[House Report 111-497]
[From the U.S. Government Publishing Office]


111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     111-497

======================================================================
 
 PROVIDING FOR CONSIDERATION OF THE SENATE AMENDMENT TO THE BILL (H.R. 
  4213) TO AMEND THE INTERNAL REVENUE CODE OF 1986 TO EXTEND CERTAIN 
              EXPIRING PROVISIONS, AND FOR OTHER PURPOSES

                                _______
                                

May 26, 2010.--Referred to the House Calendar and ordered to be printed

                                _______
                                

  Mr. Hastings of Florida, from the Committee on Rules, submitted the 
                               following

                              R E P O R T

                      [To accompany H. Res. 1403]

    The Committee on Rules, having had under consideration 
House Resolution 1403, by a nonrecord vote, report the same to 
the House with the recommendation that the resolution be 
adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for the consideration of the Senate 
amendment to H.R. 4213, to amend the Internal Revenue Code of 
1986 to extend certain expiring provisions, and for other 
purposes. The resolution makes in order a motion offered by the 
chair of the Committee on Ways and Means or his designee that 
the House concur in the Senate amendment to H.R. 4213 with the 
amendment printed in part A of this report, modified by the 
amendment printed in part B. The resolution provides one hour 
of debate on the motion equally divided and controlled by the 
chair and ranking minority member of the Committee on Ways and 
Means. The resolution waives all points of order against 
consideration of the motion. The resolution provides that the 
Senate amendment and the motion shall be considered as read. 
The rule tables House Resolution 1392.

                         EXPLANATION OF WAIVERS

    The waiver of all points of order against consideration of 
the motion includes a waiver of clause 10 of rule XXI (PAYGO). 
The House amendment, as amended, complies with all statutory 
PAYGO requirements.

                            COMMITTEE VOTES

    The results of each record vote on an amendment or motion 
to report, together with the names of those voting for and 
against, are printed below:

Rules Committee record vote No. 423

    Date: May 26, 2010.
    Measure: Senate amendment to H.R. 4213.
    Motion by: Mr. Dreier.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Brady (TX), #4, which would 
exempt real estate from changes in taxation of carried 
interest.
    Results: Defeated 3-8.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; 
Pingree--Nay; Dreier--Yea; Sessions--Yea; Foxx--Yea; 
Slaughter--Nay.

Rules Committee record vote No. 424

    Date: May 26, 2010.
    Measure: Senate amendment to H.R. 4213.
    Motion by: Mr. Sessions.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Brown-Waite (FL), #1, which 
would strike Section 523 (Medicare Physician Payments) and 
replace it with a reimbursement increase of 2 percent for every 
year through 2013. This would be paid for implementing limiting 
medical liability.
    Results: Defeated 3-8, Present--1.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Present; Arcuri--Nay; Perlmutter--Nay; 
Pingree--Nay; Polis--Nay; Dreier--Yea; Sessions--Yea; Foxx--
Yea; Slaughter--Nay.

Rules Committee record vote No. 425

    Date: May 26, 2010.
    Measure: Senate amendment to H.R. 4213.
    Motion by: Dr. Foxx.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Brown-Waite (FL), #2, which 
would strike title IV (revenue provisions) of the bill and use 
unobligated funds from the American Recovery and Reinvestment 
Act of 2009 as an offset.
    Results: Defeated 3-9.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; 
Pingree--Nay; Polis--Nay; Dreier--Yea; Sessions--Yea; Foxx--
Yea; Slaughter--Nay.

Rules Committee record vote No. 426

    Date: May 26, 2010.
    Measure: Senate amendment to H.R. 4213.
    Motion by: Dr. Foxx.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Cassidy (LA), #5, which would 
require that all revenue from the excise tax on oil production 
continue to fund strictly the Oil Spill Liability Trust Fund, 
and may not be used for any other purposes.
    Results: Defeated 3-9.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; 
Pingree--Nay; Polis--Nay; Dreier--Yea; Sessions--Yea; Foxx--
Yea; Slaughter--Nay.

                     SUMMARY OF AMENDMENT IN PART A

    The House amendment contains provisions to extend American 
Recovery and Reinvestment Act job programs, provide tax relief 
to working families, extend business tax credits, provide 
pension relief, extension of Unemployment Insurance and COBRA, 
extension of TANF, extension of FMAP and flood insurance, 
relief for disaster areas, relief for agriculture disaster 
areas, domestic energy tax provisions, close tax loopholes, and 
prevent outsourcing.

          SUMMARY OF AMENDMENT IN PART B CONSIDERED AS ADOPTED

    Drops the amendment to the long title of the bill.
    Clarifies the modification on who is a ``market 
participant'' for purposes of section 451(i).
    Modifies the provision so the deduction is unavailable to a 
taxpayer for whom a credit for higher education under section 
25A (the Hope and Lifetime Learning Credits) would have 
provided a greater net reduction in tax liability, without 
regard to any disallowance or reduction in value of the credit 
as a result of the alternative minimum tax.
    Clarifies the exception from the matching rule for 
shareholder payments for redemptions of securities that are not 
listed on an established securities market.
    Provides that the geographic diversity requirement for 
special transition rules for pension plans sponsored by certain 
charities is satisfied if employees are located in at least 20 
states.
    Provides that disclosure of transaction costs for an 
investment option may alternatively reference a plan's 
allocable share of such costs, that disclosure of investment 
returns is based on the calendar year to date, and that plan 
service providers and administrators are treated as complying 
with the fee disclosure requirements based on a reasonable, 
good faith interpretation of the provisions until 12 months 
after final regulations are issued.
    Clarifies that the Secretary of the Treasury may add to the 
types of reorganizations in which the earnings and profits of 
each party to the reorganization are taken into account in 
determining dividend treatment.
    Increases the Oil Spill Liability Trust Fund financing rate 
to 34 cents per barrel (rather than 32 cents).
    The extension of unemployment compensation benefits under 
the bill is shortened by one month. Also clarifies that 
conditions on the receipt of EUC benefits include conditions 
related to the availability for work, active search for work 
and refusal to accept work.
    Changes the word ``household'' to ``family'' to clarify 
eligibility for subsidized employment positions under the TANF 
Emergency Fund.
    The extension of subsidized COBRA benefits under the bill 
is shortened by one month.
    Clarifies that the policy relating to treatment of 
voluntary contributions set forth in the Patient Protection and 
Affordable Care Act applies to increases in the federal medical 
assistance percentage (FMAP) under the American Recovery and 
Reinvestment Act of 2009.
    Replaces section 523 of the bill with an increase in 
payment rates of 2.2 percent for the rest of 2010 and 1 percent 
in 2011. Instead of rates returning to present law after 2013, 
rates would return to present law after 2011.
    Deletes the provision pertaining to the Medicare 
Improvement Fund.
    The language would allow State departments of agriculture 
to use the grant funds to contract with the Farm Service Agency 
to administer the funds or to use a percentage of the funds to 
administer the funds from their offices.
    Clarifies the definition of the term ``settlement 
agreement'' to make clear that any modifications of the 
agreement by the parties, with the approval of the court, are 
part of the term settlement agreement.
    The provision adds a savings clause to section 614 
regarding revisions to the highway funding distribution under 
Pub. L. No. 111-147, the Hiring Incentives to Restore 
Employment Act (the ``HIRE Act''). The savings clause provides 
that, with regard to funding based on the Projects of National 
and Regional Significance program and the National Corridor 
Infrastructure Improvement program, each State shall receive 
the greater of the amount that the State received under the 
HIRE Act or the amount that the State is authorized to receive 
under this bill. The provision authorizes such sums as may be 
necessary from the Highway Trust Fund to carry out the 
provision.
    Makes other minor technical drafting changes to the bill.

                       PART A--TEXT OF AMENDMENT

  The House concurs in the Senate Amendment to H.R. 4213 with 
the following amendments:

  In lieu of the matter proposed to be inserted by the Senate 
amendment to the text of the bill, insert the following:

SECTION 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. Extension of Build America Bonds.
Sec. 102. Exempt-facility bonds for sewage and water supply facilities.
Sec. 103. Extension of exemption from alternative minimum tax treatment 
          for certain tax-exempt bonds.
Sec. 104. Extension and additional allocations of recovery zone bond 
          authority.
Sec. 105. Allowance of new markets tax credit against alternative 
          minimum tax.
Sec. 106. Extension of tax-exempt eligibility for loans guaranteed by 
          Federal home loan banks.
Sec. 107. 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. Credit for electricity produced at certain open-loop biomass 
          facilities.
Sec. 204. Extension and modification of credit for steel industry fuel.
Sec. 205. Credit for producing fuel from coke or coke gas.
Sec. 206. New energy efficient home credit.
Sec. 207. Excise tax credits and outlay payments for alternative fuel 
          and alternative fuel mixtures.
Sec. 208. Special rule for sales or dispositions to implement FERC or 
          State electric restructuring policy for qualified electric 
          utilities.
Sec. 209. Suspension of limitation on percentage depletion for oil and 
          gas from marginal wells.
Sec. 210. Direct payment of energy efficient appliances tax credit.
Sec. 211. Modification of standards for windows, doors, and skylights 
          with respect to the credit for nonbusiness energy property.

                    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. Tax incentives for investment in the District of Columbia.
Sec. 268. Renewal community tax incentives.
Sec. 269. Temporary increase in limit on cover over of rum excise taxes 
          to Puerto Rico and the Virgin Islands.
Sec. 270. Payment to American Samoa in lieu of extension of economic 
          development credit.
Sec. 271. Election to temporarily utilize unused AMT credits determined 
          by domestic investment.
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.
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.

                      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.

                      TITLE III--PENSION PROVISIONS

                   Subtitle A--Pension Funding Relief

                      Part 1--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. Suspension of certain funding level limitations.
Sec. 304. Lookback for credit balance rule.
Sec. 305. Information reporting.
Sec. 306. Rollover of amounts received in airline carrier bankruptcy.

                       Part 2--Multiemployer Plans

Sec. 311. Optional use of 30-year amortization periods.
Sec. 312. Optional longer recovery periods for multiemployer plans in 
          endangered or critical status.
Sec. 313. Modification of certain amortization extensions under prior 
          law.
Sec. 314. Alternative default schedule for plans in endangered or 
          critical status.
Sec. 315. Transition rule for certifications of plan status.

                       Subtitle B--Fee Disclosure

Sec. 321. Short title of subtitle.
Sec. 322. Amendments to the Employee Retirement Income Security Act of 
          1974.
Sec. 323. Amendments to the Internal Revenue Code of 1986.
Sec. 324. Regulatory authority and coordination.
Sec. 325. Effective date of subtitle.

                        TITLE IV--REVENUE OFFSETS

                     Subtitle A--Foreign Provisions

Sec. 401. Rules to prevent splitting foreign tax credits from the income 
          to which they relate.
Sec. 402. Denial of foreign tax credit with respect to foreign income 
          not subject to United States taxation by reason of covered 
          asset acquisitions.
Sec. 403. Separate application of foreign tax credit limitation, etc., 
          to items resourced under treaties.
Sec. 404. Limitation on the amount of foreign taxes deemed paid with 
          respect to section 956 inclusions.
Sec. 405. Special rule with respect to certain redemptions by foreign 
          subsidiaries.
Sec. 406. Modification of affiliation rules for purposes of rules 
          allocating interest expense.
Sec. 407. Termination of special rules for interest and dividends 
          received from persons meeting the 80-percent foreign business 
          requirements.
Sec. 408. Source rules for income on guarantees.
Sec. 409. Limitation on extension of statute of limitations for failure 
          to notify Secretary of certain foreign transfers.

    Subtitle B--Personal Service Income Earned in Pass-thru Entities

Sec. 411. Partnership interests transferred in connection with 
          performance of services.
Sec. 412. Income of partners for performing investment management 
          services treated as ordinary income received for performance 
          of services.
Sec. 413. Employment tax treatment of professional service businesses.

                    Subtitle C--Corporate Provisions

Sec. 421. Treatment of securities of a controlled corporation exchanged 
          for assets in certain reorganizations.
Sec. 422. Taxation of boot received in reorganizations.

                      Subtitle D--Other Provisions

Sec. 431. Modifications with respect to Oil Spill Liability Trust Fund.
Sec. 432. Time for payment of corporate estimated taxes.

           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.
Sec. 503. Extension of the Emergency Contingency Fund.

                      Subtitle B--Health Provisions

Sec. 511. Extension of premium assistance for COBRA benefits.
Sec. 512. Extension of section 508 reclassifications.
Sec. 513. Repeal of delay of RUG-IV.
Sec. 514. Limitation on reasonable costs payments for certain clinical 
          diagnostic laboratory tests furnished to hospital patients in 
          certain rural areas.
Sec. 515. Funding for claims reprocessing.
Sec. 516. Extension of ARRA increase in FMAP.
Sec. 517. Medicaid and CHIP technical corrections.
Sec. 518. Addition of inpatient drug discount program to 340B drug 
          discount program.
Sec. 519. Continued inclusion of orphan drugs in definition of covered 
          outpatient drugs with respect to children's hospitals under 
          the 340B drug discount program.
Sec. 520. Conforming amendment related to waiver of coinsurance for 
          preventive services.
Sec. 521. Establish a CMS-IRS data match to identify fraudulent 
          providers.
Sec. 522. Clarification of effective date of part B special enrollment 
          period for disabled TRICARE beneficiaries.
Sec. 523. Medicare sustainable growth rate reform.
Sec. 524. Adjustment to Medicare payment localities.
Sec. 525. Clarification of 3-day payment window.

                       TITLE VI--OTHER PROVISIONS

Sec. 601. Extension of national flood insurance program.
Sec. 602. Allocation of geothermal receipts.
Sec. 603. Small business loan guarantee enhancement extensions.
Sec. 604. Emergency agricultural disaster assistance.
Sec. 605. Summer employment for youth.
Sec. 606. Housing Trust Fund.
Sec. 607. The Individual Indian Money Account Litigation Settlement Act 
          of 2010.
Sec. 608. Appropriation of funds for final settlement of claims from In 
          re Black Farmers Discrimination Litigation.
Sec. 609. 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. 610. Extension of use of 2009 poverty guidelines.
Sec. 611. Refunds disregarded in the administration of Federal programs 
          and federally assisted programs.
Sec. 612. State court improvement program.
Sec. 613. Qualifying timber contract options.
Sec. 614. Extension and flexibility for certain allocated surface 
          transportation programs.
Sec. 615. Community College and Career Training Grant Program.
Sec. 616. Extensions of duty suspensions on cotton shirting fabrics and 
          related provisions.
Sec. 617. Modification of Wool Apparel Manufacturers Trust Fund.
Sec. 618. Department of Commerce Study.
Sec. 619. ARRA planning and reporting.

                     TITLE VII--BUDGETARY PROVISIONS

Sec. 701. Budgetary provisions.

                   TITLE I--INFRASTRUCTURE INCENTIVES

SEC. 101. EXTENSION OF BUILD AMERICA BONDS.

  (a) In General.--Subparagraph (B) of section 54AA(d)(1) is 
amended by striking ``January 1, 2011'' and inserting ``January 
1, 2013''.
  (b) Extension of Payments to Issuers.--
          (1) In general.--Section 6431 is amended--
                  (A) by striking ``January 1, 2011'' in 
                subsection (a) and inserting ``January 1, 
                2013'', and
                  (B) by striking ``January 1, 2011'' in 
                subsection (f)(1)(B) and inserting ``a 
                particular date''.
          (2) Conforming amendments.--Subsection (g) of section 
        54AA is amended--
                  (A) by striking ``January 1, 2011'' and 
                inserting ``January 1, 2013''; and
                  (B) by striking ``Qualified Bonds Issued 
                Before 2011'' in the heading and inserting 
                ``Certain Qualified Bonds''.
  (c) Reduction in Percentage of Payments to Issuers.--
Subsection (b) of section 6431 is amended--
          (1) by striking ``The Secretary'' and inserting the 
        following:
          ``(1) In general.--The Secretary'';
          (2) by striking ``35 percent'' and inserting ``the 
        applicable percentage''; and
          (3) by adding at the end the following new paragraph:
          ``(2) Applicable percentage.--For purposes of this 
        subsection, the term `applicable percentage' means the 
        percentage determined in accordance with the following 
        table:


----------------------------------------------------------------------------------------------------------------
  ``In the case of a qualified bond issued during calendar
                           year:                                        The applicable percentage is:
----------------------------------------------------------------------------------------------------------------
2009 or 2010...............................................  35 percent
2011.......................................................  32 percent
2012.......................................................  30 percent.''.
----------------------------------------------------------------------------------------------------------------

  (d) Current Refundings Permitted.--Subsection (g) of section 
54AA is amended by adding at the end the following new 
paragraph:
          ``(3) Treatment of current refunding bonds.--
                  ``(A) In general.--For purposes of this 
                subsection, the term `qualified bond' includes 
                any bond (or series of bonds) issued to refund 
                a qualified bond if--
                          ``(i) the average maturity date of 
                        the issue of which the refunding bond 
                        is a part is not later than the average 
                        maturity date of the bonds to be 
                        refunded by such issue,
                          ``(ii) the amount of the refunding 
                        bond does not exceed the outstanding 
                        amount of the refunded bond, and
                          ``(iii) the refunded bond is redeemed 
                        not later than 90 days after the date 
                        of the issuance of the refunding bond.
                  ``(B) Applicable percentage.--In the case of 
                a refunding bond referred to in subparagraph 
                (A), the applicable percentage with respect to 
                such bond under section 6431(b) shall be the 
                lowest percentage specified in paragraph (2) of 
                such section.
                  ``(C) Determination of average maturity.--For 
                purposes of subparagraph (A)(i), average 
                maturity shall be determined in accordance with 
                section 147(b)(2)(A).''.
  (e) Clarification Related to Levees and Flood Control 
Projects.--Subparagraph (A) of section 54AA(g)(2) is amended by 
inserting ``(including capital expenditures for levees and 
other flood control projects)'' after ``capital expenditures''.

SEC. 102. 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. 103. 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. 104. EXTENSION AND ADDITIONAL ALLOCATIONS OF RECOVERY ZONE BOND 
                    AUTHORITY.

  (a) Extension of Recovery Zone Bond Authority.--Section 
1400U-2(b)(1) and section 1400U-3(b)(1)(B) are each amended by 
striking ``January 1, 2011'' and inserting ``January 1, 2012''.
  (b) Additional Allocations of Recovery Zone Bond Authority 
Based on Unemployment.--Section 1400U-1 is amended by adding at 
the end the following new subsection:
  ``(c) Allocation of 2010 Recovery Zone Bond Limitations Based 
on Unemployment.--
          ``(1) In general.--The Secretary shall allocate the 
        2010 national recovery zone economic development bond 
        limitation and the 2010 national recovery zone facility 
        bond limitation among the States in the proportion that 
        each such State's 2009 unemployment number bears to the 
        aggregate of the 2009 unemployment numbers for all of 
        the States.
          ``(2) Minimum allocation.--The Secretary shall adjust 
        the allocations under paragraph (1) for each State to 
        the extent necessary to ensure that no State (prior to 
        any reduction under paragraph (3)) receives less than 
        0.9 percent of the 2010 national recovery zone economic 
        development bond limitation and 0.9 percent of the 2010 
        national recovery zone facility bond limitation.
          ``(3) Allocations by states.--
                  ``(A) In general.--Each State with respect to 
                which an allocation is made under paragraph (1) 
                shall reallocate such allocation among the 
                counties and large municipalities (as defined 
                in subsection (a)(3)(B)) in such State in the 
                proportion that each such county's or 
                municipality's 2009 unemployment number bears 
                to the aggregate of the 2009 unemployment 
                numbers for all the counties and large 
                municipalities (as so defined) in such State.
                  ``(B) 2010 allocation reduced by amount of 
                previous allocation.--Each State shall reduce 
                (but not below zero)--
                          ``(i) the amount of the 2010 national 
                        recovery zone economic development bond 
                        limitation allocated to each county or 
                        large municipality (as so defined) in 
                        such State by the amount of the 
                        national recovery zone economic 
                        development bond limitation allocated 
                        to such county or large municipality 
                        under subsection (a)(3)(A) (determined 
                        without regard to any waiver thereof), 
                        and
                          ``(ii) the amount of the 2010 
                        national recovery zone facility bond 
                        limitation allocated to each county or 
                        large municipality (as so defined) in 
                        such State by the amount of the 
                        national recovery zone facility bond 
                        limitation allocated to such county or 
                        large municipality under subsection 
                        (a)(3)(A) (determined without regard to 
                        any waiver thereof).
                  ``(C) Waiver of suballocations.--A county or 
                municipality may waive any portion of an 
                allocation made under this paragraph. A county 
                or municipality shall be treated as having 
                waived any portion of an allocation made under 
                this paragraph which has not been allocated to 
                a bond issued before May 1, 2011. Any 
                allocation waived (or treated as waived) under 
                this subparagraph may be used or reallocated by 
                the State.
                  ``(D) Special rule for a municipality in a 
                county.--In the case of any large municipality 
                any portion of which is in a county, such 
                portion shall be treated as part of such 
                municipality and not part of such county.
          ``(4) 2009 unemployment number.--For purposes of this 
        subsection, the term `2009 unemployment number' means, 
        with respect to any State, county or municipality, the 
        number of individuals in such State, county, or 
        municipality who were determined to be unemployed by 
        the Bureau of Labor Statistics for December 2009.
          ``(5) 2010 national limitations.--
                  ``(A) Recovery zone economic development 
                bonds.--The 2010 national recovery zone 
                economic development bond limitation is 
                $10,000,000,000. Any allocation of such 
                limitation under this subsection shall be 
                treated for purposes of section 1400U-2 in the 
                same manner as an allocation of national 
                recovery zone economic development bond 
                limitation.
                  ``(B) Recovery zone facility bonds.--The 2010 
                national recovery zone facility bond limitation 
                is $15,000,000,000. Any allocation of such 
                limitation under this subsection shall be 
                treated for purposes of section 1400U-3 in the 
                same manner as an allocation of national 
                recovery zone facility bond limitation.''.
  (c) Authority of State to Waive Certain 2009 Allocations.--
Subparagraph (A) of section 1400U-1(a)(3) is amended by adding 
at the end the following: ``A county or municipality shall be 
treated as having waived any portion of an allocation made 
under this subparagraph which has not been allocated to a bond 
issued before May 1, 2011. Any allocation waived (or treated as 
waived) under this subparagraph may be used or reallocated by 
the State.''.

SEC. 105. 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:
                          ``(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. 106. 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. 107. 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. CREDIT FOR ELECTRICITY PRODUCED AT CERTAIN OPEN-LOOP BIOMASS 
                    FACILITIES.

  (a) In General.--Clause (ii) of section 45(b)(4)(B) is 
amended--
          (1) by striking ``5-year period'' and inserting ``6-
        year period'', and
          (2) by adding at the end the following: ``In the case 
        of the last year of the 6-year period described in the 
        preceding sentence, the credit determined under 
        subsection (a) with respect to electricity produced 
        during such year shall not exceed 80 percent of such 
        credit determined without regard to this sentence.''.
  (b) Effective Date.--The amendment made by this section shall 
apply to electricity produced and sold after December 31, 2009.

SEC. 204. 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. 205. 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. 206. 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. 207. EXCISE TAX CREDITS AND OUTLAY PAYMENTS FOR ALTERNATIVE FUEL 
                    AND ALTERNATIVE FUEL MIXTURES.

  (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), (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), (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), (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)''.
  (d) Exclusion of Black Liquor From Credit Eligibility.--The 
last sentence of section 6426(d)(2) is amended by striking ``or 
biodiesel'' and inserting ``biodiesel, or any fuel (including 
lignin, wood residues, or spent pulping liquors) derived from 
the production of paper or pulp''.
  (e) Effective Date.--The amendments made by this section 
shall apply to fuel sold or used after December 31, 2009.

SEC. 208. 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--
                                  ``(I) in its authorization of 
                                the transaction under section 
                                203 of the Federal Power Act 
                                (16 U.S.C. 824b) or by 
                                declaratory order is not itself 
                                a market participant within the 
                                meaning of such Commission's 
                                rules applicable to independent 
                                transmission providers and is 
                                not controlled by any such 
                                market participant,
                                  ``(II) to be independent from 
                                market participants (within the 
                                meaning of such rules), or
                                  ``(III) to be an independent 
                                transmission company (within 
                                the meaning of such rules), 
                                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. 209. 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. 210. 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. 211. 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
                  ``(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.

                   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 Direct Payment of Credit.--
          ``(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), 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, multiplied by
                  ``(B) 10.
          ``(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 105, 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 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''.
  (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. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF COLUMBIA.

  (a) In General.--Subsection (f) of section 1400 is amended by 
striking ``December 31, 2009'' each place it appears and 
inserting ``December 31, 2010''.
  (b) Tax-exempt DC Empowerment Zone Bonds.--Subsection (b) of 
section 1400A is amended by striking ``December 31, 2009'' and 
inserting ``December 31, 2010''.
  (c) Zero-percent Capital Gains Rate.--
          (1) Acquisition date.--Paragraphs (2)(A)(i), (3)(A), 
        (4)(A)(i), and (4)(B)(i)(I) of section 1400B(b) are 
        each amended by striking ``January 1, 2010'' and 
        inserting ``January 1, 2011''.
          (2) Limitation on period of gains.--
                  (A) In general.--Paragraph (2) of section 
                1400B(e) is amended--
                          (i) by striking ``December 31, 2014'' 
                        and inserting ``December 31, 2015'', 
                        and
                          (ii) by striking ``2014'' in the 
                        heading and inserting ``2015''.
                  (B) Partnerships and s-corps.--Paragraph (2) 
                of section 1400B(g) is amended by striking 
                ``December 31, 2014'' and inserting ``December 
                31, 2015''.
  (d) First-time Homebuyer Credit.--Subsection (i) of section 
1400C is amended by striking ``January 1, 2010'' and inserting 
``January 1, 2011''.
  (e) 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) Tax-exempt dc empowerment zone bonds.--The 
        amendment made by subsection (b) shall apply to bonds 
        issued after December 31, 2009.
          (3) Acquisition dates for zero-percent capital gains 
        rate.--The amendments made by subsection (c) shall 
        apply to property acquired or substantially improved 
        after December 31, 2009.
          (4) Homebuyer credit.--The amendment made by 
        subsection (d) shall apply to homes purchased after 
        December 31, 2009.

SEC. 268. 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. 269. 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. 270. 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. 271. 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.

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.

                      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''.

                     TITLE III--PENSION PROVISIONS

                   Subtitle A--Pension Funding Relief

                     PART 1--SINGLE-EMPLOYER PLANS

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

  (a) ERISA Amendments.--
          (1) In general.--Section 303(c)(2) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 
        1083(c)(2)) is amended by adding at the end the 
        following subparagraphs:
                  ``(D) Special rule.--
                          ``(i) In general.--In the case of the 
                        shortfall amortization base of a plan 
                        for any applicable plan year, the 
                        shortfall amortization installments are 
                        the amounts described in clause (ii) or 
                        (iii), if made applicable by an 
                        election under clause (iv). In the 
                        absence of a timely election, such 
                        installments shall be determined 
                        without regard to this subparagraph.
                          ``(ii) 2 plus 7 amortization 
                        schedule.--The shortfall amortization 
                        installments described in this clause 
                        are--
                                  ``(I) in the case of the 
                                first 2 plan years in the 9-
                                plan-year period beginning with 
                                the applicable plan year, 
                                interest on the shortfall 
                                amortization base (determined 
                                by using the effective interest 
                                rate for the applicable plan 
                                year), and
                                  ``(II) in the case of the 
                                last 7 plan years in such 9-
                                plan-year period, the amounts 
                                necessary to amortize the 
                                balance of such shortfall 
                                amortization base in level 
                                annual installments over such 
                                last 7 plan years (determined 
                                using the segment rates 
                                determined under subparagraph 
                                (C) of subsection (h)(2) for 
                                the applicable plan year, 
                                applied under rules similar to 
                                the rules of subparagraph (B) 
                                of subsection (h)(2)).
                          ``(iii) 15-year amortization.--The 
                        shortfall amortization installments 
                        described in this clause are the 
                        amounts under subparagraphs (A) and (B) 
                        determined by substituting `15 plan-
                        year period' for `7-plan-year period'.
                          ``(iv) Election.--
                                  ``(I) In general.--The plan 
                                sponsor may, with respect to a 
                                plan, elect, with respect to 
                                any of not more than 2 
                                applicable plan years, to 
                                determine shortfall 
                                amortization installments under 
                                this subparagraph. An election 
                                under either clause (ii) or 
                                clause (iii) may be made with 
                                respect to either of such 
                                applicable plan years.
                                  ``(II) Eligibility for 
                                election.--An election may be 
                                made to determine shortfall 
                                amortization installments under 
                                this subparagraph with respect 
                                to a plan only if, as of the 
                                date of the election--
                                          ``(aa) the plan 
                                        sponsor is not a debtor 
                                        in a case under title 
                                        11, United States Code, 
                                        or similar Federal or 
                                        State law,
                                          ``(bb) there are no 
                                        unpaid minimum required 
                                        contributions with 
                                        respect to the plan for 
                                        purposes of section 
                                        4971 of the Internal 
                                        Revenue Code of 1986,
                                          ``(cc) there is no 
                                        lien in favor of the 
                                        plan under subsection 
                                        (k) or under section 
                                        430(k) of such Code, 
                                        and
                                          ``(dd) a distress 
                                        termination has not 
                                        been initiated for the 
                                        plan under section 
                                        4041(c).
                                  ``(III) Rules relating to 
                                election.--Such election shall 
                                be made at such times, and in 
                                such form and manner, as shall 
                                be prescribed by the Secretary 
                                of the Treasury and shall be 
                                irrevocable, except under such 
                                limited circumstances, and 
                                subject to such conditions, as 
                                such Secretary may prescribe.
                  ``(E) Applicable plan year.--
                          ``(i) In general.--For purposes of 
                        this paragraph, the term `applicable 
                        plan year' means, subject to the 
                        election of the plan sponsor under 
                        subparagraph (D)(iv), each of not more 
                        than 2 of the plan years beginning in 
                        2008, 2009, 2010, or 2011.
                          ``(ii) Special rule relating to 
                        2008.--A plan year may be elected as an 
                        applicable plan year pursuant to this 
                        subparagraph only if the due date under 
                        subsection (j)(1) for the payment of 
                        the minimum required contribution for 
                        such plan year occurs on or after March 
                        10, 2010.
                  ``(F) Increases in shortfall amortization 
                installments in cases of excess compensation or 
                certain dividends or stock redemptions.--
                          ``(i) In general.--If, with respect 
                        to an election for an applicable plan 
                        year under subparagraph (D), there is 
                        an installment acceleration amount with 
                        respect to a plan for any plan year in 
                        the restriction period (or if there is 
                        an installment acceleration amount 
                        carried forward to a plan year not in 
                        the restriction period), then the 
                        shortfall amortization installment 
                        otherwise determined and payable under 
                        this paragraph for such plan year shall 
                        be increased by such amount.
                          ``(ii) Back-end adjustment to 
                        amortization schedule.--Subject to 
                        rules prescribed by the Secretary of 
                        the Treasury, if a shortfall 
                        amortization installment with respect 
                        to any shortfall amortization base for 
                        an applicable plan year is required to 
                        be increased for any plan year under 
                        clause (i), subsequent shortfall 
                        amortization installments with respect 
                        to such base shall be reduced, in 
                        reverse order of the otherwise required 
                        installments beginning with the final 
                        scheduled installment, to the extent 
                        necessary to limit the present value of 
                        such subsequent shortfall amortization 
                        installments (after application of this 
                        subparagraph) to the present value of 
                        the remaining unamortized shortfall 
                        amortization base.
                          ``(iii) Installment acceleration 
                        amount.--For purposes of this 
                        subparagraph--
                                  ``(I) In general.--The term 
                                `installment acceleration 
                                amount' means, with respect to 
                                any plan year in a restriction 
                                period with respect to an 
                                applicable plan year, the sum 
                                of--
                                          ``(aa) the aggregate 
                                        amount of excess 
                                        employee compensation 
                                        determined under clause 
                                        (iv) for the plan year, 
                                        plus
                                          ``(bb) the dividend 
                                        and redemption amount 
                                        determined under clause 
                                        (v) for the plan year.
                                  ``(II) Cumulative 
                                limitation.--The installment 
                                acceleration amount for any 
                                plan year shall not exceed the 
                                excess (if any) of--
                                          ``(aa) the sum of the 
                                        shortfall amortization 
                                        installments for the 
                                        plan year and all 
                                        preceding plan years in 
                                        the amortization period 
                                        elected under 
                                        subparagraph (D) with 
                                        respect to the 
                                        shortfall amortization 
                                        base with respect to an 
                                        applicable year, 
                                        determined without 
                                        regard to subparagraph 
                                        (D) and this 
                                        subparagraph, over
                                          ``(bb) the sum of the 
                                        shortfall amortization 
                                        installments for such 
                                        plan year and all such 
                                        preceding plan years, 
                                        determined after 
                                        application of 
                                        subparagraph (D) (and 
                                        in the case of any 
                                        preceding plan year, 
                                        after application of 
                                        this subparagraph).
                                  ``(III) Carryover of excess 
                                installment acceleration 
                                amounts.--
                                          ``(aa) In general.--
                                        If the installment 
                                        acceleration amount for 
                                        any plan year 
                                        (determined without 
                                        regard to subclause 
                                        (II)) exceeds the 
                                        limitation under 
                                        subclause (II), then, 
                                        subject to item (bb), 
                                        such excess shall be 
                                        treated as an 
                                        installment 
                                        acceleration amount for 
                                        the succeeding plan 
                                        year.
                                          ``(bb) Cap to 
                                        apply.--If any amount 
                                        treated as an 
                                        installment 
                                        acceleration amount 
                                        under item (aa) or this 
                                        item with respect any 
                                        succeeding plan year, 
                                        when added to other 
                                        installment 
                                        acceleration amounts 
                                        (determined without 
                                        regard to subclause 
                                        (II)) with respect to 
                                        the plan year, exceeds 
                                        the limitation under 
                                        subclause (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.
                                          ``(cc) Limitation on 
                                        years to which amounts 
                                        carried forward.--No 
                                        amount shall be carried 
                                        forward under item (aa) 
                                        or (bb) to a plan year 
                                        which begins after 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 
                                        subparagraph (D)(iii)).
                                          ``(dd) Ordering 
                                        rules.--For purposes of 
                                        applying item (bb), 
                                        installment 
                                        acceleration amounts 
                                        for the plan year 
                                        (determined without 
                                        regard to any carryover 
                                        under this clause) 
                                        shall be applied first 
                                        against the limitation 
                                        under subclause (II) 
                                        and then carryovers to 
                                        such plan year shall be 
                                        applied against such 
                                        limitation on a first-
                                        in, first-out basis.
                          ``(iv) Excess employee 
                        compensation.--
                                  ``(I) In general.--For 
                                purposes of this paragraph, the 
                                term `excess employee 
                                compensation' means the sum 
                                of--
                                          ``(aa) with respect 
                                        to any employee, for 
                                        any plan year, the 
                                        excess (if any) of--
                                                  ``(AA) 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
                                                  ``(BB) 
                                                $1,000,000, 
                                                plus
                                          ``(bb) the amount of 
                                        assets 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, during the 
                                        calendar year 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.
                                  ``(II) No double counting.--
                                No amount shall be taken into 
                                account under subclause (I) 
                                more than once.
                                  ``(III) Employee; 
                                remuneration.--For purposes of 
                                this clause, 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 the Internal 
                                Revenue Code of 1986 for the 
                                taxable year ending during such 
                                calendar year, and the term 
                                `remuneration' shall include 
                                earned income of such an 
                                individual.
                                  ``(IV) Certain payments under 
                                existing contracts.--There 
                                shall not be taken into account 
                                under subclause (I)(aa) any 
                                remuneration consisting of 
                                nonqualified deferred 
                                compensation, restricted stock 
                                (or restricted stock units), 
                                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.
                                  ``(V) Only remuneration for 
                                post-2009 services counted.--
                                Remuneration shall be taken 
                                into account under subclause 
                                (I)(aa) only to the extent 
                                attributable to services 
                                performed by the employee for 
                                the plan sponsor after December 
                                31, 2009.
                                  ``(VI) Commissions.--
                                          ``(aa) In general.--
                                        There shall not be 
                                        taken into account 
                                        under subclause (I)(aa) 
                                        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.
                                          ``(bb) Specified 
                                        employees.--Item (aa) 
                                        shall not apply in the 
                                        case of any specified 
                                        employee (within the 
                                        meaning of section 
                                        409A(a)(2)(B)(i) of the 
                                        Internal Revenue Code 
                                        of 1986) or any 
                                        employee who would be 
                                        such a specified 
                                        employee if the plan 
                                        sponsor were a 
                                        corporation described 
                                        in such section.
                                  ``(VII) Indexing of amount.--
                                In the case of any calendar 
                                year beginning after 2010, the 
                                dollar amount under subclause 
                                (I)(aa)(BB) shall be increased 
                                by an amount equal to--
                                          ``(aa) such dollar 
                                        amount, multiplied by
                                          ``(bb) the cost-of-
                                        living adjustment 
                                        determined under 
                                        section 1(f)(3) of the 
                                        Internal Revenue Code 
                                        of 1986 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 $20,000, such 
                                increase shall be rounded to 
                                the next lowest multiple of 
                                $20,000.
                          ``(v) Certain dividends and 
                        redemptions.--
                                  ``(I) In general.--The 
                                dividend and redemption amount 
                                determined under this clause 
                                for any plan year is the lesser 
                                of--
                                          ``(aa) the excess 
                                        of--
                                                  ``(AA) the 
                                                sum of the 
                                                dividends paid 
                                                during the plan 
                                                year by the 
                                                plan sponsor, 
                                                plus the 
                                                amounts paid 
                                                for the 
                                                redemption of 
                                                stock of the 
                                                plan sponsor 
                                                redeemed during 
                                                the plan year, 
                                                over
                                                  ``(BB) an 
                                                amount equal to 
                                                the average of 
                                                adjusted annual 
                                                net income of 
                                                the plan 
                                                sponsor for the 
                                                last 5 fiscal 
                                                years of the 
                                                plan sponsor 
                                                ending before 
                                                such plan year, 
                                                or
                                          ``(bb) the sum of--
                                                  ``(AA) the 
                                                amounts paid 
                                                for the 
                                                redemption of 
                                                stock of the 
                                                plan sponsor 
                                                redeemed during 
                                                the plan year, 
                                                plus
                                                  ``(BB) the 
                                                excess of 
                                                dividends paid 
                                                during the plan 
                                                year by the 
                                                plan sponsor 
                                                over the 
                                                dividend base 
                                                amount.
                                  ``(II) Definitions.--
                                          ``(aa) Adjusted 
                                        annual net income.--For 
                                        purposes of subclause 
                                        (I)(aa)(BB), the term 
                                        `adjusted annual net 
                                        income' with respect to 
                                        any fiscal year means 
                                        annual net income, 
                                        determined in 
                                        accordance with 
                                        generally accepted 
                                        accounting principles 
                                        (before after-tax gain 
                                        or loss on any sale of 
                                        assets), but without 
                                        regard to any reduction 
                                        by reason of 
                                        depreciation or 
                                        amortization, except 
                                        that in no event shall 
                                        adjusted annual net 
                                        income for any fiscal 
                                        year be less than zero.
                                          ``(bb) Dividend base 
                                        amount.--For purposes 
                                        of this clause, the 
                                        term `dividend base 
                                        amount' means, with 
                                        respect to a plan year, 
                                        an amount equal to the 
                                        greater of--
                                                  ``(AA) the 
                                                median of the 
                                                amounts of the 
                                                dividends paid 
                                                during each of 
                                                the last 5 
                                                fiscal years of 
                                                the plan 
                                                sponsor ending 
                                                before such 
                                                plan year, or
                                                  ``(BB) the 
                                                amount of 
                                                dividends paid 
                                                during such 
                                                plan year on 
                                                preferred stock 
                                                that was issued 
                                                on or before 
                                                May 21, 2010, 
                                                or that is 
                                                replacement 
                                                stock for such 
                                                preferred 
                                                stock.
                                  ``(III) Only certain post-
                                2009 dividends and redemptions 
                                counted.--For purposes of 
                                subclause (I) (other than for 
                                purposes of calculating the 
                                dividend base amount), there 
                                shall only be taken into 
                                account dividends declared, and 
                                redemptions occurring, after 
                                February 28, 2010.
                                  ``(IV) 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 
                                subclause (I).
                                  ``(V) Exception for stock 
                                dividends.--Any distribution by 
                                the plan sponsor to its 
                                shareholders of stock issued by 
                                the plan sponsor shall not be 
                                taken into account under 
                                subclause (I).
                                  ``(VI) Exception for certain 
                                redemptions.--Redemptions of 
                                securities which are not 
                                readily tradable on an 
                                established securities market 
                                which--
                                          ``(aa) are made 
                                        pursuant to a pension 
                                        plan that is qualified 
                                        under section 401 of 
                                        the Internal Revenue 
                                        Code of 1986 or a 
                                        shareholder-approved 
                                        program,
                                          ``(bb) are made on 
                                        account of an 
                                        employee's termination 
                                        of employment with the 
                                        plan sponsor, or the 
                                        death or disability of 
                                        a shareholder, or
                                          ``(cc) were, 
                                        immediately before 
                                        redemption, held 
                                        directly or indirectly 
                                        by, or for the benefit 
                                        of, the Federal 
                                        Government or a Federal 
                                        reserve bank,
                                 shall not be taken into 
                                account under subclause (I).
                          ``(vi) Other definitions and rules.--
                        For purposes of this subparagraph--
                                  ``(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 
                                applicable plan year with 
                                respect to which an election is 
                                made under subparagraph (D)--
                                          ``(aa) except as 
                                        provided in item (bb), 
                                        the 3-year period 
                                        beginning with the 
                                        applicable plan year 
                                        (or, if later, the 
                                        first plan year 
                                        beginning after 
                                        December 31, 2009), or
                                          ``(bb) if the plan 
                                        sponsor elects 15-year 
                                        amortization for the 
                                        shortfall amortization 
                                        base for the applicable 
                                        plan year, the 5-year 
                                        period beginning with 
                                        such plan 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 
                                subparagraph (D) with respect 
                                to 2 or more plans, the 
                                Secretary of the Treasury shall 
                                provide rules for the 
                                application of this 
                                subparagraph 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 clause (i) (determined 
                                without regard to this 
                                subparagraph).
                  ``(G) Mergers and acquisitions.--The 
                Secretary of the Treasury shall prescribe rules 
                for the application of subparagraphs (D) and 
                (F) in any case where there is a merger or 
                acquisition involving a plan sponsor making the 
                election under subparagraph (D).
                  ``(H) Regulations and guidance.--The 
                Secretary of the Treasury may prescribe such 
                regulations and other guidance of general 
                applicability as such Secretary may determine 
                necessary to achieve the purposes of 
                subparagraphs (D) and (F).''.
          (2) Notice requirement.--Section 204 of such Act (29 
        U.S.C. 1054) is amended--
                  (A) by redesignating subsection (k) as 
                subsection (l); and
                  (B) by inserting after subsection (j) the 
                following new subsection:
  ``(k) Notice in Connection With Shortfall Amortization 
Election.--
          ``(1) In general.--Not later 30 days after the date 
        of an election under clause (iv) of section 
        303(c)(2)(D) in connection with a single-employer plan, 
        the plan administrator shall provide notice of such 
        election in accordance with this subsection to each 
        plan participant and beneficiary, each labor 
        organization representing such participants and 
        beneficiaries, and the Pension Benefit Guaranty 
        Corporation.
          ``(2) Matters included in notice.--Each notice 
        provided pursuant to this subsection shall set forth--
                  ``(A) a statement that recently enacted 
                legislation permits employers to delay pension 
                funding;
                  ``(B) with respect to required 
                contributions--
                          ``(i) the amount of contributions 
                        that would have been required had the 
                        election not been made;
                          ``(ii) the amount of the reduction in 
                        required contributions for the 
                        applicable plan year that occurs on 
                        account of the election; and
                          ``(iii) the number of plan years to 
                        which such reduction will apply;
                  ``(C) with respect to a plan's funding status 
                as of the end of the plan year preceding the 
                applicable plan year--
                          ``(i) the liabilities determined 
                        under section 4010(d)(1)(A); and
                          ``(ii) the market value of assets of 
                        the plan; and
                  ``(D) with respect to installment 
                acceleration amounts (as defined in section 
                303(c)(2)(F)(iii)(I))--
                          ``(i) an explanation of section 
                        303(c)(2)(F) (relating to increases in 
                        shortfall amortization installments in 
                        cases of excess compensation or certain 
                        dividends or stock redemptions); and
                          ``(ii) a statement that increases in 
                        required contributions may occur in the 
                        event of future payments of excess 
                        employee compensation or certain share 
                        repurchasing or dividend activity and 
                        that subsequent notices of any such 
                        payments or activity will be provided 
                        in the annual funding notice provided 
                        pursuant to section 101(f).
          ``(3) Other requirements.--
                  ``(A) Form.--The notice required by paragraph 
                (1) shall be written in a manner calculated to 
                be understood by the average plan participant. 
                The Secretary of the Treasury shall prescribe a 
                model notice that a plan administrator may use 
                to satisfy the requirements of paragraph (1).
                  ``(B) Provision to designated persons.--Any 
                notice under paragraph (1) may be provided to a 
                person designated, in writing, by the person to 
                which it would otherwise be provided.
          ``(4) Effect of egregious failure.--
                  ``(A) In general.--In the case of any 
                egregious failure to meet any requirement of 
                this subsection with respect to any election, 
                such election shall be treated as having not 
                been made.
                  ``(B) Egregious failure.--For purposes of 
                subparagraph (A), there is an egregious failure 
                to meet the requirements of this subsection if 
                such failure is in the control of the plan 
                sponsor and is--
                          ``(i) an intentional failure 
                        (including any failure to promptly 
                        provide the required notice or 
                        information after the plan 
                        administrator discovers an 
                        unintentional failure to meet the 
                        requirements of this subsection),
                          ``(ii) a failure to provide most of 
                        the participants and beneficiaries with 
                        most of the information they are 
                        entitled to receive under this 
                        subsection, or
                          ``(iii) a failure which is determined 
                        to be egregious under regulations 
                        prescribed by the Secretary of the 
                        Treasury.
          ``(5) Use of new technologies.--The Secretary of the 
        Treasury may, in consultation with the Secretary, by 
        regulations or other guidance of general applicability, 
        allow any notice under this subsection to be provided 
        using new technologies.''.
                  (C) Subsequent supplemental notices.--Section 
                101(f)(2)(C) of such Act (29 U.S.C. 
                1021(f)(2)(C)) is amended--
                          (i) by striking ``and'' at the end of 
                        clause (i);
                          (ii) by redesignating clause (ii) as 
                        clause (iii); and
                          (iii) by inserting after clause (i) 
                        the following new clause:
                          ``(ii) any excess employee 
                        compensation amounts and any dividends 
                        and redemptions amounts determined 
                        under section 303(c)(2)(F) for the 
                        preceding plan year with respect to the 
                        plan, and''.
          (3) Disregard of installment acceleration amounts in 
        determining quarterly contributions.--Section 303(j)(3) 
        of such Act (29 U.S.C. 1083(j)(3)) is amended by adding 
        at the end the following new subparagraph:
                  ``(F) Disregard of installment acceleration 
                amounts.--Subparagraph (D) shall be applied 
                without regard to any increase under subsection 
                (c)(2)(F).''.
          (4) Conforming amendment.--Section 303(c)(1) of such 
        Act (29 U.S.C. 1083(c)(1)) is amended 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''.
  (b) IRC Amendments.--
          (1) In general.--Section 430(c)(2) of the Internal 
        Revenue Code of 1986 is amended by adding at the end 
        the following subparagraphs:
                  ``(D) Special rule.--
                          ``(i) In general.--In the case of the 
                        shortfall amortization base of a plan 
                        for any applicable plan year, the 
                        shortfall amortization installments are 
                        the amounts described in clause (ii) or 
                        (iii), if made applicable by an 
                        election under clause (iv). In the 
                        absence of a timely election, such 
                        installments shall be determined 
                        without regard to this subparagraph.
                          ``(ii) 2 plus 7 amortization 
                        schedule.--The shortfall amortization 
                        installments described in this clause 
                        are--
                                  ``(I) in the case of the 
                                first 2 plan years in the 9-
                                plan-year period beginning with 
                                the applicable plan year, 
                                interest on the shortfall 
                                amortization base (determined 
                                by using the effective interest 
                                rate for the applicable plan 
                                year), and
                                  ``(II) in the case of the 
                                last 7 plan years in such 9-
                                plan-year period, the amounts 
                                necessary to amortize the 
                                balance of such shortfall 
                                amortization base in level 
                                annual installments over such 
                                last 7 plan years (determined 
                                using the segment rates 
                                determined under subparagraph 
                                (C) of subsection (h)(2) for 
                                the applicable plan year, 
                                applied under rules similar to 
                                the rules of subparagraph (B) 
                                of subsection (h)(2)).
                          ``(iii) 15-year amortization.--The 
                        shortfall amortization installments 
                        described in this clause are the 
                        amounts under subparagraphs (A) and (B) 
                        determined by substituting `15 plan-
                        year period' for `7-plan-year period'.
                          ``(iv) Election.--
                                  ``(I) In general.--The plan 
                                sponsor may, with respect to a 
                                plan, elect, with respect to 
                                any of not more than 2 
                                applicable plan years, to 
                                determine shortfall 
                                amortization installments under 
                                this subparagraph. An election 
                                under either clause (ii) or 
                                clause (iii) may be made with 
                                respect to either of such 
                                applicable plan years.
                                  ``(II) Eligibility for 
                                election.--An election may be 
                                made to determine shortfall 
                                amortization installments under 
                                this subparagraph with respect 
                                to a plan only if, as of the 
                                date of the election--
                                          ``(aa) the plan 
                                        sponsor is not a debtor 
                                        in a case under title 
                                        11, United States Code, 
                                        or similar Federal or 
                                        State law,
                                          ``(bb) there are no 
                                        unpaid minimum required 
                                        contributions with 
                                        respect to the plan for 
                                        purposes of section 
                                        4971,
                                          ``(cc) there is no 
                                        lien in favor of the 
                                        plan under subsection 
                                        (k) or under section 
                                        303(k) of the Employee 
                                        Retirement Income 
                                        Security Act of 1974, 
                                        and
                                          ``(dd) a distress 
                                        termination has not 
                                        been initiated for the 
                                        plan under section 
                                        4041(c) of such Act.
                                  ``(III) Rules relating to 
                                election.--Such election shall 
                                be made at such times, and in 
                                such form and manner, as shall 
                                be prescribed by the Secretary 
                                and shall be irrevocable, 
                                except under such limited 
                                circumstances, and subject to 
                                such conditions, as the 
                                Secretary may prescribe.
                  ``(E) Applicable plan year.--
                          ``(i) In general.--For purposes of 
                        this paragraph, the term `applicable 
                        plan year' means, subject to the 
                        election of the plan sponsor under 
                        subparagraph (D)(iv), each of not more 
                        than 2 of the plan years beginning in 
                        2008, 2009, 2010, or 2011.
                          ``(ii) Special rule relating to 
                        2008.--A plan year may be elected as an 
                        applicable plan year pursuant to this 
                        subparagraph only if the due date under 
                        subsection (j)(1) for the payment of 
                        the minimum required contribution for 
                        such plan year occurs on or after March 
                        10, 2010.
                  ``(F) Increases in shortfall amortization 
                installments in cases of excess compensation or 
                certain dividends or stock redemptions.--
                          ``(i) In general.--If, with respect 
                        to an election for an applicable plan 
                        year under subparagraph (D), there is 
                        an installment acceleration amount with 
                        respect to a plan for any plan year in 
                        the restriction period (or if there is 
                        an installment acceleration amount 
                        carried forward to a plan year not in 
                        the restriction period), then the 
                        shortfall amortization installment 
                        otherwise determined and payable under 
                        this paragraph for such plan year shall 
                        be increased by such amount.
                          ``(ii) Back-end adjustment to 
                        amortization schedule.--Subject to 
                        rules prescribed by the Secretary, if a 
                        shortfall amortization installment with 
                        respect to any shortfall amortization 
                        base for an applicable plan year is 
                        required to be increased for any plan 
                        year under clause (i), subsequent 
                        shortfall amortization installments 
                        with respect to such base shall be 
                        reduced, in reverse order of the 
                        otherwise required installments 
                        beginning with the final scheduled 
                        installment, to the extent necessary to 
                        limit the present value of such 
                        subsequent shortfall amortization 
                        installments (after application of this 
                        subparagraph) to the present value of 
                        the remaining unamortized shortfall 
                        amortization base.
                          ``(iii) Installment acceleration 
                        amount.--For purposes of this 
                        subparagraph--
                                  ``(I) In general.--The term 
                                `installment acceleration 
                                amount' means, with respect to 
                                any plan year in a restriction 
                                period with respect to an 
                                applicable plan year, the sum 
                                of--
                                          ``(aa) the aggregate 
                                        amount of excess 
                                        employee compensation 
                                        determined under clause 
                                        (iv) for the plan year, 
                                        plus
                                          ``(bb) the dividend 
                                        and redemption amount 
                                        determined under clause 
                                        (v) for the plan year.
                                  ``(II) Cumulative 
                                limitation.--The installment 
                                acceleration amount for any 
                                plan year shall not exceed the 
                                excess (if any) of--
                                          ``(aa) the sum of the 
                                        shortfall amortization 
                                        installments for the 
                                        plan year and all 
                                        preceding plan years in 
                                        the amortization period 
                                        elected under 
                                        subparagraph (D) with 
                                        respect to the 
                                        shortfall amortization 
                                        base with respect to an 
                                        applicable year, 
                                        determined without 
                                        regard to subparagraph 
                                        (D) and this 
                                        subparagraph, over
                                          ``(bb) the sum of the 
                                        shortfall amortization 
                                        installments for such 
                                        plan year and all such 
                                        preceding plan years, 
                                        determined after 
                                        application of 
                                        subparagraph (D) (and 
                                        in the case of any 
                                        preceding plan year, 
                                        after application of 
                                        this subparagraph).
                                  ``(III) Carryover of excess 
                                installment acceleration 
                                amounts.--
                                          ``(aa) In general.--
                                        If the installment 
                                        acceleration amount for 
                                        any plan year 
                                        (determined without 
                                        regard to subclause 
                                        (II)) exceeds the 
                                        limitation under 
                                        subclause (II), then, 
                                        subject to item (bb), 
                                        such excess shall be 
                                        treated as an 
                                        installment 
                                        acceleration amount for 
                                        the succeeding plan 
                                        year.
                                          ``(bb) Cap to 
                                        apply.--If any amount 
                                        treated as an 
                                        installment 
                                        acceleration amount 
                                        under item (aa) or this 
                                        item with respect any 
                                        succeeding plan year, 
                                        when added to other 
                                        installment 
                                        acceleration amounts 
                                        (determined without 
                                        regard to subclause 
                                        (II)) with respect to 
                                        the plan year, exceeds 
                                        the limitation under 
                                        subclause (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.
                                          ``(cc) Limitation on 
                                        years to which amounts 
                                        carried forward.--No 
                                        amount shall be carried 
                                        forward under item (aa) 
                                        or (bb) to a plan year 
                                        which begins after 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 
                                        subparagraph (D)(iii)).
                                          ``(dd) Ordering 
                                        rules.--For purposes of 
                                        applying item (bb), 
                                        installment 
                                        acceleration amounts 
                                        for the plan year 
                                        (determined without 
                                        regard to any carryover 
                                        under this clause) 
                                        shall be applied first 
                                        against the limitation 
                                        under subclause (II) 
                                        and then carryovers to 
                                        such plan year shall be 
                                        applied against such 
                                        limitation on a first-
                                        in, first-out basis.
                          ``(iv) Excess employee 
                        compensation.--
                                  ``(I) In general.--For 
                                purposes of this paragraph, the 
                                term `excess employee 
                                compensation' means the sum 
                                of--
                                          ``(aa) with respect 
                                        to any employee, for 
                                        any plan year, the 
                                        excess (if any) of--
                                                  ``(AA) the 
                                                aggregate 
                                                amount 
                                                includible in 
                                                income under 
                                                chapter 1 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
                                                  ``(BB) 
                                                $1,000,000, 
                                                plus
                                          ``(bb) the amount of 
                                        assets 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, during the 
                                        calendar year 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.
                                  ``(II) No double counting.--
                                No amount shall be taken into 
                                account under subclause (I) 
                                more than once.
                                  ``(III) Employee; 
                                remuneration.--For purposes of 
                                this clause, 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 
                                `remuneration' shall include 
                                earned income of such an 
                                individual.
                                  ``(IV) Certain payments under 
                                existing contracts.--There 
                                shall not be taken into account 
                                under subclause (I) any 
                                remuneration consisting of 
                                nonqualified deferred 
                                compensation, restricted stock 
                                (or restricted stock units), 
                                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.
                                  ``(V) Only remuneration for 
                                post-2009 services counted.--
                                Remuneration shall be taken 
                                into account under subclause 
                                (I)(aa) only to the extent 
                                attributable to services 
                                performed by the employee for 
                                the plan sponsor after December 
                                31, 2009.
                                  ``(VI) Commissions.--
                                          ``(aa) In general.--
                                        There shall not be 
                                        taken into account 
                                        under subclause (I)(aa) 
                                        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.
                                          ``(bb) Specified 
                                        employees.--Item (aa) 
                                        shall not apply in the 
                                        case of any specified 
                                        employee (within the 
                                        meaning of section 
                                        409A(a)(2)(B)(i)) or 
                                        any employee who would 
                                        be such a specified 
                                        employee if the plan 
                                        sponsor were a 
                                        corporation described 
                                        in such section.
                                  ``(VII) Indexing of amount.--
                                In the case of any calendar 
                                year beginning after 2010, the 
                                dollar amount under subclause 
                                (I)(aa)(BB) shall be increased 
                                by an amount equal to--
                                          ``(aa) such dollar 
                                        amount, multiplied by
                                          ``(bb) 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 $20,000, such 
                                increase shall be rounded to 
                                the next lowest multiple of 
                                $20,000.
                          ``(v) Certain dividends and 
                        redemptions.--
                                  ``(I) In general.--The 
                                dividend and redemption amount 
                                determined under this clause 
                                for any plan year is the lesser 
                                of--
                                          ``(aa) the excess 
                                        of--
                                                  ``(AA) the 
                                                sum of the 
                                                dividends paid 
                                                during the plan 
                                                year by the 
                                                plan sponsor, 
                                                plus the 
                                                amounts paid 
                                                for the 
                                                redemption of 
                                                stock of the 
                                                plan sponsor 
                                                redeemed during 
                                                the plan year, 
                                                over
                                                  ``(BB) an 
                                                amount equal to 
                                                the average of 
                                                adjusted annual 
                                                net income of 
                                                the plan 
                                                sponsor for the 
                                                last 5 fiscal 
                                                years of the 
                                                plan sponsor 
                                                ending before 
                                                such plan year, 
                                                or
                                          ``(bb) the sum of--
                                                  ``(AA) the 
                                                amounts paid 
                                                for the 
                                                redemption of 
                                                stock of the 
                                                plan sponsor 
                                                redeemed during 
                                                the plan year, 
                                                plus
                                                  ``(BB) the 
                                                excess of 
                                                dividends paid 
                                                during the plan 
                                                year by the 
                                                plan sponsor 
                                                over the 
                                                dividend base 
                                                amount.
                                  ``(II) Definitions.--
                                          ``(aa) Adjusted 
                                        annual net income.--For 
                                        purposes of subclause 
                                        (I)(aa)(BB), the term 
                                        `adjusted annual net 
                                        income' with respect to 
                                        any fiscal year means 
                                        annual net income, 
                                        determined in 
                                        accordance with 
                                        generally accepted 
                                        accounting principles 
                                        (before after-tax gain 
                                        or loss on any sale of 
                                        assets), but without 
                                        regard to any reduction 
                                        by reason of 
                                        depreciation or 
                                        amortization, except 
                                        that in no event shall 
                                        adjusted annual net 
                                        income for any fiscal 
                                        year be less than zero.
                                          ``(bb) Dividend base 
                                        amount.--For purposes 
                                        of this clause, the 
                                        term `dividend base 
                                        amount' means, with 
                                        respect to a plan year, 
                                        an amount equal to the 
                                        greater of--
                                                  ``(AA) the 
                                                median of the 
                                                amounts of the 
                                                dividends paid 
                                                during each of 
                                                the last 5 
                                                fiscal years of 
                                                the plan 
                                                sponsor ending 
                                                before such 
                                                plan year, or
                                                  ``(BB) the 
                                                amount of 
                                                dividends paid 
                                                during such 
                                                plan year on 
                                                preferred stock 
                                                that was issued 
                                                on or before 
                                                May 21, 2010, 
                                                or that is 
                                                replacement 
                                                stock for such 
                                                preferred 
                                                stock.
                                  ``(III) Only certain post-
                                2009 dividends and redemptions 
                                counted.--For purposes of 
                                subclause (I) (other than for 
                                purposes of calculating the 
                                dividend base amount), there 
                                shall only be taken into 
                                account dividends declared, and 
                                redemptions occurring, after 
                                February 28, 2010.
                                  ``(IV) 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 
                                subclause (I).
                                  ``(V) Exception for stock 
                                dividends.--Any distribution by 
                                the plan sponsor to its 
                                shareholders of stock issued by 
                                the plan sponsor shall not be 
                                taken into account under 
                                subclause (I).
                                  ``(VI) Exception for certain 
                                redemptions.--Redemptions of 
                                securities which are not 
                                readily tradable on an 
                                established securities market 
                                which--
                                          ``(aa) are made 
                                        pursuant to a plan 
                                        which is qualified 
                                        under section 401 or a 
                                        shareholder-approved 
                                        program,
                                          ``(bb) are made on 
                                        account of an 
                                        employee's termination 
                                        of employment with the 
                                        plan sponsor, or the 
                                        death or disability of 
                                        a shareholder, or
                                          ``(cc) were, 
                                        immediately before 
                                        redemption, held 
                                        directly or indirectly 
                                        by, or for the benefit 
                                        of, the Federal 
                                        Government or a Federal 
                                        reserve bank,
                                 shall not be taken into 
                                account under subclause (I).
                          ``(vi) Other definitions and rules.--
                        For purposes of this subparagraph--
                                  ``(I) Plan sponsor.--The term 
                                `plan sponsor' includes any 
                                group of which the plan sponsor 
                                is a member and which is 
                                treated as a single employer 
                                under subsection (b), (c), (m), 
                                or (o) of section 414.
                                  ``(II) Restriction period.--
                                The term `restriction period' 
                                means, with respect to any 
                                applicable plan year with 
                                respect to which an election is 
                                made under subparagraph (D)--
                                          ``(aa) except as 
                                        provided in item (bb), 
                                        the 3-year period 
                                        beginning with the 
                                        applicable plan year 
                                        (or, if later, the 
                                        first plan year 
                                        beginning after 
                                        December 31, 2009), or
                                          ``(bb) if the plan 
                                        sponsor elects 15-year 
                                        amortization for the 
                                        shortfall amortization 
                                        base for the applicable 
                                        plan year, the 5-year 
                                        period beginning with 
                                        such plan 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 
                                subparagraph (D) with respect 
                                to 2 or more plans, the 
                                Secretary shall provide rules 
                                for the application of this 
                                subparagraph 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 clause (i) (determined 
                                without regard to this 
                                subparagraph).
                  ``(G) Mergers and acquisitions.--The 
                Secretary shall prescribe rules for the 
                application of subparagraphs (D) and (F) in any 
                case where there is a merger or acquisition 
                involving a plan sponsor making the election 
                under subparagraph (D).
                  ``(H) Regulations and guidance.--The 
                Secretary may prescribe such regulations and 
                other guidance of general applicability as the 
                Secretary may determine necessary to achieve 
                the purposes of subparagraphs (D) and (F).''.
          (2) Notice requirement.--
                  (A) In general.--Section 4980F of such Code 
                is amended--
                          (i) by striking ``subsection (e)'' 
                        each place it appears in subsection (a) 
                        and paragraphs (1) and (3) of 
                        subsection (c) and inserting 
                        ``subsections (e) and (f)'',
                          (ii) by striking ``subsection (e)'' 
                        in subsection (c)(2)(A) and inserting 
                        ``subsection (e), (f), or both, as the 
                        case may be'', and
                          (iii) by redesignating subsection (f) 
                        as subsection (g) and by inserting 
                        after subsection (e) the following new 
                        subsection:
  ``(f) Notice in Connection With Shortfall Amortization 
Election.--
          ``(1) In general.--Not later 30 days after the date 
        of an election under clause (iv) of section 
        430(c)(2)(D) in connection with a plan, the plan 
        administrator shall provide notice of such election in 
        accordance with this subsection to each plan 
        participant and beneficiary, each labor organization 
        representing such participants and beneficiaries, and 
        the Pension Benefit Guaranty Corporation.
          ``(2) Matters included in notice.--Each notice 
        provided pursuant to this subsection shall set forth--
                  ``(A) a statement that recently enacted 
                legislation permits employers to delay pension 
                funding;
                  ``(B) with respect to required 
                contributions--
                          ``(i) the amount of contributions 
                        that would have been required had the 
                        election not been made;
                          ``(ii) the amount of the reduction in 
                        required contributions for the 
                        applicable plan year that occurs on 
                        account of the election; and
                          ``(iii) the number of plan years to 
                        which such reduction will apply;
                  ``(C) with respect to a plan's funding status 
                as of the end of the plan year preceding the 
                applicable plan year--
                          ``(i) the liabilities determined 
                        under section 4010(d)(1)(A) of the 
                        Employee Retirement Income Security Act 
                        of 1974; and
                          ``(ii) the market value of assets of 
                        the plan; and
                  ``(D) with respect to installment 
                acceleration amounts (as defined in section 
                430(c)(2)(F)(iii)(I))--
                          ``(i) an explanation of section 
                        430(c)(2)(F) (relating to increases in 
                        shortfall amortization installments in 
                        cases of excess compensation or certain 
                        dividends or stock redemptions); and
                          ``(ii) a statement that increases in 
                        required contributions may occur in the 
                        event of future payments of excess 
                        employee compensation or certain share 
                        repurchasing or dividend activity and 
                        that subsequent notices of any such 
                        payments or activity will be provided 
                        in the annual funding notice provided 
                        pursuant to section 101(f) of the 
                        Employee Retirement Income Security Act 
                        of 1974.
          ``(3) Other requirements.--
                  ``(A) Form.--The notice required by paragraph 
                (1) shall be written in a manner calculated to 
                be understood by the average plan participant 
                and shall provide sufficient information (as 
                determined in accordance with regulations or 
                other guidance of general applicability 
                prescribed by the Secretary) to allow plan 
                participants and beneficiaries to understand 
                the effect of the election. The Secretary shall 
                prescribe a model notice that a plan 
                administrator may use to satisfy the 
                requirements of paragraph (1).
                  ``(B) Provision to designated persons.--Any 
                notice under paragraph (1) may be provided to a 
                person designated, in writing, by the person to 
                which it would otherwise be provided.''.
                  (B) Conforming amendment.--Subsection (g) of 
                section 4980F of such Code is amended by 
                inserting ``or (f)'' after ``subsection (e)''.
          (3) Disregard of installment acceleration amounts in 
        determining quarterly contributions.--Section 430(j)(3) 
        of such Code is amended by adding at the end the 
        following new subparagraph:
                  ``(F) Disregard of installment acceleration 
                amounts.--Subparagraph (D) shall be applied 
                without regard to any increase under subsection 
                (c)(2)(F).''.
          (4) Conforming amendment.--Paragraph (1) of section 
        430(c) of such Code is amended 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''.
  (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 FUNDING RELIEF TO PLANS WITH DELAYED 
                    EFFECTIVE DATE.

  ``(a) Alternative Elections.--
          ``(1) In general.--Subject to this section, a plan 
        sponsor of a plan to which section 104, 105, or 106 of 
        this Act applies may either elect the application of 
        subsection (b) with respect to the plan for not more 
        than 2 applicable plan years or elect the application 
        of subsection (c) with respect to the plan for 1 
        applicable plan year.
          ``(2) Eligibility for elections.--An election may be 
        made by a plan sponsor under paragraph (1) with respect 
        to a plan only if at the time of the election--
                  ``(A) the plan sponsor is not a debtor in a 
                case under title 11, United States Code, or 
                similar Federal or State law,
                  ``(B) there are no accumulated funding 
                deficiencies (as defined in section 302(a)(2) 
                of the Employee Retirement Income Security Act 
                of 1974 (as in effect immediately before the 
                enactment of this Act) or in section 412(a) of 
                the Internal Revenue Code of 1986 (as so in 
                effect)) with respect to the plan,
                  ``(C) there is no lien in favor of the plan 
                under section 302(d) (as so in effect) or under 
                section 412(n) of such Code (as so in effect), 
                and
                  ``(D) a distress termination has not been 
                initiated for the plan under section 4041(c) of 
                the Employee Retirement Income Security Act of 
                1974.
  ``(b) Alternative Additional Funding Charge.--If the plan 
sponsor elects the application of this subsection with respect 
to the plan, for purposes of applying section 302(d) of the 
Employee Retirement Income Security Act of 1974 (as in effect 
before the amendments made by this subtitle and subtitle B) and 
section 412(l) of the Internal Revenue Code of 1986 (as so in 
effect)--
          ``(1) the deficit reduction contribution under 
        paragraph (2) of such section 302(d) and paragraph (2) 
        of such section 412(l) for such plan for any applicable 
        plan year, shall be zero, and
          ``(2) the additional funding charge under paragraph 
        (1) of such section 302(d) and paragraph (1) of such 
        section 412(l) for such plan for any applicable plan 
        year shall be increased by an amount equal to the 
        installment acceleration amount (as defined in sections 
        303(c)(2)(F)(iii)(I) of such Act (as amended by the 
        American Jobs and Closing Tax Loopholes Act of 2010) 
        and 430(c)(2)(F)(iii)(I) of such Code (as so amended)) 
        with respect to the plan sponsor for such plan year, 
        determined by treating the later of such plan year or 
        the first plan year beginning after December 31, 2009, 
        as the restriction period.
  ``(c) Application of 15-year Amortization.--If the plan 
sponsor elects the application of this subsection with respect 
to the plan, for purposes of applying section 302(d) of such 
Act (as in effect before the amendments made by this subtitle 
and subtitle B) and section 412(l) of such Code (as so in 
effect)--
          ``(1) in the case of the increased unfunded new 
        liability of the plan, the applicable percentage 
        described in paragraph (4)(C) of such section 302(d) 
        and paragraph (4)(C) of such section 412(l) for any 
        pre-effective date plan year beginning with or after 
        the applicable plan year shall be the ratio of--
                  ``(A) the annual installments payable in each 
                plan year if the increased unfunded new 
                liability for such plan year were amortized in 
                equal installments over the period beginning 
                with such plan year and ending with the last 
                plan year in the period of 15 plan years 
                beginning with the applicable plan year, 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,
          ``(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, and
          ``(3) the additional funding charge with respect to 
        the plan for a plan year shall be increased by an 
        amount equal to the installment acceleration amount (as 
        defined in section 303(c)(2)(F)(iii) of such Act (as 
        amended by the American Jobs and Closing Tax Loopholes 
        Act of 2010 and section 430(c)(2)(F)(iii) of such Code 
        (as so amended)) with respect to the plan sponsor for 
        such plan year, determined without regard to subclause 
        (II) of such sections 303(c)(2)(F)(iii) and 
        430(c)(2)(F)(iii).
  ``(d) Definitions and Special Rules.--For purposes of this 
section----
          ``(1) Applicable plan year.--
                  ``(A) In general.--The term `applicable plan 
                year' with respect to a plan means, subject to 
                the election of the plan sponsor under 
                subsection (a), a plan year beginning in 2009, 
                2010, or 2011.
                  ``(B) Election.--
                          ``(i) In general.--The election 
                        described in subsection (a) shall be 
                        made at such times, and in such form 
                        and manner, as shall be prescribed by 
                        the Secretary of the Treasury.
                          ``(ii) Reduction in years which may 
                        be elected.--The number of applicable 
                        plan years for which an election may be 
                        made under section 303(c)(2)(D) of the 
                        Employee Retirement Income Security Act 
                        of 1974 (as amended by the American 
                        Jobs and Closing Tax Loopholes Act of 
                        2010) or section 430(c)(2)(D) of the 
                        Internal Revenue Code of 1986 (as so 
                        amended) shall be reduced by the number 
                        of applicable plan years for which an 
                        election under this section is made.
                  ``(C) Allocation of installment acceleration 
                amount for multiple plan election.--In the case 
                of an election under this section with respect 
                to 2 or more plans by the same plan sponsor, 
                the installment acceleration amount shall be 
                apportioned ratably with respect to such plans 
                in proportion to the deficit reduction 
                contributions of the plans determined without 
                regard to subsection (b)(1).
          ``(2) Plan sponsor.--The term `plan sponsor' shall 
        have the meaning provided such term in section 
        303(c)(2)(F)(vi)(I) of the Employee Retirement Income 
        Security Act of 1974 (as amended by the American Jobs 
        and Closing Tax Loopholes Act of 2010) and section 
        430(c)(2)(F)(vi)(I) of the Internal Revenue Code of 
        1986 (as so amended).
          ``(3) 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.
          ``(4) 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 (as 
        in effect before the amendments made by this subtitle 
        and subtitle B) and section 412(c)(2) of such Code (as 
        so in effect) 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 (as so in effect) and 
        412(l)(8)(B) of such Code (as so in effect)) of the 
        plan for the second plan year preceding the first 
        applicable plan year of such plan for which an election 
        under this section is made.
          ``(5) Other definitions.--The terms `unfunded new 
        liability' and `current liability' shall have the 
        meanings set forth in section 302(d) of such Act (as so 
        in effect) and section 412(l) of such Code (as so in 
        effect).
          ``(6) Additional funding charge increase not to 
        exceed relief.--
                  ``(A) Election under subsection (b).--In the 
                case of an election under subsection (b), an 
                increase resulting from the application of 
                subsection (b)(2) in the additional funding 
                charge with respect to a plan for a plan year 
                shall not exceed the excess (if any) of--
                          ``(i) the deficit reduction 
                        contribution under section 302(d)(2) of 
                        such Act (as so in effect) and section 
                        412(l)(2) of such Code (as so in 
                        effect) for such plan year, determined 
                        as if the election had not been made, 
                        over
                          ``(ii) the deficit reduction 
                        contribution under such sections for 
                        such plan (determined without regard to 
                        any increase under subsection (b)(2)).
                  ``(B) Election under subsection (c).--An 
                increase resulting from the application of 
                subsection (c)(3) in the additional funding 
                charge with respect to a plan for a plan year 
                shall not exceed the excess (if any) of--
                          ``(i) the sum of the deficit 
                        reduction contributions under section 
                        302(d)(2) of such Act (as so in effect) 
                        and section 412(l)(2) of such Code (as 
                        so in effect) for such plan for such 
                        plan year and for all preceding plan 
                        years beginning with or after the 
                        applicable plan year, determined as if 
                        the election had not been made, over
                          ``(ii) the sum of the deficit 
                        reduction contributions under such 
                        sections for such plan years 
                        (determined without regard to any 
                        increase under subsection (c)(3)).
  ``(e) Notice.--Not later 30 days after the date of an 
election under subsection (a) in connection with a plan, the 
plan administrator shall provide notice pursuant to, and 
subject to, rules similar to the rules of sections 204(k) of 
the Employee Retirement Income Security Act of 1974 (as amended 
by the American Jobs and Closing Tax Loopholes Act of 2010) and 
4980F(f) of the Internal Revenue Code of 1986 (as so 
amended).''.
  (b) Eligible Charity Plans.--Section 104 of such Act 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--
          ``(1) the plan is maintained by one or more employers 
        employing employees who are accruing benefits based on 
        service for the plan year,
          ``(2) such employees are employed in at least 40 
        States,
          ``(3) each such employee (other than a de minimis 
        number of employees) is employed by an employer 
        described in section 501(c)(3) of such Code and the 
        primary exempt purpose of each such employer is to 
        provide services with respect to children, and
          ``(4) the plan sponsor elects (at such time and in 
        such form and manner as shall be prescribed by the 
        Secretary of the Treasury) to be so treated.
Any election under this subsection may be revoked only with the 
consent of the Secretary of the Treasury.''.
  (c) Regulations.--The Secretary of the Treasury may prescribe 
such regulations as may be necessary to carry out the purposes 
of the amendments made by this section.
  (d) Effective Date.--
          (1) In general.--The amendment made by subsection (a) 
        shall apply to plan years beginning on or after January 
        1, 2009.
          (2) Eligible charity plans.--The amendments made by 
        subsection (b) shall apply to plan years beginning 
        after December 31, 2009.

SEC. 303. SUSPENSION OF CERTAIN FUNDING LEVEL LIMITATIONS.

  (a) Limitations on Benefit Accruals.--Section 203 of the 
Worker, Retiree, and Employer Recovery Act of 2008 (Public Law 
110-458; 122 Stat. 5118) is amended--
          (1) by striking ``the first plan year beginning 
        during the period beginning on October 1, 2008, and 
        ending on September 30, 2009'' and inserting ``any plan 
        year beginning during the period beginning on October 
        1, 2008, and ending on December 31, 2011'';
          (2) by striking ``substituting'' and all that follows 
        through ``for such plan year'' and inserting 
        ``substituting for such percentage the plan's adjusted 
        funding target attainment percentage for the last plan 
        year ending before September 30, 2009,''; and
          (3) by striking ``for the preceding plan year is 
        greater'' and inserting ``for such last plan year is 
        greater''.
  (b) Social Security Level-income Options.--
          (1) ERISA amendment.--Section 206(g)(3)(E) of the 
        Employee Retirement Income Security Act of 1974 is 
        amended by adding at the end the following new 
        sentence: ``For purposes of applying clause (i) in the 
        case of payments the annuity starting date for which 
        occurs on or before December 31, 2011, payments under a 
        social security leveling option shall be treated as not 
        in excess of the monthly amount paid under a single 
        life annuity (plus an amount not in excess of a social 
        security supplement described in the last sentence of 
        section 204(b)(1)(G)).''.
          (2) IRC amendment.--Section 436(d)(5) of the Internal 
        Revenue Code of 1986 is amended by adding at the end 
        the following new sentence: ``For purposes of applying 
        subparagraph (A) in the case of payments the annuity 
        starting date for which occurs on or before December 
        31, 2011, payments under a social security leveling 
        option shall be treated as not in excess of the monthly 
        amount paid under a single life annuity (plus an amount 
        not in excess of a social security supplement described 
        in the last sentence of section 411(a)(9)).''.
          (3) Effective date.--
                  (A) In general.--The amendments made by this 
                subsection shall apply to annuity payments the 
                annuity starting date for which occurs on or 
                after January 1, 2011.
                  (B) Permitted application.--A plan shall not 
                be treated as failing to meet the requirements 
                of sections 206(g) of the Employee Retirement 
                Income Security Act of 1974 (as amended by this 
                subsection) and section 436(d) of the Internal 
                Revenue Code of 1986 (as so amended) if the 
                plan sponsor elects to apply the amendments 
                made by this subsection to payments the annuity 
                starting date for which occurs on or after the 
                date of the enactment of this Act and before 
                January 1, 2011.
  (c) Application of Credit Balance With Respect to Limitations 
on Shutdown Benefits and Unpredictable Contingent Event 
Benefits.--With respect to plan years beginning on or before 
December 31, 2011, in applying paragraph (5)(C) of subsection 
(g) of section 206 of the Employee Retirement Income Security 
Act of 1974 and subsection (f)(3) of section 436 of the 
Internal Revenue Code of 1986 in the case of unpredictable 
contingent events (within the meaning of section 206(g)(1)(C) 
of such Act and section 436(b)(3) of such Code) occurring on or 
after January 1, 2010, the references, in clause (i) of such 
paragraph (5)(C) and subparagraph (A) of such subsection 
(f)(3), to paragraph (1)(B) of such subsection (g) and 
subsection (b)(2) of such section 436 shall be disregarded.

SEC. 304. LOOKBACK FOR CREDIT BALANCE RULE.

  (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 plan years.--
                          ``(i) In general.--For purposes of 
                        applying subparagraph (C) for plan 
                        years beginning after June 30, 2009, 
                        and on or before December 31, 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 June 30, 2007, 
                                and on or before June 30, 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 on or 
                                before December 31, 2010, and
                                  ``(II) clause (i)(II) shall 
                                apply based on the last plan 
                                year beginning before July 1, 
                                2007, as determined under rules 
                                prescribed by the Secretary of 
                                the Treasury.''.
  (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 plan years.--
                          ``(i) In general.--For purposes of 
                        applying subparagraph (C) for plan 
                        years beginning after June 30, 2009, 
                        and on or before December 31, 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 June 30, 2007, 
                                and on or before June 30, 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, 2008, and on or 
                                before December 31, 2010, and
                                  ``(II) clause (i)(II) shall 
                                apply based on the last plan 
                                year beginning before July 1, 
                                2007, as determined under rules 
                                prescribed by the Secretary.''.

SEC. 305. INFORMATION REPORTING.

  (a) In General.--Section 4010(b) of the Employee Retirement 
Security Act of 1974 (29 U.S.C. 1310(b)) is amended by striking 
paragraph (1) and inserting the following:
          ``(1) either of the following requirements are met:
                  ``(A) the funding target attainment 
                percentage (as defined in subsection (d)(2)(B)) 
                at the end of the preceding plan year of a plan 
                maintained by the contributing sponsor or any 
                member of its controlled group is less than 80 
                percent; or
                  ``(B) the aggregate unfunded vested benefits 
                (as determined under section 
                4006(a)(3)(E)(iii)) of plans maintained by the 
                contributing sponsor and the members of its 
                controlled group exceed $75,000,000 
                (disregarding plans with no unfunded vested 
                benefits);''.
  (b) Effective Date.--The amendment made by this section shall 
apply to years beginning after 2009.

SEC. 306. ROLLOVER OF AMOUNTS RECEIVED IN AIRLINE CARRIER BANKRUPTCY.

  (a) General Rules.--
          (1) Rollover of airline payment amount.--If a 
        qualified airline employee receives any airline payment 
        amount and transfers any portion of such amount to a 
        traditional IRA within 180 days of receipt of such 
        amount (or, if later, within 180 days of the date of 
        the enactment of this Act), then such amount (to the 
        extent so transferred) shall be treated as a rollover 
        contribution described in section 402(c) of the 
        Internal Revenue Code of 1986. A qualified airline 
        employee making such a transfer may exclude from gross 
        income the amount transferred, in the taxable year in 
        which the airline payment amount was paid to the 
        qualified airline employee by the commercial passenger 
        airline carrier.
          (2) Transfer of amounts attributable to airline 
        payment amount following rollover to roth ira.--A 
        qualified airline employee who has contributed an 
        airline payment amount to a Roth IRA that is treated as 
        a qualified rollover contribution pursuant to section 
        125 of the Worker, Retiree, and Employer Recovery Act 
        of 2008 may transfer to a traditional IRA, in a 
        trustee-to-trustee transfer, all or any part of the 
        contribution (together with any net income allocable to 
        such contribution), and the transfer to the traditional 
        IRA will be deemed to have been made at the time of the 
        rollover to the Roth IRA, if such transfer is made 
        within 180 days of the date of the enactment of this 
        Act. A qualified airline employee making such a 
        transfer may exclude from gross income the airline 
        payment amount previously rolled over to the Roth IRA, 
        to the extent an amount attributable to the previous 
        rollover was transferred to a traditional IRA, in the 
        taxable year in which the airline payment amount was 
        paid to the qualified airline employee by the 
        commercial passenger airline carrier. No amount so 
        transferred to a traditional IRA may be treated as a 
        qualified rollover contribution with respect to a Roth 
        IRA within the 5-taxable year period beginning with the 
        taxable year in which such transfer was made.
          (3) Extension of time to file claim for refund.--A 
        qualified airline employee who excludes an amount from 
        gross income in a prior taxable year under paragraph 
        (1) or (2) may reflect such exclusion in a claim for 
        refund filed within the period of limitation under 
        section 6511(a) (or, if later, April 15, 2011).
  (b) Treatment of Airline Payment Amounts and Transfers for 
Employment Taxes.--For purposes of chapter 21 of the Internal 
Revenue Code of 1986 and section 209 of the Social Security 
Act, an airline payment amount shall not fail to be treated as 
a payment of wages by the commercial passenger airline carrier 
to the qualified airline employee in the taxable year of 
payment because such amount is excluded from the qualified 
airline employee's gross income under subsection (a).
  (c) Definitions and Special Rules.--For purposes of this 
section--
          (1) Airline payment amount.--
                  (A) In general.--The term ``airline payment 
                amount'' means any payment of any money or 
                other property which is payable by a commercial 
                passenger airline carrier to a qualified 
                airline employee--
                          (i) under the approval of an order of 
                        a Federal bankruptcy court in a case 
                        filed after September 11, 2001, and 
                        before January 1, 2007, and
                          (ii) in respect of the qualified 
                        airline employee's interest in a 
                        bankruptcy claim against the carrier, 
                        any note of the carrier (or amount paid 
                        in lieu of a note being issued), or any 
                        other fixed obligation of the carrier 
                        to pay a lump sum amount.
                The amount of such payment shall be determined 
                without regard to any requirement to deduct and 
                withhold tax from such payment under sections 
                3102(a) and 3402(a).
                  (B) Exception.--An airline payment amount 
                shall not include any amount payable on the 
                basis of the carrier's future earnings or 
                profits.
          (2) Qualified airline employee.--The term ``qualified 
        airline employee'' means an employee or former employee 
        of a commercial passenger airline carrier who was a 
        participant in a defined benefit plan maintained by the 
        carrier which--
                  (A) is a plan described in section 401(a) of 
                the Internal Revenue Code of 1986 which 
                includes a trust exempt from tax under section 
                501(a) of such Code, and
                  (B) was terminated or became subject to the 
                restrictions contained in paragraphs (2) and 
                (3) of section 402(b) of the Pension Protection 
                Act of 2006.
          (3) Traditional ira.--The term ``traditional IRA'' 
        means an individual retirement plan (as defined in 
        section 7701(a)(37) of the Internal Revenue Code of 
        1986) which is not a Roth IRA.
          (4) Roth ira.--The term ``Roth IRA'' has the meaning 
        given such term by section 408A(b) of such Code.
  (d) Surviving Spouse.--If a qualified airline employee died 
after receiving an airline payment amount, or if an airline 
payment amount was paid to the surviving spouse of a qualified 
airline employee in respect of the qualified airline employee, 
the surviving spouse of the qualified airline employee may take 
all actions permitted under section 125 of the Worker, Retiree 
and Employer Recovery Act of 2008, or under this section, to 
the same extent that the qualified airline employee could have 
done had the qualified airline employee survived.
  (e) Effective Date.--This section shall apply to transfers 
made after the date of the enactment of this Act with respect 
to airline payment amounts paid before, on, or after such date.

                      PART 2--MULTIEMPLOYER PLANS

SEC. 311. OPTIONAL USE OF 30-YEAR AMORTIZATION PERIODS.

  (a) Elective Special Relief Rules.--
          (1) ERISA amendment.--Section 304(b) of the Employee 
        Retirement Income Security Act of 1974 is amended by 
        adding at the end the following new paragraph:
          ``(8) Elective special relief rules.--Notwithstanding 
        any other provision of this subsection--
                  ``(A) Amortization of net investment 
                losses.--
                          ``(i) In general.--The plan sponsor 
                        of a multiemployer plan with respect to 
                        which the solvency test under 
                        subparagraph (B) is met may elect to 
                        treat the portion of any experience 
                        loss or gain for a plan year that is 
                        attributable to the allocable portion 
                        of the net investment losses incurred 
                        in either or both of the first two plan 
                        years ending on or after June 30, 2008, 
                        as an experience loss separate from 
                        other experience losses or gains to be 
                        amortized in equal annual installments 
                        (until fully amortized) over the 
                        period--
                                  ``(I) beginning with the plan 
                                year for which the allocable 
                                portion is determined, and
                                  ``(II) ending with the last 
                                plan year in the 30-plan year 
                                period beginning with the plan 
                                year following the plan year in 
                                which such net investment loss 
                                was incurred.
                          ``(ii) Coordination with 
                        extensions.--If an election is made 
                        under clause (i) 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 
                                plan year for which the 
                                election under this 
                                subparagraph is made, such 
                                extension shall not result in 
                                such amortization period 
                                exceeding 30 years.
                          ``(iii) Definitions and rules.--For 
                        purposes of this subparagraph--
                                  ``(I) Net investment 
                                losses.--
                                          ``(aa) In general.--
                                        The net investment loss 
                                        incurred by a plan in a 
                                        plan year is equal to 
                                        the excess of--
                                                  ``(AA) the 
                                                expected value 
                                                of the assets 
                                                as of the end 
                                                of the plan 
                                                year, over
                                                  ``(BB) the 
                                                market value of 
                                                the assets as 
                                                of the end of 
                                                the plan year,
                                        including any 
                                        difference attributable 
                                        to a criminally 
                                        fraudulent investment 
                                        arrangement.
                                          ``(bb) Expected 
                                        value.--For purposes of 
                                        item (aa), the expected 
                                        value of the assets as 
                                        of the end of a plan 
                                        year is the excess of--
                                                  ``(AA) the 
                                                market value of 
                                                the assets at 
                                                the beginning 
                                                of the plan 
                                                year plus 
                                                contributions 
                                                made during the 
                                                plan year, over
                                                  ``(BB) 
                                                disbursements 
                                                made during the 
                                                plan year.
                                        The amounts described 
                                        in subitems (AA) and 
                                        (BB) shall be adjusted 
                                        with interest at the 
                                        valuation rate to the 
                                        end of the plan year.
                                  ``(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.
                                  ``(III) Amount attributable 
                                to allocable portion of net 
                                investment loss.--The amount 
                                attributable to the allocable 
                                portion of the net investment 
                                loss for a plan year shall be 
                                an amount equal to the 
                                allocable portion of net 
                                investment loss for the plan 
                                year under subclauses (IV) and 
                                (V), increased with interest at 
                                the valuation rate determined 
                                from the plan year after the 
                                plan year in which the net 
                                investment loss was incurred.
                                  ``(IV) Allocable portion of 
                                net investment losses.--Except 
                                as provided in subclause (V), 
                                the net investment loss 
                                incurred in a plan year shall 
                                be allocated among the 5 plan 
                                years following the plan year 
                                in which the investment loss is 
                                incurred in accordance with the 
                                following table:

``Plan year after the plan year
in which the net investment
loss was incurred                                              Allocable
                                                          portion of net
                                                         investment loss

    1st.................................................           \1/2\
    2nd.................................................               0
    3rd.................................................           \1/6\
    4th.................................................           \1/6\
    5th.................................................           \1/6\

                                  ``(V) Special rule for plans 
                                that adopt longer smoother 
                                period.--If a plan sponsor 
                                elects an extended smoothing 
                                period for its asset valuation 
                                method under subsection 
                                (c)(2)(B), then the allocable 
                                portion of net investment loss 
                                for the first two plan years 
                                following the plan year the 
                                investment loss is incurred is 
                                the same as determined under 
                                subclause (IV), but the 
                                remaining \1/2\ of the net 
                                investment loss is allocated 
                                ratably over the period 
                                beginning with the third plan 
                                year following the plan year 
                                the net investment loss is 
                                incurred and ending with the 
                                last plan year in the extended 
                                smoothing period.
                                  ``(VI) Special rule for 
                                overstatement of loss.--If, for 
                                a plan year, there is an 
                                experience loss for the plan 
                                and the amount described in 
                                subclause (III) exceeds the 
                                total amount of the experience 
                                loss for the plan year, then 
                                the excess shall be treated as 
                                an experience gain.
                                  ``(VII) Special rule in years 
                                for which overall experience is 
                                gain.--If, for a plan year, 
                                there is no experience loss for 
                                the plan, then, in addition to 
                                amortization of net investment 
                                losses under clause (i), the 
                                amount described in subclause 
                                (III) shall be treated as an 
                                experience gain in addition to 
                                any other experience gain.
                  ``(B) Solvency test.--
                          ``(i) In general.--An election may be 
                        made under this paragraph if the 
                        election includes certification by the 
                        plan actuary in connection with the 
                        election that the plan is projected to 
                        have a funded percentage at the end of 
                        the first 15 plan years that is not 
                        less than 100 percent of the funded 
                        percentage for the plan year of the 
                        election.
                          ``(ii) Funded percentage.-- For 
                        purposes of clause (i), the term 
                        `funded percentage' has the meaning 
                        provided in section 305(i)(2), except 
                        that the value of the plan's assets 
                        referred to in section 305(i)(2)(A) 
                        shall be the market value of such 
                        assets.
                          ``(iii) Actuarial assumptions.--In 
                        making any certification under this 
                        subparagraph, the plan actuary shall 
                        use the same actuarial estimates, 
                        assumptions, and methods as those 
                        applicable for the most recent 
                        certification under section 305, except 
                        that the plan actuary may take into 
                        account benefit reductions and 
                        increases in contribution rates, under 
                        either funding improvement plans 
                        adopted under section 305(c) or under 
                        section 432(c) of the Internal Revenue 
                        Code of 1986 or rehabilitation plans 
                        adopted under section 305(e) or under 
                        section 432(e) of such Code, that the 
                        plan actuary reasonably anticipates 
                        will occur without regard to any change 
                        in status of the plan resulting from 
                        the election.
                  ``(C) Additional restriction on benefit 
                increases.--If an election is made under 
                subparagraph (A), then, in addition to any 
                other applicable restrictions on benefit 
                increases, a plan amendment which is adopted on 
                or after March 10, 2010, and which increases 
                benefits may not go into effect during the 
                period beginning on such date and ending with 
                the second plan year beginning after such date 
                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 
                                election to have this paragraph 
                                apply to the plan, and
                                  ``(II) the plan's funded 
                                percentage and projected credit 
                                balances for the first 3 plan 
                                years ending on or after such 
                                date 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.
                  ``(D) Time, form, and manner of election.--An 
                election under this paragraph shall be made not 
                later than June 30, 2011, and shall be made in 
                such form and manner as the Secretary of the 
                Treasury may prescribe.
                  ``(E) Reporting.--A plan sponsor of a plan to 
                which this paragraph applies shall--
                          ``(i) give notice of such 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 Pension 
                        Benefit Guaranty Corporation may 
                        prescribe.''.
          (2) IRC amendment.--Section 431(b) of the Internal 
        Revenue Code of 1986 is amended by adding at the end 
        the following new paragraph:
          ``(8) Elective special relief rules.--Notwithstanding 
        any other provision of this subsection--
                  ``(A) Amortization of net investment 
                losses.--
                          ``(i) In general.--The plan sponsor 
                        of a multiemployer plan with respect to 
                        which the solvency test under 
                        subparagraph (B) is met may elect to 
                        treat the portion of any experience 
                        loss or gain for a plan year that is 
                        attributable to the allocable portion 
                        of the net investment losses incurred 
                        in either or both of the first two plan 
                        years ending on or after June 30, 2008, 
                        as an experience loss separate from 
                        other experience losses and gains to be 
                        amortized in equal annual installments 
                        (until fully amortized) over the 
                        period--
                                  ``(I) beginning with the plan 
                                year for which the allocable 
                                portion is determined, and
                                  ``(II) ending with the last 
                                plan year in the 30-plan year 
                                period beginning with the plan 
                                year following the plan year in 
                                which such net investment loss 
                                was incurred.
                          ``(ii) Coordination with 
                        extensions.--If an election is made 
                        under clause (i) 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 
                                plan year for which the 
                                election under this 
                                subparagraph is made, such 
                                extension shall not result in 
                                such amortization period 
                                exceeding 30 years.
                          ``(iii) Definitions and rules.--For 
                        purposes of this subparagraph--
                                  ``(I) Net investment 
                                losses.--
                                          ``(aa) In general.--
                                        The net investment loss 
                                        incurred by a plan in a 
                                        plan year is equal to 
                                        the excess of--
                                                  ``(AA) the 
                                                expected value 
                                                of the assets 
                                                as of the end 
                                                of the plan 
                                                year, over
                                                  ``(BB) the 
                                                market value of 
                                                the assets as 
                                                of the end of 
                                                the plan year,
                                        including any 
                                        difference attributable 
                                        to a criminally 
                                        fraudulent investment 
                                        arrangement.
                                          ``(bb) Expected 
                                        value.--For purposes of 
                                        item (aa), the expected 
                                        value of the assets as 
                                        of the end of a plan 
                                        year is the excess of--
                                                  ``(AA) the 
                                                market value of 
                                                the assets at 
                                                the beginning 
                                                of the plan 
                                                year plus 
                                                contributions 
                                                made during the 
                                                plan year, over
                                                  ``(BB) 
                                                disbursements 
                                                made during the 
                                                plan year.
                                        The amounts described 
                                        in subitems (AA) and 
                                        (BB) shall be adjusted 
                                        with interest at the 
                                        valuation rate to the 
                                        end of the plan year.
                                  ``(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.
                                  ``(III) Amount attributable 
                                to allocable portion of net 
                                investment loss.--The amount 
                                attributable to the allocable 
                                portion of the net investment 
                                loss for a plan year shall be 
                                an amount equal to the 
                                allocable portion of net 
                                investment loss for the plan 
                                year under subclauses (IV) and 
                                (V), increased with interest at 
                                the valuation rate determined 
                                from the plan year after the 
                                plan year in which the net 
                                investment loss was incurred.
                                  ``(IV) Allocable portion of 
                                net investment losses.--Except 
                                as provided in subclause (V), 
                                the net investment loss 
                                incurred in a plan year shall 
                                be allocated among the 5 plan 
                                years following the plan year 
                                in which the investment loss is 
                                incurred in accordance with the 
                                following table:

``Plan year after the plan year
in which the net investment
loss was incurred                                              Allocable
                                                          portion of net
                                                         investment loss

    1st.................................................           \1/2\
    2nd.................................................               0
    3rd.................................................           \1/6\
    4th.................................................           \1/6\
    5th.................................................           \1/6\

                                  ``(V) Special rule for plans 
                                that adopt longer smoother 
                                period.--If a plan sponsor 
                                elects an extended smoothing 
                                period for its asset valuation 
                                method under subsection 
                                (c)(2)(B), then the allocable 
                                portion of net investment loss 
                                for the first two plan years 
                                following the plan year the 
                                investment loss is incurred is 
                                the same as determined under 
                                subclause (IV), but the 
                                remaining \1/2\ of the net 
                                investment loss is allocated 
                                ratably over the period 
                                beginning with the third plan 
                                year following the plan year 
                                the net investment loss is 
                                incurred and ending with the 
                                last plan year in the extended 
                                smoothing period.
                                  ``(VI) Special rule for 
                                overstatement of loss.--If, for 
                                a plan year, there is an 
                                experience loss for the plan 
                                and the amount described in 
                                subclause (III) exceeds the 
                                total amount of the experience 
                                loss for the plan year, then 
                                the excess shall be treated as 
                                an experience gain.
                                  ``(VII) Special rule in years 
                                for which overall experience is 
                                gain.--If, for a plan year, 
                                there is no experience loss for 
                                the plan, then, in addition to 
                                amortization of net investment 
                                losses under clause (i), the 
                                amount described in subclause 
                                (III) shall be treated as an 
                                experience gain in addition to 
                                any other experience gain.
                  ``(B) Solvency test.--
                          ``(i) In general.--An election may be 
                        made under this paragraph if the 
                        election includes certification by the 
                        plan actuary in connection with the 
                        election that the plan is projected to 
                        have a funded percentage at the end of 
                        the first 15 plan years that is not 
                        less than 100 percent of the funded 
                        percentage for the plan year of the 
                        election.
                          ``(ii) Funded percentage.-- For 
                        purposes of clause (i), the term 
                        `funded percentage' has the meaning 
                        provided in section 432(i)(2), except 
                        that the value of the plan's assets 
                        referred to in section 432(i)(2)(A) 
                        shall be the market value of such 
                        assets.
                          ``(iii) Actuarial assumptions.--In 
                        making any certification under this 
                        subparagraph, the plan actuary shall 
                        use the same actuarial estimates, 
                        assumptions, and methods as those 
                        applicable for the most recent 
                        certification under section 432, except 
                        that the plan actuary may take into 
                        account benefit reductions and 
                        increases in contribution rates, under 
                        either funding improvement plans 
                        adopted under section 432(c) or under 
                        section 305(c) of the Employee 
                        Retirement Income Security Act of 1974 
                        or rehabilitation plans adopted under 
                        section 432(e) or under section 305(e) 
                        of such Act, that the plan actuary 
                        reasonably anticipates will occur 
                        without regard to any change in status 
                        of the plan resulting from the 
                        election.
                  ``(C) Additional restriction on benefit 
                increases.--If an election is made under 
                subparagraph (A), then, in addition to any 
                other applicable restrictions on benefit 
                increases, a plan amendment which is adopted on 
                or after March 10, 2010, and which increases 
                benefits may not go into effect during the 
                period beginning on such date and ending with 
                the second plan year beginning after such date 
                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 
                                election to have this paragraph 
                                apply to the plan, and
                                  ``(II) the plan's funded 
                                percentage and projected credit 
                                balances for the first 3 plan 
                                years ending on or after such 
                                date 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 
                        or to comply with other applicable law.
                  ``(D) Time, form, and manner of election.--An 
                election under this paragraph shall be made not 
                later than June 30, 2011, and shall be made in 
                such form and manner as the Secretary may 
                prescribe.
                  ``(E) Reporting.--A plan sponsor of a plan to 
                which this paragraph applies shall--
                          ``(i) give notice of such 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 Pension 
                        Benefit Guaranty Corporation may 
                        prescribe.''.
  (b) Asset Smoothing for Multiemployer Plans.--
          (1) ERISA amendment.--Section 304(c)(2) of the 
        Employee Retirement Income Security Act of 1974 (29 
        U.S.C. 1084(c)(2)) is amended--
                  (A) by redesignating subparagraph (B) as 
                subparagraph (C); and
                  (B) by inserting after subparagraph (A) the 
                following new subparagraph:
                  ``(B) Extended asset smoothing period for 
                certain investment losses.--The Secretary of 
                the Treasury shall not treat the asset 
                valuation method of a multiemployer plan as 
                unreasonable solely because such method spreads 
                the difference between expected and actual 
                returns for either or both of the first 2 plan 
                years ending on or after June 30, 2008, over a 
                period of not more than 10 years. Any change in 
                valuation method to so spread such difference 
                shall be treated as approved, but only if, in 
                the case that the plan sponsor has made an 
                election under subsection (b)(8), any resulting 
                change in asset value is treated for purposes 
                of amortization as a net experience loss or 
                gain.''.
          (2) IRC amendment.--Section 431(c)(2) of the Internal 
        Revenue Code of 1986 is amended--
                  (A) by redesignating subparagraph (B) as 
                subparagraph (C); and
                  (B) by inserting after subparagraph (A) the 
                following new subparagraph:
                  ``(B) Extended asset smoothing period for 
                certain investment losses.--The Secretary shall 
                not treat the asset valuation method of a 
                multiemployer plan as unreasonable solely 
                because such method spreads the difference 
                between expected and actual returns for either 
                or both of the first 2 plan years ending on or 
                after June 30, 2008, over a period of not more 
                than 10 years. Any change in valuation method 
                to so spread such difference shall be treated 
                as approved, but only if, in the case that the 
                plan sponsor has made an election under 
                subsection (b)(8), any resulting change in 
                asset value is treated for purposes of 
                amortization as a net experience loss or 
                gain.''.
  (c) Effective Date and Special Rules.--
          (1) Effective date.--The amendments made by this 
        section shall take effect as of the first day of the 
        first plan year beginning after June 30, 2008, except 
        that any election a plan sponsor makes pursuant to this 
        section or the amendments made thereby that affects the 
        plan's funding standard account for any plan year 
        beginning before October 1, 2009, 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 
        that plan year.
          (2) Deemed approval for certain funding method 
        changes.--In the case of a multiemployer plan with 
        respect to which an election has been made under 
        section 304(b)(8) of the Employee Retirement Income 
        Security Act of 1974 (as amended by this section) or 
        section 431(b)(8) of the Internal Revenue Code of 1986 
        (as so amended)--
                  (A) any change in the plan's funding method 
                for a plan year beginning on or after July 1, 
                2008, and on or before December 31, 2010, from 
                a method that does not establish a base for 
                experience gains and losses to one that does 
                establish such a base shall be treated as 
                approved by the Secretary of the Treasury, and
                  (B) any resulting funding method change base 
                shall be treated for purposes of amortization 
                as a net experience loss or gain.

SEC. 312. OPTIONAL LONGER RECOVERY PERIODS FOR MULTIEMPLOYER PLANS IN 
                    ENDANGERED OR CRITICAL STATUS.

  (a) ERISA Amendments.--
          (1) Funding improvement period.--Section 305(c)(4) of 
        the Employee Retirement Income Security Act of 1974 is 
        amended--
                  (A) by redesignating subparagraphs (C) and 
                (D) as subparagraphs (D) and (E), respectively; 
                and
                  (B) by inserting after subparagraph (B) the 
                following new subparagraph:
                  ``(C) Election to extend period.--The plan 
                sponsor of an endangered or seriously 
                endangered plan may elect to extend the 
                applicable funding improvement period by up to 
                5 years, reduced by any extension of the period 
                previously elected pursuant to section 205 of 
                the Worker, Retiree and Employer Relief Act of 
                2008. Such an election shall be made not later 
                than June 30, 2011, and in such form and manner 
                as the Secretary of the Treasury may 
                prescribe.''.
          (2) Rehabilitation period.--Section 305(e)(4) of such 
        Act is amended--
                  (A) by redesignating subparagraph (B) as 
                subparagraph (C);
                  (B) in last sentence of subparagraph (A), by 
                striking ``subparagraph (B)'' each place it 
                appears and inserting ``subparagraph (C)''; and
                  (C) by inserting after subparagraph (A) the 
                following new subparagraph:
                  ``(B) Election to extend period.--The plan 
                sponsor of a plan in critical status may elect 
                to extend the rehabilitation period by up to 
                five years, reduced by any extension of the 
                period previously elected pursuant to section 
                205 of the Worker, Retiree and Employer Relief 
                Act of 2008. Such an election shall be made not 
                later than June 30, 2011, and in such form and 
                manner as the Secretary of the Treasury may 
                prescribe.''.
  (b) IRC Amendments.--
          (1) Funding improvement period.--Section 432(c)(4) of 
        the Internal Revenue Code of 1986 is amended--
                  (A) by redesignating subparagraphs (C) and 
                (D) as subparagraphs (D) and (E), respectively; 
                and
                  (B) by inserting after subparagraph (B) the 
                following new subparagraph:
                  ``(C) Election to extend period.--The plan 
                sponsor of an endangered or seriously 
                endangered plan may elect to extend the 
                applicable funding improvement period by up to 
                5 years, reduced by any extension of the period 
                previously elected pursuant to section 205 of 
                the Worker, Retiree and Employer Relief Act of 
                2008. Such an election shall be made not later 
                than June 30, 2011, and in such form and manner 
                as the Secretary may prescribe.''.
          (2) Rehabilitation period.--Section 432(e)(4) of such 
        Code is amended--
                  (A) by redesignating subparagraph (B) as 
                subparagraph (C);
                  (B) in last sentence of subparagraph (A), by 
                striking ``subparagraph (B)'' each place it 
                appears and inserting ``subparagraph (C)''; and
                  (C) by inserting after subparagraph (A) the 
                following new subparagraph:
                  ``(B) Election to extend period.--The plan 
                sponsor of a plan in critical status may elect 
                to extend the rehabilitation period by up to 
                five years, reduced by any extension of the 
                period previously elected pursuant to section 
                205 of the Worker, Retiree and Employer Relief 
                Act of 2008. Such an election shall be made not 
                later than June 30, 2011, and in such form and 
                manner as the Secretary may prescribe.''.
  (c) Effective Date.--The amendments made by this section 
shall apply with respect to funding improvement periods and 
rehabilitation periods in connection with funding improvement 
plans and rehabilitation plans adopted or updated on or after 
the date of the enactment of this Act.

SEC. 313. MODIFICATION OF CERTAIN AMORTIZATION EXTENSIONS UNDER PRIOR 
                    LAW.

  (a) In General.--In the case of an amortization extension 
that was granted to a multiemployer plan under the terms of 
section 304 of the Employee Retirement Income Security Act of 
1974 (as in effect immediately prior to enactment of the 
Pension Protection Act of 2006) or section 412(e) of the 
Internal Revenue Code (as so in effect), the determination of 
whether any financial condition on the amortization extension 
is satisfied shall be made by assuming that for any plan year 
that contains some or all of the period beginning June 30, 
2008, and ending October 31, 2008, the actual rate of return on 
the plan assets was equal to the interest rate used for 
purposes of charging or crediting the funding standard account 
in such plan year, unless the plan sponsor elects otherwise in 
such form and manner as shall be prescribed by the Secretary of 
Treasury.
  (b) Revocation of Amortization Extensions.--The plan sponsor 
of a multiemployer plan may, in such form and manner and after 
such notice as may be prescribed by the Secretary, revoke any 
amortization extension described in subsection (a), effective 
for plan years following the date of the revocation.

SEC. 314. ALTERNATIVE DEFAULT SCHEDULE FOR PLANS IN ENDANGERED OR 
                    CRITICAL STATUS.

  (a) ERISA Amendments.--
          (1) Endangered status.--Section 305(c)(7) of the 
        Employee Retirement Income Security Act of 1974 (29 
        U.S.C. 1085(c)(7)) is amended by adding at the end the 
        following new subparagraph:
                  ``(D) Alternative default schedule.--
                          ``(i) In general.--A plan sponsor 
                        may, for purposes of this paragraph, 
                        designate an alternative schedule of 
                        contribution rates and related benefit 
                        changes meeting the requirements of 
                        clause (ii) as the default schedule, in 
                        lieu of the default schedule referred 
                        to in subparagraph (A).
                          ``(ii) Requirements.--An alternative 
                        schedule designated pursuant to clause 
                        (i) meets the requirements of this 
                        clause if such schedule has been 
                        adopted in collective bargaining 
                        agreements covering at least 75 percent 
                        of the active participants as of the 
                        date of the designation.''.
          (2) Critical status.--Section 305(e)(3) of such Act 
        (29 U.S.C. 1085(e)(3)) is amended by adding at the end 
        the following new subparagraph:
                  ``(D) Alternative default schedule.--
                          ``(i) In general.--A plan sponsor 
                        may, for purposes of subparagraph (C), 
                        designate an alternative schedule of 
                        contribution rates and related benefit 
                        changes meeting the requirements of 
                        clause (ii) as the default schedule, in 
                        lieu of the default schedule referred 
                        to in subparagraph (C)(i).
                          ``(ii) Requirements.--An alternative 
                        schedule designated pursuant to clause 
                        (i) meets the requirements of this 
                        clause if such schedule has been 
                        adopted in collective bargaining 
                        agreements covering at least 75 percent 
                        of the active participants as of the 
                        date of the designation.''.
  (b) Internal Revenue Code Amendments.--
          (1) Endangered status.--Section 432(c)(7) of the 
        Internal Revenue Code of 1986 is amended by adding at 
        the end the following new subparagraph:
                  ``(C) Alternative default schedule.--
                          ``(i) In general.--A plan sponsor 
                        may, for purposes of this paragraph, 
                        designate an alternative schedule of 
                        contribution rates and related benefit 
                        changes meeting the requirements of 
                        clause (ii) as the default schedule, in 
                        lieu of the default schedule referred 
                        to in subparagraph (A).
                          ``(ii) Requirements.--An alternative 
                        schedule designated pursuant to clause 
                        (i) meets the requirements of this 
                        clause if such schedule has been 
                        adopted in collective bargaining 
                        agreements covering at least 75 percent 
                        of the active participants as of the 
                        date of the designation.''.
          (2) Critical status.--Section 432(e)(3) of such Code 
        is amended by adding at the end the following new 
        subparagraph:
                  ``(D) Alternative default schedule.--
                          ``(i) In general.--A plan sponsor 
                        may, for purposes of subparagraph (C), 
                        designate an alternative schedule of 
                        contribution rates and related benefit 
                        changes meeting the requirements of 
                        clause (ii) as the default schedule, in 
                        lieu of the default schedule referred 
                        to in subparagraph (C)(i).
                          ``(ii) Requirements.--An alternative 
                        schedule designated pursuant to clause 
                        (i) meets the requirements of this 
                        clause if such schedule has been 
                        adopted in collective bargaining 
                        agreements covering at least 75 percent 
                        of the active participants as of the 
                        date of the designation.''.
  (c) Effective Date.--The amendments made by this section 
shall apply to designations of default schedules by plan 
sponsors on or after the date of the enactment of this Act.
  (d) Cross-reference.--For sunset of the amendments made by 
this section, see section 221(c) of the Pension Protection Act 
of 2006.

SEC. 315. TRANSITION RULE FOR CERTIFICATIONS OF PLAN STATUS.

  (a) In General.--A plan actuary shall not be treated as 
failing to meet the requirements of section 305(b)(3)(A) of the 
Employee Retirement Income Security Act of 1974 and section 
432(b)(3)(A) of the Internal Revenue Code of 1986 in connection 
with a certification required under such sections the deadline 
for which is after the date of the enactment of this Act if the 
plan actuary makes such certification at any time earlier than 
75 days after the date of the enactment of this Act.
  (b) Revision of Prior Certification.--
          (1) In general.--If--
                  (A) a plan sponsor makes an election under 
                section 304(b)(8) of the Employee Retirement 
                Income Security Act of 1974 and section 
                431(b)(8) of the Internal Revenue Code of 1986, 
                or under section 304(c)(2)(B) of such Act and 
                section 432(c)(2)(B) such Code, with respect to 
                a plan for a plan year beginning on or after 
                October 1, 2009, and
                  (B) the plan actuary's certification of the 
                plan status for such plan year (hereinafter in 
                this subsection referred to as ``original 
                certification'') did not take into account any 
                election so made,
        then the plan sponsor may direct the plan actuary to 
        make a new certification with respect to the plan for 
        the plan year which takes into account such election 
        (hereinafter in this subsection referred to as ``new 
        certification'') if the plan's status under section 305 
        of such Act and section 432 of such Code would change 
        as a result of such election. Any such new 
        certification shall be treated as the most recent 
        certification referred to in section 304(b)(3)(B)(iii) 
        of such Act and section 431(b)(8)(B)(iii) of such Code.
          (2) Due date for new certification.--Any such new 
        certification shall be made pursuant to section 
        305(b)(3) of such Act and section 432(b)(3) of such 
        Code; except that any such new certification shall be 
        made not later than 75 days after the date of the 
        enactment of this Act.
          (3) Notice.--
                  (A) In general.--Except as provided in 
                subparagraph (B), any such new certification 
                shall be treated as the original certification 
                for purposes of section 305(b)(3)(D) of such 
                Act and section 432(b)(3)(D) of such Code.
                  (B) Notice already provided.--In any case in 
                which notice has been provided under such 
                sections with respect to the original 
                certification, not later than 30 days after the 
                new certification is made, the plan sponsor 
                shall provide notice of any change in status 
                under rules similar to the rules such sections.
          (4) Effect of change in status.--If a plan ceases to 
        be in critical status pursuant to the new 
        certification, then the plan shall, not later than 30 
        days after the due date described in paragraph (2), 
        cease any restriction of benefit payments, and 
        imposition of contribution surcharges, under section 
        305 of such Act and section 432 of such Code by reason 
        of the original certification.

                       Subtitle B--Fee Disclosure

SEC. 321. SHORT TITLE OF SUBTITLE.

  This subtitle may be cited as the ``Defined Contribution Fee 
Disclosure Act of 2010''.

SEC. 322. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                    1974.

  (a) Requirements Relating to Service Providers and Plan 
Administrators of Individual Account Plans.--
          (1) In general.--Part 1 of subtitle B of title I of 
        the Employee Retirement Income Security Act of 1974 is 
        amended--
                  (A) by redesignating section 111 (29 U.S.C. 
                1031) as section 113; and
                  (B) by inserting after section 110 (29 U.S.C. 
                1030) the following new sections:

``SEC. 111. REQUIREMENT TO PROVIDE NOTICE OF PLAN FEE INFORMATION TO 
                    PLAN ADMINISTRATORS.

  ``(a) Initial Statement of Services Provided and Revenues 
Received.--
          ``(1) In general.--In any case in which a service 
        provider enters into a contract or arrangement to 
        provide services to an individual account plan, the 
        service provider shall, before entering into such 
        contract or arrangement, provide to the plan 
        administrator a single written statement which 
        includes, with respect to the first plan year covered 
        under such contract or arrangement, the following 
        information:
                  ``(A) A detailed description of the services 
                which will be provided to the plan by the 
                service provider, the amount of total expected 
                annual revenue with respect to such services, 
                the manner in which such revenue will be 
                collected, and the extent to which such revenue 
                varies between specific investment options.
                  ``(B)(i) In the case of a service provider 
                who is providing recordkeeping services with 
                respect to any investment option, such 
                information as is necessary for the plan 
                administrator to satisfy the requirements of 
                subparagraphs (B)(ii)(IV) and (C) of section 
                105(a)(2) and paragraphs (1) and (3) of section 
                112(a) with respect to such option, including 
                specifying the method used by the service 
                provider in disclosing or estimating expenses 
                under subparagraphs (C)(iv) and (E) of section 
                105(a)(2).
                  ``(ii) To the extent provided in regulations 
                issued by the Secretary, clause (i) shall not 
                apply in the case of a service provider 
                described in such clause if the service 
                provider receives a written notification from 
                the plan administrator that the information 
                described in such clause in connection with the 
                investment option is provided by another 
                service provider pursuant to a contract or 
                arrangement to provide services to the plan.
                  ``(C) A statement indicating--
                          ``(i) the identity of any investment 
                        options offered under the plan with 
                        respect to which the service provider 
                        provides substantial investment, 
                        trustee, custodial, or administrative 
                        services, and
                          ``(ii) in the case of any investment 
                        option, whether the service provider 
                        expects to receive any component of 
                        total expected annual revenue described 
                        in paragraph (2)(A)(ii)(II) with 
                        respect to such option and the amount 
                        of any such component.
                  ``(D) The portion of total expected annual 
                revenue which is properly allocable to each of 
                the following:
                          ``(i) Administration and 
                        recordkeeping.
                          ``(ii) Investment management.
                          ``(iii) Other services or amounts not 
                        described in clause (i) or (ii).
          ``(2) Definition of total expected annual revenue.--
        For purposes of this section--
                  ``(A) In general.--The term `total expected 
                annual revenue' means, with respect to any plan 
                year--
                          ``(i) any amount expected to be 
                        received during such plan year from the 
                        plan (including amounts paid from 
                        participant accounts), any participant 
                        or beneficiary, or any plan sponsor in 
                        connection with the contract or 
                        arrangement referred to in paragraph 
                        (1), and
                          ``(ii) any amount not taken into 
                        account under clause (i) which is 
                        expected to be received during such 
                        plan year by the service provider in 
                        connection with--
                                  ``(I) plan administration, 
                                recordkeeping, consulting, 
                                management, or investment or 
                                other service activities 
                                undertaken by the service 
                                provider with respect to the 
                                plan, or
                                  ``(II) plan administration, 
                                recordkeeping, consulting, 
                                management, or investment or 
                                other service activities 
                                undertaken by any other person 
                                with respect to the plan.
                  ``(B) Expressed as dollar amount or 
                percentage of assets.--Total expected annual 
                revenue and any amount indicated under 
                paragraph (1)(C)(ii) may be expressed as a 
                dollar amount or as a percentage of assets (or 
                a combination thereof), as appropriate. To the 
                extent that total expected annual revenue is 
                expressed as a percentage of assets, such 
                percentage shall be properly allocated among 
                clauses (i), (ii), and (iii) of paragraph 
                (1)(D).
                  ``(C) Provision of fee schedule for certain 
                participant initiated transactions.--In the 
                case of amounts expected to be received from 
                participants or beneficiaries under the plan 
                (or from an account of a participant or 
                beneficiary) as a fee or charge in connection 
                with a transaction initiated by the participant 
                (other than loads, commissions, brokerage fees, 
                and other investment related transactions)--
                          ``(i) such amounts shall not be taken 
                        into account in determining total 
                        expected annual revenue, and
                          ``(ii) the service provider shall 
                        provide to the plan administrator, as 
                        part of the statement referred to in 
                        paragraph (1), a fee schedule which 
                        describes each such fee or charge, the 
                        amount thereof, and the manner in which 
                        such amount is collected.
                  ``(D) Estimations.--In determining under this 
                subsection any amount which is expected to be 
                received by the service provider, the service 
                provider shall provide a reasonable estimate of 
                such amount and shall indicate in the statement 
                referred to in paragraph (1) whether such 
                amount disclosed is an estimate. Any such 
                estimate shall be based on reasonable 
                assumptions specified in such statement.
          ``(3) Allocation rules.--The Secretary shall provide 
        rules for defining total expected annual revenue and 
        for the appropriate and consistent allocation of total 
        expected annual revenue among clauses (i), (ii), and 
        (iii) of paragraph (1)(D), except that the entire 
        amount of such revenue shall be allocated among such 
        clauses and no amount may be taken into account under 
        more than one clause.
          ``(4) Disclosure of different pricing of investment 
        options.--In the case of investment options with more 
        than one share class or price level, the Secretary 
        shall prescribe regulations for the disclosure of the 
        different share classes or price levels available as 
        part of the statement in paragraph (1). Such 
        regulations shall provide guidance with respect to the 
        disclosure of the basis for qualifying for such share 
        classes or price levels, which may include amounts 
        invested, number of participants, or other factors.
          ``(5) Disclosure of investment transaction costs.--To 
        the extent provided in regulations issued by the 
        Secretary, a service provider shall separately disclose 
        the transaction costs (including sales commissions) for 
        each investment option for the preceding year.
  ``(b) Annual Statements.--With respect to each plan year 
after the plan year covered by the statement described in 
subsection (a), the service provider shall provide the plan 
administrator a single written statement which includes the 
information described in subsection (a) with respect to such 
subsequent plan year.
  ``(c) Material Change Statements.--In the case of any event 
or other change during a plan year which causes the information 
included in any statement described in subsection (a) or (b) 
with respect to such plan year to become materially incorrect, 
the service provider shall provide the plan administrator a 
written statement providing the corrected information not later 
than 30 days after the service provider knows, or exercising 
reasonable diligence would have known, of such event or other 
change.
  ``(d) Time and Manner of Providing Statement and Other 
Materials.--The statement referred to in subsections (a)(1) and 
(b) shall be made at such time and in such manner as the 
Secretary may provide. Other materials required to be provided 
under this section shall be provided in such manner as the 
Secretary may provide. All information included in such 
statements and other materials shall be presented in a manner 
which is easily understood by the typical plan administrator.
  ``(e) Exception for Small Service Providers.--The 
requirements of this section shall not apply with respect to 
any contract or arrangement for services provided with respect 
to an individual account plan for any plan year if--
          ``(1) the total annual revenue expected by the 
        service provider to be received with respect to the 
        plan for such plan year is less than $5,000, and
          ``(2) the service provider provides a written 
        statement to the plan administrator that the total 
        annual revenue expected by the service provider to be 
        received with respect to the plan is less than $5,000.
Service providers who expect to receive de minimis annual 
revenue from the plan need not provide the written statement 
described in paragraph (2). The Secretary may by regulation or 
other guidance adjust the dollar amount specified in this 
subsection.
  ``(f) Definition of Service Provider.--For purposes of this 
section--
          ``(1) In general.--The term `service provider' 
        includes any person providing administration, 
        recordkeeping, consulting, investment management 
        services, or investment advice to an individual account 
        plan under a contract or arrangement.
          ``(2) Controlled groups treated as one service 
        provider.--All persons which would be treated as a 
        single employer under subsection (b) or (c) of section 
        414 of the Internal Revenue Code of 1986 if section 
        1563(a)(1) of such Code were applied--
                  ``(A) except as provided by subparagraph (B), 
                by substituting `more than 50 percent' for `at 
                least 80 percent' each place it appears 
                therein, or
                  ``(B) for purposes of subsection 
                (a)(1)(C)(i), by substituting `at least 20 
                percent' for `at least 80 percent' each place 
                it appears therein,
        shall be treated as one person for purposes of this 
        section.

``SEC. 112. REQUIREMENT TO PROVIDE NOTICE TO PARTICIPANTS OF PLAN FEE 
                    INFORMATION.

  ``(a) Disclosures to Participants and Beneficiaries.--
          ``(1) Advance notice of available investment 
        options.--
                  ``(A) In general.--The plan administrator of 
                an applicable individual account plan shall 
                provide to the participant or beneficiary 
                notice of the investment options available 
                under the plan before--
                          ``(i) the earliest date provided for 
                        under the plan for the participant's 
                        initial investment of any contribution 
                        made on behalf of such participant, and
                          ``(ii) the effective date of any 
                        change in the list of investment 
                        options available under the plan, 
                        unless such advance notice is 
                        impracticable, and in such case, as 
                        soon as is practicable.
                  ``(B) Information included in notice.--The 
                notice required under subparagraph (A) shall--
                          ``(i) set forth, with respect to each 
                        available investment option--
                                  ``(I) the name of the option,
                                  ``(II) a general description 
                                of the option's investment 
                                objectives and principal 
                                investment strategies, 
                                principal risk and return 
                                characteristics, and the name 
                                of the option's investment 
                                manager,
                                  ``(III) whether the 
                                investment option is designed 
                                to be a comprehensive, stand-
                                alone investment for retirement 
                                that provides varying degrees 
                                of long-term appreciation and 
                                capital preservation through a 
                                mix of equity and fixed income 
                                exposures,
                                  ``(IV) the extent to which 
                                the investment option is 
                                actively managed or passively 
                                managed in relation to an index 
                                and the difference between 
                                active management and passive 
                                management,
                                  ``(V) where, and the manner 
                                in which, additional plan-
                                specific, option-specific, and 
                                generally available investment 
                                information may be obtained, 
                                and
                                  ``(VI) a statement explaining 
                                that investment options should 
                                not be evaluated solely on the 
                                basis of the charges for each 
                                option but should also be based 
                                on consideration of other key 
                                factors, including the risk 
                                level of the option, the 
                                investment objectives of the 
                                option, historical returns of 
                                the option, and the 
                                participant's personal 
                                investment objectives,
                          ``(ii) include a statement of the 
                        right under paragraph (2) of 
                        participants and beneficiaries to 
                        request, and a description of how a 
                        participant or beneficiary may request, 
                        a copy of the statements received by 
                        the plan administrator under section 
                        111 with respect to the plan, and
                          ``(iii) include the plan fee 
                        comparison chart described in 
                        subparagraph (C).
                  ``(C) Plan fee comparison chart.--
                          ``(i) In general.--
                                  ``(I) In general.--The notice 
                                provided under this paragraph 
                                shall include a plan fee 
                                comparison chart consisting of 
                                a comparison of the service and 
                                investment charges that will or 
                                could be assessed against the 
                                account of the participant or 
                                beneficiary with respect to the 
                                plan year.
                                  ``(II) Expressed as dollar 
                                amount or formula.--For 
                                purposes of this subparagraph, 
                                such charges shall be provided 
                                in the form of a dollar amount 
                                or as a formula (such as a 
                                percentage of assets), as 
                                appropriate.
                          ``(ii) Categorization of charges.--
                        The plan fee comparison chart shall 
                        provide information in relation to the 
                        following categories of charges that 
                        will or could be assessed against the 
                        account of the participant or 
                        beneficiary:
                                  ``(I) Asset-based charges 
                                specific to investment.--
                                Charges that vary depending on 
                                the investment options selected 
                                by the participant or 
                                beneficiary, including the 
                                annual operating expenses of 
                                the investment option and 
                                investment-specific asset-based 
                                charges (such as loads, 
                                commissions, brokerage fees, 
                                exchange fees, redemption fees, 
                                and surrender charges). Except 
                                as provided by the Secretary in 
                                regulations under this section, 
                                the information relating to 
                                such charges shall include a 
                                statement noting any charges 
                                for 1 or more investment 
                                options which pay for services 
                                other than investment 
                                management.
                                  ``(II) Recurring asset-based 
                                charges not specific to 
                                investment.--Charges that are 
                                assessed as a percentage of the 
                                total assets in the account of 
                                the participant or beneficiary, 
                                regardless of the investment 
                                option selected.
                                  ``(III) Administrative and 
                                transaction-based charges.--
                                Administration and transaction-
                                based charges, including fees 
                                charged to participants to 
                                cover plan administration, 
                                compliance, and recordkeeping 
                                costs, plan loan origination 
                                fees, possible redemption fees, 
                                and possible surrender charges, 
                                that are not assessed as a 
                                percentage of the total assets 
                                in the account and are either 
                                automatically deducted each 
                                year or result from certain 
                                transactions engaged in by the 
                                participant or beneficiary.
                                  ``(IV) Other charges.--Any 
                                other charges which may be 
                                deducted from participants' or 
                                beneficiaries' accounts and 
                                which are not described in 
                                subclauses (I), (II), and 
                                (III).
                          ``(iii) Fees and historical 
                        returns.--The plan fee comparison chart 
                        shall include--
                                  ``(I) the historical returns, 
                                net of fees and expenses, for 
                                the previous year, 5 years, and 
                                10 years (or for the period 
                                since inception, if shorter) 
                                with respect to such investment 
                                option, and
                                  ``(II) the historical returns 
                                of an appropriate benchmark, 
                                index, or other point of 
                                comparison for each such 
                                period.
                  ``(D) Model notices.--The Secretary shall 
                prescribe one or more model notices that may be 
                used for purposes of satisfying the 
                requirements of this paragraph, including model 
                plan fee comparison charts.
                  ``(E) Estimations.--For purposes of providing 
                the notice required under this paragraph, the 
                plan administrator may provide a reasonable and 
                representative estimate for any charges or 
                percentages disclosed under subparagraph (B) or 
                (C) and shall indicate whether the amount of 
                any such charges or percentages disclosed is an 
                estimate.
          ``(2) Disclosure of service provider statements.--The 
        plan administrator shall provide to any participant or 
        beneficiary a copy of any statement received pursuant 
        to section 111 within 30 days after receipt of a 
        request for such a statement.
          ``(3) Notice of material changes.--In the case of any 
        event or other change which causes the information 
        included in any notice described in paragraph (1) to 
        become materially incorrect, the plan administrator 
        shall provide participants and beneficiaries a written 
        statement providing the corrected information not later 
        than 30 days after the plan administrator knows, or 
        exercising reasonable diligence would have known, of 
        such event or other change.
          ``(4) Time and manner of providing notices and 
        disclosures.--
                  ``(A) In general.--The notices described in 
                paragraph (1) shall be provided at such times 
                and in such manner as the Secretary may 
                provide. Other notices and materials required 
                to be provided under this subsection shall be 
                provided in such manner as the Secretary may 
                provide.
                  ``(B) Manner of presentation.--
                          ``(i) In general.--All information 
                        included in such notices or 
                        explanations shall be presented in a 
                        manner which is easily understood by 
                        the typical participant.
                          ``(ii) Generic example of operating 
                        expenses of investment options.--The 
                        information described in paragraph 
                        (1)(C)(ii)(I) shall include a generic 
                        example describing the charges that 
                        would apply during an annual period 
                        with respect to a $10,000 investment in 
                        the investment option.
  ``(b) Applicable Individual Account Plan.--For purposes of 
this section, the term `applicable individual account plan' 
means the portion of any individual account plan which permits 
a participant or beneficiary to exercise control over assets in 
his or her account.
  ``(c) Regulations.--The Secretary shall prescribe such 
regulations or other guidance as may be necessary or 
appropriate to carry out the purposes of this section, 
including regulations or other guidance which--
          ``(1) provide a later deadline for providing the 
        notice of investment menu changes described in 
        subsection (a)(3) in appropriate circumstances, and
          ``(2) provide guidelines, and a safe harbor, for the 
        selection of an appropriate benchmark, index, or other 
        point of comparison for an investment option under 
        subsection (a)(1)(C)(iii)(II).''.
          (2) Clerical amendment.--The table of contents in 
        section 1 of such Act is amended by striking the item 
        relating to section 111 and inserting the following new 
        items:

``Sec. 111. Requirement to provide notice of plan fee information to 
          plan administrators.
``Sec. 112. Requirement to provide notice to participants of plan fee 
          information.
``Sec. 113. Repeal and effective date.''.

  (b) Quarterly Benefit Statements.--Section 105 of such Act 
(29 U.S.C. 1025) is amended--
          (1) in subsection (a)(2)--
                  (A) by redesignating subparagraph (C) as 
                subparagraph (G);
                  (B) in subparagraph (B)(ii)--
                          (i) in subclause (II), by striking 
                        ``diversified, and'' and inserting 
                        ``diversified,'';
                          (ii) in subclause (III) by striking 
                        the period and inserting ``,  and''; 
                        and
                          (iii) by adding after subclause (III) 
                        the following new subclause:
                                  ``(IV) with respect to the 
                                portion of a participant's 
                                account for which the 
                                participant has the right to 
                                direct the investment of 
                                assets, the information 
                                described in subparagraph 
                                (C).''; and
                  (C) by inserting after subparagraph (B) the 
                following new subparagraphs:
                  ``(C) Quarterly benefit statements.--The plan 
                administrator shall provide to each participant 
                and beneficiary, at least once each calendar 
                quarter, an explanation describing the 
                investment options in which the participant's 
                or beneficiary's account is invested as of the 
                last day of the preceding quarter. Such 
                explanation shall provide, to the extent 
                applicable, the following for the preceding 
                quarter:
                          ``(i) As of the last day of the 
                        quarter, a statement of the different 
                        asset classes that the participant's or 
                        beneficiary's account is invested in 
                        and the percentage of the account 
                        allocated to each asset class.
                          ``(ii) A statement of the starting 
                        and ending balance of the participant's 
                        or beneficiary's account for such 
                        quarter.
                          ``(iii) A statement of the total 
                        contributions made to the participant's 
                        or beneficiary's account during the 
                        quarter and a separate statement of--
                                  ``(I) the amount of such 
                                contributions, and the total 
                                amount of any restorative 
                                payments, which were made by 
                                the employer during the 
                                quarter, and
                                  ``(II) the amount of such 
                                contributions which were made 
                                by the employee.
                          ``(iv) A statement of the total fees 
                        and expenses which were directly 
                        deducted from the participant's or 
                        beneficiary's account during the 
                        quarter and an itemization of such fees 
                        and expenses.
                          ``(v) A statement of the net returns 
                        for the plan year to date, expressed as 
                        a percentage, and a statement as to 
                        whether the net returns include amounts 
                        described in clause (iv).
                          ``(vi) With respect to each 
                        investment option in which the 
                        participant or beneficiary was invested 
                        as of the last day of the quarter, the 
                        following:
                                  ``(I) A statement of the 
                                percentage of the participant's 
                                or beneficiary's account that 
                                is invested in such option as 
                                of the last day of such 
                                quarter.
                                  ``(II) A statement of the 
                                starting and ending balance of 
                                the participant's or 
                                beneficiary's account that is 
                                invested in such option for 
                                such quarter.
                                  ``(III) A statement of the 
                                annual operating expenses of 
                                the investment option.
                                  ``(IV) A statement of whether 
                                the disclosure described in 
                                clause (iv) includes the annual 
                                operating expenses of the 
                                investment options of the 
                                participant or beneficiary.
                          ``(vii) The statement described in 
                        section 112(a)(1)(B)(i)(VI).
                          ``(viii) A statement regarding how a 
                        participant or beneficiary may access 
                        the information required to be 
                        disclosed under section 112(a)(1).
                  ``(D) Model explanations.--The Secretary 
                shall prescribe one or more model explanations 
                that may be used for purposes of satisfying the 
                requirements of subparagraph (C).
                  ``(E) Determination of expenses.--For 
                purposes of subparagraph (C)(v)(III)--
                          ``(i) Expenses may be expressed as a 
                        dollar amount or as a percentage of 
                        assets (or a combination thereof).
                          ``(ii) The plan administrator may 
                        provide disclosure of the expenses for 
                        the quarter or may provide a reasonable 
                        and representative estimate of such 
                        expenses and shall indicate any such 
                        estimate as being an estimate. Any such 
                        estimate shall be based on reasonable 
                        assumptions stated together with such 
                        estimate.
                          ``(iii) To the extent that estimated 
                        expenses are expressed as a percentage 
                        of assets, the disclosure shall also 
                        include one of the following, stated in 
                        dollar amounts:
                                  ``(I) an estimate of the 
                                expenses for the quarter based 
                                on the amount invested in the 
                                option; or
                                  ``(II) an example describing 
                                the expenses that would apply 
                                during the quarter with respect 
                                to a hypothetical $10,000 
                                investment in the option.
                  ``(F) Annual compliance for small plans.--A 
                plan that has fewer than 100 participants and 
                beneficiaries as of the first day of the plan 
                year may provide the explanation described in 
                subparagraph (C) on an annual rather than a 
                quarterly basis.''.
  (c) Assistance From the Department of Labor.--Section 105 of 
such Act (29 U.S.C. 1025) is amended by adding at the end the 
following new subsections:
  ``(d) Assistance to Small Employers.--The Secretary shall 
make available to employers with 100 or fewer employees--
          ``(1) educational and compliance materials designed 
        to assist such employers in selecting and monitoring 
        service providers for individual account plans which 
        permit a participant or beneficiary to exercise control 
        over the assets in the account of the participant or 
        beneficiary, investment options under such plans, and 
        charges relating to such options, and
          ``(2) services designed to assist such employers in 
        finding and understanding affordable investment options 
        for such plans and in comparing the investment 
        performance of, and charges for, such options on an 
        ongoing basis against appropriate benchmarks or other 
        appropriate measures.
  ``(e) Assistance to Plan Sponsors and Plan Participants and 
Beneficiaries.--The Secretary shall provide plan administrators 
and plan sponsors of individual account plans and participants 
and beneficiaries under such plans assistance with any 
questions or problems regarding compliance with the 
requirements of subparagraphs (B)(ii)(IV) and (C) of subsection 
(a)(2) and section 112.''.
  (d) Enforcement.--
          (1) Penalties.--Section 502 of such Act (29 U.S.C. 
        1132) is amended--
                  (A) in subsection (a)(6), by striking ``under 
                paragraph (2)'' and all that follows through 
                ``subsection (c)'' and inserting ``under 
                paragraph (2), (4), (5), (6), (7), (8), (9), 
                (10), (11), or (12) of subsection (c)''; and
                  (B) in subsection (c), by redesignating the 
                second paragraph (10) as paragraph (13), and by 
                inserting after the first paragraph (10) the 
                following new paragraphs:
  ``(11)(A) In the case of any failure by a service provider 
(as defined in section 111(f)(1)) to provide a statement in 
violation of section 111, the service provider may be assessed 
by the Secretary a civil penalty of up to $1,000 for each day 
in the noncompliance period.
  ``(B) For purposes of subparagraph (A), the noncompliance 
period with respect to the failure to provide any statement is 
the period beginning on the date that such statement was 
required to be provided and ending on the date that such 
statement is provided or the failure is otherwise corrected.
  ``(C)(i) The total amount of a penalty assessed under this 
paragraph on any service provider with respect to any 
individual account plan for any plan year shall not exceed an 
amount equal to the lesser of--
          ``(I) 10 percent of the assets of the plan, 
        determined as of the first day of such plan year, or
          ``(II) $1,000,000.
  ``(ii) No penalty shall be imposed by subparagraph (A) on any 
failure if--
          ``(I) the service provider subject to liability for 
        the penalty under subparagraph (A) exercised reasonable 
        diligence to meet the requirement with respect to which 
        the failure relates, and
          ``(II) such service provider provides the information 
        required under section 111 during the 30-day period 
        beginning on the date such person knew, or exercising 
        reasonable diligence would have known, that such 
        failure existed.
  ``(iii) In the case of a failure which is due to reasonable 
cause and not to willful neglect, the Secretary may waive part 
or all of the penalty under subparagraph (A) to the extent that 
the payment of such penalty would be excessive or otherwise 
inequitable relative to the failure involved.
  ``(D) The penalty imposed under this paragraph with respect 
to any failure shall be reduced by the amount of any tax 
imposed on such person with respect to such failure under 
section 4980J of the Internal Revenue Code of 1986.
  ``(12)(A) Any plan administrator with respect to a plan who 
fails or refuses to provide a notice, explanation, or statement 
to participants and beneficiaries in accordance with 
subparagraphs (B)(ii)(IV) and (C) of section 105(a)(2) and 
section 112 may be assessed by the Secretary a civil penalty of 
up to $110 for each day in the noncompliance period.
  ``(B) For purposes of subparagraph (A), the noncompliance 
period with respect to the failure to provide any notice, 
explanation, or statement referred to in subparagraph 
(B)(ii)(IV) or (C) of section 105(a)(2) or section 112 with 
respect to any participant or beneficiary is the period 
beginning on the date that such notice, explanation, or 
statement was required to be provided and ending on the date 
that such notice, explanation, or statement is provided or the 
failure is otherwise corrected.
  ``(C)(i) The total amount of penalty assessed under this 
paragraph with respect to any plan for any plan year shall not 
exceed an amount equal to the lesser of--
          ``(I) 10 percent of the assets of the plan, 
        determined as of the first day of such plan year, or
          ``(II) $500,000.
  ``(ii) No penalty shall be imposed under subparagraph (A) on 
any failure to meet the requirements of subparagraphs 
(B)(ii)(IV) and (C) of section 105(a)(2) and section 112 if--
          ``(I) any person subject to liability for the penalty 
        under subparagraph (A) exercised reasonable diligence 
        to meet such requirements, and
          ``(II) such person provides the notice, explanation, 
        or statement to which the failure relates during the 
        30-day period beginning on the date such person knew, 
        or exercising reasonable diligence would have known, 
        that such failure existed.
  ``(iii) In the case of a failure which is due to reasonable 
cause and not to willful neglect, the Secretary shall waive 
part or all of the penalty under subparagraph (A) to the extent 
that the payment of such penalty would be excessive or 
otherwise inequitable relative to the failure involved.
  ``(iv) The penalty imposed under this paragraph with respect 
to any failure shall be reduced by the amount of any tax 
imposed on such person with respect to such failure under 
section 4980K of the Internal Revenue Code of 1986.''.
          (2) Enforcement coordination and review by the 
        department of labor.--Section 502 of such Act (29 
        U.S.C. 1132) is amended by adding at the end the 
        following new subsection:
  ``(n) Enforcement Coordination of Certain Disclosure 
Requirements Relating to Individual Account Plans and Review by 
the Department of Labor.--
          ``(1) Notification and action relating to service 
        providers.--The Secretary shall notify the applicable 
        regulatory authority in any case in which the Secretary 
        determines that a service provider is engaged in a 
        pattern or practice that precludes compliance by plan 
        administrators with subparagraphs (B)(ii)(IV) and (C) 
        of section 105(a)(2) and section 112. The Secretary 
        shall, in consultation with the applicable authority, 
        take such timely enforcement action under this title as 
        is necessary to assure that such pattern or practice 
        ceases and desists and assess any appropriate 
        penalties.
          ``(2) Annual audit of representative sampling of 
        individual account plans.--The Secretary shall annually 
        audit a representative sampling of individual account 
        plans covered by this title to determine compliance 
        with the requirements of subparagraphs (B)(ii)(IV) and 
        (C) of section 105(a)(2), section 111, and section 112. 
        The Secretary shall annually report the results of such 
        audit and any related recommendations of the Secretary 
        to the Committee on Education and Labor of the House of 
        Representatives and the Committee on Health, Education, 
        Labor, and Pensions of the Senate.''.
  (e) Review and Report to the Congress by Secretary of Labor 
Relating to Reporting and Disclosure Requirements.--
          (1) Study.--As soon as practicable after the date of 
        the enactment of this Act, the Secretary of Labor shall 
        review the reporting and disclosure requirements of 
        part 1 of subtitle B of title I of the Employee 
        Retirement Income Security Act of 1974 and related 
        provisions of the Pension Protection Act of 2006.
          (2) Report.--Not later than 18 months after the date 
        of the enactment of this Act, the Secretary of Labor, 
        in consultation with the Secretary of the Treasury, 
        shall make such recommendations as the Secretary of 
        Labor considers appropriate to the appropriate 
        committees of the Congress to consolidate, simplify, 
        standardize, and improve the applicable reporting and 
        disclosure requirements so as to simplify reporting for 
        employee pension benefit plans and ensure that needed 
        understandable information is provided to participants 
        and beneficiaries of such plans.

SEC. 323. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

  (a) In General.--Chapter 43 of the Internal Revenue Code of 
1986 (relating to qualified pension, etc. plans) is amended by 
adding at the end the following new sections:

``SEC. 4980J. FAILURE TO PROVIDE NOTICE OF PLAN FEE INFORMATION TO PLAN 
                    ADMINISTRATORS.

  ``(a) Imposition of Tax.--
          ``(1) In general.--There is hereby imposed a tax on 
        each failure of a service provider to meet the 
        requirements of paragraph (2) with respect to any 
        applicable defined contribution plan.
          ``(2) Failures described.--The failures described in 
        this paragraph are--
                  ``(A) any failure to provide an initial 
                statement described in subsection (d),
                  ``(B) any failure to provide an annual 
                statement described in subsection (e), and
                  ``(C) any failure to provide a material 
                change statement described in subsection (f).
  ``(b) Amount of Tax.--
          ``(1) In general.--The amount of the tax imposed by 
        subsection (a) on any failure shall be $1,000 for each 
        day in the noncompliance period.
          ``(2) Noncompliance period.--For purposes of 
        paragraph (1), the noncompliance period with respect to 
        the failure to provide any statement is the period 
        beginning on the date that such statement was required 
        to be provided and ending on the date that such 
        statement is provided or the failure is otherwise 
        corrected.
  ``(c) Limitations.--
          ``(1) Aggregate limitation.--The total amount of tax 
        imposed by this section on any service provider with 
        respect to any applicable defined contribution plan for 
        any plan year shall not exceed an amount equal to the 
        lesser of--
                  ``(A) 10 percent of the assets of the plan, 
                determined as of the first day of such plan 
                year, or
                  ``(B) $1,000,000.
          ``(2) Tax not to apply to failures corrected within 
        30 days.--No tax shall be imposed by subsection (a) on 
        any failure if--
                  ``(A) the service provider subject to 
                liability for the tax under subsection (a) 
                exercised reasonable diligence to meet the 
                requirement with respect to which the failure 
                relates, and
                  ``(B) such service provider provides the 
                information required under subsection (a) 
                during the 30-day period beginning on the date 
                such person knew, or exercising reasonable 
                diligence would have known, that such failure 
                existed.
          ``(3) Waiver by secretary.--In the case of a failure 
        which is due to reasonable cause and not to willful 
        neglect, the Secretary may waive part or all of the tax 
        imposed by subsection (a) to the extent that the 
        payment of such tax would be excessive or otherwise 
        inequitable relative to the failure involved.
  ``(d) Initial Statement of Services Provided and Revenues 
Received.--
          ``(1) In general.--Before entering into any contract 
        or arrangement to provide services to an applicable 
        defined contribution plan, the service provider shall 
        provide to the plan administrator a single written 
        statement which includes, with respect to the first 
        plan year covered under such contract or arrangement, 
        the following:
                  ``(A) A detailed description of the services 
                which will be provided to the plan by the 
                service provider, the amount of total expected 
                annual revenue with respect to such services, 
                the manner in which such revenue will be 
                collected, and the extent to which such revenue 
                varies between specific investment options.
                  ``(B)(i) In the case of a service provider 
                who is providing recordkeeping services with 
                respect to any investment option, such 
                information as is necessary for the plan 
                administrator to satisfy the requirements of 
                paragraphs (1), (2) and (4) of section 4980K(e) 
                with respect to such option, including 
                specifying the method used by the service 
                provider in disclosing or estimating expenses 
                under subparagraphs (A)(iv) and (C) of such 
                paragraph (2).
                  ``(ii) To the extent provided in regulations 
                issued by the Secretary of Labor, clause (i) 
                shall not apply in the case of a service 
                provider described in such clause if the 
                service provider receives a written 
                notification from the plan administrator that 
                the information described in such clause in 
                connection with the investment option is 
                provided by another service provider pursuant 
                to a contract or arrangement to provide 
                services to the plan.
                  ``(C) A statement indicating--
                          ``(i) the identity of any investment 
                        options offered under the plan with 
                        respect to which the service provider 
                        provides substantial investment, 
                        trustee, custodial, or administrative 
                        services, and
                          ``(ii) in the case of any investment 
                        option, whether the service provider 
                        expects to receive any component of 
                        total expected annual revenue described 
                        in paragraph (2)(A)(ii)(II) with 
                        respect to such option and the amount 
                        of any such component.
                  ``(D) The portion of total expected annual 
                revenue which is properly allocable to each of 
                the following:
                          ``(i) Administration and 
                        recordkeeping.
                          ``(ii) Investment management.
                          ``(iii) Other services or amounts not 
                        described in clause (i) or (ii).
          ``(2) Definition of total expected annual revenue.--
        For purposes of this section--
                  ``(A) In general.--The term `total expected 
                annual revenue' means, with respect to any plan 
                year--
                          ``(i) any amount expected to be 
                        received during such plan year from the 
                        plan (including amounts paid from 
                        participant accounts), any participant 
                        or beneficiary, or any plan sponsor in 
                        connection with the contract or 
                        arrangement referred to in paragraph 
                        (1), and
                          ``(ii) any amount not taken into 
                        account under clause (i) which is 
                        expected to be received during such 
                        plan year by the service provider in 
                        connection with--
                                  ``(I) plan administration, 
                                recordkeeping, consulting, 
                                management, or investment or 
                                other service activities 
                                undertaken by the service 
                                provider with respect to the 
                                plan, or
                                  ``(II) plan administration, 
                                recordkeeping, consulting, 
                                management, or investment or 
                                other service activities 
                                undertaken by any other person 
                                with respect to the plan.
                  ``(B) Expressed as dollar amount or 
                percentage of assets.--Total expected annual 
                revenue and any amount indicated under 
                paragraph (1)(C)(ii) may be expressed as a 
                dollar amount or as a percentage of assets (or 
                a combination thereof), as appropriate. To the 
                extent that total expected annual revenue is 
                expressed as a percentage of assets, such 
                percentage shall be properly allocated among 
                clauses (i), (ii), and (iii) of paragraph 
                (1)(D).
                  ``(C) Provision of fee schedule for certain 
                participant initiated transactions.--In the 
                case of amounts expected to be received from 
                participants or beneficiaries under the plan 
                (or from the account of a participant or 
                beneficiary) as a fee or charge in connection 
                with a transaction initiated by the participant 
                (other than loads, commissions, brokerage fees, 
                and other investment related transactions)--
                          ``(i) such amounts shall not be taken 
                        into account in determining total 
                        expected annual revenue, and
                          ``(ii) the service provider shall 
                        provide to the plan administrator, as 
                        part of the statement referred to in 
                        paragraph (1), a fee schedule which 
                        describes each such fee or charge, the 
                        amount thereof, and the manner in which 
                        such amount is collected.
                  ``(D) Estimations.--In determining under this 
                subsection any amount which is expected to be 
                received by the service provider, the service 
                provider shall provide a reasonable estimate of 
                such amount and shall indicate in the statement 
                referred to in paragraph (1) whether such 
                amount disclosed is an estimate. Any such 
                estimate shall be based on reasonable 
                assumptions specified in such statement.
          ``(3) Allocation rules.--The Secretary of Labor shall 
        provide rules for defining total expected annual 
        revenue and for the appropriate and consistent 
        allocation of total expected annual revenue among 
        clauses (i), (ii), and (iii) of paragraph (1)(D), 
        except that the entire amount of such revenue shall be 
        allocated among such clauses and no amount may be taken 
        into account under more than one clause.
          ``(4) Disclosure of different pricing of investment 
        options.--In the case of investment options with more 
        than one share class or price level, the Secretary of 
        Labor shall prescribe regulations for the disclosure of 
        the different share classes or price levels available 
        as part of the statement in paragraph (1). Such 
        regulations shall provide guidance with respect to the 
        disclosure of the basis for qualifying for such share 
        classes or price levels, which may include amounts 
        invested, number of participants, or other factors.
          ``(5) Disclosure of investment transaction costs.--To 
        the extent provided in regulations issued by the 
        Secretary of Labor, a service provider shall separately 
        disclose the transaction costs (including sales 
        commissions) for each investment option for the 
        preceding year.
  ``(e) Annual Statements.--With respect to each plan year 
after the plan year covered by the statement described in 
subsection (d), the service provider shall provide the plan 
administrator a single written statement which includes the 
information described in subsection (d) with respect to such 
subsequent plan year.
  ``(f) Material Change Statements.--In the case of any event 
or other change during a plan year which causes the information 
included in any statement described in subsection (d) or (e) 
with respect to such plan year to become materially incorrect, 
the service provider shall provide the plan administrator a 
written statement providing the corrected information not later 
than 30 days after the service provider knows, or exercising 
reasonable diligence would have known, of such event or other 
change.
  ``(g) Time and Manner of Providing Statement and Other 
Materials.--The statement referred to in subsections (d)(1) and 
(e) shall be made at such time and in such manner as the 
Secretary of Labor may provide. Other materials required to be 
provided under this section shall be provided in such manner as 
such Secretary may provide. All information included in such 
statements and other materials shall be presented in a manner 
which is easily understood by the typical plan administrator.
  ``(h) Exception for Small Service Providers.--The 
requirements of this section shall not apply with respect to 
any contract or arrangement for services provided with respect 
to an individual account plan for any plan year if--
          ``(1) the total annual revenue expected by the 
        service provider to be received with respect to the 
        plan for such plan year is less than $5,000, and
          ``(2) the service provider provides a written 
        statement to the plan administrator that the total 
        annual revenue expected by the service provider to be 
        received with respect to the plan is less than $5,000.
Service providers who expect to receive de minimis annual 
revenue from the plan need not provide the written statement 
described in paragraph (2). The Secretary of Labor may by 
regulation or other guidance adjust the dollar amount specified 
in this subsection.
  ``(i) Definitions.--For purposes of this section--
          ``(1) Service provider.--
                  ``(A) In general.--The term `service 
                provider' includes any person providing 
                administration, recordkeeping, consulting, 
                investment management services, or investment 
                advice to an applicable defined contribution 
                plan under a contract or arrangement.
                  ``(B) Controlled groups treated as one 
                service provider.--All persons which would be 
                treated as a single employer under subsection 
                (b) or (c) of section 414 if section 1563(a)(1) 
                were applied--
                          ``(i) except as provided by 
                        subparagraph (B), by substituting `more 
                        than 50 percent' for `at least 80 
                        percent' each place it appears therein, 
                        or
                          ``(ii) for purposes of subsection 
                        (d)(1)(C)(i), by substituting `at least 
                        20 percent' for `at least 80 percent' 
                        each place it appears therein,
                shall be treated as one person for purposes of 
                this section.
          ``(2) Applicable defined contribution plan.--The term 
        `applicable defined contribution plan' means any 
        defined contribution plan described in clauses (iii) 
        through (vi) of section 402(c)(8)(B).
          ``(3) Plan administrator.--The term `plan 
        administrator' has the meaning given such term by 
        section 414(g).

``SEC. 4980K. FAILURE TO PROVIDE NOTICE TO PARTICIPANTS OF PLAN FEE 
                    INFORMATION.

  ``(a) Imposition of Tax.--
          ``(1) In general.--There is hereby imposed a tax on 
        each failure of a plan administrator of an applicable 
        defined contribution plan to meet the requirements of 
        paragraph (2) with respect to any participant or 
        beneficiary.
          ``(2) Failures described.--The failures described in 
        this paragraph are--
                  ``(A) any failure to provide an advance 
                notice of available investment options 
                described in subsection (e)(1),
                  ``(B) any failure to provide an account 
                explanation described in subsection (e)(2),
                  ``(C) any failure to provide a service 
                provider statement referred to in subsection 
                (e)(3), and
                  ``(D) any failure to provide a notice of 
                material change described in subsection (e)(4).
  ``(b) Amount of Tax.--
          ``(1) In general.--The amount of the tax imposed by 
        subsection (a) on any failure with respect to any 
        participant or beneficiary shall be $100 for each day 
        in the noncompliance period.
          ``(2) Noncompliance period.--For purposes of 
        paragraph (1), the noncompliance period with respect to 
        the failure to provide any notice, explanation, or 
        statement referred to in subsection (a)(2) with respect 
        to any participant or beneficiary is the period 
        beginning on the date that such notice, explanation, or 
        statement was required to be provided and ending on the 
        date that such notice, explanation, or statement is 
        provided or the failure is otherwise corrected.
  ``(c) Limitations on Amount of Tax.--
          ``(1) Aggregate limitation.--The total amount of tax 
        imposed by this section with respect to any plan for 
        any plan year shall not exceed an amount equal to the 
        lesser of--
                  ``(A) 10 percent of the assets of the plan, 
                determined as of the first day of such plan 
                year, or
                  ``(B) $500,000.
          ``(2) Tax not to apply to failures corrected within 
        30 days.--No tax shall be imposed by subsection (a) on 
        any failure if--
                  ``(A) any person subject to liability for the 
                tax under subsection (a) exercised reasonable 
                diligence to meet the requirements of 
                subsection (e), and
                  ``(B) such person provides the notice, 
                explanation, or statement to which the failure 
                relates during the 30-day period beginning on 
                the date such person knew, or exercising 
                reasonable diligence would have known, that 
                such failure existed.
          ``(3) Waiver by secretary.--In the case of a failure 
        which is due to reasonable cause and not to willful 
        neglect, the Secretary shall waive part or all of the 
        tax imposed by subsection (a) to the extent that the 
        payment of such tax would be excessive or otherwise 
        inequitable relative to the failure involved.
  ``(d) Liability for Tax.--The plan administrator shall be 
liable for the tax imposed by subsection (a).
  ``(e) Disclosures to Participants and Beneficiaries.--
          ``(1) Advance notice of available investment 
        options.--
                  ``(A) In general.--The plan administrator of 
                an applicable defined contribution plan shall 
                provide to the participant or beneficiary 
                notice of the investment options available 
                under the plan before--
                          ``(i) the earliest date provided for 
                        under the plan for the participant's 
                        initial investment of any contribution 
                        made on behalf of such participant, and
                          ``(ii) the effective date of any 
                        change in the list of investment 
                        options available under the plan, 
                        unless such advance notice is 
                        impracticable, and in such case, as 
                        soon as is practicable.
                  ``(B) Information included in notice.--The 
                notice required under subparagraph (A) shall--
                          ``(i) set forth, with respect to each 
                        available investment option--
                                  ``(I) the name of the option,
                                  ``(II) a general description 
                                of the option's investment 
                                objectives and principal 
                                investment strategies, 
                                principal risk and return 
                                characteristics, and the name 
                                of the option's investment 
                                manager,
                                  ``(III) whether the 
                                investment option is designed 
                                to be a comprehensive, stand-
                                alone investment for retirement 
                                that provides varying degrees 
                                of long-term appreciation and 
                                capital preservation through a 
                                mix of equity and fixed income 
                                exposures,
                                  ``(IV) the extent to which 
                                the investment option is 
                                actively managed or passively 
                                managed in relation to an index 
                                and the difference between 
                                active management and passive 
                                management,
                                  ``(V) where, and the manner 
                                in which, additional plan-
                                specific, option-specific, and 
                                generally available investment 
                                information may be obtained, 
                                and
                                  ``(VI) a statement explaining 
                                that investment options should 
                                not be evaluated solely on the 
                                basis of the charges for each 
                                option but should also be based 
                                on consideration of other key 
                                factors, including the risk 
                                level of the option, the 
                                investment objectives of the 
                                option, historical returns of 
                                the option, and the 
                                participant's personal 
                                investment objectives,
                          ``(ii) include a statement of the 
                        right under paragraph (3) of 
                        participants and beneficiaries to 
                        request, and a description of how 
                        participant or beneficiary may request, 
                        a copy of the statements received by 
                        the plan administrator under section 
                        4980J with respect to the plan, and
                          ``(iii) include the plan fee 
                        comparison chart described in 
                        subparagraph (C).
                  ``(C) Plan fee comparison chart.--
                          ``(i) In general.--
                                  ``(I) In general.--The notice 
                                provided under this paragraph 
                                shall include a plan fee 
                                comparison chart consisting of 
                                a comparison of the service and 
                                investment charges that will or 
                                could be assessed against the 
                                account of the participant or 
                                beneficiary with respect to the 
                                plan year.
                                  ``(II) Expressed as dollar 
                                amount or formula.--For 
                                purposes of this subparagraph, 
                                such charges shall be provided 
                                in the form of a dollar amount 
                                or as a formula (such as a 
                                percentage of assets), as 
                                appropriate.
                          ``(ii) Categorization of charges.--
                        The plan fee comparison chart shall 
                        provide information in relation to the 
                        following categories of charges that 
                        will or could be assessed against the 
                        account of the participant or 
                        beneficiary:
                                  ``(I) Asset-based charges 
                                specific to investment.--
                                Charges that vary depending on 
                                the investment options selected 
                                by the participant or 
                                beneficiary, including the 
                                annual operating expenses of 
                                the investment option and 
                                investment-specific asset-based 
                                charges (such as loads, 
                                commissions, brokerage fees, 
                                exchange fees, redemption fees, 
                                and surrender charges). Except 
                                as provided by the Secretary of 
                                Labor in regulations under this 
                                section, the information 
                                relating to such charges shall 
                                include a statement noting any 
                                charges for 1 or more 
                                investment options which pay 
                                for services other than 
                                investment management.
                                  ``(II) Recurring asset-based 
                                charges not specific to 
                                investment.--Charges that are 
                                assessed as a percentage of the 
                                total assets in the account of 
                                the participant or beneficiary, 
                                regardless of the investment 
                                option selected.
                                  ``(III) Administrative and 
                                transaction-based charges.--
                                Administration and transaction-
                                based charges, including fees 
                                charged to participants to 
                                cover plan administration, 
                                compliance, and recordkeeping 
                                costs, plan loan origination 
                                fees, possible redemption fees, 
                                and possible surrender charges, 
                                that are not assessed as a 
                                percentage of the total assets 
                                in the account and are either 
                                automatically deducted each 
                                year or result from certain 
                                transactions engaged in by the 
                                participant or beneficiary.
                                  ``(IV) Other charges.--Any 
                                other charges which may be 
                                deducted from participants' or 
                                beneficiaries' accounts and 
                                which are not described in 
                                subclauses (I), (II), and 
                                (III).
                          ``(iii) Fees and historical 
                        returns.--The plan fee comparison chart 
                        shall include--
                                  ``(I) the historical returns, 
                                net of fees and expenses, for 
                                the previous year, 5 years, and 
                                10 years (or for the period 
                                since inception, if shorter) 
                                with respect to such investment 
                                option, and
                                  ``(II) the historical returns 
                                of an appropriate benchmark, 
                                index, or other point of 
                                comparison for each such 
                                period.
                  ``(D) Model notices.--The Secretary of Labor 
                shall prescribe one or more model notices that 
                may be used for purposes of satisfying the 
                requirements of this paragraph, including model 
                plan fee comparison charts.
                  ``(E) Estimations.--For purposes of providing 
                the notice required under this paragraph, the 
                plan administrator may provide a reasonable and 
                representative estimate for any charges or 
                percentages disclosed under subparagraph (B) or 
                (C) and shall indicate whether the amount of 
                any such charges or percentages disclosed is an 
                estimate.
          ``(2) Quarterly benefit statement.--
                  ``(A) Requirements.--The plan administrator 
                shall provide to each participant and 
                beneficiary, at least once each calendar 
                quarter, an explanation describing the 
                investment options in which the participant's 
                or beneficiary's account is invested as of the 
                last day of the preceding quarter. Such 
                explanation shall provide, to the extent 
                applicable, the following for the preceding 
                quarter:
                          ``(i) As of the last day of the 
                        quarter, a statement of the different 
                        asset classes that the participant's or 
                        beneficiary's account is invested in 
                        and the percentage of the account 
                        allocated to each asset class.
                          ``(ii) A statement of the starting 
                        and ending balance of the participant's 
                        or beneficiary's account for such 
                        quarter.
                          ``(iii) A statement of the total 
                        contributions made to the participant's 
                        or beneficiary's account during the 
                        quarter and a separate statement of--
                                  ``(I) the amount of such 
                                contributions, and the total 
                                amount of any restorative 
                                payments, which were made by 
                                the employer during the 
                                quarter, and
                                  ``(II) the amount of such 
                                contributions which were made 
                                by the employee.
                          ``(iv) A statement of the total fees 
                        and expenses which were directly 
                        deducted from the participant's or 
                        beneficiary's account during the 
                        quarter and an itemization of such fees 
                        and expenses.
                          ``(v) A statement of the net returns 
                        for the plan year to date, expressed as 
                        a percentage, and a statement as to 
                        whether the net returns include amounts 
                        described in clause (iv).
                          ``(vi) With respect to each 
                        investment option in which the 
                        participant or beneficiary was invested 
                        as of the last day of the quarter, the 
                        following:
                                  ``(I) A statement of the 
                                percentage of the participant's 
                                or beneficiary's account that 
                                is invested in such option as 
                                of the last day of such 
                                quarter.
                                  ``(II) A statement of the 
                                starting and ending balance of 
                                the participant's or 
                                beneficiary's account that is 
                                invested in such option for 
                                such quarter.
                                  ``(III) A statement of the 
                                annual operating expenses of 
                                the investment option.
                                  ``(IV) A statement of whether 
                                the disclosure described in 
                                clause (iv) includes the annual 
                                operating expenses of the 
                                investment options of the 
                                participant or beneficiary.
                          ``(vii) The statement described in 
                        paragraph (1)(B)(i)(VI).
                          ``(viii) A statement regarding how a 
                        participant or beneficiary may access 
                        the information required to be 
                        disclosed under paragraph (1).
                  ``(B) Model explanations.--The Secretary of 
                Labor shall prescribe one or more model 
                explanations that may be used for purposes of 
                satisfying the requirements of this paragraph.
                  ``(C) Determination of expenses.--For 
                purposes of subparagraph (A)(v)(III)--
                          ``(i) Expenses may be expressed as a 
                        dollar amount or as a percentage of 
                        assets (or a combination thereof).
                          ``(ii) The plan administrator may 
                        provide disclosure of the expenses for 
                        the quarter or may provide a reasonable 
                        and representative estimate of such 
                        expenses and shall indicate any such 
                        estimate as being an estimate. Any such 
                        estimate shall be based on reasonable 
                        assumptions stated together with such 
                        estimate.
                          ``(iii) To the extent that estimated 
                        expenses are expressed as a percentage 
                        of assets, the disclosure shall also 
                        include one of the following, stated in 
                        dollar amounts:
                                  ``(I) an estimate of the 
                                expenses for the quarter based 
                                on the amount invested in the 
                                option; or
                                  ``(II) an example describing 
                                the expenses that would apply 
                                during the quarter with respect 
                                to a hypothetical $10,000 
                                investment in the option.
          ``(3) Disclosure of service provider statements.--The 
        plan administrator shall provide to any participant or 
        beneficiary a copy of any statement received pursuant 
        to section 4980J within 30 days after receipt of a 
        request for such a statement.
          ``(4) Notice of material changes.--In the case of any 
        event or other change which causes the information 
        included in any notice described in paragraph (1) to 
        become materially incorrect, the plan administrator 
        shall provide participants and beneficiaries a written 
        statement providing the corrected information not later 
        than 30 days after the plan administrator knows, or 
        exercising reasonable diligence would have known, of 
        such event or other change.
          ``(5) Time and manner of providing notices and 
        disclosures.--
                  ``(A) In general.--The notices described in 
                paragraph (1) shall be provided at such times 
                and in such manner as the Secretary of Labor 
                may provide. Other notices and materials 
                required to be provided under this subsection 
                shall be provided in such manner as such 
                Secretary may provide.
                  ``(B) Manner of presentation.--
                          ``(i) In general.--All information 
                        included in such notices or 
                        explanations shall be presented in a 
                        manner which is easily understood by 
                        the typical participant.
                          ``(ii) Generic example of operating 
                        expenses of investment options.--The 
                        information described in paragraphs 
                        (1)(C)(ii)(I) shall include a generic 
                        example describing the charges that 
                        would apply during an annual period 
                        with respect to a $10,000 investment in 
                        the investment option.
                  ``(C) Annual compliance for small plans.--A 
                plan that has fewer than 100 participants and 
                beneficiaries as of the first day of the plan 
                year may provide the explanation described in 
                paragraph (2) on an annual rather than a 
                quarterly basis.
  ``(f) Definitions.--
          ``(1) Applicable defined contribution plan.--The term 
        `applicable defined contribution plan' means the 
        portion of any defined contribution plan which--
                  ``(A) permits a participant or beneficiary to 
                exercise control over assets in his or her 
                account, and
                  ``(B) is described in clauses (iii) through 
                (vi) of section 402(c)(8)(B).
          ``(2) Plan administrator.--The term `plan 
        administrator' has the meaning given such term by 
        section 414(g).
  ``(g) Regulations.--The Secretary of Labor shall prescribe 
such regulations or other guidance as may be necessary or 
appropriate to carry out the purposes of this section, 
including regulations or other guidance which--
          ``(1) provide a later deadline for providing the 
        notice of investment menu changes described in 
        subsection (e)(4) in appropriate circumstances, and
          ``(2) provide guidelines, and a safe harbor, for the 
        selection of an appropriate benchmark, index, or other 
        point of comparison for an investment option under 
        subsection (e)(1)(C)(iii)(II).''.
  (b) Clerical Amendment.--The table of sections for chapter 43 
of such Code is amended by adding at the end the following new 
items:

``Sec. 4980J. Failure to provide notice of plan fee information to plan 
          administrators.
``Sec. 4980K. Failure to provide notice to participants of plan fee 
          information.''.

SEC. 324. REGULATORY AUTHORITY AND COORDINATION.

  (a) Regulatory Authority.--The Secretary of Labor shall 
prescribe regulations or other guidance to the extent the 
Secretary determines necessary or appropriate to carry out the 
purposes of sections 105, 111, and 112 of the Employee 
Retirement Income Security Act of 1974 and sections 4980J and 
4980K of the Internal Revenue Code of 1986, including 
regulations or other guidance which--
          (1) provide safe harbor and simplified methods for 
        making the allocations described in subsection 
        (a)(1)(D) of such section 111 and subsection (d)(1)(D) 
        of such section 4980J, and
          (2) provide special rules for the application of such 
        sections to--
                  (A) investments with a guaranteed rate of 
                return,
                  (B) investments with an insurance component, 
                and
                  (C) employer sponsored retirement plans 
                funded through an individual retirement 
                account.
          (3) address notices with respect to investments 
        provided through participant directed brokerage 
        trading,
          (4) address the disclosure of information that is not 
        proprietary to the service provider, and
          (5) provide rules to allow service providers to 
        consolidate information to satisfy the requirements of 
        such sections with respect to all such service 
        providers.
  (b) Certain Electronic Disclosures Permitted.--Any disclosure 
required under section 112 of the Employee Retirement Income 
Security Act of 1974 or section 4980K of the Internal Revenue 
Code of 1986 may be provided through an electronic medium under 
such rules as shall be prescribed under such section by the 
Secretary of Labor not later than 1 year after the date of the 
enactment of this Act. Such rules shall be similar to those 
applicable under the Internal Revenue Code of 1986 with respect 
to notices to participants in pension plans. Such Secretary 
shall regularly modify such rules as appropriate to take into 
account new developments, including new forms of electronic 
media, and to fairly take into consideration the interests of 
plan sponsors, service providers, and participants. The rules 
prescribed by such Secretary pursuant to this subsection shall 
provide for a method for the typical participant or beneficiary 
to obtain without undue burden any such disclosure in writing 
on paper in lieu of receipt through an electronic medium.

SEC. 325. EFFECTIVE DATE OF SUBTITLE.

  (a) In General.--The amendments made by this subtitle shall 
apply to plan years beginning after December 31, 2011.
  (b) Application of Service Provider Disclosures to Existing 
Contracts and Arrangements.--For purposes of section 111 of the 
Employee Retirement Income Security Act of 1974 and section 
4980J of the Internal Revenue Code of 1986, any contract or 
arrangement to provide services to a plan which is in effect on 
January 1, 2012, shall be treated as a new contract or 
arrangement entered into on such date.

                       TITLE IV--REVENUE OFFSETS

                     Subtitle A--Foreign Provisions

SEC. 401. RULES TO PREVENT SPLITTING FOREIGN TAX CREDITS FROM THE 
                    INCOME TO WHICH THEY RELATE.

  (a) In General.--Subpart A of part III of subchapter N of 
chapter 1 is amended by adding at the end the following new 
section:

``SEC. 909. SUSPENSION OF TAXES AND CREDITS UNTIL RELATED INCOME TAKEN 
                    INTO ACCOUNT.

  ``(a) In General.--If there is a foreign tax credit splitting 
event with respect to a foreign income tax paid or accrued by 
the taxpayer, such tax shall not be taken into account for 
purposes of this title before the taxable year in which the 
related income is taken into account under this chapter by the 
taxpayer.
  ``(b) Special Rules With Respect to Section 902 
Corporations.--If there is a foreign tax credit splitting event 
with respect to a foreign income tax paid or accrued by a 
section 902 corporation, such tax shall not be taken into 
account--
          ``(1) for purposes of section 902 or 960, or
          ``(2) for purposes of determining earnings and 
        profits under section 964(a),
 before the taxable year in which the related income is taken 
into account under this chapter by such section 902 corporation 
or a domestic corporation which meets the ownership 
requirements of subsection (a) or (b) of section 902 with 
respect to such section 902 corporation.
  ``(c) Special Rules.--For purposes of this section--
          ``(1) Application to partnerships, etc.--In the case 
        of a partnership, subsections (a) and (b) shall be 
        applied at the partner level. Except as otherwise 
        provided by the Secretary, a rule similar to the rule 
        of the preceding sentence shall apply in the case of 
        any S corporation or trust.
          ``(2) Treatment of foreign taxes after suspension.--
        In the case of any foreign income tax not taken into 
        account by reason of subsection (a) or (b), except as 
        otherwise provided by the Secretary, such tax shall be 
        so taken into account in the taxable year referred to 
        in such subsection (other than for purposes of section 
        986(a)) as a foreign income tax paid or accrued in such 
        taxable year.
  ``(d) Definitions.--For purposes of this section--
          ``(1) Foreign tax credit splitting event.--There is a 
        foreign tax credit splitting event with respect to a 
        foreign income tax if the related income is (or will 
        be) taken into account under this chapter by a covered 
        person.
          ``(2) Foreign income tax.--The term `foreign income 
        tax' means any income, war profits, or excess profits 
        tax paid or accrued to any foreign country or to any 
        possession of the United States.
          ``(3) Related income.--The term `related income' 
        means, with respect to any portion of any foreign 
        income tax, the income (or, as appropriate, earnings 
        and profits) to which such portion of foreign income 
        tax relates.
          ``(4) Covered person.--The term `covered person' 
        means, with respect to any person who pays or accrues a 
        foreign income tax (hereafter in this paragraph 
        referred to as the `payor')--
                  ``(A) any entity in which the payor holds, 
                directly or indirectly, at least a 10 percent 
                ownership interest (determined by vote or 
                value),
                  ``(B) any person which holds, directly or 
                indirectly, at least a 10 percent ownership 
                interest (determined by vote or value) in the 
                payor,
                  ``(C) any person which bears a relationship 
                to the payor described in section 267(b) or 
                707(b), and
                  ``(D) any other person specified by the 
                Secretary for purposes of this paragraph.
          ``(5) Section 902 corporation.--The term `section 902 
        corporation' means any foreign corporation with respect 
        to which one or more domestic corporations meets the 
        ownership requirements of subsection (a) or (b) of 
        section 902.
  ``(e) Regulations.--The Secretary may issue such regulations 
or other guidance as is necessary or appropriate to carry out 
the purposes of this section, including regulations or other 
guidance which provides--
          ``(1) appropriate exceptions from the provisions of 
        this section, and
          ``(2) for the proper application of this section with 
        respect to hybrid instruments.''.
  (b) Clerical Amendment.--The table of sections for subpart A 
of part III of subchapter N of chapter 1 is amended by adding 
at the end the following new item:

``Sec. 909. Suspension of taxes and credits until related income taken 
          into account.''.

  (c) Effective Date.--The amendments made by this section 
shall apply to--
          (1) foreign income taxes (as defined in section 
        909(d) of the Internal Revenue Code of 1986, as added 
        by this section) paid or accrued after May 20, 2010, 
        and
          (2) foreign income taxes (as so defined) paid or 
        accrued by a section 902 corporation (as so defined) on 
        or before such date (and not deemed paid under section 
        902(a) or 960 of such Code on or before such date), but 
        only for purposes of applying sections 902 and 960 with 
        respect to periods after such date.
Section 909(b)(2) of the Internal Revenue Code of 1986, as 
added by this section, shall not apply to foreign income taxes 
described in paragraph (2).

SEC. 402. DENIAL OF FOREIGN TAX CREDIT WITH RESPECT TO FOREIGN INCOME 
                    NOT SUBJECT TO UNITED STATES TAXATION BY REASON OF 
                    COVERED ASSET ACQUISITIONS.

  (a) In General.--Section 901 is amended by redesignating 
subsection (m) as subsection (n) and by inserting after 
subsection (l) the following new subsection:
  ``(m) Denial of Foreign Tax Credit With Respect to Foreign 
Income Not Subject to United States Taxation by Reason of 
Covered Asset Acquisitions.--
          ``(1) In general.--In the case of a covered asset 
        acquisition, the disqualified portion of any foreign 
        income tax determined with respect to the income or 
        gain attributable to the relevant foreign assets--
                  ``(A) shall not be taken into account in 
                determining the credit allowed under subsection 
                (a), and
                  ``(B) in the case of a foreign income tax 
                paid by a section 902 corporation (as defined 
                in section 909(d)(5)), shall not be taken into 
                account for purposes of section 902 or 960.
          ``(2) Covered asset acquisition.--For purposes of 
        this section, the term `covered asset acquisition' 
        means--
                  ``(A) a qualified stock purchase (as defined 
                in section 338(d)(3)) to which section 338(a) 
                applies,
                  ``(B) any transaction which--
                          ``(i) is treated as an acquisition of 
                        assets for purposes of this chapter, 
                        and
                          ``(ii) is treated as the acquisition 
                        of stock of a corporation (or is 
                        disregarded) for purposes of the 
                        foreign income taxes of the relevant 
                        jurisdiction,
                  ``(C) any acquisition of an interest in a 
                partnership which has an election in effect 
                under section 754, and
                  ``(D) to the extent provided by the 
                Secretary, any other similar transaction.
          ``(3) Disqualified portion.--For purposes of this 
        section--
                  ``(A) In general.--The term `disqualified 
                portion' means, with respect to any covered 
                asset acquisition, for any taxable year, the 
                ratio (expressed as a percentage) of--
                          ``(i) the aggregate basis differences 
                        (but not below zero) allocable to such 
                        taxable year under subparagraph (B) 
                        with respect to all relevant foreign 
                        assets, divided by
                          ``(ii) the income on which the 
                        foreign income tax referred to in 
                        paragraph (1) is determined (or, if the 
                        taxpayer fails to substantiate such 
                        income to the satisfaction of the 
                        Secretary, such income shall be 
                        determined by dividing the amount of 
                        such foreign income tax by the highest 
                        marginal tax rate applicable to such 
                        income in the relevant jurisdiction).
                  ``(B) Allocation of basis difference.--For 
                purposes of subparagraph (A)(i)--
                          ``(i) In general.--The basis 
                        difference with respect to any relevant 
                        foreign asset shall be allocated to 
                        taxable years using the applicable cost 
                        recovery method under this chapter.
                          ``(ii) Special rule for disposition 
                        of assets.--Except as otherwise 
                        provided by the Secretary, in the case 
                        of the disposition of any relevant 
                        foreign asset--
                                  ``(I) the basis difference 
                                allocated to the taxable year 
                                which includes the date of such 
                                disposition shall be the excess 
                                of the basis difference with 
                                respect to such asset over the 
                                aggregate basis difference with 
                                respect to such asset which has 
                                been allocated under clause (i) 
                                to all prior taxable years, and
                                  ``(II) no basis difference 
                                with respect to such asset 
                                shall be allocated under clause 
                                (i) to any taxable year 
                                thereafter.
                  ``(C) Basis difference.--
                          ``(i) In general.--The term `basis 
                        difference' means, with respect to any 
                        relevant foreign asset, the excess of--
                                  ``(I) the adjusted basis of 
                                such asset immediately after 
                                the covered asset acquisition, 
                                over
                                  ``(II) the adjusted basis of 
                                such asset immediately before 
                                the covered asset acquisition.
                          ``(ii) Built-in loss assets.--In the 
                        case of a relevant foreign asset with 
                        respect to which the amount described 
                        in clause (i)(II) exceeds the amount 
                        described in clause (i)(I), such excess 
                        shall be taken into account under this 
                        subsection as a basis difference of a 
                        negative amount.
                          ``(iii) Special rule for section 338 
                        elections.--In the case of a covered 
                        asset acquisition described in 
                        paragraph (2)(A), the covered asset 
                        acquisition shall be treated for 
                        purposes of this subparagraph as 
                        occurring at the close of the 
                        acquisition date (as defined in section 
                        338(h)(2)).
          ``(4) Relevant foreign assets.--For purposes of this 
        section, the term `relevant foreign asset' means, with 
        respect to any covered asset acquisition, any asset 
        (including any goodwill, going concern value, or other 
        intangible) with respect to such acquisition if income, 
        deduction, gain, or loss attributable to such asset is 
        taken into account in determining the foreign income 
        tax referred to in paragraph (1).
          ``(5) Foreign income tax.--For purposes of this 
        section, the term `foreign income tax' means any 
        income, war profits, or excess profits tax paid or 
        accrued to any foreign country or to any possession of 
        the United States.
          ``(6) Taxes allowed as a deduction, etc.--Sections 
        275 and 78 shall not apply to any tax which is not 
        allowable as a credit under subsection (a) by reason of 
        this subsection.
          ``(7) Regulations.--The Secretary may issue such 
        regulations or other guidance as is necessary or 
        appropriate to carry out the purposes of this 
        subsection, including to exempt from the application of 
        this subsection certain covered asset acquisitions, and 
        relevant foreign assets with respect to which the basis 
        difference is de minimis.''.
  (b) Effective Date.--
          (1) In general.--Except as provided in paragraph (2), 
        the amendments made by this section shall apply to 
        covered asset acquisitions (as defined in section 
        901(m)(2) of the Internal Revenue Code of 1986, as 
        added by this section) after--
                  (A) May 20, 2010, if the transferor and the 
                transferee are related, and
                  (B) the date of the enactment of this Act in 
                any other case.
          (2) Transition rule.--The amendments made by this 
        section shall not apply to any covered asset 
        acquisition (as so defined) with respect to which the 
        transferor and the transferee are not related if such 
        acquisition is--
                  (A) made pursuant to a written agreement 
                which was binding on May 20, 2010, and at all 
                times thereafter,
                  (B) described in a ruling request submitted 
                to the Internal Revenue Service on or before 
                such date, or
                  (C) described on or before such date in a 
                public announcement or in a filing with the 
                Securities and Exchange Commission.
          (3) Related persons.--For purposes of this 
        subsection, a person shall be treated as related to 
        another person if the relationship between such persons 
        is described in section 267 or 707(b) of the Internal 
        Revenue Code of 1986.

SEC. 403. SEPARATE APPLICATION OF FOREIGN TAX CREDIT LIMITATION, ETC., 
                    TO ITEMS RESOURCED UNDER TREATIES.

  (a) In General.--Subsection (d) of section 904 is amended by 
redesignating paragraph (6) as paragraph (7) and by inserting 
after paragraph (5) the following new paragraph:
          ``(6) Separate application to items resourced under 
        treaties.--
                  ``(A) In general.--If--
                          ``(i) without regard to any treaty 
                        obligation of the United States, any 
                        item of income would be treated as 
                        derived from sources within the United 
                        States,
                          ``(ii) under a treaty obligation of 
                        the United States, such item would be 
                        treated as arising from sources outside 
                        the United States, and
                          ``(iii) the taxpayer chooses the 
                        benefits of such treaty obligation,
                subsections (a), (b), and (c) of this section 
                and sections 902, 907, and 960 shall be applied 
                separately with respect to each such item.
                  ``(B) Coordination with other provisions.--
                This paragraph shall not apply to any item of 
                income to which subsection (h)(10) or section 
                865(h) applies.
                  ``(C) Regulations.--The Secretary may issue 
                such regulations or other guidance as is 
                necessary or appropriate to carry out the 
                purposes of this paragraph, including 
                regulations or other guidance which provides 
                that related items of income may be aggregated 
                for purposes of this paragraph.''.
  (b) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after the date of the 
enactment of this Act.

SEC. 404. LIMITATION ON THE AMOUNT OF FOREIGN TAXES DEEMED PAID WITH 
                    RESPECT TO SECTION 956 INCLUSIONS.

  (a) In General.--Section 960 is amended by adding at the end 
the following new subsection:
  ``(c) Limitation With Respect to Section 956 Inclusions.--
          ``(1) In general.--If there is included under section 
        951(a)(1)(B) in the gross income of a domestic 
        corporation any amount attributable to the earnings and 
        profits of a foreign corporation which is a member of a 
        qualified group (as defined in section 902(b)) with 
        respect to the domestic corporation, the amount of any 
        foreign income taxes deemed to have been paid during 
        the taxable year by such domestic corporation under 
        section 902 by reason of subsection (a) with respect to 
        such inclusion in gross income shall not exceed the 
        amount of the foreign income taxes which would have 
        been deemed to have been paid during the taxable year 
        by such domestic corporation if cash in an amount equal 
        to the amount of such inclusion in gross income were 
        distributed as a series of distributions (determined 
        without regard to any foreign taxes which would be 
        imposed on an actual distribution) through the chain of 
        ownership which begins with such foreign corporation 
        and ends with such domestic corporation.
          ``(2) Authority to prevent abuse.--The Secretary 
        shall issue such regulations or other guidance as is 
        necessary or appropriate to carry out the purposes of 
        this subsection, including regulations or other 
        guidance which prevent the inappropriate use of the 
        foreign corporation's foreign income taxes not deemed 
        paid by reason of paragraph (1).''.
  (b) Effective Date.--The amendment made by this section shall 
apply to acquisitions of United States property (as defined in 
section 956(c) of the Internal Revenue Code of 1986) after May 
20, 2010.

SEC. 405. SPECIAL RULE WITH RESPECT TO CERTAIN REDEMPTIONS BY FOREIGN 
                    SUBSIDIARIES.

  (a) In General.--Paragraph (5) of section 304(b) is amended 
by redesignating subparagraph (B) as subparagraph (C) and by 
inserting after subparagraph (A) the following new 
subparagraph:
                  ``(B) Special rule in case of foreign 
                acquiring corporation.--In the case of any 
                acquisition to which subsection (a) applies in 
                which the acquiring corporation is a foreign 
                corporation, no earnings and profits shall be 
                taken into account under paragraph (2)(A) (and 
                subparagraph (A) shall not apply) if more than 
                50 percent of the dividends arising from such 
                acquisition (determined without regard to this 
                subparagraph) would not--
                          ``(i) be subject to tax under this 
                        chapter for the taxable year in which 
                        the dividends arise, or
                          ``(ii) be includible in the earnings 
                        and profits of a controlled foreign 
                        corporation (as defined in section 957 
                        and without regard to section 
                        953(c)).''.
  (b) Effective Date.--The amendments made by this section 
shall apply to acquisitions after May 20, 2010.

SEC. 406. MODIFICATION OF AFFILIATION RULES FOR PURPOSES OF RULES 
                    ALLOCATING INTEREST EXPENSE.

  (a) In General.--Subparagraph (A) of section 864(e)(5) is 
amended by adding at the end the following: ``Notwithstanding 
the preceding sentence, a foreign corporation shall be treated 
as a member of the affiliated group if--
                          ``(i) more than 50 percent of the 
                        gross income of such foreign 
                        corporation for the taxable year is 
                        effectively connected with the conduct 
                        of a trade or business within the 
                        United States, and
                          ``(ii) at least 80 percent of either 
                        the vote or value of all outstanding 
                        stock of such foreign corporation is 
                        owned directly or indirectly by members 
                        of the affiliated group (determined 
                        with regard to this sentence).''.
  (b) Effective Date.--The amendment made by this section shall 
apply to taxable years beginning after the date of the 
enactment of this Act.

SEC. 407. TERMINATION OF SPECIAL RULES FOR INTEREST AND DIVIDENDS 
                    RECEIVED FROM PERSONS MEETING THE 80-PERCENT 
                    FOREIGN BUSINESS REQUIREMENTS.

  (a) In General.--Paragraph (1) of section 861(a) is amended 
by striking subparagraph (A) and by redesignating subparagraphs 
(B) and (C) as subparagraphs (A) and (B), respectively.
  (b) Grandfather Rule With Respect to Withholding on Interest 
and Dividends Received From Persons Meeting the 80-percent 
Foreign Business Requirements.--
          (1) In general.--Subparagraph (B) of section 
        871(i)(2) is amended to read as follows:
                  ``(B) The active foreign business percentage 
                of--
                          ``(i) any dividend paid by an 
                        existing 80/20 company, and
                          ``(ii) any interest paid by an 
                        existing 80/20 company.''.
          (2) Definitions and special rules.--Section 871 is 
        amended by redesignating subsections (l) and (m) as 
        subsections (m) and (n), respectively, and by inserting 
        after subsection (k) the following new subsection:
  ``(l) Rules Relating to Existing 80/20 Companies.--For 
purposes of this subsection and subsection (i)(2)(B)--
          ``(1) Existing 80/20 company.--
                  ``(A) In general.--The term `existing 80/20 
                company' means any corporation if--
                          ``(i) such corporation met the 80-
                        percent foreign business requirements 
                        of section 861(c)(1) (as in effect 
                        before the enactment of this 
                        subsection) for such corporation's last 
                        taxable year beginning before January 
                        1, 2011,
                          ``(ii) such corporation meets the 80-
                        percent foreign business requirements 
                        of subparagraph (B) with respect to 
                        each taxable year after the taxable 
                        year referred to in clause (i), and
                          ``(iii) there has not been an 
                        addition of a substantial line of 
                        business with respect to such 
                        corporation after the date of the 
                        enactment of this subsection.
                  ``(B) Foreign business requirements.--
                          ``(i) In general.--A corporation 
                        meets the 80-percent foreign business 
                        requirements of this subparagraph if it 
                        is shown to the satisfaction of the 
                        Secretary that at least 80 percent of 
                        the gross income from all sources of 
                        such corporation for the testing period 
                        is active foreign business income.
                          ``(ii) Active foreign business 
                        income.--For purposes of clause (i), 
                        the term `active foreign business 
                        income' means gross income which--
                                  ``(I) is derived from sources 
                                outside the United States (as 
                                determined under this 
                                subchapter), and
                                  ``(II) is attributable to the 
                                active conduct of a trade or 
                                business in a foreign country 
                                or possession of the United 
                                States.
                          ``(iii) Testing period.--For purposes 
                        of this subsection, the term `testing 
                        period' means the 3-year period ending 
                        with the close of the taxable year of 
                        the corporation preceding the payment 
                        (or such part of such period as may be 
                        applicable). If the corporation has no 
                        gross income for such 3-year period (or 
                        part thereof), the testing period shall 
                        be the taxable year in which the 
                        payment is made.
          ``(2) Active foreign business percentage.--The term 
        `active foreign business percentage' means, with 
        respect to any existing 80/20 company, the percentage 
        which--
                  ``(A) the active foreign business income of 
                such company for the testing period, is of
                  ``(B) the gross income of such company for 
                the testing period from all sources.
          ``(3) Aggregation rules.--For purposes of applying 
        paragraph (1) (other than subparagraph (A)(i) thereof) 
        and paragraph (2)--
                  ``(A) In general.--The corporation referred 
                to in paragraph (1)(A) and all of such 
                corporation's subsidiaries shall be treated as 
                one corporation.
                  ``(B) Subsidiaries.--For purposes of 
                subparagraph (A), the term `subsidiary' means 
                any corporation in which the corporation 
                referred to in subparagraph (A) owns (directly 
                or indirectly) stock meeting the requirements 
                of section 1504(a)(2) (determined by 
                substituting `50 percent' for `80 percent' each 
                place it appears and without regard to section 
                1504(b)(3)).
          ``(4) Regulations.--The Secretary may issue such 
        regulations or other guidance as is necessary or 
        appropriate to carry out the purposes of this section, 
        including regulations or other guidance which provide 
        for the proper application of the aggregation rules 
        described in paragraph (3).''.
  (c) Conforming Amendments.--
          (1) Section 861 is amended by striking subsection (c) 
        and by redesignating subsections (d), (e), and (f) as 
        subsections (c), (d), and (e), respectively.
          (2) Paragraph (9) of section 904(h) is amended to 
        read as follows:
          ``(9) Treatment of certain domestic corporations.--In 
        the case of any dividend treated as not from sources 
        with the United States under section 861(a)(2)(A), the 
        corporation paying such dividend shall be treated for 
        purposes of this subsection as a United States-owned 
        foreign corporation.''.
          (3) Subsection (c) of section 2104 is amended in the 
        last sentence by striking ``or to a debt obligation of 
        a domestic corporation'' and all that follows and 
        inserting a period.
  (d) Effective Date.--
          (1) In general.--Except as provided in paragraph (2), 
        the amendments made by this section shall apply to 
        taxable years beginning after December 31, 2010.
          (2) Grandfather rule for outstanding debt 
        obligations.--
                  (A) In general.--The amendments made by this 
                section shall not apply to payments of interest 
                on obligations issued before the date of the 
                enactment of this Act.
                  (B) Exception for related party debt.--
                Subparagraph (A) shall not apply to any 
                interest which is payable to a related person 
                (determined under rules similar to the rules of 
                section 954(d)(3)).
                  (C) Significant modifications treated as new 
                issues.--For purposes of subparagraph (A), a 
                significant modification of the terms of any 
                obligation (including any extension of the term 
                of such obligation) shall be treated as a new 
                issue.

SEC. 408. SOURCE RULES FOR INCOME ON GUARANTEES.

  (a) Amounts Sourced Within the United States.--Subsection (a) 
of section 861 is amended by adding at the end the following 
new paragraph:
          ``(9) Guarantees.--Amounts--
                  ``(A) received from noncorporate residents or 
                domestic corporations with respect to 
                guarantees, and
                  ``(B) paid by any foreign person with respect 
                to guarantees if such amount is connected with 
                income which is effectively connected (or 
                treated as effectively connected) with the 
                conduct of a trade or business in the United 
                States.''.
  (b) Amounts Sourced Without the United States.--Subsection 
(a) of section 862 is amended by striking ``and'' at the end of 
paragraph (7), by striking the period at the end of paragraph 
(8) and inserting ``; and'', and by adding at the end the 
following new paragraph:
          ``(9) amounts received with respect to guarantees 
        other than those derived from sources within the United 
        States as provided in section 861(a)(9).''.
  (c) Conforming Amendment.--Clause (ii) of section 
864(c)(4)(B) is amended by striking ``dividends or interest'' 
and inserting ``dividends, interest, or amounts with respect to 
guarantees''.
  (d) Effective Date.--The amendments made by this section 
shall apply to guarantees issued after the date of the 
enactment of this Act.

SEC. 409. LIMITATION ON EXTENSION OF STATUTE OF LIMITATIONS FOR FAILURE 
                    TO NOTIFY SECRETARY OF CERTAIN FOREIGN TRANSFERS.

  (a) In General.--Paragraph (8) of section 6501(c) is 
amended--
          (1) by striking ``In the case of any information'' 
        and inserting the following:
                  ``(A) In general.--In the case of any 
                information'', and
          (2) by adding at the end the following:
                  ``(B) Application to failures due to 
                reasonable cause.--If the failure to furnish 
                the information referred to in subparagraph (A) 
                is due to reasonable cause and not willful 
                neglect, subparagraph (A) shall apply only to 
                the item or items related to such failure.''.
  (b) Effective Date.--The amendments made by this section 
shall take effect as if included in section 513 of the Hiring 
Incentives to Restore Employment Act.

    Subtitle B--Personal Service Income Earned in Pass-thru Entities

SEC. 411. PARTNERSHIP INTERESTS TRANSFERRED IN CONNECTION WITH 
                    PERFORMANCE OF SERVICES.

  (a) Modification to Election To Include Partnership Interest 
in Gross Income in Year of Transfer.--Subsection (c) of section 
83 is amended by redesignating paragraph (4) as paragraph (5) 
and by inserting after paragraph (3) the following new 
paragraph:
          ``(4) Partnership interests.--Except as provided by 
        the Secretary, in the case of any transfer of an 
        interest in a partnership in connection with the 
        provision of services to (or for the benefit of) such 
        partnership--
                  ``(A) the fair market value of such interest 
                shall be treated for purposes of this section 
                as being equal to the amount of the 
                distribution which the partner would receive if 
                the partnership sold (at the time of the 
                transfer) all of its assets at fair market 
                value and distributed the proceeds of such sale 
                (reduced by the liabilities of the partnership) 
                to its partners in liquidation of the 
                partnership, and
                  ``(B) the person receiving such interest 
                shall be treated as having made the election 
                under subsection (b)(1) unless such person 
                makes an election under this paragraph to have 
                such subsection not apply.''.
  (b) Conforming Amendment.--Paragraph (2) of section 83(b) is 
amended by inserting ``or subsection (c)(4)(B)'' after 
``paragraph (1)''.
  (c) Effective Date.--The amendments made by this section 
shall apply to interests in partnerships transferred after the 
date of the enactment of this Act.

SEC. 412. INCOME OF PARTNERS FOR PERFORMING INVESTMENT MANAGEMENT 
                    SERVICES TREATED AS ORDINARY INCOME RECEIVED FOR 
                    PERFORMANCE OF SERVICES.

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

``SEC. 710. SPECIAL RULES FOR PARTNERS PROVIDING INVESTMENT MANAGEMENT 
                    SERVICES TO PARTNERSHIP.

  ``(a) Treatment of Distributive Share of Partnership Items.--
For purposes of this title, in the case of an investment 
services partnership interest--
          ``(1) In general.--Notwithstanding section 702(b)--
                  ``(A) any net income with respect to such 
                interest for any partnership taxable year shall 
                be treated as ordinary income, and
                  ``(B) any net loss with respect to such 
                interest for such year, to the extent not 
                disallowed under paragraph (2) for such year, 
                shall be treated as an ordinary loss.
        All items of income, gain, deduction, and loss which 
        are taken into account in computing net income or net 
        loss shall be treated as ordinary income or ordinary 
        loss (as the case may be).
          ``(2) Treatment of losses.--
                  ``(A) Limitation.--Any net loss with respect 
                to such interest shall be allowed for any 
                partnership taxable year only to the extent 
                that such loss does not exceed the excess (if 
                any) of--
                          ``(i) the aggregate net income with 
                        respect to such interest for all prior 
                        partnership taxable years, over
                          ``(ii) the aggregate net loss with 
                        respect to such interest not disallowed 
                        under this subparagraph for all prior 
                        partnership taxable years.
                  ``(B) Carryforward.--Any net loss for any 
                partnership taxable year which is not allowed 
                by reason of subparagraph (A) shall be treated 
                as an item of loss with respect to such 
                partnership interest for the succeeding 
                partnership taxable year.
                  ``(C) Basis adjustment.--No adjustment to the 
                basis of a partnership interest shall be made 
                on account of any net loss which is not allowed 
                by reason of subparagraph (A).
                  ``(D) Prior partnership years.--Any reference 
                in this paragraph to prior partnership taxable 
                years shall only include prior partnership 
                taxable years to which this section applies.
          ``(3) Net income and loss.--For purposes of this 
        section--
                  ``(A) Net income.--The term `net income' 
                means, with respect to any investment services 
                partnership interest for any partnership 
                taxable year, the excess (if any) of--
                          ``(i) all items of income and gain 
                        taken into account by the holder of 
                        such interest under section 702 with 
                        respect to such interest for such year, 
                        over
                          ``(ii) all items of deduction and 
                        loss so taken into account.
                  ``(B) Net loss.--The term `net loss' means, 
                with respect to such interest for such year, 
                the excess (if any) of the amount described in 
                subparagraph (A)(ii) over the amount described 
                in subparagraph (A)(i).
          ``(4) Special rule for dividends.--Any dividend taken 
        into account in determining net income or net loss for 
        purposes of paragraph (1) shall not be treated as 
        qualified dividend income for purposes of section 1(h).
  ``(b) Dispositions of Partnership Interests.--
          ``(1) Gain.--Any gain on the disposition of an 
        investment services partnership interest shall be--
                  ``(A) treated as ordinary income, and
                  ``(B) recognized notwithstanding any other 
                provision of this subtitle.
          ``(2) Loss.--Any loss on the disposition of an 
        investment services partnership interest shall be 
        treated as an ordinary loss to the extent of the excess 
        (if any) of--
                  ``(A) the aggregate net income with respect 
                to such interest for all partnership taxable 
                years to which this section applies, over
                  ``(B) the aggregate net loss with respect to 
                such interest allowed under subsection (a)(2) 
                for all partnership taxable years to which this 
                section applies.
          ``(3) Exception for the disposition of an interest in 
        a publicly traded partnership by an individual.--
        Paragraphs (1) and (2) shall not apply in the case of 
        the disposition by an individual of an investment 
        services partnership interest which is an interest in a 
        publicly traded partnership (as defined in section 
        7704) if neither such individual nor any member of such 
        individual's family (within the meaning of section 
        318(a)(1)) has (at any time) provided any of the 
        services described in subsection (c)(1) with respect to 
        assets held (directly or indirectly) by such publicly 
        traded partnership.
          ``(4) Election with respect to certain exchanges.--
        Paragraph (1)(B) shall not apply to the contribution of 
        an investment services partnership interest to a 
        partnership in exchange for an interest in such 
        partnership if--
                  ``(A) the taxpayer makes an irrevocable 
                election to treat the partnership interest 
                received in the exchange as an investment 
                services partnership interest, and
                  ``(B) the taxpayer agrees to comply with such 
                reporting and recordkeeping requirements as the 
                Secretary may prescribe.
          ``(5) Disposition of portion of interest.--In the 
        case of any disposition of an investment services 
        partnership interest, the amount of net loss which 
        otherwise would have (but for subsection (a)(2)(C)) 
        applied to reduce the basis of such interest shall be 
        disregarded for purposes of this section for all 
        succeeding partnership taxable years.
          ``(6) Distributions of partnership property.--In the 
        case of any distribution of property by a partnership 
        with respect to any investment services partnership 
        interest held by a partner--
                  ``(A) the excess (if any) of--
                          ``(i) the fair market value of such 
                        property at the time of such 
                        distribution, over
                          ``(ii) the adjusted basis of such 
                        property in the hands of the 
                        partnership,
                shall be taken into account as an increase in 
                such partner's distributive share of the 
                taxable income of the partnership (except to 
                the extent such excess is otherwise taken into 
                account in determining the taxable income of 
                the partnership),
                  ``(B) such property shall be treated for 
                purposes of subpart B of part II as money 
                distributed to such partner in an amount equal 
                to such fair market value, and
                  ``(C) the basis of such property in the hands 
                of such partner shall be such fair market 
                value.
        Subsection (b) of section 734 shall be applied without 
        regard to the preceding sentence. In the case of a 
        taxpayer which satisfies requirements similar to the 
        requirements of subparagraphs (A) and (B) of paragraph 
        (4), this paragraph and paragraph (1)(B) shall not 
        apply to the distribution of a partnership interest if 
        such distribution is in connection with a contribution 
        (or deemed contribution) of any property of the 
        partnership to which section 721 applies pursuant to a 
        transaction described in paragraph (1)(B) or (2) of 
        section 708(b).
          ``(7) Application of section 751.--In applying 
        section 751, an investment services partnership 
        interest shall be treated as an inventory item.
  ``(c) Investment Services Partnership Interest.--For purposes 
of this section--
          ``(1) In general.--The term `investment services 
        partnership interest' means any interest in a 
        partnership which is held (directly or indirectly) by 
        any person if it was reasonably expected (at the time 
        that such person acquired such interest) that such 
        person (or any person related to such person) would 
        provide (directly or indirectly) a substantial quantity 
        of any of the following services with respect to assets 
        held (directly or indirectly) by the partnership:
                  ``(A) Advising as to the advisability of 
                investing in, purchasing, or selling any 
                specified asset.
                  ``(B) Managing, acquiring, or disposing of 
                any specified asset.
                  ``(C) Arranging financing with respect to 
                acquiring specified assets.
                  ``(D) Any activity in support of any service 
                described in subparagraphs (A) through (C).
          ``(2) Specified asset.--The term `specified asset' 
        means securities (as defined in section 475(c)(2) 
        without regard to the last sentence thereof), real 
        estate held for rental or investment, interests in 
        partnerships, commodities (as defined in section 
        475(e)(2)), or options or derivative contracts with 
        respect to any of the foregoing.
          ``(3) Exception for family farms.--The term 
        `specified asset' shall not include any farm used for 
        farming purposes if such farm is held by a partnership 
        all of the interests in which are held (directly or 
        indirectly) by members of the same family. Terms used 
        in the preceding sentence which are also used in 
        section 2032A shall have the same meaning as when used 
        in such section.
          ``(4) Related persons.--A person shall be treated as 
        related to another person if the relationship between 
        such persons is described in section 267 or 707(b).
  ``(d) Exception for Certain Capital Interests.--
          ``(1) In general.--In the case of any portion of an 
        investment services partnership interest which is a 
        qualified capital interest, all items of income, gain, 
        loss, and deduction which are allocated to such 
        qualified capital interest shall not be taken into 
        account under subsection (a) if--
                  ``(A) allocations of items are made by the 
                partnership to such qualified capital interest 
                in the same manner as such allocations are made 
                to other qualified capital interests held by 
                partners who do not provide any services 
                described in subsection (c)(1) and who are not 
                related to the partner holding the qualified 
                capital interest, and
                  ``(B) the allocations made to such other 
                interests are significant compared to the 
                allocations made to such qualified capital 
                interest.
          ``(2) Authority to provide exceptions to allocation 
        requirements.--To the extent provided by the Secretary 
        in regulations or other guidance--
                  ``(A) Allocations to portion of qualified 
                capital interest.--Paragraph (1) may be applied 
                separately with respect to a portion of a 
                qualified capital interest.
                  ``(B) No or insignificant allocations to 
                nonservice providers.--In any case in which the 
                requirements of paragraph (1)(B) are not 
                satisfied, items of income, gain, loss, and 
                deduction shall not be taken into account under 
                subsection (a) to the extent that such items 
                are properly allocable under such regulations 
                or other guidance to qualified capital 
                interests.
                  ``(C) Allocations to service providers' 
                qualified capital interests which are less than 
                other allocations.--Allocations shall not be 
                treated as failing to meet the requirement of 
                paragraph (1)(A) merely because the allocations 
                to the qualified capital interest represent a 
                lower return than the allocations made to the 
                other qualified capital interests referred to 
                in such paragraph.
          ``(3) Special rule for changes in services.--In the 
        case of an interest in a partnership which is not an 
        investment services partnership interest and which, by 
        reason of a change in the services with respect to 
        assets held (directly or indirectly) by the 
        partnership, would (without regard to the reasonable 
        expectation exception of subsection (c)(1)) have become 
        such an interest--
                  ``(A) notwithstanding subsection (c)(1), such 
                interest shall be treated as an investment 
                services partnership interest as of the time of 
                such change, and
                  ``(B) for purposes of this subsection, the 
                qualified capital interest of the holder of 
                such partnership interest immediately after 
                such change shall not be less than the fair 
                market value of such interest (determined 
                immediately before such change).
          ``(4) Special rule for tiered partnerships.--Except 
        as otherwise provided by the Secretary, in the case of 
        tiered partnerships, all items which are allocated in a 
        manner which meets the requirements of paragraph (1) to 
        qualified capital interests in a lower-tier partnership 
        shall retain such character to the extent allocated on 
        the basis of qualified capital interests in any upper-
        tier partnership.
          ``(5) Exception for no-self-charged carry and 
        management fee provisions.--Except as otherwise 
        provided by the Secretary, an interest shall not fail 
        to be treated as satisfying the requirement of 
        paragraph (1)(A) merely because the allocations made by 
        the partnership to such interest do not reflect the 
        cost of services described in subsection (c)(1) which 
        are provided (directly or indirectly) to the 
        partnership by the holder of such interest (or a 
        related person).
          ``(6) Special rule for dispositions.--In the case of 
        any investment services partnership interest any 
        portion of which is a qualified capital interest, 
        subsection (b) shall not apply to so much of any gain 
        or loss as bears the same proportion to the entire 
        amount of such gain or loss as--
                  ``(A) the distributive share of gain or loss 
                that would have been allocated to the qualified 
                capital interest (consistent with the 
                requirements of paragraph (1)) if the 
                partnership had sold all of its assets at fair 
                market value immediately before the 
                disposition, bears to
                  ``(B) the distributive share of gain or loss 
                that would have been so allocated to the 
                investment services partnership interest of 
                which such qualified capital interest is a 
                part.
          ``(7) Qualified capital interest.--For purposes of 
        this subsection--
                  ``(A) In general.--The term `qualified 
                capital interest' means so much of a partner's 
                interest in the capital of the partnership as 
                is attributable to--
                          ``(i) the fair market value of any 
                        money or other property contributed to 
                        the partnership in exchange for such 
                        interest (determined without regard to 
                        section 752(a)),
                          ``(ii) any amounts which have been 
                        included in gross income under section 
                        83 with respect to the transfer of such 
                        interest, and
                          ``(iii) the excess (if any) of--
                                  ``(I) any items of income and 
                                gain taken into account under 
                                section 702 with respect to 
                                such interest, over
                                  ``(II) any items of deduction 
                                and loss so taken into account.
                  ``(B) Adjustment to qualified capital 
                interest.--
                          ``(i) Distributions and losses.--The 
                        qualified capital interest shall be 
                        reduced by distributions from the 
                        partnership with respect to such 
                        interest and by the excess (if any) of 
                        the amount described in subparagraph 
                        (A)(iii)(II) over the amount described 
                        in subparagraph (A)(iii)(I).
                          ``(ii) Special rule for contributions 
                        of property.--In the case of any 
                        contribution of property described in 
                        subparagraph (A)(i) with respect to 
                        which the fair market value of such 
                        property is not equal to the adjusted 
                        basis of such property immediately 
                        before such contribution, proper 
                        adjustments shall be made to the 
                        qualified capital interest to take into 
                        account such difference consistent with 
                        such regulations or other guidance as 
                        the Secretary may provide.
          ``(8) Treatment of certain loans.--
                  ``(A) Proceeds of partnership loans not 
                treated as qualified capital interest of 
                service providing partners.--For purposes of 
                this subsection, an investment services 
                partnership interest shall not be treated as a 
                qualified capital interest to the extent that 
                such interest is acquired in connection with 
                the proceeds of any loan or other advance made 
                or guaranteed, directly or indirectly, by any 
                other partner or the partnership (or any person 
                related to any such other partner or the 
                partnership).
                  ``(B) Reduction in allocations to qualified 
                capital interests for loans from nonservice 
                providing partners to the partnership.--For 
                purposes of this subsection, any loan or other 
                advance to the partnership made or guaranteed, 
                directly or indirectly, by a partner not 
                providing services described in subsection 
                (c)(1) to the partnership (or any person 
                related to such partner) shall be taken into 
                account in determining the qualified capital 
                interests of the partners in the partnership.
  ``(e) Other Income and Gain in Connection With Investment 
Management Services.--
          ``(1) In general.--If--
                  ``(A) a person performs (directly or 
                indirectly) investment management services for 
                any entity,
                  ``(B) such person holds (directly or 
                indirectly) a disqualified interest with 
                respect to such entity, and
                  ``(C) the value of such interest (or payments 
                thereunder) is substantially related to the 
                amount of income or gain (whether or not 
                realized) from the assets with respect to which 
                the investment management services are 
                performed,
        any income or gain with respect to such interest shall 
        be treated as ordinary income. Rules similar to the 
        rules of subsections (a)(4) and (d) shall apply for 
        purposes of this subsection.
          ``(2) Definitions.--For purposes of this subsection--
                  ``(A) Disqualified interest.--
                          ``(i) In general.--The term 
                        `disqualified interest' means, with 
                        respect to any entity--
                                  ``(I) any interest in such 
                                entity other than indebtedness,
                                  ``(II) convertible or 
                                contingent debt of such entity,
                                  ``(III) any option or other 
                                right to acquire property 
                                described in subclause (I) or 
                                (II), and
                                  ``(IV) any derivative 
                                instrument entered into 
                                (directly or indirectly) with 
                                such entity or any investor in 
                                such entity.
                          ``(ii) Exceptions.--Such term shall 
                        not include--
                                  ``(I) a partnership interest,
                                  ``(II) except as provided by 
                                the Secretary, any interest in 
                                a taxable corporation, and
                                  ``(III) except as provided by 
                                the Secretary, stock in an S 
                                corporation.
                  ``(B) Taxable corporation.--The term `taxable 
                corporation' means--
                          ``(i) a domestic C corporation, or
                          ``(ii) a foreign corporation 
                        substantially all of the income of 
                        which is--
                                  ``(I) effectively connected 
                                with the conduct of a trade or 
                                business in the United States, 
                                or
                                  ``(II) subject to a 
                                comprehensive foreign income 
                                tax (as defined in section 
                                457A(d)(2)).
                  ``(C) Investment management services.--The 
                term `investment management services' means a 
                substantial quantity of any of the services 
                described in subsection (c)(1).
  ``(f) Regulations.--The Secretary shall prescribe such 
regulations or other guidance as is necessary or appropriate to 
carry out the purposes of this section, including regulations 
or other guidance to--
          ``(1) provide modifications to the application of 
        this section (including treating related persons as not 
        related to one another) to the extent such modification 
        is consistent with the purposes of this section,
          ``(2) prevent the avoidance of the purposes of this 
        section, and
          ``(3) coordinate this section with the other 
        provisions of this title.
  ``(g) Special Rules for Individuals.--In the case of an 
individual--
          ``(1) In general.--Subsection (a)(1) shall apply only 
        to the applicable percentage of the net income or net 
        loss referred to in such subsection.
          ``(2) Dispositions, etc.--The amount which (but for 
        this paragraph) would be treated as ordinary income by 
        reason of subsection (b) or (e) shall be the applicable 
        percentage of such amount.
          ``(3) Pro rata allocation to items.--For purposes of 
        applying subsections (a) and (e) the aggregate amount 
        treated as ordinary income for any such taxable year 
        shall be allocated ratably among the items of income, 
        gain, loss, and deduction taken into account in 
        determining such amount.
          ``(4) Special rule for recognition of gain.--Gain 
        which (but for this section) would not be recognized 
        shall be recognized by reason of subsection (b) only to 
        the extent that such gain is treated as ordinary income 
        after application of paragraph (2).
          ``(5) Coordination with limitation on losses.--For 
        purposes of applying paragraph (2) of subsection (a) 
        with respect to any net loss for any taxable year--
                  ``(A) such paragraph shall only apply with 
                respect to the applicable percentage of such 
                net loss for such taxable year,
                  ``(B) in the case of a prior partnership 
                taxable year referred to in clause (i) or (ii) 
                of subparagraph (A) of such paragraph, only the 
                applicable percentage (as in effect for such 
                prior taxable year) of net income or net loss 
                for such prior partnership taxable year shall 
                be taken into account, and
                  ``(C) any net loss carried forward to the 
                succeeding partnership taxable year under 
                subparagraph (B) of such paragraph shall--
                          ``(i) be taken into account in such 
                        succeeding year without reduction under 
                        this subsection, and
                          ``(ii) in lieu of being taken into 
                        account as an item of loss in such 
                        succeeding year, shall be taken into 
                        account--
                                  ``(I) as an increase in net 
                                loss or as a reduction in net 
                                income (including below zero), 
                                as the case may, and
                                  ``(II) after any reduction in 
                                the amount of such net loss or 
                                net income under this 
                                subsection.
        A rule similar to the rule of the preceding sentence 
        shall apply for purposes of subsection (b)(2)(A).
          ``(6) Coordination with treatment of dividends.--
        Subsection (a)(4) shall only apply to the applicable 
        percentage of dividends described therein.
          ``(7) Applicable percentage.--For purposes of this 
        subsection, the term `applicable percentage' means 75 
        percent (50 percent in the case of any taxable year 
        beginning before January 1, 2013).
  ``(h) Cross Reference.--For 40 percent penalty on certain 
underpayments due to the avoidance of this section, see section 
6662.''.
  (b) Treatment for Purposes of Section 7704.--Subsection (d) 
of section 7704 is amended by adding at the end the following 
new paragraph:
          ``(6) Income from investment services partnership 
        interests not qualified.--
                  ``(A) In general.--Items of income and gain 
                shall not be treated as qualifying income if 
                such items are treated as ordinary income by 
                reason of the application of section 710 
                (relating to special rules for partners 
                providing investment management services to 
                partnership). The preceding sentence shall not 
                apply to any item described in paragraph (1)(E) 
                (or so much of paragraph (1)(F) as relates to 
                paragraph (1)(E)).
                  ``(B) Special rules for certain 
                partnerships.--
                          ``(i) Certain partnerships owned by 
                        real estate investment trusts.--
                        Subparagraph (A) shall not apply in the 
                        case of a partnership which meets each 
                        of the following requirements:
                                  ``(I) Such partnership is 
                                treated as publicly traded 
                                under this section solely by 
                                reason of interests in such 
                                partnership being convertible 
                                into interests in a real estate 
                                investment trust which is 
                                publicly traded.
                                  ``(II) 50 percent or more of 
                                the capital and profits 
                                interests of such partnership 
                                are owned, directly or 
                                indirectly, at all times during 
                                the taxable year by such real 
                                estate investment trust 
                                (determined with the 
                                application of section 267(c)).
                                  ``(III) Such partnership 
                                meets the requirements of 
                                paragraphs (2), (3), and (4) of 
                                section 856(c).
                          ``(ii) Certain partnerships owning 
                        other publicly traded partnerships.--
                        Subparagraph (A) shall not apply in the 
                        case of a partnership which meets each 
                        of the following requirements:
                                  ``(I) Substantially all of 
                                the assets of such partnership 
                                consist of interests in one or 
                                more publicly traded 
                                partnerships (determined 
                                without regard to subsection 
                                (b)(2)).
                                  ``(II) Substantially all of 
                                the income of such partnership 
                                is ordinary income or section 
                                1231 gain (as defined in 
                                section 1231(a)(3)).
                  ``(C) Transitional rule.--Subparagraph (A) 
                shall not apply to any taxable year of the 
                partnership beginning before the date which is 
                10 years after the date of the enactment of 
                this paragraph.''.
  (c) Imposition of Penalty on Underpayments.--
          (1) In general.--Subsection (b) of section 6662 is 
        amended by inserting after paragraph (7) the following 
        new paragraph:
          ``(8) The application of subsection (e) of section 
        710 or the regulations prescribed under section 710(f) 
        to prevent the avoidance of the purposes of section 
        710.''.
          (2) Amount of penalty.--
                  (A) In general.--Section 6662 is amended by 
                adding at the end the following new subsection:
  ``(k) Increase in Penalty in Case of Property Transferred for 
Investment Management Services.--In the case of any portion of 
an underpayment to which this section applies by reason of 
subsection (b)(8), subsection (a) shall be applied with respect 
to such portion by substituting `40 percent' for `20 
percent'.''.
                  (B) Conforming amendment.--Subparagraph (B) 
                of section 6662A(e)(2) is amended by striking 
                ``or (i)'' and inserting ``, (i), or (k)''.
          (3) Special rules for application of reasonable cause 
        exception.--Subsection (c) of section 6664 is amended--
                  (A) by redesignating paragraphs (3) and (4) 
                as paragraphs (4) and (5), respectively,
                  (B) by striking ``paragraph (3)'' in 
                paragraph (5)(A), as so redesignated, and 
                inserting ``paragraph (4)'', and
                  (C) by inserting after paragraph (2) the 
                following new paragraph:
          ``(3) Special rule for underpayments attributable to 
        investment management services.--
                  ``(A) In general.--Paragraph (1) shall not 
                apply to any portion of an underpayment to 
                which this section applies by reason of 
                subsection (b)(8) unless--
                          ``(i) the relevant facts affecting 
                        the tax treatment of the item are 
                        adequately disclosed,
                          ``(ii) there is or was substantial 
                        authority for such treatment, and
                          ``(iii) the taxpayer reasonably 
                        believed that such treatment was more 
                        likely than not the proper treatment.
                  ``(B) Rules relating to reasonable belief.--
                Rules similar to the rules of subsection (d)(3) 
                shall apply for purposes of subparagraph 
                (A)(iii).''.
  (d) Income and Loss From Investment Services Partnership 
Interests Taken Into Account in Determining Net Earnings From 
Self-Employment.--
          (1) Internal revenue code.--Section 1402(a) is 
        amended by striking ``and'' at the end of paragraph 
        (16), by striking the period at the end of paragraph 
        (17) and inserting ``; and'', and by inserting after 
        paragraph (17) the following new paragraph:
          ``(18) notwithstanding the preceding provisions of 
        this subsection, in the case of any individual engaged 
        in the trade or business of providing services 
        described in section 710(c)(1) with respect to any 
        entity, any amount treated as ordinary income or 
        ordinary loss of such individual under section 710 with 
        respect to such entity shall be taken into account in 
        determining the net earnings from self-employment of 
        such individual.''.
          (2) Social security act.--Section 211(a) of the 
        Social Security Act is amended by striking ``and'' at 
        the end of paragraph (15), by striking the period at 
        the end of paragraph (16) and inserting ``; and'', and 
        by inserting after paragraph (16) the following new 
        paragraph:
          ``(17) Notwithstanding the preceding provisions of 
        this subsection, in the case of any individual engaged 
        in the trade or business of providing services 
        described in section 710(c)(1) of the Internal Revenue 
        Code of 1986 with respect to any entity, any amount 
        treated as ordinary income or ordinary loss of such 
        individual under section 710 of such Code with respect 
        to such entity shall be taken into account in 
        determining the net earnings from self-employment of 
        such individual.''.
  (e) Conforming Amendments.--
          (1) Subsection (d) of section 731 is amended by 
        inserting ``section 710(b)(4) (relating to 
        distributions of partnership property),'' after ``to 
        the extent otherwise provided by''.
          (2) Section 741 is amended by inserting ``or section 
        710 (relating to special rules for partners providing 
        investment management services to partnership)'' before 
        the period at the end.
          (3) The table of sections for part I of subchapter K 
        of chapter 1 is amended by adding at the end the 
        following new item:

``Sec. 710. Special rules for partners providing investment management 
          services to partnership.''.

  (f) Effective Date.--
          (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall 
        apply to taxable years ending after the date of the 
        enactment of this Act.
          (2) Partnership taxable years which include effective 
        date.--In applying section 710(a) of the Internal 
        Revenue Code of 1986 (as added by this section) in the 
        case of any partnership taxable year which includes the 
        date of the enactment of this Act, the amount of the 
        net income referred to in such section shall be treated 
        as being the lesser of the net income for the entire 
        partnership taxable year or the net income determined 
        by only taking into account items attributable to the 
        portion of the partnership taxable year which is after 
        such date.
          (3) Dispositions of partnership interests.--Section 
        710(b) of the Internal Revenue Code of 1986 (as added 
        by this section) shall apply to dispositions and 
        distributions after the date of the enactment of this 
        Act.
          (4) Other income and gain in connection with 
        investment management services.--Section 710(e) of such 
        Code (as added by this section) shall take effect on 
        the date of the enactment of this Act.
          (5) Waiver of estimated tax penalties.--No addition 
        to tax shall be made under section 6654 of such Code 
        for any failure to pay estimated tax for a taxable year 
        that includes the date of the enactment of this Act 
        with respect to any underpayment to the extent such 
        underpayment was created or increased by this section.

SEC. 413. EMPLOYMENT TAX TREATMENT OF PROFESSIONAL SERVICE BUSINESSES.

  (a) In General.--Section 1402 is amended by adding at the end 
the following new subsection:
  ``(m) Special Rules for Professional Service Businesses.--
          ``(1) Shareholders providing services to disqualified 
        s corporations.--
                  ``(A) In general.--In the case of any 
                disqualified S corporation, each shareholder of 
                such disqualified S corporation who provides 
                substantial services with respect to the 
                professional service business referred to in 
                subparagraph (C) shall take into account such 
                shareholder's pro rata share of all items of 
                income or loss described in section 1366 which 
                are attributable to such business in 
                determining the shareholder's net earnings from 
                self-employment.
                  ``(B) Treatment of family members.--Except as 
                otherwise provided by the Secretary, the 
                shareholder's pro rata share of items referred 
                to in subparagraph (A) shall be increased by 
                the pro rata share of such items of each member 
                of such shareholder's family (within the 
                meaning of section 318(a)(1)) who does not 
                provide substantial services with respect to 
                such professional service business.
                  ``(C) Disqualified s corporation.--For 
                purposes of this subsection, the term 
                `disqualified S corporation' means--
                          ``(i) any S corporation which is a 
                        partner in a partnership which is 
                        engaged in a professional service 
                        business if substantially all of the 
                        activities of such S corporation are 
                        performed in connection with such 
                        partnership, and
                          ``(ii) any other S corporation which 
                        is engaged in a professional service 
                        business if the principal asset of such 
                        business is the reputation and skill of 
                        3 or fewer employees.
          ``(2) Partners.--In the case of any partnership which 
        is engaged in a professional service business, 
        subsection (a)(13) shall not apply to any partner who 
        provides substantial services with respect to such 
        professional service business.
          ``(3) Professional service business.--For purposes of 
        this subsection, the term `professional service 
        business' means any trade or business if substantially 
        all of the activities of such trade or business involve 
        providing services in the fields of health, law, 
        lobbying, engineering, architecture, accounting, 
        actuarial science, performing arts, consulting, 
        athletics, investment advice or management, or 
        brokerage services.
          ``(4) Regulations.--The Secretary shall prescribe 
        such regulations as may be necessary or appropriate to 
        carry out the purposes of this subsection, including 
        regulations which prevent the avoidance of the purposes 
        of this subsection through tiered entities or 
        otherwise.
          ``(5) Cross reference.--For employment tax treatment 
        of wages paid to shareholders of S corporations, see 
        subtitle C.''.
  (b) Conforming Amendment.--Section 211 of the Social Security 
Act is amended by adding at the end the following new 
subsection:
  ``(l) Special Rules for Professional Service Businesses.--
          ``(1) Shareholders providing services to disqualified 
        s corporations.--
                  ``(A) In general.--In the case of any 
                disqualified S corporation, each shareholder of 
                such disqualified S corporation who provides 
                substantial services with respect to the 
                professional service business referred to in 
                subparagraph (C) shall take into account such 
                shareholder's pro rata share of all items of 
                income or loss described in section 1366 of the 
                Internal Revenue Code of 1986 which are 
                attributable to such business in determining 
                the shareholder's net earnings from self-
                employment.
                  ``(B) Treatment of family members.--Except as 
                otherwise provided by the Secretary of the 
                Treasury, the shareholder's pro rata share of 
                items referred to in subparagraph (A) shall be 
                increased by the pro rata share of such items 
                of each member of such shareholder's family 
                (within the meaning of section 318(a)(1) of the 
                Internal Revenue Code of 1986) who does not 
                provide substantial services with respect to 
                such professional service business.
                  ``(C) Disqualified s corporation.--For 
                purposes of this subsection, the term 
                `disqualified S corporation' means--
                          ``(i) any S corporation which is a 
                        partner in a partnership which is 
                        engaged in a professional service 
                        business if substantially all of the 
                        activities of such S corporation are 
                        performed in connection with such 
                        partnership, and
                          ``(ii) any other S corporation which 
                        is engaged in a professional service 
                        business if the principal asset of such 
                        business is the reputation and skill of 
                        3 or fewer employees.
          ``(2) Partners.--In the case of any partnership which 
        is engaged in a professional service business, 
        subsection (a)(12) shall not apply to any partner who 
        provides substantial services with respect to such 
        professional service business.
          ``(3) Professional service business.--For purposes of 
        this subsection, the term `professional service 
        business' means any trade or business if substantially 
        all of the activities of such trade or business involve 
        providing services in the fields of health, law, 
        lobbying, engineering, architecture, accounting, 
        actuarial science, performing arts, consulting, 
        athletics, investment advice or management, or 
        brokerage services.''.
  (c) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2010.

                    Subtitle C--Corporate Provisions

SEC. 421. TREATMENT OF SECURITIES OF A CONTROLLED CORPORATION EXCHANGED 
                    FOR ASSETS IN CERTAIN REORGANIZATIONS.

  (a) In General.--Section 361 (relating to nonrecognition of 
gain or loss to corporations; treatment of distributions) is 
amended by adding at the end the following new subsection:
  ``(d) Special Rules for Transactions Involving Section 355 
Distributions.--In the case of a reorganization described in 
section 368(a)(1)(D) with respect to which stock or securities 
of the corporation to which the assets are transferred are 
distributed in a transaction which qualifies under section 
355--
          ``(1) this section shall be applied by substituting 
        `stock other than nonqualified preferred stock (as 
        defined in section 351(g)(2))' for `stock or 
        securities' in subsections (a) and (b)(1), and
          ``(2) the first sentence of subsection (b)(3) shall 
        apply only to the extent that the sum of the money and 
        the fair market value of the other property transferred 
        to such creditors does not exceed the adjusted bases of 
        such assets transferred (reduced by the amount of the 
        liabilities assumed (within the meaning of section 
        357(c))).''.
  (b) Conforming Amendment.--Paragraph (3) of section 361(b) is 
amended by striking the last sentence.
  (c) Effective Date.--
          (1) In general.--Except as provided in paragraph (2), 
        the amendments made by this section shall apply to 
        exchanges after the date of the enactment of this Act.
          (2) Transition rule.--The amendments made by this 
        section shall not apply to any exchange pursuant to a 
        transaction which is--
                  (A) made pursuant to a written agreement 
                which was binding on March 15, 2010, and at all 
                times thereafter;
                  (B) described in a ruling request submitted 
                to the Internal Revenue Service on or before 
                such date; or
                  (C) described on or before such date in a 
                public announcement or in a filing with the 
                Securities and Exchange Commission.

SEC. 422. TAXATION OF BOOT RECEIVED IN REORGANIZATIONS.

  (a) In General.--Paragraph (2) of section 356(a) is amended--
          (1) by striking ``If an exchange'' and inserting 
        ``Except as otherwise provided by the Secretary--
                  ``(A) In general.--If an exchange'',
          (2) by striking ``then there shall be'' and all that 
        follows through ``February 28, 1913'' and inserting 
        ``then the amount of other property or money shall be 
        treated as a dividend to the extent of the earnings and 
        profits of the corporation'', and
          (3) by adding at the end the following new 
        subparagraph:
                  ``(B) Certain reorganizations.--In the case 
                of a reorganization described in section 
                368(a)(1)(D) to which section 354(b)(1) 
                applies, in applying subparagraph (A)--
                          ``(i) the earnings and profits of 
                        each corporation which is a party to 
                        the reorganization shall be taken into 
                        account, and
                          ``(ii) the amount which is a dividend 
                        (and source thereof) shall be 
                        determined under rules similar to the 
                        rules of paragraphs (2) and (5) of 
                        section 304(b).''.
  (b) Earnings and Profits.--Paragraph (7) of section 312(n) is 
amended by adding at the end the following: ``A similar rule 
shall apply to an exchange to which section 356(a)(1) 
applies.''.
  (c) Conforming Amendment.--Paragraph (1) of section 356(a) is 
amended by striking ``then the gain'' and inserting ``then 
(except as provided in paragraph (2)) the gain''.
  (d) Effective Date.--
          (1) In general.--Except as provided in paragraph (2), 
        the amendments made by this section shall apply to 
        exchanges after the date of the enactment of this Act.
          (2) Transition rule.--The amendments made by this 
        section shall not apply to any exchange between 
        unrelated persons pursuant to a transaction which is--
                  (A) made pursuant to a written agreement 
                which was binding on May 20, 2010, and at all 
                times thereafter,
                  (B) described in a ruling request submitted 
                to the Internal Revenue Service on or before 
                such date, or
                  (C) described in a public announcement or 
                filing with the Securities and Exchange 
                Commission on or before such date.
          (3) Related persons.--For purposes of this 
        subsection, a person shall be treated as related to 
        another person if the relationship between such persons 
        is described in section 267 or 707(b) of the Internal 
        Revenue Code of 1986.

                      Subtitle D--Other Provisions

SEC. 431. MODIFICATIONS WITH RESPECT TO OIL SPILL LIABILITY TRUST FUND.

  (a) Extension of Application of Oil Spill Liability Trust 
Fund Financing Rate.--Paragraph (2) of section 4611(f) is 
amended by striking ``December 31, 2017'' and inserting 
``December 31, 2020''.
  (b) Increase in Oil Spill Liability Trust Fund Financing 
Rate.--Subparagraph (B) of section 4611(c)(2) is amended to 
read as follows:
                  ``(B) the Oil Spill Liability Trust Fund 
                financing rate is 32 cents a barrel.''.
  (c) Increase in Per Incident Limitations on Expenditures.--
Subparagraph (A) of section 9509(c)(2) is amended--
          (1) by striking ``$1,000,000,000'' in clause (i) and 
        inserting ``$5,000,000,000'',
          (2) by striking ``$500,000,000'' in clause (ii) and 
        inserting ``$2,500,000,000'', and
          (3) by striking ``$1,000,000,000 per incident, etc'' 
        in the heading and inserting ``Per incident 
        limitations''.
  (d) Effective Date.--
          (1) Extension of financing rate.--Except as provided 
        in paragraph (2), the amendments made by this section 
        shall take effect on the date of the enactment of this 
        Act.
          (2) Increase in financing rate.--The amendment made 
        by subsection (b) shall apply to crude oil received and 
        petroleum products entered during calendar quarters 
        beginning more than 60 days after the date of the 
        enactment of this Act.

SEC. 432. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

  The percentage under paragraph (2) of section 561 of the 
Hiring Incentives to Restore Employment Act in effect on the 
date of the enactment of this Act is increased by 30.5 
percentage points.

          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 ``December 31, 2010'';
          (B) in the heading for subsection (b)(2), by striking 
        ``June 2, 2010'' and inserting ``December 31, 2010''; 
        and
          (C) in subsection (b)(3), by striking ``November 6, 
        2010'' and inserting ``May 31, 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 ``December 31, 2010'';
          (B) in the heading for paragraph (2), by striking 
        ``June 2, 2010'' and inserting ``December 31, 2010''; 
        and
          (C) in paragraph (3), by striking ``December 7, 
        2010'' and inserting ``June 30, 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 ``January 1, 2011''; and
          (B) in subsection (c), by striking ``November 6, 
        2010'' and inserting ``June 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 ``May 31, 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) 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.

SEC. 503. EXTENSION OF THE EMERGENCY CONTINGENCY FUND.

  (a) In General.--Section 403(c) of the Social Security Act 
(42 U.S.C. 603(c)) is amended--
          (1) in paragraph (2)(A), by inserting ``, and for 
        fiscal year 2011, $2,500,000,000'' before ``for 
        payment'';
          (2) by striking paragraph (2)(B) and inserting the 
        following:
                  ``(B) Availability and use of funds.--
                          ``(i) Fiscal years 2009 and 2010.--
                        The amounts appropriated to the 
                        Emergency Fund under subparagraph (A) 
                        for fiscal year 2009 shall remain 
                        available through fiscal year 2010 and 
                        shall be used to make grants to States 
                        in each of fiscal years 2009 and 2010 
                        in accordance with paragraph (3), 
                        except that the amounts shall remain 
                        available through fiscal year 2011 to 
                        make grants and payments to States in 
                        accordance with paragraph (3)(C) to 
                        cover expenditures to subsidize 
                        employment positions held by 
                        individuals placed in the positions 
                        before fiscal year 2011.
                          ``(ii) Fiscal year 2011.--Subject to 
                        clause (iii), the amounts appropriated 
                        to the Emergency Fund under 
                        subparagraph (A) for fiscal year 2011 
                        shall remain available through fiscal 
                        year 2012 and shall be used to make 
                        grants to States based on expenditures 
                        in fiscal year 2011 for benefits and 
                        services provided in fiscal year 2011 
                        in accordance with the requirements of 
                        paragraph (3).
                          ``(iii) Reservation of funds.--Of the 
                        amounts appropriated to the Emergency 
                        Fund under subparagraph (A) for fiscal 
                        year 2011, $500,000 shall be placed in 
                        reserve for use in fiscal year 2012, 
                        and shall be used to award grants for 
                        any expenditures described in this 
                        subsection incurred by States after 
                        September 30, 2011.'';
          (3) in paragraph (2)(C), by striking ``2010'' and 
        inserting ``2012'';
          (4) in paragraph (3)--
                  (A) in clause (i) of each of subparagraphs 
                (A), (B), and (C)--
                          (i) by striking ``year 2009 or 2010'' 
                        and inserting ``years 2009 through 
                        2011'';
                          (ii) by striking ``and'' at the end 
                        of subclause (I);
                          (iii) by striking the period at the 
                        end of subclause (II) and inserting ``; 
                        and''; and
                          (iv) by adding at the end the 
                        following:
                                  ``(III) if the quarter is in 
                                fiscal year 2011, has provided 
                                the Secretary with such 
                                information as the Secretary 
                                may find necessary in order to 
                                make the determinations, or 
                                take any other action, 
                                described in paragraph 
                                (5)(C).''; and
                  (B) in subparagraph (C), by adding at the end 
                the following:
                          ``(iv) Limitation on expenditures for 
                        subsidized employment.--An expenditure 
                        for subsidized employment shall be 
                        taken into account under clause (ii) 
                        only if the expenditure is used to 
                        subsidize employment for--
                                  ``(I) a member of a needy 
                                family (without regard to 
                                whether the family is receiving 
                                assistance under the State 
                                program funded under this 
                                part); or
                                  ``(II) an individual who has 
                                exhausted (or, within 60 days, 
                                will exhaust) all rights to 
                                receive unemployment 
                                compensation under Federal and 
                                State law, and who is a member 
                                of a needy household.'';
          (5) by striking paragraph (5) and inserting the 
        following:
          ``(5) Limitations on payments; adjustment 
        authority.--
                  ``(A) Fiscal years 2009 and 2010.--The total 
                amount payable to a single State under 
                subsection (b) and this subsection for fiscal 
                years 2009 and 2010 combined shall not exceed 
                50 percent of the annual State family 
                assistance grant.
                  ``(B) Fiscal year 2011.--Subject to 
                subparagraph (C), the total amount payable to a 
                single State under subsection (b) and this 
                subsection for fiscal year 2011 shall not 
                exceed 30 percent of the annual State family 
                assistance grant.
                  ``(C) Adjustment authority.--If the Secretary 
                determines that the Emergency Fund is at risk 
                of being depleted before September 30, 2011, or 
                that funds are available to accommodate 
                additional State requests under this 
                subsection, the Secretary may, through program 
                instructions issued without regard to the 
                requirements of section 553 of title 5, United 
                States Code--
                          ``(i) specify priority criteria for 
                        awarding grants to States during fiscal 
                        year 2011; and
                          ``(ii) adjust the percentage 
                        limitation applicable under 
                        subparagraph (B) with respect to the 
                        total amount payable to a single State 
                        for fiscal year 2011.''; and
          (6) in paragraph (6), by inserting ``or for 
        expenditures described in paragraph (3)(C)(iv)'' before 
        the period.
  (b) Conforming Amendments.--Section 2101 of division B of the 
American Recovery and Reinvestment Act of 2009 (Public Law 111-
5) is amended--
          (1) in subsection (a)(2)--
                  (A) by striking ``2010'' and inserting 
                ``2011''; and
                  (B) by striking all that follows ``repealed'' 
                and inserting a period; and
          (2) in subsection (d)(1), by striking ``2010'' and 
        inserting ``2011''.
  (c) Program Guidance.--The Secretary of Health and Human 
Services shall issue program guidance, without regard to the 
requirements of section 553 of title 5, United States Code, 
which ensures that the funds provided under the amendments made 
by this section to a jurisdiction for subsidized employment do 
not support any subsidized employment position the annual 
salary of which is greater than, at State option--
          (1) 200 percent of the poverty line (within the 
        meaning of section 673(2) of the Omnibus Budget 
        Reconciliation Act of 1981, including any revision 
        required by such section 673(2)) for a family of 4; or
          (2) the median wage in the jurisdiction.

                     Subtitle B--Health Provisions

SEC. 511. EXTENSION OF PREMIUM ASSISTANCE FOR COBRA BENEFITS.

  (a) In General.--Subsection (a)(3)(A) of section 3001 of 
division B of the American Recovery and Reinvestment Act of 
2009 (Public Law 111-5), as amended by section 3(a) of the 
Continuing Extension Act of 2010 (Public Law 111-157), is 
amended by striking ``May 31, 2010'' and inserting ``December 
31, 2010''.
  (b) Rules Relating to 2010 Extension.--Subsection (a) of 
section 3001 of division B of the American Recovery and 
Reinvestment Act of 2009 (Public Law 111-5), as amended by 
section 3(b) of the Continuing Extension Act of 2010 (Public 
Law 111-157), is amended by adding at the end the following:
          ``(19) Additional rules related to 2010 extension.--
        In the case of an individual who, with regard to 
        coverage described in paragraph (10)(B), experiences a 
        qualifying event related to a termination of employment 
        on or after June 1, 2010, and prior to the date of the 
        enactment of this paragraph, rules similar to those in 
        paragraphs (4)(A) and (7)(C) shall apply with respect 
        to all continuation coverage, including State 
        continuation coverage programs.''.
  (c) Effective Date.--The amendments made by this section 
shall take effect as if included in the provisions of section 
3001 of division B of the American Recovery and Reinvestment 
Act of 2009.

SEC. 512. EXTENSION OF SECTION 508 RECLASSIFICATIONS.

  (a) In General.--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 Public 
Law 111-148, is amended by striking ``September 30, 2010'' and 
inserting ``September 30, 2011''.
  (b) Application.--For fiscal year 2011, the Secretary of 
Health and Human Services may implement the amendment made by 
subsection (a) by posting on the Internet website of the 
Centers for Medicare & Medicaid Services a list of the areas 
and the hospitals whose reclassifications will be extended 
pursuant to such amendment. Hospitals located in or 
reclassified to labor market areas that are affected by such 
extension may terminate or withdraw their reclassifications by 
following the procedures included in section 412.273 of title 
42, Code of Federal Regulations, except that any request for 
such termination or withdrawal must be received by the Medicare 
Geographic Classification Review Board not later than the date 
that is 5 business days after the day of such posting on the 
Internet website of the Centers for Medicare & Medicaid 
Services or June 18, 2010, whichever date is later.
  (c) Conforming Amendment.--Section 117(a)(3) of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-
173)), is amended by inserting ``in fiscal years 2008 and 
2009'' after ``For purposes of implementation of this 
subsection''.

SEC. 513. REPEAL OF DELAY OF RUG-IV.

  Effective as if included in the enactment of Public Law 111-
148, section 10325 of such Act is repealed.

SEC. 514. LIMITATION ON REASONABLE COSTS PAYMENTS FOR CERTAIN CLINICAL 
                    DIAGNOSTIC LABORATORY TESTS FURNISHED TO HOSPITAL 
                    PATIENTS IN CERTAIN RURAL AREAS.

  Section 3122 of Public Law 111-148 is repealed and the 
provision of law amended by such section is restored as if such 
section had not been enacted.

SEC. 515. 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.

SEC. 516. EXTENSION OF ARRA INCREASE IN FMAP.

  (a) In General.--Section 5001 of the American Recovery and 
Reinvestment Act of 2009 (Public Law 111-5) is amended--
          (1) in subsection (a)(3), by striking ``first 
        calendar quarter'' and inserting ``first 3 calendar 
        quarters'';
          (2) in subsection (c)--
                  (A) in paragraph (2)(B), by striking ``July 
                1, 2010'' and inserting ``January 1, 2011'';
                  (B) in paragraph (3)(B)(i), by striking 
                ``July 1, 2010'' and inserting ``January 1, 
                2011'' each place it appears; and
                  (C) in paragraph (4)(C)(ii), by striking 
                ``the 3-consecutive-month period beginning with 
                January 2010'' and inserting ``any 3-
                consecutive-month period that begins after 
                December 2009 and ends before January 2011'';
          (3) in subsection (e), by adding at the end the 
        following:
``Notwithstanding paragraph (5), the increases in the FMAP for 
a State under this section shall apply to payments under title 
XIX of such Act that are attributable to expenditures for 
medical assistance provided to nonpregnant childless adults 
made eligible under a State plan under such title (including 
under any waiver under such title or under section 1115 of such 
Act (42 U.S.C. 1315)) who would have been eligible for child 
health assistance or other health benefits under eligibility 
standards in effect as of December 31, 2009, of a waiver of the 
State child health plan under the title XXI of such Act.'';
          (4) in subsection (g)--
                  (A) in paragraph (1), by striking ``September 
                30, 2011'' and inserting ``March 31, 2012'';
                  (B) in paragraph (2)--
                          (i) by inserting ``of such Act'' 
                        after ``1923''; and
                          (ii) by adding at the end the 
                        following new sentence: ``Voluntary 
                        contributions by a political 
                        subdivision to the non-Federal share of 
                        expenditures under the State Medicaid 
                        plan or to the non-Federal share of 
                        payments under section 1923 of the 
                        Social Security Act shall not be 
                        considered to be required contributions 
                        for purposes of this section.''; and
                  (C) by adding at the end the following:
                  ``(3) Certification by chief executive 
                officer.--No additional Federal funds shall be 
                paid to a State as a result of this section 
                with respect to a calendar quarter occurring 
                during the period beginning on January 1, 2011, 
                and ending on June 30, 2011, unless, not later 
                than 45 days after the date of enactment of 
                this paragraph, the chief executive officer of 
                the State certifies that the State will request 
                and use such additional Federal funds.''; and
          (5) in subsection (h)(3), by striking ``December 31, 
        2010'' and inserting ``June 30, 2011''.
  (b) Conforming Amendment.--Section 1905(cc) of the Social 
Security Act (42 U.S.C. 1396d(cc)) is amended by striking the 
last sentence (relating to the treatment of voluntary 
contributions).

SEC. 517. MEDICAID AND CHIP TECHNICAL CORRECTIONS.

  (a) Repeal of Exclusion of Certain Individuals and Entities 
From Medicaid.--Section 6502 of Public Law 111-148 is repealed 
and the provisions of law amended by such section are restored 
as if such section had never been enacted. Nothing in the 
previous sentence shall affect the execution or placement of 
the insertion made by section 6503 of such Act.
  (b) Income Level for Certain Children Under Medicaid.--
Effective as if included in the enactment of Public Law 111-
148, section 2001(a)(5)(B) of such Act is amended by striking 
all that follows ``is amended'' and inserting the following: 
``by inserting after `100 percent' the following: `(or, 
beginning January 1, 2014, 133 percent)'.''.
  (c) Calculation and Publication of Payment Error Rate 
Measurement for Certain Years.--Section 601(b) of the 
Children's Health Insurance Program Reauthorization Act of 2009 
(Public Law 111-3) is amended by adding at the end the 
following: ``The Secretary is not required under this 
subsection to calculate or publish a national or a State-
specific error rate for fiscal year 2009 or fiscal year 
2010.''.
  (d) Corrections to Exceptions to Exclusion of Children of 
Certain Employees.--Section 2110(b)(6) of the Social Security 
Act (42 U.S.C. 1397jj(b)(6)) is amended--
          (1) in subparagraph (B)--
                  (A) by striking ``per person'' in the 
                heading; and
                  (B) by striking ``each employee'' and 
                inserting ``employees''; and
          (2) in subparagraph (C), by striking ``, on a case-
        by-case basis,''.
  (e) Electronic Health Records.--Effective as if included in 
the enactment of section 4201(a)(2) of the American Recovery 
and Reinvestment Act of 2009 (Public Law 111-5), section 
1903(t) of the Social Security Act (42 U.S.C. 1396b(t)) is 
amended--
          (1) in paragraph (3)(E), by striking ``reduced by any 
        payment that is made to such Medicaid provider from any 
        other source (other than under this subsection or by a 
        State or local government)'' and inserting ``reduced by 
        the average payment the Secretary estimates will be 
        made to such Medicaid providers (determined on a 
        percentage or other basis for such classes or types of 
        providers as the Secretary may specify) from other 
        sources (other than under this subsection, or by the 
        Federal government or a State or local government)''; 
        and
          (2) in paragraph (6)(B), by inserting before the 
        period the following: ``and shall be determined to have 
        met such responsibility to the extent that the payment 
        to the Medicaid provider is not in excess of 85 percent 
        of the net average allowable cost''.
  (f) Corrections of Designations.--
          (1) Section 1902 of the Social Security Act (42 
        U.S.C. 1396a) is amended--
                  (A) in subsection (a)(10), in the matter 
                following subparagraph (G), by striking ``and'' 
                before ``(XVI) the medical'' and by striking 
                ``(XVI) if'' and inserting ``(XVII) if''; and
                  (B) in subsection (ii)(2), by striking 
                ``(XV)'' and inserting ``(XVI)''.
          (2) Section 2107(e)(1) of the Social Security Act (42 
        U.S.C. 1397gg(e)(1)) is amended by redesignating the 
        subparagraph (N) of that section added by 2101(e) of 
        Public Law 111-148 as subparagraph (O).

SEC. 518. ADDITION OF INPATIENT DRUG DISCOUNT PROGRAM TO 340B DRUG 
                    DISCOUNT PROGRAM.

  (a) Addition of Inpatient Drug Discount.--Title III of the 
Public Health Service Act is amended by inserting after section 
340B (42 U.S.C. 256b) the following:

``SEC. 340B-1. DISCOUNT INPATIENT DRUGS FOR INDIVIDUALS WITHOUT 
                    PRESCRIPTION DRUG COVERAGE.

  ``(a) Requirements for Agreements With the Secretary.--
          ``(1) In general.--
                  ``(A) Agreement.--The Secretary shall enter 
                into an agreement with each manufacturer of 
                covered inpatient drugs under which the amount 
                required to be paid (taking into account any 
                rebate or discount, as provided by the 
                Secretary) to the manufacturer for covered 
                inpatient drugs (other than drugs described in 
                paragraph (3)) purchased by a covered entity on 
                or after January 1, 2011, does not exceed an 
                amount equal to the average manufacturer price 
                for the drug under title XIX of the Social 
                Security Act in the preceding calendar quarter, 
                reduced by the rebate percentage described in 
                paragraph (2). For a covered inpatient drug 
                that also is a covered outpatient drug under 
                section 340B, the amount required to be paid 
                under the preceding sentence shall be equal to 
                the amount required to be paid under section 
                340B(a)(1) for such drug. The agreement with a 
                manufacturer under this subparagraph may, at 
                the discretion of the Secretary, be included in 
                the agreement with the same manufacturer under 
                section 340B.
                  ``(B) Ceiling price.--Each such agreement 
                shall require that the manufacturer furnish the 
                Secretary with reports, on a quarterly basis, 
                of the price for each covered inpatient drug 
                subject to the agreement that, according to the 
                manufacturer, represents the maximum price that 
                covered entities may permissibly be required to 
                pay for the drug (referred to in this section 
                as the `ceiling price'), and shall require that 
                the manufacturer offer each covered entity 
                covered inpatient drugs for purchase at or 
                below the applicable ceiling price if such drug 
                is made available to any other purchaser at any 
                price.
                  ``(C) Allocation method.--Each such agreement 
                shall require that, if the supply of a covered 
                inpatient drug is insufficient to meet demand, 
                then the manufacturer may use an allocation 
                method that is reported in writing to, and 
                approved by, the Secretary and does not 
                discriminate on the basis of the price paid by 
                covered entities or on any other basis related 
                to the participation of an entity in the 
                program under this section.
          ``(2) Rebate percentage defined.--
                  ``(A) In general.--For a covered inpatient 
                drug purchased in a calendar quarter, the 
                `rebate percentage' is the amount (expressed as 
                a percentage) equal to--
                          ``(i) the average total rebate 
                        required under section 1927(c) of the 
                        Social Security Act (or the average 
                        total rebate that would be required if 
                        the drug were a covered outpatient drug 
                        under such section) with respect to the 
                        drug (for a unit of the dosage form and 
                        strength involved) during the preceding 
                        calendar quarter; divided by
                          ``(ii) the average manufacturer price 
                        for such a unit of the drug during such 
                        quarter.
                  ``(B) Over the counter drugs.--
                          ``(i) In general.--For purposes of 
                        subparagraph (A), in the case of over 
                        the counter drugs, the `rebate 
                        percentage' shall be determined as if 
                        the rebate required under section 
                        1927(c) of the Social Security Act is 
                        based on the applicable percentage 
                        provided under section 1927(c)(3) of 
                        such Act.
                          ``(ii) Definition.--The term `over 
                        the counter drug' means a drug that may 
                        be sold without a prescription and 
                        which is prescribed by a physician (or 
                        other persons authorized to prescribe 
                        such drug under State law).
          ``(3) Drugs provided under state medicaid plans.--
        Drugs described in this paragraph are drugs purchased 
        by the entity for which payment is made by the State 
        under the State plan for medical assistance under title 
        XIX of the Social Security Act.
          ``(4) Requirements for covered entities.--
                  ``(A) Prohibiting duplicate discounts or 
                rebates.--
                          ``(i) In general.--A covered entity 
                        shall not request payment under title 
                        XIX of the Social Security Act for 
                        medical assistance described in section 
                        1905(a)(12) of such Act with respect to 
                        a drug that is subject to an agreement 
                        under this section if the drug is 
                        subject to the payment of a rebate to 
                        the State under section 1927 of such 
                        Act.
                          ``(ii) Establishment of mechanism.--
                        The Secretary shall establish a 
                        mechanism to ensure that covered 
                        entities comply with clause (i). If the 
                        Secretary does not establish a 
                        mechanism under the previous sentence 
                        within 12 months of the enactment of 
                        this section, the requirements of 
                        section 1927(a)(5)(C) of the Social 
                        Security Act shall apply.
                          ``(iii) Prohibiting disclosure to 
                        group purchasing organizations.--In the 
                        event that a covered entity is a member 
                        of a group purchasing organization, 
                        such entity shall not disclose the 
                        price or any other information 
                        pertaining to any purchases under this 
                        section directly or indirectly to such 
                        group purchasing organization.
                  ``(B) Prohibiting resale, dispensing, or 
                administration of drugs except to certain 
                patients.--With respect to any covered 
                inpatient drug that is subject to an agreement 
                under this subsection, a covered entity shall 
                not dispense, administer, resell, or otherwise 
                transfer the covered inpatient drug to a person 
                unless--
                          ``(i) such person is a patient of the 
                        entity; and
                          ``(ii) such person does not have 
                        health plan coverage (as defined in 
                        subsection (c)(3)) that provides 
                        prescription drug coverage in the 
                        inpatient setting with respect to such 
                        covered inpatient drug.
                For purposes of clause (ii), a person shall be 
                treated as having health plan coverage (as 
                defined in subsection (c)(3)) with respect to a 
                covered inpatient drug if benefits are not 
                payable under such coverage with respect to 
                such drug for reasons such as the application 
                of a deductible or cost sharing or the use of 
                utilization management.
                  ``(C) Auditing.--A covered entity shall 
                permit the Secretary and the manufacturer of a 
                covered inpatient drug that is subject to an 
                agreement under this subsection with the entity 
                (acting in accordance with procedures 
                established by the Secretary relating to the 
                number, duration, and scope of audits) to audit 
                at the Secretary's or the manufacturer's 
                expense the records of the entity that directly 
                pertain to the entity's compliance with the 
                requirements described in subparagraph (A) or 
                (B) with respect to drugs of the manufacturer. 
                The use or disclosure of information for 
                performance of such an audit shall be treated 
                as a use or disclosure required by law for 
                purposes of section 164.512(a) of title 45, 
                Code of Federal Regulations.
                  ``(D) Additional sanction for 
                noncompliance.--If the Secretary finds, after 
                notice and hearing, that a covered entity is in 
                violation of a requirement described in 
                subparagraph (A) or (B), the covered entity 
                shall be liable to the manufacturer of the 
                covered inpatient drug that is the subject of 
                the violation in an amount equal to the 
                reduction in the price of the drug (as 
                described in subparagraph (A)) provided under 
                the agreement between the Secretary and the 
                manufacturer under this subsection.
                  ``(E) Maintenance of records.--
                          ``(i) In general.--A covered entity 
                        shall establish and maintain an 
                        effective recordkeeping system to 
                        comply with this section and shall 
                        certify to the Secretary that such 
                        entity is in compliance with 
                        subparagraphs (A) and (B). The 
                        Secretary shall require that hospitals 
                        that purchase covered inpatient drugs 
                        for inpatient dispensing or 
                        administration under this subsection 
                        appropriately segregate inventory of 
                        such covered inpatient drugs, either 
                        physically or electronically, from 
                        drugs for outpatient use, as well as 
                        from drugs for inpatient dispensing or 
                        administration to individuals who have 
                        (for purposes of subparagraph (B)) 
                        health plan coverage described in 
                        clause (ii) of such subparagraph.
                          ``(ii) Certification of no third-
                        party payer.--A covered entity shall 
                        maintain records that contain 
                        certification by the covered entity 
                        that no third party payment was 
                        received for any covered inpatient drug 
                        that is subject to an agreement under 
                        this subsection and that was dispensed 
                        to an inpatient.
          ``(5) Treatment of distinct units of hospitals.--In 
        the case of a covered entity that is a distinct part of 
        a hospital, the distinct part of the hospital shall not 
        be considered a covered entity under this subsection 
        unless the hospital is otherwise a covered entity under 
        this subsection.
          ``(6) Notice to manufacturers.--The Secretary shall 
        notify manufacturers of covered inpatient drugs and 
        single State agencies under section 1902(a)(5) of the 
        Social Security Act of the identities of covered 
        entities under this subsection, and of entities that no 
        longer meet the requirements of paragraph (4), by means 
        of timely updates of the Internet website supported by 
        the Department of Health and Human Services relating to 
        this section.
          ``(7) No prohibition on larger discount.--Nothing in 
        this subsection shall prohibit a manufacturer from 
        charging a price for a drug that is lower than the 
        maximum price that may be charged under paragraph (1).
  ``(b) Covered Entity Defined.--In this section, the term 
`covered entity' means an entity that meets the requirements 
described in subsection (a)(4) and is one of the following:
          ``(1) A subsection (d) hospital (as defined in 
        section 1886(d)(1)(B) of the Social Security Act) 
        that--
                  ``(A) is owned or operated by a unit of State 
                or local government, is a public or private 
                non-profit corporation which is formally 
                granted governmental powers by a unit of State 
                or local government, or is a private nonprofit 
                hospital which has a contract with a State or 
                local government to provide health care 
                services to low income individuals who are not 
                entitled to benefits under title XVIII of the 
                Social Security Act or eligible for assistance 
                under the State plan for medical assistance 
                under title XIX of such Act; and
                  ``(B) for the most recent cost reporting 
                period that ended before the calendar quarter 
                involved, had a disproportionate share 
                adjustment percentage (as determined using the 
                methodology under section 1886(d)(5)(F) of the 
                Social Security Act as in effect on the date of 
                enactment of this section) greater than 20.20 
                percent or was described in section 
                1886(d)(5)(F)(i)(II) of such Act (as so in 
                effect on the date of enactment of this 
                section).
          ``(2) A children's hospital excluded from the 
        Medicare prospective payment system pursuant to section 
        1886(d)(1)(B)(iii) of the Social Security Act that 
        would meet the requirements of paragraph (1), including 
        the disproportionate share adjustment percentage 
        requirement under subparagraph (B) of such paragraph, 
        if the hospital were a subsection (d) hospital as 
        defined by section 1886(d)(1)(B) of the Social Security 
        Act.
          ``(3) A free-standing cancer hospital excluded from 
        the Medicare prospective payment system pursuant to 
        section 1886(d)(1)(B)(v) of the Social Security Act 
        that would meet the requirements of paragraph (1), 
        including the disproportionate share adjustment 
        percentage requirement under subparagraph (B) of such 
        paragraph, if the hospital were a subsection (d) 
        hospital as defined by section 1886(d)(1)(B) of the 
        Social Security Act.
          ``(4) An entity that is a critical access hospital 
        (as determined under section 1820(c)(2) of the Social 
        Security Act), and that meets the requirements of 
        paragraph (1)(A).
          ``(5) An entity that is a rural referral center, as 
        defined by section 1886(d)(5)(C)(i) of the Social 
        Security Act, or a sole community hospital, as defined 
        by section 1886(d)(5)(C)(iii) of such Act, and that 
        both meets the requirements of paragraph (1)(A) and has 
        a disproportionate share adjustment percentage equal to 
        or greater than 8 percent.
  ``(c) Other Definitions.--In this section:
          ``(1) Average manufacturer price.--
                  ``(A) In general.--The term `average 
                manufacturer price'--
                          ``(i) has the meaning given such term 
                        in section 1927(k) of the Social 
                        Security Act, except that such term 
                        shall be applied under this section 
                        with respect to covered inpatient drugs 
                        in the same manner (as applicable) as 
                        such term is applied under such section 
                        1927(k) with respect to covered 
                        outpatient drugs (as defined in such 
                        section); and
                          ``(ii) with respect to a covered 
                        inpatient drug for which there is no 
                        average manufacturer price (as defined 
                        in clause (i)), shall be the amount 
                        determined under regulations 
                        promulgated by the Secretary under 
                        subparagraph (B).
                  ``(B) Rulemaking.--The Secretary shall by 
                regulation, in consultation with the 
                Administrator of the Centers for Medicare & 
                Medicaid Services, establish a method for 
                determining the average manufacturer price for 
                covered inpatient drugs for which there is no 
                average manufacturer price (as defined in 
                subparagraph (A)(i)). Regulations promulgated 
                with respect to covered inpatient drugs under 
                the preceding sentence shall provide for the 
                application of methods for determining the 
                average manufacturer price that are the same as 
                the methods used to determine such price in 
                calculating rebates required for such drugs 
                under an agreement between a manufacturer and a 
                State that satisfies the requirements of 
                section 1927(b) of the Social Security Act, as 
                applicable.
          ``(2) Covered inpatient drug.--The term `covered 
        inpatient drug' means a drug--
                  ``(A) that is described in section 1927(k)(2) 
                of the Social Security Act;
                  ``(B) that, notwithstanding paragraph (3)(A) 
                of section 1927(k) of such Act, is used in 
                connection with an inpatient service provided 
                by a covered entity that is enrolled to 
                participate in the drug discount program under 
                this section; and
                  ``(C) that is not purchased by the covered 
                entity through or under contract with a group 
                purchasing organization.
          ``(3) Health plan coverage.--The term `health plan 
        coverage' means--
                  ``(A) health insurance coverage (as defined 
                in section 2791, and including coverage under a 
                State health benefits risk pool);
                  ``(B) coverage under a group health plan (as 
                defined in such section, and including coverage 
                under a church plan, a governmental plan, or a 
                collectively bargained plan);
                  ``(C) coverage under a Federal health care 
                program (as defined by section 1128B(f) of the 
                Social Security Act); or
                  ``(D) such other health benefits coverage as 
                the Secretary recognizes for purposes of this 
                section.
          ``(4) Manufacturer.--The term `manufacturer' has the 
        meaning given such term in section 1927(k) of the 
        Social Security Act.
  ``(d) Program Integrity.--
          ``(1) Manufacturer compliance.--
                  ``(A) In general.--From amounts appropriated 
                under subsection (f), the Secretary shall 
                provide for improvements in compliance by 
                manufacturers with the requirements of this 
                section in order to prevent overcharges and 
                other violations of the discounted pricing 
                requirements specified in this section.
                  ``(B) Improvements.--The improvements 
                described in subparagraph (A) shall include the 
                following:
                          ``(i) The establishment of a process 
                        to enable the Secretary to verify the 
                        accuracy of ceiling prices calculated 
                        by manufacturers under subsection 
                        (a)(1) and charged to covered entities, 
                        which shall include the following:
                                  ``(I) Developing and 
                                publishing through an 
                                appropriate policy or 
                                regulatory issuance, precisely 
                                defined standards and 
                                methodology for the calculation 
                                of ceiling prices under such 
                                subsection.
                                  ``(II) Comparing regularly 
                                the ceiling prices calculated 
                                by the Secretary with the 
                                quarterly pricing data that is 
                                reported by manufacturers to 
                                the Secretary.
                                  ``(III) Conducting periodic 
                                monitoring of sales 
                                transactions by covered 
                                entities.
                                  ``(IV) Inquiring into any 
                                discrepancies between ceiling 
                                prices and manufacturer pricing 
                                data that may be identified and 
                                taking, or requiring 
                                manufacturers to take, 
                                corrective action in response 
                                to such discrepancies, 
                                including the issuance of 
                                refunds pursuant to the 
                                procedures set forth in clause 
                                (ii).
                          ``(ii) The establishment of 
                        procedures for manufacturers to issue 
                        refunds to covered entities in the 
                        event that there is an overcharge by 
                        the manufacturers, including the 
                        following:
                                  ``(I) Providing the Secretary 
                                with an explanation of why and 
                                how the overcharge occurred, 
                                how the refunds will be 
                                calculated, and to whom the 
                                refunds will be issued.
                                  ``(II) Oversight by the 
                                Secretary to ensure that the 
                                refunds are issued accurately 
                                and within a reasonable period 
                                of time.
                          ``(iii) The provision of access 
                        through the Internet website supported 
                        by the Department of Health and Human 
                        Services to the applicable ceiling 
                        prices for covered inpatient drugs as 
                        calculated and verified by the 
                        Secretary in accordance with this 
                        section, in a manner (such as through 
                        the use of password protection) that 
                        limits such access to covered entities 
                        and adequately assures security and 
                        protection of privileged pricing data 
                        from unauthorized re-disclosure.
                          ``(iv) The development of a mechanism 
                        by which--
                                  ``(I) rebates, discounts, or 
                                other price concessions 
                                provided by manufacturers to 
                                other purchasers subsequent to 
                                the sale of covered inpatient 
                                drugs to covered entities are 
                                reported to the Secretary; and
                                  ``(II) appropriate credits 
                                and refunds are issued to 
                                covered entities if such 
                                discounts, rebates, or other 
                                price concessions have the 
                                effect of lowering the 
                                applicable ceiling price for 
                                the relevant quarter for the 
                                drugs involved.
                          ``(v) Selective auditing of 
                        manufacturers and wholesalers to ensure 
                        the integrity of the drug discount 
                        program under this section.
                          ``(vi) The establishment of a 
                        requirement that manufacturers and 
                        wholesalers use the identification 
                        system developed by the Secretary for 
                        purposes of facilitating the ordering, 
                        purchasing, and delivery of covered 
                        inpatient drugs under this section, 
                        including the processing of chargebacks 
                        for such drugs.
                          ``(vii) The imposition of sanctions 
                        in the form of civil monetary 
                        penalties, which--
                                  ``(I) shall be assessed 
                                according to standards and 
                                procedures established in 
                                regulations to be promulgated 
                                by the Secretary not later than 
                                January 1, 2011;
                                  ``(II) shall not exceed 
                                $10,000 per single dosage form 
                                of a covered inpatient drug 
                                purchased by a covered entity 
                                where a manufacturer knowingly 
                                charges such covered entity a 
                                price for such drug that 
                                exceeds the ceiling price under 
                                subsection (a)(1); and
                                  ``(III) shall not exceed 
                                $100,000 for each instance 
                                where a manufacturer withholds 
                                or provides materially false 
                                information to the Secretary or 
                                to covered entities under this 
                                section or knowingly violates 
                                any provision of this section 
                                (other than subsection (a)(1)).
          ``(2) Covered entity compliance.--
                  ``(A) In general.--From amounts appropriated 
                under subsection (f), the Secretary shall 
                provide for improvements in compliance by 
                covered entities with the requirements of this 
                section in order to prevent diversion and 
                violations of the duplicate discount provision 
                and other requirements specified under 
                subsection (a)(4).
                  ``(B) Improvements.--The improvements 
                described in subparagraph (A) shall include the 
                following:
                          ``(i) The development of procedures 
                        to enable and require covered entities 
                        to update at least annually the 
                        information on the Internet website 
                        supported by the Department of Health 
                        and Human Services relating to this 
                        section.
                          ``(ii) The development of procedures 
                        for the Secretary to verify the 
                        accuracy of information regarding 
                        covered entities that is listed on the 
                        website described in clause (i).
                          ``(iii) The development of more 
                        detailed guidance describing 
                        methodologies and options available to 
                        covered entities for billing covered 
                        inpatient drugs to State Medicaid 
                        agencies in a manner that avoids 
                        duplicate discounts pursuant to 
                        subsection (a)(4)(A).
                          ``(iv) The establishment of a single, 
                        universal, and standardized 
                        identification system by which each 
                        covered entity site and each covered 
                        entity's purchasing status under 
                        sections 340B and this section can be 
                        identified by manufacturers, 
                        distributors, covered entities, and the 
                        Secretary for purposes of facilitating 
                        the ordering, purchasing, and delivery 
                        of covered inpatient drugs under this 
                        section, including the processing of 
                        chargebacks for such drugs.
                          ``(v) The imposition of sanctions in 
                        the form of civil monetary penalties, 
                        which--
                                  ``(I) shall be assessed 
                                according to standards and 
                                procedures established in 
                                regulations promulgated by the 
                                Secretary; and
                                  ``(II) shall not exceed 
                                $10,000 for each instance where 
                                a covered entity knowingly 
                                violates subsection (a)(4)(B) 
                                or knowingly violates any other 
                                provision of this section.
                          ``(vi) The termination of a covered 
                        entity's participation in the program 
                        under this section, for a period of 
                        time to be determined by the Secretary, 
                        in cases in which the Secretary 
                        determines, in accordance with 
                        standards and procedures established by 
                        regulation, that--
                                  ``(I) the violation by a 
                                covered entity of a requirement 
                                of this section was repeated 
                                and knowing; and
                                  ``(II) imposition of a 
                                monetary penalty would be 
                                insufficient to reasonably 
                                ensure compliance with the 
                                requirements of this section.
                          ``(vii) The referral of matters, as 
                        appropriate, to the Food and Drug 
                        Administration, the Office of the 
                        Inspector General of the Department of 
                        Health and Human Services, or other 
                        Federal or State agencies.
          ``(3) Administrative dispute resolution process.--
        From amounts appropriated under subsection (f), the 
        Secretary may establish and implement an administrative 
        process for the resolution of the following:
                  ``(A) Claims by covered entities that 
                manufacturers have violated the terms of their 
                agreement with the Secretary under subsection 
                (a)(1).
                  ``(B) Claims by manufacturers that covered 
                entities have violated subsection (a)(4)(A) or 
                (a)(4)(B).
  ``(e) Audit and Sanctions.--
          ``(1) Audit.--From amounts appropriated under 
        subsection (f), the Inspector General of the Department 
        of Health and Human Services (referred to in this 
        subsection as the `Inspector General') shall audit 
        covered entities under this section to verify 
        compliance with criteria for eligibility and 
        participation under this section, including the 
        antidiversion prohibitions under subsection (a)(4)(B), 
        and take enforcement action or provide information to 
        the Secretary who shall take action to ensure program 
        compliance, as appropriate. A covered entity shall 
        provide to the Inspector General, upon request, records 
        relevant to such audits.
          ``(2) Report.--For each audit conducted under 
        paragraph (1), the Inspector General shall prepare and 
        publish in a timely manner a report which shall include 
        findings and recommendations regarding--
                  ``(A) the appropriateness of covered entity 
                eligibility determinations and, as applicable, 
                certifications;
                  ``(B) the effectiveness of antidiversion 
                prohibitions; and
                  ``(C) the effectiveness of restrictions on 
                inpatient dispensing and administration.
  ``(f) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section such sums as may 
be necessary for fiscal year 2011 and each succeeding fiscal 
year.''.
  (b) Rulemaking.--Not later than January 1, 2011, the 
Secretary shall promulgate regulations implementing section 
340B-1 of the Public Health Service Act (as added by subsection 
(a)).
  (c) Conforming Amendment to Section 340B.--Paragraph (1) of 
section 340B(a) of the Public Health Service Act (42 U.S.C. 
256b(a)) is amended by adding at the end the following: ``Such 
agreement shall further require that, if the supply of a 
covered outpatient drug is insufficient to meet demand, then 
the manufacturer may use an allocation method that is reported 
in writing to, and approved by, the Secretary and does not 
discriminate on the basis of the price paid by covered entities 
or on any other basis related to the participation of an entity 
in the program under this section. The agreement with a 
manufacturer under this paragraph may, at the discretion of the 
Secretary, be included in the agreement with the same 
manufacturer under section 340B-1.''.
  (d) Conforming Amendments to Medicaid.--Section 1927 of the 
Social Security Act (42 U.S.C. 1396r-8) is amended--
          (1) in subsection (a)--
                  (A) in paragraph (1), in the first sentence, 
                by striking ``and paragraph (6)'' and inserting 
                ``, paragraph (6), and paragraph (8)''; and
                  (B) by adding at the end the following new 
                paragraph:
          ``(8) Limitation on prices of drugs purchased by 
        340b-1-covered entities.--
                  ``(A) Agreement with secretary.--A 
                manufacturer meets the requirements of this 
                paragraph if the manufacturer has entered into 
                an agreement with the Secretary that meets the 
                requirements of section 340B-1 of the Public 
                Health Service Act with respect to covered 
                inpatient drugs (as defined in such section) 
                purchased by a 340B-1-covered entity on or 
                after January 1, 2011.
                  ``(B) 340B-1-covered entity defined.--In this 
                subsection, the term `340B-1-covered entity' 
                means an entity described in section 340B-1(b) 
                of the Public Health Service Act.''; and
          (2) in subsection (c)(1)(C)(i)(I)--
                  (A) by striking ``or'' before ``a covered 
                entity''; and
                  (B) by inserting before the semicolon the 
                following: ``, or a covered entity for a 
                covered inpatient drug (as such terms are 
                defined in section 340B-1of the Public Health 
                Service Act)''.

SEC. 519. CONTINUED INCLUSION OF ORPHAN DRUGS IN DEFINITION OF COVERED 
                    OUTPATIENT DRUGS WITH RESPECT TO CHILDREN'S 
                    HOSPITALS UNDER THE 340B DRUG DISCOUNT PROGRAM.

  (a) Definition of Covered Outpatient Drug.--
          (1) Amendment.--Subsection (e) of section 340B of the 
        Public Health Service Act (42 U.S.C. 256b) is amended 
        by striking ``covered entities described in 
        subparagraph (M)''and inserting ``covered entities 
        described in subparagraph (M) (other than a children's 
        hospital described in subparagraph (M))''.
          (2) Effective date.--The amendment made by paragraph 
        (1) shall take effect as if included in the enactment 
        of section 2302 of the Health Care and Education 
        Reconciliation Act of 2010 (Public Law 111-152).
  (b) Technical Amendment.--Subparagraph (B) of section 
1927(a)(5) of the Social Security Act (42 U.S.C. 1396r-8(a)(5)) 
is amended by striking ``and a children's hospital'' and all 
that follows through the end of the subparagraph and inserting 
a period.

SEC. 520. CONFORMING AMENDMENT RELATED TO WAIVER OF COINSURANCE FOR 
                    PREVENTIVE SERVICES.

  Effective as if included in section 10501(i)(2)(A) of Public 
Law 111-148, section 1833(a)(3)(A) of the Social Security Act 
(42 U.S.C. 1395l(a)(3)(A)) is amended by striking ``section 
1861(s)(10)(A)'' and inserting ``section 1861(ddd)(3)''.

SEC. 521. 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 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)(5) of the Social Security Act (42 
U.S.C. 1395cc(j)(5)), 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. 522. CLARIFICATION OF EFFECTIVE DATE OF PART B SPECIAL ENROLLMENT 
                    PERIOD FOR DISABLED TRICARE BENEFICIARIES.

  Effective as if included in the enactment of Public Law 111-
148, section 3110(a)(2) of such Act is amended to read as 
follows:
          ``(2) Effective date.--The amendment made by 
        paragraph (1) shall apply to elections made after the 
        date of the enactment of this Act.''.

SEC. 523. MEDICARE SUSTAINABLE GROWTH RATE REFORM.

  (a) Transitional Update for the Second Portion of 2010 and 
2011.--Subsection (d) of section 1848 of the Social Security 
Act (42 U.S.C. 1395w-4) is amended--
          (1) in the heading of paragraph (10), by striking 
        ``portion'' and inserting ``the first portion ''; and
          (2) by adding at the end the following new 
        paragraphs:
          ``(11) Update for the second portion of 2010.--In 
        lieu of the update to the single conversion factor 
        established in paragraph (1)(C) that would otherwise 
        apply 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 1.3 percent.
          ``(12) Update for 2011.--In lieu of the update to the 
        single conversion factor established in paragraph 
        (1)(C) that would otherwise apply for 2011, the update 
        to the single conversion factor shall be 1.0 
        percent.''.
  (b) Rebasing SGR Using 2010 and Limitation on Cumulative 
Adjustment Period During SGR Reform Period.--
          (1) In general.--Subsection (d)(4) of such section is 
        amended--
                  (A) in subparagraph (B), by striking 
                ``subparagraph (D)'' and inserting 
                ``subparagraphs (D) and (G)''; and
                  (B) by adding at the end the following new 
                subparagraph:
                  ``(G) Rebasing using 2010 for update 
                adjustments during sgr reform period.--In 
                determining the update adjustment factor under 
                subparagraph (B) for years during the SGR 
                reform period--
                          ``(i) the allowed expenditures for 
                        2010 shall be equal to the amount of 
                        the actual expenditures for physicians' 
                        services during 2010; and
                          ``(ii) the reference in subparagraph 
                        (B)(ii)(I) to `April 1, 1996' shall be 
                        treated as a reference to `January 1, 
                        2010 (or, if later, the first day of 
                        the fifth year before the year 
                        involved)'.''.
          (2) SGR reform period defined.--Subsection (j) of 
        such section, as amended by subsection (d)(1), is 
        amended by adding at the end the following new 
        paragraph:
          ``(6) SGR reform period.--The term `SGR reform 
        period' means the period beginning January 1, 2012, and 
        ending on December 31, 2013.''.
  (c) Limitation on Physicians' Services Included in Target 
Growth Rate Computation to Services Covered Under Physician Fee 
Schedule During the SGR Reform Period.--Subsection (f)(4)(A) of 
such section is amended to read as follows:
                  ``(A) Services included in physicians' 
                services.--
                          ``(i) In general.--Except as provided 
                        in clause (ii), the term `physicians' 
                        services' includes other items and 
                        services (such as clinical diagnostic 
                        laboratory tests and radiology 
                        services), specified by the Secretary, 
                        that are commonly performed or 
                        furnished by a physician or in a 
                        physician's office, but does not 
                        include services furnished to a 
                        Medicare Advantage plan enrollee.
                          ``(ii) During sgr reform period.--
                        Effective for services furnished on or 
                        after January 1, 2010, with respect to 
                        the application of this subsection 
                        during the SGR reform period, the term 
                        `physicians' services' includes--
                                  ``(I) other items and 
                                services for which payment 
                                under this part is made under 
                                the fee schedule under this 
                                section;
                                  ``(II) services of 
                                practitioners described in 
                                section 1842(b)(18)(C) for 
                                which payment is made on a 
                                basis related to such fee 
                                schedule; and
                                  ``(III) services described in 
                                section 1861(p) (other than 
                                such services when furnished in 
                                the facility of a provider of 
                                services) for which payment is 
                                made on a basis related to such 
                                fee schedule;
                        but does not include services furnished 
                        to a Medicare Advantage plan 
                        enrollee.''.
  (d) Establishment of Separate Target Growth Rates for 
Categories of Services.--
          (1) Establishment of service categories.--Subsection 
        (j) of such section is amended by adding after 
        paragraph (4) the following new paragraph:
          ``(5) Service categories.--For services furnished on 
        or after January 1, 2010, each of the following 
        categories of physicians' services (as defined in 
        paragraph (3)) shall be treated as a separate `service 
        category':
                  ``(A) Evaluation and management services and 
                preventive services that are procedure codes 
                (for services covered under this title) for--
                          ``(i) services in the category 
                        designated Evaluation and Management in 
                        the Health Care Common Procedure Coding 
                        System (established by the Secretary 
                        under subsection (c)(5) as of December 
                        31, 2009, and as subsequently modified 
                        by the Secretary); and
                          ``(ii) preventive services (as 
                        defined in section 1861(ddd)(3)) for 
                        which payment is made under this 
                        section.
                  ``(B) All other services not described in 
                subparagraph (A).
        Service categories established under this paragraph 
        shall apply without regard to the specialty of the 
        physician furnishing the service.''.
          (2) Establishment of separate conversion factors for 
        each service category during sgr reform period.--
        Subsection (d)(1) of such section is amended--
                  (A) in subparagraph (A)--
                          (i) by designating the sentence 
                        beginning ``The conversion factor'' as 
                        clause (i) with the heading 
                        ``Application of single conversion 
                        factor.--'' and with appropriate 
                        indentation;
                          (ii) by striking ``The conversion 
                        factor'' and inserting ``Subject to 
                        clause (ii), the conversion factor''; 
                        and
                          (iii) by adding at the end the 
                        following new clause:
                          ``(ii) Application of multiple 
                        conversion factors during sgr reform 
                        period.--
                                  ``(I) In general.--In 
                                applying clause (i) for years 
                                during the SGR reform period, 
                                separate conversion factors 
                                shall be established for each 
                                service category of physicians' 
                                services (as defined in 
                                subsection (j)(5)) and any 
                                reference in this section to a 
                                conversion factor for such 
                                years shall be deemed to be a 
                                reference to the conversion 
                                factor for each of such 
                                categories.
                                  ``(II) Initial conversion 
                                factors.--Such factors for 2012 
                                shall be based upon the single 
                                conversion factor as in effect 
                                on December 31, 2011, updated 
                                in accordance with paragraph 
                                (13) for such category for 
                                2012.
                                  ``(III) Updating of 
                                conversion factors.--Such 
                                factor for a service category 
                                for a subsequent year during 
                                the SGR reform period shall be 
                                based upon the conversion 
                                factor for such category for 
                                the previous year updated in 
                                accordance with paragraph (13) 
                                for such category for the year 
                                involved.''; and
                  (B) in subparagraph (D), by adding at the end 
                the following: ``For purposes of applying the 
                previous sentence to a year during the SGR 
                reform period, the reference to `other 
                physicians' services' is deemed a reference to 
                `physicians' services described in the service 
                category described in subsection (j)(5)(B)'.''.
          (3) Establishing updates for conversion factors for 
        service categories during sgr reform period.--
        Subsection (d) of such section, as amended by 
        subsection (a), is amended--
                  (A) in paragraph (4)(C)(iii), by striking 
                ``The allowed'' and inserting ``Subject to 
                paragraph (13)(B), the allowed''; and
                  (B) by adding at the end the following new 
                paragraph:
          ``(13) Updates for service categories beginning with 
        2012 during sgr reform period.--The following rules 
        apply during the SGR reform period:
                  ``(A) In general.--In applying paragraph (4) 
                for a year beginning with 2012, the following 
                rules apply:
                          ``(i) Application of separate update 
                        adjustments for each service 
                        category.--Pursuant to paragraph 
                        (1)(A)(ii)(I), the update shall be made 
                        to the conversion factor for each 
                        service category (as defined in 
                        subsection (j)(5)) based upon an update 
                        adjustment factor for the respective 
                        category and year and such update 
                        adjustment factor shall be computed, 
                        for a year, separately for each service 
                        category.
                          ``(ii) Computation of allowed and 
                        actual expenditures based on service 
                        categories.--In computing the prior 
                        year adjustment component and the 
                        cumulative adjustment component under 
                        clauses (i) and (ii) of paragraph 
                        (4)(B) for a service category, the 
                        following rules apply:
                                  ``(I) Application based on 
                                service categories.--The 
                                allowed expenditures and actual 
                                expenditures shall be the 
                                allowed and actual expenditures 
                                for the service category, as 
                                determined under subparagraph 
                                (B).
                                  ``(II) Application of 
                                category specific target growth 
                                rate.--The growth rate applied 
                                under clause (ii)(II) of such 
                                paragraph shall be the target 
                                growth rate for the service 
                                category involved under 
                                subsection (f)(5).
                          ``(iii) No negative update.--In no 
                        case shall the update to any conversion 
                        factor be less than 0.
                          ``(iv) Modification of restriction on 
                        update restriction factor.--In applying 
                        paragraph (4)(D), `-0.04' shall be 
                        substituted for `-0.07'.
                  ``(B) Determination of allowed 
                expenditures.--In applying paragraph (4) for a 
                year beginning with 2011, notwithstanding 
                subparagraph (C)(iii) of such paragraph, the 
                allowed expenditures for a service category for 
                a year is an amount computed by the Secretary 
                as follows:
                          ``(i) For 2011.--For 2011:
                                  ``(I) Total 2010 actual 
                                expenditures for all services 
                                included in sgr computation for 
                                each service category.--Compute 
                                total actual expenditures for 
                                physicians' services (as 
                                defined in subsection 
                                (f)(4)(A)(ii)) for 2010 for 
                                each service category.
                                  ``(II) Increase by growth 
                                rate to obtain 2011 allowed 
                                expenditures for service 
                                category.--Compute allowed 
                                expenditures for the service 
                                category for 2011 by increasing 
                                the allowed expenditures for 
                                the service category for 2010 
                                computed under subclause (I) by 
                                the target growth rate for such 
                                service category under 
                                subsection (f) for 2011.
                          ``(ii) For 2012 and subsequent years 
                        during sgr reform period.--For 2012 and 
                        any subsequent year during the SGR 
                        reform period, take the amount of 
                        allowed expenditures for such category 
                        for the preceding year (under clause 
                        (i) or this clause) and increase it by 
                        the target growth rate determined under 
                        subsection (f) for such category and 
                        year.''.
          (4) Application of separate target growth rates for 
        each category during sgr reform period.--
                  (A) In general.--Subsection (f) of such 
                section is amended by adding at the end the 
                following new paragraph:
          ``(5) Application during sgr reform period of 
        separate target growth rates for each service 
        category.--With respect to the application of this 
        section during the SGR reform period, the target growth 
        rate for a year beginning with 2011 shall be computed 
        and applied separately under this subsection for each 
        service category (as defined in subsection (j)(5)) and 
        shall be computed using the same method for computing 
        the growth rate under paragraph (2) except that the 
        factor described in paragraph (2)(C) for--
                  ``(A) the service category described in 
                subsection (j)(5)(A) shall be increased by 
                0.02; and
                  ``(B) the service category described in 
                subsection (j)(5)(B) shall be increased by 
                0.01.''.
                  (B) Use of target growth rates during sgr 
                reform period.--Such section is further 
                amended--
                          (i) in subsection (d)--
                                  (I) in paragraph (1)(E)(ii), 
                                by inserting ``(and the target 
                                growth rate with respect to 
                                years during the SGR reform 
                                period)'' after ``sustainable 
                                growth rate''; and
                                  (II) in paragraph 
                                (4)(B)(ii)(II), by inserting 
                                ``(or the target growth rate 
                                with respect to years during 
                                the SGR reform period)'' after 
                                ``sustainable growth rate'';
                          (ii) in the heading of subsection 
                        (f), by inserting ``and Target Growth 
                        Rate'' after ``Sustainable Growth 
                        Rate''; and
                          (iii) in subsection (f)(1)--
                                  (I) by striking ``and'' at 
                                the end of subparagraph (A);
                                  (II) in subparagraph (B), by 
                                striking the period at the end 
                                and inserting ``; and''; and
                                  (III) by adding at the end 
                                the following new subparagraph:
                  ``(C) November 1, 2010, the target growth 
                rate for 2011, and November 1 of each 
                succeeding year (before the last year of the 
                SGR reform period) the target growth rate for 
                such succeeding year and each of the 2 
                preceding years.''.
  (e) No Effect of Sgr Reform Period on Computation of 
Conversion Factor After Sgr Reform Period.--Such section is 
further amended--
          (1) in subsection (d), as amended by subsections (a) 
        and (d)(3)(B) of this section, by adding at the end the 
        following new paragraph:
          ``(14) No effect of 2010 through 2013 changes on 
        computation of conversion factor for 2014 and 
        subsequent years.--The conversion factor under this 
        subsection shall be computed under paragraph (1)(A) for 
        2014 and subsequent years as if the amendments made by 
        subsections (a) through (d) of section 523 of the 
        American Jobs and Closing Tax Loopholes Act of 2010 had 
        never applied.''; and
          (2) by adding at the end of subsection (f), as 
        amended by subsection (d)(4) of this section, the 
        following new paragraph:
          ``(6) Temporary adjustment.--In determining the 
        growth rate under paragraph (2) for 2015, the 
        Secretary's estimate of the percentage change otherwise 
        determined under paragraph (2)(D) shall be reduced by 
        4.0 percentage points.''.
  (f) Application to Shared Savings Program During the SGR 
Reform Period.--Subsection (f) of such section, as amended by 
subsections (d)(4)(A) and (e)(2) of this section, is further 
amended by adding at the end the following new paragraph:
          ``(7) Application to shared savings program during 
        the sgr reform period.--
                  ``(A) In general.--In applying this 
                subsection and subsection (d) to services 
                furnished in a year during the SGR reform 
                period by an ACO professional (as defined in 
                section 1899(h)(1) and including a physician as 
                defined in section 1866A(a)(3)(A) for purposes 
                of applying section 1899(k))) to individuals 
                who are assigned to an accountable care 
                organization under the shared savings program 
                under section 1899 (including subsection (k) of 
                such section), the Secretary shall develop, not 
                later than January 1, 2012, and in accordance 
                with this paragraph a method that--
                          ``(i) allows each such organization 
                        to choose (for all years in the SGR 
                        reform period during its agreement 
                        period under section 1899) to have its 
                        own expenditure target and update for 
                        such professionals for such year, with 
                        respect to individuals who are assigned 
                        to that organization, that are 
                        consistent with subsection 
                        (d)(13)(A)(iii) and the methodologies 
                        described in this subsection and under 
                        such program, including--
                                  ``(I) the same scope of items 
                                and services as are included in 
                                physicians' services under 
                                paragraph (4)(A)(ii); and
                                  ``(II) the application of the 
                                same factors under paragraph 
                                (2) to the computation of the 
                                target growth rate for such 
                                program, except that the 
                                enrollment growth factor 
                                described in paragraph (2)(B) 
                                shall be determined by the 
                                Secretary on the basis of the 
                                annual increase in individuals 
                                assigned to the organization; 
                                and
                          ``(ii) provides that the target 
                        growth rates and conversion factors 
                        applicable to other physicians shall 
                        not apply to such professionals to the 
                        extent that the physicians' services 
                        are furnished to individuals assigned 
                        to the organization.
                  ``(B) Application.--In applying subparagraph 
                (A), the Secretary may limit the application of 
                such subparagraph based on factors such as the 
                number of individuals assigned to the 
                organization involved and such other factors as 
                the Secretary determines appropriate and may 
                apply the difference in the update under clause 
                (i) of such subparagraph on a claim-by-claim or 
                lump sum basis.
                  ``(C) No application after sgr reform 
                period.--Subparagraph (A) shall not apply to 
                years after the end of the SGR reform 
                period.''.

SEC. 524. ADJUSTMENT TO MEDICARE PAYMENT LOCALITIES.

  (a) In General.--Section 1848(e) of the Social Security Act 
(42 U.S.C.1395w-4(e)) is amended by adding at the end the 
following new paragraph:
          ``(6) Transition to use of msas as fee schedule areas 
        in california.--
                  ``(A) In general.--
                          ``(i) Revision.--Subject to clause 
                        (ii) and notwithstanding the previous 
                        provisions of this subsection, for 
                        services furnished on or after January 
                        1, 2012, the Secretary shall revise the 
                        fee schedule areas used for payment 
                        under this section applicable to the 
                        State of California using the 
                        Metropolitan Statistical Area (MSA) 
                        iterative Geographic Adjustment Factor 
                        methodology as follows:
                                  ``(I) The Secretary shall 
                                configure the physician fee 
                                schedule areas using the 
                                Metropolitan Statistical Areas 
                                (each in this paragraph 
                                referred to as an `MSA'), as 
                                defined by the Director of the 
                                Office of Management and Budget 
                                as of the date of the enactment 
                                of this paragraph, as the basis 
                                for the fee schedule areas.
                                  ``(II) For purposes of this 
                                clause, the Secretary shall 
                                treat all areas not included in 
                                an MSA as a single rest-of-
                                State MSA and any reference in 
                                this paragraph to an MSA shall 
                                be deemed to include a 
                                reference to such rest-of-State 
                                MSA.
                                  ``(III) The Secretary shall 
                                list all MSAs within the State 
                                by Geographic Adjustment Factor 
                                described in paragraph (2) (in 
                                this paragraph referred to as a 
                                `GAF') in descending order.
                                  ``(IV) In the first 
                                iteration, the Secretary shall 
                                compare the GAF of the highest 
                                cost MSA in the State to the 
                                weighted-average GAF of all the 
                                remaining MSAs in the State. If 
                                the ratio of the GAF of the 
                                highest cost MSA to the 
                                weighted-average of the GAF of 
                                remaining lower cost MSAs is 
                                1.05 or greater, the highest 
                                cost MSA shall be a separate 
                                fee schedule area.
                                  ``(V) In the next iteration, 
                                the Secretary shall compare the 
                                GAF of the MSA with the second-
                                highest GAF to the weighted-
                                average GAF of the all the 
                                remaining MSAs (excluding MSAs 
                                that become separate fee 
                                schedule areas). If the ratio 
                                of the second-highest MSA's GAF 
                                to the weighted-average of the 
                                remaining lower cost MSAs is 
                                1.05 or greater, the second-
                                highest MSA shall be a separate 
                                fee schedule area.
                                  ``(VI) The iterative process 
                                shall continue until the ratio 
                                of the GAF of the MSA with 
                                highest remaining GAF to the 
                                weighted-average of the 
                                remaining MSAs with lower GAFs 
                                is less than 1.05, and the 
                                remaining group of MSAs with 
                                lower GAFs shall be treated as 
                                a single rest-of-State fee 
                                schedule area.
                                  ``(VII) For purposes of the 
                                iterative process described in 
                                this clause, if two MSAs have 
                                identical GAFs, they shall be 
                                combined.
                          ``(ii) Transition.--For services 
                        furnished on or after January 1, 2012, 
                        and before January 1, 2017, in the 
                        State of California, after calculating 
                        the work, practice expense, and 
                        malpractice geographic indices that 
                        would otherwise be determined under 
                        clauses (i), (ii), and (iii) of 
                        paragraph (1)(A) for a fee schedule 
                        area determined under clause (i), if 
                        the index for a county within a fee 
                        schedule area is less than the index 
                        that would otherwise be in effect for 
                        such county, the Secretary shall 
                        instead apply the index that would 
                        otherwise be in effect for such county.
                  ``(B) Subsequent revisions.--After the 
                transition described in subparagraph (A)(ii), 
                not less than every 3 years the Secretary shall 
                review and update the fee schedule areas using 
                the methodology described in subparagraph 
                (A)(i) and any updated MSAs as defined by the 
                Director of the Office of Management and 
                Budget. The Secretary shall review and make any 
                changes pursuant to such reviews concurrent 
                with the application of the periodic review of 
                the adjustment factors required under paragraph 
                (1)(C) for California.
                  ``(C) References to fee schedule areas.--
                Effective for services furnished on or after 
                January 1, 2012, for the State of California, 
                any reference in this section to a fee schedule 
                area shall be deemed a reference to a fee 
                schedule area established in accordance with 
                this paragraph.''.
  (b) Conforming Amendment to Definition of Fee Schedule 
Area.--Section 1848(j)(2) of the Social Security Act (42 U.S.C. 
1395w(j)(2)) is amended by striking ``The term'' and inserting 
``Except as provided in subsection (e)(6)(C), the term''.

SEC. 525. CLARIFICATION OF 3-DAY PAYMENT WINDOW.

  (a) In General.--Section 1886 of the Social Security Act (42 
U.S.C. 1395ww) is amended--
          (1) by adding at the end of subsection (a)(4) the 
        following new sentence: ``In applying the first 
        sentence of this paragraph, the term `other services 
        related to the admission' includes all services that 
        are not diagnostic services (other than ambulance and 
        maintenance renal dialysis services) for which payment 
        may be made under this title that are provided by a 
        hospital (or an entity wholly owned or operated by the 
        hospital) to a patient--
                  ``(A) on the date of the patient's inpatient 
                admission; or
                  ``(B) during the 3 days (or, in the case of a 
                hospital that is not a subsection (d) hospital, 
                during the 1 day) immediately preceding the 
                date of such admission unless the hospital 
                demonstrates (in a form and manner, and at a 
                time, specified by the Secretary) that such 
                services are not related (as determined by the 
                Secretary) to such admission.''; and
          (2) in subsection (d)(7)--
                  (A) in subparagraph (A), by striking ``and'' 
                at the end;
                  (B) in subparagraph (B), by striking the 
                period and inserting ``, and'' ; and
                  (C) by adding at the end the following new 
                subparagraph:
                  ``(C) the determination of whether services 
                provided prior to a patient's inpatient 
                admission are related to the admission (as 
                described in subsection (a)(4)).''.
  (b) Effective Date.--The amendments made by subsection (a) 
shall apply to services furnished on or after the date of the 
enactment of this Act.
  (c) No Reopening of Previously Bundled Claims.--
          (1) In general.--The Secretary of Health and Human 
        Services may not reopen a claim, adjust a claim, or 
        make a payment pursuant to any request for payment 
        under title XVIII of the Social Security Act, submitted 
        by an entity (including a hospital or an entity wholly 
        owned or operated by the hospital) for services 
        described in paragraph (2) for purposes of treating, as 
        unrelated to a patient's inpatient admission, services 
        provided during the 3 days (or, in the case of a 
        hospital that is not a subsection (d) hospital, during 
        the 1 day) immediately preceding the date of the 
        patient's inpatient admission.
          (2) Services described.--For purposes of paragraph 
        (1), the services described in this paragraph are other 
        services related to the admission (as described in 
        section 1886(a)(4) of the Social Security Act (42 
        U.S.C. 1395ww(a)(4)), as amended by subsection (a)) 
        which were previously included on a claim or request 
        for payment submitted under part A of title XVIII of 
        such Act for which a reopening, adjustment, or request 
        for payment under part B of such title, was not 
        submitted prior to the date of the enactment of this 
        Act.
  (d) Implementation.--Notwithstanding any other provision of 
law, the Secretary of Health and Human Services may implement 
the provisions of this section (and amendments made by this 
section) by program instruction or otherwise.
  (e) Rule of Construction.--Nothing in the amendments made by 
this section shall be construed as changing the policy 
described in section 1886(a)(4) of the Social Security Act (42 
U.S.C. 1395ww(a)(4)), as applied by the Secretary of Health and 
Human Services before the date of the enactment of this Act, 
with respect to diagnostic services.
  (f) Revisions to the Medicare Improvement Fund.--Section 
1898(b)(1) of the Social Security Act (42 U.S.C. 1395iii(b)(1)) 
is amended by amending subparagraph (A) to read as follows:
                  ``(A) fiscal year 2014, $3,950,000,000;''.

                       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. ALLOCATION OF GEOTHERMAL RECEIPTS.

  Notwithstanding any other provision of law, for fiscal year 
2010 only, all funds received from sales, bonuses, royalties, 
and rentals under the Geothermal Steam Act of 1970 (30 U.S.C. 
1001 et seq.) shall be deposited in the Treasury, of which--
          (1) 50 percent shall be used by the Secretary of the 
        Treasury to make payments to States within the 
        boundaries of which the leased land and geothermal 
        resources are located;
          (2) 25 percent shall be used by the Secretary of the 
        Treasury to make payments to the counties within the 
        boundaries of which the leased land or geothermal 
        resources are located; and
          (3) 25 percent shall be deposited in miscellaneous 
        receipts.

SEC. 603. 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. 604. EMERGENCY AGRICULTURAL DISASTER ASSISTANCE.

  (a) Definitions.--Except as otherwise provided in this 
section, in this section:
          (1) Disaster county.--
                  (A) In general.--The term ``disaster county'' 
                means a county included in the geographic area 
                covered by a qualifying natural disaster 
                declaration for the 2009 crop year.
                  (B) Exclusion.--The term ``disaster county'' 
                does not include a contiguous county.
          (2) Eligible aquaculture producer.--The term 
        ``eligible aquaculture producer'' means an aquaculture 
        producer that during the 2009 calendar year, as 
        determined by the Secretary--
                  (A) produced an aquaculture species for which 
                feed costs represented a substantial percentage 
                of the input costs of the aquaculture 
                operation; and
                  (B) experienced a substantial price increase 
                of feed costs above the previous 5-year 
                average.
          (3) Eligible producer.--The term ``eligible 
        producer'' means an agricultural producer in a disaster 
        county.
          (4) Eligible specialty crop producer.--The term 
        ``eligible specialty crop producer'' means an 
        agricultural producer that, for the 2009 crop year, as 
        determined by the Secretary--
                  (A) produced, or was prevented from planting, 
                a specialty crop; and
                  (B) experienced specialty crop losses in a 
                disaster county due to drought, excessive 
                rainfall, or a related condition.
          (5) Qualifying natural disaster declaration.--The 
        term ``qualifying natural disaster declaration'' means 
        a natural disaster declared by the Secretary for 
        production losses under section 321(a) of the 
        Consolidated Farm and Rural Development Act (7 U.S.C. 
        1961(a)).
          (6) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture.
          (7) Specialty crop.--The term ``specialty crop'' has 
        the meaning given the term in section 3 of the 
        Specialty Crops Competitiveness Act of 2004 (Public Law 
        108-465; 7 U.S.C. 1621 note).
  (b) Supplemental Direct Payment.--
          (1) In general.--Of the funds of the Commodity Credit 
        Corporation, the Secretary shall use such sums as are 
        necessary to make supplemental payments under sections 
        1103 and 1303 of the Food, Conservation, and Energy Act 
        of 2008 (7 U.S.C. 8713, 8753) to eligible producers on 
        farms located in disaster counties that had at least 1 
        crop of economic significance (other than specialty 
        crops or crops intended for grazing) suffer at least a 
        5-percent crop loss on a farm due to a natural 
        disaster, including quality losses, as determined by 
        the Secretary, in an amount equal to 90 percent of the 
        direct payment the eligible producers received for the 
        2009 crop year on the farm.
          (2) ACRE program.--Eligible producers that received 
        direct payments under section 1105 of the Food, 
        Conservation, and Energy Act of 2008 (7 U.S.C. 8715) 
        for the 2009 crop year and that otherwise meet the 
        requirements of paragraph (1) shall be eligible to 
        receive supplemental payments under that paragraph in 
        an amount equal to 112.5 percent of the reduced direct 
        payment the eligible producers received for the 2009 
        crop year under section 1103 or 1303 of the Food, 
        Conservation, and Energy Act of 2008 (7 U.S.C. 8713, 
        8753).
          (3) Relationship to other law.--Assistance received 
        under this subsection shall be included in the 
        calculation of farm revenue for the 2009 crop year 
        under section 531(b)(4)(A) of the Federal Crop 
        Insurance Act (7 U.S.C. 1531(b)(4)(A)) and section 
        901(b)(4)(A) of the Trade Act of 1974 (19 U.S.C. 
        2497(b)(4)(A)).
  (c) Specialty Crop Assistance.--
          (1) In general.--Of the funds of the Commodity Credit 
        Corporation, the Secretary shall use not more than 
        $300,000,000, to remain available until September 30, 
        2011, to carry out a program of grants to States to 
        assist eligible specialty crop producers for losses due 
        to a natural disaster affecting the 2009 crops, of 
        which not more than--
                  (A) $150,000,000 shall be used to assist 
                eligible specialty crop producers in counties 
                that have been declared a disaster as the 
                result of drought; and
                  (B) $150,000,000 shall be used to assist 
                eligible specialty crop producers in counties 
                that have been declared a disaster as the 
                result of excessive rainfall or a related 
                condition.
          (2) Notification.--Not later than 45 days after the 
        date of enactment of this Act, the Secretary shall 
        notify the State department of agriculture (or similar 
        entity) in each State of the availability of funds to 
        assist eligible specialty crop producers, including 
        such terms as are determined by the Secretary to be 
        necessary for the equitable treatment of eligible 
        specialty crop producers.
          (3) Provision of grants.--
                  (A) In general.--The Secretary shall make 
                grants to States for disaster counties on a pro 
                rata basis based on the value of specialty crop 
                losses in those counties during the 2009 
                calendar year, as determined by the Secretary.
                  (B) Timing.--Not later than 90 days after the 
                date of enactment of this Act, the Secretary 
                shall make grants to States to provide 
                assistance under this subsection.
                  (C) Maximum grant.--The maximum amount of a 
                grant made to a State for counties described in 
                paragraph (1)(B) may not exceed $40,000,000.
          (4) Requirements.--The Secretary shall make grants 
        under this subsection only to States that demonstrate 
        to the satisfaction of the Secretary that the State 
        will--
                  (A) use grant funds to issue payments to 
                eligible specialty crop producers;
                  (B) provide assistance to eligible specialty 
                crop producers not later than 60 days after the 
                date on which the State receives grant funds; 
                and
                  (C) not later than 30 days after the date on 
                which the State provides assistance to eligible 
                specialty crop producers, submit to the 
                Secretary a report that describes--
                          (i) the manner in which the State 
                        provided assistance;
                          (ii) the amounts of assistance 
                        provided by type of specialty crop; and
                          (iii) the process by which the State 
                        determined the levels of assistance to 
                        eligible specialty crop producers.
                  (D) Relation to other law.--Assistance 
                received under this subsection shall be 
                included in the calculation of farm revenue for 
                the 2009 crop year under section 531(b)(4)(A) 
                of the Federal Crop Insurance Act (7 U.S.C. 
                1531(b)(4)(A)) and section 901(b)(4)(A) of the 
                Trade Act of 1974 (19 U.S.C. 2497(b)(4)(A)).
  (d) Cottonseed Assistance.--
          (1) In general.--Of the funds of the Commodity Credit 
        Corporation, the Secretary shall use not more than 
        $42,000,000 to provide supplemental assistance to 
        eligible producers and first-handlers of the 2009 crop 
        of cottonseed in a disaster county.
          (2) General terms.--Except as otherwise provided in 
        this subsection, the Secretary shall provide disaster 
        assistance under this subsection under the same terms 
        and conditions as assistance provided under section 
        3015 of the Emergency Agricultural Disaster Assistance 
        Act of 2006 (title III of Public Law 109-234; 120 Stat. 
        477).
          (3) Distribution of assistance.--The Secretary shall 
        distribute assistance to first handlers for the benefit 
        of eligible producers in a disaster county in an amount 
        equal to the product obtained by multiplying--
                  (A) the payment rate, as determined under 
                paragraph (4); and
                  (B) the county-eligible production, as 
                determined under paragraph (5).
          (4) Payment rate.--The payment rate shall be equal to 
        the quotient obtained by dividing--
                  (A) the total funds made available to carry 
                out this subsection; by
                  (B) the sum of the county-eligible 
                production, as determined under paragraph (5).
          (5) County-eligible production.--The county-eligible 
        production shall be equal to the product obtained by 
        multiplying--
                  (A) the number of acres planted to cotton in 
                the disaster county, as reported to the 
                Secretary by first handlers;
                  (B) the expected cotton lint yield for the 
                disaster county, as determined by the Secretary 
                based on the best available information; and
                  (C) the national average seed-to-lint ratio, 
                as determined by the Secretary based on the 
                best available information for the 5 crop years 
                immediately preceding the 2009 crop, excluding 
                the year in which the average ratio was the 
                highest and the year in which the average ratio 
                was the lowest in such period.
  (e) Aquaculture Assistance.--
          (1) In general.--Of the funds of the Commodity Credit 
        Corporation, the Secretary shall use not more than 
        $25,000,000, to remain available until September 30, 
        2011, to carry out a program of grants to States to 
        assist eligible aquaculture producers for losses 
        associated with high feed input costs during the 2009 
        calendar year.
          (2) Notification.--Not later than 45 days after the 
        date of enactment of this Act, the Secretary shall 
        notify the State department of agriculture (or similar 
        entity) in each State of the availability of funds to 
        assist eligible aquaculture producers, including such 
        terms as are determined by the Secretary to be 
        necessary for the equitable treatment of eligible 
        aquaculture producers.
          (3) Provision of grants.--
                  (A) In general.--The Secretary shall make 
                grants to States under this subsection on a pro 
                rata basis based on the amount of aquaculture 
                feed used in each State during the 2009 
                calendar year, as determined by the Secretary.
                  (B) Timing.--Not later than 90 days after the 
                date of enactment of this Act, the Secretary 
                shall make grants to States to provide 
                assistance under this subsection.
          (4) Requirements.--The Secretary shall make grants 
        under this subsection only to States that demonstrate 
        to the satisfaction of the Secretary that the State 
        will--
                  (A) use grant funds to assist eligible 
                aquaculture producers;
                  (B) provide assistance to eligible 
                aquaculture producers not later than 60 days 
                after the date on which the State receives 
                grant funds; and
                  (C) not later than 30 days after the date on 
                which the State provides assistance to eligible 
                aquaculture producers, submit to the Secretary 
                a report that describes--
                          (i) the manner in which the State 
                        provided assistance;
                          (ii) the amounts of assistance 
                        provided per species of aquaculture; 
                        and
                          (iii) the process by which the State 
                        determined the levels of assistance to 
                        eligible aquaculture producers.
          (5) Reduction in payments.--An eligible aquaculture 
        producer that receives assistance under this subsection 
        shall not be eligible to receive any other assistance 
        under the supplemental agricultural disaster assistance 
        program established under section 531 of the Federal 
        Crop Insurance Act (7 U.S.C. 1531) and section 901 of 
        the Trade Act of 1974 (19 U.S.C. 2497) for any losses 
        in 2009 relating to the same species of aquaculture.
          (6) Report to congress.--Not later than 240 days 
        after the date of enactment of this Act, the Secretary 
        shall submit to the appropriate committees of Congress 
        a report that--
                  (A) describes in detail the manner in which 
                this subsection has been carried out; and
                  (B) includes the information reported to the 
                Secretary under paragraph (4)(C).
  (f) Hawaii Transportation Cooperative.--Notwithstanding any 
other provision of law, the Secretary shall use $21,000,000 of 
funds of the Commodity Credit Corporation to make a payment to 
an agricultural transportation cooperative in the State of 
Hawaii, the members of which are eligible to participate in the 
commodity loan program of the Farm Service Agency, for 
assistance to maintain and develop employment.
  (g) Livestock Forage Disaster Program.--
          (1) Definition of disaster county.--In this 
        subsection:
                  (A) In general.--The term ``disaster county'' 
                means a county included in the geographic area 
                covered by a qualifying natural disaster 
                declaration announced by the Secretary in 
                calendar year 2009.
                  (B) Inclusion.--The term ``disaster county'' 
                includes a contiguous county.
          (2) Payments.--Of the funds of the Commodity Credit 
        Corporation, the Secretary shall use not more than 
        $50,000,000 to carry out a program to make payments to 
        eligible producers that had grazing losses in disaster 
        counties in calendar year 2009.
          (3) Criteria.--
                  (A) In general.--Except as provided in 
                subparagraph (B), assistance under this 
                subsection shall be determined under the same 
                criteria as are used to carry out the programs 
                under section 531(d) of the Federal Crop 
                Insurance Act (7 U.S.C. 1531(d)) and section 
                901(d) of the Trade Act of 1974 (19 U.S.C. 
                2497(d)).
                  (B) Drought intensity.--For purposes of this 
                subsection, an eligible producer shall not be 
                required to meet the drought intensity 
                requirements of section 531(d)(3)(D)(ii) of the 
                Federal Crop Insurance Act (7 U.S.C. 
                1531(d)(3)(D)(ii)) and section 901(d)(3)(D)(ii) 
                of the Trade Act of 1974 (19 U.S.C. 
                2497(d)(3)(D)(ii)).
          (4) Amount.--Assistance under this subsection shall 
        be in an amount equal to 1 monthly payment using the 
        monthly payment rate under section 531(d)(3)(B) of the 
        Federal Crop Insurance Act (7 U.S.C. 1531(d)(3)(B)) and 
        section 901(d)(3)(B) of the Trade Act of 1974 (19 
        U.S.C. 2497(d)(3)(B)).
          (5) Relation to other law.--An eligible producer that 
        receives assistance under this subsection shall be 
        ineligible to receive assistance for 2009 grazing 
        losses under the program carried out under section 
        531(d) of the Federal Crop Insurance Act (7 U.S.C. 
        1531(d)) and section 901(d) of the Trade Act of 1974 
        (19 U.S.C. 2497(d)).
  (h) Emergency Loans for Poultry Producers.--
          (1) Definitions.--In this subsection:
                  (A) Announcement date.--The term 
                ``announcement date'' means the date on which 
                the Secretary announces the emergency loan 
                program under this subsection.
                  (B) Poultry integrator.--The term ``poultry 
                integrator'' means a poultry integrator that 
                filed proceedings under chapter 11 of title 11, 
                United States Code, in United States Bankruptcy 
                Court during the 30-day period beginning on 
                December 1, 2008.
          (2) Loan program.--
                  (A) In general.--Of the funds of the 
                Commodity Credit Corporation, the Secretary 
                shall use not more than $75,000,000, to remain 
                available until expended, for the cost of 
                making no-interest emergency loans available to 
                poultry producers that meet the requirements of 
                this subsection.
                  (B) Terms and conditions.--Except as 
                otherwise provided in this subsection, 
                emergency loans under this subsection shall be 
                subject to such terms and conditions as are 
                determined by the Secretary.
          (3) Loans.--
                  (A) In general.--An emergency loan made to a 
                poultry producer under this subsection shall be 
                for the purpose of providing financing to the 
                poultry producer in response to financial 
                losses associated with the termination or 
                nonrenewal of any contract between the poultry 
                producer and a poultry integrator.
                  (B) Eligibility.--
                          (i) In general.--To be eligible for 
                        an emergency loan under this 
                        subsection, not later than 90 days 
                        after the announcement date, a poultry 
                        producer shall submit to the Secretary 
                        evidence that--
                                  (I) the contract of the 
                                poultry producer described in 
                                subparagraph (A) was not 
                                continued; and
                                  (II) no similar contract has 
                                been awarded subsequently to 
                                the poultry producer.
                          (ii) Requirement to offer loans.--
                        Notwithstanding any other provision of 
                        law, if a poultry producer meets the 
                        eligibility requirements described in 
                        clause (i), subject to the availability 
                        of funds under paragraph (2)(A), the 
                        Secretary shall offer to make a loan 
                        under this subsection to the poultry 
                        producer with a minimum term of 2 
                        years.
          (4) Additional requirements.--
                  (A) In general.--A poultry producer that 
                receives an emergency loan under this 
                subsection may use the emergency loan proceeds 
                only to repay the amount that the poultry 
                producer owes to any lender for the purchase, 
                improvement, or operation of the poultry farm.
                  (B) Conversion of the loan.--A poultry 
                producer that receives an emergency loan under 
                this subsection shall be eligible to have the 
                balance of the emergency loan converted, but 
                not refinanced, to a loan that has the same 
                terms and conditions as an operating loan under 
                subtitle B of the Consolidated Farm and Rural 
                Development Act (7 U.S.C. 1941 et seq.).
  (i) State and Local Governments.--Section 1001(f)(6)(A) of 
the Food Security Act of 1985 (7 U.S.C. 1308(f)(6)(A)) is 
amended by inserting ``(other than the conservation reserve 
program established under subchapter B of chapter 1 of subtitle 
D of title XII of this Act)'' before the period at the end.
  (j) Administration.--
          (1) Regulations.--
                  (A) In general.--As soon as practicable after 
                the date of enactment of this Act, the 
                Secretary shall promulgate such regulations as 
                are necessary to implement this section and the 
                amendment made by this section.
                  (B) Procedure.--The promulgation of the 
                regulations and administration of this section 
                and the amendment made by this section shall be 
                made without regard to--
                          (i) the notice and comment provisions 
                        of section 553 of title 5, United 
                        States Code;
                          (ii) the Statement of Policy of the 
                        Secretary of Agriculture effective July 
                        24, 1971 (36 Fed. Reg. 13804), relating 
                        to notices of proposed rulemaking and 
                        public participation in rulemaking; and
                          (iii) chapter 35 of title 44, United 
                        States Code (commonly known as the 
                        ``Paperwork Reduction Act'').
                  (C) Congressional review of agency 
                rulemaking.--In carrying out this paragraph, 
                the Secretary shall use the authority provided 
                under section 808 of title 5, United States 
                Code.
          (2) Administrative costs.--Of the funds of the 
        Commodity Credit Corporation, the Secretary may use up 
        to $10,000,000 to pay administrative costs incurred by 
        the Secretary that are directly related to carrying out 
        this Act.
          (3) Prohibition.--None of the funds of the 
        Agricultural Disaster Relief Trust Fund established 
        under section 902 of the Trade Act of 1974 (19 U.S.C. 
        2497a) may be used to carry out this Act.

SEC. 605. 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. 606. HOUSING TRUST FUND.

  (a) Funding.--There is hereby appropriated for the Housing 
Trust Fund established pursuant to section 1338 of the Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992 
(12 U.S.C. 4568), $1,065,000,000, for use under such section: 
Provided, That of the total amount provided under this heading, 
$65,000,000 shall be available to the Secretary of Housing and 
Urban Development only for incremental project-based voucher 
assistance to be allocated to States to be used solely in 
conjunction with grant funds awarded under such section 1338, 
pursuant to the formula established under section 1338 and 
taking into account different per unit subsidy needs among 
states, as determined by the Secretary.
  (b) Amendments.--Section 1338 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 
U.S.C. 4568) is amended--
          (1) in subsection (c)--
                  (A) in paragraph (4)(A) by inserting after 
                the period at the end the following: 
                ``Notwithstanding any other provision of law, 
                for the fiscal year following enactment of this 
                sentence and thereafter, the Secretary may make 
                such notice available only on the Internet at 
                the appropriate government website or websites 
                or through other electronic media, as 
                determined by the Secretary.'';
                  (B) in paragraph (5)(C), by striking ``(8)'' 
                and inserting ``(9)''; and
                  (C) in paragraph (7)(A)--
                          (i) by striking ``section 
                        1335(a)(2)(B)'' and inserting ``section 
                        1335(a)(1)(B)''; and
                          (ii) by inserting ``the units funded 
                        under'' after ``75 percent of''; and
          (2) by adding at the end the following new 
        subsection:
  ``(k) Environmental Review.--For the purpose of environmental 
compliance review, funds awarded under this section shall be 
subject to section 288 of the HOME Investment Partnerships Act 
(12 U.S.C. 12838) and shall be treated as funds under the 
program established by such Act.''.

SEC. 607. THE INDIVIDUAL INDIAN MONEY ACCOUNT LITIGATION SETTLEMENT ACT 
                    OF 2010.

  (a) Short Title.--This section may be cited as the 
``Individual Indian Money Account Litigation Settlement Act of 
2010''.
  (b) Definitions.--In this section:
          (1) Amended complaint.--The term ``Amended 
        Complaint'' means the Amended Complaint attached to the 
        Settlement.
          (2) Land consolidation program.--The term ``Land 
        Consolidation Program'' means a program conducted in 
        accordance with the Settlement and the Indian Land 
        Consolidation Act (25 U.S.C. 2201 et seq.) under which 
        the Secretary may purchase fractional interests in 
        trust or restricted land.
          (3) Litigation.--The term ``Litigation'' means the 
        case entitled Elouise Cobell et al. v. Ken Salazar et 
        al., United States District Court, District of 
        Columbia, Civil Action No. 96-1285 (JR).
          (4) Plaintiff.--The term ``Plaintiff'' means a member 
        of any class certified in the Litigation.
          (5) Secretary.--The term ``Secretary'' means the 
        Secretary of the Interior.
          (6) Settlement.--The term ``Settlement'' means the 
        Class Action Settlement Agreement dated December 7, 
        2009, in the Litigation, as modified by the parties to 
        the Litigation.
          (7) Trust administration class.--The term ``Trust 
        Administration Class'' means the Trust Administration 
        Class as defined in the Settlement.
  (c) Purpose.--The purpose of this section is to authorize the 
Settlement.
  (d) Authorization.--The Settlement is authorized, ratified, 
and confirmed.
  (e) Jurisdictional Provisions.--
          (1) In general.--Notwithstanding the limitation of 
        jurisdiction of district courts contained in section 
        1346(a)(2) of title 28, United States Code, the United 
        States District Court for the District of Columbia 
        shall have jurisdiction over the claims asserted in the 
        Amended Complaint for purposes of the Settlement.
          (2) Certification of trust administration class.--
                  (A) In general.--Notwithstanding the 
                requirements of the Federal Rules of Civil 
                Procedure, the court overseeing the Litigation 
                may certify the Trust Administration Class.
                  (B) Treatment.--On certification under 
                subparagraph (A), the Trust Administration 
                Class shall be treated as a class under Federal 
                Rule of Civil Procedure 23(b)(3) for purposes 
                of the Settlement.
  (f) Trust Land Consolidation.--
          (1) Trust land consolidation fund.--
                  (A) Establishment.--On final approval (as 
                defined in the Settlement) of the Settlement, 
                there shall be established in the Treasury of 
                the United States a fund, to be known as the 
                ``Trust Land Consolidation Fund''.
                  (B) Availability of amounts.--Amounts in the 
                Trust Land Consolidation Fund shall be made 
                available to the Secretary during the 10-year 
                period beginning on the date of final approval 
                of the Settlement--
                          (i) to conduct the Land Consolidation 
                        Program; and
                          (ii) for other costs specified in the 
                        Settlement.
                  (C) Deposits.--
                          (i) In general.--On final approval 
                        (as defined in the Settlement) of the 
                        Settlement, the Secretary of the 
                        Treasury shall deposit in the Trust 
                        Land Consolidation Fund $2,000,000,000 
                        of the amounts appropriated by section 
                        1304 of title 31, United States Code.
                          (ii) Conditions met.--The conditions 
                        described in section 1304 of title 31, 
                        United States Code, shall be considered 
                        to be met for purposes of clause (i).
                  (D) Transfers.--In a manner designed to 
                encourage participation in the Land 
                Consolidation Program, the Secretary may 
                transfer, at the discretion of the Secretary, 
                not more than $60,000,000 of amounts in the 
                Trust Land Consolidation Fund to the Indian 
                Education Scholarship Holding Fund established 
                under paragraph 2.
          (2) Indian education scholarship holding fund.--
                  (A) Establishment.--On the final approval (as 
                defined in the Settlement) of the Settlement, 
                there shall be established in the Treasury of 
                the United States a fund, to be known as the 
                ``Indian Education Scholarship Holding Fund''.
                  (B) Availability.--Notwithstanding any other 
                provision of law governing competition, public 
                notification, or Federal procurement or 
                assistance, amounts in the Indian Education 
                Scholarship Holding Fund shall be made 
                available, without further appropriation, to 
                the Secretary to contribute to an Indian 
                Education Scholarship Fund, as described in the 
                Settlement, to provide scholarships for Native 
                Americans.
          (3) Acquisition of trust or restricted land.--The 
        Secretary may acquire, at the discretion of the 
        Secretary and in accordance with the Land Consolidation 
        Program, any fractional interest in trust or restricted 
        land.
          (4) Treatment of unlocatable plaintiffs.--A Plaintiff 
        the whereabouts of whom are unknown and who, after 
        reasonable efforts by the Secretary, cannot be located 
        during the 5 year period beginning on the date of final 
        approval (as defined in the Settlement) of the 
        Settlement shall be considered to have accepted an 
        offer made pursuant to the Land Consolidation Program.
  (g) Taxation and Other Benefits.--
          (1) Internal revenue code.--For purposes of the 
        Internal Revenue Code of 1986, amounts received by an 
        individual Indian as a lump sum or a periodic payment 
        pursuant to the Settlement--
                  (A) shall not be included in gross income; 
                and
                  (B) shall not be taken into consideration for 
                purposes of applying any provision of the 
                Internal Revenue Code of 1986 that takes into 
                account excludible income in computing adjusted 
                gross income or modified adjusted gross income, 
                including section 86 of that Code (relating to 
                Social Security and tier 1 railroad retirement 
                benefits).
          (2) Other benefits.--Notwithstanding any other 
        provision of law, for purposes of determining initial 
        eligibility, ongoing eligibility, or level of benefits 
        under any Federal or federally assisted program, 
        amounts received by an individual Indian as a lump sum 
        or a periodic payment pursuant to the Settlement shall 
        not be treated for any household member, during the 1-
        year period beginning on the date of receipt--
                  (A) as income for the month during which the 
                amounts were received; or
                  (B) as a resource.

SEC. 608. APPROPRIATION OF FUNDS FOR FINAL SETTLEMENT OF CLAIMS FROM IN 
                    RE BLACK FARMERS DISCRIMINATION LITIGATION.

  (a) Definitions.--In this section:
          (1) Settlement agreement.--The term ``Settlement 
        Agreement'' means the settlement agreement dated 
        February 18, 2010, between certain plaintiffs, by and 
        through their counsel, and the Secretary of Agriculture 
        to resolve, fully and forever, the claims raised or 
        that could have been raised in the cases consolidated 
        in In re Black Farmers Discrimination Litigation, No. 
        08-511 (D.D.C.), including Pigford claims asserted 
        under section 14012 of the Food, Conservation, and 
        Energy Act of 2008 (Public Law 110-246; 122 Stat. 
        2209).
          (2) Pigford claim.--The term ``Pigford claim'' has 
        the meaning given that term in section 14012(a)(3) of 
        the Food, Conservation, and Energy Act of 2008 (Public 
        Law 110-246; 122 Stat. 2210).
  (b) Appropriation of Funds.--There is hereby appropriated to 
the Secretary of Agriculture $1,150,000,000, to remain 
available until expended, to carry out the terms of the 
Settlement Agreement if the Settlement Agreement is approved by 
a court order that is or becomes final and nonappealable. The 
funds appropriated by this subsection are in addition to the 
$100,000,000 of funds of the Commodity Credit Corporation made 
available by section 14012(i) of the Food, Conservation, and 
Energy Act of 2008 (Public Law 110-246; 122 Stat. 2212) and 
shall be available for obligation only after those Commodity 
Credit Corporation funds are fully obligated. If the Settlement 
Agreement is not approved as provided in this subsection, the 
$100,000,000 of funds of the Commodity Credit Corporation made 
available by section 14012(i) of the Food, Conservation, and 
Energy Act of 2008 shall be the sole funding available for 
Pigford claims.
  (c) Use of Funds.--The use of the funds appropriated by 
subsection (b) shall be subject to the express terms of the 
Settlement Agreement.
  (d) Treatment of Remaining Funds.--If any of the funds 
appropriated by subsection (b) are not obligated and expended 
to carry out the Settlement Agreement, the Secretary of 
Agriculture shall return the unused funds to the Treasury and 
may not make the unused funds available for any purpose related 
to section 14012 of the Food, Conservation, and Energy Act of 
2008, for any other settlement agreement executed in In re 
Black Farmers Discrimination Litigation, No. 08-511 (D.D.C.), 
or for any other purpose.
  (e) Rules of Construction.--Nothing in this section shall be 
construed as requiring the United States, any of its officers 
or agencies, or any other party to enter into the Settlement 
Agreement or any other settlement agreement. Nothing in this 
section shall be construed as creating the basis for a Pigford 
claim.
  (f) Conforming Amendments.--Section 14012 of the Food, 
Conservation, and Energy Act of 2008 (Public Law 110-246; 122 
Stat. 2209) is amended--
          (1) in subsection (c)(1)--
                  (A) by striking ``subsection (h)'' and 
                inserting ``subsection (g)''; and
                  (B) by striking ``subsection (i)'' and 
                inserting ``subsection (h)'';
          (2) by striking subsection (e);
          (3) in subsection (g), by striking ``subsection (f)'' 
        and inserting ``subsection (e)'';
          (4) in subsection (i)--
                  (A) by striking ``(1) In general.--Of the 
                funds'' and inserting ``Of the funds''; and
                  (B) by striking paragraph (2);
          (5) by striking subsection (j); and
          (6) by redesignating subsections (f), (g), (h), (i), 
        and (k) as subsections (e), (f), (g), (h), and (i), 
        respectively.

SEC. 609. 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.
                  ``(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. 610. 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. 611. 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. 612. STATE COURT IMPROVEMENT PROGRAM.

  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''.

SEC. 613. QUALIFYING TIMBER CONTRACT OPTIONS.

  (a) Definitions.--In this section:
          (1) Qualifying contract.--The term ``qualifying 
        contract'' means a contract that has not been 
        terminated by the Bureau of Land Management for the 
        sale of timber on lands administered by the Bureau of 
        Land Management that meets all of the following 
        criteria:
                  (A) The contract was awarded during the 
                period beginning on January 1, 2005, and ending 
                on December 31, 2008.
                  (B) There is unharvested volume remaining for 
                the contract.
                  (C) The contract is not a salvage sale.
                  (D) The Secretary determined there is not an 
                urgent need to harvest under the contract due 
                to deteriorating timber conditions that 
                developed after the award of the contract.
          (2) Secretary.--The term ``Secretary'' means the 
        Secretary of the Interior, acting through the Director 
        of Bureau of Land Management.
          (3) Timber purchaser.--The term ``timber purchaser'' 
        means the party to the qualifying contract for the sale 
        of timber from lands administered by the Bureau of Land 
        Management.
  (b) Market-related Contract Extension Option.--Upon a timber 
purchaser's written request, the Secretary may make a one-time 
modification to the qualifying contract to add 3 years to the 
contract expiration date if the written request--
          (1) is received by the Secretary not later than 90 
        days after the date of enactment of this Act; and
          (2) contains a provision releasing the United States 
        from all liability, including further consideration or 
        compensation, resulting from the modification under 
        this subsection of the term of a qualifying contract.
  (c) Reporting.--Not later than 6 months after the date of the 
enactment of this Act, the Secretary shall submit to Congress a 
report detailing a plan and timeline to promulgate new 
regulations authorizing the Bureau of Land Management to extend 
timber contracts due to changes in market conditions.
  (d) Regulations.--Not later than 2 years after the date of 
the enactment of this Act, the Secretary shall promulgate new 
regulations authorizing the Bureau of Land Management to extend 
timber contracts due to changes in market conditions.
  (e) No Surrender of Claims.--This section shall not have the 
effect of surrendering any claim by the United States against 
any timber purchaser that arose under a timber sale contract, 
including a qualifying contract, before the date on which the 
Secretary adjusts the contract term under subsection (b).

SEC. 614. EXTENSION AND FLEXIBILITY FOR CERTAIN ALLOCATED SURFACE 
                    TRANSPORTATION PROGRAMS.

  (a) Modification of Allocation Rules.--Section 411(d) of the 
Surface Transportation Extension Act of 2010 (Public Law 111-
147; 124 Stat. 80) is amended--
          (1) in paragraph (1)--
                  (A) in the matter preceding subparagraph 
                (A)--
                          (i) by striking ``1301, 1302,''; and
                          (ii) by striking ``1198, 1204,''; and
                  (B) in subparagraph (A)--
                          (i) in the matter preceding clause 
                        (i) by striking ``apportioned under 
                        sections 104(b) and 144 of title 23, 
                        United States Code,'' and inserting 
                        ``specified in section 105(a)(2) of 
                        title 23, United States Code (except 
                        the high priority projects program),''; 
                        and
                          (ii) in clause (ii) by striking 
                        ``apportioned under such sections of 
                        such Code'' and inserting ``specified 
                        in such section 105(a)(2) (except the 
                        high priority projects program)'';
          (2) in paragraph (2)--
                  (A) in the matter preceding subparagraph 
                (A)--
                          (i) by striking ``1301, 1302,''; and
                          (ii) by striking ``1198, 1204,''; and
                  (B) in subparagraph (A)--
                          (i) in the matter preceding clause 
                        (i) by striking ``apportioned under 
                        sections 104(b) and 144 of title 23, 
                        United States Code,'' and inserting 
                        ``specified in section 105(a)(2) of 
                        title 23, United States Code (except 
                        the high priority projects program),''; 
                        and
                          (ii) in clause (ii) by striking 
                        ``apportioned under such sections of 
                        such Code'' and inserting ``specified 
                        in such section 105(a)(2) (except the 
                        high priority projects program)''; and
          (3) by adding at the end the following:
          ``(5) Projects of national and regional significance 
        and national corridor infrastructure improvement 
        programs.--
                  ``(A) Redistribution among states.--
                Notwithstanding sections 1301(m) and 1302(e) of 
                SAFETEA-LU (119 Stat. 1202 and 1205), the 
                Secretary shall apportion funds authorized to 
                be appropriated under subsection (b) for the 
                projects of national and regional significance 
                program and the national corridor 
                infrastructure improvement program among all 
                States such that each State's share of the 
                funds so apportioned is equal to the State's 
                share for fiscal year 2009 of funds apportioned 
                or allocated for the programs specified in 
                section 105(a)(2) of title 23, United States 
                Code.
                  ``(B) Distribution among programs.--Funds 
                apportioned to a State pursuant to subparagraph 
                (A) shall be--
                          ``(i) made available to the State for 
                        the programs specified in section 
                        105(a)(2) of title 23, United States 
                        Code (except the high priority projects 
                        program), and in the same proportion 
                        for each such program that--
                                  ``(I) the amount apportioned 
                                to the State for that program 
                                for fiscal year 2009; bears to
                                  ``(II) the amount apportioned 
                                to the State for fiscal year 
                                2009 for all such programs; and
                          ``(ii) administered in the same 
                        manner and with the same period of 
                        availability as funding is administered 
                        under programs identified in clause 
                        (i).''.
  (b) Expenditure Authority From Highway Trust Fund.--Paragraph 
(1) of section 9503(c) of the Internal Revenue Code of 1986 is 
amended by striking ``Surface Transportation Extension Act of 
2010'' and inserting ``American Jobs and Closing Tax Loopholes 
Act of 2010''.
  (c) Effective Date.--The amendments made by this section 
shall take effect upon the date of enactment of the Surface 
Transportation Extension Act of 2010 (Public Law 111-147; 124 
Stat. 78 et seq.) and shall be treated as being included in 
that Act at the time of the enactment of that Act.

SEC. 615. COMMUNITY COLLEGE AND CAREER TRAINING GRANT PROGRAM.

  (a) In General.--Section 278(a) of the Trade Act of 1974 (19 
U.S.C. 2372(a)) is amended by adding at the end the following:
          ``(3) Rule of construction.--For purposes of this 
        section, any reference to `workers', `workers eligible 
        for training under section 236', or any other reference 
        to workers under this section shall be deemed to 
        include individuals who are, or are likely to become, 
        eligible for unemployment compensation as defined in 
        section 85(b) of the Internal Revenue Code of 1986, or 
        who remain unemployed after exhausting all rights to 
        such compensation.''.
  (b) Definition of Eligible Institution.--Section 278(b)(1) of 
the Trade Act of 1974 (19 U.S.C. 2372(b)(1)) is amended--
          (1) by striking ``section 102'' and inserting 
        ``section 101(a)''; and
          (2) by striking ``1002'' and inserting ``1001(a)''.
  (c) Authorization of Appropriations.--Section 279 of the 
Trade Act of 1974 (19 U.S.C. 2372a) is amended--
          (1) in subsection (a), by striking the last sentence; 
        and
          (2) by adding at the end the following:
  ``(c) Administrative and Related Costs.--The Secretary may 
retain not more than 5 percent of the funds appropriated under 
subsection (b) for each fiscal year to administer, evaluate, 
and establish reporting systems for the Community College and 
Career Training Grant program under section 278.
  ``(d) Supplement Not Supplant.--Funds appropriated under 
subsection (b) shall be used to supplement and not supplant 
other Federal, State, and local public funds expended to 
support community college and career training programs.
  ``(e) Availability.--Funds appropriated under subsection (b) 
shall remain available for the fiscal year for which the funds 
are appropriated and the subsequent fiscal year.''.

SEC. 616. EXTENSIONS OF DUTY SUSPENSIONS ON COTTON SHIRTING FABRICS AND 
                    RELATED PROVISIONS.

  (a) Extensions.--Each of the following headings of the 
Harmonized Tariff Schedule of the United States is amended by 
striking the date in the effective date column and inserting 
``12/31/2013'':
          (1) Heading 9902.52.08 (relating to woven fabrics of 
        cotton).
          (2) Heading 9902.52.09 (relating to woven fabrics of 
        cotton).
          (3) Heading 9902.52.10 (relating to woven fabrics of 
        cotton).
          (4) Heading 9902.52.11 (relating to woven fabrics of 
        cotton).
          (5) Heading 9902.52.12 (relating to woven fabrics of 
        cotton).
          (6) Heading 9902.52.13 (relating to woven fabrics of 
        cotton).
          (7) Heading 9902.52.14 (relating to woven fabrics of 
        cotton).
          (8) Heading 9902.52.15 (relating to woven fabrics of 
        cotton).
          (9) Heading 9902.52.16 (relating to woven fabrics of 
        cotton).
          (10) Heading 9902.52.17 (relating to woven fabrics of 
        cotton).
          (11) Heading 9902.52.18 (relating to woven fabrics of 
        cotton).
          (12) Heading 9902.52.19 (relating to woven fabrics of 
        cotton).
          (13) Heading 9902.52.20 (relating to woven fabrics of 
        cotton).
          (14) Heading 9902.52.21 (relating to woven fabrics of 
        cotton).
          (15) Heading 9902.52.22 (relating to woven fabrics of 
        cotton).
          (16) Heading 9902.52.23 (relating to woven fabrics of 
        cotton).
          (17) Heading 9902.52.24 (relating to woven fabrics of 
        cotton).
          (18) Heading 9902.52.25 (relating to woven fabrics of 
        cotton).
          (19) Heading 9902.52.26 (relating to woven fabrics of 
        cotton).
          (20) Heading 9902.52.27 (relating to woven fabrics of 
        cotton).
          (21) Heading 9902.52.28 (relating to woven fabrics of 
        cotton).
          (22) Heading 9902.52.29 (relating to woven fabrics of 
        cotton).
          (23) Heading 9902.52.30 (relating to woven fabrics of 
        cotton).
          (24) Heading 9902.52.31 (relating to woven fabrics of 
        cotton).
  (b) Extension of Duty Refunds and Pima Cotton Trust Fund; 
Modification of Affidavit Requirements.--Section 407 of title 
IV of division C of the Tax Relief and Health Care Act of 2006 
(Public Law 109-432; 120 Stat. 3060) is amended--
          (1) in subsection (b)--
                  (A) in paragraph (1), by striking ``amounts 
                determined by the Secretary'' and all that 
                follows through ``5208.59.80'' and inserting 
                ``amounts received in the general fund that are 
                attributable to duties received since January 
                1, 2004, on articles classified under heading 
                5208''; and
                  (B) in paragraph (2), by striking ``October 
                1, 2008'' and inserting ``December 31, 2013'';
          (2) in subsection (d)--
                  (A) in the matter preceding paragraph (1), by 
                inserting ``annually'' after ``provided''; and
                  (B) in paragraph (1), by inserting ``during 
                the year in which the affidavit is filed and'' 
                after ``imported cotton fabric''; and
          (3) in subsection (f)--
                  (A) in the matter preceding paragraph (1), by 
                inserting ``annually'' after ``provided''; and
                  (B) in paragraph (1), by inserting ``during 
                the year in which the affidavit is filed and'' 
                after ``United States''.
  (c) Effective Date.--The amendments made by this section 
shall take effect on the date of the enactment of this Act and 
apply with respect to affidavits filed on or after such date of 
enactment.

SEC. 617. MODIFICATION OF WOOL APPAREL MANUFACTURERS TRUST FUND.

  (a) In General.--Section 4002(c)(2)(A) of the Miscellaneous 
Trade and Technical Corrections Act of 2004 (Public Law 108-
429; 118 Stat. 2600) is amended by striking ``chapter 51'' and 
inserting ``chapter 62''.
  (b) Full Restoration of Payment Levels in Fiscal Year 2010.--
          (1) Transfer of amounts.--
                  (A) In general.--Not later than 30 days after 
                the date of the enactment of this Act, the 
                Secretary of the Treasury shall transfer to the 
                Wool Apparel Manufacturers Trust Fund, out of 
                the general fund of the Treasury of the United 
                States, amounts determined by the Secretary of 
                the Treasury to be equivalent to amounts 
                received in the general fund that are 
                attributable to the duty received on articles 
                classified under chapter 62 of the Harmonized 
                Tariff Schedule of the United States, subject 
                to the limitation in subparagraph (B).
                  (B) Limitation.--The Secretary of the 
                Treasury shall not transfer more than the 
                amount determined by the Secretary to be 
                necessary for--
                          (i) U.S. Customs and Border 
                        Protection to make payments to eligible 
                        manufacturers under section 4002(c)(3) 
                        of the Miscellaneous Trade and 
                        Technical Corrections Act of 2004 so 
                        that the amount of such payments, when 
                        added to any other payments made to 
                        eligible manufacturers under section 
                        4002(c)(3) of such Act for calendar 
                        year 2010, equal the total amount of 
                        payments authorized to be provided to 
                        eligible manufacturers under section 
                        4002(c)(3) of such Act for calendar 
                        year 2010; and
                          (ii) the Secretary of Commerce to 
                        provide grants to eligible 
                        manufacturers under section 4002(c)(6) 
                        of the Miscellaneous Trade and 
                        Technical Corrections Act of 2004 so 
                        that the amounts of such grants, when 
                        added to any other grants made to 
                        eligible manufacturers under section 
                        4002(c)(6) of such Act for calendar 
                        year 2010, equal the total amount of 
                        grants authorized to be provided to 
                        eligible manufacturers under section 
                        4002(c)(6) of such Act for calendar 
                        year 2010.
          (2) Payment of amounts.--U.S. Customs and Border 
        Protection shall make payments described in paragraph 
        (1) to eligible manufacturers not later than 30 days 
        after such transfer of amounts from the general fund of 
        the Treasury of the United States to the Wool Apparel 
        Manufacturers Trust Fund. The Secretary of Commerce 
        shall promptly provide grants described in paragraph 
        (1) to eligible manufacturers after such transfer of 
        amounts from the general fund of the Treasury of the 
        United States to the Wool Apparel Manufacturers Trust 
        Fund.
  (c) Rule of Construction.--The amendment made by subsection 
(a) shall not be construed to affect the availability of 
amounts transferred to the Wool Apparel Manufacturers Trust 
Fund before the date of the enactment of this Act.

SEC. 618. DEPARTMENT OF COMMERCE STUDY.

  Not later than 180 days after the date of enactment of this 
Act, the Secretary of Commerce shall report to Congress 
detailing--
          (1) the pattern of job loss in the New England, Mid-
        Atlantic, and Midwest States over the past 20 years;
          (2) the role of the off-shoring of manufacturing jobs 
        in overall job loss in the regions; and
          (3) recommendations to attract industries and bring 
        jobs to the region.

SEC. 619. 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
                  (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. BUDGETARY PROVISIONS.

  (a) Statutory Paygo.--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, jointly submitted for printing in the Congressional 
Record by the Chairmen of the House and Senate Budget 
Committees, provided that such statement has been submitted 
prior to the vote on passage in the House acting first on this 
conference report or amendment between the Houses.
  (b) Emergency Designations.--Sections 501, 511, and 516--
          (1) are 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)),
          (2) in the House of Representatives, are designated 
        as an emergency for purposes of pay-as-you-go 
        principles, and
          (3) in the Senate, are 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.

  Amend the title of the bill so as to read: ``A bill to 
promote American jobs through increased investment in 
infrastructure and other job creating activities, to close tax 
loopholes, to eliminate tax incentives for offshoring of jobs, 
and for other purposes.''.

         PART B--TEXT OF AMENDMENT TO BE CONSIDERED AS ADOPTED

    Page 25, strike line 22 and all that follows through line 
15 on page 26, and insert the following:

          (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''.

  Page 31, after line 11, insert the following:

  (c) Temporary Coordination With Hope and Lifetime Learning 
Credits.--In the case of any taxpayer for any taxable year 
beginning in 2010, no deduction shall be allowed under section 
222 of the Internal Revenue Code of 1986 if--
          (1) the taxpayer's net Federal income tax reduction 
        which would be attributable to such deduction for such 
        taxable year, is less than
          (2) the credit which would be allowed to the taxpayer 
        for such taxable year under section 25A of such Code 
        (determined without regard to sections 25A(e) and 26 of 
        such Code).

  Page 82, strike line 10 and all that follows through line 7 
on page 83 and insert the following:

                                  ``(VI) Exception for certain 
                                redemptions.--The following 
                                shall not be taken into account 
                                under subclause (I):
                                          ``(aa) Redemptions of 
                                        securities which, at 
                                        the time of redemption, 
                                        are not listed on an 
                                        established securities 
                                        market and--
                                                  ``(AA) are 
                                                made pursuant 
                                                to a pension 
                                                plan that is 
                                                qualified under 
                                                section 401 of 
                                                the Internal 
                                                Revenue Code of 
                                                1986 or a 
                                                shareholder-
                                                approved 
                                                program, or
                                                  ``(BB) are 
                                                made on account 
                                                of an 
                                                employee's 
                                                termination of 
                                                employment with 
                                                the plan 
                                                sponsor, or the 
                                                death or 
                                                disability of a 
                                                shareholder.
                                          ``(bb) Redemptions of 
                                        securities which are 
                                        not, immediately after 
                                        issuance, listed on an 
                                        established securities 
                                        market and are, or had 
                                        previously been--
                                                  ``(AA) held, 
                                                directly or 
                                                indirectly, by, 
                                                or for the 
                                                benefit of, the 
                                                Federal 
                                                Government or a 
                                                Federal reserve 
                                                bank, or
                                                  ``(BB) held 
                                                by a national 
                                                government (or 
                                                a government-
                                                related entity 
                                                of such a 
                                                government) or 
                                                an employee 
                                                benefit plan if 
                                                such shares are 
                                                substantially 
                                                identical to 
                                                shares 
                                                described in 
                                                subitem (AA).

  Page 107, strike line 16 and all that follows through line 12 
on page 108 and insert the following:

                                  ``(VI) Exception for certain 
                                redemptions.--The following 
                                shall not be taken into account 
                                under subclause (I):
                                          ``(aa) Redemptions of 
                                        securities which, at 
                                        the time of redemption, 
                                        are not listed on an 
                                        established securities 
                                        market and--
                                                  ``(AA) are 
                                                made pursuant 
                                                to a pension 
                                                plan that is 
                                                qualified under 
                                                section 401 or 
                                                a shareholder-
                                                approved 
                                                program, or
                                                  ``(BB) are 
                                                made on account 
                                                of an 
                                                employee's 
                                                termination of 
                                                employment with 
                                                the plan 
                                                sponsor, or the 
                                                death or 
                                                disability of a 
                                                shareholder.
                                          ``(bb) Redemptions of 
                                        securities which are 
                                        not, immediately after 
                                        issuance, listed on an 
                                        established securities 
                                        market and are, or had 
                                        previously been--
                                                  ``(AA) held, 
                                                directly or 
                                                indirectly, by, 
                                                or for the 
                                                benefit of, the 
                                                Federal 
                                                Government or a 
                                                Federal reserve 
                                                bank, or
                                                  ``(BB) held 
                                                by a national 
                                                government (or 
                                                a government-
                                                related entity 
                                                of such a 
                                                government) or 
                                                an employee 
                                                benefit plan if 
                                                such shares are 
                                                substantially 
                                                identical to 
                                                shares 
                                                described in 
                                                subitem (AA).

  Page 124, line 4, strike ``40'' and insert ``20''.

  Page 175, line 13, insert before the period the following: 
``or the plan's allocable share of such costs for the preceding 
year''.

  Page 189, line 10, strike ``plan''.

  Page 190, line 22, strike ``subparagraph (C)(v)(III)'' and 
insert ``subparagraph (C)(vi)(III)''.

  Page 207, line 15, insert before the period the following: 
``or the plan's allocable share of such costs for the preceding 
year''.

  Page 221, line 4, strike ``plan''.

  Page 222, line 18, strike ``subparagraph (A)(v)(III)'' and 
insert ``subparagraph (A)(vi)(III)''.

  Page 228, insert after line 24 the following:

  (c) Special Rule for Compliance With Subtitle.--Until 12 
months after final regulations are issued by the Secretary of 
Labor pursuant to the amendments made by this subtitle, a 
service provider or plan administrator shall be treated as 
having complied with such amendments if such service provider 
or plan administrator complies with a reasonable good faith 
interpretation of such amendments.

  Page 249, line 19, strike ``with'' and insert ``within''.

  Page 274, line 3, insert ``be'' after ``may''.

  Page 289, line 21, insert ``or any other reorganization 
specified by the Secretary'' before ``, in applying''.

  Page 291, line 23, strike ``32'' and insert ``34''.

  Page 293, line 2, strike ``30.5'' and insert ``36''.

  Page 293, line 14, strike ``December 31, 2010'' and insert 
``November 30, 2010''.

  Page 293, strike lines 15 through 17 and insert the 
following:

          (B) in the heading for subsection (b)(2), by striking 
        ``june 2, 2010'' and inserting ``november 30, 2010''; 
        and

  Page 293, line 19, strike ``May 31, 2011'' and insert ``April 
30, 2011''.

  Page 293, line 25, strike ``December 31, 2010'' and insert 
``November 30, 2010''.

  Page 294, strike lines 1 through 3 and insert the following:

          (B) in the heading for paragraph (2), by striking 
        ``june 2, 2010'' and inserting ``november 30, 2010''; 
        and

  Page 294, line 5, strike ``June 30, 2011'' and insert ``May 
31, 2011''.

  Page 294, line 11, strike ``January 1, 2011'' and insert 
``December 1, 2010''.

  Page 294, line 13, strike ``June 1, 2011'' and insert ``May 
1, 2011''.

  Page 294, line 17, strike ``May 31, 2011'' and insert ``April 
30, 2011''.

  Page 295, after line 3, insert the following:

  (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)''.

  Page 295, line 4, strike ``(c)'' and insert ``(d)''.

  Page 301, line 12, strike ``household'' and insert 
``family''.

  Page 304, line 9, strike ``December 31, 2010'' and insert 
``November 30, 2010''.

  Page 307, line 8, strike ``(a) In General.--''.

  Page 308, strike line 18 and all that follows through page 
309, line 4, and insert the following:

                  (B) in paragraph (2), by inserting ``of such 
                Act'' after ``1923''; and

  Page 309, strike lines 18 through 21.

  Page 343, strike line 19 and all that follows through line 24 
on page 359, and insert the following:

SEC. 523. PHYSICIAN PAYMENT UPDATE.

  Section 1848(d) of the Social Security Act (42 U.S.C. 1395w-
4(d)) is amended--
          (1) in paragraph (10), in the heading, by striking 
        ``portion'' and inserting ``the first 5 months ''; and
          (2) by adding at the end the following new 
        paragraphs:
          ``(11) Update for the last 7 months of 2010.--
                  ``(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 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 2.2 percent.
                  ``(B) No effect on computation of conversion 
                factor for 2011 and subsequent years.--The 
                conversion factor under this subsection shall 
                be computed under paragraph (1)(A) for 2011 and 
                subsequent years as if subparagraph (A) had 
                never applied.
          ``(12) Update for 2011.--
                  ``(A) In general.--Subject to paragraphs 
                (7)(B), (8)(B), (9)(B), (10)(B), and (11)(B), 
                in lieu of the update to the single conversion 
                factor established in paragraph (1)(C) that 
                would otherwise apply for 2011, the update to 
                the single conversion factor shall be 1.0 
                percent.
                  ``(B) No effect on computation of conversion 
                factor for 2012 and subsequent years.--The 
                conversion factor under this subsection shall 
                be computed under paragraph (1)(A) for 2012 and 
                subsequent years as if subparagraph (A) had 
                never applied.''.

  Page 367, strike lines 16 through 20.

  Page 374, strike line 19 and all that follows through line 8 
on page 375 (all of paragraph (3)), and insert the following:

          (3) Provision of grants.--
                  (A) In general.--The Secretary shall make 
                grants to States for disaster counties on a pro 
                rata basis based on the value of specialty crop 
                losses in those counties during the 2009 
                calendar year, as determined by the Secretary.
                  (B) Administrative costs.--State Secretary of 
                Agriculture may not use more than five percent 
                of the funds provided for costs associated with 
                the administration of the grants provided in 
                paragraph (1).
                  (C) Administration of grants.--State 
                Secretary of Agriculture may enter into a 
                contract with the Department of Agriculture to 
                administer the grants provided in paragraph 
                (1).
                  (D) Timing.--Not later than 90 days after the 
                date of enactment of this Act, the Secretary 
                shall make grants to States to provide 
                assistance under this subsection.
                  (E) Maximum grant.--The maximum amount of a 
                grant made to a State for counties described in 
                paragraph (1)(B) may not exceed $40,000,000.

  Page 396, line 25, strike ``2010,'' and insert ``2010 
(including any modifications agreed to by the parties and 
approved by the court under that agreement)''.

  Page 414, after line 16, insert the following:

  (d) Savings Clause.--
          (1) In general.--For fiscal year 2010 and for the 
        period beginning on October 1, 2010, and ending on 
        December 31, 2010, the amount of funds apportioned to 
        each State under section 411(d) of the Surface 
        Transportation Extension Act of 2010 (Public Law 111-
        147) that is determined by the amount that the State 
        received or was authorized to receive for fiscal year 
        2009 to carry out the projects of national and regional 
        significance program and national corridor 
        infrastructure improvement program shall be the greater 
        of--
                  (A) the amount that the State was authorized 
                to receive under section 411(d) of the Surface 
                Transportation Extension Act of 2010 with 
                respect to each such program according to the 
                provisions of that Act, as in effect on the day 
                before the date of enactment of this Act; or
                  (B) the amount that the State is authorized 
                to receive under section 411(d) of the Surface 
                Transportation Extension Act of 2010 with 
                respect to each such program pursuant to the 
                provisions of that Act, as amended by the 
                amendments made by this section.
          (2) Obligation authority.--For fiscal year 2010, the 
        amount of obligation authority distributed to each 
        State shall be the greater of--
                  (A) the amount that the State was authorized 
                to receive pursuant to section 120(a)(4)(A) (as 
                it pertains to the Appalachian Development 
                Highway System program) of title I of division 
                A of the Consolidated Appropriations Act, 2010 
                (Public Law 111-117) and sections 120(a)(4)(B) 
                and 120(a)(6) of such title, as of the day 
                before the date of enactment of this Act; or
                  (B) the amount that the State is authorized 
                to receive pursuant to section 120(a)(4)(A) (as 
                it pertains to the Appalachian Development 
                Highway System program) of title I of division 
                A of the Consolidated Appropriations Act, 2010 
                (Public Law 111-117) and sections 120(a)(4)(B) 
                and 120(a)(6) of such title, as of the date of 
                enactment of this Act.
          (3) Authorization of appropriations.--There is 
        authorized to be appropriated out of the Highway Trust 
        Fund (other than the Mass Transit Account) such sums as 
        may be necessary to carry out this subsection.
          (4) Increase in obligation limitation.--The 
        limitation under the heading ``Federal-aid Highways 
        (Limitation on Obligations) (Highway Trust Fund)'' in 
        Public Law 111-117 is increased by such sums as may be 
        necessary to carry out this subsection.
          (5) Contract authority.--Funds made available to 
        carry out this subsection shall be available for 
        obligation and administered in the same manner as if 
        such funds were apportioned under chapter 1 of title 
        23, United States Code.
          (6) Amounts.--The dollar amount specified in section 
        105(d)(1) of title 23, United States Code, the dollar 
        amount specified in section 120(a)(4)(B) of title I of 
        division A of the Consolidated Appropriations Act, 2010 
        (Public Law 111-117), and the dollar amount specified 
        in section 120(b)(10) of such title shall each be 
        increased as necessary to carry out this subsection.

  Page 433, strike the amendment to the title of the bill.

                                  
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