[Congressional Record (Bound Edition), Volume 156 (2010), Part 8]
[Senate]
[Pages 11093-11116]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 4376. Mr. Thune (for himself, Mr. McConnell, Mr. McCain, Mr. 
Isakson, Mr. Bond, Mr. Enzi, Mr. Cornyn, Mr. Barrasso, Mr. Roberts, Mr. 
Coburn, Mr. Chambliss, Mr. Brown of Massachusetts, and Mr. Gregg) 
proposed an amendment to amendment SA 4369 proposed by Mr. Baucus to 
the bill H.R. 4213, to amend the Internal Revenue Code of 1986 to 
extend certain expiring provisions, and for other purposes; as follows:

       Strike all after the first word and insert the following:

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

       (a) Short Title.--This Act may be cited as the ``American 
     Jobs and Closing Tax Loopholes Act of 2010''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in titles I, II, and IV of 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--INFRASTRUCTURE INCENTIVES

Sec. 101. Exempt-facility bonds for sewage and water supply facilities.
Sec. 102. Extension of exemption from alternative minimum tax treatment 
              for certain tax-exempt bonds.
Sec. 103. Allowance of new markets tax credit against alternative 
              minimum tax.
Sec. 104. Extension of tax-exempt eligibility for loans guaranteed by 
              Federal home loan banks.
Sec. 105. Extension of temporary small issuer rules for allocation of 
              tax-exempt interest expense by financial institutions.

               TITLE II--EXTENSION OF EXPIRING PROVISIONS

                           Subtitle A--Energy

Sec. 201. Alternative motor vehicle credit for new qualified hybrid 
              motor vehicles other than passenger automobiles and light 
              trucks.
Sec. 202. Incentives for biodiesel and renewable diesel.
Sec. 203. Extension and modification of credit for steel industry fuel.
Sec. 204. Credit for producing fuel from coke or coke gas.
Sec. 205. New energy efficient home credit.
Sec. 206. Special rule for sales or dispositions to implement FERC or 
              State electric restructuring policy for qualified 
              electric utilities.
Sec. 207. Suspension of limitation on percentage depletion for oil and 
              gas from marginal wells.
Sec. 208. Direct payment of energy efficient appliances tax credit.
Sec. 209. Modification of standards for windows, doors, and skylights 
              with respect to the credit for nonbusiness energy 
              property.
Sec. 210. Credit for electricity produced at certain open-loop biomass 
              facilities.
Sec. 211. Excise tax credits and outlay payments for alternative fuel 
              and alternative fuel mixtures.
Sec. 212. Credit for refined coal facilities.
Sec. 213. Credit for production of low sulfur diesel fuel.

                   Subtitle B--Individual Tax Relief

                    PART I--Miscellaneous Provisions

Sec. 221. Deduction for certain expenses of elementary and secondary 
              school teachers.
Sec. 222. Additional standard deduction for State and local real 
              property taxes.
Sec. 223. Deduction of State and local sales taxes.
Sec. 224. Contributions of capital gain real property made for 
              conservation purposes.
Sec. 225. Above-the-line deduction for qualified tuition and related 
              expenses.
Sec. 226. Tax-free distributions from individual retirement plans for 
              charitable purposes.
Sec. 227. Look-thru of certain regulated investment company stock in 
              determining gross estate of nonresidents.

                  PART II--Low-income Housing Credits

Sec. 231. Election for direct payment of low-income housing credit for 
              2010.

                    Subtitle C--Business Tax Relief

Sec. 241. Research credit.
Sec. 242. Indian employment tax credit.
Sec. 243. New markets tax credit.
Sec. 244. Railroad track maintenance credit.
Sec. 245. Mine rescue team training credit.
Sec. 246. Employer wage credit for employees who are active duty 
              members of the uniformed services.
Sec. 247. 5-year depreciation for farming business machinery and 
              equipment.
Sec. 248. 15-year straight-line cost recovery for qualified leasehold 
              improvements, qualified restaurant buildings and 
              improvements, and qualified retail improvements.
Sec. 249. 7-year recovery period for motorsports entertainment 
              complexes.
Sec. 250. Accelerated depreciation for business property on an Indian 
              reservation.
Sec. 251. Enhanced charitable deduction for contributions of food 
              inventory.
Sec. 252. Enhanced charitable deduction for contributions of book 
              inventories to public schools.
Sec. 253. Enhanced charitable deduction for corporate contributions of 
              computer inventory for educational purposes.
Sec. 254. Election to expense mine safety equipment.
Sec. 255. Special expensing rules for certain film and television 
              productions.
Sec. 256. Expensing of environmental remediation costs.
Sec. 257. Deduction allowable with respect to income attributable to 
              domestic production activities in Puerto Rico.
Sec. 258. Modification of tax treatment of certain payments to 
              controlling exempt organizations.
Sec. 259. Exclusion of gain or loss on sale or exchange of certain 
              brownfield sites from unrelated business income.
Sec. 260. Timber REIT modernization.
Sec. 261. Treatment of certain dividends of regulated investment 
              companies.
Sec. 262. RIC qualified investment entity treatment under FIRPTA.
Sec. 263. Exceptions for active financing income.
Sec. 264. Look-thru treatment of payments between related controlled 
              foreign corporations under foreign personal holding 
              company rules.
Sec. 265. Basis adjustment to stock of S corps making charitable 
              contributions of property.
Sec. 266. Empowerment zone tax incentives.
Sec. 267. Renewal community tax incentives.
Sec. 268. Temporary increase in limit on cover over of rum excise taxes 
              to Puerto Rico and the Virgin Islands.
Sec. 269. Payment to American Samoa in lieu of extension of economic 
              development credit.
Sec. 270. Election to temporarily utilize unused AMT credits determined 
              by domestic investment.
Sec. 271. Reduction in corporate rate for qualified timber gain.
Sec. 272. Study of extended tax expenditures.

            Subtitle D--Temporary Disaster Relief Provisions

                    PART I--National Disaster Relief

Sec. 281. Waiver of certain mortgage revenue bond requirements.
Sec. 282. Losses attributable to federally declared disasters.

[[Page 11094]]

Sec. 283. Special depreciation allowance for qualified disaster 
              property.
Sec. 284. Net operating losses attributable to federally declared 
              disasters.
Sec. 285. Expensing of qualified disaster expenses.
Sec. 286. Special depreciation allowance.

                      PART II--Regional Provisions

                    subpart a--new york liberty zone

Sec. 291. Special depreciation allowance for nonresidential and 
              residential real property.
Sec. 292. Tax-exempt bond financing.

                           subpart b--go zone

Sec. 295. Increase in rehabilitation credit.
Sec. 296. Work opportunity tax credit with respect to certain 
              individuals affected by Hurricane Katrina for employers 
              inside disaster areas.
Sec. 297. Extension of low-income housing credit rules for buildings in 
              GO zones.
Sec. 298. Tax-exempt bond financing.

                  subpart c--midwester disaster areas

Sec. 299. Special rules for use of retirement funds.
Sec. 300. Exclusion of cancellation of mortgage indebtedness.

                     TITLE III--PENSION PROVISIONS

                   Subtitle A--Single Employer Plans

Sec. 301. Extended period for single-employer defined benefit plans to 
              amortize certain shortfall amortization bases.
Sec. 302. Application of extended amortization period to plans subject 
              to prior law funding rules.
Sec. 303. Lookback for certain benefit restrictions.
Sec. 304. Lookback for credit balance rule for plans maintained by 
              charities.

                    Subtitle B--Multiemployer Plans

Sec. 321. Adjustments to funding standard account rules.

                       TITLE IV--REVENUE OFFSETS

Sec. 401. Rollovers from elective deferral plans to Roth designated 
              accounts.
Sec. 402. Participants in government section 457 plans allowed to treat 
              elective deferrals as Roth contributions.
Sec. 403. Temporary one-year freeze on raises, bonuses, and other 
              salary increases for Federal employees.
Sec. 404. Capping the total number of Federal employees.
Sec. 405. Collection of unpaid taxes from employees of the Federal 
              Government.
Sec. 406. Reducing printing and publishing costs of Government 
              documents.
Sec. 407. Reducing excessive duplication, overhead and spending within 
              the Federal Government.
Sec. 408. Eliminating nonessential Government travel.
Sec. 409. Eliminating bonuses for poor performance by Government 
              contractors.
Sec. 410. $1,000,000,000 limitation on voluntary payments to the United 
              Nations.
Sec. 411. Rescinding a State department training facility unwanted by 
              residents of the community in which it is planned to be 
              constructed.
Sec. 412. Reducing budgets of Members of Congress.
Sec. 413. Disposing of unneeded and unused government property.
Sec. 414. Auctioning and selling of unused and unneeded equipment.
Sec. 415. Rescinding unspent Federal funds.
Sec. 416. Use of stimulus funds to offset spending.
Sec. 417. Deficit Reduction Trust Fund.

          TITLE V--UNEMPLOYMENT, HEALTH, AND OTHER ASSISTANCE

        Subtitle A--Unemployment Insurance and Other Assistance

Sec. 501. Extension of unemployment insurance provisions.
Sec. 502. Coordination of emergency unemployment compensation with 
              regular compensation.

       Subtitle B--Physician Payment Update and Other Provisions

                    PART I--Physician Payment Update

Sec. 511. Physician payment update.

               PART II--Extension of Expiring Provisions

Sec. 521. Extension of MMA section 508 reclassifications.
Sec. 522. Extension of Medicare work geographic adjustment floor.
Sec. 523. Extension of exceptions process for Medicare therapy caps.
Sec. 524. Extension of payment for technical component of certain 
              physician pathology services.
Sec. 525. Extension of ambulance add-ons.
Sec. 526. Extension of physician fee schedule mental health add-on 
              payment.
Sec. 527. Extension of outpatient hold harmless provision.
Sec. 528. Extension of Medicare reasonable costs payments for certain 
              clinical diagnostic laboratory tests furnished to 
              hospital patients in certain rural areas.
Sec. 529. Extension of the qualifying individual (QI) program.
Sec. 530. Extension of Transitional Medical Assistance (TMA).
Sec. 531. Extension of DRA court improvement grants.

PART III--Changes to the Patient Protection and Affordable Care Act and 
                         Additional Provisions

 subpart a--changes to the patient protection and affordable care act 
                       and additional provisions

Sec. 541. Expansion of affordability exception to individual mandate.
Sec. 542. Replacement of Medicaid primary care payment cliff.
Sec. 543. Establish a CMS-IRS data match to identify fraudulent 
              providers.
Sec. 544. Funding for claims reprocessing.

                  subpart b--medical liability reform

Sec. 551. Short title.
Sec. 552. Findings and purpose.
Sec. 553. Definitions.
Sec. 554. Encouraging speedy resolution of claims.
Sec. 555. Compensating patient injury.
Sec. 556. Maximizing patient recovery.
Sec. 557. Additional health benefits.
Sec. 558. Punitive damages.
Sec. 559. Authorization of payment of future damages to claimants in 
              health care lawsuits.
Sec. 560. Effect on other laws.
Sec. 561. State flexibility and protection of states' rights.
Sec. 562. Applicability; effective date.

                       TITLE VI--OTHER PROVISIONS

Sec. 601. Extension of national flood insurance program.
Sec. 602. Small business loan guarantee enhancement extensions.
Sec. 603. Summer employment for youth.
Sec. 604. Expansion of eligibility for concurrent receipt of military 
              retired pay and veterans' disability compensation to 
              include all chapter 61 disability retirees regardless of 
              disability rating percentage or years of service.
Sec. 605. Extension of use of 2009 poverty guidelines.
Sec. 606. Refunds disregarded in the administration of Federal programs 
              and federally assisted programs.
Sec. 607. ARRA planning and reporting.

                    TITLE VII--BUDGETARY PROVISIONS

Sec. 701. Determination of budgetary effects.

                   TITLE I--INFRASTRUCTURE INCENTIVES

     SEC. 101. EXEMPT-FACILITY BONDS FOR SEWAGE AND WATER SUPPLY 
                   FACILITIES.

       (a) Bonds for Water and Sewage Facilities Exempt From 
     Volume Cap on Private Activity Bonds.--
       (1) In general.--Paragraph (3) of section 146(g) is amended 
     by inserting ``(4), (5),'' after ``(2),''.
       (2) Conforming amendment.--Paragraphs (2) and (3)(B) of 
     section 146(k) are both amended by striking ``(4), (5), 
     (6),'' and inserting ``(6)''.
       (b) Tax-exempt Issuance by Indian Tribal Governments.--
       (1) In general.--Subsection (c) of section 7871 is amended 
     by adding at the end the following new paragraph:
       ``(4) Exception for bonds for water and sewage 
     facilities.--Paragraph (2) shall not apply to an exempt 
     facility bond 95 percent or more of the net proceeds (as 
     defined in section 150(a)(3)) of which are to be used to 
     provide facilities described in paragraph (4) or (5) of 
     section 142(a).''.
       (2) Conforming amendment.--Paragraph (2) of section 7871(c) 
     is amended by striking ``paragraph (3)'' and inserting 
     ``paragraphs (3) and (4)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 102. EXTENSION OF EXEMPTION FROM ALTERNATIVE MINIMUM TAX 
                   TREATMENT FOR CERTAIN TAX-EXEMPT BONDS.

       (a) In General.--Clause (vi) of section 57(a)(5)(C) is 
     amended--
       (1) by striking ``January 1, 2011'' in subclause (I) and 
     inserting ``January 1, 2012''; and
       (2) by striking ``and 2010'' in the heading and inserting 
     ``, 2010, and 2011''.
       (b) Adjusted Current Earnings.--Clause (iv) of section 
     56(g)(4)(B) is amended--
       (1) by striking ``January 1, 2011'' in subclause (I) and 
     inserting ``January 1, 2012''; and
       (2) by striking ``and 2010'' in the heading and inserting 
     ``, 2010, and 2011''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after December 31, 2010.

     SEC. 103. ALLOWANCE OF NEW MARKETS TAX CREDIT AGAINST 
                   ALTERNATIVE MINIMUM TAX.

       (a) In General.--Subparagraph (B) of section 38(c)(4), as 
     amended by the Patient Protection and Affordable Care Act, is 
     amended by redesignating clauses (v) through (ix) as clauses 
     (vi) through (x), respectively, and by inserting after clause 
     (iv) the following new clause:

[[Page 11095]]

       ``(v) the credit determined under section 45D, but only 
     with respect to credits determined with respect to qualified 
     equity investments (as defined in section 45D(b)) initially 
     made before January 1, 2012,''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to credits determined with respect to qualified 
     equity investments (as defined in section 45D(b) of the 
     Internal Revenue Code of 1986) initially made after March 15, 
     2010.

     SEC. 104. EXTENSION OF TAX-EXEMPT ELIGIBILITY FOR LOANS 
                   GUARANTEED BY FEDERAL HOME LOAN BANKS.

       Clause (iv) of section 149(b)(3)(A) is amended by striking 
     ``December 31, 2010'' and inserting ``December 31, 2011''.

     SEC. 105. EXTENSION OF TEMPORARY SMALL ISSUER RULES FOR 
                   ALLOCATION OF TAX-EXEMPT INTEREST EXPENSE BY 
                   FINANCIAL INSTITUTIONS.

       (a) In General.--Clauses (i), (ii), and (iii) of section 
     265(b)(3)(G) are each amended by striking ``or 2010'' and 
     inserting ``, 2010, or 2011''.
       (b) Conforming Amendment.--Subparagraph (G) of section 
     265(b)(3) is amended by striking ``and 2010'' in the heading 
     and inserting ``, 2010, and 2011''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after December 31, 2010.

               TITLE II--EXTENSION OF EXPIRING PROVISIONS

                           Subtitle A--Energy

     SEC. 201. ALTERNATIVE MOTOR VEHICLE CREDIT FOR NEW QUALIFIED 
                   HYBRID MOTOR VEHICLES OTHER THAN PASSENGER 
                   AUTOMOBILES AND LIGHT TRUCKS.

       (a) In General.--Paragraph (3) of section 30B(k) is amended 
     by striking ``December 31, 2009'' and inserting ``December 
     31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property purchased after December 31, 2009.

     SEC. 202. INCENTIVES FOR BIODIESEL AND RENEWABLE DIESEL.

       (a) Credits for Biodiesel and Renewable Diesel Used as 
     Fuel.--Subsection (g) of section 40A is amended by striking 
     ``December 31, 2009'' and inserting ``December 31, 2010''.
       (b) Excise Tax Credits and Outlay Payments for Biodiesel 
     and Renewable Diesel Fuel Mixtures.--
       (1) Paragraph (6) of section 6426(c) is amended by striking 
     ``December 31, 2009'' and inserting ``December 31, 2010''.
       (2) Subparagraph (B) of section 6427(e)(6) is amended by 
     striking ``December 31, 2009'' and inserting ``December 31, 
     2010''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to fuel sold or used after December 31, 2009.

     SEC. 203. EXTENSION AND MODIFICATION OF CREDIT FOR STEEL 
                   INDUSTRY FUEL.

       (a) Credit Period.--
       (1) In general.--Subclause (II) of section 45(e)(8)(D)(ii) 
     is amended to read as follows:

       ``(II) Credit period.--In lieu of the 10-year period 
     referred to in clauses (i) and (ii)(II) of subparagraph (A), 
     the credit period shall be the period beginning on the date 
     that the facility first produces steel industry fuel that is 
     sold to an unrelated person after September 30, 2008, and 
     ending 2 years after such date.''.

       (2) Conforming amendment.--Section 45(e)(8)(D) is amended 
     by striking clause (iii) and by redesignating clause (iv) as 
     clause (iii).
       (b) Extension of Placed-in-service Date.--Subparagraph (A) 
     of section 45(d)(8) is amended--
       (1) by striking ``(or any modification to a facility)''; 
     and
       (2) by striking ``2010'' and inserting ``2011''.
       (c) Clarifications.--
       (1) Steel industry fuel.--Subclause (I) of section 
     45(c)(7)(C)(i) is amended by inserting ``, a blend of coal 
     and petroleum coke, or other coke feedstock'' after ``on 
     coal''.
       (2) Ownership interest.--Section 45(d)(8) is amended by 
     adding at the end the following new flush sentence:
     ``With respect to a facility producing steel industry fuel, 
     no person (including a ground lessor, customer, supplier, or 
     technology licensor) shall be treated as having an ownership 
     interest in the facility or as otherwise entitled to the 
     credit allowable under subsection (a) with respect to such 
     facility if such person's rent, license fee, or other 
     entitlement to net payments from the owner of such facility 
     is measured by a fixed dollar amount or a fixed amount per 
     ton, or otherwise determined without regard to the profit or 
     loss of such facility.''.
       (3) Production and sale.--Subparagraph (D) of section 
     45(e)(8), as amended by subsection (a)(2), is amended by 
     redesignating clause (iii) as clause (iv) and by inserting 
     after clause (ii) the following new clause:
       ``(iii) Production and sale.--The owner of a facility 
     producing steel industry fuel shall be treated as producing 
     and selling steel industry fuel where that owner manufactures 
     such steel industry fuel from coal, a blend of coal and 
     petroleum coke, or other coke feedstock to which it has 
     title. The sale of such steel industry fuel by the owner of 
     the facility to a person who is not the owner of the facility 
     shall not fail to qualify as a sale to an unrelated person 
     solely because such purchaser may also be a ground lessor, 
     supplier, or customer.''.
       (d) Specified Credit for Purposes of Alternative Minimum 
     Tax Exclusion.--Subclause (II) of section 38(c)(4)(B)(iii) is 
     amended by inserting ``(in the case of a refined coal 
     production facility producing steel industry fuel, during the 
     credit period set forth in section 45(e)(8)(D)(ii)(II))'' 
     after ``service''.
       (e) Effective Dates.--
       (1) In general.--The amendments made by subsections (a), 
     (b), and (d) shall take effect on the date of the enactment 
     of this Act.
       (2) Clarifications.--The amendments made by subsection (c) 
     shall take effect as if included in the amendments made by 
     the Energy Improvement and Extension Act of 2008.

     SEC. 204. CREDIT FOR PRODUCING FUEL FROM COKE OR COKE GAS.

       (a) In General.--Paragraph (1) of section 45K(g) is amended 
     by striking ``January 1, 2010'' and inserting ``January 1, 
     2011''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to facilities placed in service after December 
     31, 2009.

     SEC. 205. NEW ENERGY EFFICIENT HOME CREDIT.

       (a) In General.--Subsection (g) of section 45L is amended 
     by striking ``December 31, 2009'' and inserting ``December 
     31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to homes acquired after December 31, 2009.

     SEC. 206. SPECIAL RULE FOR SALES OR DISPOSITIONS TO IMPLEMENT 
                   FERC OR STATE ELECTRIC RESTRUCTURING POLICY FOR 
                   QUALIFIED ELECTRIC UTILITIES.

       (a) In General.--Paragraph (3) of section 451(i) is amended 
     by striking ``January 1, 2010'' and inserting ``January 1, 
     2011''.
       (b) Modification of Definition of Independent Transmission 
     Company.--
       (1) In general.--Clause (i) of section 451(i)(4)(B) is 
     amended to read as follows:
       ``(i) who the Federal Energy Regulatory Commission 
     determines in its authorization of the transaction under 
     section 203 of the Federal Power Act (16 U.S.C. 824b) or by 
     declaratory order--

       ``(I) is not itself a market participant as determined by 
     the Commission, and also is not controlled by any such market 
     participant, or
       ``(II) to be independent from market participants or to be 
     an independent transmission company within the meaning of 
     such Commission's rules applicable to independent 
     transmission providers, and''.

       (2) Related persons.--Paragraph (4) of section 451(i) is 
     amended by adding at the end the following flush sentence:
     ``For purposes of subparagraph (B)(i)(I), a person shall be 
     treated as controlled by another person if such persons would 
     be treated as a single employer under section 52.''.
       (c) Effective Date.--
       (1) In general.--The amendment made by subsection (a) shall 
     apply to dispositions after December 31, 2009.
       (2) Modifications.--The amendments made by subsection (b) 
     shall apply to dispositions after the date of the enactment 
     of this Act.

     SEC. 207. SUSPENSION OF LIMITATION ON PERCENTAGE DEPLETION 
                   FOR OIL AND GAS FROM MARGINAL WELLS.

       (a) In General.--Clause (ii) of section 613A(c)(6)(H) is 
     amended by striking ``January 1, 2010'' and inserting 
     ``January 1, 2011''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.

     SEC. 208. DIRECT PAYMENT OF ENERGY EFFICIENT APPLIANCES TAX 
                   CREDIT.

       In the case of any taxable year which includes the last day 
     of calendar year 2009 or calendar year 2010, a taxpayer who 
     elects to waive the credit which would otherwise be 
     determined with respect to the taxpayer under section 45M of 
     the Internal Revenue Code of 1986 for such taxable year shall 
     be treated as making a payment against the tax imposed under 
     subtitle A of such Code for such taxable year in an amount 
     equal to 85 percent of the amount of the credit which would 
     otherwise be so determined. Such payment shall be treated as 
     made on the later of the due date of the return of such tax 
     or the date on which such return is filed. Elections under 
     this section may be made separately for 2009 and 2010, but 
     once made shall be irrevocable. No amount shall be includible 
     in gross income or alternative minimum taxable income by 
     reason of this section.

     SEC. 209. MODIFICATION OF STANDARDS FOR WINDOWS, DOORS, AND 
                   SKYLIGHTS WITH RESPECT TO THE CREDIT FOR 
                   NONBUSINESS ENERGY PROPERTY.

       (a) In General.--Paragraph (4) of section 25C(c) is amended 
     by striking ``unless'' and all that follows and inserting 
     ``unless--
       ``(A) in the case of any component placed in service after 
     the date which is 90 days after the date of the enactment of 
     the American Jobs and Closing Tax Loopholes Act of 2010, such 
     component meets the criteria for such components established 
     by the 2010 Energy Star Program Requirements for Residential 
     Windows, Doors, and Skylights, Version 5.0 (or any subsequent 
     version of such requirements which is in effect after January 
     4, 2010),
       ``(B) in the case of any component placed in service after 
     the date of the enactment of the American Jobs and Closing 
     Tax Loopholes Act of 2010 and on or before the date which is 
     90 days after such date, such component meets the criteria 
     described in subparagraph (A) or is equal to or below a U 
     factor of 0.30 and SHGC of 0.30, and

[[Page 11096]]

       ``(C) in the case of any component which is a garage door, 
     such component is equal to or below a U factor of 0.30 and 
     SHGC of 0.30.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 210. CREDIT FOR ELECTRICITY PRODUCED AT CERTAIN OPEN-
                   LOOP BIOMASS FACILITIES.

       (a) In General.--Clause (ii) of section 45(b)(4)(B) is 
     amended by striking ``5-year period'' and inserting ``6-year 
     period''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to electricity produced and sold after December 
     31, 2009.

     SEC. 211. EXCISE TAX CREDITS AND OUTLAY PAYMENTS FOR 
                   ALTERNATIVE FUEL AND ALTERNATIVE FUEL MIXTURES.

       (a) In General.--Sections 6426(d)(5), 6426(e)(3), and 
     6427(e)(6)(C) are each amended by striking ``December 31, 
     2009'' and inserting ``December 31, 2010''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to fuel sold or used after December 31, 2009.

     SEC. 212. CREDIT FOR REFINED COAL FACILITIES.

       (a) In General.--Subparagraphs (A) and (B) of section 
     45(d)(8) are each amended by striking ``January 1, 2010'' and 
     inserting ``January 1, 2011''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to facilities placed in service after December 
     31, 2009.

     SEC. 213. CREDIT FOR PRODUCTION OF LOW SULFUR DIESEL FUEL.

       (a) Applicable Period.--Paragraph (4) of section 45H(c) is 
     amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 339 of the 
     American Jobs Creation Act of 2004.

                   Subtitle B--Individual Tax Relief

                    PART I--MISCELLANEOUS PROVISIONS

     SEC. 221. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND 
                   SECONDARY SCHOOL TEACHERS.

       (a) In General.--Subparagraph (D) of section 62(a)(2) is 
     amended by striking ``or 2009'' and inserting ``2009, or 
     2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.

     SEC. 222. ADDITIONAL STANDARD DEDUCTION FOR STATE AND LOCAL 
                   REAL PROPERTY TAXES.

       (a) In General.--Subparagraph (C) of section 63(c)(1) is 
     amended by striking ``or 2009'' and inserting ``2009, or 
     2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.

     SEC. 223. DEDUCTION OF STATE AND LOCAL SALES TAXES.

       (a) In General.--Subparagraph (I) of section 164(b)(5) is 
     amended by striking ``January 1, 2010'' and inserting 
     ``January 1, 2011''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.

     SEC. 224. CONTRIBUTIONS OF CAPITAL GAIN REAL PROPERTY MADE 
                   FOR CONSERVATION PURPOSES.

       (a) In General.--Clause (vi) of section 170(b)(1)(E) is 
     amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.
       (b) Contributions by Certain Corporate Farmers and 
     Ranchers.--Clause (iii) of section 170(b)(2)(B) is amended by 
     striking ``December 31, 2009'' and inserting ``December 31, 
     2010''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2009.

     SEC. 225. ABOVE-THE-LINE DEDUCTION FOR QUALIFIED TUITION AND 
                   RELATED EXPENSES.

       (a) In General.--Subsection (e) of section 222 is amended 
     by striking ``December 31, 2009'' and inserting ``December 
     31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.

     SEC. 226. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT 
                   PLANS FOR CHARITABLE PURPOSES.

       (a) In General.--Subparagraph (F) of section 408(d)(8) is 
     amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distributions made in taxable years beginning 
     after December 31, 2009.

     SEC. 227. LOOK-THRU OF CERTAIN REGULATED INVESTMENT COMPANY 
                   STOCK IN DETERMINING GROSS ESTATE OF 
                   NONRESIDENTS.

       (a) In General.--Paragraph (3) of section 2105(d) is 
     amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to estates of decedents dying after December 31, 
     2009.

                  PART II--LOW-INCOME HOUSING CREDITS

     SEC. 231. ELECTION FOR DIRECT PAYMENT OF LOW-INCOME HOUSING 
                   CREDIT FOR 2010.

       (a) In General.--Section 42 is amended by redesignating 
     subsection (n) as subsection (o) and by inserting after 
     subsection (m) the following new subsection:
       ``(n) Election for Refundable Credits.--
       ``(1) In general.--The housing credit agency of each State 
     shall be allowed a credit in an amount equal to such State's 
     2010 low-income housing refundable credit election amount, 
     which shall be payable by the Secretary as provided in 
     paragraph (5).
       ``(2) 2010 low-income housing refundable credit election 
     amount.--For purposes of this subsection, the term `2010 low-
     income housing refundable credit election amount' means, with 
     respect to any State, such amount as the State may elect 
     which does not exceed 85 percent of the product of--
       ``(A) the sum of--
       ``(i) 100 percent of the State housing credit ceiling for 
     2010 which is attributable to amounts described in clauses 
     (i) and (iii) of subsection (h)(3)(C), plus any increase in 
     the State housing credit ceiling for 2010 made by reason of 
     section 1400N(c) (including as such section is applied by 
     reason of sections 702(d)(2) and 704(b) of the Tax Extenders 
     and Alternative Minimum Tax Relief Act of 2008), and
       ``(ii) 40 percent of the State housing credit ceiling for 
     2010 which is attributable to amounts described in clauses 
     (ii) and (iv) of such subsection, plus any increase in the 
     State housing credit ceiling for 2010 made by reason of the 
     application of such section 702(d)(2) and 704(b), multiplied 
     by
       ``(B) 10.
     For purposes of subparagraph (A)(ii), in the case of any area 
     to which section 702(d)(2) or 704(b) of the Tax Extenders and 
     Alternative Minimum Tax Relief Act of 2008 applies, section 
     1400N(c)(1)(A) shall be applied without regard to clause (i)
       ``(3) Coordination with non-refundable credit.--For 
     purposes of this section, the amounts described in clauses 
     (i) through (iv) of subsection (h)(3)(C) with respect to any 
     State for 2010 shall each be reduced by so much of such 
     amount as is taken into account in determining the amount of 
     the credit allowed with respect to such State under paragraph 
     (1).
       ``(4) Special rule for basis.--Basis of a qualified low-
     income building shall not be reduced by the amount of any 
     payment made under this subsection.
       ``(5) Payment of credit; use to finance low-income 
     buildings.--The Secretary shall pay to the housing credit 
     agency of each State an amount equal to the credit allowed 
     under paragraph (1). Rules similar to the rules of 
     subsections (c) and (d) of section 1602 of the American 
     Recovery and Reinvestment Tax Act of 2009 shall apply with 
     respect to any payment made under this paragraph, except that 
     such subsection (d) shall be applied by substituting `January 
     1, 2012' for `January 1, 2011'.''.
       (b) Conforming Amendment.--Section 1324(b)(2) of title 31, 
     United States Code, is amended by inserting ``42(n),'' after 
     ``36C,''.

                    Subtitle C--Business Tax Relief

     SEC. 241. RESEARCH CREDIT.

       (a) In General.--Subparagraph (B) of section 41(h)(1) is 
     amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.
       (b) Conforming Amendment.--Subparagraph (D) of section 
     45C(b)(1) is amended by striking ``December 31, 2009'' and 
     inserting ``December 31, 2010''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred after December 31, 
     2009.

     SEC. 242. INDIAN EMPLOYMENT TAX CREDIT.

       (a) In General.--Subsection (f) of section 45A is amended 
     by striking ``December 31, 2009'' and inserting ``December 
     31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.

     SEC. 243. NEW MARKETS TAX CREDIT.

       (a) In General.--Subparagraph (F) of section 45D(f)(1) is 
     amended by inserting ``and 2010'' after ``2009''.
       (b) Conforming Amendment.--Paragraph (3) of section 45D(f) 
     is amended by striking ``2014'' and inserting ``2015''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to calendar years beginning after 2009.

     SEC. 244. RAILROAD TRACK MAINTENANCE CREDIT.

       (a) In General.--Subsection (f) of section 45G is amended 
     by striking ``January 1, 2010'' and inserting ``January 1, 
     2011''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenditures paid or incurred in taxable years 
     beginning after December 31, 2009.

     SEC. 245. MINE RESCUE TEAM TRAINING CREDIT.

       (a) In General.--Subsection (e) of section 45N is amended 
     by striking ``December 31, 2009'' and inserting ``December 
     31, 2010''.
       (b) Credit Allowable Against AMT.--Subparagraph (B) of 
     section 38(c)(4), as amended by section 104, is amended--
       (1) by redesignating clauses (vii) through (x) as clauses 
     (viii) through (xi), respectively; and
       (2) by inserting after clause (vi) the following new 
     clause:
       ``(vii) the credit determined under section 45N,''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this

[[Page 11097]]

     section shall apply to taxable years beginning after December 
     31, 2009.
       (2) Allowance against amt.--The amendments made by 
     subsection (b) shall apply to credits determined for taxable 
     years beginning after December 31, 2009, and to carrybacks of 
     such credits.

     SEC. 246. EMPLOYER WAGE CREDIT FOR EMPLOYEES WHO ARE ACTIVE 
                   DUTY MEMBERS OF THE UNIFORMED SERVICES.

       (a) In General.--Subsection (f) of section 45P is amended 
     by striking ``December 31, 2009'' and inserting ``December 
     31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to payments made after December 31, 2009.

     SEC. 247. 5-YEAR DEPRECIATION FOR FARMING BUSINESS MACHINERY 
                   AND EQUIPMENT.

       (a) In General.--Clause (vii) of section 168(e)(3)(B) is 
     amended by striking ``January 1, 2010'' and inserting 
     ``January 1, 2011''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2009.

     SEC. 248. 15-YEAR STRAIGHT-LINE COST RECOVERY FOR QUALIFIED 
                   LEASEHOLD IMPROVEMENTS, QUALIFIED RESTAURANT 
                   BUILDINGS AND IMPROVEMENTS, AND QUALIFIED 
                   RETAIL IMPROVEMENTS.

       (a) In General.--Clauses (iv), (v), and (ix) of section 
     168(e)(3)(E) are each amended by striking ``January 1, 2010'' 
     and inserting ``January 1, 2011''.
       (b) Conforming Amendments.--
       (1) Clause (i) of section 168(e)(7)(A) is amended by 
     striking ``if such building is placed in service after 
     December 31, 2008, and before January 1, 2010,''.
       (2) Paragraph (8) of section 168(e) is amended by striking 
     subparagraph (E).
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2009.

     SEC. 249. 7-YEAR RECOVERY PERIOD FOR MOTORSPORTS 
                   ENTERTAINMENT COMPLEXES.

       (a) In General.--Subparagraph (D) of section 168(i)(15) is 
     amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2009.

     SEC. 250. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON 
                   AN INDIAN RESERVATION.

       (a) In General.--Paragraph (8) of section 168(j) is amended 
     by striking ``December 31, 2009'' and inserting ``December 
     31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2009.

     SEC. 251. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF 
                   FOOD INVENTORY.

       (a) In General.--Clause (iv) of section 170(e)(3)(C) is 
     amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made after December 31, 2009.

     SEC. 252. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF 
                   BOOK INVENTORIES TO PUBLIC SCHOOLS.

       (a) In General.--Clause (iv) of section 170(e)(3)(D) is 
     amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made after December 31, 2009.

     SEC. 253. ENHANCED CHARITABLE DEDUCTION FOR CORPORATE 
                   CONTRIBUTIONS OF COMPUTER INVENTORY FOR 
                   EDUCATIONAL PURPOSES.

       (a) In General.--Subparagraph (G) of section 170(e)(6) is 
     amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2009.

     SEC. 254. ELECTION TO EXPENSE MINE SAFETY EQUIPMENT.

       (a) In General.--Subsection (g) of section 179E is amended 
     by striking ``December 31, 2009'' and inserting ``December 
     31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2009.

     SEC. 255. SPECIAL EXPENSING RULES FOR CERTAIN FILM AND 
                   TELEVISION PRODUCTIONS.

       (a) In General.--Subsection (f) of section 181 is amended 
     by striking ``December 31, 2009'' and inserting ``December 
     31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to productions commencing after December 31, 
     2009.

     SEC. 256. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.

       (a) In General.--Subsection (h) of section 198 is amended 
     by striking ``December 31, 2009'' and inserting ``December 
     31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenditures paid or incurred after December 
     31, 2009.

     SEC. 257. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME 
                   ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES 
                   IN PUERTO RICO.

       (a) In General.--Subparagraph (C) of section 199(d)(8) is 
     amended--
       (1) by striking ``first 4 taxable years'' and inserting 
     ``first 5 taxable years''; and
       (2) by striking ``January 1, 2010'' and inserting ``January 
     1, 2011''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.

     SEC. 258. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS 
                   TO CONTROLLING EXEMPT ORGANIZATIONS.

       (a) In General.--Clause (iv) of section 512(b)(13)(E) is 
     amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to payments received or accrued after December 
     31, 2009.

     SEC. 259. EXCLUSION OF GAIN OR LOSS ON SALE OR EXCHANGE OF 
                   CERTAIN BROWNFIELD SITES FROM UNRELATED 
                   BUSINESS INCOME.

       (a) In General.--Subparagraph (K) of section 512(b)(19) is 
     amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property acquired after December 31, 2009.

     SEC. 260. TIMBER REIT MODERNIZATION.

       (a) In General.--Paragraph (8) of section 856(c) is amended 
     by striking ``means'' and all that follows and inserting 
     ``means December 31, 2010.''.
       (b) Conforming Amendments.--
       (1) Subparagraph (I) of section 856(c)(2) is amended by 
     striking ``the first taxable year beginning after the date of 
     the enactment of this subparagraph'' and inserting ``a 
     taxable year beginning on or before the termination date''.
       (2) Clause (iii) of section 856(c)(5)(H) is amended by 
     inserting ``in taxable years beginning'' after 
     ``dispositions''.
       (3) Clause (v) of section 857(b)(6)(D) is amended by 
     inserting ``in a taxable year beginning'' after ``sale''.
       (4) Subparagraph (G) of section 857(b)(6) is amended by 
     inserting ``in a taxable year beginning'' after ``In the case 
     of a sale''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after May 22, 2009.

     SEC. 261. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED 
                   INVESTMENT COMPANIES.

       (a) In General.--Paragraphs (1)(C) and (2)(C) of section 
     871(k) are each amended by striking ``December 31, 2009'' and 
     inserting ``December 31, 2010''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.

     SEC. 262. RIC QUALIFIED INVESTMENT ENTITY TREATMENT UNDER 
                   FIRPTA.

       (a) In General.--Clause (ii) of section 897(h)(4)(A) is 
     amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.
       (b) Effective Date.--
       (1) In general.--The amendment made by subsection (a) shall 
     take effect on January 1, 2010. Notwithstanding the preceding 
     sentence, such amendment shall not apply with respect to the 
     withholding requirement under section 1445 of the Internal 
     Revenue Code of 1986 for any payment made before the date of 
     the enactment of this Act.
       (2) Amounts withheld on or before date of enactment.--In 
     the case of a regulated investment company--
       (A) which makes a distribution after December 31, 2009, and 
     before the date of the enactment of this Act; and
       (B) which would (but for the second sentence of paragraph 
     (1)) have been required to withhold with respect to such 
     distribution under section 1445 of such Code,
     such investment company shall not be liable to any person to 
     whom such distribution was made for any amount so withheld 
     and paid over to the Secretary of the Treasury.

     SEC. 263. EXCEPTIONS FOR ACTIVE FINANCING INCOME.

       (a) In General.--Sections 953(e)(10) and 954(h)(9) are each 
     amended by striking ``January 1, 2010'' and inserting 
     ``January 1, 2011''.
       (b) Conforming Amendment.--Section 953(e)(10) is amended by 
     striking ``December 31, 2009'' and inserting ``December 31, 
     2010''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years of foreign corporations 
     beginning after December 31, 2009, and to taxable years of 
     United States shareholders with or within which any such 
     taxable year of such foreign corporation ends.

     SEC. 264. LOOK-THRU TREATMENT OF PAYMENTS BETWEEN RELATED 
                   CONTROLLED FOREIGN CORPORATIONS UNDER FOREIGN 
                   PERSONAL HOLDING COMPANY RULES.

       (a) In General.--Subparagraph (C) of section 954(c)(6) is 
     amended by striking ``January 1, 2010'' and inserting 
     ``January 1, 2011''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years of foreign corporations 
     beginning after December 31, 2009, and to taxable years of 
     United States shareholders with or within which any such 
     taxable year of such foreign corporation ends.

     SEC. 265. BASIS ADJUSTMENT TO STOCK OF S CORPS MAKING 
                   CHARITABLE CONTRIBUTIONS OF PROPERTY.

       (a) In General.--Paragraph (2) of section 1367(a) is 
     amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.

[[Page 11098]]

       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2009.

     SEC. 266. EMPOWERMENT ZONE TAX INCENTIVES.

       (a) In General.--Section 1391 is amended--
       (1) by striking ``December 31, 2009'' in subsection 
     (d)(1)(A)(i) and inserting ``December 31, 2010''; and
       (2) by striking the last sentence of subsection (h)(2).
       (b) Increased Exclusion of Gain on Stock of Empowerment 
     Zone Businesses.--Subparagraph (C) of section 1202(a)(2) is 
     amended--
       (1) by striking ``December 31, 2014'' and inserting 
     ``December 31, 2015''; and
       (2) by striking ``2014'' in the heading and inserting 
     ``2015''.
       (c) Treatment of Certain Termination Dates Specified in 
     Nominations.--In the case of a designation of an empowerment 
     zone the nomination for which included a termination date 
     which is contemporaneous with the date specified in 
     subparagraph (A)(i) of section 1391(d)(1) of the Internal 
     Revenue Code of 1986 (as in effect before the enactment of 
     this Act), subparagraph (B) of such section shall not apply 
     with respect to such designation unless, after the date of 
     the enactment of this section, the entity which made such 
     nomination reconfirms such termination date, or amends the 
     nomination to provide for a new termination date, in such 
     manner as the Secretary of the Treasury (or the Secretary's 
     designee) may provide.
       (d) Effective Date.--The amendments made by this section 
     shall apply to periods after December 31, 2009.

     SEC. 267. RENEWAL COMMUNITY TAX INCENTIVES.

       (a) In General.--Subsection (b) of section 1400E is 
     amended--
       (1) by striking ``December 31, 2009'' in paragraphs (1)(A) 
     and (3) and inserting ``December 31, 2010''; and
       (2) by striking ``January 1, 2010'' in paragraph (3) and 
     inserting ``January 1, 2011''.
       (b) Zero-percent Capital Gains Rate.--
       (1) Acquisition date.--Paragraphs (2)(A)(i), (3)(A), 
     (4)(A)(i), and (4)(B)(i) of section 1400F(b) are each amended 
     by striking ``January 1, 2010'' and inserting ``January 1, 
     2011''.
       (2) Limitation on period of gains.--Paragraph (2) of 
     section 1400F(c) is amended--
       (A) by striking ``December 31, 2014'' and inserting 
     ``December 31, 2015''; and
       (B) by striking ``2014'' in the heading and inserting 
     ``2015''.
       (3) Clerical amendment.--Subsection (d) of section 1400F is 
     amended by striking ``and `December 31, 2014' for `December 
     31, 2014'''.
       (c) Commercial Revitalization Deduction.--
       (1) In general.--Subsection (g) of section 1400I is amended 
     by striking ``December 31, 2009'' and inserting ``December 
     31, 2010''.
       (2) Conforming amendment.--Subparagraph (A) of section 
     1400I(d)(2) is amended by striking ``after 2001 and before 
     2010'' and inserting ``which begins after 2001 and before the 
     date referred to in subsection (g)''.
       (d) Increased Expensing Under Section 179.--Subparagraph 
     (A) of section 1400J(b)(1) is amended by striking ``January 
     1, 2010'' and inserting ``January 1, 2011''.
       (e) Treatment of Certain Termination Dates Specified in 
     Nominations.--In the case of a designation of a renewal 
     community the nomination for which included a termination 
     date which is contemporaneous with the date specified in 
     subparagraph (A) of section 1400E(b)(1) of the Internal 
     Revenue Code of 1986 (as in effect before the enactment of 
     this Act), subparagraph (B) of such section shall not apply 
     with respect to such designation unless, after the date of 
     the enactment of this section, the entity which made such 
     nomination reconfirms such termination date, or amends the 
     nomination to provide for a new termination date, in such 
     manner as the Secretary of the Treasury (or the Secretary's 
     designee) may provide.
       (f) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to periods after December 31, 2009.
       (2) Acquisitions.--The amendments made by subsections 
     (b)(1) and (d) shall apply to acquisitions after December 31, 
     2009.
       (3) Commercial revitalization deduction.--
       (A) In general.--The amendment made by subsection (c)(1) 
     shall apply to buildings placed in service after December 31, 
     2009.
       (B) Conforming amendment.--The amendment made by subsection 
     (c)(2) shall apply to calendar years beginning after December 
     31, 2009.

     SEC. 268. TEMPORARY INCREASE IN LIMIT ON COVER OVER OF RUM 
                   EXCISE TAXES TO PUERTO RICO AND THE VIRGIN 
                   ISLANDS.

       (a) In General.--Paragraph (1) of section 7652(f) is 
     amended by striking ``January 1, 2010'' and inserting 
     ``January 1, 2011''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distilled spirits brought into the United 
     States after December 31, 2009.

     SEC. 269. PAYMENT TO AMERICAN SAMOA IN LIEU OF EXTENSION OF 
                   ECONOMIC DEVELOPMENT CREDIT.

       The Secretary of the Treasury (or his designee) shall pay 
     $18,000,000 to the Government of American Samoa for purposes 
     of economic development. The payment made under the preceding 
     sentence shall be treated for purposes of section 1324 of 
     title 31, United States Code, as a refund of internal revenue 
     collections to which such section applies.

     SEC. 270. ELECTION TO TEMPORARILY UTILIZE UNUSED AMT CREDITS 
                   DETERMINED BY DOMESTIC INVESTMENT.

       (a) In General.--Section 53 is amended by adding at the end 
     the following new subsection:
       ``(g) Election for Corporations With New Domestic 
     Investments.--
       ``(1) In general.--If a corporation elects to have this 
     subsection apply for its first taxable year beginning after 
     December 31, 2009, the limitation imposed by subsection (c) 
     for such taxable year shall be increased by the AMT credit 
     adjustment amount.
       ``(2) AMT credit adjustment amount.--For purposes of 
     paragraph (1), the term `AMT credit adjustment amount' means, 
     the lesser of--
       ``(A) 50 percent of a corporation's minimum tax credit for 
     its first taxable year beginning after December 31, 2009, 
     determined under subsection (b), or
       ``(B) 10 percent of new domestic investments made during 
     such taxable year.
       ``(3) New domestic investments.--For purposes of this 
     subsection, the term `new domestic investments' means the 
     cost of qualified property (as defined in section 
     168(k)(2)(A)(i))--
       ``(A) the original use of which commences with the taxpayer 
     during the taxable year, and
       ``(B) which is placed in service in the United States by 
     the taxpayer during such taxable year.
       ``(4) Credit refundable.--For purposes of subsection (b) of 
     section 6401, the aggregate increase in the credits allowable 
     under this part for any taxable year resulting from the 
     application of this subsection shall be treated as allowed 
     under subpart C (and not under any other subpart). For 
     purposes of section 6425, any amount treated as so allowed 
     shall be treated as a payment of estimated income tax for the 
     taxable year.
       ``(5) Election.--An election under this subsection shall be 
     made at such time and in such manner as prescribed by the 
     Secretary, and once made, may be revoked only with the 
     consent of the Secretary. Not later than 90 days after the 
     date of the enactment of this subsection, the Secretary shall 
     issue guidance specifying such time and manner.
       ``(6) Treatment of certain partnership investments.--For 
     purposes of this subsection, a corporation shall take into 
     account its allocable share of any new domestic investments 
     by a partnership for any taxable year if, and only if, more 
     than 90 percent of the capital and profits interests in such 
     partnership are owned by such corporation (directly or 
     indirectly) at all times during such taxable year.
       ``(7) No double benefit.--
       ``(A) In general.--A corporation making an election under 
     this subsection may not make an election under subparagraph 
     (H) of section 172(b)(1).
       ``(B) Special rules with respect to taxpayers previously 
     electing applicable net operating losses.--In the case of a 
     corporation which made an election under subparagraph (H) of 
     section 172(b)(1) and elects the application of this 
     subsection--
       ``(i) Election of applicable net operating loss treated as 
     revoked.--The election under such subparagraph (H) shall 
     (notwithstanding clause (iii)(II) of such subparagraph) be 
     treated as having been revoked by the taxpayer.
       ``(ii) Coordination with provision for expedited refund.--
     The amount otherwise treated as a payment of estimated income 
     tax under the last sentence of paragraph (4) shall be reduced 
     (but not below zero) by the aggregate increase in unpaid tax 
     liability determined under this chapter by reason of the 
     revocation of the election under clause (i).
       ``(iii) Application of statute of limitations.--With 
     respect to the revocation of an election under clause (i)--

       ``(I) the statutory period for the assessment of any 
     deficiency attributable to such revocation shall not expire 
     before the end of the 3-year period beginning on the date of 
     the election to have this subsection apply, and
       ``(II) such deficiency may be assessed before the 
     expiration of such 3-year period notwithstanding the 
     provisions of any other law or rule of law which would 
     otherwise prevent such assessment.

       ``(C) Exception for eligible small businesses.--
     Subparagraphs (A) and (B) shall not apply to an eligible 
     small business as defined in section 172(b)(1)(H)(v)(II).
       ``(8) Regulations.--The Secretary may issue such 
     regulations or other guidance as may be necessary or 
     appropriate to carry out the purposes of this subsection, 
     including to prevent fraud and abuse under this 
     subsection.''.
       (b) Conforming Amendments.--
       (1) Section 6211(b)(4)(A) is amended by inserting 
     ``53(g),'' after ``53(e),''.
       (2) Section 1324(b)(2) of title 31, United States Code, is 
     amended by inserting ``53(g),'' after ``53(e),''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.

[[Page 11099]]



     SEC. 271. REDUCTION IN CORPORATE RATE FOR QUALIFIED TIMBER 
                   GAIN.

       (a) In General.--Paragraph (1) of section 1201(b) is 
     amended by striking ``ending'' and all that follows through 
     ``such date''.
       (b) Conforming Amendment.--Paragraph (3) of section 1201(b) 
     is amended to read as follows:
       ``(3) Application of subsection.--The qualified timber gain 
     for any taxable year shall not exceed the qualified timber 
     gain which would be determined by not taking into account any 
     portion of such taxable year after December 31, 2010.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after May 22, 2009.

     SEC. 272. STUDY OF EXTENDED TAX EXPENDITURES.

       (a) Findings.--Congress finds the following:
       (1) Currently, the aggregate cost of Federal tax 
     expenditures rivals, or even exceeds, the amount of total 
     Federal discretionary spending.
       (2) Given the escalating public debt, a critical 
     examination of this use of taxpayer dollars is essential.
       (3) Additionally, tax expenditures can complicate the 
     Internal Revenue Code of 1986 for taxpayers and complicate 
     tax administration for the Internal Revenue Service.
       (4) To facilitate a better understanding of tax 
     expenditures in the future, it is constructive for 
     legislation extending these provisions to include a study of 
     such provisions.
       (b) Requirement to Report.--Not later than November 30, 
     2010, the Chief of Staff of the Joint Committee on Taxation, 
     in consultation with the Comptroller General of the United 
     States, shall submit to the Committee on Ways and Means of 
     the House of Representatives and the Committee on Finance of 
     the Senate a report on each tax expenditure (as defined in 
     section 3(3) of the Congressional Budget Impoundment Control 
     Act of 1974 (2 U.S.C. 622(3)) extended by this title.
       (c) Rolling Submission of Reports.--The Chief of Staff of 
     the Joint Committee on Taxation shall initially submit the 
     reports for each such tax expenditure enacted in this 
     subtitle (relating to business tax relief) and subtitle A 
     (relating to energy) in order of the tax expenditure 
     incurring the least aggregate cost to the greatest aggregate 
     cost (determined by reference to the cost estimate of this 
     Act by the Joint Committee on Taxation). Thereafter, such 
     reports may be submitted in such order as the Chief of Staff 
     determines appropriate.
       (d) Contents of Report.--Such reports shall contain the 
     following:
       (1) An explanation of the tax expenditure and any relevant 
     economic, social, or other context under which it was first 
     enacted.
       (2) A description of the intended purpose of the tax 
     expenditure.
       (3) An analysis of the overall success of the tax 
     expenditure in achieving such purpose, and evidence 
     supporting such analysis.
       (4) An analysis of the extent to which further extending 
     the tax expenditure, or making it permanent, would contribute 
     to achieving such purpose.
       (5) A description of the direct and indirect beneficiaries 
     of the tax expenditure, including identifying any unintended 
     beneficiaries.
       (6) An analysis of whether the tax expenditure is the most 
     cost-effective method for achieving the purpose for which it 
     was intended, and a description of any more cost-effective 
     methods through which such purpose could be accomplished.
       (7) A description of any unintended effects of the tax 
     expenditure that are useful in understanding the tax 
     expenditure's overall value.
       (8) An analysis of how the tax expenditure could be 
     modified to better achieve its original purpose.
       (9) A brief description of any interactions (actual or 
     potential) with other tax expenditures or direct spending 
     programs in the same or related budget function worthy of 
     further study.
       (10) A description of any unavailable information the staff 
     of the Joint Committee on Taxation may need to complete a 
     more thorough examination and analysis of the tax 
     expenditure, and what must be done to make such information 
     available.
       (e) Minimum Analysis by Deadline.--In the event the Chief 
     of Staff of the Joint Committee on Taxation concludes it will 
     not be feasible to complete all reports by the date specified 
     in subsection (a), at a minimum, the reports for each tax 
     expenditure enacted in this subtitle (relating to business 
     tax relief) and subtitle A (relating to energy) shall be 
     completed by such date.

            Subtitle D--Temporary Disaster Relief Provisions

                    PART I--NATIONAL DISASTER RELIEF

     SEC. 281. WAIVER OF CERTAIN MORTGAGE REVENUE BOND 
                   REQUIREMENTS.

       (a) In General.--Paragraph (11) of section 143(k) is 
     amended by striking ``January 1, 2010'' and inserting 
     ``January 1, 2011''.
       (b) Special Rule for Residences Destroyed in Federally 
     Declared Disasters.--Paragraph (13) of section 143(k), as 
     redesignated by subsection (c), is amended by striking 
     ``January 1, 2010'' in subparagraphs (A)(i) and (B)(i) and 
     inserting ``January 1, 2011''.
       (c) Technical Amendment.--Subsection (k) of section 143 is 
     amended by redesignating the second paragraph (12) (relating 
     to special rules for residences destroyed in federally 
     declared disasters) as paragraph (13).
       (d) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendment made by this section shall apply to 
     bonds issued after December 31, 2009.
       (2) Residences destroyed in federally declared disasters.--
     The amendments made by subsection (b) shall apply with 
     respect to disasters occurring after December 31, 2009.
       (3) Technical amendment.--The amendment made by subsection 
     (c) shall take effect as if included in section 709 of the 
     Tax Extenders and Alternative Minimum Tax Relief Act of 2008.

     SEC. 282. LOSSES ATTRIBUTABLE TO FEDERALLY DECLARED 
                   DISASTERS.

       (a) In General.--Subclause (I) of section 165(h)(3)(B)(i) 
     is amended by striking ``January 1, 2010'' and inserting 
     ``January 1, 2011''.
       (b) $500 Limitation.--Paragraph (1) of section 165(h) is 
     amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.
       (c) Effective Date.--
       (1) In general.--The amendment made by subsection (a) shall 
     apply to federally declared disasters occurring after 
     December 31, 2009.
       (2) $500 limitation.--The amendment made by subsection (b) 
     shall apply to taxable years beginning after December 31, 
     2009.

     SEC. 283. SPECIAL DEPRECIATION ALLOWANCE FOR QUALIFIED 
                   DISASTER PROPERTY.

       (a) In General.--Subclause (I) of section 168(n)(2)(A)(ii) 
     is amended by striking ``January 1, 2010'' and inserting 
     ``January 1, 2011''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to disasters occurring after December 31, 2009.

     SEC. 284. NET OPERATING LOSSES ATTRIBUTABLE TO FEDERALLY 
                   DECLARED DISASTERS.

       (a) In General.--Subclause (I) of section 172(j)(1)(A)(i) 
     is amended by striking ``January 1, 2010'' and inserting 
     ``January 1, 2011''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to losses attributable to disasters occurring 
     after December 31, 2009.

     SEC. 285. EXPENSING OF QUALIFIED DISASTER EXPENSES.

       (a) In General.--Subparagraph (A) of section 198A(b)(2) is 
     amended by striking ``January 1, 2010'' and inserting 
     ``January 1, 2011''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenditures on account of disasters occurring 
     after December 31, 2009.

     SEC. 286. SPECIAL DEPRECIATION ALLOWANCE.

       (a) In General.--Paragraph (6) of section 1400N(d)(6) is 
     amended by striking subparagraph (D).
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2009.

                      PART II--REGIONAL PROVISIONS

                    Subpart A--New York Liberty Zone

     SEC. 291. SPECIAL DEPRECIATION ALLOWANCE FOR NONRESIDENTIAL 
                   AND RESIDENTIAL REAL PROPERTY.

       (a) In General.--Subparagraph (A) of section 1400L(b)(2) is 
     amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2009.

     SEC. 292. TAX-EXEMPT BOND FINANCING.

       (a) In General.--Subparagraph (D) of section 1400L(d)(2) is 
     amended by striking ``January 1, 2010'' and inserting 
     ``January 1, 2011''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to bonds issued after December 31, 2009.

                           Subpart B--GO Zone

     SEC. 295. INCREASE IN REHABILITATION CREDIT.

       (a) In General.--Subsection (h) of section 1400N is amended 
     by striking ``December 31, 2009'' and inserting ``December 
     31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to amounts paid or incurred after December 31, 
     2009.

     SEC. 296. WORK OPPORTUNITY TAX CREDIT WITH RESPECT TO CERTAIN 
                   INDIVIDUALS AFFECTED BY HURRICANE KATRINA FOR 
                   EMPLOYERS INSIDE DISASTER AREAS.

       (a) In General.--Paragraph (1) of section 201(b) of the 
     Katrina Emergency Tax Relief Act of 2005 is amended by 
     striking ``4-year'' and inserting ``5-year''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to individuals hired after August 27, 2009.

     SEC. 297. EXTENSION OF LOW-INCOME HOUSING CREDIT RULES FOR 
                   BUILDINGS IN GO ZONES.

       Section 1400N(c)(5) is amended by striking ``January 1, 
     2011'' and inserting ``January 1, 2013''.

     SEC. 298. TAX-EXEMPT BOND FINANCING.

       (a) In General.--Paragraphs (2)(D) and (7)(C) of section 
     1400N(a) are each amended by striking ``January 1, 2011'' and 
     inserting ``January 1, 2012''.
       (b) Conforming Amendments.--Sections 702(d)(1) and 704(a) 
     of the Heartland Disaster Tax Relief Act of 2008 (Public Law 
     110-343; 122 Stat. 3913, 3919) are each amended by

[[Page 11100]]

     striking``January 1, 2011'' each place it appears and 
     inserting ``January 1, 2012''.

                  Subpart C--Midwester Disaster Areas

     SEC. 299. SPECIAL RULES FOR USE OF RETIREMENT FUNDS.

       (a) In General.--Section 702(d)(10) of the Heartland 
     Disaster Tax Relief Act of 2008 (Public Law 110-343; 122 
     Stat. 3918) is amended--
       (1) by striking ``January 1, 2010'' both places it appears 
     and inserting ``January 1, 2011'', and
       (2) by striking ``December 31, 2009'' both places it 
     appears and inserting ``December 31, 2010''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in section 702(d)(10) of the 
     Heartland Disaster Tax Relief Act of 2008.

     SEC. 300. EXCLUSION OF CANCELLATION OF MORTGAGE INDEBTEDNESS.

       (a) In General.--Section 702(e)(4)(C) of the Heartland 
     Disaster Tax Relief Act of 2008 (Public Law 110-343; 122 
     Stat. 3918) is amended by striking ``January 1, 2010'' and 
     inserting ``January 1, 2011''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to discharges of indebtedness after December 31, 
     2009.

                     TITLE III--PENSION PROVISIONS

                   Subtitle A--Single Employer Plans

     SEC. 301. EXTENDED PERIOD FOR SINGLE-EMPLOYER DEFINED BENEFIT 
                   PLANS TO AMORTIZE CERTAIN SHORTFALL 
                   AMORTIZATION BASES.

       (a) Amendments to ERISA.--
       (1) In general.--Paragraph (2) of section 303(c) of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1083(c)) is amended by adding at the end the following 
     subparagraph:
       ``(D) Special election for eligible plan years.--
       ``(i) In general.--If a plan sponsor elects to apply this 
     subparagraph with respect to the shortfall amortization base 
     of a plan for any eligible plan year (in this subparagraph 
     and paragraph (7) referred to as an `election year'), then, 
     notwithstanding subparagraphs (A) and (B)--

       ``(I) the shortfall amortization installments with respect 
     to such base shall be determined under clause (ii) or (iii), 
     whichever is specified in the election, and
       ``(II) the shortfall amortization installment for any plan 
     year in the 9-plan-year period described in clause (ii) or 
     the 15-plan- year period described in clause (iii), 
     respectively, with respect to such shortfall amortization 
     base is the annual installment determined under the 
     applicable clause for that year for that base.

       ``(ii) 2 plus 7 amortization schedule.--The shortfall 
     amortization installments determined under this clause are--

       ``(I) in the case of the first 2 plan years in the 9-plan-
     year period beginning with the election year, interest on the 
     shortfall amortization base of the plan for the election year 
     (determined using the effective interest rate for the plan 
     for the election year), and
       ``(II) in the case of the last 7 plan years in such 9-plan-
     year period, the amounts necessary to amortize the remaining 
     balance of the shortfall amortization base of the plan for 
     the election year in level annual installments over such last 
     7 plan years (using the segment rates under subparagraph (C) 
     for the election year).

       ``(iii) 15-year amortization.--The shortfall amortization 
     installments determined under this subparagraph are the 
     amounts necessary to amortize the shortfall amortization base 
     of the plan for the election year in level annual 
     installments over the 15-plan-year period beginning with the 
     election year (using the segment rates under subparagraph (C) 
     for the election year).
       ``(iv) Election.--

       ``(I) In general.--The plan sponsor of a plan may elect to 
     have this subparagraph apply to not more than 2 eligible plan 
     years with respect to the plan, except that in the case of a 
     plan described in section 106 of the Pension Protection Act 
     of 2006, the plan sponsor may only elect to have this 
     subparagraph apply to a plan year beginning in 2011.
       ``(II) Amortization schedule.--Such election shall specify 
     whether the amortization schedule under clause (ii) or (iii) 
     shall apply to an election year, except that if a plan 
     sponsor elects to have this subparagraph apply to 2 eligible 
     plan years, the plan sponsor must elect the same schedule for 
     both years.
       ``(III) Other rules.--Such election shall be made at such 
     time, and in such form and manner, as shall be prescribed by 
     the Secretary of the Treasury, and may be revoked only with 
     the consent of the Secretary of the Treasury. The Secretary 
     of the Treasury shall, before granting a revocation request, 
     provide the Pension Benefit Guaranty Corporation an 
     opportunity to comment on the conditions applicable to the 
     treatment of any portion of the election year shortfall 
     amortization base that remains unamortized as of the 
     revocation date.

       ``(v) Eligible plan year.--For purposes of this 
     subparagraph, the term `eligible plan year' means any plan 
     year beginning in 2008, 2009, 2010, or 2011, except that a 
     plan year shall only be treated as an eligible plan year if 
     the due date under subsection (j)(1) for the payment of the 
     minimum required contribution for such plan year occurs on or 
     after the date of the enactment of this subparagraph.
       ``(vi) Reporting.--A plan sponsor of a plan who makes an 
     election under clause (i) shall--

       ``(I) give notice of the election to participants and 
     beneficiaries of the plan, and
       ``(II) inform the Pension Benefit Guaranty Corporation of 
     such election in such form and manner as the Director of the 
     Pension Benefit Guaranty Corporation may prescribe.

       ``(vii) Increases in required installments in certain 
     cases.--For increases in required contributions in cases of 
     excess compensation or extraordinary dividends or stock 
     redemptions, see paragraph (7).''.
       (2) Increases in required installments in certain cases.--
     Section 303(c) of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1083(c)) is amended by adding at the end 
     the following paragraph:
       ``(7) Increases in alternate required installments in cases 
     of excess compensation or extraordinary dividends or stock 
     redemptions.--
       ``(A) In general.--If there is an installment acceleration 
     amount with respect to a plan for any plan year in the 
     restriction period with respect to an election year under 
     paragraph (2)(D), then the shortfall amortization installment 
     otherwise determined and payable under such paragraph for 
     such plan year shall, subject to the limitation under 
     subparagraph (B), be increased by such amount.
       ``(B) Total installments limited to shortfall base.--
     Subject to rules prescribed by the Secretary of the Treasury, 
     if a shortfall amortization installment with respect to any 
     shortfall amortization base for an election year is required 
     to be increased for any plan year under subparagraph (A)--
       ``(i) such increase shall not result in the amount of such 
     installment exceeding the present value of such installment 
     and all succeeding installments with respect to such base 
     (determined without regard to such increase but after 
     application of clause (ii)), and
       ``(ii) subsequent shortfall amortization installments with 
     respect to such base shall, in reverse order of the otherwise 
     required installments, be reduced to the extent necessary to 
     limit the present value of such subsequent shortfall 
     amortization installments (after application of this 
     paragraph) to the present value of the remaining unamortized 
     shortfall amortization base.
       ``(C) Installment acceleration amount.--For purposes of 
     this paragraph--
       ``(i) In general.--The term `installment acceleration 
     amount' means, with respect to any plan year in a restriction 
     period with respect to an election year, the sum of--

       ``(I) the aggregate amount of excess employee compensation 
     determined under subparagraph (D) with respect to all 
     employees for the plan year, plus
       ``(II) the aggregate amount of extraordinary dividends and 
     redemptions determined under subparagraph (E) for the plan 
     year.

       ``(ii) Annual limitation.--The installment acceleration 
     amount for any plan year shall not exceed the excess (if any) 
     of--

       ``(I) the sum of the shortfall amortization installments 
     for the plan year and all preceding plan years in the 
     amortization period elected under paragraph (2)(D) with 
     respect to the shortfall amortization base with respect to an 
     election year, determined without regard to paragraph (2)(D) 
     and this paragraph, over
       ``(II) the sum of the shortfall amortization installments 
     for such plan year and all such preceding plan years, 
     determined after application of paragraph (2)(D) (and in the 
     case of any preceding plan year, after application of this 
     paragraph).

       ``(iii) Carryover of excess installment acceleration 
     amounts.--

       ``(I) In general.--If the installment acceleration amount 
     for any plan year (determined without regard to clause (ii)) 
     exceeds the limitation under clause (ii), then, subject to 
     subclause (II), such excess shall be treated as an 
     installment acceleration amount with respect to the 
     succeeding plan year.
       ``(II) Cap to apply.--If any amount treated as an 
     installment acceleration amount under subclause (I) or this 
     subclause with respect any succeeding plan year, when added 
     to other installment acceleration amounts (determined without 
     regard to clause (ii)) with respect to the plan year, exceeds 
     the limitation under clause (ii), the portion of such amount 
     representing such excess shall be treated as an installment 
     acceleration amount with respect to the next succeeding plan 
     year.
       ``(III) Limitation on years to which amounts carried for.--
     No amount shall be carried under subclause (I) or (II) to a 
     plan year which begins after the first plan year following 
     the last plan year in the restriction period (or after the 
     second plan year following such last plan year in the case of 
     an election year with respect to which 15-year amortization 
     was elected under paragraph (2)(D)).
       ``(IV) Ordering rules.--For purposes of applying subclause 
     (II), installment acceleration amounts for the plan year 
     (determined without regard to any carryover under this

[[Page 11101]]

     clause) shall be applied first against the limitation under 
     clause (ii) and then carryovers to such plan year shall be 
     applied against such limitation on a first-in, first-out 
     basis.

       ``(D) Excess employee compensation.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `excess employee compensation' 
     means, with respect to any employee for any plan year, the 
     excess (if any) of--

       ``(I) the aggregate amount includible in income under 
     chapter 1 of the Internal Revenue Code of 1986 for 
     remuneration during the calendar year in which such plan year 
     begins for services performed by the employee for the plan 
     sponsor (whether or not performed during such calendar year), 
     over
       ``(II) $1,000,000.

       ``(ii) Amounts set aside for nonqualified deferred 
     compensation.--If during any calendar year assets are set 
     aside or reserved (directly or indirectly) in a trust (or 
     other arrangement as determined by the Secretary of the 
     Treasury), or transferred to such a trust or other 
     arrangement, by a plan sponsor for purposes of paying 
     deferred compensation of an employee under a nonqualified 
     deferred compensation plan (as defined in section 409A of 
     such Code) of the plan sponsor, then, for purposes of clause 
     (i), the amount of such assets shall be treated as 
     remuneration of the employee includible in income for the 
     calendar year unless such amount is otherwise includible in 
     income for such year. An amount to which the preceding 
     sentence applies shall not be taken into account under this 
     paragraph for any subsequent calendar year.
       ``(iii) Only remuneration for certain post-2009 services 
     counted.--Remuneration shall be taken into account under 
     clause (i) only to the extent attributable to services 
     performed by the employee for the plan sponsor after February 
     28, 2010.
       ``(iv) Exception for certain equity payments.--

       ``(I) In general.--There shall not be taken into account 
     under clause (i)(I) any amount includible in income with 
     respect to the granting after February 28, 2010, of service 
     recipient stock (within the meaning of section 409A of the 
     Internal Revenue Code of 1986) that, upon such grant, is 
     subject to a substantial risk of forfeiture (as defined under 
     section 83(c)(1) of such Code) for at least 5 years from the 
     date of such grant.
       ``(II) Secretarial authority.--The Secretary of the 
     Treasury may by regulation provide for the application of 
     this clause in the case of a person other than a corporation.

       ``(v) Other exceptions.--The following amounts includible 
     in income shall not be taken into account under clause 
     (i)(I):

       ``(I) Commissions.--Any remuneration payable on a 
     commission basis solely on account of income directly 
     generated by the individual performance of the individual to 
     whom such remuneration is payable.
       ``(II) Certain payments under existing contracts.--Any 
     remuneration consisting of nonqualified deferred 
     compensation, restricted stock, stock options, or stock 
     appreciation rights payable or granted under a written 
     binding contract that was in effect on March 1, 2010, and 
     which was not modified in any material respect before such 
     remuneration is paid.

       ``(vi) Self-employed individual treated as employee.--The 
     term `employee' includes, with respect to a calendar year, a 
     self-employed individual who is treated as an employee under 
     section 401(c) of such Code for the taxable year ending 
     during such calendar year, and the term `compensation' shall 
     include earned income of such individual with respect to such 
     self-employment.
       ``(vii) Indexing of amount.--In the case of any calendar 
     year beginning after 2010, the dollar amount under clause 
     (i)(II) shall be increased by an amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) of such Code for the calendar year, 
     determined by substituting `calendar year 2009' for `calendar 
     year 1992' in subparagraph (B) thereof.

     If the amount of any increase under clause (i) is not a 
     multiple of $1,000, such increase shall be rounded to the 
     next lowest multiple of $1,000.
       ``(E) Extraordinary dividends and redemptions.--
       ``(i) In general.--The amount determined under this 
     subparagraph for any plan year is the excess (if any) of the 
     sum of the dividends declared during the plan year by the 
     plan sponsor plus the aggregate amount paid for the 
     redemption of stock of the plan sponsor redeemed during the 
     plan year over the greater of--

       ``(I) the adjusted net income (within the meaning of 
     section 4043) of the plan sponsor for the preceding plan 
     year, determined without regard to any reduction by reason of 
     interest, taxes, depreciation, or amortization, or
       ``(II) in the case of a plan sponsor that determined and 
     declared dividends in the same manner for at least 5 
     consecutive years immediately preceding such plan year, the 
     aggregate amount of dividends determined and declared for 
     such plan year using such manner.

       ``(ii) Only certain post-2009 dividends and redemptions 
     counted.--For purposes of clause (i), there shall only be 
     taken into account dividends declared, and redemptions 
     occurring, after February 28, 2010.
       ``(iii) Exception for intra-group dividends.--Dividends 
     paid by one member of a controlled group (as defined in 
     section 302(d)(3)) to another member of such group shall not 
     be taken into account under clause (i).
       ``(iv) Exception for certain redemptions.--Redemptions that 
     are made pursuant to a plan maintained with respect to 
     employees, or that are made on account of the death, 
     disability, or termination of employment of an employee or 
     shareholder, shall not be taken into account under clause 
     (i).
       ``(v) Exception for certain preferred stock.--

       ``(I) In general.--Dividends and redemptions with respect 
     to applicable preferred stock shall not be taken into account 
     under clause (i) to the extent that dividends accrue with 
     respect to such stock at a specified rate in all events and 
     without regard to the plan sponsor's income, and interest 
     accrues on any unpaid dividends with respect to such stock.
       ``(II) Applicable preferred stock.--For purposes of 
     subclause (I), the term `applicable preferred stock' means 
     preferred stock which was issued before March 1, 2010 (or 
     which was issued after such date and is held by an employee 
     benefit plan subject to the provisions of this title).

       ``(F) Other definitions and rules.--For purposes of this 
     paragraph--
       ``(i) Plan sponsor.--The term ` plan sponsor' includes any 
     member of the plan sponsor's controlled group (as defined in 
     section 302(d)(3)).
       ``(ii) Restriction period.--The term `restriction period' 
     means, with respect to any election year--

       ``(I) except as provided in subclause (II), the 3-year 
     period beginning with the election year (or, if later, the 
     first plan year beginning after December 31, 2009), and
       ``(II) if the plan sponsor elects 15-year amortization for 
     the shortfall amortization base for the election year, the 5-
     year period beginning with the election year (or, if later, 
     the first plan year beginning after December 31, 2009).

       ``(iii) Elections for multiple plans.--If a plan sponsor 
     makes elections under paragraph (2)(D) with respect to 2 or 
     more plans, the Secretary of the Treasury shall provide rules 
     for the application of this paragraph to such plans, 
     including rules for the ratable allocation of any installment 
     acceleration amount among such plans on the basis of each 
     plan's relative reduction in the plan's shortfall 
     amortization installment for the first plan year in the 
     amortization period described in subparagraph (A) (determined 
     without regard to this paragraph).
       ``(iv) Mergers and acquisitions.--The Secretary of the 
     Treasury shall prescribe rules for the application of 
     paragraph (2)(D) and this paragraph in any case where there 
     is a merger or acquisition involving a plan sponsor making 
     the election under paragraph (2)(D).''.
       (3) Conforming amendments.--Section 303 of such Act (29 
     U.S.C. 1083) is amended--
       (A) in subsection (c)(1), by striking ``the shortfall 
     amortization bases for such plan year and each of the 6 
     preceding plan years'' and inserting ``any shortfall 
     amortization base which has not been fully amortized under 
     this subsection'', and
       (B) in subsection (j)(3), by adding at the end the 
     following:
       ``(F) Quarterly contributions not to include certain 
     increased contributions.--Subparagraph (D) shall be applied 
     without regard to any increase under subsection (c)(7).''.
       (b) Amendments to Internal Revenue Code of 1986.--
       (1) In general.--Paragraph (2) of section 430(c) is amended 
     by adding at the end the following subparagraph:
       ``(D) Special election for eligible plan years.--
       ``(i) In general.--If a plan sponsor elects to apply this 
     subparagraph with respect to the shortfall amortization base 
     of a plan for any eligible plan year (in this subparagraph 
     and paragraph (7) referred to as an `election year'), then, 
     notwithstanding subparagraphs (A) and (B)--

       ``(I) the shortfall amortization installments with respect 
     to such base shall be determined under clause (ii) or (iii), 
     whichever is specified in the election, and
       ``(II) the shortfall amortization installment for any plan 
     year in the 9-plan-year period described in clause (ii) or 
     the 15-plan-year period described in clause (iii), 
     respectively, with respect to such shortfall amortization 
     base is the annual installment determined under the 
     applicable clause for that year for that base.

       ``(ii) 2 plus 7 amortization schedule.--The shortfall 
     amortization installments determined under this clause are--

       ``(I) in the case of the first 2 plan years in the 9-plan-
     year period beginning with the election year, interest on the 
     shortfall amortization base of the plan for the election year 
     (determined using the effective interest rate for the plan 
     for the election year), and

[[Page 11102]]

       ``(II) in the case of the last 7 plan years in such 9-plan-
     year period, the amounts necessary to amortize the remaining 
     balance of the shortfall amortization base of the plan for 
     the election year in level annual installments over such last 
     7 plan years (using the segment rates under subparagraph (C) 
     for the election year).

       ``(iii) 15-year amortization.--The shortfall amortization 
     installments determined under this subparagraph are the 
     amounts necessary to amortize the shortfall amortization base 
     of the plan for the election year in level annual 
     installments over the 15-plan-year period beginning with the 
     election year (using the segment rates under subparagraph (C) 
     for the election year).
       ``(iv) Election.--

       ``(I) In general.--The plan sponsor of a plan may elect to 
     have this subparagraph apply to not more than 2 eligible plan 
     years with respect to the plan, except that in the case of a 
     plan described in section 106 of the Pension Protection Act 
     of 2006, the plan sponsor may only elect to have this 
     subparagraph apply to a plan year beginning in 2011.
       ``(II) Amortization schedule.--Such election shall specify 
     whether the amortization schedule under clause (ii) or (iii) 
     shall apply to an election year, except that if a plan 
     sponsor elects to have this subparagraph apply to 2 eligible 
     plan years, the plan sponsor must elect the same schedule for 
     both years.
       ``(III) Other rules.--Such election shall be made at such 
     time, and in such form and manner, as shall be prescribed by 
     the Secretary, and may be revoked only with the consent of 
     the Secretary. The Secretary shall, before granting a 
     revocation request, provide the Pension Benefit Guaranty 
     Corporation an opportunity to comment on the conditions 
     applicable to the treatment of any portion of the election 
     year shortfall amortization base that remains unamortized as 
     of the revocation date.

       ``(v) Eligible plan year.--For purposes of this 
     subparagraph, the term `eligible plan year' means any plan 
     year beginning in 2008, 2009, 2010, or 2011, except that a 
     plan year shall only be treated as an eligible plan year if 
     the due date under subsection (j)(1) for the payment of the 
     minimum required contribution for such plan year occurs on or 
     after the date of the enactment of this subparagraph.
       ``(vi) Reporting.--A plan sponsor of a plan who makes an 
     election under clause (i) shall--

       ``(I) give notice of the election to participants and 
     beneficiaries of the plan, and
       ``(II) inform the Pension Benefit Guaranty Corporation of 
     such election in such form and manner as the Director of the 
     Pension Benefit Guaranty Corporation may prescribe.

       ``(vii) Increases in required installments in certain 
     cases.--For increases in required contributions in cases of 
     excess compensation or extraordinary dividends or stock 
     redemptions, see paragraph (7).''.
       (2) Increases in required contributions if excess 
     compensation paid.--Section 430(c) is amended by adding at 
     the end the following paragraph:
       ``(7) Increases in alternate required installments in cases 
     of excess compensation or extraordinary dividends or stock 
     redemptions.--
       ``(A) In general.--If there is an installment acceleration 
     amount with respect to a plan for any plan year in the 
     restriction period with respect to an election year under 
     paragraph (2)(D), then the shortfall amortization installment 
     otherwise determined and payable under such paragraph for 
     such plan year shall, subject to the limitation under 
     subparagraph (B), be increased by such amount.
       ``(B) Total installments limited to shortfall base.--
     Subject to rules prescribed by the Secretary, if a shortfall 
     amortization installment with respect to any shortfall 
     amortization base for an election year is required to be 
     increased for any plan year under subparagraph (A)--
       ``(i) such increase shall not result in the amount of such 
     installment exceeding the present value of such installment 
     and all succeeding installments with respect to such base 
     (determined without regard to such increase but after 
     application of clause (ii)), and
       ``(ii) subsequent shortfall amortization installments with 
     respect to such base shall, in reverse order of the otherwise 
     required installments, be reduced to the extent necessary to 
     limit the present value of such subsequent shortfall 
     amortization installments (after application of this 
     paragraph) to the present value of the remaining unamortized 
     shortfall amortization base.
       ``(C) Installment acceleration amount.--For purposes of 
     this paragraph--
       ``(i) In general.--The term `installment acceleration 
     amount' means, with respect to any plan year in a restriction 
     period with respect to an election year, the sum of--

       ``(I) the aggregate amount of excess employee compensation 
     determined under subparagraph (D) with respect to all 
     employees for the plan year, plus
       ``(II) the aggregate amount of extraordinary dividends and 
     redemptions determined under subparagraph (E) for the plan 
     year.

       ``(ii) Annual limitation.--The installment acceleration 
     amount for any plan year shall not exceed the excess (if any) 
     of--

       ``(I) the sum of the shortfall amortization installments 
     for the plan year and all preceding plan years in the 
     amortization period elected under paragraph (2)(D) with 
     respect to the shortfall amortization base with respect to an 
     election year, determined without regard to paragraph (2)(D) 
     and this paragraph, over
       ``(II) the sum of the shortfall amortization installments 
     for such plan year and all such preceding plan years, 
     determined after application of paragraph (2)(D) (and in the 
     case of any preceding plan year, after application of this 
     paragraph).

       ``(iii) Carryover of excess installment acceleration 
     amounts.--

       ``(I) In general.--If the installment acceleration amount 
     for any plan year (determined without regard to clause (ii)) 
     exceeds the limitation under clause (ii), then, subject to 
     subclause (II), such excess shall be treated as an 
     installment acceleration amount with respect to the 
     succeeding plan year.
       ``(II) Cap to apply.--If any amount treated as an 
     installment acceleration amount under subclause (I) or this 
     subclause with respect any succeeding plan year, when added 
     to other installment acceleration amounts (determined without 
     regard to clause (ii)) with respect to the plan year, exceeds 
     the limitation under clause (ii), the portion of such amount 
     representing such excess shall be treated as an installment 
     acceleration amount with respect to the next succeeding plan 
     year.
       ``(III) Limitation on years to which amounts carried for.--
     No amount shall be carried under subclause (I) or (II) to a 
     plan year which begins after the first plan year following 
     the last plan year in the restriction period (or after the 
     second plan year following such last plan year in the case of 
     an election year with respect to which 15-year amortization 
     was elected under paragraph (2)(D)).
       ``(IV) Ordering rules.--For purposes of applying subclause 
     (II), installment acceleration amounts for the plan year 
     (determined without regard to any carryover under this 
     clause) shall be applied first against the limitation under 
     clause (ii) and then carryovers to such plan year shall be 
     applied against such limitation on a first-in, first-out 
     basis.

       ``(D) Excess employee compensation.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `excess employee compensation' 
     means, with respect to any employee for any plan year, the 
     excess (if any) of--

       ``(I) the aggregate amount includible in income under this 
     chapter for remuneration during the calendar year in which 
     such plan year begins for services performed by the employee 
     for the plan sponsor (whether or not performed during such 
     calendar year), over
       ``(II) $1,000,000.

       ``(ii) Amounts set aside for nonqualified deferred 
     compensation.--If during any calendar year assets are set 
     aside or reserved (directly or indirectly) in a trust (or 
     other arrangement as determined by the Secretary), or 
     transferred to such a trust or other arrangement, by a plan 
     sponsor for purposes of paying deferred compensation of an 
     employee under a nonqualified deferred compensation plan (as 
     defined in section 409A) of the plan sponsor, then, for 
     purposes of clause (i), the amount of such assets shall be 
     treated as remuneration of the employee includible in income 
     for the calendar year unless such amount is otherwise 
     includible in income for such year. An amount to which the 
     preceding sentence applies shall not be taken into account 
     under this paragraph for any subsequent calendar year.
       ``(iii) Only remuneration for certain post-2009 services 
     counted.--Remuneration shall be taken into account under 
     clause (i) only to the extent attributable to services 
     performed by the employee for the plan sponsor after February 
     28, 2010.
       ``(iv) Exception for certain equity payments.--

       ``(I) In general.--There shall not be taken into account 
     under clause (i)(I) any amount includible in income with 
     respect to the granting after February 28, 2010, of service 
     recipient stock (within the meaning of section 409A) that, 
     upon such grant, is subject to a substantial risk of 
     forfeiture (as defined under section 83(c)(1)) for at least 5 
     years from the date of such grant.
       ``(II) Secretarial authority.--The Secretary may by 
     regulation provide for the application of this clause in the 
     case of a person other than a corporation.

       ``(v) Other exceptions.--The following amounts includible 
     in income shall not be taken into account under clause 
     (i)(I):

       ``(I) Commissions.--Any remuneration payable on a 
     commission basis solely on account of income directly 
     generated by the individual performance of the individual to 
     whom such remuneration is payable.
       ``(II) Certain payments under existing contracts.--Any 
     remuneration consisting of nonqualified deferred 
     compensation, restricted stock, stock options, or stock 
     appreciation rights payable or granted under a written 
     binding contract that was in effect on March 1, 2010, and 
     which was not modified in any material respect before such 
     remuneration is paid.

[[Page 11103]]

       ``(vi) Self-employed individual treated as employee.--The 
     term `employee' includes, with respect to a calendar year, a 
     self-employed individual who is treated as an employee under 
     section 401(c) for the taxable year ending during such 
     calendar year, and the term `compensation' shall include 
     earned income of such individual with respect to such self-
     employment.
       ``(vii) Indexing of amount.--In the case of any calendar 
     year beginning after 2010, the dollar amount under clause 
     (i)(II) shall be increased by an amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year, determined by 
     substituting `calendar year 2009' for `calendar year 1992' in 
     subparagraph (B) thereof.

     If the amount of any increase under clause (i) is not a 
     multiple of $1,000, such increase shall be rounded to the 
     next lowest multiple of $1,000.
       ``(E) Extraordinary dividends and redemptions.--
       ``(i) In general.--The amount determined under this 
     subparagraph for any plan year is the excess (if any) of the 
     sum of the dividends declared during the plan year by the 
     plan sponsor plus the aggregate amount paid for the 
     redemption of stock of the plan sponsor redeemed during the 
     plan year over the greater of--

       ``(I) the adjusted net income (within the meaning of 
     section 4043 of the Employee Retirement Income Security Act 
     of 1974) of the plan sponsor for the preceding plan year, 
     determined without regard to any reduction by reason of 
     interest, taxes, depreciation, or amortization, or
       ``(II) in the case of a plan sponsor that determined and 
     declared dividends in the same manner for at least 5 
     consecutive years immediately preceding such plan year, the 
     aggregate amount of dividends determined and declared for 
     such plan year using such manner.

       ``(ii) Only certain post-2009 dividends and redemptions 
     counted.--For purposes of clause (i), there shall only be 
     taken into account dividends declared, and redemptions 
     occurring, after February 28, 2010.
       ``(iii) Exception for intra-group dividends.--Dividends 
     paid by one member of a controlled group (as defined in 
     section 412(d)(3)) to another member of such group shall not 
     be taken into account under clause (i).
       ``(iv) Exception for certain redemptions.--Redemptions that 
     are made pursuant to a plan maintained with respect to 
     employees, or that are made on account of the death, 
     disability, or termination of employment of an employee or 
     shareholder, shall not be taken into account under clause 
     (i).
       ``(v) Exception for certain preferred stock.--

       ``(I) In general.--Dividends and redemptions with respect 
     to applicable preferred stock shall not be taken into account 
     under clause (i) to the extent that dividends accrue with 
     respect to such stock at a specified rate in all events and 
     without regard to the plan sponsor's income, and interest 
     accrues on any unpaid dividends with respect to such stock.
       ``(II) Applicable preferred stock.--For purposes of 
     subclause (I), the term `applicable preferred stock' means 
     preferred stock which was issued before March 1, 2010 (or 
     which was issued after such date and is held by an employee 
     benefit plan subject to the provisions of title I of Employee 
     Retirement Income Security Act of 1974).

       ``(F) Other definitions and rules.--For purposes of this 
     paragraph--
       ``(i) Plan sponsor.--The term ` plan sponsor' includes any 
     member of the plan sponsor's controlled group (as defined in 
     section 412(d)(3)).
       ``(ii) Restriction period.--The term `restriction period' 
     means, with respect to any election year--

       ``(I) except as provided in subclause (II), the 3-year 
     period beginning with the election year (or, if later, the 
     first plan year beginning after December 31, 2009), and
       ``(II) if the plan sponsor elects 15-year amortization for 
     the shortfall amortization base for the election year, the 5-
     year period beginning with the election year (or, if later, 
     the first plan year beginning after December 31, 2009).

       ``(iii) Elections for multiple plans.--If a plan sponsor 
     makes elections under paragraph (2)(D) with respect to 2 or 
     more plans, the Secretary shall provide rules for the 
     application of this paragraph to such plans, including rules 
     for the ratable allocation of any installment acceleration 
     amount among such plans on the basis of each plan's relative 
     reduction in the plan's shortfall amortization installment 
     for the first plan year in the amortization period described 
     in subparagraph (A) (determined without regard to this 
     paragraph).
       ``(iv) Mergers and acquisitions.--The Secretary shall 
     prescribe rules for the application of paragraph (2)(D) and 
     this paragraph in any case where there is a merger or 
     acquisition involving a plan sponsor making the election 
     under paragraph (2)(D).''.
       (3) Conforming amendments.--Section 430 is amended--
       (A) in subsection (c)(1), by striking ``the shortfall 
     amortization bases for such plan year and each of the 6 
     preceding plan years'' and inserting ``any shortfall 
     amortization base which has not been fully amortized under 
     this subsection'', and
       (B) in subsection (j)(3), by adding at the end the 
     following:
       ``(F) Quarterly contributions not to include certain 
     increased contributions.--Subparagraph (D) shall be applied 
     without regard to any increase under subsection (c)(7).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning after December 31, 2007.

     SEC. 302. APPLICATION OF EXTENDED AMORTIZATION PERIOD TO 
                   PLANS SUBJECT TO PRIOR LAW FUNDING RULES.

       (a) In General.--Title I of the Pension Protection Act of 
     2006 is amended by redesignating section 107 as section 108 
     and by inserting the following after section 106:

     ``SEC. 107. APPLICATION OF EXTENDED AMORTIZATION PERIODS TO 
                   PLANS WITH DELAYED EFFECTIVE DATE.

       ``(a) In General.--If the plan sponsor of a plan to which 
     section 104, 105, or 106 of this Act applies elects to have 
     this section apply for any eligible plan year (in this 
     section referred to as an `election year'), section 302 of 
     the Employee Retirement Income Security Act of 1974 and 
     section 412 of the Internal Revenue Code of 1986 (as in 
     effect before the amendments made by this subtitle and 
     subtitle B) shall apply to such year in the manner described 
     in subsection (b) or (c), whichever is specified in the 
     election. All references in this section to `such Act' or 
     `such Code' shall be to such Act or such Code as in effect 
     before the amendments made by this subtitle and subtitle B.
       ``(b) Application of 2 and 7 Rule.--In the case of an 
     election year to which this subsection applies--
       ``(1) 2-year lookback for determining deficit reduction 
     contributions for certain plans.--For purposes of applying 
     section 302(d)(9) of such Act and section 412(l)(9) of such 
     Code, the funded current liability percentage (as defined in 
     subparagraph (C) thereof) for such plan for such plan year 
     shall be such funded current liability percentage of such 
     plan for the second plan year preceding the first election 
     year of such plan.
       ``(2) Calculation of deficit reduction contribution.--For 
     purposes of applying section 302(d) of such Act and section 
     412(l) of such Code to a plan to which such sections apply 
     (after taking into account paragraph (1))--
       ``(A) in the case of the increased unfunded new liability 
     of the plan, the applicable percentage described in section 
     302(d)(4)(C) of such Act and section 412(l)(4)(C) of such 
     Code shall be the third segment rate described in sections 
     104(b), 105(b), and 106(b) of this Act, and
       ``(B) in the case of the excess of the unfunded new 
     liability over the increased unfunded new liability, such 
     applicable percentage shall be determined without regard to 
     this section.
       ``(c) Application of 15-year Amortization.--In the case of 
     an election year to which this subsection applies, for 
     purposes of applying section 302(d) of such Act and section 
     412(l) of such Code--
       ``(1) in the case of the increased unfunded new liability 
     of the plan, the applicable percentage described in section 
     302(d)(4)(C) of such Act and section 412(l)(4)(C) of such 
     Code for any pre-effective date plan year beginning with or 
     after the first election year shall be the ratio of--
       ``(A) the annual installments payable in each year if the 
     increased unfunded new liability for such plan year were 
     amortized over 15 years, using an interest rate equal to the 
     third segment rate described in sections 104(b), 105(b), and 
     106(b) of this Act, to
       ``(B) the increased unfunded new liability for such plan 
     year, and
       ``(2) in the case of the excess of the unfunded new 
     liability over the increased unfunded new liability, such 
     applicable percentage shall be determined without regard to 
     this section.
       ``(d) Election.--
       ``(1) In general.--The plan sponsor of a plan may elect to 
     have this section apply to not more than 2 eligible plan 
     years with respect to the plan, except that in the case of a 
     plan to which section 106 of this Act applies, the plan 
     sponsor may only elect to have this section apply to 1 
     eligible plan year.
       ``(2) Amortization schedule.--Such election shall specify 
     whether the rules under subsection (b) or (c) shall apply to 
     an election year, except that if a plan sponsor elects to 
     have this section apply to 2 eligible plan years, the plan 
     sponsor must elect the same rule for both years.
       ``(3) Other rules.--Such election shall be made at such 
     time, and in such form and manner, as shall be prescribed by 
     the Secretary of the Treasury, and may be revoked only with 
     the consent of the Secretary of the Treasury.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Eligible plan year.--For purposes of this 
     subparagraph, the term `eligible plan year' means any plan 
     year beginning in 2008, 2009, 2010, or 2011, except that a 
     plan year beginning in 2008 shall only be treated as an 
     eligible plan year if the due date for the payment of the 
     minimum required contribution

[[Page 11104]]

     for such plan year occurs on or after the date of the 
     enactment of this clause.
       ``(2) Pre-effective date plan year.--The term `pre-
     effective date plan year' means, with respect to a plan, any 
     plan year prior to the first year in which the amendments 
     made by this subtitle and subtitle B apply to the plan.
       ``(3) Increased unfunded new liability.--The term 
     `increased unfunded new liability' means, with respect to a 
     year, the excess (if any) of the unfunded new liability over 
     the amount of unfunded new liability determined as if the 
     value of the plan's assets determined under subsection 
     302(c)(2) of such Act and section 412(c)(2) of such Code 
     equaled the product of the current liability of the plan for 
     the year multiplied by the funded current liability 
     percentage (as defined in section 302(d)(8)(B) of such Act 
     and 412(l)(8)(B) of such Code) of the plan for the second 
     plan year preceding the first election year of such plan.
       ``(4) Other definitions.--The terms `unfunded new 
     liability' and `current liability' shall have the meanings 
     set forth in section 302(d) of such Act and section 412(l) of 
     such Code.''.
       (b) Eligible Charity Plans.--Section 104 of the Pension 
     Protection Act of 2006 is amended--
       (1) by striking ``eligible cooperative plan'' wherever it 
     appears in subsections (a) and (b) and inserting ``eligible 
     cooperative plan or an eligible charity plan'', and
       (2) by adding at the end the following new subsection:
       ``(d) Eligible Charity Plan Defined.--For purposes of this 
     section, a plan shall be treated as an eligible charity plan 
     for a plan year if the plan is maintained by more than one 
     employer (determined without regard to section 414(c) of the 
     Internal Revenue Code) and 100 percent of the employers are 
     described in section 501(c)(3) of such Code.''.
       (c) Effective Date.--
       (1) In general.--The amendment made by subsection (a) shall 
     take effect as if included in the Pension Protection Act of 
     2006.
       (2) Eligible charity plan.--The amendments made by 
     subsection (b) shall apply to plan years beginning after 
     December 31, 2007, except that a plan sponsor may elect to 
     apply such amendments to plan years beginning after December 
     31, 2008. Any such election shall be made at such time, and 
     in such form and manner, as shall be prescribed by the 
     Secretary of the Treasury, and may be revoked only with the 
     consent of the Secretary of the Treasury.

     SEC. 303. LOOKBACK FOR CERTAIN BENEFIT RESTRICTIONS.

       (a) In General.--
       (1) Amendment to erisa.--Section 206(g)(9) of the Employee 
     Retirement Income Security Act of 1974 is amended by adding 
     at the end the following:
       ``(D) Special rule for certain years.--Solely for purposes 
     of any applicable provision--
       ``(i) In general.--For plan years beginning on or after 
     October 1, 2008, and before October 1, 2010, the adjusted 
     funding target attainment percentage of a plan shall be the 
     greater of--

       ``(I) such percentage, as determined without regard to this 
     subparagraph, or
       ``(II) the adjusted funding target attainment percentage 
     for such plan for the plan year beginning after October 1, 
     2007, and before October 1, 2008, as determined under rules 
     prescribed by the Secretary of the Treasury.

       ``(ii) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year--

       ``(I) clause (i) shall apply to plan years beginning after 
     December 31, 2007, and before January 1, 2010, and
       ``(II) clause (i)(II) shall apply based on the last plan 
     year beginning before November 1, 2007, as determined under 
     rules prescribed by the Secretary of the Treasury.

       ``(iii) Applicable provision.--For purposes of this 
     subparagraph, the term `applicable provision' means--

       ``(I) paragraph (3), but only for purposes of applying such 
     paragraph to a payment which, as determined under rules 
     prescribed by the Secretary of the Treasury, is a payment 
     under a social security leveling option which accelerates 
     payments under the plan before, and reduces payments after, a 
     participant starts receiving social security benefits in 
     order to provide substantially similar aggregate payments 
     both before and after such benefits are received, and
       ``(II) paragraph (4).''.

       (2) Amendment to internal revenue code of 1986.--Section 
     436(j) of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following:
       ``(3) Special rule for certain years.--Solely for purposes 
     of any applicable provision--
       ``(A) In general.--For plan years beginning on or after 
     October 1, 2008, and before October 1, 2010, the adjusted 
     funding target attainment percentage of a plan shall be the 
     greater of--
       ``(i) such percentage, as determined without regard to this 
     paragraph, or
       ``(ii) the adjusted funding target attainment percentage 
     for such plan for the plan year beginning after October 1, 
     2007, and before October 1, 2008, as determined under rules 
     prescribed by the Secretary.
       ``(B) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year--
       ``(i) subparagraph (A) shall apply to plan years beginning 
     after December 31, 2007, and before January 1, 2010, and
       ``(ii) subparagraph (A)(ii) shall apply based on the last 
     plan year beginning before November 1, 2007, as determined 
     under rules prescribed by the Secretary.
       ``(C) Applicable provision.--For purposes of this 
     paragraph, the term `applicable provision' means--
       ``(i) subsection (d), but only for purposes of applying 
     such paragraph to a payment which, as determined under rules 
     prescribed by the Secretary, is a payment under a social 
     security leveling option which accelerates payments under the 
     plan before, and reduces payments after, a participant starts 
     receiving social security benefits in order to provide 
     substantially similar aggregate payments both before and 
     after such benefits are received, and
       ``(ii) subsection (e).''.
       (b) Interaction With Wrera Rule.--Section 203 of the 
     Worker, Retiree, and Employer Recovery Act of 2008 shall 
     apply to a plan for any plan year in lieu of the amendments 
     made by this section applying to sections 206(g)(4) of the 
     Employee Retirement Income Security Act of 1974 and 436(e) of 
     the Internal Revenue Code of 1986 only to the extent that 
     such section produces a higher adjusted funding target 
     attainment percentage for such plan for such year.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to plan years 
     beginning on or after October 1, 2008.
       (2) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year, the 
     amendments made by this section shall apply to plan years 
     beginning after December 31, 2007.

     SEC. 304. LOOKBACK FOR CREDIT BALANCE RULE FOR PLANS 
                   MAINTAINED BY CHARITIES.

       (a) Amendment to Erisa.--Paragraph (3) of section 303(f) of 
     the Employee Retirement Income Security Act of 1974 is 
     amended by adding the following at the end thereof:
       ``(D) Special rule for certain years of plans maintained by 
     charities.--
       ``(i) In general.--For purposes of applying subparagraph 
     (C) for plan years beginning after August 31, 2009, and 
     before September 1, 2011, the ratio determined under such 
     subparagraph for the preceding plan year shall be the greater 
     of--

       ``(I) such ratio, as determined without regard to this 
     subparagraph, or
       ``(II) the ratio for such plan for the plan year beginning 
     after August 31, 2007, and before September 1, 2008, as 
     determined under rules prescribed by the Secretary of the 
     Treasury.

       ``(ii) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year--

       ``(I) clause (i) shall apply to plan years beginning after 
     December 31, 2008, and before January 1, 2011, and
       ``(II) clause (i)(II) shall apply based on the last plan 
     year beginning before September 1, 2007, as determined under 
     rules prescribed by the Secretary of the Treasury.

       ``(iii) Limitation to charities.--This subparagraph shall 
     not apply to any plan unless such plan is maintained 
     exclusively by one or more organizations described in section 
     501(c)(3) of the Internal Revenue Code of 1986.''.
       (b) Amendment to Internal Revenue Code of 1986.--Paragraph 
     (3) of section 430(f) of the Internal Revenue Code of 1986 is 
     amended by adding the following at the end thereof:
       ``(D) Special rule for certain years of plans maintained by 
     charities.--
       ``(i) In general.--For purposes of applying subparagraph 
     (C) for plan years beginning after August 31, 2009, and 
     before September 1, 2011, the ratio determined under such 
     subparagraph for the preceding plan year of a plan shall be 
     the greater of--

       ``(I) such ratio, as determined without regard to this 
     subsection, or
       ``(II) the ratio for such plan for the plan year beginning 
     after August 31, 2007 and before September 1, 2008, as 
     determined under rules prescribed by the Secretary.

       ``(ii) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year--

       ``(I) clause (i) shall apply to plan years beginning after 
     December 31, 2007, and before January 1, 2010, and
       ``(II) clause (i)(II) shall apply based on the last plan 
     year beginning before September 1, 2007, as determined under 
     rules prescribed by the Secretary.

       ``(iii) Limitation to charities.--This subparagraph shall 
     not apply to any plan unless such plan is maintained 
     exclusively by one or more organizations described in section 
     501(c)(3).''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to plan years 
     beginning after August 31, 2009.
       (2) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year, the 
     amendments made by

[[Page 11105]]

     this section shall apply to plan years beginning after 
     December 31, 2008.

                    Subtitle B--Multiemployer Plans

     SEC. 321. ADJUSTMENTS TO FUNDING STANDARD ACCOUNT RULES.

       (a) Adjustments.--
       (1) Amendment to erisa.--Section 304(b) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1084(b)) is 
     amended by adding at the end the following new paragraph:
       ``(8) Special relief rules.--Notwithstanding any other 
     provision of this subsection--
       ``(A) Amortization of net investment losses.--
       ``(i) In general.--A multiemployer plan with respect to 
     which the solvency test under subparagraph (C) is met may 
     treat the portion of any experience loss or gain attributable 
     to net investment losses incurred in either or both of the 
     first two plan years ending after August 31, 2008, as an item 
     separate from other experience losses, to be amortized in 
     equal annual installments (until fully amortized) over the 
     period --

       ``(I) beginning with the plan year in which such portion is 
     first recognized in the actuarial value of assets, and
       ``(II) ending with the last plan year in the 30-plan year 
     period beginning with the plan year in which such net 
     investment loss was incurred.

       ``(ii) Coordination with extensions.--If this subparagraph 
     applies for any plan year--

       ``(I) no extension of the amortization period under clause 
     (i) shall be allowed under subsection (d), and
       ``(II) if an extension was granted under subsection (d) for 
     any plan year before the election to have this subparagraph 
     apply to the plan year, such extension shall not result in 
     such amortization period exceeding 30 years.

       ``(iii) Net investment losses.--For purposes of this 
     subparagraph--

       ``(I) In general.--Net investment losses shall be 
     determined in the manner prescribed by the Secretary of the 
     Treasury on the basis of the difference between actual and 
     expected returns (including any difference attributable to 
     any criminally fraudulent investment arrangement).
       ``(II) Criminally fraudulent investment arrangements.--The 
     determination as to whether an arrangement is a criminally 
     fraudulent investment arrangement shall be made under rules 
     substantially similar to the rules prescribed by the 
     Secretary of the Treasury for purposes of section 165 of the 
     Internal Revenue Code of 1986.

       ``(B) Expanded smoothing period.--
       ``(i) In general.--A multiemployer plan with respect to 
     which the solvency test under subparagraph (C) is met may 
     change its asset valuation method in a manner which--

       ``(I) spreads the difference between expected and actual 
     returns for either or both of the first 2 plan years ending 
     after August 31, 2008, over a period of not more than 10 
     years,
       ``(II) provides that for either or both of the first 2 plan 
     years beginning after August 31, 2008, the value of plan 
     assets at any time shall not be less than 80 percent or 
     greater than 130 percent of the fair market value of such 
     assets at such time, or
       ``(III) makes both changes described in subclauses (I) and 
     (II) to such method.

       ``(ii) Asset valuation methods.--If this subparagraph 
     applies for any plan year--

       ``(I) the Secretary of the Treasury shall not treat the 
     asset valuation method of the plan as unreasonable solely 
     because of the changes in such method described in clause 
     (i), and
       ``(II) such changes shall be deemed approved by such 
     Secretary under section 302(d)(1) and section 412(d)(1) of 
     such Code.

       ``(iii) Amortization of reduction in unfunded accrued 
     liability.--If this subparagraph and subparagraph (A) both 
     apply for any plan year, the plan shall treat any reduction 
     in unfunded accrued liability resulting from the application 
     of this subparagraph as a separate experience amortization 
     base, to be amortized in equal annual installments (until 
     fully amortized) over a period of 30 plan years rather than 
     the period such liability would otherwise be amortized over.
       ``(C) Solvency test.--The solvency test under this 
     paragraph is met only if the plan actuary certifies that the 
     plan is projected to have sufficient assets to timely pay 
     expected benefits and anticipated expenditures over the 
     amortization period, taking into account the changes in the 
     funding standard account under this paragraph.
       ``(D) Restriction on benefit increases.--If subparagraph 
     (A) or (B) apply to a multiemployer plan for any plan year, 
     then, in addition to any other applicable restrictions on 
     benefit increases, a plan amendment increasing benefits may 
     not go into effect during either of the 2 plan years 
     immediately following such plan year unless--
       ``(i) the plan actuary certifies that--

       ``(I) any such increase is paid for out of additional 
     contributions not allocated to the plan immediately before 
     the application of this paragraph to the plan, and
       ``(II) the plan's funded percentage and projected credit 
     balances for such 2 plan years are reasonably expected to be 
     at least as high as such percentage and balances would have 
     been if the benefit increase had not been adopted, or

       ``(ii) the amendment is required as a condition of 
     qualification under part I of subchapter D of chapter 1 of 
     the Internal Revenue Code of 1986 or to comply with other 
     applicable law.
       ``(E) Reporting.--A plan sponsor of a plan to which this 
     paragraph applies shall--
       ``(i) give notice of such application to participants and 
     beneficiaries of the plan, and
       ``(ii) inform the Pension Benefit Guaranty Corporation of 
     such application in such form and manner as the Director of 
     the Pension Benefit Guaranty Corporation may prescribe.''.
       (2) Amendment to internal revenue code of 1986.--Section 
     431(b) is amended by adding at the end the following new 
     paragraph:
       ``(8) Special relief rules.--Notwithstanding any other 
     provision of this subsection--
       ``(A) Amortization of net investment losses.--
       ``(i) In general.--A multiemployer plan with respect to 
     which the solvency test under subparagraph (C) is met may 
     treat the portion of any experience loss or gain attributable 
     to net investment losses incurred in either or both of the 
     first two plan years ending after August 31, 2008, as an item 
     separate from other experience losses, to be amortized in 
     equal annual installments (until fully amortized) over the 
     period --

       ``(I) beginning with the plan year in which such portion is 
     first recognized in the actuarial value of assets, and
       ``(II) ending with the last plan year in the 30-plan year 
     period beginning with the plan year in which such net 
     investment loss was incurred.

       ``(ii) Coordination with extensions.--If this subparagraph 
     applies for any plan year--

       ``(I) no extension of the amortization period under clause 
     (i) shall be allowed under subsection (d), and
       ``(II) if an extension was granted under subsection (d) for 
     any plan year before the election to have this subparagraph 
     apply to the plan year, such extension shall not result in 
     such amortization period exceeding 30 years.

       ``(iii) Net investment losses.--For purposes of this 
     subparagraph--

       ``(I) In general.--Net investment losses shall be 
     determined in the manner prescribed by the Secretary on the 
     basis of the difference between actual and expected returns 
     (including any difference attributable to any criminally 
     fraudulent investment arrangement).
       ``(II) Criminally fraudulent investment arrangements.--The 
     determination as to whether an arrangement is a criminally 
     fraudulent investment arrangement shall be made under rules 
     substantially similar to the rules prescribed by the 
     Secretary for purposes of section 165.

       ``(B) Expanded smoothing period.--
       ``(i) In general.--A multiemployer plan with respect to 
     which the solvency test under subparagraph (C) is met may 
     change its asset valuation method in a manner which--

       ``(I) spreads the difference between expected and actual 
     returns for either or both of the first 2 plan years ending 
     after August 31, 2008, over a period of not more than 10 
     years,
       ``(II) provides that for either or both of the first 2 plan 
     years beginning after August 31, 2008, the value of plan 
     assets at any time shall not be less than 80 percent or 
     greater than 130 percent of the fair market value of such 
     assets at such time, or
       ``(III) makes both changes described in subclauses (I) and 
     (II) to such method.

       ``(ii) Asset valuation methods.--If this subparagraph 
     applies for any plan year--

       ``(I) the Secretary shall not treat the asset valuation 
     method of the plan as unreasonable solely because of the 
     changes in such method described in clause (i), and
       ``(II) such changes shall be deemed approved by the 
     Secretary under section 302(d)(1) of the Employee Retirement 
     Income Security Act of 1974 and section 412(d)(1).

       ``(iii) Amortization of reduction in unfunded accrued 
     liability.--If this subparagraph and subparagraph (A) both 
     apply for any plan year, the plan shall treat any reduction 
     in unfunded accrued liability resulting from the application 
     of this subparagraph as a separate experience amortization 
     base, to be amortized in equal annual installments (until 
     fully amortized) over a period of 30 plan years rather than 
     the period such liability would otherwise be amortized over.
       ``(C) Solvency test.--The solvency test under this 
     paragraph is met only if the plan actuary certifies that the 
     plan is projected to have sufficient assets to timely pay 
     expected benefits and anticipated expenditures over the 
     amortization period, taking into account the changes in the 
     funding standard account under this paragraph.
       ``(D) Restriction on benefit increases.--If subparagraph 
     (A) or (B) apply to a multiemployer plan for any plan year, 
     then, in addition to any other applicable restrictions on 
     benefit increases, a plan amendment increasing benefits may 
     not go into effect during either of the 2 plan years 
     immediately following such plan year unless--
       ``(i) the plan actuary certifies that--

       ``(I) any such increase is paid for out of additional 
     contributions not allocated to the

[[Page 11106]]

     plan immediately before the application of this paragraph to 
     the plan, and
       ``(II) the plan's funded percentage and projected credit 
     balances for such 2 plan years are reasonably expected to be 
     at least as high as such percentage and balances would have 
     been if the benefit increase had not been adopted, or

       ``(ii) the amendment is required as a condition of 
     qualification under part I of subchapter D or to comply with 
     other applicable law.
       ``(E) Reporting.--A plan sponsor of a plan to which this 
     paragraph applies shall--
       ``(i) give notice of such application to participants and 
     beneficiaries of the plan, and
       ``(ii) inform the Pension Benefit Guaranty Corporation of 
     such application in such form and manner as the Director of 
     the Pension Benefit Guaranty Corporation may prescribe.''.
       (b) Effective Dates.--
       (1) In general.--The amendments made by this section shall 
     take effect as of the first day of the first plan year ending 
     after August 31, 2008, except that any election a plan makes 
     pursuant to this section that affects the plan's funding 
     standard account for the first plan year beginning after 
     August 31, 2008, shall be disregarded for purposes of 
     applying the provisions of section 305 of the Employee 
     Retirement Income Security Act of 1974 and section 432 of the 
     Internal Revenue Code of 1986 to such plan year.
       (2) Restrictions on benefit increases.--Notwithstanding 
     paragraph (1), the restrictions on plan amendments increasing 
     benefits in sections 304(b)(8)(D) of such Act and 
     431(b)(8)(D) of such Code, as added by this section, shall 
     take effect on the date of enactment of this Act.

                       TITLE IV--REVENUE OFFSETS

     SEC. 401. ROLLOVERS FROM ELECTIVE DEFERRAL PLANS TO ROTH 
                   DESIGNATED ACCOUNTS.

       (a) In General.--Section 402A(c) of the Internal Revenue 
     Code of 1986 is amended by adding at the end the following 
     new paragraph:
       ``(4) Taxable rollovers to designated roth accounts.--
       ``(A) In general.--Notwithstanding sections 402(c), 
     403(b)(8), and 457(e)(16), in the case of any distribution to 
     which this paragraph applies--
       ``(i) there shall be included in gross income any amount 
     which would be includible were it not part of a qualified 
     rollover contribution,
       ``(ii) section 72(t) shall not apply, and
       ``(iii) unless the taxpayer elects not to have this clause 
     apply, any amount required to be included in gross income for 
     any taxable year beginning in 2010 by reason of this 
     paragraph shall be so included ratably over the 2-taxable-
     year period beginning with the first taxable year beginning 
     in 2011.

     Any election under clause (iii) for any distributions during 
     a taxable year may not be changed after the due date for such 
     taxable year.
       ``(B) Distributions to which paragraph applies.--In the 
     case of an applicable retirement plan which includes a 
     qualified Roth contribution program, this paragraph shall 
     apply to a distribution from such plan other than from a 
     designated Roth account which is contributed in a qualified 
     rollover contribution to the designated Roth account 
     maintained under such plan for the benefit of the individual 
     to whom the distribution is made.
       ``(C) Other rules.--The rules of subparagraphs (D), (E), 
     and (F) of section 408A(d)(3) (as in effect for taxable years 
     beginning after 2009) shall apply for purposes of this 
     paragraph.''.

     SEC. 402. PARTICIPANTS IN GOVERNMENT SECTION 457 PLANS 
                   ALLOWED TO TREAT ELECTIVE DEFERRALS AS ROTH 
                   CONTRIBUTIONS.

       (a) In General.--Section 402A(e)(1) (defining applicable 
     retirement plan) is amended by striking ``and'' at the end of 
     subparagraph (A), by striking the period at the end of 
     subparagraph (B) and inserting ``, and'', and by adding at 
     the end the following:
       ``(C) an eligible deferred compensation plan (as defined in 
     section 457(b)) of an eligible employer described in section 
     457(e)(1)(A).''.
       (b) Elective Deferrals.--Section 402A(e)(2) (defining 
     elective deferral) is amended to read as follows:
       ``(2) Elective deferral.--The term `elective deferral' 
     means--
       ``(A) any elective deferral described in subparagraph (A) 
     or (C) of section 402(g)(3), and
       ``(B) any elective deferral of compensation by an 
     individual under an eligible deferred compensation plan (as 
     defined in section 457(b)) of an eligible employer described 
     in section 457(e)(1)(A).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2010.

     SEC. 403. TEMPORARY ONE-YEAR FREEZE ON RAISES, BONUSES, AND 
                   OTHER SALARY INCREASES FOR FEDERAL EMPLOYEES.

       Notwithstanding any other provision of law, civilian 
     employees of the Federal Government in fiscal year 2011 shall 
     not receive a cost of living adjustment or other salary 
     increase, including a bonus. The salaries of members of the 
     armed forces are exempt from the provisions of this section.

     SEC. 404. CAPPING THE TOTAL NUMBER OF FEDERAL EMPLOYEES.

       (a) In General.--Not later than 3 months after the date of 
     enactment of this Act, the head of each relevant Federal 
     department or agency shall collaborate with the Director of 
     the Office of Management and Budget to determine how many 
     full-time employees the department or agency employs. For 
     each new full-time employee added to any Federal department 
     or agency for any purpose, the head of such department or 
     agency shall ensure that the addition of such new employee is 
     offset by a reduction of one existing full-time employee at 
     such department or agency.
       (b) Information on Total Employees.--The Director of the 
     Office of Management and Budget shall publicly disclose the 
     total number of Federal employees, as well as a breakdown of 
     Federal employees by agency and the annual salary by title of 
     each Federal employee at an agency and update such 
     information not less than once a year.

     SEC. 405. COLLECTION OF UNPAID TAXES FROM EMPLOYEES OF THE 
                   FEDERAL GOVERNMENT.

       (a) In General.--Chapter 73 of title 5, United States Code, 
     is amended by adding at the end the following:

  ``SUBCHAPTER VIII--COLLECTION OF UNPAID TAXES FROM EMPLOYEES OF THE 
                           FEDERAL GOVERNMENT

     ``Sec. 7381. Collection of unpaid taxes from employees of the 
       Federal Government

       ``(a) Definition.--For purposes of this section--
       ``(1) the term `seriously delinquent tax debt' means an 
     outstanding debt under the Internal Revenue Code of 1986 for 
     which a notice of lien has been filed in public records 
     pursuant to section 6323 of such Code, except that such term 
     does not include--
       ``(A) a debt that is being paid in a timely manner pursuant 
     to an agreement under section 6159 or section 7122 of such 
     Code; and
       ``(B) a debt with respect to which a collection due process 
     hearing under section 6330 of such Code, or relief under 
     subsection (a), (b), or (f) of section 6015 of such Code, is 
     requested or pending; and
       ``(2) the term `Federal employee' means--
       ``(A) an employee, as defined by section 2105; and
       ``(B) an employee of the United States Congress, including 
     Members of the House of Representatives and Senators.
       ``(b) Collection of Unpaid Taxes.--The Internal Revenue 
     Service shall coordinate with the Department of Treasury and 
     the hiring agency of a Federal employee who has a seriously 
     delinquent tax debt to collect such taxes by withholding a 
     portion of the employee's salary over a period set by the 
     hiring agency to ensure prompt payment.''.
       (b) Clerical Amendment.--The analysis for chapter 73 of 
     title 5, United States Code, is amended by adding at the end 
     the following:

  ``subchapter viii--collection of unpaid taxes from employees of the 
                           federal government

``Sec. 7381. Collection of unpaid taxes from employees of the Federal 
              Government.''.

     SEC. 406. REDUCING PRINTING AND PUBLISHING COSTS OF 
                   GOVERNMENT DOCUMENTS.

       Within 90 days after the date of enactment of this Act, the 
     Director of the Office of Management and Budget shall 
     coordinate with the heads of Federal departments and 
     independent agencies to determine which Government 
     publications could be available on Government websites and no 
     longer printed and to devise a strategy to reduce overall 
     Government printing costs by no less than a total of 
     $4,600,000 over the 10-year period beginning with fiscal year 
     2010. The Director shall ensure that essential printed 
     documents prepared for Social Security recipients, Medicare 
     beneficiaries, and other populations in areas with limited 
     internet access or use continue to remain available.

     SEC. 407. REDUCING EXCESSIVE DUPLICATION, OVERHEAD AND 
                   SPENDING WITHIN THE FEDERAL GOVERNMENT.

       (a) Reducing Duplication.--The Director of the Office of 
     Management Budget and the Secretary of each department (or 
     head of each independent agency) shall work with the Chairman 
     and ranking member of the relevant congressional 
     appropriations subcommittees and the congressional 
     authorizing committees and the Director of the Office of 
     Management Budget to consolidate programs with duplicative 
     goals, missions, and initiatives.
       (b) Controlling Bureaucratic Overhead Costs.--Each Federal 
     department and agency shall reduce annual administrative 
     expenses by at least five percent in fiscal year 2011.
       (c) Rescissions of Excessive Spending.--There is hereby 
     rescinded an amount equal to 5 percent of--
       (1) the budget authority provided (or obligation limit 
     imposed) for fiscal year 2010 for any discretionary account 
     in any other fiscal year 2010 appropriation Act;
       (2) the budget authority provided in any advance 
     appropriation for fiscal year 2010 for any discretionary 
     account in any prior fiscal year appropriation Act; and
       (3) the contract authority provided in fiscal year 2010 for 
     any program subject to limitation contained in any fiscal 
     year 2010 appropriation Act.

[[Page 11107]]

       (d) Proportionate Application.--Any rescission made by 
     subsection (a) shall be applied proportionately--
       (1) to each discretionary account and each item of budget 
     authority described in such subsection; and
       (2) within each such account and item, to each program, 
     project, and activity (with programs, projects, and 
     activities as delineated in the appropriation Act or 
     accompanying reports for the relevant fiscal year covering 
     such account or item, or for accounts and items not included 
     in appropriation Acts, as delineated in the most recently 
     submitted President's budget)
       (e) Exceptions.--This section shall not apply to 
     discretionary authority appropriated or otherwise made 
     available to the Department of Veterans Affairs and the 
     Department of Defense.
       (f) OMB Report.--Within 30 days after the date of enactment 
     of this section, the Director of the Office of Management and 
     Budget shall submit to the Committees on Appropriations of 
     the House of Representatives and the Senate a report 
     specifying the account and amount of each rescission made 
     pursuant to this section and the report shall be posted on 
     the public website of the Office of Management and Budget.

     SEC. 408. ELIMINATING NONESSENTIAL GOVERNMENT TRAVEL.

       Within 60 days after the date of enactment of this Act, the 
     Director of the Office of Management and Budget, in 
     consultation with the heads of the Federal departments and 
     agencies, shall establish a definition of ``nonessential 
     travel'' and criteria to determine if travel-related expenses 
     and requests by Federal employees meet the definition of 
     ``nonessential travel''. No travel expenses paid for, in 
     whole or in part, with Federal funds shall be paid by the 
     Federal Government unless a request is made prior to the 
     travel and the requested travel meets the criteria 
     established by this section. Any travel request that does not 
     meet the definition and criteria shall be disallowed, 
     including reimbursement for air flights, automobile rentals, 
     train tickets, lodging, per diem, and other travel-related 
     costs. The definition established by the Director of the 
     Office of Management and Budget may include exemptions in the 
     definition, including travel related to national defense, 
     homeland security, border security, national disasters, and 
     other emergencies. The Director of the Office of Management 
     and Budget shall ensure that all travel costs paid for in 
     part or whole by the Federal Government not related to 
     national defense, homeland security, border security, 
     national disasters, and other emergencies do not exceed 
     $5,000,000,000 annually.

     SEC. 409. ELIMINATING BONUSES FOR POOR PERFORMANCE BY 
                   GOVERNMENT CONTRACTORS.

       (a) Guidance on Linking of Award and Incentive Fees to 
     Outcomes.--Not later than 180 days after the date of 
     enactment of this Act, each Federal department or agency 
     shall issue guidance, with detailed implementation 
     instructions (including definitions), on the appropriate use 
     of award and incentive fees in department or agency programs.
       (b) Elements.--The guidance under subsection (a) shall--
       (1) ensure that all new contracts using award fees link 
     such fees to outcomes (which shall be defined in terms of 
     program cost, schedule, and performance);
       (2) establish standards for identifying the appropriate 
     level of officials authorized to approve the use of award and 
     incentive fees in new contracts;
       (3) provide guidance on the circumstances in which 
     contractor performance may be judged to be excellent or 
     superior and the percentage of the available award fee which 
     contractors should be paid for such performance;
       (4) establish standards for determining the percentage of 
     the available award fee, if any, which contractors should be 
     paid for performance that is judged to be acceptable, 
     average, expected, good, or satisfactory;
       (5) ensure that no award fee may be paid for contractor 
     performance that is judged to be below satisfactory 
     performance or performance that does not meet the basic 
     requirements of the contract;
       (6) provide specific direction on the circumstances, if 
     any, in which it may be appropriate to roll over award fees 
     that are not earned in one award fee period to a subsequent 
     award fee period or periods;
       (7) ensure that the Department or agency--
       (A) collects relevant data on award and incentive fees paid 
     to contractors; and
       (B) has mechanisms in place to evaluate such data on a 
     regular basis; and
       (8) include performance measures to evaluate the 
     effectiveness of award and incentive fees as a tool for 
     improving contractor performance and achieving desired 
     program outcomes.
       (c) Return of Unearned Bonuses.--Any funds intended to be 
     awarded as incentive fees that are not paid due to 
     contractors inability to meet the criteria established by 
     this section shall be returned to the Treasury.

     SEC. 410. $1,000,000,000 LIMITATION ON VOLUNTARY PAYMENTS TO 
                   THE UNITED NATIONS.

       Notwithstanding any other provision of law, the Secretary 
     of State shall ensure no more than $1,000,000,000 is provided 
     to the United Nations each year in excess of the United 
     States' annual assessed contributions

     SEC. 411. RESCINDING A STATE DEPARTMENT TRAINING FACILITY 
                   UNWANTED BY RESIDENTS OF THE COMMUNITY IN WHICH 
                   IT IS PLANNED TO BE CONSTRUCTED.

       Notwithstanding any other provision of law, no Federal 
     funds may be spent to construct a State Department training 
     facility in Ruthsberg, Maryland, and any funding obligated 
     for the facility by Public Law 111-5 are rescinded, Provided 
     That, this section does not prohibit funds otherwise 
     appropriated to be spent by the State Department for training 
     facilities in other jurisdictions in accordance with law.

     SEC. 412. REDUCING BUDGETS OF MEMBERS OF CONGRESS.

       (a) In General.--Of the funds made available under Public 
     Law 111-68 for the legislative branch, $100,000,000 in 
     unobligated balances are permanently rescinded on a pro rata 
     basis: Provided, That the rescissions made by the section 
     shall not apply to funds made available to the Capitol 
     Police.
       (b) Reporting.--The Director of the Office of Management 
     and Budget shall report to Congress the amounts rescinded 
     under subsection (a).

     SEC. 413. DISPOSING OF UNNEEDED AND UNUSED GOVERNMENT 
                   PROPERTY.

       (a) In General.--Chapter 5 of subtitle I of title 40, 
     United States Code, is amended by adding at the end the 
     following:

         ``SUBCHAPTER VII--EXPEDITED DISPOSAL OF REAL PROPERTY

     ``Sec. 621. Definitions

       ``In this subchapter:
       ``(1) Director.--The term `Director' means the Director of 
     the Office of Management and Budget.
       ``(2) Expedited disposal of a real property.--The term 
     `expedited disposal of a real property' means a demolition of 
     real property or a sale of real property for cash that is 
     conducted under the requirements of section 545.
       ``(3) Landholding agency.--The term `landholding agency' 
     means a landholding agency as defined under section 501(i)(3) 
     of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 
     11411(i)(3)).
       ``(4) Real property.--
       ``(A) In general.--The term `real property' means--
       ``(i) a parcel of real property under the administrative 
     jurisdiction of the Federal Government that is--

       ``(I) excess;
       ``(II) surplus;
       ``(III) underperforming; or
       ``(IV) otherwise not meeting the needs of the Federal 
     Government, as determined by the Director; and

       ``(ii) a building or other structure located on real 
     property described under clause (i).
       ``(B) Exclusion.--The term `real property' excludes any 
     parcel of real property or building or other structure 
     located on such real property that is to be closed or 
     realigned under the Defense Base Closure and Realignment Act 
     of 1990 (part A of title XXIX of Public Law 101-510; 10 
     U.S.C. 2687 note).

     ``Sec. 622. Disposal program

       ``(a) The Director of the Office of Management and Budget 
     shall dispose of by sale or auction not less than 
     $15,000,000,000 worth of real property that is not meeting 
     Federal Government from fiscal year 2010 to fiscal year 2015.
       ``(b) Agencies shall recommend candidate disposition real 
     properties to the Director for participation in the pilot 
     program established under section 622.
       ``(c) The Director, with the concurrence of the head of the 
     executive agency concerned and consistent with the criteria 
     established in this subchapter, may then select such 
     candidate real properties for participation in the program 
     and notify the recommending agency accordingly.
       ``(d) The Director shall ensure that all real properties 
     selected for disposition under this section are listed on a 
     website that shall--
       ``(1) be updated routinely; and
       ``(2) include the functionality to allow members of the 
     public, at their option, to receive such updates through 
     electronic mail.
       ``(e) The Director may transfer real property identified in 
     the enactment of this section to the Department of Housing 
     and Urban Development if the Secretary of Housing and Urban 
     Development has determined such properties are suitable for 
     use to assist the homeless.''.
       (b) Technical and Conforming Amendment.--The table of 
     sections for chapter 5 of subtitle I of title 40, United 
     States Code, is amended by inserting after the item relating 
     to section 611 the following:

          ``subchapter vii--expedited disposal of real property

``Sec. 621. Definitions .
``Sec. 622. Disposal program.''.

     SEC. 414. AUCTIONING AND SELLING OF UNUSED AND UNNEEDED 
                   EQUIPMENT.

       (a) Notwithstanding section 1033 of the National Defense 
     Authorization Act of 1997 or any other provision of law, the 
     Secretary of Defense shall auction or sell unused, 
     unnecessary, or surplus supplies and equipment without 
     providing preference to State or local governments.
       (b) The Secretary may make exceptions to the sale or 
     auction of such equipment for

[[Page 11108]]

     transfers of excess military property to state and local law 
     enforcement agencies related to counter-drug efforts, 
     counter-terrorism activities, or other efforts determined to 
     be related to national defense or homeland security. The 
     Secretary of Defense may sell such equipment to State and 
     local agencies at fair market value.

     SEC. 415. RESCINDING UNSPENT FEDERAL FUNDS.

       (a) In General.--Notwithstanding any other provision of 
     law, of all available unobligated Federal funds, 
     $80,000,000,000 in appropriated discretionary unexpired funds 
     are rescinded.
       (b) Implementation.--Not later than 60 days after the date 
     of enactment of this Act, the Director of the Office of 
     Management and Budget shall--
       (1) identify the accounts and amounts rescinded to 
     implement subsection (a); and
       (2) submit a report to the Secretary of the Treasury and 
     Congress of the accounts and amounts identified under 
     paragraph (1) for rescission.
       (c) Exception.--This section shall not apply to the 
     unobligated Federal funds of the Department of Defense or the 
     Department of Veterans Affairs. 

     SEC. 416. USE OF STIMULUS FUNDS TO OFFSET SPENDING.

       The unobligated balance of each amount appropriated or made 
     available under the American Recovery and Reinvestment Act of 
     2009 (Public Law 111-5) (other than under title X of division 
     A of such Act) is rescinded such that the aggregate amount of 
     such rescissions equal $37,500,000,000 in order to offset the 
     net increase in spending resulting from the provisions of, 
     and amendments made by, this Act. The Director of the Office 
     of Management and Budget shall report to each congressional 
     committee the amounts so rescinded within the jurisdiction of 
     such committee.

     SEC. 417. DEFICIT REDUCTION TRUST FUND.

       (a) In General.--Subchapter I of chapter 31 of title 31, 
     United States Code, is amended by adding at the end the 
     following new section:

     ``Sec. 3114. Certain rescinded stimulus funds to reduce 
       public debt

       ``(a) There is established in the Treasury of the United 
     States a trust fund to be known as the `Deficit Reduction 
     Trust Fund' (in this section referred to as the `Trust 
     Fund').
       ``(b) There is appropriated to the Trust Fund the following 
     amounts:
       ``(1) Amounts equivalent to the reductions in Federal 
     spending, as estimated by the Secretary from time to time, as 
     a result of the provisions of sections 403, 404, 406, 407 
     (other than subsection (c) thereof), 408, 409, 410, and 414 
     of the American Jobs and Closing Tax Loopholes Act of 2010.
       ``(2) Amounts equivalent to the amounts rescinded under 
     sections 407(c), 411, 412, 415, and 416 of the American Jobs 
     and Closing Tax Loopholes Act of 2010.
       ``(3) Amounts equivalent to the amounts received under the 
     program established under section 622 of title 5, United 
     States Code.
       ``(4) The amount of taxes received in the Treasury 
     attributable to section 7384 of the Internal Revenue Code of 
     1986 and the amendments made by sections 401 and 402 of the 
     American Jobs and Closing Tax Loopholes Act of 2010, as 
     estimated by the Secretary.
       ``(c) The Secretary of the Treasury shall use the moneys in 
     the Trust Fund solely to pay at maturity, or to redeem or buy 
     before maturity, an obligation of the Government included in 
     the public debt.
       ``(d) Any obligation of the Government which is paid, 
     redeemed, or bought with money from the Trust Fund shall be 
     canceled and retired and may not be reissued.''.
       (b) Conforming Amendment.--The table of sections for 
     subchapter I of chapter 31 of title 31, United States Code, 
     is amended by adding at the end the following new item:

``3114. Certain rescinded stimulus funds to reduce public debt.''.

          TITLE V--UNEMPLOYMENT, HEALTH, AND OTHER ASSISTANCE

        Subtitle A--Unemployment Insurance and Other Assistance

     SEC. 501. EXTENSION OF UNEMPLOYMENT INSURANCE PROVISIONS.

       (a) In General.--(1) Section 4007 of the Supplemental 
     Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C. 3304 
     note) is amended--
       (A) by striking ``June 2, 2010'' each place it appears and 
     inserting ``November 30, 2010'';
       (B) in the heading for subsection (b)(2), by striking 
     ``june 2, 2010'' and inserting ``november 30, 2010''; and
       (C) in subsection (b)(3), by striking ``November 6, 2010'' 
     and inserting ``April 30, 2011''.
       (2) Section 2002(e) of the Assistance for Unemployed 
     Workers and Struggling Families Act, as contained in Public 
     Law 111-5 (26 U.S.C. 3304 note; 123 Stat. 438), is amended--
       (A) in paragraph (1)(B), by striking ``June 2, 2010'' and 
     inserting ``November 30, 2010'';
       (B) in the heading for paragraph (2), by striking ``june 2, 
     2010'' and inserting ``november 30, 2010''; and
       (C) in paragraph (3), by striking ``December 7, 2010'' and 
     inserting ``May 31, 2011''.
       (3) Section 2005 of the Assistance for Unemployed Workers 
     and Struggling Families Act, as contained in Public Law 111-5 
     (26 U.S.C. 3304 note; 123 Stat. 444), is amended--
       (A) by striking ``June 2, 2010'' each place it appears and 
     inserting ``December 1, 2010''; and
       (B) in subsection (c), by striking ``November 6, 2010'' and 
     inserting ``May 1, 2011''.
       (4) Section 5 of the Unemployment Compensation Extension 
     Act of 2008 (Public Law 110-449; 26 U.S.C. 3304 note) is 
     amended by striking ``November 6, 2010'' and inserting 
     ``April 30, 2011''.
       (b) Funding.--Section 4004(e)(1) of the Supplemental 
     Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C. 3304 
     note) is amended--
       (1) in subparagraph (D), by striking ``and'' at the end; 
     and
       (2) by inserting after subparagraph (E) the following:
       ``(F) the amendments made by section 501(a)(1) of the 
     American Jobs and Closing Tax Loopholes Act of 2010; and''.
       (c) Conditions for Receiving Emergency Unemployment 
     Compensation.--Section 4001(d)(2) of the Supplemental 
     Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C. 3304 
     note) is amended, in the matter preceding subparagraph (A), 
     by inserting before ``shall apply'' the following: 
     ``(including terms and conditions relating to availability 
     for work, active search for work, and refusal to accept 
     work)''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of the 
     Continuing Extension Act of 2010 (Public Law 111-157).

     SEC. 502. COORDINATION OF EMERGENCY UNEMPLOYMENT COMPENSATION 
                   WITH REGULAR COMPENSATION.

       (a) Certain Individuals Not Ineligible by Reason of New 
     Entitlement to Regular Benefits.--Section 4002 of the 
     Supplemental Appropriations Act, 2008 (Public Law 110-252; 26 
     U.S.C. 3304 note) is amended by adding at the end the 
     following:
       ``(g) Coordination of Emergency Unemployment Compensation 
     With Regular Compensation.--
       ``(1) If--
       ``(A) an individual has been determined to be entitled to 
     emergency unemployment compensation with respect to a benefit 
     year,
       ``(B) that benefit year has expired,
       ``(C) that individual has remaining entitlement to 
     emergency unemployment compensation with respect to that 
     benefit year, and
       ``(D) that individual would qualify for a new benefit year 
     in which the weekly benefit amount of regular compensation is 
     at least either $100 or 25 percent less than the individual's 
     weekly benefit amount in the benefit year referred to in 
     subparagraph (A),
     then the State shall determine eligibility for compensation 
     as provided in paragraph (2).
       ``(2) For individuals described in paragraph (1), the State 
     shall determine whether the individual is to be paid 
     emergency unemployment compensation or regular compensation 
     for a week of unemployment using one of the following 
     methods:
       ``(A) The State shall, if permitted by State law, establish 
     a new benefit year, but defer the payment of regular 
     compensation with respect to that new benefit year until 
     exhaustion of all emergency unemployment compensation payable 
     with respect to the benefit year referred to in paragraph 
     (1)(A);
       ``(B) The State shall, if permitted by State law, defer the 
     establishment of a new benefit year (which uses all the wages 
     and employment which would have been used to establish a 
     benefit year but for the application of this paragraph), 
     until exhaustion of all emergency unemployment compensation 
     payable with respect to the benefit year referred to in 
     paragraph(1)(A);
       ``(C) The State shall pay, if permitted by State law--
       ``(i) regular compensation equal to the weekly benefit 
     amount established under the new benefit year, and
       ``(ii) emergency unemployment compensation equal to the 
     difference between that weekly benefit amount and the weekly 
     benefit amount for the expired benefit year; or
       ``(D) The State shall determine rights to emergency 
     unemployment compensation without regard to any rights to 
     regular compensation if the individual elects to not file a 
     claim for regular compensation under the new benefit year.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to individuals whose benefit years, as described 
     in section 4002(g)(1)(B) the Supplemental Appropriations Act, 
     2008 (Public Law 110-252; 26 U.S.C. 3304 note), as amended by 
     this section, expire after the date of enactment of this Act.

       Subtitle B--Physician Payment Update and Other Provisions

                    PART I--PHYSICIAN PAYMENT UPDATE

     SEC. 511. PHYSICIAN PAYMENT UPDATE.

       Section 1848 of the Social Security Act (42 U.S.C. 1395w-4) 
     is amended--
       (1) in subsection (d)--
       (A) in paragraph (10), in the heading, by striking 
     ``portion'' and inserting ``the first 5 months''; and
       (B) by adding at the end the following new paragraph:
       ``(11) Update for the last 7 months of 2010 and for 2011 
     and 2012.--

[[Page 11109]]

       ``(A) In general.--Subject to paragraphs (7)(B), (8)(B), 
     (9)(B), and (10)(B), in lieu of the update to the single 
     conversion factor established in paragraph (1)(C) that would 
     otherwise apply--
       ``(i) for 2010 for the period beginning on June 1, 2010, 
     and ending on December 31, 2010, the update to the single 
     conversion factor shall be 2.0 percent; and
       ``(ii) for each of 2011 and 2012, the update to the single 
     conversion factor shall be 2.0 percent.
       ``(B) No effect on computation of conversion factor for 
     2013 and subsequent years.--The conversion factor under this 
     subsection shall be computed under paragraph (1)(A) for 2013 
     and subsequent years as if subparagraph (A) had never 
     applied.''; and
       (2) in subsection (f), by adding at the end the following 
     new paragraph:
       ``(5) Temporary adjustment.--In determining the growth rate 
     under paragraph (2) for 2014, the Secretary's estimate of the 
     percentage change otherwise determined under paragraph (2)(D) 
     shall be reduced by 4.0 percentage points.''.

               PART II--EXTENSION OF EXPIRING PROVISIONS

     SEC. 521. EXTENSION OF MMA SECTION 508 RECLASSIFICATIONS.

       Section 106(a) of division B of the Tax Relief and Health 
     Care Act of 2006 (42 U.S.C. 1395 note), as amended by section 
     117 of the Medicare, Medicaid, and SCHIP Extension Act of 
     2007 (Public Law 110-173), section 124 of the Medicare 
     Improvements for Patients and Providers Act of 2008 (Public 
     Law 110-275), and sections 3137(a) and 10317 of the Patient 
     Protection and Affordable Care Act (Public Law 111-148), is 
     amended by striking ``September 30, 2010'' and inserting 
     ``September 30, 2011''.

     SEC. 522. EXTENSION OF MEDICARE WORK GEOGRAPHIC ADJUSTMENT 
                   FLOOR.

       Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 
     1395w-4(e)(1)(E)), as amended by section 3102 of the Patient 
     Protection and Affordable Care Act (Public Law 111-148), is 
     amended by striking ``before January 1, 2011'' and inserting 
     ``before January 1, 2012''.

     SEC. 523. EXTENSION OF EXCEPTIONS PROCESS FOR MEDICARE 
                   THERAPY CAPS.

       Section 1833(g)(5) of the Social Security Act (42 U.S.C. 
     1395l(g)(5)) is amended by striking ``and ending on'' and all 
     that follows through ``2010'' and inserting ``and ending on 
     December 31, 2011''.

     SEC. 524. EXTENSION OF PAYMENT FOR TECHNICAL COMPONENT OF 
                   CERTAIN PHYSICIAN PATHOLOGY SERVICES.

       Section 542(c) of the Medicare, Medicaid, and SCHIP 
     Benefits Improvement and Protection Act of 2000 (as enacted 
     into law by section 1(a)(6) of Public Law 106-554), as 
     amended by section 732 of the Medicare Prescription Drug, 
     Improvement, and Modernization Act of 2003 (42 U.S.C. 1395w-4 
     note), section 104 of division B of the Tax Relief and Health 
     Care Act of 2006 (42 U.S.C. 1395w-4 note), section 104 of the 
     Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
     Law 110-173), section 136 of the Medicare Improvements for 
     Patients and Providers Act of 2008 (Public Law 110-275), and 
     section 3104 of the Patient Protection and Affordable Care 
     Act (Public Law 111-148) is amended by striking ``and 2010'' 
     and inserting ``2010, and 2011''.

     SEC. 525. EXTENSION OF AMBULANCE ADD-ONS.

       (a) Ground Ambulance.--Section 1834(l)(13)(A) of the Social 
     Security Act (42 U.S.C. 1395m(l)(13)(A)), as amended by 
     sections 3105(a) and 10311(a) of the Patient Protection and 
     Affordable Care Act (Public Law 111-148), is amended--
       (1) in the matter preceding clause (i), by striking 
     ``2011'' and inserting ``2012''; and
       (2) in each of clauses (i) and (ii), by striking ``January 
     1, 2011'' and inserting ``January 1, 2012'' each place it 
     appears.
       (b) Air Ambulance.--Section 146(b)(1) of the Medicare 
     Improvements for Patients and Providers Act of 2008 (Public 
     Law 110-275), as amended by sections 3105(b) and 10311(b) of 
     the Patient Protection and Affordable Care Act (Public Law 
     111-148), is amended by striking ``December 31, 2010'' and 
     inserting ``December 31, 2011''.
       (c) Super Rural Ambulance.--Section 1834(l)(12)(A) of the 
     Social Security Act (42 U.S.C. 1395m(l)(12)(A)), as amended 
     by sections 3105(c) and 10311(c) of the Patient Protection 
     and Affordable Care Act (Public Law 111-148), is amended by 
     striking ``2011'' and inserting ``2012''.

     SEC. 526. EXTENSION OF PHYSICIAN FEE SCHEDULE MENTAL HEALTH 
                   ADD-ON PAYMENT.

       Section 138(a)(1) of the Medicare Improvements for Patients 
     and Providers Act of 2008 (Public Law 110-275), as amended by 
     section 3107 of the Patient Protection and Affordable Care 
     Act (Public Law 111-148), is amended by striking ``December 
     31, 2010'' and inserting ``December 31, 2011''.

     SEC. 527. EXTENSION OF OUTPATIENT HOLD HARMLESS PROVISION.

       Section 1833(t)(7)(D)(i) of the Social Security Act (42 
     U.S.C. 1395l(t)(7)(D)(i)), as amended by section 3121(a) of 
     the Patient Protection and Affordable Care Act (Public Law 
     111-148), is amended--
       (1) in subclause (II)--
       (A) in the first sentence, by striking ``2011''and 
     inserting ``2012''; and
       (B) in the second sentence, by striking ``or 2010'' and 
     inserting ``2010, or 2011''; and
       (2) in subclause (III), by striking ``January 1, 2011'' and 
     inserting ``January 1, 2012''.

     SEC. 528. EXTENSION OF MEDICARE REASONABLE COSTS PAYMENTS FOR 
                   CERTAIN CLINICAL DIAGNOSTIC LABORATORY TESTS 
                   FURNISHED TO HOSPITAL PATIENTS IN CERTAIN RURAL 
                   AREAS.

       Section 416(b) of the Medicare Prescription Drug, 
     Improvement, and Modernization Act of 2003 (42 U.S.C. 1395l-
     4), as amended by section 105 of division B of the Tax Relief 
     and Health Care Act of 2006 (42 U.S.C. 1395l note), section 
     107 of the Medicare, Medicaid, and SCHIP Extension Act of 
     2007 (42 U.S.C. 1395l note), and section 3122 of the Patient 
     Protection and Affordable Care Act (Public Law 111-148), is 
     amended by striking ``the 1-year period beginning on July 1, 
     2010'' and inserting ``the 2-year period beginning on July 1, 
     2010''.

     SEC. 529. EXTENSION OF THE QUALIFYING INDIVIDUAL (QI) 
                   PROGRAM.

       (a) Extension.--Section 1902(a)(10)(E)(iv) of the Social 
     Security Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is amended by 
     striking ``December 2010'' and inserting ``December 2011''.
       (b) Extending Total Amount Available for Allocation.--
     Section 1933(g) of such Act (42 U.S.C. 1396u-3(g)) is 
     amended--
       (1) in paragraph (2)--
       (A) by striking ``and'' at the end of subparagraph (M);
       (B) in subparagraph (N), by striking the period at the end 
     and inserting a semicolon; and
       (C) by adding at the end the following new subparagraphs:
       ``(O) for the period that begins on January 1, 2011, and 
     ends on September 30, 2011, the total allocation amount is 
     $720,000,000; and
       ``(P) for the period that begins on October 1, 2011, and 
     ends on December 31, 2011, the total allocation amount is 
     $280,000,000.''; and
       (2) in paragraph (3), in the matter preceding subparagraph 
     (A), by striking ``or (N)'' and inserting ``(N), or (P)''.

     SEC. 530. EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE (TMA).

       Sections 1902(e)(1)(B) and 1925(f) of the Social Security 
     Act (42 U.S.C. 1396a(e)(1)(B), 1396r-6(f)) are each amended 
     by striking ``December 31, 2010'' and inserting ``December 
     31, 2011''.

     SEC. 531. EXTENSION OF DRA COURT IMPROVEMENT GRANTS.

       Section 438 of the Social Security Act (42 U.S.C. 629h) is 
     amended--
       (1) in subsection (c)(2)(A), by striking ``2010'' and 
     inserting ``2011''; and
       (2) in subsection (e), by striking ``2010'' and inserting 
     ``2011''.

PART III--CHANGES TO THE PATIENT PROTECTION AND AFFORDABLE CARE ACT AND 
                         ADDITIONAL PROVISIONS

 Subpart A--Changes to the Patient Protection and Affordable Care Act 
                       and Additional Provisions

     SEC. 541. EXPANSION OF AFFORDABILITY EXCEPTION TO INDIVIDUAL 
                   MANDATE.

       Section 5000A(e)(1)(A) of the Internal Revenue Code of 
     1986, as added by section 1501(b) of the Patient Protection 
     and Affordable Care Act (Public Law 111-148), is amended by 
     striking ``8 percent'' and inserting ``5 percent''.

     SEC. 542. REPLACEMENT OF MEDICAID PRIMARY CARE PAYMENT CLIFF.

       (a) Payments to Primary Care Providers.--
       (1) Grants to states to increase payments.--From the 
     amounts appropriated under paragraph (2), the Secretary of 
     Health and Human Services shall award grants to States with 
     an approved State plan amendment under the Medicaid program 
     under title XIX of the Social Security Act to permanently 
     increase payment rates to primary care providers under the 
     State Medicaid program above the rates applicable under the 
     State Medicaid program on the date of enactment of this Act. 
     Funds paid to a State from such a grant shall only be used 
     for expenditures attributable to the additional amounts paid 
     to such providers as a result of the increase in such rates.
       (2) Appropriation.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated to the 
     Secretary of Health and Human Services on January 1, 2013, 
     $8,000,000,000, to remain available until expended.
       (b) Repeal of Medicaid Primary Care Payment Cliff.--Section 
     1202 of the Health Care and Education Reconciliation Act of 
     2010 (Public Law 111-152) (and the amendments made by such 
     section) is repealed.

     SEC. 543. ESTABLISH A CMS-IRS DATA MATCH TO IDENTIFY 
                   FRAUDULENT PROVIDERS.

       (a) Authority to Disclose Return Information Concerning 
     Outstanding Tax Debts for Purposes of Enhancing Medicare 
     Program Integrity.--
       (1) In general.--Section 6103(l) of the Internal Revenue 
     Code of 1986 is amended by adding at the end the following 
     new paragraph:
       ``(22) Disclosure of return information to department of 
     health and human services for purposes of enhancing medicare 
     program integrity.--
       ``(A) In general.--The Secretary shall, upon written 
     request from the Secretary of Health and Human Services, 
     disclose to officers and employees of the Department of

[[Page 11110]]

     Health and Human Services return information with respect to 
     a taxpayer who has applied to enroll, or reenroll, as a 
     provider of services or supplier under the Medicare program 
     under title XVIII of the Social Security Act. Such return 
     information shall be limited to--
       ``(i) the taxpayer identity information with respect to 
     such taxpayer;
       ``(ii) the amount of the delinquent tax debt owed by that 
     taxpayer; and
       ``(iii) the taxable year to which the delinquent tax debt 
     pertains.
       ``(B) Restriction on disclosure.--Return information 
     disclosed under subparagraph (A) may be used by officers and 
     employees of the Department of Health and Human Services for 
     the purposes of, and to the extent necessary in, establishing 
     the taxpayer's eligibility for enrollment or reenrollment in 
     the Medicare program, or in any administrative or judicial 
     proceeding relating to, or arising from, a denial of such 
     enrollment or reenrollment, or in determining the level of 
     enhanced oversight to be applied with respect to such 
     taxpayer pursuant to section 1866(j)(3) of the Social 
     Security Act.
       ``(C) Delinquent tax debt.--For purposes of this paragraph, 
     the term `delinquent tax debt' means an outstanding debt 
     under this title for which a notice of lien has been filed 
     pursuant to section 6323, but the term does not include a 
     debt that is being paid in a timely manner pursuant to an 
     agreement under section 6159 or 7122, or a debt with respect 
     to which a collection due process hearing under section 6330 
     is requested, pending, or completed and no payment is 
     required.''.
       (2) Conforming amendments.--Section 6103(p)(4) of such 
     Code, as amended by sections 1414 and 3308 of Public Law 111-
     148, in the matter preceding subparagraph (A) and in 
     subparagraph (F)(ii), is amended by striking ``or (17)'' and 
     inserting ``(17), or (22)'' each place it appears.
       (b) Secretary's Authority to Use Information From the 
     Department of Treasury in Medicare Enrollments and 
     Reenrollments.--Section 1866(j)(2) of the Social Security Act 
     (42 U.S.C. 1395cc(j)), as inserted by section 6401(a) of 
     Public Law 111-148, is further amended--
       (1) by redesignating subparagraph (E) as subparagraph (F); 
     and
       (2) by inserting after subparagraph (D) the following new 
     subparagraph:
       ``(E) Use of information from the department of treasury 
     concerning tax debts.--In reviewing the application of a 
     provider of services or supplier to enroll or reenroll under 
     the program under this title, the Secretary shall take into 
     account the information supplied by the Secretary of the 
     Treasury pursuant to section 6103(l)(22) of the Internal 
     Revenue Code of 1986, in determining whether to deny such 
     application or to apply enhanced oversight to such provider 
     of services or supplier pursuant to paragraph (3) if the 
     Secretary determines such provider of services or supplier 
     owes such a debt.''.
       (c) Authority to Adjust Payments of Providers of Services 
     and Suppliers With the Same Tax Identification Number for 
     Medicare Obligations.--Section 1866(j)(6) of the Social 
     Security Act (42 U.S.C. 1395cc(j)(6)), as inserted by section 
     6401(a) of Public Law 111-148, is amended--
       (1) in the paragraph heading, by striking ``past-due'' and 
     inserting ``medicare'';
       (2) in subparagraph (A), by striking ``past-due obligations 
     described in subparagraph (B)(ii) of an'' and inserting 
     ``amount described in subparagraph (B)(ii) due from such''; 
     and
       (3) in subparagraph (B)(ii), by striking ``a past-due 
     obligation'' and inserting ``an amount that is more than the 
     amount required to be paid''.

     SEC. 544. FUNDING FOR CLAIMS REPROCESSING.

       For purposes of carrying out the provisions of, and 
     amendments made by, this Act that relate to title XVIII of 
     the Social Security Act, and other provisions of such title 
     that involve reprocessing of claims, there are appropriated 
     to the Secretary of Health and Human Services for the Centers 
     for Medicare & Medicaid Services Program Management Account, 
     from amounts in the general fund of the Treasury not 
     otherwise appropriated, $175,000,000. Amounts appropriated 
     under the preceding sentence shall remain available until 
     expended.

                  Subpart B--Medical Liability Reform

     SEC. 551. SHORT TITLE.

       This subpart may be cited as the ``Medical Care Access 
     Protection Act of 2010'' or the ``MCAP Act''.

     SEC. 552. FINDINGS AND PURPOSE.

       (a) Findings.--
       (1) Effect on health care access and costs.--Congress finds 
     that our current civil justice system is adversely affecting 
     patient access to health care services, better patient care, 
     and cost-efficient health care, in that the health care 
     liability system is a costly and ineffective mechanism for 
     resolving claims of health care liability and compensating 
     injured patients, and is a deterrent to the sharing of 
     information among health care professionals which impedes 
     efforts to improve patient safety and quality of care.
       (2) Effect on interstate commerce.--Congress finds that the 
     health care and insurance industries are industries affecting 
     interstate commerce and the health care liability litigation 
     systems existing throughout the United States are activities 
     that affect interstate commerce by contributing to the high 
     costs of health care and premiums for health care liability 
     insurance purchased by health care system providers.
       (3) Effect on federal spending.--Congress finds that the 
     health care liability litigation systems existing throughout 
     the United States have a significant effect on the amount, 
     distribution, and use of Federal funds because of--
       (A) the large number of individuals who receive health care 
     benefits under programs operated or financed by the Federal 
     Government;
       (B) the large number of individuals who benefit because of 
     the exclusion from Federal taxes of the amounts spent to 
     provide them with health insurance benefits; and
       (C) the large number of health care providers who provide 
     items or services for which the Federal Government makes 
     payments.
       (b) Purpose.--It is the purpose of this subpart to 
     implement reasonable, comprehensive, and effective health 
     care liability reforms designed to--
       (1) improve the availability of health care services in 
     cases in which health care liability actions have been shown 
     to be a factor in the decreased availability of services;
       (2) reduce the incidence of ``defensive medicine'' and 
     lower the cost of health care liability insurance, all of 
     which contribute to the escalation of health care costs;
       (3) ensure that persons with meritorious health care injury 
     claims receive fair and adequate compensation, including 
     reasonable noneconomic damages;
       (4) improve the fairness and cost-effectiveness of our 
     current health care liability system to resolve disputes 
     over, and provide compensation for, health care liability by 
     reducing uncertainty in the amount of compensation provided 
     to injured individuals; and
       (5) provide an increased sharing of information in the 
     health care system which will reduce unintended injury and 
     improve patient care.

     SEC. 553. DEFINITIONS.

       In this subpart:
       (1) Alternative dispute resolution system; adr.--The term 
     ``alternative dispute resolution system'' or ``ADR'' means a 
     system that provides for the resolution of health care 
     lawsuits in a manner other than through a civil action 
     brought in a State or Federal court.
       (2) Claimant.--The term ``claimant'' means any person who 
     brings a health care lawsuit, including a person who asserts 
     or claims a right to legal or equitable contribution, 
     indemnity or subrogation, arising out of a health care 
     liability claim or action, and any person on whose behalf 
     such a claim is asserted or such an action is brought, 
     whether deceased, incompetent, or a minor.
       (3) Collateral source benefits.--The term ``collateral 
     source benefits'' means any amount paid or reasonably likely 
     to be paid in the future to or on behalf of the claimant, or 
     any service, product or other benefit provided or reasonably 
     likely to be provided in the future to or on behalf of the 
     claimant, as a result of the injury or wrongful death, 
     pursuant to--
       (A) any State or Federal health, sickness, income-
     disability, accident, or workers' compensation law;
       (B) any health, sickness, income-disability, or accident 
     insurance that provides health benefits or income-disability 
     coverage;
       (C) any contract or agreement of any group, organization, 
     partnership, or corporation to provide, pay for, or reimburse 
     the cost of medical, hospital, dental, or income disability 
     benefits; and
       (D) any other publicly or privately funded program.
       (4) Compensatory damages.--The term ``compensatory 
     damages'' means objectively verifiable monetary losses 
     incurred as a result of the provision of, use of, or payment 
     for (or failure to provide, use, or pay for) health care 
     services or medical products, such as past and future medical 
     expenses, loss of past and future earnings, cost of obtaining 
     domestic services, loss of employment, and loss of business 
     or employment opportunities, damages for physical and 
     emotional pain, suffering, inconvenience, physical 
     impairment, mental anguish, disfigurement, loss of enjoyment 
     of life, loss of society and companionship, loss of 
     consortium (other than loss of domestic service), hedonic 
     damages, injury to reputation, and all other nonpecuniary 
     losses of any kind or nature. Such term includes economic 
     damages and noneconomic damages, as such terms are defined in 
     this section.
       (5) Contingent fee.--The term ``contingent fee'' includes 
     all compensation to any person or persons which is payable 
     only if a recovery is effected on behalf of one or more 
     claimants.
       (6) Economic damages.--The term ``economic damages'' means 
     objectively verifiable monetary losses incurred as a result 
     of the provision of, use of, or payment for (or failure to 
     provide, use, or pay for) health care services or medical 
     products, such as past and future medical expenses,

[[Page 11111]]

     loss of past and future earnings, cost of obtaining domestic 
     services, loss of employment, and loss of business or 
     employment opportunities.
       (7) Health care goods or services.--The term ``health care 
     goods or services'' means any goods or services provided by a 
     health care institution, provider, or by any individual 
     working under the supervision of a health care provider, that 
     relates to the diagnosis, prevention, care, or treatment of 
     any human disease or impairment, or the assessment of the 
     health of human beings.
       (8) Health care institution.--The term ``health care 
     institution'' means any entity licensed under Federal or 
     State law to provide health care services (including but not 
     limited to ambulatory surgical centers, assisted living 
     facilities, emergency medical services providers, hospices, 
     hospitals and hospital systems, nursing homes, or other 
     entities licensed to provide such services).
       (9) Health care lawsuit.--The term ``health care lawsuit'' 
     means any health care liability claim concerning the 
     provision of health care goods or services affecting 
     interstate commerce, or any health care liability action 
     concerning the provision of (or the failure to provide) 
     health care goods or services affecting interstate commerce, 
     brought in a State or Federal court or pursuant to an 
     alternative dispute resolution system, against a health care 
     provider or a health care institution regardless of the 
     theory of liability on which the claim is based, or the 
     number of claimants, plaintiffs, defendants, or other 
     parties, or the number of claims or causes of action, in 
     which the claimant alleges a health care liability claim.
       (10) Health care liability action.--The term ``health care 
     liability action'' means a civil action brought in a State or 
     Federal Court or pursuant to an alternative dispute 
     resolution system, against a health care provider or a health 
     care institution regardless of the theory of liability on 
     which the claim is based, or the number of plaintiffs, 
     defendants, or other parties, or the number of causes of 
     action, in which the claimant alleges a health care liability 
     claim.
       (11) Health care liability claim.--The term ``health care 
     liability claim'' means a demand by any person, whether or 
     not pursuant to ADR, against a health care provider or health 
     care institution, including third-party claims, cross-claims, 
     counter-claims, or contribution claims, which are based upon 
     the provision of, use of, or payment for (or the failure to 
     provide, use, or pay for) health care services, regardless of 
     the theory of liability on which the claim is based, or the 
     number of plaintiffs, defendants, or other parties, or the 
     number of causes of action.
       (12) Health care provider.--
       (A) In general.--The term ``health care provider'' means 
     any person (including but not limited to a physician (as 
     defined by section 1861(r) of the Social Security Act (42 
     U.S.C. 1395x(r)), registered nurse, dentist, podiatrist, 
     pharmacist, chiropractor, or optometrist) required by State 
     or Federal law to be licensed, registered, or certified to 
     provide health care services, and being either so licensed, 
     registered, or certified, or exempted from such requirement 
     by other statute or regulation.
       (B) Treatment of certain professional associations.--For 
     purposes of this subpart, a professional association that is 
     organized under State law by an individual physician or group 
     of physicians, a partnership or limited liability partnership 
     formed by a group of physicians, a nonprofit health 
     corporation certified under State law, or a company formed by 
     a group of physicians under State law shall be treated as a 
     health care provider under subparagraph (A).
       (13) Malicious intent to injure.--The term ``malicious 
     intent to injure'' means intentionally causing or attempting 
     to cause physical injury other than providing health care 
     goods or services.
       (14) Noneconomic damages.--The term ``noneconomic damages'' 
     means damages for physical and emotional pain, suffering, 
     inconvenience, physical impairment, mental anguish, 
     disfigurement, loss of enjoyment of life, loss of society and 
     companionship, loss of consortium (other than loss of 
     domestic service), hedonic damages, injury to reputation, and 
     all other nonpecuniary losses of any kind or nature.
       (15) Punitive damages.--The term ``punitive damages'' means 
     damages awarded, for the purpose of punishment or deterrence, 
     and not solely for compensatory purposes, against a health 
     care provider or health care institution. Punitive damages 
     are neither economic nor noneconomic damages.
       (16) Recovery.--The term ``recovery'' means the net sum 
     recovered after deducting any disbursements or costs incurred 
     in connection with prosecution or settlement of the claim, 
     including all costs paid or advanced by any person. Costs of 
     health care incurred by the plaintiff and the attorneys' 
     office overhead costs or charges for legal services are not 
     deductible disbursements or costs for such purpose.
       (17) State.--The term ``State'' means each of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Virgin Islands, Guam, American Samoa, the Northern 
     Mariana Islands, the Trust Territory of the Pacific Islands, 
     and any other territory or possession of the United States, 
     or any political subdivision thereof.

     SEC. 554. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.

       (a) In General.--Except as otherwise provided for in this 
     section, the time for the commencement of a health care 
     lawsuit shall be 3 years after the date of manifestation of 
     injury or 1 year after the claimant discovers, or through the 
     use of reasonable diligence should have discovered, the 
     injury, whichever occurs first.
       (b) General Exception.--The time for the commencement of a 
     health care lawsuit shall not exceed 3 years after the date 
     of manifestation of injury unless the tolling of time was 
     delayed as a result of--
       (1) fraud;
       (2) intentional concealment; or
       (3) the presence of a foreign body, which has no 
     therapeutic or diagnostic purpose or effect, in the person of 
     the injured person.
       (c) Minors.--An action by a minor shall be commenced within 
     3 years from the date of the alleged manifestation of injury 
     except that if such minor is under the full age of 6 years, 
     such action shall be commenced within 3 years of the 
     manifestation of injury, or prior to the eighth birthday of 
     the minor, whichever provides a longer period. Such time 
     limitation shall be tolled for minors for any period during 
     which a parent or guardian and a health care provider or 
     health care institution have committed fraud or collusion in 
     the failure to bring an action on behalf of the injured 
     minor.
       (d) Rule 11 Sanctions.--Whenever a Federal or State court 
     determines (whether by motion of the parties or whether on 
     the motion of the court) that there has been a violation of 
     Rule 11 of the Federal Rules of Civil Procedure (or a similar 
     violation of applicable State court rules) in a health care 
     liability action to which this subpart applies, the court 
     shall impose upon the attorneys, law firms, or pro se 
     litigants that have violated Rule 11 or are responsible for 
     the violation, an appropriate sanction, which shall include 
     an order to pay the other party or parties for the reasonable 
     expenses incurred as a direct result of the filing of the 
     pleading, motion, or other paper that is the subject of the 
     violation, including a reasonable attorneys' fee. Such 
     sanction shall be sufficient to deter repetition of such 
     conduct or comparable conduct by others similarly situated, 
     and to compensate the party or parties injured by such 
     conduct.

     SEC. 555. COMPENSATING PATIENT INJURY.

       (a) Unlimited Amount of Damages for Actual Economic Losses 
     in Health Care Lawsuits.--In any health care lawsuit, nothing 
     in this subpart shall limit the recovery by a claimant of the 
     full amount of the available economic damages, 
     notwithstanding the limitation contained in subsection (b).
       (b) Additional Noneconomic Damages.--
       (1) Health care providers.--In any health care lawsuit 
     where final judgment is rendered against a health care 
     provider, the amount of noneconomic damages recovered from 
     the provider, if otherwise available under applicable Federal 
     or State law, may be as much as $250,000, regardless of the 
     number of parties other than a health care institution 
     against whom the action is brought or the number of separate 
     claims or actions brought with respect to the same 
     occurrence.
       (2) Health care institutions.--
       (A) Single institution.--In any health care lawsuit where 
     final judgment is rendered against a single health care 
     institution, the amount of noneconomic damages recovered from 
     the institution, if otherwise available under applicable 
     Federal or State law, may be as much as $250,000, regardless 
     of the number of parties against whom the action is brought 
     or the number of separate claims or actions brought with 
     respect to the same occurrence.
       (B) Multiple institutions.--In any health care lawsuit 
     where final judgment is rendered against more than one health 
     care institution, the amount of noneconomic damages recovered 
     from each institution, if otherwise available under 
     applicable Federal or State law, may be as much as $250,000, 
     regardless of the number of parties against whom the action 
     is brought or the number of separate claims or actions 
     brought with respect to the same occurrence, except that the 
     total amount recovered from all such institutions in such 
     lawsuit shall not exceed $500,000.
       (c) No Discount of Award for Noneconomic Damages.--In any 
     health care lawsuit--
       (1) an award for future noneconomic damages shall not be 
     discounted to present value;
       (2) the jury shall not be informed about the maximum award 
     for noneconomic damages under subsection (b);
       (3) an award for noneconomic damages in excess of the 
     limitations provided for in subsection (b) shall be reduced 
     either before the entry of judgment, or by amendment of the 
     judgment after entry of judgment, and such reduction shall be 
     made before accounting for any other reduction in damages 
     required by law; and
       (4) if separate awards are rendered for past and future 
     noneconomic damages and the combined awards exceed the 
     limitations described in subsection (b), the future 
     noneconomic damages shall be reduced first.
       (d) Fair Share Rule.--In any health care lawsuit, each 
     party shall be liable for that

[[Page 11112]]

     party's several share of any damages only and not for the 
     share of any other person. Each party shall be liable only 
     for the amount of damages allocated to such party in direct 
     proportion to such party's percentage of responsibility. A 
     separate judgment shall be rendered against each such party 
     for the amount allocated to such party. For purposes of this 
     section, the trier of fact shall determine the proportion of 
     responsibility of each party for the claimant's harm.

     SEC. 556. MAXIMIZING PATIENT RECOVERY.

       (a) Court Supervision of Share of Damages Actually Paid to 
     Claimants.--
       (1) In general.--In any health care lawsuit, the court 
     shall supervise the arrangements for payment of damages to 
     protect against conflicts of interest that may have the 
     effect of reducing the amount of damages awarded that are 
     actually paid to claimants.
       (2) Contingency fees.--
       (A) In general.--In any health care lawsuit in which the 
     attorney for a party claims a financial stake in the outcome 
     by virtue of a contingent fee, the court shall have the power 
     to restrict the payment of a claimant's damage recovery to 
     such attorney, and to redirect such damages to the claimant 
     based upon the interests of justice and principles of equity.
       (B) Limitation.--The total of all contingent fees for 
     representing all claimants in a health care lawsuit shall not 
     exceed the following limits:
       (i) 40 percent of the first $50,000 recovered by the 
     claimant(s).
       (ii) 33\1/3\ percent of the next $50,000 recovered by the 
     claimant(s).
       (iii) 25 percent of the next $500,000 recovered by the 
     claimant(s).
       (iv) 15 percent of any amount by which the recovery by the 
     claimant(s) is in excess of $600,000.
       (b) Applicability.--
       (1) In general.--The limitations in subsection (a) shall 
     apply whether the recovery is by judgment, settlement, 
     mediation, arbitration, or any other form of alternative 
     dispute resolution.
       (2) Minors.--In a health care lawsuit involving a minor or 
     incompetent person, a court retains the authority to 
     authorize or approve a fee that is less than the maximum 
     permitted under this section.
       (c) Expert Witnesses.--
       (1) Requirement.--No individual shall be qualified to 
     testify as an expert witness concerning issues of negligence 
     in any health care lawsuit against a defendant unless such 
     individual--
       (A) except as required under paragraph (2), is a health 
     care professional who--
       (i) is appropriately credentialed or licensed in 1 or more 
     States to deliver health care services; and
       (ii) typically treats the diagnosis or condition or 
     provides the type of treatment under review; and
       (B) can demonstrate by competent evidence that, as a result 
     of training, education, knowledge, and experience in the 
     evaluation, diagnosis, and treatment of the disease or injury 
     which is the subject matter of the lawsuit against the 
     defendant, the individual was substantially familiar with 
     applicable standards of care and practice as they relate to 
     the act or omission which is the subject of the lawsuit on 
     the date of the incident.
       (2) Physician review.--In a health care lawsuit, if the 
     claim of the plaintiff involved treatment that is recommended 
     or provided by a physician (allopathic or osteopathic), an 
     individual shall not be qualified to be an expert witness 
     under this subsection with respect to issues of negligence 
     concerning such treatment unless such individual is a 
     physician.
       (3) Specialties and subspecialties.--With respect to a 
     lawsuit described in paragraph (1), a court shall not permit 
     an expert in one medical specialty or subspecialty to testify 
     against a defendant in another medical specialty or 
     subspecialty unless, in addition to a showing of substantial 
     familiarity in accordance with paragraph (1)(B), there is a 
     showing that the standards of care and practice in the two 
     specialty or subspecialty fields are similar.
       (4) Limitation.--The limitations in this subsection shall 
     not apply to expert witnesses testifying as to the degree or 
     permanency of medical or physical impairment.

     SEC. 557. ADDITIONAL HEALTH BENEFITS.

       (a) In General.--The amount of any damages received by a 
     claimant in any health care lawsuit shall be reduced by the 
     court by the amount of any collateral source benefits to 
     which the claimant is entitled, less any insurance premiums 
     or other payments made by the claimant (or by the spouse, 
     parent, child, or legal guardian of the claimant) to obtain 
     or secure such benefits.
       (b) Preservation of Current Law.--Where a payor of 
     collateral source benefits has a right of recovery by 
     reimbursement or subrogation and such right is permitted 
     under Federal or State law, subsection (a) shall not apply.
       (c) Application of Provision.--This section shall apply to 
     any health care lawsuit that is settled or resolved by a fact 
     finder.

     SEC. 558. PUNITIVE DAMAGES.

       (a) Punitive Damages Permitted.--
       (1) In general.--Punitive damages may, if otherwise 
     available under applicable State or Federal law, be awarded 
     against any person in a health care lawsuit only if it is 
     proven by clear and convincing evidence that such person 
     acted with malicious intent to injure the claimant, or that 
     such person deliberately failed to avoid unnecessary injury 
     that such person knew the claimant was substantially certain 
     to suffer.
       (2) Filing of lawsuit.--No demand for punitive damages 
     shall be included in a health care lawsuit as initially 
     filed. A court may allow a claimant to file an amended 
     pleading for punitive damages only upon a motion by the 
     claimant and after a finding by the court, upon review of 
     supporting and opposing affidavits or after a hearing, after 
     weighing the evidence, that the claimant has established by a 
     substantial probability that the claimant will prevail on the 
     claim for punitive damages.
       (3) Separate proceeding.--At the request of any party in a 
     health care lawsuit, the trier of fact shall consider in a 
     separate proceeding--
       (A) whether punitive damages are to be awarded and the 
     amount of such award; and
       (B) the amount of punitive damages following a 
     determination of punitive liability.

     If a separate proceeding is requested, evidence relevant only 
     to the claim for punitive damages, as determined by 
     applicable State law, shall be inadmissible in any proceeding 
     to determine whether compensatory damages are to be awarded.
       (4) Limitation where no compensatory damages are awarded.--
     In any health care lawsuit where no judgment for compensatory 
     damages is rendered against a person, no punitive damages may 
     be awarded with respect to the claim in such lawsuit against 
     such person.
       (b) Determining Amount of Punitive Damages.--
       (1) Factors considered.--In determining the amount of 
     punitive damages under this section, the trier of fact shall 
     consider only the following:
       (A) the severity of the harm caused by the conduct of such 
     party;
       (B) the duration of the conduct or any concealment of it by 
     such party;
       (C) the profitability of the conduct to such party;
       (D) the number of products sold or medical procedures 
     rendered for compensation, as the case may be, by such party, 
     of the kind causing the harm complained of by the claimant;
       (E) any criminal penalties imposed on such party, as a 
     result of the conduct complained of by the claimant; and
       (F) the amount of any civil fines assessed against such 
     party as a result of the conduct complained of by the 
     claimant.
       (2) Maximum award.--The amount of punitive damages awarded 
     in a health care lawsuit may not exceed an amount equal to 
     two times the amount of economic damages awarded in the 
     lawsuit or $250,000, whichever is greater. The jury shall not 
     be informed of the limitation under the preceding sentence.
       (c) Liability of Health Care Providers.--
       (1) In general.--A health care provider who prescribes, or 
     who dispenses pursuant to a prescription, a drug, biological 
     product, or medical device approved by the Food and Drug 
     Administration, for an approved indication of the drug, 
     biological product, or medical device, shall not be named as 
     a party to a product liability lawsuit invoking such drug, 
     biological product, or medical device and shall not be liable 
     to a claimant in a class action lawsuit against the 
     manufacturer, distributor, or product seller of such drug, 
     biological product, or medical device.
       (2) Medical product.--The term ``medical product'' means a 
     drug or device intended for humans. The terms ``drug'' and 
     ``device'' have the meanings given such terms in sections 
     201(g)(1) and 201(h) of the Federal Food, Drug and Cosmetic 
     Act (21 U.S.C. 321), respectively, including any component or 
     raw material used therein, but excluding health care 
     services.

     SEC. 559. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO 
                   CLAIMANTS IN HEALTH CARE LAWSUITS.

       (a) In General.--In any health care lawsuit, if an award of 
     future damages, without reduction to present value, equaling 
     or exceeding $50,000 is made against a party with sufficient 
     insurance or other assets to fund a periodic payment of such 
     a judgment, the court shall, at the request of any party, 
     enter a judgment ordering that the future damages be paid by 
     periodic payments in accordance with the Uniform Periodic 
     Payment of Judgments Act promulgated by the National 
     Conference of Commissioners on Uniform State Laws.
       (b) Applicability.--This section applies to all actions 
     which have not been first set for trial or retrial before the 
     effective date of this subpart.

     SEC. 560. EFFECT ON OTHER LAWS.

       (a) General Vaccine Injury.--
       (1) In general.--To the extent that title XXI of the Public 
     Health Service Act establishes a Federal rule of law 
     applicable to a civil action brought for a vaccine-related 
     injury or death--
       (A) this subpart shall not affect the application of the 
     rule of law to such an action; and
       (B) any rule of law prescribed by this subpart in conflict 
     with a rule of law of such title XXI shall not apply to such 
     action.

[[Page 11113]]

       (2) Exception.--If there is an aspect of a civil action 
     brought for a vaccine-related injury or death to which a 
     Federal rule of law under title XXI of the Public Health 
     Service Act does not apply, then this subpart or otherwise 
     applicable law (as determined under this subpart) will apply 
     to such aspect of such action.
       (b) Smallpox Vaccine Injury.--
       (1) In general.--To the extent that part C of title II of 
     the Public Health Service Act establishes a Federal rule of 
     law applicable to a civil action brought for a smallpox 
     vaccine-related injury or death--
       (A) this subpart shall not affect the application of the 
     rule of law to such an action; and
       (B) any rule of law prescribed by this subpart in conflict 
     with a rule of law of such part C shall not apply to such 
     action.
       (2) Exception.--If there is an aspect of a civil action 
     brought for a smallpox vaccine-related injury or death to 
     which a Federal rule of law under part C of title II of the 
     Public Health Service Act does not apply, then this subpart 
     or otherwise applicable law (as determined under this 
     subpart) will apply to such aspect of such action.
       (c) Other Federal Law.--Except as provided in this section, 
     nothing in this subpart shall be deemed to affect any defense 
     available, or any limitation on liability that applies to, a 
     defendant in a health care lawsuit or action under any other 
     provision of Federal law.

     SEC. 561. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.

       (a) Health Care Lawsuits.--The provisions governing health 
     care lawsuits set forth in this subpart shall preempt, 
     subject to subsections (b) and (c), State law to the extent 
     that State law prevents the application of any provisions of 
     law established by or under this subpart. The provisions 
     governing health care lawsuits set forth in this subpart 
     supersede chapter 171 of title 28, United States Code, to the 
     extent that such chapter--
       (1) provides for a greater amount of damages or contingent 
     fees, a longer period in which a health care lawsuit may be 
     commenced, or a reduced applicability or scope of periodic 
     payment of future damages, than provided in this subpart; or
       (2) prohibits the introduction of evidence regarding 
     collateral source benefits.
       (b) Preemption of Certain State Laws.--No provision of this 
     subpart shall be construed to preempt any State law (whether 
     effective before, on, or after the date of the enactment of 
     this subpart) that specifies a particular monetary amount of 
     compensatory or punitive damages (or the total amount of 
     damages) that may be awarded in a health care lawsuit, 
     regardless of whether such monetary amount is greater or 
     lesser than is provided for under this subpart, 
     notwithstanding section 555(a).
       (c) Protection of State's Rights and Other Laws.--
       (1) In general.--Any issue that is not governed by a 
     provision of law established by or under this subpart 
     (including the State standards of negligence) shall be 
     governed by otherwise applicable Federal or State law.
       (2) Rule of construction.--Nothing in this subpart shall be 
     construed to--
       (A) preempt or supersede any Federal or State law that 
     imposes greater procedural or substantive protections (such 
     as a shorter statute of limitations) for a health care 
     provider or health care institution from liability, loss, or 
     damages than those provided by this subpart;
       (B) preempt or supercede any State law that permits and 
     provides for the enforcement of any arbitration agreement 
     related to a health care liability claim whether enacted 
     prior to or after the date of enactment of this subpart;
       (C) create a cause of action that is not otherwise 
     available under Federal or State law; or
       (D) affect the scope of preemption of any other Federal 
     law.

     SEC. 562. APPLICABILITY; EFFECTIVE DATE.

       This subpart shall apply to any health care lawsuit brought 
     in a Federal or State court, or subject to an alternative 
     dispute resolution system, that is initiated on or after the 
     date of the enactment of this subpart, except that any health 
     care lawsuit arising from an injury occurring prior to the 
     date of enactment of this subpart shall be governed by the 
     applicable statute of limitations provisions in effect at the 
     time the injury occurred.

                       TITLE VI--OTHER PROVISIONS

     SEC. 601. EXTENSION OF NATIONAL FLOOD INSURANCE PROGRAM.

       (a) Extension.--Section 129 of the Continuing 
     Appropriations Resolution, 2010 (Public Law 111-68), as 
     amended by section 7(a) of Public Law 111-157, is amended by 
     striking ``by substituting'' and all that follows through the 
     period at the end, and inserting ``by substituting December 
     31, 2010, for the date specified in each such section.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall be considered to have taken effect on May 31, 2010.

     SEC. 602. SMALL BUSINESS LOAN GUARANTEE ENHANCEMENT 
                   EXTENSIONS.

       (a) Appropriation.--There is appropriated, out of any funds 
     in the Treasury not otherwise appropriated, for an additional 
     amount for ``Small Business Administration--Business Loans 
     Program Account'', $505,000,000, to remain available through 
     December 31, 2010, for the cost of--
       (1) fee reductions and eliminations under section 501 of 
     division A of the American Recovery and Reinvestment Act of 
     2009 (Public Law 111-5; 123 Stat. 151), as amended by this 
     section; and
       (2) loan guarantees under section 502 of division A of the 
     American Recovery and Reinvestment Act of 2009 (Public Law 
     111-5; 123 Stat. 152), as amended by this section.

     Such costs, including the cost of modifying such loans, shall 
     be as defined in section 502 of the Congressional Budget Act 
     of 1974.
       (b) Extension of Programs.--
       (1) Fees.--Section 501 of division A of the American 
     Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123 
     Stat. 151) is amended by striking ``September 30, 2010'' each 
     place it appears and inserting ``December 31, 2010''.
       (2) Loan guarantees.--Section 502(f) of division A of the 
     American Recovery and Reinvestment Act of 2009 (Public Law 
     111-5; 123 Stat. 153) is amended by striking ``May 31, 2010'' 
     and inserting ``December 31, 2010''.
       (c) Appropriation.--There is appropriated for an additional 
     amount, out of any funds in the Treasury not otherwise 
     appropriated, for administrative expenses to carry out 
     sections 501 and 502 of division A of the American Recovery 
     and Reinvestment Act of 2009 (Public Law 111-5), $5,000,000, 
     to remain available until expended, which may be transferred 
     and merged with the appropriation for ``Small Business 
     Administration--Salaries and Expenses''.

     SEC. 603. SUMMER EMPLOYMENT FOR YOUTH.

       There is appropriated, out of any funds in the Treasury not 
     otherwise appropriated, for an additional amount for 
     ``Department of Labor--Employment and Training 
     Administration--Training and Employment Services'' for 
     activities under the Workforce Investment Act of 1998 
     (``WIA''), $1,000,000,000 shall be available for obligation 
     on the date of enactment of this Act for grants to States for 
     youth activities, including summer employment for youth: 
     Provided, That no portion of such funds shall be reserved to 
     carry out section 127(b)(1)(A) of the WIA: Provided further, 
     That for purposes of section 127(b)(1)(C)(iv) of the WIA, 
     funds available for youth activities shall be allotted as if 
     the total amount available for youth activities in the fiscal 
     year does not exceed $1,000,000,000: Provided further, That 
     with respect to the youth activities provided with such 
     funds, section 101(13)(A) of the WIA shall be applied by 
     substituting ``age 24'' for ``age 21'': Provided further, 
     That the work readiness performance indicator described in 
     section 136(b)(2)(A)(ii)(I) of the WIA shall be the only 
     measure of performance used to assess the effectiveness of 
     summer employment for youth provided with such funds: 
     Provided further, That an amount that is not more than 1 
     percent of such amount may be used for the administration, 
     management, and oversight of the programs, activities, and 
     grants carried out with such funds, including the evaluation 
     of the use of such funds: Provided further, That funds 
     available under the preceding proviso, together with funds 
     described in section 801(a) of division A of the American 
     Recovery and reinvestment Act of 2009 (Public Law 111-5), and 
     funds provided in such Act under the heading ``Department of 
     Labor-Departmental Management-Salaries and Expenses'', shall 
     remain available for obligation through September 30, 2011.

     SEC. 604. EXPANSION OF ELIGIBILITY FOR CONCURRENT RECEIPT OF 
                   MILITARY RETIRED PAY AND VETERANS' DISABILITY 
                   COMPENSATION TO INCLUDE ALL CHAPTER 61 
                   DISABILITY RETIREES REGARDLESS OF DISABILITY 
                   RATING PERCENTAGE OR YEARS OF SERVICE.

       (a) Phased Expansion Concurrent Receipt.--Subsection (a) of 
     section 1414 of title 10, United States Code, is amended to 
     read as follows:
       ``(a) Payment of Both Retired Pay and Disability 
     Compensation.--
       ``(1) Payment of both required.--
       ``(A) In general.--Subject to subsection (b), a member or 
     former member of the uniformed services who is entitled for 
     any month to retired pay and who is also entitled for that 
     month to veterans' disability compensation for a qualifying 
     service-connected disability (in this section referred to as 
     a `qualified retiree') is entitled to be paid both for that 
     month without regard to sections 5304 and 5305 of title 38.
       ``(B) Applicability of full concurrent receipt phase-in 
     requirement.--During the period beginning on January 1, 2004, 
     and ending on December 31, 2013, payment of retired pay to a 
     qualified retiree is subject to subsection (c).
       ``(C) Phase-in exception for 100 percent disabled 
     retirees.--The payment of retired pay is subject to 
     subsection (c) only during the period beginning on January 1, 
     2004, and ending on December 31, 2004, in the case of the 
     following qualified retirees:
       ``(i) A qualified retiree receiving veterans' disability 
     compensation for a disability rated as 100 percent.
       ``(ii) A qualified retiree receiving veterans' disability 
     compensation at the rate payable for a 100 percent disability 
     by reason of a determination of individual unemployability.

[[Page 11114]]

       ``(D) Temporary phase-in exception for certain chapter 61 
     disability retirees; termination.--Subject to subsection (b), 
     during the period beginning on January 1, 2011, and ending on 
     September 30, 2012, subsection (c) shall not apply to a 
     qualified retiree described in subparagraph (B) or (C) of 
     paragraph (2).
       ``(2) Qualifying service-connected disability defined.--In 
     this section:
       ``(A) 50 percent rating threshold.--In the case of a member 
     or former member receiving retired pay under any provision of 
     law other than chapter 61 of this title, or under chapter 61 
     with 20 years or more of service otherwise creditable under 
     section 1405 or computed under section 12732 of this title, 
     the term `qualifying service-connected disability' means a 
     service-connected disability or combination of service-
     connected disabilities that is rated as not less than 50 
     percent disabling by the Secretary of Veterans Affairs. 
     However, during the period specified in paragraph (1)(D), 
     members or former members receiving retired pay under chapter 
     61 with 20 years or more of creditable service computed under 
     section 12732 of this title, but not otherwise entitled to 
     retired pay under any other provision of this title, shall 
     qualify in accordance with subparagraphs (B) and (C).
       ``(B) Inclusion of members not otherwise entitled to 
     retired pay.--In the case of a member or former member 
     receiving retired pay under chapter 61 of this title, but who 
     is not otherwise entitled to retired pay under any other 
     provision of this title, the term `qualifying service-
     connected disability' means a service-connected disability or 
     combination of service-connected disabilities that is rated 
     by the Secretary of Veterans Affairs at the disabling level 
     specified in one of the following clauses (which, subject to 
     paragraph (3), is effective on or after the date specified in 
     the applicable clause):
       ``(i) January 1, 2011, rated 100 percent, or a rate payable 
     at 100 percent by reason of individual unemployability or 
     rated 90 percent.
       ``(ii) January 1, 2012, rated 80 percent or 70 percent.
       ``(iii) January 1, 2013, rated 60 percent or 50 percent.
       ``(C) Elimination of rating threshold.--In the case of a 
     member or former member receiving retired pay under chapter 
     61 regardless of being otherwise eligible for retirement, the 
     term `qualifying service-connected disability' means a 
     service-connected disability or combination of service-
     connected disabilities that is rated by the Secretary of 
     Veterans Affairs at the disabling level specified in one of 
     the following clauses (which, subject to paragraph (3), is 
     effective on or after the date specified in the applicable 
     clause):
       ``(i) January 1, 2014, rated 40 percent or 30 percent.
       ``(ii) January 1, 2015, any rating.
       ``(3) Limited duration.--Notwithstanding the effective date 
     specified in each clause of subparagraphs (B) and (C) of 
     paragraph (2), the clause--
       ``(A) shall apply only if the termination date specified in 
     paragraph (1)(D) would occur during or after the calendar 
     year specified in the clause; and
       ``(B) shall not apply beyond the termination date specified 
     in paragraph (1)(D).''.
       (b) Conforming Amendment to Special Rules for Chapter 61 
     Disability Retirees.--Subsection (b) of such section is 
     amended to read as follows:
       ``(b) Special Rules for Chapter 61 Disability Retirees When 
     Eligibility Has Been Established for Such Retirees.--
       ``(1) General reduction rule.--The retired pay of a member 
     retired under chapter 61 of this title is subject to 
     reduction under sections 5304 and 5305 of title 38, but only 
     to the extent that the amount of the members retired pay 
     under chapter 61 of this title exceeds the amount of retired 
     pay to which the member would have been entitled under any 
     other provision of law based upon the member's service in the 
     uniformed services if the member had not been retired under 
     chapter 61 of this title.
       ``(2) Chapter 61 retirees not otherwise entitled to retired 
     pay.--
       ``(A) Before termination date.--If a member with a 
     qualifying service-connected disability (as defined in 
     subsection (a)(2)) is retired under chapter 61 of this title, 
     but is not otherwise entitled to retired pay under any other 
     provision of this title, and the termination date specified 
     in subsection (a)(1)(D) has not occurred, the retired pay of 
     the member is subject to reduction under sections 5304 and 
     5305 of title 38, but only to the extent that the amount of 
     the member's retired pay under chapter 61 of this title 
     exceeds the amount equal to 2\1/2\ percent of the member's 
     years of creditable service multiplied by the member's 
     retired pay base under section 1406(b)(1) or 1407 of this 
     title, whichever is applicable to the member.
       ``(B) After termination date.--Subsection (a) does not 
     apply to a member described in subparagraph (A) if the 
     termination date specified in subsection (a)(1)(D) has 
     occurred.''.
       (c) Conforming Amendment to Full Concurrent Receipt Phase-
     in.--Subsection (c) of such section is amended by striking 
     ``the second sentence of''.
       (d) Clerical Amendments.--
       (1) Section heading.--The heading of such section is 
     amended to read as follows:

     ``Sec. 1414. Concurrent receipt of retired pay and veterans' 
       disability compensation''.

       (2) Table of sections.--The table of sections at the 
     beginning of chapter 71 of such title is amended by striking 
     the item related to section 1414 and inserting the following 
     new item:

``1414. Concurrent receipt of retired pay and veterans' disability 
              compensation.''.

       (e) Effective Date.--The amendments made by this section 
     shall take effect on January 1, 2011.

     SEC. 605. EXTENSION OF USE OF 2009 POVERTY GUIDELINES.

       Section 1012 of the Department of Defense Appropriations 
     Act, 2010 (Public Law 111-118), as amended by section 6 of 
     the Continuing Extension Act of 2010 (Public Law 111-157), is 
     amended--
       (1) by striking ``before May 31, 2010''; and
       (2) by inserting ``for 2011'' after ``until updated poverty 
     guidelines''.

     SEC. 606. REFUNDS DISREGARDED IN THE ADMINISTRATION OF 
                   FEDERAL PROGRAMS AND FEDERALLY ASSISTED 
                   PROGRAMS.

       (a) In General.--Subchapter A of chapter 65 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new section:

     ``SEC. 6409. REFUNDS DISREGARDED IN THE ADMINISTRATION OF 
                   FEDERAL PROGRAMS AND FEDERALLY ASSISTED 
                   PROGRAMS.

       ``(a) In General.--Notwithstanding any other provision of 
     law, any refund (or advance payment with respect to a 
     refundable credit) made to any individual under this title 
     shall not be taken into account as income, and shall not be 
     taken into account as resources for a period of 12 months 
     from receipt, for purposes of determining the eligibility of 
     such individual (or any other individual) for benefits or 
     assistance (or the amount or extent of benefits or 
     assistance) under any Federal program or under any State or 
     local program financed in whole or in part with Federal 
     funds.
       ``(b) Termination.--Subsection (a) shall not apply to any 
     amount received after December 31, 2010.''.
       (b) Clerical Amendment.--The table of sections for such 
     subchapter is amended by adding at the end the following new 
     item:

``Sec. 6409. Refunds disregarded in the administration of Federal 
              programs and federally assisted programs.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts received after December 31, 2009.

     SEC. 607. ARRA PLANNING AND REPORTING.

       Section 1512 of the American Recovery and Reinvestment Act 
     of 2009 (Public Law 111-5; 123 Stat. 287) is amended--
       (1) in subsection (d)--
       (A) in the subsection heading, by inserting ``Plans and'' 
     after ``Agency'';
       (B) by striking ``Not later than'' and inserting the 
     following:
       ``(1) Definition.--In this subsection, the term `covered 
     program' means a program for which funds are appropriated 
     under this division--
       ``(A) in an amount that is--
       ``(i) more than $2,000,000,000; and
       ``(ii) more than 150 percent of the funds appropriated for 
     the program for fiscal year 2008; or
       ``(B) that did not exist before the date of enactment of 
     this Act.
       ``(2) Plans.--Not later than July 1, 2010, the head of each 
     agency that distributes recovery funds shall submit to 
     Congress and make available on the website of the agency a 
     plan for each covered program, which shall, at a minimum, 
     contain--
       ``(A) a description of the goals for the covered program 
     using recovery funds;
       ``(B) a discussion of how the goals described in 
     subparagraph (A) relate to the goals for ongoing activities 
     of the covered program, if applicable;
       ``(C) a description of the activities that the agency will 
     undertake to achieve the goals described in subparagraph (A);
       ``(D) a description of the total recovery funding for the 
     covered program and the recovery funding for each activity 
     under the covered program, including identifying whether the 
     activity will be carried out using grants, contracts, or 
     other types of funding mechanisms;
       ``(E) a schedule of milestones for major phases of the 
     activities under the covered program, with planned delivery 
     dates;
       ``(F) performance measures the agency will use to track the 
     progress of each of the activities under the covered program 
     in meeting the goals described in subparagraph (A), including 
     performance targets, the frequency of measurement, and a 
     description of the methodology for each measure;
       ``(G) a description of the process of the agency for the 
     periodic review of the progress of the covered program 
     towards meeting the goals described in subparagraph (A); and
       ``(H) a description of how the agency will hold program 
     managers accountable for achieving the goals described in 
     subparagraph (A).
       ``(3) Reports.--
       ``(A) In general.--Not later than''; and

[[Page 11115]]

       (C) by adding at the end the following:
       ``(B) Reports on plans.--Not later than 30 days after the 
     end of the calendar quarter ending September 30, 2010, and 
     every calendar quarter thereafter during which the agency 
     obligates or expends recovery funds, the head of each agency 
     that developed a plan for a covered program under paragraph 
     (2) shall submit to Congress and make available on a website 
     of the agency a report for each covered program that--
       ``(i) discusses the progress of the agency in implementing 
     the plan;
       ``(ii) describes the progress towards achieving the goals 
     described in paragraph (2)(A) for the covered program;
       ``(iii) discusses the status of each activity carried out 
     under the covered program, including whether the activity is 
     completed;
       ``(iv) details the unobligated and unexpired balances and 
     total obligations and outlays under the covered program;
       ``(v) discusses--

       ``(I) whether the covered program has met the milestones 
     for the covered program described in paragraph (2)(E);
       ``(II) if the covered program has failed to meet the 
     milestones, the reasons why; and
       ``(III) any changes in the milestones for the covered 
     program, including the reasons for the change;

       ``(vi) discusses the performance of the covered program, 
     including--

       ``(I) whether the covered program has met the performance 
     measures for the covered program described in paragraph 
     (2)(F);
       ``(II) if the covered program has failed to meet the 
     performance measures, the reasons why; and
       ``(III) any trends in information relating to the 
     performance of the covered program; and

       ``(vii) evaluates the ability of the covered program to 
     meet the goals of the covered program given the performance 
     of the covered program.'';
       (2) in subsection (f)--
       (A) by striking ``Within 180 days'' and inserting the 
     following:
       ``(1) In general.--Within 180 days''; and
       (B) by adding at the end the following:
       ``(2) Penalties.--
       ``(A) In general.--Subject to subparagraphs (B), (C), and 
     (D), the Attorney General may bring a civil action in an 
     appropriate United States district court against a recipient 
     of recovery funds from an agency that does not provide the 
     information required under subsection (c) or knowingly 
     provides information under subsection (c) that contains a 
     material omission or misstatement. In a civil action under 
     this paragraph, the court may impose a civil penalty on a 
     recipient of recovery funds in an amount not more than 
     $250,000. Any amounts received from a civil penalty under 
     this paragraph shall be deposited in the general fund of the 
     Treasury.
       ``(B) Notification.--
       ``(i) In general.--The head of an agency shall provide a 
     written notification to a recipient of recovery funds from 
     the agency that fails to provide the information required 
     under subsection (c). A notification under this subparagraph 
     shall provide the recipient with information on how to comply 
     with the necessary reporting requirements and notice of the 
     penalties for failing to do so.
       ``(ii) Limitation.--A court may not impose a civil penalty 
     under subparagraph (A) relating to the failure to provide 
     information required under subsection (c) if, not later than 
     31 days after the date of the notification under clause (i), 
     the recipient of the recovery funds provides the information.
       ``(C) Considerations.--In determining the amount of a 
     penalty under this paragraph for a recipient of recovery 
     funds, a court shall consider--
       ``(i) the number of times the recipient has failed to 
     provide the information required under subsection (c);
       ``(ii) the amount of recovery funds provided to the 
     recipient;
       ``(iii) whether the recipient is a government, nonprofit 
     entity, or educational institution; and
       ``(iv) whether the recipient is a small business concern 
     (as defined under section 3 of the Small Business Act (15 
     U.S.C. 632)), with particular consideration given to 
     businesses with not more than 50 employees.
       ``(D) Applicability.--This paragraph shall apply to any 
     report required to be submitted on or after the date of 
     enactment of this paragraph.
       ``(E) Nonexclusivity.--The imposition of a civil penalty 
     under this subsection shall not preclude any other criminal, 
     civil, or administrative remedy available to the United 
     States or any other person under Federal or State law.
       ``(3) Technical assistance.--Each agency distributing 
     recovery funds shall provide technical assistance, as 
     necessary, to assist recipients of recovery funds in 
     complying with the requirements to provide information under 
     subsection (c), which shall include providing recipients with 
     a reminder regarding each reporting requirement.
       ``(4) Public listing.--
       ``(A) In general.--Not later than 45 days after the end of 
     each calendar quarter, and subject to the notification 
     requirements under paragraph (2)(B), the Board shall make 
     available on the website established under section 1526 a 
     list of all recipients of recovery funds that did not provide 
     the information required under subsection (c) for the 
     calendar quarter.
       ``(B) Contents.--A list made available under subparagraph 
     (A) shall, for each recipient of recovery funds on the list, 
     include the name and address of the recipient, the 
     identification number for the award, the amount of recovery 
     funds awarded to the recipient, a description of the activity 
     for which the recovery funds were provided, and, to the 
     extent known by the Board, the reason for noncompliance.
       ``(5) Regulations and reporting.--
       ``(A) Regulations.--Not later than 90 days after the date 
     of enactment of this paragraph, the Attorney General, in 
     consultation with the Director of the Office of Management 
     and Budget and the Chairperson, shall promulgate regulations 
     regarding implementation of this section.
       ``(B) Reporting.--
       ``(i) In general.--Not later than July 1, 2010, and every 3 
     months thereafter, the Director of the Office of Management 
     and Budget, in consultation with the Chairperson, shall 
     submit to Congress a report on the extent of noncompliance by 
     recipients of recovery funds with the reporting requirements 
     under this section.
       ``(ii) Contents.--Each report submitted under clause (i) 
     shall include--

       ``(I) information, for the quarter and in total, regarding 
     the number and amount of civil penalties imposed and 
     collected under this subsection, sorted by agency and 
     program;
       ``(II) information on the steps taken by the Federal 
     Government to reduce the level of noncompliance; and
       ``(III) any other information determined appropriate by the 
     Director.''; and

       (3) by adding at the end the following:
       ``(i) Termination.--The reporting requirements under this 
     section shall terminate on September 30, 2013.''.

                    TITLE VII--BUDGETARY PROVISIONS

     SEC. 701. DETERMINATION OF BUDGETARY EFFECTS.

       (a) In General.--The budgetary effects of this Act, for the 
     purpose of complying with the Statutory Pay-As-You-Go Act of 
     2010, shall be determined by reference to the latest 
     statement titled ``Budgetary Effects of PAYGO Legislation'' 
     for this Act, submitted for printing in the Congressional 
     Record by the Chairman of the Senate Budget Committee, 
     provided that such statement has been submitted prior to the 
     vote on passage.
       (b) Emergency Designation for Congressional Enforcement.--
     In the House of Representatives, this Act, with the exception 
     of section 511, is designated as an emergency for purposes of 
     pay-as-you-go principles. In the Senate, this Act is 
     designated as an emergency requirement pursuant to section 
     403(a) of S. Con. Res. 13 (111th Congress), the concurrent 
     resolution on the budget for fiscal year 2010.
       (c) Emergency Designation for Statutory PAYGO.--This Act, 
     with the exception of section 511, is designated as an 
     emergency requirement pursuant to section 4(g) of the 
     Statutory Pay-As-You-Go Act of 2010 (Public Law 111-139; 2 
     U.S.C. 933(g)).
                                 ______
                                 
  SA 4377. Mr. BOND submitted an amendment intended to be proposed to 
amendment SA 4369 proposed by Mr. Baucus to the bill H.R. 4213, to 
amend the Internal Revenue Code of 1986 to extend certain expiring 
provisions, and for other purposes; which was ordered to lie on the 
table; as follows:

       Beginning on page 173, line 6, strike all through page 231, 
     line 12, and insert the following:

     SEC. 401. USE OF STIMULUS FUNDS TO OFFSET SPENDING.

       The unobligated balance of each amount appropriated or made 
     available under the American Recovery and Reinvestment Act of 
     2009 (Public Law 111-5) (other than under title X of division 
     A of such Act) is rescinded such that the aggregate amount of 
     such rescissions equal $39,860,000,000 in order to offset the 
     net increase in spending resulting from the provisions of, 
     and amendments made by, this Act. The Director of the Office 
     of Management and Budget shall report to each congressional 
     committee the amounts so rescinded within the jurisdiction of 
     such committee.
                                 ______
                                 
  SA 4378. Mr. BOND submitted an amendment intended to be proposed to 
amendment SA 4369 proposed by Mr. Baucus to the bill H.R. 4213, to 
amend the Internal Revenue Code of 1986 to extend certain expiring 
provisions, and for other purposes; which was ordered to lie on the 
table; as follows:

       Beginning on page 173, line 6, strike all through page 231, 
     line 12.
                                 ______
                                 
  SA 4379. Mr. VITTER submitted an amendment intended to be proposed to 
amendment SA 4369 proposed by Mr. Baucus to the bill H.R. 4213, to 
amend the Internal Revenue Code of 1986 to extend certain expiring 
provisions, and for other purposes; which was ordered to lie on the 
table; as follows:


[[Page 11116]]

       At the end of the subtitle D of title IV, add the 
     following:

     SEC. ___. NEW REVENUES TO THE OIL SPILL LIABILITY TRUST FUND.

       The revenue resulting from any increase in the Oil Spill 
     Liability Trust Fund financing rate under section 4611 of the 
     Internal Revenue Code of 1986 shall--
       (1) not be counted for purposes of offsetting revenues, 
     receipts, or discretionary spending under the Congressional 
     Budget Act of 1974 or the Statutory Pay-As-You-Go Act of 
     2010; and
       (2) shall only be used for the purposes of the Oil Spill 
     Liability Trust Fund.
                                 ______
                                 
  SA 4380. Mr. BUNNING (for himself, Mr. Rockefeller, Mr. Byrd, and Mr. 
Enzi,) submitted an amendment intended to be proposed to amendment SA 
4369 proposed by Mr. Baucus to the bill H.R. 4213, to amend the 
Internal Revenue Code of 1986 to extend certain expiring provisions, 
and for other purposes; which was ordered to lie on the table; as 
follows:

       Strike subsections (a) through (c) of section 207 and 
     insert the following:
       (a) Alternative Fuel Credit.--Paragraph (5) of section 
     6426(d) is amended by striking ``after December 31, 2009'' 
     and all that follows and inserting ``after--
       ``(A) September 30, 2014, in the case of liquefied 
     hydrogen,
       ``(B) December 31, 2010, in the case of fuels described in 
     subparagraph (A), (C), (E), (F), or (G) of paragraph (2), and
       ``(C) December 31, 2009, in any other case.''.
       (b) Alternative Fuel Mixture Credit.--Paragraph (3) of 
     section 6426(e) is amended by striking ``after December 31, 
     2009'' and all that follows and inserting ``after--
       ``(A) September 30, 2014, in the case of liquefied 
     hydrogen,
       ``(B) December 31, 2010, in the case of fuels described in 
     subparagraph (A), (C), (E), (F), or (G) of subsection (d)(2), 
     and
       ``(C) December 31, 2009, in any other case.''.
       (c) Payment Authority.--
       (1) In general.--Paragraph (6) of section 6427(e) is 
     amended by striking ``and'' at the end of subparagraph (C), 
     by striking the period at the end of subparagraph (D) and 
     inserting ``, and'', and by adding at the end the following 
     new subparagraph:
       ``(E) any alternative fuel or alternative fuel mixture (as 
     so defined) involving fuel described in subparagraph (A), 
     (C), (E), (F), or (G) of section 6426(d)(2) sold or used 
     after December 31, 2010.''.
       (2) Conforming amendment.--Subparagraph (C) of section 
     6427(e)(6) is amended by inserting ``or (E)'' after 
     ``subparagraph (D)''.
                                 ______
                                 
  SA 4381. Mr. BENNET submitted an amendment intended to be proposed to 
amendment SA 4369 proposed by Mr. Baucus to the bill H.R. 4213, to 
amend the Internal Revenue Code of 1986 to extend certain expiring 
provisions, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 303, between lines 12 and 13, insert the following:

     SEC. 526. RURAL HEALTH ACCESS AND IMPROVEMENT.

       (a) Grants to Promote Hospital Health Information 
     Technology.--Section 3013 of the Public Health Service Act 
     (42 U.S.C. 300jj-33) is amended by adding at the end the 
     following:
       ``(j) Priority.--In awarding a grant under this section, 
     the Secretary shall give priority to qualified State-
     designated entities that are critical access hospitals, as 
     defined in section 1861(mm) of the Social Security Act.''.
       (b) Expanded Participation in Section 340B Program.--
     Section 340B(a)(4) of the Public Health Service Act (42 
     U.S.C. 256b(a)(4)) is amended by adding at the end the 
     following:
       ``(P) An entity that is a rural health clinic, as defined 
     in section 1861(aa)(2) of the Social Security Act.''.
       (c) GAO Study and Report on Dispensing Fees.--The 
     Comptroller General of the United States shall study and 
     report on the following aspects of the Medicaid pharmacy 
     benefit program under title XIX of the Social Security Act 
     (42 U.S.C. 1396a et seq.):
       (1) Any additional costs to pharmacies, and the factors 
     contributing to such costs, associated with--
       (A) providing pharmacy services, including whether the 
     pharmacy providing the services is--
       (i) a rural or urban pharmacy;
       (ii) an independent or chain-operated pharmacy;
       (iii) a specialty pharmacy; or
       (iv) a long term care pharmacy;
       (B) compliance with the requirements of the drug use review 
     program under section 1927(g) of the Social Security Act (42 
     U.S.C. 1396r-8(g)), including any State-based counseling 
     requirements; and
       (C) compliance with any additional administrative burdens, 
     such as coordination of benefits and prior authorization 
     requirements.
       (2) The ability of pharmacies to collect Medicaid 
     copayments.
       (3) The policies used by States to encourage generic drug 
     utilization.
       (4) State Medicaid policies regarding the administration of 
     vaccinations by pharmacists and access to vaccinations.
       (d) State Offices of Rural Health.--Section 338J of the 
     Public Health Service Act (42 U.S.C. 254r) is amended by 
     striking subsection (k).
                                 ______
                                 
  SA 4382. Mrs. LINCOLN (for herself, Mr. Cornyn, and Mr. Ensign) 
submitted an amendment intended to be proposed to amendment SA 4369 
proposed by Mr. Baucus to the bill H.R. 4213, to amend the Internal 
Revenue Code of 1986 to extend certain expiring provisions, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the end of subtitle C of title II, insert the following:

     SEC. ----. REDUCTION IN CORPORATE RATE FOR QUALIFIED TIMBER 
                   GAIN.

       (a) In General.--Paragraph (1) of section 1201(b) is 
     amended by striking ``ending'' and all that follows through 
     ``such date''.
       (b) Conforming Amendment.--Paragraph (3) of section 1201(b) 
     is amended to read as follows:
       ``(3) Application of subsection.--The qualified timber gain 
     for any taxable year shall not exceed the qualified timber 
     gain which would be determined by not taking into account any 
     portion of such taxable year after December 31, 2010.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after May 22, 2009.

                          ____________________