[Congressional Record (Bound Edition), Volume 156 (2010), Part 2]
[Senate]
[Pages 2007-2018]
[From the U.S. Government Publishing Office, www.gpo.gov]




 COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS ACT, 
                                  2010

  On Wednesday, February 24, 2010, the Senate passed H.R. 2847, as 
amended, as follows:

                               H.R. 2847

         Resolved, That the Senate agrees to the amendment of the 
     House of Representatives to the amendment of the Senate to 
     the bill (H.R. 2847) entitled ``An Act making appropriations 
     for the Departments of Commerce and Justice, and Science, and 
     Related Agencies for the fiscal year ending September 30, 
     2010, and for other purposes.'', with the following Senate 
     amendment to House amendment to Senate amendment:
       In lieu of the matter proposed to be inserted by the 
     amendment of the House to the amendment of the Senate insert 
     the following:

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

       (a) Short Title.--This Act may be cited as the ``Hiring 
     Incentives to Restore Employment Act''.
       (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 for this Act 
     is as follows:

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

    TITLE I--INCENTIVES FOR HIRING AND RETAINING UNEMPLOYED WORKERS

Sec. 101. Payroll tax forgiveness for hiring unemployed workers.
Sec. 102. Business credit for retention of certain newly hired 
              individuals in 2010.

                          TITLE II--EXPENSING

Sec. 201. Increase in expensing of certain depreciable business assets.

                 TITLE III--QUALIFIED TAX CREDIT BONDS

Sec. 301. Issuer allowed refundable credit for certain qualified tax 
              credit bonds.

     TITLE IV--EXTENSION OF CURRENT SURFACE TRANSPORTATION PROGRAMS

Sec. 401. Short title.

                    Subtitle A--Federal-aid Highways

Sec. 411. In general.
Sec. 412. Administrative expenses.
Sec. 413. Rescission of unobligated balances.
Sec. 414. Reconciliation of funds.

  Subtitle B--National Highway Traffic Safety Administration, Federal 
      Motor Carrier Safety Administration, and Additional Programs

Sec. 421. Extension of National Highway Traffic Safety Administration 
              Highway Safety Programs.
Sec. 422. Extension of Federal Motor Carrier Safety Administration 
              Programs.
Sec. 423. Additional programs.

               Subtitle C--Public Transportation Programs

Sec. 431. Allocation of funds for planning programs.
Sec. 432. Special rule for urbanized area formula grants.
Sec. 433. Allocating amounts for capital investment grants.
Sec. 434. Apportionment of formula grants for other than urbanized 
              areas.
Sec. 435. Apportionment based on fixed guideway factors.
Sec. 436. Authorizations for public transportation.
Sec. 437. Amendments to SAFETEA-LU.

                     Subtitle D--Revenue Provisions

Sec. 441. Repeal of provision prohibiting the crediting of interest to 
              the Highway Trust Fund.
Sec. 442. Restoration of certain foregone interest to Highway Trust 
              Fund.
Sec. 443. Treatment of certain amounts appropriated to Highway Trust 
              Fund.
Sec. 444. Termination of transfers from highway trust fund for certain 
              repayments and credits.
Sec. 445. Extension of authority for expenditures.
Sec. 446. Level of obligation limitations.

                       TITLE V--OFFSET PROVISIONS

               Subtitle A--Foreign Account Tax Compliance

           PART I--Increased Disclosure of Beneficial Owners

Sec. 501. Reporting on certain foreign accounts.
Sec. 502. Repeal of certain foreign exceptions to registered bond 
              requirements.

        PART II--Under Reporting With Respect to Foreign Assets

Sec. 511. Disclosure of information with respect to foreign financial 
              assets.
Sec. 512. Penalties for underpayments attributable to undisclosed 
              foreign financial assets.
Sec. 513. Modification of statute of limitations for significant 
              omission of income in connection with foreign assets.

                 PART III--Other Disclosure Provisions

Sec. 521. Reporting of activities with respect to passive foreign 
              investment companies.
Sec. 522. Secretary permitted to require financial institutions to file 
              certain returns related to withholding on foreign 
              transfers electronically.

             PART IV--Provisions Related to Foreign Trusts

Sec. 531. Clarifications with respect to foreign trusts which are 
              treated as having a United States beneficiary.
Sec. 532. Presumption that foreign trust has United States beneficiary.
Sec. 533. Uncompensated use of trust property.
Sec. 534. Reporting requirement of United States owners of foreign 
              trusts.
Sec. 535. Minimum penalty with respect to failure to report on certain 
              foreign trusts.

PART V--Substitute Dividends and Dividend Equivalent Payments Received 
                by Foreign Persons Treated as Dividends

Sec. 541. Substitute dividends and dividend equivalent payments 
              received by foreign persons treated as dividends.

  Subtitle B--Delay in Application of Worldwide Allocation of Interest

Sec. 551. Delay in application of worldwide allocation of interest.

    TITLE I--INCENTIVES FOR HIRING AND RETAINING UNEMPLOYED WORKERS

     SEC. 101. PAYROLL TAX FORGIVENESS FOR HIRING UNEMPLOYED 
                   WORKERS.

       (a) In General.--Section 3111 is amended by adding at the 
     end the following new subsection:
       ``(d) Special Exemption for Certain Individuals Hired in 
     2010.--
       ``(1) In general.--Subsection (a) shall not apply to wages 
     paid by a qualified employer with respect to employment 
     during the period beginning on the day after the date of the 
     enactment of this subsection and ending on December 31, 2010, 
     of any qualified individual for services performed--
       ``(A) in a trade or business of such qualified employer, or
       ``(B) in the case of a qualified employer exempt from tax 
     under section 501(a), in furtherance of the activities 
     related to the purpose or function constituting the basis of 
     the employer's exemption under section 501.
       ``(2) Qualified employer.--For purposes of this 
     subsection--
       ``(A) In general.--The term `qualified employer' means any 
     employer other than the United States, any State, or any 
     political subdivision thereof, or any instrumentality of the 
     foregoing.
       ``(B) Treatment of employees of post-secondary educational 
     institutions.--Notwithstanding subparagraph (A), the term 
     `qualified employer' includes any employer which is a public 
     institution of higher education (as defined in section 101(b) 
     of the Higher Education Act of 1965).
       ``(3) Qualified individual.--For purposes of this 
     subsection, the term `qualified individual' means any 
     individual who--

[[Page 2008]]

       ``(A) begins employment with a qualified employer after 
     February 3, 2010, and before January 1, 2011,
       ``(B) certifies by signed affidavit, under penalties of 
     perjury, that such individual has not been employed for more 
     than 40 hours during the 60-day period ending on the date 
     such individual begins such employment,
       ``(C) is not employed by the qualified employer to replace 
     another employee of such employer unless such other employee 
     separated from employment voluntarily or for cause, and
       ``(D) is not an individual described in section 51(i)(1) 
     (applied by substituting `qualified employer' for `taxpayer' 
     each place it appears).
       ``(4) Election.--A qualified employer may elect to have 
     this subsection not apply. Such election shall be made in 
     such manner as the Secretary may require.''.
       (b) Coordination With Work Opportunity Credit.--Section 
     51(c) is amended by adding at the end the following new 
     paragraph:
       ``(5) Coordination with payroll tax forgiveness.--The term 
     `wages' shall not include any amount paid or incurred to a 
     qualified individual (as defined in section 3111(d)(3)) 
     during the 1-year period beginning on the hiring date of such 
     individual by a qualified employer (as defined in section 
     3111(d)) unless such qualified employer makes an election not 
     to have section 3111(d) apply.''.
       (c) Transfers to Federal Old-Age and Survivors Insurance 
     Trust Fund.--There are hereby appropriated to the Federal 
     Old-Age and Survivors Trust Fund and the Federal Disability 
     Insurance Trust Fund established under section 201 of the 
     Social Security Act (42 U.S.C. 401) amounts equal to the 
     reduction in revenues to the Treasury by reason of the 
     amendments made by subsection (a). Amounts appropriated by 
     the preceding sentence shall be transferred from the general 
     fund at such times and in such manner as to replicate to the 
     extent possible the transfers which would have occurred to 
     such Trust Fund had such amendments not been enacted.
       (d) Effective Date.--The amendments made by this section 
     shall apply to wages paid after the date of the enactment of 
     this Act.

     SEC. 102. BUSINESS CREDIT FOR RETENTION OF CERTAIN NEWLY 
                   HIRED INDIVIDUALS IN 2010.

       (a) In General.--In the case of any taxable year ending 
     after the date of the enactment of this Act, the current year 
     business credit determined under section 38(b) of the 
     Internal Revenue Code of 1986 for such taxable year shall be 
     increased by an amount equal to the product of--
       (1) $1,000, and
       (2) the number of retained workers with respect to which 
     subsection (b)(2) is first satisfied during such taxable 
     year.
       (b) Retained Worker.--For purposes of this section, the 
     term ``retained worker'' means any qualified individual (as 
     defined in section 3111(d)(3) of the Internal Revenue Code of 
     1986)--
       (1) who was employed by the taxpayer on any date during the 
     taxable year,
       (2) who was so employed by the taxpayer for a period of not 
     less than 52 consecutive weeks, and
       (3) whose wages for such employment during the last 26 
     weeks of such period equaled at least 80 percent of such 
     wages for the first 26 weeks of such period.
       (c) Limitation on Carrybacks.--No portion of the unused 
     business credit under section 38 of the Internal Revenue Code 
     of 1986 for any taxable year which is attributable to the 
     increase in the current year business credit under this 
     section may be carried to a taxable year beginning before the 
     date of the enactment of this section.

                          TITLE II--EXPENSING

     SEC. 201. INCREASE IN EXPENSING OF CERTAIN DEPRECIABLE 
                   BUSINESS ASSETS.

       (a) In General.--Subsection (b) of section 179 is amended--
       (1) by striking ``($125,000 in the case of taxable years 
     beginning after 2006 and before 2011)'' in paragraph (1) and 
     inserting ``($250,000 in the case of taxable years beginning 
     after 2007 and before 2011)'',
       (2) by striking ``($500,000 in the case of taxable years 
     beginning after 2006 and before 2011)'' in paragraph (2) and 
     inserting ``($800,000 in the case of taxable years beginning 
     after 2007 and before 2011)'',
       (3) by striking paragraphs (5) and (7), and
       (4) by redesignating paragraph (6) as paragraph (5).
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.

                 TITLE III--QUALIFIED TAX CREDIT BONDS

     SEC. 301. ISSUER ALLOWED REFUNDABLE CREDIT FOR CERTAIN 
                   QUALIFIED TAX CREDIT BONDS.

       (a) Credit Allowed.--Section 6431 is amended by adding at 
     the end the following new subsection:
       ``(f) Application of Section to Certain Qualified Tax 
     Credit Bonds.--
       ``(1) In general.--In the case of any specified tax credit 
     bond--
       ``(A) such bond shall be treated as a qualified bond for 
     purposes of this section,
       ``(B) subsection (a) shall be applied without regard to the 
     requirement that the qualified bond be issued before January 
     1, 2011,
       ``(C) the amount of the payment determined under subsection 
     (b) with respect to any interest payment date under such bond 
     shall be--
       ``(i) in the case of a bond issued by a qualified small 
     issuer, 65 percent of the amount of interest payable on such 
     bond by such issuer with respect to such date, and
       ``(ii) in the case of a bond issued by any other person, 45 
     percent of the amount of interest payable on such bond by 
     such issuer with respect to such date,
       ``(D) interest on any such bond shall be includible in 
     gross income for purposes of this title,
       ``(E) no credit shall be allowed under section 54A with 
     respect to such bond,
       ``(F) any payment made under subsection (b) shall not be 
     includible as income for purposes of this title, and
       ``(G) the deduction otherwise allowed under this title to 
     the issuer of such bond with respect to interest paid under 
     such bond shall be reduced by the amount of the payment made 
     under this section with respect to such interest.
       ``(2) Definitions.--For purposes of this subsection--
       ``(A) Specified tax credit bond.--The term `specified tax 
     credit bond' means any qualified tax credit bond (as defined 
     in section 54A(d)) if--
       ``(i) such bond is--

       ``(I) a new clean renewable energy bond (as defined in 
     section 54C),
       ``(II) a qualified energy conservation bond (as defined in 
     section 54D),
       ``(III) a qualified zone academy bond (as defined in 
     section 54E), or
       ``(IV) a qualified school construction bond (as defined in 
     section 54F), and

       ``(ii) the issuer of such bond makes an irrevocable 
     election to have this subsection apply,
       ``(B) Qualified small issuer.--The term `qualified small 
     issuer' means, with respect to any calendar year, any issuer 
     who is not reasonably expected to issue tax-exempt bonds 
     (other than private activity bonds) and specified tax credit 
     bonds (determined without regard to whether an election is 
     made under this subsection) during such calendar year in an 
     aggregate face amount exceeding $30,000,000.''.
       (b) Technical Corrections Relating to Qualified School 
     Construction Bonds.--
       (1) The second sentence of section 54F(d)(1) is amended by 
     striking ``by the State'' and inserting ``by the State 
     education agency (or such other agency as is authorized under 
     State law to make such allocation)''.
       (2) The second sentence of section 54F(e) is amended by 
     striking ``subsection (d)(4)'' and inserting ``paragraphs (2) 
     and (4) of subsection (d)''.
       (c) Effective Dates.--
       (1) In general.--The amendment made by subsection (a) shall 
     apply to bonds issued after the date of the enactment of this 
     Act.
       (2) Technical corrections.--The amendments made by 
     subsection (b) shall take effect as if included in section 
     1521 of the American Recovery and Reinvestment Tax Act of 
     2009.

     TITLE IV--EXTENSION OF CURRENT SURFACE TRANSPORTATION PROGRAMS

     SEC. 401. SHORT TITLE.

       This title may be cited as the ``Surface Transportation 
     Extension Act of 2010''.

                    Subtitle A--Federal-aid Highways

     SEC. 411. IN GENERAL.

       (a) In General.--Except as provided in this Act, 
     requirements, authorities, conditions, eligibilities, 
     limitations, and other provisions authorized under titles I, 
     V, and VI of the SAFETEA-LU (119 Stat. 1144), the SAFETEA-LU 
     Technical Corrections Act of 2008 (122 Stat. 1572), titles I 
     and VI of the Intermodal Surface Transportation Act of 1991 
     (105 Stat. 1914), titles I and V of the Transportation Equity 
     Act for the 21st Century (112 Stat. 107), and title 23, 
     United States Code (excluding chapter 4 of that title), which 
     would otherwise expire on or cease to apply after September 
     30, 2009, or the date specified in section 106(3) of the 
     Continuing Appropriations Resolution, 2010 (Public Law 111-
     68), are incorporated by reference and shall continue in 
     effect until December 31, 2010.
       (b) Authorization of Appropriations.--Except as provided in 
     section 412, there are authorized to be appropriated out of 
     the Highway Trust Fund (other than the Mass Transit 
     Account)--
       (1) for fiscal year 2010, a sum equal to the total amount 
     authorized to be appropriated out of the Highway Trust Fund 
     for programs, projects, and activities for fiscal year 2009 
     under titles I, V, and VI of the SAFETEA-LU (119 Stat. 1144), 
     and title 23, United States Code (excluding chapter 4 of that 
     title); and
       (2) for the period beginning on October 1, 2010, and ending 
     on December 31, 2010, a sum equal to \1/4\ of the total 
     amount authorized to be appropriated out of the Highway Trust 
     Fund for programs, projects, and activities for fiscal year 
     2009 under titles I, V, and VI of the SAFETEA-LU (119 Stat. 
     1144), and title 23, United States Code (excluding chapter 4 
     of that title).
       (c) Use of Funds.--
       (1) Fiscal year 2010.--Except as otherwise expressly 
     provided in this Act, funds authorized to be appropriated 
     under subsection (b)(1) for fiscal year 2010 shall be 
     distributed, administered, limited, and made available for 
     obligation in the same manner and at the same level as funds 
     authorized to be appropriated out of the Highway Trust Fund 
     for fiscal year 2009 to carry out programs, projects, 
     activities, eligibilities, and requirements under the 
     SAFETEA-LU (119 Stat. 1144), the SAFETEA-LU Technical 
     Corrections Act of 2008 (122 Stat. 1572), titles I and VI of 
     the Intermodal Surface Transportation Act of 1991 (105 Stat. 
     1914), titles I and V of the Transportation Equity Act for 
     the 21st Century (112 Stat.

[[Page 2009]]

     107), and title 23, United States Code (excluding chapter 4 
     of that title).
       (2) Fiscal year 2011.--Except as otherwise expressly 
     provided in this Act, funds authorized to be appropriated 
     under subsection (b)(2) for the period beginning on October 
     1, 2010, and ending on December 31, 2010, shall be 
     distributed, administered, limited, and made available for 
     obligation in the same manner and at the same level as \1/4\ 
     of the total amount of funds authorized to be appropriated 
     out of the Highway Trust Fund for fiscal year 2009 to carry 
     out programs, projects, activities, eligibilities, and 
     requirements under the SAFETEA-LU (119 Stat. 1144), the 
     SAFETEA-LU Technical Corrections Act of 2008 (122 Stat. 
     1572), titles I and VI of the Intermodal Surface 
     Transportation Act of 1991 (105 Stat. 1914), titles I and V 
     of the Transportation Equity Act for the 21st Century (112 
     Stat. 107), and title 23, United States Code (excluding 
     chapter 4 of that title).
       (3) Calculation.--The amounts authorized to be appropriated 
     under subsection (b) shall be calculated without regard to 
     any rescission or cancellation of funds or contract authority 
     for fiscal year 2009 under the SAFETEA-LU (119 Stat. 1144) or 
     any other law.
       (4) Contract authority.--
       (A) In general.--Except as provided in subparagraph (B), 
     funds authorized to be appropriated under this section shall 
     be available for obligation and shall be administered in the 
     same manner as if such funds were apportioned under chapter 1 
     of title 23, United States Code, and--
       (i) for fiscal year 2010, shall be subject to a limitation 
     on obligations for Federal-aid highways and highway safety 
     construction programs included in an Act making 
     appropriations for fiscal year 2010 or a portion of that 
     fiscal year; and
       (ii) for the period beginning on October 1, 2010, and 
     ending on December 31, 2010, shall be subject to a limitation 
     on obligations included in an Act making appropriations for 
     fiscal year 2011 or a portion of that fiscal year, except 
     that during such period obligations subject to such 
     limitation shall not exceed \1/4\ of the limitation on 
     obligations included in an Act making appropriations for 
     fiscal year 2011.
       (B) Exceptions.--A limitation on obligations described in 
     clause (i) or (ii) of subparagraph (A) shall not apply to any 
     obligation under--
       (i) section 125 of title 23, United States Code; or
       (ii) section 105 of title 23, United States Code--

       (I) for fiscal year 2010, only in an amount equal to 
     $639,000,000; and
       (II) for the period beginning on October 1, 2010, and 
     ending on December 31, 2010, only in an amount equal to 
     $159,750,000.

       (5) Calculations for distribution of obligation 
     limitation.--Upon enactment of an Act making appropriations 
     for the Department of Transportation for fiscal year 2011 
     (other than an Act or resolution making continuing 
     appropriations), the Secretary shall--
       (A) as necessary for purposes of making the calculations 
     for the distribution of any obligation limitation under such 
     Act, annualize the amount of contract authority provided 
     under this Act for Federal-aid highways and highway safety 
     construction programs; and
       (B) multiply the resulting distribution of any obligation 
     limitation under such Act by \1/4\.
       (d) Extension and Flexibility for Certain Allocated 
     Programs.--
       (1) Fiscal year 2010.--Notwithstanding any other provision 
     of law, for fiscal year 2010, the portion of the share of 
     funds of a State under subsection (b)(1) determined by the 
     amount that the State received or was authorized to receive 
     for fiscal year 2009 to carry out sections 1301, 1302, 1307, 
     1702, and 1934 of the SAFETEA-LU (119 Stat. 1198, 1204, 1217, 
     1256, and 1485), and section 144(f)(1) of title 23, United 
     States Code, shall be--
       (A) made available to the State for programs apportioned 
     under sections 104(b) and 144 of title 23, United States 
     Code, and in the same proportion for each such program that--
       (i) the amount apportioned to the State for that program 
     for fiscal year 2009; bears to
       (ii) the amount apportioned to the State for fiscal year 
     2009 for all programs apportioned under such sections of such 
     Code; and
       (B) administered in the same manner and with the same 
     period of availability as such funding is administered under 
     programs identified in subparagraph (A), except that no funds 
     may be used to carry out the project described in section 
     1307(d)(1) of the SAFETEA-LU (119 Stat. 1217; 122 Stat. 
     1577).
       (2) Fiscal year 2011.--Notwithstanding any other provision 
     of law, for the period beginning on October 1, 2010, and 
     ending on December 31, 2010, the portion of the share of 
     funds of a State under subsection (b)(2) determined by \1/4\ 
     of the amount that the State received or was authorized to 
     receive for fiscal year 2009 to carry out sections 1301, 
     1302, 1307, 1702, and 1934 of the SAFETEA-LU (119 Stat. 1198, 
     1204, 1217, 1256, and 1485) and section 144(f)(1) of title 
     23, United States Code, shall be--
       (A) made available to the State for programs apportioned 
     under sections 104(b) and 144 of title 23, United States 
     Code, and in the same proportion for each such program that--
       (i) the amount apportioned to the State for that program 
     for fiscal year 2009; bears to
       (ii) the amount apportioned to the State for fiscal year 
     2009 for all programs apportioned under such sections of such 
     Code; and
       (B) administered in the same manner and with the same 
     period of availability as such funding is administered under 
     programs identified in subparagraph (A), except that no funds 
     may be used to carry out the project described in section 
     1307(d)(1) of the SAFETEA-LU (119 Stat. 1217; 122 Stat. 
     1577).
       (3) Territories and puerto rico.--
       (A) Fiscal year 2010.--Notwithstanding any other provision 
     of law, for fiscal year 2010, the portion of the share of 
     funds of a territory or Puerto Rico under paragraph (b)(1) 
     determined by the amount that the territory or Puerto Rico 
     received or was authorized to receive for fiscal year 2009 to 
     carry out section 1934 of SAFETEA-LU (119 Stat. 1485), shall 
     be--
       (i) for a territory, made available and administered in the 
     same manner as funding is made available and administered 
     under section 215 of title 23, United States Code; and
       (ii) for Puerto Rico, made available and administered in 
     the same manner as funding is made available and administered 
     under section 165 of title 23, United States Code.
       (B) Fiscal year 2011.--Notwithstanding any other provision 
     of law, for the period beginning on October 1, 2010, and 
     ending on December 31, 2010, the portion of the share of 
     funds of a territory or Puerto Rico under paragraph (b)(2) 
     determined by \1/4\ of the amount that the territory or 
     Puerto Rico received or was authorized to receive for fiscal 
     year 2009 to carry out section 1934 of SAFETEA-LU (119 Stat. 
     1485), shall be--
       (i) for a territory, made available and administered in the 
     same manner as funding is made available and administered 
     under section 215 of title 23, United States Code; and
       (ii) for Puerto Rico, made available and administered in 
     the same manner as funding is made available and administered 
     under section 165 of title 23, United States Code.
       (C) Territory defined.--In this paragraph, the term 
     ``territory'' means any of the following territories of the 
     United States: American Samoa, the Commonwealth of the 
     Northern Mariana Islands, Guam, or the United States Virgin 
     Islands.
       (4) Additional funds.--
       (A) In general.--No additional funds shall be provided for 
     any project or activity under subsection (c), or paragraph 
     (1) or (2) of this subsection, that the Secretary of 
     Transportation determines was sufficiently funded before or 
     during fiscal year 2009 to achieve the authorized purpose of 
     the project or activity.
       (B) Reservation and redistribution of funds.--Funds made 
     available in accordance with paragraph (1) or (2) of 
     subsection (c) or paragraph (1) or (2) of this subsection for 
     a project or activity described in subparagraph (A) shall 
     be--
       (i) reserved by the Secretary of Transportation; and
       (ii) distributed to each State in accordance with paragraph 
     (1) or (2) of subsection (c), or paragraph (1) or (2) of this 
     subsection, as appropriate, for use in carrying out other 
     highway projects and activities extended by subsection (c) or 
     this subsection, in the proportion that--

       (I) the total amount of funds made available for fiscal 
     year 2009 for projects and activities described in 
     subparagraph (A) in the State; bears to
       (II) the total amount of funds made available for fiscal 
     year 2009 for those projects and activities in all States.

       (e) Extension of Authorizations Under Title V of SAFETEA-
     LU.--
       (1) In general.--The programs authorized under paragraphs 
     (1) through (5) of section 5101(a) of the SAFETEA-LU (119 
     Stat. 1779) shall be continued--
       (A) for fiscal year 2010, at the funding levels authorized 
     for those programs for fiscal year 2009; and
       (B) for the period beginning on October 1, 2010, and ending 
     on December 31, 2010, at \1/4\ the funding levels authorized 
     for those programs for fiscal year 2009.
       (2) Distribution of funds.--Funds for programs continued 
     under paragraph (1) shall be distributed to major program 
     areas under those programs in the same proportions as funds 
     were allocated for those program areas for fiscal year 2009, 
     except that designations for specific activities shall not be 
     required to be continued for--
       (A) fiscal year 2010; or
       (B) the period beginning on October 1, 2010, and ending on 
     December 31, 2010.
       (3) Additional funds.--
       (A) In general.--No additional funds shall be provided for 
     any project or activity under this subsection that the 
     Secretary of Transportation determines was sufficiently 
     funded before or during fiscal year 2009 to achieve the 
     authorized purpose of the project or activity.
       (B) Distribution.--Funds that would have been made 
     available under paragraph (1) for a project or activity but 
     for the prohibition under subparagraph (A) shall be 
     distributed in accordance with paragraph (2).

     SEC. 412. ADMINISTRATIVE EXPENSES.

       (a) Authorization of Contract Authority.--Notwithstanding 
     any other provision of this Act or any other law, there are 
     authorized to be appropriated from the Highway Trust Fund 
     (other than the Mass Transit Account), from amounts provided 
     under section 411, for administrative expenses of the 
     Federal-aid highway program--
       (1) $422,425,000 for fiscal year 2010; and
       (2) $105,606,250 for the period beginning on October 1, 
     2010, and ending on December 31, 2010.
       (b) Contract Authority.--Funds authorized to be 
     appropriated by this section shall be--
       (1) available for obligation, and shall be administered, in 
     the same manner as if such funds were apportioned under 
     chapter 1 of title 23, United States Code; and

[[Page 2010]]

       (2) subject to a limitation on obligations for Federal-aid 
     highways and highway safety construction programs, except 
     that such funds shall remain available until expended.

     SEC. 413. RESCISSION OF UNOBLIGATED BALANCES.

       (a) In General.--The Secretary of Transportation shall 
     restore funds rescinded pursuant to section 10212 of the 
     SAFETEA-LU (Public Law 109-59; 119 Stat. 1937) to the States 
     and to the programs from which the funds were rescinded.
       (b) Administration of Funds.--The restored amounts shall be 
     administered in the same manner as the funds originally 
     rescinded, except those funds may only be used with an 
     obligation limitation provided in an Act making 
     appropriations for Federal-aid highways and highway safety 
     construction programs enacted after implementation of the 
     rescission under section 10212 of the SAFETEA-LU (Public Law 
     109-59; 119 Stat. 1937).
       (c) Funding.--
       (1) In general.--There is authorized to be appropriated 
     from the Highway Trust Fund (other than the Mass Transit 
     Account) for fiscal year 2010 to carry out this section an 
     amount equal to the amount of funds rescinded under section 
     10212 of the SAFETEA-LU (Public Law 109-59; 119 Stat. 1937).
       (2) Availability for obligation.--Funds authorized to be 
     appropriated by this section shall be--
       (A) made available under this section and available for 
     obligation in the same manner as if the funds were 
     apportioned under chapter 1 of title 23, United States Code, 
     except that the funds shall retain the characteristics of the 
     funds originally rescinded; and
       (B) subject to a limitation on obligations for Federal-aid 
     highways and highway safety construction programs included in 
     an Act making appropriations for fiscal year 2010 or a 
     portion of the fiscal year.
       (d) Limitation.--No funds authorized to be restored under 
     this section shall be restored after the end of fiscal year 
     2010.

     SEC. 414. RECONCILIATION OF FUNDS.

       The Secretary shall reduce the amount apportioned or 
     allocated for a program, project, or activity under this 
     title by amounts apportioned or allocated pursuant to the 
     Continuing Appropriations Resolution, 2010 (Public Law 111-
     68).

  Subtitle B--National Highway Traffic Safety Administration, Federal 
      Motor Carrier Safety Administration, and Additional Programs

     SEC. 421. EXTENSION OF NATIONAL HIGHWAY TRAFFIC SAFETY 
                   ADMINISTRATION HIGHWAY SAFETY PROGRAMS.

       (a) Chapter 4 Highway Safety Programs.--Section 2001(a)(1) 
     of the SAFETEA-LU (119 Stat. 1519) is amended--
       (1) by striking ``and''; and
       (2) by striking ``2009.'' and inserting ``2009, 
     $235,000,000 for fiscal year 2010, and $58,750,000 for the 
     period beginning on October 1, 2010, and ending on December 
     31, 2010.''.
       (b) Highway Safety Research and Development.--Section 
     2001(a)(2) of the SAFETEA-LU (119 Stat. 1519) is amended--
       (1) by striking ``and''; and
       (2) by striking ``2009.'' and inserting ``2009, 
     $107,329,000 for fiscal year 2010, and $27,061,000 for the 
     period beginning on October 1, 2010, and ending on December 
     31, 2010.''.
       (c) Occupant Protection Incentive Grants.--
       (1) Extension of program.--Section 405(a) of title 23, 
     United States Code, is amended--
       (A) in paragraph (3), by striking ``6'' and inserting 
     ``8''; and
       (B) in paragraph (4)(C), by striking ``fifth and sixth'' 
     and inserting ``fifth through eighth''.
       (2) Authorization of appropriations.--Section 2001(a)(3) of 
     the SAFETEA-LU (119 Stat. 1519) is amended--
       (A) by striking ``and''; and
       (B) by striking ``2009.'' and inserting ``2009, $25,000,000 
     for fiscal year 2010, and $6,250,000 for the period beginning 
     on October 1, 2010, and ending on December 31, 2010.''.
       (d) Safety Belt Performance Grants.--Section 2001(a)(4) of 
     the SAFETEA-LU (119 Stat. 1519) is amended--
       (1) by striking ``and''; and
       (2) by striking ``2009.'' and inserting ``2009, 
     $124,500,000 for fiscal year 2010, and $31,125,000 for the 
     period beginning on October 1, 2010, and ending on December 
     31, 2010.''.
       (e) State Traffic Safety Information System Improvements.--
     Section 2001(a)(5) of the SAFETEA-LU (119 Stat. 1519) is 
     amended--
       (1) by striking ``and''; and
       (2) by striking ``2009.'' and inserting ``2009, $34,500,000 
     for fiscal year 2010, and $8,625,000 for the period beginning 
     on October 1, 2010, and ending on December 31, 2010.''.
       (f) Alcohol-impaired Driving Countermeasures Incentive 
     Grant Program.--
       (1) Extension of program.--Section 410 of title 23, United 
     States Code, is amended--
       (A) in subsection (a)(3)(C), by striking ``fifth, sixth, 
     seventh, and eighth'' and inserting ``fifth through tenth''; 
     and
       (B) in subsection (b)(2)(C), by striking ``2008 and 2009'' 
     and inserting ``2008, 2009, 2010, and 2011''.
       (2) Authorization of appropriations.--Section 2001(a)(6) of 
     the SAFETEA-LU (119 Stat. 1519) is amended--
       (A) by striking ``and''; and
       (B) by striking ``2009.'' and inserting ``2009, 
     $139,000,000 for fiscal year 2010, and $34,750,000 for the 
     period beginning on October 1, 2010, and ending on December 
     31, 2010.''.
       (g) National Driver Register.--Section 2001(a)(7) of the 
     SAFETEA-LU (119 Stat. 1520) is amended--
       (1) by striking ``and''; and
       (2) by striking ``2009.'' and inserting ``2009, $4,078,000 
     for fiscal year 2010, and $1,029,000 for the period beginning 
     on October 1, 2010, and ending on December 31, 2010.''.
       (h) High Visibility Enforcement Program.--
       (1) Extension of program.--Section 2009(a) of the SAFETEA-
     LU (23 U.S.C. 402 note) is amended by striking ``2009'' and 
     inserting ``2011''.
       (2) Authorization of appropriations.--Section 2001(a)(8) of 
     the SAFETEA-LU (119 Stat. 1520) is amended--
       (A) by striking ``and''; and
       (B) by striking ``2009.'' and inserting ``2009, $29,000,000 
     for fiscal year 2010, and $7,250,000 for the period beginning 
     on October 1, 2010, and ending on December 31, 2010.''.
       (i) Motorcyclist Safety.--
       (1) Extension of program.--Section 2010(d)(1)(B) of the 
     SAFETEA-LU (23 U.S.C. 402 note) is amended by striking ``and 
     fourth'' and inserting ``fourth, fifth, and sixth''.
       (2) Authorization of appropriations.--Section 2001(a)(9) of 
     the SAFETEA-LU (119 Stat. 1520) is amended--
       (A) by striking ``and''; and
       (B) by striking ``2009.'' and inserting ``2009, $7,000,000 
     for fiscal year 2010, and $1,750,000 for the period beginning 
     on October 1, 2010, and ending on December 31, 2010.''.
       (j) Child Safety and Child Booster Seat Safety Incentive 
     Grants.--
       (1) Extension of program.--Section 2011(c)(2) of the 
     SAFETEA-LU (23 U.S.C. 405 note) is amended by striking 
     ``fourth fiscal year'' and inserting ``fourth, fifth, and 
     sixth fiscal years''.
       (2) Authorization of appropriations.--Section 2001(a)(10) 
     of the SAFETEA-LU (119 Stat. 1520) is amended--
       (A) by striking ``and''; and
       (B) by striking ``2009.'' and inserting ``2009, $7,000,000 
     for fiscal year 2010, and $1,750,000 for the period beginning 
     on October 1, 2010, and ending on December 31, 2010.''.
       (k) Administrative Expenses.--Section 2001(a)(11) of the 
     SAFETEA-LU (119 Stat. 1520) is amended--
       (1) by striking ``and'' the last place it appears; and
       (2) by striking ``2009.'' and inserting ``2009, $25,047,000 
     for fiscal year 2010, and $6,332,000 for the period beginning 
     on October 1, 2010, and ending on December 31, 2010.''.
       (l) Applicability of Title 23.--Section 2001(c) of the 
     SAFETEA-LU (119 Stat. 1520) is amended by striking ``2009'' 
     and inserting ``2011''.
       (m) Drug-impaired Driving Enforcement.--Section 2013(f) of 
     the SAFETEA-LU (23 U.S.C. 403 note) is amended by striking 
     ``2009'' and inserting ``2011''.
       (n) Older Driver Safety; Law Enforcement Training.--Section 
     2017 of the SAFETEA-LU is amended--
       (1) in subsection (a)(1) (119 Stat. 1541), by striking 
     ``2009'' and inserting ``2011''; and
       (2) in subsection (b)(2) (23 U.S.C. 402 note), by striking 
     ``2009'' and inserting ``2011''.

     SEC. 422. EXTENSION OF FEDERAL MOTOR CARRIER SAFETY 
                   ADMINISTRATION PROGRAMS.

       (a) Motor Carrier Safety Grants.--Section 31104(a) of title 
     49, United States Code, is amended--
       (1) in paragraph (4), by striking ``and'' at the end;
       (2) in paragraph (5), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(6) $209,000,000 for fiscal year 2010; and
       ``(7) $52,679,000 for the period beginning on October 1, 
     2010, and ending on December 31, 2010.''.
       (b) Administrative Expenses.--Section 31104(i)(1) of title 
     49, United States Code, is amended--
       (1) in subparagraph (D), by striking ``and'';
       (2) in subparagraph (E), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(F) ``(F) $239,828,000 for fiscal year 2010; and
       ``(G) ``(G) $61,036,000 for the period beginning on October 
     1, 2010, and ending on December 31, 2010.''.
       (c) Grant Programs.--Section 4101(c) of the SAFETEA-LU (119 
     Stat. 1715) is amended--
       (1) in paragraph (1), by striking ``2009.'' and inserting 
     ``2009, and $25,000,000 for fiscal year 2010, and $6,301,000 
     for the period beginning on October 1, 2010, and ending on 
     December 31, 2010.'';
       (2) in paragraph (2), by striking ``2009.'' and inserting 
     ``2009, $32,000,000 for fiscal year 2010, and $8,066,000 for 
     the period beginning on October 1, 2010, and ending on 
     December 31, 2010.'';
       (3) in paragraph (3), by striking ``2009.'' and inserting 
     ``2009, $5,000,000 for fiscal year 2010, and $1,260,000 for 
     the period beginning on October 1, 2010, and ending on 
     December 31, 2010.'';
       (4) in paragraph (4), by striking ``2009.'' and inserting 
     ``2009, $25,000,000 for fiscal year 2010, and $6,301,000 for 
     the period beginning on October 1, 2010, and ending on 
     December 31, 2010.''; and
       (5) in paragraph (5), by striking ``2009.'' and inserting 
     ``2009, $3,000,000 for fiscal year 2010, and $756,000 for the 
     period beginning on October 1, 2010, and ending on December 
     31, 2010.''.
       (d) High-priority Activities.--Section 31104(k) of title 
     49, United States Code, is amended by striking ``2009'' in 
     paragraph (2) and inserting ``2009, $15,000,000 for fiscal 
     year 2010, and $3,781,000 for the period beginning on

[[Page 2011]]

     October 1, 2010, and ending on December 31, 2010''.
       (e) New Entrant Audits.--Section 31144(g)(5)(B) of title 
     49, United States Code, is amended by inserting ``(and up to 
     $7,310,000 for the period beginning on October 1, 2010, and 
     ending on December 31, 2010)'' after ``fiscal year''.
       (f) Commercial Driver's License Information System 
     Modernization.--Section 4123(d) of the SAFETEA-LU (119 Stat. 
     1736) is amended--
       (1) in paragraph (3), by striking ``and'' at the end;
       (2) in paragraph (4), by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding at the end the following:
       ``(5) $8,000,000 for fiscal year 2010; and
       ``(6) $2,016,000 for the period beginning on October 1, 
     2010, and ending on December 31, 2010.''.
       (g) Outreach and Education.--Section 4127(e) of the 
     SAFETEA-LU (119 Stat. 1741) is amended by striking ``and 
     2009'' and inserting ``2009, and 2010, and $252,000 to the 
     Federal Motor Carrier Safety Administration, and $756,000 to 
     the National Highway Traffic Safety Administration, for the 
     period beginning on October 1, 2010, and ending on December 
     31, 2010,''.
       (h) Grant Program for Commercial Motor Vehicle Operators.--
     Section 4134(c) of the SAFETEA-LU (119 Stat. 1744) is amended 
     by striking ``2009'' and inserting ``2009, 2010, and $252,000 
     for the period beginning on October 1, 2010, and ending on 
     December 31, 2010,''.
       (i) Motor Carrier Safety Advisory Committee.--Section 
     4144(d) of the SAFETEA-LU (1119 Stat. 1748) is amended by 
     striking ``September 30, 2010'' and inserting ``December 31, 
     2010''.
       (j) Working Group for Development of Practices and 
     Procedures To Enhance Federal-State Relations.--Section 
     4213(d) of the SAFETEA-LU (49 U.S.C. 14710 note) is amended 
     by striking ``September 30, 2009'' and inserting ``December 
     31, 2010''.

     SEC. 423. ADDITIONAL PROGRAMS.

       (a) Hazardous Materials Research Projects.--Section 7131(c) 
     of the SAFETEA-LU (119 Stat. 1910) is amended by striking 
     ``through 2009'' and inserting ``through 2010, and $315,000 
     for the period beginning on October 1, 2010, and ending on 
     December 31, 2010,''.
       (b) Dingell-Johnson Sport Fish Restoration Act.--Section 4 
     of the Dingell-Johnson Sport Fish Restoration Act (16 U.S.C. 
     777c) is amended--
       (1) in subsection (a), in the matter preceding paragraph 
     (1), by striking ``2009,'' and inserting ``2010 and for the 
     period beginning on October 1, 2010, and ending on December 
     31, 2010,''; and
       (2) in subsection (b)(1)(A), by striking ``2010,'' and 
     inserting ``and for the period beginning on October 1, 2010, 
     and ending on December 31, 2010,''.

               Subtitle C--Public Transportation Programs

     SEC. 431. ALLOCATION OF FUNDS FOR PLANNING PROGRAMS.

       Section 5305(g) of title 49, United States Code, is amended 
     by striking ``2009'' and inserting ``2010, and for the period 
     beginning October 1, 2010, and ending December 31, 2010,''.

     SEC. 432. SPECIAL RULE FOR URBANIZED AREA FORMULA GRANTS.

       Section 5307(b)(2) of title 49, United States Code, is 
     amended--
       (1) in the paragraph heading, by striking ``2009'' and 
     inserting ``2010, and the period beginning october 1, 2010, 
     and ending december 31, 2010'';
       (2) in subparagraph (A), by striking ``2009,'' and 
     inserting ``2010, and the period beginning October 1, 2010, 
     and ending December 31, 2010,''; and
       (3) in subparagraph (E)--
       (A) in the subparagraph heading, by striking ``and 2009'' 
     and inserting ``through 2010 and during the period beginning 
     october 1, 2010, and ending december 31, 2010''; and
       (B) in the matter preceding clause (i), by striking ``and 
     2009'' and inserting ``through 2010, and during the period 
     beginning October 1, 2010, and ending December 31, 2010,''.

     SEC. 433. ALLOCATING AMOUNTS FOR CAPITAL INVESTMENT GRANTS.

       Section 5309(m) of title 49, United States Code, is 
     amended--
       (1) in paragraph (2)--
       (A) in the heading, by striking ``2009'' and inserting 
     ``2010 and october 1, 2010, through december 31, 2010'';
       (B) in the matter preceding subparagraph (A), by striking 
     ``2009'' and inserting ``2010, and during the period 
     beginning October 1, 2010, and ending December 31, 2010,''; 
     and
       (C) in subparagraph (A)(i), by striking ``2009'' and 
     inserting ``2010, and $50,000,000 for the period beginning 
     October 1, 2010, and ending December 31, 2010,'';
       (2) in paragraph (6)--
       (A) in subparagraph (B), by striking ``2009'' and inserting 
     ``2010, and $3,750,000 shall be available for the period 
     beginning October 1, 2010, and ending December 31, 2010,''; 
     and
       (B) in subparagraph (C), by striking ``2009'' and inserting 
     ``2010, and $1,250,000 shall be available for the period 
     beginning October 1, 2010 and ending December 31, 2010,''; 
     and
       (3) in paragraph (7)--
       (A) in subparagraph (A)--
       (i) by redesignating clauses (i) through (viii) as 
     subclauses (I) through (VIII), respectively;
       (ii) in the matter preceding subclause (I), as so 
     redesignated, by striking ``$10,000,000'' and all that 
     follows through ``2009'' and inserting the following:
       ``(i) Fiscal years 2006 through 2010.--$10,000,000 shall be 
     available in each of fiscal years 2006 through 2010''; and
       (iii) by inserting after subclause (VIII), as so 
     redesignated, the following:
       ``(ii) Special rule for october 1, 2010, through december 
     31, 2010.--$2,500,000 shall be available in the period 
     beginning October 1, 2010, and ending December 31, 2010, for 
     ferry boats or ferry terminal facilities. The Secretary shall 
     set aside a portion of such amount in accordance with clause 
     (i), except that the Secretary shall set aside 25 percent of 
     each dollar amount specified in subclauses (I) through 
     (VIII).'';''.
       (B) in subparagraph (B), by inserting after ``2009.'' the 
     following:
       ``(v) $13,500,000 for fiscal year 2010.
       ``(vi) $3,375,000 for the period beginning October 1, 2010, 
     and ending December 31, 2010.'';
       (C) in subparagraph (C), by inserting ``, and during the 
     period beginning October 1, 2010, and ending December 31, 
     2010,'' after ``fiscal year'';
       (D) in subparagraph (D), by inserting ``, and not less than 
     $8,750,000 shall be available for the period beginning 
     October 1, 2010, and ending December 31, 2010,'' after 
     ``year''; and
       (E) in subparagraph (E), by inserting ``, and $750,000 
     shall be available for the period beginning October 1, 2010, 
     and ending December 31, 2010,'' after ``year''.

     SEC. 434. APPORTIONMENT OF FORMULA GRANTS FOR OTHER THAN 
                   URBANIZED AREAS.

       Section 5311(c)(1) of title 49, United States Code, is 
     amended by adding at the end the following:
       ``(E) $15,000,000 for fiscal year 2010.
       ``(F) $3,750,000 for the period beginning October 1, 2010, 
     and ending December 31, 2010.''.

     SEC. 435. APPORTIONMENT BASED ON FIXED GUIDEWAY FACTORS.

       Section 5337 of title 49, United States Code, is amended--
       (1) in subsection (a), in the matter preceding paragraph 
     (1), by striking ``2009'' and inserting ``2010''; and
       (2) by adding at the end the following:
       ``(g) Special Rule for October 1, 2010, Through December 
     31, 2010.--The Secretary shall apportion amounts made 
     available for fixed guideway modernization under section 5309 
     for the period beginning October 1, 2010, and ending December 
     31, 2010, in accordance with subsection (a), except that the 
     Secretary shall apportion 25 percent of each dollar amount 
     specified in subsection (a).''.

     SEC. 436. AUTHORIZATIONS FOR PUBLIC TRANSPORTATION.

       (a) Formula and Bus Grants.--Section 5338(b) of title 49, 
     United States Code, is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (C), by striking ``and'' at the end;
       (B) in subparagraph (D), by striking the period at the end 
     and inserting a semicolon; and
       (C) by adding at the end the following:
       ``(E) $8,360,565,000 for fiscal year 2010; and
       ``(F) $2,090,141,250 for the period beginning October 1, 
     2010, and ending December 31, 2010.''; and
       (2) in paragraph (2)--
       (A) in subparagraph (A), by striking ``and $113,500,000 for 
     fiscal year 2009'' and inserting ``$113,500,000 for each of 
     fiscal years 2009 and 2010, and $28,375,000 for the period 
     beginning October 1, 2010, and ending December 31, 2010,'';
       (B) in subparagraph (B), by striking ``and $4,160,365,000 
     for fiscal year 2009'' and inserting ``$4,160,365,000 for 
     each of fiscal years 2009 and 2010, and $1,040,091,250 for 
     the period beginning October 1, 2010, and ending December 31, 
     2010,'';
       (C) in subparagraph (C), by striking ``and $51,500,000 for 
     fiscal year 2009'' and inserting ``$51,500,000 for each of 
     fiscal years 2009 and 2010, and $12,875,000 for the period 
     beginning October 1, 2010, and ending December 31, 2010,'';
       (D) in subparagraph (D), by striking ``and $1,666,500,000 
     for fiscal year 2009'' and inserting ``$1,666,500,000 for 
     each of fiscal years 2009 and 2010, and $416,625,000 for the 
     period beginning October 1, 2010 and ending December 31, 
     2010,'';
       (E) in subparagraph (E), by striking ``and $984,000,000 for 
     fiscal year 2009'' and inserting ``$984,000,000 for each of 
     fiscal years 2009 and 2010, and $246,000,000 for the period 
     beginning October 1, 2010 and ending December 31, 2010,'';
       (F) in subparagraph (F), by striking ``and $133,500,000 for 
     fiscal year 2009'' and inserting ``$133,500,000 for each of 
     fiscal years 2009 and 2010, and $33,375,000 for the period 
     beginning October 1, 2010 and ending December 31, 2010,'';
       (G) in subparagraph (G), by striking ``and $465,000,000 for 
     fiscal year 2009'' and inserting ``$465,000,000 for each of 
     fiscal years 2009 and 2010, and $116,250,000 for the period 
     beginning October 1, 2010 and ending December 31, 2010,'';
       (H) in subparagraph (H), by striking ``and $164,500,000 for 
     fiscal year 2009'' and inserting ``$164,500,000 for each of 
     fiscal years 2009 and 2010, and $41,125,000 for the period 
     beginning October 1, 2010 and ending December 31, 2010,'';
       (I) in subparagraph (I), by striking ``and $92,500,000 for 
     fiscal year 2009'' and inserting ``$92,500,000 for each of 
     fiscal years 2009 and 2010, and $23,125,000 for the period 
     beginning October 1, 2010 and ending December 31, 2010,'';
       (J) in subparagraph (J), by striking ``and $26,900,000 for 
     fiscal year 2009'' and inserting ``$26,900,000 for each of 
     fiscal years 2009 and 2010, and $6,725,000 for the period 
     beginning October 1, 2010 and ending December 31, 2010,'';
       (K) in subparagraph (K), by striking ``and $3,500,000 for 
     fiscal year 2009'' and inserting ``$3,500,000 for each of 
     fiscal years 2009 and 2010, and $875,000 for the period 
     beginning October 1, 2010 and ending December 31, 2010,'';

[[Page 2012]]

       (L) in subparagraph (L), by striking ``and $25,000,000 for 
     fiscal year 2009'' and inserting ``$25,000,000 for each of 
     fiscal years 2009 and 2010, and $6,250,000 for the period 
     beginning October 1, 2010 and ending December 31, 2010,'';
       (M) in subparagraph (M), by striking ``and $465,000,000 for 
     fiscal year 2009'' and inserting ``$465,000,000 for each of 
     fiscal years 2009 and 2010, and $116,250,000 for the period 
     beginning October 1, 2010 and ending December 31, 2010,''; 
     and
       (N) in subparagraph (N), by striking ``and $8,800,000 for 
     fiscal year 2009'' and inserting ``$8,800,000 for each of 
     fiscal years 2009 and 2010, and $2,200,000 for the period 
     beginning October 1, 2010 and ending December 31, 2010,''.
       (b) Capital Investment Grants.--Section 5338(c) of title 
     49, United States Code, is amended--
       (1) in paragraph (3), by striking ``and'' at the end;
       (2) in paragraph (4), by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding at the end the following:
       ``(5) $2,000,000,000 for fiscal year 2010; and
       ``(6) $500,000,000 for the period of October 1, 2010 
     through December 31, 2010.''.
       (c) Research and University Research Centers.--Section 
     5338(d) of title 49, United States Code, is amended--
       (1) in paragraph (1), in the matter preceding subparagraph 
     (A), by striking ``and $69,750,000 for fiscal year 2009'' and 
     inserting ``$69,750,000 for each of fiscal years 2009 and 
     2010, and $17,437,500 for the period beginning October 1, 
     2010, and ending December 31, 2010''; and
       (2) by adding at the end the following:
       ``(3) Additional authorizations.--
       ``(A) In general.--
       ``(i) Fiscal year 2010.--Of amounts authorized to be 
     appropriated for fiscal year 2010 under paragraph (1), the 
     Secretary shall allocate for each of the activities and 
     projects described in subparagraphs (A) through (F) of 
     paragraph (1) an amount equal to the amount allocated for 
     fiscal year 2009 under each such subparagraph.
       ``(ii) October 1, 2010 through december 31, 2010.--Of 
     amounts authorized to be appropriated for the period 
     beginning October 1, 2010, through December 31, 2010, under 
     paragraph (1), the Secretary shall allocate for each of the 
     activities and projects described in subparagraphs (A) 
     through (F) of paragraph (1) an amount equal to 25 percent of 
     the amount allocated for fiscal year 2009 under each such 
     subparagraph.
       ``(B) University centers program.--
       ``(i) Fiscal year 2010.--Of the amounts allocated under 
     subparagraph (A)(i) for the university centers program under 
     section 5506 for fiscal year 2010, the Secretary shall 
     allocate for each program described in clauses (i) through 
     (iii) and (v) through (viii) of paragraph (2)(A) an amount 
     equal to the amount allocated for fiscal year 2009 under each 
     such clause.
       ``(ii) October 1, 2010 through december 31, 2010.--Of the 
     amounts allocated under subparagraph (A)(i) for the 
     university centers program under section 5506 for the period 
     beginning October 1, 2010, and ending December 31, 2010, the 
     Secretary shall allocate for each program described in 
     clauses (i) through (iii) and (v) through (viii) of paragraph 
     (2)(A) an amount equal to 25 percent of the amount allocated 
     for fiscal year 2009 under each such clause.
       ``(iii) Funding.--If the Secretary determines that a 
     project or activity described in paragraph (2) received 
     sufficient funds in fiscal year 2009, or a previous fiscal 
     year, to carry out the purpose for which the project or 
     activity was authorized, the Secretary may not allocate any 
     amounts under clause (i) or (ii) for the project or activity 
     for fiscal year 2010, or any subsequent fiscal year.''.
       (d) Administration.--Section 5338(e) of title 49, United 
     States Code, is amended--
       (1) in paragraph (3), by striking ``and'' at the end;
       (2) in paragraph (4), by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding at the end the following:
       ``(5) $98,911,000 for fiscal year 2010; and
       ``(6) $24,727,750 for the period beginning October 1, 2010, 
     and ending December 31, 2010.''.

     SEC. 437. AMENDMENTS TO SAFETEA-LU.

       (a) Contracted Paratransit Pilot.--Section 3009(i)(1) of 
     the SAFETEA-LU (Public Law 109-59; 119 Stat. 1572) is amended 
     by striking ``2009'' and inserting ``2010, and for the period 
     beginning October 1, 2010, and ending December 31, 2010''.
       (b) Public-private Partnership Pilot Program.--Section 3011 
     of the SAFETEA-LU (49 U.S.C. 5309 note) is amended--
       (1) in subsection (c)(5), by striking ``2009'' and 
     inserting ``2010 and the period beginning October 1, 2010, 
     and ending December 31, 2010''; and
       (2) in subsection (d), by striking ``2009'' and inserting 
     ``2010, and for the period beginning October 1, 2010, and 
     ending December 31, 2010''.
       (c) Elderly Individuals and Individuals With Disabilities 
     Pilot Program.--Section 3012(b)(8) of the SAFETEA-LU (49 
     U.S.C. 5310 note) is amended by striking ``September 30, 
     2009'' and inserting ``December 31, 2010''.
       (d) Obligation Ceiling.--Section 3040 of the SAFETEA-LU 
     (Public Law 109-59; 119 Stat. 1639) is amended--
       (1) in paragraph (4), by striking ``and'' at the end;
       (2) in paragraph (5), by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding at the end the following:
       ``(6) $10,507,752,000 for fiscal year 2010, of which not 
     more than $8,360,565,000 shall be from the Mass Transit 
     Account; and
       ``(7) $2,626,938,000 for the period beginning October 1, 
     2010, and ending December 31, 2010, of which not more than 
     $2,090,141,250 shall be from the Mass Transit Account.''.
       (e) Project Authorizations for New Fixed Guideway Capital 
     Projects.--Section 3043 of the SAFETEA-LU (Public Law 109-59; 
     119 Stat. 1640) is amended--
       (1) in subsection (b), in the matter preceding paragraph 
     (1), by striking ``2009'' and inserting ``2010, and for the 
     period beginning October 1, 2010, and ending December 31, 
     2010,''; and
       (2) in subsection (c), in the matter preceding paragraph 
     (1), by striking ``2009'' and inserting ``2010, and for the 
     period beginning October 1, 2010, and ending December 31, 
     2010,''.
       (f) Allocations for National Research and Technology 
     Programs.--Section 3046 of the SAFETEA-LU (49 U.S.C. 5338 
     note) is amended--
       (1) in subsection (b), by inserting ``or period'' after 
     ``fiscal year''; and
       (2) by adding at the end the following:
       ``(c) Additional Appropriations.--The Secretary shall 
     allocate amounts appropriated pursuant to section 5338(d) of 
     title 49, United States Code, for national research and 
     technology programs under sections 5312, 5314, and 5322 of 
     such title--
       ``(1) for fiscal year 2010, in amounts equal to the amounts 
     allocated for fiscal year 2009 under each of paragraphs (2), 
     (3), (5), (6), and (8) through (25) of subsection (a); and
       ``(2) for the period beginning October 1, 2010, and ending 
     December 31, 2010, in amounts equal to 25 percent of the 
     amounts allocated for fiscal year 2009 under each of 
     paragraphs (2), (3), (5), (6), and (8) through (25) of 
     subsection (a).
       ``(d) Funding.--If the Secretary determines that a project 
     or activity described in subsection (a) received sufficient 
     funds in fiscal year 2009, or a previous fiscal year, to 
     carry out the purpose for which the project or activity was 
     authorized, the Secretary may not allocate any amounts under 
     subsection (c) for the project or activity for fiscal year 
     2010, or any subsequent fiscal year.''.

                     Subtitle D--Revenue Provisions

     SEC. 441. REPEAL OF PROVISION PROHIBITING THE CREDITING OF 
                   INTEREST TO THE HIGHWAY TRUST FUND.

       (a) In General.--Paragraph (1) of section 9503(f) is 
     amended by striking subparagraph (B).
       (b) Conforming Amendments.--Such paragraph, as amended by 
     paragraph (1), is further amended--
       (1) by striking ``, and'' at the end of subparagraph (A) 
     and inserting a period; and
       (2) by striking ``1998'' in the matter preceding 
     subparagraph (A) and all that follows through ``the opening 
     balance'' and inserting ``1998, the opening balance''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this title.

     SEC. 442. RESTORATION OF CERTAIN FOREGONE INTEREST TO HIGHWAY 
                   TRUST FUND.

       (a) In General.--Paragraph (2) of section 9503(f) is 
     amended to read as follows:
       ``(2) Restoration of foregone interest.--Out of money in 
     the Treasury not otherwise appropriated, there is hereby 
     appropriated--
       ``(A) $14,700,000,000 to the Highway Account (as defined in 
     subsection (e)(5)(B)) in the Highway Trust Fund; and
       ``(B) $4,800,000,000 to the Mass Transit Account in the 
     Highway Trust Fund.''.
       (b) Conforming Amendment.--Paragraph (1) of section 9503(e) 
     is amended by striking ``this subsection'' and inserting 
     ``this section''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 443. TREATMENT OF CERTAIN AMOUNTS APPROPRIATED TO 
                   HIGHWAY TRUST FUND.

       (a) In General.--Section 9503(f), as amended by this Act, 
     is amended by adding at the end the following new paragraph:
       ``(4) Treatment of appropriated amounts.--Any amount 
     appropriated under this subsection to the Highway Trust Fund 
     shall remain available without fiscal year limitation.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 444. TERMINATION OF TRANSFERS FROM HIGHWAY TRUST FUND 
                   FOR CERTAIN REPAYMENTS AND CREDITS.

       (a) In General.--Section 9503(c) is amended by striking 
     paragraph (2) and by redesignating paragraphs (3), (4), (5), 
     and (6) as paragraphs (2), (3), (4), and (5), respectively.
       (b) Conforming Amendments.--
       (1) Section 9502(a) is amended by striking ``section 
     9503(c)(7)'' and inserting ``section 9503(c)(5)''.
       (2) Section 9503(b)(4)(D) is amended by striking 
     ``paragraph (4)(D) or (5)(B)'' and inserting ``paragraph 
     (3)(D) or (4)(B)''.
       (3) Paragraph (2) of section 9503(c), as redesignated by 
     subsection (a), is amended by adding at the end the following 
     new sentence: ``The amounts payable from the Highway Trust 
     Fund under the preceding sentence shall be determined by 
     taking into account only the portion of the taxes which are 
     deposited into the Highway Trust Fund.''.
       (4) Section 9503(e)(5)(A) is amended by striking ``(2), 
     (3), and (4)'' and inserting ``(2) and (3)''.
       (5) Section 9504(a) is amended by striking ``section 
     9503(c)(4), section 9503(c)(5)'' and inserting ``section 
     9503(c)(3), section 9503(c)(4)''.
       (6) Section 9504(b)(2) is amended by striking ``section 
     9503(c)(5)'' and inserting ``section 9503(c)(4)''.

[[Page 2013]]

       (7) Section 9504(e) is amended by striking ``section 
     9503(c)(4)'' and inserting section ``9503(c)(3)''.
       (c) Effective Date.--The amendment made by this section 
     shall apply to transfers relating to amounts paid and credits 
     allowed after the date of the enactment of this Act.

     SEC. 445. EXTENSION OF AUTHORITY FOR EXPENDITURES.

       (a) Highways Trust Fund.--
       (1) Highway account.--Paragraph (1) of section 9503(c) is 
     amended--
       (A) by striking ``September 30, 2009 (October 1, 2009'' and 
     inserting ``December 31, 2010 (January 1, 2011''; and
       (B) by striking ``under'' and all that follows and 
     inserting ``under the Surface Transportation Extension Act of 
     2010 or any other provision of law which was referred to in 
     this paragraph before the date of the enactment of such Act 
     (as such Act and provisions of law are in effect on the date 
     of the enactment of such Act).''.
       (2) Mass transit account.--Paragraph (3) of section 9503(e) 
     is amended--
       (A) by striking ``October 1, 2009'' and inserting ``January 
     1, 2011''; and
       (B) by striking ``in accordance with'' and all that follows 
     and inserting ``in accordance with the Surface Transportation 
     Extension Act of 2010 or any other provision of law which was 
     referred to in this paragraph before the date of the 
     enactment of such Act (as such Act and provisions of law are 
     in effect on the date of the enactment of such Act).''.
       (3) Exception to limitation on transfers.--Subparagraph (B) 
     of section 9503(b)(6) is amended by striking ``September 30, 
     2009 (October 1, 2009'' and inserting ``December 31, 2010 
     (January 1, 2011''.
       (b) Sport Fish Restoration and Boating Trust Fund.--
       (1) In general.--Paragraph (2) of section 9504(b) is 
     amended--
       (A) by striking ``(as in effect'' in subparagraph (A) and 
     all that follows in such subparagraph and inserting ``(as in 
     effect on the date of the enactment of the Surface 
     Transportation Extension Act of 2010),'',
       (B) by striking ``(as in effect'' in subparagraph (B) and 
     all that follows in such subparagraph and inserting ``(as in 
     effect on the date of the enactment of the Surface 
     Transportation Extension Act of 2010), and'', and
       (C) by striking ``(as in effect'' in subparagraph (C) and 
     all that follows in such subparagraph and inserting ``(as in 
     effect on the date of the enactment of the Surface 
     Transportation Extension Act of 2010).''.
       (2) Exception to limitation on transfers.--Paragraph (2) of 
     section 9504(d) is amended by striking ``October 1, 2009'' 
     and inserting ``January 1, 2011''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on September 30, 2009.

     SEC. 446. LEVEL OF OBLIGATION LIMITATIONS.

       (a) Highway Category.--Section 8003(a) of the SAFETEA-LU (2 
     U.S.C. 901 note; 119 Stat. 1917) is amended--
       (1) in paragraph (4), by striking ``and'' at the end;
       (2) in paragraph (5), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(6) for the period beginning on October 1, 2009, and 
     ending on September 30, 2010, $42,469,970,178.
       ``(7) for the period beginning on October 1, 2010, and 
     ending on December 31, 2010, $10,617,492,545.''.
       (b) Mass Transit Category.--Section 8003(b) of the SAFETEA-
     LU (2 U.S.C. 901 note; 119 Stat. 1917) is amended--
       (1) in paragraph (4), by striking ``and'' at the end;
       (2) in paragraph (5), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(6) for the period beginning on October 1, 2009, and 
     ending on December 31, 2010, $10,338,065,000.
       ``(7) for the period beginning on October 1, 2010, and 
     ending on December 31, 2010, $2,584,516,250.''.
       (c) Treatment of Funds.--No adjustment pursuant to section 
     110 of title 23, United States Code, shall be made for fiscal 
     year 2010 or fiscal year 2011.

                       TITLE V--OFFSET PROVISIONS

               Subtitle A--Foreign Account Tax Compliance

           PART I--INCREASED DISCLOSURE OF BENEFICIAL OWNERS

     SEC. 501. REPORTING ON CERTAIN FOREIGN ACCOUNTS.

       (a) In General.--The Internal Revenue Code of 1986 is 
     amended by inserting after chapter 3 the following new 
     chapter:

  ``CHAPTER 4--TAXES TO ENFORCE REPORTING ON CERTAIN FOREIGN ACCOUNTS

``Sec. 1471. Withholdable payments to foreign financial institutions.
``Sec. 1472. Withholdable payments to other foreign entities.
``Sec. 1473. Definitions.
``Sec. 1474. Special rules.

     ``SEC. 1471. WITHHOLDABLE PAYMENTS TO FOREIGN FINANCIAL 
                   INSTITUTIONS.

       ``(a) In General.--In the case of any withholdable payment 
     to a foreign financial institution which does not meet the 
     requirements of subsection (b), the withholding agent with 
     respect to such payment shall deduct and withhold from such 
     payment a tax equal to 30 percent of the amount of such 
     payment.
       ``(b) Reporting Requirements, etc.--
       ``(1) In general.--The requirements of this subsection are 
     met with respect to any foreign financial institution if an 
     agreement is in effect between such institution and the 
     Secretary under which such institution agrees--
       ``(A) to obtain such information regarding each holder of 
     each account maintained by such institution as is necessary 
     to determine which (if any) of such accounts are United 
     States accounts,
       ``(B) to comply with such verification and due diligence 
     procedures as the Secretary may require with respect to the 
     identification of United States accounts,
       ``(C) in the case of any United States account maintained 
     by such institution, to report on an annual basis the 
     information described in subsection (c) with respect to such 
     account,
       ``(D) to deduct and withhold a tax equal to 30 percent of--
       ``(i) any passthru payment which is made by such 
     institution to a recalcitrant account holder or another 
     foreign financial institution which does not meet the 
     requirements of this subsection, and
       ``(ii) in the case of any passthru payment which is made by 
     such institution to a foreign financial institution which has 
     in effect an election under paragraph (3) with respect to 
     such payment, so much of such payment as is allocable to 
     accounts held by recalcitrant account holders or foreign 
     financial institutions which do not meet the requirements of 
     this subsection,
       ``(E) to comply with requests by the Secretary for 
     additional information with respect to any United States 
     account maintained by such institution, and
       ``(F) in any case in which any foreign law would (but for a 
     waiver described in clause (i)) prevent the reporting of any 
     information referred to in this subsection or subsection (c) 
     with respect to any United States account maintained by such 
     institution--
       ``(i) to attempt to obtain a valid and effective waiver of 
     such law from each holder of such account, and
       ``(ii) if a waiver described in clause (i) is not obtained 
     from each such holder within a reasonable period of time, to 
     close such account.

     Any agreement entered into under this subsection may be 
     terminated by the Secretary upon a determination by the 
     Secretary that the foreign financial institution is out of 
     compliance with such agreement.
       ``(2) Financial institutions deemed to meet requirements in 
     certain cases.--A foreign financial institution may be 
     treated by the Secretary as meeting the requirements of this 
     subsection if--
       ``(A) such institution--
       ``(i) complies with such procedures as the Secretary may 
     prescribe to ensure that such institution does not maintain 
     United States accounts, and
       ``(ii) meets such other requirements as the Secretary may 
     prescribe with respect to accounts of other foreign financial 
     institutions maintained by such institution, or
       ``(B) such institution is a member of a class of 
     institutions with respect to which the Secretary has 
     determined that the application of this section is not 
     necessary to carry out the purposes of this section.
       ``(3) Election to be withheld upon rather than withhold on 
     payments to recalcitrant account holders and nonparticipating 
     foreign financial institutions.--In the case of a foreign 
     financial institution which meets the requirements of this 
     subsection and such other requirements as the Secretary may 
     provide and which elects the application of this paragraph--
       ``(A) the requirements of paragraph (1)(D) shall not apply,
       ``(B) the withholding tax imposed under subsection (a) 
     shall apply with respect to any withholdable payment to such 
     institution to the extent such payment is allocable to 
     accounts held by recalcitrant account holders or foreign 
     financial institutions which do not meet the requirements of 
     this subsection, and
       ``(C) the agreement described in paragraph (1) shall--
       ``(i) require such institution to notify the withholding 
     agent with respect to each such payment of the institution's 
     election under this paragraph and such other information as 
     may be necessary for the withholding agent to determine the 
     appropriate amount to deduct and withhold from such payment, 
     and
       ``(ii) include a waiver of any right under any treaty of 
     the United States with respect to any amount deducted and 
     withheld pursuant to an election under this paragraph.

     To the extent provided by the Secretary, the election under 
     this paragraph may be made with respect to certain classes or 
     types of accounts of the foreign financial institution.
       ``(c) Information Required To Be Reported on United States 
     Accounts.--
       ``(1) In general.--The agreement described in subsection 
     (b) shall require the foreign financial institution to report 
     the following with respect to each United States account 
     maintained by such institution:
       ``(A) The name, address, and TIN of each account holder 
     which is a specified United States person and, in the case of 
     any account holder which is a United States owned foreign 
     entity, the name, address, and TIN of each substantial United 
     States owner of such entity.
       ``(B) The account number.
       ``(C) The account balance or value (determined at such time 
     and in such manner as the Secretary may provide).
       ``(D) Except to the extent provided by the Secretary, the 
     gross receipts and gross withdrawals or payments from the 
     account (determined for

[[Page 2014]]

     such period and in such manner as the Secretary may provide).
       ``(2) Election to be subject to same reporting as united 
     states financial institutions.--In the case of a foreign 
     financial institution which elects the application of this 
     paragraph--
       ``(A) subparagraphs (C) and (D) of paragraph (1) shall not 
     apply, and
       ``(B) the agreement described in subsection (b) shall 
     require such foreign financial institution to report such 
     information with respect to each United States account 
     maintained by such institution as such institution would be 
     required to report under sections 6041, 6042, 6045, and 6049 
     if--
       ``(i) such institution were a United States person, and
       ``(ii) each holder of such account which is a specified 
     United States person or United States owned foreign entity 
     were a natural person and citizen of the United States.

     An election under this paragraph shall be made at such time, 
     in such manner, and subject to such conditions as the 
     Secretary may provide.
       ``(3) Separate requirements for qualified intermediaries.--
     In the case of a foreign financial institution which is 
     treated as a qualified intermediary by the Secretary for 
     purposes of section 1441 and the regulations issued 
     thereunder, the requirements of this section shall be in 
     addition to any reporting or other requirements imposed by 
     the Secretary for purposes of such treatment.
       ``(d) Definitions.--For purposes of this section--
       ``(1) United states account.--
       ``(A) In general.--The term `United States account' means 
     any financial account which is held by one or more specified 
     United States persons or United States owned foreign 
     entities.
       ``(B) Exception for certain accounts held by individuals.--
     Unless the foreign financial institution elects to not have 
     this subparagraph apply, such term shall not include any 
     depository account maintained by such financial institution 
     if--
       ``(i) each holder of such account is a natural person, and
       ``(ii) with respect to each holder of such account, the 
     aggregate value of all depository accounts held (in whole or 
     in part) by such holder and maintained by the same financial 
     institution which maintains such account does not exceed 
     $50,000.

     To the extent provided by the Secretary, financial 
     institutions which are members of the same expanded 
     affiliated group shall be treated for purposes of clause (ii) 
     as a single financial institution.
       ``(C) Elimination of duplicative reporting requirements.--
     Such term shall not include any financial account in a 
     foreign financial institution if--
       ``(i) such account is held by another financial institution 
     which meets the requirements of subsection (b), or
       ``(ii) the holder of such account is otherwise subject to 
     information reporting requirements which the Secretary 
     determines would make the reporting required by this section 
     with respect to United States accounts duplicative.
       ``(2) Financial account.--Except as otherwise provided by 
     the Secretary, the term `financial account' means, with 
     respect to any financial institution--
       ``(A) any depository account maintained by such financial 
     institution,
       ``(B) any custodial account maintained by such financial 
     institution, and
       ``(C) any equity or debt interest in such financial 
     institution (other than interests which are regularly traded 
     on an established securities market).

     Any equity or debt interest which constitutes a financial 
     account under subparagraph (C) with respect to any financial 
     institution shall be treated for purposes of this section as 
     maintained by such financial institution.
       ``(3) United states owned foreign entity.--The term `United 
     States owned foreign entity' means any foreign entity which 
     has one or more substantial United States owners.
       ``(4) Foreign financial institution.--The term `foreign 
     financial institution' means any financial institution which 
     is a foreign entity. Except as otherwise provided by the 
     Secretary, such term shall not include a financial 
     institution which is organized under the laws of any 
     possession of the United States.
       ``(5) Financial institution.--Except as otherwise provided 
     by the Secretary, the term `financial institution' means any 
     entity that--
       ``(A) accepts deposits in the ordinary course of a banking 
     or similar business,
       ``(B) as a substantial portion of its business, holds 
     financial assets for the account of others, or
       ``(C) is engaged (or holding itself out as being engaged) 
     primarily in the business of investing, reinvesting, or 
     trading in securities (as defined in section 475(c)(2) 
     without regard to the last sentence thereof), partnership 
     interests, commodities (as defined in section 475(e)(2)), or 
     any interest (including a futures or forward contract or 
     option) in such securities, partnership interests, or 
     commodities.
       ``(6) Recalcitrant account holder.--The term `recalcitrant 
     account holder' means any account holder which--
       ``(A) fails to comply with reasonable requests for the 
     information referred to in subsection (b)(1)(A) or (c)(1)(A), 
     or
       ``(B) fails to provide a waiver described in subsection 
     (b)(1)(F) upon request.
       ``(7) Passthru payment.--The term `passthru payment' means 
     any withholdable payment or other payment to the extent 
     attributable to a withholdable payment.
       ``(e) Affiliated Groups.--
       ``(1) In general.--The requirements of subsections (b) and 
     (c)(1) shall apply--
       ``(A) with respect to United States accounts maintained by 
     the foreign financial institution, and
       ``(B) except as otherwise provided by the Secretary, with 
     respect to United States accounts maintained by each other 
     foreign financial institution (other than any foreign 
     financial institution which meets the requirements of 
     subsection (b)) which is a member of the same expanded 
     affiliated group as such foreign financial institution.
       ``(2) Expanded affiliated group.--For purposes of this 
     section, the term `expanded affiliated group' means an 
     affiliated group as defined in section 1504(a), determined--
       ``(A) by substituting `more than 50 percent' for `at least 
     80 percent' each place it appears, and
       ``(B) without regard to paragraphs (2) and (3) of section 
     1504(b).

     A partnership or any other entity (other than a corporation) 
     shall be treated as a member of an expanded affiliated group 
     if such entity is controlled (within the meaning of section 
     954(d)(3)) by members of such group (including any entity 
     treated as a member of such group by reason of this 
     sentence).
       ``(f) Exception for Certain Payments.--Subsection (a) shall 
     not apply to any payment to the extent that the beneficial 
     owner of such payment is--
       ``(1) any foreign government, any political subdivision of 
     a foreign government, or any wholly owned agency or 
     instrumentality of any one or more of the foregoing,
       ``(2) any international organization or any wholly owned 
     agency or instrumentality thereof,
       ``(3) any foreign central bank of issue, or
       ``(4) any other class of persons identified by the 
     Secretary for purposes of this subsection as posing a low 
     risk of tax evasion.

     ``SEC. 1472. WITHHOLDABLE PAYMENTS TO OTHER FOREIGN ENTITIES.

       ``(a) In General.--In the case of any withholdable payment 
     to a non-financial foreign entity, if--
       ``(1) the beneficial owner of such payment is such entity 
     or any other non-financial foreign entity, and
       ``(2) the requirements of subsection (b) are not met with 
     respect to such beneficial owner,

     then the withholding agent with respect to such payment shall 
     deduct and withhold from such payment a tax equal to 30 
     percent of the amount of such payment.
       ``(b) Requirements for Waiver of Withholding.--The 
     requirements of this subsection are met with respect to the 
     beneficial owner of a payment if--
       ``(1) such beneficial owner or the payee provides the 
     withholding agent with either--
       ``(A) a certification that such beneficial owner does not 
     have any substantial United States owners, or
       ``(B) the name, address, and TIN of each substantial United 
     States owner of such beneficial owner,
       ``(2) the withholding agent does not know, or have reason 
     to know, that any information provided under paragraph (1) is 
     incorrect, and
       ``(3) the withholding agent reports the information 
     provided under paragraph (1)(B) to the Secretary in such 
     manner as the Secretary may provide.
       ``(c) Exceptions.--Subsection (a) shall not apply to--
       ``(1) except as otherwise provided by the Secretary, any 
     payment beneficially owned by--
       ``(A) any corporation the stock of which is regularly 
     traded on an established securities market,
       ``(B) any corporation which is a member of the same 
     expanded affiliated group (as defined in section 1471(e)(2) 
     without regard to the last sentence thereof) as a corporation 
     described in subparagraph (A),
       ``(C) any entity which is organized under the laws of a 
     possession of the United States and which is wholly owned by 
     one or more bona fide residents (as defined in section 
     937(a)) of such possession,
       ``(D) any foreign government, any political subdivision of 
     a foreign government, or any wholly owned agency or 
     instrumentality of any one or more of the foregoing,
       ``(E) any international organization or any wholly owned 
     agency or instrumentality thereof,
       ``(F) any foreign central bank of issue, or
       ``(G) any other class of persons identified by the 
     Secretary for purposes of this subsection, and
       ``(2) any class of payments identified by the Secretary for 
     purposes of this subsection as posing a low risk of tax 
     evasion.
       ``(d) Non-Financial Foreign Entity.--For purposes of this 
     section, the term `non-financial foreign entity' means any 
     foreign entity which is not a financial institution (as 
     defined in section 1471(d)(5)).

     ``SEC. 1473. DEFINITIONS.

       ``For purposes of this chapter--
       ``(1) Withholdable payment.--Except as otherwise provided 
     by the Secretary--
       ``(A) In general.--The term `withholdable payment' means--
       ``(i) any payment of interest (including any original issue 
     discount), dividends, rents, salaries, wages, premiums, 
     annuities, compensations, remunerations, emoluments, and 
     other fixed or determinable annual or periodical

[[Page 2015]]

     gains, profits, and income, if such payment is from sources 
     within the United States, and
       ``(ii) any gross proceeds from the sale or other 
     disposition of any property of a type which can produce 
     interest or dividends from sources within the United States.
       ``(B) Exception for income connected with united states 
     business.--Such term shall not include any item of income 
     which is taken into account under section 871(b)(1) or 
     882(a)(1) for the taxable year.
       ``(C) Special rule for sourcing interest paid by foreign 
     branches of domestic financial institutions.--Subparagraph 
     (B) of section 861(a)(1) shall not apply.
       ``(2) Substantial united states owner.--
       ``(A) In general.--The term `substantial United States 
     owner' means--
       ``(i) with respect to any corporation, any specified United 
     States person which owns, directly or indirectly, more than 
     10 percent of the stock of such corporation (by vote or 
     value),
       ``(ii) with respect to any partnership, any specified 
     United States person which owns, directly or indirectly, more 
     than 10 percent of the profits interests or capital interests 
     in such partnership, and
       ``(iii) in the case of a trust--

       ``(I) any specified United States person treated as an 
     owner of any portion of such trust under subpart E of part I 
     of subchapter J of chapter 1, and
       ``(II) to the extent provided by the Secretary in 
     regulations or other guidance, any specified United States 
     person which holds, directly or indirectly, more than 10 
     percent of the beneficial interests of such trust.

       ``(B) Special rule for investment vehicles.--In the case of 
     any financial institution described in section 1471(d)(5)(C), 
     clauses (i), (ii), and (iii) of subparagraph (A) shall be 
     applied by substituting `0 percent' for `10 percent'.
       ``(3) Specified united states person.--Except as otherwise 
     provided by the Secretary, the term `specified United States 
     person' means any United States person other than--
       ``(A) any corporation the stock of which is regularly 
     traded on an established securities market,
       ``(B) any corporation which is a member of the same 
     expanded affiliated group (as defined in section 1471(e)(2) 
     without regard to the last sentence thereof) as a corporation 
     the stock of which is regularly traded on an established 
     securities market,
       ``(C) any organization exempt from taxation under section 
     501(a) or an individual retirement plan,
       ``(D) the United States or any wholly owned agency or 
     instrumentality thereof,
       ``(E) any State, the District of Columbia, any possession 
     of the United States, any political subdivision of any of the 
     foregoing, or any wholly owned agency or instrumentality of 
     any one or more of the foregoing,
       ``(F) any bank (as defined in section 581),
       ``(G) any real estate investment trust (as defined in 
     section 856),
       ``(H) any regulated investment company (as defined in 
     section 851),
       ``(I) any common trust fund (as defined in section 584(a)), 
     and
       ``(J) any trust which--
       ``(i) is exempt from tax under section 664(c), or
       ``(ii) is described in section 4947(a)(1).
       ``(4) Withholding agent.--The term `withholding agent' 
     means all persons, in whatever capacity acting, having the 
     control, receipt, custody, disposal, or payment of any 
     withholdable payment.
       ``(5) Foreign entity.--The term `foreign entity' means any 
     entity which is not a United States person.

     ``SEC. 1474. SPECIAL RULES.

       ``(a) Liability for Withheld Tax.--Every person required to 
     deduct and withhold any tax under this chapter is hereby made 
     liable for such tax and is hereby indemnified against the 
     claims and demands of any person for the amount of any 
     payments made in accordance with the provisions of this 
     chapter.
       ``(b) Credits and Refunds.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     determination of whether any tax deducted and withheld under 
     this chapter results in an overpayment by the beneficial 
     owner of the payment to which such tax is attributable shall 
     be made as if such tax had been deducted and withheld under 
     subchapter A of chapter 3.
       ``(2) Special rule where foreign financial institution is 
     beneficial owner of payment.--
       ``(A) In general.--In the case of any tax properly deducted 
     and withheld under section 1471 from a specified financial 
     institution payment--
       ``(i) if the foreign financial institution referred to in 
     subparagraph (B) with respect to such payment is entitled to 
     a reduced rate of tax with respect to such payment by reason 
     of any treaty obligation of the United States--

       ``(I) the amount of any credit or refund with respect to 
     such tax shall not exceed the amount of credit or refund 
     attributable to such reduction in rate, and
       ``(II) no interest shall be allowed or paid with respect to 
     such credit or refund, and

       ``(ii) if such foreign financial institution is not so 
     entitled, no credit or refund shall be allowed or paid with 
     respect to such tax.
       ``(B) Specified financial institution payment.--The term 
     `specified financial institution payment' means any payment 
     if the beneficial owner of such payment is a foreign 
     financial institution.
       ``(3) Requirement to identify substantial united states 
     owners.--No credit or refund shall be allowed or paid with 
     respect to any tax properly deducted and withheld under this 
     chapter unless the beneficial owner of the payment provides 
     the Secretary such information as the Secretary may require 
     to determine whether such beneficial owner is a United States 
     owned foreign entity (as defined in section 1471(d)(3)) and 
     the identity of any substantial United States owners of such 
     entity.
       ``(c) Confidentiality of Information.--
       ``(1) In general.--For purposes of this chapter, rules 
     similar to the rules of section 3406(f) shall apply.
       ``(2) Disclosure of list of participating foreign financial 
     institutions permitted.--The identity of a foreign financial 
     institution which meets the requirements of section 1471(b) 
     shall not be treated as return information for purposes of 
     section 6103.
       ``(d) Coordination With Other Withholding Provisions.--The 
     Secretary shall provide for the coordination of this chapter 
     with other withholding provisions under this title, including 
     providing for the proper crediting of amounts deducted and 
     withheld under this chapter against amounts required to be 
     deducted and withheld under such other provisions.
       ``(e) Treatment of Withholding Under Agreements.--Any tax 
     deducted and withheld pursuant to an agreement described in 
     section 1471(b) shall be treated for purposes of this title 
     as a tax deducted and withheld by a withholding agent under 
     section 1471(a).
       ``(f) Regulations.--The Secretary shall prescribe such 
     regulations or other guidance as may be necessary or 
     appropriate to carry out the purposes of, and prevent the 
     avoidance of, this chapter.''.
       (b) Special Rule for Interest on Overpayments.--Subsection 
     (e) of section 6611 is amended by adding at the end the 
     following new paragraph:
       ``(4) Certain withholding taxes.--In the case of any 
     overpayment resulting from tax deducted and withheld under 
     chapter 3 or 4, paragraphs (1), (2), and (3) shall be applied 
     by substituting `180 days' for `45 days' each place it 
     appears.''.
       (c) Conforming Amendments.--
       (1) Section 6414 is amended by inserting ``or 4'' after 
     ``chapter 3''.
       (2) Paragraph (1) of section 6501(b) is amended by 
     inserting ``4,'' after ``chapter 3,''.
       (3) Paragraph (2) of section 6501(b) is amended--
       (A) by inserting ``4,'' after ``chapter 3,'' in the text 
     thereof, and
       (B) by striking ``taxes and tax imposed by chapter 3'' in 
     the heading thereof and inserting ``and withholding taxes''.
       (4) Paragraph (3) of section 6513(b) is amended--
       (A) by inserting ``or 4'' after ``chapter 3'', and
       (B) by inserting ``or 1474(b)'' after ``section 1462''.
       (5) Subsection (c) of section 6513 is amended by inserting 
     ``4,'' after ``chapter 3,''.
       (6) Paragraph (1) of section 6724(d) is amended by 
     inserting ``under chapter 4 or'' after ``filed with the 
     Secretary'' in the last sentence thereof.
       (7) Paragraph (2) of section 6724(d) is amended by 
     inserting ``or 4'' after ``chapter 3''.
       (8) The table of chapters of the Internal Revenue Code of 
     1986 is amended by adding at the end the following new item:

``Chapter 4. Taxes To Enforce Reporting on Certain Foreign Accounts.''.

       (d) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to payments made after December 31, 2012.
       (2) Grandfathered treatment of outstanding obligations.--
     The amendments made by this section shall not require any 
     amount to be deducted or withheld from any payment under any 
     obligation outstanding on the date which is 2 years after the 
     date of the enactment of this Act or from the gross proceeds 
     from any disposition of such an obligation.
       (3) Interest on overpayments.--The amendment made by 
     subsection (b) shall apply--
       (A) in the case of such amendment's application to 
     paragraph (1) of section 6611(e) of the Internal Revenue Code 
     of 1986, to returns the due date for which (determined 
     without regard to extensions) is after the date of the 
     enactment of this Act,
       (B) in the case of such amendment's application to 
     paragraph (2) of such section, to claims for credit or refund 
     of any overpayment filed after the date of the enactment of 
     this Act (regardless of the taxable period to which such 
     refund relates), and
       (C) in the case of such amendment's application to 
     paragraph (3) of such section, to refunds paid after the date 
     of the enactment of this Act (regardless of the taxable 
     period to which such refund relates).

     SEC. 502. REPEAL OF CERTAIN FOREIGN EXCEPTIONS TO REGISTERED 
                   BOND REQUIREMENTS.

       (a) Repeal of Exception to Denial of Deduction for Interest 
     on Non-Registered Bonds.--
       (1) In general.--Paragraph (2) of section 163(f) is amended 
     by striking subparagraph (B) and by redesignating 
     subparagraph (C) as subparagraph (B).
       (2) Conforming amendments.--
       (A) Paragraph (2) of section 149(a) is amended by inserting 
     ``or'' at the end of subparagraph (A), by striking ``, or'' 
     at the end of subparagraph (B) and inserting a period, and by 
     striking subparagraph (C).
       (B) Subparagraph (A) of section 163(f)(2) is amended by 
     inserting ``or'' at the end of clause

[[Page 2016]]

     (ii), by striking ``, or'' at the end of clause (iii) and 
     inserting a period, and by striking clause (iv).
       (C) Subparagraph (B) of section 163(f)(2), as redesignated 
     by paragraph (1), is amended--
       (i) by striking ``, and subparagraph (B),'' in the matter 
     preceding clause (i), and
       (ii) by amending clause (i) to read as follows:
       ``(i) such obligation is of a type which the Secretary has 
     determined by regulations to be used frequently in avoiding 
     Federal taxes, and''.
       (D) Sections 165(j)(2)(A) and 1287(b)(1) are each amended 
     by striking ``except that clause (iv) of subparagraph (A), 
     and subparagraph (B), of such section shall not apply''.
       (b) Repeal of Treatment as Portfolio Debt.--
       (1) In general.--Paragraph (2) of section 871(h) is amended 
     to read as follows:
       ``(2) Portfolio interest.--For purposes of this subsection, 
     the term `portfolio interest' means any interest (including 
     original issue discount) which--
       ``(A) would be subject to tax under subsection (a) but for 
     this subsection, and
       ``(B) is paid on an obligation--
       ``(i) which is in registered form, and
       ``(ii) with respect to which--

       ``(I) the United States person who would otherwise be 
     required to deduct and withhold tax from such interest under 
     section 1441(a) receives a statement (which meets the 
     requirements of paragraph (5)) that the beneficial owner of 
     the obligation is not a United States person, or
       ``(II) the Secretary has determined that such a statement 
     is not required in order to carry out the purposes of this 
     subsection.''.

       (2) Conforming amendments.--
       (A) Section 871(h)(3)(A) is amended by striking 
     ``subparagraph (A) or (B) of''.
       (B) Paragraph (2) of section 881(c) is amended to read as 
     follows:
       ``(2) Portfolio interest.--For purposes of this subsection, 
     the term `portfolio interest' means any interest (including 
     original issue discount) which--
       ``(A) would be subject to tax under subsection (a) but for 
     this subsection, and
       ``(B) is paid on an obligation--
       ``(i) which is in registered form, and
       ``(ii) with respect to which--

       ``(I) the person who would otherwise be required to deduct 
     and withhold tax from such interest under section 1442(a) 
     receives a statement which meets the requirements of section 
     871(h)(5) that the beneficial owner of the obligation is not 
     a United States person, or
       ``(II) the Secretary has determined that such a statement 
     is not required in order to carry out the purposes of this 
     subsection.''.

       (c) Dematerialized Book Entry Systems Treated as Registered 
     Form.--Paragraph (3) of section 163(f) is amended by 
     inserting ``, except that a dematerialized book entry system 
     or other book entry system specified by the Secretary shall 
     be treated as a book entry system described in such section'' 
     before the period at the end.
       (d) Repeal of Exception to Requirement That Treasury 
     Obligations Be in Registered Form.--
       (1) In general.--Subsection (g) of section 3121 of title 
     31, United States Code, is amended by striking paragraph (2) 
     and by redesignating paragraphs (3) and (4) as paragraphs (2) 
     and (3), respectively.
       (2) Conforming amendments.--Paragraph (1) of section 
     3121(g) of such title is amended--
       (A) by adding ``or'' at the end of subparagraph (A),
       (B) by striking ``; or'' at the end of subparagraph (B) and 
     inserting a period, and
       (C) by striking subparagraph (C).
       (e) Preservation of Exception for Excise Tax Purposes.--
     Paragraph (1) of section 4701(b) is amended to read as 
     follows:
       ``(1) Registration-required obligation.--
       ``(A) In general.--The term `registration-required 
     obligation' has the same meaning as when used in section 
     163(f), except that such term shall not include any 
     obligation which--
       ``(i) is required to be registered under section 149(a), or
       ``(ii) is described in subparagraph (B).
       ``(B) Certain obligations not included.--An obligation is 
     described in this subparagraph if--
       ``(i) there are arrangements reasonably designed to ensure 
     that such obligation will be sold (or resold in connection 
     with the original issue) only to a person who is not a United 
     States person,
       ``(ii) interest on such obligation is payable only outside 
     the United States and its possessions, and
       ``(iii) on the face of such obligation there is a statement 
     that any United States person who holds such obligation will 
     be subject to limitations under the United States income tax 
     laws.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after the date which is 2 
     years after the date of the enactment of this Act.

        PART II--UNDER REPORTING WITH RESPECT TO FOREIGN ASSETS

     SEC. 511. DISCLOSURE OF INFORMATION WITH RESPECT TO FOREIGN 
                   FINANCIAL ASSETS.

       (a) In General.--Subpart A of part III of subchapter A of 
     chapter 61 is amended by inserting after section 6038C the 
     following new section:

     ``SEC. 6038D. INFORMATION WITH RESPECT TO FOREIGN FINANCIAL 
                   ASSETS.

       ``(a) In General.--Any individual who, during any taxable 
     year, holds any interest in a specified foreign financial 
     asset shall attach to such person's return of tax imposed by 
     subtitle A for such taxable year the information described in 
     subsection (c) with respect to each such asset if the 
     aggregate value of all such assets exceeds $50,000 (or such 
     higher dollar amount as the Secretary may prescribe).
       ``(b) Specified Foreign Financial Assets.--For purposes of 
     this section, the term `specified foreign financial asset' 
     means--
       ``(1) any financial account (as defined in section 
     1471(d)(2)) maintained by a foreign financial institution (as 
     defined in section 1471(d)(4)), and
       ``(2) any of the following assets which are not held in an 
     account maintained by a financial institution (as defined in 
     section 1471(d)(5))--
       ``(A) any stock or security issued by a person other than a 
     United States person,
       ``(B) any financial instrument or contract held for 
     investment that has an issuer or counterparty which is other 
     than a United States person, and
       ``(C) any interest in a foreign entity (as defined in 
     section 1473).
       ``(c) Required Information.--The information described in 
     this subsection with respect to any asset is:
       ``(1) In the case of any account, the name and address of 
     the financial institution in which such account is maintained 
     and the number of such account.
       ``(2) In the case of any stock or security, the name and 
     address of the issuer and such information as is necessary to 
     identify the class or issue of which such stock or security 
     is a part.
       ``(3) In the case of any other instrument, contract, or 
     interest--
       ``(A) such information as is necessary to identify such 
     instrument, contract, or interest, and
       ``(B) the names and addresses of all issuers and 
     counterparties with respect to such instrument, contract, or 
     interest.
       ``(4) The maximum value of the asset during the taxable 
     year.
       ``(d) Penalty for Failure To Disclose.--
       ``(1) In general.--If any individual fails to furnish the 
     information described in subsection (c) with respect to any 
     taxable year at the time and in the manner described in 
     subsection (a), such person shall pay a penalty of $10,000.
       ``(2) Increase in penalty where failure continues after 
     notification.--If any failure described in paragraph (1) 
     continues for more than 90 days after the day on which the 
     Secretary mails notice of such failure to the individual, 
     such individual shall pay a penalty (in addition to the 
     penalties under paragraph (1)) of $10,000 for each 30-day 
     period (or fraction thereof) during which such failure 
     continues after the expiration of such 90-day period. The 
     penalty imposed under this paragraph with respect to any 
     failure shall not exceed $50,000.
       ``(e) Presumption That Value of Specified Foreign Financial 
     Assets Exceeds Dollar Threshold.--If--
       ``(1) the Secretary determines that an individual has an 
     interest in one or more specified foreign financial assets, 
     and
       ``(2) such individual does not provide sufficient 
     information to demonstrate the aggregate value of such 
     assets,

     then the aggregate value of such assets shall be treated as 
     being in excess of $50,000 (or such higher dollar amount as 
     the Secretary prescribes for purposes of subsection (a)) for 
     purposes of assessing the penalties imposed under this 
     section.
       ``(f) Application to Certain Entities.--To the extent 
     provided by the Secretary in regulations or other guidance, 
     the provisions of this section shall apply to any domestic 
     entity which is formed or availed of for purposes of holding, 
     directly or indirectly, specified foreign financial assets, 
     in the same manner as if such entity were an individual.
       ``(g) Reasonable Cause Exception.--No penalty shall be 
     imposed by this section on any failure which is shown to be 
     due to reasonable cause and not due to willful neglect. The 
     fact that a foreign jurisdiction would impose a civil or 
     criminal penalty on the taxpayer (or any other person) for 
     disclosing the required information is not reasonable cause.
       ``(h) Regulations.--The Secretary shall prescribe such 
     regulations or other guidance as may be necessary or 
     appropriate to carry out the purposes of this section, 
     including regulations or other guidance which provide 
     appropriate exceptions from the application of this section 
     in the case of--
       ``(1) classes of assets identified by the Secretary, 
     including any assets with respect to which the Secretary 
     determines that disclosure under this section would be 
     duplicative of other disclosures,
       ``(2) nonresident aliens, and
       ``(3) bona fide residents of any possession of the United 
     States.''.
       (b) Clerical Amendment.--The table of sections for subpart 
     A of part III of subchapter A of chapter 61 is amended by 
     inserting after the item relating to section 6038C the 
     following new item:

``Sec. 6038D. Information with respect to foreign financial assets.''.

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

     SEC. 512. PENALTIES FOR UNDERPAYMENTS ATTRIBUTABLE TO 
                   UNDISCLOSED FOREIGN FINANCIAL ASSETS.

       (a) In General.--Section 6662, as amended by this Act, is 
     amended--
       (1) in subsection (b), by inserting after paragraph (6) the 
     following new paragraph:

[[Page 2017]]

       ``(7) Any undisclosed foreign financial asset 
     understatement.'', and
       (2) by adding at the end the following new subsection:
       ``(j) Undisclosed Foreign Financial Asset Understatement.--
       ``(1) In general.--For purposes of this section, the term 
     `undisclosed foreign financial asset understatement' means, 
     for any taxable year, the portion of the understatement for 
     such taxable year which is attributable to any transaction 
     involving an undisclosed foreign financial asset.
       ``(2) Undisclosed foreign financial asset.--For purposes of 
     this subsection, the term `undisclosed foreign financial 
     asset' means, with respect to any taxable year, any asset 
     with respect to which information was required to be provided 
     under section 6038, 6038B, 6038D, 6046A, or 6048 for such 
     taxable year but was not provided by the taxpayer as required 
     under the provisions of those sections.
       ``(3) Increase in penalty for undisclosed foreign financial 
     asset understatements.--In the case of any portion of an 
     underpayment which is attributable to any undisclosed foreign 
     financial asset understatement, subsection (a) shall be 
     applied with respect to such portion by substituting `40 
     percent' for `20 percent'.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 513. MODIFICATION OF STATUTE OF LIMITATIONS FOR 
                   SIGNIFICANT OMISSION OF INCOME IN CONNECTION 
                   WITH FOREIGN ASSETS.

       (a) Extension of Statute of Limitations.--
       (1) In general.--Paragraph (1) of section 6501(e) is 
     amended by redesignating subparagraphs (A) and (B) as 
     subparagraphs (B) and (C), respectively, and by inserting 
     before subparagraph (B) (as so redesignated) the following 
     new subparagraph:
       ``(A) General rule.--If the taxpayer omits from gross 
     income an amount properly includible therein and--
       ``(i) such amount is in excess of 25 percent of the amount 
     of gross income stated in the return, or
       ``(ii) such amount--

       ``(I) is attributable to one or more assets with respect to 
     which information is required to be reported under section 
     6038D (or would be so required if such section were applied 
     without regard to the dollar threshold specified in 
     subsection (a) thereof and without regard to any exceptions 
     provided pursuant to subsection (h)(1) thereof), and
       ``(II) is in excess of $5,000,

     the tax may be assessed, or a proceeding in court for 
     collection of such tax may be begun without assessment, at 
     any time within 6 years after the return was filed.''.
       (2) Conforming amendments.--
       (A) Subparagraph (B) of section 6501(e)(1), as redesignated 
     by paragraph (1), is amended by striking all that precedes 
     clause (i) and inserting the following:
       ``(B) Determination of gross income.--For purposes of 
     subparagraph (A)--''.
       (B) Paragraph (2) of section 6229(c) is amended by striking 
     ``which is in excess of 25 percent of the amount of gross 
     income stated in its return'' and inserting ``and such amount 
     is described in clause (i) or (ii) of section 
     6501(e)(1)(A)''.
       (b) Additional Reports Subject to Extended Period.--
     Paragraph (8) of section 6501(c) is amended--
       (1) by inserting ``pursuant to an election under section 
     1295(b) or'' before ``under section 6038'',
       (2) by inserting ``1298(f),'' before ``6038'', and
       (3) by inserting ``6038D,'' after ``6038B,''.
       (c) Clarifications Related to Failure To Disclose Foreign 
     Transfers.--Paragraph (8) of section 6501(c) is amended by 
     striking ``event'' and inserting ``tax return, event,''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to--
       (1) returns filed after the date of the enactment of this 
     Act; and
       (2) returns filed on or before such date if the period 
     specified in section 6501 of the Internal Revenue Code of 
     1986 (determined without regard to such amendments) for 
     assessment of such taxes has not expired as of such date.

                 PART III--OTHER DISCLOSURE PROVISIONS

     SEC. 521. REPORTING OF ACTIVITIES WITH RESPECT TO PASSIVE 
                   FOREIGN INVESTMENT COMPANIES.

       (a) In General.--Section 1298 is amended by redesignating 
     subsection (f) as subsection (g) and by inserting after 
     subsection (e) the following new subsection:
       ``(f) Reporting Requirement.--Except as otherwise provided 
     by the Secretary, each United States person who is a 
     shareholder of a passive foreign investment company shall 
     file an annual report containing such information as the 
     Secretary may require.''.
       (b) Conforming Amendment.--Subsection (e) of section 1291 
     is amended by striking ``, (d), and (f)'' and inserting ``and 
     (d)''.
       (c) Effective Date.--The amendments made by this section 
     take effect on the date of the enactment of this Act.

     SEC. 522. SECRETARY PERMITTED TO REQUIRE FINANCIAL 
                   INSTITUTIONS TO FILE CERTAIN RETURNS RELATED TO 
                   WITHHOLDING ON FOREIGN TRANSFERS 
                   ELECTRONICALLY.

       (a) In General.--Subsection (e) of section 6011 is amended 
     by adding at the end the following new paragraph:
       ``(4) Special rule for returns filed by financial 
     institutions with respect to withholding on foreign 
     transfers.--The numerical limitation under paragraph (2)(A) 
     shall not apply to any return filed by a financial 
     institution (as defined in section 1471(d)(5)) with respect 
     to tax for which such institution is made liable under 
     section 1461 or 1474(a).''.
       (b) Conforming Amendment.--Subsection (c) of section 6724 
     is amended by inserting ``or with respect to a return 
     described in section 6011(e)(4)'' before the end period.
       (c) Effective Date.--The amendment made by this section 
     shall apply to returns the due date for which (determined 
     without regard to extensions) is after the date of the 
     enactment of this Act.

             PART IV--PROVISIONS RELATED TO FOREIGN TRUSTS

     SEC. 531. CLARIFICATIONS WITH RESPECT TO FOREIGN TRUSTS WHICH 
                   ARE TREATED AS HAVING A UNITED STATES 
                   BENEFICIARY.

       (a) In General.--Paragraph (1) of section 679(c) is amended 
     by adding at the end the following:

     ``For purposes of subparagraph (A), an amount shall be 
     treated as accumulated for the benefit of a United States 
     person even if the United States person's interest in the 
     trust is contingent on a future event.''.
       (b) Clarification Regarding Discretion To Identify 
     Beneficiaries.--Subsection (c) of section 679 is amended by 
     adding at the end the following new paragraph:
       ``(4) Special rule in case of discretion to identify 
     beneficiaries.--For purposes of paragraph (1)(A), if any 
     person has the discretion (by authority given in the trust 
     agreement, by power of appointment, or otherwise) of making a 
     distribution from the trust to, or for the benefit of, any 
     person, such trust shall be treated as having a beneficiary 
     who is a United States person unless--
       ``(A) the terms of the trust specifically identify the 
     class of persons to whom such distributions may be made, and
       ``(B) none of those persons are United States persons 
     during the taxable year.''.
       (c) Clarification That Certain Agreements and 
     Understandings Are Terms of the Trust.--Subsection (c) of 
     section 679, as amended by subsection (b), is amended by 
     adding at the end the following new paragraph:
       ``(5) Certain agreements and understandings treated as 
     terms of the trust.--For purposes of paragraph (1)(A), if any 
     United States person who directly or indirectly transfers 
     property to the trust is directly or indirectly involved in 
     any agreement or understanding (whether written, oral, or 
     otherwise) that may result in the income or corpus of the 
     trust being paid or accumulated to or for the benefit of a 
     United States person, such agreement or understanding shall 
     be treated as a term of the trust.''.

     SEC. 532. PRESUMPTION THAT FOREIGN TRUST HAS UNITED STATES 
                   BENEFICIARY.

       (a) In General.--Section 679 is amended by redesignating 
     subsection (d) as subsection (e) and inserting after 
     subsection (c) the following new subsection:
       ``(d) Presumption That Foreign Trust Has United States 
     Beneficiary.--If a United States person directly or 
     indirectly transfers property to a foreign trust (other than 
     a trust described in section 6048(a)(3)(B)(ii)), the 
     Secretary may treat such trust as having a United States 
     beneficiary for purposes of applying this section to such 
     transfer unless such person--
       ``(1) submits such information to the Secretary as the 
     Secretary may require with respect to such transfer, and
       ``(2) demonstrates to the satisfaction of the Secretary 
     that such trust satisfies the requirements of subparagraphs 
     (A) and (B) of subsection (c)(1).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to transfers of property after the date of the 
     enactment of this Act.

     SEC. 533. UNCOMPENSATED USE OF TRUST PROPERTY.

       (a) In General.--Paragraph (1) of section 643(i) is 
     amended--
       (1) by striking ``directly or indirectly to'' and inserting 
     ``(or permits the use of any other trust property) directly 
     or indirectly to or by'', and
       (2) by inserting ``(or the fair market value of the use of 
     such property)'' after ``the amount of such loan''.
       (b) Exception for Compensated Use.--Paragraph (2) of 
     section 643(i) is amended by adding at the end the following 
     new subparagraph:
       ``(E) Exception for compensated use of property.--In the 
     case of the use of any trust property other than a loan of 
     cash or marketable securities, paragraph (1) shall not apply 
     to the extent that the trust is paid the fair market value of 
     such use within a reasonable period of time of such use.''.
       (c) Application to Grantor Trusts.--Subsection (c) of 
     section 679, as amended by this Act, is amended by adding at 
     the end the following new paragraph:
       ``(6) Uncompensated use of trust property treated as a 
     payment.--For purposes of this subsection, a loan of cash or 
     marketable securities (or the use of any other trust 
     property) directly or indirectly to or by any United States 
     person (whether or not a beneficiary under the terms of the 
     trust) shall be treated as paid or accumulated for the 
     benefit of a United States person. The preceding sentence 
     shall not apply to the extent that the United States person 
     repays the loan at a market rate of interest (or pays the

[[Page 2018]]

     fair market value of the use of such property) within a 
     reasonable period of time.''.
       (d) Conforming Amendments.--Paragraph (3) of section 643(i) 
     is amended--
       (1) by inserting ``(or use of property)'' after ``If any 
     loan'',
       (2) by inserting ``or the return of such property'' before 
     ``shall be disregarded'', and
       (3) by striking ``regarding loan principal'' in the heading 
     thereof.
       (e) Effective Date.--The amendments made by this section 
     shall apply to loans made, and uses of property, after the 
     date of the enactment of this Act.

     SEC. 534. REPORTING REQUIREMENT OF UNITED STATES OWNERS OF 
                   FOREIGN TRUSTS.

       (a) In General.--Paragraph (1) of section 6048(b) is 
     amended by inserting ``shall submit such information as the 
     Secretary may prescribe with respect to such trust for such 
     year and'' before ``shall be responsible to ensure''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 535. MINIMUM PENALTY WITH RESPECT TO FAILURE TO REPORT 
                   ON CERTAIN FOREIGN TRUSTS.

       (a) In General.--Subsection (a) of section 6677 is 
     amended--
       (1) by inserting ``the greater of $10,000 or'' before ``35 
     percent'', and
       (2) by striking the last sentence and inserting the 
     following: ``At such time as the gross reportable amount with 
     respect to any failure can be determined by the Secretary, 
     any subsequent penalty imposed under this subsection with 
     respect to such failure shall be reduced as necessary to 
     assure that the aggregate amount of such penalties do not 
     exceed the gross reportable amount (and to the extent that 
     such aggregate amount already exceeds the gross reportable 
     amount the Secretary shall refund such excess to the 
     taxpayer).''
       (b) Effective Date.--The amendments made by this section 
     shall apply to notices and returns required to be filed after 
     December 31, 2009.

PART V--SUBSTITUTE DIVIDENDS AND DIVIDEND EQUIVALENT PAYMENTS RECEIVED 
                BY FOREIGN PERSONS TREATED AS DIVIDENDS

     SEC. 541. SUBSTITUTE DIVIDENDS AND DIVIDEND EQUIVALENT 
                   PAYMENTS RECEIVED BY FOREIGN PERSONS TREATED AS 
                   DIVIDENDS.

       (a) In General.--Section 871 is amended by redesignating 
     subsection (l) as subsection (m) and by inserting after 
     subsection (k) the following new subsection:
       ``(l) Treatment of Dividend Equivalent Payments.--
       ``(1) In general.--For purposes of subsection (a), sections 
     881 and 4948(a), and chapters 3 and 4, a dividend equivalent 
     shall be treated as a dividend from sources within the United 
     States.
       ``(2) Dividend equivalent.--For purposes of this 
     subsection, the term `dividend equivalent' means--
       ``(A) any substitute dividend made pursuant to a securities 
     lending or a sale-repurchase transaction that (directly or 
     indirectly) is contingent upon, or determined by reference 
     to, the payment of a dividend from sources within the United 
     States,
       ``(B) any payment made pursuant to a specified notional 
     principal contract that (directly or indirectly) is 
     contingent upon, or determined by reference to, the payment 
     of a dividend from sources within the United States, and
       ``(C) any other payment determined by the Secretary to be 
     substantially similar to a payment described in subparagraph 
     (A) or (B).
       ``(3) Specified notional principal contract.--For purposes 
     of this subsection, the term `specified notional principal 
     contract' means--
       ``(A) any notional principal contract if--
       ``(i) in connection with entering into such contract, any 
     long party to the contract transfers the underlying security 
     to any short party to the contract,
       ``(ii) in connection with the termination of such contract, 
     any short party to the contract transfers the underlying 
     security to any long party to the contract,
       ``(iii) the underlying security is not readily tradable on 
     an established securities market,
       ``(iv) in connection with entering into such contract, the 
     underlying security is posted as collateral by any short 
     party to the contract with any long party to the contract, or
       ``(v) such contract is identified by the Secretary as a 
     specified notional principal contract,
       ``(B) in the case of payments made after the date which is 
     2 years after the date of the enactment of this subsection, 
     any notional principal contract unless the Secretary 
     determines that such contract is of a type which does not 
     have the potential for tax avoidance.
       ``(4) Definitions.--For purposes of paragraph (3)(A)--
       ``(A) Long party.--The term `long party' means, with 
     respect to any underlying security of any notional principal 
     contract, any party to the contract which is entitled to 
     receive any payment pursuant to such contract which is 
     contingent upon, or determined by reference to, the payment 
     of a dividend from sources within the United States with 
     respect to such underlying security.
       ``(B) Short party.--The term `short party' means, with 
     respect to any underlying security of any notional principal 
     contract, any party to the contract which is not a long party 
     with respect to such underlying security.
       ``(C) Underlying security.--The term `underlying security' 
     means, with respect to any notional principal contract, the 
     security with respect to which the dividend referred to in 
     paragraph (2)(B) is paid. For purposes of this paragraph, any 
     index or fixed basket of securities shall be treated as a 
     single security.
       ``(5) Payments determined on gross basis.--For purposes of 
     this subsection, the term `payment' includes any gross amount 
     which is used in computing any net amount which is 
     transferred to or from the taxpayer.
       ``(6) Prevention of over-withholding.--In the case of any 
     chain of dividend equivalents one or more of which is subject 
     to tax under subsection (a) or section 881, the Secretary may 
     reduce such tax, but only to the extent that the taxpayer can 
     establish that such tax has been paid with respect to another 
     dividend equivalent in such chain, or is not otherwise due, 
     or as the Secretary determines is appropriate to address the 
     role of financial intermediaries in such chain. For purposes 
     of this paragraph, a dividend shall be treated as a dividend 
     equivalent.
       ``(7) Coordination with chapters 3 and 4.--For purposes of 
     chapters 3 and 4, each person that is a party to any contract 
     or other arrangement that provides for the payment of a 
     dividend equivalent shall be treated as having control of 
     such payment.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to payments made on or after the date that is 180 
     days after the date of the enactment of this Act.

  Subtitle B--Delay in Application of Worldwide Allocation of Interest

     SEC. 551. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF 
                   INTEREST.

       (a) In General.--Paragraphs (5)(D) and (6) of section 
     864(f) are each amended by striking ``December 31, 2017'' and 
     inserting ``December 31, 2019''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

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