 11 or 
     similar case, the day before the petition is filed).
       ``(4) Proration of deficiency to installments.--If an 
     election is made under paragraph (1) to pay the net tax 
     liability described in paragraph (1) in installments and a 
     deficiency has been assessed which increases such net tax 
     liability, the increase shall be prorated to the installments 
     payable under paragraph (1). The part of the increase so 
     prorated to any installment the date for payment of which has 
     not arrived shall be collected at the same time as, and as a 
     part of, such installment. The part of the increase so 
     prorated to any installment the date for payment of which has 
     arrived shall be paid upon notice and demand from the 
     Secretary. This subsection shall not apply if the deficiency 
     is due to negligence, to intentional disregard of rules and 
     regulations, or to fraud with intent to evade tax.
       ``(5) Time for payment of interest.--Interest payable under 
     section 6601 on the unpaid portion of any amount of tax the 
     time for payment of which as been extended under this 
     subsection shall be paid annually at the same time as, and as 
     part of, each installment payment of such tax. In the case of 
     a deficiency to which paragraph (4) applies, interest with 
     respect to such deficiency which is assigned under the 
     preceding sentence to any installment the date for payment of 
     which has arrived on or before the date of the assessment of 
     the deficiency, shall be paid upon notice and demand from the 
     Secretary.
       ``(6) Net tax liability for deemed subpart f inclusions.--
     For purposes of this subsection--

[[Page S5235]]

       ``(A) In general.--The net tax liability described in 
     paragraph (1) with respect to any United States shareholder 
     for any taxable year is the excess (if any) of--
       ``(i) such taxpayer's net income tax for the taxable year, 
     over
       ``(ii) such taxpayer's net income tax for such taxable year 
     determined as if the elections under subsection (b)(2) with 
     respect to 1 or more controlled foreign corporations had not 
     been made.
       ``(B) Net income tax.--The term `net income tax' means the 
     net income tax (as defined in section 38(c)(1)) reduced by 
     the credit allowed under section 38.
       ``(e) Special Rules.--For purposes of this section--
       ``(1) Elections.--Any election under subsection (a), 
     (b)(2), or (d)(1) shall be made not later than the due date 
     (including extensions) for the return of tax for the taxable 
     year for which made and shall be made in such manner as the 
     Secretary may provide.
       ``(2) Section not to apply to noncontrolled section 902 
     corporations treated as cfcs.--No election may be made under 
     subsection (a) with respect to a controlled foreign 
     corporation which was a noncontrolled section 902 corporation 
     which a United States shareholder elected under section 
     245A(b) to treat as a controlled foreign corporation.
       ``(3) Pro rata share.--A shareholder's pro rata share of 
     any earnings and profits shall be determined in the same 
     manner as under section 951(a)(2).''.
       (b) Conforming Amendments.--
       (1) Clause (vi) of section 56(g)(4)(C), as amended by this 
     Act, is amended--
       (A) by striking ``965'' and inserting ``965(b)'', and
       (B) by inserting ``and inclusions'' after ``certain 
     distributions'' in the heading thereof.
       (2) Paragraph (2) of section 6601(b) is amended--
       (A) by striking ``section 6156(a)'' in the matter preceding 
     subparagraph (A) and inserting ``section 965(d)(1) or 
     6156(a)'', and
       (B) by striking ``section 6156(b)'' in subparagraph (A) and 
     inserting ``section 965(d)(2) or 6156(b), as the case may 
     be''.
       (3) The table of section for subpart F of part III of 
     subchapter N of chapter 1 is amended by striking the item 
     relating to section 965 and inserting the following:

``Sec. 965. Treatment of deferred foreign income upon transition to 
              participation exemption system of taxation.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years of foreign corporations 
     beginning after December 31, 2012, and to taxable years of 
     United States shareholders with or within which such taxable 
     years of foreign corporations end.

               TITLE II--OTHER INTERNATIONAL TAX REFORMS

                 Subtitle A--Modifications of Subpart F

     SEC. 201. TREATMENT OF LOW-TAXED FOREIGN INCOME AS SUBPART F 
                   INCOME.

       (a) In General.--Subsection (a) of section 952 is amended 
     by redesignating paragraphs (3), (4), and (5) as paragraphs 
     (4), (5), and (6), respectively, and by inserting after 
     paragraph (2) the following new paragraph:
       ``(3) low-taxed income (as defined under subsection 
     (e)),''.
       (b) Low-Taxed Income.--Section 952 is amended by adding at 
     the end the following new subsection:
       ``(e) Low-Taxed Income.--
       ``(1) In general.--For purposes of subsection (a), except 
     as provided in paragraph (2), the term `low-taxed income' 
     means, with respect to any taxable year of a controlled 
     foreign corporation, the entire gross income of the 
     controlled foreign corporation unless the taxpayer 
     establishes to the satisfaction of the Secretary that such 
     income was subject to an effective rate of income tax 
     (determined under rules similar to the rules of section 
     954(b)(4)) imposed by a foreign country in excess of one-half 
     of the highest rate of tax under section 11(b) for taxable 
     years of United States corporations beginning in the same 
     calendar year as the taxable year of the controlled foreign 
     corporation begins.
       ``(2) Exception for qualified business income.--For 
     purposes of paragraph (1), qualified business income--
       ``(A) shall be taken into account in determining the 
     effective rate of income tax at which the entire gross income 
     of the controlled foreign corporation is taxed, but
       ``(B) the amount of gross income treated as low-taxed 
     income under paragraph (1) shall be reduced by the amount of 
     the qualified business income.
       ``(3) Qualified business income.--For purposes of this 
     subsection--
       ``(A) In general.--The term `qualified business income' 
     means, with respect to any controlled foreign corporation, 
     income derived by the controlled foreign corporation in a 
     foreign country but only if--
       ``(i) such income is attributable to the active conduct of 
     a trade or business of such corporation in such foreign 
     country,
       ``(ii) the corporation maintains an office or fixed place 
     of business in such foreign country, and
       ``(iii) officers and employees of the corporation 
     physically located at such office or place of business in 
     such foreign country conducted (or significantly contributed 
     to the conduct of) activities within the foreign country 
     which are substantial in relation to the activities necessary 
     for the active conduct of the trade or business to which such 
     income is attributable.
       ``(B) Exception for intangible income.--For purposes of 
     subparagraph (A), qualified business income of a controlled 
     foreign corporation shall not include intangible income (as 
     defined in section 250(c)(3)).
       ``(4) Determination of effective rate of foreign income tax 
     and qualified business income.--
       ``(A) Country-by-country determination.--For purposes of 
     determining the effective rate of income tax imposed by any 
     foreign country under paragraph (1) and qualified business 
     income under paragraph (3), each such paragraph shall be 
     applied separately with respect to--
       ``(i) each foreign country in which a controlled foreign 
     corporation conducts any trade or business, and
       ``(ii) the entire gross income and qualified business 
     income derived with respect to such foreign country.
       ``(B) Treatment of losses.--For purposes of determining the 
     effective rate of income tax imposed by any foreign country 
     under paragraph (1)--
       ``(i) such effective rate shall be determined without 
     regard to any losses carried to the relevant taxable year, 
     and
       ``(ii) to the extent the income of the controlled foreign 
     corporation reduces losses in the relevant taxable year, such 
     effective rate shall be treated as being the effective rate 
     which would have been imposed on such income without regard 
     to such losses.
       ``(5) Deductions to be taken into account.--The gross 
     income of a controlled foreign corporation taken into account 
     under this subsection shall be reduced, under regulations 
     prescribed by the Secretary, so as to take into account 
     deductions (including taxes) properly allocable to such 
     income.''.
       (c) Conforming Amendments.--
       (1) Subsection (a) of section 952 is amended--
       (A) by striking ``paragraph (4)'' in the next to last 
     sentence and inserting ``paragraph (5)'', and
       (B) by striking ``paragraph (5)'' in the last sentence and 
     inserting ``paragraph (6)''.
       (2) Subsection (d) of section 952 is amended by striking 
     ``subsection (a)(5)'' and inserting ``subsection (a)(6)''.
       (3) Paragraphs (1) and (2) of section 999(c) are each 
     amended by striking ``section 952(a)(3)'' and inserting 
     ``section 952(a)(4)''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years of foreign corporations 
     beginning after December 31, 2012, and to taxable years of 
     United States shareholders with or within which such taxable 
     years of foreign corporations end.

     SEC. 202. PERMANENT EXTENSION OF LOOK-THRU RULE FOR 
                   CONTROLLED FOREIGN CORPORATIONS.

       (a) In General.--Section 954(c)(6)(C) is amended by 
     striking ``and before January 1, 2012,''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years of foreign corporations 
     beginning after December 31, 2011, and to taxable years of 
     United States shareholders with or within which such taxable 
     years of foreign corporations end.

     SEC. 203. PERMANENT EXTENSION OF EXCEPTIONS FOR ACTIVE 
                   FINANCING INCOME.

       (a) Exception From Insurance Income.--Section 953(e)(10) is 
     amended--
       (1) by striking ``and before January 1, 2012,'', and
       (2) by striking the last sentence.
       (b) Exception From Foreign Personal Holding Company 
     Income.--Section 954(h)(9) is amended by striking ``and 
     before January 1, 2012,''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years of foreign corporations 
     beginning after December 31, 2011, and to taxable years of 
     United States shareholders with or within which such taxable 
     years of foreign corporations end.

     SEC. 204. FOREIGN BASE COMPANY INCOME NOT TO INCLUDE SALES OR 
                   SERVICES INCOME.

       (a) Repeal.--Paragraphs (2) and (3) of section 954(a) are 
     repealed.
       (b) Conforming Amendments.--
       (1) Section 954(d) is amended by adding at the end the 
     following new paragraph:
       ``(5) Termination.--This subsection shall not apply to 
     taxable years of foreign corporations beginning after 
     December 31, 2012, and to taxable years of United States 
     shareholders with or within which such taxable years of 
     foreign corporations end.''.
       (2) Section 954(e) is amended by adding at the end the 
     following new paragraph:
       ``(3) Termination.--This subsection shall not apply to 
     taxable years of foreign corporations beginning after 
     December 31, 2012, and to taxable years of United States 
     shareholders with or within which such taxable years of 
     foreign corporations end.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years of foreign corporations 
     beginning after December 31, 2012, and to taxable years of 
     United States shareholders with or within which such taxable 
     years of foreign corporations end.

        Subtitle B--Modifications Related to Foreign Tax Credit

     SEC. 211. MODIFICATION OF APPLICATION OF SECTIONS 902 AND 960 
                   WITH RESPECT TO POST-2012 EARNINGS.

       (a) Section 902 Not To Apply to Dividends From Post-2012 
     Earnings.--Section 902 is

[[Page S5236]]

     amended by redesignating subsection (d) as subsection (e) and 
     by inserting after subsection (c) the following new 
     subsection:
       ``(d) Section Not To Apply to Dividends From Post-2012 
     Earnings.--
       ``(1) In general.--This section shall not apply to the 
     portion of any dividend paid by a foreign corporation to the 
     extent such portion is made out of earnings and profits of 
     the foreign corporation (computed in accordance with sections 
     964(a) and 986) accumulated in taxable years beginning after 
     December 31, 2012.
       ``(2) Coordination with distributions from pre-2013 
     earnings and profits.--For purposes of this section--
       ``(A) Ordering rule.--Any distribution in a taxable year 
     beginning after December 31, 2012, shall be treated as first 
     made out of earnings and profits of the foreign corporation 
     (computed in accordance with sections 964(a) and 986) 
     accumulated in taxable years beginning before January 1, 
     2013.
       ``(B) Post-1986 undistributed earnings.--Post-1986 
     undistributed earnings shall not include earnings and profits 
     described in paragraph (1).''.
       (b) Determination of Section 960 Credit on Current Year 
     Basis.--Section 960 is amended by adding at the end the 
     following new subsection:
       ``(d) Deemed Paid Credit for Subpart F Inclusions 
     Attributable to Post-2012 Earnings.--
       ``(1) In general.--For purposes of this subpart, if there 
     is included in the gross income of a domestic corporation any 
     amount under section 951(a)--
       ``(A) with respect to any controlled foreign corporation 
     with respect to which such domestic corporation is a United 
     States shareholder, and
       ``(B) which is attributable to the earnings and profits of 
     the controlled foreign corporation (computed in accordance 
     with sections 964(a) and 986) accumulated in taxable years 
     beginning after December 31, 2012,
     then subsections (a), (b), and (c) shall not apply and such 
     domestic corporation shall be deemed to have paid so much of 
     such foreign corporation's foreign income taxes as are 
     properly attributable to the amount so included.
       ``(2) Foreign income taxes.--For purposes of this 
     subsection, the term `foreign income taxes' means any income, 
     war profits, or excess profits taxes paid or accrued by the 
     controlled foreign corporation to any foreign country or 
     possession of the United States.
       ``(3) Regulations.--The Secretary shall provide such 
     regulations as may be necessary or appropriate to carry out 
     the provisions of this subsection.''.

     SEC. 212. SEPARATE FOREIGN TAX CREDIT BASKET FOR FOREIGN 
                   INTANGIBLE INCOME.

       (a) In General.--Paragraph (1) of section 904(d) 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) foreign intangible income (as defined in paragraph 
     (2)(J)).''.
       (b) Foreign Intangible Income.--
       (1) In general.--Section 904(d)(2) is amended by 
     redesignating subparagraphs (J) and (K) as subparagraphs (K) 
     and (L) and by inserting after subparagraph (I) the 
     following:
       ``(J) Foreign intangible income.--For purposes of this 
     section--
       ``(i) In general.--The term `foreign intangible income' has 
     the meaning given such term by section 250(c).
       ``(ii) Coordination.--Passive category income and general 
     category income shall not include foreign intangible 
     income.''.
       (2) General category income.--Section 904(d)(2)(A)(ii) is 
     amended by inserting ``or foreign intangible income'' after 
     ``passive category income''.
       (c) Effective Dates.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years beginning after December 31, 2012.
       (2) Transitional rule.--For purposes of section 904(d)(1) 
     of the Internal Revenue Code of 1986 (as amended by this 
     Act)--
       (A) taxes carried from any taxable year beginning before 
     January 1, 2013, to any taxable year beginning on or after 
     such date, with respect to any item of income, shall be 
     treated as described in the subparagraph of such section 
     904(d)(1) in which such income would be described without 
     regard to the amendments made by this section, and
       (B) any carryback of taxes with respect to foreign 
     intangible income from a taxable year beginning on or after 
     January 1, 2013, to a taxable year beginning before such date 
     shall be allocated to the general income category.

     SEC. 213. INVENTORY PROPERTY SALES SOURCE RULE EXCEPTIONS NOT 
                   TO APPLY FOR FOREIGN TAX CREDIT LIMITATION.

       (a) In General.--Section 904 is amended by redesignating 
     subsection (l) as subsection (m) and by inserting after 
     subsection (k) the following new subsection:
       ``(l) Inventory Property Sales Source Rule Exceptions Not 
     To Apply.--Any amount which would be treated as derived from 
     sources without the United States by reason of the 
     application of section 862(a)(6) or 863(b)(2) for any taxable 
     year shall be treated as derived from sources within the 
     United States for purposes of this section.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2012.

         Subtitle C--Allocation of Interest on Worldwide Basis

     SEC. 221. ACCELERATION OF ELECTION TO ALLOCATE INTEREST ON A 
                   WORLDWIDE BASIS.

       Section 864(f)(6) is amended by striking ``December 31, 
     2020'' and inserting ``December 31, 2012''.
                                 ______
                                 
  SA 2565. Mr. ENZI submitted an amendment intended to be proposed by 
him to the bill S. 3364, to provide an incentive for businesses to 
bring jobs back to America; which was ordered to lie on the table; as 
follows:

       At the end, add the following:

     TITLE __--TAX RETURN DUE DATE SIMPLIFICATION AND MODERNIZATION

     SEC. _01. SHORT TITLE; REFERENCE.

       (a) Short Title.--This title may be cited as the ``Tax 
     Return Due Date Simplification and Modernization Act of 
     2012''.
       (b) Reference.--Except as otherwise expressly provided, 
     whenever in this title an amendment or repeal is expressed in 
     terms of an amendment to, or repeal of, a section or other 
     provision, the reference shall be considered to be made to a 
     section or other provision of the Internal Revenue Code of 
     1986.

     SEC. _02. NEW DUE DATE FOR PARTNERSHIP FORM 1065, S 
                   CORPORATION FORM 1120S, AND C CORPORATION FORM 
                   1120.

       (a) Partnerships.--
       (1) In general.--Section 6072 is amended by adding at the 
     end the following new subsection:
       ``(f) Returns of Partnerships.--Returns of partnerships 
     under section 6031 made on the basis of the calendar year 
     shall be filed on or before the 15th day of March following 
     the close of the calendar year, and such returns made on the 
     basis of a fiscal year shall be filed on or before the 15th 
     day of the third month following the close of the fiscal 
     year.''.
       (2) Conforming amendment.--Section 6072(a) is amended by 
     striking ``6017, or 6031'' and inserting ``or 6017''.
       (b) S Corporations.--
       (1) In general.--So much of subsection (b) of 6072 as 
     precedes the second sentence thereof is amended to read as 
     follows:
       ``(b) Returns of Certain Corporations.--Returns of S 
     corporations under sections 6012 and 6037 made on the basis 
     of the calendar year shall be filed on or before the 31st day 
     of March following the close of the calendar year, and such 
     returns made on the basis of a fiscal year shall be filed on 
     or before the last day of the third month following the close 
     of the fiscal year.''.
       (2) Conforming amendments.--
       (A) Section 1362(b) is amended--
       (i) by striking ``15th'' each place it appears and 
     inserting ``last'',
       (ii) by striking ``2\1/2\'' each place it appears and 
     inserting ``3'', and
       (iii) by striking ``2 months and 15 days'' in paragraph (4) 
     and inserting ``3 months''.
       (B) Section 1362(d)(1)(C)(i) is amended by striking 
     ``15th'' and inserting ``last''.
       (C) Section 1362(d)(1)(C)(ii) is amended by striking ``such 
     15th day'' and inserting ``the last day of the 3d month 
     thereof''.
       (c) Conforming Amendments Relating to C Corporations.--
       (1) Section 170(a)(2)(B) is amended by striking ``third 
     month'' and inserting ``4th month''.
       (2) Section 563 is amended by striking ``third month'' each 
     place it appears and inserting ``4th month''.
       (3) Section 1354(d)(1)(B)(i) is amended by striking ``3d 
     month'' and inserting ``4th month''.
       (4) Subsection (a) and (c) of section 6167 are each amended 
     by striking ``third month'' and inserting ``4th month''.
       (5) Section 6425(a)(1) is amended by striking ``third 
     month'' and inserting ``4th month''.
       (6) Subsections (b)(2)(A), (g)(3), and (h)(1) of section 
     6655 are each amended by striking ``3rd month'' and inserting 
     ``4th month''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to returns for taxable years beginning after 
     December 31, 2012.

     SEC. _03. MODIFICATION OF DUE DATES BY REGULATION.

       In the case of returns for taxable years beginning after 
     December 31, 2012, the Secretary of the Treasury or the 
     Secretary's delegate shall modify appropriate regulations to 
     provide as follows:
       (1) The maximum extension for the returns of partnerships 
     filing Form 1065 shall be a 6-month period ending on 
     September 15 for calendar year taxpayers.
       (2) The maximum extension for the returns of trusts filing 
     Form 1041 shall be a 5\1/2\-month period ending on September 
     30 for calendar year taxpayers.
       (3) The maximum extension for the returns of employee 
     benefit plans filing Form 5500 shall be an automatic 3\1/2\-
     month period ending on November 15 for calendar year 
     taxpayers.
       (4) The maximum extension for the returns of organizations 
     exempt from income tax filing Form 990 shall be an automatic 
     6-month period ending on November 15 for calendar year 
     filers.
       (5) The due date of Form 3520-A (relating to the Annual 
     Information Return of Foreign Trust with a United States 
     Owner) for calendar year filers shall be April 15 with a 
     maximum extension for a 6-month period ending on October 15.

[[Page S5237]]

       (6) The due date of Form TD F 90-22.1 (relating to Report 
     of Foreign Bank and Financial Accounts) shall be April 15 
     with a maximum extension for a 6-month period ending on 
     October 15 and with provision for an extension under rules 
     similar to the rules in Treas. Reg. 1.6081-5.   For any 
     taxpayer required to file such Form for the first time, any 
     penalty for failure to timely request for, or file, an 
     extension, may be waived by the Secretary of the Treasury or 
     the Secretary's delegate.

     SEC. _04. CORPORATIONS PERMITTED STATUTORY AUTOMATIC 6-MONTH 
                   EXTENSION OF INCOME TAX RETURNS.

       (a) In General.--Section 6081(b) is amended by striking ``3 
     months'' and inserting ``6 months''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to returns for taxable years beginning after 
     December 31, 2012.
                                 ______
                                 
  SA 2566. Mr. McCAIN (for himself and Mrs. Hagan) submitted an 
amendment intended to be proposed by him to the bill S. 3364, to 
provide an incentive for businesses to bring jobs back to America; 
which was ordered to lie on the table; as follows:

       At the end, add the following:

                TITLE __--FOREIGN EARNINGS REINVESTMENT

     SEC. _01. SHORT TITLE.

       This title may be cited as the ``Foreign Earnings 
     Reinvestment Act''.

     SEC. _02. ALLOWANCE OF TEMPORARY DIVIDENDS RECEIVED DEDUCTION 
                   FOR DIVIDENDS RECEIVED FROM A CONTROLLED 
                   FOREIGN CORPORATION.

       (a) Applicability of Provision.--
       (1) In general.--Subsection (f) of section 965 is amended 
     to read as follows:
       ``(f) Election; Election Year.--
       ``(1) In general.--The taxpayer may elect to apply this 
     section to--
       ``(A) the taxpayer's last taxable year which begins before 
     the date of the enactment of the Foreign Earnings 
     Reinvestment Act, or
       ``(B) the taxpayer's first taxable year which begins during 
     the 1-year period beginning on such date.
     Such election may be made for a taxable year only if made on 
     or before the due date (including extensions) for filing the 
     return of tax for such taxable year.
       ``(C) Election year.--For purposes of this section, the 
     term `election year' means the taxable year--
       ``(i) which begins after the date that is one year before 
     the date of the enactment of the Foreign Earnings 
     Reinvestment Act, and
       ``(ii) to which the taxpayer elects under paragraph (1) to 
     apply this section.''.
       (2) Conforming amendments.--
       (A) Extraordinary dividends.--Section 965(b)(2) of such 
     Code is amended--
       (i) by striking ``June 30, 2003'' and inserting ``September 
     30, 2011'', and
       (ii) by adding at the end the following new sentence: ``The 
     amounts described in clauses (i), (ii), and (iii) shall not 
     include any amounts which were taken into account in 
     determining the deduction under subsection (a) for any prior 
     taxable year.''.
       (B) Determinations relating to related party 
     indebtedness.--Section 965(b)(3)(B) of such Code is amended 
     by striking ``October 3, 2004'' and inserting ``September 30, 
     2011''.
       (C) Applicable financial statement.--Section 965(c)(1) of 
     such Code is amended by striking ``June 30, 2003'' each place 
     it appears and inserting ``September 30, 2011''.
       (D) Determinations relating to base period.--Section 
     965(c)(2) of such Code is amended by striking ``June 30, 
     2003'' and inserting ``September 30, 2011''.
       (b) Deduction Includes Current and Accumulated Foreign 
     Earnings.--
       (1) In general.--Paragraph (1) of section 965(b) of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(1) In general.--The amount of dividends taken into 
     account under subsection (a) shall not exceed the sum of the 
     current and accumulated earnings and profits described in 
     section 959(c)(3) for the year a deduction is claimed under 
     subsection (a), without diminution by reason of any 
     distributions made during the election year, for all 
     controlled foreign corporations of the United States 
     shareholder.''.
       (2) Conforming amendments.--
       (A) Section 965(c) of such Code, as amended by subsection 
     (a), is amended by striking paragraph (1) and by 
     redesignating paragraphs (2), (3), (4), and (5), as 
     paragraphs (1), (2), (3), and (4), respectively.
       (B) Paragraph (4) of section 965(c) of such Code, as 
     redesignated by subparagraph (A), is amended to read as 
     follows:
       ``(4) Controlled groups.--All United States shareholders 
     which are members of an affiliated group filing a 
     consolidated return under section 1501 shall be treated as 
     one United States shareholder.''.
       (c) Amount of Deduction.--
       (1) In general.--Paragraph (1) of section 965(a) of the 
     Internal Revenue Code of 1986 is amended by striking ``85 
     percent'' and inserting ``75 percent''.
       (2) Bonus deduction in subsequent taxable year for 
     increasing jobs.--Section 965 of such Code is amended by 
     adding at the end the following new subsection:
       ``(g) Bonus Deduction.--
       ``(1) In general.--In the case of any taxpayer who makes an 
     election to apply this section, there shall be allowed as a 
     deduction for the first taxable year following the election 
     year an amount equal to the applicable percentage of the cash 
     dividends which are taken into account under subsection (a) 
     with respect to such taxpayer for the election year.
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage is the amount which bears the 
     same ratio (not greater than 1) to 10 percent as--
       ``(A) the excess (if any) of--
       ``(i) the qualified payroll of the taxpayer for the 
     calendar year which begins with or within the first taxable 
     year following the election year, over
       ``(ii) the qualified payroll of the taxpayer for calendar 
     year 2010, bears to
       ``(B) 10 percent of the qualified payroll of the taxpayer 
     for calendar year 2010.
       ``(3) Qualified payroll.--For purposes of this paragraph:
       ``(A) In general.--The term `qualified payroll' means, with 
     respect to a taxpayer for any calendar year, the aggregate 
     wages (as defined in section 3121(a)) paid by the corporation 
     during such calendar year.
       ``(B) Exception for changes in ownership of trades or 
     businesses.--
       ``(i) Acquisitions.--If, after December 31, 2009, and 
     before the close of the first taxable year following the 
     election year, a taxpayer acquires the trade or business of a 
     predecessor, then the qualified payroll of such taxpayer for 
     any calendar year shall be increased by so much of the 
     qualified payroll of the predecessor for such calendar year 
     as was attributable to the trade or business acquired by the 
     taxpayer.
       ``(ii) Dispositions.--If, after December 31, 2009, and 
     before the close of the first taxable year following the 
     election year, a taxpayer disposes of a trade or business, 
     then--

       ``(I) the qualified payroll of such taxpayer for calendar 
     year 2010 shall be decreased by the amount of wages for such 
     calendar year as were attributable to the trade or business 
     which was disposed of by the taxpayer, and
       ``(II) if the disposition occurs after the beginning of the 
     first taxable year following the election year, the qualified 
     payroll of such taxpayer for the calendar year which begins 
     with or within such taxable year shall be decreased by the 
     amount of wages for such calendar year as were attributable 
     to the trade or business which was disposed of by the 
     taxpayer.

       ``(C) Special rule.--For purposes of determining qualified 
     payroll for any calendar year after calendar year 2011, such 
     term shall not include wages paid to any individual if such 
     individual received compensation from the taxpayer for 
     services performed--
       ``(i) after the date of the enactment of this paragraph, 
     and
       ``(ii) at a time when such individual was not an employee 
     of the taxpayer.''.
       (3) Reduction for failure to maintain employment levels.--
     Paragraph (4) of section 965(b) of such Code (relating to 
     limitations) is amended to read as follows:
       ``(4) Reduction in benefits for failure to maintain 
     employment levels.--
       ``(A) In general.--If, during the period consisting of the 
     calendar month in which the taxpayer first receives a 
     distribution described in subsection (a)(1) and the 
     succeeding 23 calendar months, the taxpayer does not maintain 
     an average employment level at least equal to the taxpayer's 
     prior average employment, an additional amount equal to 
     $75,000 multiplied by the number of employees by which the 
     taxpayer's average employment level during such period falls 
     below the prior average employment (but not exceeding the 
     aggregate amount allowed as a deduction pursuant to 
     subsection (a)(1)) shall be taken into income by the taxpayer 
     during the taxable year that includes the final day of such 
     period.
       ``(B) Average employment level.--For purposes of this 
     paragraph, the taxpayer's average employment level for a 
     period shall be the average number of full-time United States 
     employees of the taxpayer, measured at the end of each month 
     during the period.
       ``(C) Prior average employment.--For purposes of this 
     paragraph, the taxpayer's `prior average employment' shall be 
     the average number of full-time United States employees of 
     the taxpayer during the period consisting of the 24 calendar 
     months immediately preceding the calendar month in which the 
     taxpayer first receives a distribution described in 
     subsection (a)(1).
       ``(D) Full-time united states employee.--For purposes of 
     this paragraph--
       ``(i) In general.--The term `full-time United States 
     employee' means an individual who provides services in the 
     United States as a full-time employee, based on the 
     employer's standards and practices; except that regardless of 
     the employer's classification of the employee, an employee 
     whose normal schedule is 40 hours or more per week is 
     considered a full-time employee.
       ``(ii) Exception for changes in ownership of trades or 
     businesses.--Such term does not include--

       ``(I) any individual who was an employee, on the date of 
     acquisition, of any trade or business acquired by the 
     taxpayer during the 24-month period referred to in 
     subparagraph (A), and
       ``(II) any individual who was an employee of any trade or 
     business disposed of by the taxpayer during the 24-month 
     period referred to in subparagraph (A) or the 24-month period 
     referred to in subparagraph (C).

       ``(E) Aggregation rules.--In determining the taxpayer's 
     average employment level and prior average employment, all 
     domestic members of a controlled group shall be treated as a 
     single taxpayer.''.

[[Page S5238]]

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

                          ____________________